BYLAWS

of The Official Committee

of Unsecured Creditors of
Lorax Corporation

 

I.                   MEMBERSHIP

A.     Membership of the Official Committee of Unsecured Creditors (the “Committee”) of Lorax Corporation (the “Debtor”) shall be held in the name of the creditor appointed to the Committee by the U.S. Trustee for the Northern District of Texas (the “U.S. Trustee”).  Each Committee member shall have one vote.

B.     Any member of the Committee may designate a primary representative and alternative representatives to attend Committee meetings, provided such representative and alternates are employees of, or an attorney or an authorized representative for, the creditor and such designation is made to the Committee Chairperson (the “Chair”) prior to the relevant meeting. An alternate shall be deemed a member of the Committee for all purposes of the meetings in the absence of the primary representative.

C.     A member resigning from the Committee shall give written notice of such resignation to the U.S. Trustee, the Chair and the Committee counsel. If a member resigns from the Committee, the Committee may make recommendations to the Court or the U.S. Trustee for a substitute for the resigned member. During the period after the resignation and prior to the appointment of a substitute, the membership of the Committee shall consist of those members remaining after the resignation.

D.     A Committee member that transfers in excess of 80% of its claim to a party other than an affiliate (as such terms is defined in the Bankruptcy Code), whether by sale, participation, grant of an option or other method, shall promptly, upon reaching an agreement in principle with respect to such transfer, notify the Chair and counsel to the Committee of such transfer. Such notice shall be in writing. Upon consummation of the transfer of such claim, the Committee member shall be deemed to have resigned from the Committee.

II.                CHAIRMANSHIP

A.     There shall be a single Chair of the Committee, who shall be elected from among the representatives of the Committee members, by a majority vote of the Committee, and who shall serve until the earlier of resignation, removal, or dissolution of the Committee at the conclusion of the case.

B.     As authorized by the Committee, the Chair or the Committee’s professional advisors shall speak for the Committee in reporting the Committee’s non-confidential decided positions to other parties-in-interest in this proceeding and to the press, if appropriate. Committee counsel and other professionals retained by the Committee shall be authorized to act on the advice and instructions of the Chair issued in accordance with these Bylaws. The Chair shall have the authority to sign documents on behalf of the Committee as appropriate in order to implement decisions of the Committee.

C.     The Chair, once elected, may be removed, with or without cause, by affirmative vote of at least two-thirds of the members. Upon removal of the Chair, the Committee shall immediately elect his or her successor.

D.     If the Chair resigns its position from the Committee, then the Committee shall immediately elect his or her successor.

E.      The Committee may elect a Vice-Chair who may exercise the duties if the Chair is not available to perform his or her duties.

III.             QUORUM

A.     A quorum shall consist of a majority of voting members of the Committee, including any members voting by proxy or present by telephonic conference facilities.

B.     No member of the Committee may vote except by its designated representative or designated alternate.

C.     Proxies in respect of specific issues will be permitted, provided such proxy vote shall be confirmed in writing to the Chair and Committee counsel by the voting member. Voting by a designated alternate will not be deemed to be voting by proxy.

IV.              MEETINGS

A.     No meeting shall be held unless a quorum is present at the beginning of the meeting. A meeting at which a quorum was initially present may continue to transact business of the Committee notwithstanding the departure or abstention of one or more members after the beginning of the meeting, subject to the provisions of Section VI.A hereof.

B.     It is the intention of the Committee to hold regular meetings on a regular basis. Regular meetings shall be held on dates and at locations designated by the Committee or, where necessary, by the Chair. Additionally, regular meetings may be called by any two members of the Committee by request to the Chair or Committee counsel. Announcements of the date and place of the next succeeding meeting shall be made by the Chair at a duly scheduled meeting, if possible and , in any event, shall be confirmed by mail, overnight mail, electronic mail or facsimile transmission, where possible, on not less than two days’ notice.

C.     Special meetings may be called by Committee counsel or the Chair by giving prior notice by telephone, overnight mail, electronic mail or facsimile transmission, to each member. If such notice is by telephone, it shall be confirmed by electronic mail or facsimile transmission. The primary purpose of the special meeting shall be set forth in the notice.

D.     The Chair shall call special meetings whenever the Chair deems it appropriate or whenever requested to do so by any member of the Committee or by counsel to the Committee.

E.      Meetings shall be held in person or by telephone conference call.

F.      Meetings of the Committee shall not be open to person other than members of the Committee, their designated representatives or alternates and designated counsel and other professionals, and professionals employed by the Committee, provided, however, that the Committee, by affirmative vote of a majority of its members, may, for special, limited purposes, permit other persons to attend.

G.     The Chair, or such other person as the Chair may designate, shall preside at all meetings of the Committee.

V.                 AGENDA

A.     To the extent possible, matters shall be presented to the Committee upon written agenda prepared by the Chair with the assistance of Committee professionals and transmitted to the Committee members not less than 24 hours prior to Committee meetings.

B.     Any member may at any time bring any matter before the Committee for its attention.

VI.              ACTION BY COMMITTEE

A.     Action by the Committee taken at Committee meetings shall require the affirmative vote of a majority of those voting (either in person or by proxy), provided that a quorum was present at the time of the vote. The Chair or counsel for the Committee shall tally and record the votes of members of the Committee. The Chair’s determination of the vote of the Committee with respect to any matter will be final.

B.     Action may be taken by Committee vote without a meeting provided the Chair determines, upon consultation with the Committee’s professionals, that the situation is appropriate for such action. In such cases, votes must be obtained by polling members on the issue by telephone, electronic mail or facsimile transmission. Polling may be conducted by the Chair, the Committee counsel, or an agent or employee of either of such persons. Such a vote shall be effective if a good faith effort is made to reach and consult with each representative of the members of the Committee or their designated alternates and, if requested by such member or its designated alternate, its counsel, with respect to the proposed action, and if, prior to the taking of such action, a majority of the members of the Committee or their designated alternates actually cast votes with respect to such action and a majority of the members of the Committee approves the action. The Chair or its designee shall provide prompt notice of any such action to each member who has not given approval, and shall use reasonable best efforts to provide such notice confirmed in writing within two days.

C.     Without prior Committee action or consent, the Chair, with the advice of the professionals for the Committee, shall be empowered to consent to or otherwise act on relatively minor matters between meetings, which may include (i) requests by an party-in-interest for the entry of Court or other matters involving amounts not greater than $100,000 in the aggregate, for all such matter during such period and (ii) other matters not readily susceptible of monetary evaluation that, in the judgment of the Chair, upon advice of Committee counsel, are considered to be in the normal course of business and not significant (including not significant to the interests of unsecured creditors generally), including, without limitation, such matters raised by court-filed applications. This authorization is for convenience purposes and it is not the intention of this authorization that all such relatively minor matters be handled without consultation of the Committee. The Committee shall be advised promptly of any matters so acted on by the Chair and the Chair or its designee shall use its reasonable best efforts to do so within two business days after such action. Notwithstanding the foregoing, no such action shall be taken by the Chair if it can reasonably be expected to have presidential effect.

D.     In special, unexpected emergency situations, actions may be taken by the Chair on behalf of the Committee without a meeting, provided, however, the Chair determines, after consultation with the Committee’s professionals, that such action is absolutely vital to the interests of the Committee and action is required before the Committee can be called together for a meeting or polled, and provided, further, the Chair or counsel for the Committee shall first make good faith effort to poll the members of the Committee concerning the matter at issue, and provided, further, the Chair or counsel for the Committee will use its reasonable best efforts to, within one day after taking such action, give written notice to each of the members of the action taken, the basis for the action and the reason for taking action without a meeting.

E.      Upon request by a member of the Committee, such member’s vote on any matter shall be recorded in the minutes of the appropriate meeting.

VII.           CONFLICTS OF INTEREST

A.     If any matter under consideration by the Committee appears to involve a conflict of interest with any member(s) serving on the Committee, the member(s) with the conflicting interest shall: (i) disclose to the Committee the existence of any potential conflict of which he or she has knowledge, and (ii) abstain from voting on the matter being considered by the Committee if a majority of the members of the Committee determines such abstention is appropriate. The Committee shall have the authority to excuse any such member(s) from any meeting at any appropriate time. The existence of a conflict of interest shall be determined by the affirmative vote of a majority in number of members of the Committee present at a given meeting (less the vote of the member(s) having the apparent conflict of interest and the vote of any other member who appears to be, in the judgment of Committee counsel, subject to the same conflict of interest).

B.     While all members acknowledge that they are acting in a fiduciary capacity as defined by law, nothing contained in these Bylaws shall, subject to the Confidentiality and Conflict of Interest provisions of these Bylaws and related issues: (a) prevent any member from exercising (promoting to exercise) or seeking (or omitting to seek) to enforce or protect any of its rights as an individual creditor or other party-in-interest; or (b) otherwise affect the ability of any member to act in its capacity as an individual creditor or other party-in-interest as it may deem appropriate.

VIII.        CONFIDENTIALITY OF INFORMATION

A.     Each member of the Committee is aware of the fiduciary duty that it has to all unsecured creditors of the Debtors and agrees that it will act in accordance with such duty in dealing with confidential information. All matters discussed at Committee meetings (whether or not memorialized in any minutes thereof), not generally available to the public, are confidential and shall not be disclosed or revealed to third parties. A Committee member may share any confidential information, documents and matters: (i) with the member’s attorneys, financial consultants, outside auditors, employees or agents who require such information in order to deal with the responsibilities of the member’s institution as a Committee member or with the Committee member’s claim, provided that the person or entity receiving such disclosure agrees to be and is bound by these rules of confidentiality; (ii) where required by law, rule or where demanded by any regulatory authority; and (iii) with third parties, provided appropriate confidentiality agreements acceptable to the Committee and, if appropriate, the Debtors, are duly executed, with such persons and approved by the affirmative vote of a majority of the Committee. To comply with their obligations as members of the Committee, members who are from time to time contacted by constituent unsecured creditors or are otherwise obligated to report to such creditors, may impart to such creditors public information supplied by the Debtors (which, in any event, is not confidential information) or such other information as the Committee, or in emergency situations when the Committee is not available to make a decision, the Chair, on the advice of counsel, may approve, which approval shall be promptly disclosed to all Committee members.

B.     Upon the resignation or removal of a member of the Committee, such member shall promptly return to counsel to the Committee or destroy any non-public or confidential material (including copies thereof) received by the member solely in its capacity and in the course of its tenure as a member of the Committee. Notwithstanding the resignation or removal of a member, such member shall continue to be bound by the confidentiality provisions of these Bylaws.

C.     If any member violates the provisions of this Article VIII, the Committee may request that the U.S. Trustee or the Bankruptcy Court remove such member from the Committee membership and the member shall be deemed to consent to such removal. Nothing in this Article VIII may be construed as conferring upon the Debtors or any other party any right of enforcement, these Bylaws being for the sole benefit of the Committee.

IX.              SUBCOMMITTEES

The Committee may create such subcommittees as it deems appropriate and delegate to such subcommittees such powers and responsibilities as it deems appropriate, so long as such appointment and delegation are approved by a majority of the Committee (either in person or by proxy) and do not delegate from the powers or duties of the Committee or Article XI hereof. The Chair shall appoint the membership for each of the subcommittees created, subject to approval to the Committee. The Chair shall be a member or ex officio member of each subcommittee. Each subcommittee shall promptly report to the Committee and shall be available to respond to inquiry from any Committee member.

X.                 EXPENSES

Reimbursement of reasonable expenses of the Committee and of Committee members incurred in connection with Committee business shall be sought from the Debtors. Reasonable expenses shall include expenses for attendance at meetings by the respective representatives or alternates of Committee members, and shall include expenses incurred for transportation, hotel, food, cabs, and related expenses. Reimbursement may also be sought for telephone calls and such other expenses as the Committee approves. Requests for reimbursement of expenses shall be itemized and supported by original receipts, as required by the U.S. Trustee.

XI.              RULES OF PROCEDURE

The Chair shall preside over each Committee meeting in a manner that promotes fairness, a full opportunity for analysis of all business coming before the Committee, and a full opportunity for each Committee member to express its view. Parliamentary procedure, such as Robert’s Rules of Order is recommended though, need not be followed in every detail.

XII.           EFFECTIVENESS OF AND AMENDMENT TO BYLAWS

These Bylaws shall become effective when approved by all members, and may be amended, waived or repealed, by a two-thirds vote of the voting members of the Committee.

 

Adopted:          May 02, 2003

 

 

 

ART LEERSKOV, Committee Chair,
on behalf of the Creditors’ Committee
for Lorax Corporation