<PAGE>

                                                                   EXHIBIT 10.01

                     THIRD AMENDED AND RESTATED AGREEMENT OF
                               LIMITED PARTNERSHIP

                                       OF

                      CRESCENT REAL ESTATE EQUITIES LIMITED
                                   PARTNERSHIP

                           Dated as of January 2, 2003

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                                   <C>
ARTICLE I DEFINED TERMS..........................................................................................      3

ARTICLE II ORGANIZATIONAL MATTERS................................................................................     15

         Section 2.1       Continuation of Partnership...........................................................     15

         Section 2.2       Name..................................................................................     15

         Section 2.3       Principal Office and Registered Agent.................................................     16

         Section 2.4       Power of Attorney.....................................................................     16

         Section 2.5       Term..................................................................................     17

ARTICLE III PURPOSE..............................................................................................     17

         Section 3.1       Purpose and Business..................................................................     17

         Section 3.2       Powers................................................................................     18

ARTICLE IV CAPITAL CONTRIBUTIONS.................................................................................     18

         Section 4.1       Capital Contributions of the Partners.................................................     18

         Section 4.2       Additional Funding....................................................................     19

         Section 4.3       Issuance of Additional Partnership Interests..........................................     21

         Section 4.4       No Preemptive Rights..................................................................     23

         Section 4.5       No Interest on Capital................................................................     23

         Section 4.6       Stock Incentive Plans.................................................................     23

         Section 4.7       Other Equity Compensation Plans.......................................................     24

         Section 4.8       Series A Preferred Partnership Units and Series B Redeemable Preferred
                           Partnership Units.....................................................................     26

ARTICLE V DISTRIBUTIONS..........................................................................................     28

         Section 5.1       Initial Partnership Distributions.....................................................     28

         Section 5.2       Requirement and Characterization of Distributions.....................................     28

         Section 5.3       Amounts Withheld......................................................................     28
</TABLE>

                                      (i)
<PAGE>

<TABLE>
<S>                                                                                                                   <C>
         Section 5.4       Distributions In Kind.................................................................     28

         Section 5.5       Distributions Upon Liquidation........................................................     29

         Section 5.6       Distribution Rights of Series A Preferred Shares and Series B Redeemable Preferred
                           Shares................................................................................     29

ARTICLE VI ALLOCATIONS...........................................................................................     29

         Section 6.1       Allocations For Capital Account Purposes..............................................     29

         Section 6.2       Allocation of Nonrecourse Debt........................................................     30

         Section 6.3       Allocations for Series A Preferred Partnership Units and Series B Redeemable
                           Preferred Partnership Units...........................................................     30

ARTICLE VII MANAGEMENT AND OPERATIONS OF BUSINESS................................................................     31

         Section 7.1       Management............................................................................     31

         Section 7.2       Certificate of Limited Partnership....................................................     35

         Section 7.3       Restrictions on General Partner's Authority...........................................     35

         Section 7.4       Reimbursement of the Crescent Group...................................................     35

         Section 7.5       Outside Activities of the Crescent Group..............................................     36

         Section 7.6       Contracts with Affiliates.............................................................     37

         Section 7.7       Indemnification.......................................................................     37

         Section 7.8       Liability of the General Partner......................................................     39

         Section 7.9       Other Matters Concerning the General Partner..........................................     40

         Section 7.10      Title to Partnership Assets...........................................................     41

         Section 7.11      Reliance by Third Parties.............................................................     41

         Section 7.12      Limited Partner Representatives.......................................................     41

ARTICLE VIII RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS..........................................................     42

         Section 8.1       Limitation of Liability...............................................................     42

         Section 8.2       Management of Business................................................................     42

         Section 8.3       Outside Activities of Limited Partners................................................     42
</TABLE>

                                      (ii)

<PAGE>

<TABLE>
<S>                                                                                                                   <C>
         Section 8.4       Return of Capital.....................................................................     42

         Section 8.5       Rights of Limited Partners Relating to the Partnership................................     43

         Section 8.6       Exchange Rights.......................................................................     44

         Section 8.7       Covenants Relating to the Exchange Rights.............................................     44

         Section 8.8       Other Matters Relating to the Exchange Rights.........................................     45

ARTICLE IX BOOKS, RECORDS, ACCOUNTING AND REPORTS................................................................     46

         Section 9.1       Records and Accounting................................................................     46

         Section 9.2       Fiscal Year...........................................................................     46

         Section 9.3       Reports...............................................................................     46

ARTICLE X TAX MATTERS............................................................................................     46

         Section 10.1      Preparation of Tax Returns............................................................     46

         Section 10.2      Tax Elections.........................................................................     47

         Section 10.3      Tax Matters Partner...................................................................     47

         Section 10.4      Organizational Expenses...............................................................     48

         Section 10.5      Withholding...........................................................................     48

ARTICLE XI TRANSFERS AND WITHDRAWALS.............................................................................     49

         Section 11.1      Transfer..............................................................................     49

         Section 11.2      Transfer of Partnership Interests of the General Partner..............................     49

         Section 11.3      Transfer of Partnership Interests of Limited Partners Other Than Crescent Equities....     50

         Section 11.4      Substituted Limited Partners..........................................................     51

         Section 11.5      Assignees.............................................................................     52

         Section 11.6      General Provisions....................................................................     52

         Section 11.7      Acquisition of Partnership Interest by Partnership....................................     53

ARTICLE XII ADMISSION OF PARTNERS................................................................................     53

         Section 12.1      Admission of Substituted General Partner..............................................     53
</TABLE>

                                     (iii)
<PAGE>

<TABLE>
<S>                                                                                                                   <C>
         Section 12.2      Admission of Additional or Employee Limited Partners..................................     53

         Section 12.3      Amendment of Agreement and Certificate of Limited Partnership.........................     55

ARTICLE XIII DISSOLUTION AND LIQUIDATION.........................................................................     55

         Section 13.1      Dissolution...........................................................................     55

         Section 13.2      Winding Up............................................................................     56

         Section 13.3      Compliance with Timing Requirements of Regulations....................................     57

         Section 13.4      Deemed Contribution and Distribution..................................................     58

         Section 13.5      Rights of Limited Partners............................................................     58

         Section 13.6      Documentation of Liquidation..........................................................     58

         Section 13.7      Reasonable Time for Winding-Up........................................................     58

         Section 13.8      Liability of the Liquidator...........................................................     58

         Section 13.9      Waiver of Partition...................................................................     59

ARTICLE XIV AMENDMENT OF AGREEMENT...............................................................................     59

         Section 14.1      Amendments............................................................................     59

ARTICLE XV PARTNER REPRESENTATIONS AND WARRANTIES................................................................     60

         Section 15.1      Representations and Warranties........................................................     60

ARTICLE XVI ARBITRATION OF DISPUTES..............................................................................     61

         Section 16.1      Arbitration...........................................................................     61

         Section 16.2      Procedures............................................................................     61

         Section 16.3      Binding Character.....................................................................     62

         Section 16.4      Exclusivity...........................................................................     63

         Section 16.5      No Alteration of Agreement............................................................     63

ARTICLE XVII GENERAL PROVISIONS..................................................................................     63

         Section 17.1      Addresses and Notice..................................................................     63

         Section 17.2      Titles and Captions...................................................................     63
</TABLE>

                                      (iv)
<PAGE>

<TABLE>
<S>                                                                                                                   <C>
         Section 17.3      Pronouns and Plurals..................................................................     63

         Section 17.4      Further Action........................................................................     64

         Section 17.5      Binding Effect........................................................................     64

         Section 17.6      Creditors.............................................................................     64

         Section 17.7      Waiver................................................................................     64

         Section 17.8      No Agency.............................................................................     64

         Section 17.9      Entire Understanding..................................................................     64

         Section 17.10     Counterparts..........................................................................     64

         Section 17.11     Applicable Law........................................................................     64

         Section 17.12     Invalidity of Provisions..............................................................     65

         Section 17.13     Guaranty by Crescent Equities.........................................................     65

         Section 17.14     Restriction on Sale of Sonoma Property................................................     65
</TABLE>

Exhibit A -- Partners, Partnership Units and Partnership Interests

Exhibit B -- Capital Account Maintenance

Exhibit C -- Special Tax Allocation Rules

Exhibit D -- Notice of Exchange

Exhibit E -- Listing of Approved Substituted Limited Partners

                                      (v)
<PAGE>

           THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

                                       OF

                CRESCENT REAL ESTATE EQUITIES LIMITED PARTNERSHIP

         THIS THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated
as of January 2, 2003, is entered into by and among Crescent Real Estate
Equities, Ltd., a Delaware corporation, as general partner (the "General
Partner"), and those parties who are Limited Partners as listed on Exhibit A
hereto or who are admitted from time to time as Limited Partners as herein
provided.

                              W I T N E S S E T H:

         WHEREAS, Crescent Real Estate Equities Limited Partnership, a Delaware
limited partnership (the "Partnership"), was formed pursuant to that certain
Certificate of Limited Partnership dated February 9, 1994 and filed on February
9, 1994 in the office of the Secretary of State of Delaware, and that certain
Agreement of Limited Partnership dated as of February 9, 1994 (the "Initial
Agreement");

         WHEREAS, the Initial Agreement was amended and restated in its entirety
by that certain First Amended and Restated Agreement of Limited Partnership of
Crescent Real Estate Equities Limited Partnership, dated as of May 5, 1994, as
amended by the First Amendment to the First Amended and Restated Agreement of
Limited Partnership of Crescent Real Estate Equities Limited Partnership, dated
as of May 16, 1994, the Second Amendment to the First Amended and Restated
Agreement of Limited Partnership of Crescent Real Estate Equities Limited
Partnership, dated as of April 11, 1995, the Third Amendment to the First
Amended and Restated Agreement of Limited Partnership of Crescent Real Estate
Equities Limited Partnership, dated as of April 11, 1995, the Fourth Amendment
to the First Amended and Restated Agreement of Limited Partnership of Crescent
Real Estate Equities Limited Partnership, dated as of May 3, 1995, the Fifth
Amendment to the First Amended and Restated Agreement of Limited Partnership of
Crescent Real Estate Equities Limited Partnership, dated as of May 31, 1995, the
Sixth Amendment to the First Amended and Restated Agreement of Limited
Partnership of Crescent Real Estate Equities Limited Partnership, dated as of
June 1, 1995, the Seventh Amendment to the First Amended and Restated Agreement
of Limited Partnership of Crescent Real Estate Equities Limited Partnership,
dated as of August 23, 1995, the Eighth Amendment to the First Amended and
Restated Agreement of Limited Partnership of Crescent Real Estate Equities
Limited Partnership, dated as of December 31, 1995, the Restatement of Ninth
Amendment to the First Amended and Restated Agreement of Limited Partnership of
Crescent Real Estate Equities Limited Partnership, dated as of February 16,
1996, the Supplemental Amendment to the Restatement of Ninth Amendment to the
First Amended and Restated Agreement of Limited Partnership of Crescent Real
Estate Equities Limited Partnership, dated as of June 30, 1996, the Tenth
Amendment to the First Amended and Restated Agreement of Limited Partnership of
Crescent Real Estate Equities Limited Partnership, dated as of July 26, 1996,
the Eleventh Amendment to the First Amended and Restated Agreement of Limited
Partnership of Crescent Real Estate Equities Limited Partnership, dated as of
November 4, 1996, the Twelfth Amendment to the First Amended and Restated
Agreement of

<PAGE>

Limited Partnership, dated as of December 31, 1996, the Thirteenth Amendment to
the First Amended and Restated Agreement of Limited Partnership, dated as of
April 29, 1997 and the Fourteenth Amendment to the First Amended and Restated
Agreement of Limited Partnership, dated as of April 30, 1997 (hereinafter
referred to collectively as the "First Amended Agreement");

         WHEREAS, the First Amended Agreement was amended and restated in its
entirety by that certain Second Amended and Restated Agreement of Limited
Partnership of Crescent Real Estate Equities Limited Partnership, dated as of
November 1, 1997, as amended by the First Amendment to the Second Amended and
Restated Agreement of Limited Partnership of Crescent Real Estate Equities
Limited Partnership, dated as of February 19, 1998, the Second Amendment to the
Second Amended and Restated Agreement of Limited Partnership of Crescent Real
Estate Equities Limited Partnership, dated as of March 2, 1998, the Third
Amendment to the Second Amended and Restated Agreement of Limited Partnership of
Crescent Real Estate Equities Limited Partnership, dated as of April 27, 1998,
the Fourth Amendment to the Second Amended and Restated Agreement of Limited
Partnership of Crescent Real Estate Equities Limited Partnership, dated as of
June 1, 1998, the Fifth Amendment to the Second Amended and Restated Agreement
of Limited Partnership of Crescent Real Estate Equities Limited Partnership,
dated as of June 30, 1998, the Sixth Amendment to the Second Amended and
Restated Agreement of Limited Partnership of Crescent Real Estate Equities
Limited Partnership, dated as of July 15, 1998, the Seventh Amendment to the
Second Amended and Restated Agreement of Limited Partnership of Crescent Real
Estate Equities Limited Partnership, dated as of September 30, 1998, the Eighth
Amendment to the Second Amended and Restated Agreement of Limited Partnership of
Crescent Real Estate Equities Limited Partnership, dated as of January 31, 1999,
the Ninth Amendment to the Second Amended and Restated Agreement of Limited
Partnership of Crescent Real Estate Equities Limited Partnership, dated as of
April 15, 1999, the Tenth Amendment to the Second Amended and Restated Agreement
of Limited Partnership of Crescent Real Estate Equities Limited Partnership,
dated as of May 3, 1999, the Eleventh Amendment to the Second Amended and
Restated Agreement of Limited Partnership of Crescent Real Estate Equities
Limited Partnership, dated as of June 1, 1999, the Twelfth Amendment to the
Second Amended and Restated Agreement of Limited Partnership, dated as of June
3, 1999, the Thirteenth Amendment to the Second Amended and Restated Agreement
of Limited Partnership, dated as of December 31, 1999, the Fourteenth Amendment
to the Second Amended and Restated Agreement of Limited Partnership, dated as of
January 31, 2000, the Fifteenth Amendment to the Second Amended and Restated
Agreement of Limited Partnership, dated as of March 1, 2000, the Sixteenth
Amendment to the Second Amended and Restated Agreement of Limited Partnership,
dated as of July 31, 2001, the Seventeenth Amendment to the Second Amended and
Restated Agreement of Limited Partnership, dated as of December 31, 2001, the
Eighteenth Amendment to the Second Amended and Restated Agreement of Limited
Partnership, dated as of April 26, 2002, the Nineteenth Amendment to the Second
Amended and Restated Agreement of Limited Partnership, dated as of May 17, 2002,
and the Twentieth Amendment to the Second Amended and Restated Agreement of
Limited Partnership, dated as of January 1, 2003 (hereinafter referred to
collectively as the "Second Amended Agreement");

         WHEREAS, the General Partner desires to amend and restate in its
entirety the Second Amended Agreement pursuant to its authority under Sections
2.4 and 14.1.B of the Second

                                      - 2 -

<PAGE>

Amended Agreement and the powers of attorney granted to the General Partner by
the Limited Partners in order to (i) combine all of the provisions of the Second
Amended Agreement into one document, and (ii) make changes to provisions of the
Second Amended Agreement in accordance with Section 14.1.B(3) of the Second
Amended Agreement;

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereto,
intending legally to be bound, hereby agree as follows:

                                   ARTICLE I
                                  DEFINED TERMS

         Except as otherwise herein expressly provided, the following terms and
phrases shall have the meanings set forth below:

         "Act" means the Delaware Revised Uniform Limited Partnership Act, as it
may be amended from time to time, and any successor to such statute.

         "Additional Funds" has the meaning set forth in Section 4.2.A hereof.

         "Additional Limited Partner" has the meaning set forth in Section 4.3
hereof.

         "Adjusted Capital Account" means the Capital Account maintained for
each Partner as of the end of each fiscal year (i) increased by any amounts
which such Partner is obligated to restore pursuant to any provision of this
Agreement or is treated as being obligated to restore pursuant to Regulations
Section 1.704-1(b)(2)(ii)(c) or is deemed to be obligated to restore pursuant to
the penultimate sentences of Regulations Sections 1.704-2(g)(1) and
1.704-2(i)(5) and (ii) decreased by the items described in Regulations Sections
1.704-1 (b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account is intended to comply with
the provisions of Regulations Section 1.704-l(b)(2)(ii)(d) and shall be
interpreted consistently therewith.

         "Adjusted Capital Account Deficit" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Adjusted Capital Account as of
the end of the relevant fiscal year.

         "Adjusted Property" means any property the Carrying Value of which has
been adjusted pursuant to Section 1.D of Exhibit B hereof.

         "Adjustment Date" has the meaning set forth in Section 4.2.A(2) hereof.

         "Affiliate" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by or under common control with such Person.

         "Agreement" means this Third Amended and Restated Agreement of Limited
Partnership, as it may be amended, supplemented or restated from time to time.

                                     - 3 -

<PAGE>

         "Amstar" means Amstar Continental Plaza Limited Partnership, a Colorado
limited partnership.

         "Amstar Required Cash Payment" means the "Required Cash Payment" as
defined in Article III of that certain Contribution Agreement dated February 8,
1994 between Amstar and the Partnership.

         "Assignee" means a Person to whom a Limited Partnership Interest has
been transferred in a manner permitted under this Agreement, but who has not
become a Substituted Limited Partner, and who has the rights set forth in
Sections 8.6, 11.3.A and 11.5.

         "Available Cash" means, with respect to any period for which such
calculation is being made, (i) the sum of:

                  A.       the Partnership's Net Income or Net Loss, as the case
         may be, for such period (without regard to adjustments resulting from
         allocations described in Section 1.A-E of Exhibit C),

                  B.       Depreciation and all other noncash charges deducted
         in determining Net Income or Net Loss for such period,

                  C.       the amount of any reduction in reserves of the
         Partnership referred to in clause (ii)(f) below (including, without
         limitation, reductions resulting because the General Partner determines
         such amounts are no longer necessary),

                  D.       the excess of proceeds from the sale, exchange,
         disposition, or refinancing of Partnership property during such period
         over the gain (or loss, as the case may be) recognized from such sale,
         exchange, disposition, or refinancing during such period (excluding
         Terminating Capital Transactions) as such items of gain or loss are
         determined in accordance with Section 1.B of Exhibit B, and

                  E.       all other cash received by the Partnership for such
         period, including cash contributions and loan proceeds (other than
         refinancing proceeds described in (d) above), that was not included in
         determining Net Income or Net Loss for such period;

         (ii)     less the sum of:

                  (a)      all principal debt payments made during such period
         by the Partnership,

                  (b)      capital expenditures made by the Partnership during
         such period,

                  (c)      investments in any entity (including loans made
         thereto) to the extent that such investments are not otherwise
         described in clauses (ii)(a) or (b),

                  (d)      all other expenditures and payments not deducted in
         determining Net Income or Net Loss for such period,

                                     - 4 -

<PAGE>

                  (e)      any amount included in determining Net Income or Net
         Loss for such period that was not received by the Partnership during
         such period, and

                  (f)      the amount of any increase in reserves (including,
         without limitation, working capital accounts or other cash or similar
         balances) established during such period which the General Partner
         determines are necessary or appropriate in its sole and absolute
         discretion.

         Notwithstanding the foregoing, Available Cash shall not include any
cash received or reductions in reserves, or take into account any disbursements
made or reserves established, after commencement of the dissolution and
liquidation of the Partnership.

         "Bankruptcy" of a Person shall be deemed to have occurred when (a) the
Person commences a voluntary proceeding seeking liquidation, reorganization or
other relief under any bankruptcy, insolvency or other similar law now or
hereafter in effect, (b) the Person is adjudged as bankrupt or insolvent, or a
final and nonappealable order for relief under any bankruptcy, insolvency or
similar law now or hereafter in effect has been entered against the Person, (c)
the Person executes and delivers a general assignment for the benefit of the
Person's creditors, (d) the Person files an answer or other pleading admitting
or failing to contest the material allegations of a petition filed against the
Person in any proceeding of the nature described in clause (b) above, (e) the
Person seeks, consents to or acquiesces in the appointment of a trustee,
receiver or liquidator for the Person or for all or any substantial part of the
Person's properties, (f) any proceeding seeking liquidation, reorganization or
other relief under any bankruptcy, insolvency or other similar law now or
hereafter in effect has not been dismissed within one hundred twenty (120) days
after the commencement thereof, (g) the appointment without the Person's consent
or acquiescence of a trustee, receiver or liquidator has not been vacated or
stayed within ninety (90) days of such appointment, or (h) an appointment
referred to in clause (g) is not vacated within ninety (90) days after the
expiration of any such stay.

         "Book-Tax Disparities" means, with respect to any item of Contributed
Property or Adjusted Property, as of the date of any determination, the
difference between the Carrying Value of such Contributed Property or Adjusted
Property and the adjusted basis thereof for federal income tax purposes as of
such date. A Partner's share of the Partnership's Book-Tax Disparities in all of
its Contributed Property and Adjusted Property will be reflected by the
difference between such Partner's Capital Account balance as maintained pursuant
to Exhibit B and the hypothetical balance of such Partner's Capital Account
computed as if it had been maintained strictly in accordance with federal income
tax accounting principles.

         "Business Day" means any day except a Saturday, Sunday or other day on
which banking institutions in the State of New York are authorized or obligated
by law or executive order to close.

         "Canyon Contribution Agreement" means that certain Contribution
Agreement, dated July 26, 1996, by and between the Partnership and Canyon Ranch.

         "Canyon Ranch" means Canyon Ranch, Inc. an Arizona corporation.

                                     - 5 -

<PAGE>

         "Canyon Ranch Property" means the property and assets specified in the
Canyon Contribution Agreement.

         "Capital Account" means the capital account maintained for a Partner
pursuant to Exhibit B hereof.

         "Capital Contribution" means, with respect to any Partner, any cash,
cash equivalents or the Net Asset Value of Contributed Property which such
Partner contributes to the Partnership.

         "Carrying Value" means (i) with respect to a Contributed Property or
Adjusted Property, the Gross Asset Value of such property reduced (but not below
zero) by all Depreciation with respect to such property charged to the Partners'
Capital Accounts and (ii) with respect to any other Partnership property, the
adjusted basis of such property for federal income tax purposes, all as of the
time of determination. The Carrying Value of any property shall be adjusted from
time to time in accordance with Exhibit B hereof, and to reflect changes,
additions or other adjustments to the Carrying Value for improvements and
dispositions and acquisitions of Partnership properties, as deemed appropriate
by the General Partner.

         "Cash Amount" means an amount of cash equal to the Value, as of the
date of receipt by Crescent Equities of a Notice of Exchange, of the REIT Shares
Amount. Notwithstanding the foregoing, if the Crescent Group raises the Cash
Amount through an offering of securities, borrowings or otherwise, the Cash
Amount shall be reduced by an amount equal to the expenses incurred by the
Crescent Group in connection with raising such funds (to the extent that such
expenses are allocable to funds used to pay the Cash Amount); provided, however,
that the total reduction of the Cash Amount for such expenses shall not exceed
five percent (5%) of the total Cash Amount as determined prior to reduction for
such expenses.

         "Certificate" means the Certificate of Limited Partnership of the
Partnership filed in the office of the Secretary of State of Delaware, as
amended from time to time in accordance with the terms hereof and the Act.

         "Code" means the Internal Revenue Code of 1986, as amended and in
effect from time to time, as interpreted by the applicable regulations
thereunder. Any reference herein to a specific section or sections of the Code
shall be deemed to include a reference to any corresponding provision of future
law.

         "Consultant Unit Agreement" means that certain Consultant Unit
Agreement, dated August 15, 1995, by and between Greenbrier and the Partnership.

         "Contributed Funds" has the meaning set forth in Section 4.2.A(2)
hereof

         "Contributed Property" means each property or other asset (but
excluding cash), in such form as may be permitted by the Act, contributed to the
Partnership. Once the Carrying Value of a Contributed Property is adjusted
pursuant to Section 1.D of Exhibit B hereof, such property shall no longer
constitute a Contributed Property for purposes of Exhibit B hereof, but shall be
deemed an Adjusted Property for such purposes.

         "Contribution Date" has the meaning set forth in Section 4.3 hereof.

                                     - 6 -

<PAGE>

         "Crescent Equities" means Crescent Real Estate Equities Company, a
Texas real estate investment trust.

         "Crescent Group" means Crescent Equities, the General Partner, and any
wholly owned subsidiaries of Crescent Equities or the General Partner.

         "Crescent Loan" has the meaning set forth in Section 4.2.A(1) hereof.

         "Declaration of Trust" means the Declaration of Trust of Crescent
Equities, as it may be amended, supplemented or restated from time to time.

         "Deemed Partnership Interest Value" as of any date shall mean, with
respect to a Partner, the product of (i) the Deemed Value of the Partnership as
of such date, multiplied by (ii) such Partner's Partnership Interest as of such
date.

         "Deemed Value of the Partnership" as of any date shall mean the
quotient of the following amounts:

         (i)      the product of (a) the Value of a REIT Share as of such date,
multiplied by (b) the total number of REIT Shares issued and outstanding as of
the close of business on such date (excluding treasury shares and, for purposes
of Section 4.2 hereof, excluding any REIT Shares issued in exchange for
Contributed Funds to be contributed to the Partnership by Crescent Equities on
the Adjustment Date for which the calculation is being made), divided by

         (ii)     the aggregate Partnership Interest of Crescent Equities and
the General Partner as of such date.

         "Demand Notice" has the meaning set forth in Section 16.2 hereof.

         "Depreciation" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization, or other cost recovery deduction
allowable with respect to an asset for such year, except that if the Carrying
Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of such year or other period, Depreciation shall be an
amount which bears the same ratio to such beginning Carrying Value as the
federal income tax depreciation, amortization, or other cost recovery deduction
for such year bears to such beginning adjusted tax basis; provided, however,
that if the federal income tax depreciation, amortization, or other cost
recovery deduction for such year is zero, Depreciation shall be determined with
reference to such beginning Carrying Value using any reasonable method selected
by the General Partner.

         "Employee Limited Partner" has the meaning set forth in Section 4.7.C
hereof.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor statute.

         "Exchange Factor" means, effective as of March 20, 1997 (the record
date on which the two-for-one stock split of Crescent Equities common shares was
effected in the form of a 100% share dividend), 2.0, provided that in the event
that Crescent Equities (i) pays a dividend on its

                                     - 7 -

<PAGE>

outstanding REIT Shares in REIT Shares or makes a distribution to all holders of
its outstanding REIT Shares in REIT Shares, (ii) subdivides its outstanding REIT
Shares, or (iii) combines its outstanding REIT Shares into a smaller number of
REIT Shares, the Exchange Factor shall be adjusted by multiplying the Exchange
Factor by a fraction, the numerator of which shall be the number of REIT Shares
that would be issued and outstanding on the record date for such event if such
dividend, distribution, subdivision or combination had occurred as of such date,
and the denominator of which shall be the actual number of REIT Shares issued
and outstanding on the record date for such dividend, distribution, subdivision
or combination. Any adjustment of the Exchange Factor shall become effective
immediately after the effective date of such event retroactive to the record
date for such event; provided, however, that if Crescent Equities receives a
Notice of Exchange after the record date, but prior to the effective date, of
any such event, the Exchange Factor shall be determined as if Crescent Equities
had received the Notice of Exchange immediately prior to the record date for
such event. From the date of inception of the Partnership, until March 26, 1997,
the Exchange Factor was 1.0.

         "Exchange Right" has the meaning set forth in Section 8.6 hereof.

         "Exchanging Person" has the meaning set forth in Section 8.6.A hereof.

         "Falcon Point Property" means the Falcon Point single family
residential development located in Houston, Texas.

         "First Amended Agreement" has the meaning set forth in the Recitals to
this Agreement.

         "Funding Loan Proceeds" means the net cash proceeds received by the
Crescent Group in Connection with any Funding Loan, after deduction of all costs
and expenses incurred by the Crescent Group in connection with such Funding
Loan.

         "Funding Loan(s)" means any borrowing or refinancing of borrowings by
or on behalf of the Crescent Group from any lender for the purpose of causing
Crescent Equities to advance the proceeds thereof to the Partnership as a loan
pursuant to Section 4.2.A(1) hereof.

         "General Partner" means Crescent Real Estate Equities, Ltd. (formerly
known as CRE General Partner, Inc.), a Delaware corporation which is a wholly
owned subsidiary of Crescent Equities, its duly admitted successors and assigns
and any other Person who is a General Partner at the time of reference thereto.

         "General Partnership Interest" means the Partnership Interest held by
the General Partner.

         "Greenbrier" means Texas Greenbrier Associates, Inc., a Texas
corporation.

         "Greenbrier Agreement" means that certain Agreement of Acceptance of
the Partnership Agreement executed by Greenbrier and delivered to the General
Partner.

         "Gross Asset Value" of any Contributed Property or Properties
contributed by a Partner to the Partnership in connection with the execution of
the First Amended Agreement means the Net Asset Value of such Contributed
Property or Properties as set forth in Exhibit A thereof, increased by any
liabilities either treated as assumed by the Partnership upon the contribution
of

                                     - 8 -
<PAGE>

such property or properties or to which such property or properties are treated
as subject when contributed pursuant to the provisions of Section 752 of the
Code. The Gross Asset Value of any other Contributed Property or Properties
means the fair market value of such property or properties at the time of
contribution as determined by the General Partner using such reasonable method
of valuation as it may adopt. The General Partner shall, in its sole and
absolute discretion, use such method as it deems reasonable and appropriate to
allocate the aggregate of the Gross Asset Value of Contributed Properties
contributed in a single or integrated transaction among the separate properties
on a basis proportional to their respective fair market values.

         "HA Development Corporation" means Houston Area Development Corp., a
Texas corporation that will own the Falcon Point Property and the Huntington
Woods Property.

         "Huntington Woods Property" means the Huntington Woods single family
residential development located in Houston, Texas.

         "Incapacity" or "Incapacitated" means, (i) as to any individual
Partner, death, total physical disability or entry of an order by a court of
competent jurisdiction adjudicating him incompetent to manage his Person or his
estate; (ii) as to any corporation which is a Partner, the filing of a
certificate of dissolution, or its equivalent, for the corporation or the
revocation of its charter; (iii) as to any partnership which is a Partner, the
dissolution and commencement of winding up of the partnership; (iv) as to any
estate which is a Partner, the distribution by the fiduciary of the estate's
entire interest in the Partnership; (v) as to any trustee of a trust which is a
Partner, the termination of the trust (but not the substitution of a new
trustee); or (vi) as to any Partner, the Bankruptcy of such Partner.

         "Indemnitee" means (i) any Person made a party to a proceeding by
reason of his status as (A) a member of the Crescent Group, (B) a director or
officer of the Partnership or of a member of the Crescent Group, or (C) an
attorney-in-fact of the General Partner acting pursuant to Section 7.9.C, and
(ii) such other Persons (including Affiliates of the General Partner or the
Partnership) as the General Partner may designate from time to time, in its sole
and absolute discretion.

         "Initial Agreement" has the meaning set forth in the Recitals to this
Agreement.

         "IRS" means the Internal Revenue Service, which administers the
internal revenue laws of the United States.

         "Lien" means any liens, security interests, mortgages, deeds of trust,
charges, claims, encumbrances, pledges, options, rights of first offer or first
refusal and any other rights or interests of any kind or nature, actual or
contingent, or other similar encumbrances of any nature whatsoever.

         "Limited Partner" means any Person named as a Limited Partner in
Exhibit A attached hereto, as such Exhibit may be amended from time to time, or
any Substituted Limited Partner, Additional Limited Partner, or Employee Limited
Partner, in such Person's capacity as a Limited Partner in the Partnership.

                                     - 9 -
<PAGE>

         "Limited Partnership Interest" means a Partnership Interest of a
Limited Partner in the Partnership and includes any and all benefits to which
the holder of such a Partnership Interest may be entitled as provided in this
Agreement, together with all obligations of such Person to comply with the terms
and provisions of this Agreement.

         "Liquidating Event(s)" has the meaning set forth in Section 13.1
hereof.

         "Liquidation Preferences" has the meaning set forth in Section 6.3.B
hereof.

         "Liquidator" has the meaning set forth in Section 13.2 hereof.

         "Management Company" means Crescent Development Management Corp., a
Texas corporation that will provide management services to the Mira Vista
Property, the Falcon Point Property, the Huntington Woods Property, and certain
other properties that may be acquired by the Partnership in the future. The
Partnership will own one (1) share of voting common stock and nine thousand
eight hundred and ninety-nine (9,899) shares of nonvoting common stock of the
Management Company.

         "Mira Vista Property" means the single family residential development
located in Fort Worth, Texas, and a ninety-eight percent (98%) interest in the
limited liability company that owns the adjacent Mira Visa Golf Club.

         "MV Development Corporation" means Mira Vista Development Corp., a
Texas corporation that will own the Mira Vista Property.

         "Net Asset Value" in the case of any Contributed Property contributed
by a Partner to the Partnership in connection with the execution of this
Agreement shall be determined on an aggregate basis with respect to all of the
properties contributed by such Partner to the Partnership, and means the
aggregate Gross Asset Values of such properties, reduced by any liabilities
either treated as assumed by the Partnership upon the contribution of such
properties or to which such properties are treated as subject when contributed
pursuant to the provisions of Section 752 of the Code. The aggregate Net Asset
Values of the properties contributed by each Partner to the Partnership in
connection with the execution of the First Amended Agreement are set forth in
Exhibit A thereof. In the case of any other Contributed Property and as of the
time of its contribution to the Partnership, Net Asset Value means the Gross
Asset Value of such property, reduced by any liabilities either treated as
assumed by the Partnership upon such contribution or to which such property is
treated as subject when contributed pursuant to Section 752 of the Code.

         "Net Income" means, for any taxable period, the excess, if any, of the
Partnership's items of income and gain for such taxable period over the
Partnership's items of loss and deduction for such taxable period. The items
included in the calculation of Net Income shall be determined in accordance with
Section 1.B of Exhibit B. Once an item of income, gain, loss or deduction that
has been included in the initial computation of Net Income is subjected to the
special allocation rules in Exhibit C, Net Income or the resulting Net Loss,
whichever the case may be, shall be recomputed without regard to such item.

                                     - 10 -
<PAGE>

         "Net Loss" means, for any taxable period, the excess, if any, of the
Partnership's items of loss and deduction for such taxable period over the
Partnership's items of income and gain for such taxable period. The items
included in the calculation of Net Loss shall be determined in accordance with
Section 1.B of Exhibit B. Once an item of income, gain, loss or deduction that
has been included in the initial computation of Net Loss is subjected to the
special allocation rules in Exhibit C, Net Loss or the resulting Net Income,
whichever the case may be, shall be recomputed without regard to such items.

         "New Interests" has the meaning set forth in Section 8.7.C hereof.

         "New Securities" has the meaning set forth in Section 8.7.C hereof.

         "Nonrecourse Built-in Gain" means, with respect to any Contributed
Properties or Adjusted Properties that are subject to a mortgage or negative
pledge securing a Nonrecourse Liability, the amount of any taxable gain that
would be allocated to the Partners pursuant to Section 2.B of Exhibit C if such
properties were disposed of in a taxable transaction in full satisfaction of
such liabilities and for no other consideration.

          "Nonrecourse Deductions" has the meaning set forth in Regulations
Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a fiscal
year shall be determined in accordance with the rules of Regulations Section
1.704-2(c).

         "Nonrecourse Liability" has the meaning set forth in Regulations
Section 1.752-1(a)(2).

         "Non-Unitholder Partnership Interest" means a Limited Partnership
Interest that does not have Partnership Units associated therewith.

         "Notice of Exchange" means the Notice of Exchange substantially in the
form of Exhibit D to this Agreement.

         "Partner" means a General Partner or a Limited Partner, and "Partners"
means the General Partner and the Limited Partners.

         "Partner Minimum Gain" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i)(3).

         "Partner Nonrecourse Debt" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

         "Partner Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(i)(2), and the amount of Partner Nonrecourse
Deductions with respect to a Partner Nonrecourse Debt for a Partnership year
shall be determined in accordance with the rules of Regulations Section
1.704-2(i)(2).

         "Partnership" means the limited partnership formed under the Act and
pursuant to this Agreement.

                                     - 11 -
<PAGE>

         "Partnership Interest" means an ownership interest in the Partnership
representing a Capital Contribution by either a Limited Partner or the General
Partner and includes any and all benefits to which the holder of such a
Partnership Interest may be entitled as provided in this Agreement, together
with all obligations of such Person to comply with the terms and provisions of
this Agreement. The Partnership Interest of each Partner shall be expressed as a
percentage of the total Partnership Interests owned by all of the Partners, as
specified in Exhibit A attached hereto, as such Exhibit may be amended from time
to time. All Partnership Interests shall be calculated to the nearest one
millionth of one percent (0.000000%), with amounts equal to or greater than
0.0000005% being rounded up to the next one millionth of one percent, and with
amounts less than 0.0000005% being rounded down to the next one millionth of one
percent.

         "Partnership Minimum Gain" has the meaning set forth in Regulations
Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as
any net increase or decrease in Partnership Minimum Gain, for a fiscal year
shall be determined in accordance with the rules of Regulations Section
1.704-2(d).

         "Partnership Record Date" means the record date established by the
General Partner for the distribution of Available Cash pursuant to Section 5.2
hereof, which record date shall be the same as the record date established by
Crescent Equities or otherwise pursuant to the Texas Act for a distribution to
its shareholders of some or all of its portion of such distribution.

         "Partnership Unit" means a unit representing the Exchange Rights
associated with the Partnership Interests issued to certain of the Limited
Partners pursuant to the terms of this Agreement, which unit may be exchanged
for REIT Shares or cash through the exercise of the Exchange Rights set forth in
Sections 8.6. The number of Partnership Units of each Limited Partner shall be
as specified in Exhibit A attached hereto, as such Exhibit may be amended from
time to time. The Partnership Units may be evidenced by certificates as set
forth in Section 4.1.C hereof.

         "Person" means an individual or a corporation, partnership, trust,
unincorporated organization, association or other entity.

         "Qualified Individual" has the meaning set forth in Section 16.2
hereof.

         "RainAm Investors" means RainAm Investment Properties Ltd., a Texas
limited partnership.

         "Recapture Income" means any gain recognized by the Partnership
(computed without regard to any adjustment required by Section 734 or Section
743 of the Code) upon the disposition of any property or asset of the
Partnership, which gain is characterized as ordinary income because it
represents the recapture of deductions previously taken with respect to such
property or asset.

         "Regulations" means the income tax regulations promulgated under the
Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).

         "Regulatory Allocations" has the meaning set forth in Section 1.H of
Exhibit C hereof.

                                     - 12 -
<PAGE>

         "REIT" means a real estate investment trust under Sections 856 through
860 of the Code.

         "REIT Share" means a common share of beneficial interest of Crescent
Equities.

         "REIT Shares Amount" means a number of REIT Shares equal to the product
of (i) the number of Partnership Units to be exchanged by an Exchanging Person
pursuant to Section 8.6, multiplied by (ii) the Exchange Factor; provided that
in the event Crescent Equities issues to all holders of REIT Shares rights,
options, warrants or convertible or exchangeable securities entitling the
shareholders to subscribe for or purchase REIT Shares, or any other securities
or property (collectively, the "rights"), then the REIT Shares Amount shall also
include such rights that a holder of that number of REIT Shares would be
entitled to receive.

         "Representative" has the meaning set forth in Section 7.12 hereof.

         "Requesting Party" has the meaning set forth in Section 16.2 hereof.

         "Residual Gain" or "Residual Loss" means any item of gain or loss, as
the case may be, of the Partnership recognized for federal income tax purposes
resulting from a sale, exchange or other disposition of Contributed Property or
Adjusted Property, to the extent such item of gain or loss is not allocable
pursuant to Section 2.B.1(a) or 2.B.2(a) of Exhibit C to eliminate Book-Tax
Disparities.

         "SEC" means the United States Securities and Exchange Commission.

         "Second Amended Agreement" has the meaning set forth in the Recitals to
this Agreement.

         "Securities Act" means the Securities Act of 1933, as amended, or any
successor statute.

         "Series A Preferred Partnership Units" means the preferred equity
ownership interests in the Partnership issued to Crescent Equities by the
Partnership in connection with the issuance by Crescent Equities of the Series A
Preferred Shares.

         "Series A Preferred Shares" means the 6-3/4% Series A Convertible
Cumulative Preferred Shares issued by Crescent Equities.

         "Series B Redeemable Preferred Partnership Units" means the preferred
equity ownership interests in the Partnership issued to Crescent Equities by the
Partnership in connection with the issuance by Crescent Equities of the Series B
Redeemable Preferred Shares.

         "Series B Redeemable Preferred Shares" means the Series B Cumulative
Redeemable Preferred Shares issued by Crescent Equities.

         "Sonoma" means Rahn Sonoma, Ltd., a Florida limited partnership.

         "Sonoma Contribution Agreement" means that certain Contribution
Agreement, dated September 13, 1996, by and among Crescent Real Estate Equities,
Inc., the Partnership, Sonoma, Peter H. Roberts and John H. Anderson.

                                     - 13 -
<PAGE>

         "Sonoma Property" means the property and assets specified in the Sonoma
Contribution Agreement.

         "Specified Exchange Date" means the tenth Business Day after receipt by
Crescent Equities of a Notice of Exchange, unless applicable law requires a
later date. Notwithstanding the foregoing, if Crescent Equities elects to pay
all or any portion of the consideration to an Exchanging Person in cash, the
Specified Exchange Date may be extended for an additional period to the extent
required for the Crescent Group to raise the funds required to pay the cash
consideration to the Exchanging Person.

         "Stock Incentive Plan" means The 1994 Crescent Real Estate Equities,
Inc. Stock Incentive Plan, as amended from time to time, or any other stock
incentive plan adopted by Crescent Equities.

         "Subsidiary Development Corporation(s)" means MV Development
Corporation and HA Development Corporation, and either of them.

         "Substituted Limited Partner" means a Person who is admitted as a
Limited Partner to the Partnership pursuant to Section 11.4.

         "Terminating Capital Transaction" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

         "Texas Act" means the Texas Real Estate Investment Trust Act, as the
same may be amended from time to time, or any successor statute thereto.

         "Trading Day" means a day on which the principal national securities
exchange on which the REIT Shares are listed or admitted to trading is open for
the transaction of business or, if the REIT Shares are not listed or admitted to
trading, means a Business Day.

         "Transaction" has the meaning set forth in Section 11.2.B hereof.

         "Unrealized Gain" attributable to any item of Partnership property
means, as of any date of determination, the excess, if any, of (i) the fair
market value of such property (as determined under Exhibit B hereof) as of such
date, over (ii) the Carrying Value of such property (prior to any adjustment to
be made on such date pursuant to Exhibit B hereof) as of such date.

         "Unrealized Loss" attributable to any item of Partnership property
means, as of any date of determination, the excess, if any, of (i) the Carrying
Value of such property (prior to any adjustment to be made on such date pursuant
to Exhibit B hereof) as of such date, over (ii) the fair market value of such
property (as determined under Exhibit B hereof) as of such date.

         "Value" means, with respect to a REIT Share as of any date, the average
of the "closing price" for the ten (10) consecutive Trading Days immediately
preceding such date (except as provided to the contrary in Sections 4.2, 4.3 and
4.6 hereof). The "closing price" for each such Trading Day means the last sale
price, regular way on such day, or, if no such sale takes place on

                                     - 14 -
<PAGE>

that day, the average of the closing bid and asked prices on that day, regular
way, in either case as reported on the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on the
New York Stock Exchange, or if the REIT Shares are not so listed or admitted to
trading, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
(including the National Market System of the National Association of Securities
Dealers, Inc. Automated Quotation System) on which the REIT Shares are listed or
admitted to trading or, if the REIT Shares are not so listed or admitted to
trading, the last quoted price or, if not quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System or, if such
system is no longer in use, the principal automated quotation system then in use
or, if the REIT Shares are not so quoted by any such system, the average of the
closing bid and asked prices as furnished by a professional market maker
selected by the board of directors of the General Partner making a market in the
REIT Shares, or, if there is no such market maker or such closing prices
otherwise are not available, the fair market value of the REIT Shares as of such
day, as determined by the board of directors of the General Partner in its sole
discretion. In the event Crescent Equities issues to all holders of REIT Shares
rights, options, warrants or convertible or exchangeable securities entitling
the shareholders to subscribe for or purchase REIT Shares or any other property,
then the Value of a REIT Share shall include the value of such rights, as
determined by the board of directors of the General Partner acting in good faith
on the basis of such quotations and other information as it considers, in its
reasonable judgment, appropriate.

                                   ARTICLE II
                             ORGANIZATIONAL MATTERS

         Section 2.1       Continuation of Partnership

         The Partners hereby continue the Partnership as a limited partnership
pursuant to the provisions of the Act and upon the terms and conditions set
forth in this Agreement. Except as expressly provided herein to the contrary,
the rights and obligations of the Partners and the administration and
termination of the Partnership shall be governed by the Act. The Partnership
Interest of each Partner shall be personal property for all purposes.

         Section 2.2       Name

         The name of the Partnership is Crescent Real Estate Equities Limited
Partnership. The Partnership's business may be conducted under any other name or
names deemed advisable by the General Partner, including the name of the General
Partner or any Affiliate thereof. The words "Limited Partnership," "L.P." "Ltd."
or similar words or letters shall be included in the Partnership's name where
necessary for purposes of complying with the laws of any jurisdiction that so
requires. The General Partner in its sole and absolute discretion may change the
name of the Partnership at any time and from time to time and shall notify the
Limited Partners of such change in the regular communication to the Limited
Partners next succeeding the effectiveness of the change of name.

                                     - 15 -
<PAGE>

         Section 2.3       Principal Office and Registered Agent

         The principal office of the Partnership is 777 Main Street, Suite 2100,
Fort Worth, Texas 76102, or such other place as the General Partner may from
time to time designate. The registered agent of the Partnership is The
Prentice-Hall Corporation System, Inc., located at 1013 Centre Road, in the city
of Wilmington, County of New Castle, Delaware 19805, or such other Person as the
General Partner may from time to time designate. The Partnership may maintain
offices at such other place or places within or outside the State of Delaware as
the General Partner deems advisable.

         Section 2.4       Power of Attorney

                  A.       Each Limited Partner constitutes and appoints the
General Partner, any Liquidator, and authorized officers and attorneys-in-fact
of each, and each of those acting singly, in each case with full power of
substitution, as its true and lawful agent and attorney-in-fact, with full power
and authority in its name, place and stead to:

                  (1)      execute, swear to, acknowledge, deliver, file and
                           record in the appropriate public offices (a) all
                           certificates, documents and other instruments
                           (including, without limitation, the Certificate and
                           all amendments or restatements of this Agreement or
                           the Certificate) that the General Partner or the
                           Liquidator deems appropriate or necessary to qualify
                           or continue the existence or qualification of the
                           Partnership as a limited partnership (or a
                           partnership in which the limited partners have
                           limited liability) in the State of Delaware and in
                           all other jurisdictions in which the Partnership may
                           conduct business or own property; (b) all instruments
                           that the General Partner deems appropriate or
                           necessary to reflect any amendment, change,
                           modification or restatement of this Agreement made in
                           accordance with its terms; (c) all conveyances and
                           other instruments or documents that the General
                           Partner or Liquidator, as the case may be, deems
                           appropriate or necessary to reflect the dissolution
                           and liquidation of the Partnership pursuant to the
                           terms of this Agreement, including, without
                           limitation, a certificate of cancellation; and (d)
                           all instruments relating to the Capital Contribution
                           of any Partner or the admission, withdrawal, removal
                           or substitution of any Partner made pursuant to the
                           terms of this Agreement; and

                  (2)      execute, swear to, acknowledge and file all ballots,
                           consents, approvals, waivers, certificates and other
                           instruments appropriate or necessary, in the sole and
                           absolute discretion of the General Partner, to make,
                           evidence, give, confirm or ratify any vote, consent,
                           approval, agreement or other action which is made or
                           given by the Partners hereunder or is consistent with
                           the terms of this Agreement or appropriate or
                           necessary, in the sole discretion of the General
                           Partner, to effectuate the terms or intent of this
                           Agreement.

                                     - 16 -
<PAGE>

Nothing contained herein shall be construed as authorizing the General Partner
to amend this Agreement except in accordance with Article 14 hereof or as may be
otherwise expressly provided for in this Agreement.

                  B.       The foregoing power of attorney is hereby declared to
be irrevocable and a power coupled with an interest, in recognition of the fact
that each of the Partners will be relying upon the power of the General Partner
to act as contemplated by this Agreement in any filing or other action by it on
behalf of the Partnership, and it shall survive and not be affected by the
subsequent Incapacity of any Limited Partner or the transfer of all or any
portion of such Limited Partner's Partnership Interest and shall extend to such
Limited Partner's heirs, successors, assigns and personal representatives. Each
such Limited Partner hereby agrees to be bound by any representation made by the
General Partner, acting in good faith pursuant to such power of attorney; and
each such Limited Partner hereby waives any and all defenses which may be
available to contest, negate or disaffirm the action of the General Partner,
taken in good faith under such power of attorney. Each Limited Partner shall
execute and deliver to the General Partner or the Liquidator, within fifteen
(15) days after receipt of the General Partner's or Liquidator's request
therefor, such further designation, powers of attorney and other instruments as
the General Partner or the Liquidator, as the case may be, deems necessary to
effectuate this Agreement and the purposes of the Partnership.

         Section 2.5       Term

         The term of the Partnership commenced on February 9, 1994, and shall
continue until December 3 1, 2093, unless it is dissolved sooner pursuant to the
provisions of Article 13 or as otherwise provided by law.

                                   ARTICLE III
                                     PURPOSE

         Section 3.1       Purpose and Business

         The purpose and nature of the business to be conducted by the
Partnership is (i) to conduct any business that may be lawfully conducted by a
limited partnership organized pursuant to the Act, including, without
limitation, to acquire, hold, own, develop, construct, improve, maintain,
operate, sell, lease, transfer, encumber, convey, exchange, and otherwise
dispose of or deal with real and personal property of all kinds; to acquire
stock ownership interests in and to exercise all of the powers of a stockholder
in the Subsidiary Development Corporations and the Management Company; (ii) to
enter into any partnership, joint venture or other similar arrangement to engage
in any of the foregoing or the ownership of interests in any entity engaged in
any of the foregoing; and to exercise all of the powers of an owner in any such
entity; and (iii) to do anything necessary, appropriate, proper, advisable,
desirable, convenient or incidental to the foregoing; provided, however, that
such business shall be limited to and conducted in such a manner as to permit
Crescent Equities at all times to qualify as a REIT, unless Crescent Equities
voluntarily terminates its REIT status pursuant to its Declaration of Trust. In
connection with the foregoing, and without limiting Crescent Equities' right in
its sole discretion to cease qualifying as a REIT, the Partners acknowledge that
Crescent Equities'

                                     - 17 -
<PAGE>

current status as a REIT inures to the benefit of all the Partners and not
solely the Crescent Group.

         Section 3.2       Powers

         Subject to all of the terms, covenants, conditions and limitations
contained in this Agreement and any other agreement entered into by the
Partnership, the Partnership shall have full power and authority to do any and
all acts and things necessary, appropriate, proper, advisable, desirable,
incidental to or convenient for the furtherance and accomplishment of the
purposes and business described herein and for the protection and benefit of the
Partnership, including, without limitation, full power and authority, directly
or through its ownership interest in other entities, to enter into, perform and
carry out contracts of any kind, borrow money and issue evidences of
indebtedness, whether or not secured by mortgage, deed of trust, pledge or other
lien, acquire and develop real property, and lease, sell, transfer or otherwise
dispose of real property; provided, however, that the Partnership shall not
take, or refrain from taking, any action which, in the judgment of General
Partner, in its sole and absolute discretion, (i) could adversely affect the
ability of Crescent Equities to achieve or maintain qualification as a REIT,
(ii) could subject Crescent Equities to any additional taxes under Section 857
or Section 4981 of the Code, or (iii) could violate any law or regulation of any
governmental body or agency having jurisdiction over Crescent Equities or its
securities, unless such action (or inaction) shall have been specifically
consented to by the General Partner in writing.

                                   ARTICLE IV
                              CAPITAL CONTRIBUTIONS

         Section 4.1       Capital Contributions of the Partners

                  A.       Each Partner listed in Exhibit A has previously made
a Capital Contribution to the Partnership as specified in the First Amended
Agreement or in the Second Amended Agreement, as the case may be, in exchange
for its Partnership Units and Partnership Interest set forth in Exhibit A.

                  B.       The Partners shall own Partnership Units in the
amounts set forth in Exhibit A and shall have Partnership Interests in the
Partnership as set forth in Exhibit A, which Partnership Units and Partnership
Interests shall be adjusted in Exhibit A from time to time by the General
Partner to the extent necessary to reflect accurately the exercise of Exchange
Rights, Capital Contributions, transfers of Partnership Interests, admissions of
Additional Limited Partners or Employee Limited Partners, or similar events.
Except as provided in Section 10.5, or as a result of directly paying any
Partnership debt, the Partners shall have no obligation to make any additional
Capital Contributions or loans to the Partnership.

                  C.       The interest of each Limited Partner in Partnership
Units may be evidenced by one or more certificates in such form as the General
Partner may from time to time prescribe. Upon surrender to the General Partner
of a certificate evidencing the ownership of Partnership Units accompanied by
proper evidence of authority to transfer, the General Partner shall cancel the
old certificate, issue a new certificate to the Person entitled thereto and
record the transaction upon its books. The transfer of Partnership Units may be
effectuated only in

                                     - 18 -
<PAGE>

connection with a transfer of a Limited Partnership Interest pursuant to the
terms of Section 8.6 or Article 11 hereof. The General Partner may issue a new
certificate or certificates in place of any certificate or certificates
previously issued, which previously-issued certificate or certificates are
alleged to have been lost, stolen or destroyed, upon the making of an affidavit
of that fact by the owner claiming the certificate or certificates to be lost,
stolen or destroyed. When issuing such new certificate or certificates, the
General Partner may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate or certificates, or its legal representative, to give the
Partnership a bond in such sum as the General Partner may direct as indemnity
against any claim that may be made against the Partnership with respect to the
certificate or certificates alleged to have been lost, stolen or destroyed.

         Section 4.2       Additional Funding

                  A.       If the General Partner determines that it is in the
best interests of the Partnership to provide for additional Partnership funds
("Additional Funds") for any Partnership purpose in excess of any other funds
determined by the General Partner to be available to the Partnership, the
General Partner (i) may cause the Partnership to obtain such funds from outside
borrowings, (ii) may cause the Partnership to obtain such funds by the admission
of Additional Limited Partners pursuant to Section 4.3 hereof, or (iii) may
elect to have Crescent Equities provide such Additional Funds to the
Partnership. On any date that Crescent Equities provides Additional Funds to the
Partnership (the "Funding Date"):

                  (1)      to the extent the General Partner elects to borrow
                           all or any portion of the Additional Funds through a
                           Funding Loan, the General Partner shall cause
                           Crescent Equities to lend (the "Crescent Loan") to
                           the Partnership the Funding Loan Proceeds on
                           comparable terms and conditions, including interest
                           rate, repayment schedule and costs and expenses, as
                           shall be applicable with respect to or incurred in
                           connection with the Funding Loan; or

                  (2)      to the extent the General Partner does not elect to
                           borrow all or any portion of the Additional Funds by
                           entering into a Funding Loan, the General Partner
                           shall cause Crescent Equities to contribute to the
                           Partnership as an additional Capital Contribution the
                           amount of the Additional Funds not loaned to the
                           Partnership as a Crescent Loan (the "Contributed
                           Funds") (hereinafter, each Funding Date on which
                           Crescent Equities so contributes Contributed Funds
                           pursuant to this subparagraph (2) is referred to as
                           an "Adjustment Date"). The Crescent Group may raise
                           such Contributed Funds through a private placement or
                           public offering of REIT Shares or otherwise. The
                           Partnership shall assume or pay the expenses,
                           including any applicable underwriting discounts
                           incurred by the Crescent Group in connection with
                           raising such Contributed Funds through a private
                           placement or public offering of its securities or
                           otherwise (i.e., Crescent Equities shall be treated
                           as contributing to the Partnership as Contributed
                           Funds the gross amount of funds raised, and the
                           Partnership shall be charged with the cost of raising
                           such funds, with

                                     - 19 -
<PAGE>

                           such cost allocated to all of the Partners in
                           accordance with Article VI of the Agreement).

                  B.       Effective on each Adjustment Date, Crescent Equities
shall receive an additional Partnership Interest (and the Partnership Interest
of each Limited Partner other than Crescent Equities shall be reduced) such
that:

                           (1)      the Partnership Interest of each Limited
Partner not owning Partnership Units (other than Crescent Equities) shall be
equal to a fraction, the numerator of which is equal to the Deemed Partnership
Interest Value of such Limited Partner (computed as of the Business Day
immediately preceding the Adjustment Date) and the denominator of which is equal
to the sum of (i) the Deemed Value of the Partnership (computed as of the
Business Day immediately preceding the Adjustment Date) and (ii) the amount of
Contributed Funds contributed by Crescent Equities on such Adjustment Date;

                           (2)      the combined Partnership Interest of
Crescent Equities and the General Partner shall be equal to a fraction, the
numerator of which is equal to the sum of (i) the combined Deemed Partnership
Interest Value of Crescent Equities and the General Partner (computed as of the
Business Day immediately preceding the Adjustment Date) and (ii) the amount of
the Contributed Funds contributed by Crescent Equities on such Adjustment Date
and the denominator of which is equal to the sum of (x) the Deemed Value of the
Partnership (computed as of the Business Day immediately preceding the
Adjustment Date) and (y) the amount of the Contributed Funds contributed by
Crescent Equities on such Adjustment Date. The Partnership Interest of the
General Partner shall remain one percent (1%), and the Partnership Interest of
Crescent Equities shall be equal to the combined Partnership Interest determined
in clause (2) of the preceding sentence, reduced by one percentage point (1%);
and

                           (3)      the Partnership Interest of each Limited
Partner owning Partnership Units shall be equal to the product of the following:
(i) the difference obtained from subtracting (x) the sum of the combined
Partnership Interest of Crescent Equities and the General Partner as calculated
in Section 4.2.B(2) hereof, plus the aggregate Non-Unitholder Partnership
Interests as calculated in Section 4.2.B(1) hereof, from (y) one hundred percent
(100%), and (ii) a fraction, the numerator of which is equal to the number of
Partnership Units held by such Limited Partner on such Adjustment Date, and the
denominator of which is equal to the total number of Partnership Units held by
all Limited Partners on such Adjustment Date.

         The General Partner shall be authorized on behalf of each of the
Partners to amend this Agreement to reflect the increase in the Partnership
Interest of Crescent Equities and the corresponding reduction of the Partnership
Interests of the other Limited Partners in accordance with the provisions of
this Section 4.2. The number of Partnership Units owned by the Limited Partners
and Assignees shall not be decreased in connection with any additional
contribution of funds to the Partnership by Crescent Equities pursuant to this
Section 4.2. Notwithstanding anything to the contrary contained in this
Agreement, for purposes of calculating the "Deemed Value of the Partnership" and
the "Deemed Partnership Interest Value" under this Section 4.2.B with respect to
cash amounts raised by Crescent in a private placement or public offering of
REIT Shares and contributed to the Partnership as Contributed Funds, the Value"
of a REIT Share shall be the gross offering price (prior to deduction of any
expenses, including without

                                     - 20 -
<PAGE>

limitation selling commissions or underwriting discounts) per REIT Share sold in
the private placement or public offering.

                  C.       The Partners hereby acknowledge and agree that any
Additional Funds provided by the Crescent Group (through Crescent Equities) to
the Partnership pursuant to this Section 4.2 may be in the form of real property
or an interest therein rather than cash. In the event that real property or an
interest therein is contributed by Crescent Equities to the Partnership pursuant
to this Section 4.2:

                           (1)      to the extent that the consideration given
in exchange for such real property or interest therein is in the form of
indebtedness, Crescent Equities shall be deemed to have made a Crescent Loan to
the Partnership pursuant to Section 4.2.A(1) hereof in an amount equal to the
amount of such indebtedness; and

                           (2)      to the extent that the consideration given
in exchange for such real property or interest therein is in the form of cash or
REIT Shares, (i) Crescent Equities shall be deemed to have contributed
Contributed Funds to the Partnership pursuant to Section 4.2.A(2) hereof in an
amount equal to the amount of cash or the Value (computed as of the Business Day
immediately preceding the date on which such real property or interest therein
is contributed to the Partnership) of the REIT Shares given as consideration,
and (ii) the Partnership Interests of the Limited Partners shall be adjusted as
set forth in Section 4.2.B hereof.

To the extent that the consideration given for such real property or interest
therein is New Securities, the provisions of Section 8.7.C hereof shall apply to
the contribution of the real property or interest therein by Crescent Equities
to the Partnership.

         Section 4.3       Issuance of Additional Partnership Interests

         At any time after the date hereof, without the consent of any Partner,
but subject to the provisions of Section 12.2 hereof, the General Partner may,
upon its determination that the issuance of additional Partnership Interests is
in the best interests of the Partnership, cause the Partnership to issue
Partnership Interests to and admit as a limited partner in the Partnership, any
Person (the "Additional Limited Partner") in exchange for the contribution by
such Person of cash and/or property in such amounts as is determined appropriate
by the General Partner to further the purposes of the Partnership under Section
3.1 hereof. In the event that an Additional Limited Partner is admitted to the
Partnership pursuant to this Section 4.3:

                  (1)      if the Additional Limited Partner does not receive
                           any Partnership Units in connection with the receipt
                           of his or its Partnership Interest, the Partnership
                           Interest of such Additional Limited Partner shall be
                           equal to a fraction, the numerator of which is equal
                           to the total dollar amount of the cash contributed
                           and/or the Net Asset Value of the property
                           contributed by the Additional Limited Partner as of
                           the date of contribution to the Partnership (the
                           "Contribution Date") and the denominator of which is
                           equal to the sum of (i) the Deemed Value of the
                           Partnership (computed as of the Business Day
                           immediately preceding the Contribution Date) and (ii)
                           the total dollar amount of the cash contributed
                           and/or the Net Asset Value

                                     - 21 -
<PAGE>

                           of the property contributed by the Additional Partner
                           as of the Contribution Date;

                  (2)      the Partnership Interest of Crescent Equities shall
                           be reduced, as of the Contribution Date, such that
                           the combined Partnership Interest of Crescent
                           Equities and the General Partner shall be equal to a
                           fraction, the numerator of which is equal to the
                           combined Deemed Partnership Interest Value of
                           Crescent Equities and the General Partner (computed
                           as of the Business Day immediately preceding the
                           Contribution Date) and the denominator of which is
                           equal to the sum of (i) the Deemed Value of the
                           Partnership (computed as of the Business Day
                           immediately preceding the Contribution Date) and (ii)
                           the total dollar amount of the cash contributed
                           and/or the Net Asset Value of the property
                           contributed by the Additional Limited Partner as of
                           the Contribution Date (with the Partnership Interest
                           of the General Partner remaining at one percent (1%),
                           and the Partnership Interest of Crescent Equities
                           equal to the combined Partnership Interest determined
                           above in this Section 4.3(2), reduced by one
                           percentage point (1%));

                  (3)      the Partnership Interest of each existing Limited
                           Partner not owning Partnership Units (other than
                           Crescent Equities) shall be reduced, as of the
                           Contribution Date, such that the Partnership Interest
                           of each such Limited Partner shall be equal to a
                           fraction, the numerator of which is equal to the
                           Deemed Partnership Interest Value of such Limited
                           Partner (computed as of the Business Day immediately
                           preceding the Contribution Date) and the denominator
                           of which is equal to the sum of (i) the Deemed Value
                           of the Partnership (computed as of the Business Day
                           immediately preceding the Contribution Date) and (ii)
                           the total dollar amount of the cash contributed
                           and/or the Net Asset Value of the property
                           contributed by the Additional Limited Partner as of
                           the Contribution Date; and

                  (4)      The Partnership Interest of each existing Limited
                           Partner owning Partnership Units and of the
                           Additional Limited Partner, if such Additional
                           Partner receives Partnership Units in connection with
                           the receipt of his or its Partnership Interest, shall
                           be equal to the product of the following: (i) the
                           difference obtained from subtracting (x) the sum of
                           the combined Partnership Interest of Crescent
                           Equities and the General Partner as calculated in
                           Section 4.3(2) hereof, plus the aggregate
                           Non-Unitholder Partnership Interests as calculated in
                           Sections 4.2(1) and (3) hereof, from (y) one hundred
                           percent (100%), and (ii) a fraction, the numerator of
                           which is equal to the number of Partnership Units
                           held by such Limited Partner on such Contribution
                           Date, and the denominator of which is equal to the
                           total number of Partnership Units held by all Limited
                           Partners (including the Additional Limited Partner)
                           on such Contribution Date.

                                     - 22 -
<PAGE>

         The General Partner shall be authorized on behalf of each of the
Partners to amend this Agreement to reflect the admission of any Additional
Limited Partner and any reduction of the Partnership Interests of the other
Limited Partners in accordance with the provisions of this Section 4.3.

         The number of Partnership Units owned by the Limited Partners and
Assignees shall not be decreased in connection with any admission of an
Additional Limited Partner pursuant to this Section 4.3. The General Partner may
(but is not required to) grant to an Additional Limited Partner Partnership
Units, which Partnership Units shall enable the Additional Limited Partner to
participate in the Exchange Rights, upon such terms and conditions as are deemed
appropriate by the General Partner. Notwithstanding anything to the contrary
contained in this Agreement, if the value of the Partnership Units granted to an
Additional Limited Partner is determined based on the average of the "closing
price" of a REIT Share for a period of time other than the ten (10)-day period
specified in the Article I definition of "Value" (including, without limitation,
a determination based on the "closing price" of a REIT Share for the Trading Day
immediately preceding the admission of such Additional Limited Partner), then
such other time period shall be used in calculating the "Value" of a REIT Share
for purposes of calculating the "Deemed Value of the Partnership" and the
"Deemed Partnership Interest Value" under this Section 4.3 with respect to the
admission of such Additional Limited Partner.

         Section 4.4       No Preemptive Rights

         Except as otherwise set forth in Section 4.2.A, no Person shall have
any preemptive, preferential or other similar right with respect to the making
of additional Capital Contributions or loans to the Partnership.

         Section 4.5       No Interest on Capital

         No Partner shall be entitled to interest on its Capital Contribution or
its Capital Account.

         Section 4.6       Stock Incentive Plans

                  A.       Grants of REIT Shares. If grants of REIT Shares are
made in connection with a Stock Incentive Plan,

                           (1)      Crescent Equities shall, as soon as
practicable after such grant, contribute to the capital of the Partnership an
amount equal to the price (if any) paid to Crescent Equities by the party
receiving the grant of REIT Shares;

                           (2)      Crescent Equities shall, as of the date on
which the grant of REIT Shares is made, be deemed to have contributed to the
Partnership as Contributed Funds pursuant to Section 4.2.A(2) hereof an amount
equal to the fair market value (computed using the "closing price" (as such term
is defined in the definition of the term "Value" in Article I hereof) as of the
date on which the grant of REIT Shares is made) of the REIT Shares delivered by
Crescent Equities to such party; and

                           (3)      the General Partner's Partnership Interest
shall remain unchanged, and the Partnership Interests of Crescent Equities and
the other Limited Partners shall be

                                     - 23 -
<PAGE>

adjusted as set forth in Section 4.2, based on the amount deemed to be
contributed, determined pursuant to Section 4.6.A(2); provided that, for
purposes of calculating the "Deemed Value of the Partnership" and the "Deemed
Partnership Interest Value" under Section 4.2, the "Value" of a REIT Share shall
be the "closing price" (as such term is defined in the definition of the term
Value" in Article I hereof) of a REIT Share as of the date on which the grant of
REIT Shares is made.

                  B.       Exercise of Stock Options. If stock options granted
in connection with a Stock Incentive Plan are exercised:

                           (1)      Crescent Equities shall, as soon as
practicable after such exercise, contribute to the capital of the Partnership an
amount equal to the exercise price paid to Crescent Equities by the exercising
party;

                           (2)      Crescent Equities shall, as of the date on
which the purchase of the REIT Shares is consummated by such exercising party,
be deemed to have contributed to the Partnership as Contributed Funds pursuant
to Section 4.2.A(2) hereof an amount equal to the fair market value (computed
using the "closing price" (as such term is defined in the definition of "Value"
in Article I hereof) as of the date on which such purchase of REIT Shares is
consummated by such exercising party) of the REIT Shares delivered by Crescent
Equities to such exercising party; and

                           (3)      the General Partner's Partnership Interest
shall remain unchanged, and the Partnership Interests of Crescent Equities and
the other Limited Partners shall be adjusted as set forth in Section 4.2, based
on the amount deemed to be contributed, determined pursuant to Section 4.6.B(2);
provided that, for purposes of calculating the "Deemed Value of the Partnership"
and the "Deemed Partnership Interest Value" under Section 4.2, the "Value" of a
REIT Share shall be the "closing price" (as such term is defined in the
definition of the term "Value" in Article I hereof) of a REIT Share as of the
date on which the purchase of REIT Shares is consummated by the exercising
party.

         Section 4.7       Other Equity Compensation Plans

                  A.       The Partnership may adopt a compensation plan for its
employees, agents or consultants pursuant to which the Partnership may grant
Limited Partnership Interests (including Partnership Units, which Partnership
Units shall enable the Limited Partner to participate in the Exchange Rights),
or options to acquire Limited Partnership Interests (including Partnership
Units, which Partnership Units shall enable the Limited Partner to participate
in the Exchange Rights), to one or more of its employees, agents or consultants
upon such terns and conditions as may be deemed necessary or appropriate by the
General Partner.

                  B.       The Management Company may adopt a compensation plan
for its employees, agents or consultants pursuant to which the Management
Company may grant Limited Partnership Interests (including Partnership Units,
which Partnership Units shall enable the Limited Partner to participate in the
Exchange Rights), or options to acquire Limited Partnership Interests (including
Partnership Units, which Partnership Units shall enable the Limited Partner to
participate in the Exchange Rights), to one or more of its employees, agents or

                                     - 24 -
<PAGE>

consultants. The Partnership may sell Limited Partnership Interests (including
Partnership Units, which Partnership Units shall enable the Limited Partner to
participate in the Exchange Rights) to the Management Company for delivery to
its employees, agents or consultants. The price at which the Partnership shall
sell such Partnership Interests to the Management Company shall be the fair
market value of such Partnership Interests, as determined by the General Partner
in its reasonable discretion.

                  C.       Upon any admission of an employee, agent or
consultant of the Partnership or the Management Company as an additional Limited
Partner (an "Employee Limited Partner") pursuant to Section 4.7.A or 4.7.B
above, the Partnership Interests of the other Partners shall be diluted, on a
pro rata basis, in proportion to their respective Partnership Interests, to
reflect the admission of the Employee Limited Partner. Notwithstanding the
foregoing, the Partnership Interest of the General Partner shall not be diluted
upon the admission of the Employee Limited Partner; any dilution that would
otherwise occur with respect to the Partnership Interest of the General Partner
in accordance with the terms of the preceding sentence shall be allocated
instead to Crescent Equities. The number of Partnership Units owned by the
Limited Partners and Assignees shall not be decreased in connection with any
admission of an Employee Limited Partner.

                  D.       In addition to the compensation plans described in
Sections 4.6, 4.7.A and 4.7.B hereof, the General Partner, in its sole and
absolute discretion and without the approval of the Limited Partners, may
propose and adopt on behalf of the Partnership employee benefit plans or other
incentive compensation plans (including, without limitation, plans granting REIT
Shares or options to purchase REIT Shares, plans granting Partnership Interests
(including Partnership Units) or options to purchase Partnership Interests
(including Partnership Units), "phantom" equity plans or other plans in which
compensation is tied to revenue or income amounts, or based on increases in the
market value of equity ownership interests) for the benefit of employees, agents
or consultants of any member of the Crescent Group, the Partnership, the
Management Company, the Subsidiary Development Corporation(s) or any Affiliate
of the foregoing in respect of services performed, directly or indirectly, for
the benefit of the Crescent Group, the Partnership, the Management Company or
the Subsidiary Development Corporation(s).

                  E.       Notwithstanding anything to the contrary contained
above in this Section 4.7, upon any admission of an Employee Limited Partner
pursuant to Section 4.7.A or 4.7.B above:

                  (1)      If the admission is made in connection with a grant
                           of Partnership Units to an Employee Limited Partner,
                           (a) the Employee Limited Partner shall, as of the
                           date on which the grant of the Partnership Units is
                           made, be deemed to have contributed to the
                           Partnership pursuant to Section 4.3 hereof an amount
                           equal to the fair market value of the Partnership
                           Units delivered to such Employee Limited Partner
                           (computed by calculating the product of the following
                           three items: (i) the number of Partnership Units
                           delivered to such Employee Limited Partner,
                           multiplied by (ii) the Exchange Factor, multiplied by
                           (iii) the "closing price," as such term is defined in
                           the definition of the term "Value" in Article I
                           hereof, of a REIT Share on the

                                     - 25 -
<PAGE>

                           date on which the grant of Partnership Units is made)
                           and (b) the General Partner's Partnership Interest
                           shall remain unchanged, and the Partnership Interests
                           of Crescent Equities and the other Limited Partners
                           shall be adjusted as set forth in Section 4.3, based
                           on the amount deemed to be contributed by the
                           Employee Limited Partner as determined pursuant to
                           clause (a) above; provided that, for purposes of
                           calculating the "Deemed Value of the Partnership" and
                           the "Deemed Partnership Interest Value" under Section
                           4.3, the "Value" of a REIT Share shall be the
                           "closing price" (as such term is defined in the
                           definition of the term "Value" in Article I hereof)
                           of a REIT Share as of the date on which the grant of
                           Partnership Units is made.

                  (2)      If the admission is made in connection with the
                           exercise of an option to purchase Partnership Units
                           by an Employee Limited Partner, (a) the Employee
                           Limited Partner shall, as of the date on which the
                           option to purchase Partnership Units is exercised, be
                           deemed to have contributed to the Partnership
                           pursuant to Section 4.3 hereof an amount equal to the
                           fair market value of the Partnership Units delivered
                           to such Employee Limited Partner (computed by
                           calculating the product of the following three items:
                           (i) the number of Partnership Units delivered to such
                           Employee Limited Partner, multiplied by (ii) the
                           Exchange Factor, multiplied by (iii) the "closing
                           price," as such term is defined in the definition of
                           the term "Value" in Article I hereof, of a REIT Share
                           on the date on which the option to purchase
                           Partnership Units is exercised) and (b) the General
                           Partner's Partnership Interest shall remain
                           unchanged, and the Partnership Interests of Crescent
                           Equities and the other Limited Partners shall be
                           adjusted as set forth in Section 4.3, based on the
                           amount deemed to be contributed by the Employee
                           Limited Partner as determined pursuant to clause (a)
                           above; provided that, for purposes of calculating the
                           "Deemed Value of the Partnership" and the "Deemed
                           Partnership Interest Value" under Section 4.3, the
                           "Value" of a REIT Share shall be the "closing price"
                           (as such term is defined in the definition of the
                           term "Value" in Article I hereof) of a REIT Share as
                           of the date on which the option to purchase
                           Partnership Units is exercised.

         Section 4.8       Series A Preferred Partnership Units and Series B
                           Redeemable Preferred Partnership Units

                  A.       Series A Preferred Partnership Units. Pursuant to
Section 8.7.C of the Agreement, effective on February 19, 1998, the issuance
date of the Series A Preferred Shares by Crescent Equities, the Partnership
issued 8,000,000 Series A Preferred Partnership Units to Crescent Equities. On
April 26, 2002, Crescent Equities issued an additional 2,800,000 Series A
Preferred Shares, and the Partnership issued an additional 2,800,000 Series A
Preferred Partnership Units to Crescent Equities. Crescent Equities shall have a
zero percentage Partnership Interest with respect to such Series A Preferred
Partnership Units and shall have no voting rights other than the right to vote
on any amendment to this Agreement if such amendment would (i) convert the
Series A Preferred Partnership Units into a general partner's

                                     - 26 -
<PAGE>

interest, (ii) modify the limited liability of Crescent Equities with respect to
the Series A Preferred Partnership Units, or (iii) alter the distribution,
redemption, conversion or liquidation rights of the Series A Preferred
Partnership Units. The distribution rights of the Series A Preferred Partnership
Units are set forth in Section 5.6 below, the tax allocations with respect to
the Series A Preferred Partnership Units are set forth in Section 6.3 below, and
the redemption and conversion rights of the Series A Preferred Partnership Units
are set forth in Sections 4.8.C and D below.

                  B.       Series B Redeemable Preferred Partnership Units.
Pursuant to Section 8.7.C of the Second Amended Agreement, effective on May 17,
2002, the issuance date of the Series B Redeemable Preferred Shares by Crescent
Equities, the Partnership issued 3,000,000 Series B Redeemable Preferred
Partnership Units to Crescent Equities. Crescent Equities shall have a zero
percentage Partnership Interest with respect to such Series B Redeemable
Preferred Partnership Units and shall have no voting rights other than the right
to vote on any amendment to this Agreement if such amendment would (i) convert
the Series B Redeemable Preferred Partnership Units into a general partner's
interest, (ii) modify the limited liability of Crescent Equities with respect to
the Series B Redeemable Preferred Partnership Units, or (iii) alter the
distribution, redemption, conversion or liquidation rights of the Series B
Redeemable Preferred Partnership Units. The distribution rights of the Series B
Redeemable Preferred Partnership Units are set forth in Section 5.6 below, the
tax allocations with respect to the Series B Redeemable Preferred Partnership
Units are set forth in Section 6.3 below, and the redemption rights of the
Series B Redeemable Preferred Partnership Units are set forth in Section 4.8.C
below.

                  C.       Redemption Rights. In the event that Crescent
Equities exercises its redemption right with respect to the Series A Preferred
Shares, the Partnership shall concurrently redeem a corresponding amount of
Series A Preferred Partnership Units at the same redemption price paid by
Crescent Equities for the Series A Preferred Shares (i.e., a redemption price of
$25 per Series A Preferred Share, plus any accrued, unpaid quarterly
distribution thereon). In the event that Crescent Equities exercises its
redemption right with respect to the Series B Redeemable Preferred Shares, the
Partnership shall concurrently redeem a corresponding amount of Series B
Redeemable Preferred Partnership Units at the same redemption price paid by
Crescent Equities for the Series B Redeemable Preferred Shares (i.e., a
redemption price of $25 per Series B Redeemable Preferred Share, plus any
accrued, unpaid quarterly distribution thereon).

                  D.       Conversion Rights. Upon exercise of any conversion
right with respect to the Series A Preferred Shares, (i) Crescent Equities
shall, as of the date on which the conversion is consummated, be deemed to have
contributed to the Partnership as Contributed Funds pursuant to Section 4.2.A(2)
of the Agreement an amount equal to the Value (computed as of the Business Day
immediately preceding the date on which such conversion is consummated) of the
REIT Shares delivered by Crescent Equities to such holder of Series A Preferred
Shares, (ii) the Partnership Interests of Crescent Equities and the other
Limited Partners shall be adjusted as set forth in Section 4.2 of the Agreement,
and (iii) a corresponding portion of Series A Preferred Partnership Units shall
be retired. Notwithstanding the foregoing, to the extent that Crescent Equities
pays cash to the holder of Series A Preferred Shares in lieu of fractional
shares upon conversion of such Series A Preferred Shares to REIT Shares, such
cash payment shall be treated

                                     - 27 -
<PAGE>

as a redemption of the corresponding portion of the Series A Preferred Shares
and the Partnership shall concurrently redeem a corresponding amount of Series A
Preferred Partnership Units at the same redemption price paid by Crescent
Equities for the Series A Preferred Shares.

                                    ARTICLE V
                                  DISTRIBUTIONS

         Section 5.1       Initial Partnership Distributions

         Upon execution of the First Amended and Restated Agreement, the
Partnership made (i) a distribution of one million five hundred thousand dollars
($1,500,000) to RainAm Investors, and (ii) a distribution in an amount equal to
the Amstar Required Cash Payment to Amstar. In addition, the Partnership
returned to the General Partner, CRE Limited Partner, Inc. and Gerald W. Haddock
the initial capital contributions of one dollar ($l), seventy-four dollars ($74)
and twenty-five dollars ($25),respectively, previously made by such Persons to
the Partnership.

         Section 5.2       Requirement and Characterization of Distributions

         Subject to Section 5.6 below, the General Partner shall cause the
Partnership to distribute quarterly all, or such portion deemed appropriate by
the General Partner, of Available Cash generated by the Partnership during such
quarter to the Partners who are Partners on the Partnership Record Date with
respect to such quarter in accordance with their respective Partnership
Interests on such Partnership Record Date. The General Partner shall take such
reasonable efforts, as determined by it in its sole and absolute discretion and
consistent with the qualification of Crescent Equities as a REIT, to distribute
Available Cash to the Limited Partners so as to preclude any such distribution
or portion thereof from being treated as part of a sale of property to the
Partnership by a Limited Partner under Section 707 of the Code or the
Regulations thereunder; provided that the General Partner and the Partnership
shall not have any liability to a Limited Partner under any circumstances as a
result of any distribution to a Limited Partner being so treated.
Notwithstanding the foregoing, the General Partner shall use its best efforts to
cause the Partnership to distribute sufficient amounts to enable Crescent
Equities to pay shareholder dividends that will (i) allow Crescent Equities to
achieve and maintain qualification as a REIT, and (ii) avoid the imposition of
any additional taxes under Section 857 or Section 4981 of the Code.

         Section 5.3       Amounts Withheld

         All amounts withheld pursuant to the Code or any provisions of any
state or local tax law and Section 10.5 hereof with respect to any allocation,
payment or distribution to a Partner shall be treated as amounts distributed to
such Partner pursuant to Section 5.2 for all purposes under this Agreement.

         Section 5.4       Distributions In Kind

         Pursuant to Section 17-605 of the Act, the General Partner has the
authority to make in-kind distributions of assets to the Partners. Any such
distributions in kind shall be distributed among the Partners in the same manner
as set forth in Section 5.2 with respect to Available Cash (provided that
distributions in kind made after commencement of the liquidation of the

                                     - 28 -
<PAGE>

Partnership shall be distributed to the Partners in accordance with Section
13.2). The General Partner shall determine the fair market value of any assets
distributed in kind using such reasonable method of valuation as it may adopt.

         Section 5.5       Distributions Upon Liquidation

         Proceeds from a Terminating Capital Transaction and any other cash
received or reductions in reserves made after commencement of the liquidation of
the Partnership shall be distributed to the Partners in accordance with Section
13.2.

         Section 5.6       Distribution Rights of Series A Preferred Shares and
                           Series B Redeemable Preferred Shares

         Notwithstanding anything to the contrary contained in Section 5.2
above, and prior to any distributions of Available Cash under such provision, on
any date on which Crescent Equities is required to make a distribution of
accrued, unpaid quarterly distributions to the holders of Series A Preferred
Shares or the holders of Series B Redeemable Preferred Shares, the General
Partner shall cause distributions of Available Cash to be made in cash to
Crescent Equities (i) with respect to the Series A Preferred Partnership Units,
in an amount equal to the amount that is required to be distributed by Crescent
Equities on that date to the holders of Series A Preferred Shares, and (ii) with
respect to the Series B Redeemable Preferred Partnership Units, in an amount
equal to the amount that is required to be distributed by Crescent Equities on
that date to the holders of Series B Redeemable Preferred Shares.

                                   ARTICLE VI
                                   ALLOCATIONS

         Section 6.1       Allocations For Capital Account Purposes

         For purposes of maintaining the Capital Accounts and in determining the
rights of the Partners among themselves, the Partnership's items of income,
gain, loss and deduction (computed in accordance with Exhibit B hereof) shall be
allocated among the Partners in each taxable year (or portion thereof) as
provided herein below.

                  A.       Net Income. After giving effect to the special
allocations set forth in Section 1 of Exhibit C and the allocations set forth in
Section 6.3 below, Net Income shall be allocated (i) first, to the General
Partner to the extent that Net Losses previously allocated to the General
Partner pursuant to the last sentence of Section 6.1.B exceed Net Income
previously allocated to the General Partner pursuant to this clause (i) of
Section 6.1.A, and (ii) thereafter, Net Income shall be allocated to the
Partners in accordance with their respective Partnership Interests.

                  B.       Net Losses. After giving effect to the special
allocations set forth in Section 1 of Exhibit C and the allocations set forth in
Section 6.3 below, Net Losses shall be allocated to the Partners in accordance
with their respective Partnership Interests, provided that Net Losses shall not
be allocated to any Limited Partner pursuant to this Section 6.1.B to the extent
that such allocation would cause such Limited Partner to have an Adjusted
Capital Account Deficit at the end of such taxable year (or increase any
existing Adjusted Capital

                                     - 29 -
<PAGE>

Account Deficit). All Net Losses in excess of the limitations set forth in this
Section 6.1.B shall be allocated to the General Partner.

                  C.       Allocations to Reflect Issuance of New Interests. In
the event that the Partnership issues New Interests to Crescent Equities
pursuant to Section 8.7.C, the General Partner shall make such revisions to
Sections 6.1.A and B above as it determines are necessary to reflect the
issuance of such New Interests.

         Section 6.2       Allocation of Nonrecourse Debt

         For purposes of Regulations Section 1.752-3(a), the Partners agree that
Nonrecourse Liabilities of the Partnership in excess of the sum of (i) the
amount of Partnership Minimum Gain and (ii) the total amount of Nonrecourse
Built-in Gain shall be allocated among the Partners in accordance with their
respective Partnership Interests.

         Section 6.3       Allocations for Series A Preferred Partnership Units
                           and Series B Redeemable Preferred Partnership Units

         Notwithstanding Sections 6.1.A and B above, after giving effect to the
special allocations set forth in Section 1 of Exhibit C to this Agreement:

                  A.       Each year, gross income of the Partnership shall be
allocated first to Crescent Equities until the cumulative amount allocated under
this Section 6.3.A to Crescent Equities for the current year and all prior years
is equal to the cumulative amount for the current year and all prior years of
the sum of (A) the distributions made to Crescent Equities under Section 5.6 of
this Agreement, (B) the portion of the distributions made to Crescent Equities
under Section 4.8.C of this Agreement (if any) that exceeds $25 per Series A
Preferred Partnership Unit and (C) the portion of the distributions made to
Crescent Equities under paragraph Section 4.8.C of this Agreement (if any) that
exceeds $25 per Series B Redeemable Preferred Partnership Unit. Any remaining
Net Profits or Net Losses (other than gain or loss from a sale or other
disposition of all or substantially all of the assets of the Partnership, which
shall be allocated as set forth in Sections 6.3.B and C below) shall be
allocated as set forth in Sections 6.1.A and B above.

                  B.       The gain of the Partnership from a sale or other
disposition of all or substantially all of the assets of the Partnership shall
be allocated among the Partners as follows: (A) first, to Crescent Equities in
the amount necessary to cause its Capital Account balance to be equal to the
liquidation preferences payable by Crescent Equities on the outstanding Series A
Preferred Shares and Series B Redeemable Preferred Shares (the "Liquidation
Preferences") (i.e., a liquidation payment of $25 per Series A Preferred Share,
plus any accrued, unpaid quarterly distribution thereon, and a liquidation
payment of $25 per Series B Redeemable Preferred Share, plus any accrued, unpaid
quarterly distribution thereon, subject to reduction on a pro rata basis (as
more fully set forth in the respective Statements of Designation for the Series
A Preferred Shares and the Series B Redeemable Preferred Shares) to the extent
that there are insufficient funds to pay the aforementioned liquidation
preferences in full), (B) second, to the Partners in the amounts necessary, and
in the ratio of such amounts, to cause the Capital Account balance of Crescent
Equities in excess of the Liquidation Preferences and the Capital Account of
each other

                                     - 30 -
<PAGE>

Partner to be in the same ratio as their respective Partnership Interests, and
(iii) thereafter, to all of the Partners in proportion to their respective
Partnership Interests.

                  C.       The loss of the Partnership from a sale or other
disposition of all or substantially all of the assets of the Partnership shall
be allocated among the Partners as follows: (A) first, to the Partners, if any,
having positive Capital Account balances, in the amounts necessary, and in the
ratio of such amounts, so as to cause the positive Capital Account Balance of
Crescent Equities to equal the Liquidation Preferences and the positive Capital
Account balance of each other Partner to equal zero (or, if there is
insufficient loss to accomplish this result, loss shall be allocated in a manner
so as to cause the positive Capital Account balance of Crescent Equities in
excess of the Liquidation Preference and the positive Capital Account balance of
each other Partner to be in the same ratio as their respective Partnership
Interests), (B) second, to Crescent Equities, until its positive Capital Account
balance equals zero, and (C) thereafter, to the Partners in proportion to their
respective Partnership Interests.

                                  ARTICLE VII
                      MANAGEMENT AND OPERATIONS OF BUSINESS

         Section 7.1       Management

                  A.       Except as otherwise expressly provided in this
Agreement, all management powers over the business and affairs of the
Partnership are exclusively vested in the General Partner, and no Limited
Partner shall have any right to participate in or exercise control or management
power over the business and affairs of the Partnership. The General Partner may
not be removed by the Limited Partners with or without cause. In addition to the
powers now or hereafter granted a general partner of a limited partnership under
applicable law or which are granted to the General Partner under any other
provision of this Agreement, the General Partner, subject to Section 7.3 hereof,
shall have full power and authority to do all things and perform all acts
specified in this Agreement or otherwise deemed necessary or desirable by it to
conduct the business of the Partnership, to exercise all Partnership powers set
forth in Section 3.2 hereof and to effectuate the Partnership purposes set forth
in Section 3.1 hereof (to the extent consistent with allowing Crescent Equities
at all times to qualify as a REIT, unless Crescent Equities voluntarily
terminates its REIT status pursuant to the Declaration of Trust), including,
without limitation, to:

                  (1)      acquire interests in real or personal property of any
                           kind and type, and any and all kinds of interests
                           therein, and determine the manner in which title
                           thereto is to be held; manage, insure against loss,
                           protect and subdivide any such property; improve,
                           develop or redevelop any such property; dedicate for
                           public use, vacate any such property subdivisions or
                           parts thereof, or resubdivide such property or any
                           part thereof; lease, renew or extend leases, amend,
                           change or modify the terms and provisions of leases,
                           and grant options to lease and options to renew
                           leases and options to purchase; partition, sell or
                           otherwise dispose of all or any portion of such
                           property; exchange all or any portion of such
                           property for other real or personal property; grant
                           easements or charges of any kind; release, convey or
                           assign any right, title or interest in or about or
                           easement appurtenant to such property or any part
                           thereof; construct and reconstruct,

                                     - 31 -
<PAGE>

                           remodel, alter, repair, add to or take from buildings
                           on such property; insure any Person having an
                           interest in or responsibility for the care,
                           management or repair of such property; direct the
                           trustee of any land trust to mortgage, lease, convey
                           or contract to convey the real estate held in such
                           land trust or to execute and deliver deeds,
                           mortgages, notes, and any and all documents
                           pertaining to the property subject to such land trust
                           or in any matter regarding such trust; and execute
                           assignments of all or any part of the beneficial
                           interest in such land trust;

                  (2)      employ, engage or contract with or dismiss from
                           employment or engagement Persons to the extent deemed
                           necessary by the General Partner for the operation
                           and management of the Partnership business,
                           including, but not limited to, employees, including
                           employees having such titles as the General Partner
                           may from time to time specify, such as "chairman of
                           the board," "chief executive officer," chief
                           operating officer," "president," "vice president,"
                           "secretary," "treasurer"; contractors;
                           subcontractors; engineers; architects; surveyors;
                           mechanics; consultants; accountants; attorneys;
                           insurance brokers; real estate brokers; and others;

                  (3)      make expenditures, borrow money, procure loans and
                           advances from any Person for Partnership purposes
                           (including, without limitation, borrow money to
                           permit the Partnership to make distributions in such
                           amounts as will permit Crescent Equities (so long as
                           Crescent Equities elects to qualify as a REIT) to
                           avoid the payment of any federal income tax
                           (including, for this purpose, any excise tax pursuant
                           to Section 4981 of the Code) and to make
                           distributions to its shareholders sufficient to
                           permit Crescent Equities to maintain REIT status) and
                           apply for and secure, from any Person, credit or
                           accommodations; contract, assume or guarantee
                           liabilities and obligations, direct or contingent and
                           of every kind and nature with or without security;
                           and repay, prepay, discharge, settle, adjust,
                           compromise, or liquidate any such loan, advance,
                           credit, obligation or liability;

                  (4)      pledge, hypothecate, mortgage, assign, deposit,
                           deliver, enter into sale and leaseback arrangements
                           or otherwise give as security or as additional or
                           substitute security, any and all Partnership
                           property, tangible or intangible, including, but not
                           limited to, real estate and beneficial interests in
                           land trusts, and make substitutions thereof, and
                           receive any proceeds thereof upon the release or
                           surrender thereof; sign, execute and deliver any and
                           all assignments, deeds and other contracts and
                           instruments in writing; authorize, give, make,
                           procure, accept and receive moneys, payments,
                           property, notices, demands, vouchers, receipts,
                           releases, compromises and adjustments; waive notices,
                           demands, protests and authorize and execute waivers
                           of every kind and nature; negotiate, execute, deliver
                           and receive written agreements, undertakings and
                           instruments of every kind and

                                     - 32 -
<PAGE>

                           nature; give oral instructions and make oral
                           agreements; and generally to do any and all other
                           acts and things incidental to any of the foregoing;

                  (5)      acquire and enter into any contract of insurance
                           which the General Partner deems necessary or
                           appropriate for the protection of the Partnership and
                           the Partners, for the conservation of the
                           Partnership's assets or for any purpose convenient or
                           beneficial to the Partnership;

                  (6)      conduct any and all banking transactions on behalf of
                           the Partnership; adjust and settle checking, savings,
                           and other accounts with such institutions as the
                           General Partner shall deem appropriate; draw, sign,
                           execute, accept, endorse, guarantee, deliver, receive
                           and pay any checks, drafts, bills of exchange,
                           acceptances, notes, obligations, undertakings and
                           other instruments for or relating to the payment of
                           money in, into, or from any account in the
                           Partnership's name; execute, procure, consent to and
                           authorize extensions and renewals of the same; and
                           make deposits and withdraw the same and negotiate or
                           discount commercial paper, acceptances, negotiable
                           instruments, bills of exchange and dollar drafts;

                  (7)      demand, sue for, receive, and otherwise take steps to
                           collect or recover all debts, rents, proceeds,
                           interests, dividends, goods, chattels, income from
                           property, damages and all other property, to which
                           the Partnership may be entitled or which are or may
                           become due the Partnership from any Person; commence,
                           prosecute or enforce, or defend, answer or oppose,
                           contest and abandon all legal proceedings in which
                           the Partnership is or may hereafter be interested;
                           settle, compromise or submit to arbitration any
                           accounts, debts, claims, disputes and matters which
                           may arise between the Partnership and any other
                           Person and grant an extension of time for the payment
                           or satisfaction thereof on any terms, with or without
                           security; and indemnify any Indemnitees against
                           liabilities and contingencies in accordance with the
                           provisions of Section 7.7 of this Agreement or
                           otherwise;

                  (8)      take all reasonable measures necessary to insure
                           compliance by the Partnership with applicable laws,
                           and other contractual obligations and arrangements
                           entered into by the Partnership from time to time in
                           accordance with the provisions of this Agreement,
                           including periodic reports as required to lenders;
                           and use all due diligence to insure that the
                           Partnership is in compliance with its contractual
                           obligations;

                  (9)      form, acquire a debt or equity ownership interest in,
                           and contribute or loan property to, any further
                           corporations, limited or general partnerships, joint
                           ventures, real estate investment trusts, or other
                           entities upon such terms and conditions as General
                           Partner deems appropriate;

                  (10)     invest assets of the Partnership on a temporary basis
                           in commercial paper, government securities, checking
                           or savings accounts, money market funds,

                                     - 33 -
<PAGE>

                           or any other highly liquid investments deemed
                           appropriate by the General Partner; make loans,
                           including participating or convertible loans, to
                           other Persons (including, without limitation, the
                           Subsidiary Development Corporation(s) and the
                           Management Company) upon such terms and conditions,
                           and for such security, as deemed appropriate by the
                           General Partner; repay obligations of any Person in
                           which the Partnership has an equity investment
                           (including, without limitation, the Subsidiary
                           Development Corporation(s) and the Management
                           Company); and purchase existing debt obligations held
                           by other Persons, including participating or
                           convertible debt obligations, upon such terms and
                           conditions, and for such security, as deemed
                           appropriate by the General Partner;

                  (11)     negotiate, execute and perform any contracts,
                           conveyance or other instruments that the General
                           Partner considers useful or necessary to the conduct
                           of the Partnership's operations or the implementation
                           of the General Partner's powers under this Agreement;

                  (12)     distribute Partnership cash or other assets in
                           accordance with this Agreement;

                  (13)     maintain the Partnership's books and records;

                  (14)     prepare and deliver all financial, regulatory, tax
                           and other filings or reports to governmental or other
                           agencies having jurisdiction over the Partnership;
                           and

                  (15)     take any action in connection with the Partnership's
                           direct or indirect investment in any other Person.

                  B.       Each of the Limited Partners agrees that the General
Partner is authorized to execute, deliver and perform the above-mentioned
agreements and transactions on behalf of the Partnership without any further
act, approval or vote of the Partners, notwithstanding any other provisions of
this Agreement (except as provided in Section 7.3), the Act or any applicable
law, rule or regulation. The execution, delivery or performance by the General
Partner or the Partnership of any agreement authorized or permitted under this
Agreement shall not constitute a breach by the General Partner of any duty that
the General Partner may owe the Partnership or the Limited Partners or any other
Persons under this Agreement or of any duty stated or implied by law or equity.

                  C.       At all times from and after the date hereof, the
General Partner may cause the Partnership to obtain and maintain (i) casualty,
liability and other insurance on the properties of the Partnership and (ii)
liability insurance for the Indemnitees hereunder.

                  D.       At all times from and after the date hereof, the
General Partner may cause the Partnership to establish and maintain working
capital reserves in such amounts as the General Partner, in its sole and
absolute discretion, deems appropriate and reasonable from time to time.

                                     - 34 -
<PAGE>

                  E.       In exercising its authority under this Agreement, the
General Partner may, but shall be under no obligation to, take into account the
tax consequences to any Partner of any action taken by it. The General Partner
and the Partnership shall not have liability to a Limited Partner under any
circumstances as a result of an income tax liability incurred by such Limited
Partner as a result of an action (or inaction) by the General Partner pursuant
to its authority under this Agreement.

         Section 7.2       Certificate of Limited Partnership

         To the extent that such action is determined by the General Partner to
be necessary or appropriate, the General Partner shall file amendments to and
restatements of the Certificate and do all things necessary or appropriate to
maintain the Partnership as a limited partnership (or a partnership in which the
limited partners have limited liability) under the laws of the State of Delaware
and each other jurisdiction in which the Partnership may elect to do business or
own property. Subject to the terms of Section 8.5.A(3) hereof, the General
Partner shall not be required, before or after filing, to deliver or mail a copy
of the Certificate or any amendment thereto to any Limited Partner. The General
Partner shall use all reasonable efforts to cause to be filed such other
certificates or documents as may be reasonable and necessary or appropriate for
the continuation, qualification and operation of a limited partnership (or a
partnership in which the limited partners have limited liability) in the State
of Delaware and any other jurisdiction in which the Partnership may elect to do
business or own property.

         Section 7.3       Restrictions on General Partner's Authority

         The General Partner shall not have the authority to:

                  A.       take any action in contravention of this Agreement or
which would make it impossible to carry on the ordinary business of the
Partnership;

                  B.       possess Partnership property, or assign any rights in
specific Partnership property, for other than a Partnership purpose;

                  C.       do any act in contravention of applicable law; or

                  D.       perform any act that would subject a Limited Partner
to liability as a general partner in any jurisdiction or any other liability
except as provided herein or under the Act.

         Section 7.4       Reimbursement of the Crescent Group

                  A.       Except as provided in this Section 7.4 and elsewhere
in this Agreement (including the provisions of Articles 5 and 6 regarding
distributions, payments, and allocations to which it may be entitled), the
General Partner shall not be compensated for its services as general partner of
the Partnership.

                  B.       The Crescent Group shall be reimbursed on a monthly
basis, or such other basis as the General Partner may determine in its sole and
absolute discretion, for all expenses the Crescent Group incurs relating to the
ownership and operation of, or for the benefit of, the

                                     - 35 -
<PAGE>

Partnership, provided that the amount of any such reimbursement shall be reduced
by any income received by the Crescent Group with respect to bank accounts or
other assets held by it as permitted in Section 7.5. The Limited Partners
acknowledge that the Crescent Group's sole business is the ownership of
interests in and operation of the Partnership, and that all of the Crescent
Group's operating expenses (including, without limitation, costs and expenses
relating to the formation and continuity of existence of the Crescent Group,
costs and expenses associated with compliance with the periodic reporting
requirements and all other rules and regulations of the SEC or any other
federal, state or local regulatory body, salaries payable to officers and
employees of the Crescent Group, fees and expenses payable to directors of the
Crescent Group, costs and expenses relating to the bank accounts or other assets
held by the Crescent Group as permitted in Section 7.5 and all other operating,
debt service or administrative costs of the Crescent Group) are incurred for the
benefit of the Partnership and shall be reimbursed by the Partnership. Such
reimbursements shall be in addition to any reimbursement to the Crescent Group
as a result of indemnification pursuant to Section 7.7 hereof. If and to the
extent any reimbursements to the Crescent Group are determined for federal
income tax purposes not to constitute payment of expenses of the Partnership,
the amounts so determined shall constitute guaranteed payments within the
meaning of Section 707(c) of the Code, shall be treated consistently therewith
by the Partnership and all Partners, and shall not be treated as distributions
for purposes of computing the Partners' Capital Accounts.

         Section 7.5       Outside Activities of the Crescent Group

         The Crescent Group shall not directly or indirectly enter into or
conduct any business, other than in connection with the ownership, acquisition
and disposition of Partnership Interests and the management of the business of
the Partnership, and such activities as are incidental thereto. The Crescent
Group shall not own any assets other than Partnership Interests in the
Partnership, and such bank accounts or similar instruments as it deems necessary
to carry out its responsibilities contemplated under this Agreement and the
Declaration of Trust. The Crescent Group shall not borrow funds for the purpose
of making distributions to the shareholders of any member of the Crescent Group
unless such borrowing is effectuated through the Partnership. Notwithstanding
anything to the contrary contained above in this Section 7.5, (1) Crescent
Equities may form additional direct or indirect wholly owned subsidiary entities
to serve as general partners of partnerships or managing members of limited
liability companies in which the Partnership also owns a direct or indirect
ownership interest, provided that (i) the General Partner determines that the
formation of the subsidiary entities is necessary or appropriate to further the
business objectives of the Partnership and (ii) the subsidiary entities (a) make
capital contributions in exchange for their ownership interests in the
partnerships and limited liability companies on a pro rata basis with the
Partnership and (b) do not own more than one percent (1%) of the total ownership
interests in any such partnership or limited liability company, and (2) the
Crescent Group may own such other assets as the General Partner determines are
necessary and appropriate to further the business interests of the Partnership,
upon such terms and conditions as the General Partner determines are necessary
and appropriate to protect the interests of the Partnership.

                                     - 36 -
<PAGE>

         Section 7.6       Contracts with Affiliates

                  A.       The Partnership may contribute assets and loan funds
to joint ventures, other partnerships, corporations or other business entities
in which it is or thereby becomes a participant upon such terms and subject to
such conditions consistent with this Agreement and applicable law as the General
Partner, in its sole and absolute discretion, deems advisable. The foregoing
authority shall not create any right or benefit in favor of any such other
business entities.

                  B.       Except as expressly permitted by this Agreement, no
Partner or Affiliate of a Partner shall sell, transfer or convey any property
to, purchase any property from, lend or borrow funds, provide services to, or
enter into any other transaction with the Partnership, directly or indirectly,
except pursuant to transactions that are on terms that are fair and reasonable
and no less favorable to the Partnership than could be obtained from an
unaffiliated third party.

                  C.       The General Partner is expressly authorized to enter
into, in the name and on behalf of the Partnership, noncompetition agreements
and other conflict avoidance agreements for its benefit with various Affiliates
of the Partnership and its Partners, on such terms as the General Partner, in
its sole and absolute discretion, believes are advisable.

         Section 7.7       Indemnification

                  A.       The Partnership shall indemnify each Indemnitee from
and against any and all losses, claims, damages, liabilities, joint or several,
expenses (including, without limitation, attorneys' fees and other legal fees
and expenses), judgments, fines, settlements, and other amounts arising from any
and all claims, demands, actions, suits or proceedings, civil, criminal,
administrative or investigative, that relate to the operations of the
Partnership as set forth in this Agreement in which such Indemnitee may be
involved, or is threatened to be involved, as a party or otherwise, unless it is
established that: (i) the act or omission of the Indemnitee was material to the
matter giving rise to the proceedings and either was committed in bad faith or
was the result of active and deliberate dishonesty; (ii) the Indemnitee actually
received an improper personal benefit in money, property or services; or (iii)
in the case of any criminal proceeding, the Indemnitee had reasonable cause to
believe that the act or omission was unlawful. Without limitation, the foregoing
indemnity shall extend to any liability of any Indemnitee, pursuant to a loan
guaranty or otherwise, for any indebtedness of the Partnership or any subsidiary
entity (including, without limitation, any indebtedness which the Partnership or
any subsidiary entity has assumed or taken subject to), and the General Partner
is hereby authorized and empowered, on behalf of the Partnership, to enter into
one or more indemnity agreements consistent with the provisions of this Section
7.7 in favor of any Indemnitee having or potentially having liability for any
such indebtedness. The termination of any proceeding by judgment, order or
settlement does not create a presumption that the Indemnitee did not meet the
requisite standard of conduct set forth in this Section 7.7.A. The termination
of any proceeding by conviction of an Indemnitee or upon a plea of nolo
contendre or its equivalent by an Indemnitee, or an entry of an order of
probation against an Indemnitee prior to judgment, creates a rebuttable
presumption that such Indemnitee acted in a manner contrary to that specified in
this Section 7.7.A with respect to the subject matter of such proceeding.

                                     - 37 -
<PAGE>

                  B.       The right to indemnification conferred in this
Section 7.7 shall be a contract right and shall include the right of each
Indemnitee to be paid by the Partnership the expenses incurred in defending any
such proceeding in advance of its final disposition; provided, however, that the
payment of such expenses in advance of the final disposition of a proceeding
shall be made only upon delivery to the Partnership of (i) a written affirmation
of the Indemnitee of his or her good faith belief that the standard of conduct
necessary for indemnification by the Partnership pursuant to this Section 7.7
has been met, and (ii) a written undertaking by or on behalf of the Indemnitee
to repay all amounts so advanced if it shall ultimately be determined that the
standard of conduct has not been met.

                  C.       The indemnification provided pursuant to this Section
7.7 shall continue as to a Person who has ceased to have the status of an
Indemnitee pursuant to clause (i) of the definition of "Indemnitee" set forth in
Article I hereof and shall inure to the benefit of the heirs, successors,
assigns, executors and administrators of any such Person, or to a Person whose
status as an lndemnitee was originally established pursuant to clause (ii) of
such definition and was later terminated for any reason other than the
affirmative decision of the General Partner to terminate such status; provided,
however, that except as provided in Section 7.7.D with respect to proceedings
seeking to enforce rights to indemnification, the Partnership shall indemnify
any such Person seeking indemnification in connection with a proceeding (or part
thereof) initiated by such Person only if such proceeding (or part thereof) was
authorized by the General Partner.

                  D.       If a claim under Sections 7.7.A, 7.7.B or 7.7.C is
not paid in full by the Partnership within thirty (30) calendar days after a
written claim has been received by the Partnership, the Indemnitee making such
claim may at any time thereafter (but prior to payment of the claim) bring suit
against the Partnership to recover the unpaid amount of the claim and, if
successful, in whole or in part, such Indemnitee 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 Partnership) that the Indemnitee
has not met the standards of conduct set forth above which make it permissible
for the Partnership to indemnify the Indemnitee for the amount claimed, but the
burden of proving such defense shall be on the Partnership. Neither the failure
of the Partnership to have made a determination prior to the commencement of
such action that indemnification of the Indemnitee is proper in the
circumstances because he or she has met the applicable standard of conduct set
forth herein nor an actual determination by the Partnership that the Indemnitee
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the Indemnitee has not met the applicable
standard of conduct.

                  E.       Following any "change in control" of Crescent
Equities 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 shall be made by independent legal counsel selected by the
Indemnitee, which such independent legal counsel shall be retained by the
General Partner on behalf of the Partnership and at the expense of the
Partnership.

                  F.       The right to indemnification and the payment of
expenses incurred in defending a proceeding in advance of its final disposition
conferred in this Section 7.7 shall not

                                     - 38 -
<PAGE>

be exclusive of any other right which any person may have or hereafter acquire
under any statute or agreement, or pursuant to any vote of the Partners, or
otherwise.

                  G.       The Partnership may purchase and maintain insurance,
at its expense, on its own behalf and on behalf of any Indemnitee and of such
other Persons as the General Partner shall determine, against any liability
(including expenses) that may be asserted against and incurred by such Person in
connection with the Partnership's activities pursuant to this Agreement, whether
or not the Partnership would have the power to indemnify such Person against
such liability under the terms of this Agreement. In addition, the Partnership
may, together with Crescent Equities, enter into indemnification agreements with
one or more of the Indemnitees pursuant to which the Partnership and Crescent
Equities shall jointly and severally agree to indemnify such Indemnitee(s) to
the fullest extent permitted by law, and advance to such Indemnitee(s) all
related expenses, subject to reimbursement if it is subsequently determined that
indemnification is not permitted.

                  H.       Any indemnification pursuant to this Section 7.7
shall be made only out of assets of the Partnership, and neither the General
Partner nor any Limited Partner shall have any obligation to contribute to the
capital of the Partnership or otherwise provide funds to enable the Partnership
to fund its obligations under this Section 7.7.

                  I.       No Limited Partner shall be liable for the
obligations of the Partnership by reason of the indemnification provisions set
forth in this Agreement.

                  J.       An Indemnitee shall not be denied indemnification in
whole or in part pursuant to this Section 7.7 because such lndemnitee has an
interest in the transaction to which the indemnification relates if the
transaction otherwise was permitted by the terms of this Agreement.

                  K.       The provisions of this Section 7.7 are for the
benefit of the Indemnitees, their heirs, successors, assigns, executors and
administrators, and shall not be deemed to create any rights for the benefit of
any other Person. Any amendment, modification or repeal of this Section 7.7 or
any provision hereof shall be prospective only and shall not in any way affect
the limitations on the Partnership's liability to any Indemnitee under this
Section 7.7 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 arise or be asserted.

         Section 7.8       Liability of the General Partner

                  A.       Notwithstanding anything to the contrary set forth in
this Agreement, the General Partner shall not be liable for monetary damages to
the Partnership or any Partners for losses sustained or liabilities incurred as
a result of errors in judgment or of any act or omission if the General Partner
acted in good faith.

                  B.       The Limited Partners expressly acknowledge that the
General Partner is acting on behalf of the Partnership and the shareholders of
Crescent Equities collectively, that the General Partner is under no obligation
to consider the separate interests of the Limited Partners (including, without
limitation, the tax consequences to Limited Partners) in deciding

                                     - 39 -
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whether to cause the Partnership to take (or decline to take) any actions, and
that the General Partner shall not be liable to the Partnership or to any
Partner for monetary damages for losses sustained, liabilities incurred, or
benefits not derived by Limited Partners in connection with such decisions,
provided that the General Partner has acted in good faith.

                  C.       Subject to its obligations and duties as General
Partner set forth in Section 7.1.A hereof, the General Partner may exercise any
of the powers granted to it by this Agreement and perform any of the duties
imposed upon it hereunder either directly or by or through its agents. The
General Partner shall not be responsible for any misconduct or negligence on the
part of any such agent appointed by it in good faith.

                  D.       Any amendment, modification or repeal of this Section
7.8 or any provision hereof shall be prospective only and shall not in any way
affect the limitations on the General Partner's liability to the Partnership and
the Limited Partners under this Section 7.8 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 arise or be asserted.

         Section 7.9       Other Matters Concerning the General Partner

                  A.       The General Partner may rely, and shall be protected
in acting or refraining from acting, upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order, bond,
debenture, or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties.

                  B.       The General Partner may consult with legal counsel,
accountants, appraisers, management consultants, investment bankers and other
consultants and advisers selected by it, and any act taken or omitted to be
taken in reliance upon the opinion of such Persons as to matters which such
General Partner reasonably believes to be within such Person's professional or
expert competence shall be conclusively presumed to have been done or omitted in
good faith.

                  C.       The General Partner shall have the right, in respect
of any of its powers or obligations hereunder, to act through any of its duly
authorized officers and a duly appointed attorney or attorneys-in-fact. Each
such attorney shall, to the extent provided by the General Partner in the power
of attorney, have full power and authority to do and perform all and every act
and duty which is permitted or required to be done by the General Partner
hereunder.

                  D.       Notwithstanding any other provision of this Agreement
or the Act, any action of the General Partner on behalf of the Partnership or
any decision of the General Partner to refrain from acting on behalf of the
Partnership, undertaken in the good faith belief that such action or omission is
necessary or advisable in order (i) to protect the ability of Crescent Equities
to achieve or maintain qualification as a REIT or (ii) to avoid the incurring by
Crescent Equities of any taxes under Section 857 or Section 4981 of the Code, is
expressly authorized under this Agreement and is deemed approved by all of the
Limited Partners, to the extent such approval may be necessary.

                                     - 40 -
<PAGE>

         Section 7.10      Title to Partnership Assets

         Title to Partnership assets, whether real, personal or mixed and
whether tangible or intangible, shall be deemed to be owned by the Partnership
as an entity, and no Partner, individually or collectively, shall have any
ownership interest in such Partnership assets or any portion thereof. Title to
any or all of the Partnership assets may be held in the name of the Partnership,
the General Partner or one or more nominees, as the General Partner may
determine, including Affiliates of the General Partner. The General Partner
hereby declares and warrants that any Partnership assets for which legal title
is held in the name of the General Partner or any nominee or Affiliate of the
General Partner shall be held by the General Partner for use and benefit of the
Partnership in accordance with the provisions of this Agreement; provided,
however, that the General Partner shall use its best efforts to cause beneficial
and record title to such assets to be vested in the Partnership as soon as
reasonably practicable. All Partnership assets shall be recorded as the property
of the Partnership in its books and records, irrespective of the name in which
legal title to such Partnership assets is held.

         Section 7.11      Reliance by Third Parties

         Notwithstanding anything to the contrary in this Agreement, any Person
dealing with the Partnership shall be entitled to assume that the General
Partner has full power and authority to encumber, sell or otherwise use in any
manner any and all assets of the Partnership and to enter into any contracts on
behalf of the Partnership, and such Person shall be entitled to deal with the
General Partner as if it were the Partnership's sole party in interest, both
legally and beneficially. Each Limited Partner hereby waives any and all
defenses or other remedies which may be available against such Person to
contest, negate or disaffirm any action of the General Partner in connection
with any such dealing. In no event shall any Person dealing with the General
Partner or its representatives be obligated to ascertain that the terms of this
Agreement have been complied with or to inquire into the necessity or expedience
of any act or action of the General Partner or its representatives. Each and
every certificate, document or other instrument executed on behalf of the
Partnership by the General Partner or its representatives shall be conclusive
evidence in favor of any and every Person relying thereon or claiming thereunder
that (i) at the time of the execution and delivery of such certificate, document
or instrument, this Agreement was in full force and effect, (ii) the Person
executing and delivering such certificate, document or instrument was duly
authorized and empowered to do so for and on behalf of the Partnership, and
(iii) such certificate, document or instrument was duly executed and delivered
in accordance with the terms and provisions of this Agreement and is binding
upon the Partnership.

         Section 7.12      Limited Partner Representatives

         Any Limited Partner may (but shall not be required to) appoint a
representative (the "Representative") who shall have full power and authority to
exercise all rights, including consent rights, of such Limited Partner under
this Agreement. Any such appointment shall be made in a writing delivered by the
Limited Partner to the General Partner. The same Person may serve as
Representative for more than one Limited Partner. Any action taken by a
Representative on behalf of a Limited Partner shall be fully binding on such
Limited Partner. The General Partner shall be entitled to rely on the actions
taken by a Representative without further evidence of its authority or further
action by the Limited Partner who appointed such Representative. Any

                                     - 41 -
<PAGE>

appointment of a Representative shall remain effective until rescinded in a
writing delivered by the Limited Partner to the General Partner. A Limited
Partner may revoke its designation of a Representative, or replace a designated
Representative with a different Representative, at any time by delivering
written notice of such action to the General Partner.

                                  ARTICLE VIII
                   RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

         Section 8.1       Limitation of Liability

         The Limited Partners shall have no liability under this Agreement
except as expressly provided in this Agreement, including Section 10.5 hereof,
or under the Act.

         Section 8.2       Management of Business

         No Limited Partner (other than any officer, director, employee,
partner, agent or trustee of the General Partner, the Partnership or any of
their Affiliates, in his, her or its capacity as such) shall take part in the
operation, management or control (within the meaning of the Act) of the
Partnership's business, transact any business in the Partnership's name or have
the power to sign documents for or otherwise bind the Partnership. The
transaction of any such business by the General Partner, any of its Affiliates
or any officer, director, employee, partner, agent or trustee of the General
Partner, the Partnership or any of their Affiliates, in their capacity as such,
shall not affect, impair or eliminate the limitations on the liability of the
Limited Partners under this Agreement.

         Section 8.3       Outside Activities of Limited Partners

         Subject to Section 7.5 hereof, and subject to any agreements entered
into pursuant to Section 7.6.C hereof and any other agreements entered into by a
Limited Partner or its Affiliates with the Partnership, any Limited Partner and
any officer, director, employee, agent, trustee, Affiliate or shareholder of any
Limited Partner shall be entitled to and may have business interests and engage
in business activities in addition to those relating to the Partnership,
including business interests and activities in direct competition with the
Partnership. Neither the Partnership nor any Partners shall have any rights by
virtue of this Agreement in any business ventures of any Limited Partner. None
of the Limited Partners nor any other Person shall have the rights by virtue of
this Agreement or the partnership relationship established hereby in any
business ventures of any other Person, other than the Crescent Group, and such
Person shall have no obligation pursuant to this Agreement to offer any interest
in any such business ventures to the Partnership, any Limited Partner or any
such other Person, even if such opportunity is of a character which, if
presented to the Partnership, any Limited Partner or such other Person, could be
taken by such Person.

         Section 8.4       Return of Capital

         Except pursuant to the Exchange Rights set forth in Section 8.6, no
Limited Partner shall be entitled to the withdrawal or return of his Capital
Contribution, except to the extent of distributions made pursuant to this
Agreement or upon termination of the Partnership as provided herein. No Limited
Partner shall have priority over any other Limited Partner either as to the

                                     - 42 -
<PAGE>

return of Capital Contributions or, except to the extent provided by Exhibit C
hereof or as permitted by Section 8.7.C, or otherwise expressly provided in this
Agreement, as to profits, losses or distributions.

         Section 8.5       Rights of Limited Partners Relating to the
                           Partnership

                  A.       In addition to other rights provided by this
Agreement or by the Act, and except as limited by Section 8.5.C hereof, each
Limited Partner shall have the right, for a purpose reasonably related to such
Limited Partner's interest as a limited partner in the Partnership, upon written
demand with a statement of the purpose of such demand and at such Limited
Partner's own expense:

                  (1)      to obtain a copy of the Partnership's federal, state
                           and local income tax returns for each fiscal year;

                  (2)      to obtain a current list of the name and last known
                           business, residence or mailing address of each
                           Partner; provided, however, that the General Partner
                           may require, as a condition of providing such list to
                           the Limited Partner, that the Limited Partner confirm
                           in writing to the General Partner that the names of
                           the Partners and other information provided by the
                           list will be held in strictest confidence and no
                           distribution of the list will be made;

                  (3)      to obtain a copy of this Agreement and the
                           Certificate, and all amendments to the Agreement and
                           the Certificate, together with executed copies of all
                           powers of attorney pursuant to which this Agreement,
                           the Certificate and all amendments to the Agreement
                           and the Certificate have been executed; and

                  (4)      to obtain true and full information regarding the
                           amount of cash and a description and statement of any
                           other property or services contributed by each
                           Partner and which each Partner has agreed to
                           contribute in the future, and the date on which each
                           became a Partner.

                  B.       The Partnership shall notify each Limited Partner in
writing of any change made to the Exchange Factor. Such written notification
shall be included with the quarterly financial statements that are sent to each
Limited Partner pursuant to Section 9.3 hereof.

                  C.       Notwithstanding any other provision of this Section
8.5, the General Partner may keep confidential from the Limited Partners, for
such period of time as the General Partner determines in its sole and absolute
discretion to be reasonable, any information that (i) the General Partner
believes to be in the nature of trade secrets or other information the
disclosure of which the General Partner in good faith believes is not in the
best interests of the Partnership, or (ii) the Partnership is required by law or
by agreements with unaffiliated third parties to keep confidential.

                                     - 43 -
<PAGE>

         Section 8.6       Exchange Rights

                  A.       Subject to the limitations set forth herein, in
Section 8.6.B below and in Exhibit A, each Limited Partner or Assignee owning
Partnership Units shall have the right (the "Exchange Right") to require
Crescent Equities to exchange on any Specified Exchange Date all or any portion
of the Partnership Units owned by such Limited Partner or Assignee (an
"Exchanging Person") for consideration consisting of (i) an amount of cash equal
to the Cash Amount, (ii) a number of REIT Shares equal to the REIT Shares
Amount, or (iii) any combination of (i) or (ii) above, with the decision as to
the type of consideration to be given to the Exchanging Person to be made by
Crescent Equities, in its sole and absolute discretion. The Exchange Right shall
be exercised pursuant to a Notice of Exchange delivered to Crescent Equities by
the Exchanging Person, accompanied by any certificate or certificates evidencing
the Partnership Units to be exchanged. If Crescent Equities elects to pay all or
any portion of the consideration to an Exchanging Person in cash, the Crescent
Group agrees to use its best efforts to raise any required funds as quickly as
possible after receipt of the Notice of Exchange.

                  B.       Notwithstanding anything to the contrary contained in
Section 8.6.A above, to the extent that the delivery of REIT Shares to an
Exchanging Person pursuant to Section 8.6.A above would cause the Exchanging
Person to violate the applicable "Ownership Limit" or the "Existing Holder
Limit" set forth in the Declaration of Trust, Crescent Equities may not deliver
REIT Shares to such Exchanging Person but may, in its sole and absolute
discretion, elect to either (1) pay the consideration to the Exchanging Person
in the form of the Cash Amount, or (2) refuse, in whole or in part, to accept
the Notice of Exchange.

         Section 8.7       Covenants Relating to the Exchange Rights

                  A.       Crescent Equities shall at all times reserve for
issuance such number of REIT Shares as may be necessary to enable it to issue
such REIT Shares in full satisfaction of the Exchange Rights with respect to all
Partnership Units which are from time to time outstanding.

                  B.       As long as Crescent Equities shall be obligated to
file periodic reports under the Exchange Act, Crescent Equities shall use its
best efforts to file such reports in such manner as shall enable any recipient
of REIT Shares issued pursuant to Section 8.6 in reliance upon an exemption from
registration under the Securities Act to continue to be eligible to utilize Rule
144 promulgated by the SEC pursuant to the Securities Act, or any successor rule
or regulation or statute thereunder, for the resale thereof.

                  C.       Crescent Equities shall not issue any additional REIT
Shares (other than REIT Shares contemplated by Sections 4.2 and 8.6 and REIT
Shares issued pursuant to a Stock Incentive Plan) other than on a pro rata basis
to all holders of REIT Shares. Crescent Equities shall not issue any preferred
stock or rights, options, warrants or convertible or exchangeable securities
containing the right to subscribe for or purchase REIT Shares ("New Securities")
other than to all holders of REIT Shares unless (i) the General Partner shall
cause the Partnership to issue to Crescent Equities preferred equity ownership
interests or rights, options, warrants or convertible or exchangeable securities
of the Partnership ("New Interests") having designations, preferences and other
rights, all such that the economic interests are substantially similar to those
of the New Securities, and (ii) Crescent Equities contributes the proceeds from
the issuance of

                                     - 44 -
<PAGE>

such New Securities and from the exercise of rights contained in such New
Securities to the Partnership. The Partners hereby acknowledge and agree that
the proceeds received by Crescent Equities in exchange for the issuance of New
Securities may be cash or real property or an interest therein. If any New
Securities are subsequently converted or exchanged for REIT Shares, (i) Crescent
Equities shall, as of the date on which the conversion or exchange is
consummated, be deemed to have contributed to the Partnership as Contributed
Funds pursuant to Section 4.2.A(2) hereof an amount equal to the Value (computed
as of the Business Day immediately preceding the date on which such conversion
or exchange of the New Securities is consummated) of the REIT Shares delivered
by Crescent Equities to such holder of New Securities, and (ii) the Partnership
Interests of Crescent Equities and the other Limited Partners shall be adjusted
as set forth in Section 4.2. The number of Partnership Units held by the Limited
Partners shall not be decreased in connection with the issuance of any New
Securities or in connection with any subsequent conversion or exchange of any
New Securities for REIT Shares.

                  D.       Each Limited Partner and Assignee covenants and
agrees that all Partnership Units delivered for exchange pursuant to Section 8.6
hereof shall be delivered to Crescent Equities free and clear of all Liens and,
notwithstanding anything herein contained to the contrary, Crescent Equities
shall be under no obligation to acquire Partnership Units which are or may be
subject to any Liens. Each Limited Partner and Assignee further agrees that, in
the event any state or local property transfer tax is payable as a result of the
transfer of its Partnership Units to Crescent Equities, such Limited Partner or
Assignee shall assume and pay such transfer tax.

                  E.       In the event Crescent Equities purchases REIT Shares,
then the General Partner shall cause the Partnership to purchase from Crescent
Equities a portion of its Partnership Interest on the same terms that Crescent
Equities purchased such REIT Shares.

         Section 8.8       Other Matters Relating to the Exchange Rights

                  A.       Any Partnership Units transferred to Crescent
Equities in connection with the exercise of the Exchange Rights shall be
canceled.

                  B.       Upon any transfer of Partnership Units by an
Exchanging Person to Crescent Equities pursuant to Section 8.6 above, the
Partnership Interest of such Limited Partner or Assignee shall be decreased (and
the Partnership Interest of Crescent Equities shall be correspondingly
increased) as provided in this Section 8.8.B. The Partnership Interest of such
Limited Partner or Assignee subsequent to the exchange event shall be equal to
the product of the following: (i) the Partnership Interest of such Limited
Partner or Assignee immediately prior to the exchange event, multiplied by (ii)
a fraction, the numerator of which is the total Partnership Units owned by such
Limited Partner or Assignee immediately after the exchange event, and the
denominator of which is the total number of Partnership Units owned by such
Limited Partner or Assignee immediately prior to the exchange event.
Notwithstanding the foregoing, if a Limited Partner or Assignee owns Partnership
Units and also owns Partnership Interests issued pursuant to Section 4.3 or 4.7
above, which Partnership Interests were not associated with Partnership Units,
the portion of the Partnership Interest of such Limited Partner or Assignee that
represents the Partnership Interests issued pursuant to Section 4.3 or 4.7 shall
not be subject to reduction pursuant to the provisions of this Section 8.8.B.

                                     - 45 -
<PAGE>

                                   ARTICLE IX
                     BOOKS, RECORDS, ACCOUNTING AND REPORTS

         Section 9.1       Records and Accounting

         The General Partner shall keep or cause to be kept at the principal
office of the Partnership appropriate books and records with respect to the
Partnership's business, including, without limitation, all books and records
necessary to provide to the Limited Partners any information, lists and copies
of documents required to be provided pursuant to Section 8.5 hereof. Any records
maintained by or on behalf of the Partnership in the regular course of its
business may be kept on, or be in the form of, punch cards, magnetic tape,
photographs, micrographic or any other information storage device, provided that
the records so maintained are convertible into clearly legible written form
within a reasonable period of time. The books of the Partnership shall be
maintained, for financial and tax reporting purposes, on an accrual basis in
accordance with generally accepted accounting principles.

         Section 9.2       Fiscal Year

         The fiscal year of the Partnership shall be the calendar year.

         Section 9.3       Reports

         As soon as practicable after the close of each fiscal quarter (other
than the last quarter of the fiscal year), the General Partner shall cause to be
mailed to each Limited Partner a quarterly report containing financial
statements of the Partnership, or of the Crescent Group if such statements are
prepared solely on a consolidated basis with the Crescent Group, for such fiscal
quarter, presented in accordance with generally accepted accounting principles.
As soon as practicable after the close of each fiscal year, the General Partner
shall cause to be mailed to each Limited Partner an annual report containing
financial statements of the Partnership, or of the Crescent Group if such
statements are prepared solely on a consolidated basis with the Crescent Group,
for such fiscal year, presented in accordance with generally accepted accounting
principles. The annual financial statements shall be audited by a nationally
recognized firm of independent public accountants selected by the General
Partner.

                                    ARTICLE X
                                   TAX MATTERS

         Section 10.1      Preparation of Tax Returns

         The General Partner shall arrange for the preparation and timely filing
of all returns of Partnership income, gains, deductions, losses and other items
required of the Partnership for federal, state and local income tax purposes,
and the delivery to the Limited Partners of all tax information reasonably
required by the Limited Partners for federal, state and local income tax
reporting purposes.

                                     - 46 -
<PAGE>

         Section 10.2      Tax Elections

         Except as otherwise provided herein, the General Partner shall, in its
sole and absolute discretion, determine whether to make any available election
or choose any available reporting method pursuant to the Code or state or local
tax law; provided, however, that the General Partner shall make the election
under Section 754 of the Code in accordance with applicable regulations
thereunder. The General Partner shall have the right to seek to revoke any such
election (including, without limitation, the election under Section 754 of the
Code) or change any reporting method upon the General Partner's determination in
its sole and absolute discretion that such revocation is in the best interests
of all of the Partners.

         Section 10.3      Tax Matters Partner

                  A.       The General Partner shall be the "tax matters
partner" of the Partnership for federal income tax purposes. Pursuant to Section
6223(c)(3) of the Code, upon receipt of notice from the IRS of the beginning of
an administrative proceeding with respect to the Partnership, the tax matters
partner shall furnish the IRS with the name, address and profits interest of
each of the Limited Partners, provided that such information is provided to the
Partnership by the Limited Partners.

                  B.       The tax matters partner is authorized, but not
required:

                  (1)      to enter into any settlement with the IRS with
                           respect to any administrative or judicial proceedings
                           for the adjustment of Partnership items required to
                           be taken into account by a Partner for income tax
                           purposes (such administrative proceedings being
                           referred to as a "tax audit" and such judicial
                           proceedings being referred to as "judicial review"),
                           and in the settlement agreement the tax matters
                           partner may expressly state that such agreement shall
                           bind all Partners, except that such settlement
                           agreement shall not bind any Partner (i) who (within
                           the time prescribed pursuant to the Code and
                           Regulations) files a statement with the IRS providing
                           that the tax matters partner shall not have the
                           authority to enter into a settlement agreement on
                           behalf of such Partner or (ii) who is a "notice
                           partner" (as defined in Section 6231 of the Code) or
                           a member of a "notice group" (as defined in Section
                           6223(b)(2) of the Code);

                  (2)      in the event that a notice of a final administrative
                           adjustment at the Partnership level of any item
                           required to be taken into account by a Partner for
                           tax purposes (a "final adjustment") is mailed to the
                           tax matters partner, to seek judicial review of such
                           final adjustment, including the filing of a petition
                           for readjustment with the Tax Court or the United
                           States Claims Court, or the filing of a complaint for
                           refund with the District Court of the United States
                           for the district in which the Partnership's principal
                           place of business is located;

                  (3)      to intervene in any action brought by any other
                           Partner for judicial review of a final adjustment;

                                     - 47 -
<PAGE>

                  (4)      to file a request for an administrative adjustment
                           with the IRS at any time and, if any part of such
                           request is not allowed by the IRS, to file an
                           appropriate pleading (petition or complaint) for
                           judicial review with respect to such request;

                  (5)      to enter into an agreement with the IRS to extend the
                           period for assessing any tax which is attributable to
                           any item required to be taken into account by a
                           Partner for tax purposes, or an item affected by such
                           item; and

                  (6)      to take any other action on behalf of the Partners of
                           the Partnership in connection with any tax audit or
                           judicial review proceeding to the extent permitted by
                           applicable law or regulations.

         The taking of any action and the incurring of any expense by the tax
matters partner in connection with any such proceeding, except to the extent
required by law, is a matter in the sole and absolute discretion of the tax
matters partner and the provisions relating to indemnification of Indemnitees
set forth in Section 7.7 of this Agreement shall be fully applicable to the tax
matters partner in its capacity as such.

                  C.       The tax matters partner shall receive no compensation
for its services. All third party costs and expenses incurred by the tax matters
partner in performing its duties as such (including legal and accounting fees)
shall be borne by the Partnership. Nothing herein shall be construed to restrict
the Partnership from engaging an accounting firm to assist the tax matters
partner in discharging its duties hereunder.

         Section 10.4      Organizational Expenses

         The Partnership shall elect to deduct expenses, if any, incurred by it
in organizing the Partnership ratably over a sixty (60)-month period as provided
in Section 709 of the Code.

         Section 10.5      Withholding

         Each Limited Partner hereby authorizes the Partnership to withhold from
or pay on behalf of or with respect to such Limited Partner any amount of
federal, state, local, or foreign taxes that the General Partner determines that
the Partnership is required to withhold or pay with respect to any amount
distributable or allocable to such Limited Partner pursuant to this Agreement,
including, without limitation, any taxes required to be withheld or paid by the
Partnership pursuant to Sections 1441, 1442, 1445, or 1446 of the Code. Any
amount paid on behalf of or with respect to a Limited Partner shall constitute a
loan by the Partnership to such Limited Partner, which loan shall be repaid by
such Limited Partner within fifteen (15) days after notice from the General
Partner that such payment must be made unless (i) the Partnership withholds such
payment from a distribution which would otherwise be made to the Limited
Partner, or (ii) the General Partner determines, in its sole and absolute
discretion, that such payment may be satisfied out of the available funds of the
Partnership which would, but for such payment, be distributed to the Limited
Partner. Any amounts withheld pursuant to the foregoing clauses (i) or (ii)
shall be treated as having been distributed to such Limited Partner. Each
Limited Partner hereby unconditionally and irrevocably grants to the Partnership
a security interest in such Limited Partner's Partnership Interest to secure
such Limited Partner's obligation

                                     - 48 -
<PAGE>

to pay to the Partnership any amounts required to be paid pursuant to this
Section 10.5. In the event that a Limited Partner fails to pay any amounts owed
to the Partnership pursuant to this Section 10.5 when due, the General Partner
may, in its sole and absolute discretion, elect to make the payment to the
Partnership on behalf of such defaulting Limited Partner, and in such event
shall be deemed to have loaned such amount to such defaulting Limited Partner
and, until repayment of such loan, shall succeed to all rights and remedies of
the Partnership as against such defaulting Limited Partner (including, without
limitation, the right to receive distributions). Any amounts payable by a
Limited Partner hereunder shall bear interest at the base rate on corporate
loans at large United States money center commercial banks, as published from
time to time in the Wall Street Journal, plus four percentage points (but not
higher than the maximum lawful rate) from the date such amount is due (i.e.,
fifteen (1 5) days after demand) until such amount is paid in full. Each Limited
Partner shall take such actions as the Partnership or the General Partner shall
request in order to perfect or enforce the security interest created hereunder.

                                   ARTICLE XI
                            TRANSFERS AND WITHDRAWALS

         Section 11.1      Transfer

                  A.       The term "transfer," when used in this Article 11
with respect to a Partnership Interest, shall be deemed to refer to a
transaction by which the General Partner purports to assign its General
Partnership Interest to another Person or by which a Limited Partner purports to
assign its Limited Partnership Interest to another Person, and includes a sale,
assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any
other disposition by law or otherwise. The term "transfer" when used in this
Article 11 does not include any exchange of Partnership Units by a Limited
Partner pursuant to Section 8.6.

                  B.       No Partnership Interest shall be transferred, in
whole or in part, except in accordance with the terms and conditions set forth
in this Article 11. Any transfer or purported transfer of a Partnership Interest
not made in accordance with this Article 11 shall be null and void.

         Section 11.2      Transfer of Partnership Interests of the General
                           Partner

                  A.       The General Partner shall not withdraw from the
Partnership or transfer all or any portion of its interest in the Partnership
except in connection with a transaction described in Section 11.2.B or 11.2.C.

                  B.       Crescent Equities shall not engage in any merger,
consolidation or other combination with or into another Person, or sale of all
or substantially all of its assets, or any reclassification, or recapitalization
or change of outstanding REIT Shares (other than a reincorporation, a
reorganization primarily for the purpose of changing domicile or converting to
corporate form, a change in par value, or from par value to no par value, or as
a result of a subdivision or combination as described in the definition of
"Exchange Factor," which require no consent of the Limited Partners under this
Agreement) ("Transaction"), unless the Transaction either:

                                     - 49 -
<PAGE>

                  (1)      includes a merger of the Partnership or sale of
                           substantially all of the assets of the Partnership,
                           as a result of which all Limited Partners will
                           receive for each Partnership Unit an amount of cash,
                           securities, or other property equal to the product of
                           the Exchange Factor and the greatest amount of cash,
                           securities or other property paid to a holder of one
                           REIT Share in consideration of one REIT Share at any
                           time during the period from and after the date on
                           which the Transaction is consummated, provided that
                           if, in connection with the Transaction, a purchase,
                           tender or exchange offer shall have been made to and
                           accepted by the holders of more than fifty percent
                           (50%) of the outstanding REIT Shares, the holders of
                           Partnership Units shall receive the greatest amount
                           of cash, securities, or other property which a
                           Limited Partner would have received had it exercised
                           the Exchange Right and received REIT Shares in
                           exchange for all of its Partnership Units immediately
                           prior to the expiration of such purchase, tender or
                           exchange offer; or

                  (2)      provides that the Partnership shall continue as a
                           separate entity and grants to the Limited Partners
                           exchange rights with respect to the ownership
                           interests in the new entity that are substantially
                           equivalent to the Exchange Rights provided for in
                           Section 8.6.

                  C.       Crescent Equities shall not transfer all or any
portion of its ownership interest in the General Partner; provided, however,
that Crescent Equities may liquidate the General Partner.

         Section 11.3      Transfer of Partnership Interests of Limited Partners
                           Other Than Crescent Equities

                  A.       Subject to the provisions of Sections 11.3.C, 11.3.D,
11.3.E, 11.3.F and 11.3.G hereof, any Limited Partner other than Crescent
Equities may freely transfer all or any portion of its Partnership Interest. Any
transferee of a Limited Partnership Interest (whether such transferee is a
Substituted Limited Partner or an Assignee) shall also become the owner of any
Partnership Units associated with such Limited Partnership Interest, and shall
be entitled to exercise the Exchange Rights with respect to such Partnership
Units in accordance with the terms and conditions set forth in Section 8.6
above.

                  B.       If a Limited Partner is Incapacitated, the executor,
administrator, trustee, committee, guardian, conservator or receiver of such
Limited Partner's estate shall have all the rights of a Limited Partner, but not
more rights than those enjoyed by other Limited Partners, for the purpose of
settling or managing the estate and such power as the Incapacitated Limited
Partner possessed to transfer all or any part of its interest in the
Partnership. The Incapacity of a Limited Partner, in and of itself, shall not
dissolve or terminate the Partnership.

                  C.       The General Partner may prohibit any transfer
otherwise permitted under this Section 11.3 by a Limited Partner of its
Partnership Interest if, in the opinion of legal counsel to the Partnership,
such transfer would require filing of a registration statement under the

                                     - 50 -
<PAGE>

Securities Act or would otherwise violate any federal or state securities laws
or regulations applicable to the Partnership or the Partnership Interest.

                  D.       No transfer by a Limited Partner of its Partnership
Interest may be made to any Person if (i) in the opinion of legal counsel for
the Partnership, it would result in the Partnership being treated as an
association taxable as a corporation for federal income tax purposes, or result
in a termination of the Partnership for federal income tax purposes, (ii) in the
opinion of the legal counsel for the Partnership, it would adversely affect the
ability of Crescent Equities to continue to qualify as a REIT or subject
Crescent Equities to any additional taxes under Section 857 or Section 4981 of
the Code, or (iii) the General Partner determines that such transfer is
effectuated through or, together with other similar transfers, could result in
the creation of an "established securities market" or a "secondary market (or
the substantial equivalent thereof)" or otherwise increase the likelihood that
the Partnership would be treated as a "publicly traded partnership" within the
meaning of Code Section 7704 and the related Notice 88-75, 1988-2 C.B. 386, and
Treasury Regulations Section 1.7704-1.

                  E.       No transfer by a Limited Partner of its Partnership
Interest may be made (i) to any Person who lacks the legal right, power or
capacity to own a Partnership Interest, (ii) in violation of any provision of
any mortgage or trust deed (or the note or bond secured thereby) constituting a
Lien against an asset of the Partnership, (iii) in violation of applicable law,
or (iv) if such transfer would, in the opinion of counsel to the Partnership,
cause any portion of the assets of the Partnership to constitute assets of any
employee benefit plan pursuant to Department of Labor regulations section
2510.2-101.

                  F.       No transfer of a Limited Partnership Interest may be
made to a lender to the Partnership or any Person who is related (within the
meaning of Regulations Section 1.752-4(b)) to any lender to the Partnership
whose loan constitutes a Nonrecourse Liability, except with the consent of the
General Partner, which consent may be granted or withheld in the sole and
absolute discretion of the General Partner.

         Section 11.4      Substituted Limited Partners

                  A.       Except as otherwise expressly provided in the last
sentence of this Section 11.4.A, no Limited Partner shall have the right to
substitute a transferee as a Limited Partner in its place without the consent of
the General Partner, which consent may be granted or withheld by the General
Partner in its sole and absolute discretion. The General Partner's failure or
refusal to permit a transferee of a Limited Partnership Interest to become a
Substituted Limited Partner shall not give rise to any cause of action against
the Partnership or any Partner. Notwithstanding anything to the contrary
contained above in this Section 11.4.A, if the transferee of a Limited
Partnership Interest is a Person listed on Exhibit E attached hereto, the
General Partner shall be required to admit such transferee as a Substituted
Limited Partner, provided that (i) the transfer of the Limited Partnership
Interest to such Person is not prohibited under the provisions of Sections
11.3.C through G hereof, and (ii) such transferee complies with the provisions
of the second sentence of Section 11.4.B hereof.

                  B.       A transferee who has been admitted as a Substituted
Limited Partner in accordance with this Article 11 shall have all the rights and
powers and be subject to all the

                                     - 51 -
<PAGE>

restrictions and liabilities of a Limited Partner under this Agreement. The
admission of any transferee as a Substituted Limited Partner shall be subject to
the transferee executing and delivering to the Partnership an acceptance of all
of the terms and conditions of this Agreement (including, without limitation,
the provisions of Section 2.4) and such other documents or instruments as may be
required to effect the admission.

                  C.       Upon the admission of a Substituted Limited Partner,
the General Partner shall amend Exhibit A to reflect the name, address, number
of Partnership Units, and Partnership Interest of such Substituted Limited
Partner and to eliminate or adjust, if necessary, the name, address and interest
of the predecessor of such Substituted Limited Partner.

         Section 11.5      Assignees

         If the General Partner, in its sole and absolute discretion, does not
consent to the admission of any permitted transferee under Section 11.3 as a
Substituted Limited Partner, as described in Section 11.4, such transferee shall
be considered an Assignee for purposes of this Agreement. An Assignee shall be
deemed to have had assigned to it, and shall be entitled to receive
distributions from the Partnership and the share of Net Income, Net Losses,
Recapture Income, and any other items of income, gain, loss, deduction and
credit of the Partnership attributable to the Partnership Interest transferred
to such transferee, but shall not be entitled to vote such Partnership Interest
on any matter presented to the Limited Partners for a vote (such Partnership
Interest being deemed to have been voted on such matter in the same proportion
as all other Partnership Interests held by the Limited Partners are voted). In
the event any such transferee desires to make a further transfer of any such
Partnership Interest, such transferee shall be subject to all of the provisions
of this Article 11 to the same extent and in the same manner as any Limited
Partner desiring to make a transfer of a Partnership Interest.

         Section 11.6      General Provisions

                  A.       No Limited Partner may withdraw from the Partnership
other than as a result of a permitted transfer of all of such Limited Partner's
Partnership Interest in accordance with this Article 11 or pursuant to an
exchange of its Partnership Interest under Section 8.6.

                  B.       Any Limited Partner who shall transfer all of its
Partnership Interest in a permitted transfer pursuant to this Article 11 or
pursuant to an exchange of all of its Partnership Units under Section 8.6 shall
cease to be a Limited Partner.

                  C.       If any Partnership Interest is exchanged pursuant to
Section 8.6 or transferred pursuant to this Article 11 at any time other than
the end of a fiscal year, Net Income, Net Loss, each item thereof and all other
items attributable to such interest for such fiscal year shall be allocated
between the transferor Partner and the transferee Partner in the same ratio as
the number of days in such fiscal year before and after such transfer, except
that gain or loss attributable to the sale or other disposition of all or any
substantial portion of the Partnership assets or to other extraordinary
non-recurring items shall be allocated to the owner of the Partnership Interest
as of the date of closing of the sale or other disposition, or, with respect to
other extraordinary non-recurring items, the date the profit is realized or the
loss is incurred, as the case may be. Solely for purposes of the allocations to
be made under the preceding sentence

                                     - 52 -
<PAGE>

(but not for any other purpose), (i) any Partnership Interest that is exchanged
or otherwise transferred prior to the eighth day of a month shall receive
allocations under the preceding sentence as if it had been transferred on the
first day of the month, (ii) any Partnership Interest that is exchanged or
otherwise transferred on or after the eighth day of a month and prior to the
twenty-third day of such month shall receive allocations under the preceding
sentence as if it had been transferred on the fifteenth day of the month, and
(iii) any Partnership Interest that is exchanged or otherwise transferred on or
after the twenty-third day of a month shall receive allocations under the
preceding sentence as if it had been transferred on the first day of the next
succeeding month. All distributions of Available Cash with respect to which the
Partnership Record Date is before the date of such transfer or exchange shall be
made to the transferor Partner, and all distributions of Available Cash
thereafter shall be made to the transferee Partner.

         Section 11.7      Acquisition of Partnership Interest by Partnership

         The Partnership may acquire, by purchase, redemption or otherwise, any
Partnership Interest or other interest of a Partner in the Partnership. Any
Partnership Interest or other interest so acquired by the Partnership shall be
deemed canceled. In the event that a Partnership Interest is acquired by the
Partnership pursuant to this Section 11.7, the Partnership Interest of each
other existing Partner shall be increased, as of the date of acquisition of such
Partnership Interest by the Partnership, such that the Partnership Interest of
each Partner shall be equal to the sum of (a) each Partner's existing
Partnership Interest, plus (b) the product obtained by multiplying (i) each
Partner's existing Partnership Interest by (ii) a fraction, the numerator of
which is equal to the Partnership Interest acquired by the Partnership and the
denominator of which is equal to the result obtained by subtracting (A) one
minus (B) the Partnership Interest acquired by the Partnership.

                                  ARTICLE XII
                              ADMISSION OF PARTNERS

         Section 12.1      Admission of Substituted General Partner

         A successor to all of the General Partner's General Partnership
Interest pursuant to Section 11.2 hereof who is proposed to be admitted as a
substituted General Partner shall be admitted to the Partnership as the General
Partner, effective simultaneously with such transfer. Any such transferee shall
carry on the business of the Partnership without dissolution. In each case, the
admission shall be subject to the substituted General Partner executing and
delivering to the Partnership an acceptance of all of the terms and conditions
of this Agreement and such other documents or instruments as may be required to
effect the admission.

         Section 12.2      Admission of Additional or Employee Limited Partners

                  A.       After the admission to the Partnership of the Limited
Partners on the date hereof, a Person who makes a Capital Contribution to the
Partnership in accordance with Section 4.3 hereof or receives a Limited
Partnership Interest pursuant to Section 4.7 hereof shall be admitted to the
Partnership as an Additional Limited Partner or Employee Limited Partner, as the
case may be, only upon furnishing to the General Partner (i) evidence of
acceptance in form satisfactory to the General Partner of all of the terns and
conditions of this Agreement, including,

                                     - 53 -
<PAGE>

without limitation, the power of attorney granted in Section 2.4 hereof, and
(ii) such other documents or instruments as may be required in the discretion of
the General Partner in order to effect such Person's admission as an Additional
Limited Partner or Employee Limited Partner, as the case may be. The admission
of any Person as an Additional Limited Partner or Employee Limited Partner, as
the case may be, shall become effective on the date upon which the name of such
Person is recorded on the books and records of the Partnership, following the
consent of the General Partner to such admission.

                  B.       If any Additional Limited Partner or Employee Limited
Partner is admitted to the Partnership at any time other than the end of a
fiscal year, Net Income, Net Loss, each item thereof and all other items for
such fiscal year shall be allocated among such Additional Limited Partner or
Employee Limited Partner and all other Partners by taking into account their
varying interests during such fiscal year in accordance with Section 706(d) of
the Code. For this purpose, Net Income, Net Loss, each item thereof and all
other items for such fiscal year shall be prorated based on the portion of the
taxable year that has elapsed prior to the admission of such Additional Limited
Partner or Employee Limited Partner, except that gain or loss attributable to
the sale or other disposition of all or any substantial portion of the
Partnership assets or to other extraordinary non-recurring items shall be
allocated to the Partners who own Partnership Interests as of the date of
closing of the sale or other disposition, or, with respect to other
extraordinary non-recurring items, the date the profit is realized or the loss
is incurred, as the case may be. Solely for purposes of the allocations to be
made under the preceding sentence (but not for any other purpose), (i) any
Additional Limited Partner or Employee Limited Partner that is admitted to the
Partnership prior to the eighth day of a month shall receive allocations under
the preceding sentence as if such Partner had been admitted on the first day of
the month, (ii) any Additional Limited Partner or Employee Limited Partner that
is admitted to the Partnership on or after the eighth day of the month and prior
to the twenty-third day of such month shall receive allocations under the
preceding sentence as if such Partner had been admitted on the fifteenth day of
the month, and (iii) any Additional Limited Partner or Employee Limited Partner
that is admitted to the Partnership on or after the twenty-third day of a month
shall receive allocations under the preceding sentence as if such Partner had
been admitted on the first day of the next succeeding month. All distributions
of Available Cash with respect to which the Partnership Record Date is before
the date of admission of such Additional Limited Partner or Employee Limited
Partner shall be made solely to Partners other than the Additional Limited
Partner or Employee Limited Partner, and all distributions of Available Cash
thereafter shall be made to all Partners including the Additional Limited
Partner or Employee Limited Partner.

                  C.       Greenbrier has executed and delivered to the General
Partner the Greenbrier Agreement. The General Partner, exercising its discretion
pursuant to Section 12.2.A hereof, hereby agrees that the Greenbrier Agreement
is the sole document required to effectuate the admission to the Partnership of
Greenbrier as an Additional Limited Partner. The Greenbrier Agreement contains
an "evergreen" provision so that it shall be deemed reexecuted and delivered to
the General Partner by Greenbrier if, as and whenever it shall acquire future
installments of Partnership Units under the Consultant Unit Agreement if, prior
to the acquisition of any such future installment, it shall have exchanged all
of its Partnership Units and consequently ceased to be a Limited Partner
pursuant to Section 11.6.B hereof. Accordingly, if, as and whenever Greenbrier
receives Partnership Units pursuant to the terms of the Consultant Unit
Agreement, the General Partner shall automatically admit Greenbrier as an
Additional Limited Partner

                                     - 54 -
<PAGE>

without requiring any additional documentation from Greenbrier, even if
Greenbrier is not at that time a Limited Partner of the Partnership.

         Section 12.3      Amendment of Agreement and Certificate of Limited
                           Partnership

         For the admission to the Partnership of any Partner in accordance with
the provisions of this Agreement, the General Partner shall take all steps
necessary and appropriate under the Act to amend the records of the Partnership
and, if necessary, to prepare as soon as practical an amendment of this
Agreement (including an amendment of Exhibit A) and, if required by law, shall
prepare and file an amendment to the Certificate and may for this purpose
exercise the power of attorney granted pursuant to Section 2.4 hereof.

                                  ARTICLE XIII
                           DISSOLUTION AND LIQUIDATION

         Section 13.1      Dissolution

         The Partnership shall not be dissolved by the admission of Substituted
Limited Partners, Additional Limited Partners or Employee Limited Partners, or
by the admission of a substituted General Partner in accordance with the terms
of this Agreement. Upon the withdrawal of the General Partner, any substituted
General Partner shall continue the business of the Partnership. The Partnership
shall dissolve, and its affairs shall be wound up, upon the first to occur of
any of the following ("Liquidating Events"):

                  A.       the expiration of its term as provided in Section 2.5
hereof.

                  B.       an event of withdrawal of the General Partner, as
defined in the Act (other than (i) a liquidation of the General Partner into
Crescent Equities, in which event Crescent Equities shall become the General
Partner, or (ii) an event of Bankruptcy), unless within ninety (90) days after
the withdrawal remaining Partners owning a majority-in-interest of the total
Partnership Interests of the remaining Partners agree in writing to continue the
business of the Partnership and to the appointment, effective immediately prior
to the date of withdrawal, of a substitute General Partner;

                  C.       an election to dissolve the Partnership made in
writing by the General Partner;

                  D.       entry of a decree of judicial dissolution of the
Partnership pursuant to the provisions of the Act;

                  E.       the sale of all or substantially all of the assets
and properties of the Partnership, unless the General Partner elects to continue
the Partnership business for the purpose of the receipt and the collection of
indebtedness or the collection of other consideration to be received in exchange
for the assets of the Partnership (which activities shall be deemed to be part
of the winding up of the Partnership); or

                  F.       a final and non-appealable judgment is entered by a
court with appropriate jurisdiction ding that either Crescent Equities or the
General Partner is bankrupt or insolvent, or a

                                     - 55 -
<PAGE>

final and non-appealable order for relief is entered by a court with appropriate
jurisdiction against either Crescent Equities or the General Partner, in each
case under any federal or state bankruptcy or insolvency laws as now or
hereafter in effect, unless prior to the entry of such order or judgment
remaining Partners owning a majority-in-interest of the total Partnership
Interests of the remaining Partners agree in writing to continue the business of
the Partnership and to the appointment, effective as of a date prior to the date
of such order or judgment, of a substituted General Partner.

         Section 13.2      Winding Up

                  A.       Upon the occurrence of a Liquidating Event, the
Partnership shall continue solely for the purposes of winding up its affairs in
an orderly manner, liquidating its assets (subject to the provisions of Section
13.2.B below), and satisfying the claims of its creditors and Partners. No
Partner shall take any action that is inconsistent with, or not necessary to or
appropriate for, the winding up of the Partnership's business and affairs. The
General Partner (or, in the event there is no remaining General Partner, any
Person elected by Limited Partners owning a majority-in-interest of the total
Partnership Interests of the Limited Partners (the "Liquidator")) shall be
responsible for overseeing the winding up and dissolution of the Partnership and
shall take full account of the Partnership's liabilities and property and the
Partnership property shall be liquidated as promptly as is consistent with
obtaining the fair market value thereof, and the proceeds therefrom (which may,
to the extent determined by the General Partner, include shares of stock in
Crescent Equities) shall be applied and distributed in the following order:

                  (1)      First, to the payment and discharge of all of the
                           Partnership's debts and liabilities to creditors
                           other than the Partners;

                  (2)      Second, to the payment and discharge of all of the
                           Partnership's debts and liabilities to the Partners;
                           and

                  (3)      The balance, if any, to the General Partner and
                           Limited Partners in accordance with their positive
                           Capital Account balances, after giving effect to all
                           contributions, distributions, and allocations for all
                           periods.

The General Partner shall not receive any additional compensation for any
services performed pursuant to this Article 13.

                  B.       Notwithstanding the provisions of Section 13.2.A
hereof which require liquidation of the assets of the Partnership, but subject
to the order of priorities set forth therein, if prior to or upon dissolution of
the Partnership the Liquidator determines that an immediate sale of part or all
of the Partnership's assets would be impractical or would cause undue loss to
the Partners, the Liquidator may, in its sole and absolute discretion, defer for
a reasonable time the liquidation of any assets except those necessary to
satisfy liabilities of the Partnership (including to those Partners as
creditors) and/or distribute to the Partners, in lieu of cash, as tenants in
common and in accordance with the provisions of Section 13.2.A hereof, undivided
interests in such Partnership assets as the Liquidator deems not suitable for
liquidation. Any such distributions in kind shall be made only if, in the good
faith judgment of the Liquidator, such

                                     - 56 -
<PAGE>

distributions in kind are in the best interest of the Partners, and shall be
subject to such conditions relating to the disposition and management of such
properties as the Liquidator deems reasonable and equitable and to any
agreements governing the operation of such properties at such time. The
Liquidator shall determine the fair market value of any property distributed in
kind using such reasonable method of valuation as it may adopt.

                  C.       As part of the liquidation and winding-up of the
Partnership, a proper accounting shall be made of the Capital Account of each
Partner, including an analysis of changes to the Capital Account from the date
of the last previous accounting. Financial statements presenting such accounting
shall include a report of an independent certified public accountant selected by
the Liquidator.

                  D.       As part of the liquidation and winding-up of the
Partnership, the Liquidator may sell Partnership assets (or assets owned by the
Subsidiary Corporations, the Management Company, or any other entity in which
the Partnership is an owner), at the best price and on the best terms and
conditions as the Liquidator in good faith believes are reasonably available at
the time.

         Section 13.3      Compliance with Timing Requirements of Regulations

         In the event the Partnership is "liquidated" within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made pursuant
to this Article 13 to the General Partner and Limited Partners who have positive
Capital Accounts in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2).
If any Partner has a deficit balance in its Capital Account (after giving effect
to all contributions, distributions and allocations for all taxable years,
including the year during which such liquidation occurs), such Partner shall
have no obligation to make any contribution to the capital of the Partnership
with respect to such deficit, and such deficit shall not be considered a debt
owed to the Partnership or to any other Person for any purpose whatsoever. In
the discretion of the Liquidator, a pro rata portion of the distributions that
would otherwise be made to the General Partner and Limited Partners pursuant to
this Article 13 may be:

                  (i)      distributed to a trust established for the benefit of
the General Partner and Limited Partners for the purposes of liquidating
Partnership assets, collecting amounts owed to the Partnership, and paying any
contingent or unforeseen liabilities or obligations of the Partnership or of the
General Partner arising out of or in connection with the Partnership. The assets
of any such trust shall be distributed to the General Partner and Limited
Partners from time to time, in the reasonable discretion of the Liquidator, in
the same proportions as the amount distributed to such trust by the Partnership
would otherwise have been distributed to the General Partner and Limited
Partners pursuant to this Agreement; or

                  (ii)     withheld to provide a reasonable reserve for
Partnership liabilities (contingent or otherwise) and to reflect the unrealized
portion of any installment obligations owed to the Partnership, provided that
such withheld amounts shall be distributed to the General Partner and Limited
Partners as soon as practicable.

                                     - 57 -
<PAGE>

         Section 13.4      Deemed Contribution and Distribution

         Notwithstanding any other provisions of this Article 13, in the event
the Partnership is liquidated within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g) but no Liquidating Event has occurred, the Partnership's
property shall not be liquidated, the Partnership's liabilities shall not be
paid or discharged, and the Partnership's affairs shall not be wound up.
Instead, in accordance with Regulations Section 1.708-1(b)(4), the Partnership
shall be deemed to have contributed all of its assets and liabilities to a new
partnership in exchange for an interest in the new partnership. Immediately
thereafter, the Partnership shall be deemed to have liquidated by distributing
the interests in the new partnership to the new General Partner and the Limited
Partners.

         Section 13.5      Rights of Limited Partners

         Except as otherwise provided in this Agreement, each Limited Partner
shall look solely to the assets of the Partnership for the return of its Capital
Contribution and shall have no right or power to demand or receive property
other than cash from the Partnership. No Limited Partner shall have priority
over any other Limited Partner as to the return of its Capital Contributions,
distributions, or allocations, except as permitted by Section 8.7.C or otherwise
expressly provided in this Agreement.

         Section 13.6      Documentation of Liquidation

         Upon the completion of the liquidation of the Partnership cash and
property as provided in Section 13.2 hereof, the Partnership shall be terminated
and the Certificate and all qualifications of the Partnership as a foreign
limited partnership in jurisdictions other than the State of Delaware shall be
canceled and such other actions as may be necessary to terminate the Partnership
shall be taken. The Liquidator shall have the authority to execute and record
any and all documents or instruments required to effect the dissolution,
liquidation and termination of the Partnership.

         Section 13.7      Reasonable Time for Winding-Up

         A reasonable time shall be allowed for the orderly winding-up of the
business and affairs of the Partnership and the liquidation of its assets
pursuant to Section 13.2 hereof, in order to minimize any losses otherwise
attendant upon such winding-up, and the provisions of this Agreement shall
remain in effect between the Partners during the period of liquidation.

         Section 13.8      Liability of the Liquidator

         The Liquidator shall be indemnified and held harmless by the
Partnership from and against any and all claims, demands, liabilities, costs,
damages and causes of action of any nature whatsoever arising out of or
incidental to the Liquidator's taking of any action authorized under or within
the scope of this Agreement; provided, however, that the Liquidator shall not be
entitled to indemnification, and shall not be held harmless, where the claim,
demand, liability, cost, damage or cause of action at issue arises out of:

                                     - 58 -
<PAGE>

                  (1)      a matter entirely unrelated to the Liquidator's
                           action or conduct pursuant to the provisions of this
                           Agreement; or

                  (2)      the proven willful misconduct or gross negligence of
                           the Liquidator.

         Section 13.9      Waiver of Partition

         Each Partner hereby waives any right to a partition of the Partnership
property.

                                  ARTICLE XIV
                             AMENDMENT OF AGREEMENT

         Section 14.1      Amendments

                  A.       Amendments to this Agreement may be proposed by the
General Partner. Except as provided in Section 14.1.B or 14.1.C, a proposed
amendment shall be adopted and be effective as an amendment hereto if it is
approved by the General Partner and Limited Partners owning a
majority-in-interest of the total Partnership Interests of the Limited Partners.

                  B.       Notwithstanding Section 14.1.A, the General Partner
shall have the power, without the Consent of the Limited Partners, to amend this
Agreement as may be required to facilitate or implement any of the following
purposes:

                  (1)      to add to the obligations of the General Partner or
                           surrender any right or power granted to the General
                           Partner or any Affiliate of the General Partner for
                           the benefit of the Limited Partners;

                  (2)      to reflect the admission, substitution, termination,
                           or withdrawal of Partners in accordance with this
                           Agreement (including, without limitation, adjustments
                           to Exhibit A to reflect such events, as set forth in
                           Section 4.1.B hereof); and

                  (3)      to reflect a change that is of an inconsequential
                           nature and does not adversely affect the Limited
                           Partners in any material respect, or to cure any
                           ambiguity, correct or supplement any provision in
                           this Agreement not inconsistent with law or with
                           other provisions, or make other changes with respect
                           to matters arising under this Agreement that will not
                           be inconsistent with law or with the provisions of
                           this Agreement.

                  C.       Notwithstanding anything to the contrary contained in
Section 14.1.A hereof, this Agreement shall not be amended without the prior
written consent of each Partner adversely affected if such amendment would (i)
convert a Limited Partner's interest in the Partnership into a general partner's
interest, (ii) modify the limited liability of a Limited Partner, (iii) alter
rights of the Partner to receive distributions pursuant to Article 5, or the
allocations specified in Article 6 (except as permitted pursuant to Sections
4.2, 4.3, 4.6, 4.7, 8.7 and Section 14.1.B(3) hereof), (iv) alter or modify the
Exchange Rights set forth in Section 8.6, or the right set forth in Section
11.2.B, (v) cause the termination of the Partnership prior to the time set forth
in Sections 2.5 or 13.1, or (vi) amend this Section 14.1.C. Further, no
amendment may alter the

                                     - 59 -
<PAGE>

restrictions on the General Partner's authority set forth in Section 7.3 without
the consent of all Limited Partners.

                                   ARTICLE XV
                     PARTNER REPRESENTATIONS AND WARRANTIES

         Section 15.1      Representations and Warranties

                  A.       Each Partner represents and warrants severally and
not jointly, and solely on behalf of itself, to the Partnership and the other
Partners as follows:

                           (1)      Organization. If such Partner is not a
natural person, such Partner is duly formed and validly existing and is
qualified to do business and in good standing in the jurisdictions in which it
does business.

                           (2)      Due Authorization; Binding Agreement. This
Agreement has been duly executed and delivered by such Partner, or an authorized
representative of such Partner, and constitutes a legal, valid and binding
obligation of such Partner, enforceable against such Partner in accordance with
the terms hereof.

                           (3)      Consents and Approvals. No consent, waiver,
approval or authorization of, or filing, registration or qualification with, or
notice to, any governmental unit or any other person is required to be made,
obtained or given by such Partner in connection with the execution, delivery and
performance of this Agreement other than consents, waivers, approvals or
authorizations which have been obtained prior to the date hereof.

                           (4)      No Conflict with Other Documents or
Violation of Law. The execution of this Agreement by such Partner and such
Partner's performance of the transactions contemplated herein will not violate
any document, instrument, agreement, stipulation, judgment, order, or any
applicable federal, state or local law, ordinance or regulation to which such
Partner is a party or by which such Partner is bound.

                  B.       Each Limited Partner represents and warrants that its
Limited Partnership Interest is being acquired for its own account and not with
a view to the distribution or other sale thereof, except in a transaction which
is exempt from registration under the Securities Act or registered thereunder.
Any distribution or other sale of the Limited Partnership Interest of such
Limited Partner shall be subject to the provisions of Section 11.3 hereof. Such
Limited Partner further represents and warrants to the Partnership and the other
Partners as follows:

                           (1)      If such Limited Partner is a corporation,
partnership or a Massachusetts business trust or similar business trust, it has
not been formed for the specific purpose of acquiring the Limited Partnership
Interest, and has total assets in excess of Five Million Dollars ($5,000,000);

                           (2)      If such Limited Partner is an individual, he
or she had an individual income in excess of $200,000 in each of the two most
recent tax years or joint income with his or her spouse in excess of $300,000 in
each of those years and has a reasonable expectation of reaching at least the
same income level in the current year;

                                     - 60 -
<PAGE>

                           (3)      Such Limited Partner is a sophisticated
investor with the capacity to protect its own interests in investments of this
nature, and is capable of evaluating the merits and risks of an investment in
the Limited Partnership Interest;

                           (4)      Such Limited Partner has had an opportunity
to ask questions and receive answers concerning the investment in the Limited
Partnership Interest, and has all of the information deemed by it to be
necessary or appropriate to evaluate the investment in the Limited Partnership
Interest and the risks and merits thereof;

                           (5)      Such Limited Partner is aware of the
following:

                                    (i)      An investment in the Limited
Partnership Interest is speculative, with no assurance of any income therefrom;

                                    (ii)     No federal or state agency bas made
any finding or determination as to the fairness of the acquisition, or any
recommendation or endorsement of such acquisition;

                                    (iii)    Transferability of the Limited
Partnership Interest is restricted and, accordingly, it may not be possible for
such Limited Partner to liquidate the Limited Partnership Interest in case of
emergency; and

                                    (iv)     With respect to the tax aspects of
an investment in the Limited Partnership Interest, such Limited Partner in
making this acquisition is not relying to any degree upon the advice of Crescent
Equities or the Partnership, or any Person affiliated therewith, but rather
solely upon its own legal, financial and tax advisors.

                                  ARTICLE XVI
                             ARBITRATION OF DISPUTES

         Section 16.1      Arbitration

         Notwithstanding anything to the contrary contained in this Agreement,
all claims, disputes and controversies between the parties hereto (including,
without limitation, any claims, disputes and controversies between the
Partnership and any one or more of the Partners and any claims, disputes and
controversies among any two or more Partners) arising out of or in connection
with this Agreement or the Partnership created hereby, relating to the validity,
construction, performance, breach, enforcement or termination thereof, or
otherwise, shall be resolved by binding arbitration in the State of Texas, in
accordance with this Article 16 and, to the extent not inconsistent herewith,
the Expedited Procedures and Commercial Arbitration Rules of the American
Arbitration Association.

         Section 16.2      Procedures

         Any arbitration called for by this Article 16 shall be conducted in
accordance with the following procedures:

                                     - 61 -
<PAGE>

                           (1)      The Partnership or any partner (the
"Requesting Party") may demand arbitration pursuant to Section 16.1 hereof at
any time by giving written notice of such demand (the "Demand Notice") to all
other Partners and (if the Requesting Party is not the Partnership) to the
Partnership, which Demand Notice shall describe in reasonable detail the nature
of the claim, dispute or controversy.

                           (2)      Within fifteen (15) days after the giving of
a Demand Notice, the Requesting Party, on the one hand, and each of the other
Partners and/or the Partnership against whom the claim has been made or with
respect to which a dispute has arisen, on the other hand, shall select and
designate in writing to the other party one reputable, disinterested individual
deemed competent to arbitrate the claim, dispute or controversy (a "Qualified
Individual") willing to act as an arbitrator of the claim, dispute or
controversy. Within fifteen (15) days after the foregoing selections have been
made, the arbitrators so selected shall jointly select a third Qualified
Individual willing to act as an arbitrator of the claim, dispute or controversy.
In the event that the two arbitrators initially selected are unable to agree on
a third arbitrator within the second fifteen (15) day period referred to above,
then, on the application of either party, the American Arbitration Association
shall promptly select and appoint a Qualified Individual to act as the third
arbitrator. The three arbitrators selected pursuant to this Section 16.2(2)
shall constitute the arbitration panel for the arbitration in question.

                           (3)      The presentations of the parties hereto in
the arbitration proceeding shall be commenced and completed within sixty (60)
days after the selection of the arbitration panel pursuant to Section 16.2(2)
above, and the arbitration panel shall render its decision in writing within
thirty (30) days after the completion of such presentations. Any decision
concurred in by any two (2) of the arbitrators shall constitute the decision of
the arbitration panel, and unanimity shall not be required.

                           (4)      The arbitration panel shall have the
discretion to include in its decision a direction that all or part of the
attorneys' fees and costs of any party or parties and/or the costs of such
arbitration be paid by any other party or parties. On the application of a party
before or after the initial decision of the arbitration panel, and proof of its
attorneys' fees and costs, the arbitration panel shall order the other party to
make any payments directed pursuant to the preceding sentence.

                           (5)      Notwithstanding anything to the contrary
contained above in this Section 16.2, if either party fails to select a
Qualified Individual to act as an arbitrator for such party with the fifteen
(15) day time period set forth in the first sentence of Section 16.2(2), the
Qualified Individual selected by the other party shall serve as sole arbitrator
under this Section 16.2 in lieu of the arbitration panel. Such sole arbitrator
shall have all of the rights and duties of the arbitration panel set forth above
in this Section 16.2.

         Section 16.3      Binding Character

         Any decision rendered by the arbitration panel pursuant to this Article
16 shall be final and binding on the parties hereto, and judgment thereon may be
entered by any state or federal court of competent jurisdiction

                                     - 62 -
<PAGE>

         Section 16.4      Exclusivity

         Arbitration shall be the exclusive method available for resolution of
claims, disputes and controversies described in Section 16.1 hereof, and the
Partnership and its Partners stipulate that the provisions hereof shall be a
complete defense to any suit, action, or proceeding in any court or before any
administrative or arbitration tribunal with respect to any such claim,
controversy or dispute. The provisions of this Article 16 shall survive the
dissolution of the Partnership.

         Section 16.5      No Alteration of Agreement

         Nothing contained herein shall be deemed to give the arbitrators any
authority, power or right to alter, change, amend, modify, add to, or subtract
from any of the provisions of this Agreement.

                                  ARTICLE XVII
                               GENERAL PROVISIONS

         Section 17.1      Addresses and Notice

         All notices, requests, demands and other communications hereunder to a
Partner shall be in writing and shall be deemed to have been duly given if
delivered by hand or if sent by certified mail, return receipt requested,
properly addressed and postage prepaid, or transmitted by commercial overnight
courier to the Partner at the address set forth in Exhibit A or at such other
address as the Partner shall notify the General Partner in writing. Such
communications shall be deemed sufficiently given, served, sent or received for
all purposes at such time as delivered to the addressee (with the return receipt
or delivery receipt being deemed conclusive evidence of such delivery) or at
such time as delivery is refused by the addressee upon presentation.

         Section 17.2      Titles and Captions

         All article or section titles or captions in this Agreement are for
convenience only. They shall not be deemed part of this Agreement and in no way
define, limit, extend or describe the scope or intent of any provisions hereof.
Except as specifically provided otherwise, (i) references to "Articles" and
"Sections" are to Articles and Sections of this Agreement, and (ii) references
to "Exhibits" are to the Exhibits attached to this Agreement. Each Exhibit
attached hereto and referred to herein is hereby incorporated by reference.

         Section 17.3      Pronouns and Plurals

         Whenever the context may require, any pronoun used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the
singular form of nouns, pronouns and verbs shall include the plural and vice
versa. Any references in this Agreement to "including" shall be deemed to mean
"including without limitation."

                                     - 63 -
<PAGE>

         Section 17.4      Further Action

         The parties shall execute and deliver all documents, provide all
information and take or refrain from taking action as may be necessary or
appropriate to achieve the purpose of this Agreement.

         Section 17.5      Binding Effect

         This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.

         Section 17.6      Creditors

         None of the provisions of this Agreement shall be for the benefit of,
or shall be enforceable by, any creditor of the Partnership.

         Section 17.7      Waiver

         No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach or any other covenant, duty, agreement or condition.

         Section 17.8      No Agency

         Nothing contained herein shall be construed to constitute any partner
the agent of another Partner, except as specifically provided herein, or in any
manner to limit the Partners in the carrying on of their own respective
businesses or activities.

         Section 17.9      Entire Understanding

         This Agreement constitutes the entire agreement and understanding among
the Partners and supersedes any prior understanding and/or written or oral
agreements among them respecting the subject matter herein.

         Section 17.10     Counterparts

         This Agreement may be executed in counterparts, all of which together
shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart. Each party shall become bound by this Agreement immediately
upon affixing its signature hereto.

         Section 17.11     Applicable Law

         This Agreement shall be construed in accordance with and governed by
the laws of the State of Delaware, without regard to the principles of conflicts
of law. The laws of the State of Delaware shall be applied in construing the
Agreement in connection with all arbitration proceedings under Article XVI;
provided that, to the extent that the laws of another jurisdiction

                                     - 64 -
<PAGE>

are otherwise applicable as to procedural requirements relating to the
arbitration, the procedural requirements of such other jurisdiction shall be
complied with.

         Section 17.12     Invalidity of Provisions

         If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respects, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.

         Section 17.13     Guaranty by Crescent Equities

         Crescent Equities unconditionally and irrevocably guarantees to the
Limited Partners the performance by the General Partner of the obligations of
the General Partner under this Agreement. This guaranty is exclusively for the
benefit of the Limited Partners and shall not extend to the benefit of any
creditor of the Partnership.

         Section 17.14     Restriction on Sale of Sonoma Property

         The General Partner hereby acknowledges that the Partnership's ability
to sell or otherwise transfer the Sonoma Property is subject to certain
restrictions under the Sonorna Contribution Agreement for a period of seven (7)
years after the date of the Sonoma Contribution Agreement, or as otherwise set
forth at the end of Article II of the Sonoma Contribution Agreement.

                                     - 65 -
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.

                                  GENERAL PARTNER:

                                  CRESCENT REAL ESTATE EQUITIES, LTD.,
                                  a Delaware corporation

                                  By: /s/ JERRY R. CRENSHAW, JR.
                                     -------------------------------------------
                                  Name: Jerry R. Crenshaw, Jr.
                                       -----------------------------------------
                                  Title: Executive Vice President, Chief
                                         Financial and Accounting Officer
                                        ----------------------------------------

                                  LIMITED PARTNERS:
                                  as set forth in Exhibit A hereto:

                                  By:   CRESCENT REAL ESTATE EQUITIES,
                                        LTD., as attorney-in-fact pursuant to
                                        Sections 2.4 and 14.1.B of the Agreement

                                        By: /s/ DAVID M. DEAN
                                           -------------------------------------
                                        Name: David M. Dean
                                             -----------------------------------
                                        Title: Executive Vice President, Law and
                                               Administration
                                              ----------------------------------
<PAGE>

                                   EXHIBIT A
             PARTNERS, PARTNERSHIP UNITS AND PARTNERSHIP INTERESTS

<TABLE>
<CAPTION>
                                                                                  Partnership        Partnership
            Name and Address of Partner                                              Units            Interests
            ---------------------------                                           -----------        -----------
<S>                                                                               <C>                <C>
General Partner:

Crescent Real Estate Equities, Ltd.                                                    None            1.000000%
777 Main Street
Suite 2100
Fort Worth, TX 76102

Limited Partners:

Crescent Real Estate Equities Company                                                  None           83.290712%
777 Main Street
Suite 2100
Fort Worth, TX 76102

Anderson, John H.                                                                   286,389            0.506735%
P.O. Box 460430
Fort Lauderdale, FL 33346

Big Bend III Investments, L.P.                                                       18,989            0.033599%
4514 Cole Avenue, Suite 400
Dallas, TX 75205

Blalock, Myron G. III                                                                20,857            0.036904%
12 Greenway Plaza, Suite 1400
Houston, TX 77046

Canyon Ranch, Inc.                                                                  503,429            0.890764%
8600 E. Rockcliff Rd.
Tucson, AZ 85750

Cruce, Ervin D.                                                                       2,110            0.003733%
6233 Indian Creek
Fort Worth, TX 76107

Friedman, Alan D.                                                                    11,150            0.019729%
4408 Fairfax
Dallas, TX 75205
</TABLE>

                                      A-1
<PAGE>

<TABLE>
<CAPTION>
                                                                                  Partnership        Partnership
            Name and Address of Partner                                              Units            Interests
            ---------------------------                                           -----------        -----------
<S>                                                                               <C>                <C>
Friedman and Uhlemeyer, Inc.                                                          1,055            0.001867%
c/o Mrs. Bayard H. Friedman
1301 Shady Oaks Lane
Fort Worth, TX 76107

Goff, John C.                                                                       906,485            1.603929%
777 Main Street, Suite 2250
Fort Worth, TX 76102

Haddock, Diane                                                                        1,000            0.001769%
c/o Haddock Investments
210 W. 6th Street
Suite 1206
Fort Worth, TX 76102

Haddock, Gerald W.                                                                  210,419            0.372314%
c/o Haddock Investments
210 W. 6th Street
Suite 1206
Fort Worth, TX 76102

Hersh, Kenneth A.                                                                       422            0.000747%
c/o Natural Gas Partners, L.P.
777 Main Street, Suite 2250
Fort Worth, TX 76102

Joost, Peter M. and Joost, Lindsay M., Trustees U/T/A
dated April 11, 2002                                                                 25,000            0.044235%
555 California Street, Suite 5180
San Francisco, CA 94104

Kelly, Thomas L., II                                                                  8,440            0.014934%
c/o CHB Capital Partners
511 16th Street, Suite 600
Denver, CO 80202

Kelly, W. Whitney                                                                     1,285            0.002274%
777 Main Street, Suite 1160
Fort Worth, TX 76102

Lewis, Michael S.                                                                       960            0.001699%
4405 Hanover
Dallas, TX 75225
</TABLE>

                                       A-2
<PAGE>

<TABLE>
<CAPTION>
                                                                                  Partnership        Partnership
            Name and Address of Partner                                              Units            Interests
            ---------------------------                                           -----------        -----------
<S>                                                                               <C>                <C>
Luce, Thomas W., III, Trustee                                                         4,220            0.007467%
David N. Meyerson 1982 Trust UA
8/16/82
4514 Cole Avenue, Suite 400
Dallas, TX 75205

Luce, Thomas W., III, Trustee                                                         4,220            0.007467%
Marti A. Meyerson 1982 Trust UA
8/16/82
4514 Cole Avenue, Suite 400
Dallas, TX 75205

Moore, Darla                                                                        261,602            0.462877%
777 Main Street, Suite 2250
Fort Worth, TX 76102

Office Towers LLC                                                                 3,135,481            5.547902%
639 Isbell Road, #390
Reno, NV 89509
Attn: Ms. Jan George

Rainwater, Inc.                                                                      24,753            0.043798%
777 Main Street, Suite 2250
Fort Worth, TX 76102
Attn: Karen Reynolds

Rainwater, Courtney E.                                                               21,098            0.037331%
777 Main Street, Suite 2250
Fort Worth, TX 76102
Attn: Karen Reynolds

Rainwater, Matthew J.                                                                21,098            0.037331%
777 Main Street, Suite 2250
Fort Worth, TX 76102
Attn: Karen Reynolds

Rainwater, Richard Todd                                                              21,098            0.037331%
777 Main Street, Suite 2250
Fort Worth, TX 76102
Attn: Karen Reynolds
</TABLE>

                                       A-3
<PAGE>

<TABLE>
<CAPTION>
                                                                                  Partnership        Partnership
            Name and Address of Partner                                              Units            Interests
            ---------------------------                                           -----------        -----------
<S>                                                                               <C>                <C>
Rainwater, Richard E.                                                             2,306,665            4.081400%
777 Main Street, Suite 2250
Fort Worth, TX 76102
Attn:   Karen Reynolds

Roberts, Peter H.                                                                   339,543            0.600785%
2 Harborage Island
Fort Lauderdale, FL 33316

Rosewood Property Company                                                           629,330            1.113533%
500 Crescent Court
Suite 300
Dallas, TX 75201
Attn: Paul E. Rowsey, III

Senterra Corporation                                                                 83,441            0.147640%
12 Greenway Plaza, Suite 1400
Houston, TX 77046
Attn: Douglas Schnitzer

Taurus Investment Group, Inc.                                                         1,205            0.002132%
1400 E. Newport Center Drive, Suite 209
Deerfield Beach, FL 33442

Tofsky, Neil H.                                                                      20,857            0.036904%
12 Greenway Plaza, Suite 1400
Houston, TX 77046

Varma, Sanjay                                                                         1,266            0.002240%
c/o Sonoma Spa Resorts
777 Main Street, Suite 1390
Fort Worth, TX 76102

Wassel, James S.                                                                        598            0.001058%
14 Hartshorne Lane
Rumson, NJ 07760

Wilson, Thomas L.                                                                       642            0.001136%
5441 Northcrest Road
Fort Worth, TX 76107
</TABLE>

                                       A-4
<PAGE>

<TABLE>
<CAPTION>
                                                                                  Partnership        Partnership
            Name and Address of Partner                                              Units            Interests
            ---------------------------                                           -----------        -----------
<S>                                                                               <C>                <C>
Wright, Christina V.                                                                  1,950            0.003450%
c/o East West Resorts Management, Inc.
15 Highlands Lane
Avon, CO 81620

Yates, Murphy C.                                                                      1,285            0.002274%
777 Main Street, Suite 2100
Fort Worth, TX 76102
                                                                                  8,878,342                 100%
                                                                                  =========          ==========
</TABLE>

Series A Preferred Partnership Unit Holders:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                                Number of Series A Preferred Partnership                Issue Date
              Holder                            Units
------------------------------------------------------------------------------------------------------------------
<S>                                             <C>                                                     <C>
Crescent Real Estate Equities Company                          8,000,000                                 2/19/98
777 Main Street, Suite 2100
Fort Worth, Texas 76102
------------------------------------------------------------------------------------------------------------------
Crescent Real Estate Equities Company                          2,800,000                                 4/26/02
777 Main Street, Suite 2100
Fort Worth, Texas 76102

------------------------------------------------------------------------------------------------------------------
</TABLE>

Series B Redeemable Preferred Partnership Unit Holders:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                                Number of Series B Redeemable Preferred                 Issue Date
              Holder                            Partnership Units
------------------------------------------------------------------------------------------------------------------
<S>                                             <C>                                                     <C>
Crescent Real Estate Equities Company                         3,000,000                                  05/17/02
777 Main Street, Suite 2100
Fort Worth, Texas 76102

------------------------------------------------------------------------------------------------------------------
Crescent Real Estate Equities Company                           400,000                                  06/06/02
777 Main Street, Suite 2100
Fort Worth, Texas 76102
------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      A-5
<PAGE>

                                   EXHIBIT B

                           CAPITAL ACCOUNT MAINTENANCE

1.       Capital Accounts of the Partners

         A.       The Partnership shall maintain for each Partner a separate
                  Capital Account in accordance with the rules of Regulations
                  Section 1.704-1(b)(2)(iv). Such Capital Account shall be
                  increased by (i) the amount of all Capital Contributions made
                  by such Partner to the Partnership pursuant to this Agreement
                  and (ii) such Partner's share of Net Income allocated to such
                  Partner pursuant to Section 6.1.A of the Agreement, all items
                  of Partnership income and gain allocated to such Partner
                  pursuant to Section 6.3 of the Agreement, and all items of
                  Partnership income and gain (including income and gain exempt
                  from tax) computed in accordance with Section 1.B hereof and
                  allocated to such Partner pursuant to Exhibit C hereof, and
                  decreased by (x) the amount of cash or Net Asset Value of all
                  actual and deemed distributions of cash or property made to
                  such Partner pursuant to this Agreement and (y) such Partner's
                  share of Net Loss allocated to such Partner pursuant to
                  Section 6.1.A of the Agreement, all items of Partnership
                  deduction and loss allocated to such Partner pursuant to
                  Section 6.3 of the Agreement, and all items of Partnership
                  deduction and loss computed in accordance with Section 1.B
                  hereof and allocated to such Partner pursuant to Exhibit C
                  hereof.

         B.       For purposes of computing the amount of any item of income,
                  gain, deduction or loss to be reflected in the Partners'
                  Capital Accounts, unless otherwise specified in this
                  Agreement, the determination, recognition and classification
                  of any such item shall be the same as its determination,
                  recognition and classification for federal income tax purposes
                  determined in accordance with Section 703(a) of the Code (for
                  this purpose all items of income, gain, loss or deduction
                  required to be stated separately pursuant to Section 703(a)(l)
                  of the Code shall be included in taxable income or loss), with
                  the following adjustments:

                  (1)      Except as otherwise provided in Regulations Section
                           1.704-1(b)(2)(iv)(m), the computation of all items of
                           income, gain, loss and deduction shall be made
                           without regard to any election under Section 754 of
                           the Code which may be made by the Partnership,
                           provided that the amounts of any adjustments to the
                           adjusted bases of the assets of the Partnership made
                           pursuant to Section 734 of the Code as a result of
                           the distribution of property by the Partnership to a
                           Partner (to the extent that such adjustments have not
                           previously been reflected in the Partners' Capital
                           Accounts) shall be reflected in the Capital Accounts
                           of the Partners in the manner and subject to the
                           limitations prescribed in Regulations Section
                           1.704-1(b)(2)(iv)(m).

                  (2)      The computation of all items of income, gain, loss
                           and deduction shall be made without regard to the
                           fact that items described in Sections 705(a)(l)(B) or
                           705(a)(2)(B) of the Code are not includable in gross

                                      B-1
<PAGE>

                           income or arc neither currently deductible nor
                           capitalized for federal income tax purposes.

                  (3)      Any income, gain or loss attributable to the taxable
                           disposition of any Partnership property shall be
                           determined as if the adjusted basis of such property
                           as of such date of disposition were equal in amount
                           to the Partnership's Carrying Value with respect to
                           such property as of such date.

                  (4)      In lieu of the depreciation, amortization, and other
                           cost recovery deductions taken into account in
                           computing such taxable income or loss, there shall be
                           taken into account Depreciation for such fiscal year.

                  (5)      In the event the Carrying Value of any Partnership
                           Asset is adjusted pursuant to Section 1.D hereof, the
                           amount of any such adjustment shall be taken into
                           account as gain or loss from the disposition of such
                           asset.

                  (6)      Any items specially allocated under Section 2 of
                           Exhibit C hereof shall not be taken into account.

         C.       A transferee of a Partnership Interest shall succeed to a pro
                  rata portion of the Capital Account of the transferor.

         D.       (1)      Consistent with the provisions of Regulations Section
                           1.704-l(b)(2)(iv)(f), and as provided in Section
                           1.D(2), the Carrying Values of all Partnership assets
                           shall be adjusted upward or downward to reflect any
                           Unrealized Gain or Unrealized Loss attributable to
                           such Partnership property, as of the times of the
                           adjustments provided in Section 1.D(2) hereof, as if
                           such Unrealized Gain or Unrealized Loss had been
                           recognized on an actual sale of each such property
                           and allocated pursuant to Article 6 of the Agreement.

                  (2)      Such adjustments shall be made as of the following
                           times: (a) immediately prior to the acquisition of an
                           additional interest in the Partnership by any new or
                           existing Partner in exchange for more than a de
                           minimis Capital Contribution; (b) immediately prior
                           to the distribution by the Partnership to a Partner
                           of more than a de minimis amount of property as
                           consideration for an interest in the Partnership; and
                           (c) immediately prior to the liquidation of the
                           Partnership within the meaning of Regulations Section
                           1.704-1(b)(2)(ii)(g), provided however that
                           adjustments pursuant to clauses (a) and (b) above
                           shall be made only if the General Partner determines
                           that such adjustments are necessary or appropriate to
                           reflect the relative economic interests of the
                           Partners in the Partnership.

                  (3)      In accordance with Regulations Section
                           1.704-1(b)(2)(iv)(e) the Carrying Value of
                           Partnership assets distributed in kind shall be
                           adjusted upward and downward to reflect any
                           Unrealized Gain or Unrealized Loss attributable to
                           such Partnership property, as of the time any such
                           asset is distributed, as if such Unrealized Gain or
                           Unrealized Loss had been

                                       B-2
<PAGE>

                           recognized on an actual sale of such Partnership
                           property and allocated pursuant to Article 6 of the
                           Agreement.

                  (4)      In determining such Unrealized Gain or Unrealized
                           Loss the aggregate cash amount and fair market value
                           of all Partnership assets (including cash or cash
                           equivalents) shall be determined by the General
                           Partner using such reasonable method of valuation as
                           it may adopt, or in the case of a liquidating
                           distribution pursuant to Article 13 of the Agreement,
                           be determined and allocated by the Liquidator using
                           such reasonable methods of valuation as it may adopt.
                           The General Partner, or the Liquidator, as the case
                           may be, shall allocate such aggregate value among the
                           assets of the Partnership (in such manner as it
                           determines in its sole and absolute discretion to
                           arrive at a fair market value for individual
                           properties).

         E.       The provisions of this Agreement relating to the maintenance
of Capital Accounts are intended to comply with Regulations Section 1.704-l(b)
and shall be interpreted and applied in a manner consistent with such
Regulations. In the event the General Partner shall determine that it is prudent
to modify the manner in which the Capital Accounts, or any debits or credits
thereto (including, without limitation, debits or credits relating to
liabilities which are secured by contributed or distributed property or which
are assumed by the Partnership, the General Partner, or the Limited Partners)
are computed in order to comply with such Regulations, the General Partner may
make such modification, provided that it is not likely to have a material effect
on the amounts distributable to any Person pursuant to Article 13 of the
Agreement upon the dissolution of the Partnership. The General Partner also
shall (i) make any adjustments that are necessary or appropriate to maintain
equality between the Capital Accounts of the Partners and the amount of
Partnership capital reflected on the Partnership's balance sheet, as computed
for book purposes, in accordance with Regulations Section 1.704-1(b)(2)(iv)(q),
and (ii) make any appropriate modifications in the event unanticipated events
might otherwise cause this Agreement not to comply with Regulations Section
1.704-1(b).

                                       B-3
<PAGE>

                                    EXHIBIT C

                          SPECIAL TAX ALLOCATION RULES

1.       Special Allocation Rules.

         Notwithstanding any other provision of the Agreement or this Exhibit C,
the following special allocations shall be made in the following order:

         A.       Minimum Gain Chargeback. Notwithstanding the provisions of
                  Article 6 of the Agreement or any other provisions of this
                  Exhibit C, if there is a net decrease in Partnership Minimum
                  Gain during any fiscal year (except as a result of certain
                  conversions and refinancings of Partnership indebtedness,
                  certain capital contributions, or certain revaluations of the
                  Partnership property as further described in Regulations
                  Sections 1.704-2(d)(4), 1.704-2(f)(2) or 1.704-2(f)(3)), each
                  Partner shall be specially allocated items of Partnership
                  income and gain for such year (and, if necessary, subsequent
                  years) in an amount equal to such Partner's share of the net
                  decrease in Partnership Minimum Gain, as determined under
                  Regulations Section 1.704-2(g). Allocations pursuant to the
                  previous sentence shall be made in proportion to the
                  respective amounts required to be allocated to each Partner
                  pursuant thereto. The items to be so allocated shall be
                  determined in accordance with Regulations Sections
                  1.704-2(f)(6) and 1.704-2(j)(2). This Section 1.A is intended
                  to comply with the minimum gain chargeback requirements in
                  Regulations Section 1.704-2(f) and for purposes of this
                  Section 1.A. only, each Partner's Adjusted Capital Account
                  Deficit shall be determined prior to any other allocations
                  pursuant to Article 6 of the Agreement with respect to such
                  fiscal year and without regard to any decrease in Partner
                  Minimum Gain during such fiscal year.

         B.       Partner Minimum Gain Chargeback. Notwithstanding any other
                  provision of Article 6 of the Agreement or any other
                  provisions of this Exhibit C (except Section 1.A hereof), if
                  there is a net decrease in Partner Minimum Gain attributable
                  to a Partner Nonrecourse Debt during any fiscal year (except
                  as a result of certain conversions and refinancings of
                  Partnership indebtedness, certain capital contributions, or
                  certain revaluations of the Partnership property as further
                  described in Regulations Sections 1.704-2(i)(3) and
                  1.704-2(i)(4)), each Partner who has a share of the Partner
                  Minimum Gain attributable to such Partner Nonrecourse Debt,
                  determined in accordance with Regulations Section
                  1.704-2(i)(5), shall be specially allocated items of
                  Partnership income and gain for such year (and, if necessary,
                  subsequent years) in an amount equal to such Partner's share
                  of the net decrease in Partner Minimum Gain attributable to
                  such Partner Nonrecourse Debt, determined in accordance with
                  Regulations Section 1.704-2(i)(5). Allocations pursuant to the
                  previous sentence shall be made in proportion to the
                  respective amounts required to be allocated to each General
                  Partner and Limited Partner pursuant thereto. The items to be
                  so allocated shall be determined in accordance with
                  Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This
                  Section 1.B is intended to comply with the minimum gain
                  chargeback

                                       C-1
<PAGE>

                  requirement in such Section of the Regulations and shall be
                  interpreted consistently therewith. Solely for purposes of
                  this Section 1.B, each partner's Adjusted Capital Account
                  Deficit shall be determined prior to any other allocations
                  pursuant to Article 6 of the Agreement or this Exhibit with
                  respect to such fiscal year, other than allocations pursuant
                  to Section 1.A hereof.

         C.       Qualified Income Offset. In the event any Partner unexpectedly
                  receives any adjustments, allocations or distributions
                  described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4),
                  1.704-l(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), and after
                  giving effect to the allocations required under Sections 1.A
                  and 1.B hereof, such Partner has an Adjusted Capital Account
                  Deficit, items of Partnership income and gain shall be
                  specifically allocated to such Partner in an amount and manner
                  sufficient to eliminate, to the extent required by the
                  Regulations, its Adjusted Capital Account Deficit created by
                  such adjustments, allocations or distributions as quickly as
                  possible. This Section 1.C is intended to constitute a
                  "qualified income offset" under Regulation Section
                  1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
                  therewith.

         D.       Nonrecourse Deductions. Nonrecourse Deductions for any taxable
                  period shall be allocated to the Partners in accordance with
                  their respective Partnership Interests. If the General Partner
                  determines in its good faith discretion that the Partnership's
                  Nonrecourse Deductions must be allocated in a different ratio
                  to satisfy the safe harbor requirements of the Regulations
                  promulgated under Section 704(b) of the Code, the General
                  Partner is authorized, upon notice to the Limited Partners, to
                  revise the prescribed ratio to the numerically closest ratio
                  which does satisfy such requirements.

         E.       Partner Nonrecourse Deductions. Any Partner Nonrecourse
                  Deductions for any fiscal year shall be specially allocated to
                  the Partner who bears the economic risk of loss with respect
                  to the Partner Nonrecourse Debt to which such Partner
                  Nonrecourse Deductions are attributable in accordance with
                  Regulations Sections 1.704-2(b)(4) and 1.704-2(i).

         F.       Code Section 754 Adjustments. To the extent an adjustment to
                  the adjusted tax basis of any Partnership asset pursuant to
                  Section 734(b) or 743(b) of the Code is required, pursuant to
                  Regulations Section l .704-1(b)(2)(iv)(m), to be taken into
                  account in determining Capital Accounts, the amount of such
                  adjustment to the Capital Accounts shall be treated as an item
                  of gain (if the adjustment increases the basis of the asset)
                  or loss (if the adjustment decreases such basis), and such
                  item of gain or loss shall be specially allocated to the
                  Partners in a manner consistent with the manner in which their
                  Capital Accounts are required to be adjusted pursuant to such
                  Section of the Regulations.

         G.       Sections 1245/1250 Recapture. If any portion of gain from the
                  sale of property is treated as Recapture Income, such
                  Recapture Income shall be allocated among the Partners in
                  accordance with the provisions of Regulations Sections
                  1.1245-1(e) and 1.1250-1(f).

                                       C-2
<PAGE>

         H.       Curative Allocations. The allocations set forth in Section 1.C
                  of this Exhibit C (the "Regulatory Allocations") are intended
                  to comply with certain requirements of the Regulations
                  promulgated under Section 704 of the Code. The Regulatory
                  Allocations shall be taken into account in allocating Net
                  Income, Net Losses and other items of income, gain, loss and
                  deduction to each Partner so that, to the extent possible, and
                  to the extent permitted by the Regulations, the cumulative
                  allocations of Net Income, Net Losses and other items and the
                  Regulatory Allocations to each Partner shall be equal to the
                  net amount that would have been allocated to each Partner if
                  the Regulatory Allocations had not been made.

2.       Allocations for Tax Purposes

         A.       Except as otherwise provided in this Section 2, for federal
                  income tax purposes, each item of income, gain, loss and
                  deduction shall be allocated among the Partners in the same
                  manner as its correlative item of "book" income, gain, loss or
                  deduction is allocated pursuant to Article 6 of the Agreement
                  and Section 1 of this Exhibit C.

         B.       Notwithstanding any other provision in this Agreement, in an
                  attempt to eliminate Book-Tax Disparities attributable to a
                  Contributed Property or Adjusted Property, items of income,
                  gain, loss, and deduction shall be allocated for federal
                  income tax purposes (and not for "book" purposes) among the
                  Partners as follows:

                  (1)      (a)      In the case of a Contributed Property, such
                           items attributable thereto shall be allocated among
                           the Partners consistent with the principles of
                           Section 704(c) of the Code that takes into account
                           the variation between the Gross Asset Value of such
                           property and its adjusted basis at the time of
                           contribution; and

                           (b)      any item of Residual Gain or Residual Loss
                           attributable to a Contributed Property shall be
                           allocated among the Partners in the same manner as
                           its correlative item of "book" gain or loss is
                           allocated pursuant to Article 6 of the Agreement and
                           Section 1 of this Exhibit C.

                  (2)      (a)      In the case of an Adjusted Property, such
                           items shall

                                    (1)      first, be allocated among the
                                    Partners in a manner consistent with the
                                    principles of Section 704(c) of the Code to
                                    take into account the Unrealized Gain or
                                    Unrealized Loss attributable to such
                                    property and the allocations thereof
                                    pursuant to Exhibit B and

                                    (2)      second, in the event such property
                                    was originally a Contributed Property, be
                                    allocated among the Partners in a manner
                                    consistent with Section 2.B.(1) of this
                                    Exhibit C; and

                           (b)      any item of Residual Gain or Residual Loss
                           attributable to an Adjusted Property shall be
                           allocated among the Partners in the same

                                       C-3
<PAGE>

                           manner as its correlative item of "book" gain or loss
                           is allocated pursuant to Article 6 of the Agreement
                           and Section 1 of this Exhibit C.

                  (3)      all other items of income, gain, loss and deduction
                           shall be allocated among the Partners in the same
                           manner as their correlative item of "book" gain or
                           loss is allocated pursuant to Article 6 of the
                           Agreement and Section 1 of this Exhibit C.

         C.       For purposes of Sections 2.B(1)(a) and 2.B(2)(a) of this
                  Exhibit C, the General Partner shall utilize the "traditional
                  method with curative allocations" option described in
                  Regulations Section 1.704-3(c) to eliminate Book-Tax
                  Disparities attributable to a Contributed Property or Adjusted
                  Property; provided, however, that curative allocations with
                  respect to a Contributed Property or Adjusted Property shall
                  only be made (i) to the extent necessary to offset the effect
                  of the "ceiling rule" described in Regulations Section
                  1.704-3(b)(1) on allocations of depreciation deductions with
                  respect to such Contributed Property or Adjusted Property, and
                  (ii) from the allocation of gain (or loss) on the sale or
                  other disposition of such Contributed Property or Adjusted
                  Property, up to the amount of such gain (or loss). This
                  curative allocation provision is intended to comply with
                  Regulations Section 1.704-3(c)(3)(iii)(B).

         D.       Notwithstanding the foregoing, for purposes of Section
                  2.B(l)(a) of this Exhibit C, the General Partner shall have
                  the right to utilize the "remedial allocation method"
                  described in Regulations Section 1.704-3(d) to eliminate
                  Book-Tax Disparities attributable to the contribution to the
                  Partnership of the Canyon Ranch Property specified in the
                  Canyon Contribution Agreement. For purposes of determining the
                  amount of book depreciation with respect to the Canyon Ranch
                  Property as described under Regulations Section 1.704-3(d)(2),
                  the excess of book basis over tax basis with respect to the
                  Canyon Ranch Property shall be allocated twenty-four percent
                  (24%) to nondepreciable land and seventy-six percent (76%) to
                  depreciable buildings. The seventy-six percent (76%) allocated
                  to buildings shall be depreciated using the straight-line
                  method over thirty-nine (39) years. In no case shall the
                  General Partner amend this Agreement to provide for an
                  allocation of phantom income to Canyon Ranch to take into
                  account the difference between the book value of the Canyon
                  Ranch Property and its basis except as provided in this
                  Section 2.C of Exhibit C or unless otherwise agreed to by
                  Canyon Ranch in writing.

         E.       Notwithstanding anything to the contrary contained in this
                  Section 2.C, for purposes of Section 2.B(1)(a) of this Exhibit
                  C, the General Partner shall have the authority, in its sole
                  and absolute discretion, to elect the method to be used under
                  Regulations Section 1.704-3 to take into account the variation
                  between the fair market value and the adjusted tax basis of
                  that certain Agreement of Sale dated May 30, 1997 by and
                  between Rosewood Georgetown Joint Venture, a Texas joint
                  venture, as seller, and Lano International, Inc., a Delaware
                  corporation, and Armada/Hoffler Holding Company, a Virginia
                  corporation, as purchaser.

                                       C-4
<PAGE>

3.       General Partner Allocation.

         Notwithstanding any other provision in this Agreement, the interests
(including limited partnership interests) of the General Partner in each
material item of Partnership income, gain, loss, deduction or credit shall be
equal to at least one percent (1%) of each such item at all times during the
existence of the Partnership (except as otherwise required under Sections 704(b)
or 704(c) or the special allocations provided for in Section 1 of this Exhibit
C).

                                       C-5
<PAGE>

                                    EXHIBIT D

                               NOTICE OF EXCHANGE

         The undersigned hereby irrevocably (i) exchanges ___________Partnership
Units in Crescent Real Estate Equities Limited Partnership in accordance with
the terms of the Third Amended and Restated Agreement of Limited Partnership
Agreement of Crescent Real Estate Equities Limited Partnership and the Exchange
Right referred to in Section 8.6 therein, (ii) surrenders such Partnership Units
and all right, title and interest therein, and (iii) directs that the Cash
Amount or the REIT Shares Amount, as the case may be, deliverable upon exercise
of the Exchange Right be delivered to the address specified below, and, if REIT
Shares are to be delivered, such REIT Shares be registered or placed in the
name(s) and at the address(es) specified below.

         The undersigned hereby represents and warrants that (i) it has full
power and authority to transfer all of its right, title and interest in such
Partnership Units, (ii) such Partnership Units are free and clear of all Liens,
and (iii) it will assume and pay any state or local transfer tax that may be
payable as a result of the transfer of such Partnership Units.

Dated:_____________________

Name of Limited Partner:            ____________________________________________

Signature of Limited Partner:       ____________________________________________
                                    By:_________________________________________
                                    Title:______________________________________

Address:                            ____________________________________________
                                    (Street Address)

                                    ____________________________________________
                                    (City) (State) (Zip Code)

                                    Signature [Attested]
                                    [Witnessed] by:
                                    ____________________________________________

If REIT Shares are to be issued, issue to:
Name:
Address:
Please insert social security or identifying number:

                                       D-1
<PAGE>

                                    EXHIBIT E

                         LISTING OF APPROVED SUBSTITUTED
                                LIMITED PARTNERS

777 Main Operating, Ltd.
Agnew, David B.
American Airlines Fixed Benefit Plan
AMSTAR Capital Management Corporation
AMSTAR Continental Plaza Limited Partnership
AMSTAR Group, Ltd.
APL General, Ltd.
Autem, Joseph W.
Bankers Trust Company
Bartlett, James R.
Brooks, Steven D.
Bush, George W.
Caroline Hunt Trust Estate
Chappel, J. Randell
Continental Plaza Ventures
Courtney Elizabeth Rainwater Trust
Cruce, Ervin D.
David N. Meyerson 1982 Trust
Frampton, Harry H., III
Friedman, Alan D.
Friedman, Bayard H.
Goff, John C.
Hackstock, Nick J.
Haddock, Gerald W.
Hana Development, Inc.
Happel, Dr. Otto, Ing.
Harkness, Randall L.
Hersh, Kenneth A.
Isakson, Mark J.
J.R. Bartlett, Inc.
JFI, L.P.
Joost 1991 Children's Trust
Joost, Peter M.
Joost, William E.
Kelly, Thomas L. III
Kelly, W. Whitney
Korenvaes, Harlan B.
Kosac, Michael J.
Marti A. Meyerson 1982 Trust
Matthew James Rainwater Trust
Meyerson, Morton H.

                                      E-1
<PAGE>

Mira Vista Investors, L.P.
Mira Vista Partners
Moore, Samuel S.
Nick J. Hackstock, Inc.
O'Brien, Christopher J.
P.E.P. II Investors, Inc.
Rainwater Investor Partners, Ltd.
Rainwater RainAm Investors
Rainwater, Richard E.
Rainwater, Walter J.
Retirement Plan of Aluminum Company of America Master Trusts
Richard Todd Rainwater Trust
Rosewood Real Estate Equities, Inc.
Small, Robert I.
Squires, Richard D.
The Rosewood Corporation
Thomason MacArthur, Ltd.
Tower Holdings, Inc.
Wilson, Thomas L.
Yates, Murphy C.

                                       E-2