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                                                                    EXHIBIT 3(b)

                              AMENDED AND RESTATED
                                     BYLAWS
                                       OF
                                PEERLESS MFG. CO.

                    As Adopted and in Effect on May 21, 1997

                                    ARTICLE I

                                     OFFICES

         Section 1. The registered office shall be located in the City of
Dallas, County of Dallas, State of Texas.

         Section 2. 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 1. All annual meetings of shareholders shall be held at such
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. The annual meetings of shareholders shall be held on a date
to be determined from time to time by the board of directors. At the annual
meeting the shareholders shall elect a board of directors and transact such
other business as may properly be brought before the meeting.

         In order to properly submit any business to an annual meeting of
shareholders, including, without limitation, a nomination for the election to
the board of directors by a shareholder, a shareholder must give timely notice
in writing to the secretary of the corporation. To be considered timely, a
shareholder's notice must be delivered either in person or by United States
certified mail, postage prepaid, and received at the principal executive offices
of the corporation (a) not less than one hundred twenty (120) days nor more than
one hundred fifty (150) days before the first anniversary date of the
corporation's proxy statement in connection with the last annual meeting of
shareholders or (b) if no annual meeting has been called after the expiration of
more than thirty (30) days from the date for such meeting contemplated at the
time of the previous year's proxy statement, not less than a reasonable time, as
determined by the board of directors, prior to the date of the applicable annual
meeting.

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         The secretary of the corporation will deliver any shareholder proposals
and nominations received in a timely manner for review by the board of directors
or a committee designated by the board of directors.

         A shareholder's notice to submit business to an annual meeting of
shareholders will set forth (i) the name and address of the shareholder, (ii)
the class and number of shares of stock beneficially owned by such shareholder,
(iii) the name in which such shares are registered on the stock transfer books
of the corporation, (iv) a representation that the shareholder intends to appear
at the meeting in person or by proxy to submit the business specified in such
notice, (v) any material interest of the shareholder in the business to be
submitted, and (vi) a brief description of the business desired to be submitted
to the annual meeting, including the complete text of any resolutions to be
presented at the annual meeting, and the reasons for conducting such business at
the annual meeting. In addition, the shareholder making such proposal will
promptly provide any other information reasonably requested by the corporation.

         Notwithstanding the foregoing provisions of this bylaw, a shareholder
who seeks to have any proposal included in the corporation's proxy statement
will comply with the requirements of Regulation 14A under the Securities
Exchange Act of 1934, as amended.

         Section 3. Special meetings of shareholders may be called by (a) the
president or the board of directors or (b) the holders of at least ten percent
(10%) of all shares entitled to vote at a special meeting, unless the articles
of incorporation provide for a number of shares greater than or less than ten
percent (10%), in which event a special meeting may be called by the holders of
at least the percentage of shares specified in the articles of incorporation.

         Section 4. Written or printed notice stating the place, day and hour of
a 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, except in the case of a
special meeting called by the requsite number shareholders as provided in
Section 3 of this Article, in which case the notice must be given not less than
fifty (50) nor more than sixty (60) days before the day of such meeting, either
personally or by mail, by or at the direction of the president, the secretary or
the officer or person calling the meeting, to each shareholder entitled to vote
at such. When a meeting of shareholders is adjourned for thirty (30) days or
more, notice of the adjourned meeting shall be given as in the case of an
original meeting. When a meeting is adjourned for less than thirty (30) days, it
shall not be necessary to give any notice of the time and place of the adjourned
meeting or of the business to be transacted thereat, other than by announcement
at the meeting at which the adjournment is taken.

         Section 5. Any notice required to be given to any shareholder, under
any provision of the Texas Business Corporation Act, as amended (the "TBCA"), or
the articles of incorporation or bylaws, need not be given to the shareholder if
(a) notice of two (2) consecutive annual meetings and all notices of meetings
held during the period between those annual meetings, if any, or (b) all (but in
no event less than two) payments (if sent by first class mail) of distributions
or interest on securities during a 12-month period have been mailed to that
person, addressed at

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his address as shown on the share transfer records of the corporation, and have
been returned undeliverable. Any action or meeting taken or held without notice
to such a person shall have the same force and effect as if the notice had been
duly given, and if the action taken by the corporation is reflected in any
articles or document filed with the Secretary of State, such articles or
document may state that notice was duly given to all persons to whom notice was
required to be given. If such a person delivers to the corporation a written
notice setting forth his then current address, the requirement that notice be
given to that person shall be reinstated.

         Section 6. Business transacted at any special meeting shall be confined
to the purposes stated in the notice thereof.

         Section 7. 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 in the articles of incorporation. If,
however, a quorum shall not be present or represented at any meeting of
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 of the shares entitled to vote and thus
represented at such meeting.

         Section 8. 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 meeting of shareholders, unless the vote of a greater number is
required by law, the articles of incorporation or bylaws.

         Section 9. 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 TBCA. At any
election for directors, every shareholder entitled to vote at any such election
shall have the right to vote, in person or proxy, the number of shares owned by
him for as many persons as there are directors to be elected and for whose
election he has a right to vote, and shareholders of the corporation are
expressly prohibited from cumulating their votes in any election for directors
of the corporation.

         Section 10. A shareholder may vote in person or by proxy executed in
writing by the shareholder. A telegram, telex, cablegram or similar transmission
by the shareholder, or a photographic, photostatic, facsimile or similar
reproduction of a writing executed by the shareholder, shall be treated as an
execution in writing for the purposes of this section. 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 the proxy form
conspicuously states that the proxy is irrevocable and the proxy is coupled with
an interest.

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         Section 11. 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 the address of and
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 or principal
place of business 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 book 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. However, failure to prepare and to make available
such list in the manner provided above shall not affect the validity of any
action taken at the meeting.

         Section 12. Any action required by law to be taken at a meeting of
shareholders, or any action which may be taken at a meeting of shareholders, may
be taken without a meeting, without prior notice, and without a vote, if a
consent in writing, setting forth the action so taken shall be signed and bear
the date of the signature by shareholders having not less than the minimum
number of votes that would be 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 with respect to the subject matter thereof.

         Section 13. In advance of any meeting of shareholders, the board of
directors may appoint any persons, other than nominees for office, as inspectors
of election to act at such meeting or any adjournment thereof. If inspectors of
election are not so appointed, the chairman of any such meeting may, and on the
request of any shareholder or his proxy shall, appoint inspectors of election at
the meeting. The number of inspectors shall be either one (1) or three (3). If
appointed at a meeting on the request of one or more shareholders or proxies,
the majority of shares present shall determine whether one or three inspectors
are to be appointed. In case any person appointed as inspector fails to appear
or fails or refuses to act, the vacancy may be filled by appointment by the
board of directors in advance of the meeting, or at the meeting by the person
acting as chairman. The inspectors of election shall (a) determine the number of
shares outstanding and the voting power of each, the shares represented at the
meeting, the existence of a quorum, and the authenticity, validity and effect of
proxies; (b) receive votes, ballots or consents; (c) hear and determine all
challenges and questions in any way arising in connection with the right to
vote; (d) count and tabulate all votes or consents and determine the result; and
(e) do such acts as may be proper to conduct the election or vote with fairness
to all shareholders. The inspectors of election shall perform their duties
impartially, in good faith, to the best of their ability and as expeditiously as
is practical. If there are three inspectors of election, the decision, act or
certificate of a majority is effective in all respects as the decision, act or
certificate of all. On request of the chairman of the meeting or of any
shareholder or his proxy, the inspectors shall make a report in writing of any
challenge or question or matter determined by them and execute a certificate of
any fact found by them. Any report or certificate made by them is prima facie
evidence of the facts stated therein. At every meeting of the shareholders, the
chairman of the board, or in his absence, or in the event that the board of
directors has not designated a chairman

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of the board, the president, or in his absence, the vice president designated by
the president, or, in the absence of such designation, a chairman (who shall be
one of the vice presidents, if any is present) chosen by a majority in interest
of the shareholders present in person or by proxy and entitled to vote, shall
act as chairman. The secretary of the corporation, or in his absence, an
assistant secretary, shall act as secretary of all meetings of the shareholders.
In the absence at such meeting of the secretary or assistant secretary, the
chairman may appoint another person to act as secretary of the meeting.

         Section 14. Subject to the provisions required herein for notice of
meetings, shareholders may participate in and hold a meeting of shareholders, by
means of conference by telephone or similar communications equipment, provided
all persons participating in the meeting can hear each other, and participation
in a meeting pursuant to this Section 14 shall constitute presence in person at
such meeting, except where a person participates in 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 III

                                    DIRECTORS

         Section 1. The number of directors of the corporation shall be five
(5). Directors need not be residents of the State of Texas or shareholders of
the corporation. No decrease in the number of directors shall have the effect of
reducing the term of any incumbent director. A director may only be removed from
office for "cause" (as defined below), at a meeting of shareholders called
expressly for that purpose by the affirmitive vote of shareholders holding sixty
six and two-thirds percent (66 2/3%) or more of the issued and outstanding
shares then entitled to vote at any election of the directors. For purposes of
this Section, "cause" shall mean the willful engaging by the director in illegal
conduct or gross misconduct which is materially and demonstrably injurious to
the corporation. For purpose of this provision, no act or failure to act, on the
part of the director, shall be considered willful unless it is done, or omitted
to be done, by the director in bad faith or without reasonable belief that the
director's action or omission was in the best interests of the corporation.

         The directors will be divided into three classes designated as Class I,
Class II, and Class III. Class I will consist of one director, and each of Class
II and Class III will consist of two directors. Each Class of directors will
stand for election at the 1997 annual shareholders' meeting for the following
terms: Class I director will be elected for a one-year term; Class II directors
will be elected for a two-year term; and Class III directors will be elected for
a three-year term. At each following annual shareholders' meeting, commencing
with the 1998 annual stockholders' meeting, each of the successors to the
directors of the Class whose term will expire at such annual meeting will be
elected for a term running until the third annual meeting succeeding his or her
election and until his or her successor has been duly elected and qualified.

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         Section 2. Vacancies in the board of directors shall exist in the case
of the happening of any of the following events: (a) the death, resignation or
removal of any director; (b) the authorized number of directors is increased or
(c) at any annual or special meeting of shareholders at which any director is
elected, the shareholders fail to elect the full authorized number of directors
to be voted for at that meeting. The board of directors may declare vacant the
office of a director in either of the following cases: (a) if he is adjudged
incompetent by an order of court, or finally convicted of a felony or (b) if
within sixty (60) days after notice of his election, he does not accept the
office either in writing or by attending a meeting of the board of directors.
Any vacancy occurring in the board of directors may be filled by election at an
annual meeting or at a special meeting of shareholders called for that purpose
or by the affirmative vote of a majority of the remaining directors though less
than a quorum of the board of directors, or by a sole remaining director. Any
directorship to be filled by reason of an increase in the number of directors
may be filled by election at an annual meeting or at a special meeting of
shareholders called for that purpose, or 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; 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. A director elected to fill a vacancy shall be
elected to the unexpired term of his predecessor in office.

         Section 3. 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 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 or authorized or approved by the shareholders.

                       MEETINGS OF THE BOARD OF DIRECTORS

         Section 4. Meetings of the board of directors, regular or special, may
be held either within or without the State of Texas. Any regular or special
meeting is valid, wherever held, if held on written consent of all members of
the board given either before or after the meeting and filed with the secretary
of the corporation.

         Section 5. 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 6. 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.

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         Section 7. Special meetings of the board of directors may be called by
the president and shall be called by the secretary on the written request of two
(2) directors. Written notice of special meetings of the board of directors
shall be given personally, or sent by mail or by other form of written
communication, to each director at least three (3) days before the date of the
meeting. 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 8. A majority of the authorized number of directors shall
constitute a quorum for the transaction of business and the act of the majority
of the directors present at a meeting duly held at which a quorum is present
shall be the act of the board of directors, unless a greater number is required
by law or the articles of incorporation or as otherwise set forth in these
bylaws. Each director present at a meeting will be deemed to have assented to
any action taken at the meeting unless his dissent to the action is entered in
the minutes of the meeting, or unless he shall file his written dissent thereto
with the secretary of the meeting or shall forward such dissent by registered
mail to the secretary of the corporation immediately after such meeting. 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 9. Any action required or permitted to be taken at a meeting of
the board of directors or any committee thereof 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 committee, as the case may be, and such
consent shall have the same force and effect as a unanimous vote at a meeting.
Subject to the provisions required herein for notice of meetings, members of the
board of directors or members of any committee designated by the board of
directors may participate in and hold a meeting of such board or committee by
means of conference by telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and
participation in a meeting pursuant to this Section 9 shall constitute presence
in person at such meeting, except where a person participates in 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.

         Section 10. No director shall be disqualified from holding his office
or be liable to the corporation or to any shareholder or creditor thereof for
any loss incurred by this corporation under or by reason of any contract,
transaction or act, or be accountable for any gains or profits he may have
realized therein as a result of any contract or transaction between this
corporation and such director or between this corporation and any other
corporation, partnership, association or other organization in which such
director or officer is a director or officer or has a financial interest.

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                             COMMITTEES OF DIRECTORS

         Section 11. The board of directors, by resolution adopted by a majority
of the full board, may designate from among its members one or more 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, except that no such
committee shall have the authority of the board of directors in reference to
amending the articles of incorporation (except that a committee may exercise the
authority of the board of directors vested in accordance with Article 2.13 of
the TBCA); proposing a reduction of the stated capital of the corporation in the
manner permitted by Article 4.12 of TBCA; approving a plan of merger or share
exchange of the corporation; recommending to the shareholders the sale, lease or
exchange of all or substantially all of the property and assets of the
corporation otherwise than in the usual and regular course of its business;
recommending to the shareholders a voluntary dissolution of the corporation or a
revocation thereof; amending, altering or repealing the bylaws of the
corporation or adopting new bylaws of the corporation; filling vacancies in the
board of directors or any such committee; filling any directorship to be filled
by reason of an increase in the number of directors; electing or removing
officers of the corporation or members of any such committee, fixing the
compensation of any member of such committee; or altering or repealing any
resolution of the board of directors that, by its terms, provides that it shall
not be amended or repealed. Unless the resolution designating a particular
committee so provides, no committee of the board of directors shall have the
authority to authorize a distribution or to authorize the issuance of shares of
the corporation. Vacancies in the membership of any such committee shall be
filled by the board of directors at a regular or special meeting of the board of
directors. Any such committee shall keep regular minutes of its proceedings and
report the same to the board of directors when required. The designation of a
committee of the board of directors and the delegation thereto of authority
shall not operate to relieve the board of directors, or any member thereof, of
any responsibility imposed by law. Each director shall be deemed to have
assented to any action of the executive committee or any other committee, unless
he shall, within seven (7) days after receiving actual or constructive notice of
such action, deliver his written dissent thereto to the secretary of the
corporation. Members of such committee shall serve at the pleasure of the board
of directors.

                            COMPENSATION OF DIRECTORS

         Section 12. 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 or a stated salary as
director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.

                              CHAIRMAN OF THE BOARD

         Section 13. The board of directors may, in its discretion, choose a
chairman of the board who shall preside at meetings of 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

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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.

                                   ARTICLE IV

                              NOTICES AND REQUESTS

         Section 1. Notices and requests to directors, officers or shareholders
shall be in writing and delivered personally or mailed to the directors,
officers or shareholders at their addresses appearing on the books of the
corporation. Notice or request by mail shall be deemed to be given and received
at the time when deposited in the United States mail, addressed to the addressee
at his address as it appears on the records of the corporation, with adequate
postage thereon prepaid; notice or request by personal delivery shall be deemed
to be given and received at the time when same shall be actually received by the
person to whom addressed. Notices and requests to directors and officers may
also be given by telegram, and shall be deemed delivered when same shall be
deposited at a telegraph office for transmission and all appropriate fees
therefor have been paid.

         Section 2. 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.

         Section 3. 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 1. The officers of the corporation shall consist of a president
and a secretary and such other officers as may be elected or appointed by the
board of directors. Any two or more offices may be held by the same person.

         Section 2. The board of directors, at its first meeting after each
annual meeting of shareholders, shall choose a president, a secretary and such
other officers as they deem appropriate, none of whom need be a member of the
board.

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         Section 3. Such other officers and assistant officers and agents as may
be deemed necessary may be elected or appointed by the board of directors to
hold office for such period, have such authority and perform such duties as are
provided by the bylaws or as the board of directors may determine.

         Section 4. The salaries of all officers and agents of the corporation
shall be fixed from time to time by the board of directors.

         Section 5. Each officer of the corporation shall hold office until he
shall resign or shall be removed or otherwise disqualified to serve, or his
successor shall be chosen and qualified. Any officer or agent may be removed by
the board of directors, with or without cause, whenever in its judgment the best
interest 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.

                                  THE PRESIDENT

         Section 6. 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. 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 shareholders and the board
of directors.

         Section 7. He shall execute bonds, mortgages and other contracts 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.

                               THE VICE PRESIDENTS

         Section 8. The vice presidents in the order of their seniority, or
otherwise, as 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.

                     THE SECRETARY AND ASSISTANT SECRETARIES

         Section 9. The secretary shall attend all meetings of the board of
directors and all meetings of 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. Except as may be otherwise provided in these bylaws, he shall give, or
cause to be given, notice of all meetings of 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.

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         Section 10. The assistant secretaries in the order of their seniority,
or if there be none, the treasurer, acting as assistant secretary, or otherwise,
as 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. Assistant secretaries may be
appointed by the president without prior approval of the board of directors.

                     THE TREASURER AND ASSISTANT TREASURERS

         Section 11. The treasurer 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 monies
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.

         Section 12. He 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
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 13. If required by the board of directors, he 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
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 14. The assistant treasurers in the order of their seniority,
or otherwise, as determined by the board of directors, or the secretary acting
as assistant treasurer shall, in the absence or disability of the treasurer,
perform the duties and exercise the powers of the treasurer. 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 1. The corporation shall deliver certificates representing all
shares to which shareholders are entitled. Certificates representing shares
shall be signed by the president or any vice president and the secretary or any
assistant secretary of the corporation, or any other officers of the corporation
so authorized by the board of directors and may be sealed with the seal of the
corporation, if any, or a facsimile thereof. No certificate shall be issued for
any share until the consideration therefor has been fully paid. Each certificate
representing shares shall state upon the face thereof that the corporation is
organized under the laws of the State of Texas, the name

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of the person to whom issued, the number and class and the designation of the
series, if any, which said certificate represents, and the par value of each
share represented by such certificate or a statement that the shares are without
par value. If the corporation is authorized to issue shares of more than one
class, each certificate representing shares issued by the corporation (a) shall
conspicuously set forth on the face or back of the certificate a full statement
of all of the designations, preferences, limitations and relative rights of the
shares of each class authorized to be issued and 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 that 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 (b) shall conspicuously state on the face
or back of the certificate that such a statement is set forth in the articles of
incorporation on file in the office of the Secretary of State, and 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.

         Each certificate representing shares issued by the corporation (a)
shall conspicuously set forth on the face or back of the certificate a full
statement of the limitation or denial of preemptive rights contained in the
articles of incorporation, or (b) shall conspicuously state on the face or back
of the certificate that (i) such a statement is set forth in the articles of
incorporation on file in the office of the Secretary of State and (ii) the
corporation will furnish a copy of such statement to the record holder of the
certificate without charge on request to the corporation at its principal place
of business or registered office.

         Each certificate representing shares restricted as to transfer or
registration of the transfer, as permitted by the TBCA (a) shall conspicuously
contain a full or summary statement of the restriction on the face of the
certificate, or (b) shall contain such statement on the back of the certificate
and conspicuously refer to the same on the face of the certificate, or (c) shall
conspicuously state on the face of or back of the certificate that such a
restriction exists pursuant to a specified document and (i) that the corporation
will furnish to the record holder of the certificate, without charge, upon
written request to the corporation at its principal place of business or
registered office a copy of the specified document, or (ii) if such document is
one required or permitted to be and has been filed under the TBCA, that such
specified document is on file in the office of the Secretary of State and
contains a full statement of such restriction. The definitions of the terms
"conspicuous" and "conspicuously" are set forth in the TBCA.

         Section 2. The signatures of the authorized officers of the corporation
upon a certificate may be facsimiles. In case any officer who has signed or
whose facsimile signature has been placed upon such certificate 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 3. Where a certificate has been lost, apparently destroyed or
wrongfully taken and the owner fails to notify the corporation of that fact
within a reasonable time after he has notice of it, and the corporation
registers a transfer of the shares represented by the certificate before
receiving such a notification, the owner is precluded from asserting against the

                                       12
<PAGE>

corporation any claim for registering the transfer or any claim to a new
certificate. The board of directors may direct a new certificate or certificates
to be issued in place of any certificate or certificates theretofore issued by
the corporation alleged to have been lost, destroyed or wrongfully taken, upon
the making of an affidavit of that fact by the person claiming the certificate
of stock to be lost or destroyed. When authorizing such issuance of a new
certificate or certificates, 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 certificates, 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 and/or to satisfy any other reasonable
requirements imposed by the board of directors. If, after the issuance of a new
certificate as a replacement for a lost, destroyed or wrongfully taken
certificate, a bona fide purchaser of the original certificate presents it for
registration of transfer, the corporation must register the transfer unless
registration would result in over-issue. In addition to any rights on the
indemnity bond, the corporation may recover the new certificate from the person
to whom it was issued or any person taking under him except a bona fide
purchaser.

         Section 4. Upon surrender to the corporation or the transfer agent of
the corporation of a certificate for shares duly 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.
When a transfer of shares is requested and there is reasonable doubt as to the
right of the person seeking the transfer, the corporation or its transfer agent,
before recording the transfer of the shares on its books or issuing any
certificate therefor, may require from the person seeking the transfer
reasonable proof of his right to the transfer. If there remains a reasonable
doubt of the right to the transfer, the corporation may refuse a transfer unless
the person gives adequate security or a bond of indemnity executed by a
corporate surety or by two individual sureties satisfactory to the corporation
as to form, amount and responsibility of sureties. The bond shall be conditioned
to protect the corporation, its officers, transfer agents and registrars, or any
of them, against any loss, damage, expense or other liability to the owner of
the shares by reason of the recordation of the transfer or the issuance of a new
certificate for shares.

                    CLOSING OF TRANSFER BOOKS AND RECORD DATE

         Section 5. For the purpose of determining shareholders entitled to
notice of or to vote at any meeting of shareholders or any adjournment thereof,
or entitled to receive a distribution by the corporation (other than a
distribution involving a purchase or redemption by the corporation of any of its
own shares) or a share dividend, or in order to make a determination of
shareholders for any other proper purposes (other than determining shareholders
entitled to consent to action by shareholders proposed to be taken without a
meeting of shareholders), the board of directors may provide that the share
transfer records shall be closed for a stated period not to exceed, in any case,
sixty (60) days. If the share transfer records shall be closed for the purpose
of determining shareholders entitled to notice of or to vote at a meeting of
shareholders, such records shall be closed for at least ten (10) days
immediately preceding such meeting. In lieu of

                                       13
<PAGE>

closing the share transfer records, 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 sixty (60) 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 share transfer records 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 a distribution (other than a
distribution involving a purchase or redemption by the corporation of any of its
own shares) or a share dividend, 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 distribution or share dividend 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
share transfer records and the stated period of closing has expired, in which
case the board of directors shall make a new determination, as hereinbefore
provided.

         Section 6. Distributions made by the corporation, whether in
liquidation or from earnings, profits, assets or capital, including all
distributions payable but not paid to the holder of the shares, his heirs,
successors or assigns but that have been held in suspense by the corporation or
that were paid or delivered by it into an escrow account or to a trustee or
custodian, shall be payable by the corporation, escrow agent, trustee or
custodian to the holder of the shares as of the record date determined for that
distribution as provided in Section 5 of this Article, or to his heirs,
successors or assigns.

                          CORPORATE RECORDS AND REPORTS

         Section 7. The corporation shall keep books and records of account and
shall keep minutes of the proceedings of its shareholders, its board of
directors and each committee of its board of directors. The corporation shall
keep at its registered office or principal place of business, or at the office
of its transfer agent or registrar, a record of the original issuance of shares
issued by the corporation and a record of each transfer of those shares that
have been presented to the corporation for registration of transfer. Such
records shall contain the names and addresses of all past and current
shareholders of the corporation and the number and class of shares issued by the
corporation and held by each of them. Any books, records, minutes, and share
transfer records may be in written form or in any other form capable of being
converted into written form within a reasonable time. Any person who shall have
been a shareholder for at least six (6) months immediately preceding his demand,
or shall be the holder of at least five percent (5%) of all the outstanding
shares of the corporation, upon written demand stating the purpose thereof,
shall have the right to examine, in person or by agent, accountant or attorney,
at any reasonable time or times, for any proper purpose, its relevant books and
records of account, minutes and share transfer records, and to make extracts
therefrom.

                                       14
<PAGE>

                             REGISTERED SHAREHOLDERS

         Section 8. 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, and to vote as such owner, 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

                               GENERAL PROVISIONS

         Section 1. The board of directors may authorize and the corporation may
make distributions, and pay share dividends, subject to any restrictions in the
articles of incorporation and limitations set forth in the TBCA.

         Section 2. The board of directors may by resolution create a reserve or
reserves out of surplus or designate or allocate any and all of its surplus in
any manner for any proper purpose or purposes, and may increase, decrease or
abolish any such reserve in the same manner.

         Section 3. When shares are registered on the books of the corporation
in the names of two (2) or more persons as joint owners with the right of
survivorship, after the death of a joint owner and before the time that the
corporation receives actual written notice that parties other than the surviving
joint owner or owners claim an interest in the shares or any distributions
thereon, the corporation may record on its books and otherwise effect the
transfer of those shares to any person, firm or corporation (including the
surviving joint owner, individually) and pay any distributions made in respect
of those shares, in each case as if the surviving joint owner or owners were the
absolute owners of the shares. In permitting such a transfer by and making any
distributions to such a surviving joint owner or owners before the receipt of
written notice from other parties claiming an interest in those shares or
distributions, the corporation shall be discharged from all liability for the
transfer or payment so made; provided, however, that the discharge of the
corporation from liability and the transfer of full legal and equitable title of
the shares in no way shall affect, reduce or limit any cause of action existing
in favor of any owner of an interest in those shares or distributions against
the surviving owner or owners.

                                     CHECKS

         Section 4. All checks, drafts or other orders for payment of money,
notes or other evidences of indebtedness issued in the name of or payable to the
corporation shall be signed or endorsed by such officer or officers or such
other person or persons as the board of directors may from time to time
designate.

                                       15
<PAGE>

                                   FISCAL YEAR

         Section 5. The fiscal year of the corporation shall end on June 30 of
each year until such date is changed by resolution of the Board of Directors.

                                      SEAL

         Section 6. The corporate seal, if any, shall have inscribed thereon the
name of the corporation, and be in a form approved by the board of directors.
The seal may be used by causing it or a facsimile thereof to be impressed or
affixed or in any other manner reproduced.

                                  ARTICLE VIII

                               AMENDMENT OF BYLAWS

         Section 1. The board of directors may amend or repeal these bylaws, or
adopt new bylaws at any regular meeting of the board of directors or at any
special meeting of the board of directors if notice of such amendment, repeal or
adoption of new bylaws is contained in the notice of such meeting, unless (a)
the articles of incorporation or the TBCA reserves the power exclusively to the
shareholders in whole or in part, or (b) the shareholders, in amending,
repealing or adopting a particular bylaw, expressly provide that the board of
directors may not amend or repeal that bylaw.

         Section 2. The shareholders may amend or repeal these bylaws, or adopt
new bylaws upon the affirmitive vote of the holders of at least sixty six and
two thirds percent (66 2/3%) of the issued and outstanding shares then entitled
to vote on such amendment, unless the articles of incorporation or a bylaw
adopted by the shareholders provide otherwise as to all or some portion of these
bylaws, even though the bylaws may also be amended, repealed or adopted by the
board of directors.

                                   ARTICLE IX

                    INDEMNIFICATION OF OFFICERS AND DIRECTORS

         Section 1. As utilized in this Article, the following terms shall have
the meanings indicated:

                  (a)      The term "corporation" includes any domestic or
         foreign predecessor entity of the corporation in a merger,
         consolidation or other transaction in which the liabilities of the
         predecessor are transferred to the corporation by operation of law and
         in any other transaction in which the corporation assumes the
         liabilities of the predecessor, but does not specifically exclude
         liabilities that are the subject matter of this Article.

                                       16
<PAGE>

                  (b)      The term "director" means any person who is or was a
         director of the corporation and any person who, while a director of the
         corporation, is or was serving at the request of the corporation as a
         director, officer, partner, venturer, proprietor, trustee, employee,
         agent or similar functionary of another foreign or domestic
         corporation, partnership, joint venture, sole proprietorship, trust,
         employee benefit plan or other enterprise.

                  (c)      The term "expenses" include court costs and
         attorneys' fees.

                  (d)      The term "official capacity" means: (i) when used
         with respect to a director, the office of director in the corporation,
         and (ii) when used with respect to a person other than a director, the
         elective or appointive office in the corporation held by the officer or
         the employment or agency relationship undertaken by the employee or
         agent on behalf of the corporation, but (iii) in both (i) and (ii)
         above does not include service for any other foreign or domestic
         corporation or any partnership, joint venture, sole proprietorship,
         trust, employee benefit plan or other enterprise.

                  (e)      The term "proceeding" means 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 and any inquiry or investigation that could
         lead to such an action, suit or proceeding.

         Section 2. The corporation shall indemnify a person who was, is or is
threatened to be made a named defendant or respondent in a proceeding because
the person is or was a director only if it is determined, in accordance with
Section 6 of this Article that the person (a) conducted himself or herself in
good faith; (b) reasonably believed: (i) in the case of conduct in the official
capacity as a director of the corporation, that the conduct was in the
corporation's best interests, and (ii) in all other cases, that the conduct was
at least not opposed to the corporation's best interests; and (iii) in the case
of any criminal proceeding, had no reasonable cause to believe the conduct was
unlawful.

         Section 3. A director shall not be indemnified by the corporation as
provided in Section 2 of this Article for obligations resulting from a
proceeding (a) in which the director is found liable on the basis that a
personal benefit was improperly received by the director, whether or not the
benefit resulted from an action taken in the person's official capacity, or (b)
in which the person is found liable to the corporation, except to the extent
permitted in Section 5 of this Article.

         Section 4. The termination of a proceeding by judgment, order,
settlement or conviction or on a plea of nolo contendere or its equivalent is
not of itself determinative that the person did not meet the requirements set
forth in Section 2 of this Article. A person shall be deemed to have been found
liable in respect of any claim, issue or matter only after the person shall have
been so adjudged by a court of competent jurisdiction after exhaustion of all
appeals therefrom.

                                       17
<PAGE>

         Section 5. A person may be indemnified by the corporation as provided
in Section 2 of this Article against judgments, penalties (including excise and
similar taxes), fines, settlements and reasonable expenses actually incurred by
the person in connection with the proceeding; but if the person is found liable
to the corporation or is found liable on the basis that a personal benefit was
improperly received by the person, the indemnification (a) shall be limited to
reasonable expenses actually incurred by the person in connection with the
proceeding, and (b) shall not be made in respect of any proceeding in which the
person shall have been found liable for willful or intentional misconduct in the
performance of the person's duty to the corporation.

         Section 6. A determination of indemnification under Section 2 of this
Article shall be made (a) by a majority vote of a quorum consisting of directors
who at the time of the vote are not named defendants or respondents in the
proceeding; (b) if such a quorum cannot be obtained, by a majority vote of a
committee of the board of directors, designated to act in the matter by a
majority vote of all directors, consisting solely of two (2) or more directors
who at the time of the vote are not named defendants or respondents in the
proceeding; (c) by special legal counsel selected by the board of directors or a
committee thereof by a vote as set forth in subsection (a) or (b) of this
Section 6, or, if such a quorum cannot be obtained and such a committee cannot
be established, by a majority vote of all directors; or (d) by the shareholders
in a vote that excludes the shares held by directors who are named defendants or
respondents in the proceeding.

         Section 7. Authorization of indemnification and determination as to
reasonableness of expenses shall be made in the same manner as the determination
that indemnification is permissible, except that if the determination that
indemnification is permissible is made by special legal counsel, authorization
of indemnification and determination as to reasonableness of expenses shall be
made in the manner specified by subsection (c) of Section 6 of this Article for
the selection of special legal counsel. A provision contained in the articles of
incorporation, the bylaws, a resolution of shareholders or directors, or an
agreement that makes mandatory the indemnification described in Section 2 of
this Article shall be deemed to constitute authorization of indemnification in
the manner required herein, even though such provision may not have been adopted
or authorized in the same manner as the determination that indemnification is
permissible.

         Section 8. The corporation shall indemnify a director against
reasonable expenses incurred by the director in connection with a proceeding in
which the director is a named defendant or respondent because the person is or
was a director if the director has been wholly successful, on the merits or
otherwise, in the defense of the proceeding.

         Section 9. If, upon application of a director, a court of competent
jurisdiction determines, after giving any notice the court considers necessary,
that the director is fairly and reasonably entitled to indemnification in view
of all the relevant circumstances, whether or not the director has met the
requirements set forth in Section 2 of this Article or has been found liable in
the circumstances described in Section 3 of this Article, the corporation shall
indemnify the director to such further extent as the court shall determine; but
if the person is found liable to the corporation or is found liable on the basis
that personal benefit was improperly received by

                                       18
<PAGE>

the person, the indemnification shall be limited to reasonable expenses actually
incurred by the person in connection with the proceeding.

         Section 10. Reasonable expenses incurred by a director who was, is or
is threatened to be made a named defendant or respondent in a proceeding may be
paid or reimbursed by the corporation in advance of the final disposition of the
proceeding and without the determination specified in Section 6 of this Article
or the authorization or determination specified in Section 7 of this Article,
after the corporation receives a written affirmation by the director of a good
faith belief that the standard of conduct necessary for indemnification under
this Article has been met and a written undertaking by or on behalf of the
director to repay the amount paid or reimbursed if it is ultimately determined
that he has not met that standard or if it is ultimately determined that
indemnification of the director against expenses incurred by him in connection
with that proceeding is prohibited by Section 5 of this Article. A provision
contained in the articles of incorporation, these bylaws, a resolution of the
shareholders or directors, or an agreement that makes mandatory the payment or
reimbursement permitted under this Section shall be deemed to constitute
authorization of that payment or reimbursement.

         Section 11. The written undertaking required by Section 10 of this
Article shall be an unlimited general obligation of the director, but need not
be secured. It may be accepted without reference to financial ability to make
repayment.

         Section 12. Notwithstanding any other provision of this Article, the
corporation may pay or reimburse expenses incurred by a director in connection
with an appearance as a witness or other participation in a proceeding at a time
when he is not a named defendant or respondent in the proceeding.

         Section 13. An officer of the corporation shall be indemnified by the
corporation as and to the same extent provided by Sections 7, 8 and 9 of this
Article for a director and is entitled to seek indemnification under those
sections to the same extent as a director. The corporation may indemnify and
advance expenses to an officer, employee or agent of the corporation to the same
extent that it may indemnify and advance expenses to directors under this
Article.

         Section 14. The corporation may indemnify and advance expenses to
persons who are not or were not officers, employees or agents of the corporation
but who are or were serving at the request of the corporation as a director,
officer, partner, venturer, proprietor, trustee, employee, agent or similar
functionary of another foreign or domestic corporation, partnership, joint
venture, sole proprietorship, trust, employee benefit plan or other enterprise,
to the same extent that it may indemnify and advance expenses to directors under
this Article.

         Section 15. The corporation may indemnify and advance expenses to an
officer, employee, agent or person identified in Section 14 of this Article and
who is not a director to such further extent, consistent with law, as may be
provided by the articles of incorporation, these bylaws, general or specific
action of the board of directors or contract or as permitted or required by
common law.

                                       19
<PAGE>

         Section 16. The corporation may purchase and maintain insurance or
another arrangement on behalf of any person who is or was a director, officer,
employee or agent of the corporation or who is or was serving at the request of
the corporation as a director, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary of another foreign or domestic
corporation, partnership, joint venture, sole proprietorship, trust, employee
benefit plan or other enterprise, against any liability asserted against such
person and incurred by such person in such a capacity or arising out of the
status as such a person, whether or not the corporation would have the power to
indemnify such person against that liability under this Article. If the
insurance or other arrangement is with a person or entity that is not regularly
engaged in the business of providing insurance coverage, the insurance or
arrangement may provide for payment of a liability with respect to which the
corporation would not have the power to indemnify the person only if including
coverage for the additional liability has been approved by the shareholders of
the corporation. Without limiting the power of the corporation to procure or
maintain any kind of insurance or other arrangement, the corporation may, for
the benefit of persons indemnified by the corporation (a) create a trust fund,
(b) establish any form of self-insurance, (c) secure its indemnity obligations
by grant of a security interest or other lien on the assets of the corporation,
or (d) establish a letter of credit, guaranty or surety arrangement. The
insurance or other arrangement may be procured, maintained or established within
the corporation or with any insurer or other person deemed appropriate by the
board of directors, regardless of whether all or part of the stock or other
securities of the insurer or other person are owned in whole or part by the
corporation. In the absence of fraud, the judgment of the board of directors as
to the terms and conditions of the insurance or other arrangement and the
identity of the insurer or other person participating in an arrangement shall be
conclusive and the insurance or arrangement shall not be voidable and shall not
subject the directors approving the insurance or arrangement to liability, on
any ground, regardless of whether directors participating in the approval are
beneficiaries of the insurance or arrangement.

         Section 17. Any indemnification of or advance of expenses to a director
in accordance with this Article shall be reported in writing to the shareholders
with or before the notice or waiver of notice of the next meeting of
shareholders or with or before the next submission to shareholders of a consent
to action without a meeting and, in any case, within the twelve (12) month
period immediately following the date of the indemnification or advance.

         Section 18. For purposes of this Article, the corporation is deemed to
have requested a director to serve an employee benefit plan whenever the
performance by the director of the director's duties to the corporation also
imposes duties on, or otherwise involves services by, the director to the plan
or participants or beneficiaries of the plan. Excise taxes assessed on a
director with respect to an employee benefit plan pursuant to applicable law
shall be deemed to be fines. Action taken or omitted by the director with
respect to an employee benefit plan in the performance of the director's duties
or for a purpose reasonably believed by the director to be in the interest of
the participants and beneficiaries of the plan shall be deemed to be for a
purpose which is not opposed to the best interests of the corporation.

                                       20
<PAGE>

                             FIRST AMENDMENT TO THE
                         AMENDED AND RESTATED BYLAWS OF
                                PEERLESS MFG. CO.

         On January 14, 2004, at a meeting of directors duly called and at which
a quorum was present, the Board of Directors of Peerless Mfg. Co., a Texas
corporation, amended Section 13 of Article III of its Amended and Restated
Bylaws to read in its entirety as follows:

                             "CHAIRMAN OF THE BOARD

                  Section 13. The board of directors may, in its discretion,
         choose a chairman of the board who shall preside at meetings of
         shareholders and of the directors. 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."

         Except as set forth above, the Amended and Restated Bylaws are
unchanged. This Amendment became effective on the date adopted by the Board of
Directors.

         IN WITNESS WHEREOF, the undersigned has executed this Amendment by
order of the Board of Directors.

                                          /s/ KATHERINE FRAZIER
                                          ----------------------------------
                                          Katherine Frazier, Secretary