Document:

exv10w1

 

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

     THIS IS AN EMPLOYMENT AGREEMENT made as of the 20th day of April, 2005 by and
between Mercury Air Group, Inc., a Delaware corproation (“Mercury”) and Kent Rosenthal.
(“Rosenthal”), who resides at 362 Loire Valley Drive, Simi Valley, CA 93065.

     WHEREAS, Mercury and Rosenthal desire to enter into an employment agreement which will confirm
and set forth the terms and conditions of Rosenthal’s employment with Mercury.

     NOW THEREFORE, in consideration of the premises to this Agreement and for other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Mercury and
Rosenthal agree as follows:

     1.     Mercury hereby hires and employs Rosenthal, and Rosenthal agrees to work for Mercury under
the following terms hereby agreed upon.

     2.     Rosenthal is hereby engaged to work in the capacity as Chief Financial Officer. In this
capacity, Rosenthal shall be responsible for all traditional CFO duties including but not limited
to accounting, staff and financial reporting matters, maintaining banking and audit firm
relationships, SEC reporting, working with Mercury Board’s Audit Committee and such others duties
as may be assigned by the Chief Executive Officer (“CEO”) or Board of Directors, all under the
direction and supervision of the CEO. Rosenthal shall report directly to the CEO of Mercury.

     3.     Rosenthal has entered into service and commenced work hereunder as of December 13, 2004 and
his employment shall continue, unless sooner terminated pursuant to the terms hereof, until
December 12, 2006 (such term of employment hereinafter referred to as the “Contract Term”).

     4.     Rosenthal agrees that he shall devote sufficient skill, labor and attention to said
employment during the Contract Term in order to promptly and faithfully do and perform all services
pertaining to said position that are or may hereafter be required of him by Mercury during the
Contract Term.

     5.     Mercury agrees as follows:

 

Exhibit “A”

 

     (a) Mercury shall pay Rosenthal a base salary at the rate of $185,000 per year during
each year of the Contract Term, beginning on the date hereof, payable bi-weekly. The Board
of Directors of Mercury (or a duly constituted and empowered committee thereof) may further
increase Rosenthal’s salary at its discretion. In addition, Rosenthal may participate in
applicable Mercury incentive bonus plans and receive annual bonuses as may be approved by
the Board of Directors of Mercury (or a duly constituted and empowered committee thereof).
Finally, Rosenthal shall on the date of signing receive a sign on bonus in the amount of
$40,000.

     (b) Rosenthal shall receive other incidental benefits of employment that are provided
generally to Mercury’s other senior executive employees, such as health and welfare
insurance, pension plan and four (4) weeks of annual vacation.

     (c) Rosenthal shall also be reimbursed for all reasonable business expenses incurred
in connection with his employment.

     6.    (a) This Agreement and the employment of Rosenthal hereunder shall terminate on the
first to occur of:

(i) the expiration of the term specified in Paragraph 3 hereof;

(ii) the death or Physical or Mental Disability of Rosenthal as described
in Paragraph (e) hereof; or

(iii) Rosenthal’s termination pursuant to Paragraphs (b)(i) or (b)(ii)
hereof.

     (b) The Board of Directors of Mercury may terminate or shall be deemed to have
terminated the employment of Rosenthal at any time:

(i) “with cause”, which is defined herein as Rosenthal’s (1)
misappropriation of corporate funds, fraud, embezzlement or other illegal
conduct to the detriment of Mercury, (2) gross negligence in the execution
of his material assigned duties, (3) refusal or failure, after not less
than 5 days written notice that such refusal or failure would constitute a
default hereunder, to carry out any reasonable and material direction from
the CEO given to him in writing, (4) conviction of a felony, (5) failure
to meet the personal/departmental goals and objectives for Rosenthal as
set out in writing from time to time by the CEO (5) material breach or
violation of the terms of this Agreement, which breach or violation

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shall not have been fully cured (as determined by the Board of Directors acting
in good faith) by Rosenthal within 5 days after receipt of written notice
of the same from the Board of Directors, or (6) Rosenthal’s engagement in
drug or alcohol abuse; or

(ii) “without cause” if they shall determine that it is in the best
interests of Mercury to terminate this Agreement for any reason or no
reason at all.

     (c) In the event Rosenthal’s termination is for any reason set out in Paragraph
6(b)(i) or Paragraph 6(a)(i) above at any time, Rosenthal shall not be entitled to any
termination payments or benefits other than (i) salary and other accrued benefits earned up
to the date of termination.

     (d) Upon a termination of Rosenthal’s employment for any reason set out in Paragraph
6(a)(ii) or upon a termination pursuant to the provisions of Paragraph 6(b)(ii) above at
any time, Rosenthal shall be entitled to (i) salary and other accrued benefits earned up to
the last day of the month in which employment was terminated; (ii) and (ii) a lump sum
termination payment equal to the benefits set out in Paragraph 5(a) for the remainder of
the Contract Term. Rosenthal shall also be entitled to the medical, health and
insurance-related benefits as set forth in Paragraph 5(b) hereof prior to and for the
remainder of the Contract Term.

     (e) As used herein, “Physical or Mental Disability” shall mean a serious illness,
accident or any other physical or mental incapacity which prevents Rosenthal from
substantially performing his duties hereunder for a continuous period of twelve months. The
last day of any such twelve (12) month period shall be Rosenthal’s “Date of Disability”

     (f) All payments to be made in the event of the death of Rosenthal shall be made to
Rosenthal’s surviving spouse, or in the event Rosenthal dies without leaving a surviving
spouse, then to such beneficiary as Rosenthal may designate in writing to Mercury for that
purpose, or if Rosenthal has not so designated, then to the personal representative of the
estate of Rosenthal.

     (g) This Section 6 shall not be deemed a limitation of Rosenthal’s benefits under any
death or disability plan currently in effect.

     7.      Mercury will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Mercury, by agreement in form and substance satisfactory to
Rosenthal, to expressly assume and agree to perform this Agreement in the same manner

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and to the same extent that Mercury would be required to perform it if no such succession had taken place.
As used in this paragraph, “Employer” shall mean Mercury Air Group, Inc. and any successor to its
business and/or assets as aforesaid which executes and delivers the agreement provided for in this
paragraph 7, or which otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law.

     8.      Rosenthal understands that in the course of his employment with Mercury, he shall or may be
making use of, acquiring, or adding to confidential information of a special and unique nature and
value relating to such matters as Mercury’s trade secrets, systems, inventions, programs,
procedures, manuals, confidential reports and communications, and lists of customers and clients.
Rosenthal also understands that any information, data and materials received by Mercury from
third-parties in confidence (or subject to nondisclosure or similar covenants), including but not
limited to customers, prospective customers, joint ventures, parties to cooperative agreements or
partners, shall be deemed to be and shall be confidential information. Rosenthal hereby confirms
that he has not and shall not, except with the express, prior written consent of Mercury, or except
if he is acting as an employee of Mercury solely for the benefit of Mercury in connection with
Mercury’s business and in accordance with Mercury’s business practices and employee policies, at
any time during or following the term of his employment by Mercury, directly or indirectly,
disclose, divulge, reveal, report, publish, transfer or use, for any purpose whatsoever, any of
such information which has been obtained by or disclosed to him as a result of his employment by
Mercury. Further, Rosenthal agrees to be bound by all nondisclosure or similar covenants between
Mercury and any third party.

     9.      Rosenthal further understands that all of the following information and materials are
“Protected Information” belonging to Mercury and shall be kept strictly confidential, even if not
physically marked as such:

a. Applications, operating system, database, communication and other computer
software, whether now or hereafter existing, developed for use on any operating
system, all modifications, enhancements and versions and all options available with
respect thereto, and all future products developed or derived therefrom;

b. Source and object codes, flowcharts, algorithms, coding sheets, routines,
sub-routines, compilers, assemblers, design concepts, and related documentation and
manuals;

c. Products, inventions, production processes, marketing techniques and
arrangements, mailing lists, purchasing information, pricing policies, quoting
procedures, financial information, customer and prospect names and requirements,
employee, customer supplier and distributor data and

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other materials and information relating to Mercury’s business and activities and
the manner in which Mercury does business;

d. Discoveries, concepts and ideas including, without limitation, the nature and
results of research and development activities, processes formulas, inventions,
computer-related equipment or technology, techniques, “know-how”, designs,
drawings, and specifications;

e. Any other materials or information related to the business or activities of
Mercury which are not generally known to others engaged in similar businesses or
activities;

f. All ideas which are derived from or relate to Rosenthal’s access to or
knowledge of any of the above enumerated materials and information; and

g. All information, data and materials received by Mercury from third-parties in
confidence (or subject to nondisclosure or similar covenants), including but not
limited to information, data and materials received by Mercury from customers,
prospective customers, joint ventures, parties to cooperative agreements or
partners.

     10.    At Mercury’s request, or, in the absence of such a request, upon termination of
Rosenthal’s employment with Mercury, Rosenthal agrees to turn over to Mercury all notes, data
tapes, lists, reference items, sketches drawings memoranda, records, and other materials in any way
relating to any financial data, Protected Information and Inventions and other documents that are
in his possession or control belonging to Mercury or relating to its business.

     11.    Rosenthal represents and warrants that his employment with Mercury does not and will not
breach any agreement or duty which he has to any other party to keep in confidence any confidential
information belonging to others. Rosenthal will not disclose to Mercury or use in its behalf any
confidential information belonging to others. Except as set forth on any exhibit that is attached
hereto and signed by both parties hereof, Rosenthal does not claim an ownership interest in any
inventions.

     12.    Rosenthal understands that a breach of this Agreement including, but not limited to,
unauthorized copying, assignment, transfer or distribution of Protected Information and inventions
will result in irreparable or immeasurable damage to Mercury and that Mercury is authorized to seek
injunctive relief against Rosenthal. Rosenthal also consents to the exclusive jurisdiction of any
federal or state court located in Los Angeles, California, as the appropriate forum for resolution
of any dispute arising from this Agreement, including issuance of an injunction. Rosenthal
understands that this provision

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regarding the issuance of an injunction does not limit any remedies at law or equity otherwise
available to Mercury.

     13.      No oral arrangements have been made between the parties hereto and this Agreement may he
amended only in writing signed by both parties.

     14.      The rights and obligations of Mercury under this Agreement shall inure to the benefit of
and shall be binding upon the successors and assigns of Mercury. Rosenthal may not assign his
obligations under this Agreement.

     15.      If any provision of this Agreement shall be declared invalid or unenforceable by a court
of competent jurisdiction, the remainder of this Agreement shall not be affected thereby and shall
continue in full force and effect.

     16.      This Agreement shall be construed in accordance with the laws of the state of California.

     IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of the day and year
first above written.

	 	 	 	 	 
	EMPLOYEE:
	 	MERCURY AIR GROUP, INC.
	 

	 	 	 	 
	/s/ Kent Rosenthal

	 	By:
	 	/s/ Joseph A. Czyzyk
	 

	 	 	 	 
	Kent Rosenthal

	 	
Title:
	 	
Chief Executive Officer
	

	 	 	 	 
	 

	 	 	 	 
	/s/ Wayne J. Lovett
	 	 	 	 
	Witness	 	 	 	 

6exv4w2

 

Exhibit 4.2

BYLAWS

OF

AMREIT

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	ARTICLE I
	 	OFFICES AND RECORDS	 	1
	 
	 	SECTION	 	1.1	 	PRINCIPAL OFFICE	 	1
	 
	 	SECTION	 	1.2	 	ADDITIONAL OFFICES	 	1
	 
	 	SECTION	 	1.3	 	BOOKS AND RECORDS	 	1
	ARTICLE II
	 	SHAREHOLDERS	 	1
	 
	 	SECTION	 	2.1	 	ANNUAL MEETING	 	1
	 
	 	SECTION	 	2.2	 	SPECIAL MEETINGS	 	1
	 
	 	SECTION	 	2.3	 	PLACE OF MEETING	 	2
	 
	 	SECTION	 	2.4	 	NOTICE OF MEETING	 	2
	 
	 	SECTION	 	2.5	 	MEETING WITHOUT NOTICE; WAIVER OF NOTICE	 	2
	 
	 	SECTION	 	2.6	 	QUORUM	 	2
	 
	 	SECTION	 	2.7	 	ADJOURNMENT	 	2
	 
	 	SECTION	 	2.8	 	PROXIES	 	2
	 
	 	SECTION	 	2.9	 	NOTICE OF SHAREHOLDER BUSINESS AND
	 	 
	 
	 	 	 	 	 	NOMINATIONS.	 	3
	 
	 	SECTION	 	2.10	 	PROCEDURE FOR ELECTION OF TRUST MANAGERS	 	5
	 
	 	SECTION	 	2.11	 	VOTE OF SHAREHOLDERS	 	5
	 
	 	SECTION	 	2.12	 	OPENING AND CLOSING THE POLLS	 	5
	 
	 	SECTION	 	2.13	 	INSPECTORS	 	5
	 
	 	SECTION	 	2.14	 	INFORMAL ACTION	 	6
	ARTICLE III
	 	BOARD OF TRUST MANAGERS	 	6
	 
	 	SECTION	 	3.1	 	GENERAL POWERS	 	6
	 
	 	SECTION	 	3.2	 	NUMBER, TENURE AND QUALIFICATIONS	 	6
	 
	 	SECTION	 	3.3	 	COMPOSITION OF THE BOARD OF TRUST MANAGERS	 	6
	 
	 	SECTION	 	3.4	 	REGULAR MEETINGS	 	6
	 
	 	SECTION	 	3.5	 	SPECIAL MEETINGS	 	7
	 
	 	SECTION	 	3.6	 	NOTICE	 	7
	 
	 	SECTION	 	3.7	 	QUORUM	 	7
	 
	 	SECTION	 	3.8	 	PARTICIPATION BY CONFERENCE TELEPHONE	 	7
	 
	 	SECTION	 	3.9	 	PRESUMPTION OF ASSENT	 	8
	 
	 	SECTION	 	3.10	 	ADJOURNMENTS	 	8
	 
	 	SECTION	 	3.11	 	INFORMAL ACTION	 	8
	 
	 	SECTION	 	3.12	 	VACANCIES	 	8
	 
	 	SECTION	 	3.13	 	REMOVAL	 	8
	 
	 	SECTION	 	3.14	 	COMMITTEES	 	9
	ARTICLE IV
	 	OFFICERS	 	10
	 
	 	SECTION	 	4.1	 	CATEGORIES OF OFFICERS	 	10
	 
	 	SECTION	 	4.2	 	ELECTION AND TERM OF OFFICE	 	10
	 
	 	SECTION	 	4.3	 	CHAIRMAN OF THE BOARD	 	10
	 
	 	SECTION	 	4.4	 	CHIEF EXECUTIVE OFFICER	 	11
	 
	 	SECTION	 	4.5	 	PRESIDENT	 	11
	 
	 	SECTION	 	4.6	 	VICE PRESIDENTS	 	11
	 
	 	SECTION	 	4.7	 	SECRETARY	 	11

 

 

	 	 	 	 	 	 	 	 	 
	 
	 	SECTION	 	4.8	 	TREASURER	 	12
	 
	 	SECTION	 	4.9	 	REMOVAL	 	12
	 
	 	SECTION	 	4.10	 	SALARIES	 	12
	 
	 	SECTION	 	4.11	 	VACANCIES	 	12
	 
	 	SECTION	 	4.12	 	RESIGNATIONS	 	12
	ARTICLE V
	 	SHARE CERTIFICATES AND TRANSFERS	 	13
	 
	 	SECTION	 	5.1	 	SHARE CERTIFICATES	 	13
	 
	 	SECTION	 	5.2	 	RECORD DATE AND CLOSING OF TRANSFER BOOKS	 	13
	 
	 	SECTION	 	5.3	 	REGISTERED SHAREHOLDERS	 	13
	 
	 	SECTION	 	5.4	 	LOST CERTIFICATES	 	14
	ARTICLE VI
	 	MISCELLANEOUS PROVISIONS	 	14
	 
	 	SECTION	 	6.1	 	FISCAL YEAR	 	14
	 
	 	SECTION	 	6.2	 	DIVIDENDS	 	14
	 
	 	SECTION	 	6.3	 	DEBT LIMITATIONS.	 	14
	 
	 	SECTION	 	6.4	 	SEAL	 	14
	 
	 	SECTION	 	6.5	 	EXECUTION OF WRITTEN INSTRUMENTS	 	14
	 
	 	SECTION	 	6.6	 	SIGNING OF CHECKS AND NOTES	 	14
	 
	 	SECTION	 	6.7	 	VOTING OF SECURITIES HELD IN OTHER ENTITIES	 	15
	 
	 	SECTION	 	6.8	 	INDEMNIFICATION AND INSURANCE.	 	15
	ARTICLE VII
	 	AMENDMENTS	 	19

 

 

BYLAWS

OF

AMREIT

ORGANIZED UNDER THE LAWS OF THE STATE OF TEXAS

ARTICLE I

OFFICES AND RECORDS

     SECTION 1.1     PRINCIPAL OFFICE. The initial address of the principal office of the Company in
the State of Texas is 8 Greenway Plaza, Suite 824, Houston, Texas 77046.

     SECTION 1.2     ADDITIONAL OFFICES. The Company may have such other offices, either within or
without the State of Texas, as the Board of Trust Managers from time to time may designate or as
the business of the Company from time to time may require.

     SECTION 1.3     BOOKS AND RECORDS. The books and records of the Company may be kept, either
within or without the State of Texas, at such place or places as the Board of Trust Managers from
time to time may designate.

ARTICLE II

SHAREHOLDERS

     SECTION 2.1     ANNUAL MEETING. An annual meeting of the shareholders of the Company shall be
held each year on such date and at such time as may be fixed by resolution of the Board of Trust
Managers.

     SECTION 2.2     SPECIAL MEETINGS. Subject to the rights of the holders of any class or series of
preferred shares of the Company (“Preferred Shares”) to elect additional trust managers under
specified circumstances, special meetings of the shareholders may be called only by the Chairman of
the Board, the Vice Chairman of the Board, the Chief Executive Officer, the President, the Board of
Trust Managers pursuant to a resolution adopted by a majority of the total number of trust managers
constituting the whole Board of Trust Managers (the “Whole Board”), or by written request to the
Secretary by the holders of not less than 25 percent of all of the shares then outstanding and
entitled to vote at such meeting (the “Voting Shares”); provided that (i) the Secretary shall
inform the shareholders requesting such meeting of the reasonably estimated cost of preparing and
disseminating notice thereof and shall not be required to give such notice until the Company has
received payment in such amount from such shareholders and (ii) unless requested by holders of a
majority of the Voting Shares, the Secretary shall not be required to call a special meeting to
consider any matter which is substantially the same as a matter voted on at any special meeting of
the shareholders held during the twelve (12) months preceding the request to call such new special
meeting.

 

 

     SECTION 2.3     PLACE OF MEETING. Meetings shall be held at the principal office of the Company
or at such other place, within or without the State of Texas, as the Board of Trust Managers from
time to time by resolution may designate.

     SECTION 2.4     NOTICE OF MEETING. 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 prepared and delivered by the Company, not less than ten (10) days nor more than
sixty (60) days before the date of the meeting, personally or by mail, to each shareholder of
record entitled to vote at such meeting and to each shareholder or other person, if any, entitled
to notice of the meeting. If delivered by mail, such notice shall be deemed to be delivered when
deposited in the United States mail with postage thereon prepaid, addressed to the shareholder at
his or her address as it appears on the share transfer books of the Company. If delivered
personally, such notice shall be deemed given when so delivered to the shareholder as provided
above and if by facsimile, such notice shall be deemed given upon completion of the facsimile
transmission to the shareholder as provided above. Meetings may be held without notice if all
shareholders entitled to vote are present, or if notice is waived by those not present in
accordance with Section 2.5 of these Bylaws. Any previously scheduled meeting of the shareholders
may be postponed by resolution of the Board of Trust Managers upon public notice given prior to the
date scheduled for such meeting.

     SECTION 2.5     MEETING WITHOUT NOTICE; WAIVER OF NOTICE. Either before or after a shareholders’
meeting, a shareholder may waive notice thereof by executing a waiver of notice to be filed with
the Company’s records of shareholder meetings. Any such written notice shall be deemed to be the
equivalent of notice pursuant to Section 2.4 hereof. Attendance at a shareholders’ meeting, either
in person or by proxy, by a person entitled to notice thereof shall constitute a waiver of notice
of the meeting unless such person attends for the sole and express purpose of objecting to the
transaction of business on the ground that the meeting was not lawfully called or convened.

     SECTION 2.6     QUORUM. Except as otherwise provided by law or by the Declaration of Trust of the
Company, as the same may be amended or restated from time to time (the “Declaration of Trust”), the
holders of a majority of the Voting Shares, represented in person or by proxy, shall constitute a
quorum at a meeting of shareholders, except that when specified business is to be voted on by a
class or series voting as a class, the holders of a majority of the shares of such class or series
shall constitute a quorum for the transaction of such business.

     SECTION 2.7     ADJOURNMENT. A meeting of shareholders convened on the date for which it was
called may be adjourned prior to the completion of business thereat to a date not more than one
hundred twenty (120) days after the record date of the original meeting. Notice of a subsequent
meeting held as a result of an adjournment, other than by announcement at the meeting at which the
adjournment was taken, shall not be necessary. If a quorum is present or represented at such
subsequent meeting, any business may be transacted thereat which could have been transacted at the
meeting which was adjourned.

     SECTION 2.8     PROXIES. At all meetings of shareholders, a shareholder entitled to vote may vote
in person or by proxy executed in writing thereby or by his duly authorized attorney-in-fact. A
proxy shall not be valid after eleven (11) months from the date of its

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execution unless a longer period is expressly stated therein. A proxy shall be revocable
unless the proxy form states conspicuously that the proxy is irrevocable and the proxy is coupled
with an interest. Each proxy must be filed with the Secretary of the Company or his representative
at or before the time of the meeting to which it relates.

     SECTION 2.9     NOTICE OF SHAREHOLDER BUSINESS AND NOMINATIONS.

     A.     ANNUAL MEETING OF SHAREHOLDERS.

               (1)     Nominations of persons for election to the Board of Trust Managers of the Company and the
proposal of business to be considered by the shareholders may be made at an annual meeting of
shareholders (i) pursuant to the Company’s notice of meeting delivered pursuant to Section 2.4 of
these Bylaws; (ii) by or at the direction of the Chairman of the Board of Trust Managers; or (iii)
by any shareholder of the Company who is entitled to vote at the meeting, who has complied with the
notice procedures set forth in clauses (2) and (3) of this Paragraph A and who was a shareholder of
record at the time such notice is delivered to the Secretary of the Company.

               (2)     For nominations or other business to be properly brought before an annual meeting by a
shareholder pursuant to clause (iii) of Paragraph A(1) of this Section 2.9, the shareholder must
have given timely notice thereof in writing to the Secretary of the Company. To be timely, a
shareholder’s notice shall be delivered to the Secretary at the principal office of the Company not
less than seventy (70) days nor more than ninety (90) days prior to the anniversary of the
preceding year’s annual meeting; provided, however, that in the event that the date of an annual
meeting is advanced by more than thirty (30) days or delayed by more than sixty (60) days from such
anniversary date, to be timely notice by the shareholder must be so delivered not earlier than the
ninetieth (90th) day prior to such annual meeting and not later than the close of business on the
later of the seventieth (70th) day prior to such annual meeting or the tenth (10th) day following
the day on which public announcement of the date of such meeting is first made. Such shareholder’s
notice shall set forth (i) as to each person whom the shareholder proposes to nominate for election
or reelection as a trust manager, all information relating to such person that is required to be
disclosed in solicitations of proxies for election of trust managers, or is otherwise required,
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, or any successor
statute thereto (the “Exchange Act”), including such person’s written consent to being named in the
proxy statement as a nominee and to serving as a trust manager if elected; (ii) as to any other
business that the shareholder proposes to bring before the meeting, a brief description of the
business desired to be brought before the meeting, the reasons for conducting such business at the
meeting and any material interest in such business of such shareholder and the beneficial owner, if
any, on whose behalf the proposal is made; and (iii) as to the shareholder giving the notice and
the beneficial owner, if any, on whose behalf the nomination or proposal is made (a) the name and
address of such shareholder, as they appear on the Company’s share transfer books, and the name and
address of such beneficial owner; (b) the class or series and number of shares of beneficial
interest of the Company which are owned beneficially and of record by such shareholder and such
beneficial owner; and (c) the date or dates upon which the shareholder acquired ownership of such
shares.

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               (3)     Notwithstanding anything in the second sentence of Paragraph A(2) of this Section 2.9 to
the contrary, in the event that the number of trust managers to be elected to the Board of Trust
Managers of the Company is increased and there is no public announcement naming all of the nominees
for trust manager or specifying the size of the increased Board of Trust Managers made by the
Company at least seventy (70) days prior to the first anniversary of the preceding year’s annual
meeting, a shareholder’s notice required by Paragraph A of this Section 2.9 shall also be
considered timely, but only with respect to nominees for any new positions created by such
increase, if it shall be delivered to the Secretary at the principal executive offices of the
Company not later than the close of business on the tenth (10th) day following the day on which
such public announcement is first made by the Company.

     B.     SPECIAL MEETINGS OF SHAREHOLDERS. Only such business shall be conducted at a special
meeting of shareholders as shall have been brought before the meeting pursuant to the Company’s
notice of meeting pursuant to Section 2.4 of these Bylaws. Nominations of persons for election to
the Board of Trust Managers may be made at a special meeting of shareholders at which trust
managers are to be elected pursuant to the Company’s notice of meeting (i) by or at the direction
of the Board of Trust Managers or (ii) by any shareholder of the Company who is entitled to vote at
the meeting, who complies with the notice procedures set forth in this Section 2.9 and who is a
shareholder of record at the time such notice is delivered to the Secretary of the Company.
Nominations by shareholders of persons for election to the Board of Trust Managers may be made at
such a special meeting of shareholders if the shareholder’s notice as required by Paragraph A(2) of
this Section 2.9 shall be delivered to the Secretary at the principal office of the Company not
earlier than the ninetieth (90th) day prior to such special meeting and not later than the close of
business on the later of the seventieth (70th) day prior to such special meeting or the tenth
(10th) day following the day on which public announcement is first made of the date of the special
meeting and of the nominees proposed by the Board of Trust Managers to be elected at such meeting.

     C.     GENERAL.

               (1)     Only persons who are nominated in accordance with the procedures set forth in this Section
2.9 shall be eligible to serve as trust managers, and only such business shall be conducted at a
meeting of shareholders as shall have been brought before the meeting in accordance with the
procedures set forth in this Section. Except as otherwise provided by law, the Declaration of
Trust or these Bylaws, the chairman of the meeting shall have the power and duty to determine
whether a nomination or any business proposed to be brought before the meeting was made or brought
in accordance with the procedures set forth in this Section 2.9 and, if any proposed nomination or
business is determined not to be in compliance herewith, to declare that such defective nomination
or proposal shall be disregarded.

               (2)     For purposes of this Section 2.9, “public announcement” shall mean disclosure in a press
release reported by the Dow Jones News Service, Associated Press or comparable national news
service or in a document publicly filed by the Company with the Securities and Exchange Commission
pursuant to Section 13, 14 or 15(d) of the Exchange Act.

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               (3)     Notwithstanding the foregoing provisions of this Section 2.9, a shareholder shall also comply
with all applicable requirements of the Exchange Act and the rules and regulations thereunder with
respect to the matters set forth herein. Nothing in this Bylaw shall be deemed to affect any
rights of shareholders to request inclusion of proposals in the Company’s proxy statement pursuant
to Rule 14a-8 under the Exchange Act or to create any additional rights with respect to any such
inclusion.

     SECTION 2.10     PROCEDURE FOR ELECTION OF TRUST MANAGERS. Subject to the rights of the holders
of any class or series of Preferred Shares to elect trust managers under specified circumstances,
and to the laws of the State of Texas, each shareholder having the right to vote for the election
of trust managers shall, unless otherwise provided in the Declaration of Trust or by applicable
law, have the right to vote, in person or by proxy, the number of shares owned by such shareholder
for as many persons as there are to be elected and for whose election such shareholder has the
right to vote. Unless otherwise provided by the Declaration of Trust, no shareholder shall have
the right or be permitted to cumulate his or her votes on any basis. Election of trust managers at
all meetings of the shareholders at which trust managers are to be elected may be by voice vote,
unless the chairman of the meeting shall order, or any shareholder shall demand, that voting be by
written ballot, and, except as otherwise expressly provided with respect to the right of the
holders of any series of Preferred Shares to elect additional trust managers under specified
circumstances, a majority of the votes cast thereat shall elect the trust managers. Voting on any
other question or election may be by voice vote, unless the chairman of the meeting shall order, or
any shareholder shall demand, that voting be by written ballot.

     SECTION 2.11     VOTE OF SHAREHOLDERS. Subject to the rights of the holders of any class or
series of Preferred Shares to elect trust managers under specified circumstances, and to the laws
of the State of Texas, each shareholder having the right to vote shall be entitled at every meeting
of shareholders to one (1) vote for every share standing in his or her name on the record date
fixed by the Board of Trust Managers pursuant to Section 5.2 of these Bylaws. Except as otherwise
provided by law, the Declaration of Trust, these Bylaws, any resolution adopted by the Board of
Trust Managers authorizing a series of Preferred Shares, or any resolution adopted by a majority of
the Whole Board, all matters submitted to the shareholders at any meeting (other than the election
of trust managers) shall be decided by a majority of the votes cast with respect thereto.

     SECTION 2.12     OPENING AND CLOSING THE POLLS. The chairman of the meeting shall fix, and
announce at the meeting, the date and time of the opening and the closing of the polls for each
matter upon which the shareholders are to vote at the meeting.

     SECTION 2.13     INSPECTORS. At any meeting of shareholders, the chairman of such meeting may,
and upon the request of any shareholder shall, appoint one or more persons as inspectors for such
meeting. Such inspector or inspectors shall ascertain and report the number of shares represented
at such meeting in person or by proxy, based upon the determination of such inspector or inspectors
of the validity and effect of proxies, count all votes, report the results and perform such other
acts as are proper to conduct voting with impartiality and fairness to all shareholders. Each
report of inspectors shall be in writing and signed by the inspector or, if there is more than one,
by a majority of inspectors acting at such meeting, in which event the report of the majority shall
be the report of the inspectors. The report of the inspector or

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inspectors on the number of shares represented at a meeting and the results of voting thereat
shall be prima facie evidence thereof.

     SECTION 2.14     INFORMAL ACTION. Any action required or permitted to be taken at a meeting of
shareholders may be taken without a meeting if the following are filed with the Company’s records
of shareholder meetings:

               (1)     a unanimous written consent which sets forth the action and is signed by each shareholder
entitled to vote thereon; and

               (2)     a written waiver of any right to dissent signed by each shareholder, if any, entitled to
notice of the meeting but not entitled to vote thereat.

ARTICLE III

BOARD OF TRUST MANAGERS

     SECTION 3.1     GENERAL POWERS. The business and affairs of the Company shall be managed by, or
under the direction of, its Board of Trust Managers. In addition to the powers and authorities
expressly conferred by these Bylaws, the Board of Trust Managers may exercise all such powers of
the Company and do all such lawful acts and things as are not by law or by the Declaration of Trust
or these Bylaws required to be exercised or done by the shareholders.

     SECTION 3.2     NUMBER, TENURE AND QUALIFICATIONS. Subject to the rights of the holders of any
class or series of Preferred Shares to elect trust managers under specified circumstances, the
number of trust managers shall be fixed from time to time pursuant to a resolution adopted by a
majority of the Whole Board, but shall consist of not more than nine (9) nor less than three (3)
trust managers who need not be residents of the State of Texas and need not hold shares in the
Company; provided that if, at any time, the Company has fewer than three (3) shareholders, the
number of trust managers may be less than three (3), but not less than the number of shareholders.
Each trust manager shall hold office until his or her successor shall have been duly elected and
qualified.

     SECTION 3.3     COMPOSITION OF THE BOARD OF TRUST MANAGERS. Except during a period of vacancy or
vacancies on the Board of Trust Managers, a majority of the trust managers at all times shall be
persons who are not affiliates (as that term is defined in the next succeeding sentence) of the
Company other than affiliation solely by reason of service as a trust manager of the Company (the
“Independent Trust Managers”). For purposes of this Section 3.3, “affiliate” shall mean, with
respect to the Company, any individual who (i) directly or indirectly controls, is controlled by or
is under common control with, such entity or (ii) any officer, director, trust manager, general
partner or trustee of such entity (other than a trust manager of the Company who otherwise would be
deemed to be an affiliate of the Company solely by reason of service as a trust manager).

     SECTION 3.4     REGULAR MEETINGS. A regular meeting of the Board of Trust Managers to elect
officers and consider other business shall be held without notice other than this Section 3.4
immediately after, and at the same place as, each annual meeting of shareholders.

6

 

The Board of Trust Managers may, by resolution, designate the time and place for additional
regular meetings without notice other than such resolution.

     SECTION 3.5     SPECIAL MEETINGS. Special meetings of the Board of Trust Managers shall be called
at the request of the Chairman of the Board, the Vice Chairman of the Board, the Chief Executive
Officer, the President or a majority of the Board of Trust Managers. The person or persons
authorized to call special meetings of the Board of Trust Managers may fix the place and time of
the meeting.

     SECTION 3.6     NOTICE. Notice of any special meeting shall be given to each trust manager at his
business or residence as recorded in the books and records of the Company or at such other address
as such trust manager may designate in writing to the Secretary of the Company by mail, by telegram
or express courier, charges prepaid, by facsimile or telephonic communication. If mailed, such
notice shall be deemed adequately delivered if deposited in the United States mails so addressed,
with postage thereon prepaid, at least five (5) days before the day of such meeting. If by
telegram, such notice shall be deemed adequately delivered if the telegram is delivered to the
telegraph company at least twenty-four (24) hours before the time set for such meeting. If by
express courier, the notice shall be deemed adequately given if delivered to the courier company at
least two (2) days before the day of such meeting. If by telephone or facsimile, the notice shall
be deemed adequately delivered if given at least twelve (12) hours prior to the time set for such
meeting. Neither the business to be transacted at, nor the purpose of, any regular or special
meeting of the Board of Trust Managers need be specified in the notice of such meeting, except for
amendments to these Bylaws as provided under Article VII hereof. A meeting may be held at any time
without notice if all the trust managers are present or if those not present waive notice of the
meeting in writing, either before or after such meeting. Attendance of a trust manager at a meeting
shall constitute waiver of notice of that meeting unless he or she attends for the sole and express
purpose of objecting to the transaction of business on the ground that the meeting was not lawfully
called or convened.

     SECTION 3.7     QUORUM. A number of trust managers equal to at least a majority of the trust
managers then in office shall constitute a quorum for the transaction of business; provided,
however, that if the Whole Board consists of two or three trust managers, two trust managers shall
constitute a quorum, if the Whole Board consists of one trust manager, one trust manager shall
constitute a quorum and that in no event may less than one third (1/3) of the Whole Board
constitute a quorum. Anything else herein to the contrary notwithstanding, if at any meeting of
the Board of Trust Managers there shall be less than a quorum present, a majority of the trust
managers present may adjourn the meeting from time to time without further notice. Except as may
otherwise be provided by the Declaration of Trust, these Bylaws or applicable law, the act of the
majority of the trust managers present at a meeting at which a quorum is present shall be the act
of the Board of Trust Managers. The trust managers present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal or departure of
enough trust managers to leave less than a quorum.

     SECTION 3.8     PARTICIPATION BY CONFERENCE TELEPHONE. Members of the Board of Trust Managers, or
any committee thereof, may participate in a meeting of such Board or committee by means of
conference telephone or similar communications equipment by

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means of which all persons participating in the meeting can hear each other, and participation
in a meeting pursuant to this Section 3.8 shall constitute presence in person at such meeting.

     SECTION 3.9     PRESUMPTION OF ASSENT. A trust manager of the Company who is present at a meeting
of the trust managers at which action on any corporate matter is taken shall be presumed to have
assented to the action taken unless his or her dissent shall be entered in the minutes of the
meeting or unless he or she shall file a written dissent to such action with the person acting as
the secretary of the meeting before the adjournment thereof.

     SECTION 3.10     ADJOURNMENTS. Any meeting of the Board of Trust Managers may be adjourned prior
to the completion of business thereat. Notice of the subsequent meeting held as a result of an
adjournment, other than by announcement at the meeting at which the adjournment is taken, shall not
be necessary. If a quorum is present at such subsequent meeting, any business may be transacted
thereat which could have been transacted at the meeting which was adjourned.

     SECTION 3.11     INFORMAL ACTION. If all of the trust managers consent in writing to any action
required or permitted to be taken at a meeting of the Board of Trust Managers or a committee
thereof and the writing or writings evidencing such consent is or are filed by the Secretary of the
Company with the minutes of proceedings of the Board of Trust Managers or such committee, the
action shall be as valid as though it had been taken at a meeting of the Board or committee.

     SECTION 3.12     VACANCIES. Except as otherwise provided in this Section 3.12, subject to the
rights of the holders of any class or series of Preferred Shares to elect additional trust managers
under specified circumstances, unless the Board of Trust Managers otherwise determines, vacancies
resulting from death, resignation, retirement, disqualification, or other cause relating to a
then-existing Board position shall be filled by the affirmative vote of a majority of the remaining
trust managers, though less than a quorum of the Board of Trust Managers, and newly created trust
managerships resulting from an increase in the authorized number of trust managers shall be filled
by the affirmative vote of a majority of the Whole Board and, in either event, trust managers so
chosen shall hold office for a term expiring at the annual meeting of shareholders at which the
term of office of the class to which they have been elected expires and until such trust manager’s
successor shall have been duly elected and qualified. No decrease in the number of authorized
trust managers constituting the Whole Board shall shorten the term of any incumbent trust manager.
Vacancies on the Board of Trust Managers due to the removal of a trust manager may be filled by the
shareholders at an annual or special meeting called for that purpose, and trust managers so chosen
shall hold office for a term expiring at the annual meeting of shareholders at which the term of
office of the class to which they have been elected expires and until each such trust manager’s
successor shall have been duly elected and qualified. The appointment or election of a successor
trust manager shall be considered an amendment to the Declaration of Trust.

     SECTION 3.13     REMOVAL. Subject to the rights of the holders of any class or series of
Preferred Shares to elect additional trust managers under specified circumstances, any trust
manager, or the entire Board of Trust Managers, may be removed from office at any time, but

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only for cause and only by the affirmative vote of the holders of at least 80 percent of the
then outstanding Voting Shares, voting together as a single class.

     SECTION 3.14     COMMITTEES. The Board of Trust Managers, by resolution or resolutions passed by
a majority of the Whole Board, may designate from among the members of the trust managers one or
more committees which, to the extent provided in such resolution or resolutions, shall have and may
exercise all of the authority of the Board of Trust Managers in the business and affairs of the
Company to the extent consistent with the Texas Real Estate Investment Trust Act, as amended from
time to time, or any successor statute thereto (the “Texas REIT Act”), except the power to amend
the Declaration of Trust, to approve a plan of merger or share exchange, to declare dividends or
distributions on shares, to amend these Bylaws, to issue shares except in the manner and to the
extent prescribed by the Declaration of Trust, these Bylaws or any resolution designating the
committee, to fill vacancies in the trust managers or in the committee, to elect or remove officers
of the Company or members of the committee, to fix the compensation of any member of the committee,
to recommend to the shareholders any action requiring shareholder approval, or to approve any
merger, consolidation or share exchange which does not require shareholder approval, each committee
to consist of two (2) or more trust managers of the Company, including, without limitation the
following committees:

	 	(1)  	An Executive Committee, which shall have such authority as
shall be delegated by the Board of Trust Managers, including, without
limitation, authority to acquire and dispose of real property and to execute
contracts and agreements on behalf of the full Board of Trust Managers
including, without limitation, those relating to the incurrence of debt by the
Company or subsidiaries thereof, and shall advise the Board of Trust Managers
from time to time with respect to such matters as the Board of Trust Managers
shall direct.
	 
	 	(2)  	An Audit Committee, which shall consist of Outside Trust
Managers (as defined below). The Audit Committee shall make recommendations
concerning the engagement of independent public accountants, review with the
independent public accountants the plans and results of each audit engagement,
professional services provided by the independent public accountants, review
the independence of the independent public accountants, consider the range of
audit and non-audit fees and review the adequacy of the Company’s internal
accounting controls.
	 
	 	(3)  	An Executive Compensation Committee, which shall determine
compensation for the Company’s executive officers and shall administer any
share incentive or other compensation plans adopted by the Company.

For purposes of this Section 3.14, “Outside Trust Managers” shall mean trust managers who are not
(i) officers or former officers of the Company or any subsidiary thereof; (ii) employees of the
Company or any subsidiary or division thereof; (iii) relatives of an executive officer; (iv)
holders of more than five (5) percent of the Voting Shares of the Company or any subsidiary
thereof; (v) members of any organization acting as an adviser, consultant, legal counsel or in a
similar capacity with respect to the Company and receiving compensation therefor on an ongoing
basis

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from the Company, in addition to trust managers fees; or (vi) with reference to any particular
transaction, interested trust managers within the meaning of Section 4.20 of the Texas REIT Act or
any successor provision thereto. The Board of Trust Managers may designate one or more trust
managers as alternate members of any committee, who may replace any absent or disqualified member
at any meeting of such committee. Unless the Board of Trust Managers shall provide otherwise, the
presence of one-half (1/2) of the total membership of any committee of the Board of Trust Managers
shall constitute a quorum for the transaction of business at any meeting of such committee and the
act of a majority of those present shall be the act of such committee. Each committee shall keep
regular minutes of its proceedings and report the same to the full Board of Trust Managers when so
requested.

ARTICLE IV

OFFICERS

     SECTION 4.1     CATEGORIES OF OFFICERS. The elected officers of the Company shall consist of a
Chairman of the Board, a Chief Executive Officer, a President, one or more Executive Vice
Presidents or Vice Presidents, a Secretary and a Treasurer. Such other officers, assistant
officers, agents and employees as the Board of Trust Managers may from time to time deem necessary
may be elected by the Board of Trust Managers or appointed by the Chairman of the Board. The
Chairman of the Board and the Vice Chairman of the Board shall be chosen from among the trust
managers. Two or more offices may be held by the same person, except that a person may not
concurrently serve as the President and a Vice President or Executive Vice President. Each officer
chosen or appointed in the manner prescribed by the Board of Trust Managers shall have such powers
and duties as generally pertain to his or her office or offices, subject to the specific provisions
of this Article IV. Such officers also shall have such powers and duties as from time to time may
be conferred by the Board of Trust Managers or by any committee thereof authorized to do so.

     SECTION 4.2     ELECTION AND TERM OF OFFICE. The elected officers of the Company shall be elected
annually by the Board of Trust Managers at the regular meeting of the Board of Trust Managers held
after each annual meeting of the shareholders. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as is convenient. Each officer shall
hold office until his or her successor shall have been duly elected and shall have qualified, or
until his or her death or until he or she shall resign or be removed from office.

     SECTION 4.3     CHAIRMAN OF THE BOARD. The Chairman of the Board shall preside at all meetings of
the shareholders and of the Board of Trust Managers. The Chairman of the Board shall be
responsible for general management of the affairs of the Company and shall perform all duties
incidental to the office which may be required by law, and all such other duties as may properly be
required by the Board of Trust Managers. Except where by law the signature of the Chief Executive
Officer or the President is required, the Chairman of the Board shall possess the same power as the
Chief Executive Officer and the President to sign all certificates, contracts, and other
instruments of the Company which may be authorized by the Board of Trust Managers. The Chairman of
the Board shall make such reports to the Board of Trust Managers and the shareholders as are
properly required by the Board of Trust Managers. The Chairman of

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the Board shall see that all orders and resolutions of the Board of Trust Managers and of any
committee thereof are carried into effect.

     SECTION 4.4     CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall act in a general
executive capacity and shall assist the Chairman of the Board in the administration and operation
of the Company’s business and general supervision of its policies and affairs. The Chief Executive
Officer may, in the absence of or because of the inability to act of the Chairman of the Board,
perform all duties of the Chairman of the Board and, in the absence of or because of the inability
to act of the Chairman of the Board and the Vice Chairman of the Board, preside at all meetings of
shareholders and of the Board of Trust Managers. The Chief Executive Officer may sign, alone or
with the Secretary or any assistant secretary or any other officer of the Company properly
authorized by the Board of Trust Managers, certificates, contracts and other instruments of the
Company as authorized by the Board of Trust Managers.

     SECTION 4.5     PRESIDENT. The President shall be the chief operating officer of the Company,
shall act in a general executive capacity and shall assist the Chairman of the Board and the Chief
Executive Officer in the administration and operation of the Company’s business and general
supervision of its policies and affairs. The President may, in the absence of or because of the
inability to act of the Chairman of the Board and the Chief Executive Officer, perform all duties
of the Chairman of the Board and, in the absence of or because of the inability to act of the
Chairman of the Board, the Vice Chairman of the Board and the Chief Executive Officer, preside at
all meetings of shareholders and of the Board of Trust Managers. The President may sign, alone or
with the Secretary or any assistant secretary or any other officer of the Company properly
authorized by the Board of Trust Managers, certificates, contracts and other instruments of the
Company as authorized by the Board of Trust Managers.

     SECTION 4.6     VICE PRESIDENTS. The Vice President or Vice Presidents, if any, including any
Executive Vice Presidents, shall perform the duties of the Chief Executive Officer and the
President in the absence or disability of both the Chief Executive Officer and the President, and
shall have such powers and perform such other duties as the Board of Trust Managers or the Chairman
of the Board from time to time may prescribe.

     SECTION 4.7     SECRETARY. The Secretary shall give, or cause to be given, notice of all meetings
of shareholders and trust managers and all other notices required by law, by the Declaration of
Trust or by these Bylaws, and in case of his or her absence or refusal or neglect so to do, any
such notice may be given by any person thereunto directed by the Chairman of the Board, the Vice
Chairman of the Board, the Chief Executive Officer, the President or the Board of Trust Managers,
upon whose request the meeting is called, as provided in these Bylaws. The Secretary shall record
all the proceedings of the meetings of the Board of Trust Managers, any committees thereof and the
shareholders of the Company in a book or books to be kept for that purpose, and shall perform such
other duties as from time to time may be prescribed by the Board of Trust Managers, the Chairman of
the Board, the Chief Executive Officer or the President. The Secretary shall have custody of the
seal, if any, of the Company and shall affix the same to all instruments requiring it, when
authorized by the Board of Trust Managers, the Chairman of the Board, the Chief Executive Officer
or the President, and shall attest to the same.

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     SECTION 4.8     TREASURER. The Treasurer shall have custody of all Company funds and securities
and shall keep full and accurate account of receipts and disbursements in books belonging to the
Company. The Treasurer shall deposit all moneys and other valuable effects in the name and to the
credit of the Company in such depositories as may be designated by the Board of Trust Managers.
The Treasurer shall disburse the funds of the Company in such manner as may be ordered by the Board
of Trust Managers, the Chairman of the Board, the Chief Executive Officer or the President, taking
proper vouchers for such disbursements. The Treasurer shall render to the Chairman of the Board,
the Chief Executive Officer, the President and the Board of Trust Managers, whenever requested, an
account of all his or her transactions as Treasurer and of the financial condition of the Company.
If required by the Board of Trust Managers, the Treasurer shall give the Company a bond for the
faithful discharge of his or her other duties in such amount and with such surety as the Board of
Trust Managers shall prescribe. The Treasurer also shall perform such duties and have such powers
as the Board of Trust Managers from time to time may prescribe.

     SECTION 4.9     REMOVAL. Any officer elected by the Board of Trust Managers or appointed in the
manner prescribed hereby may be removed by a majority of the members of the Whole Board whenever,
in their judgment, the best interests of the Company would be served thereby. No elected or
appointed officer shall have any contractual rights against the Company for compensation by virtue
of such election or appointment beyond the date of the election or appointment of his or her
successor, his or her death, resignation or removal, whichever event shall first occur, except as
otherwise provided in an employment or similar contract or under an employee deferred compensation
plan.

     SECTION 4.10     SALARIES. The Board of Trust Managers shall fix the salaries of the Chairman of
the Board, the Chief Executive Officer and the President of the Company, or may delegate the
authority to do so to a duly constituted Executive Compensation Committee. The salaries of other
officers, agents and employees of the Company may be fixed by the Board of Trust Managers, by a
committee of the Board, by the Chairman of the Board or by another officer or committee to whom
that function has been delegated by the Board of Trust Managers or the Chairman of the Board.

     SECTION 4.11     VACANCIES. Any newly created office or vacancy in any office because of death,
resignation or removal shall be filled by the Board of Trust Managers or, in the case of an office
not specifically provided for in Section 4.1 hereof, by or in the manner prescribed by the Board of
Trust Managers. The officer so selected shall hold office until his or her successor is duly
selected and shall have qualified, unless he or she sooner resigns or is removed from office in the
manner provided in these Bylaws.

     SECTION 4.12     RESIGNATIONS. Any trust manager or officer, whether elected or appointed, may
resign at any time by serving written notice of such resignation on the Chairman of the Board, the
Chief Executive Officer, the President or the Secretary, and such resignation shall be deemed to be
effective as of the close of business on the date said notice is received by the Chairman of the
Board, the Chief Executive Officer, the President or the Secretary. No action shall be required of
the Board of Trust Managers or the shareholders to make any such resignation effective.

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ARTICLE V

SHARE CERTIFICATES AND TRANSFERS

     SECTION 5.1     SHARE CERTIFICATES. Each shareholder shall be entitled to a certificate or
certificates, in a form approved by the Board of Trust Managers and consistent with the Texas REIT
Act, which shall represent and certify the number, kind and class of shares owned by him or her in
the Company. Each certificate shall be signed by the Chairman of the Board, the Chief Executive
Officer or a Vice President, and by the Secretary or the Treasurer (or an assistant secretary or
assistant treasurer, if any) and, pursuant to resolutions of the Board of Trust Managers, any such
signature may be in facsimile. In case any officer, transfer agent or registrar who has signed, or
whose facsimile signature has been placed on, a certificate has ceased to hold such office before
the certificate is issued, it nevertheless may be issued by the Company with the same effect as if
he or she held such office at the date of issue.

     SECTION 5.2     RECORD DATE AND CLOSING OF TRANSFER BOOKS. The Board of Trust Managers may fix,
in advance, a date as the record date for the purpose of determining shareholders entitled to
notice of, or to vote at, any meeting of shareholders, or shareholders entitled to receive payment
of any dividend or distribution or the allotment of any rights, or the shareholders entitled to
exercise any rights in respect of any change, conversion or exchange of stock, or in order to make
a determination of shareholders for any other proper purpose. The record date may not be prior to
the close of business on the day the record date is fixed. Such record date shall not be prior to
the close of business on the day such date is fixed and 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. The stock transfer
books of the Company may not be closed for a period longer than twenty (20) days.

     If no record date is fixed and the Company’s stock transfer books are not closed, the
determination of shareholders entitled to notice of, or to vote at, a meeting of shareholders shall
be at the close of the business on the day on which notice of the meeting is mailed. If no record
date is fixed, the record date for determining shareholders for any purpose other than that
specified in the preceding sentence shall be at the close of business on the day on which the
resolution of the Board of Trust Managers relating thereto is adopted.

     When a determination of shareholders of record entitled to notice of, or to vote at, any
meeting of shareholders has been made as provided in this Section 5.2, such determination shall
apply to any future meeting in respect of an adjournment thereof, unless the trust managers fix a
new record date under this section for such future meeting.

     SECTION 5.3     REGISTERED SHAREHOLDERS. The Company shall be entitled to treat the holder of
record of shares as the holder in fact and, except as otherwise provided by the laws of the State
of Texas, shall not be bound to recognize any equitable or other claim to or interest in the
shares.

     Shares of the Company shall be transferred on its books only upon the surrender to the Company
of the share certificates duly endorsed or accompanied by proper evidence of

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succession, assignment or authority to transfer, and upon presentation of adequate evidence of
the validity of the transfer under this Section 5.3 and the laws of the State of Texas. In that
event, the surrendered certificates shall be canceled, new certificates issued to the person
entitled to them and the transaction recorded on the books of the Company.

     SECTION 5.4     LOST CERTIFICATES. The Board of Trust Managers may direct a new certificate to be
issued in place of a certificate alleged to have been destroyed or lost if the owner makes an
affidavit that it is destroyed or lost. The Board, in its discretion, may, as a condition
precedent to issuing the new certificate, require the owner to give the Company a bond as indemnity
against any claim that may be made against the Company on the certificate allegedly destroyed or
lost.

ARTICLE VI

MISCELLANEOUS PROVISIONS

     SECTION 6.1     FISCAL YEAR. The fiscal year of the Company shall begin on the first (1st) day of
January and end on the thirty-first (31st) day of December of each year.

     SECTION 6.2     DIVIDENDS. The Board of Trust Managers may from time to time declare, and the
Company may pay, dividends on its outstanding shares in the manner and upon the terms and
conditions provided by law and the Declaration of Trust.

     SECTION 6.3     DEBT LIMITATIONS. The trust managers shall review the borrowings of the Company
quarterly for reasonableness in relation to the Company’s net assets. The Company shall not incur
recourse indebtedness if, after giving effect to the incurrence thereof, aggregate recourse
indebtedness, secured and unsecured, would exceed fifty-five percent (55%) of the Company’s Net
Asset Value on an unconsolidated basis. For this purpose, the term “Net Asset Value” means the
Company’s total assets (less intangibles) value based on market capitalization rates and current
year rental income, before deducting depreciation or other non-cash reserves, less total
liabilities, as calculated in good faith by the trust managers at the end of each quarter on a
basis consistently applied.

     SECTION 6.4     SEAL. The seal of the Company, if any, shall have inscribed thereon the name of
the Company and shall be in such form as may be approved by the Board of Trust Managers. The seal
may be used by causing it or a facsimile thereof to be impressed, affixed or otherwise reproduced.

     SECTION 6.5     EXECUTION OF WRITTEN INSTRUMENTS. Contracts, deeds, documents, and other
instruments shall be executed by the Chairman of the Board, the Chief Executive Officer, the
President or a Vice President and attested by the Secretary or an assistant secretary, unless the
Board of Trust Managers shall designate other authorized signatories or other procedures for their
execution.

     SECTION 6.6     SIGNING OF CHECKS AND NOTES. Checks, notes, drafts, and demands for money shall
be signed by such person or persons as may be designated by the Board of Trust Managers, the
Chairman of the Board, the Chief Executive Officer or the President.

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     SECTION 6.7     VOTING OF SECURITIES HELD IN OTHER ENTITIES. In the absence of other arrangements
by the Board of Trust Managers, securities issued by any other trust, corporation, partnership or
other entity and owned or controlled by this Company may be voted at any securityholders’ meeting
of such other entity by the Chairman of the Board of this Company or, if he or she is not present
at the meeting, by the Chief Executive Officer, the President or any Vice President of this
Company, and in the event none of the Chairman of the Board, the Chief Executive Officer, the
President or any Vice President is to be present at a meeting, the securities may be voted by such
person as the Chairman of the Board and the Secretary of the Company shall, by duly executed proxy,
designate to represent the Company at the meeting.

     SECTION 6.8     INDEMNIFICATION AND INSURANCE.

     A.      DEFINITIONS. In this Section 6.8:

               (1)     “COMPANY” includes any domestic or foreign predecessor of the Company in a merger,
consolidation, or other transaction in which the liabilities of the predecessor are transferred to
the Company by operation of law and in any other transaction in which the Company assumes the
liabilities of the predecessor but does not specifically exclude liabilities that are the subject
of this Section 6.8.

               (2)     “INDEMNITEE” means (i) any present or former Trust Manager, officer, employee or agent of
the Company, (ii) any person who while serving in any of the capacities referred to in clause (i)
hereof served at the Company’s request as a director, officer, partner, venturer, proprietor,
trustee, employee, agent or similar functionary of another real estate investment trust or foreign
or domestic corporation, partnership, joint venture, sole proprietorship, trust, employee benefit
plan or other enterprise, and (iii) any person nominated or designed by (or pursuant to authority
granted by) the Trust Managers or any committee thereof to serve in any of the capacities referred
to in clause (i) or (ii) hereof.

               (3)     “OFFICIAL CAPACITY” means (i) when used with respect to a Trust Manager, the office of
Trust Manager of the Company and (ii) when used with respect to a person other than a Trust
Manager, the elective or appointive office of the Company held by such person or the employment or
agency relationship undertaken by such person on behalf of the Company, but in each case does not
include service for any other real estate investment trust or foreign or domestic corporation or
any partnership, joint venture, sole proprietorship, trust, employee benefit plan or other
enterprise.

               (4)     “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.

     B.     INDEMNIFICATION. The Company shall indemnify every Indemnitee against all judgments,
penalties (including excise and similar taxes), fines, amounts paid in settlement and reasonable
expenses actually incurred by the Indemnitee in connection with any Proceeding in which he was, is
or is threatened to be named defendant or respondent, or in which he was or

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is a witness without being named a defendant or respondent, by reason, in whole or in part, of
his serving or having served, or having been nominated or designated to serve, in any of the
capacities referred to in Section 6.8.A(1), if it is determined in accordance with Section 6.8.D
that the Indemnitee (a) conducted himself in good faith, (b) reasonably believed, in the case of
conduct in his Official Capacity, that his conduct was in the Company’s best interests and, in all
other cases, that his conduct was at least not opposed to the Company’s best interests, and (c) in
the case of any criminal proceeding, had no reasonable cause to believe that his conduct was
unlawful; provided, however, that in the event that an Indemnitee is found liable to the Company or
is found liable on the basis that personal benefit was improperly received by the Indemnitee the
indemnification (i) is limited to reasonable expenses actually incurred by the Indemnitee in
connection with the Proceeding and (ii) shall not be made in respect of any Proceeding in which the
Indemnitee shall have been found liable for willful or intentional misconduct in the performance of
his duty to the Company. Except as provided in the immediately preceding proviso to the first
sentence of this Section 6.8.B, no indemnification shall be made under this Section 6.8.B in
respect of any Proceeding in which such Indemnitee shall have been (x) found liable on the basis
that personal benefit was improperly received by him, whether or not the benefit resulted from an
action taken in the Indemnitee’s Official Capacity, or (y) found liable to the Company. The
termination of any Proceeding by judgment, order, settlement or conviction, or on a plea of nolo
contendere or its equivalent, is not of itself determinative that the Indemnitee did not meet the
requirements set forth in clauses (a), (b) or (c) in the first sentence of this Section 6.8.B. An
Indemnitee shall be deemed to have been found liable in respect of any claim, issue or matter only
after the Indemnitee shall have been so adjudged by a court of competent jurisdiction after
exhaustion of all appeals therefrom. Reasonable expenses shall include, without limitation, all
court costs and all fees and disbursements of attorneys for the Indemnitee.

     C.     SUCCESSFUL DEFENSE. Without limitation of Section 6.8.B and in addition to the
indemnification provided for in Section 6.8.B, the Company shall indemnify every Indemnitee against
reasonable expenses incurred by such person in connection with any Proceeding in which he is a
witness or a named defendant or respondent because he served in any of the capacities referred to
in Section 6.8.A(1), if such person has been wholly successful, on the merits or otherwise, in
defense of the Proceeding.

     D.     DETERMINATIONS. Any indemnification under Section 6.8.B (unless ordered by a court of
competent jurisdiction) shall be made by the Company only upon a determination that indemnification
of the Indemnitee is proper in the circumstances because he has met the applicable standard of
conduct. Such determination shall be made (a) by the Trust Managers by a majority vote of a quorum
consisting of Trust Managers who, at the time of such vote, are not named defendants or respondents
in the Proceeding; (b) if such a quorum cannot be obtained, then by a majority vote of a committee
of the Trust Managers, duly designated to act in the matter by a majority vote of all Trust
Managers (in which designation Trust Managers who are named defendants or respondents in the
Proceeding may participate), such committee to consist solely of two (2) or more Trust Managers
who, at the time of the committee vote, are not named defendants or respondents in the Proceeding;
(c) by special legal counsel selected by the Trust Managers or a committee thereof by vote as set
forth in clauses (a) or (b) of this Section 6.8.D or, if the requisite quorum of all of the Trust
Managers cannot be obtained and such committee cannot be established, by a majority vote of all of
the Trust managers (in which Trust Managers who are named defendants or respondents in the
Proceeding may participate); or (d) by the

16

 

shareholders in a vote that excludes the shares held by Trust Managers that are named
defendants or respondents in the Proceeding. 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,
determination as to reasonableness of expenses must be made in the manner specified in clause (c)
of the preceding sentence for the selection of special legal counsel. In the event a determination
is made under this Section 6.8.D that the Indemnitee has met the applicable standard of conduct as
to some matters but not as to others, amounts to be indemnified may be reasonably prorated.

     E.      ADVANCEMENT OF EXPENSES. Reasonable expenses (including court costs and attorneys’ fees)
incurred by an Indemnitee who was or is a witness or was, is or is threatened to be made a named
defendant or respondent in a Proceeding shall be paid or reimbursed by the Company at reasonable
intervals in advance of the final disposition of such Proceeding, and without making any of the
determinations specified in Section 6.8.D, after receipt by the Company of (a) a written
affirmation by such Indemnitee of his good faith belief that he has met the standard of conduct
necessary for indemnification by the Company under this Section 6.8 and (b) a written undertaking
by or on behalf of such Indemnitee to repay the amount paid or reimbursed by the Company if it
shall ultimately be determined that he is not entitled to be indemnified by the Company as
authorized in this Section 6.8. Such written undertaking shall be an unlimited general obligation
of the Indemnitee but need not be secured and it may be accepted without reference to financial
ability to make repayment. Notwithstanding any other provision of this Section 6.8, the Company
may pay or reimburse expenses incurred by an Indemnitee in connection with his appearance as a
witness or other participation in a Proceeding at a time when he is not named a defendant or
respondent in the Proceeding.

     F.     ENFORCEMENT. If a claim under paragraph B of this Section 6.8 is not paid in full by the
Company within thirty (30) calendar days after a written claim has been received by the Company,
the claimant may at any time thereafter (but prior to payment of the claim) bring suit against the
Company to recover the unpaid amount of the claim and, if successful, in whole or in part, the
claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a
defense to any such action (other than an action brought to enforce a claim for expenses incurred
in defending any proceeding in advance of its final disposition where the required undertaking, if
any, has been tendered to the Company) that the claimant has not met the standards of conduct which
make it permissible under the Texas REIT Act for the Company to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the Company. Neither the
failure of the Company (including its Board of Trust Managers, independent legal counsel or
stockholders) to have made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Texas REIT Act, nor an actual determination by the
Company (including its Board of Trust Managers, independent legal counsel or stockholders) that the
claimant has not met such applicable standard of conduct, shall be a defense to the action or
create a presumption that the claimant has not met the applicable standard of conduct.

     G.     PROCEDURE UPON A CHANGE IN CONTROL. Following any “change in control” of the Company of
the type required to be reported under Item 1 of Form 8-K promulgated under the Exchange Act, any
determination as to entitlement to indemnification

17

 

shall be made by independent legal counsel selected by the claimant, which such independent
legal counsel shall be retained by the Board of Trust Managers on behalf of the Company.

     H.     EMPLOYEE BENEFIT PLANS. For purposes of this Section 6.8, the Company shall be deemed to
have requested an Indemnitee to serve an employee benefit plan whenever the performance by him of
his duties to the Company also imposed or imposes duties on or otherwise involved or involves
services by him to the plan or participants or beneficiaries of the plan. Excise taxes assessed on
an Indemnitee with respect to an employee benefit plan pursuant to applicable law shall be deemed
fines. Action taken or omitted by an Indemnitee with respect to an employee benefit plan in the
performance of his duties for a purpose reasonably believed by him 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 Company.

     I.     AUTHORIZATION TO PURCHASE INSURANCE. The Company may purchase and maintain insurance, at
its expense, on its own behalf and on behalf of any person who is or was a trust manager, officer,
employee or agent of the Company or who while a trust manager, officer, employee or agent of the
Company is or was serving at the request of the Company as a trust manager, officer, partner,
trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture,
trust or other enterprise, or employee benefit plan, against any liability asserted against and
incurred by such person in any such capacity or arising out of such person’s position, whether or
not the Company would have the power to indemnify such person against such expense or liability
under the Texas REIT Act.

     J.     OTHER INDEMNIFICATION AND INSURANCE. The indemnification provided by this Section 6.8
shall (a) not be deemed exclusive of, or to preclude, any other rights to which those seeking
indemnification may at any time be entitled under the Company’s Declaration of Trust, any law,
agreement or vote of shareholders or disinterested Trust Managers, or otherwise, or under any
policy or policies of insurance purchased and maintained by the Company on behalf of any
Indemnitee, both as to action in his Official Capacity and as to action in any other capacity, (b)
continue as to a person who has ceased to be in the capacity by reason of which he was an
Indemnitee with respect to matters arising during the period he was in such capacity, and (c) inure
to the benefit of the heirs, executors and administrators of such a person.

     K.     NOTICE. Any indemnification of or advance of expenses to an Indemnitee in accordance with
this Section 6.8 shall be reported in writing to the shareholders of the Company with or before the
notice or waiver of notice of the next shareholders’ meeting or with or before the next submission
to shareholders of a consent to action without a meeting and, in any case, within the twelve-month
period immediately following the date of the indemnification or advance.

     L.     CONSTRUCTION. The indemnification provided by this Section 6.8 shall be subject to all
valid and applicable laws, including, without limitation, the Texas REIT Act, and, in the event
this Section 6.8 or any of the provisions hereof or the indemnification contemplated hereby are
found to be inconsistent with or contrary to any such valid laws, the latter shall be deemed to
control and this Section 6.8 shall be regarded as modified accordingly, and, as so modified, shall
continue in full force and effect.

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     M.     CONTINUING OFFER, RELIANCE, ETC. The provisions of this Section 6.8 (a) are for the
benefit of, and may be enforced by, each Indemnitee of the Company, the same as if set forth in
their entirety in a written instrument duly executed and delivered by the Company and such
Indemnitee and (b) constitute a continuing offer to all present and future Indemnitees. The
Company, by its adoption of these Bylaws, (x) acknowledges and agrees that each Indemnitee of the
Company has relied upon and will continue to rely upon the provisions of this Section 6.8 in
becoming, and serving in any of the capacities referred to in Section 6.8.A(1) hereof, (y) waives
reliance upon, and all notices of acceptance of, such provisions by such Indemnitees and (z)
acknowledges and agrees that no present or future Indemnitee shall be prejudiced in his right to
enforce the provisions of this Section 6.8 in accordance with their terms by any act or failure to
act on the part of the Company.

     N.     INDEMNIFICATION OF SHAREHOLDERS. The Company shall indemnify each shareholder against any
claim or liability to which the shareholder may become subject by reason of being or having been a
shareholder. The Company shall reimburse each shareholder for all legal and other expenses
reasonably incurred by such shareholder in connection with any such claim or liability.

     O.     AUTHORITY TO FURTHER INDEMNIFY. The Company may, to the extent authorized from time to
time by the Trust Managers, grant rights of indemnification and rights to be paid by the Company
the expenses incurred in defending any proceeding in advance of its final disposition to any
employee or agent of the Company to the fullest extent of the provisions of this Section 6.8 with
respect to the indemnification and advancement of expenses of Trust Managers and officers of the
Company.

     P.     EFFECT OF AMENDMENT. No amendment, modification or repeal of this Section 6.8 or any
provision of this Section 6.8 shall in any manner terminate, reduce or impair the right of any
past, present or future Indemnitees to be indemnified by the Company, nor the obligation of the
Company to indemnify any such Indemnitees, under and in accordance with the provisions of this
Section 6.8 as in effect immediately prior to such amendment, modification or repeal with respect
to claims arising from or relating to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when such claims may be asserted.

ARTICLE VII

AMENDMENTS

     These Bylaws may be amended, added to, rescinded or repealed at any meeting of the Board of
Trust Managers or of the shareholders, provided that notice of the proposed change was given (i) in
the case of a meeting of the shareholders, in the notice of the meeting given pursuant to Section
2.4 of these Bylaws and (ii) in the case of a meeting of the Board of Trust Managers, in a notice
given pursuant to Section 3.4 or 3.6 hereof, as the case may be; provided, however, that, in the
case of amendments by shareholders, except as otherwise specifically required by law,
notwithstanding any other provisions of these Bylaws or the Declaration of Trust or any provision
of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative
vote of the holders of any particular class or series of the Voting Shares required by

19

 

law, the Declaration of Trust or these Bylaws with respect to any class or series of Preferred
Shares, the affirmative vote of the holders of that proportion of the Voting Shares necessary to
approve an amendment to the Company’s Declaration of Trust pursuant to such Declaration of Trust
and the Texas REIT Act, voting together as a single class, shall be required to alter, amend
or repeal any provision of these Bylaws.

20

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