AMENDED AND RESTATED
 
                                     BYLAWS
 
                                       OF
 
                          TEXAS UNITED BANCSHARES, INC.
 
                                     BYLAWS
 
                                   ARTICLE I
 
                                     OFFICES
 
         Section 1.1. Registered Office and Agent. The registered office and
agent of the Corporation shall be as designated from time to time by the
appropriate filing by the Corporation with the Office of the Secretary of State
of the State of Texas.
 
         Section 1.2. Other Offices. The corporation may also have offices at
such other places, either within or without the State of Texas, as the board of
directors may from time to time determine or as the business of the corporation
may require.
 
                                   ARTICLE II
 
                            MEETINGS OF SHAREHOLDERS
 
         Section 2.1. Meetings. All annual meetings of shareholders shall be
held at the offices of the corporation in the City of La Grange, State of Texas,
or at such other place, within or without the State of Texas, as may be
designated by the board of directors and stated in the notice of the meeting or
in a duly executed waiver of notice thereof Special meetings of shareholders may
be held at such place, within or without the State of Texas, and at such time as
shall be stated in the notice of the meeting or in a duly executed waiver of
notice thereof
 
         Section 2.2. Annual Meetings. Annual meetings of shareholders,
commencing with the year 1999, shall be held on the fourth Thursday of April, if
not a legal holiday, and if a legal holiday, then on the next secular day
following at 10:00 a.m., or at such other date and time as may be designated by
the board of directors, at which the shareholders shall elect a board of
directors and transact such other business as may properly be brought before the
meeting.
 
         Section 2.3. Shareholder Proposals. All proposals of shareholders
intended to be presented at the annual meeting of shareholders must be received
by the corporation at its principal offices not later than the 60th day nor
earlier than the 90th day prior to the first anniversary of the preceding year's
annual meeting, except that in the event that the date of the annual meeting is
more than 30 days before or more than 60 days after such anniversary date,
notice by the shareholder must be delivered no earlier than the 90th day prior
to such annual meeting and no later than the later of the 60th day prior to such
annual meeting or the 10th day following the day on which public announcement of
the date of such meeting is first made by the corporation.
 
 
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         Section 2.4. Special Meetings. Special meetings of the shareholders may
be called by the president. by a majority of the board of directors or the
holders of not less than one-half (1/2) of all shares entitled to vote at the
meeting.
 
         Section 2.5. Notice of Shareholders' Meetings. Written or printed
notice stating the place, day and hour of the meeting and, in the case of a
special meeting, the purpose or purposes for which the meeting is called, shall
be delivered not less than ten (10) nor more than sixty (60) days before the day
of the meeting, either personally, by U.S. mail, by facsimile or by electronic
mail ("e-mail") by or at the direction of the president, the secretary, or the
officer or person calling the meeting, to each shareholder of record entitled to
vote at such meeting. If mailed, such notice shall be deemed to be delivered
when deposited in the United States mail addressed to the shareholder at his
address as it appears on the stock transfer books of the association, with
postage thereon prepaid. Notice by e-mail shall be deemed to be given at the
time when same shall be mailed. Notice by facsimile shall be deemed to be given
at the time the sender receives a confirmation that the facsimile transmission
was completed.
 
         Section 2.6. Business at Special Meetings. Business transacted at any
special meeting shall be confined to the purposes stated in the notice thereof.
 
         Section 2.7. Quorum. The holders of a majority of the shares entitled
to vote, represented in person or by proxy, shall constitute a quorum at
meetings of shareholders except as otherwise provided by law or by the articles
of incorporation. If, however, a quorum shall not be present or represented at
any meeting of the shareholders, the shareholders present in person or
represented by proxy shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present or represented. At such adjourned meeting at which a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting as originally notified and called. The shareholders
present at a duly organized meeting may continue to transact business
notwithstanding the withdrawal of some shareholders prior to adjournment, but in
no event shall a quorum consist of the holders of less than one-third (1/3) of
the shares entitled to vote and thus represented at such meeting.
 
         Section 2.8. Shareholders' Acts. The vote of the holders of a majority
of the shares entitled to vote and thus represented at a meeting at which a
quorum is present shall be the act of the shareholders' meeting, unless the vote
of a greater number is required by law, the articles of incorporation, or these
Bylaws.
 
         Section 2.9. Voting Shares. Each outstanding share, regardless of
class, shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders, except to the extent that the voting rights of the
shares of any class are limited or denied by the articles of incorporation or
the Texas Business Corporation Act (the "TBCA").
 
         Section 2.10. Proxy. A shareholder may vote in person or by proxy
executed in writing by the shareholder or by his duly authorized
attorney-in-fact. No proxy shall be valid after eleven (11) months from the date
of its execution unless otherwise provided in the proxy. Each proxy shall be
revocable unless expressly provided therein to be irrevocable, and unless
otherwise made irrevocable by law. Each proxy shall be filed with the Secretary
of the corporation prior to
 
 
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or at the time of the meeting. Any vote may be taken by voice or by show of
hands unless someone entitled to vote objects, in which case written ballots
shall be used.
 
         Section 2.11. Shareholder List. The officer or agent having charge of
the stock transfer books shall make, at least ten (10) days before each meeting
of shareholders, a complete list of the shareholders entitled to vote at such
meeting or any adjournment thereof, arranged in alphabetical order, with number
of shares held by each, which list, for a period of ten (10) days prior to such
meeting, shall be kept on file at the registered office of the corporation and
shall be subject to inspection by any shareholder at any time during the usual
business hours. Such list shall also be produced and kept open at the time and
place of the meeting and shall be subject to the inspection of any shareholder
during the whole time of the meeting. The original stock transfer books shall be
prima facie evidence as to who are the shareholders entitled to examine such
list or transfer book or to vote at any such meeting of shareholders.
 
         Section 2.12. Action by Shareholders Without a Meeting. Any action
required by the TBCA to be taken at any annual or special meeting of
shareholders, or any action that may be taken at any annual or special meeting
of shareholders, may be taken without a meeting, without prior notice, and
without a vote, if a consent or consents in writing, setting forth the action so
taken, shall be signed by the holder or holders of shares representing not less
than the minimum number of votes that would have been necessary to take such
action at a meeting at which the holders of all shares entitled to vote on the
action were present and voted.
 
         Section 2.13. Telephonic Meetings. Shareholders may participate in and
hold a meeting by means of telephone conference or similar communication
equipment by means of which all persons participating in the meeting can hear
each other. Participation in such a meeting shall constitute presence in person
at the meeting, except where a person participates in the meeting for the
express purpose of objecting to the transaction of any business on the ground
the meeting is not lawfully called or convened.
 
         Section 2.14. Nominations. Nominations for election to the board of
directors may be made by the board of directors or by any shareholder of the
corporation entitled to vote for the election of directors. Nominations, other
than those made by or on behalf of the existing management of the corporation,
shall be made in writing and shall be delivered or mailed to the President of
the corporation not less than 90 days prior to the date of the scheduled annual
meeting; provided, however, that in the event that less than 100 days notice or
prior disclosure of the meeting is given by the corporation, notice of a
nomination proposed by a shareholder to be timely must be received by the
President within 10 days of the date of such notice or disclosure of the meeting
by the corporation.
 
                                  ARTICLE III
 
                                    DIRECTORS
 
         Section 3.1. Number of Directors; Election Term; Qualification;
Removal. The number of directors of the corporation shall not be less than five
(5) nor more than twenty-five (25), and within that minimum and maximum shall be
determined from time to time by the Board of Directors in their sole discretion;
provided, however, no director's term shall be shortened by
 
 
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reducing the number of directors. The directors shall be elected to staggered
three year terms at the annual meeting of the shareholders, except as provided
in Section 3.2 or Section 3.3 of this Article, and each director elected shall
hold office for the term for which he is elected and until his successor is
elected and qualified. At the organizational meeting, the directors shall be
elected to initial terms of one, two and three years. Subsequent terms shall be
for three years each. Directors need not be residents of the State of Texas or
shareholders of the corporation. Any director may be removed at any time, but
only for cause, at any special or annual meeting of the shareholders, by the
affirmative vote, of seventy percent (70%) of the outstanding shares entitled to
vote for the election of such director if notice of intention to act upon such
matter shall have been given in the notice calling such meeting and if such
removal is approved by a seventy percent (70%) of the board of directors.
 
         Section 3.2. Vacancies and Newly Created Directorships. Subject to
Section 3.3, any vacancy occurring in the board of directors may be filled by
the affirmative vote of a majority of the directors then in office, although
less than a quorum of the board of directors, or by the sole remaining director.
A director elected to fill a vacancy shall be elected for the unexpired term of
his predecessor in office and until such director's successor shall have been
elected and qualified. Notwithstanding the foregoing:
 
                  a. The specific individuals who were former directors of South
         Central Texas Bancshares, Inc. or any subsidiary of South Central Texas
         Bancshares, Inc. (the "South Central Continuing Directors") will
         nominate the parties to fill vacancies created when one of the South
         Central Continuing Directors ceases to be a director. The
         recommendation for filling such vacancy will be approved by the board
         of directors, unless the board of directors overrides the
         recommendation of the South Central Continuing Directors to fill such
         vacancy by a seventy percent (70%) vote. This provision is in
         accordance with the "Agreement and Plan of Reorganization," approved on
         January 29, 1998, by all parties subject to the agreement.
 
                  b. The specific individuals who were former directors of
         Premier Bancshares, Inc. (the "Premier Continuing Directors") will
         nominate the parties to fill vacancies created when one of the Premier
         Continuing Directors ceases to be a director. The recommendation for
         filling such vacancy will be approved by the board of directors, unless
         the board of directors overrides the recommendation of the Premier
         Continuing Directors to fill such vacancy by a seventy percent (70%)
         vote. This provision is in accordance with the "Agreement and Plan of
         Reorganization," approved on January 29, 1998, by all parties subject
         to the Agreement.
 
         Section 3.3. Increase in Number of Directors. A directorship to be
filled by reason of an increase in the number of directors either may be filled
by the board of directors for a term of office continuing only until the next
election of one or more directors by the shareholders or may be filled by
election at an annual meeting or at a special meeting of the shareholders
entitled to vote called for that purpose; provided that the board of directors
may not fill more than two such directorships during the period between any two
successive annual meetings of shareholders.
 
         Section 3.4. Management. The business and affairs of the corporation
shall be managed by its board of directors which may exercise all such, powers
of the corporation and do
 
 
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all such lawful acts and things as are not by statute or by the articles of
incorporation or by these bylaws directed or required to be exercised and done
by the shareholders.
 
         Section 3.5. Retirement. Directors of the corporation must retire upon
achieving the age of seventy-two (72), such retirement to be effective on the
December 31st next following a director's seventy-second (72nd) birthday.
 
         Section 3.6. Meetings. Meetings of the board of directors, regular or
special, may be held either within or without the State of Texas.
 
         Section 3.7. First Meeting. The first meeting of each newly elected
board of directors shall be held at such time and place as shall be fixed by the
vote of the shareholders at the annual meeting and no notice of such meeting
shall be necessary to the newly elected directors in order legally to constitute
the meeting, provided a quorum shall be present. In the event of the failure of
the shareholders to fix the time and place of such first meeting of the newly
elected board of directors, or in the event such meeting is not held at the time
and place so fixed by the shareholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the board of directors, or as shall be specified in a
written waiver signed by all of the directors.
 
         Section 3.8. Regular Meetings. Regular meetings of the board of
directors may be held without notice at such time and at such place as shall
from time to time be determined by the board of directors.
 
         Section 3.9. Special Meetings. Special meetings of the board of
directors may be called by the chairman of the board or president and shall be
called by the secretary on the written request of two (2) directors. Written or
oral notice of special meetings of the board of directors shall be given to each
director at any time before the meeting. Except as otherwise expressly provided
by law, neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the board of directors need be specified in the
notice or waiver of notice of such meeting.
 
         Section 3.10. Quorum. A majority of the directors shall constitute a
quorum for the transaction of business and the act of the majority of the
directors present at a meeting at which a quorum is present shall be the act of
the board of directors, unless a greater number is required by law or by the
articles of incorporation. If a quorum shall not be present at any meeting of
the board of directors, the directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present. At such adjourned meeting at which a quorum shall be
present, any business may be transacted which might have been transacted at the
meeting as originally notified and called.
 
         Section 3.11. Action by Directors Without a Meeting. Any action
required or permitted to be taken at a meeting of the board of directors or the
executive committee may be taken without a meeting if a consent in writing,
setting forth the action taken, is signed by all of the members of the board of
directors or the executive committee, as the case may be, and such consent shall
have the same force and effect as a unanimous vote at a meeting.
 
 
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         Section 3.12. Telephonic Meetings. Directors and committee members may
participate in and hold a meeting by means of telephone conference or similar
communication equipment by means of which all persons participating in the
meeting can hear each other. Participation in such a meeting shall constitute
presence in person at the meeting, except where a person participates in the
meeting for the express purpose of objecting to the transaction of any business
on the ground the meeting is not lawfully called or convened.
 
         Section 3.13. Committees of Directors. The board of directors, by
resolution adopted by a majority of the whole board, may designate from among
its members an executive committee and one or more other committees, each of
which, to the extent provided in such resolution, shall have and may exercise
all of the authority of the board of directors in the business and affairs of
the corporation except where the action of the board of directors is required by
statute. Vacancies in the membership of a committee shall be filled by the board
of directors at a regular or special meeting of the board of directors. The
executive committee shall keep regular minutes of its proceedings and report the
same to the board when required. The designation of any such committee and the
delegation thereto of authority shall not operate to relieve the board of
directors, or any member thereof, of any responsibility imposed upon it or him
by law.
 
         Section 3.14. Compensation of Directors, The directors may be paid
their expenses, if any, of attendance at each meeting of the board of directors
and may be paid a fixed sum for attendance at each meeting of the board of
directors in addition to any stated salary or bonus received as director. No
such payment shall preclude any director from serving the association in any
other capacity and receiving compensation therefor. The board of directors may
also allow members of special or standing committees to receive compensation for
attending committee meetings. Such compensation received by members of such
committees may or may not be the same as any amounts received by a director for
attending a board meeting.
 
                                   ARTICLE IV
 
                                     NOTICES
 
         Section 4.1. Method of Notice to Shareholders. Notices to shareholders
shall be in writing and delivered by mail, or by facsimile to the shareholders
at their addresses and/or facsimile numbers appearing on the books of the
association. Notice by mail or e-mail shall be deemed to be given at the time
when same shall be mailed. Notice by facsimile shall be deemed to be given at
the time the sender receives a confirmation that the facsimile transmission was
completed.
 
         Section 4.2. Method of Notice to Directors. Notices to directors shall
be either in writing or oral. Notice in writing may be delivered personally,
mailed, sent by facsimile, or sent by email to directors at their street or
e-mail addresses, or facsimile numbers, appearing on the books of the
association. Notice by mail or e-mail shall be deemed to be given at the time
when same shall be mailed. Notice by facsimile shall be deemed to be given at
the time the sender receives a confirmation that the facsimile transmission was
completed. Oral notice may be made in person or by telephone to the director to
be notified.
 
 
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         Section 4.3. Waiver of Notice. Whenever any notice is required to be
given to any shareholder or director under the provisions of the statutes or of
the articles of incorporation or of these bylaws, a waiver thereof in writing
signed by the person or persons entitled to such notice, whether before or after
the time stated therein, shall be equivalent to the giving of such notice.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting, except where a director attends a meeting for the express purpose
of objecting to the transaction of any business on the ground that the meeting
is not lawfully called or convened.
 
                                   ARTICLE V
 
                                    OFFICERS
 
         Section 5.1. Officers. The officers of the corporation shall consist of
a president, one or more vice presidents, a secretary and a chief financial
officer, each of whom shall be elected by the board of directors. Any two or
more offices may be held by the same person.
 
         Section 5.2. Election. The board of directors at its first meeting
after each annual meeting of shareholders shall choose a president. one or more
vice presidents, a secretary and a chief financial officer, none of whom need be
a member of the board.
 
         Section 5.3. Other Officers. Such other officers and assistant officers
and agents as may be deemed necessary may be elected or appointed by the board
of directors.
 
         Section 5.4. Compensation. The salaries of all officers and agents of
the corporation shall be fixed by the board of directors.
 
         Section 5.5. Term; Removal; Vacancies. The officers of the corporation
shall hold office until their successors are chosen and qualify. Any officer or
agent or member of the executive committee elected or appointed by the board of
directors may be removed by the board of directors whenever in its judgment the
best interests of the corporation will be served thereby, but such removal shall
be without prejudice to the contract rights, if any, of the person so removed.
Any vacancy occurring in any office of the corporation by death, resignation,
removal or otherwise shall be filled by the board of directors.
 
         Section 5.6. Chairman of the Board. The board of directors may, in its
discretion, choose a chairman of the board who shall preside at meetings of the
shareholders and of the directors and shall be an ex officio member of all
standing committees. The chairman of the board shall have such other powers and
shall perform such other duties as shall be designated by the board of
directors. The chairman of the board shall be a member of the board of directors
but no other officers of the corporation need be a director. The chairman of the
board shall serve until his successor is chosen and qualified, but he may be
removed at any time by the affirmative vote of a majority of the board of
directors. The chairman of the board shall be a voting position on the board of
directors.
 
         Section 5.7. The President/Chief Executive Officer. The president shall
be the chief executive officer of the corporation, shall have general and active
management of the business of the corporation and shall see that all orders and
resolutions of the board of directors are carried into effect. The president
shall be a member of the board of directors. He shall have the power to
 
 
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vote all shares of voting capital stock owned or controlled by the corporation,
in such manner as the board of directors may from time to time instruct. He or
she shall perform such other duties and have such other authority and powers as
the board of directors may from time to time prescribe, and he or she may from
time to time delegate duties, authority and powers to the other officers of the
corporation. In the absence of the chairman of the board or in the event the
board of directors shall not have designated a chairman of the board, the
president shall preside at meetings of the shareholders and the board of
directors.
 
         Section 5.8. Powers of President. The president shall execute bonds,
mortgages and other contracts requiring a seal, under the seal of the
corporation, except where required or permitted by law to be otherwise signed
and executed and except where the signing and execution thereof shall be
expressly delegated by the board of directors to some other officer or agent of
the corporation.
 
         Section 5.9. The Vice Presidents. The vice presidents in the order of
their seniority, unless otherwise determined by the board of directors, shall,
in the absence or disability of the president, perform the duties and exercise
the powers of the president. They shall perform such other duties and have such
other powers as the board of directors shall prescribe.
 
         Section 5.10. The Secretary. The secretary shall attend all meetings of
the board of directors and all meetings of the shareholders and record all the
proceedings of the meetings of the corporation and of the board of directors in
a book to be kept for that purpose and shall perform like duties for the
standing committees when required. He or she shall give, or cause to be given,
notice of all meetings of the shareholders and special meetings of the board of
directors, and shall perform such other duties as may be prescribed by the board
of directors or president, under whose supervision he shall be. He or she shall
keep in safe custody the seal of the corporation and, when authorized by the
board of directors, affix the same to any instrument requiring it and, when so
affixed, it shall be attested by his signature or by the signature of the
treasurer or an assistant secretary.
 
         Section 5.11. The Assistant Secretaries. The assistant secretaries in
the order of their seniority, unless otherwise determined by the board of
directors, shall, in the absence or disability of the secretary, perform the
duties and exercise the powers of the secretary. They shall perform such other
duties and have such other powers as the board of directors may from time to
time prescribe.
 
         Section 5.12. The Chief Financial Officer. The chief financial officer
shall have the custody of the corporate funds and securities and shall keep full
and accurate accounts of receipts and disbursements in books belonging to the
corporation and shall deposit all moneys and other valuable effects in the name
and to the credit of the corporation in such depositories as may be designated
by the board of directors. He or she shall perform all other duties as assigned
by the President/CEO or the Board of Directors.
 
         Section 5.13. Disbursement of Funds by Chief Financial Officer. He or
she shall disburse the funds of the corporation as may be ordered by the board
of directors, taking proper vouchers for such disbursements, and shall render to
the president and the board of directors at
 
 
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its regular meetings or when the board of directors so requires, an account of
all his transactions as treasurer and of the financial condition of the
corporation.
 
         Section 5.14. Bond of Chief Financial Officer. If required by the board
of directors, he or she shall give the corporation a bond in such sum and with
such surety or sureties as shall be satisfactory to the board of directors for
the faithful performance of the duties of his office and for the restoration to
the corporation, in case of his or her death, resignation, retirement or removal
from office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
corporation.
 
         Section 5.15. The Assistant Financial Officers. The assistant financial
officers in the order of their seniority, unless otherwise determined by the
board of directors shall, in the absence or disability of the chief financial
officer, perform the duties and exercise the powers of the chief financial
officer. They shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
 
                                   ARTICLE VI
 
                             CERTIFICATES FOR SHARES
 
         Section 6.1. Certificates of Shares. The corporation shall deliver
certificates representing all shares to which shareholders are entitled; and
such certificates shall be signed by the president or a vice president, and the
secretary or an assistant secretary, of the corporation, and may be sealed with
the seal of the corporation or a facsimile thereof. No certificate shall be
issued until the consideration therefor has been fully paid. Each certificate
representing shares of the corporation shall state upon the face thereof that
the corporation is organized under the laws of the State of Texas, the name of
the person to whom issued, the number and class and the designation of the
series, if any, which such certificate represents, and the par value of each
share represented by such certificate or a statement that the shares are without
par value.
 
         Section 6.2. Classes of Stock. If the corporation is authorized to
issue shares of more than one class, each certificate representing shares issued
by the corporation (1) shall conspicuously set forth on the face or back of the
certificate a full statement of (a) all of the designations, preferences,
limitations, and relative rights of the shares of each class authorized to be
issued and (b) if the corporation is authorized to issue shares of any preferred
or special class in series, the variations in the relative rights and
preferences of the shares of each such series to the extent they have been fixed
and determined and the authority of the board of directors to fix and determine
the relative rights and preferences of subsequent series; or (2) shall
conspicuously state on the face or back of the certificate that (a) such a
statement is set forth in the articles of incorporation on file in the office of
the Secretary of State and (b) the corporation will furnish a copy of such
statement to the record holder of the certificate without charge on written
request to the corporation at its principal place of business or registered
office.
 
         Section 6.3. Preemptive Rights. If the corporation has by its articles
of incorporation limited or denied the preemptive right of shareholders to
acquire unissued or treasury shares of the corporation, every certificate
representing shares issued by the corporation (1) shall conspicuously set forth
upon the face or back of the certificate a full statement of the limitation
 
 
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or denial of preemptive rights contained in the articles of incorporation; or
(2) shall conspicuously state on the face or back of the certificate (a) that
there is on file in the office of the Secretary of State a full statement of the
limitation or denial of preemptive rights contained in the articles of
incorporation, and (b) that the corporation will furnish a copy of such
statement to any shareholder without charge upon written request to the
corporation at its principal place of business or registered office.
 
         Section 6.4. Signatures on Certificates. The signatures of the
president or vice president and the secretary or assistant secretary upon a
certificate may be live or a facsimile thereof. In case any officer who has
signed shall have ceased to be such officer before such certificate is issued,
it may be issued by the corporation with the same effect as if he were such
officer at the date of the issuance.
 
         Section 6.5. Lost Certificates. The board of directors may direct a new
certificate for shares to be issued in place of any certificate theretofore
issued by the corporation alleged to have been lost or destroyed, upon the
making of an affidavit of that fact by the person claiming the certificate to
have been lost or destroyed. When authorizing such issuance of a new
certificate, the board of directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost or destroyed
certificate, or his legal representative, to advertise the same in such manner
as it shall require and/or to give the corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the corporation
with respect to the certificate alleged to have been lost or destroyed.
 
         Section 6.6. Transfer of Shares. Upon surrender to the corporation or
the transfer agent of the corporation of a certificate endorsed or accompanied
by proper evidence of succession, assignment or authority to transfer, it shall
be the duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
 
         Section 6.7. Restriction on Transfer of Securities.
 
            a. If the corporation issues any securities which are not registered
under the Securities Act of 1933, as amended, the transfer of any such shall be
restricted in accordance with the following legend:
 
                           "The securities represented by this [certificate or
                  instrument] have not been registered under The Securities Act
                  of 1933, as amended (the "Act"), and may not be offered for
                  sale, sold or transferred unless a registration statement
                  under the Act is then in effect with respect to such
                  securities or an exemption from the registration requirement
                  of the Act is then in fact applicable to such sale, transfer
                  or offer for sale."
 
            b. If the securities are offered pursuant to the intrastate
exemption from registration contained in Section 3(a)(11) of the Securities Act
of 1933, as amended (the "Act"), the following language should be added to the
legend:
 
                           "In addition, these securities have been issued
                  pursuant to the
 
 
 
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                  intrastate offering exemption of the Act [Section 3(a)(11)]
                  and Rule 147 thereunder, and may not, prior to nine months
                  after the last sale of any security issued by the corporation
                  pursuant to the offering of which these securities are a part,
                  be sold to anyone not a resident of the State of Texas."
 
         c. If the securities are offered pursuant to Section 4(2) of the Act or
under Regulation D. promulgated by the Securities and Exchange Commission under
Sections 3(b) and 4(2) of the Act, the following language should be added to the
legend:
 
                           "In addition, these securities have been issued
                  pursuant to [Section 4(2) of the Act] or [Section 4(2) of the
                  Act and Regulation D thereunder] or [Regulation D under the
                  Act] and may constitute "restricted securities" as that term
                  is defined in Rule 144 under the Act and be subject to
                  restrictions and reporting requirements on resale or other
                  transfer."
 
         d. Similarly, if the corporation issues any securities which are not
registered under the securities laws of the state of incorporation of the
corporation (or other relevant state), the transfer of any such securities
shall, to the extent required by law, be restricted in accordance with the
appropriate legend placed upon the certificate or instrument evidencing the
same.
 
         e. In the event any restriction on the transfer, or registration of the
transfer, of shares shall be imposed or agreed to by the corporation, each
certificate or instrument representing shares so restricted (1) shall
conspicuously set forth a full or summary statement of the restriction on the
face of the certificate or instrument; or (2) shall set forth such statement on
the back of the certificate or instrument and conspicuously refer to the same on
the face of the certificate or instrument; or (3) shall conspicuously state on
the face or back of the certificate or instrument that such a restriction exists
pursuant to a specified document and (a) that the corporation will furnish to
the record holder of the certificate or instrument without charge upon written
request to the corporation at its principal place of business or registered
office a copy of the specified document, or (b) if such document is one required
or permitted by law to be and has been filed, that such specified document is on
file in the office of the Secretary of State and contains a full statement of
such restriction.
 
         Section 6.8. Closing of Transfer Books and Fixing Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or shareholders entitled to
receive payment of any dividend on shares, or in order to make a determination
of shareholders for any other proper purposes, the board of directors may
provide that the stock transfer books shall be closed for a stated period not to
exceed, in any case, fifty (50) days. If the stock transfer books shall be
closed for the purpose of determining shareholders entitled to notice of or to
vote at a meeting of shareholders, such books shall be closed for at least ten
(10) days immediately preceding such meeting. In lieu of closing the stock
transfer books, the board of directors may fix in advance a date as the record
date for any such determination of shareholders, such date in any case to be not
more than fifty (50) days, and, in case of a meeting of shareholders, not less
than ten (10) days, prior to the date on which the particular action requiring
such determination of shareholders is to be taken. If the stock
 
 
 
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transfer books are not closed and no record date is fixed for the determination
of shareholders entitled to notice of or to vote at a meeting of shareholders,
or shareholders entitled to receive payment of a dividend on shares or of
interest or principal on indebtedness, the date on which the notice of the
meeting is mailed or the date on which the resolutions of the board of directors
declaring such dividend or authorizing such payment of principal or interest is
adopted, as the case may be, shall be the record date for such determination of
shareholders. When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof, except where the
determination has been made through the closing of stock transfer books and the
stated period of closing has expired.
 
         Section 6.9. Registered Shareholders. The Corporation shall be entitled
to recognize the exclusive rights of a person registered on its books as the
owner of shares to receive dividends or payments of interest and principal
thereon, and to vote as the owner of such share or shares, and shall not be
bound to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of the State of
Texas.
 
                                   ARTICLE VII
 
                                    INDEMNITY
 
         Section 7.1. Indemnification.
 
            a. Except as may be limited by law and subject to the requirements
of the TBCA, the Corporation shall indemnify any director or officer or former
director or officer of the Corporation, or any person who may have served at its
request as a director or officer or former director or officer of another
Corporation in which it owns shares of capital stock or of which it is a
creditor, against expenses actually and necessarily incurred by him in
connection with the defense of any action, suit, or proceeding, whether civil or
criminal, in which he is made a party be reason of being or having been such
director or officer, except in relation to matters as to which he shall be
adjudged in such action, suit or proceeding to be liable for negligence or
misconduct in performance of duty.
 
            b. The Corporation shall not be obligated to reimburse the amount of
any settlement unless it has agreed in writing to such settlement. If any person
shall unreasonably fail to enter into a settlement of any threatened, pending,
or completed action, suit, or proceeding, whether civil, criminal,
administrative, arbitrative, or investigative, any appeal in such an action,
suit, or proceeding, or any inquiry or investigation that could lead to such an
action, suit, or proceeding ("Proceeding") within the scope of Section (a) of
the Corporation's Articles of Incorporation, offered or assented to by the
opposing party or parties and which is acceptable to the Corporation, then the
indemnification obligation of the Corporation in connection with such Proceeding
shall be limited to the total of the amount at which settlement could have been
made and the expenses incurred by such person prior to the time the settlement
could reasonably have been effected.
 
 
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         Section 7.2. Expenses Advanced. The expenses of a director or officer
incurred as a party to any Proceeding, shall be paid by the Corporation as they
are incurred and in advance of the final disposition of the Proceeding,
provided, however, that the advance payment of expenses shall be made only upon
receipt by the Corporation of both a written affirmation from the director or
officer of his good faith belief that he has met the standard of conduct
necessary for indemnification under applicable laws and regulations and an
unlimited, general undertaking by or on behalf of the director or officer to
repay all amounts so advanced in the event that it is ultimately determined by a
final decision, order, or decree of a court of competent jurisdiction that the
director or officer has not met those standards or if it is ultimately
determined that indemnification of the director or officer in connection with
such Proceeding is prohibited by the Corporation's Articles of Incorporation or
under applicable law or regulation.
 
         Section 7.3. Insurance. The Corporation may (but shall not be required
to) purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Corporation or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any such
capacity or arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability under these Bylaws
of the laws of the State of Texas.
 
         Section 7.4. Other Protection and Indemnification. The protection and
indemnification provided hereunder shall not be deemed exclusive of any other
rights to which such director or officer or former director or officer or such
person may be entitled, under any agreement, insurance policy or vote of
shareholders, or otherwise.
 
         Section 7.5. Interested Directors. No contract or transaction between
the Corporation and any of its directors or officers (or any firm or corporation
in which any director or officer is directly or indirectly interested) shall be
void or voidable solely because of the interest of such directors or officers in
the transaction or solely because such directors or officers are present at or
participate in the meeting of the board of directors which authorizes the
transaction, or solely because his or their votes are counted for such purpose,
if the material facts as to the relationship or interest of the directors or
officers are disclosed or known to the board of directors, and the board in good
faith authorized the contract or transaction by the affirmative vote of a
majority of the disinterested directors, even though less than a quorum.
 
                                  ARTICLE VIII
 
                               GENERAL PROVISIONS
 
         Section 8.1. Share Dividends. The board of directors may declare and
the corporation may pay dividends on its outstanding shares in cash, property,
or its own shares pursuant to law and subject to the provisions of its articles
of incorporation.
 
         Section 8.2. Reserves. The board of directors may, by resolution,
create a reserve or reserves out of earned surplus for any proper purpose or
purposes, and may abolish any such reserve in the same manner.
 
 
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         Section 8.3. Report to Shareholders. The board of directors must, when
requested by the holders of at least one-third (1/3) of the outstanding shares
of the corporation, present written reports of the situation and amount of
business of the corporation.
 
         Section 8.4. Checks. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the board of directors may from time to time designate.
 
         Section 8.5. Fiscal Year. The fiscal year of the corporation shall be
fixed by the resolution of the board of directors. Until changed by the board of
directors, the fiscal year of the corporation shall begin on the first day of
January each year.
 
         Section 8.6. Seal. The corporate seal shall have inscribed thereon the
name of the corporation, the year of its organization and the words "Corporate
Seal, Texas." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or in any other manner reproduced.
 
                                   ARTICLE IX
 
                               AMENDMENT OF BYLAWS
 
         Section 9.1. Amendment, Alteration and Repeal of Bylaws. These bylaws
may be altered, amended or repealed or new bylaws may be adopted at any meeting
of the board of directors at which a quorum is present, by the affirmative vote
of seventy percent (70%) the directors present at such meeting. The shareholders
of the Corporation shall not have the power to adopt, amend or repeal the Bylaws
of the Corporation.