MOTION RECORD OF THE APPLICANT - Alvarez & Marsal

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Court File No.: CV-17-11758-00CL ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST) IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED AND IN THE MATTER OF PAYLESS HOLDINGS LLC, PAYLESS SHOESOURCE CANADA INC., PAYLESS SHOESOURCE CANADA GP INC. AND THOSE OTHER ENTITIES LISTED ON SCHEDULE "A" HERETO APPLICATION OF PAYLESS HOLDINGS LLC UNDER SECTION 46 OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C.1985, c. C-36, AS AMENDED June 16, 2017 MOTION RECORD OF THE APPLICANT Returnable June 21, 2017 OSLER, HOSKIN & HARCOURT LLP Box 50, 1 First Canadian Place Toronto, Ontario, Canada MSX !B8 Marc Wasserman LSUC# 44066M Tel: 416.862.4908 [email protected] John MacDonald LSUC# 25884R Tel: 416.862.5672 [email protected] Shawn T. Irving LSUC# 50035U Tel: 416.862.4733 [email protected] Fax: 416.862.6666 Lawyers for the Applicant

Transcript of MOTION RECORD OF THE APPLICANT - Alvarez & Marsal

Court File No.: CV-17-11758-00CL

ONTARIO SUPERIOR COURT OF JUSTICE

(COMMERCIAL LIST)

IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED

AND IN THE MATTER OF PAYLESS HOLDINGS LLC, PAYLESS SHOESOURCE CANADA INC., PAYLESS SHOESOURCE CANADA GP INC. AND THOSE OTHER

ENTITIES LISTED ON SCHEDULE "A" HERETO

APPLICATION OF PAYLESS HOLDINGS LLC UNDER SECTION 46 OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C.1985, c. C-36, AS AMENDED

June 16, 2017

MOTION RECORD OF THE APPLICANT Returnable June 21, 2017

OSLER, HOSKIN & HARCOURT LLP Box 50, 1 First Canadian Place Toronto, Ontario, Canada MSX !B8

Marc Wasserman LSUC# 44066M Tel: 416.862.4908 [email protected]

John MacDonald LSUC# 25884R Tel: 416.862.5672 [email protected]

Shawn T. Irving LSUC# 50035U Tel: 416.862.4733 [email protected]

Fax: 416.862.6666

Lawyers for the Applicant

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TO: SERVICE LIST

TABLE OF CONTENTS

Table of Contents

Tab Document Page No.

1. Notice of Motion dated June 16, 2017 1

2. Draft Recognition Order 15

A. Schedule “A” – Additional Chapter 11 Debtors 19

B. Schedule “B” – Final Customer and Partner Order 20

C. Schedule “C” – Final Insurance Order 26

D. Schedule “D” – Final Critical Vendors Order 32

E. Schedule “E” – Final Cash Management Order 41

F. Schedule “F” – Final Prepetition Wages and Benefits Order 52

G. Schedule “G” – Final Surety Bond Order 59

H. Schedule “H” – Final Prepetition Taxes and Fees Order 66

I. Schedule “I” – Final Utilities Order 71

3. Affidavit of Michael Shakra sworn June 16, 2017 80

4. Affidavit of Michael Schwindle unsworn 334

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Court File No.: CV-17-11758-00CL

ONTARIO SUPERIOR COURT OF JUSTICE

(COMMERCIAL LIST)

IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED

AND IN THE MATTER OF PAYLESS HOLDINGS LLC, PAYLESS SHOESOURCE CANADA INC., PAYLESS SHOESOURCE CANADA GP INC. AND THOSE OTHER

ENTITIES LISTED ON SCHEDULE "A" HERETO

APPLICATION OF PAYLESS HOLDINGS LLC UNDER SECTION 46 OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED

NOTICE OF MOTION (Motion for Recognition of U.S. Final Orders)

(Returnable June 21, 2017)

Payless Holdings LLC ("Payless"), in its capacity as the foreign representative (the "Foreign

Representative") of Payless along with those entities listed in Schedule "A" that filed voluntary

petitions for relief pursuant to Chapter 11 of the U.S. Bankruptcy Code (collectively, the

"Chapter 11 Debtors"), will make a motion to the Ontario Superior Court of Justice

(Commercial List) on June 21, 2017 at 11:30 a.m. or as soon thereafter as the motion can be

heard at 330 University Avenue, Toronto, Ontario.

PROPOSED METHOD OF HEARING: The motion is to be heard orally.

THE MOTION IS FOR:

1. An Order substantially in the fonn attached hereto as Schedule "I":

(a) recognizing and enforcing the terms of the U.S. Final Orders (as defined below)

pursuant to section 49 of the Companies' Creditors Arrangement Act, R.S.C.

1985, c. C-36 (the "CCAA");

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(b) correcting ~ typographical error in the Initial Recognition Order issued by this

Honourable Court on April 7, 2017 and in the Supplemental Order (Foreign Main

Proceeding) issued by this Honourable Court on April 12, 2017; and

(c) providing for such fmiher and other relief as counsel may advise and this

Honourable Court may permit.

THE GROUNDS FOR THE MOTION ARE:

The Chapter 11 Proceedings and the Canadian Proceedings

1. Capitalized tenns used herein and not otherwise defined have the meaning given to them

in the Affidavit of Michael Schwindle to be sworn;

2. On April 4, 2017, each of the Chapter 11 Debtors filed petitions pursuant to chapter 11

of the U.S. Bankruptcy Code (the "Chapter 11 Cases") with the United States Bankrnptcy Court

for the Eastern District of Missouri (the "U.S. Court");

3. On April 6, 2017, the U.S. Comi granted certain First Day Orders;

4. On April 7, 2017, this Court granted an initial order (the "Initial Recognition Order")

which, among other things, recognized the Chapter 11 Cases as "foreign main proceedings"

pursuant to Part IV of the CCAA; and

5. On April 12, 2017, this Court granted a supplemental order (the "Supplemental Order")

which, among other things, recognized ce1iain First Day Orders made by the U.S. Court;

The U.S. Final Orders

6. On May 9, 2017, the U.S. Comi made the following Orders (collectively, the "May 9

Final Orders"):

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(a) Final Order (I) Authorizing the Debtors to (A) Honor Certain Prepetition

Obligations to Customers and Partners and (B) Continue Certain Customer and

Partner Programs in the Ordinary Course of Business and (II) Granting Related

Relief;

(b) Final Order (I) Authorizing The Debtors to (A) Continue Insurance Coverage

Entered into Prepetition and Satisfy Prepetition Obligations Related Thereto and

(B) Renew, Supplement, or Purchase Insurance Policies, and (II) Granting

Related Relief;

(c) Final Order (A) Authmizing the Debtors to Pay Certain Prepetition Claims of (I)

Critical Vendors and (II) Carrier, Warehousemen, and Section 503(B)(9)

Claimants and (B) Granting Related Relief;

(d) Final Order (I) Authorizing the Debtors to (A) Pay Prepetition Wages, Salaries,

Other Compensation, and Reimbursable Expenses and (B) Continue Employee

Benefits Programs, and (II) Granting Related Relief;

(e) Final Order (I) Authorizing the Payment of Certain Prepetition Taxes and Fees

and (II) Granting Related Relief; and

(f) Final Order (I) Prohibiting Utility Providers from Altering, Refusing, or

Discontinuing Utility Services, (II) Detennining Adequate Assurance of Payment

for Future Utility Service, (III) Establishing Procedures for Detennining Adequate

Assurance of Payment, and (IV) Granting Related relief;

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7. On May 17, 2017, the U.S. Court made a Final Order (I) Authorizing the Debtors to

Continue and Renew the Surety Bond Program on an Uninterrupted Basis, and (II) Granting

Related Relief (the "May 17 Final Order");

8. On May 25, 2017, the U.S. Court made a Final Order (I) Authorizing the Debtors to (A)

Continue Using the Cash Management System and (B) Maintain Existing Bank Accounts and

Business Fonns; (II) Authorizing Continued Intercompany Transactions; (III) Granting

Superiority Administrative Expense Status to Post-Petition Intercompany Payments; and (IV)

Granting Related Relief (the "May 25 Final Order" and together with the May 9 Final Orders

and the May 17 Final Order, the "Final Orders");

9. Recognition of the Final Orders by this Court is necessary for the protection of the

Chapter 11 Debtors' property and the interests of their creditors;

Correction a/Typographical Errors

I 0. Each of the Initial Recognition Order and the Supplmental Recognition Order contain

references to "Payless Shoesource GP Inc.". The correct name for this Payless entity is "Payless

Shoesource Canada GP Inc."

11. Accordingly, the Chapter 11 Debtors are requesting that references to "Payless

Shoesource GP Inc." be deleted and replaced with "Payless Shoesource Canada GP Inc."

Other Grounds

12. The CCAA, including Part IV and section 49 thereof;

13. Paragraph 34 of the Supplemental Order; and

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14. Such further and other grounds as counsel may advise and this Honourable Court may

pennit.

THE FOLLOWING DOCUMENTARY EVIDENCE will be used at the hearing of the

motion:

I. The affidavit of Michael Schwindle to be sworn, the Affidavit of Michael Shakra sworn

June 16, 2017 and the exhibits referred to therein;

2. The Initial Recognition Order;

3. The Supplemental Order;

4. The Final Orders;

5. The First Report of the Infonnation Officer dated June 7, 2017;

6. The Second Report of the Infonnation Officer to be served; and

7. Such further and other materials as counsel may advise and this Honourable Court may

pern1it.

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June 16, 2017

TO: THE ATTACHED SERVICE LIST

OSLER, HOSKIN & HARCOURT, LLP P.O. Box 50, 1 First Canadian Place Toronto, ON M5X JBS

Marc Wassennan LSUC# 44066M Tel: 416.862.4908 [email protected]

John MacDonald LSUC# 25884R Tel: 416.862.5672 [email protected]

Shawn T. Irving LSUC# 500350 Tel: 416.862.4733 [email protected]

Fax: 416.862.6666

Lawyers for the Applicant

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Court File No.: CV-17-11758-00CL

ONTARIO SUPERIOR COURT OF JUSTICE

(COMMERCIAL LIST)

IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED

AND IN THE MATTER OF PAYLESS HOLDINGS LLC, PAYLESS SHOESOURCE CANADA INC., PAYLESS SHOESOURCE CANADA GP INC. AND THOSE OTHER

ENTITIES LISTED ON SCHEDULE "A" HERETO

APPLICATION OF PAYLESS HOLDINGS LLC UNDER SECTION 46 OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED

SERVICE LIST

Counsel/Party Te/epJ,one Facsimile Party

Osler Hoskin & Harcourt LLP 416.862.6666 Counsel for the Applicant P.O. Box 50, 1 First Canadian Place Toronto, ON M5X 1B8

Marc Wasserman 416.862.4908 [email protected]

John MacDonald 416.862.5672 [email protected]

Shawn Irving 416.862.4733 [email protected]

Patrick Riesterer 416.862.5947 [email protected]

Michael Shakra 416.862.6643 [email protected]

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Counsel/Party Telephone Facsimile Party

Kirkland & Ellis LLP 212-446-4900 US Counsel for the Chapter 601 Lexington Ave, New York, NY 11 Debtors 10022, USA

Nicole Greenblatt [email protected] 212.446.4664

Will Guerrieri [email protected] 312.862.7061

Cristine Pirro [email protected] 212.446.4748

Jessica Kuppersmith [email protected] 212.446.5956

Joshua M. Altman [email protected] 312.862.3625

Armstrong Teasdale LLP 314.621.5065 Local Agent for the Chapter 7700 Forsyth Blvd. Suite 1800 11 Debtors St. Louis, MO 63105, USA

Steven N. Cousins 314.342.8033 [email protected]

Alvarez & Marsal Canada Inc. 416.847.5201 Information Officer 200 Bay Street, Suite 2900Royal Bank South Tower, Toronto ON M5J 2Jl

Al Hutchens [email protected] 416.847.5159

Melanie MacKenzie mmackenzie(a),alvarezandmarsal.com 416.847.5158

Matthew Brouwer [email protected] 416.847.5182

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Counsel/Party Telephone Facsimile Party

Stikeman Elliott LLP 416.947.0866 Counsel to the Information 5300 Commerce Court West, 199 Bay Officer Street, Toronto, ON M5L 1B9

Ashley Taylor [email protected] 416.869.5236

Lee Nicholson 416.869 .5604 [email protected]

Norton Rose Fulbright Canada LLP 416.216.3930 Canadian Counsel to the DIP Royal Bank Plaza, South Tower, Suite ABL Lenders 3800, 200 Bay Street,Toronto, ON M5J2Z4

David Amato [email protected] 416.216.1861

Tony Reyes [email protected] 416.216.4825

Virginie Gauthier [email protected] om

416.216.4853

Choate, Hall & Stewart LLP 617.248.4000 Counsel to the DIP ABL Two International Place Lenders Boston, MA 02110

Kevin J. Simard 617. 248.4086 [email protected]

Jennifer Conway Fenn 617.248.4845 [email protected]

Douglas R. Gooding 617-248-5277

[email protected]

Thompson Coburn LLP 314.552.7000 Local Agent to the DIP ABL 505 N 7th St, St. Louis, Lenders MO 63101, USA

Mark V. Bossi 314.552.6000 mbossi@thomr:1soncoburn.com

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Counsel/Party Telephone Facsimile Party

Torys LLP 416.865.7380 Counsel to Cadillac Fairview 79 Wellington St W #3000, Toronto, ONM5K 1N2

David Bish [email protected] 416.865.7353

McLean & Kerr LLP 416.366.8571 Counsel to Morguard, 130 Adelaide Street West, Suite 2800 SmartReit, Crombie, Toronto, ON M5H 3P5 RioCan, 20 Vic, Triovest,

Springwood and Blackwood Linda Galessiere 416.364.5371 [email protected]

Gowling WLG (Canada) LLP 416.862.7661 Counsel to Ivanhoe 100 King St W #1600, Toronto, ONM5X 105

Cambridge Inc

Clifton Prophet 416.862.3509 [email protected]

Mark W. Crane 416.862.4309 [email protected]

Francois Viau 514.392.9530 [email protected]

Schulte Roth & Zabel LLP 212.593.5955 Counsel to TPG 919 Third Avenue New York, NY 10022 USA

Marc Friess 212.756.2081 marc.friess/al.srz.com

Adam Harris [email protected] 212.756.2253

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Counsel/Party Telephone Facsimile Party

Blaney McMurty LLP 416.596.2044 Counsel to Bentall Kennedy 1500 - 2 Queen Street East (Canada) LP, Quadreal Toronto, ON MSC 3G5 Property Group and First

JohnC. Wolf Capital Management ULC

[email protected] 416.593.2994

David T. Ullmann dullmannla)blaney.com

416.596.4289 Moneris Solutions Corporation 3300 Bloor Street West Toronto, ON M8X 2X2

Rose Klimsiakrose. 416.734.1435 [email protected]

Fogler, RubinoffLLP 416.941.8852 Counsel to Doral Holdings Suite 3000, P.O. Box 95 Limited and 430635 Ontario Toronto-Dominion Centre Inc. 77 King Street West? Toronto Ontario M5K 1 G8

VemW.DaRe 416.941.8842 [email protected]

Cominar Real Estate Investment 418.681.2946 TrustComplexe Jules-Dallaire 2820 Laurier Blvd., Suite 850 Quebec City, QC GlVOCl

Andree-Lemay Roux [email protected] 418.681.8151

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Counsel/Party Telephone Facsimile Party

Province of British Columbia I Revenue 250.356.0700 and Taxation Group Legal Services Branch Ministry of Justice and Attorney General

Suite 400, 1675 Douglas Street, Victoria BC VSW 9J7

Aaron Welch Aaron. [email protected]

Revenue and Taxation Group, Legal Services Branch [email protected]

Borden Ladner Gervais LLP / 514.954.1905 Counsel to Bell Mobility, S.E.N.C.R.L., S.R.L Bell Canada and Bell Aliant 1000, rue De La Gauchetiere Ouest, Suite I Bureau 900, Montreal, QC H3B 5H4

Fran9ois D. Gagnon [email protected] 514.954.2553

Ouassim Tadlaoui [email protected] 514.954.3103

Alectra Utilities Inc. 2185 Derry Road West, Mississauga Ontario L5N 7 A6

Lawrence Wilde [email protected]

Borden Ladner Gervais LLP 416.367.6749 Counsel to Synerex Bay Adelaide Centre, East Tower, 22 Construction Group Inc. Adelaide St W, Toronto, ON M5H 4E3

James W. MacLellan 416.367.6592 [email protected]

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SCHEDULE "A"

ADDITIONAL CHAPTER 11 DEBTORS

Payless Intermediate Holdings LLC WBG PSS Holdings LLC Payless Inc. Payless Finance, Inc. Collective Brands Services, Inc. PSS Delaware Company 4, Inc. Shoe Sourcing, Inc Payless Shoesource, Inc Eastborough, Inc. Payless Purchasing Services, Inc. Payless Shoesource Merchandising, Inc. Payless Gold Value CO, Inc. Payless Shoesource Distribution, Inc. Payless Shoesource Worldwide, Inc. Payless NYC, Inc. Payless Shoesource of Puerto Rico, Inc. Payless Collective GP, LLC Collective Licensing, LP Collective Licensing International LLC Clinch, LLC Collective Brands Franchising Services, LLC Payless International Franchising, LLC Collective Brands Logistics, Limited Dynamic Assets Limited PSS Canada, Inc.

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THE HONOURABLE

R.S.J. MORA WETZ

Court File No.: CV-17-011758-00CL

ONTARIO SUPERIOR COURT OF JUSTICE

(COMMERCIAL LIST)

WEDNESDAY, THE21ST DAY OF JUNE, 2017

IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED

AND IN THE MATTER OF PAYLESS HOLDINGS LLC, PAYLESS SHOESHOURCE CANADA INC, PAYLESS SHOESOURCE CANADA GP INC AND

THE OTHER ENTITIES LISTED ON SCHEDULE "A" HERETO

APPLICATION OF PAYLESS HOLDINGS LLC UNDER SECTION 46 OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS

AMENDED

RECOGNITION ORDER

THIS MOTION, made by Payless Holdings LLC in its capacity as the foreign

representative (the "Foreign Representative") of Payless Shoesource Canada Inc., Payless

Shoesource Canada GP Inc. and Payless Shoesource Canada LP together with the other

entities listed in Schedule "N' hereto ( collectively. the "Chapter 11 Debtors" and each, a

"Chapter 11 Debtor"), pursuant to the Companies' Creditors Arrangement Act, R.S.C. 1985,

c. C-36, as amended (the "CCAA") for an Order: (i) recognizing and enforcing the terms of

the Final Orders (as defined below) entered by the United States Bankruptcy Court for the

Eastern District of Missouri (the "U.S. Court"); (ii) amending the title of these proceedings;

and (iii) for certain other relief, was heard this day at 330 University Avenue, Toronto,

Ontario.

ON READING the Notice of Motion dated June 16, 2017, the Affidavit of Michael

Schwindle sworn June•, 2017, the Affidavit of Michael Shakra sworn June 16, 2017, the

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First Report of the Information Officer dated June 7, 2017 (the "First Report") and the

Second Report of the Information Officer dated June•, 2017 (the "Second Report").

AND UPON HEARING the submissions of counsel for the Foreign Representative, counsel

for the Information Officer and those other parties present, no one else appearing although

duly served as appears from the affidavit of service of• sworn June •, 2017:

SERVICE

I. THIS COURT ORDERS that the time for service of the Notice of Motion and the

Motion Record is hereby abridged and validated so that this Motion is properly returnable

today and hereby dispenses with further service thereof.

RECOGNITION OF FOREIGN ORDERS

2. THIS COURT ORDERS that the following orders ( collectively, the "Final Orders")

of the U.S. Court are hereby recognized and given full force and effect in all provinces and

territories of Canada pursuant to section 49 of the CCAA:

(a) Final Order (I) Authorizing the Debtors to (A) Honor Certain Prepetition

Obligations to Customers and Partners and (B) Continue Certain Customer and

Partner Programs in the Ordinary Course of Business and (II) Granting Related

Relief (the "Final Customer and Partner Order");

(b) Final Order (I) Authorizing The Debtors to (A) Continue Insurance Coverage

Entered into Prepetition and Satisfy Prepetition Obligations Related Thereto

and (B) Renew, Supplement, or Purchase Insurance Policies, and (II) Granting

Related Relief (the "Final Insurance Order");

(c) Final Order (A) Authorizing the Debtors to Pay Certain Prepetition Claims of

(I) Critical Vendors and (II) Carrier, Warehousemen, and Section 503(B)(9)

Claimants and (B) Granting Related Relief (the "Final Critical Vendors

Order"):

( d) Final Order (I) Authorizing the Debtors to (A) Continue Using the Cash

Management System and (B) Maintain Existing Bank Accounts and Business

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Forms; (II) Authorizing Continued Intercompany Transactions; (III) Granting

Superiority Administrative Expense Status to Post-Petition Intercompany

Payments; and (IV) Granting Related Relief (the "Final Cash Management

Order"):

(e) Final Order (I) Authorizing the Debtors to (A) Pay Prepetition Wages, Salaries,

Other Compensation, and Reimbursable Expenses and (B) Continue Employee

Benefits Programs, and (II) Granting Related Relief (the "Final Prepetition

Wages and Benefits Order"):

(f) Final Order (I) Authorizing the Debtors to Continue and Renew the Surety

Bond Program on an Uninterrupted Basis, and (II) Granting Related Relief (the

"Final Surety Bond Order");

(g) Final Order (I) Authorizing the Payment of Certain Prepetition Taxes and Fees

and (II) Granting Related Relief (the "Final Prepetition Taxes and Fees

Order"); and

(h) Final Order (I) Prohibiting Utility Providers from Altering, Refusing, or

Discontinuing Utility Services, (II) Determining Adequate Assurance of

Payment for Future Utility Service, (III) Establishing Procedures for

Determining Adequate Assurance of Payment, and (IV) Granting Related

Relief (the "Final Utilities Order").

attached hereto as Schedules "B" to "I", provided, however, that in the event of any

conflict between the terms of the Final Orders and the Orders of this Court made in the

within proceedings, the Orders of this Court shall govern with respect to the Chapter

11 Debtors' current and future assets, undertakings and properties of every nature and

kind whatsoever in Canada.

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AMENDMENTS TO INITIAL RECOGNITION ORDER AND SUPPLEMENTAL ORDER (FOREIGN MAIN PROCEEDING)

3. THIS COURT ORDERS that all references contained in the Initial Recognition Order

issued by this Court on April 7, 2017 and in the Supplemental Order (Foreign Main

Proceeding) issued by this Court on April 12, 2017 to "Payless Shoesource GP Inc." are

hereby deleted and replaced with references to "Payless ShoeSource Canada GP Inc."

INFORMATION OFFICER

4. THIS COURT ORDERS that the First Report, the Second Report and the activities of

the Information Officer described therein, be and are hereby approved.

AID AND ASSISTANCE

5. THIS COURT HEREBY REQUESTS the aid and recognition of any court, tribunal,

regulatory or administrative body having jurisdiction in Canada or in the United States, to

give effect to this Order and to assist the Chapter 11 Debtors, the Foreign Representative, the

Information Officer, and their respective agents in carrying out the terms of this Order. All

courts, tribunals, regulatory and administrative bodies are hereby respectfully requested to

make such orders and to provide such assistance to the Chapter 11 Debtors, the Foreign

Representative and the Information Officer, the latter as an officer of this Court, as may be

necessary or desirable to give effect to this Order, or to assist the Chapter 11 Debtors, the

Foreign Representative, the Information Officer, and their respective agents in carrying out

the terms of this Order.

6. THIS COURT ORDERS that each of the Chapter 11 Debtors, the Foreign

Representative and the Information Officer be at liberty and is hereby authorized and

empowered to apply to any court, tribunal, regulatory or administrative body, wherever

located, for the recognition of this Order and for assistance in carrying out the terms of this

Order.

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SCHEDULE A - ADDITIONAL CHAPTER 11 DEBTORS

Payless Intermediate Holdings LLC WBG PSS Holdings LLC Payless Inc. Payless Finance, Inc. Collective Brands Services, Inc. PSS Delaware Company 4, Inc. Shoe Sourcing, Inc Payless Shoesource, Inc Eastborough, Inc. Payless Purchasing Services, Inc. Payless Shoesource Merchandising, Inc. Payless Gold Value CO, Inc. Payless Shoesource Distribution, Inc. Payless Shoesource Worldwide, Inc. Payless NYC, Inc. Payless Shoesource of Puerto Rico, Inc. Payless Collective GP, LLC Collective Licensing, LP Collective Licensing International LLC Clinch, LLC Collective Brands Franchising Services, LLC Payless International Franchising, LLC Collective Brands Logistics, Limited Dynamic Assets Limited PSS Canada, Inc.

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SCHEDULEB

Final Customer and Partner Order

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Case 17-42267 Doc 638 Filed 05/09/17 Entered 05/09/1715:57:36 Main Document Pg 1 of 5

In re:

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

) Case No. 17-42267-659 ) Chapter 11

Payless Holdings LLC, et al.,

Debtors.

) ) Jointly Administered ) ) Related Docket Nos.: 21, 92

FINAL ORDER (I) AUTHORIZING THE DEBTORS TO (A) HONOR

CERTAIN PREPETITION OBLIGATIONS TO CUSTOMERS AND PARTNERS AND (B) OTHERWISE CONTINUE CERTAIN CUSTOMER AND PARTNER PROGRAMS IN THE ORDINARY

COURSE OF BUSINESS AND (II) GRANTING RELATED RELIEF

Upon the motion (the "Motion") 1 of the above-captioned debtors and debtors m

possession (collectively, the "Debtors") for entry of a final order (this "Final Order"),

(a) authorizing the Debtors to (i) honor certain prepetition obligations to Customers and

Programs and (ii) maintain and administer the Customer Programs in the ordinary course of

business and in a manner consistent with past practice, and (b) granting related relief, all as more

fully set forth in the Motion; and upon the First Day Declaration; and this Court having

jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and Rule 81-9.0l(B)(l) of

the Local Rules of the United States District Court for the Eastern District of Missouri; and this

Court having found that this is a core proceeding pursuant to 28 U.S.C. § 157(b)(2), and that this

Court may enter a final order consistent with Article III of the United States Constitution; and

this Court having found that venue of this proceeding and the Motion in this district is proper

pursuant to 28 U.S.C. §§ 1408 and 1409; and this Court having found that the relief requested in

Capitalized terms used but not otherwise defined in this Final Order shall have the meanings ascribed to them in the Motion or in the First Day Declaration, as applicable.

21

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the Motion is in the best interests of the Debtors' estates, their creditors, and other parties-in­

interest; and this Court having found that the Debtors' notice of the Motion and opportunity for a

hearing on the Motion were appropriate under the circumstances and no other notice need be

provided; and this Court having reviewed the Motion and having heard the statements in support

of the relief requested therein at a hearing before this Court ( the "Hearing"); and this Court

having determined that the legal and factual bases set forth in the Motion and at the Hearing

establish just cause for the relief granted herein; and upon all of the proceedings had before this

Court; and after due deliberation and sufficient cause appeming therefor, it is

HEREBY ORDERED THAT:

I. The Motion is granted on a final basis as set forth herein.

2. The relief provided in the Interim Order is approved on a final basis.

3. The Debtors are authorized, but not directed, to honor and perform their Customer

Programs on a final basis; provided, however, that the Debtors shall honor their Gift Card

Program in Stores, including online and in those Stores that are being or will be identified for

closure pursuant to any motion.

4. The Debtors are authorized, but not directed, to continue, renew, and replace the

Customer Programs on a postpetition basis in the ordinary course of their businesses and

consistent with their prepetition practices.

5. Notwithstanding the relief granted herein and any actions taken hereunder,

nothing contained in the Motion or this Interim Order or any payment made pursuant to this

Interim Order shall constitute, nor is it intended to constitute, (a) an admission as to the validity

of any prepetition claim against a Debtor entity, (b) a waiver of the Debtors' rights to dispute any

prepetition claim of any groups, (c) a promise or a requirement to pay a prepetition claim, (d) an

2

22

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implication or admission that any particular claim is of a type specified or defined in this Final

Order or the Motion, ( e) a request or authorization to assume any prepetition agreement,

contract, or lease pursuant to section 365 of the Bankruptcy Code, (f) a waiver or limitation of

the Debtors' rights or the rights of any other person under the Bankruptcy Code or any other

applicable law, (g) an admission as to the validity or priority of any claim or lien against the

Debtors, or (h) a waiver of the Debtors' rights to subsequently dispute such claim or lien.

6. The banks and financial institutions on which checks were drawn or electronic

payment requests made in payment of the prepetition obligations approved herein are authorized,

but not directed, to receive, process, honor, and pay all such checks and electronic payment

requests when presented for payment, provided that sufficient funds are on deposit and standing

in the Debtors' credit in the applicable bank accounts to cover such payments, and all such

banks and financial institutions are authorized to rely on the Debtors' designation of any

particular check or electronic payment request as approved by this Final Order without any duty

of further inquiry and without liability for following the Debtors' instructions.

7. The Debtors are authorized to issue postpetition checks, or to affect postpetition

fund transfer requests, in replacement of any checks or fund transfer requests that are dishonored

as a consequence of these chapter 11 cases with respect to prepetition amounts owed in

connection with the Customer Programs.

8. Nothing contained in the Motion or this Final Order is intended or should be

construed to create an administrative priority claim on account of any Customer Programs.

9. Notwithstanding anything to the contrary contained herein, any payment made or

to be made under this Final Order, any authorization contained in this Final Order, or any claim

for which payment is authorized hereunder, shall be subject to any orders of this Court approving

3

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any debtor in possession financing for, or any use of cash collateral by, the Debtors , and any

documents providing for such debtor in possession financing and the budget governing such

debtor in possession financing and use of cash collateral.

10. Notice of the Motion satisfies the requirements of Bankruptcy Rule 6004(a).

11. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this Final

Order are immediately effective and enforceable upon its entry.

12. No later than two (2) business days after the date of this order, the Debtors shall

serve a copy of the Final Order on the Notice Parties and shall file a certificate of service no later

than 24 hours after service.

DATED: May 9, 2017 St. Louis, Missouri jjh

4

a.~-IY A. SURRATT-STATES

Chief United States Bankruptcy Judge

24

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Order Prepared by:

Steven N. Cousins MO 30788 Erin M. Edelman MO 67374 John G. Willard MO 67049 Armstrong Teasdale LLP 7700 Forsyth Boulevard, Suite 1800 St. Louis, Missouri 63105 Telephone: (314) 621-5070 Facsimile: (314) 621-2239 Email: [email protected] Email: [email protected] Email: [email protected]

Nicole L. Greenblatt, P.C. (admitted pro hac vice) Cristine F. Pirro (admitted pro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 60 I Lexington Avenue New York, New York 10021 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: [email protected] Email: [email protected]

James H.M. Sprayregen, P.C. William A. Guerrieri (admitted pro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Email: [email protected]

Counsel to Debtors and Debtors in Possession

5

25

SCHEDULEC

Final Insurance Order

26

Case 17-42267 Doc 634 Filed 05/09/17 Entered 05/09/17 15:47:41 Main Document Pg 1 of 5

In re:

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

) Case No. 17-42267-659 ) Chapter 11

Payless Holdings LLC, et al.,

Debtors.

) ) Jointly Administered ) ) Related Docket Nos.: 10, 89

FINAL ORDER (I) AUTHORIZING THE DEBTORS TO (A) CONTINUE INSURANCE

COVERAGE ENTERED INTO PREPETITION AND SATISFY PREPETITION OBLIGATIONS RELATED

THERETO AND (B) RENEW, SUPPLEMENT, OR PURCHASE INSURANCE POLICIES, AND (II) GRANTING RELATED RELIEF

Upon the motion (the "Motion") 1 of the above-captioned debtors and debtors m

possession (collectively, the "Debtors") for entry of a final order (this "Final Order"),

(a) authorizing the Debtors to (i) continue insurance coverage entered into prepetition and satisfy

payment of prepetition obligations related thereto in the ordinary course of business and

(ii) renew, supplement, or purchase insurance coverage in the ordinary course of business, and

(b) granting related relief, all as more fully set forth in the Motion; and upon the First Day

Declaration; and this Court having jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and

1334 and Rule 81.901(B)(I) of the Local Bankruptcy Rules of the United States District Court

for the Eastern District of Missouri; and this Court having found that this is a core proceeding

pursuant to 28 U.S.C. § 157(b)(2), and that this Court may enter a final order consistent with

Article III of tlie United States Constitution; and this Court having found that venue of this

proceeding and the Motion in this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409; and

this Court having found that the relief requested in the Motion is in the best interests of the

Capitalized terms used but not otherwise defined in this Order shall have the meanings ascribed to them in the Motion or in the First Day Declaration, as applicable.

27

Case 17-42267 Doc 634 Filed 05/09/17 Entered 05/09/17 15:47:41 Main Document Pg 2 of 5

Debtors' estates, their creditors, and other parties in interest; and this Court having found that the

Debtors' notice of the Motion and opportunity for a hearing on the Motion were appropriate

under the circumstances and no other notice need be provided; and this Court having reviewed

the Motion and having heard the statements in support of the relief requested therein at a hearing

before this Court ( the "Hearing"); and this Court having determined that the legal and factual

bases set forth in the Motion and at the Hearing establish just cause for the relief granted herein;

and upon all of the proceedings had before this Court; and after due deliberation and sufficient

cause appearing therefor, it is

HEREBY ORDERED THAT:

1. The Motion is granted on a final basis as set forth herein.

2. The relief provided in the Interim Order is approved on a final basis.

3. The Debtors are authorized, but not directed, to continue the Insurance Policies,

including, but not limited to those identified on Exhibit A to the Motion,2 in the ordinary course

of business and to pay any prepetition and postpetition obligations related to the Insurance

Policies, including, without limitation, paying any amounts owed on account of Premiums,

Deductible Fees, Insurance Administrator Fees, Brokerage Fees, and other fees and costs in the

ordinary course of business.

4. The Debtors are authorized, but not directed, to renew, supplement, modify, or

purchase Insurance Policies on a postpetition basis to the extent that the Debtors determine that

such action is in the best interest of their estates.

5. The Debtors are authorized, but not directed, to honor any amounts owed on

account of any Insurance Policy Audits in the ordinary course of business.

1 For the avoidance of doubt, Insurance Policies shall include all insurance policies, whether current or expired, and any agreements related thereto.

2

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6. Nothing herein alters or amends the terms and conditions of any Insurance Policy

or relieves the Debtors of any of their obligations under the Insurance Policies.

7. The banks and financial institutions on which checks were drawn or electronic

payment requests made in payment of the prepetition obligations approved herein are authorized,

but not directed, to receive, process, honor, and pay all such checks and electronic payment

requests when presented for payment, and all such banks and financial institutions are authorized

to rely on the Debtors' designation of any particular check or electronic payment request as

approved by this Final Order.

8. The Debtors are authorized to issue postpetition checks, or to effect postpetition

fund transfer requests, in replacement of any checks or fund transfer requests that are dishonored

as a consequence of these chapter 11 cases with respect to prepetition amounts owed in

connection with any Insurance Policies.

9. Notwithstanding anything to the contrary contained herein, any payment made or

to be made under this Order, any authorization contained in this Order, or any claim for which

payment is authorized hereunder, shall be subject to any orders of this Court approving any

debtor in possession financing for, or any use of cash collateral by, the Debtors, and any

documents providing for such debtor in possession financing and the budget governing such

debtor in possession financing and use of cash collateral.

10. Notwithstanding the relief granted herein and any actions taken hereunder,

nothing contained in the Motion or this Final Order or any payment made pursuant to this Final

Order shall constitute, nor is it intended to constitute, an admission as to the validity or priority

of any claim or lien against the Debtors, a waiver of the Debtors' rights to subsequently dispute

such claim or lien, or the assumption or adoption of any agreement, contract, or lease under

3

29

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section 365 of the Bankruptcy Code.

I I. Notice of the Motion satisfies the requirements set forth m Bankruptcy

Rule 6004(a).

12. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this Final

Order are immediately effective and enforceable upon its entry.

I 3. No later than two (2) business days after the date of this Order, the Debtors shall

serve a copy of the Order on the Notice Parties and shall file a certificate of service no later than

24 hours after service.

DATED: May 9, 2017 St. Louis, Missouri jjh

4

~0.~-Mt@ KAY A. SURRATT-STATES

Chief United States Bankruptcy Judge

30

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Order Prepared by:

Steven N. Cousins MO 30788 Erin M. Edelman MO 67374 John G. Willard MO 67049 Armstrong Teasdale LLP 7700 Forsyth Boulevard, Suite 1800 St. Louis, Missouri 63105 Telephone: (314) 621-5070 Facsimile: (314) 621-2239 Email: [email protected] Email: [email protected] Email: [email protected]

Nicole L. Greenblatt, P.C. (admitted pro hac vice) Cristine F. Pirro ( admitted pro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 601 Lexington Avenue New York, New York 10021 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: [email protected] Email: [email protected]

James H.M. Sprayregen, P.C. William A. Guerrieri (admitted pro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Email: [email protected]

Counsel to Debtors and Debtors in Possession

5

31

SCHEDULED

Final Critical Vendors Order

32

Case 17-42267 Doc 642 Filed 05/09/17 Entered 05/09/17 16:12:08 Main Document Pg 1 of 8

In re:

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

) Case No. 17-42267-659 ) Chapter 11

Payless Holdings LLC, et al.,

Debtors.

) ) Jointly Administered ) ) Related Docket Nos.: 30, 94

FINAL ORDER (A) AUTHORIZING THE DEBTORS

TO PAY CERTAIN PREPETITION CLAIMS OF (I) CRITICAL VENDORS AND (II) CARRIER, WAREHOUSEMEN,

AND SECTION 503(B)(9) CLAIMANTS AND (B) GRANTING RELATED RELIEF

Upon the motion (the "Motion")! of the above-captioned debtors and debtors m

possession (collectively, the "Debtors") for entry of a final order (this "Final Order"),

(a) authorizing, but not directing, the Debtors to pay prepetition claims held by (i) Critical

Vendors; (ii) Carriers and Warehousemen; and (iii) 503(b)(9) Claimants (collectively, the

"Vendor Claims") in the aggregate in an amount not to exceed $113 million on a final basis; and

(b) granting related relief; all as more fully set forth in the Motion; and upon the First Day

Declaration; and this Court having jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and

1334 and Rule 81-9.0l(B)(l) of the Local Rules of the United States District Court for the

Eastern District of Missouri; and this Court having found that this is a core proceeding pursuant

to 28 U.S.C. § 157(b)(2), and that tl1is Court may enter a final order consistent with Article III of

the United States Constitution; and this Court having found that venue of this proceeding and the

Motion in this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409; and this Comi having

found that the relief requested in the Motion is in the best interests of the Debtors' estates, their

Capitalized terms used but not otherwise defined in this Final Order shall have the meanings ascribed to such terms elsewhere in the Motion or in the First Day Declaration, as applicable.

33

Case 17-42267 Doc 642 Filed 05/09/17 Entered 05/09/17 16:12:08 Main Document Pg 2 of 8

creditors, and other parties in interest; and this Court having found that the Debtors' notice of the

Motion and opportunity for a hearing on the Motion were appropriate and no other notice need

be provided; and this Court having reviewed the Motion and having heard the statements in

support of the relief requested therein at a hearing before this Court ( the "Hearing"); and this

Court having determined that the legal and factual bases set forth in the Motion and at the

Hearing establish just cause for the relief granted herein; and upon all of the proceedings had

before this Court; and after due deliberation and sufficient cause appearing therefor, it is

HEREBY ORDERED THAT:

1. The Motion is granted as set forth herein on a final basis.

2. The relief provided in the Interim Order is approved on a final basis.

3. The Debtors are authorized, but not directed, to pay the prepetition Vendor

Claims in the ordinary course of business and consistent with their prepetition practices;

provided that such payments shall not exceed $113 million in the aggregate unless otherwise

ordered by the Court after notice and a hearing; provided fi1rther that:

(a) the Debtors' professionals and the Committee's professionals shall have a weekly telephonic meeting during which the Debtors' professionals shall provide an update with respect to proposals made before and after the entry of this Final Order to holders of Vendor Claims, the status thereof, and any other information reasonably requested by the Committee regarding the proposals; provided, that, the Consenting First Lien Ad Hoc Committee's (as defined in the RSA) professionals shall receive reasonable advance notice of any such weekly meeting and an opportunity to participate therein;

(b) the Debtors shall provide the Committee's professionals with a list, which may be provided by electronic mail, of any Vendor Claims sought to be paid (the "Vendor Claims List") in conjunction with a proposal made after the entry of this Final Order, which Vendor Claims List shall identify, without limitation, the following information: (i) the Debtor(s) against which the Vendor Claim is

2

34

Case 17-42267 Doc 642 Filed 05/09/17 Entered 05/09/17 16:12:08 Main Document Pg 3 of 8

asserted; (ii) the amount of the Vendor Claim; (iii) the claimant asserting the Vendor Claim; (iv) the basis for the Vendor Claim, including the estimated amount of such Vendor Claim that is entitled to priority under section 503 (b )(9) of the Bankruptcy Code and the amount that is a general unsecured claim; (v) and whether the Debtors are providing a waiver under section 54 7 of the Bankruptcy Code; provided, however, that the Committee's professionals shall keep the Vendor Claims List confidential and not disclose any of the information in the matrix to anyone including but not limited to any member of the Committee without the prior written consent of the Debtors; provided, that, the Debtors shall simultaneously provide the Consenting First Lien Ad Hoc Committee's professionals with a copy of such Vendor Claims List;

(c) the Committee's professionals shall have until 5:00 p.m. prevailing Central Time on the third business day after receipt of the Vendor Claims List to review the Vendor Claims List (the "List Review Period") and notify the Debtors in writing, which may be by electronic mail, of any issues (the "Issues") with respect to the payment of any Vendor Claim above $500,000 (the "Notified Payment"); provided, that, any such notice shall simultaneously be provided to the Consenting First Lien Ad Hoc Committee's professionals;

( d) if the Committee does not notify the Debtors of any Issues by the expiration of the List Review Period, or if the Committee consents to the proposed Notified Payment before expiration of the List Review Period, the Debtors shall be permitted to pay the applicable Vendor Claims, subject to the terms of this Final Order;

(e) if the Committee timely notifies the Debtors of any Issue with respect to any Notified Payment (thereafter, a "Questioned Payment") prior to the expiration of the List Review Period, then the Debtors and the Committee shall attempt to resolve the Issues surrounding such Questioned Payment consensually. If no consensual resolution is reached by the date that is five (5) days following delivery of notice of the proposed payment (the "Resolution Date"), the Committee may file a formal objection on the docket and any such objection shall be resolved by the Court at a hearing to be scheduled at the Court's earliest convenience. If the Committee fails to object within two (2) business days of the Resolution Date, the Debtors shall

3

35

Case 17-42267 Doc 642 Filed 05/09/17 Entered 05/09/17 16:12:08 Main Document Pg 4 of 8

be authorized to make the proposed payment without further Court order. For the avoidance of doubt, the Debtors may pay any Vendor Claim other than any Questioned Payment.

4. The Debtors are authorized, but not directed, to pay Vendor Claims, in whole or

in part, upon such terms and in the manner provided in this Final Order, and upon such terms as

agreed to between the Debtor and the Critical Vendor in the Debtors' sole reasonable business

judgment; provided that if any party accepts payment hereunder and does not continue supplying

goods or services to the Debtors in accordance with the Trade Terms (a) the Debtors may take

any and all appropriate steps to recover from such Vendor any payments made to it on account of

its prepetition claim to the extent that such payments exceed the postpetition amounts then owing

to such party; (b) upon recovery by the Debtors, any prepetition claim of such party may be

reinstated as if the payment on account thereof had not been made; and ( c) if an outstanding

postpetition balance is due from the Debtors to such party, the Debtors may elect to

recharacterize and apply any payment made pursuant to this Final Order to such outstanding

postpetition balance and such party will be required to repay to the Debtors such paid amounts

that exceed the postpetition obligations then outstanding without the right of any setoffs, claims,

provisions for payment of any claims, or otherwise.

5. If any Vendor is paid with respect to its Vendor Claim and thereafter does not

continue to provide goods or services to the Debtors in accordance with the Trade Terms, any

payments made to the Vendor shall be subject to avoidance under section 549 of the Bankruptcy

Code and shall be recoverable by the Debtors in cash upon written request. Upon recovery by

the Debtors, the Vendor Claim shall be reinstated as a prepetition claim in the amount recovered.

6. Nothing herein shall impair or prejudice the ability of the Debtors or any party in

interest to contest the extent, perfection, priority, validity, or amounts of any claims held by any

4

36

Case 17-42267 Doc 642 Filed 05/09/17 Entered 05/09/17 16:12:08 Main Document Pg 5 of 8

Critical Vendor. The Debtors do not concede that any claims satisfied pursuant to this Final

Order are valid, and the Debtors expressly reserve all of their rights and the rights of any party in

interest to contest the extent, validity, or perfection or seek the avoidance of all such liens or the

priority of such claims.

7. All undisputed obligations related to the Outstanding Orders are granted

administrative expense priority in accordance with section 503(b)(l)(A) of the Bankruptcy Code.

8. The Debtors are authorized, but not directed, to pay all undisputed amounts

related to the Outstanding Orders in the ordinary course of business consistent with the parties'

customary practices in effect prior to the Petition Date.

9. Nothing herein or in the Motion shall be constrned to limit, or in any way affect,

the Debtors' ability to dispute or contest the amount of, or basis for, any claims against the

Debtors arising in connection with the Outstanding Orders.

10. Notwithstanding the relief granted herein and any actions taken hereunder,

nothing contained in the Motion or this Final Order or any payment made pursuant to this Final

Order shall constitute, nor is it intended to constitute, an admission as to the validity or priority

of any claim or lien against the Debtors, a waiver of the Debtors' rights or the rights of any party

in interest to subsequently dispute such claim or lien, or the assumption or adoption of any

agreement, contract, or lease under section 365 of the Bankruptcy Code.

11. The banks and financial institutions on which checks were drawn or electronic

payment requests made in payment of the prepetition obligations approved herein are authorized,

but not directed, to receive, process, honor, and pay all such checks and electronic payment

requests when presented for payment, provided that sufficient funds are on deposit and standing

in the Debtors' credit in the applicable bank accounts to cover such payments, and all such banks

5

37

Case 17-42267 Doc 642 Filed 05/09/17 Entered 05/09/1716:12:08 Main Document Pg 6 of 8

and financial institutions are authorized to rely on the Debtors' designation of any particular

check or electronic payment request as approved by this Final Order without any duty of further

inquiry and without liability for following the Debtors' instructions.

12. The Debtors are authorized to issue postpetition checks, or to effect postpetition

fund transfer requests, in replacement of any checks or fund transfer requests that are dishonored

as a consequence of these chapter 11 cases with respect to prepetition amounts owed in

connection with any Critical Vendor Claims.

13. Notice of the Motion as provided therein shall be deemed good and sufficient

notice of such motion and the requirements of Bankruptcy Rule 6004(a) and the Local

Bankruptcy Rules are satisfied by such notice.

14. To the extent that this Final Order is inconsistent with any prior order or pleading

with respect to the Motion in these cases, the terms of this Final Order shall govern.

15. Notwithstanding anything to the contrary contained herein, any payment made or

to be made under this Final Order, any authorization contained in this Final Order, or any claim

for which payment is authorized hereunder, shall be subject to any orders of this Court approving

any debtor in possession financing for, or any use of cash collateral by, the Debtors, and any

documents providing for such debtor in possession financing and the budget governing such

debtor in possession financing and use of cash collateral.

16. Any party who accepts payment in full from the Debtors ofa Vendor Claim shall

take all actions necessary to remove any mechanics' liens, possessory liens, or similar state law

trade liens on the Debtors' assets such party may have based upon such Vendor Claim at such

party's sole expense.

17. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this Final

6

38

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Order are immediately effective and enforceable upon its entry.

18. No later than two (2) business days after the date of this order, the Debtors shall

serve a copy of the Final Order on the Notice Parties and shall file a certificate of service no later

than 24 hours after service.

DATED: May 9, 2017 St. Louis, Missouri .Uh

7

t/,.+t, .. O.~ -lt.t@ ~y A. SURRATT-STATES Chief United States Bankruptcy Judge

39

Case 17-42267 Doc 642 Filed 05/09/17 Entered 05/09/1716:12:08 Main Document Pg 8 of 8

Order Prepared By:

Steven N. Cousins MO 30788 Erin M. Edelman MO 67374 John G. Willard MO 67049 Armstrong Teasdale LLP 7700 Forsyth Boulevard, Suite 1800 St. Louis, MO 63105 Telephone: (314) 621-5070 Facsimile: (314) 612-2239 Email: [email protected] Email: [email protected] Email: [email protected]

Nicole L. Greenblatt, P.C. (admitted pro hac vice) Cristine F. Pirro (admitted pro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 601 Lexington A venue New York, NY 10021 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: [email protected] Email: [email protected]

James H.M. Sprayregen, P.C. William A. Guerrieri (admitted pro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Email: [email protected]

Counsel to Debtors and Debtors in Possession

8

40

SCHEDULEE

Final Cash Management Order

41

Case 17-42267 Doc 892 Filed 05/25/17 Entered 05/25/1715:47:21 Main Document Pg 1 of 10

In re:

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

) Case No. 17-42267-659 ) Chapter 11

Payless Holdings LLC, et al.,

Debtors.

) ) Jointly Administered ) ) Related Docket No.: 22

FINAL ORDER (I) AUTHORIZING THE DEBTORS TO (A) CONTINUE USING THE

CASH MANAGEMENT SYSTEM AND (B) MAINTAIN EXISTING BANK ACCOUNTS AND BUSINESS FORMS;

(II) AUTHORIZING CONTINUED INTERCOMPANY TRANSACTIONS; (Ill) GRANTING SUPERIORITY ADMINISTRATIVE EXPENSE STATUS TO POST­

PETITION INTERCOMPANY PAYMENTS; AND (IV) GRANTING RELATED RELIEF

Upon the motion (the "Motion"/ of the above-captioned debtors and debtors in

possession ( collectively, the "Debtors") for the entry of a final order (this "Final Order" or

"Order"): (a) authorizing, but not directing, the Debtors to (i) continue to operate the Debtors'

cash management system, (ii) honor certain prepetition obligations related thereto, (iii) maintain

existing business forms, and (iv) continue to maintain business relationships with each other and

with non-Debtor affiliates consistent with historical practice; and (b) granting related relief, all as

more fully set forth in the Motion; and upon the First Day Declaration; and this Court having

found that the Com1 has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and

Rule 81.90 I (B)(l) of the Local Rules of the United States District Court for the Eastern District

of Missouri; and the Court having found that this is a core proceeding pursuant to 28 U.S.C.

§ I 57(b )(2), and that this Court may enter a final order consistent with Article III of the United

States Constitution; and the Court having found that venue of this proceeding and the Motion in

Capitalized terms used but not otherwise defined in this Order shall have the meanings ascribed to such terms in the Motion.

42

Case 17-42267 Doc 892 Fited 05/25/17 Entered 05/25/17 15:47:21 Main Document Pg 2 of 10

this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409; and the Court having found that

the relief requested in the Motion is in the best interests of the Debtors' estates, their creditors,

and other parties in interest; and the Court having found that the Debtors provided appropriate

notice of the Motion and the opportunity for a hearing on the Motion under the circumstances;

and the Court having reviewed the Motion and having heard the statements in support of the

relief requested therein at a hearing before the Court (the "Hearing"); and the Court having

determined that the legal and factual bases set forth in the Motion and at the Hearing establish

just cause for the relief granted herein; and upon all of the proceedings had before the Court; and

after due deliberation and sufficient cause appearing therefor, it is

HEREBY ORDERED THAT:

1. The Motion is granted on a final basis as set forth herein.

2. The Debtors are authorized but not directed to: (a) continue using the Cash

Management System and honor any prepetition obligations related to the use thereof;

(b) designate, maintain, close, and continue to use on a final basis any or all of their existing

Bank Accounts, including, but not limited to, the Bank Accounts identified on Exhibit B

attached to the Motion, in the names and with the account numbers existing immediately before

the Petition Date; ( c) deposit funds in and withdraw funds from the Bank Accounts by all means,

including checks, wire transfers, ACH transfers, and other debits; ( d) treat their prepetition Bank

Accounts for all purposes as debtor in possession accounts; and (e) open new debtor in

possession Bank Accounts.

3. For banks at which the Debtors hold Bank Accounts that are not party to a

Unifonn Depository Agreement with the U.S. Trustee, the Debtors shall use their good-faith

effort to cause the banks to execute a Uniform Depository Agreement in a fom1 prescribed by the

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U.S. Trustee within 30 days of the Petition Date. The U.S. Trustee's rights to seek further relief

from this Court on notice in the event that the aforementioned banks are unwilling to execute a

Unifo1m Depository Agreement in a form prescribed by the U.S. Trustee are fully reserved.

4. The Debtors are authorized to deposit their cash in the Bank Accounts consistent

with their prepetition practices and the Cash Management System. The Debtors are relieved

from the obligations under section 345(b) of the Bankruptcy Code to obtain a bond from any

entity with which money is deposited or maintained in the Bank Accounts with respect to TD

Bank, for a period of 30 days from the date of this Order, and Cash Management Banks located

outside the United States of America; provided, however, that the Debtors shall use best efforts

to obtain the consent of TD Bank to enter into a Uniform Depository Agreement with the U.S.

Trustee. If TD Bank has not entered into a Uniform Depository Agreement with the U.S.

Trustee within 30 days of the date of this Order, the Debtors are directed to ensure that the

aggregate funds on deposit at TD Bank do not exceed $250,000 at any point during these

chapter 11 cases or until a Uniform Depository Agreement with the U.S. Trustee is executed and

the requirements contained therein fulfilled.

5. The Debtors are authorized, but not directed, to continue using, in their present

form, the Business Forms, as well as checks and other documents related to the Bank Accounts

existing immediately before the Petition Date, including electronic versions of the Debtors'

Business Forms, checks, and other documents related to the Bank Accounts.

6. Except as otherwise provided in this Final Order and only to the extent sufficient

funds standing in the Debtors' credit are available in each applicable Bank Account, all Cash

Management Banks at which the Bank Accounts are maintained are authorized, but not directed

to continue to service and administer the Bank Accounts as accounts of the Debtors as debtors in

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possession, without interruption and in the ordinary course of business, consistent with

prepetition practices, and to receive, process, honor, and pay any and all checks, drafts, wire

transfers, and ACH and other transfers issued, whether before or after the Petition Date, and

drawn on the Bank Accounts after the Petition Date by the holders or makers thereof, as the case

may be; provided that the Debtors will instruct the Cash Management Banks as to which checks,

drafts, wire transfers (excluding any wire transfers or ACH transactions that the Cash

Management Banks are obligated to settle), or other items presented, issued, or drawn, shall not

be honored. Each of the Debtors' existing depository and disbursement Cash Management

Banks is authorized to debit the Debtors' accounts in the ordinary course of business without the

need for further order of this Court for: (a) all checks drawn on the Debtors' Bank Accounts

which are cashed at such Cash Management Bank's counters or exchanged for cashier's checks

by the payees thereof prior to the Petition Date; (b) all checks or other items deposited in one of

the Debtors' Bank Accounts with such Cash Management Bank prior to the Petition Date which

have been dishonored or retnrned unpaid for any reason, together with any fees and costs in

com1ection therewith, to the same extent the Debtors were responsible for such items prior to the

Petition Date; and ( c) all undisputed prepetition amounts outstanding as of the date hereof, if

any, owed to any Cash Management Bank as service charges for the maintenance of the Cash

Management System.

7. Except for those checks, drafts, wires, or other ACH transfers that are authorized

or required to be honored under an order of the Court, no Debtor shall instrnct or request any

Cash Management Bank to pay or honor any check, draft, or other payment item issued on

a Bank Account prior to the Petition Date but presented to such Cash Management Bank for

payment after the Petition Date.

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8. Except as otheiwise provided in this Final Order, the Cash Management Banks

are authorized to charge, and the Debtors are authorized, but not directed, to pay, honor, or

allow, prepetition and postpetition fees, costs, charges, and expenses, including the Bank Fees,

and charge back returned items, whether such items were deposited prepetition or postpetition, to

the Bank Accounts in the ordinary course. Any such postpetition fees, costs, charges, and

expenses, including the Bank Fees, or charge-backs are not so paid shall be entitled to priority as

administrative expense pursuant to section 503(b)(l) of the Bankruptcy Code.

9. The Debtors' credit card processors are authorized to process payments in the

ordinary course of business, including the netting out of any fees and/or chargebacks whether

arising before or after the Petition Date.

10. Any payment that is authorized by the Debtors and paid from a Bank Account by

a Cash Management Bank before the Petition Date (including any ACH payment such Cash

Management Bank is or becomes obligated to settle), any instruments issued by such Cash

Management Bank on behalf of any Debtor pursuant to a "midnight deadline" or otheiwise, or

any reimbursement or charge back for any coin and currency orders provided by the Cash

Management Banks prior to the Petition Date shall be deemed to be paid prepetition, whether or

not actually debited from the Bank Account prepetition.

11. As soon as practicable after entry of this Final Order, the Debtors shall serve

a copy of this Final Order on the Cash Management Banks.

12. The U.S. Trustee Guidelines' requirement to establish separate accounts for tax

payments is hereby waived.

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13. With respect to Postpetition Intercompany Transactions occurring in the ordinary

course of business (including with respect to netting or setoffs), the Debtors are authorized, but

not directed, to continue such practices in the ordinary course of business.

14. Pursuant to sections 503(b)(l) and 364(b) of the Bankruptcy Code, all valid

postpetition payments on account of a Postpetition Intercompany Transaction made in the

ordinary course by (a) a Debtor to another Debtor or (b) a non-Debtor affiliate to a Debtor shall

in each case be accorded administrative expense status, subject and junior to the claims,

including adequate protection claims, granted in connection with any debtor in possession

financing in accordance with any order(s) of this Court approving any postpetition secured

debtor in possession financing and/or the use of cash collateral, except to the extent such

Postpetition Intercompany Transactions are on account of an antecedent debt. For the avoidance

of doubt, nothing herein shall alter paragraph 5 of the Final Order (I) Authorizing the Debtors to

Obtain Postpetition Financing, (II) Authorizing the Debtors to Use Cash Collateral,

(III) Granting Liens and Providing Superpriority Administrative Expense Status, (IV) Granting

Adequate Protection to the Prepetition Lenders, (V) Modifying the Automatic Stay, and

(VI) Granting Related Relief, including, without limitation, the definition of Excluded Property

(as defined therein).

15. Unless prohibited by applicable Jaw, transfers made by a Debtor to a non-Debtor

affiliate pursuant to a Postpetition Intercompany Transaction shall be deemed a claim against,

and Joan to, such non-Debtor affiliate (and not a contribution of capital), except to the extent

such Postpetition Intercompany Transactions are on account of antecedent debts.

16. Except as otherwise set forth herein, those certain existing deposit agreements

between the Debtors Cash Management Banks shall continue to govern the postpetition cash

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management relationship between the Debtors and the Cash Management Banks, and all

provisions of such agreements, including without limitation, the termination and fee provisions,

shall remain in full force and effect. Either the Debtors or the Cash Management Banks may,

without further Order of this Court, implement changes to the Cash Management System and

procedures in the ordinary course of business pursuant to the terms of those certain existing

deposit agreements, including, without limitation, the opening and closing of Bank Accounts.

17. The Debtors are authorized to open new bank accounts, so long as any such new

account is: (a) with one of the Debtors' existing Cash Management Banks; or (b) with a bank

that is (i) insured with the FDIC and (ii) designated as an authorized depository by the

U.S. Trustee pursuant to the U.S. Trustee Guidelines; and (c) the Debtors provide notice to the

U.S. Trustee and the Notice Parties of the opening of such account; provided that each account

opened by any of the Debtors on or after the Petition Date at any bank shall, for purposes of this

Final Order, be deemed a Bank Account as if it had been listed on Exhibit B attached to the

Motion, and the bank at which such new account is maintained shall, for purposes of this Final

Order, be deemed a Cash Management Bank.

18. Nothing contained herein shall prevent the Debtors from closing any Bank

Accounts as they may deem necessary and appropriate, to the extent consistent with any orders

of this Court relating thereto, and any relevant Cash Management Bank is instructed to honor the

Debtors' requests to close such Bank Accounts, and the Debtors shall give notice of the closure

of any Bank Account to the U.S. Trustee and the Notice Parties.

19. Notwithstanding any other provision of this Final Order, should any Cash

Management Bank honor a prepetition check or other item drawn on any account that is the

subject of this Final Order: (a) at the direction of the Debtors to honor such prepetition check or

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item, (b) in a good faith belief that the Court has authorized such prepetition check or item to be

honored, or ( c) as the result of an innocent mistake made despite implementation of customary

item handling procedures, such Cash Management Bank shall not be deemed to be nor shall be

liable to the Debtors, their estates or any other person or entity, or otherwise be in violation of

this Final Order. Any of the Debtors' Cash Management Banks may rely on the representations

of the Debtors with respect to whether any check or other payment order drawn or issued by the

Debtors prior to the Petition Date should be honored pursuant to this or any other order of the

Court, and such Cash Management Bank shall not have any liability to any party for relying on

such representations by the Debtors as provided for herein.

20. Notwithstanding the relief granted in this Final Order and any actions taken

pursuant to such relief, and subject to the administrative expense status afforded pursuant to

Paragraph 13 of this Final Order, nothing contained in the Motion or this Final Order or any

payment made pursuant to this Final Order shall constitute, nor is it intended to constitute, an

admission as to the validity or priority of any claim or lien against the Debtors, a waiver of the

Debtors' rights to subsequently dispute such claim or lien, or the assumption or adoption of any

agreement, contract, or lease under section 365 of the Bankruptcy Code.

21. Nothing in this Final Order authorizes the Debtors to accelerate any payments not

otherwise due prior to the date of the Final Hearing.

22. Notwithstanding anything to the contrary contained in this Final Order, any

payment made or to be made under this Final Order, any authorization contained in this Final

Order, or any claim for which payment is authorized hereunder, shall be subject to any orders of

this Court approving any debtor in possession financing for, or any use of cash collateral by, the

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Debtors, and any documents providing for such debtor in possession financing and the budget

governing such debtor in possession financing and use of cash collateral.

23. Nothing in this Final Order shall permit the Debtors to make or to cause their

non-debtor subsidiaries to make any postpetition transfers outside the ordinary course of

business.

24. The Debtors shall provide to the advisors to the Official Committee of Unsecured

Creditors appointed in these cases and the Prepetition First Lien Term Loan Steering Committee

a detailed report of intercompany balances by and among the Debtors and their non-debtor

subsidiaries. The format of such report shall be consistent with the materials previously shared

with the advisors to the Official Committee of Unsecured Creditors as well as with the advisors

to the Prepetition First Lien Term Loan Steering Committee and shall be due on or by the 25th

day following the Debtors' fiscal month close.

25. Notice of the Motion as provided therein shall be deemed good and sufficient

notice of such Motion and the requirements of Bankruptcy Rule 6004(a) are satisfied by such

notice.

26. Notwithstanding the possible applicability of Bankruptcy Rule 6004(h), the terms

and conditions of this Final Order shall be immediately effective and enforceable upon its entry.

27. All time periods set forth in this Final Order shall be calculated in accordance

with Bankruptcy Rule 9006(a).

28. No later than two (2) business days after the date of this Order, the Debtors shall

serve a copy of the Order on the Notice Parties and shall file a certificate of service no later than

24 hours after service.

DATED: May 25, 2017 St. Louis, Missouri .Lih

Chief United States Bankruptcy Judge

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Order Prepared By:

Steven N. Cousins MO 30788 Erin M. Edelman MO 67374 John G. Willard MO 67049 Armstrong Teasdale LLP 7700 Forsyth Boulevard, Suite 1800 St. Louis, Missouri 63105 Telephone: (314) 621-5070 Facsimile: (314) 621-2239 Email: [email protected] Email: [email protected] Email: [email protected]

Nicole L. Greenblatt, P.C. (admitted pro hac vice) Cristine F. Pirro (admitted pro hac vice) Kirkland & Ellis LLP Kirkland and Ellis International LLP 601 Lexington A venue New York, New York 10021 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: [email protected] Email: [email protected] James H.M. Sprayregen, P.C. William A. Guerrieri (admitted pro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Email: [email protected]

Counsel for Debtors and Debtors in Possession

10

51

SCHEDULEF

Final Prepetition Wages and Benefits Order

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In re:

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

) Case No. 17-42267-659 ) Chapter 11

Payless Holdings LLC, et al.,

Debtors.

) ) Jointly Administered ) ) Related Docket Nos.: 14, 68,240

FINAL ORDER (I) AUTHORIZING THE DEBTORS TO (A) PAY PREPETITION WAGES, SALARIES, OTHER

COMPENSATION, AND REIMBURSABLE EXPENSES AND (B) CONTINUE EMPLOYEE BENEFITS PROGRAMS, AND /II) GRANTING RELATED RELIEF

Upon the motion (the "Motion")1 of the above-captioned debtors and debtors m

possession (collectively, the "Debtors") for entry of a final order (this "Final Order"),

(a) authorizing, but not directing, the Debtors to (i) pay prepetition wages, salaries, other

compensation, and reimbursable expenses, and (ii) continue employee benefits programs in the

ordinary course of business, including payment of certain prepetition obligations related thereto,

and (b) granting related relief; all as more fully set forth in the Motion; and upon the First Day

Declaration; and this Court having jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and

1334 and Rule 81.90!(B)(I) of the Local Rules of the United States District Court for the

Eastern District of Missouri; and this Court having found that this is a core proceeding pursuant

to 28 U.S.C. § I 57(b )(2), and that this Court may enter a final order consistent with Article III of

the United States Constitution; and this Court having found that venue of this proceeding and the

Motion in this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409; and this Court having

found that the relief requested in the Motion is in the best interests of the Debtors' estates, their

creditors, and other parties in interest; and this Court having found that the Debtors provided

Capitalized terms used in this Order and not immediately defined have the meanings given to such terms in the Motion or in the First Day Declaration, as applicable.

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appropriate notice of the Motion and the opportunity for a hearing under the circumstances; and

this Court having reviewed the Motion and having heard the statements in support of the relief

requested therein at a hearing before this Court (the "Hearing"); and this Court having

determined that the legal and factual bases set forth in the Motion and at the Hearing establish

just cause for the relief granted herein; and upon all of the proceedings had before this Court; and

after due deliberation and sufficient cause appearing therefor, it is

HEREBY ORDERED THAT:

I. The Motion is granted on a final basis as set forth herein.

2. The relief provided in the Interim Order is approved on a final basis.

3. The Debtors are authorized, but not directed, to continue and modify the

Employee Compensation and Benefits on a postpetition basis, and to pay and honor prepetition

amounts related thereto, in each case in the ordinary course of business, and consistent with the

Debtors' prepetition policies and practices; provided that, the Debtors are not authorized to make

any payments on account of the Non-Insider Annual Incentive Plan pursuant to this Order;

provided ji,rther that, the Debtors shall not pay amounts of Non-Insider Severance Obligations

that were owed as of the Petition Date that exceed $80,000.00 to any single individual with five

years or less of employment with the Debtors unless such payment is consented to by the U.S.

Trustee or ordered by this Court.

4. The automatic stay of Section 362(a) of the Bankruptcy Code, to the extent

applicable, is hereby lifted to permit: (a)(i) Employees to proceed with their workers'

compensation claims, whether arising prior to or subsequent to the Petition Date, in the

appropriate judicial or administrative forum under the U.S. Workers' Compensation Program

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and the Canada Workers' Compensation Program,2 (ii) insurance carriers and third party

administrators providing coverage for any workers' compensation claims to handle, administer,

defend, settle and/or pay workers' compensation claims, (iii) the Debtors to pay all amounts

relating thereto in the ordinary course of business, and (iv) any insurance carrier and/or third

party administrators providing coverage for any workers' compensation claims to draw on any

and all letters of credit, and apply any proceeds thereof, provided on behalf of the Debtors

therefor pursuant to the terms of the Workers' Compensation Program without further order of

the Bankruptcy Court if any when the Debtors fail to pay and/or reimburse any insurance carriers

or third party administrators for any amounts in relation to any workers' compensation claim;

and (b) the notice requirements pursuant to Bankruptcy Rule 4001(d) with respect to clause (a)

of this paragraph 4 are waived. This modification of the automatic stay pertains solely to claims

under the U.S. Workers' Compensation Program and Canada Workers' Compensation Program.

5. Nothing herein (a) alters or amends the terms and conditions of the U.S. Workers'

Compensation Program or the Canada Workers Compensation Program including, but not

limited to, (i) the obligation, if any, of any insurer or third party administrator to pay any

amounts within a deductible and the right, if any, of an insurer or third party administrator to

seek reimbursement from the Debtors therefor, (ii) the obligation, if any, of the Debtors to

reimburse any insurer or third party administrator for defense costs, and (iii) the right, if any, of

any insurer or third party administrator to draw on any letters of credit, or apply any proceeds

thereof, if any, in subparagraphs (i) and (ii), above, to the extent that the Debtors fail to

reimburse the insurer or third party administrator therefor (and, to the extent necessary, the

For the avoidance of doubt, the Debtors' U.S. Workers Compensation Program and Canada Workers Compensation Program shall include all workers' compensation insurance policies, whether current or expired, and any agreements related thereto.

3

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automatic stay of section 362 of the Bankruptcy Code is hereby modified to permit such); (b)

relieves the Debtors of any of their other obligations under the U.S. Workers' Compensation

Program or the Canada Workers Compensation Program; ( c) creates or permits a direct right of

action against an insurance carrier or third party administrator; or (iv) precludes or limits, in any

way, the rights of any insurance carrier to contest and/or litigate the existence, primacy and/or

scope of available coverage under the U.S. Workers' Compensation Program or the Canada

Workers Compensation Program.

6. Notwithstanding the relief granted herein and any actions taken hereunder,

nothing contained in the Motion or this Final Order or any payment made pursuant to this Final

Order shall constitute, nor is it intended to constitute, an admission as to the validity or priority

of any claim or lien against the Debtors, a waiver of the Debtors' rights to subsequently dispute

such claim or lien, or the assumption or adoption of any agreement, contract, or lease under

section 365 of the Bankruptcy Code.

7. Nothing in the Motion or this Final Order shall impair the Debtors' or any other

party-in-interests' ability to contest the validity or amount of any payment made pursuant to this

Final Order.

8. Notwithstanding the relief granted herein or any action taken hereunder, nothing

contained in this Final Order shall create any rights in favor of, or enhance the status of any

claim held by, any Employee, Independent Contractor, Temporary Worker, or Temporary

Staffing Agency, or other person or entity.

9. The banks and financial institutions on which checks were drawn or electronic

payment requests made in payment of the prepetition obligations approved herein are authorized,

but not directed, to receive, process, honor, and pay all such checks and electronic payment

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requests when presented for payment, and all such banks and financial institutions are authorized

to rely on the Debtors' designation of any particular check or electronic payment request as

approved by this Final Order.

I 0. The Debtors are authorized to issue postpetition checks, or to effect postpetition

fund transfer requests, in replacement of any checks or fund transfer requests that are dishonored

as a consequence of these chapter 11 cases with respect to prepetition amounts owed in

connection with any Employee Compensation and Benefits.

11. Notwithstanding anything to the contrary contained herein, any payment made or

to be made under this Final Order, any authorization contained in this Final Order, or any claim

for which payment is authorized hereunder, shall be subject to any orders of this Court approving

any debtor in possession financing for, or any use of cash collateral by, the Debtors, and any

documents providing for such debtor in possession financing and the Budget governing such

debtor in possession financing and use of cash collateral.

12. Notice of the Motion satisfies the requirements of Bankruptcy Rule 6004(a).

13. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this Final

Order are immediately effective and enforceable upon its entry.

14. No later than 2 days after the date of this Final Order, the Claims and Noticing

Agent is directed to serve a copy of the Final Order and is directed to file a certificate of service

no later than 24 hours after service.

DATED: May9,2017 St. Louis, Missouri jjh

Chief United States Bankruptcy Judge

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Order Prepared by:

Steven N. Cousins MO 30788 Erin M. Edelman MO 67374 Jolm G. Willard MO 67049 Armstrong Teasdale LLP 7700 Forsyth Boulevard, Suite 1800 St. Louis, Missouri 63105 Telephone: (314) 621-5070 Facsimile: (314) 621-2239 Email: [email protected] Email: [email protected] Email: [email protected]

Nicole L. Greenblatt, P .C. (admitted pro hac vice) Cristine F. Pirro (admitted pro /we vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 60 I Lexington A venue New York, New York 10021 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: [email protected] Email: [email protected]

James H.M. Sprayregen, P.C. William A. Guerrieri (admitted pro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Email: [email protected]

Counsel to Debtors and Debtors in Possession

6

58

SCHEDULEG

Final Surety Bond Order

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In re:

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

) Case No. 17-42267-659 ) Chapter 11

Payless Holdings LLC, et al.,

Debtors.

) ) Jointly Administered ) ) Related Docket Nos.: 11, 90

FINAL ORDER (I) AUTHORIZING THE DEBTORS TO CONTINUE AND RENEW THE SURETY BOND PROGRAM ON

AN UNINTERRUPTED BASIS, AND (II) GRANTING RELATED RELIEF

Upon the motion (the "Motion")1 of the above-captioned debtors and debtors in

possession ( collectively, the "Debtors") for entry of a Final Order (this "Final Order" or

"Order"), (a) authorizing the Debtors to continue and renew the Surety Bond Program on an

uninterrupted basis, and (b) granting related relief, all as more fully set forth in the Motion; and

upon the First Day Declaration; and this Court having jurisdiction over this matter pursuant to 28

U.S.C. §§ 157 and 1334 and Rule 81.90 I (B)(l) of the Local Rules of the United States District

Court for the Eastern District of Missouri; and this Court having found that this is a core

proceeding pursuant to 28 U.S.C. § l 57(b )(2), and that this Court may enter a final order

consistent with Article III of the United States Constitution; and this Court having found that

venue of this proceeding and the Motion in this district is proper pursuant to 28 U.S.C. §§ 1408

and 1409; and this Court having found that the relief requested in the Motion is in the best

interests of the Debtors' estates, their creditors, and other parties in interest; and this Court

having found that the Debtors' provided appropriate notice of the Motion and the opportunity for

a hearing under the circumstances; and this Court having reviewed the Motion and having heard

Capitalized terms used but not otherwise defined in this Order shall have the meanings ascribed to such terms in the Motion.

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the statements in support of the relief requested therein at a hearing before this Court

(the "Hearing"); and this Court having determined that the legal and factual bases set forth in the

Motion and at the Hearing establish just cause for the relief granted herein; and any and all

objections having been resolved or overruled; and upon all of the proceedings had before this

Court; and after due deliberation and sufficient cause appearing therefor, it is

HEREBY ORDERED THAT:

I. The Motion is granted on a final basis as set forth herein.

2. The relief provided in the Interim Order is approved on a final basis.

3. The Debtors are authorized, but not directed, to maintain the Surety Bond

Program without inte1ruption, including paying all amounts arising thereunder in the ordinary

course of business on a postpetition basis, without interruption and in accordance with the same

practices and procedures as were in effect prior to the Petition Date.

4. The Debtors are authorized, but not directed, to renew existing surety bonds;

increase or decrease the size of any surety bond; obtain new surety bonds; perform under the

Surety Indemnity Agreements (including providing collateral security); replace their Surety

Brokers as is necessary; and execute any other agreements in connection with the Surety Bond

Program and all related instruments, documents, and papers, and to take all actions reasonably

appropriate with respect thereto.

5. The failure to specifically describe or include any particular feature of the Surety

Bond Program in this Order shall not diminish or impair the effectiveness of such feature, it

being the intent of this Court that the Surety Bond Program be approved in its entirety.

6. Notwithstanding anything herein to the contrary, the entry of this Final Order is

without prejudice to, and does not constitute a waiver of, expressly or implicitly, the rights,

2

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claims, and defenses (if any) of the Sureties under: (a) the Surety Indemnity Agreements, surety

bonds, or any related agreements with the Debtors; (b) applicable bankruptcy or non-bankruptcy

law; or ( c) any related letters of credit or cash collateral, all of which rights are expressly

reserved, nor shall it affect the Debtors' rights, claims, and defenses (if any) related thereto.

Nothing in this Final Order shall be construed to obligate any Surety to renew or increase the

amount of any existing surety bond or to issue any new surety bonds to the Debtors. To the

extent a Surety holds collateral pledged prepetition, the Surety has the right to keep and maintain

such collateral until the obligations on all of its bonds are released and discharged and may use

the collateral to pay claims on any bonds and losses, as defined in the Surety's indemnity

agreement(s) with the Debtors, in the ordinary course of business, and the prepetition collateral

will apply with equal force to surety bonds renewed and issued postpetition.

7. The banks and financial institutions on which checks were drawn or electronic

payment requests made in payment of the prepetition obligations approved herein are authorized,

but not directed, to receive, process, honor, and pay all such checks and electronic payment

requests when presented for payment, and all such banks and financial institutions are authorized

to rely on the Debtors' designation of any particular check or electronic payment request as

approved by this Final Order.

8. Notwithstanding the relief granted herein and any actions taken hereunder,

nothing contained in the Motion or this Final Order or any payment made pursuant to this Final

Order shall constitute, nor is it intended to constitute, an admission as to the validity or priority

of any claim or lien against the Debtors, a waiver of the Debtors' rights to subsequently dispute

such claim or lien, or the assumption or adoption of any agreement, contract, or lease under

section 365 of the Bankruptcy Code.

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9. Nothing in this Order or the Motion shall be construed as prejudicing the rights of

the Debtors or any other party in interest to dispute or contest the amount of or basis for any

claims against the Debtors in connection with or relating to the Surety Bond Program and

nothing herein renders any claim by any third party based on a prepetition actual, potential, or

asserted liability of the Debtors, which claim may or does result in a loss to a surety under the

Surety Bond Program, into a postpetition claim or expense of administration.

I 0. Except as expressly set forth herein, to the extent any surety bond or related

agreement is deemed an executory contract within the meaning of section 365 of the Bankruptcy

Code, neither this Order nor any payments made in accordance with this Order shall constih1te

(a) the assumption or postpetition reaffirmation of those surety bonds or related agreements

under section 3 65 of the Bankruptcy Code, (b) a grant of third-party beneficiary status or

bestowal of any additional rights on any third party, or (c) a waiver of any rights, claims or

defenses of the Debtors.

I I. The Debtors are authorized to issue postpetition checks, or to effect postpetition

fund transfer requests, in replacement of any checks or fund transfer requests that are dishonored

as a consequence of these chapter I I cases with respect to prepetition amounts owed in

connection with any obligations related to the Surety Bond Program.

I 2. Notwithstanding anything to the contrary contained herein, any payment made or

to be made under this Order, any authorization contained in this Order, or any claim for which

payment is authorized hereunder, shall be subject to any orders of this Court approving any

debtor in possession financing for, or any use of cash collateral by, the Debtors, and any

documents providing for such debtor in possession financing and the Budget governing such

debtor in possession financing and use of cash collateral.

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13. Notice of the Motion satisfies the requirements of Bankruptcy Rule 6004(a).

14. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this Order

are immediately effective and enforceable upon its entry.

15. No later than two (2) days after the date of this Order, the Debtors shall serve a

copy of the Order on the Notice Parties and shall file a certificate of service no later than 24

hours after service.

DATED: May 17, 2017 St. Louis, Missouri ]h

Chief United States Bankruptcy Judge

5

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Order Prepared By:

Steven N. Cousins MO 30788 Erin M. Edelman MO 67374 Jolm G. Willard MO 67049 Armstrong Teasdale LLP 7700 Forsyth Boulevard, Suite 1800 St. Louis, Missouri 63105 Telephone: (314) 621-5070 Facsimile: (314) 621-2239 Email: [email protected] Email: [email protected] Email: [email protected]

Nicole L. Greenblatt, P.C. (admitted pro hac vice) Cristine F. Pirro (admitted pro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 601 Lexington A venue New York, New York 10021 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: [email protected] Email: [email protected]

James H.M. Sprayregen, P.C. William A. Guerrieri (admitted pro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Email: [email protected]

Counsel for Debtors and Debtors in Possession

65

SCHEDULER

Final Prepetition Taxes and Fees Order

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In re:

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

) Case No. 17-42267-659 ) Chapter 11

PAYLESS HOLDINGS LLC, et al., ) ) Jointly Administered

Debtors. ) ) Related to Docket Nos.: 12, 91

FINAL ORDER (I) AUTHORIZING THE PAYMENT OF CERTAIN PREPETITION TAXES AND FEES AND (II) GRANTING RELATED RELIEF

Upon the motion (the "Motion")1 of the above-captioned debtors and debtors m

possession (collectively, the "Debtors") for entry of a final order (this "Final Order"),

(a) authorizing the Debtors to remit and pay certain taxes and fees on a postpetition basis in the

ordinary course of business; and (b) granting related relief; all as more fully set forth in the

Motion; and upon the First Day Declaration; and this Court having jurisdiction over this matter

pursuant to 28 U.S.C. §§ 157 and 1334 and Rule 81-9.0l(B)(l) of the Local Rules of the United

States District Court for the Eastern District of Missouri; and this Court having found that this is

a core proceeding pursuant to 28 U.S.C. § l 57(b )(2), and that this Court may enter a final order

consistent with Article III of the United States Constitution; and this Court having found that

venue of this proceeding and the Motion in this district is proper pursuant to 28 U.S.C. §§ 1408

and 1409; and this Court having found that the relief requested in the Motion is in the best

interests of the Debtors' estates, their creditors, and other parties-in-interest; and this Court

having found that the Debtors' notice of the Motion and opportunity for a hearing on the Motion

were appropriate under the circumstances and no other notice need be provided; and this Court

having reviewed the Motion and having heard the statements in support of the relief requested

Capitalized terms used but not otherwise defined in this Order shall have the meanings ascribed to such terms in the Motion or in the First Day Declaration, as applicable.

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therein at a hearing before this Court (the "Hearing"); and this Court having determined that the

legal and factual bases set forth in the Motion and at the Hearing establish just cause for the

relief granted herein; and upon all of the proceedings had before this Court; and after due

deliberation and sufficient cause appearing therefor, it is

HEREBY ORDERED THAT:

1. The Motion is granted on a final basis as set forth herein.

2. The relief provided in the Interim Order [Docket No. 91] is approved on a final

basis.

3. The Debtors are authorized, but not directed, to pay or remit the Taxes and Fees

described in the Motion that are due and owing on a prepetition basis without further order of the

Court.

4. The Debtors, are authorized, but not directed, to continue to pay or remit the

Taxes and Fees described in the Motion that accrue and will become payable in the ordinary

course on a postpetition basis during the pendency of these chapter 11 cases without further

order of the Court.

5. The banks and financial institutions on which checks were drawn or electronic

payment requests made in payment of the prepetition obligations approved herein are authorized,

but not directed, to receive, process, honor, and pay all such checks and electronic payment

requests when presented for payment, provided that sufficient funds are on deposit and standing

in the Debtors' credit in the applicable bank accounts to cover such payments, and all such banks

and financial institutions are authorized to rely on the Debtors' designation of any particular

check or electronic payment request as approved by this Final Order without any duty of further

inquiry and without liability for following the Debtors' instructions.

2

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6. Notwithstanding the relief granted herein and any actions taken hereunder,

nothing contained in the Motion or this Final Order or any payment made pursuant to this Final

Order shall constitute, nor is it intended to constitute, an admission as to the validity or priority

of any claim or lien against the Debtors, a waiver of the Debtors' rights to subsequently dispute

such claim or lien, or the assumption or adoption of any agreement, contract, or lease under

section 365 of the Bankruptcy Code.

7. Notwithstanding the relief granted herein or any actions taken hereunder, nothing

contained in this Final Order shall create any rights in favor of, or enhance the status of any

claim held by, any party in interest.

8. The Debtors are authorized to issue postpetition checks, or to affect postpetition

fund transfer requests, in replacement of any checks or fund transfer requests that are dishonored

as a consequence of these chapter 11 cases with respect to prepetition amounts owed in

connection with any Taxes and Fees.

9. Notwithstanding anything to the contrary contained herein, any payment made or

to be made under this Order, any authorization contained in this Order, or any claim for which

payment is authorized hereunder, shall be subject to any orders of this Court approving any

debtor in possession financing for, or any use of cash collateral by, the Debtors, and any

documents providing for such debtor in possession financing and the Budget governing such

debtor in possession financing and use of cash collateral.

I 0. Notice of the Motion satisfies the requirements set forth 111 Bankmptcy

Rule 6004(a).

11. Notwithstanding Bankruptcy Rule 6004(h), the tenns and conditions of this Final

Order are immediately effective and enforceable upon its entry.

3

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12. No later than two (2) business days after the date of this order, the Debtors shall

serve a copy of the Final Order on the Notice Parties and shall file a certificate of service no later

than 24 hours after service.

DATED: May9,2017 St. Louis, Missouri jjh

Order Prepared By:

Steven N. Cousins MO 30788 Erin M. Edelman MO 67374 John G. Willard MO 67049 Annstrong Teasdale LLP 7700 Forsyth Boulevard, Suite 1800 St. Louis, MO 63105 Telephone: (314) 621-5070 Facsimile: (314) 612-2239 Email: [email protected] Email: [email protected] Email: [email protected]

Nicole L. Greenblatt, P.C. (admitted pro J,ac vice) Cristine F. Pi1rn (admitted pro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 60 I Lexington Avenue NewYork,NY 10021 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: nicole.greenb][email protected] Email: [email protected]

James H.M. Sprayregen, P.C. William A. Guerrieri (admitted pro /,ac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Email: [email protected]

Counsel to Debtors and Debtors in Possession

~~0.~--KAY A. SURRATT-STATES

Chief United States Bankruptcy Judge

4

70

SCHDULEI

Final Utilities Order

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In re:

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

) Case No. 17-42267-659 ) Chapter 11

Payless Holdings LLC, et al.,

Debtors.

) ) Jointly Administered ) ) Related Docket Nos.: 20, 128

FINAL ORDER (I) PROHIBITING UTILITY PROVIDERS FROM ALTERING, REFUSING, OR DISCONTINUING UTILITY SERVICES,

(II) DETERMINING ADEQUATE ASSURANCE OF PAYMENT FOR FUTURE UTILITY SERVICE, (III) ESTABLISHING PROCEDURES FOR DETERMINING

ADEQUATE ASSURANCE OF PAYMENT, AND (IV) GRANTING RELATED RELIEF

Upon the motion (the "Motion") 1 of the above-captioned debtors and debtors in

possession (collectively, the "Debtors") for entry of a final order (this "Final Order"),

(a) prohibiting Utility Providers from altering, refusing, or discontinuing services;

(b) determining adequate assurance of payment for future Utility Services; ( c) establishing

procedures for determining adequate assurance of payment for future Utility Services;

( d) granting related relief; all as more fully set forth in the Motion; and upon the First Day

Declaration; and this Court having jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and

1334 and Rule 81.90l(B)(l) of the Local Rules of the United States District Court for the

Eastern District of Missouri; and that this Court may enter a final order consistent with Article III

of the United States Constitution; and this Court having found that venue of this proceeding and

the Motion in this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409; and this Court

having found that the Debtors' notice of the Motion and opportunity for a hearing on the Motion

were appropriate under the circumstances and no other notice need be provided; and this Court

Capitalized terms used but not otherwise defined in this Order shall have the meanings ascribed to such terms in the Motion or in the First Day Declaration, as applicable.

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having reviewed the Motion and having heard the statements in support of the relief requested

therein at a hearing before this Court (the "Hearing"); and this Court having determined that the

legal and factual bases set forth in the Motion and at the Hearing establish just cause for the

relief granted herein; and upon all of the proceedings had before this Court; and after due

deliberation and sufficient cause appearing therefor, it is

HEREBY ORDERED THAT:

I. The Motion is granted as set forth herein.

2. The Debtors shall serve a copy of this Final Order on any Utility Provider

identified prior to the entry of this Final Order no later than two business days after the date the

Final Order is entered.

3. All Utility Providers are prohibited from altering, refusing, or discontinuing

services on account of any unpaid prepetition charges, the commencement of these chapter 11

cases, or any perceived inadequacy of the Proposed Adequate Assurance.

4. The Debtors are authorized, but not directed, to pay any prepetition or postpetition

obligations related to Utility Agent Fees in accordance with prepetition practices.

5. The following Adequate Assurance Procedures are hereby approved, m all

respects, on a final basis:

a. The Debtors will serve a copy of the Motion and the Interim and Final Orders granting the relief requested herein to each Utility Provider within two (2) business days after entry of the order by the Court.

b. Subject to paragraphs (e)-(h) herein, the Debtors will deposit the Adequate Assurance Deposit, in the aggregate amount of $1,060,064, in the Adequate Assurance Account within five ( 5) business days after entry of the Final Order granting this Motion; provided that to the extent any Utility Provider receives any value from the' Debtors as adequate assurance of payment, the Debtors may reduce the Adequate Assurance Deposit maintained in the Adequate Assurance Account by such amount.

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c. If an amount relating to Utility Services provided postpetition by a Utility Provider is unpaid, and remains unpaid beyond any applicable grace period, such Utility Provider may request a disbursement from the Adequate Assurance Account by giving notice to: (i) the Debtors: Payless Holdings LLC, et al., 3231 SE Sixth Ave., Topeka, Kansas 66607, Attn: Utility Manager; (ii) counsel to the Debtors: Kirkland & Ellis LLP, 601 Lexington Avenue, New York, New York 10022, Attn: Cristine F. Pirro; (iii) the Office of the United States Trustee for the Eastern District of Missouri, Attn: Paul Randolph, Esq.; (iv) counsel for the Official Committee of Unsecured Creditors appointed in these chapter 11 cases; and (v) to the extent not listed herein those parties requesting notice pursuant to Bankruptcy Rule 2002 (collectively, the "Notice Parties"). The Debtors shall honor such request within five ( 5) business days after the date the request is received by the Debtors, subject to the ability of the Debtors and any such requesting Utility Provider to resolve any dispute regarding such request without further order of the Court; provided that in no event shall a Utility Provider be permitted to receive aggregate disbursements in excess of the total amount set forth for such Utility Provider under the column labeled "Adequate Assurance Deposit" on the Utility Service List attached to the Motion as Exhibit A.

d. The portion of the Adequate Assurance Deposit attributable to each Utility Provider shall be returned to the Debtors on the earlier of (i) the reconciliation and payment by the Debtors of the Utility Provider's final invoice in accordance with applicable nonbankruptcy law following the Debtors' termination of Utility Services from such Utility Provider; and (ii) the effective date of any chapter 11 plan approved in these chapter 11 cases.

e. Any Utility Provider desiring additional assurances of payment in the form of deposits, prepayments, or otherwise must serve a request for additional assurance (an "Additional Assurance Request") on the Notice Parties.

f. Any Additional Assurance Request must: (i) be made in writing; (ii) identify the location for which the Utility Services are provided; (iii) include information regarding any security deposits paid by the Debtors; (iv) provide evidence that the Debtors have a direct obligation to the Utility Provider; and (v) explain why the Utility Provider believes the Adequate Assurance Deposit is insufficient adequate assurance of payment.

g. An Additional Assurance Request may be made at any time. If a Utility Provider fails to file and serve an Additional Assurance Request, the Utility Provider shall be: (i) deemed to have received "satisfactory" adequate assurance of payment in compliance with section 366 of the Bankruptcy Code; and (ii) forbidden from discontinuing, altering, or refusing Utility Services to, or discriminating against, the Debtors on

3

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account of any unpaid prepet1t10n charges, or requmng additional assurance of payment other than the Proposed Adequate Assurance.

h. Upon the Debtors' receipt of any Additional Assurance Request, the Debtors shall have 30 days from the receipt of such Additional Assurance Request (the "Resolution Period") to negotiate with such Utility Provider to resolve such Utility Provider's Additional Assurance Request; provided that the Debtors and Utility Provider may extend the Resolution Period by mutual agreement.

1. The Debtors may, and without further order from the Court, resolve any Additional Assurance Request by mutual agreement with a Utility Provider.

J. If the Debtors determine, in their sole discretion, that the Additional Assurance Request is not reasonable and are not able to reach an alternative resolution with the Utility Provider during the Resolution Period, the Debtors, during or immediately after the Resolution Period, may request a hearing ( a "Determination Hearing") before the Court to determine the adequacy of assurances of payment with respect to a particular Utility Provider pursuant to section 366( c )(3) of the Bankruptcy Code.

k. Pending resolution of any such Determination Hearing, the relevant Utility Provider filing such Additional Assurance Request shall be prohibited from altering, refusing, or discontinuing Utility Services to the Debtors on account of: (i) unpaid charges for prepetition services; (ii) a pending Adequate Assurance Request; or (iii) any objections filed in response to the Proposed Adequate Assurance.

I. The Adequate Assurance Deposit deposited into the Adequate Assurance Account on behalf of any Utility Provider (including any additional amount deposited upon request of any applicable Utility Provider) will be returned to the Debtors, less any amounts owed on account of unpaid, postpetition Utility Services, by no later than five (5) business days following the earlier of the date upon which (i) a chapter 11 plan becomes effective after being confirmed in these chapter 11 cases or (ii) the Debtors provide notice to a Utility Provider that services provided to the Debtors by such Utility Provider no longer will be needed.

6. The Adequate Assurance Deposit shall be deemed adequate assurance of payment

for any Utility Provider that fails to make an Additional Assurance Request.

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7. The Debtors will cause a copy of this Final Order, including the Adequate

Assurance Procedures, to be served on any subsequently identified Utility Provider and any such

Utility Provider shall be bound by the Adequate Assurance Procedures.

8. The banks and financial institutions on which checks were drawn or electronic

payment requests made in payment of the prepetition obligations approved herein are authorized,

but not directed, to receive, process, honor, and pay all such checks and electronic payment

requests when presented for payment, and all such banks and financial institutions are authorized

to rely on the Debtors' designation of any particular check or electronic payment request as

approved by this Final Order.

9. Notwithstanding the relief granted herein and any actions taken hereunder,

nothing contained in the Motion or this Final Order or any payment made pursuant to this Final

Order shall constitute, nor is it intended to constitute, an admission as to the validity or priority

of any claim or lien against the Debtors, a waiver of the Debtors' rights to subsequently dispute

such claim or lien, or the assumption or adoption of any agreement, contract, or lease under

section 365 of the Bankruptcy Code.

10. The Debtors are authorized to issue postpetition checks, or to effect postpetition

fund transfer requests, in replacement of any checks or fund transfer requests that are dishonored

as a consequence of these chapter 11 cases with respect to prepetition amounts owed in

connection with any Utility Agent Fees.

11. Notwithstanding anything to the contrary contained herein, any payment made or

to be made under this Order, any authorization contained in this Order, or any claim for which

payment is authorized hereunder, shall be subject to any orders of this Court approving any

debtor in possession financing for, or any use of cash collateral by, the Debtors, and any

5

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documents providing for such debtor in possession financing and the budget governing such

debtor in possession financing and use of cash collateral.

12. Notice of the Motion as provided therein shall be deemed good and sufficient

notice of such Motion and the requirements of Bankruptcy Rule 6004(a) and the Local Rules are

satisfied by such notice.

13. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this

Interim Order are immediately effective and enforceable upon its entry.

14. No later than two (2) business days after the date of this Order, the Debtors shall

serve a copy of the Order on the Notice Parties and shall file a certificate of service no later than

24 hours after service.

DATED: May 9, 2017 St. Louis, Missouri jjh

Chief United States Bankruptcy Judge

6

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Order Prepared By:

Steven N. Cousins MO 30788 Erin M. Edelman MO 67374 John G. Willard MO 67049 Armstrong Teasdale LLP 7700 Forsyth Boulevard, Suite 1800 St. Louis, MO 63105 Telephone: (314) 621-5070 Facsimile: (314) 621-2239 Email: [email protected] Email: [email protected] Email: [email protected]

Nicole L. Greenblatt, P.C. (admitted pro hac vice) Cristine F. Pirro ( admitted pro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 601 Lexington A venue New York, NY 10021 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: [email protected] Email: [email protected]

James H.M. Sprayregen, P.C. William A. Guerrieri (admitted pro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Email: [email protected]

· Counsel to Debtors and Debtors in Possession

7

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TAB3

Court File No.: CV-17-11758-00CL ONTARIO

SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST)

IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED

AND IN THE MATTER OF PAYLESS HOLDINGS LLC, PAYLESS SHOESOURCE CANADA INC., PAYLESS SHOESOURCE CANADA GP INC. AND THOSE OTHER

ENTITIES LISTED ON SCHEDULE "A" HERETO

APPLICATION OF PAYLESS HOLDINGS LLC UNDER SECTION 46 OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED

SAY:

AFFIDAVIT OF MICHAEL SHAKRA (Sworn June 16, 2017)

I, Michael Shakra, of the City of Toronto, in the Province of Ontario, MAKE OATH AND

1. I am an associate with Osler, Hoskin & Harcourt LLP ("Osler"). Osler is Canadian counsel

to Payless Holdings LLC ("Payless Holdings" or the "Foreign Representative"), which is the

ultimate parent company of 28 affiliated debtors and debtors in possession, including Payless

Shoesource Canada Inc., Payless ShoeSource Canada GP Inc., and Payless Shoesource Canada

LP (the "Payless Canada Group"), that have filed voluntary petitions for relief pursuant to

Chapter 11 of the U.S. Bankruptcy Code (collectively with Payless Holdings, the "Chapter 11

Debtors"). As such, I have personal knowledge of the matters to which I hereinafter depose in this

Affidavit. Where I do not possess personal knowledge, I have stated the source of my information

and, in all such cases, believe it to be true.

2. I swear this Affidavit in support of a motion by Payless Holdings in its capacity as foreign

representative of itself as well as the other Chapter 11 Debtors for an Order recognizing and

80

-2-

enforcing the terms of the Final Orders (as defined below) entered by the United States Bankruptcy

Court for the Eastern District of Missouri (the "U.S. Court'').

A. The U.S. Orders

Claims Bar Order

3. On May 15, 2017, the U.S. Court granted the Order Establishing Bar Dates for Filing

Proofs of Claim and Approving Form and Manner of Notice Thereof(the "Claims Bar Order").

The Claims Bar Order establishes dates by which proofs of claim must be filed against the Chapter

11 Debtors, other than the Payless Canada Group. A comprehensive description of the Claims Bar

Order is contained in the First Report of the Information Officer dated June 7, 2017 (the "First

Report') and the Affidavit of Michael Schwindle to be sworn (the "Second Schwindle

Affidavit"). A copy of the Claims Bar Order is attached hereto as Exhibit "A".

The Final Orders

4. On April 4, 2017, each of the Chapter 11 Debtors filed voluntary petitions for relief

pursuant to Chapter 11 of the U.S. Bankruptcy Code with the U.S. Court. The U.S. Debtors also

filed several motions with the U.S. Court and, on April 5, 2017, the U.S. Court heard motions (the

"First Day Motions") for various interim or final orders (the "First Day Orders"). The U.S. Court

granted certain First Day Orders, a number of which were granted on an interim basis.

5. Subsequently, the Chapter 11 Debtors obtained final orders approving the relief granted in

the interim orders on a final basis. The Foreign Representative is seeking recognition of the

following final orders issued by the U.S. Court (collectively, the "Final Orders"), each of which

are described in more details in the Second Schwindle Affidavit:

81

- 3 -

(a) Final Order (I) Authorizing the Debtors to (A) Honor Certain Prepetition

Obligations to Customers and Partners and (B) Continue Certain Customer and

Partner Programs in the Ordinary Course of Business and (II) Granting Related

Relief(the "Final Customer and Partner Order");

(b) Final Order (I) Authorizing The Debtors to (A) Continue Insurance Coverage

Entered into Prepetition and Satisfy Prepetition Obligations Related Thereto and

(B) Renew, Supplement, or Purchase Insurance Policies, and (II) Granting Related

Relief(the "Final Insurance Order");

( c) Final Order (A) Authorizing the Debtors to Pay Certain Prepetition Claims of (I)

Critical Vendors and (II) Carrier, Warehousemen, and Section 503(B)(9)

Claimants and (B) Granting Related Relief (the "Final Critical Vendors Order"):

(d) Final Order (I) Authorizing the Debtors to (A) Continue Using the Cash

Management System and (B) Maintain Existing Bank Accounts and Business

Forms; (II) Authorizing Continued Intercompany Transactions; (III) Granting

Superiority Administrative Expense Status to Post-Petition Intercompany

Payments; and (JV) Granting Related Relief (the "Final Cash Management

Order"):

(e) Final Order(!) Authorizing the Debtors to (A) Pay Prepetition Wages, Salaries,

Other Compensation, and Reimbursable Expenses and (B) Continue Employee

Benefits Programs, and (JI) Granting Related Relief (the "Final Prepetition

Wages and Benefits Order"):

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(f) Final Order (!) Authorizing the Debtors to Continue and Renew the Surety Bond

Program on an Uninterrupted Basis, and (JI) Granting Related Relief (the "Final

Surety Bond Order");

(g) Final Order(!) Authorizing the Payment of Certain Prepetition Taxes and Fees and

(II) Granting Related Relief (the "Final Prepetition Taxes and Fees Order"); and

(h) Final Order (!) Prohibiting Utility Providers from Altering, Refusing, or

Discontinuing Utility Services, (II) Determining Adequate Assurance of Payment

for Future Utility Service, (III) Establishing Procedures for Determining Adequate

Assurance of Payment, and (JV) Granting Related Relief (the "Final Utilities

Order").

Copies of the Final Orders are attached hereto as Exhibits "B" to "I".

6. Except for the Final Utilities Order, the Ontario Superior Court of Justice (Commercial

List) (the "Ontario Court") previously recognized and enforced the interim versions of each of

the Final Orders. A copy of the Motion for Continuation of Utility Service filed the Chapter 11

Debtors in support of the interim Utilities Order is attached hereto as Exhibit "J".

7. The Final Customer and Partner Order, the Final Insurance Order, the Final Critical

Vendors Order, the Final Prepetition Wages and Benefits Order, the Final Prepetition Taxes and

Fees Order and the Final Utilities Order were entered by the U.S. Court on May 9, 2017. The Final

Surety Bond Order and the Final Cash Management Order were entered by the U.S. Court on May

17, 2017 and May 25, 2017, respectively.

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8. Copies of the Final Orders and related motion materials are available from Prime Clerk,

LLC, the notice and claims agent for the Chapter 11 Debtors at the following website:

https:// cases. prim eel erk. com/pay! ess/Home-Index.

SWORN BEFORE ME at the City of Toronto, in the Province of Ontario, on June 16,2017.

Conyt}issioper f}\r ta!fing affidavits, etc. r h~k ll.~S~

Michael S. Shakra

84

Claims Bar Order

THIS IS EXHIBIT "A" REFERRED TO IN THE AFFIDAVIT OF MICHAEL SHAKRA, SWORN BEFORE ME

THIS 161h DAY OF JUNE, 2017.

Ll A Commissio~or taking Affidavits, etc.

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In re:

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

) Case No. 17-42267-659 ) Chapter 11

Payless Holdings LLC, et al.,

Debtors.

) ) Jointly Administered ) ) Related Docket Nos.: 287, 571

ORDER ESTABLISHING BAR DATES FOR FILING PROOFS OF CLAIM AND APPROVING FORM AND MANNER OF NOTICE THEREOF

Upon the motion (the "Motion")1 of the above-captioned debtors and debtors in

possession (collectively, the "Debtors") for entry of an order establishing bar dates for filing

proofs of claim and approving form and manner of notice thereof; and this Court having

jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and Rule 81.901(B)(l) of the

Local Rules of the United States District Court for the Eastern District of Missouri; and this

Comt having found that this is a core proceeding pursuant to 28 U.S.C. § 157(b)(2), and that this

Court may enter a final order consistent with Article III of the United States Constitution; and

this Court having found that venue of this proceeding and the Motion in this district is proper

pursuant to 28 U.S.C. §§ 1408 and 1409; and this Court having found that the relief requested is

in the best interests of the Debtors' estates, their creditors, and other parties in interest; and this

Court having found that the Debtors provided appropriate notice of the Motion and the

opportunity for a hearing under the circumstances; and this Court having reviewed the Motion

and having heard the statements in support of the relief requested therein at a hearing before this

Court (the "Hearing"); and this Court having determined that the legal and factual bases set forth

in the Motion and at the Hearing establish just cause for the relief granted herein; and any and all

Capitalized terms used but not otherwise defined in this Order shall have the meanings ascribed to such terms elsewhere in the Motion or in the First Day Declaration, as applicable.

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objections having been resolved or overruled; and upon all of the proceedings had before this

Court; and after due deliberation and sufficient cause appearing therefor, pursuant to sections

105, 501 and 503 of the Bankruptcy Code, Bankruptcy Rules 2002 and 3003(c) and Local Rules

3001 and 3003, it is

HEREBY ORDERED THAT:

1. The Motion is granted to the extent set forth herein.

2. As used herein, (a) the term "claim" has the meaning given to such term in

section 101(5) of the Bankruptcy Code, (b) the term "entity" has the meaning given to such term

in section 101(15) of the Bankruptcy Code and (c) the term "governmental unit" has the meaning

given to such term in section 101(27) of the Bankruptcy Code.

3. The forms of the Bar Date Notice, the Proof of Claim Form and the Publication

Notice attached hereto as Exhibit A, Exhibit B and Exhibit C, respectively, and the manner of

providing notice of the Bar Dates proposed in the Motion are approved in all respects pursuant to

Bankruptcy Rules 2002(a)(7), 2002(1), and 2002(p). The form and manner of notice of the Bar

Dates approved herein are (a) reasonable and adequate and (b) fulfill the notice requirements of

the Bankruptcy Code, the Bankruptcy Rules, and the Local Bankruptcy Rules. As such, the

Debtors are authorized to direct their claims and noticing agent Prime Clerk, LLC ("Prime

Clerk"), to prepare and serve the Bar Date Notice Package in the manner described in paragraphs

9, 20, and 21 below and publish the Publication Notice as described in paragraph 19 below.

4. Except as otherwise provided in this Order, all entities (including, without

limitation, individuals, partnerships, corporations, joint ventures, and trusts) that assert a claim

against a Debtor that arose or is deemed to have arisen prior to the Petition Date must file a proof

of claim in writing in accordance with the procedures described herein so that such proof of

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claim is actually received by Prime Clerk on or before 11 :59 p.m., Central Time, on

June 19, 2017 (the "General Bar Date").

5. Except as otherwise provided in this Order, the General Bar Date applies to all

types of claims against the Debtors that arose prior to the Petition Date, including secured

claims, unsecured priority claims, claims under section 503(b)(9) of the Bankruptcy Code, and

unsecured nonpriority claims.

6. The filing of a proof of claim form is deemed to satisfy the procedural

requirements for the assertion of administrative priority claims under section 503(b)(9) of the

Bankruptcy Code; provided, however, that all other administrative claims under section 503(b) of

the Bankruptcy Code, other than Rejection Damage Claims ( as defined below), must be made by

separate requests for payment in accordance with section 503(a) of the Bankruptcy Code and will

not be deemed proper if made by a proof of claim.

7. Within five days after the entry of this Order, the Debtors will serve, through

Prime Clerk, the Bar Date Notice and a Proof of Claim Form upon all creditors that have been

identified as of the date of entry of this Order. Prime Clerk shall, using the Court's ECF System

as instructed by the Clerk, electronically file with the Court all proofs of claim that Prime Clerk

has received or will receive in these cases. Upon receipt of a proof of claim or a transfer of

claim, Prime Clerk shall stamp the receipt date and time on the document before filing it with the

Court. The Clerk need not physically transfer any claim that she receives electronically to Prime

Clerk. The Clerk shall, by using Prime Clerk's overnight express account, transmit to Prime

Clerk any paper proof of claim that she receives.

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8. Subject to terms described in this order for holders of claims subject to the

Governmental Bar Date, Rejection Bar Date, and the Amended Schedules Bar Date, the

following entities must file a proof of claim on or before the General Bar Date:

a. any entity (i) whose prepetition claim against a Debtor is not listed in the applicable Debtor's Schedules or is listed as disputed, contingent or unliquidated and (ii) that desires to participate in any of these chapter 11 cases or share in any distribution in any of them; and

b. any entity that believes that its prepetition claim is improperly classified in the Schedules or is listed in an incorrect amount or against an incorrect Debtor, and that desires to have its claim allowed in a classification or amount or against a Debtor other than that identified in the Schedules.

9. The following procedures for the filing of proofs of claim shall apply:

a. proofs of claim must be on the Proof of Claim Form attached hereto as Exhibit B or otherwise conform substantially to Official Form B 41 O;

b. proofs of claim must be sent either (a) through the CM/ECF system on the Court's website at https://www.ecf.moeb.uscourts.gov/cgibin/login; or

_ (b)_elec_tronically_using_the.BlectronicJ>roof_of_Claim (eFOC}-Frogram-on--­the Court's web site at http://www.moeb.uscourts.gov/epoc.htm; or (c) by first-class mail or overnight courier to Clerk of the Bankruptcy Court, Eastern District of Missouri, 111 S. 10th St., 4th Floor, St. Louis, MO 63102; or ( d) by first-class mail, overnight courier, or hand-delivery to Payless Holdings LLC Claims Processing Center, c/o Prime Clerk LLC, 830 3rd Avenue, 3rd Floor, New York, NY 10022 Proofs of claim may NOT be delivered by facsimile or electronic mail transmission;

c. proofs of claims will be deemed filed only when actually received by Prime Clerk or the Clerk of the Bankruptcy Court per the instructions set forth in the foregoing subparagraph on or before the applicable Bar Date. If a creditor wishes to receive acknowledgement of Prime Clerk's receipt of a proof of claim, the creditor also must submit to Prime Clerk by the applicable Bar Date and concurrently with its original proof of claim (i) a copy of the original proof of claim and (ii) a self-addressed, postage prepaid return envelope. Received proofs of claim will also be posted on Prime Clerk's website, https://cases.primeclerk.com/payless as soon as is practicable after they are received;2

The Debtors cannot guarantee that Proofs of Claim submitted near the Bar Date will be posted prior to the Bar Date.

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d. proofs of claim must (i) be signed by the claimant or, if the claimant is not an individual, by an authorized agent of the claimant ( electronic signature is acceptable), (ii) include any documents upon which the claim is based (or, if such documents are voluminous, a summary) or an explanation as to why the documents are not available, (iii) be written in the English language and (iv) be denominated in United States currency; and

e. all Claimants asserting a Claim against more than one Debtor must file a separate Proof of Claim with respect to each such Debtor and identify on each Proof of Claim the particular Debtor against which such Claim is asserted and the case number for that particular Debtor. If any Proof of Claim does not clearly specify the name of the Debtor against which the claim is asserted (including listing multiple Debtors), that Proof of Claim shall be administered as though it was filed against Payless Holdings LLC, unless a single different case number is clearly specified. Notwithstanding the foregoing, the failure of any entity to file its Proof of Claim against the correct Debtor shall not constitute cause to expunge the Proof of Claim. Rather, the Debtors may seek to reclassify the Proof of Claim so that the claim is asserted against the proper Debtor on notice to the affected claimant.

10. The following entities, whose claims otherwise would be subject to the General

Bar Date, shall not be required to file proofs of claim in these chapter 11 cases:

a. any entity that already has filed a signed proof of claim against the applicable Debtor(s) with Prime Clerk or the Clerk of the Bankruptcy Court for the Eastern District of Missouri in a form substantially similar to Official Form B 410;

b. any entity whose claim is listed on the Schedules if: (i) the claim is not scheduled as any of "disputed," "contingent," or "unliquidated;" (ii) such entity agrees with the amount, naiure, and priority of the claim as set forth in the Schedules; and (iii) such entity does not dispute that its claim is an obligation only of the specific Debtor against which the claim is listed in the Schedules;

c. any entity whose claim has previously been allowed by order of the Court;

d. any entity whose claim has been paid in full by the Debtors pursuant to the Bankruptcy Code or in accordance with an order of the Court;

e. any Debtor or non-Debtor subsidiary having a claim against another Debtor;

f. any entity whose claim is solely against any of the Debtors' non-Debtor affiliates;

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g. any holder of an equity interest in the Debtors need not file a proof of interest with respect to the ownership of such equity interest at this time; provided, however, that any holder of an equity interest who wishes to assert a claim against the Debtors, including a claim relating to such equity interest or the purchase or sale of such interest, must file a proof of claim asserting such claim on or prior to the Claims Bar Date pursuant to procedures set forth herein;

h. a current employee of the Debtors, ifan order of this Court authorized the Debtors to honor such claim in the ordinary course of business for wages, commissions, or benefits; provided, however, that a current employee must submit a Proof of Claim by the Claims Bar Date for all other claims arising before the Petition Date, including claims for wrongful termination, discrimination, harassment, hostile work environment, and/or retaliation;

i. any current or former officer, director, or employee for claims based on indemnification, contribution, or reimbursement;

j. (i) the DIP ABL Lenders, on account of claims arising under the DIP ABL Loan Agreement, (ii) the DIP Term Lenders, on account of claims arising under the DIP Term Loan Agreement, (iii) the Prepetition TL First Lien Lenders, on account of claims arising under the Prepetition TL First Lien

__ Agreement, _(h1_) _ _the __ Prepetition_IL Second-Lien-Lenders,-on-account-of-- -claims arising under the Prepetition TL Second Lien Agreement, and (v) the Prepetition Revolver Lenders, on account of claims arising under the Prepetition Revolver Agreement;

k. any individual holder of a claim for principal, interest, or appiicable fees or charges (a "Debt Claim") on account of any note, bond, or debenture issued by the Debtors pursuant to an indenture ( an "Indenture") or a credit agreement (a "Credit Agreement") with respect to such claim;

I. any holder ofa claim allowable under section 503(b) and 507(a)(2) of the Bankruptcy Code as an expense of administrative that arose after the Administrative Claims Bar Date (other than any claim allowable under section 503(b)(9) of the Bankruptcy Code)

m. any entity holding a claim for which a separate deadline is fixed by the Court;

n. claims for fees and expenses of professionals (i) retained in these proceedings or (ii) compensated pursuant to the Final DIP Order;

o. claims asserting administrative priority and arising in the ordinary course of business after the Petition Date (but not, for the avoidance of doubt, claims asserting priority pursuant to section 503(b)(9) of the Bankruptcy Code); and

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p. claims asserted by any counterparty to an unexpired lease who has agreed, in an email to the Debtors at [email protected] or other

. written correspondence with the Debtors, that they will provide the Debtors with a cure statement by no later than June 19, 2017, which cure statement may be consolidated to apply to multiple properties so long as each property, and its cure amount, is listed in a separate exhibit to the cure statement; provided that if an unexpired lease counterparty provides the Debtors with such a cure statement, the unexpired lease counterparty shall not be required to also file a cure objection by any cure objection deadline; provided further that each such unexpired lease counterparty shall not be exempted from the requirement to file a rejection damages claim or apply for payment of administrative expenses, to the extent applicable, and when such claims would otherwise be due under the terms of this Order.

11. Any entity holding an interest in any Debtor ( an "Interest Holder"), which interest

is .based exclusively upon the ownership of common or preferred stock in a corporation, a

membership interest in a limited liability corporation or partnership or warrants or rights to

purchase, sell or subscribe to such a security or interest (any such security or interest,

an "Interest"), need not file a proof of Interest on or before the General Bar Date; provided,

however, that Interest Holders that wish to assert claims against any of the Debtors that arise out

of or relate to the ownership or purchase of an Interest, including claims arising out of or relating

to the sale, issuance or distribution of the Interest, must file proofs of claim on or before the

General Bar Date, unless another exception contained in this Order applies. The Debtors retain

the right to seek relief at a later date establishing a deadline for Interest Holders to file proofs of

Interest.

12. Any governmental unit asserting a claim against the Debtors (whether secured,

unsecured priority or unsecured nonpriority) that arose or is deemed to have arisen prior to the

Petition Date must file a proof of claim in writing in accordance with the procedures described

herein so that such proof of claim is actually received by Prime Clerk on or before 11 :59 p.m.,

Central Time, on October 2, 2017 (the "Governmental Bar Date").

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13. Any entity asserting claims arising from or relating to the rejection of executory

contracts or unexpired leases pursuant to an order of this Court or by operation of

section 365(d)(4) of the Bankruptcy Code in the applicable Debtor's chapter 11 case, or claims

otherwise related to such rejected agreements, including (a) secured claims, unsecured priority

claims and unsecured nonpriority claims that arose or are deemed to have arisen prior to the

Petition Date and (b) administrative claims under section 503(b) of the Bankruptcy Code

( collectively, "Rejection Damages Claims") are required to file proofs of claim by the later of:

(a) the General Bar Date or Governmental Bar Date (as applicable); and (b) 11:59 p.m., Central

Time, on the date that is 30 days after the entry of the relevant order or the deemed rejection date

(the "Rejection Bar Date"). For the avoidance of doubt, all µrepetition and postpetition claims of

any kind or nature relating to the rejection of executory contacts or unexpired leases must be

filed by the Rejection Bar Date. Orders approving the rejection of executory contracts or

unexpired leases entered after the date of entry of this Order shall include a description of the

Rejection Bar Date in the text thereof.

14. Each entity asserting a Rejection Damages Claim with an administrative claim

component must file, along with its proof of claim, a detailed statement describing the nature and

basis of any portion of the Rejection Damages Claim asserting an administrative priority under

section 503(b) of the Bankruptcy Code (the "Administrative Claim Supplement"). The filing of

a proof of claim form, along with an attached Administrative Claim Supplement, if applicable,

shall be deemed to satisfy the procedural requirements for the assertion of a Rejection Damages

Claim (including any administrative claim included therein).

15. All administrative claims under section 503(b) of the Bankruptcy Code other than

(a) claims under section 503(b)(9) of the Bankruptcy Code and (b) any portion of a Rejection

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Damages Claim asserting administrative priority, must be made by separate requests for payment

in accordance with section 503(a) of the Bankruptcy Code and shall not be deemed proper if

made by proof of claim.

16. The Debtors shall retain the right, subject to the Final DIP Order, to: (a) dispute,

or assert offsets or defenses against, any filed claim or any claim listed or reflected in the

Schedules as to nature, amount, liability, priority, classification or otherwise; (b) subsequently

designate any scheduled claim as disputed, contingent or unliquidated; and ( c) otherwise amend

or supplement the Schedules.

17. If the Debtors amend or supplement their Schedules after the service of the Bar

Date Notice Package, the Debtors shall give notice of any such amendment or supplement to the

holders of claims affected thereby, including notice of the Amended Schedules Bar Date to file

proofs of claim in response to the amendment or supplement to the Schedules. In particular, if a

Debtor amends or supplements its Schedules to: (a) reduce the undisputed, noncontingent and

liquidated amount of a claim; (b) change the nature or classification of a claim against the Debtor

in a manner adverse to the scheduled creditor; or ( c) add a new claim to the Schedules with

respect to a party that was not previously served with notice of the Bar Dates, the affected

claimant is required to file a proof of claim or amend any previously filed proof of claim in

respect of the new or amended scheduled claim in accordance with the procedures described

herein by the later of: (i) the General Bar Date; and (ii) 11 :59 p.m., Central Time, on the date

· that is 30 days after the date that notice of the applicable amendment to the Schedules is served

on the claimant (the "Amended Schedule Bar Date"). Notwithstanding the foregoing, nothing

contained herein shall preclude the Debtors from objecting to any claim, whether scheduled or

filed, on any grounds.

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18. Pursuant to sections 105(a) and 503(a) of the Bankruptcy Code and Bankruptcy

Rule 3003(c)(2), and except as otherwise provided in this Bar Date Order, any entity that is

required to file a proof of claim in these cases pursuant to the Bankruptcy Code, the Bankruptcy

Rules or this Order with respect to a particular claim against a Debtor, but that fails to properly

do so by the applicable Bar Date, shall be estopped and enjoined from: (a) asserting any such

claim against the Debtors or their estates or property that (i) is in an amount that exceeds the

amount, if any, that is identified in the Schedules on behalf of such entity as undisputed,

noncontingent and liquidated or (ii) is of a different nature or classification than any such claim

identified in the Schedules on behalf of such entity ( any such claim under subparagraph ( a) of

this paragraph being referred to herein as an "Unscheduled Claim"); (b) voting on, or receiving

distributions under, any chapter 11 plan in these chapter 11 cases in respect of an Unscheduled

Claim; or ( c) with respect to any administrative priority claim component of any Rejection

Damages Claim, asserting any such priority claim against the Debtors or their estates or property.

19. Pursuant to Bankruptcy Rule 2002(1), the Debtors shall publish notice of the Bar

Dates in substantially the form of the Publication Notice attached hereto as Exhibit C, once in the

Topeka Capital-Journal, the national edition of USA Today, and in the Globe and Mail, at least

30 days before the General Bar Date, which publication is hereby approved and shall be deemed

good, adequate and sufficient publication notice of the Bar Dates. The Debtors, in their sole

discretion, may publish the Publication Notice in other, including regional, newspapers, trade

journals or similar publications.

20. Within five (5) days after the entry of this Order, the Debtors, through Prime

Clerk or otherwise, shall serve the Bar Date Notice Package, including a copy of the Bar Date

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Notice and the Proof of Claim Form substantially in the forms attached hereto as Exhibit A and

Exhibit B, respectively, by first class mail, postage prepaid (or equivalent service), on:

a. all known potential claimants and their counsel (if known), including all entities listed in the Schedules as potentially holding claims;

b. the Office of the United States Trustee for the Eastern District of Missouri (the "U.S. Trustee");

c. counsel to the Official Committee of Unsecured Creditors;

d. counsel to the DIP ABL Lenders;

e. counsel to the DIP Term Loan Lenders;

f. counsel to the Prepetition TL First Lien Lenders;

g. counsel to the Prepetition ABL Lenders;

h. counsel to the Prepetition TL Second Lien Lenders;

i. all parties that have requested notice of the proceedings in these cases as of the date of the Bar Date Order;

j. all parties that have filed proofs of claim in these cases as of the date of the Bar Date Order;

k. all parties to executory contracts and unexpired leases with the Debtors that have been identified as of the date of the Bar Date Order, including all parties to rejected executory contracts and unexpired leases as of the date of the Bar Date Order;

I. all parties to pending litigation with the Debtors that have been identified as of the date of the Bar Date Order;

m. the Internal Revenue Service for this District and all other taxing authorities for the jurisdictions in which the Debtors conducted business as of the Petition Date;

n. all relevant state attorneys general;

o. the Securities and Exchange Commission;

p. all federal and state environmental protection agencies for the jurisdictions in which the Debtors held property or conducted business as of the Petition Date;

.q. the Core Parties (as defined in the Case Management Motion); and

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r. such additional persons and entities as deemed appropriate by the Debtors or the Clerk of Court.

21. As part of the bar date package, the Debtors shall mail one or more Proof of

Claim Forms (as appropriate) to the parties receiving the Bar Date Notice. For holders of

potential claims listed in the Schedules, the Proof of Claim Form mailed to such entities shall

indicate how the Debtors have scheduled the creditor's claim in the Schedules, including

(a) the identity of the Debtor against which the entity's claim is scheduled, (b) the amount of the

claim, if any, (c) whether the claim is listed as disputed, contingent or unliquidated and

( d) whether the claim is listed as a secured claim, an unsecured priority claim or an unsecured

nonpriority claim.

22. Except as otherwise provided in this Order, all entities asserting claims against

more than one Debtor are required to file a separate proof of claim with respect to each such

- --- Debtor-and-identify on -each-proof-of-claim--the-particular Debtor-against-which their claim is

asserted. If more than one Debtor is listed on the proof of claim form, then the Debtors will treat

such claim as filed only against the first listed Debtor. Any claim filed under the joint

administration case number (Payless Holdings LLC, Case No. 17-42267-659) or otherwise

without identifying a Debtor will be presumed to be filed only against Debtor Payless Holdings

LLC.

23. Notwithstanding any other provision of this Order, no entity (including, without

limitation, individuals, partnerships, corporations, joint ventures, and trusts) that asserts or may

assert a claim against Payless Shoesource Canada Inc., Payless Shoesource Canada GP Inc., or

Payless Shoesource Canada LP shall be required to file a proof of claim nor shall such entity be

subject to the General Bar Date or the Governmental Bar Date until further order of this Court.

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24. The entry of this Order is without prejudice to the rights of the Debtors to seek a

further order of this Court fixing a date by which holders of claims or interests not subject to the

Bar Dates established herein must file proofs of such claims or interests, or requests for payment

of administrative claims, or be barred from doing so, including holders of claims or interests

against Payless Shoesource Canada Inc., Payless Shoesource Canada GP Inc., or Payless

Shoesource Canada LP.

25. The requirements of Local Rules 3001 and 3003 are hereby deem~d satisfied.

26. Notice of the Motion satisfies the requirements of Bankruptcy Rule 6004(a).

27. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this Order

are immediately effective and enforceable upon its entry.

28. No later than 2 days after the date of this Order, Prime Clerk is directed to serve a

copy of the Order on the Notice Parties and is directed to file a certificate of service no later than

24 hours after service.

DATED: May 16, 2017 St. Louis, Missouri ijh

13

KOJ11 a.~-~ KAW#A. SURRATT-STATES

Chief United States Bankruptcy Judge

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Order Prepared by:

Steven N. Cousins MO 30788 Erin M. Edelman MO 67374 John G. Willard MO 67049 Armstrong Teasdale LLP 7700 Forsyth Boulevard, Suite 1800 St. Louis, Missouri 63 l 05 Telephone: (314) 621-5070 Facsimile: (314) 621-2239 Email: [email protected] Email: [email protected] Email: [email protected]

Nicole L. Greenblatt, P.C. (admitted pro hac vice) Cristine F. Pirro (admitted pro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 601 Lexington A venue New York, New York 10021 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: [email protected]

- Email:--cristine,pirro@kirkland;com

James H.M. Sprayregen, P.C. William A. Guerrieri (admitted pro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Email: [email protected]

Counsel to the Debtors and Debtors in Possession

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EXHIBIT A

Form of Notice of Bar Date

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UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

In re: ) Case No. 17-42267-659 ) Chapter 11

Payless Holdings LLC, et al.,

Debtors.

) ) Jointly Administered )

NOTICE OF DEADLINES FOR FILING OF PROOFS OF CLAIM

TO ALL PERSONS AND ENTITIES WITH CLAIMS AGAINST ANY OF THE ABOVE-CAPTIONED DEBTOR ENTITIES:

On , 2017, the United States Bankruptcy Court for the Eastern District of Missouri (the "Court") entered an order (Docket No. _) (the "Bar Date Order")1 establishing certain deadlines for the filing of proofs of claim in the chapter 11 cases of the above-captioned debtors and debtors in possession ( collectively, the "Debtors").2 A list of all of the Debtors, together with their respective case numbers, is attached hereto.

By the Bar Date Order, the Court established: (a) June 19, 2017 at 11:59 p.m., Central Time (the "General Bar Date"), as the general deadline for entities to file proofs of claim in the Debtors' cases for claims against the Debtors that arose or are deemed to have arisen prior to the date on which the Debtors filed their chapter 11 petitions, April 4, 2017 (the "Petition Date"); and (ii) October 2, 2017 at 11:59 p.m., Central Time (the "Governmental Bar Date"), as the general deadline for governmental units to file proofs of claim in the Debtors' cases for claims against the Debtors that arose or are deemed to have arisen prior to the Petition Date. As described belo,v, the Bar Date Order also establishes different bar dates for certain categories of claims.

For your convenience, enclosed with this Notice is a customized proof of claim form (the "Proof of Claim Form"), which identifies on its face the amount, nature and classification of your claim(s), if any, listed in the Debtors' schedules of assets and liabilities and statements of financial affairs filed in these chapter 11 cases (collectively, the "Schedules").

As used in this Notice, the term "entity" has the meaning given to it in section IO I (15) of title 11 of the United States Code (the "Bankruptcy Code"), and includes all persons, estates, trusts and the United States trustee. As used in this Notice, the terms "person" and "governmental unit" have the meanings given to them in sections 101(41) and 101(27) of the Bankruptcy Code, respectively.

2

All capitalized tenns not otherwise defined herein shall have the meaning set forth in the Bar Date Order.

Holders of claims and interests against Payless Shoesource Canada Inc., Payless Shoesource Canada GP Inc., or Payless Shoesource Canada LP. are not subject to the deadlines and other requirements of the Bar Date Order.

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As used in this Notice, the term "claim" means, as to or against any of the Debtors and in accordance with section 101(5) of the Bankruptcy Code: (a) any right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured; or (b) any right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured.

Contact information for the Debtors' claims and noticing agent, Prime Clerk LLC ("Prime Clerk"), which is available to provide you with additional information regarding these chapter 11 cases and the filing of a proof ofclaim, is provided in section I below.

A. THE BAR DATES

The Bar Date Order establishes the following bar dates for filing proofs of claim or requests for payment of certain administrative expenses in these cases ( collectively, the "Bar Dates"):

I. The General Bar Date. Pursuant to the Bar Date Order, except as described below, all entities holding claims (whether secured, unsecured, priority or unsecured priority, including section 503(b)(9) claims) against the Debtors that arose or are deemed to have arisen prior to the Petition Date are required to file proofs of claim by the General Bar Date (i.e., by June 19, 2017, 2017 at 11:59 p.m., Central Time). The General Bar Date applies to all types of claims against the Debtors that arose prior to the Petition Date, including secured claims, unsecured priority claims (including, without limitation, claims entitled to priority under section 503(b)(9) of the Bankruptcy Code) and unsecured nonpriority claims.

2. The Governmental Bar Date. Pursuant to the Bar Date Order, except as described below, all governmental units holding claims against the Debtors that arose before the Petition Date are required to file proofs of claim by October 2, 2017 at 11:59 p.m., Central Time, the Governmental Bar Date.).

3. The Rejection Bar Date. Pursuant to the Bar Date Order, any entity asserting claims against the Debtors arising from or relating to the rejection of executory contracts or unexpired leases, in accordance with section 365 of the Bankruptcy Code and pursuant to a court order or by operation of section 365(d)(4) of the Bankruptcy Code, or claims otherwise related to such rejected agreements, including: (a) secured claims, unsecured priority claims and unsecured nonpriority claims that arose or are deemed to have arisen prior to the Petition Date; and (b) administrative claims under section 503(b) of the Bankruptcy Code, (collectively, "Rejection Damages Claims") are required to file proofs of claim by the later of: (i) the General Bar Date and (ii) 11 :59 p.m., Central Time, on the date that is 30 days after the entry of the relevant order or deemed rejection date. The later of these dates is referred to in this Notice as the "Rejection Bar Date." For the avoidance of doubt, all prepetition and postpetition claims of any kind or nature arising from or relating to

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4.

rejected executory contacts or unexpired leases must be filed by the Rejection Bar Date.

The Amended Schedule Bar Date. Pursuant to the Bar Date Order, if, subsequent to the date of this Notice, a Debtor amends or supplements its Schedules to: (a) reduce the undisputed, noncontingent and liquidated amount of a claim against the Debtor; (b) change the nature or classification of a claim against the Debtor in a manner adverse to the scheduled creditor; or ( c) add a new claim to the Schedules with respect to a party that was not previously served with notice of the Bar Dates, the affected claimant is required to file a proof of claim or amend any previously filed proof of claim in respect of the new or amended scheduled claim on or before the later of: (i) the General Bar Date; and (ii) 11:59 p.m., Central Time, on the date that is 30 days after notice of the applicable amendment or supplement to the Schedules is served on the claimant. The later of these dates is referred to in this Notice as the "Amended Schedule Bar Date."

B. WHO MUST FILE A PROOF OF CLAIM

Unless one of the exceptions described in Section E below applies, if you have a claim that arose or is deemed to have arisen prior to the Petition Date, you MUST file a proof of claim to vote on a chapter 11 plan or to share in distributions from the Debtors' bankruptcy estates. Claims based on acts or omissions of the Debtors that occurred before the Petition Date must be filed on or prior to the applicable Bar Date, even if such claims are not now fixed, liquidated, or certain or did not mature or become fixed, liquidated, or certain before the Petition Date.

Except where the Governmental Bar Date, Rejection Bar Date, or the Amended Schedule Bar Date apply to establish a different deadline or one of the exceptions described in Section E below applies, the following entities must file proofs of claim on or before the General Bar Date:

I. any entity (i) whose prepetiti<in claim against a Debtor is not listed in the applicable Debtor's Schedules or is listed as "disputed," "contingent" or "unliquidated" and (ii) that desires to participate in any of these chapter 11 cases or share in any distribution in any of them; and

2. any entity that believes that its prepetition claim is improperly classified in the Schedules or is listed in an incorrect amount or against an incorrect Debtor and that desires to have its claim allowed in a classification or amount or against a Debtor other than that identified in the Schedules.

C. WHAT TO FILE

The Debtors are enclosing a Proof of Claim Form for use in these cases, or you may use another proof of claim form that conforms substantially to the standard proof of claim form, Official Form B 410. You will receive a different Proof of Claim Form for each claim scheduled in your name by the Debtors. You may utilize the Proof of Claim Form(s) provided by the Debtors to file your claim. Additional proof of claim forms may be obtained, free of charge, at the following websites: http://www.uscourts.gov/forms/bankruptcy-forms or https://cases.primeclerk.com/payless.

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All proof of claim forms must be signed by the claimant or, if the claimant is not an individual, by an authorized agent of the claimant (electronic signatures are acceptable). The proof of claim form must be written in English and be denominated in United States currency. You should attach to your completed proof of claim form any documents upon which the claim is based (or, if such documents are voluminous, attach a summary) or an explanation as to why the documents are not available.

Except as otherwise set forth in the Bar Date Order, all Claimants asserting a Claim against more than one Debtor must file a separate Proof of Claim with respect to each such Debtor and identify on each Proof of Claim the particular Debtor against which such Claim is asserted and the case number for that particular Debtor. If any Proof of Claim does not clearly specify the name of the Debtor against which the claim is asserted (including listing multiple Debtors), that Proof of Claim shall be administered as though it was filed against Payless Holdings LLC, unless a single different case number is clearly specified. Notwithstanding the foregoing, the failure of any entity to file its Proof of Claim against the correct Debtor shall not constitute cause to expunge the Proof of Claim. Rather, the Debtors may seek to reclassify the Proof of Claim so that the claim is asserted against the proper Debtor on notice to the affected claimant.

Any entity asserting a Rejection Damages Claim with an administrative claim component must file, along with its proof of claim, a detailed statement describing the nature and basis of any portion of the Rejection Damages Claim asserting an administrative priority under section 503(b) of the Bankruptcy Code (the "Administrative Claim Supplement").

Under the Bar Date Order, the filing of a proof of claim form, along with an attached Administrative Claim Supplement, if applicable, shall be deemed to satisfy the procedural requirements for the assertion of a Rejection Damages Claim (including any administrative claim included therein). All other administrative claims under section 503(b) of the Bankruptcy Code must be made by separate requests for payment in accordance with section 503(a) of the Bankruptcy Code and shall not be deemed proper if made by proof of claim. No deadline has been established for the filing of administrative claims other than (a) claims under section 503(b)(9) of the Bankruptcy Code and (b) any portion of a Rejection Damages Claim seeking administrative priority, which claims must be filed by the General Bar Date and the Rejection Bar Date, respectively.

D. WHEN AND WHERE TO FILE

All Proofs of Claim must be sent either (a) through the CM/ECF system on the Court's website at http://www.moeb.uscourts.gov/epoc.htm; or (b) electronically using the Electronic Proof of Claim ( ePOC) Program on the Court's web site at https://www.ecf.moeb.uscourts.gov/cgibin/login; or (c) by first-class mail or overnight courier to Clerk of the Bankruptcy Court, Eastern District of Missouri, Ill S. !Otl' St., 4th Floor, St. Louis, MO 63102; or ( d) by first-class mail, overnight courier, or hand-delivery to Payless Holdings LLC Claims Processing Center, c/o Prime Clerk LLC, 830 3rd Avenue, 3rd Floor, New York, NY I 0022. Proofs of claim must be actually received on or before the applicable Bar Date.

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Proofs of claim will be deemed filed only when actually received by the United States Bankruptcy Court for the Eastern District of Missouri or by the Payless Claims Processing Center on or before the applicable Bar Date. Proofs of claim may NOT be delivered by facsimile or electronic mail transmission. Any facsimile or electronic mail submission will not be accepted and will not be deemed filed until a proof of claim is submitted by one of the approved methods described above.

Proof of claim forms will be collected from the Payless Claims Processing Center, docketed and maintained by the Debtors' claims agent, Prime Clerk. If you wish to receive acknowledgement of Prime Clerk's receipt of a proof of claim, you must submit to Prime Clerk by the applicable Bar Date and concurrently with your original proof of claim: (a) a copy of the original proof of claim; and (b) a self-addressed, postage prepaid return envelope. Filed proofs of claim will be posted on Prime Clerk's website, https://cases.primeclerk.com/payless, as soon as is practicable after receipt.

E. WHO NEED NOT FILE A PROOF OF CLAIM

The Bar Date Order further provides that the following entities, whose claims otherwise would be subject to the General Bar Date or the Governmental Bar Date, need not file proofs of claim:

I. any entity that already has filed a signed proof of claim against the applicable Debtor(s) with Prime Clerk or the Clerk of the Bankruptcy Qiurt forJhe_Eastern rnstricLofMissouri in a form substantially-similar to Official Form B 410;

2. any entity whose claim is listed on the Schedules if: (i) the claim is not scheduled as any of "disputed," "contingent," or "unliquidated;" (ii) such entity agrees with the amount, nature, and priority of the ciaim as set forth in the Schedules; and (iii) such entity does not dispute that its claim is an obligation only of the specific Debtor against which the claim is listed in the Schedules;

3. any entity whose claim has previously been allowed by order of the Court;

4. any entity whose claim has been paid in full by the Debtors pursuant to the Bankruptcy Code or in accordance with an order of the Court;

5. any Debtor or non-Debtor subsidiary having a claim against another Debtor;

6. any entity whose claim is solely against any of the Debtors' non-Debtor affiliates;

7. any holder of an equity interest in the Debtors need not file a proof of interest with respect to the ownership of such equity interest at this time; provided, however, that any holder of an equity interest who wishes to assert a claim against the Debtors, including a claim relating to such

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equity interest or the purchase or sale of such interest, must file a proof of claim asserting such claim on or prior to the Claims Bar Date pursuant to procedures set forth herein;

8. a current employee of the Debtors, if an order of this Court authorized the Debtors to honor such claim in the ordinary course of business for wages, commissions, or benefits; provided, however, that a current employee must submit a Proof of Claim by the Claims Bar Date for all other claims arising before the Petition Date, including claims for wrongful termination, discrimination, harassment, hostile work environment, and/or retaliation;

9. any current or former officer, director, or employee for claims based on indemnification, contribution, or reimbursement;

10. (i) the DIP ABL Lenders, on account of claims arising under the DIP ABL Loan Agreement, (ii) the DIP Term Lenders, on account of claims arising under the DIP Term Loan Agreement, (iii) the Prepetition TL First Lien Lenders, on account of claims arising under the Prepetition TL First Lien Agreement, (iv) the Prepetition TL Second Lien Lenders, on account of claims arising under the Prepetition TL Second Lien Agreement, and (v) the Prepetition Revolver Lenders, on account of claims arising under the Prepetition Revolver Agreement;3

11. any individual holder of a claim for principal, interest, or applicable fees or charges (a "Debt Claim") on account of any note, bond, or debenture issued by the Debtors pursuant to an indenture ( an "Indenture") or a credit agreement ( a "Credit Agreement") with respect to such claim;

12. any holder of a claim allowable under section 503(b) and 507(a)(2) of the Bankruptcy Code as an expense of administrative that arose after the Administrative Claims Bar Date (other than any claim allowable under section 503(b)(9) of the Bankruptcy Code);

13. any entity holding a claim for which a separate deadline is fixed by the Court;

Capitalized terms used but not defined in this Paragraph E(9) shall have the meanings set forth in the Interim DIP Order. The "Interim DIP Order" means that certain Final Order (I) Authorizing the Debtors to Obtain Postpetition Financing, (II) Authorizing The Debtors to Use Cash Collateral, (III) Granting Liens and Providing Superpriority Administrative Expense Status, (IV) Granting Adequate Protection to the ?repetition Lenders, (V) Modifying the Automatic Stay, (VI) Scheduling a Final Hearing, and (VII) Granting Related Relief [Docket No. 69].

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14. any holder of a claim for fees and expenses of professionals (i) retained in these proceedings or (ii) compensated pursuant to the Final DIP Order;4

15. any holder of a claim asserting administrative priority and arising in the ordinary course of business after the Petition Date (but not, for the avoidance of doubt, claims asserting priority pursuant to section 503(b)(9) of the Bankruptcy Code); and

16. any holder of a claim asserted by any counterparty to an unexpired lease who has agreed, in an email to the Debtors at [email protected] or other written correspondence with the Debtors, that it will provide the Debtors with a cure statement by no later than June 19, 2017, which cure statement may be consolidated to apply to multiple properties so long as each property, and its cure amount, is listed in a separate exhibit to the cure statement; provided that if an unexpired lease counterparty provides the Debtors with such a cure statement, the unexpired lease counterparty shall not be required to also file a cure objection by any cure objection deadline; provided farther that each such unexpired lease counterparty shall not be exempted from the requirement to file a rejection damages claim or apply for payment of administrative expenses, to the extent applicable, and when such claims would otherwise be due under the terms of the Bar Date Order and this Notice .

... ____ _ D. __ .. NQ_BARDATEFORPROOFS.OFINTEREST

Any entity holding an interest in any Debtor (an "Interest Holder"), which interest is based exclusively upon the ownership of common or preferred stock in a corporation, a membership interest in a limited liability corporation or partnership or warrants or rights to purchase, sell or subscribe to such a security or interest ( any such security or interest, an "Interest"), need not file a proof of Interest on or before the General Bar Date; provided, however, that. Interest Holders who wish to assert claims against any of the Debtors that arise out of or relate to the ownership or purchase of an Interest, including claims arising out of or relating to the sale, issuance or distribution of the Interest, must file proofs of claim on or before the General Bar Date, unless another exception identified in this Notice applies. The Debtors have reserved the right to establish at a later time a bar date requiring Interest Holders to file proofs of Interest. If such bar date is established, Interest Holders will be notified of the bar date for filing proofs oflnterest at the appropriate time.

For purposes of this Notice, the term "Final DIP Order" shall mean a final order granting the Debtors' Motion for Entry of Interim and Final Orders (I) Authorizing the Debtors to Obtain Postpetition Financing, (JI) Authorizing The Debtors to Use Cash Collateral, (II!) Granting Liens and Providing Superpriority Administrative &pense Status, (IV) Granting Adequate Protection to the ?repetition Lenders, (V) Modifying the Automatic Stay, (VJ) Scheduling a Final Hearing, and (VII) Granting Related Relief[Docket No. 36].

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E. EXECUTORY CONTRACTS AND UNEXPIRED LEASES

As described in Section A above, any entity wishing to assert a Rejection Damages Claim must file, by the Rejection Bar Date, a proof of claim for any prepetition or postpetition damages caused by such rejection, or any other prepetition or postpetition claims of any kind or nature whatsoever relating to the rejected agreement. As further described in Section C above, any entity asserting a Rejection Damages Claim with an administrative claim component must file, along with its proof of claim, an Administrative Claim Supplement.

F. CONSEQUENCES OF FAILURE TO FILE A PROOF OF CLAIM BY THE APPLICABLE BAR DATE

EXCEPT AS OTHERWISE SET FORTH IN THE BAR DATE ORDER, ANY ENTITY THAT IS REQUIRED TO FILE A PROOF OF CLAIM WITH RESPECT TO A PARTICULAR CLAIM AGAINST A DEBTOR BUT THAT FAILS TO DO SO BY THE APPLICABLE BAR DATE DESCRIBED IN THIS NOTICE SHALL BE ESTOPPED AND ENJOINED FROM THE FOLLOWING: (A) ASSERTING ANY SUCH CLAIM AGAINST THE DEBTORS OR THEIR ESTATES OR PROPERTY THAT (I) IS IN AN AMOUNT THAT EXCEEDS THE AMOUNT, IF ANY, THAT IS IDENTIFIED IN THE SCHEDULES ON BEHALF OF SUCH ENTITY AS UNDISPUTED, NONCONTINGENT AND LIQUIDATED OR (II) IS OF A DIFFERENT NATURE OR CLASSIFICATION THAN ANY SUCH CLAIM IDENTIFIED IN THE SCHEDULES ON BEHALF OF SUCH ENTITY (ANY SUCH CLAIM IN THIS SUBPARAGRAPH (A) BEING REFERRED TO IN THIS NOTICE AS AN "UNSCHEDULED CLAIM"); (B) VOTING UPON, . OR RECEIVING DISTRIBUTIONS UNDER, ANY CHAPTER 11 PLAN IN THESE CHAPTER 11 CASES IN RESPECT OF AN UNSCHEDULED CLAIM; OR (C) WITH RESPECT TO ANY ADMINISTRATIVE PRIORITY CLAIM COMPONENT OF ANY REJECTION DAMAGES CLAIM, ASSERTING ANY SUCH PRIORITY CLAIM AGAINST THE DEBTORS OR THEIR ESTATES OR PROPERTY.

G. THE DEBTORS' SCHEDULES AND ACCESS THERETO

You may be listed as the holder of a claim against one or more of the Debtors in the Debtors' Schedules. To determine if and how you are listed on the Schedules, please refer to the descriptions set forth on the enclosed Proof of Claim Form(s) regarding the nature, amount and status of your claim(s). If the Debtors believe that you may hold claims against more than one Debtor, you will receive multiple Proof of Claim Forms, each of which will reflect the nature and amount of your claim against one Debtor, as listed in the Schedules.

If you rely on the Debtors' Schedules, it is your responsibility to determine that the claim is accurately listed in the Schedules. Otherwise, or if you decide to file a proof of claim, you must do so before the applicable Bar Date in accordance with the procedures set forth in this Notice.

H. RESERVATION OF RIGHTS

The Debtors reserve the right, subject to the Final DIP Order, to: (a) dispute, or assert offsets or defenses against, any filed claim or any claim listed or reflected in the Schedules as to

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nat11re, amount, liability, priority, classification or otherwise; (b) subsequently designate any scheduled claim as disputed, contingent or unliquidated; and (c) otherwise amend or supplement the Schedules. Nothing contained in this Notice shall preclude the Debtors from objecting to any claim, whether scheduled or filed, on any grounds.

I. ADDITIONAL INFORMATION

Copies of the Debtors' Schedules, the Bar Date Order, the Proof of Claim Form and other information and documents regarding the Debtors' chapter 11 cases are available for inspection and download free of charge on Prime Clerk's website at https://cases.primeclerk.com/payless. Copies of the Schedules and other documents filed in these cases also may be examined between the hours of 8:30 a.m. and 4:30 p.m., Central Time, Monday through Friday, at the U.S. Bankruptcy Court Eastern District of Missouri, Office of the Clerk of Bankruptcy Court, 111 South 10th Street, Fourth Floor, St. Louis, MO 63102.

If you require additional information regarding the filing of a proof of claim, you may contact Prime Clerk at (844) 648-5574 (toll free in the U.S. and Canada) or (347) 505-5245 (international calls). You also may contact Prime Clerk by writing to:

Payless Holdings LLC Claims Processing Center c/o Prime Clerk LLC 830 3rd Avenue, 3rd Floor New York, NY I 0022

A HOLDER OF A POSSIBLE CLAIM AGAINST THE DEBTORS SHOULD CONSULT AN ATTORNEY REGARDING ANY MATTERS NOT COVERED BY THIS NOTICE, SUCH AS WHETHER THE HOLDER SHOULD FILE A PROOF OF CLAIM.

BY ORDER OF Tftb COURT

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.,, . Debtor's EIN Number I. Pavless Holdings LLC 80-0855704

2. Payless Intennediate Holdine:s LLC 46-1125190

3. WBG-PSS Holdings LLC 45-5170673 4. Payless Inc. 43-1813160

5. Payless Finance, Inc. 43-1622101

6. Collective Brands Services, Inc. 48-1227266

7. PSS Delaware Comoany 4, Inc. 48-1221466

8. Shoe Sourcine:, Inc. 48-1234075

9. Pavless ShoeSource, Inc. 48-0674097

10. Eastborough, Inc. 48-1212803

11. Payless Purchasing Services, Inc. 48-1253043

12. Pavless ShoeSource Merchandising, Inc. 48-1140946

13. Pavless Gold Value CO, Inc. 46-1103581

14. Pavless ShoeSource Distribution, Inc. 48-1140944

15. Payless Shoesource Worldwide, Inc. 43-1646884

16. Pavless NYC, Inc. 48-1194126

17. Pav less Shoesource of Puerto Rico, Inc. 66-0479107

18. Pavless Collective GP, LLC 82-1302940

19. Collective Licensing, L.P. 20-4231256

20. Collective Licensing International LLC 05-0585451

21. Clinch, LLC 27-2429836

22. CoUective Brands Franchising Services, LLC 26-3883636

23. Pavless International Franchisine:, LLC 27-3686448

24. Collective Brands Franchisine: Services, LLC 26-3883636

25. Payless International Franchising, LLC 27-3686448

26. Collective Brands Logistics, Limited 98-0546466

27. Dynamic Assets Limited 98-0381978

28. PSS Canada, Inc. 74-2834969

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EXHIBITB

Proof of Claim Form

111

• • • Fill in this information to identify the case (Select only one Debtor per claim form):

Clpayless Holdings LLC (Case No. 17-42267)

QPayless Shoesource, Inc. (Case No. 17-42257)

Ocol!ectlve Licensing, LP (Case No. 17-42279)

Dconective Brands Frand1ising Services, LLC (Case No.17-42280)

CJPayless NYC, !nc. (Case No. 17-42261)

CIEastborough, Inc. (Gase No. 17-42287)

Dpayless Shoesource Worldwide, Inc. (Case No. 17-42268)

0Payless Collectlve GP, LLC (Case No. 17-42290)

Dconective Brands Services, Inc. (Case No. 17-42291)

Dpayless Gold Value Co, Inc. (Case No. 17-42292)

Doynamic; Assets Limited icase No. 17-42294)

DColleclive Brands LogisUcs, Limited (Case No. 17-42299

Dpayless Shoesource Distribution, Inc. (Case No. 17-42300)

DPayless lntennediate Holdings LLC (Case No.17-42301)

DCo!leclive Licensing lntemational, LLC (Case No. 17-42302)

Dshoe Soun:ing, Inc. (Case No. 17-42303)

Clp55 Delaware Company 4, Inc. (Case No. 17-42282)

Dpay1ess Shoesource Merchandising, Inc. (Case No. 17-42283)

OpayJess International Franchising, LLC (Case No.17-42284)

Opay1ess Finance, Inc. (Case No. 17-42286)

DPSS Canada, Inc. (Case No. 17-42296)

ClPayless Purchasing Se!'\llces, Inc. cease No.17-42297)

DPayless Inc. (case No. 17-42298)

ClWBG-PSS Holdings LLC (case No. 17-42305)

Dclinch, LLC (Case No. 17-42307)

Clpayless Shoesource of Puerto Rico, lnc.

(Case No.17-42308)

Debtor Payless Holdings LLC has listed your claim on Schedule E/F Part 1 as a General Unsecured claim in the amount of $206,453.22. If you agree with the claim amount and characterization, you do not need to submit this claim form. If you disagree, you must timely file a proof of claim form or be estopped and enjoined from further

Official Form 410

Proof of Claim L'c.c'.c.'0ccv.c.ecy'"'-.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~---' 04/16

Read the instructions before filling out this form. This form is for making a claim for payment In a bankruptcy case. Other than a claim under 11 U.S.C. § 503(b)(9)1 this form should not be used to make a request for payment of an administrative expense. Make such a request according to 11 U.S.C. § 503. Filers must leave out or redact information that is entitled to privacy on this fonn or on any attached documents. Attach redacted copies of any documents that support the claim, such as promissory notes, purchase orders, invoices, itemized statements of running accounts, contracts, judgments, mortgages, and security agreements. Do not send original documents; they may be destroyed after scanning. If the documents are not available, explain in an attachment.

A person who files a fraudulent claim could be fined up to $500,000, imprisoned for up to 5 years, or both. 18 U.S.C. §§ 152, 157, and 3571.

Fill"in ·an the information about the claim as of the date the case was filed. That date is on the notice of bankruptcy (Form 309) that you received.

Identify the Claim

1. Who is the current creditor?

2. Has this claim been acquired from someone else?

3. Where should notices and payments to the creditor be sent?

4.

5.

I

Federal Rule of Bankruptcy Procedure (FRBP) 2002(g)

Does this claim amend one already filed?

Do you know if anyone else has filed a proof of claim for this claim?

Official Form 41 O

ABC Shoe Supplier, Inc.

Name of the current creditor (the person or entity to be paid for this claim)

Other names the creditor used with the debtor -------------------------------

D No D Yes. From whom? _______________________________ _

ABC Shoe Supplier, Inc. Attn: General Counsel 555 W First St Bellingham, WA 98225

Contact phone

Contact email

D No

Wh8re shouid.payments to the creditor be sent? (If ciiileien1f'" , · · .

Name

Number Street

City State ZIP Code

Contact phone

Contact email

D Yes. Claim number on court claims registry (if known)-~- Filed on MM I DD I yyyy

D No D Yes. Vv110 made the earlier filing?

Proof of Claim page 1

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Give Information About the Claim as of the Date the Case Was Filed

6. Do you have any number D No you use to identify the 0 Yes. Last 4 digits of the debtor's account or any number you use to identify the debtor: __ -- ----debtor?

7. How much is the claim? $ . Does this amount include interest or other charges?

D No

D Yes. Attach statement itemizing interest, fees, expenses, or other charges required by Bankruptcy Rule 3001 (c)(2)(A).

8. What is the basis of the Examples: Goods sold, money loaned, lease, services performed, personal injury or wrongful death, or credH card. claim?

Attach _redacted copies of any documents supporting the claim required by Bankruptcy Rule 3001 {c).

Limit disclosing information that is entitled to privacy, such as health care information.

9. Is all or part of the claim 0 No secured? D Yes. The claim is secured by a lien on property.

Nature of property:

D Real estate. If the claim· is secured by the debtor's principal residence, file a Mortgage Proof of Cf aim Attachment (Officfal Form 410-A) with this Proof of Claim.

0 Motor vehicle

0 Other. Describe:

-------- -- --~- ------Basis for perfection:

Attach redacted copies of documents, if any, that show evidence of perfection of a security interest (for example, a mortgage, lien, certificate of title, financing statement, or other document that shows the lien has been filed or recorded.)

Value of property; $

Amount of the claim that Is secured: $

Amount of the claim that is unsecured: $ (The sum of the secured and unsecured amounts should match the amount in line 7.)

Amount necessary to cure any default as of the date of the petition: s

Annual Interest Rate (when case was filed) ___ %

0 Fixed

D Variable

10. ls this claim based on a D No lease?

D Yes. Amount necessary to cure any default as of the date of the petition. $

11. ls this claim subject to a D No right of setoff?

D Yes. Identify the property:

Officlal Form 410 Proof of Claim page 2

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entitled to priority under 11 U.S.C. § 507(a)?

A claim may be partly priority and partly nonpriority. For example, in some categories, the law limits the amount entitled to priority.

13. lsall orpartofthe claim entitled to administrative priority pursuant to 11 u.s.c. § 503(b)(9)?

Sign Below

The person completing this proof of claim must sign and date it. FRBP 9011(b).

If you file this claim electronically, FRBP 5005(a)(2) authorizes courts to establish local rules specifying what a signature is.

A person who files a fraudulent claim could be fined up to $500,000, imprisoned for up to 5 years, or both. 18 U.S.C. §§ 152, 157, and 3571.

Official Form 410

0 No

D Yes. Check one:

D Domestic support obligations (including alimony and child support)under 11 U.S.C. § 507(a)(1)(A) or(a)(1)(B).

D Up to $2,850* of deposits toward purchase, lease, or rental of property or services for personal, family, or household use. 11 U.S.C. § 507(a)(7).

D Wages, salaries, or commissions (up to $12,850*) earned within 180 days before the

Amount entitled to priority

$ ______ _

$ _______ _

bankruptcy petition is filed or the debtor's business ends, whichever isear1ier. $ _______ _ 11 U.S.C. § 507(a)(4).

D Taxes or penalties owed to governmental units. 11 U.S.C. § 507(a)(8). $, _______ _

0 Contributions to an employee benefit plan. 11 U.S.C. § 507(a)(5). $, _______ _

0 Other. Specify subsection of 11 U.S.C. § 507(a)() that applies. $, _______ _

~ Amounts are subject to adjustment on 4/01/16 and every 3 years after that for cases begun on or after the date of adjustment.

0 No

D Yes. Indicate the amount of your claim arising from the value of any goods received $ by the Debtor within 20 days before the date of commencement of the above case, in ---------which the goods have been sold to the Debtor in the ordinary course of such Debtor's business. Attach documentation supporting such claim.

Check the appropriate box:

D I am the creditor.

D I am the creditor's attorney or authorized agent.

D I am the trustee, or the debtor, or their authorized agent. Bankruptcy Rule 3004.

D I am a guarantor, surety, endorser, or other codebtor. Bankruptcy Rule 3005.

I understand that an authorized signature on this Proof of Claim serves as an acknowledgment that when calculating the amount of the claim, the creditor gave the debtor credit for any payments received toward the debt.

I have examined the information in this Proof of Claim and have a reasonable belief that the information is true and correct.

I declare under penalty of perjury that the foregoing is true and correct.

Executed on date ______ (mm/dd/yyyy)

Signature Print the name of the person who is completing and signing this claim:

Name

Title

Company

First name Middle name Last name

Identify the corporate servicer as the company if the authorized agent Js a servicer.

Address Number Street

City

Contact phone

Proof of Claim

State

Email

ZIP Code

page3

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Official Form 410

Instructions for Proof of Claim United States Bankruptcy Court 12115

These instructions and definitions generally explain the law. In certain circumstances1 such as bankruptcy cases that debtors do not file voluntarily, exceptions to these general rules may apply. You should consider obtaining the advice of an attorney, especially if you are unfamiliar with the bankruptcy process and privacy regulations.

A person who files a fraudulent claim could be fined up to $500,000, Imprisoned for up to 5 years, or both. 18 U.S.C. §§ 152, 157 and 3571.

How to fill out this form

• Fill in all of the infonnation about the claim as of the date the case was filed.

• Fill in the caption at the top of the form.

• If the claim has been acquired from someone else, ·then state the identity-of thelast·party who owned the claim or was the holder of the claim and who transferred it to you before the initial claim was filed.

• Attach any supporting documents to this fonn. Attach redacted copies of any documents that show thatthe debt exists, a lien secures the debt, or both. (See the definition of redaction on the next page.)

Also attach redacted copies of any documents that show perfection of any security interest or any assignments or transfers of the debt. In addition to the documents, a summary may be added. Federal Rule ofBankruptcy Procedure (called "Bankruptcy Rule") 3001(c) and(d).

• Do not attach original documents because attachments may be destroyed afterscanning.

• If the claim is based on delivering health care goods or services, do not disclose confidential health care information. Leave out or redact confidential infonnation both in the claim and in the attached documents.

• A Proof of Claim fonn and any attached documents must show only the last 4 digits of any social security number, individual's tax identification number, or financial account number, and only the year of any person's date of birth. See Bankruptcy Rule 9037.

• For a minor child, fill in only the child's initials and the full name and address of the child's parent or · guardian.-For·e~ample;·write·Ac 8;.·a minorchild(;John Doe. parenl, 123 Main St., City, Slate). See Bankruptcy Rule 9037.

Confirmation that the claim has been filed

To receive confirmation that the claim has been filed, enclose a stamped self-addressed envelope and a copy of this form. You may view a list of filed claims in this case by visiting the Claims and Noticing Agent's website at bttps·//cascs primeclcrk cnm/ or the Court1s website at https·//www pacer gov and brtps·// www ecfmneh nscm1rts gov/rg-ibin/login

Understand the terms used in this form

Administrative expense: Generally, an expense that arises

after a bankruptcy case is filed in connection with operating, liquidating, or distributing the bankruptcy estate. 11 u.s.c. § 503.

Claim: A creditor's right to receive payment for a debt that the debtor owed on the date the debtor filed for bankruptcy. 11 U.S.C. § 101 (5). A claim may be secured or unsecured.

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Claim Pursuant to 11 U.S.C. §503(b)(9): A claim arising from the value of any goods received by the Debtor within 20 days before the date of commencement of the above case, in which the goods have been sold to the Debtor in the ordinary course of the Debtor's business. Attach documentation supporting such claim.

Creditor: A person, corporation. or other entity to whom a debtor owes a debt that was incurred on or before the date the debtor filed for bankruptcy. 11 U.S.C. §IO I ( I 0).

Debtor: A person. corporation, or other entity who is in bankruptcy. Use the debtor's name and case number asshown in the bankruptcy notice you received. 11 U.S.C. § I 01 (13).

Evidence of perfection: Evidence of perfection of a security interest may include documents showing that a security interest has been filed or recorded. such as a mo1igage, lien. certificate of title, or financingstatemcnt.

Information that is entitled to privacy: A Proof a/Claim form and any attached documents must show only the last 4

digits of any social security number, an individual's tax iden.tification ~umber, or a financial account number, only the initials ofa minor's name, and only the year of any person's date of birth. !fa claim is based on delivering health care goods 01: services, limit the disclosllre of the goods orservices to avoid embarrassment or disclosure of confidential health care information. You may later be required to give more information if the trustee or someone else in interest objects to the claim.

Priority claim: A claim within a category of unsecured claims that is entitled to priority under 11 U.S.C. §507(a). These claims are paid from the available money or property in a bankruptcy case before other unsecured claims arc pa.id. Common priority unsecured claims include alimony, child support, taxes, and certain unpaid wages.

Proof of claim: A form that shows the amount of debt the d~btor mvcd _t_o a creditor. on the date of the bankruptcyfiling. The form must be filed in the district where the case is pending.

Redaction of infonnation: Masking, editing out, or deleting certain informatiOn to protect privacy. Filers must redactor leave out information entitled to privacy on the Proof of Claim form and any attached documents.

Secured claim under 11 U.S.C. §506(a): A claim backed by a lien on particular property of the debtor. A claim is secured to the extent that a creditor has the right to be paid from the properly before other creditors are paid. The amount ofa secured claim usually cannot be more than the value of the particular property on which the creditor has a lien. Any amount owed to a creditor that is more than the value of the property normally may be an unsecured claim. But exceptions exist; for example, see 11 U.S.C. § 1322(b) and the final sentence ofl325(a).

Examples of liens on property include a mortgage on real estate or a security interest in a car. A lien may be voluntarily granted by a debtor or may be obtained through a court proceeding. In some states, a courtj udgment may be a lien.

Setoff: Occurs when a creditor pays itself with money belonging to the debtor that it is holding, or by canceling a debt it owes to the debtor.

Unsecured claim: A claim that does not meet the requirements of a secured claim. A claim may be unsecured in part to the extent that the amount of the claim is more than the value of the property on which a creditor has a lien.

Offers to purchase a claim

Certain entities purchase claims for an amount that is less than the face value of the claims. These entities may contact creditors offering to purchase their claims. Some written communications from these entities may easily be confused with official coutt documcntati on or communications from the debtor. These entities do not represent the bankruptcy court, the bankruptcy trustee, or the debtor. A creditor has no obligation to sell its claim. However, if a creditor decides to sell its claim, any transfer of that claim is subjectto Bankruptcy Rule 300 I( c), any provisions ofthe Bankruptcy Code (11 U.S.C. § 101 et seq.) that apply, and any orders of the bankrupteyeom1 that apply.

Please send completed Proof(s) of Claim to:

Payless Holdings LLC Claims Processing Center e/o Prime Clerk LLC 830 3rd A venue, 3rd Floor New York, NY 10022

Do not file these instructions with your form

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EXHIBITC

Form of Publication Notice

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In re:

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

) Case No. 17-42267-659 ) Chapter 11

Payless Holdings LLC, et al.,

Debtors.

) ) Jointly Administered )

NOTICE OF DEADLINES FOR FILING OF PROOFS OF CLAIM

PLEASE TAKE NOTICE OF THE FOLLOWING:

On , 2017, the United States Bankruptcy Court for the Eastern District of Missouri (the "Court") entered an order (Docket No. _) (the "Bar Date Order")1 establishing certain deadlines for the filing of proofs of claim in the chapter 11 cases of Payless Holdings LLC and certain of its direct and indirect subsidiaries (collectively, the "Debtors").2 A schedule ideutifying the Debtors and their respective case and tax ideutification numbers can be obtaiued, free of charge, from the website maintained by the Debtors' claims and noticiug agent, Prime Clerk LLC ("Prime Clerk"), at https://cases.primeclerk.com/payless (the "Prime Clerk Website").

By the Bar Date Order, the Court established: (i) Juue 19, 2017 at 11:59 p.m., Central Time (the "General Bar Date"), as the general deadline for entities to file proofs of claim in the Debtors' cases for claims against the Debtors that arose or are deemed to have arisen prior to the date on which the Debtors filed their chapter 11 petitions, April 4, 2017 (the "Petition Date"); and (ii) October 2, 2017 at 11:59 p.m., Central Time (the "Governmental Bar Date"), as the general deadline for governmental units to file proofs of claim in the Debtors' cases for claims against the Debtors that arose or are deemed to have arisen prior to the Petition Date. As described below, the Bar Date Order also establishes different bar dates for certain categories of claims.

As used in this Notice, the terms "claim," "entity," "governmental unit," "person" have the meanings given to them under applicable sections of title 11 of the United States Code (the "Bankruptcy Code").

All capitalized terms not otherwise defined herein shall have the meaning set forth in the Bar Date Order.

Holders of claims and interests against Payless Shoesource Canada Inc., Payless ShoeSource Canada GP Inc., or Payless Shoesource Canada LP. are not subject to deadlines and other requirements of the Bar Date Order.

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A. THEBARDATES

The Bar Date Order establishes the following bar dates for filing proofs of claim or requests for payment of certain administrative expenses in these cases (collectively, the "Bar Dates"):

1. The General Bar Date. Pursuant to the Bar Date Order, except as described below, all entities holding claims (whether secured, unsecured, priority or unsecured priority, including section 503(b)(9) claims) against the Debtors that arose or are deemed to have arisen prior to the commencement of these cases are required to file proofs of claim by the General Bar Date. The General Bar Date applies to all types of claims against the Debtors that arose prior to the Petition Date.

2. The Governmental Bar Date. Pursuant to the Bar Date Order, all governmental units holding claims against the Debtors that arose before the Petition Date are required to file proofs of claim by the Governmental Bar Date (i.e., by October 2, 2017 at 11 :59 p.m., Central Time).

3. The Rejection Bar Date. Pursuant to the Bar Date Order, any entity asserting any Jirepetition or postpetition claims against the Debtors (including administrative claims under section 503(b) of the Bankruptcy Code) arising from or relating to the rejection of executory contracts or unexpired leases pursuant to a court order or by operation of section 365(d)(4) of the Bankruptcy Code (collectively, "Rejection Damages Claims") are required to file proofs of claim by the later of:

-(i)-the General Bar-Date;-and -(ii)-J-1:59-·p,m.; eentral -Time; orr the·date that is 30 days after the entry of the relevant order or the deemed rejection date. The later of these dates is referred to in this Notice as the "Rejection Bar Date."

4. 1'.he Amended Schedule··-Bar -Date. Pursuant to -the Bar Date Order, if, subsequent to the date of this Notice, a Debtor amends or supplements its Schedules to: (i) reduce the undisputed, noncontingent and liquidated amount of a claim against the Debtor; (ii) change the nature or classification of a claim against the Debtor in a manner adverse to the scheduled creditor; or (iii) add a new claim to the Schedules with respect to a party that was not previously served with notice of the Bar Dates, the affected claimant is required to file a proof of claim or amend any previously filed proof of claim in respect of the new or amended scheduled claim on or before the later of: (i) the General Bar Date; and (ii) 11 :59 p.m., Central Time, on the date that is 30 days after the date that notice of the applicable amendment or supplement to the Schedules is served on the claimant. The later of these dates is referred to in this Notice as the "Amended Schedule Bar Date."

B. WHO MUST FILE A PROOF OF CLAIM

Unless an exception applies, if you have a claim that arose or is deemed to have arisen prior to the Petition Date, you MUST file a proof of claim to vote on a chapter I I plan or to share in distributions from the Debtors' bankruptcy estates. Claims based on acts or omissions of the Debtors that occurred before the Petition Date must be filed on or prior to the applicable Bar

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Date, even if such claims are not now fixed, liquidated or certain or did not mature or become fixed, liquidated or certain before the Petition Date. The exceptions to the requirement to file a claim by the Bar Dates are described in the Bar Date Order, which is available on the Prime Clerk Website.

C. NO BAR DATE FOR PROOFS OF INTEREST

Any entity holding an interest in any Debtor (an "Interest Holder"), which interest is based exclusively upon the ownership of common or preferred stock in a corporation, a membership interest in a limited liability corporation or partnership or warrants or rights to purchase, sell or subscribe to such a security or interest ( any such security or interest, an "Interest"), need not file a proof of Interest on or before the General Bar Date; provided, however, that Interest Holders who wish to assert claims against any of the Debtors that arise out of or relate to the ownership or purchase of an Interest, including claims arising out of or relating to the sale, issuance or distribution of the Interest, must file proofs of claim on or before the General Bar Date, unless another exception applies. The Debtors have reserved the right to establish at a later time a bar date requiring Interest Holders to file proofs of Interest. If such bar date is established, Interest Holders will be notified of the bar date for filing proofs oflnterest at the appropriate time.

D. WHAT TO FILE

Claims should be asserted on proof of claim forms that conform substantially to the standard proof of claim form, Official Form B 410. Proof of claim forms may be obtained, free of charge, at http://www.uscourts.gov/forms/bankruptcy-forms or the Prime Clerk Website.

All proof of claim forms must be signed by the claimant or, if the claimant is not an individual, by an authorized agent of the claimant (electronic signatures are acceptable). The proof of claim form must be written in English and be denominated in United States currency. You should attach to your completed proof of claim form any documents upon which the claim is based ( or, if such documents are voluminous, attach a summary) or an explanation as to why the documents are not available.

Except as otherwise set forth in the Bar Date Order, all Claimants asserting a Claim against more than one Debtor must file a separate Proof of Claim with respect to each such Debtor and identify on each Proof of Claim the particular Debtor against which such Claim is asserted and the case number for that particular Debtor. If any Proof of Claim does not clearly specify the name of the Debtor against which the claim is asserted (including listing multiple Debtors), that Proof of Claim shall be administered as though it was filed against Payless Holdings LLC, unless a single different case number is clearly specified. Notwithstanding the foregoing, the failure of any entity to file its Proof of Claim against the correct Debtor shall not constitute cause to expunge the Proof of Claim. Rather, the Debtors may seek to reclassify the Proof of Claim so that the claim is asserted against the proper Debtor on notice to the affected claimant.

Any entity asserting a Rejection Damages Claim with an administrative claim component must file, along with its proof of claim, a detailed statement describing the nature and basis of

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any portion of the Rejection Damages Claim asserting an administrative priority under section 503(b) of the Bankruptcy Code (the "Administrative Claim Supplement").

Under the Bar Date Order, the filing of a proof of claim form, along with an attached Administrative Claim Supplement, if applicable, shall be deemed to satisfy the procedural requirements for the assertion of a Rejection Damages Claim (including any administrative claim included therein). All other administrative claims under section 503(b) of the Bankruptcy Coile must be made by separate requests for payment in accordance with section 503(a) of the Bankruptcy Coile and shall not be deemed proper if made by proof of claim. No deadline has been established for the filing of administrative claims other than (a) claims under section 503(b)(9) of the Bankruptcy Code and (b) any portion of a Rejection Damages Claim seeking administrative priority, which claims must be filed by the General Bar Date and the Rejection Bar Date, respectively.

E. WHEN AND WHERE TO FILE

Proofs of Claim must be sent either (a) through the CM/ECF system on the Court's website at http://www.moeb.uscourts.gov/epoc.htm; or (b) electronically using the Electronic Proof of Claim (ePOC) Program on the Court's web site at https://www.ecf.moeb.uscourts.gov/cgibin/login; or (c) by first-class mail or overnight courier to Clerk of the Bankruptcy Court, Eastern District of Missouri, 111 S. IO'h St., 4th Floor, St. Louis, MO 63102; or (d) by first-class mail, overnight courier, or hand-delivery to Payless Holdings LLC Claims Processing Center, c/o Prime Clerk, LLC, 830 3rd Avenue, 3rd Floor, New York, NY 10022. Proofs of claim willbe deemed filed only when actually received by the .Clerk of

··-the US Bankruptcy Court or by the Payless Claims Processing Center on or before the applicable Bar Date. Proofs of claim may NOT be delivered by facsimile or electronic mail transmission. Any facsimile or electronic mail submission will not be accepted and will not be deemed filed until a proof of claim is submitted by one of the approved methods described above.

Proof of claim forms will be collected from the Claims Processing Center, docketed and maintained by the Debtors' claims agent, Prime Clerk. If you wish to receive acknowledgement of Prime Clerk's receipt of a proof of claim, you must submit to Prime Clerk by the applicable_ Bar Date and concurrently with your original proof of claim: (a) a copy of the original proof of claim; and (b) a self-addressed, postage prepaid return envelope.

F. CONSEQUENCES OF FAILURE TO FILE A PROOF OF CLAIM BY THE APPLICABLE BAR DATE

EXCEPT AS OTHERWISE SET FORTH IN THE BAR DATE ORDER, ANY ENTITY THAT IS REQUIRED TO FILE A PROOF OF CLAIM WITH RESPECT TO A PARTICULAR CLAIM AGAINST A DEBTOR BUT THAT FAILS TO DO SO BY THE APPLICABLE BAR DATE DESCRIBED IN THIS NOTICE SHALL BE ESTOPPED AND ENJOINED FROM THE FOLLOWING: (A) ASSERTING ANY SUCH CLAIM AGAINST THE DEBTORS OR THEIR ESTATES OR PROPERTY THAT (I) IS IN AN AMOUNT THAT EXCEEDS THE AMOUNT, IF ANY, THAT IS IDENTIFIED IN THE SCHEDULES ON BEHALF OF SUCH ENTITY AS UNDISPUTED, NONCONTINGENT AND LIQUIDATED OR (II) IS OF A

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DIFFERENT NATURE OR CLASSIFICATION THAN ANY SUCH CLAIM IDENTIFIED IN THE SCHEDULES ON BEHALF OF SUCH ENTITY (ANY SUCH CLAIM IN THIS SUBPARAGRAPH (A) BEING REFERRED TO IN THIS NOTICE AS AN "UNSCHEDULED CLAIM"); (B) VOTING UPON, OR RECEIVING DISTRIBUTIONS UNDER, ANY CHAPTER 11 PLAN OR PLANS IN THESE CHAPTER 11 CASES IN RESPECT OF AN UNSCHEDULED CLAIM; OR (C) WITH RESPECT TO ANY ADMINISTRATIVE PRIORITY CLAIM COMPONENT OF ANY REJECTION DAMAGES CLAIM, ASSERTING ANY SUCH PRIORITY CLAIM AGAINST THE DEBTORS OR THEIR ESTATES OR PROPERTY.

G. RESERVATION OF RIGHTS

The Debtors reserve the right, subject to the Final DIP Order,3 to: (a) dispute, or assert offsets or defenses against, any filed claim or any claim listed or reflected in the Schedules as to nature, amount, liability, priority, classification or otherwise; (b) subsequently designate any scheduled claim as disputed, contingent or unliquidated; and ( c) otherwise amend or supplement the Schedules. Nothing contained in this Notice shall preclude the Debtors from objecting to any claim, whether scheduled or filed, on any grounds.

H. THE DEBTORS' SCHEDULES AND ADDITIONAL INFORMATION

You may be listed as the holder of a claim against one or more of the Debtors in the Debtors' Schedules. Copies of the Debtors' Schedules, a proof of claim form and other information and documents regarding the Debtors' chapter 11 cases (including the Bar Date Order) are available for inspection and download free of charge on the Prime Clerk Website.

If you rely on the Debtors' Schedules, it is your responsibility to determine that the claim is accurately listed in the Schedules. Otherwise, if you decide to file a proof of claim, you must do so before the applicable Bar Date in accordance with the procedures set forth in this Notice.

If you require additional information regarding the filing of a proof of claim, you may contact Prime Clerk at (844) 648-5574 (toll free in the U.S. and Canada) or (347) 505-5245 (international calls). You also may contact Prime Clerk directly by writing to the Prime Clerk Claims Processing Center.

A HOLDER OF A POSSIBLE CLAIM AGAINST THE DEBTORS SHOULD CONSULT AN ATTORNEY REGARDING ANY MATTERS NOT COVERED BY THIS NOTICE, SUCH AS WHETHER THE HOLDER SHOULD FILE A PROOF OF CLAIM. YOU ARE FURTHER ENCOURAGED TO CAREFULLY REVIEW THE BAR DATE ORDER AND RELATED MATERIALS ON THE PRIME CLERK WEBSITE.

For purposes of this Notice, the term "Final DIP Order" shall mean a final order granting the Debtors' Motion for Entry of Interim and Final Orders (I) Authorizing the Debtors to Obtain Postpetilion Financing, (II) Authorizing The Debtors to Use Cash Collateral, (III) Granting Liens and Providing Superpriority Administrative Expense Status, (IV) Granting Adequate Protection to the ?repetition lenders, (V) Modifying the Automatic Stay, (VI) Scheduling a Final Hearing, and (VIJ) Granting Related Relief[Docket No. 36].

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122

Final Customer and Partner Order

THIS IS EXHIBIT "B" REFERRED TO IN THE AFFIDAVIT OF MICHAEL SHAKRA, SWORN BEFORE ME ™L 161

h DAY OF JUNE, 2017.

;L A Commissioner for taking Affidavits, etc.

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In re:

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

) Case No. J 7-42267-659 ) Chapter 11

Payless Holdings LLC, et al.,

Debtors.

) ) Jointly Administered ) ) Related Docket Nos.: 21, 92

FINAL ORDER (I) AUTHORIZING THE DEBTORS TO (A) HONOR

CERTAIN PREPETITION OBLIGATIONS TO CUSTOMERS AND PARTNERS AND (B) OTHERWISE CONTINUE CERTAIN CUSTOMER AND PARTNER PROGRAMS IN THE ORDINARY

COURSE OF BUSINESS AND (II) GRANTING RELATED RELIEF

Upon the motion (the "Motion")1 of the above-captioned debtors and debtors m

possession (collectively, the "Debtors") for entry of a final order (this "Final Order"),

(a) authorizing the Debtors to (i) honor certain prepetition obligations to Customers and

Programs and (ii) maintain and administer the Customer Programs in the ordinary course of

business and in a manner consistent with past practice, and (b) granting related relief, all as more

fully set forth in the Motion; and upon the First Day Declaration; and this Court having

jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and Rule 81-9.0J(B)(J) of

the Local Rules of the United States District Court for the Eastern District of Missouri; and this

Court having found that this is a core proceeding pursuant to 28 U.S.C. § 157(b)(2), and that this

Court may enter a final order consistent with Article III of the United States Constitution; and

this Court having found that venue of this proceeding and the Motion in this district is proper

pursuant to 28 U.S.C. §§ 1408 and 1409; and this Court having found that the reliefrequested in

Capitalized tem1s used but not othenvise defined in this Final Order shall have the meanings ascribed to them in the Motion or in the First Day Declaration, as applicable.

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the Motion is in the best interests of the Debtors' estates, their creditors, and other parties-in­

interest; and this Court having found that the Debtors' notice of the Motion and opportunity for a

hearing on the Motion were appropriate under the circumstances and no other notice need be

provided; and this Court having reviewed the Motion and having heard the statements in support

of the relief requested therein at a hearing before this Court (the "Hearing"); and this Court

having determined that the legal and factual bases set forth in the Motion and at the Hearing

establish just cause for the relief granted herein; and upon all of the proceedings had before this

Court; and after due deliberation and sufficient cause appearing therefor, it is

HEREBY ORDERED THAT:

I. The Motion is granted on a final basis as set forth herein.

2. The relief provided in the Interim Order is approved on a final basis.

3. The Debtors are authorized, but not directed, to honor and perform their Customer'

Programs on a final basis; provided, however, that the Debtors shall honor their Gift Card

Program in Stores, including online and in those Stores that are being or will be identified for

closure pursuant to any motion.

4. The Debtors are authorized, but not directed, to continue, renew, and replace the

Customer Programs on a postpetition basis in the ordinary course of their businesses and

consistent with their prepetition practices.

5. Notwithstanding the relief granted herein and any actions taken hereunder,

nothing contained in the Motion or this Interim Order or any payment made pursuant to this

Interim Order shall constitute, nor is it intended to constitute, (a) an admission as to the validity

of any prepetition claim against a Debtor entity, (b) a waiver of the Debtors' rights to dispute any

prepetition claim of any groups, (c) a promise or a requirement to pay a prepetition claim, (d) an

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implication or admission that any particular claim is of a type specified or defined in this Final

Order or the Motion, (e) a request or authorization to assume any prepetition agreement,

contract, or lease pursuant to section 365 of the Bankruptcy Code, (f) a waiver or limitation of

the Debtors' rights or the rights of any other person under the Bankruptcy Code or any other

applicable law, (g) an admission as to the validity or priority of any claim or lien against the

Debtors, or (h) a waiver of the Debtors' rights to subsequently dispute such claim or lien.

6. The banks and financial institutions on which checks were drawu or electronic

payment requests made in payment of the prepetition obligations approved herein are authorized,

but not directed, to receive, process, honor, and pay all such checks and electronic payment

requests when presented for payment, provided that sufficient funds are on deposit and standing

in the Debtors' credit in the applicable bank accounts to cover such payments, and all such

banks and financial instih1tions are authorized to rely on the Debtors' designation of any

particular check or electronic payment request as approved by this Final Order without any duty

of further inquiry and without liability for following the Debtors' instructions.

7. The Debtors are authorized to issue postpetition checks, or to affect postpetition

fund transfer requests, in replacement of any checks or fund transfer requests that are dishonored

as a consequence of these chapter 11 cases with respect to prepetition amounts owed in

connection with the Customer Programs.

8. Nothing contained in the Motion or this Final Order is intended or should be

construed to create an administrative priority claim on account of any Customer Programs.

9. Notwithstanding anything to the contrary contained herein, any payment made or

to be made under this Final Order, any authorization contained in this Final Order, or auy claim

for which payment is authorized hereunder, shall be subject to any orders of this Court approving

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any debtor in possession financing for, or any use of cash collateral by, the Debtors , and any

documents providing for such debtor in possession financing and the budget governing such

debtor in possession financing and use of cash collateral.

I 0. Notice of the Motion satisfies the requirements of Bankruptcy Rule 6004(a).

11. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this Final

Order are immediately effective and enforceable upon its entry.

12. No later than two (2) business days after the date ofthis order, the Debtors shall

serve a copy of the Final Order on the Notice Parties and shall file a certificate of service no later

than 24 hours after service.

DATED: May 9, 2017 St. Louis, Missouri jjh

4

Krm a.~-~ KAi'Y A. SURRATT-STATES Chief United States Bankrnptcy Jndge

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Order Prepared by:

Steven N. Cousins MO 30788 Erin M. Edelman MO 67374 John G. Willard MO 67049 Armstrong Teasdale LLP 7700 Forsyth Boulevard, Suite 1800 St. Louis, Missouri 63105 Telephone: (314) 621-5070 Facsimile: (314) 621-2239 Email: [email protected] Email: [email protected] Email: [email protected]

Nicole L. Greenblatt, P.C. (admitted pro hac vice) Cristine F. Pirro (admitted pro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 601 Lexington Avenue New York, New York 10021 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: [email protected] Email: [email protected]

James H.M. Sprayregen, P.C. William A. Guerrieri (admitted pro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Email: [email protected]

Counsel to Debtors and Debtors in Possession

5

128

Final Insurance Order

THIS IS EXHIBIT "C" REFERRED TO IN THE AFFIDAVIT OF MICHAEL SHAKRA, SWORN BEFORE ME

THIS 161h DAY OF JUNE, 2017.

( ,( A Commis;foner for taking Affidavits, etc.

129

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In re:

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

) Case No. l 7-42267-659 ) Chapter 11

Payless Holdings LLC, et al.,

Debtors.

) ) Jointly Administered ) ) Related Docket Nos.: 10, 89

FINAL ORDER (I) AUTHORIZING THE DEBTORS TO (A) CONTINUE INSURANCE

COVERAGE ENTERED INTO PREPETITION AND SATISFY PREPETITION OBLIGATIONS RELATED

THERETO AND (B) RENEW, SUPPLEMENT, OR PURCHASE INSURANCE POLICIES, AND (II) GRANTING RELATED RELIEF

Upon the motion (the "Motion") 1 of the above-captioned debtors and debtors m

possession (collectively, the "Debtors") for entry of a final order (this "Final Order"),

(a) authorizing the Debtors to (i) continue insurance coverage entered into prepetition and satisfy

payment of prepetition obligations related thereto in the ordinary course of business and

(ii) renew, supplement, or purchase insurance coverage in the ordinary course of business, and

(b) granting related relief, all as more fully set forth in the Motion; and upon the First Day

Declaration; and this Court having jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and

1334 and Rule 81.901(B)(I) of the Local Bankruptcy Rules of the United States District Court

for the Eastern District of Missouri; and this Court having found that this is a core proceeding

pursuant to 28 U.S.C. § 157(b)(2), and that this Court may enter a final order consistent with

Article III of the United States Constitution; and this Court having found that venue of this

proceeding and the Motion in this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409; and

this Court having found that the relief requested in the Motion is in the best interests of the

Capitalized terms used but not otherwise defined in this Order shall have the meanings ascribed to them in the Motion or in the First Day Dcclnration, ns applicable.

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Debtors' estates, their creditors, and other parties in interest; and this Court having found that the

Debtors' notice of the Motion and opportunity for a hearing on the Motion were appropriate

under the circumstances and no other notice need be provided; and this Court having reviewed

the Motion and having heard the statements in support of the relief requested therein at a hearing

before this Court (the "Hearing"); and this Court having detemuned that the legal and factual

bases set forth in the Motion and at the Hearing establish just cause for the relief granted herein;

and upon all of the proceedings had before this Court; and after due deliberation and sufficient

cause appearing therefor, it is

HEREBY ORDERED THAT:

I. The Motion is granted on a final basis as set forth herein.

2. The relief provided in the Interim Order is approved on a final basis.

3. The Debtors are authorized, but not directed, to continue the Insurance Policies,

inclnding, bnt not limited to those identified on Exhibit A to the Motion,2 in the ordinary course

of business and to pay any prepetition and postpetition obligations related to the Insurance

Policies, including, without limitation, paying any amounts owed on account of Premiums,

Deductible Fees, Insurance Administrator Fees, Brokerage Fees, and other fees and costs in the

ordinary course of business.

4. The Debtors are authorized, but not directed, to renew, supplement, modify, or

purchase Insurance Policies on a postpetition basis to the extent that the Debtors determine that

such action is in the best interest of their estates.

5. The Debtors are authorized, but not directed, to honor any aµiounts owed on

account of any Insurance Policy Audits in the ordinary course of business.

2 For the avoidance of doubt, Insurance Policies shall include all insurance policies, whether current or expired, and any agreements related thereto.

2

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6. Nothing herein alters or amends the terms and conditions of any Insurance Policy

or relieves the Debtors of any of their obligations under the Insurance Policies.

7. The banks and financial institutions on which checks were drawn or electronic

payment requests made in payment of the prepetition obligations approved herein are authorized,

but not directed, to receive, process, honor, and pay all such checks and electronic payment

requests when presented for payment, and all such banks and financial institutions are authorized

to rely on the Debtors' designation of any particular check or electronic payment request as

approved by this Final Order.

8. The Debtors are authorized to issue postpetition checks, or to effect postpetition

fund transfer requests, in replacement of any checks or fund transfer requests that are dishonored

as a consequence of these chapter 11 cases with respect to prepetition amounts owed in

connection with any Insurance Policies.

9. Notwithstanding anything to the contrary contained herein, any payment made or

to be made under this Order, any authorization contained in this Order, or any claim for which

payment is authorized hereunder, shall be subject to any orders of this Court approving any

debtor in possession financing for, or any use of cash collateral by, the Debtors, and any

documents providing for such debtor in possession financing and the budget governing such

' debtor in possession financing and use of cash collateral.

I 0. Notwithstanding the relief granted herein and any actions taken hereunder,

nothing contained in the Motion or this Final Order or any payment made pursuant to this Final

Order shall constitute, nor is it intended to constitute, an admission as to the validity or priority

of any claim or lien against the Debtors, a waiver of the Debtors' rights to subsequently dispute

such claim or lien, or the assumption or adoption of any agreement, contract, or lease under

3

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section 365 of the Bankruptcy Code.

11. Notice of the Motion satisfies the requirements set forth m Bankruptcy

Rule 6004(a).

12. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this Final

Order are immediately effective and enforceable upon its entry.

13. No later than two (2) business days after the date of this Order, the Debtors shall

serve a copy of the Order on the Notice Parties and shall lile a certificate of service no later than

24 hours after service.

DATED: May 9, 2017 St. Louis, Missouri jjh

4

UQ;ftJ a.~ -Mi&4! KA~Y A. SURRATT-STATES

Chief United States Bankruptcy Judge

133

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Order Prepared by:

Steven N. Cousins MO 30788 Erin M. Edelman MO 67374 John G. Willard MO 67049 Armstrong Teasdale LLP 7700 Forsyth Boulevard, Suite 1800 St. Louis, Missouri 63105 Telephone: (314) 621-5070 Facsimile: (314) 621-2239 Email: [email protected] Email: [email protected] Email: [email protected]

Nicole L. Greenblatt, P.C. (admitted pro hac vice) Cristine F. Pirro (admitted pro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 601 Lexington A venue New York, New York 10021 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: [email protected] Email: [email protected]

James H.M. Sprayregen, P.C. William A. Guerrieri (admitted pro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Email: [email protected]

Counsel to Debtors and Debtors in Possession

5

134

Final Critical Vendors Order

THIS IS EXHIBIT "D" REFERRED TO IN THE AFFIDAVIT OF MICHAEL SHAKRA, SWORN BEFORE ME

THIS 16'h DAY OF JUNE, 2017.

k~ A Commissioner fi#taking Affidavits, etc.

135

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In re:

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

) Case No. J 7-42267-659 ) Chapter 11

Payless Holdings LLC, el al.,

Debtors.

) ) Jointly Administered ) ) Related Docket Nos.: 30, 94

FINAL ORDER (A) AUTHORIZING THE DEBTORS

TO PAY CERTAIN PREPETITION CLAIMS OF (I) CRITICAL VENDORS AND (II) CARRIER, WAREHOUSEMEN,

AND SECTION 503(B)(9) CLAIMANTS AND (B) GRANTING RELATED RELIEF

Upon the motion (the "Motion")1 of the above-captioned debtors and debtors m

possession (collectively, the "Debtors") for entry of a final order (this "Final Order"),

(a) authorizing, but not directing, the Debtors to pay prepetition claims held by (i) Critical

Vendors; (ii) Carriers and Warehousemen; and (iii) 503(b)(9) Claimants (collectively, the

"Vendor Claims") in the aggregate in an amount not to exceed $ I 13 million on a final basis; and

(b) granting related relief; all as more fully set forth in the Motion; and upon the First Day

Declaration; and this Court having jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and

1334 and Rule 81-9.0J(B)(J) of the Local Rules of the United States District Court for the

Eastern District of Missouri; and this Court having found that this is a core proceeding pursuant

to 28 U.S.C. § 157(b)(2), and that this Court may enter a final order consistent with Article III of

the United States Constitution; and this Court having found that venue of this proceeding and the

Motion in this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409; and this Court having

found that the relief requested in the Motion is in the best interests of the Debtors' estates, their

Capitalized terms used but not otberwise defined in this Final Order shall have the meanings ascribed to such tenns elsewhere in the Motion or in the First Day Dedaration, as applicable.

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creditors, and other parties in interest; and this Court having found that the Debtors' notice of the

Motion and opportunity for a hearing on the Motion were appropriate and no other notice need

be provided; and this Court having reviewed the Motion and having heard the statements in

support of the relief requested therein at a hearing before this Court (the "Hearing"); and this

Court having determined that the legal and factual bases set forth in the Motion and at the

Hearing establish just cause for the relief granted herein; and upon all of the proceedings had

before this Court; and after due. deliberation and sufficient cause appearing therefor, it is

HEREBY ORDERED THAT:

I. The Motion is granted as set forth herein on a final basis.

2. The relief provided in the Interim Order is approved on a final basis.

3. The Debtors are authorized, but not directed, to pay the prepetition Vendor

Claims in the ordinary course of business and consistent with their prepetition practices;

provided that such payments shall not exceed $113 million in the aggregate unless otherwise

ordered by the Court after notice and a hearing; provided further that:

(a) the Debtors' professionals and the Committee's professionals shall have a weekly telephonic meeting during which the Debtors' professionals shall provide an update with respect to proposals made before and after the entry of this Final Order to holders of Vendor Claims, the status thereof, and any other information reasonably requested by the Committee regarding the proposals; provided, that, the Consenting First Lien Ad Hoc Committee's (as defined in the RSA) professionals shall receive reasonable advance notice of any such weekly meeting and an opportunity to participate t~erein;

(b) the Debtors shall provide the Committee's professionals with a list, which may be provided by electronic mail, of any Vendor Claims sought to be paid (the "Vendor Claims List") in conjunction with a proposal made after the entry of this Final Order, which Vendor Claims List shall identify, without limitation, the following infonnation: (i) the Debtor(s) against which the Vendor Claim is

2

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asserted; (ii) the amount of the Vendor Claim; (iii) the claimant asserting the Vendor Claim; (iv) the basis for the Vendor Claim, including the estimated amount of such Vendor Claim that is entitled to priority under section 503(b)(9) of the Bankruptcy Code and the amount that is a general unsecured claim; (v) and whether the Debtors are providing a waiver under section 547 of the Bankruptcy Code; provided, however, that the Committee's professionals shall keep the Vendor Claims List confidential and not disclose any of the information in the matrix to anyone including but not limited to any member of the Committee without the prior written consent of the Debtors; provided, that, the Debtors shall simultaneously provide the Consenting First Lien Ad Hoc Committee's professionals with a copy of such Vendor Claims List;

(c) the Committee's professionals shall have until 5:00 p.m. prevailing Central Time on the third business day after receipt of the Vendor Claims List to review the Vendor Claims List (the "List Review Period") and notify the Debtors in writing, which may be by electronic mail, of any issues (the "Issues") with respect to the payment of any Vendor Claim above $500,000 (the "Notified Payment"); provided, that, any such notice shall simultaneously be provided to the Consenting First Lien Ad Hoc Committee's professionals;

( d) if the Committee does not notify the Debtors of any Issues by the expiration of the List Review Period, or if the Committee consents to the proposed Notified Payment before expiration of the List Review Period, the Debtors shall be permitted to pay the applicable Vendor Claims, subject to the terms of this Final Order;

(e) if the Committee timely notifies the Debtors of any Issue with respect to any Notified Payment (thereafter, a "Questioned Payment") prior to the expiration of the List Review Period, then the Debtors and the Committee shall attempt to resolve the Issues surrounding such Questioned Payment consensually. If no consensual resolution is reached by the date that is five (5) days following delivery of notice of the proposed payment (the "Resolution Date"), the Committee may file a fomrnl objection on the docket and any such objection shall be resolved by the Court at a hearing to be scheduled at the Court's earliest convenience. If the Committee fails to object within two (2) business days of the Resolution Date, the Debtors shall

3

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be authorized lo make the proposed payment without further Court order. For the avoidance of doubt, the Debtors may pay any Vendor Claim other than any Questioned Payment.

4. The Debtors are authorized, but not directed, to pay Vendor Claims, in whole or

in part, upon such terms and in the manner provided in this Final Order, and upon such terms as

agreed to between the Debtor and the Critical Vendor in the Debtors' sole reasonable business

judgment; provided that if any party accepts payment hereunder and does not continue supplying

goods or services to the Debtors in accordance with the Trade Terms (a) the Debtors may take

any and all appropriate steps to recover from such Vendor any payments made to it on account of

its prepetition claim to the extent that such payments exceed the postpetition amounts then owing

to such party; (b) upon recovery by the Debtors, any prepetition claim of such party may be

reinstated as if the payment on account thereof had not been made; and (c) if an outstanding

postpetition balance is due from the Debtors to such party, the Debtors may elect to

recharacterize and apply any payment made pursuant to this Final Order to such outstanding

postpetition balance and such party will be required to repay to the Debtors such paid amounts

that exceed the postpetition obligations then outstanding without the right of any setoffs, claims,

provisions for payment of any claims, or otherwise.

5. If any Vendor is paid with respect to its Vendor Claim and thereafter does not

continue to provide goods or services to the Debtors in accordance with the Trade Terms, any

payments made to the Vendor shall be subject to avoidance under section 549 of the Bankruptcy

Code and shall be recoverable by the Debtors in cash upon written request. Upon recovery by

the Debtors, the Vendor Claim shall be reinstated as a prepetition claim in the amount recovered.

6. Nothing herein shall impair or prejudice the ability of the Debtors or any party in

interest to contest the extent, perfection, priority, validity, or amounts of any claims held by any

4

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Critical Vendor. The Debtors do not concede that any claims satisfied pursuant to this Final

Order are valid, and the Debtors expressly reserve all of their rights and the rights of any party in

interest to contest the extent, validity, or perfection or seek the avoidance of all such liens or the

priority of such claims.

7. All undisputed obligations related to the Outstanding Orders are granted

administrative expense priority in accordance with section 503(b)(I)(A) of the Bankruptcy Code.

8. The Debtors are authorized, but not directed, lo pay all undisputed amounts

related to the Outstanding Orders in the ordinary course of business consistent with the parties'

customary practices in effect prior to the Petition Date.

9. Nothing herein or in the Motion shall be construed to limit, or in any way affect,

the Debtors' ability to dispute or contest the amount of, or basis for, any claims against the

Debtors arising in connection with the Outstanding Orders.

10. Notwithstanding the relief granted herein and any actions taken hereunder,

nothing contained in the Motion or this Final Order or any payment made pursuant to this Final

Order shall constitute, nor is it intended to constitute, an admission as to the validity or priority

of any claim or lien against the Debtors, a waiver of the Debtors' rights or the rights of any party

in interest to subsequently dispute such claim or lien, or the assumption or adoption of any

agreement, contract, or lease under section 365 of the Bankruptcy Code.

11. The banks and financial institutions on which checks were drawn or electronic

payment requests made in payment of the prepetition obligations approved herein are authorized,

but not directed, to receive, process, honor, and pay all such checks and electronic payment

requests when presented for payment, provided that sufficient funds are on deposit and standing

in the Debtors' credit in the applicable bank accounts to cover such payments, and all such banks

5

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and financial institutions are authorized to rely on the Debtors' designation of any particular

check or electronic payment request as approved by this Final Order without any duty of further

inquiry and without liability for following the Debtors' instructions.

12. The Debtors are authorized to issue postpetition checks, or to effect postpetition

fund transfer requests, in replacement of any checks or fund transfer requests that are dishonored

as a consequence of these chapter 11 cases with respect to prepetition amounts owed in

connection with any Critical Vendor Claims.

13. Notice of the Motion as provided therein shall be deemed good and sufficient

notice of such motion and the requirements of Bankruptcy Rule 6004(a) and the Local

Bankruptcy Rules are satisfied by such notice.

14. To the extent that this Final Order is inconsistent with any prior order or pleading

with respect to the Motion in these cases, the terms of this Final Order shall govern.

15. Notwithstanding anything to the contrary contained herein, any payment made or

to be made nnder this Final Order, any authorization contained in this Final Order, or any claim

for which payment is authorized hereunder, shall be subject to any orders of this Court approving

any debtor in possession financing for, or any use of cash collateral by, the Debtors, and any

documents providing for such debtor in possession financing and the budget governing such

debtor in possession financing and use of cash collateral.

16. Any party who accepts payment in full from the Debtors ofa Vendor Claim shall

take all actions necessary to remove any mechanics' liens, possessory liens, or similar state law

trade liens on the Debtors' assets such party may have based upon such Vendor Claim at such

party's sole expense.

17. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this Final

6

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Order are immediately effective and enforceable upon its entry.

18. No later than two (2) business days after the date oftbis order, the Debtors shall

serve a copy of the Final Order on the Notice Parties and shall file a ce11ificate of service no later

than 24 hours after service.

DATED: May 9, 2017 St. Louis, Missouri jjh

7

Kcdi a.~ -M4?4! KA~A. SURRATT-STATES

Chief United States Bankruptcy Judge

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Order Prepared By:

Steven N. Cousins MO 30788 Erin M. Edelman MO 67374 John G. Willard MO 67049 Annstrong Teasdale LLP 7700 Forsyth Boulevard, Suite 1800 St. Louis, MO 63105 Telephone: (314) 621-5070 Facsimile: (314) 612-2239 Email: [email protected] Email: [email protected] Email: [email protected]

Nicole L. Greenblatt, P.C. (admitted pro hac vice) Cristine F. Pirro (admitted pro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 60 I Lexington Avenue New York, NY 10021 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: [email protected] Email: [email protected]

James H.M. Sprayregen, P.C. William A. Guerrieri (admitted pro hac vice) Kirkland & Ellis LLP Kirk:lanu·& :E1lis International LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Email: [email protected]

Counsel to Debtors and Debtors in Possession

8

143

Final Cash Management Order

THIS IS EXHIBIT "E" REFERRED TO IN THE AFFIDAVIT OF MICHAEL SHAKRA, SWORN BEFORE ME

THIS 16th DAY OF JUNE, 2017.

Lil A Commission~taking Affidavits, etc.

144

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In re:

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

) Case No. 17-42267-659 ) Chapter 11

Payless Holdings LLC, et al.,

Debtors.

) ) Jointly Administered ) ) Related Docket No.: 22

FINAL ORDER (I) AUTHORIZING THE DEBTORS TO (A) CONTINUE USING THE

CASH MANAGEMENT SYSTEM AND (B) MAINTAIN EXISTING BANK ACCOUNTS AND BUSINESS FORMS;

(II) AUTHORIZING CONTINUED INTERCOMPANY TRANSACTIONS; (III) GRANTING SUPERIORITY ADMINISTRATIVE EXPENSE STATUS TO POST­

PETITION INTERCOMP ANY PAYMENTS; AND (IV) GRANTING RELATED RELIEF

Upon the motion (the "Motion")1 of the above-captioned debtors and debtors in

possession (collectively, the "Debtors") for the entry of a final order (this "Final Order" or

"Order"): (a) authorizing, but not directing, the Debtors to (i) continue to operate the Debtors'

cash management system, (ii) honor certain prepetition obligations related thereto, (iii) maintain

existing business forms, and (iv) continue to maintain business relationships with each other and

with non-Debtor affiliates consistent with historical practice; and (b) granting related relief, all as

more fully set forth in the Motion; and upon the First Day Declaration; and this Court having

fow1d that the Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and

Rule 81.90!(B)(l) of the Local Rules of the United States District Court for the Eastern District

of Missouri; and the Court having found that this is a core proceeding pursuant to 28 U.S.C.

§ 157(b)(2), and that this Court may enter a final order consistent with Article III of the United

States Constitution; and the Court having found that venue of this proceeding and the Motion in

Capitalized tenns used but not otherwise defined in this Order shall have the meanings ascribed to such tenns in the Motion.

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this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409; and the Court having found that

tl1e relief requested in the Motion is in the best interests of the Debtors' estates, their creditors,

and other parties in interest; and the Court having found that the Debtors provided appropriate

notice of the Motion and the opportunity for a hearing on the Motion under the circumstances;

and the Court having reviewed the Motion and having heard the statements in support of the

relief requested therein at a hearing before the Court (the "Hearing"); and the Court having

determined that the legal and factual bases set forth in the Motion and at the Hearing establish

just cause for the relief granted herein; and upon all of the proceedings had before the Court; and

after due deliberation and sufficient cause appearing therefor, it is

HEREBY ORDERED THAT:

1. The Motion is granted on a final basis as set forth herein.

2. The Debtors are authorized but not directed to: (a) continue using the Cash

Management System and honor any prepetition obligations related to the use thereof;

(b) designate, maintain, close, and continue to use on a final basis any or all of their existing

Bank Accounts, including, but not limited to, the Bank Accounts identified on Exhibit B

attached to the Motion, in the names and with the account numbers existing inunediately before

the Petition Date; (c) deposit funds in and withdraw funds from the Bank Accounts by all means,

including checks, wire transfers, ACH transfers, and other debits; (d) treat their prepetition Bank

Accounts for all purposes as debtor in possession accounts; and (e) open new debtor in

possession Bank Accounts.

3. For banks at which the Debtors hold Bank Accounts that are not party to a

Uniform Depository Agreement with the U.S. Trustee, the Debtors shall use their good-faith

effort to cause the banks to execute a Uniform Depository Agreement in a form prescribed by the

2

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U.S. Trustee within 30 days of the Petition Date. The U.S. Trustee's rights to seek further relief

from this Court on notice in the event that the aforementioned banks are unwilling to execute a

Uniform Depository Agreement in a fom1 prescribed by the U.S. Trustee are fully reserved.

4. The Debtors are authorized to deposit their cash in the Bank Accounts consistent

with their prepetition practices and the Cash Management System. The Debtors are relieved

from the obligations under section 345(b) of the Bankruptcy Code to obtain a bond from any

entity with which money is deposited or maintained in the Bank Accounts with respect to TD

Bank, for a period of 30 days from the date of this Order, and Cash Management Banks located

outside the United States of America; provided, however, that the Debtors shall use best efforts

to obtain the consent of TD Bank to enter into a Unifonn Depository Agreement with the U.S.

Trustee. If TD Bank has not entered into a Unifonn Depository Agreement with the U.S.

Trustee within 30 days of the date of this Order, the Debtors are directed to ensure that the

aggregate funds on deposit at TD Bank do not exceed $250,000 at any point during these

chapter 11 cases or until a Uniform Depository Agreement with the U.S. Trustee is executed and

the requirements contained therein fulfilled.

5. The Debtors are authorized, but not directed, to continue using, in their present

form, the Business Forms, as well as checks and other documents related to the Bank Accounts

existing immediately before the Petition Date, including electronic versions of the Debtors'

Business Forms, checks, and other documents related to the Bank Accounts.

6. Except as otherwise provided in this Final Order and only to the extent sufficient

funds stanmng in the Debtors' credit are available in each applicable Bank Account, all Cash

Management Banks at which the Bank Accounts are maintained are authorized, but not directed

to continue to service and administer the Bank Accounts as accounts of the Debtors as debtors in

3

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possess10n, without interruption and in the ordinary course of business, consistent with

prepetition practices, and to receive, process, honor, and pay any and all checks, drafts, wire

transfers, and ACH and other transfers issued, whether before or after the Petition Date, and

drawn on the Bank Accounts after the Petition Date by the holders or makers thereof, as the case

may be; provided that the Debtors will instruct the Cash Management Banks as to which checks,

drafts, wire transfers (excluding any wire transfers or ACH transactions that the Cash

Management Banks are obligated to settle), or other items presented, issued, or drawn, shall not

be honored. Each of the Debtors' existing depository and disbursement Cash Management

Banks is authorized to debit the Debtors' accounts in the ordinary course of business without the

need for further order of this Court for: (a) all checks drawn on the Debtors' Bank Accounts

which are cashed at such Cash Management Bank's counters or exchanged for cashier's checks

by the payees thereof prior to the Petition Date; (b) all checks or other items deposited in one of

the Debtors' Bank Accounts with such Cash Management Bank prior to the Petition Date which

have been dishonored or returned unpaid for any reason, together with any fees and costs in

connection therewith, to the same extent the Debtors were responsible for such items prior to the

Petition Date; and ( c) all undisputed prepetition amounts outstanding as of the date hereof, if

any, owed to any Cash Management Bank as service charges for the maintenance of the Cash

Management System.

7. Except for those checks, drafts, wires, or other ACH transfers that are authorized

or required to be honored under an order of the Court, no Debtor shall instruct or request any

Cash Management Bank to pay or honor any check, draft, or other payment item issued on

' a Bank Account prior to the Petition Date but presented to such Cash Management Bank for

payment after the Petition Date.

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8. Except as otherwise provided in this Final Order, the Cash Management Banks

are authorized to charge, and the Debtors are authorized, but not directed, to pay, honor, or

allow, prepetition and postpetition fees, costs, charges, and expenses, including the Bank Fees,

and charge back returned items, whether such items were deposited prepetition or postpetition, to

the Bank Accounts in the ordinary course. Any such postpetition fees, costs, charges, and

expenses, including the Bank Fees, or charge-backs are not so paid shall be entitled to priority as

administrative expense pursuant to section 503(b)(l) of the Bankrnptcy Code.

9. The Debtors' credit card processors are authorized to process payments in the

ordinary course of business, including the netting out of any fees and/or chargebacks whether

arising before or after the Petition Date.

10. Any payment that is authorized by the Debtors and paid from a Bank Account by

a Cash Management Bank before the Petition Date (including any ACH payment such Cash

Management Bank is or becomes obligated to settle), any instrnments issued by such Cash

Management Bank on behalf of any Debtor pursuant to a "midnight deadline" or otherwise, or

any reimbursement or charge back for any coin and currency orders provided by the Cash

Management Banks prior to the Petition Date shall be deemed to be paid prepetition, whether or

not actually debited from the Bank Account prepetition.

11. As soon as practicable after entry of this Final Order, the Debtors shall serve

a copy of this Final Order on the Cash Management Banks.

12. The U.S. Trnstee Guidelines' requirement to establish separate accounts for tax

payments is hereby waived.

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13. With respect to Postpetition Intercompany Transactions occurring in the ordinary

course of business (including with respect to netting or setoffs), the Debtors are authorized, but

not directed, to continue such practices in the ordinary course of business.

14. Pursuant to sections 503(b)(l) and 364(b) of the Bankruptcy Code, all valid

postpetition payments on account of a Postpetition Intercompany Transaction made in the

ordinary course by (a) a Debtor to another Debtor or (b) a non-Debtor affiliate to a Debtor shall

in each case be accorded administrative expense status, subject and junior to the claims,

including adequate protection claims, granted in connection with any debtor in possession

financing in accordance with any order(s) of this Court approving any postpetition secured

debtor in possession financing and/or the use of cash collateral, except to the extent such

Postpetition Intercompany Transactions are on account of an antecedent debt. For the avoidance

of doubt, nothing herein shall alter paragraph 5 of the Final Order(!) Authorizing the Debtors to

Obtain Postpetition Financing, (JI) Authorizing the Debtors to Use Cash Collateral,

(Ill) Granting Liens and Providing Superpriority Administrative Expense Status, (IV) Granting

Adequate Protection to the Prepetition Lenders, (V) Modifying the Automatic Stay, and

(VJ) Granting Related Relief, including, without limitation, the definition of Excluded Property

(as defined therein).

15. Unless prohibited by applicable law, transfers made by a Debtor to a non-Debtor

affiliate pursuant to a Postpetition Intercompany Transaction shall be deemed a claim against,

and loan to, such non-Debtor affiliate (and not a contribution of capital), except to the extent

such Postpetition Intercompany Transactions are on account of antecedent debts.

16. Except as otherwise set forth herein, those certain existing deposit agreements

between the Debtors Cash Management Banks shall continue to govem the postpetition cash

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management relationship between the Debtors and the Cash Management Banks, and all

provisions of such agreements, including without limitation, the termination and fee provisions,

shall remain in full force and effect. Either the Debtors or the Cash Management Banks may,

without further Order of this Court, implement changes to the Cash Management System and

procedures in the ordinary course of business pursuant to the terms of those certain existing

deposit agreements, including, without limitation, the opening and closing of Bank Accounts.

17. The Debtors are authorized to open new bank accounts, so long as any such new

account is: (a) with one of the Debtors' existing Cash Management Banks; or (b) with a bank

that is (i) insured with the FDIC and (ii) designated as an authorized depository by the

U.S. Trustee pursuant to the U.S. Trustee Guidelines; and (c) the Debtors provide notice to the

U.S. Trustee and the Notice Parties of the opening of such account; provided that each account

opened by any of the Debtors on or after the Petition Date at any bank shall, for purposes of this

Final Order, be deemed a Bank Account as if it had been listed on Exhibit B attached to the

Motion, and the bank at which such new account is maintained shall, for purposes of this Final

Order, be deemed a Cash Management Bank.

18. Nothing contained herein shall prevent the Debtors from closing any Bank

Accounts as they may deem necessary and appropriate, to the extent consistent with any orders

of this Court relating thereto, and any relevant Cash Management Bank is instructed to honor the

Debtors' requests to close such Bank Accounts, and the Debtors shall give notice of the closure

of any Bank Account to the U.S. Trustee and the Notice Parties.

19. Notwithstanding any other provision of this Final Order, should any Cash

Management Bank honor a prepetition check or other item drawn on any account that is the

subject of this Final Order: (a) at the direction of the Debtors to honor such prepetition check or

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item, (b) in a good faith belief that the Court has authorized such prepetition check or item to be

honored, or (c) as the result of an innocent mistake made despite implementation of customary

item handling procedures, such Cash Management Bank shall not be deemed to be nor shall be

liable to the Debtors, their estates or any other person or entity, or otherwise be in violation of

this Final Order. Any of the Debtors' Cash Management Banks may rely on the representations

of the Debtors with respect to whether any check or other payment order drawn or issued by the

Debtors prior to the Petition Date should be honored pursuant to this or any other order of the

Court, and such Cash Management Bank shall not have any liability to any party for relying on

such representations by the Debtors as provided for herein.

20. Notwithstanding the relief granted in this Final Order and any actions taken

pursuant to such relief, and subject to the administrative expense stat11s afforded pursuant to

Paragraph 13 of this Final Order, nothing contained in the Motion or this Final Order or any

payment made pursuant to this Final Order shall constitute, nor is it intended to constitute, an

admission as to the validity or priority of any claim or lien against the Debtors, a waiver of the

Debtors' rights to subsequently dispute such claim or lien, or the assumption or adoption of any

agreement, contract, or lease under section 365 of the Bankruptcy Code.

21. Nothing in this Final Order authorizes the Debtors to accelerate any payments not

otherwise due prior to the date of the Final Hearing.

22. Notwithstanding anything to the contrary contained in this Final Order, any

payment made or to be made under this Final Order, any authorization contained in this Final

Order, or any claim for which payment is authorized hereunder, shall be subject to any orders of

this Court approving any debtor in possession financing for, or any use of cash collateral by, the

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Debtors, and any documents providing for such debtor in possession financing and the budget

governing such debtor in possession financing and use of cash collateral.

23. Nothing in this Final Order shall permit the Debtors to make or to cause their

non-debtor subsidiaries to make any postpetition transfers outside the ordinary course of

business.

24. The Debtors shall provide to the advisors to the Official Committee of Unsecured

Creditors appointed in these cases and the Prepetition First Lien Term Loan Steering Committee

a detailed report of intercompany balances by and an1ong the Debtors and their non-debtor

subsidiaries. The format of such report shall be consistent with the materials previously shared

with the advisors to the Official Committee of Unsecured Creditors as weJI as with the advisors

to the Prepetition First Lien Term Loan Steering Committee and shall be due on or by the 25th

day foJlowing the Debtors' fiscal month close.

25. Notice of the Motion as provided therein shall be deemed good and sufficient

notice of such Motion and the requirements of Bankruptcy Rule 6004(a) are satisfied by such

notice.

26. Notwithstanding the possible applicability of Bankruptcy Rule 6004(h), the terms

and conditions of this Final Order shall be inmlediately effective and enforceable upon its entry.

27. All time periods ~et forth in this Final Order shall be calculated in accordance

with Bankruptcy Rule 9006(a).

28. No later than two (2) business days after the date of this Order, the Debtors shall

serve a copy of the Order on the Notice Parties and shall file a certificate of service no later than

24 hours after service.

DATED: May 25, 2017 St. Louis, Missouri .iih

9

~ O.Zwwm,-!M@ KAWfY A. SURRATT-STATES

Chief United States Bankruptcy Judge

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Order Prepared By:

Steven N. Cousins MO 30788 Erin M. Edelman MO 67374 John G. Willard MO 67049 Annstrong Teasdale LLP 7700 Forsyth Boulevard, Suite 1800 St. Louis, Missouri 63105 Telephone: (314) 621-5070 Facsimile: (314) 621-2239 Email: [email protected] Email: [email protected] Email: [email protected]

NicoleL. Greenblatt, P.C. (admitted pro hac vice) Cristine F. Pirro (admitted pro hac vice) Kirkland & Ellis LLP Kirkland and Ellis International LLP 601 Lexington Avenue New York, New York 10021 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: [email protected] Email: [email protected] James H.M. Sprayregen, P.C. William A. Guerrieri (admitted pro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 3bONorth-LaSaile Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Email: [email protected]

Counsel for Debtors and Debtors in Possession

10

154

Final Prepetition Wages and Benefits Order

THIS IS EXHIBIT "F" REFERRED TO IN THE AFFIDAVIT OF MICHAEL SHAKRA, SWORN BEFORE ME

THI~ JUNE, 2017.

A Commissioner for taking Affidavits, etc.

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In re:

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

) Case No. 17-42267-659 ) Chapter 11

Payless Holdings LLC, et al., )

Debtors. ) Jointly Administered ) ) Related Docket Nos.: 14, 68, 240

FINAL ORDER (I) AUTHORIZING THE DEBTORS TO (A) PAY PREPETITION WAGES, SALARIES, OTHER

COMPENSATION, AND REIMBURSABLE EXPENSES AND (B) CONTINUE EMPLOYEE BENEFITS PROGRAMS, AND (II) GRANTING RELATED RELIEF

Upon the motion (the "Motion")' of the above-captioned debtors and debtors m

possession (collectively, the "Debtors") for entry of a final order (this "Final Order"),

(a) authorizing, but not directing, the Debtors to (i) pay prepetition wages, salaries, other

compensation, and reimbursable expenses, and (ii) continue employee benefits programs in the

ordinary course of business, including payment of certain prepetition obligations related thereto,

and (b) granting related relief; all as more fully set forth in the Motion; and upon the First Day

Declaration; and this Court having jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and

1334 and Rule 81.90I(B)(I) of the Local Rules of the United States District Court for the

Eastern District of Missouri; and this Court having found that this is a core proceeding pursuant

to 28 U.S.C. § 157(b)(2), and that this Court may enter a final order consistent with Article III of

the United States Constitution; and this Court having found that venue of this proceeding and the

Motion in this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409; and this Court having

found that the reliefrequested in the Motion is in the best interests of the Debtors' estates, their

creditors, and other parties in interest; and this Court having fow1d that the Debtors provided

Capitalized tem1s used in this Order and not inunediately defined have the meanings given to such terms in the Motion or in the First Day Declaration, JS applicable.

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appropriate notice of the Motion and the opportw1ity for a hearing under the circumstances; and

this Court having reviewed the Motion and having heard the statements in support of the relief

requested therein at a hearing before this Court (the "Hearing"); and this Court having

determined that the legal and factual bases set forth in the Motion and at the Hearing establish

just cause for the relief granted herein; and upon all of the proceedings had before this Court; and

after due deliberation and sufficient cause appearing therefor, it is

HEREBY ORDERED THAT:

I. The Motion is granted on a final basis as set forth herein.

2. The relief provided in the Interim Order is approved on a final basis.

3. The Debtors are authorized, but not directed, to continue and modify the

Employee Compensation and Benefits on a postpetition basis, and to pay and honor prepetition

amounts related thereto, in each case in the ordinary course of business, and consistent with the

Debtors' prepetition policies and practices; provided that, the Debtors are not authorized to make

any payments on account of the Non-Insider Annual Incentive Plan pursuant to this Order;

provided further that, the Debtors shall not pay amounts of Non-Insider Severance Obligations

that were owed as of the Petition Date that exceed $80,000.00 to any single individual with five

years or less of employment with the Debtors unless such payment is consented to by the U.S.

Trustee or ordered by this Court.

4. The automatic stay of Section 362(a) of the Bankrnptcy Code, to the extent

applicable, is hereby lifted to permit: (a)(i) Employees to proceed with their workers'

compensation claims, whether arising prior to or subsequent to the Petition Date, in the

appropriate judicial or administrative forum under the U.S. Workers' Compensation Program

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and the Canada Workers' Compensation Program,' (ii) insurance earners and third party

administrators providing coverage for any workers' compensation claims to handle, administer,

defend, settle and/or pay workers' compensation claims, (iii) the Debtors to pay all amounts

relating thereto in the ordinary course of business, and (iv) any insurance carrier and/or third

party administrators providing coverage for any workers' compensation claims to draw on any

and all letters of credit, and apply any proceeds thereof, provided on behalf of the Debtors

therefor pursuant to the terms of the Workers' Compensation Program without further order of

the Bankruptcy Court if any when the Debtors fail to pay and/or reimburse any insurance carriers

or third party administrators for any amounts in relation to any workers' compensation claim;

and (b) the notice requirements pursuant to Bankruptcy Rule 400l(d) with respect to clause (a)

of this paragraph 4 are waived. This modification of the automatic stay pertains solely to claims

under the U.S. Workers' Compensation Program and Canada Workers' Compensation Program.

5. Nothing herein (a) alters or amends the terms and conditions of the U.S. Workers'

Compensation Program or the Canada Workers Compensation Program including, but not

limited to, (i) the obligation, if any, of any insurer or third party administrator to pay any

amounts within a deductible and the right, if any, of an insurer or third party administrator to

seek reimbursement from the Debtors therefor, (ii) the obligation, if any, of the Debtors to

reimburse any insurer or third party administrator for defense costs, and (iii) the right, if any, of

any insurer or third party administrator to draw on any letters of credit, or apply any proceeds

thereof, if any, in subparagraphs (i) and (ii), above, lo the extent that the Debtors fail to

reimburse the insurer or third party administrator therefor (and, to the extent necessary, the

2 For the avoidance of doubt, the Debtors' U.S. Workers Compensation Program and Canada Workers Compensation Program shall hlclude all workers' compensation insurance policies, whetber current or expired, and any agreements related thereto.

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automatic stay of section 362 of the Bankruptcy Code is hereby modified to permit such); (b)

relieves the Debtors of any of their other obligations under the U.S. Workers' Compensation

Program or the Canada Workers Compensation Program; (c) creates or permits a direct right of

action against an insurance carrier or third party administrator; or (iv) precludes or limits, in any

way, the rights of any insurance carrier to contest and/or litigate the existence, primacy and/or

scope of available coverage under the U.S. Workers' Compensation Program or the Canada

Workers Compensation Program.

6. Notwithstanding the relief granted herein and any actions taken hereunder,

nothing contained in the Motion or this Final Order or any payment made pursuant to this Final

Order shall constitute, nor is it intended to constitute, an admission as to the validity or priority

of any claim or lien against the Debtors, a waiver of the Debtors' rights to subsequently dispute

such claim or lien, or the assumption or adoption of any agreement, contract, or lease under

section 365 of the Bankruptcy Code.

7. Nothing in the Motion or this Final Order shall impair the Debtors' or any other

party-in-interests' ability to contest the validity or amount of any payment made pursuant to this

Final Order.

8. Notwithstanding the relief granted herein or any action taken hereunder, nothing

contained in this Final Order shall create any rights in favor of, or enhance the status of any

claim held by, any Employee, Independent Contractor, Temporary Worker, or Temporary

Staffing Agency, or other person or entity.

9. The banks and financial institutions on which checks were drawn or electronic

payment requests made in payment of the prepetition obligations approved herein are authorized,

but not directed, to receive, process, honor, and pay all such checks and electronic payment

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requests when presented for payment, and all such banks and financial institutions are authorized

to rely on the Debtors' designation of any particular check or electronic payment reqnest as

approved by this Final Order.

10. The Debtors are authorized to issue postpetition checks, or to effect postpetition

fund transfer requests, in replacement of any checks or fund transfer requests that are dishonored

as a consequence of these chapter 11 cases with respect to prepetition amounts owed in

connection with any Employee Compensation and Benefits.

11. Notwithstanding anything to the contrary contained herein, any payment made or

to be made under this Final Order, any authorization contained in this Final Order, or any claim

for which payment is authorized hereunder, shall be subject to any orders of this Court approving

any debtor in possession financing for, or any use of cash collateral by, the Debtors, and any

documents providing for such debtor in possession financing and the Budget governing such

debtor in possession financing and use of cash collateral.

12. Notice of the Motion satisfies the requirements of Bankruptcy Rule 6004(a).

13. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this Final

Order are immediately effective and enforceable upon its entry.

14. No later than 2 days after the date of this Final Order, the Claims and Noticing

Agent is directed to serve a copy of the Final Order and is directed to file a certificate of service

no later than 24 hours after service.

DATED: May 9, 2017 St. Louis, Missouri iih

5

Krrth a.~-&!41 Jy A. SURRATT-STATES Chief United States Bankruptcy Judge

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Order Prepared by:

Steven N. Cousins MO 30788 Erin M. Edelman MO 67374 John G. Willard MO 67049 Armstrong Teasdale LLP 7700 Forsyth Boulevard, Suite 1800 St. Louis, Missouri 63105 Telephone: (314) 621-5070 Facsimile: (314) 621-2239 Email: [email protected] Email: [email protected] Email: [email protected]

Nicole L. Greenblatt, P.C. (admitted pro hac vice) Cristine F. Pirro (admitted pro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 60_1 Lexington Avenue New York, New York 10021 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: [email protected] Email: [email protected]

James H.M. Sprayregen, P.C. William A. Guerrieri (admitted pro hacvice) Kirkland & Ellis LLP Kirkland & Ellis Trifernational LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Email: [email protected]

Counsel to Debtors and Debtors in Possession

6

161

Final Surety Bond Order

THIS IS EXHIBIT "G" REFERRED TO IN THE AFFIDAVIT OF MICHAEL SHAKRA, SWORN BEFORE ME

THIS l6th DAY OF JUNE, 2017.

cL A Commissioner for taking Affidavits, etc.

162

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In re:

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

) Case No. 17-42267-659 ) Chapter 11

Payless Holdings LLC, et al.,

Debtors.

) ) Jointly Administered ) ) Related Docket Nos.: 11, 90

FINAL ORDER (I) AUTHORIZING THE DEBTORS TO CONTINUE AND RENEW THE SURETY BOND PROGRAM ON

AN UNINTERRUPTED BASIS, AND (II) GRANTING RELATED RELIEF

Upon the motion (the "Motion")1 of the above-captioned debtors and debtors m

possession ( collectively, the "Debtors") for entry of a Final Order (this "Final Order" or

"Order"), (a) anthorizing the Debtors to continue and renew the Surety Bond Program on an

uninterrupted basis, and (b) granting related relief, all as more fully set forth in the Motion; and

upon the First Day Declaration; and this Court having jurisdiction over this matter pursuant to 28

U.S.C. §§ 157 and 1334 and Rule 81.90!(B)(J) of the Local Rules of the United States District

Court for the Eastern District of Missouri; and this Court having found that this is a core

proceeding pursuant to 28 U.S.C. § 157(b)(2), and that this Court may enter a final order

consistent with Article III of the United States Constitution; and this Court having found that

venue of this proceeding and the Motion in this district is proper pursuant to 28 U.S.C. §§ 1408

and 1409; and this Court having found that the relief requested in the Motion is in the best

interests of the Debtors' estates, their creditors, and other parties in interest; and this Court

having found that the Debtors' provided appropriate notice of the Motion and the opportunity for

a hearing under the circumstances; and this Court having reviewed the Motion and having heard

Capitalized tenus used but not otherwise defined in this Order shall have the meanings ascribed to such tenns in the Motion.

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the statements in support of the relief requested therein at a hearing before this Court

(the "Hearing"); and this Court having detennined that the legal and factual bases set forth in the

Motion and at the Hearing establish just cause for the relief granted herein; and any and all

objections having been resolved or overruled; and upon all of the '.Proceedings had before this

Court; and after due deliberation and sufficient cause appearing therefor, it is

HEREBY ORDERED THAT:

1 . The Motion is granted on a final basis as set forth herein.

2. The relief provided in the Interim Order is approved on a final basis.

3. The Debtors are authorized, but not directed, to maintain the Surety Bond

Program without interruption, including paying all amounts arising thereunder in the ordinary

course of business on a poslpetition basis, without intenuption and in accordance with the same

practices and procedures as were in effect prior to the Petition Date.

4. The Debtors are authorized, but not directed, to renew existing surety bonds;

increase or decrease the size of any surety bond; obtain new surety bonds; perform under the

Surety Indel1111ity Agreements (including providing collateral security); replace their Surety

Brokers as is necessary; and execute any other agreements in connection with the Surety Bond

Program and all related instruments, documents, and papers, and to take all actions reasonably

appropriate with respect thereto.

5. The failure to specifically describe or include any particular feature of the Surety

Bond Program in this Order shall not diminish or impair the effectiveness of such feature, it

being the intent of this Court that the Surety Bond Program be approved in its entirety.

6. Notwithstanding anything herein to the contrary, the entry of this Final Order is

without prejudice to, and does not constitute a waiver of, expressly or implicitly, the rights,

2

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claims, and defenses (if any) of the Sureties under: (a) the Surety Indemnity Agreements, surety

bonds, or any related agreements with the Debtors; (b) applicable bankruptcy or non-bankruptcy

law; or (c) any related letters of credit or cash collateral, all of which rights are expressly

reserved, nor shall it affect the Debtors' rights, claims, and defenses (if any) related thereto.

Nothing in this Final Order shall be construed to obligate any Surety to renew or increase the

amount of any existing surety bond or to issue any new surety bonds to the Debtors. To the

extent a Surely holds collateral pledged prepetition, the Surety has the right to keep and maintain

such collateral until the obligations on all of its bonds are released and discharged and may use

the collateral to pay claims on any bonds and losses, as defined in the Surety's indemnity

agreement(s) with the Debtors, in the ordinary course of business, and the µrepetition collateral

will apply with equal force to surety bonds renewed and issued postpetition.

7. The banks and financial institutions on which checks were drawn or electronic •

payment requests made in payment of the prepetition obligations approved herein are authorized,

but not directed, to receive, process, honor, and pay all such checks and electronic payment

requests when presented for payment, and all such banks and financial institutions are authorized

to rely on the Debtors' designation of any particular check or electronic payment request as

approved by this Final Order.

8. Notwithstanding the relief granted herein and any actions taken hereunder,

nothing contained in the Motion or this Final Order or any payment made pursuant to this Final

Order shall constitute, nor is it intended to constitute, an admission as to the validity or priority

of any claim or lien against the Debtors, a waiver of the Debtors' rights to subsequently dispute

such claim or lien, or the assumption or adoption of any agreement, contract, or lease under

section 365 of the Bankruptcy Code.

3

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9. Nothing in this Order or the Motion shall be constmed as prejudicing the rights of

the Debtors or any other party in interest to dispute or contest the amount of or basis for any

claims against the Debtors in connection with or relating to the Surety Bond Program and

nothing herein renders any claim by any third party based on a prepetition actual, potential, or

asserted liability of the Debtors, which claim may or does result in a loss to a surety under the

Surety Bond Program, into a postpetition claim or expense of administration.

IO. Except as expressly set forth herein, to the extent any snrety bond or related

agreement is deemed an executory contract within the meaning of section 365 of the Bankruptcy

Code, neither this Order nor any payments made in accordance with th.is Order shall constitute

(a) the assumption or postpetition reaffirmation of those surety bonds or related agreements

under section 365 of the Bankruptcy Code, (b) a grant of third-party beneficiary status or

bestowal of any additional rights on any third party, or (c) a waiver of any rights, claims or

defenses of the Debtors.

11. The Debtors are authorized to issue postpetition checks, or to effect postpetition

fund transfer requests, in replacement of any checks or fund transfer requests that are dishonored

as a consequence of these chapter 11 cases with respect to prepetition amounts owed in

connection with any obligations related to the Surety Bond Program.

12. Notwithstanding anything to the contrary contained herein, any payment made or

to be made under th.is Order, any authorization contained in this Order, or any claim for which

payment is authorized hereunder, shall be subject to any orders of this Court approving any

debtor in possession financing for, or any use of cash collateral by, the Debtors, and any

documents providing for such debtor in possession financing and the Budget governing such

debtor in possession financing and use of cash collateral.

4

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13. Notice of the Motion satisfies the requirements of Bankruptcy Rule 6004(a).

14. Notwithstanding Bankruptcy Rule 6004(h), the tenns and conditions of this Order

are immediately effective and enforceable upon its entry.

15. No later than two (2) days after the date of this Order, the Debtors shall serve a

copy of the Order on the Notice Parties and shall file a certificate of service no later than 24

hours after service.

DATED: May 17, 2017 St. Louis, Missouri jjh

5

~ a.~-Mm4! KA~Y A. SURRATT-STATES

Chief United States Bankruptcy Judge

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Order Prepared By:

Steven N. Cousins MO 30788 Erin M. Edelman MO 67374 John G. Willard MO 67049 Armstrong Teasdale LLP 7700 Forsyth Boulevard, Suite 1800 St. Louis, Missouri 63105 Telephone: (314) 621-5070 Facsimile: (314) 621-2239 Email: [email protected] Email: [email protected] Email: [email protected]

Nicole L. Greenblatt, P.C. (admitted pro hac vice) Cristine F. Pirro (admitted pro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 60 I Lexington A venue New York, New York 10021 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: [email protected] Email: [email protected]

James H.M. Sprayregen, P.C. WilliamA. Guerrieri (admittedpro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Email: [email protected]

Counsel for Debtors and Debtors in Possession

168

Final Prepetition Taxes and Fees Order

THIS IS EXHIBIT "H" REFERRED TO IN THE AFFIDAVIT OF MICHAEL SHAKRA, SWORN BEFORE ME

THIS 11.A Y OF JUNE, 2017.

A Commissioner for taking Affidavits, etc.

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In re:

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

) Case No. 17-42267-659 ) Chapter 11

PAYLESS HOLDINGS LLC, el al., )

Debtors. ) Jointly Administered ) ) Related to Docket Nos.: 12, 91

FINAL ORDER (I) AUTHORIZING THE PAYMENT OF CERTAIN PREPETITION TAXES AND FEES AND@ GRANTING RELATED RELIEF

Upon the motion (the "Motion")1 of the above-captioned debtors and debtors m

possession (collectively, the "Debtors") for entry of a final order (this "Final Order"),

(a) anthorizing the Debtors to remit and pay certain taxes and fees on a postpetition basis in the

ordinary course of business; and (b) granting related relief; all as more fully set forth in the

Motion; and upon the First Day Declaration; and this Court having jurisdiction over this matter

pursuant to 28 U.S.C. §§ 157 and 1334 and Rule 81-9.0l(B)(l) of the Local Rules of the United

States District Court for the Eastern District of Missouri; and this Court having found that this is

a core proceeding pursuant to 28 U.S.C. § 157(b)(2), and that this Court may enter a final order

consistent with Article III of the United States Constitution; and this Court having found that

venue of this proceeding and the Motion in this district is proper pursuant to 28 U.S.C. §§ 1408

and 1409; and this Court having found that the relief requested in the Motion is in the best

interests of the Debtors' estates, their creditors, and other parties-in-interest; and this Court

having found that the Debtors' notice of the Motion and opportunity for a hearing on the Motion

were appropriate under the circumstances and no other notice need be provided; and this Court

having reviewed the Motion and having heard the statements in support of the relief requested

Capitalized tem1s used but not otherwise defined in this Order shall have the meanings ascribed to suc-h terms in the Motion or in the First Day Oeclarntion, as applicable.

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therein at a hearing before this Court (the "Hearing"); and this Court having determined that the

legal and factual bases set forth in the Motion and at the Hearing establish just cause for the

relief granted herein; and upon all of the proceedings had before this Court; and after due

deliberation and sufficient cause appearing therefor, it is

HEREBY ORDERED THAT:

I. The Motion is granted on a final basis as set forth herein.

2. The relief provided in the Interim Order [Docket No. 91] is approved on a final

basis.

3. The Debtors are authorized, but not directed, to pay or remit the Taxes and Fees

described in the Motion that are due and owing on a prepetition basis without further order of the

Court.

4. The Debtors, are authorized, but not directed, lo continue to pay or remit the

Taxes and Fees described in the Motion that accrue and will become payable in the ordinary

course on a postpetilion basis during the pendency of these chapter 11 cases without furtber

order oftlie Court.

5. The banks and financial institutions on which checks were drawn or electronic

payment requests made in payment of the prepetition obligations approved herein are authorized,

but not directed, to receive, process, honor, and pay all such checks and electronic payment

requests when presented for payment, provided that sufficient funds are on deposit and standing

in the Debtors' credit in the applicable bank accounts to cover such payments, and all such banks

and financial institutions are authorized to rely on the Debtors' designation of any particular

check or electronic payment request as approved by this Final Order without any duty of further

inquiry and without liability for following the Debtors' instructions.

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6. Notwithstanding the relief granted herein and any actions taken hereW1der,

nothing contained in the Motion or this Final Order or any payment made pursuant to this Final

Order shall constitute, nor is it intended to constitute, an admission as to the validity or priority

of any claim or lien against the Debtors, a waiver of the Debtors' rights to subsequently dispute

such claim or lien, or the assumption or adoption of any agreement, contract, or lease under

section 365 of the Bankruptcy Code.

7. Notwithstanding the relief granted herein or any actions taken hereunder, nothing

contaiped in this Final Order shall create any rights in favor of, or enhance the status of any

claim held by, any party in interest.

8. The Debtors are authorized to issue postpetition checks, or to affect postpetition

fund transfer requests, in replacement of any checks or fund transfer requests that are dishonored

as a consequence of these chapter 11 cases with respect to prepetition amounts owed in

connection with any Truces and Fees.

9. Notwithstanding anything to the contrary contained herein, any payment made or

to be made under this Order, any authorization contained in this Order, or any claim for which

payment is authorized hereunder, shall be subject to any orders of this Court approving any

debtor in possession financing for, or any use of cash collateral by, the Debtors, and any

documents providing for such debtor in possession financing and the Budget governing such

debtor in possession financing and use of cash collateral.

I 0. Notice of the Motion satisfies the requirements set forth m Bankruptcy

Rule 6004(a).

11. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this Final

Order are immediately effective and enforceable upon its entry.

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12. No later than two (2) business days after the date of this order, the Debtors shall

serve a copy of the Final Order on the Notice Parties and shall file a certificate of service no later

than 24 hours after service.

DATED: May9,2017 St. Louis, Missouri jjh

Order Prepared By:

Steven N. Cousins MO 30788 Erin M. Edebnan MO 67374 John G. Willard MO 67049 Armstrong Teasdale LLP 7700 Forsyth Boulevard, Suite 1800 St. Louis, MO 63105 Telephone: (314) 621-5070 Facsimile: (314) 612-2239 Email: [email protected] Email: [email protected] Email_: [email protected]

Nicole L. Greenblatt, P.C. (admitted pro hac vice) Cristine F. Pirro (admitted pro hac vice) Kiiflarid &-Ellis TLP Kirkland & Ellis International LLP 60 I Lexington A venue NewYork,NY 10021 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: [email protected] Email: [email protected]

James H.M. Sprayregen, P.C. William A. Guerrieri (admitted pro hac vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Email: [email protected]

Counsel to Debtors and Debtors in Possession

4

Km O.~-bat@ ~A. SURRATT-STATES

Chief United States Bankruptcy Judge

173

Final Utilities Order

THIS IS EXHIBIT "I" REFERRED TO IN THE AFFIDAVIT OF MICHAEL SHAKRA, SWORN BEFORE ME

THIS 161h DAY OF JUNE, 2017.

w A Commissioner for taking Affidavits, etc.

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In re:

UNITED ST A TES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

) Case No. 17-42267-659 ) Chapter II

Payless Holdings LLC, et al.,

Debtors.

) ) Jointly Administered ) ) Related Docket Nos.: 20, 128

FINAL ORDER (I) PROHIBITING UTILITY PROVIDERS FROM ALTERING, REFUSING, OR DISCONTINUING UTILITY SERVICES,

(II) DETERMINING ADEQUATE ASSURANCE OF PAYMENT FOR FUTURE UTILITY SERVICE, (III) ESTABLISHING PROCEDURES FOR DETERMINING

ADEQUATE ASSURANCE OF PAYMENT, AND (IV) GRANTING RELATED RELIEF

Upon the motion (the "Motion")1 of the above-captioned debtors and debtors in

possession (collectively, the "Debtors") for entry of a final order (this "Final Order"),

(a) prohibiting Utility Providers from altering, refusing, or discontinuing services;

(b) determining adequate assurance of payment for future Utility Services; ( c) establishing

procedures for detennining adequate assurance of payment for future Utility Services;

( d) granting related relief; all as more fully set forth in the Motion; and upon the First Day

Declaration; and this Court having jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and

1334 and Rule 81.901(8)(1) of the Local Rules of the United States District Court for the

Eastern District of Missouri; and that this Court may enter a final order consistent with Article III

of the United States Constitution; and this Court having found that venue of this proceeding and

the Motion in this district is proper pursuant lo 28 U.S.C. §§ 1408 and 1409; and this Court

having found that the Debtors' notice of the Motion and opportunity for a hearing on the Motion

were appropriate under the circumstances and no other notice need be provided; and this Court

Capitalized tem1s used but not othenvise defined in this Order shall have the meanings ascribed to such terms in the Motion or in the First Day Declarntion, as applicable.

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having reviewed the Motion and having heard Lhe statements in support of the relief requested

therein at a hearing before this Court (the "Hearing"); and this Courl having determined that the

legal and factual bases set forth in the Motion and at the Hearing establish just cause for the

relief granted herein; and upon all of the proceedings had before this Court; and afler due

deliberation and sufficient cause appearing therefor, it is

HEREBY ORDERED THAT:

l. The Motion is granted as set forth herein.

2. The Debtors shall serve a copy of this Final Order on any Utility Provider

identified prior to the entry of Lhis Final Order no later than two business days after the date the

Final Order is entered.

3. All Utility Providers are prohibited from altering, refusing, or discontinuing

services on account of any unpaid prepetition charges, the commencement of these chapter 11

cases, or any perceived inadequacy of the Proposed Adequate Assurance.

4. The Debtors are authorized, but not directed, to pay any prepetition or postpetition

obligations related to Utility Agent Fees in accordance with prepetition practices.

5. The following Adequate Assurance Procedures are hereby approved, m all

respects, on a fmal basis:

a. The Debtors will serve a copy of the Motion and the Interim and Final Orders granling the relief requested herein to each Utility Provider with.in Lwo (2) business days after entry of the order by the Court.

b. Subject to paragraphs (e)-(h) herein, the Debtors will deposit the Adequate Assurance Deposit, in Lhe aggregate amount of $1,060,064, in the Adequate Assurance Account within five (5) business days after entry of the Final Order granting this Motion; provided that to the extent any Utility Provider receives any value from the Debtors as adequate assurance of payment, the Debtors may reduce the Adequate Assurance Deposit maintained in the Adequate Assurance Account by such amount.

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c. If an amount relating to Utility Services provided postpetition by a Utility Provider is unpaid, and remains unpaid beyond any applicable grace period, such Utility Provider may request a disbursement from the Adequate Assurance Account by giving notice to: (i) the Debtors: Payless Holdings LLC, el al., 3231 SE Sixth Ave., Topeka, Kansas 66607, Attn: Utility Manager; (ii) counsel to the Debtors: Kirkland & Ellis LLP, 601 Lexington Avenue, New York, New York 10022, Attn: Cristine F. Pirro; (iii) the Office of the United States Trustee for the Eastern District of Missouri, Attn: Paul Randolph, Esq.; (iv) counsel for the Official Committee of Unsecured Creditors appointed in these chapter 11 cases; and (v) to the extent not listed herein those parties requesting notice pursuant to Bankruptcy Rule 2002 (collectively, the "Notice Parties"). The Debtors shall honor such request within five (5) business days after the date the request is received by the Debtors, subject to the ability of the Debtors and any such requesting Utility Provider to resolve any dispute regarding such request without further order of the Court; provided that in no event shall a Utility Provider be pem1itted to receive aggregate disbursements in excess of the total amount set forth for such Utility Provider under the column labeled "Adequate Assurance Deposit" on the Utility Service List attached to the Motion as Exhibit A.

d. The portion of the Adequate Assurance Deposit attributable to each Utility Provider shall be returned to the Debtors on the earlier of (i) the reconciliation and payment by the Debtors of the Utility Provider's final invoice in accordance with applicable nonbankruptcy law following the Debtors' termination of Utility Services from such Utility Provider; and (ii) the effective date of any chapter 11 plan approved in these chapter 11 cases.

e. Any Utility Provider desiring additional assurances of payment in the form of deposits, prepayments, or otherwise must serve a request for additional assurance (an "Additional Assurance Request") on the Notice Parties.

£ Any Additional Assurance Request must: (i) be made in writing; (ii) identify the location for which the Utility Services are provided; (iii) include infonnation regarding any security deposits paid by the Debtors; (iv) provide evidence that the Debtors have a direct obligation to the Utility Provider; and (v) explain why the Utility Provider believes the Adequate Assurance Deposit is insufficient adequate assurance of payment.

g. An Additional Assurance Request may be made at any time. If a Utility Provider fails to file and serve an Additional Assurance Request, the Utility Provider shall be: (i) deemed to have received "satisfactory" adequate assurance of payment in compliance with section 366 of the Bankruptcy Code; and (ii) forbidden from discontinuing, altering, or refusing Utility Services to, or discriminating against, the Debtors on

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account of any unpaid prepeut1011 charges, or requmng additional assurance of payment other than the Proposed Adequate Assurance.

h. Upon the Debtors' receipt of any Additional Assurance Request, the Debtors shall have 30 days from the receipt of such Additional Assurance Request (the "Resolution Period") to negotiate with such Utility Provider to resolve such Utility Provider's Additional Assurance Request; provided that the Debtors and Utility Provider may extend the Resolution Period by mutual agreement.

1. The Debtors may, and without further order from the Court, resolve any Additional Assurance Request by mutual agreement with a Utility Provider.

J. If the Debtors determine, in their sole discretion, that the Additional Assurance Request is not reasonable and are not able to reach an alternative resolution with the Utility Provider during the Resolution Period, the Debtors, during or immediately after the Resolution Period, may request a hearing (a "Determination Hearing") before the Court to determine the adequacy of assurances of payment with respect to a particular Utility Provider pursuant to section 366(c)(3) of the Bankmptcy Code.

k. Pending resolution of any such Determination Hearing, the relevant Utility Provider filing such Additional Assurance Request shall be prohibited from altering, refusing, or discontinuing Utility Services to the Debtors on account of: (i) unpaid charges for prepetition services; (ii) a pending Adequate Assurance Request; or (iii) any objections filed in resp0nse-t0 the--Proposed-Adequate ·Assurance.

I. The Adequate Assurance Deposit deposited into the Adequate Assurance Account on behalf of any Utility Provider (including any additional amount deposited upon request of any applicable Utility Provider) will be returned to the Debtors, less any amounts · owed on account of unpaid, postpetition Utility Services, by no later than five (5) business days following the earlier of the date upon which (i) a chapter I I plan becomes effective after being confirmed in these chapter I I cases or (ii) the Debtors provide notice to a Utility Provider that services provided to the Debtors by such Utility Provider no longer will be needed.

6. The Adequate Assurance Deposit shall be deemed adequate assurance of payment

for any Utility Provider that fails to make au Additional Assurance Request.

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7. The Debtors will cause a copy of this Final Order, including the Adequate

Assurance Procedures, to be served on any subsequently identified Utility Provider and any such

Utility Provider shall be bound by the Adequate Assurance Procedures.

8. The banks and financial institutions on which checks were drawn or electronic

payment requests made in payment of the prepetition obligations approved herein are authorized,

but not directed, to receive, process, honor, and pay all such checks and electronic payment

requests when presented for payment, and all such banks and financial institutions are authorized

to rely on the Debtors' designation of any particular check or electronic payment request as

approved by this Final Order.

9. Notwithstanding the relief granted herein and any actions taken hereunder,

nothing contained in the Motion or this Final Order or any payment made pursuant to this Final

Order shall constitute, nor is it intended to constitute, an admission as to the validity or priority

of any claim or lien against the Debtors, a waiver of the Debtors' rights to subsequently dispute

such claim or lien, or the assumption or adoption of any agreement, contract, or lease under

section 365 of the Bankruptcy Code.

10. The Debtors are authorized to issue postpetition checks, or to effect postpetition

fund transfer requests, in replacement of any checks or fund transfer requests that are dishonored

as a consequence of these chapter 11 cases with respect to prepetition amounts owed in

connection with any Utility Agent Fees.

11. Notwithstanding anything to the contrary contained herein, any payment made or

to be made under this Order, any authorization contained in this Order, or any claim for which

payment is authorized heretmder, shall be subject to any orders of this Court approving any

debtor in possession financing for, or any use of cash collateral by, the Debtors, and any

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documents providing for such debtor in possession financing and the budget governing such

debtor in possession financing and use of cash collateral.

12. Notice of the Motion as provided therein shall be deemed good and sufficient

notice of such Motion and the requirements of Bankruptcy Rule 6004(a) and the Local Rules are

satisfied by such notice.

13. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this

Interim Order are immediately effective and enforceable upon its entry.

14. No later than two (2) business days after the date of this Order, the Debtors shall

serve a copy of the Order on the Notice Parties and shall file a certificate of service no later tban

24 hours after service.

DATED: May 9, 2017 St. Louis, Missouri .iih

6

ld.m a.~-~ KAW[Y A. SURRATT-STATES Chief United States Bankmptcy Judge

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Order Prepared By:

Steven N. Cousins MO 30788 Erin M. Edelman MO 67374 John G. Willard MO 67049 Armstrong Teasdale LLP 7700 Forsyth Boulevard, Suite 1800 St. Louis, MO 63105 Telephone: (314) 621-5070 Facsimile: (314) 621-2239 Email: [email protected] Email: [email protected] Email: [email protected]

Nicole L. Greenblatt, P.C. (admitted pro hoc vice) Cristine F. Pirro (admitted pro hoc vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 60 I Lexington A venue New York, NY 10021 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: [email protected] Email: [email protected]

James H.M. Sprayregen, P.C. William A. Guerrieri (admitted pro hoc vice) Kirkland & Ellis LLP Kirkland & Ellis International LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Email: [email protected]

Counsel to Debtors and Debtors in Possession

7

181

Motion for Continuation of Utility Service

THIS IS EXHIBIT "J" REFERRED TO IN THE AFFIDAVIT OF MICHAEL SHAKRA, SWORN BEFORE ME

THIS 16'h DAY OF JUNE, 2017.

ll A Commissioner for taking Affidavits, etc.

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Inre:

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

) ) Case No. 17-42267 (659) ) CHAPTER 11

PAYLESS HOLDINGS LLC, el al.,1 )

Debtors.

) (Joint Administration Requested) ) ) Hearing Date: April 5, 2017 ) Hearing Time: 1:30 P.M. ) Hearing Location: Courtroom 7 North __________________ )

DEBTORS' MOTION SEEKING ENTRY OF INTERIM AND FINAL ORDERS (I) PROHIBITING UTILITY PROVIDERS FROM

ALTERING, REFUSING, OR DISCONTINUING UTILITY SERVICES, (II) DETERMINING ADEQUATE ASSURANCE OF PAYMENT FOR FUTURE

UTILITY SERVICES, (III) ESTABLISHING PROCEDURES FOR DETERMINING ADEQUATE ASSURANCE OF PAYMENT, AND (IV) GRANTING RELATED RELIBF

The above-captioned debtors and debtors in possession (collectively, the "Debtors")

respectfully state as follows in support of this motion (this "Motion"):2

'

The Debtors (as defined herein) in these chapter 11 cases, along with the last four digits of each Debtor's federal tax identification number, are: Payless Holdings LLC [5704]; Payless Intermediate Holdings LLC [NIA]; WBG-PSS Holdings LLC [NIA]; Payless Inc. [3160]; Payless Finance, Inc. [2101]; Collective Brands Services, Inc. [7266]; PSS Delaware Company 4, Inc. [1466]; Shoe Sourcing, Inc. [4075]; Payless Shoesource, Inc. [4097]; Eastborough, Inc. [2803]; Payless Purchasing Services, Inc. [3043]; Payless Shoesource Merchandising, Inc. [0946]; Payless Gold Value CO, Inc. [3581]; Payless Shoesource Distribution, Inc. [0944]; Payless Shoesource Worldwide, Inc. [6884]; Payless NYC, Inc. [4126]; Payless Shoesource of Puerto Rico, Inc. [9017]; Payless Collective GP, LLC [NIA]; Collective Licensing, LP [1256]; Collective Licensing International LLC [5451]; Clinch, LLC [9836]; Collective Brands Franchising Services, LLC [3636]; Payless International Franchising, LLC [6448]; Collective Brands Logistics, Limited [6466]; Dynamic Assets Limited [1978]; PSS Canada, Inc. [4969]; Payless ShoeSource Canada Inc. [4180]; Payless ShoeSource Canada GP Inc. [4182]; and Payless Shoesource Canada LP [4179]. The location of Debtor Payless Holdings LLC's corporate headquarters and the Debtors' service address is: c/o Payless Shoesource, Inc., 3231 SE 6th Avenue, Topeka, KS 66607, United States.

The facts and circwnslances supporting this Motion are set forth in the Declaration of Michael Schwindle in Support of Debtors' Chapter 11 Proceedings and First Day Pleadings (the "First Day Declaration"), filed contemporaneously herewith and incorporated -by reference herein.

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Relief Reguested3

I. By this Motion, and pursuant to sections I 05(a) and 366 of title 11 of the United

States Code (the "Bankruptcy Code") and rules 6003 and 6004(h) of the Federal Rules of

Bankruptcy Procedure (the "Bankruptcy Rules"), the Debtors seek entry of an interim order

(the "Proposed Interim Order")4 and a final order (the "Proposed Final Order"): 5 (a) prohibiting

utility providers from altering, refusing, or discontinuing services; (b) determining adequate

assurance of payment for future utility services; (c) establishing procedures for detennining

adequate assurance of payment for future utility services (the "Adequate Assurance

Procedures"); and (d) granting related relief. In addition, the Debtors request that the Court (as

defined herein) schedule a flllal hearing within approximately 21 days of the commencement of

these cases to consider approval of this Motion on a final basis.

Jurisdiction and Venue

2. The United States Bankruptcy Court for the Eastern District of Missouri (the

"Court") has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and

Rule81.90l(B){l) oftheLocalRules of the United States District Court for tlieEasfom District

of Missouri. The Debtors confirm their consent, pursuant to Bankruptcy Rule 7008, to the entry

of a final order by the Court in connection with this Motion to the extent that it is later

determined that the Court, absent consent of the parties, cannot enter final orders or judgments in

connection herewith consistent with Article III of the United States Constitution.

3. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409.

Capitalized te1ms used but not immediately or othenvise defined in this Motion shall have the meanings ascribed to such terms elsewhere in this Motion or in the First Day Declaration, as applicable.

A copy of the Proposed Interim Order will be provided to the Notice Pmiies (as defined below) and made available on the Debtors' case infonnation website at https://cases.primeclerk.com/payless.

A copy of the Proposed Final Order will be provided to the Notice Parties (as defined below) and made available on the Debtors' case info1mation website at https://cases.prirneclerk.com/payless.

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Background

4. The Debtors and their non-Debtor affiliates (together, the "Company"), comprise

the largest specialty family footwear retailer in the Western Hemisphere, offering a wide range

of shoes and accessory items at affordable prices. The Company has more than 4,000 stores in

more than 30 conntries. The Debtors are headquartered in Topeka, Kansas, but their operations

are extensive and span across Asia, the Middle East, Latin America, Europe, and the United

States.

5. On the date hereof (the "Petition Date"), each of the Debtors filed a voluntary

petition for relief under chapter 11 of the Bankruptcy Code. The Debtors are operating their

businesses and managing their properties as debtors in possession pursuaut to sections 1107(a)

and 1108 of the Bankruptcy Code. Concurrently with the filing of this Motion, tl1e Debtors filed

a motion requesting procedural consolidation and joint administration of these chapter 11 cases

pursuant to Bankruptcy Rule 1015(b). No request for the appointment ofa trustee or exauiiner

has been made in these chapter I I cases and no committees have been appointed or designated.

The Utility Services

6. In the ordinary course of their business, and management of their properties, the

Debtors obtain electricity, natural gas, water and sewage, telephone, internet, cable, aud other

similar utility services (collectively, the "Utility Services") from approximately 2,500 utility

providers (collectively, the "Utility Providers"). A non-exclusive list of the Utility Providers and

their affiliates that provide Utility Services to the Debtors as of the Petition Date

(the "Utility Service List") is attached hereto as Exhibit A.6

6 Although the Debtors believe that the Utility Service List includes all of their Utility Providers, the Debtors reserve the 1ight to supplement the list if they inadvertently omitted any Utility Provider. Additionally, the listing of an entity on the Utility Service List is not an admission that such entity is a utility within the meaning of section 366 of the Bankrnptcy Code, and the Debtors reserve the right to contest any such characterization in the funtre.

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7. Preserving Utility Services on an uninterrupted basis is essential to the Debtors'

ongoing operations, and, therefore, to the success of their reorganization. Indeed, any

interruption of Utility Services, even for a brief period of time, would seriously jeopardize the

Debtors' operations, customer relationships, revenue and profits, the Debtors' reorganization

efforts and, ultimately, the Debtors' going concern value and creditor recoveries. It is, therefore,

critical that Utility Services continue uninterrupted during these chapter 11 cases.

8. On average, the Debtors pay approximately $2.8 million each month for the

Utility Services, calculated as a historical average over the twelve months ended December 31,

2016. Accordingly, the Debtors estimate that the cost for the Utility Services during the next

30 days will be approximately $2.8 million.7

I. Proposed Adequate Assurance of Payment

9. The Debtors intend to pay postpetition obligations owed to the Utility Providers in

the ordinary course of business and in a timely manner. In the ordinary course of business, the

Debtors pay the Utility Providers through third-party agents. Specifically, Ecova, Inc.

("EciJva"), Tangoe Inc. ("Tarii;Oe"), and Republic Services Inc. (''Republic" and collectively

with Ecova and Tangoe, the "Utility Agents"), pay the Utility Providers directly for Utility

Services on behalf of the Debtors. In practice, the Utility Providers submit invoices directly to

the Utility Agents. In general, the Utility Agents then bill the Debtors electronically ten (JO)

days in advance of the date payment is due to a particular Utility Provider. The Debtors then

transfer funds to the Utility Agents who in turn pay the Utility Providers on the Debtors' behalf

as payments for Utility Services come due. Ecova and Tangoe invoice the Debtors for their

Certain of the Debtors' obligations to Utility Providers are incurred in Canadian dollars. For purposes of estimation, any obligations incurred in Canadian dollars have been converted to U.S. dollars based on an exchange rate of approximately 0.7504 as of March 30, 2017, as published by the Wall Street Journal, on line edition.

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services on a monthly basis, separate from the invoices they submit to the Debtors on behalf of

the Utility Providers for Utility Services, while Republic's service fee is included in each invoice

it submits to the Debtors on behalf of the Utility Providers for Utility Services

(the "Utility Agent Fees"). On average, the Debtors pay approximately $45,000 in the aggregate

per month in Utility Agent Fees.

10. The Debtors estimate that approximately $115,000 in prepelition Utility Agent

Fees will become due and owing to the Utility Agents within 21 days after the Petition Date.

The Debtors seek authority to honor any amounts owed on account of prepetition Utility Agent

Fees and to pay any Utility Agent Fees that may arise on a postpetition basis in the ordinary

course of business in accordance with prepetition practices to ensure that Utility Services are

uninterrupted.

11. The Debtors believe that cash held by the Debtors and generated in the ordinary

course of business will provide sufficient liquidity to pay the Utility Agents and, therefore, the

Utility Providers, for Utility Services in accordance with prepetition practice during the

pendency of these chapter 11 cases. In addition, in the ordinary course of business, the Debtors

have provided approximately $2.3 million of surety bonds, letters of credit, and cash deposits to

secure certain of the Debtors' obligations with respect to certain of the Utility Providers. The

Utility Service List attached hereto as Exhibit A identifies which of the Utility Providers are

secured by surety bonds, letters of credit, and/or cash deposits. Nevertheless, to provide

additional assurance of payment to the Utility Providers, the Debtors propose lo deposit

approximately $1,060,064 into a segregated account (the "Adequate Assurance Deposit").8 The

8 As noted above, certain of the Debtors obligations to Utility Providers are incun-ed in Canadian dollars. For purposes of determining an Adequate Assurance Deposit amount in U.S. dollars, any obligations incurred in Canadian do-liars have been converted to U.S. dollars based on an exchange rate of approximately 0.7504 as of March 30, 2017, as published by the Wall Street Journal, online edition.

5 KE 46235922

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Adequate Assurance Deposit equals approximately two (2) weeks of Utility Services, calculated

as a historical average over the twelve months ended December 31, 2016, net of any prepetition

deposits, letters of credit, or surety bonds already provided to the Utility Providers in the

ordinary course. The Adequate Assurance Deposit will be held in a segregated account at Wells

Fargo Bank, N.A. for the benefit of the Utility Providers (the "Adequate Assurance Account")

for the duration of these chapter 11 cases and may be applied to any postpetition defaults in

payment to the Utility Providers. The Adequate Assurance Deposit will be held by the Debtors;

no liens will encumber the Adequate Assurance Deposit or the Adequate Assurance Account.

12. The Debtors, however, shall have the right to reduce the Adequate Assurance

Deposit to the extent: (i) the Adequate Assurance Deposit includes an amount on account of a

Utility Provider that the Debtors subsequently detennine should be removed from the Utility

Services List; (ii) a Utility Provider and/or corresponding account has been removed from the

Utility Services List because the Debtors have closed the store that was previously serviced by

such Utility Provider; (iii) that any Utility Provider has instead been provided with a letter of

credit or some other form of security acceptable to the Utility Provider; or (iv) an Additional

Adequate Assurance Request (as defined below) is properly served by a Utility Provider and any

settlement results in such Utility Provider's removal from the Utility Services List or in the

payment of alternate assurance to the Utility Provider.

13. The Debtors submit that the Adequate Assurance Deposit, in conjunction with the

Debtors' cash flow from operations and cash on hand, demonstrates their ability to pay for future

Utility Services in accordance with prepetition practice (collectively, the "Proposed Adequate

Assurance") and constitutes sufficient adequate assurance to the Utility Providers in full

satisfaction -0f section 3 66 of the Bankruptcy Code.

6 KE 46235922

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II. The Adequate Assurance Procedures

14. In light of the severe consequences to the Debtors' businesses and operations that

would result from any interruption in Utility Services-but also recognizing the right of the

Utility Providers to evaluate the Proposed Adequate Assurance-if a Utility Provider believes

additional adequate assurance is required, they may request such assurance pursuant to the

Adequate Assurance Procedures below:

KE 46235922

a. The Debtors will serve a copy of the Motion and the Interim and Final Orders granting the relief requested herein to each Utility Provider within two (2) business days after entry of the order by the Court.

b. Subject to paragraphs (e)-(h) herein, the Debtors will deposit the Adequate Assurance Deposit, in the aggregate amount of $1,060,064, in the Adequate Assurance Account within five (5) business days after entry of the Final Order granting this Motion; provided that to the extent any Utility Provider receives any value from the Debtors as adequate assurance of payment, the Debtors may reduce the Adequate Assurance Deposit maintained in the Adequate Assurance Account by such amount.

c. If an amount relating to Utility Services provided postpetition by a Utility Provider is unpaid, and remains unpaid beyond any applicable grace period, such Utility Provider may request a disbursement from the Adequate Assurance Account by giving notice to: (i) the Debtors: Payless Holdings LLC, et al., 3231 SE Sixth Ave., Topeka, Kansas 66607, Attn: Utility Manager; (ii) proposed counsel to the Debtors: Kirkland & Ellis LLP, 601 Lexington Avenue, New York, New York 10022, Attn: Jessica Kuppersmith and Cristine F. Pirro; (iii) the Office of the United States Trustee for the Eastern District of Missouri, Attn: Paul Randolph, Esq.; (iv) the official committee of unsecured creditors (if any) appointed in these chapter 11 cases and their counsel; and (v) to the extent not listed herein those parties requesting notice pursuant to Bankruptcy Rule 2002 (collectively, the "Notice Parties"). The Debtors shall honor such request within five (5) business days after the date the request is received by the Debtors, subject to the ability of the Debtors and any such requesting Utility Provider to resolve any dispute regarding such request without further order of the Court; provided that in no event shall a Utility Provider be permitted to receive aggregate disbursements in excess of the total amount set forth for such Utility Provider under the column labeled "Adequate Assurance Deposit" on the Utility Service List attached hereto as Exhibit A.

7

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KE 46235922

d. The portion of the Adequate Assurance Deposit attributable to each Utility Provider shall be returned to the Debtors on the earlier of (i) the reconciliation and payment by the Debtors of the Utility Provider's final invoice in accordance with applicable nonbankruptcy law following the Debtors' tennination of Utility Services from such Utility Provider; and (ii) the effective date of any chapter I I plan approved in these chapter I I cases.

e. Any Utility Provider desiring additional assurances of payment in the form of deposits, prepayments, or otherwise must serve a request for additional assurance (an "Additional Assurance Request") on the Notice Parties.

f. Any Additional Assurance Request must: (i) be made in writing; (ii) identify the location for which tbe Utility Services are provided; (iii) include information regarding any security deposits paid by the Debtors; (iv) provide evidence that the Debtors have a direct obligation to the Utility Provider; and (v) explain why the Utility Provider believes the Adequate Assurance Deposit is insufficient adequate assurance of payment.

g. An Additional Assurance Request may be made at any time. If a Utility Provider fails to file and serve an Additional Assurance Request, the Utility Provider shall be: (i) deemed to have received "satisfactory" adequate assurance of payment in compliance with section 366 of the Bankruptcy Code; and (ii) forbidden . from discontinuing, altering, or refusing Utility Services to, or discriminating against, the Debtors on account of any unpaid prepetition charges, or requiring additional assurance of payment other than the Proposed Adequate Assurance.

h. Upon the Debtors' receipt of any Additional Assurance Request, the Debtors shall have 30 days from the receipt of such Additional Assurance Request (the "Resolution Period") to negotiate with such Utility Provider to resolve such Utility Provider's Additional Assurance Request; provided that the Debtors and Utility Provider may extend the Resolution Period by mutual agreement.

1. The Debtors may, and without further order from the Court, resolve any Additional Assurance Request by mutual agreement with a Utility Provider.

J. If the Debtors detennine, in their sole discretion, that the Additional Assurance Request is not reasonable and are not able to reach an alternative resolution with the Utility Provider during the Resolution Period, the Debtors, during or immediately after the Resolution Period, may request a hearing (a "Detennination Hearing") before the Court to determine the adequacy of assurances of payment with respect to a

8

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particular Utility Provider pursuant to section 366(c)(3) of the Bankruptcy Code.

k. Pending resolution of any such Determination Hearing, the relevant Utility Provider filing such Additional Assurance Request shall be prohibited from altering, refusing, or discontinuing Utility Services to the Debtors on account of: (i) unpaid charges for prepetition services; (ii) a pending Adequate Assurance Request; or (iii) any objections filed in response to the Proposed Adequate Assurance.

I. The Adequate Assurance Deposit deposited into the Adequate Assurance Account on behalf of any Utility Provider (including any additional amount deposited upon request of any applicable Utility Provider) will be returned to the Debtors, less any amounts owed on account of unpaid, postpetition Utility Services, by no later than five (5) business days following the earlier of the date upon which (i) a chapter 11 plan becomes effective after being confirmed in these chapter 11 cases or (ii) the Debtors provide notice to a Utility Provider that services provided to the Debtors by such Utility Provider no longer will be needed.

15. The Adequate Assurance Procedures set forth a streamlined process for Utility

Providers to address potential concerns with respect to the Proposed Adequate Assurance, while

allowing the Debtors to administer their chapter 11 estates uninterrupted. More specifically, the

Adequate Assurance Procedures permit a Utility Provider to object to the Proposed Adequate

Assurance by serving an Adequate Assurance Request upon certain notice parties. The Debtors,

in their discretion, may then resolve any Adequate Assurance Request by mutual agreement with

the Utility Provider and without further order of the Court. If the Adequate Assurance Request

cannot be resolved by mutual agreement, the Debtors may seek Court resolution of the Adequate

Assurance Request.

16. Absent compliance with the Adequate Assurance Procedures, the Debtors request

that the Utility Providers, including subsequently added Utility Providers, be forbidden from

altering, refusing, or discontinuing service or requiring additional adequate assurance of payment

other than the Proposed Adequate Assurance, pending entry of a final order approving the relief

requested herein.

9 KE 46235922

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III. Modifications to the Utility Service List

I 7. The Debtors have made an extensive and good-faith effort to identify all Utility

Providers and include them on the Utility Service List. Nonetheless, to the extent the Debtors

subsequently identify additional Utility Providers or discontinue any Utility Services, the

Debtors seek authority, in their sole discretion, to amend the Utility Service List to add or

remove any Utility Provider. The Debtors further request that the relief requested in this Motion,

including the proposed Adequate Assurance Procedures, and any order granting this Motion shall

apply to any subsequently identified Utility Provider, regardless of when such Utility Provider

was added to the Utility Service List. The Debtors will serve a copy of this Motion and the order

approving the requested relief on any Utility Provider subsequently added to the Utility Service

List; and any subsequent added Utility Provider shall have 20 days from the date of service of

this Motion and the order to make a request for adequate assurance of payment. Further, the

Debtors shall have the period specified in the proposed Adequate Assurance Procedures to seek

to resolve any subsequently added Utility Provider's request for adequate assurance of payment

by Iiiuhiai agreement wifh the Utility Pfoviiler without further oriler of the Court or the need to

schedule a hearing with the Court to determine the adequacy of assurance payment in accordance

with the proposed Adequate Assurance Procedures.

18. The Debtors request that all Utility Providers, including subsequently added

Utility Providers to the Utility Service List, including those Utility Providers directly paid by the

Utility Agents, be prohibited from altering, refusing, or discontinuing any Utility Services to the

Debtors absent further order of the Court.

Basis For Relief

19. Section 366 of the Bankruptcy Code protects a debtor against the immediate

tem1ination or alteration of utility services after the Petition Date. See 11 U.S.C. § 366. Further,

10 KE 46235922

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section 366(c) of the Bankruptcy Code requires a debtor to provide "adequate assurance" of

payment for postpetition utility services in a form "satisfactory" to a utility provider within

30 days of the petition, or the utility company may alter, refuse, or discontinue service.

I I U.S.C. § 366(c)(2). Section 366(c)(J) of the Bankruptcy Code provides a non-exhaustive list

of examples of what constitutes "assurance of payment." 11 U.S.C. § 366(c)(l). Although

assurance of payment must be "adequate," it need not constitute an absolute guarantee of the

debtors' ability to pay. See, e.g., In re Great At/. & Pac. Tea Co., No. I l-CV-1338 (CS),

201 I WL 5546954, at *5 (Bankr. S.D.N.Y. Nov. 14, 201 J) ("Courts will approve an amount that

is adequate enough to insure against unreasonable risk of nonpayment, but are not required to

give the equivalent ofa guaranty of payment in full.") (citation omitted); In re Caldor, Inc.-NY,

199 B.R. I, 3 (S.D.N.Y. 1996) ("Section 366(b) requires ... 'adequate assurance' of payment.

The statute does not require an 'absolute gnarantee of payment.'") (citation omitted), aff'd sub

nom. Va. Elec. & Power Co. v. Caldor, Inc.-NY, 117 F.3d 646 (2d Cir. 1997).

20. When considering whether a given assurance of payment is "adequate," a court

should examine the totality of the circumstances to make an informed decision as to whether a

utility provider will be subject to an unreasonable risk of nonpayment. See, e.g., Mass. Elec. Co.

v. Keydata Co,p. (In re Keydata C01p.), 12 B.R. 156, 158 (B.A.P. 1st Cir. 1981) (citing

In re Cunha, I B.R. 330 (Bankr. E.D. Va. 1979)); In re Adelphia Bus. Solutions, Inc.,

280 B.R. 63, 82-83 (Bankr. S.D.N.Y. 2002). In determining the level of adequate assurance,

however, "a bankruptcy court must focus upon the need of the utility for assurance,

and ... require that the debtor supply no more than that, since the debtor almost perforce has a

conflicting need to conserve scarce financial resources." See Va. Elec. & Power Co., 117 F.3d at

650 (internal quotations omitted) (citing In re Penn Jersey Corp., 72 B.R. 981, 985 (Bankr. E.D.

11 KE 462359n

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Pa. 1987)); see also Great All. & Pac., 2011 WL 5546954, at *5-6 (holding that no additional

adequate assurance deposit was necessary where such deposit would impose an unreasonable

burden on reorganizing debtors).

21. Here, the Proposed Adequate Assurance adequately assures the Utility Providers

against any risk of nonpayment for future Utility Services. The Adequate Assurance Deposit

and, in .addition, the Debtors' ongoing ability with its cash on hand to meet obligations as they

come dne in the ordinary course, and the direct payments being made by the Utility Agents on

behalf of the Debtors to various Utility Providers, provides assurance of the Debtors' payment of

its future ntility obligations. Moreover, termination of the Utility Services could result in the

Debtors' inability to operate their businesses to the detriment of all stakeholders. Cf In re

Monroe Well Serv., Inc., 83 B.R. 317, 321-22 (Bankr. E.D. Pa. 1988) (noting that without utility

service the debtors "would have to cease operations" and that section 366 of the Bankruptcy

Code "was intended to limit the leverage.held by utility companies, not increase it").

22. Courts are permitted to fashion reasonable procedures, such as the

Adequate Assurance Procedures proposed herein, to implement the protections afforded under

section 366 of the Bankruptcy Code. See, e.g., In re Circuit City Stores, Inc.,

No. 08-35653 (KRH), 2009 WL 484553, at *5 (Bankr. E.D. Va. Jan. 14, 2009) ("The plain

language of§ 366 of the Bankruptcy Code allows the court to adopt the Procedures set forth in

the Utility Order."). Absent such procedures, the Debtors "could be forced to address numerous

requests by utility companies in an unorganized manner at a critical period in their efforts to

reorganize." Id. Here, notwithstanding a determination that the Proposed Adequate Assurance

constitutes sufficient adequate assurance, any rights the Utility Providers believe they have under

sections 366(b) and (c}(2) of the Bankruptcy Code are wholly preserved under the Adequate

12 KE 46235922

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Assurance Procedures. Cf id. at *5. The Utility Providers still may choose, in accordance with

the Adequate Assurance Procedures, to request modification of the Proposed Adequate

Assurance. Cf id. at *6. The Adequate Assurance Procedures, however, avoid a haphazard and

chaotic process whereby each Utility Provider could make an extortionate, last-minute demand

for adequate assurance that would force the Debtors to pay under the threat of losing critical

Utility Services. Cf id. at *5.

23. Because the Adequate Assurance Procedures are reasonable and in accord with

section 366 of the Bankruptcy Code, the Court should grant the relief requested herein. Similar

procedures have been approved by courts in this district and by courts in other jurisdictions. See,

e.g., In re THI Hockey, Inc., No. 16-44815 (CER) (Bankr. E.D. Mo. July 8, 2016) (approving

payment of equal to two weeks of utility service into segregated interest bearing account as

adequate assurance to utility providers); In re Peabody Energy Corp., No. 16-42529 (BSS)

(Bankr. E.D. Mo. Apr. 15, 2016) (same); In re Noranda Aluminum, Inc., No. 16-10083 (BSS)

(Bankr. E.D. Mo. Mar. 10, 2016); In re Arch Coal, Inc., No. 16-40120 (CER) (Bankr. E.D. Mo.

Jan. 14, 2016) (same); In re Bakers Footwear Grp. Inc., No. 12-49658 (CER) (Bankr. E.D. Mo.

Oct. 18, 2012); In re ContinentalAFA Dispensing Co., No. 08-45921 (KAS) (Bankr. E.D. Mo.

Aug 29, 2008); see also In re Brei/burn Energy Partners LP, No. 16-11390 (SMB) (Bankr.

S.D.N.Y. June 16, 2016) (same); In re Aeropostale, Inc., No. 16-11275 (SHL) (Bankr. S.D.N.Y.

May 24, 2016) (same).9

24. Further, the Court possesses the power, under section 105(a) of the Bankruptcy

Code, to "issue any order, process, or judgment that is necessary or appropriate to carry out the

provisions of this title." 11 U.S.C. § 105(a). The Adequate Assurance Procedures and the

Because of the voluminous nature of these orders, such orders have not been attached to this Motion. Copies of these orders are available upon request to the Debtors' proposed counsel.

13 KE 462.15922

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Proposed Adequate Assurance are necessary and appropriate to carry out the provisions in the

Bankruptcy Code, particularly section 366 thereof. Accordingly, the Court should exercise its

powers under sections 366 and I 05(a) of the Bankruptcy Code and approve both the

Adequate Assurance Procedures and the Proposed Adequate Assurance.

The Requirements of Bankruptcy Rule 6003 Are Satisfied

25. Bankruptcy Rule 6003 empowers a court to grant relief within the first 21 days

after the Petition Date "to the extent that relief is necessary to avoid immediate and irreparable

harm." Immediate and irreparable harm exists where the absence of relief would impair a

debtor's ability to reorganize or threaten the debtor's future as a going concern. For the reasons

discussed above, authorizing the Debtors to deposit the Adequate Assurance Deposit into the

Adequate Assurance Account is vital to the Debtors' operations and the failure to make said

Deposit can potentially severely disrupt the Debtors' operations at a critical juncture.

Accordingly, the Debtors submit that they have satisfied the ''immediate and irreparable harm"

standard of Bankruptcy Rule 6003 to support granting the relief requested herein.

Reservation of Rights

26. Nothing contained herein is intended or should be construed as an admission as to

the validity of any claim against the Debtors, a waiver of the Debtors' or any other parties-in­

interests' rights to dispute any claim, or an approval or assumption of any agreement, contract, or

lease under section 365 of the Bankruptcy Code. The Debtors expressly reserve their right to

contest any claim related to the relief sought herein. Likewise, if the Court grants the relief

sought herein, any payment made pursuant to an order of the Court is not intended to be nor

should it be construed as an admission as to the validity of any claim or a waiver of the Debtors'

or any other parties-in-interests' rights to subsequently dispute such claim.

14 KE 46235922

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Waiver of Bankruptcv Rule 6004(a) and 6004(11)

27. To implement the foregoing successfully, the Debtors request that the Court enter

an order providing that notice of the relief requested herein satisfied Bankruptcy Rule 6004(a)

and that the Debtors have established cause to exclude such relief from the 14-day stay period

under Bankruptcy Rule 6004(h).

Notice

28. The Debtors will provide notice of this Motion to: (a) the Office of the United

States Trustee for the Eastern District of Missouri; (b) the holders of the 50 largest unsecured

claims against the Debtors (on a consolidated basis); (c) counsel to the Prepetition ABL Agent;

(d) coUI1sel to certain Prepetition ABL Lenders; (e) counsel to the Prepetition First Lien Term

Loan Agent and the DIP Term Loan Agent; (f) coUI1sel to the Prepetition First Lien Term Loan

Steering Committee; (g) counsel to the Prepetition Second Lien Term Loan Agent; (h) the DIP

ABL Agent; (i) co-coUI1sel to the DIP ABL Agent, Choate, Hall & Stewart LLP (Attn: Kevin J.

Simard, Esq. and Douglas R. Gooding, Esq.) and Thompson Coburn LLP (Attn: Mark V. Bossi,

Esq.); U) the Tranche A-1 Agent; (k) counsel to the Tranche A-1 Agent, Schulte, Roth & Zabel,

LLP (Attn: Adam C. Harris, Esq.); (I) the United States Attorney's Office for the Eastern District

of Missouri; (m) the Internal Revenue Service; (n) the United States Securities and Exchange

Commission; (o) the state attorneys general for all states in which the Debtors conduct business;

(p) the Utility Providers; (q) the Utility Agents; and (r) any party that has requested notice

pursuant to Bankruptcy Rule 2002 (collectively, the "Notice Parties"). The Debtors submit that,

in light of the nature of the reliefrequested, no other or further notice need be given.

No Prior Request

29. No prior request for the relief sought in this Motion has been made to this or any

other court.

15 KE 46235922

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WHEREFORE, the Debtors respectfully request entry of the Proposed Interim Order and

the Proposed Final Order (a) granting the relief requested herein and (b) granting such other

relief as is just and proper.

Dated: April 4, 2017

St. Louis, Missouri

KE 46235922

Isl Steven N. Cousins

Steven N. Cousins MO 30788 Erin M. Edelman MO 67374 Armstrong Teasdale LLP 7700 Forsyth Boulevard, Suite 1800 St. Louis, MO 63105 Telephone: (314) 621-5070 Facsimile: (314) 612-2239 Email: [email protected] Email: [email protected]

Nicole L. Greenblatt, P.C. (pro hac vice pending) Cristine F. Pirro (pro hac vice pending) Jessica Kuppersmith (pro hac vice pending) Kirkland & Ellis LLP Kirkland & Ellis International LLP 60 I Lexington A venue New York, NY 10021 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: [email protected] Email: cristine. [email protected] Email: [email protected]

James H.M. Sprayregen, P.C. William A. Guerrieri (pro hac vice pending) Kirkland & Ellis LLP Kirkland & Ellis International LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Email: [email protected]

Proposed Counsel for Debtors and Debtors in Possession

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KE 46235922

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333

TAB4

Court File No.: CV-17-11758-00CL ONTARIO

SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST)

IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED

AND IN THE MATTER OF PAYLESS HOLDINGS LLC, PAYLESS SHOESOURCE CANADA INC., PAYLESS SHOESOURCE CANADA GP INC. AND THOSE OTHER

ENTITIES LISTED ON SCHEDULE "A" HERETO

APPLICATION OF PAYLESS HOLDINGS LLC UNDER SECTION 46 OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED

AFFIDAVIT OF MICHAEL SCHWIND LE (Sworn June •, 2017)

I, Michael Schwindle, of the City of Lawrence, in the State of Kansas, United States of

America, MAKE OATH AND SAY:

I. I am the Senior Vice President and Chief Financial Officer of Payless Holdings LLC

("Payless Holdings" or the "Foreign Representative"), which is the ultimate parent company of

28 affiliated debtors and debtors in possession, including Payless Shoesource Canada Inc., Payless

Shoesource Canada GP Inc., and Payless Shoesource Canada LP (the "Payless Canada Group"),

that have filed voluntary petitions for relief pursuant to Chapter 11 of the U.S. Bankruptcy Code

( collectively with Payless Holdings, the "Chapter 11 Debtors"). As such, I have personal

knowledge of the matters to which I hereinafter depose in this Affidavit. Where I do not possess

personal knowledge, I have stated the source of my information and, in all such cases, believe it

to be true.

2. I swear this Affidavit in support of the motion by Payless Holdings in its capacity as foreign

representative of itself as well as the other Chapter 11 Debtors for an Order recognizing and

334

-2-

enforcing the terms of the Final Orders (as defined below) entered by the United States Bankruptcy

Court for the Eastern District of Missouri (the "U.S. Court").

3. Capitalized terms used herein and not otherwise defined shall have the meaning given to

them in my affidavit, sworn April 6, 2017 in these proceedings (the "Initial Affidavit"). All dollar

references in this Affidavit are in U.S. dollars unless otherwise specified.

A. Background

4. On April 4, 2017, each of the Chapter 11 Debtors filed voluntary petitions for relief

pursuant to Chapter 11 of the U.S. Bankruptcy Code with the U.S. Court (the "Chapter 11

Proceedings").

5. The U.S. Debtors also filed several motions with the U.S. Court and, on April 5, 2017, the

U.S. Court heard motions (the "First Day Motions") for various interim or final orders (the "First

Day Orders"). The U.S. Court granted certain First Day Orders, a number of which were granted

on an interim basis.

6. By Order dated April 7, 2017, Regional Senior Justice Morawetz of the Ontario Superior

Court of Justice (the "Ontario Court") recognized the Chapter 11 Proceedings as Foreign Main

Proceedings and recognized the appointment of the Foreign Representative, and established related

stays of proceedings in favour of the Chapter 11 Debtors (the "Initial Recognition Order").

7. By Order dated April 12, 2017, Regional Senior Justice Morawetz recognized and enforced

the Foreign Representative Order, the Joint Administration Order and certain of the First Day

Orders granted by the U.S. Court in the Foreign Main Proceedings, and appointed Alvarez &

335

- 3 -

Marsal Canada Inc. as the Information Officer in respect of the CCAA Recognition Proceedings

(the "Supplemental Order").

B. Update on the Chapter 11 Cases

8. Since the Initial Affidavit, the Chapter 11 Debtors have continued to advance their

restructuring objectives and have continued to operate in the ordinary course as contemplated in

the Chapter 11 Proceedings.

Plan and Disclosure Statement

9. On April 25, 2017, the Chapter 11 Debtors filed the Debtors' Motion for Entry of an Order

(!) Approving the Adequacy of the Disclosure Statement; (II) Fixing Dates and Deadlines Related

to Confirmation of the Plan; (III) Approving Certain Procedures for Soliciting and Tabulating the

Votes on, and for Objecting to, the Plan; (JV) Approving the Procedures Related to the Rights

Offering and Authorizing the Retention of Financial Balloting Group LLC In Connection

Therewith; and (V) Approving the Manner and Form of the Various Notices and Documents

Relating Thereto (the "Disclosure Statement and Plan Solicitation Motion").

10. The plan of reorganization proposed by the Chapter 11 Debtors (as amended, the "Plan")

and related disclosure statement ( as amended, the "Disclosure Statement") were filed on the same

date. The Disclosure Statement and Plan Solicitation Motion was adjourned by the US Court on

May 29, 2017 until June 14, 2017 at 10:00 a.m. C.S.T. On June 14, 2017, the Disclosure Statement

and Plan Solicitation Motion was granted.

11. On June 5, 2017, June 13, 2017, and June 15, 2017, the Chapter 11 Debtors filed amended

versions of the Plan and Disclosure Statement.

336

-4-

12. It is anticipated that the U.S. Court will enter an order approving the Disclosure Statement

and setting a schedule for solicitation of votes on, and confirmation of, the Plan in the near term.

Solicitation on votes to accept or reject the Plan will begin on June 21, 2017. The hearing on

confirmation of the Chapter 11 Debtors' Plan is set to begin on July 24, 2017.

13. The Plan provides that the claims of the unsecured creditors of Payless Canada Group are

unaffected and will be reinstated following the effective date of the Plan. The Plan also preserves

all of the Chapter 11 Debtors' defenses in respect of claims of the unsecured creditors of Payless

Canada Group.

14. The Plan Motion seeks to establish a procedure and timetable for voting on the Plan. Key

aspects of the Plan are discussed in more detail in the First Report of the Information Officer dated

June 7, 2017 (the "First Report"). The following is the schedule of certain key dates for the

approval of the Plan:

Event/Deadline Date Record Date June 14, 2017 for all Claims filed

before such date, or, for any Claims filed after such date, the Claims Bar

Date

Solicitation Deadline June 21, 2017

Deadline to Publish the Confirmation Hearing June 21, 2017

Notice

Plan Supplement Filing Date July IO, 2017

Voting Resolution Deadline July 12, 2017 at 4:00 p.m.

(prevailing Central Time)

337

- 5 -

Event/Deadline Date Voting Deadline July 17, 2017 at 4:00 p.m.

(prevailing Central Time)

Plan Objection Deadline July 17, 2017 at 4:00 p.m.

(prevailing Central Time)

Deadline to Reply to Confirmation July 21, 2017 at 10:00 a.m.

Objections (prevailing Central Time)

Deadline to file Voting Report July 24, 2017 at 10:00 a.m.

(prevailing Central Time)

Confirmation Hearing July 24, 2017 at 10:00 a.m.

Status ofthe DIP Order

15. On May 15, 2017, the US Court granted the Final Order (i) Authorizing the Debtors to

Obtain Postpetition Financing, (ii) Authorizing the Debtors to use Cash Collateral, (iii) Granting

Liens and Providing Superpriority Administrative Expense Status, (iv) Granting Adequate

Protection to the Prepetition Lenders, (v) Modifying the Automatic Stay, and (vi) Granting Related

Relief(the "Final DIP Order").

16. The Final DIP Order was entered by the U.S. Court on May 17, 2017.

17. The Final DIP Order authorizes the Chapter 11 Debtors to borrow up to $305 million under

the DIP ABL Facilities and $80 million under the DIP Term Loan Facility. Detailed descriptions

of the DIP ABL Facilities and the DIP Term Loan Facility are contained in the Report of the

Proposed Information Officer dated April 7, 2017 and the Initial Affidavit.

18. The Final DIP Order provides that the Foreign Representative may seek recognition of the

Final DIP Order from the Ontario Court on such additional terms and conditions related solely to

338

- 6 -

the property of the Payless Canada Group as the Chapter 11 Debtors may determine are necessary

and desirable in respect of the creditors of the Payless Canada Group to obtain the Ontario Court's

recognition of the Final DIP Order.

19. As described in the First Report, the Chapter 11 Debtors have entered into a series of

extension agreements with the DIP ABL Lenders (the "Extension Agreements") extending the

milestones under the DIP ABL Agreement by which the foreign representative is required to seek

recognition of the Interim DIP Order and the Final DIP Order from the Ontario Court. Until the

Final DIP Order is recognized by the Ontario Court, the assets of the Payless Canada Group are

not counted toward the borrowing base for the DIP ABL Facilities.

20. Pursuant to a recent amendment to the DIP ABL Facility, the requirement of the Foreign

Representative to seek recognition of the Interim DIP Order and Final DIP Order has been

reserved. As a result, the Foreign Representative is not seeking recognition by the Ontario Court

of the Interim DIP Order or the Final DIP Order as part of its motion for recognition of the Final

Orders.

US Claims Bar Order

21. On May 15, 2017, the U.S. Court granted the Order Establishing Bar Dates for Filing

Proofs of Claim and Approving Form and Manner of Notice Thereof(the "Claims Bar Order").

The Claims Bar Order establishes dates by which proofs of claim must be filed against the Chapter

11 Debtors, other than the Payless Canada Group.

339

- 7 -

22. Pursuant to paragraph 23 of the Claims Bar Order, creditors of the Payless Canada Group

are not required to file proofs of claim and are not subject to the General Bar Date or the

Governmental Bar Date (as such terms are defined in the Claims Bar Order).

23. Pursuant to paragraph 24 of the Claims Bar Order, entry of the Claims Bar Order is without

prejudice to the rights of the Chapter 11 Debtors to seek a further order of U.S. Court fixing a date

by which creditors of the Payless Canada Group must file proofs of claim. I understand that a copy

of the Claims Bar Order is attached to the affidavit of Michael Shakra, an associate at Osler, Hoskin

& Harcourt LLP ("Shakra Affidavit").

Other Matters

24. Pursuant to the Extension Agreements, the US-domiciled Chapter 11 Debtors agreed not

to sell, transfer or otherwise dispose of any assets to the Payless Canada Group, except inventory

if sold on "cash-on-delivery" terms.

25. On or around April 18, 2017 the Chapter 11 Debtors temporarily ceased inventory

shipments to the Payless Canada Group as a result of certain complications with converting the

Chapter 11 Debtors' intercompany payment mechanisms to cash-on-delivery. The Chapter 11

Debtors subsequently modified their internal systems to allow for cash-on delivery payments and

as of May 8, 2017, weekly inventory shipments to Canada have resumed.

26. As a result of the move to cash-on-delivery terms, the Payless Canada Group can no longer

rely on the U.S.-domiciled Chapter 11 Debtors for short-term financing or credit on inventory

purchasers. While the decision to move to cash-on-delivery terms has had an impact on the overall

liquidity position of the Payless Canada Group, at this time, the Payless Canada Group expects to

340

- 8 -

remain cash flow positive and should have sufficient cash available to continue to replenish

inventory as necessary.

C. The Final Orders of the U.S. Court

27. As discussed in greater detail in the Initial Affidavit, the U.S. Debtors filed a number of

First Day Motions seeking a variety of interim and final orders in the Foreign Main Proceedings.

On April 5, 2017, the U.S. Court held a hearing in respect of the First Day Motions and entered a

number of the orders requested on an interim basis.

28. Subsequently, the Chapter 11 Debtors obtained final orders approving the relief granted in

the interim orders on a final basis. As discussed in more detail below, the Foreign Representative

is seeking recognition of the following final orders issued by the U.S. Court ( collectively, the

"Final Orders"), which may be summarized as follows:

(a) Final Order (I) Authorizing the Debtors to (A) Honor Certain Prepetition

Obligations to Customers and Partners and (B) Continue Certain Customer and

Partner Programs in the Ordinary Course of Business and (JI) Granting Related

Relief (the "Final Customer and Partner Order"): This Order authorizes the

Chapter 11 Debtors to honour and continue various customer programs that Payless

offers, including but not limited to the following: customer gift card programs;

returns, exchanges, and refunds; warranty programs related to Payless' products,

merchant credit card agreements, and other similar policies, programs and

practices. It is essential that Payless maintain customer loyalty and goodwill by

maintaining and honouring these programs.

341

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(b) Final Order (1) Authorizing The Debtors to (A) Continue Insurance Coverage

Entered into Prepetition and Satisfy Prepetition Obligations Related Thereto and

(B) Renew, Supplement, or Purchase Insurance Policies, and (11) Granting Related

Relief (the "Final Insurance Order"): This Order authorizes the Chapter 11

Debtors to pay certain prepetition amounts owing (policy audit fees, deductible fees

and brokerage and insurance administrator fees) on account of the Chapter 11

Debtors' insurance programs, which include a number of insurance pro grams that

cover the Payless Canada Group. The Final Insurance Order also authorizes the

Chapter 11 Debtors to continue the Insurance Policies ( as defined in the Insurance

Motion), and to renew, supplement, modify or purchase Insurance Policies to the

extent that the Chapter 11 Debtors determine that such action is in the best interest

of their estates.

(c) Final Order (A) Authorizing the Debtors to Pay Certain Prepetition Claims of (1)

Critical Vendors and (II) Carrier, Warehousemen, and Section 503(B)(9)

Claimants and (B) Granting Related Relief(the "Final Critical Vendors Order"):

This Order relates to critical brokers that provide specific merchandise, and critical

carriers and warehousemen that transport and store that merchandise. The Order

authorizes the Chapter 11 Debtors to pay certain pre-petition amounts, up to a

maximum of $113 million, owed to such critical third parties to avoid jeopardizing

the Chapter 11 Debtors' ability to serve their customers going forward.

(d) Final Order (1) Authorizing the Debtors to (A) Continue Using the Cash

Management System and (B) Maintain Existing Bank Accounts and Business

Forms; (II) Authorizing Continued Intercompany Transactions; (III) Granting

342

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Superiority Administrative Expense Status to Post-Petition lntercompany

Payments; and (IV) Granting Related Relief (the "Final Cash Management

Order"): This Order authorizes, among other things, the Chapter 11 Debtors to

continue using their cash management system, including the Canada Operations

Accounts, and permits ongoing intercompany advances.

(e) Final Order (I) Authorizing the Debtors to (A) Pay Prepetition Wages, Salaries,

Other Compensation, and Reimbursable Expenses and (B) Continue Employee

Benefits Programs, and {II) Granting Related Relief (the "Final Prepetition

Wages and Benefits Order"): This Order authorizes the continuation of the

Chapter 11 Debtors' prepetition employee obligations in the ordinary course of

business, and permits them to pay and honour certain prepetition claims relating to,

among other things, wages, salaries and other compensation. With respect to

Canada in particular, the Chapter 11 Debtors are authorized, among other things, to

(i) pay all outstanding prepetition amounts on account of unpaid wage and salary

obligations for the employees of the Payless Canada Group consistent with past

practice, and to continue paying such wage and salary obligations in the ordinary

course of business; (ii) pay in a manner consistent with historical practice any

unpaid withholding obligations and to continue to honour withholding obligations

in the ordinary course of business during the administration of the Chapter 11

Proceedings; (iii) to pay all outstanding prepetition amounts incurred by Payless

Canada Group employees on account of reimbursable expenses, and continue to

pay such reimbursable expenses on a postpetition basis; ~d (iv) continue paying

obligations under the Canada Store Leader Extreme Rewards Incentive Program

343

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and the Canada Group Leader Incentive Program (as both those terms are defined

in the Employee Wages Motion) on a postpetition basis in the ordinary course of

business and consistent with their prepetition practices.

(f) Final Order (!) Authorizing the Debtors to Continue and Renew the Surety Bond

Program on an Uninterrupted Basis, and (JI) Granting Related Relief(the "Final

Surety Bond Order"): In the ordinary course of business, certain third parties

require the Chapter 11 Debtors to post surety bonds to secure their payment or

performance of obligations, including customs and tax obligations. The Canada

Customs and Revenue Agency is one such obligee. The Final Surety Bond Order

authorizes the Chapter 11 Debtors to maintain the existing surety bond program,

including paying premiums as they come due, and to remit certain prepetition

premiums. Failure to maintain or replace the surety bonds may prevent the Chapter

11 Debtors from undertaking essential functions.

(g) Final Order (I) Authorizing the Payment of Certain Prepetition Taxes and Fees and

(II) Granting Related Relief (the "Final Prepetition Taxes and Fees Order"): In

the ordinary course of business, the Chapter 11 Debtors collect, withhold, and incur

various taxes and fees, and remit them to various federal, state, local and foreign

governments, including taxing authorities in Canada. This Order authorizes the

Chapter 11 Debtors, among other things, to pay certain taxes and fees accrued or

incurred prepetition but not paid prepetition, and to maintain certain tax payments

to avoid disruption to business operations.

344

- 12 -

(h) Final Order (I) Prohibiting Utility Providers from Altering, Refusing, or

Discontinuing Utility Services, (II) Determining Adequate Assurance of Payment

for Future Utility Service, (III) Establishing Procedures for Determining Adequate

Assurance of Payment, and (IV) Granting Related Relief (the "Final Utilities

Order"): This Order, among other things, (i) prohibits all Utility Providers from

altering, refusing, or discontinuing service on account of any unpaid prepetition

charges, the commencement of the Chapter 11 Proceedings, or any perceived

inadequacy of the Proposed Adequate Assurance; (ii) authorizes the Chapter 11

Debtors to pay any prepetition or postpetition obligations related to Utility Agent

Fees in accordance with their prepetition practices; and (iii) approves certain

Adequate Assurance Procedures for future utility services ( all capitalized terms not

defined here as defined in the Motion for Continuation of Utility Service filed by

the Chapter 11 Debtors).

I understand that copies of the Final Orders will be attached as exhibits to the Shakra Affidavit.

29. Except for the Final Utilities Order, the Ontario Court previously recognized and enforced

the interim versions of each of the Final Orders in the Supplemental Order. The Payless Canada

Group has been addressing a number of inquiries from Canadian utility providers and has

determined that recognition of the Final Utilities Order is necessary to allow the Payless Canada

Group and the other Chapter 11 Debtors to adopt a coordinated approach to addressing utility

matters. Payless Holdings, the Payless Canada Group and the other Chapter 11 Debtors require the

recognition of the Final Orders in order to maintain the status quo and protect the assets of the

Chapter 11 Debtors, while permitting the Payless Canada Group to continue operating its business

as usual in Canada during the Chapter 11 Proceedings.

345

- 13 -

30. Recognition of the Final Orders by the Ontario Court is necessary for the protection of the

Chapter 11 Debtors' property and the interests of their creditors. Accordingly, the Foreign

Representative is requesting that the Ontario Court recognize and enforce the Final Orders

pursuant to Section 49 of the CCAA.

SWORN BEFORE ME at the City of Topeka, in the State of Kansas, on June•, 2017.

Notary Public Michael Schwindle

346

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