<PAGE>   1
                                                                    EXHIBIT 10.3

                              AMENDED AND RESTATED

                              OPERATING AGREEMENT

                                       OF

                     CHARTER BEHAVIORAL HEALTH SYSTEMS, LLC


       This AMENDED AND RESTATED OPERATING AGREEMENT (this "AGREEMENT"), dated
as of June 16, 1997 is entered into by and between Charter Behavioral Health
Systems, Inc., a Delaware corporation ("CHARTER INC.") and a wholly owned
subsidiary of Magellan Health Services, Inc. ("MAGELLAN"), a Delaware
corporation, and Crescent Operating, Inc. ("CRESCENT OPERATING"), a Delaware
corporation and a designee of Crescent Real Estate Equities Limited Partnership
("CRESCENT"), a Delaware limited partnership (Charter Inc. and Crescent
Operating being referred to individually as a "MEMBER" and collectively as the
"MEMBERS"), and Magellan (who is party solely with respect to the agreements in
Section 3.2(e) of this Agreement), and shall be effective as of the 17 day of
June, 1997 (the "EFFECTIVE DATE").

                              W I T N E S S E T H:

       WHEREAS, Charter Inc. is currently engaged in the business of
operating acute care psychiatric hospitals and certain related activities;

       WHEREAS, Magellan and Crescent are parties to that certain Real Estate
Purchase and Sale Agreement, dated January 29, 1997, as amended (the "REAL
ESTATE PURCHASE AND SALE AGREEMENT"), pursuant to which Magellan has agreed to
cause Charter Inc. and certain subsidiaries of Charter Inc. to sell to Crescent
or its designated affiliate ("CRESCENT AFFILIATE") substantially all of the real
property and related improvements, furniture, fixtures and equipment (including
medical office buildings located on such real property) owned by Charter Inc.
and used in the operation of Charter Inc.'s acute care psychiatric hospitals
(the "PURCHASED FACILITIES");

       WHEREAS, Magellan and Crescent have agreed that, upon closing of the
Real Estate Purchase and Sale Agreement, Crescent Affiliate and Charter
Behavioral Health Systems, LLC (the "COMPANY") shall enter into a master lease
(the "FACILITIES LEASE"), pursuant to which Crescent Affiliate shall lease the
Purchased Facilities and certain other applicable property (collectively, the
"FACILITIES") to the Company;

       WHEREAS, Magellan, Crescent Operating and the Company are parties to that
certain Contribution Agreement, dated of even date herewith (the "CONTRIBUTION
AGREEMENT"), pursuant to which, among other things, Magellan agreed that certain
of its subsidiaries ("CONTRIBUTING SUBSIDIARIES") would contribute assets (the
"CONTRIBUTION ASSETS") to the Company in exchange for the grant of a membership
interest in the Company, and Crescent Operating agreed to contribute cash to the
Company in exchange for a membership interest in the Company;

        WHEREAS, in order to facilitate the transactions contemplated by the
Real Estate Purchase and Sale Agreement, Magellan and Charter Inc. formed the
Company pursuant to a Certificate of Formation filed with the Secretary of
State of the State of Delaware on March 14, 1997 and entered into an Operating
Agreement with respect to the Company pursuant to which Magellan owned a 99%
membership interest in the Company and Charter Inc. owned a 1% membership
interest in the Company.

        WHEREAS, prior to the date hereof, Magellan made a capital contribution
of a 1% interest in the Company to Magellan Executive Corporation ("MEC");

        WHEREAS, prior to the date hereof, Magellan made a capital contribution
of a 98% interest in the Company to Charter, Inc.;

        WHEREAS, immediately prior to the execution of this Agreement, the
Contributing Subsidiaries contributed the Contributed Assets in exchange for a
membership interest in the Company, which in the aggregate and together with
the membership interest of Charter Inc. and MEC, constituted a 50% membership
interest in the Company;

        WHEREAS, immediately prior to the execution of this Agreement, each of
the Contributing Subsidiaries and MEC assigned their membership interest in the
Company to Charter Inc. by execution of the Assignment of Limited Liability
Company Interest and Amendment to Limited Liability Company Agreement of
Charter Behavioral Health Systems, LLC, dated the date hereof;

        WHEREAS, contemporaneously with the execution of this Agreement,
Crescent Operating is contributing $5 million cash to the Company in exchange
for a 50% membership interest in the Company;

        WHEREAS, as a result of the foregoing Crescent Operating has a 50%
membership interest in the Company and Charter Inc. has a 50% membership
interest in the Company; and

       WHEREAS, the Members desire to operate and maintain the limited
liability company known as Charter Behavioral Health Systems, LLC, as formed
under the laws of the
<PAGE>   2
                                                                               2

State of Delaware as March 14, 1997, which shall operate the Facilities (as
hereafter defined), and certain leased facilities, and engage in the business 
of hospital-based behavioral healthcare.

                               A G R E E M E N T

       NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties hereto and of good and valuable consideration, the receipt and 
sufficiency of which are hereby acknowledged, the parties hereto agree to amend
and restate the Company's Operating Agreement, as follows:


                                   SECTION 1.

                                  DEFINITIONS

       1.1    DEFINITIONS.

       Capitalized words and phrases used in this Agreement have the following
meanings:

       "ACT"  means the Delaware Limited Liability Company Act, 6 Del. C.
Section 18-101, et seq., as amended from time to time (or any corresponding
provisions of succeeding law).

       "ACTION"   means any claim, action, suit, arbitration, inquiry,
proceeding or investigation by or before any governmental authority or other
authority with jurisdiction and power to adjudicate such Action.

       "ADDITIONAL CAPITAL CONTRIBUTION"  has the meaning specified in Section
3.2(e) hereof.

       "ADJUSTED CAPITAL ACCOUNT DEFICIT"  means, with respect to any Member,
the deficit balance, if any, in such Member's Capital Account as of the end of
the relevant Allocation Year, after giving effect to the following adjustments:

       (a)    Credit to such Capital Account of any amounts which such Member
is deemed to be obligated to restore pursuant to the penultimate sentences in
Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations; and

       (b)    Debit to such Capital Account the items described in Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-2(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6) of
the Regulations.

       "AFFILIATE"   means, with respect to any Person (i) any individual,
corporation, limited liability company, partnership, trust or other legal entity
directly or indirectly controlling, controlled by or under common control with
such Person, (ii) any officer, director, general partner, member or trustee of
such Person or (iii) any individual who is an officer, director, general
partner, member or trustee of any Person described in clauses (i) or (ii) of
this sentence.  For purposes of this definition, the terms
<PAGE>   3
                                                                               3

"controlling," "controlled by" or "under common control with" shall mean the
possession, direct or indirect, of the power to direct or cause the direction
of the management and policies of a Person, whether through the ownership of
voting securities, by contract or otherwise, or the power to elect at least 50%
of the directors, general partners, members or persons exercising similar
authority with respect to such Person.

       "AGREEMENT" or "OPERATING AGREEMENT"  means this Amended and Restated 
Operating Agreement of Charter Behavioral Health Systems, LLC, as amended from
time to time, which shall constitute the limited liability company agreement of
the Company for all purposes of the Act.  Words such as "herein," "hereinafter,"
"hereof," "hereto" and "hereunder" refer to this Agreement as a whole, unless
the context otherwise requires.

       "ALLOCATION YEAR"  means (i) the period commencing on the Effective Date
and ending on September 30, 1997, (ii) any subsequent twelve (12) month period
commencing on October 1 and ending on September 30 (except as may be required
by Regulations promulgated under Section 706 of the Code), or (iii) any portion
of the period described in clauses (i) or (ii) for which the Company is
required to allocate Profits, Losses and other items of Company income, gain,
loss or deduction pursuant to Section 6 hereof.

       "ANNUAL BUDGET"  has the meaning specified in Section 8.3(a).

       "BANKRUPTCY"  means, with respect to any Person, a "VOLUNTARY
BANKRUPTCY" or an "INVOLUNTARY BANKRUPTCY."  A "VOLUNTARY BANKRUPTCY" means,
with respect to any Person (i) the inability of such Person generally to pay
its debts as such debts become due, or an admission in writing by such Person
of its inability to pay its debts generally or a general assignment by such
Person for the benefit of creditors, (ii) the filing of any petition or answer
by such Person seeking to adjudicate itself as bankrupt or insolvent, or
seeking for itself any liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of such Person or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking, consenting to, or acquiescing in the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other similar
official for such Person or for any substantial part of its property or (iii)
corporate or other action taken by such Person to authorize any of the actions
set forth above.  An "INVOLUNTARY BANKRUPTCY" means, with respect to any
Person, without the consent or acquiescence of such Person, (i) the entering of
an order for relief or approving a petition for relief or reorganization or any
other petition seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or other similar relief under any
present or future bankruptcy, insolvency or similar statute, law or regulation,
(ii) the filing of any such petition against such Person which petition shall
not be dismissed within ninety (90) days, or (iii) without the consent or
acquiescence of such Person, the entering of an order appointing a trustee,
custodian, receiver or liquidator of such Person or of all or any substantial
part of the property of such Person which order shall not be dismissed within
ninety (90) days. The foregoing is intended to supersede and replace the events
listed in Sections 18-304(a) and (b) of the Act.
<PAGE>   4
                                                                               4

       "BUSINESS"  means (i) the operation of an acute care psychiatric
hospital, part of an acute care general hospital operating an acute care
psychiatric unit, a behavioral healthcare residential treatment center, a part
of a facility operating a behavioral healthcare residential treatment center,
or other similar facility providing 24-hour behavioral healthcare, and the
delivery of behavioral healthcare from such facility and other affiliated
facilities; such behavioral healthcare to include inpatient hospitalization,
partial hospitalization programs, outpatient therapy, intensive outpatient
therapy, ambulatory detoxification, behavioral modification programs and
related services; and (ii) additional services, concepts or products undertaken
pursuant to the Franchise Agreement.

       "BUSINESS DAY"  means a day of the year on which banks are not required
or authorized to close in Atlanta, Georgia or Dallas, Texas.

       "CAPITAL ACCOUNT"  means, with respect to any Member, the Capital
Account maintained for such Member in accordance with the following provisions:

              (a)    To each Member's Capital Account there shall be credited
       (i) such Member's Capital Contributions, (ii) such Member's distributive
       share of Profits and any items in the nature of income or gain which are
       specially allocated pursuant to Section 6.3 or Section 6.4 hereof and
       (iii) the amount of any Company liabilities assumed by such Member or
       which are secured by any Property distributed to such Member;

              (b)    To each Member's Capital Account there shall be debited
       (i) the amount of money and the Gross Asset Value of any Property
       distributed to such Member pursuant to any provision of this Agreement,
       (ii) such Member's distributive share of Losses and any items in the
       nature of expenses or losses which are specially allocated pursuant to
       Section 6.3 or Section 6.4 hereof and (iii) the amount of any
       liabilities of such Member assumed by the Company or which are secured
       by any Property contributed by such Member to the Company;

              (c)    In the event a Member's Interest is transferred in
       accordance with the terms of this Agreement, the transferee shall
       succeed to the Capital Account of the transferor to the extent it
       relates to the Transferred Interest; and

              (d)    In determining the amount of any liability for purposes of
       subparagraphs (a) and (b) above there shall be taken into account Code
       Section 752(c) and any other applicable provisions of the Code and
       Regulations.

       The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Regulations Section 1.704-1(b), and shall be interpreted and applied in a
manner consistent with such Regulations.  In the event the Governing Board
determines that it is prudent to modify the manner in which the Capital
Accounts,
<PAGE>   5
                                                                               5

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 Company or any Members), are computed in
order to comply with such Regulations, the Governing Board may make such
modification, provided that such modification is not likely to have a material
effect on the amounts distributed to any Person pursuant to Section 13 hereof
upon the dissolution of the Company.  The Governing Board also shall (i) make
any adjustments that are necessary or appropriate to maintain equality between
the Capital Accounts of the Members and the amount of capital reflected on the
Company'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).

       "CAPITAL CONTRIBUTIONS"  means, with respect to any Member, the amount
of money and the initial Gross Asset Value of any Property (other than money)
contributed to the Company with respect to such Member's Interest.

       "CERTIFICATE"  means the certificate of formation filed with the
Secretary of State of the State of Delaware pursuant to the Act to form the
Company, as originally executed and as amended, modified, supplemented or
restated from time to time, as the context requires.

       "CHARTER DIRECTOR" means a Director designated by Charter Inc. in
accordance with Section 8.1 hereof.

       "CHARTER INC." has the meaning specified in the introductory statement. 

       "CHIEF EXECUTIVE OFFICERS"  has the meaning specified in Section 15.2
hereof.

       "CODE"    means the United States Internal Revenue Code of 1986, as
amended from time to time.

       "COI WARRANT AGREEMENT" means the Warrant Agreement dated the date
hereof between Crescent Operating and Magellan pursuant to which Crescent
Operating is issuing warrants to Magellan.

       "COMPANY"  means the limited liability company, known as Charter
Behavioral Health Systems, LLC, formed pursuant to this Agreement and the
Certificate.

       "COMPANY MINIMUM GAIN"  has the meaning given the term "partnership
minimum gain" in Sections 1.704-2(b)(2) and 1.704-2(d) of the Regulations.

       "CONTRIBUTING SUBSIDIARIES" has the meaning specified in the
introductory statement.

       ""CONTRIBUTING AGREEMENT" has the meaning specified in the recitals.

       "CRESCENT"  has the meaning specified in the introductory statement.

       "CRESCENT DIRECTOR"  means a Director designated by Crescent Operating in
accordance with Section 8.1 hereof.

       "CRESCENT OPERATING" has the meaning specified in the introductory 
statement.

       "DEADLOCK"  has the meaning specified in Section 15.1 hereof.

       "DEBT"  of a Person means (i) any indebtedness for borrowed money or
the deferred purchase price of Property as evidenced by a note, bonds, or other
instruments, (ii) obligations as lessee under capital leases, (iii) to the
extent of the fair market value of any asset owned or held by
<PAGE>   6
                                                                               6

such Person, obligations secured by any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind existing on any such asset whether or
not the Company has assumed or become liable for the obligations secured
thereby, (iv) any obligation under any interest rate swap agreement (the amount
of such obligation shall be deemed to be the amount that would be required to
be paid by such Person to sell, unwind or terminate the swap transaction), (v)
trade credit incurred other than in the ordinary course of business and (vi)
obligations under direct or indirect guarantees of (including obligations
(contingent or otherwise) to assure a creditor against loss in respect of)
indebtedness or obligations of the kinds referred to in clauses (i), (ii),
(iii), (iv) and (v) above.

       "DEPRECIATION"  means, for each Allocation Year, an amount equal to the
depreciation, amortization, or other cost recovery deduction allowable for
United States federal income tax purposes with respect to an asset for such
Allocation Year, except that if the Gross Asset Value of an asset differs from
its adjusted basis for United States federal income tax purposes at the
beginning of such Allocation Year, Depreciation shall be an amount which bears
the same ratio to such beginning Gross Asset Value as the United States federal
income tax depreciation, amortization, or other cost recovery deduction for
such Allocation Year bears to such beginning adjusted tax basis; provided,
however, that if the adjusted basis for United States federal income tax
purposes of an asset at the beginning of such Allocation Year is zero (0),
Depreciation shall be determined with reference to such beginning Gross Asset
Value using any reasonable method selected by the Governing Board.

       "DIRECTOR"  means any of the individuals provided in Section 8.1 hereof
or otherwise designated by the Members to serve on the Governing Board pursuant
to this Agreement and "DIRECTORS" means all of such individuals.

       "DISSOLUTION EVENT"  has the meaning specified in Section 14.1 hereof.

       "EFFECTIVE DATE"  has the meaning specified in the introductory
statement.

       "ELECTION NOTICE"  has the meaning specified in Section 12.8 hereof.

       "ENCUMBRANCES"  has the meaning specified in Section 4.2 hereof.

       "EXCHANGE ACT"  means the Securities Exchange Act of 1934, as amended.

       "EXCLUDED LIABILITIES"  has the meaning specified in Section 9.7(a)
hereof.

       "EXECUTIVE OFFICER"  means each of the Chairman of the Governing Board,
the Vice Chairman of the Governing Board, the President, any Vice President
designated as an "Executive Vice President" of the Company by the Governing
Board, the Chief Financial Officer and the Treasurer.

       "FACILITIES LEASE"  means (i) that certain Master Lease Agreement, dated
as of June ___, 1997, between Crescent Affiliate, as landlord, and the Company 
and its subsidiaries, as lessees, and any
<PAGE>   7
                                                                               7

amendment or renewal thereof, and (ii) any other real estate lease agreements
between Crescent Affiliate, as landlord, and the Company or a subsidiary of 
the Company, as lessee.

       "FAIR MARKET VALUE"  has the meaning specified in Section 12.9 hereof.

       "FIRST OFFER PERIOD"  shall mean a period commencing upon delivery of an
Offer Notice and expiring at 5:00 p.m., New York time, on the 15th Business Day
following delivery of such Offer Notice; provided, however, if the Proposed
Transfer involves Non-Cash Consideration, the First Offer Period shall not
expire until the 10th Business Day after a binding determination of the Fair
Market Value of such Non-Cash Consideration has been made in accordance with
Section 12.9 hereof.

       "FISCAL QUARTER"  means (i) the period commencing on the Effective Date
and ending on June 30, 1997, (ii) any subsequent three-month period commencing
on each of January 1, April 1, July 1 and October 1 and ending on the last date
before the next such date and (iii) the period commencing on the immediately
preceding January 1, April 1, July 1 or October 1, as the case may be, and
ending on the date on which all Property is distributed to the Members pursuant
to Section 12 hereof.

       "FISCAL YEAR"  means (i) the period commencing on the Effective Date and
ending on September 30, 1997, (ii) any subsequent twelve (12) month period
commencing on October 1 and ending on September 30 (except as may be required
by Regulations promulgated under Section 706 of the Code), or (iii) the period
commencing on the immediately preceding October 1 and ending on the date on
which all Property is distributed to the Members pursuant to Section 14 hereof.

       "FRANCHISE AGREEMENT"  means (i) the Master Franchise Agreement, dated
June ___, 1997 among Magellan, through its wholly-owned subsidiary, Charter
Franchise Services, LLC ("CFS") (Magellan and CFS, collectively "Franchisor")
and the Company and any amendment or renewal thereof and (ii) any Franchise
Agreement entered into between Franchisor and the Company or its Affiliates.

       "FRANCHISOR" means, collectively, Magellan and CFS.

       "GAAP"   means generally accepted accounting principles in effect in the
United States of America from time to time.

       "GOVERNING BOARD"  has the meaning specified in Section 8.1 hereof.

       "GROSS ASSET VALUE"  means, with respect to any asset, the asset's
adjusted basis for United States federal income tax purposes, except as
follows:

              (a)    The initial Gross Asset Value of any asset contributed by
       a Member to the Company shall be the gross fair market value of such
       asset, as determined by the Governing Board; provided that the initial
       Gross Asset Values of the assets contributed to the Company pursuant to
       Section 3.1 hereof shall be the Net Asset Values of such assets as set
       forth in such Section, increased by any liabilities either treated as
       assumed by the Company upon the contribution of such assets or to which
       such assets are treated as subject when contributed pursuant to the
       provisions of Code Section 752;
<PAGE>   8
                                                                               8


              (b)    The Gross Asset Values of all Company assets shall be
       adjusted to equal their respective gross fair market values (taking Code
       Section 7701(g) into account), as determined by the Governing Board as
       of the following times:  (i) the acquisition of an additional interest
       in the Company by any new or existing Member in exchange for more than a
       de minimis Capital Contribution; (ii) the distribution by the Company to
       a Member of more than a de minimis amount of Company property as
       consideration for an interest in the Company; and (iii) the liquidation
       of the Company within the meaning of Regulations Section 1.704-
       1(b)(2)(ii)(g), provided that an adjustment described in clauses (i) and
       (ii) of this paragraph shall be made only if the Governing Board
       reasonably determines that such adjustment is necessary to reflect the
       relative economic interests of the Members in the Company;

              (c)    The Gross Asset Value of any item of Company assets
       distributed to any Member shall be adjusted to equal the gross fair
       market value (taking Code Section 7701(g) into account) of such asset on
       the date of distribution as determined by the Governing Board; and

              (d)    The Gross Asset Values of Company assets shall be
       increased (or decreased) to reflect any adjustments to the adjusted
       basis of such assets pursuant to Code Section 734(b) or Code Section
       743(b), but only to the extent that such adjustments are taken into
       account in determining Capital Accounts pursuant to Regulations Section
       1.704-1(b)(2)(iv)(m), and subparagraph (vi) of the definition of
       "PROFITS" and "LOSSES" provided, however, that Gross Asset Values shall
       not be adjusted pursuant to this subparagraph (d) to the extent that an
       adjustment pursuant to subparagraph (b) is necessary or appropriate in
       connection with a transaction that would otherwise result in an
       adjustment pursuant to this subparagraph (d).

If the Gross Asset Value of an asset has been determined or adjusted pursuant
to subparagraph (b) or (d), such Gross Asset Value shall thereafter be adjusted
by the Depreciation taken into account with respect to such asset, for purposes
of computing Profits and Losses.

       "INTEREST"  means a Member's ownership interest in the Company,
including all rights attributable to a member of a limited liability company
under the Act.

       "INVOLUNTARY BANKRUPTCY"  has the meaning set forth in the definition of
Bankruptcy.

       "ISSUANCE ITEMS"  has the meaning specified in Section 6.3(h) hereof.

       "LENDER" has the meaning set forth in Section 8.2(11) hereof.

       "LIQUIDATOR"  has the meaning specified in Section 14.5(a) hereof.

       "MAGELLAN"  has the meaning specified in the introductory statement.
<PAGE>   9
                                                                               9

       "MAJOR DECISION"  has the meaning specified in Section 8.2 hereof.

       "MEC" has the meaning specified in introductory statement.

       "MEMBER"  means Crescent Operating, Charter Inc. or any Person who is 
admitted as a Member pursuant to the terms of this Agreement.  "MEMBERS" means
all such Persons.

       "MEMBER ADVANCE" has the meaning specified in Section 3.2(e) hereof.

       "MEMBER COMMITMENT" has the meaning specified in Section 3.2(e) hereof.

       "MEMBER NONRECOURSE DEBT"  has the same meaning as the term "Member
nonrecourse debt" in Section 1.704-2(b)(4) of the Regulations.

       "MEMBER NOTE" has the meaning specified in Section 3.2(e) hereof.

       "MEMBER NONRECOURSE DEBT MINIMUM GAIN"  means an amount, with respect to
each Member Nonrecourse Debt, equal to the Company Minimum Gain that would
result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Section 1.704-2(i)(3) of the Regulations.

       "MEMBER NONRECOURSE DEDUCTIONS"  has the same meaning as the term
"Member nonrecourse deductions" in Sections 1.704-2(i)(1) and 1.704-2(i)(2) of
the Regulations.

       "NET ASSET VALUE" means, with respect to any asset contributed by a
Member to the Company, the Gross Asset Value of such asset at the time of its
contribution, reduced by any liabilities either treated as assumed by the
Company upon the contribution of such asset or to which such asset is treated
as subject when contributed pursuant to the provisions of Code Section 752;
provided that the initial Net Asset Value of the assets contributed to the
Company pursuant to Section 3.1 hereof shall be as set forth in such Section.

       "NON CASH CONSIDERATION"  has the meaning specified in Section 12.8(e)
hereof.

       "NONRECOURSE DEDUCTIONS"  has the meaning set forth in Section 1.704-
2(b)(1) of the Regulations.

       "NONRECOURSE LIABILITY"  has the meaning set forth in Section 1.704-
2(b)(3) of the Regulations.
<PAGE>   10
                                                                              10

       "NON-SELLING MEMBER"  has the meaning specified in Section 12.8 hereof.

       "OFFER NOTICE"  has the meaning specified in Section 12.8 hereof.

       "OFFER PERCENTAGE"  has the meaning specified in Section 12.8 hereof.

       "OFFERING PARTY"  has the meaning specified in Section 15.3(a) hereof.

       "ORIGINAL CAPITAL CONTRIBUTION"  means, with respect to any Member, any
Capital Contribution provided by such Member as of the Effective Date.

       "PERCENTAGE INTEREST"  means the Interest of each Member expressed as a
percentage as initially set forth in Section 3.1 hereof, or as subsequently
established by the Members in accordance with the provisions of this Agreement.


       "PERCENTAGE INTERESTS"  means the entire percentage interest of
ownership in the Company.

       "PERMITTED TRANSFER"  has the meaning set forth in Section 12.2 hereof.

       "PERSON"  means any individual, partnership (whether general or
limited), limited liability company, corporation, trust, estate, association,
nominee or other entity.

       "PROFITS"  and "LOSSES" mean, for each Allocation Year, an amount equal
to the Company's taxable income or loss for such Allocation Year, determined in
accordance with Code Section 703(a) (for this purpose, all items of income,
gain, loss, or deduction required to be stated separately pursuant to Code
Section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments (without duplication):

       (a)    Any income of the Company that is exempt from United States
Federal income tax and not otherwise taken into account in computing Profits or
Losses pursuant to this definition of "PROFITS" and "LOSSES" shall be added to
such taxable income or loss;

       (b)    Any expenditures of the Company described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Profits or Losses pursuant to this definition of "PROFITS" and
"LOSSES" shall be subtracted from such taxable income or loss;

       (c)    In the event that the Gross Asset Value of any Company asset is
adjusted pursuant to subparagraphs (b) or (c) of the definition of Gross Asset
Value, the amount of such adjustment shall be treated as an item of gain (if
the adjustment increases the Gross Asset Value of the asset) or an
<PAGE>   11
                                                                              11

item of loss (if the adjustment decreases the Gross Asset Value of the asset)
from the disposition of such asset and shall be taken into account for purposes
of computing gain or loss;

       (d)    Gain or loss resulting from any disposition of Property with
respect to which gain or loss is recognized for United States federal income
tax purposes shall be computed by reference to the Gross Asset Value of the
Property disposed of, notwithstanding that the adjusted tax basis of such
Property differs from its Gross Asset Value;

       (e)    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 Allocation Year,
computed in accordance with the definition of Depreciation;

       (f)    To the extent an adjustment to the adjusted tax basis of any
Company asset pursuant to Code Section 734(b) is required, pursuant to
Regulations Section 1.704-(b)(2)(iv)(m)(4), to be taken into account in
determining Capital Accounts as a result of a distribution other than in
liquidation of a Member's Interest in the Company, the amount of such
adjustment 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) from the
disposition of such asset and shall be taken into account for purposes of
computing Profits or Losses;

       (g)    Notwithstanding any other provision of this definition, any items
which are specially allocated pursuant to Section 6.3 or Section 6.4 hereof
shall not be taken into account in computing Profits or Losses; and

       (h)    The amounts of the items of Company income, gain, loss or
deduction available to be specially allocated pursuant to Sections 6.3 and 6.4
hereof shall be determined by applying rules analogous to those set forth in
subparagraphs (a) through (f) above.

       "PROPERTY"  means all real and personal property acquired by the
Company, including cash, and any improvements thereto, and shall include both
tangible and intangible property.

       "PROPOSED TRANSFER"  has the meaning specified in Section 12.8 hereof.

       "PROTECTED INFORMATION"  means trade secrets, confidential or
proprietary information, intellectual property, knowledge or know-how
pertaining primarily to the operation of the Company or the Business or any
confidential or proprietary information concerning any Member, including,
without limitation, research and development information, inventions, formulas,
methods, techniques, processes, protocols, plans, procedures, contracts,
financial information, computer models and know-how.  Protected Information
shall not include Protected Information which at the time of its disclosure was
in the public domain other than as result of a breach hereof by any of the
parties hereto.

       "PURCHASING PARTY"  has the meaning specified in Section 15.3(b) hereof.
<PAGE>   12
                                                                              12

       "REAL ESTATE PURCHASE AND SALE AGREEMENT"  has the meaning specified in
the recitals.

       "RECONSTITUTION PERIOD"  has the meaning specified in Section 14.1(b).

       "REGULATIONS"  means the Income Tax Regulations, including Temporary
Regulations, promulgated under the Code, as such regulations are amended from
time to time.

       "REGULATORY ALLOCATIONS"  has the meaning specified in Section 6.4
hereof.

       "RESPONDING PARTY"  has the meaning specified in Section 15.3(a) hereof.

       "RIGHT OF FIRST REFUSAL"  has the meaning specified in Section 12.8
hereof.

       "SECOND OFFER PERIOD"  shall mean a period commencing on the first
Business Day following the First Offer Period and expiring at 5:00 p.m., New
York time on the 10th Business Day thereafter.

       "SECURITIES ACT"  means the Securities Act of 1933, as amended.

       "SELLING MEMBER"  has the meaning specified in Section 12.8 hereof.

       "SELLING PARTY"  has the meaning set forth in Section 15.3(b) hereof.

       "SENIOR FACILITY" has the meaning set forth in Section 8.2(13) hereof.

       "STATED VALUE"  has the meaning specified in Section 15.3(a) hereof.

       "THIRD PARTY PURCHASER"  has the meaning specified in Section 12.8
hereof.

       "TRANSACTION AGREEMENTS"  means the Real Estate Purchase and Sale
Agreement, the Contribution Agreement, the Facilities Lease, the Franchise
Agreement, the Warrant Agreement, the COI Warrant Agreement, that certain
Subordination Agreement, dated of even date herewith, among Magellan, CFS, the
Company, and Crescent Real Estate Funding VII, L.P. and this Agreement,
collectively.

       "TRANSFER"  means, as a noun, any voluntary or involuntary transfer,
sale, pledge or hypothecation or other disposition and, as a verb, voluntarily
or involuntarily to transfer, sell, pledge or hypothecate or otherwise dispose
of.

       "VOLUNTARY BANKRUPTCY"  has the meaning set forth in the definition of
"BANKRUPTCY."

       "WARRANT AGREEMENT"  means, collectively, that certain Warrant 
Agreement, dated January 29, 1997 between Magellan and Crescent, as amended,
and that certain Warrant Agreement, dated of even date herewith, between
Magellan and Crescent Operating.
<PAGE>   13
                                                                              13



                                   SECTION 2.

                                  THE COMPANY

       2.1    FORMATION.

       The Company was formed pursuant to the Certificate attached hereto as
Exhibit A. The fact that the Certificate is on file in the office of the
Secretary of State of the State of Delaware shall constitute notice that the
Company is a limited liability company. Simultaneously with the execution of
this Agreement, each of the Directors designated in Section 8.1 shall be 
admitted as Directors of the Company. The rights and liabilities of the 
Members and Directors shall be as provided under the Act, the Certificate and 
this Operating Agreement.

       2.2    NAME.

       The name of the Company is Charter Behavioral Health Systems, LLC and 
all business of the Company shall be conducted in such name or in such other 
name as the Governing Board may designate.  The Governing Board may change the 
name of the Company upon ten (10) Business Days notice to the Members and 
shall change it to eliminate the name "Charter" upon expiration of the 
Franchise Agreement in accordance with the terms thereof.

       2.3    PURPOSE; POWERS.

       (a)    The purposes of the Company are to (i) operate the Business, (ii)
make such additional investments and engage in such additional activities as
the Governing Board may approve pursuant to Section 8.2 and (iii) engage in any
and all activities and exercise any power permitted to limited liability
companies under the laws of the State of Delaware, as applicable, related or
incidental to the purposes set forth in clauses (i) and (ii).

       (b)    The Company shall have the power to do any and all acts
necessary, appropriate, proper, advisable, incidental or convenient to or in
furtherance of the purposes of the Company set forth in this Section 2.3 and
has, without limitation, any and all powers that may be exercised on behalf of
the Company by the Governing Board pursuant to Section 8 hereof.

       2.4    PRINCIPAL PLACE OF BUSINESS; AGENT FOR SERVICE OF PROCESS.

       (a)    The principal place of business of the Company shall be located
at such place as is determined by the Governing Board.
<PAGE>   14
                                                                              14

       (b)    The registered agent for service of process on the Company in the
State of Delaware shall be Corporation Service Company or any successor as
appointed by the Governing Board in accordance with the Act.  The address for
the registered agent shall be:

              Corporation Service Company
              1013 Centre Road
              Wilmington, Delaware 19805-1297

       (c)    The initial registered office of the Company in the State of
Delaware is:

              Charter Behavioral Health Systems, LLC
              c/o Corporation Service Company
              1013 Centre Road 
              Wilmington, Delaware 19805-1297

       The Company may maintain other offices, as determined by the Governing
Board.

       (d)    The principal place of business of Charter Inc. is:

              Charter Behavioral Health Systems, Inc.
              3414 Peachtree Road, N.E., Suite 1400
              Atlanta, Georgia 30326
              Attention: General Counsel

       (e)    The principal place of business of Crescent Operating is:

              Crescent Operating, Inc.
              777 Main Street
              Suite 2100
              Fort Worth, Texas  76102
              Attention: Gerald W. Haddock

       2.5    TERM.

       The term of the Company commenced on the date the Certificate was
filed in the office of the Secretary of State of the State of Delaware in
accordance with the Act.  The Members intend that the existence of the Company
shall continue until the earlier to occur of (i) the winding up and liquidation
of the Company and the completion of its business following a Dissolution
Event, as provided in Section 14 hereof or (ii) ninety-nine (99) years from the
date on which the term of the Company commences.
<PAGE>   15
                                                                              15

       2.6    TITLE TO PROPERTY.

       All Property owned by the Company shall be owned by the Company as an
entity, and no Member shall have any ownership interest in such Property in its
individual name, and each Member's interest in the Company shall be personal
property for all purposes.  At all times after the Effective Date, the Company
shall hold title to all of its Property in the name of the Company or a wholly
owned subsidiary and not in the name of any Member.


       2.7    PAYMENTS OF INDIVIDUAL OBLIGATIONS.

       The Company's credit and assets shall be used solely for the benefit of
the Company, and no asset of the Company shall be transferred or encumbered
for, or in payment of, any individual obligation of any Member.


                                   SECTION 3.

                MEMBER SHARES, CAPITAL CONTRIBUTIONS AND FUNDING

       3.1    ORIGINAL CAPITAL CONTRIBUTIONS.

       On the Effective Date, Charter Inc. (and its affiliates) and Crescent
Operating have each made an Original Capital Contribution to the Company, with
the initial Net Asset Value of each such Original Capital Contribution (which
shall also constitute the initial Capital Account balance of the Member making
the Original Capital Contribution) immediately after the date of the Original
Capital Contributions being as follows:

<TABLE>
<CAPTION>
                                         INITIAL NET ASSET VALUE OF
                           PROPERTY           ORIGINAL CAPITAL       PERCENTAGE
        NAME              CONTRIBUTED           CONTRIBUTION          INTEREST
 -----------------     ----------------- --------------------------  ----------
 <S>                   <C>                      <C>                     <C>
 Charter Inc.           Property and assumed                                
                       obligations described                             
                        in Sections 2.1 and
                            2.3 of the
                       Contribution Agreement   $5.0 million            50.0%
                                                                     
 Crescent Operating          Cash               $5.0 million            50.0%
</TABLE>
<PAGE>   16
                                                                              16

       3.2    OTHER MATTERS.

       (a)    Except as otherwise provided in this Agreement, no Member shall
demand or receive a return on or of its Capital Contributions or withdraw from
the Company without the consent of all Members.  Under circumstances requiring
a return of any Capital Contributions, no Member has the right to receive
Property other than cash except as may be specifically provided herein.

       (b)    No Member shall receive any interest, salary or drawing with
respect to its Capital Contributions or its Capital Account or for services
rendered on behalf of the Company, or otherwise, in its capacity as a Member,
except as otherwise provided in this Agreement or approved by the Governing
Board, or except as provided in the Transaction Agreements.

       (c)    No Member shall be liable for the Debts or any other obligations
of the Company.

       (d)    A Member shall not be required to restore a deficit balance in
its Capital Account or to lend any funds to the Company, except as otherwise
provided herein or in the Transaction Agreements.

       (e)    Each of Charter Inc. and Crescent Operating will contribute an
additional $2.5 million to the capital of the Company within five (5) days after
Closing ("ADDITIONAL CAPITAL CONTRIBUTION").  Additionally, on the Effective
Date, (i) each of Charter Inc. and Crescent Operating shall agree to loan
(either directly or through an Affiliate) the Company up to an aggregate of
$17.5 million each (a "MEMBER COMMITMENT"), which Member Commitments shall
terminate on the fifth anniversary of the Effective Date, and (ii) the Company
shall execute notes (the "MEMBER NOTES"), one to Charter Inc. and one to
Crescent Operating, as security for each such Member Commitment at the time of
any loan pursuant to a Member Commitment (the form of the note is attached as
Exhibit D). Magellan, in its sole discretion, shall have the right to require
the Company, from time to time, to draw down a portion of the Member Commitments
by providing written notice specifying the total amount to be drawn, and the
date (which shall not be less than thirty Business Days after the date of such
notice) of such draw.  Each such draw (a "MEMBER ADVANCE") shall be funded 50%
by Charter Inc. from its Member Commitment and 50% by Crescent Operating from
its Member Commitment. Magellan agrees to provide funding to Charter Inc. if
required for Charter Inc. to fund its Member Commitment. Each Member Advance
shall bear interest at a rate of 10% per annum and have a term of five years
(notwithstanding any termination of the Member Commitment after the Member
Advance is made).  Notwithstanding anything to the contrary, neither Magellan
nor the Company shall have the right to require a Member Advance from Crescent
Operating unless Charter Inc. is required to make a Member Advance in the same
amount as that required for Crescent Operating.  Until the Company secures a
Senior Facility in an amount of at least $55 million supported by the Company
without a guarantee from Crescent Operating, payments under any Member Advances
which are required to be made to Charter Inc. shall be subordinated to payments
under any Member Advances which are required to be made to Crescent Operating.
If either Charter Inc. or Crescent Operating shall fail to make a Member Advance
pursuant to this paragraph within fifteen Business Days of the date specified
above, with respect to the Additional Capital Contribution, or in such notice
from Charter Inc. requiring a Member Advance and such failure continues for an
additional ten Business Days after notice from the other Member, then such
defaulting Member shall be deemed to have sold its membership interest in the
Company to the other Member upon delivery of payment by such other Member to the
defaulting Member of the sum of $100.  Except for the foregoing, the Members
shall not be required to make any additional capital contributions or loans to
the Company. Such obligation to make Additional Capital
<PAGE>   17
                                                                              17

Contributions or loans is solely for the benefit of the Members, and no Person
shall be considered a third-party beneficiary of such obligation.  The Company
shall use all Additional Capital Contributions and Member Advances for the
benefit of the Company in such manner as Charter Inc., in its sole discretion,
directs.

       (f)    The Directors shall not have any personal liability for the
repayment of any Capital Contributions of any Member.

       (g)    Notwithstanding any other provision of this Agreement, each
Member agrees to approve such amendments to this Agreement as are necessary to
allocate up to 10% of the Percentage Interests in the Company, equally from
each Member, for future incentive payments to management.


                                   SECTION 4.

                   REPRESENTATIONS AND WARRANTIES OF CHARTER INC.

       Charter Inc. represents and warrants to Crescent Operating as of the
date hereof as follows:

       4.1    ORGANIZATION AND AUTHORITY OF CHARTER INC.

       Charter Inc. is a corporation duly formed, validly existing and in good
standing under the laws of the State of Delaware and has all necessary power and
authority to enter into this Agreement, to carry out its obligations hereunder
and to consummate the transactions contemplated hereby.  This Agreement has been
duly executed and delivered by Charter Inc., and (assuming due execution and
delivery by Crescent Operating) constitutes the legal, valid and binding
obligation of Charter Inc. enforceable against Charter Inc. in accordance with
its terms, except as enforceability may be limited by bankruptcy,
conservatorship, receivership, insolvency, moratorium or similar laws affecting
creditors' rights generally or by general principles of equity.

       4.2    NO CONFLICT.

       The execution, delivery and performance by Charter Inc. of this Agreement
does not and will not (i) violate or conflict with the certificate of
incorporation or bylaws of Charter Inc., (ii) conflict with or violate any law,
rule, regulations, order, writ, judgment, injunction, decree, determination or
award applicable to Charter Inc. or (iii) result in any breach of, or constitute
a default (or event which with the giving of notice or lapse of time, or both,
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of any
pledge, lien, security interest, mortgage, charge, adverse claim or ownership or
use, or other encumbrance of any kind (collectively "ENCUMBRANCES") on any of
the assets or properties of Charter Inc. pursuant to, any note, bond, indenture,
contract, agreement, lease, license, permit, franchise or other instrument
relating to such assets or properties to which Charter Inc. is a party or by
which any of such assets or properties is bound or affected, except, in the case
of (ii) or (iii), any conflict, violation,
<PAGE>   18
                                                                              18

breach or default which would not individually or in the aggregate have a
material adverse effect on Charter Inc. or the Company.

4.3    CONSENTS AND APPROVALS.

       Except as set forth on Schedule 4.3, the execution and delivery by
Charter Inc. of this Agreement does not and will not, and the performance by
Charter Inc. of this Agreement does not and will not, require any consent,
approval, authorization or other action by, or filing with or notification to,
any governmental or regulatory authority. Charter Inc. is in compliance in all
material respects with all laws and regulations of all governmental or
guasi-governmental authorities having jurisdiction over the business of Charter
Inc.


                                   SECTION 5.

                 REPRESENTATIONS AND WARRANTIES OF CRESCENT OPERATING

       Crescent Operating represents and warrants to Charter Inc. as of the
date hereof as follows:

       5.1    ORGANIZATION AND AUTHORITY OF CRESCENT OPERATING.

       Crescent Operating is a corporation, duly formed, validly existing and
in good standing under the laws of the State of Delaware and has all necessary
power and authority to enter into this Agreement, to carry out its obligations
hereunder and to consummate the transactions contemplated hereby.  This
Agreement has been duly executed and delivered by Crescent Operating and
(assuming due execution and delivery by Charter Inc.) constitutes its legal,
valid and binding obligation enforceable against Crescent Operating in
accordance with its terms, except as enforceability may be limited by
bankruptcy, conservatorship, receivership, insolvency, moratorium or similar
laws affecting creditors' rights  generally or by general principles of equity.

       5.2    NO CONFLICT.

       The execution, delivery and performance by Crescent Operating of this
Agreement does not and will not (i) violate or conflict with the organizational
documents of Crescent Operating, (ii) conflict with or violate any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
applicable to Crescent Operating or (iii) result in any breach of, or constitute
a default (or event which with the giving of notice or lapse of time, or both,
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of any
Encumbrance on any of the assets or properties of Crescent Operating pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument relating to such assets or properties to
which Crescent Operating is a party or by which any of such assets or properties
is bound or affected, except, in the case of (ii) or (iii), any conflict,
violation, breach or default which would not individually or in the aggregate
have a material adverse effect on Crescent Operating or the Company.
<PAGE>   19
                                                                              19

       5.3    CONSENTS AND APPROVALS.

       Except as set forth in Schedule 5.3, the execution and delivery of this
Agreement by Crescent Operating does not and will not, and the performance of
this Agreement by Crescent Operating does not and will not, require any consent,
approval, authorization or other action by, or filing with or notification to,
any governmental or regulatory authority.  Crescent Operating is in compliance
in all material respects with all laws and regulations of all governmental or
quasi- governmental authorities having jurisdiction over the business of
Crescent Operating. Crescent Operating has no knowledge of material violations
of laws or regulations relating to the business of Crescent Operating and no
written notice of any material violation of any such law, regulation or
ordinance has been received by Crescent Operating except for violations or
alleged violations that are being corrected in the ordinary course of business
pursuant to an approved plan of correction and are listed on Schedule 5.3.


                                   SECTION 6.

                                  ALLOCATIONS

       6.1    PROFITS.

       After giving effect to the special allocations set forth in Sections 6.3
and 6.4, Profits for any Allocation Year shall be allocated to the Members in
proportion to their Percentage Interests.

       6.2    LOSSES.

       After giving effect to the special allocations set forth in Sections 6.3
and 6.4 and subject to Section 6.5, Losses for any Allocation Year shall be
allocated to the Members in proportion to their Percentage Interests.

       6.3    SPECIAL ALLOCATIONS.

       The following special allocations shall be made in the following order:

       (a)    MINIMUM GAIN CHARGE BACK.  Except as otherwise provided in
Section 1.704-2(f) of the Regulations, notwithstanding any other provision of
this Section 6, if there is a net decrease in Company Minimum Gain during any
Allocation Year, each Member shall be specially allocated items of Company
income and gain for such Allocation Year (and, if necessary, subsequent
Allocation Years) in an amount equal to such Member's share of the net decrease
in Company Minimum Gain, as determined in accordance with 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 Member
pursuant thereto.  The items to be so allocated shall be determined in
accordance with Sections 1.704-2(f)(6) and 1.704-2(j)(2) of the Regulations.
This Section 6.3(a) is intended to
<PAGE>   20
                                                                              20

comply with the minimum gain charge back requirement in Section 1.704-2(f) of
the Regulations and shall be interpreted consistently therewith.

       (b)    MEMBER MINIMUM GAIN CHARGE BACK.  Except as otherwise provided in
Section 1.704-2(i)(4) of the Regulations, notwithstanding any other provision
of this Section 6, if there is a net decrease in Member Nonrecourse Debt
Minimum Gain attributable to a Member Nonrecourse Debt during any Allocation
Year, each Member who has a share of the Member Nonrecourse Debt Minimum Gain
attributable to such Member Nonrecourse Debt, determined in accordance with
Section 1.704-2(i)(5) of the Regulations, shall be specially allocated items of
Company income and gain for such Allocation Year (and, if necessary, subsequent
Allocation Years) in an amount equal to such Member's share of the net decrease
in Member Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(4).  Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Member
pursuant thereto.  The items to be so allocated shall be determined in
accordance with Sections 1.704-2(i)(4) and 1.704-2(j)(2) of the Regulations.
This Section 6.3(b) is intended to comply with the minimum gain charge back
requirement in Section 1.704-2(i)(4) of the Regulations and shall be
interpreted consistently therewith.

       (c)    QUALIFIED INCOME OFFSET.  In the event any Member unexpectedly
receives any adjustments, allocations, or distributions described in Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6)
of the Regulations, items of Company income and gain shall be specially
allocated to such Member in an amount and manner sufficient to eliminate, to
the extent required by the Regulations, the Adjusted Capital Account Deficit of
the Member as quickly as possible; provided that an allocation pursuant to this
Section 6.3(c) shall be made only if and to the extent that the Member would
have an Adjusted Capital Account Deficit after all other allocations provided
for in Section 6 have been tentatively made as if this Section 6.3(c) were not
in the Agreement.

       (d)    GROSS INCOME ALLOCATION.  In the event any Member has a deficit
Capital Account at the end of any Allocation Year which is in excess of the sum
of the amount such Member 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),
each such Member shall be specially allocated items of Company income and gain
in the amount of such excess as quickly as possible, provided that an
allocation pursuant to this Section 6.3(d) shall be made only if and to the
extent that such Member would have a deficit Capital Account in excess of such
amount after all other allocations provided for in this Section 6 have been
made as if Section 6.3(c) and this Section 6.3(d) were not in the Agreement.

       (e)    NONRECOURSE DEDUCTIONS.  Nonrecourse Deductions for any
Allocation Year shall be specially allocated to the Members in proportion to
their respective Percentage Interests.

       (f)    MEMBER NONRECOURSE DEDUCTIONS.  Any Member Nonrecourse Deductions
for any Allocation Year shall be specially allocated to the Member who bears
the economic risk of loss with
<PAGE>   21
                                                                              21

respect to the Member Nonrecourse Debt to which such Member Nonrecourse
Deductions are attributable in accordance with Regulations Section 1.704-
2(i)(1).

       (g)    SECTION 754 ADJUSTMENTS.  To the extent an adjustment to the
adjusted tax basis of any Company asset, pursuant to Code Section 734(b) or
Code Section 743(b) is required, pursuant to Regulations Section
1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4), to be taken into account in
determining Capital Accounts as the result of a distribution to a Member in
complete liquidation of such Member's interest in the Company, the amount of
such adjustment to 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 gain or loss shall be specially allocated to the
Members in accordance with their interests in the Company in the event
Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Member to whom
such distribution was made in the event Regulations Section
1.704-1(b)(2)(iv)(m)(4) applies.

       (h)    ALLOCATIONS RELATING TO TAXABLE ISSUANCE OF COMPANY INTEREST.
Any income, gain, loss or deduction realized as a direct or indirect result of
the issuance of Interests by the Company to a Member (the "ISSUANCE ITEMS")
shall be allocated among the Members so that, to the extent possible, the net
amount of such Issuance Items, together with all other allocations under this
Agreement to each Member, shall be equal to the net amount that would have been
allocated to each such Member if the Issuance Items had not been realized.

       6.4    CURATIVE ALLOCATIONS.

       The allocations set forth in Sections 6.3(a) to (g) and 6.5 (the
"REGULATORY ALLOCATIONS") are intended to comply with certain requirements of
the Regulations.  It is the intent of the Members that, to the extent possible,
all Regulatory Allocations shall be offset either with other Regulatory
Allocations or with special allocations of other items of Company income, gain,
loss or deduction pursuant to this Section 6.4.  Therefore, notwithstanding any
other provision of this Section 6 (other than the Regulatory Allocations), the
Governing Board shall make such offsetting special allocations of Company
income, gain, loss or deduction in whatever manner it determines appropriate so
that, after such offsetting allocations are made, each Member's Capital Account
balance is, to the extent possible, equal to the Capital Account balance such
Member would have had if the Regulatory Allocations were not part of the
Agreement and all Company items were allocated pursuant to Sections 6.1 and
6.2; provided, however, that the Governing Board shall not make offsetting
special allocations if and to the extent that such Regulatory Allocations were
or likely will be offset with Regulatory Allocations in prior or future years.

       6.5    LOSS LIMITATION.

       Losses allocated pursuant to Section 6.2 hereof shall not exceed the
maximum amount of Losses that can be allocated without causing any Member to
have an Adjusted Capital Account Deficit at the end of any Allocation Year.  In
the event some but not all of the Members would have Adjusted Capital Account
Deficits as a consequence of an allocation of Losses pursuant to
<PAGE>   22
                                                                              22

Section 6.2 hereof, the limitation set forth in this Section 6.5 shall be
applied on a Member by Member basis and Losses not allocable to any Member as a
result of such limitation shall be allocated to the other Members in accordance
with the positive balances in such Members' Capital Accounts so as to allocate
the maximum permissible Losses to each Member under Section 1.704-
1(b)(2)(ii)(d) of the Regulations.

       6.6    OTHER ALLOCATION RULES.

       (a)    For purposes of determining the Profits, Losses, or any other
items allocable to any period, Profits, Losses, and any such other items shall
be determined on a daily, monthly, or other basis, as determined by the
Governing Board, using any permissible method under Code Section 706 and the
Regulations thereunder.

       (b)    The Members are aware of the income tax consequences of the
allocations made by this Section 6 and hereby agree to be bound by the
provisions of this Section 6 in reporting their shares of Company income and
loss for income tax purposes.

       (c)    For purposes of making all allocations pursuant to this Section 6
for any Allocation Year, cash distributed within thirty (30) days after the
last day of such Allocation Year shall be treated as having been distributed on
such last day pursuant to Section 7.1 hereof.

       (d)    Solely for purposes of determining a Member's proportionate share
of the "excess nonrecourse liabilities" of the Company within the meaning of
Regulations Section 1.752-3(a)(3), the Members' interests in Company profits
shall be in proportion to their Percentage Interests.

       (e)    To the extent permitted by Section 1.704-2(h)(3) of the
Regulations, the Governing Board shall endeavor to treat distributions of cash
as having been made from the proceeds of a Nonrecourse Liability or a Member
Nonrecourse Debt only to the extent that such distributions would cause or
increase an Adjusted Capital Account Deficit for any Member.

       6.7    TAX ALLOCATIONS:  CODE SECTION 704(C).

       In accordance with Code Section 704(c) and the Regulations thereunder,
income, gain, loss, and deduction with respect to any Property contributed to
the capital of the Company shall, solely for tax purposes, be allocated among
the Members so as to take account of any variation between the adjusted basis
of such Property to the Company for federal income tax purposes and its initial
Gross Asset Value (computed in accordance with the definition of Gross Asset
Value).  Any such variation with respect to the Contributed Assets (as defined
in the Contribution Agreement) shall be calculated using the remedial 
allocation method described in Regulation Section 1.704-3(d).

       In the event the Gross Asset Value of any Company asset is adjusted
pursuant to subparagraph (b) of the definition of Gross Asset Value, subsequent
allocations of income, gain, loss, and deduction with respect to such asset
shall take account of any variation between the adjusted
<PAGE>   23
                                                                              23

basis of such asset for federal income tax purposes and its Gross Asset Value
in the same manner as under Code Section 704(c) and the Regulations thereunder.


       Any elections or other decisions relating to such allocations shall be
made by a supermajority (of at least 80%) of the Governing Board in any manner
that reasonably reflects the purpose and intention of this Agreement.
Allocations pursuant to this Section 6.7 are solely for purposes of federal,
state, and local taxes and shall not affect, or in any way be taken into
account in computing, any Member's Capital Account or share of Profits, Losses,
other items, or distributions pursuant to any provision of this Agreement.

                                   SECTION 7.

                                 DISTRIBUTIONS

       7.1    DISTRIBUTION OF AVAILABLE CASH.  Subject to the provisions of
this Section 7, the Company's available cash shall be distributed to the
Members, in such amounts and only at such times as determined by the Governing
Board, in proportion to their respective Percentage Interests.  In no event
shall any cash distribution be made to the Members unless and until rent due
under the Facilities Lease and fees due under the Franchise Agreement are fully
paid in the year of any distribution.

       7.2    AMOUNTS WITHHELD.  Each Member hereby authorizes the Company to
withhold from or pay on behalf of or with respect to such Member any amount of
federal, state, local, or foreign taxes that the Governing Board determines
that the Company is required to withhold or pay with respect to any amount
distributable or allocable to such Member pursuant to this Agreement,
including, without limitation, any taxes required to be withheld or paid by the
Company pursuant to Sections 1441, 1442, 1445, or 1446 of the Code.  Any amount
paid on behalf of or with respect to a Member shall constitute a loan by the
Company to such Member, which loan shall be repaid by such Member within
fifteen (15) days after notice from the Governing Board that such payment must
be made unless (i) the Company withholds such payment from a distribution which
would otherwise be made to the Member, or (ii) the Governing Board determines,
in its sole and absolute discretion, that such payment may be satisfied out of
the available funds of the Company which would, but for such payment, be
distributed to the Member.  Any amounts withheld pursuant to the foregoing
clauses (i) or (ii) shall be treated as having been distributed to such Member.
Each Member hereby unconditionally and irrevocably grants to the Company a
security interest (which shall be subordinate to any pledge granted to a
financial institution as contemplated by Section 12.2) in such Member's
Percentage Interest to secure such Member's obligation to pay to the Company
any amounts required to be paid pursuant to this Section 7.2.  In the event
that a Member fails to pay any amounts owed to the Company pursuant to this
Section 7.2 when due, the Governing Board may, in its sole and absolute
discretion, elect to make the payment to the Company on behalf of such
defaulting Member and, until repayment of such loan, shall succeed to all
rights and remedies of the Company against such defaulting Member (including,
without limitation, the right to receive distributions).  Any amounts payable
by a Member 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
<PAGE>   24
                                                                              24

amount is due (i.e., fifteen (15) days after demand) until such amount is paid
in full.  Each Member shall take such actions as the Company or the Governing
Board shall request in order to perfect or enforce the security interest
created hereunder.


                                   SECTION 8.

                                   MANAGEMENT

       8.1    DIRECTORS; GOVERNING BOARD.

       (a)    The management of the Company shall be vested in the four-member
Governing Board (the "GOVERNING BOARD") designated by the Members as provided
in Sections 8.1(c) and (d) hereof.

       (b)    The number of Persons, each of whom shall be an individual
(hereinafter referred to as "DIRECTORS") on the Governing Board shall be four
(4) unless otherwise provided herein.  Each Director shall be a "MANAGER", as
defined in the Act, who shall have authority to act on behalf of the Company as
set forth herein.  The Directors shall serve without compensation but shall be
entitled to reimbursement for their out-of-pocket costs for their services
hereunder.

       (c)    Simultaneously with the execution hereof, Charter Inc. hereby
designates the individuals set forth in Items (1) through (2) as Charter
Directors and Crescent Operating hereby designates the individuals set forth in
Items (3) through (4) as Crescent Directors, such that the name and address of
the Directors who shall serve until their respective successors shall have been
designated and qualified are as follows:

<TABLE>
<CAPTION>
              Name                       Business Address and Telephone Number
 -----------------------------------     ---------------------------------------
 <S>                                     <C>
 1.  Steve Davis                         3414 Peachtree Road, N.E., Suite 1400
                                         Atlanta, GA 30326
                                         Tel.: (404) 869-9200

 2.  Craig L. McKnight                   3414 Peachtree Road, N.E., Suite 1400
                                         Atlanta, GA 30326
                                         Tel.: (404) 869-9200

 3.  John C. Goff                        777 Main Street, Suite 2100
                                         Fort Worth, TX 76102
                                         Tel.: (817) 877-0477

 4.  Gerald W. Haddock                   777 Main Street, Suite 2100
                                         Fort Worth, TX 76102
                                         Tel.: (817) 877-0477
</TABLE>

       (d)    No vote of the Members shall be required to designate Directors.
Rather, Charter Inc. shall have the right to designate two (2) Charter
Directors, and Crescent Operating shall have the right to designate two (2)
Crescent Directors. A Director shall remain in office until removed by the
Member designating such Director.  With respect to any Director other than the
initial Directors set forth in Section 8.1(c) hereof, Charter Inc. or Crescent
Operating, as the case may be, shall designate such Director by delivering to
the Company the Member's written statement designating such Director and setting
forth such Director's business address and telephone number.
<PAGE>   25
                                                                              25

       (e)    A Director may be removed at any time, with or without cause,
solely by the Member originally designating such Director.  Removal shall be
accomplished by delivery of written notice to the Company demanding such
removal and designating the Person who shall fill the position of the removed
Director.

       (f)    In the event any Director dies or is unwilling or unable to serve
as such or is removed from office by the Member that designated such Director,
the appropriate Member shall promptly designate a successor to such Director.
A Director chosen to fill a vacancy shall be designated by the Member whose
previously designated Director shall have been removed or shall have resigned.

       (g)    Each Director shall have one (1) vote.  Except as otherwise
provided in Sections 8.2 and 8.3 hereof, the Governing Board shall act by the
affirmative vote of a majority of the total number of Directors on the
Governing Board.  A Director may authorize any other Director to act for him by
proxy on all matters in which a Director is entitled to participate, including
waiving notice of any meeting, or voting or participating at a meeting.  Every
proxy must be signed by the Director or its attorney-in-fact.  No proxy shall
be valid after the expiration of eleven (11) months from the date thereof
unless otherwise provided in the proxy.  Every proxy shall be revocable at the
pleasure of the Director executing it.

       (h)    The Governing Board shall have the power to delegate authority to
such committees of Directors, officers, employees, agents and representatives
of the Company as it may from time to time deem appropriate.  Any delegation of
authority to take any action must be approved in the same manner as would be
required for the Governing Board to approve such action directly.

       (i)    A Director shall not be liable under a judgment, decree or order
of court, or in any other manner, for a debt, obligation or liability of the
Company.

       8.2    MAJOR DECISIONS.

       Notwithstanding the other provisions of this Section 8, no officer or
employee of the Company shall have any authority to cause or permit the Company
or any of its subsidiaries or Affiliates to take any of the following actions
or make any of the following decisions (each, a "MAJOR DECISION") without the
prior express action and approval of at least eighty percent (80%) of the
Governing Board:

              (1)    any sale, lease, transfer or other disposition of any
       asset of the Company or any subsidiary of the Company in an amount in
       excess of $50,000, to the extent such sale, lease, transfer, other
       disposition or granting of security interest was not previously approved
       in the Annual Budget for the then current Fiscal Year;

              (2)    the acquisition from any Person of any stock or interest
       in any corporation, company, partnership, association, business or
       business division, whether by stock purchase, asset purchase,
       contribution, merger or other business combination or joint venture, or
<PAGE>   26
                                                                              26

       otherwise causing or permitting the Company to be a party to a merger,
       transfer of assets, consolidation or reorganization with any other
       Person, provided, however, that the Company shall have the right to
       invest in short-term, highly liquid investments (which mature in no more
       than 60 days) with appropriate safety of principal including, without
       limitation, U.S. Government securities;

              (3)    the filing of a voluntary petition for bankruptcy,
       insolvency or the making of any assignment for the benefit of creditors
       by or of the Company or any other action which would constitute a
       Bankruptcy of the Company, or the substantial equivalent thereof;

              (4)    the election to dissolve and terminate the Company;

              (5)    causing or permitting the Company to engage in any
       business or activities other than the Business;

              (6)    except as provided in the Transaction Agreements, the
       Company's entry into any agreement or contract that is proposed to be
       entered into between the Company and any Member or Affiliate of a Member
       or any amendment thereof;

              (7)    any entering into, modification, amendment, extension or
       termination by the Company of any contract which delegates the
       management of any significant part of the business of the Company to any
       Person not employed by the Company;

              (8)    the selection of any Person to act as Liquidator in
       connection with the liquidation and termination of the Company in
       accordance with Section 14;

              (9)    approval of a commitment for any capital expenditure (to
       the extent not previously approved in the Annual Budget for the then
       current Fiscal Year);

              (10)   entering into any (i) contract of any sort not in the
       ordinary course of business or (ii) contract or series of related
       contracts calling for payments by the Company of more than the contract
       limit authorized by the Governing Board, or, in the absence of such
       express authorization, $10,000 in any one Fiscal Year (to the extent not
       previously approved in the Annual Budget for the then current Fiscal
       Year);

              (11)   incurring any indebtedness by the Company or granting any
       security interest in any asset of the Company to the extent not
       previously approved in the Annual Budget; provided, however, that if
       requested by a bank or group of banks (the "LENDER") which has committed
       to provide the Company with a credit facility of at least $55 million
       (the "SENIOR FACILITY"), the Company shall (i) cause any subsidiaries of
       the Company designated by the Lender to guarantee the debt incurred by
       the Company under the Senior Facility, (ii) pledge its ownership
       interest in any subsidiaries of the Company designated by the Lender to
       the Lender as security for the debt incurred by the Company under the
       Senior Facility, and (iii)
<PAGE>   27
                                                                              27

       grant a security interest in its accounts receivables to the Lender as
       security for the debt incurred by the Company under the Senior Facility;

              (12)   except as may be expressly provided hereunder, the
       admission of any Person to the Company as an additional Member or
       substitute Member or the issuance of any additional Interests or rights
       to acquire Interests in the Company;

              (13)   making a loan of Company funds to any Person, or
       guaranteeing any obligation or indebtedness of any Person, to the extent
       not previously approved in the Annual Budget;

              (14)   making a loan of Company funds to or guaranteeing any
       obligation or indebtedness of any Member or any Affiliate of any Member;


              (15)   approval of the Annual Budget for the Company for any
       Fiscal Year and approval of any changes (as described in Section 8.3) to
       such Annual Budget;

              (16)   the employment or retention of any Person (including,
       without limitation, counsel, auditors and consultants) whose gross
       annual compensation (including benefits) or fees are reasonably likely
       to exceed $150,000 in any fiscal year (unless previously approved in the
       Annual Budget);

              (17)   the establishment, amendment or termination of any
       employee pension, profit sharing or other benefit plan;

              (18)   any change of the Company's fiscal year;

              (19)   any distributions to the Members;

              (20)   entering into any employment agreement with any employee
       of the Company;

              (21)   selecting any Executive Officer or removing either the
       Chairman of the Governing Board or the President of the Company;

              (22)   any change in accounting principles used by the Company,
       except to the extent required by GAAP;

              (23)   closing any hospital or Facility which the Governing Board
       has determined is in the financial best interests of the Company;
<PAGE>   28
                                                                              28

              (24)   the decision to renew any Facilities Lease;

              (25)   the decision to renew any Franchise Agreement;

              (26)   the decision to make an initial public offering of any
       interest (debt or equity) in the Company;

              (27)   the Company's decision to exercise its right of purchase
       of an interest during the Second Offer Period in accordance with Section
       12;

              (28)   any amendment of this Agreement or the Certificate; 

              (29)   any capital contribution by any Member other than the
       Additional Capital Contribution;

              (30)   certain tax matters as provided in Sections 6.7 and 9.5; 
       and

              (31)   amending the limited liability operating agreement or
       other organizational documents of any subsidiary of the Company.

Notwithstanding the foregoing or any other provision hereof (i) Charter Inc. 
shall have the approval and other rights relating to the Company's business and
operations specified in Section 15 of the Franchise Agreement in the event that
Charter Inc. is the Selling Party pursuant to an exercise of the buy-sell option
pursuant to Section 15.3 and (ii) nothing in this Section 8.2 shall require the
approval of the Governing Board for the performance, by the Company, of any of
its obligations under the Transaction Agreements.

       8.3    ANNUAL BUDGET.

       (a)    The President and the Treasurer of the Company have proposed an 
annual operating and capital budget for the Company for the Fiscal Year ending
September 30, 1997 (for such Fiscal Year and each subsequent Fiscal Year, the
"ANNUAL BUDGET").  The proposed annual operating and capital budget shall be
deemed approved by the Governing Board upon the execution of this Agreement as
the 1997 Annual Budget.

       (b)    After the adoption of the initial Annual Budget for the Company,
the President and the Treasurer of the Company shall prepare or cause to be
prepared a proposed Annual Budget for the Company for the succeeding Fiscal Year
containing the information set forth on Schedule S-3 which shall be submitted to
the Governing Board for consideration and approval within 30 days after the
September 30 immediately preceding such Fiscal Year. Upon approval by the
Governing Board, the proposed Annual Budget shall become the Annual Budget for
the next succeeding Fiscal Year.

       (c)    If the Governing Board is unable to agree on the Annual Budget,
then until such time as the Governing Board is able to adopt and approve an
Annual Budget, the Annual Budget shall consist of the items in the proposed
Annual Budget which are not in dispute and, with respect to those items in
dispute, the items and amounts in the prior year's Annual Budget shall be
deemed to constitute the approved amounts in the Annual Budget, as the case may
be; provided, however, that the amount budgeted for acquisitions or financing
for the then-current Fiscal Year shall be the amount
<PAGE>   29
                                                                              29

that the parties are able to agree upon or, if they are unable to agree, then
these amounts shall be zero for the then-current Fiscal Year unless necessary
for ongoing operations.  Notwithstanding anything contained herein to the
contrary, to the extent that an expenditure is required to be made pursuant to
a legally binding obligation of the Company which has been previously approved
by the Governing Board or the Members (or not required to be approved pursuant
to this Agreement) or to the extent that any such expenditure is beyond the
Company's control, such as utility costs, taxes and insurance premiums, then
the approved Annual Budget for the current fiscal year shall be deemed to
include such expenditure.

       (d)    Upon approval of an Annual Budget by the Governing Board, the
Company shall, and the officers of the Company shall cause the Company to,
conduct its operations in accordance therewith, and no modifications shall be
made except in accordance with Section 8.2.

       8.4    MEETINGS OF THE GOVERNING BOARD.

       (a)    The Governing Board shall hold regular meetings no less
frequently than once every Fiscal Quarter and shall establish meeting times,
dates and places and requisite notice requirements (not shorter than those
provided in Section 8.5(b)) and adopt rules or procedures consistent with the
terms of this Agreement.  At such meetings the Governing Board shall transact
such business as may properly be brought before the meeting, whether or not the
notice of such meeting referenced the action taken at such meeting.

       (b)    Special meetings of the Governing Board may be called by any
Director.  Notice of each such meeting shall be given to each Director on the
Governing Board by telephone, telecopy, telegram or similar method (in each
case, notice shall be given at least five (5) Business Days before the time of
the meeting) or sent by first-class mail (in which case notice shall be given
at least ten (10) days before the meeting), unless a longer notice period is
established by the Governing Board.  Each such notice shall state (i) the time,
date, place (which shall be at the principal office of the Company unless
otherwise agreed to by all Directors) or other means of conducting such meeting
and (ii) the purpose of the meeting to be so held.  No actions other than those
specified in the notice may be considered at any special meeting unless
unanimously approved by the Directors.  Any Director may waive notice of any
meeting in writing before, at or after such meeting.  The attendance of a
Director at a meeting shall constitute a waiver of notice of such meeting,
except when a Director attends a meeting for the express purpose of objecting
to the transaction of any business because the meeting was not properly called.

       (c)    A majority of the Governing Board as constituted at a particular
time shall constitute a quorum for the transaction of business at such time.

       (d)    Any action required to be taken at a meeting of the Governing
Board, or any action that may be taken at a meeting of the Governing Board, may
be taken at a meeting held by means of telephone conference or other
communications equipment by means of which all persons participating
<PAGE>   30
                                                                              30

in the meeting can hear each other.  Participation in such a meeting shall
constitute presence in person at such meeting.

       (e)    Notwithstanding anything to the contrary in this Section 8.4, the
Governing Board may take without a meeting any action that may be taken by the
Governing Board under this Agreement if such action is approved by the
unanimous written consent of the Directors.

       8.5    GOVERNING BOARD POWERS.

       (a)    Except as otherwise provided in this Agreement, the Governing
Board shall have the right and authority to take all actions which the
Governing Board deems necessary, useful or appropriate for the management and
conduct of the Business.

       (b)    Except as otherwise provided in this Agreement, all powers to
control and manage the Business and affairs of the Company shall be exclusively
vested in the Governing Board, and the Governing Board may exercise all powers
of the Company and do all such lawful acts as are not by statute, the
Certificate or this Agreement directed or required to be exercised or done by
the Members, and no Member shall have any right or power to control or manage
the Business.

       (c)    The Governing Board will establish policies and guidelines for
the hiring of employees to permit the Company to act as an operating company
with respect to its Business.  The Governing Board may adopt appropriate
management incentive plans and employee benefit plans in accordance with
Section 8.2.

       8.6    INDEPENDENT ACTIVITIES; TRANSACTIONS WITH AFFILIATES.

       (a)    Each Director shall be required to devote such time to the
affairs of the Company as may be necessary to manage and operate the Company
and its subsidiaries and shall be free to serve any other Person or enterprise
in any capacity that such Director may deem appropriate in his, her or its
discretion.

       (b)    To the extent permitted by applicable law and subject to the
provisions of this Agreement, in furtherance of the purposes of the Company set
forth in Section 2.3, the Governing Board is hereby authorized to cause the
Company to purchase or lease property (whether real, personal or mixed) from,
sell or lease such property to or otherwise deal with any Member or Director,
acting on its own behalf, or any Affiliate of any Member or Director; provided
that any such purchase, sale, lease, dealing or other transaction shall be made
in accordance with Section 8.2.

       (c)    Each Member and Director and any Affiliate thereof may also lend
money to, borrow money from, act as a surety, guarantor or endorser for,
guarantee or assume one or more specific obligations of, provide collateral
for, and transact other business with the Company and, subject to other
applicable law, have the same rights and obligations with respect thereto as a
Person who is not a Member, subject to Section 8.2.
<PAGE>   31
                                                                              31


       8.7    OFFICERS.

       (a)    The officers of the Company initially shall be those listed on
Exhibit C.  Thereafter, the Executive Officers shall be chosen by the Governing
Board as provided in Section 8.2.  The Company may also have, at the discretion
of the Governing Board, such other officers as are desired, including one or
more Vice Presidents, one or more Assistant Vice Presidents, one or more
Assistant Secretaries and one or more Assistant Treasurers, and such other
officers and agents as it shall deem necessary who shall hold their offices for
such terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the Governing Board.  In the event there are
two or more Vice Presidents, then one or more may be designated as Executive
Vice President, Senior Vice President, or other similar or dissimilar title.
At the time of the election of officers, the Governing Board may determine the
order of their rank.  Any number of offices may be held by the same person.

       (b)    The officers of the Company shall hold office until their
successors are chosen by the Governing Board and commence to perform their
respective duties, provided that the initial Chairman of the Governing Board
and the initial President of the Company shall serve until resignation or
termination by the Governing Board in accordance with Section 8.2.  Any other
officer elected or appointed by the Governing Board may be removed at any time
with or without cause by the Governing Board in accordance with Section 8.2.
If the office of any officer or officers becomes vacant for any reason, such
vacancy shall be filled by the Governing Board in accordance with Section 8.2
and this Section 8.7.

       (c)    The officers of the Company shall include:

              (1)    THE CHAIRMAN OF THE GOVERNING BOARD.  The Chairman of the
       Governing Board shall, if present, preside at all meetings of the
       Governing Board and all meetings of the Members and exercise and perform
       such other powers and duties as may be from time to time assigned to him
       by the Governing Board.  All Executive Officers engaged in strategic
       planning and development and in capital functions, including without
       limitation, the Treasurer, Chief Financial Officer and the senior
       officers responsible for acquisitions, shall report to the Chairman of
       the Governing Board with respect to those functions, but shall continue
       to report to the President with respect to other functions.  If there is
       no President, the Chairman of the Governing Board shall in addition be
       the Chief Executive Officer of the Company and shall have the powers and
       duties prescribed in clause (3) below.  The initial Chairman of the
       Governing Board shall be John C. Goff.

              (2)    VICE CHAIRMAN OF THE GOVERNING BOARD.  The Vice Chairman
       of the Governing Board shall exercise and perform such other powers and
       duties as may be from time to time assigned to him by the Governing
       Board.  In the absence of the Chairman of the Governing Board, he or she
       shall preside at all meetings of the Governing Board.
<PAGE>   32
                                                                              32


              (3)    PRESIDENT.  Subject to such supervisory powers, if any, as
       may be given by the Governing Board to the Chairman of the Governing
       Board, the President shall be the Chief Executive Officer of the Company
       and shall, subject to the control of the Governing Board, have general
       supervision, direction and control of the Business and officers of the
       Company.  He shall be an ex-officio member of all committees and shall
       have the general powers and duties of management usually vested in the
       office of President and chief executive officer of corporations
       organized under the laws of the State of Delaware, and shall have such
       other powers and duties as may be prescribed by the Governing Board.
       The initial President shall be John M. DeStefanis.

              (4)    VICE PRESIDENT.  In the absence or disability of the
       President and the Chairman of the Governing Board, the Vice Presidents
       in order of their rank as fixed by the Governing Board, or if not
       ranked, the Vice President designated by the Governing Board, shall
       perform all the duties of the President, and when so acting shall have
       all the powers and be subject to all the restrictions upon the
       President.  The Vice Presidents shall have such other duties as from
       time to time may be prescribed for them, respectively, by the Governing
       Board.

              (5)    ASSISTANT VICE PRESIDENT.  The Assistant Vice President,
       or if there be more than one, the Assistant Vice Presidents, shall have
       such duties as from time to time may be prescribed for them,
       respectively, by the Governing Board.

              (6)    SECRETARY.  The Secretary shall attend all sessions of the
       Governing Board and all meetings of the Members and record all votes and
       the minutes of all proceedings in a book to be kept for that purpose and
       shall perform like duties for the standing committees when required by
       the Governing Board.  The Secretary shall give, or cause to be given,
       notice of all meetings of the Members and of the Governing Board and
       shall perform such other duties as may be prescribed by the Governing
       Board.

              (7)    ASSISTANT SECRETARY.  The Assistant Secretary, or if there
       be more than one, the Assistant Secretaries in the order determined by
       the Governing Board, of if there be no such determination, the Assistant
       Secretary designated by the Governing Board, shall, in the absence or
       disability of the Secretary, perform the duties and exercise the powers
       of the Secretary and shall perform such other duties and have such other
       powers as the Governing Board may from time to time prescribe.

              (8)    TREASURER.  The Treasurer shall have the custody of the
       corporate funds and securities and shall keep full and accurate accounts
       of receipts and disbursements in books belonging to the Company and
       shall deposit all moneys and other valuable effects in the name and to
       the credit of the Company, in such depositories as may be designated by
       the Governing Board.  The Treasurer shall disburse the funds of the
       Company as may be ordered by the Governing Board, taking proper vouchers
       for such disbursements, and shall render to the
<PAGE>   33
                                                                              33

       Governing Board, at its regular meetings, or when the Governing Board so
       requires, an account of all of his transactions as Treasurer and of the
       financial condition of the Company.

              (9)    ASSISTANT TREASURER.  The Assistant Treasurer, or if there
       shall be more than one, the Assistant Treasurers in the order determined
       by the Governing Board, or if there be no such determination, the
       Assistant Treasurer designated by the Governing Board, shall, in the
       absence or disability of the Treasurer, perform the duties and exercise
       the powers of the Treasurer and shall perform such other duties and have
       such other powers as the Governing Board may from time to time
       prescribe.

              8.8    INDEMNIFICATION OF THE DIRECTORS.

       (a)    Unless otherwise provided in Section 8.8(d) hereof, the Company,
its receiver, or its trustee (in the case of its receiver or trustee, to the
extent of Property contributed to the Company) shall indemnify, save harmless,
and pay all judgments and claims against any Director relating to any liability
or damage incurred by reason of any act performed or omitted to be performed by
any Director in connection with the Business, including reasonable attorneys'
fees incurred by the Director in connection with the defense of any action
based on any such act or omission, which attorneys' fees may be paid as
incurred.

       (b)    Unless otherwise provided in Section 8.8(d) hereof, in the event
of any action by a Member against any Director, including a Company derivative
suit, the Company shall indemnify, save harmless, and pay all expenses of such
Director, including reasonable attorneys' fees, incurred in the defense of such
action.

       (c)    Unless otherwise provided in Section 8.8(d) hereof, the Company
shall indemnify, save harmless, and pay all expenses, costs, or liabilities of
any Director, if for the benefit of the Company and in accordance with this
Agreement said Director makes any deposit or makes any other similar payment or
assumes any obligation in connection with any Property proposed to be acquired
by the Company and suffers any financial loss as the result of such action.

       (d)    Notwithstanding the provisions of Sections 8.8(a), 8.8(b) and
8.8(c) above, such Sections shall be enforced only to the maximum extent
permitted by law and no Director shall be indemnified from any liability for
the fraud, intentional misconduct, gross negligence or a knowing violation of
the law which was material to the cause of action.

       (e)    The obligations of the Company set forth in this Section 8.8 are
expressly intended to create third party beneficiary rights of each of the
Directors and any Member is authorized, on behalf of the Company, to give
written confirmation to any Director of the existence and extent of the
Company's obligations to such Director hereunder.
<PAGE>   34
                                                                              34

       8.9    FILINGS.

       (a)    Each Director is hereby authorized to and shall execute and cause
the Certificate to be filed in the office of the Secretary of State of the
State of Delaware as an authorized person within the meaning of the Act.  The
Governing Board shall take any and all other actions reasonably necessary to
perfect and maintain the status of the Company as a limited liability company
under the laws of the State of Delaware, including the preparation and filing
of such amendments to the Certificate and such other assumed name certificates,
documents, instruments and publications as may be required by law, including,
without limitation, action to reflect:

              (1)    a change in the Company name; or

              (2)    a correction of false or erroneous statements in the
       Certificate or the desire of the Members to make a change in any
       statement therein in order that it shall accurately represent the
       agreement among the Members.

       (b)    The Members and the Governing Board shall execute and cause to be
filed original or amended certificates and shall take any and all other actions
as may be reasonably necessary to perfect and maintain the status of the
Company as a limited liability company or similar type of entity under the laws
of any other jurisdictions in which the Company engages in business.

       (c)    Upon the dissolution and completion of the winding up and
liquidation of the Company in accordance with Section 14, the Liquidator, as an
authorized person within the meaning of the Act, shall promptly execute and
cause to be filed statements of intent to dissolve and certificate of
cancellation in accordance with the Act and the laws of any other jurisdictions
in which the Liquidator deems such filing necessary or advisable.

       8.10   OTHER AGREEMENTS.

       (a)    [Intentionally left blank].

       (b)    Franchise Fees.  Notwithstanding any other provision herein, each
of Crescent Operating and Charter Inc. agrees that if franchise fees due
Franchisor pursuant to the Franchise Agreement are past due for any reason in
the amounts set forth below, the Charter Inc. Directors shall have the right to
prohibit the Company from taking one or more of the following actions, and to
exercise one or more of the following rights:
<PAGE>   35
                                                                              35


<TABLE>
<CAPTION>
 AMOUNT IN ARREARS                  RIGHTS OF CHARTER INC./PROHIBITED ACTIONS BY THE COMPANY
 -----------------                  --------------------------------------------------------
 <S>                                <C>
 $6 million to $18 million          1.  No incentive compensation to management
                                    2.  No vesting of  management equity
                                    
 Above $18 million to $24 million   1.  No salary increases for key personnel
                                    2.  No additional hiring
                                    3.  No new hospital acquisitions/joint
                                        ventures

 Above $24 million                  1.  5% cutback on expenses provided for in
                                        the Annual Budget
                                    2.  Monthly approval of expenditures by
                                        Charter Inc. (capital and operating)
                                    3.  Rights to require transfer of 
                                        management and control of the Company
                                        and its subsidiaries to Charter Inc.
</TABLE>


                                   SECTION 9.

                                 ROLE OF MEMBERS

       9.1    RIGHTS OR POWERS.

       The Members shall not have any right or power to take part in the
management or control of the Company or its Business and affairs or to act for
or bind the Company in any way, except the Members have all the rights and
powers specifically set forth in this Agreement and, to the extent not
inconsistent with this Agreement, in the Act.  A Member, any Affiliate thereof
or an employee, stockholder, agent, director or officer of a Member or any
Affiliate thereof, may also be an employee or be retained as an agent of the
Company.  The existence of these relationships and acting in such capacities
will not result in the Member's being deemed to be participating in the control
of the Business of the Company or otherwise affect the limited liability of the
Member.  A Member shall not, in its capacity as a Member, take part in the
operation, management or control of the Company's business, transact any
business in the Company's name or have the power to sign documents for or
otherwise bind the Company.

       9.2    VOTING RIGHTS.

       No Member has any voting right except with respect to those matters
specifically reserved for a Member vote as set forth in this Agreement or as
required in the Act.  A Member shall have one vote for each Percentage Interest
such Member has in the Company (for example, initially, Charter Inc. and
Crescent Operating will each hold a 50% Interest in the Company and each have
fifty votes).  The approval of Members owning eighty percent (80%) or more of
the Percentage Interests in the Company is required to act on any matter
submitted to a vote of the Members.
<PAGE>   36
                                                                              36

       9.3    MEETINGS OF THE MEMBERS.

       (a)    Meetings of the Members may be called upon the written request of
any Member.  Such notice of meeting shall state the location of the meeting and
the nature of the business to be transacted.  Notice of any such meeting shall
be given to all Members not less than seven (7) Business Days nor more than
thirty (30) days prior to the date of such meeting.  Members may vote in
person, by proxy or by telephone at such meeting and may waive advance notice
of such meeting.  Members  which own in the aggregate eighty percent (80%) or
more of the Percentage Interests in the Company constitute a quorum for the
transaction of business at a meeting of the Members.  Whenever the vote or
consent of Members is permitted or required under the Agreement, such vote or
consent may be given at a meeting of the Members or may be given in accordance
with the procedure prescribed in this Section 9.3.

       (b)    Each Member may authorize any Person or Persons to act for it by
proxy on all matters in which a Member is entitled to participate, including
waiving notice of any meeting, or voting or participating at a meeting.  Every
proxy must be signed by the Member or its attorney-in-fact.  No proxy shall be
valid after the expiration of eleven (11) months from the date thereof unless
otherwise provided in the proxy.  Every proxy shall be revocable at the
pleasure of the Member executing it.

       (c)    Notwithstanding this Section 9.3, the Company may take any action
contemplated under this Agreement as approved by the consent of the Members,
such consent to be provided in writing, or by telephone or facsimile, if such
telephone conversation or facsimile is followed by a written summary of the
telephone conversation or facsimile communication sent by registered or
certified mail, postage and charges prepaid, addressed as described in Section
16.2 hereof, or to such other address as such Person may from time to time
specify by notice to the Members and Directors.

       9.4    REQUIRED MEMBER CONSENTS.

       Notwithstanding any other provision of this Operating Agreement, no
action may be taken by the Company (whether by the Governing Board or
otherwise) in connection with the following matters without the approval of
Members owning at least 80% of the outstanding Percentage Interest:

       (a)    Cause or permit the Company to engage in any activity that is not
consistent with the purposes of the Company as set forth in Section 2.3 hereof;

       (b)    Knowingly do any act in contravention of this Agreement;

       (c)    Cause the Company to reorganize, recapitalize, merge or
consolidate with another Person;

       (d)    Elect to dissolve or liquidate the Corporation;
<PAGE>   37
                                                                              37


       (e)    Cause the Company to take any action that would cause a
Bankruptcy of the Company;

       (f)    Possess Company assets, or assign rights in any Company assets,
for other than a Company purpose;

       (g)    Confess a judgment against the Company;

       (h)    Change the Percentage Interest of any Member without the consent
of the affected Member; or

       (i)    Amend this Agreement.

       9.5    TAX ELECTIONS.

       The Governing Board by supermajority (at least 80%) vote (except as
provided below) shall, without any further consent of the Members being
required (except as specifically required herein), make any and all elections
for United States federal, state, local, and foreign tax purposes including,
without limitation, any election, if permitted by applicable law:  (i) to
adjust the basis of Property pursuant to Code Sections 754, 734(b) and 743(b),
or comparable provisions of state, local or foreign law, in connection with
Transfers of Interests and Company distributions and (ii) with the consent of
all of the Members, to extend the statute of limitations for assessment of tax
deficiencies against the Members with respect to adjustments to the Company's
United States federal, state, local or foreign tax returns.  Charter Inc. is
specifically authorized to act as the "Tax Matters Member" under Section 6231
of the Code and in any similar capacity under state or local law; provided,
however, that the Tax Matters Member shall not, without the consent of the
Members holding at least 80% of the Percentage Interests, file a request for
administrative review of any Partnership item (as defined in Section 6231 of
the Code) which may be expected to result in the material assessment of tax
against a Member, initiate judicial review of any adjustment with respect to
any Partnership item, or enter into any agreement with the Internal Revenue
Service (or any state and local taxing authority) that would result in any
material change in any item of income, gain, loss, deduction, or credit or
Profits or Losses as previously reported or in the allocation of such items of
Profits or Losses.  The Tax Matters Member shall be responsible for preparing
and filing, or causing to be prepared and filed, all federal, state, and local
tax returns and shall submit all federal, state, and local income tax returns
and any other material federal, state, and local tax returns to the Governing
Board for review and supermajority (at least 80%) approval at least fifteen
days prior to the filing of such returns.  The Company shall reimburse the Tax
Matters Member for all direct expenses incurred by the Tax Matters Member in
fulfilling its duties hereunder.
<PAGE>   38
                                                                              38

       9.6    MEMBERS' LIABILITY.

       No Member shall be liable under a judgment, decree or order of a court,
or in any other manner for the Debts or any other obligations or liabilities of
the Company solely by reason of being a Member of the Company. A Member shall
be liable only to make the Capital Contributions described in Section 3, on the
terms therein described, and shall not be required to lend any funds to the
Company, or to make any other contributions, assessments or payments to the
Company; provided that a Member may be required to repay distributions made to
it as provided in Section 18-607 of the Act.

       9.7    COMPANY'S LIABILITIES.

       (a)    Notwithstanding any other provision of this Agreement and except
for those liabilities assumed by the Company pursuant to the Contribution
Agreement, the Company shall not assume, or otherwise be responsible for, any
liabilities or obligations of any Member whether actual or contingent, or
liquidated or unliquidated, arising or occurring prior to the date hereof
("EXCLUDED LIABILITIES"), which Excluded Liabilities shall include, without
limitation:

              (1)    Any liability or obligation of any Member (other than as
       provided in the Facilities Lease) in respect of any federal, state,
       local, foreign or other tax, levy, impost, fee, assessment or other
       governmental charge, including, without limitation, income, estimated
       income, business, occupation, franchise, property, payroll, personal
       property, sales, transfer, use, employment, commercial rent, occupancy,
       franchise or withholding taxes, and any premium, including, without
       limitation, interest, penalties and additions in connection therewith;

              (2)    Any liability (to the extent not covered by insurance)
       arising from any injury to or death of any person or damage to or
       destruction of any property, whether based on negligence, breach of
       warranty, strict liability, enterprise liability or any other legal or
       equitable theory arising from services performed by or on behalf of any
       Member prior to the date hereof;

              (3)    Any liability or obligation of any Member resulting from
       entering into, performing its obligations pursuant to or consummating
       the transactions contemplated by, this Agreement.

       9.8    PARTITION.

       While the Company remains in effect or is continued, each Member agrees
not to have any Company Property partitioned or file a complaint or institute
any suit, action or proceeding at law or in equity to have any Company Property
partitioned, and each Member, on behalf of itself, its successors and its
assigns hereby waives any such right.
<PAGE>   39
                                                                              39

       9.9    OTHER INSTRUMENTS.

       Each Member hereby agrees to execute and deliver to the Company within
five (5) Business Days after receipt of a written request therefor, such other
and further documents and instruments, statements of interest and holdings,
designations, powers of attorney and other instruments and to take such other
action as the Governing Board deems necessary to comply with any laws, rules or
regulations as may be necessary to enable the Company to carry out fully the
provisions of this Agreement in accordance with its terms.


                                  SECTION 10.

                         ACCOUNTING, BOOKS AND RECORDS;
                                CONFIDENTIALITY

       10.1   ACCOUNTING, BOOKS AND RECORDS.

       (a)    The Company shall keep on site at its principal place of business
each of the following:

              (1)    Separate books of account for the Company which shall show
       a true and accurate record of all costs and expenses incurred, all
       charges made, all credits made and received, and all income derived in
       connection with the conduct of the Company and the operation of its
       business in accordance with this Operating Agreement;

              (2)    A current list of the full name and last known business,
       residence, or mailing address of each Member and Director, both past and
       present;

              (3)    A copy of the Certificate and all amendments thereto,
       together with executed copies of any powers of attorney pursuant to
       which any amendment has been executed;

              (4)    Copies of the Company's federal, state, and local income
       tax returns and reports, if any, for the three most recent years;

              (5)    Copies of this Operating Agreement; and

              (6)    Unless contained in this Operating Agreement, a statement
       prepared and certified as accurate by the Governing Board of the Company
       which describes:

                     (a)    The amount of cash and a description and statement
              of the agreed value of the other property contributed by each
              Member and which each Member has agreed to contribute in the
              future;
<PAGE>   40
                                                                              40

                     (b)    Any right of a Member to receive distributions, and
              the relative preferences and designations of the Member's
              Interest.

       (b)    The Company shall use the accrual method of accounting in
preparation of its financial reports and for tax purposes and shall keep its
books and records accordingly.  Any Member or its designated representative has
the right at its own cost and expense, at any reasonable time, to have access
to and inspect and copy the contents of such books or records.  The Governing
Board shall be reimbursed by such Member for reasonable costs incurred as a
result of such inspection.  Notwithstanding anything in the Act (including
Section 18-305(c) of the Act) or this Agreement to the contrary, the Governing
Board shall not have the right to keep confidential from any Member any
information concerning the Company.

       10.2   REPORTS.

       The Governing Board shall be responsible for causing the preparation of
(i) monthly financial reports of the Company, and (ii) annual audited financial
statements in conformity with SEC standards, if required, within 75 days of the
Company's year end, and (iii) the coordination of financial matters of the
Company with the Company's accountants.

       10.3   CONFIDENTIALITY.

       Except as required by law, each Member shall cause each of its
affiliates to treat and safeguard as confidential and secret any Protected
Information.  None of the Members hereto or any of their respective affiliates
shall use or disclose, furnish or make accessible to any Person any Protected
Information.


                                  SECTION 11.

                                   AMENDMENTS

       Amendments to this Agreement may be proposed by any Director or any
Member.  Following such proposal, the Governing Board shall submit to the
Members a verbatim statement of any proposed amendment, providing that counsel
for the Company shall have approved of the same in writing as to form, and the
Governing Board shall include in any such submission a recommendation as to the
proposed amendment.  The Governing Board shall seek the written vote of the
Members on the proposed amendment or shall call a meeting to vote thereon and
to transact any other business that it may deem appropriate.
<PAGE>   41
                                                                              41

                                  SECTION 12.

                                   TRANSFERS

       12.1   RESTRICTIONS ON TRANSFERS.

       Except as otherwise permitted by this Agreement, no Member shall
Transfer all or any portion of its Interest.

       12.2   PERMITTED TRANSFERS.

       Subject to the conditions and restrictions set forth in Section 12.3
hereof, a Member may at any time Transfer all (but not less than all) of its
Interest to (i) a wholly owned subsidiary of that Member, provided that the
transferee subsidiary agrees to retransfer all of such Interest to such
transferring Member if such transferee subsidiary ceases to be a wholly owned
subsidiary of the transferring Member, (ii) the transferor's administrator or
trustee to whom such Interest is transferred involuntarily by operation of law,
(iii) any transferee if the transfer is approved by all Members which own
twenty percent (20%) or more of the outstanding Percentage Interests, in their
sole discretion, (iv) in the case of Crescent Operating, to a single transferee
if such transfer is necessary for Crescent Real Estate Equities Company ("CEI"),
as currently operated or as operated or proposed to be operated in the future to
avoid jeopardizing its status as a real estate investment trust (a "REIT") under
the Code, provided that prior to any transfer made by Crescent Operating
pursuant to this clause (iv), Crescent Operating shall provide Charter Inc. with
a written opinion of counsel that such transfer is necessary to avoid
jeopardizing the qualification of CEI as a REIT, subject to Charter Inc.'s right
of first refusal under Section 12.8; provided that Charter Inc. will notify 
Crescent Operating within 15 days after receiving notice from Crescent 
Operating of its intent to transfer pursuant to this clause (iv) and a written
opinion of counsel referred to above, whether it will exercise such rights,
and, if it elects to exercise such right, shall complete the purchase of such
Interest within 25 days after the original notice from Crescent Operating
(subject to the right of Charter Inc. to extend the date for completion of the
purchase for up to an additional 20 days if necessary to obtain any regulatory
approvals required in connection therewith) and (v) to any Person upon
compliance with the provisions of Section 12.8 hereof (any such Transfer being
referred to in this Agreement shall be a "PERMITTED TRANSFER").  A permitted
transferee or other transferee shall be admitted as a substituted Member of the
Company in accordance with Section 12.6.

       In addition, a Member may also transfer its Interest, except for any
voting rights associated with such Interest (other than voting rights in
respect of the matters listed in Section 9.4) and the right to designate
Directors on the Governing Board (each of which rights will remain with such
Member), (i) in the form of a pledge to a bona fide financial institution,
which, immediately prior to the creation of such pledge, is not an Affiliate of
such Member, to secure bona fide arms' length recourse indebtedness of such
Member and/or its subsidiaries, (ii) in the form of a pledge to Crescent Real
Estate Equities Limited Partnership pursuant to that certain Line of Credit and
Security Agreement, dated as of May 21, 1997, and that certain Amended and
Restated Credit and Security Agreement, as amended, dated as of May 30, 1997, if
the pledgee thereof agrees (i) to provide the Company with all notices of
foreclosure by such pledgee and (ii) in the event such pledgee becomes a Member,
to be bound by the provisions of this Agreement applicable to its transferor, it
being
<PAGE>   42
                                                                              42

understood that both (x) the making of such pledge and (y) such financial
institution's becoming a Member as the result of foreclosure on such pledge in
full or partial satisfaction of all or any part of the indebtedness secured
thereby or otherwise as a result of the exercise by it of its rights and
remedies with respect thereto shall each constitute a Permitted Transfer and
such financial institution shall be a "Member" for the purposes of this
Agreement, subject to the limitations described above.  If such financial
institution transfers any portion of a Member's Interest pursuant to the terms
of this Agreement, including pursuant to Section 15.3 in the event of an
Unresolved Deadlock, then, upon the consummation of such transfer, the
transferee shall have all of the rights associated with such transferred
Interest prior to its transfer to such financial institution (including all
voting rights and the right to designate Directors related to such transferred
Interest or a portion thereof), and the Member which initially transferred its
Interest to such financial institution shall have no more rights in such
Interest (to the extent transferred by the financial institution).

       12.3   CONDITIONS TO PERMITTED TRANSFERS.

       A Transfer shall not be treated as a Permitted Transfer under Section
12.2 hereof unless and until the following conditions are satisfied:

       (a)    Except in the case of a Transfer involuntarily by operation of
law, the transferor and transferee shall execute and deliver to the Company
such documents and instruments of conveyance as may be necessary or appropriate
in the opinion of counsel to the Company to effect such Transfer and to confirm
the agreement of the transferee to be bound by the provisions of this Section
12, and to comply with the requirements of Code Section 6050K.  In the case of
a Transfer of Interests involuntarily by operation of law, the Transfer shall
be confirmed by presentation to the Company of legal evidence of such Transfer,
in form and substance satisfactory to counsel to the Company.  In all cases,
unless the requirements of this sentence have been waived by the Governing
Board, the Company shall be reimbursed by the transferor and/or transferee for
all costs and expenses that it reasonably incurs in connection with such
Transfer.

       (b)    The transferor and transferee shall furnish the Company with the
transferee's taxpayer identification number, sufficient information to
determine the transferee's initial tax basis in the Interest transferred, and
any other information reasonably necessary to permit the Company to file all
required federal and state tax returns and other legally required information
statements or returns.  Without limiting the generality of the foregoing, the
Company shall not be required to make any distribution otherwise provided for
in this Agreement with respect to any transferred Interest until it has
received such information.

       (c)    Either (i) the Transfer occurs pursuant to an effective
registration statement under the Securities Act and any applicable state
securities law or (ii) the Transfer is exempt from registration or is otherwise
in compliance with the Securities Act and applicable state securities law, and
the transferor has furnished to the Company evidence (which may but need not in
the discretion of the Governing Board include an opinion of counsel) reasonably
satisfactory to the Governing Board.
<PAGE>   43
                                                                              43

       (d)    The Transfer will not cause the Company to be deemed to be an
"investment company" under the Investment Company Act of 1940, as amended, and
the transferor shall provide an opinion of counsel to such effect, unless the
Governing Board waives the requirement that such opinion be provided.  Such
opinion and counsel shall be reasonably satisfactory to the Governing Board.

       (e)    The Transfer will not cause the Company to be deemed to be a
publicly traded partnership under Code Section 7704.

       12.4   PROHIBITED TRANSFERS.

       Any purported Transfer of an Interest that is not a Permitted Transfer
shall be null and void and of no force or effect whatever; provided that, if
the Company is required to recognize a Transfer that is not a Permitted
Transfer (or if the Company, in its sole discretion, elects to recognize a
Transfer that is not a Permitted Transfer), the Interest transferred shall be
strictly limited to the transferor's rights to allocations and distributions as
provided by this Agreement with respect to the transferred Interest, which
allocations and distributions may be applied (without limiting any other legal
or equitable rights of the Company) to satisfy any debts, obligations, or
liabilities for damages that the transferor or transferee of such Interest may
have to the Company.

       In the case of a Transfer or attempted Transfer of an Interest that is
not a Permitted Transfer, the parties engaging or attempting to engage in such
Transfer shall be liable to indemnify and hold harmless the Company and the
other Members from all cost, liability, and damage that the Company or any of
such indemnified Members may incur (including, without limitation, incremental
tax liabilities, lawyers' fees and expenses) as a result of such Transfer or
attempted Transfer and efforts to enforce the indemnity granted hereby.  Any
indemnification payments made to the Company under this Section 12.4, to the
extent paid with respect to costs, liabilities or other damages incurred by a
Member, shall immediately be paid by the Company to such Member.

       12.5   RIGHTS OF UNADMITTED ASSIGNEES.

       A Person who acquires an Interest but who is not admitted as a
substituted Member pursuant to Section 12.6 hereof shall be entitled only to
allocations and distributions with respect to such Interest in accordance with
this Agreement, and shall not have any of the rights of a Member under the Act
or this Agreement.

       12.6   ADMISSION OF SUBSTITUTED MEMBERS.

       Subject to the other provisions of this Section 12, a transferee of an
Interest may be admitted to the Company as a substituted Member only upon
satisfaction of each of the conditions set forth in this Section 12.6:
<PAGE>   44
                                                                              44

       (a)    (i) The non-transferring Members consent to such admission, which
consent may be given or withheld in the sole and absolute discretion of each
such Member, or (ii) the Interest with respect to which the transferee is being
admitted was acquired by means of a Permitted Transfer;

       (b)    The transferee of an Interest shall, by written instrument in
form and substance reasonably satisfactory to the Director (and, in the case of
clause (ii) below, the transferor Member), (i) accept and adopt the terms and
provisions of this Agreement, including this Section 12 and (ii) assume the
obligations of the transferor Member under this Agreement with respect to the
transferred Interest.  The transferor Member shall be released from all such
assumed obligations except (i) those obligations or liabilities of the
transferor Member arising out of a breach of this Agreement and (ii) in the
case of a Transfer to any Person other than a Member, those obligations or
liabilities of the transferor Member based on events occurring, arising or
maturing prior to the date of Transfer;

       (c)    Unless the requirements of this Section 12.6(c) have been waived
by the Governing Board, the transferee pays or reimburses the Company for all
reasonable legal, filing, and publication costs that the Company incurs in
connection with the admission of the transferee as a Member with respect to the
Transferred Interest; and

       (d)    If required by the Governing Board, the transferee (other than a
transferee that was a Member prior to the Transfer) shall deliver to the
Company evidence of the authority of such Person to become a Member and to be
bound by all of the terms and conditions of this Agreement, and the transferee
and transferor shall each execute and deliver such other instruments as the
Governing Board reasonably deems necessary or appropriate to effect, and as a
condition to, such Transfer, including amendments to the Certificate or any
other instrument filed with the State of Delaware or any other state or
governmental authority.

       12.7   DISTRIBUTIONS AND ALLOCATIONS IN RESPECT OF TRANSFERRED
INTERESTS.

       If all or any portion of an Interest is Transferred during any
Allocation Year in compliance with the provisions of this Section 12, Profits,
Losses, each item thereof, and all other items attributable to the Transferred
Interest for such Allocation Year shall be divided and allocated between the
transferor and the transferee by taking into account their varying Percentage
Interests during the Fiscal Year in accordance with Code Section 706(d), using
any conventions permitted by law and agreed to by the transferor and
transferee.  All distributions on or before the date of such Transfer shall be
made to the transferor, and all distributions thereafter shall be made to the
transferee.  Solely for purposes of making such allocations and distributions,
the Company shall recognize such Transfer not later than the end of the
calendar month during which it is given notice of such Transfer; provided that,
if the Company is given notice of a Transfer at least ten (10) Business Days
prior to the Transfer, the Company shall recognize such Transfer as of the date
of such Transfer; and provided further that if the Company does not receive a
notice stating the date such Interest was transferred and such other
information as the Director may reasonably require within thirty (30) days
after the end of the Allocation Year during which the Transfer occurs, then all
such
<PAGE>   45
                                                                              45

items shall be allocated, and all distributions shall be made, to the Person
who, according to the books and records of the Company, was the owner of the
Interest on the last day of such Allocation Year.  Neither the Company nor the
Director shall incur any liability for making allocations and distributions in
accordance with the provisions of this Section 12.7, whether or not the
Director or the Company has knowledge of any Transfer of ownership of any
Interest.

       12.8   RIGHT OF FIRST REFUSAL

       (a)    In the event that any Member has a binding, written offer from an
unrelated Person for the Transfer of its Interest other than pursuant to a
Permitted Transfer and desires to accept such offer to purchase (a "PROPOSED
TRANSFER"), such Member (the "SELLING MEMBER") shall deliver to the Company and
the remaining Members (the "NON-SELLING MEMBERS") written notice of the
material terms of such offer, including the proposed purchaser thereof, the
amount, nature and payment schedule of the consideration to be received, the
conditions, if any, associated therewith and any other material terms of such
offer (an "OFFER NOTICE").  The Offer Notice shall constitute an irrevocable
offer by the Selling Member to sell all (but not less than all) of its Interest
subject to the Proposed Transfer (i) first, to the Non-Selling Members and (ii)
second, if and only if at that time there are more than two (2) Members, to the
Company on terms and conditions of the Proposed Transfer, except that a
purchaser under this Section 12.8 shall have the right to pay cash in an amount
equal to the Fair Market Value of any Non-Cash Consideration (the "RIGHT OF
FIRST REFUSAL").

       (b)    During the First Offer Period, each Non-Selling Member may elect
to purchase all or any portion of such Non-Selling Member's Offer Percentage
(as hereinafter defined) of the Interest subject to the Proposed Transfer by
delivering written notice of such election stating the percentage of the
Interest to be purchased (an "ELECTION NOTICE") to the Company and the Selling
Member prior to the expiration of the First Offer Period.  As used herein, a
Member's Offer Percentage shall be a fraction, the numerator of which is equal
to the Percentage Interest of the Company held by such Member on the date of
the Offer Notice and the denominator of which is the Percentage Interests held
on such date by all Non-Selling Members (the "OFFER PERCENTAGE"); provided that
a Member shall have the right in an Election Notice to agree to purchase all or
any portion of the Interest that could be purchased by other Members; and, if
one or more Members do not deliver an Election Notice or elect to purchase less
than their respective Offer Percentages, then the portion of the Interest that
could have been purchased by such Members shall be purchased by Members that,
in an Election Notice, agreed to purchase such portion of the Interest, and
each such Member shall purchase the portion of the Interest indicated in an
Election Notice, unless the sum of the portions of the Interest exceeds the
Interest so available for purchase, in which case the portions of the Interest
shall be purchased pro rata on the basis of the proportionate amount of the
Offer Percentage of such Members that deliver an Election Notice.  The failure
by any Non-Selling Member to deliver an Election Notice during the First Offer
Period shall be deemed to be an election by such Member not to purchase any of
the Interest subject to the Proposed Transfer.

       (c)    If the Non-Selling Members do not elect during the First Offer
Period to purchase all of the Interest subject to the Proposed Transfer, during
any Second Offer Period, the Company may
<PAGE>   46
                                                                              46

elect to purchase all (but not less than all) of the Interest that the Non-
Selling Members did not elect to purchase during the First Offer Period by
delivering an Election Notice to the Selling Member prior to the expiration of
the Second Offer Period.  The failure by the Company to deliver an Election
Notice during any Second Offer Period shall be deemed to be an election by the
Company not to purchase any of the Interest subject to the Proposed Transfer.

       (d)    If the Non-Selling Members and, if applicable, the Company
(either individually or collectively) do not elect to purchase all of the
Interest subject to the Proposed Transfer, the Selling Member may, Transfer to
the purchaser named in the Offer Notice (the "THIRD PARTY PURCHASER") all (but
not less than all) of the Interest subject to the Proposed Transfer in
accordance with the terms and conditions set forth in the Offer Notice;
provided, however, that if the Selling Member has not consummated the Transfer
of such Interest within the 45 Business Day period following any Second Offer
Period, all of the restrictions on Transfer contained in this Agreement shall
again be in effect with respect to such Interest.

       (e)    If the consideration for the sale of Interest pursuant to this
Right of First Refusal is cash consideration, the purchase price to be paid by
each of the Non-Selling Members and the Company, as applicable, shall be equal
to the total consideration set forth in the Offer Notice multiplied by the
percentage of such Interest being purchased by such Non-Selling Member or the
Company, as applicable.  If the consideration for the Proposed Transfer
consists of consideration that is other than cash consideration payable in
immediately available funds at the closing thereunder ("NON-CASH
CONSIDERATION") or consists of a combination of cash consideration and Non-Cash
Consideration, the purchase price shall be cash in an amount equal to the total
of the cash consideration, if any, and the Fair Market Value of the Non-Cash
Consideration as determined in accordance with Section 12.9 hereof.

       (f)    The purchase and sale of Interest pursuant to this Right of First
Refusal shall be consummated at a closing that shall occur at the principal
business office of the Company within 20 Business Days following the expiration
of the relevant Offer Period, or at such other place or time as may be mutually
acceptable to the parties.  At such closing, the Selling Member shall deliver a
certificate or other instrument representing the Interest being purchased, free
and clear of all liens, claims, encumbrances (other than as a result of this
Agreement) and defects in title and duly endorsed for Transfer to the
appropriate purchaser and, in exchange therefor, the purchaser of such Interest
shall pay the purchase price, as provided in Section 12.8(e) hereof, at such
closing by bank wire transfer of immediately available funds to a bank account
designated in writing by the Selling Member at least three Business Days prior
to such closing.

       12.9   DETERMINATION OF FAIR MARKET VALUE.

       In the event that a determination of the fair market value of Non-Cash
Consideration is required pursuant to the Right of First Refusal, the Selling
Member shall specify in the applicable Offer Notice its good faith estimate of
the fair market value of any Non-Cash Consideration to be paid in connection
with the proposed transfer.  If a majority of the disinterested members of the
<PAGE>   47
                                                                              47

Governing Board agrees with the estimated fair market value of such Non-Cash
Consideration, the estimate shall be deemed to be the Fair Market Value (the
"FAIR MARKET VALUE") thereof for purposes of this Agreement.  If a majority of
the disinterested members of the Governing Board does not agree with the
estimated fair market value, the Governing Board shall, within 10 Business Days
of receipt of the Offer Notice, deliver to the Selling Member written notice of
its disagreement and shall, for a period of 10 Business Days after delivering
such notice, negotiate with the Selling Member for the purpose of determining
the fair market value of the Non-Cash Consideration that is acceptable to the
Governing Board and the Selling Member.  If the Governing Board and the Selling
Member are unable to agree on a fair market value during the aforementioned
negotiation period, the Company and the Selling Member shall appoint a mutually
agreeable appraiser of recognized standing with respect to the nature of the
property constituting the Non-Cash Consideration to complete an appraisal of
the property constituting the Non-Cash Consideration.  Such appraiser shall
render a binding and non-appealable appraisal of the Fair Market Value of the
property constituting the Non-Cash Consideration within 10 Business Days of
such appraiser's appointment or, if it is not reasonably possible to complete
such appraisal in such time period, such longer period as shall be reasonably
necessary to complete such appraisal (not to exceed 30 Business Days).  The
Company and the Selling Member each shall bear one-half of the costs of such
appraisal.

       12.10  TAG-ALONG AND BRING-ALONG RIGHTS.

       (a)    Exercise of "Tag-Along Right."

              (i)    Transfers by the Majority Member.  In the event that
Charter Inc.'s or Crescent Operating's Percentage Interest in the Company 
decreases to less than 25%, the other party (the "Majority Member") shall not
Transfer all or part of its Interest without complying with the provisions of
this Section 12.10(a).  If the Majority Member desires to Transfer all or part
of its Interest (the "Offered Interest") to a proposed transferee, each of the
other Members (a "Remaining Member") may elect (the "Tag-Along Right") to sell
to such proposed transferee, on the same terms, consideration (on a Percentage
Interest basis) and conditions as were offered to the Majority Member, all of
the Interest then owned by each Remaining Member (if the Majority Member is
proposing to sell all of its Interest) or a portion of its Interest (if the
Majority Member is proposing to sell less than all of its Interest) in the same
proportion as the Interest proposed to be sold by the Majority Member.

              (ii)   Notification of Proposed Transfers.  In the event of a
proposed Transfer subject to this Section 12.10(a), the Majority Member shall
notify in writing all Remaining Members of the proposed Transfer.  Such notice
shall set forth: (i) the name of the proposed transferee and the portion of the
Interest that is to be transferred by the Majority Member, (ii) the proposed
amount and form of consideration and terms and conditions of payment offered by
such proposed transferee, and (iii) that the proposed transferee has been
informed of the Tag-Along Right provided for in this Section 12.10(a) and has
agreed to purchase additional Interests in accordance with the terms hereof.
The Tag-Along Right may be exercised by any Remaining Member by delivery of a
written notice to the Company (the "Tag-Along Notice") within 30 days following
receipt of the notice specified in the immediately preceding sentence stating
that the Remaining Member wishes to participate in such
<PAGE>   48
                                                                              48

transfer to the proposed transferee by including such Remaining Member's
Interest (or a portion thereof).  The Tag-Along Notice shall also specify, in
the event that only a portion of the Majority Member's Interest is being
purchased, whether or not the Remaining Member wishes to have any additional
portion (up to all) of his Interest purchased if any other Remaining Member
does not exercise such Member's Tag-Along Right.  In the event that any
proposed transferee does not purchase the Interest of the Majority Member or
Remaining Member who has exercised such Member's Tag-Along Right on the same
terms, consideration (if applicable, on a Percentage Interest basis) and
conditions as those set forth in the notice delivered by the Majority Member
then the sale by the Majority Member to the proposed transferee shall be void
ab initio and of no force and effect, and the Company shall not recognize or
give effect to such transfer.  Notwithstanding the foregoing, if any Remaining
Member shall not exercise its Tag-Along Right provided for herein, the other
Remaining Members shall have the right, upon receipt of written confirmation
from the Remaining Members not participating in the Tag-Along Right, to include
in their respective Tag-Along Notices, and to have purchased by the proposed
transferee, an additional Interest equal to each such Member's pro rata portion
of the Interest not included in the Tag-Along Right by the non-electing
Remaining Member.

       (b)    Exercise of "Bring-Along Right"

              (i)    Transfers by the Majority Member.  In the event that 
Charter Inc.'s or Crescent Operating's Percentage Interest in the Company 
decreases to less than 25% and the Majority Member proposes to Transfer its 
Interest to a proposed third party transferee in an arms-length transaction, 
then the Majority Member may, at its option, require (the "Bring-Along Right")
each other Member to sell all of its Interest (the "Designated Interest") to the
proposed transferee, at the same time and on the same terms, consideration (on
a Percentage Interest basis) and conditions at which the Majority Member is
selling its Interest.

              (ii)   Notification of Proposed Transfer.  The Majority Member
shall exercise its Bring-Along Right by sending written notice of the exercise
of the Bring-Along Right to each of the other Members.  Such notice shall set
forth: (i) the name and address of the proposed transferee and the proposed
amount and form of consideration to be paid by the proposed transferee and (ii)
the terms and conditions of such transaction.  Such notice shall be accompanied
by copies of all documents required to be executed by the Members in connection
with such transaction.  Within 10 days following receipt of the notice, each of
the other Members shall deliver to a representative of the Majority Member,
designated in the notice, instruments (or other appropriate documents necessary
to transfer the Designated Interest) representing the Designated Interest held
by such Member, duly endorsed, together with fully executed copies of all other
documents required to be executed in connection with such transactions,
including (if requested) customary legal opinions from the counsel to such
Member.  In the event that a Member should fail to deliver such instruments to
the Majority Member, the Company shall cause its books and records to show that
such Designated Interest is bound by the provisions of this Section 12.10(b)
and that such Designated Interest shall be transferred only to the third party
purchaser upon surrender for transfer by the holder thereof.  If requested by
the Majority Member, each Member shall also cause a representative that is duly
<PAGE>   49
                                                                              49

authorized to execute documents and to act on behalf of such Member to attend
the closing of the transaction and to take such actions as are reasonably
requested by the Majority Member.

              (iii)  Return of Designated Interest.  If, within 120 days after
the Majority Member gives such notice, the sale of the Designated Interest by
the Majority Member in accordance herewith has not been completed, the Majority
Member shall return to each Member all instruments or other documentation
representing the Designated Interest that such Member delivered for sale
pursuant hereto.

              (iv)   Payment for Designated Interest.  Simultaneously with the
consummation of the sale of the Designated Interest by the Majority Member and
the other Members pursuant to this Section 12.10(b), the Majority Member shall
remit, or cause the transferee to remit, to each of the Members the total sales
price of the Designated Interest sold pursuant thereto (net of the other
Members' pro rata share of any transaction expenses), and shall furnish such
other evidence of the completion and time of completion of such sale or other
disposition and the terms thereof as may be reasonably requested by such
Members.


                                  SECTION 13.

                               POWER OF ATTORNEY

       13.1   DIRECTORS AS ATTORNEYS-IN-FACT.

       Each Member hereby makes, constitutes, and appoints each of the
Directors, severally, with full power of substitution and resubstitution, its
true and lawful attorney-in-fact for it and in its name, place, and stead and
for its use and benefit, to sign, execute, certify, acknowledge, swear to,
file, publish and record (i) all certificates of formation, amended name or
similar certificates, and other certificates and instruments (including
counterparts of this Operating Agreement) which the Governing Board may deem
necessary to be filed by the Company under the laws of the State of Delaware or
any other jurisdiction in which the Company is doing or intends to do business
in order to preserve its status as a limited liability company or conduct
business in such state; (ii) any and all duly authorized amendments,
restatements or changes to this Operating Agreement and the instruments
described in clause (i), as now or hereafter amended, which the Governing Board
may deem necessary to effect a change or modification of the Company in
accordance with the terms of this Operating Agreement, including, without
limitation, amendments, restatements or changes to reflect the admission of any
substituted Member and the disposition by any Member of its interest in the
Company; (iii) all certificates of cancellation and other instruments which the
Liquidator deems necessary or appropriate to effect the dissolution and
termination of the Company pursuant to the terms of this Operating Agreement;
and (iv) any other instrument which is now or may hereafter be required by law
to be filed on behalf of the Company or is deemed necessary by the Governing
Board to comply with any laws, rules or regulations or as may be necessary to
enable the Company to carry out fully the provisions of this Operating
Agreement in accordance with its terms.  Each Member
<PAGE>   50
                                                                              50

authorizes each such attorney-in-fact to take any further action which such
attorney-in-fact shall consider necessary in connection with any of the
foregoing, hereby giving each such attorney-in-fact full power and authority to
do and perform each and every act or thing whatsoever requisite to be done in
connection with the foregoing as fully as such Member might or could do
personally, and hereby ratify and confirm all that any such attorney-in-fact
shall lawfully do, or cause to be done, by virtue thereof or hereof.

       13.2   NATURE OF SPECIAL POWER.

       The power of attorney granted to each Director pursuant to this Section
13:

       (a)    Is a special power of attorney coupled with an interest and is
irrevocable;

       (b)    May be exercised by any such attorney-in-fact by listing the
Members executing any agreement, certificate, instrument, or other document
with the single signature of any such attorney-in-fact acting as
attorney-in-fact for such Members; and

       (c)    Shall survive and not be affected by the subsequent Bankruptcy,
insolvency, dissolution, or cessation of existence of a Member and shall
survive the delivery of an assignment by a Member of the whole or a portion of
its interest in the Company (except that where the assignment is of such
Member's entire interest in the Company and the assignee, with the consent of
the other Members, is admitted as a substituted Member, the power of attorney
shall survive the delivery of such assignment for the sole purpose of enabling
any such attorney-in-fact to effect such substitution) and shall extend to such
Member's or assignee's successors and assigns.


                                  SECTION 14.

                           DISSOLUTION AND WINDING UP

       14.1   DISSOLUTION EVENTS.

       (a)    DISSOLUTION.  The Company shall dissolve and shall commence
winding up and liquidating upon the first to occur of any of the following
(each a "DISSOLUTION EVENT"):

              (1)    The unanimous vote of the Members to dissolve, wind up,
       and liquidate the Company;

              (2)    A judicial determination that an event has occurred that
       makes it unlawful, impossible or impractical to carry on the Business;

              (3)    The expiration of the Company's term;
<PAGE>   51
                                                                              51


              (4)    The entry of a decree of judicial dissolution; or

              (5)    The Bankruptcy, retirement, resignation or expulsion of
       any Member; provided that any such event will not be deemed a
       Dissolution Event if within ninety (90) days after such Dissolution
       Event if the Company has one (1) or more remaining Members and such
       Member or Members agree to continue the business and affairs of the
       Company.

       (b)    RECONSTITUTION.  If it is determined, by a court of competent
jurisdiction, that the Company has dissolved prior to the occurrence of a
Dissolution Event, then within an additional ninety (90) days after such
determination (the "RECONSTITUTION PERIOD"), all of the Members may elect to
reconstitute the Company and continue its Business on the same terms and
conditions set forth in this Agreement by forming a new limited liability
company on terms identical to those set forth in this Agreement.  Unless such
an election is made within the Reconstitution Period, the Company shall
liquidate and wind up its affairs in accordance with Section 14.2 hereof.  If
such an election is made within the Reconstitution Period, then:

              (1)    The reconstituted limited liability company shall continue
       until the occurrence of a Dissolution Event as provided in this Section
       14.1(a);

              (2)    All necessary steps shall be taken to cancel this
       Agreement and the Certificate and to enter into a new operating
       agreement and certificate of organization; provided that the right of
       the Members to select successor Directors and to reconstitute and
       continue the Business shall not exist and may not be exercised unless
       the Company has received an opinion of counsel that the exercise of the
       right would not result in the loss of limited liability of any Member
       and neither the Company nor the reconstituted limited liability company
       would cease to be treated as a partnership for U.S. federal income tax
       purposes upon the exercise of such right to continue.

       14.2   WINDING UP.

       Upon the occurrence of a Dissolution Event, the Company shall continue
solely for the purposes of winding up its affairs in an orderly manner,
liquidating its assets, and satisfying the claims of its creditors and Members,
and no Member shall take any action that is inconsistent with, or not necessary
to or appropriate for, the winding up of the Company's business and affairs;
provided that all covenants contained in this Operating Agreement and
obligations provided for in this Operating Agreement shall continue to be fully
binding upon the Members until such time as the Property has been distributed
pursuant to this Section 14.2 and the Certificate has been canceled pursuant to
the Act.  The Liquidator shall be responsible for overseeing the winding up and
dissolution of the Company, which winding up and dissolution shall be completed
within ninety (90) days of the occurrence of the Dissolution Event.  The
Liquidator shall take full account of the Company's liabilities and Property
and shall cause the Property or the proceeds from the sale thereof (as
determined pursuant to Section 12.6), to the extent sufficient therefor, to be
applied and distributed, to the maximum extent permitted by law, in the
following order:
<PAGE>   52
                                                                              52


       (a)    First, to creditors (including Members and Directors who are
creditors, to the extent otherwise permitted by law) in satisfaction of all of
the Company's Debts and other liabilities (whether by payment or the making of
reasonable provision for payment thereof), other than liabilities for which
reasonable provision for payment has been made and liabilities for distribution
to Members under Section 18-601 or 18-604 of the Act;

       (b)    Second, except as provided in this Agreement, to Members and
former Members of the Company in satisfaction of liabilities for distribution
under Sections 18-601 or 18-604 of the Act; and

       (c)    The balance, if any, to the Members in accordance with the
positive balance in their Capital Accounts, after giving effect to all
contributions, distributions and allocations for all periods.

       14.3   RIGHTS OF MEMBERS.

       Except as otherwise provided in this Agreement, each Member shall look
solely to the Property of the Company for the return of its investment and has
no right or power to demand or receive Property other than cash from the
Company.  If the assets of the Company remaining after payment or discharge of
the Debts or liabilities of the Company are insufficient to return such
investment, the Members shall have no recourse against the Company or any other
Member or Director.

       14.4   NOTICE OF DISSOLUTION/TERMINATION.

       (a)    In the event a Dissolution Event occurs, the Liquidator shall,
within thirty (30) days thereafter, provide written notice thereof to each of
the Members and to all other parties with whom the Company regularly conducts
business (as determined in the discretion of the Liquidator) and shall publish
notice thereof in a newspaper of general circulation in each place in which the
Company regularly conducts business (as determined in the discretion of the
Liquidator).

       (b)    Upon completion of the distribution of the Company's Property as
provided in this Section 14, the Company shall be terminated, and the
Liquidator shall cause the filing of the Certificate of Cancellation pursuant
to Section 18-203 of the Act and shall take all such other actions as may be
necessary to terminate the Company.

       14.5   THE LIQUIDATOR.

       (a)    DEFINITION.  The "LIQUIDATOR" shall mean a Person appointed by
the Governing Board to oversee the dissolution of the Company and shall have
the power of attorney granted to the Directors pursuant to Section 13.

       (b)    FEES.  The Company is authorized to pay a reasonable fee to the
Liquidator for its services performed pursuant to this Section 14 and to
reimburse the Liquidator for its reasonable
<PAGE>   53
                                                                              53

costs and expenses incurred in performing those services, other than a
Liquidator that is also a Member or Director.

       (c)    INDEMNIFICATION.  The Company shall indemnify, save harmless, and
pay all judgments and claims against such Liquidator or any officers,
directors, stockholders, agents or employees of the Liquidator relating to any
liability or damage incurred by reason of any act performed or omitted to be
performed by the Liquidator, or any officers, directors, stockholders, agents
or employees of the Liquidator in connection with the winding up of the
Company, including reasonable attorneys' fees incurred by the Liquidator,
officer, director, stockholder, agent or employee in connection with the
defense of any action based on any such act or omission, which attorneys' fees
may be paid as incurred, except to the extent such liability or damage is
caused by the fraud, intentional misconduct of, or a knowing violation of the
laws by the Liquidator which was material to the cause of action.

       14.6   FORM OF LIQUIDATING DISTRIBUTIONS.

       For purposes of making distributions required by Section 14.2 hereof,
the Liquidator may determine whether to distribute all or any portion of the
Property in-kind or to sell all or any portion of the Property and distribute
the proceeds therefrom.

                                  SECTION 15.

                              MANAGEMENT DEADLOCK

       15.1   EXISTENCE OF A DEADLOCK

       A deadlock of the Governing Board (a "DEADLOCK") shall be deemed to
exist if the  Governing Board shall be unable to reach agreement by the
required vote on (i) a Major Decision, (ii) a decision involving the
expenditure of more than $____ million or (iii) a decision relating to the
election of Executive Officers, provided that any matter referred to in (i),
(ii) or (iii) has been submitted for consideration at two successive meetings.

       15.2   DISCUSSIONS BY CHIEF EXECUTIVE OFFICERS

       If a Deadlock exists, the Members or Governing Board, as appropriate,
shall negotiate in good faith and use their respective best efforts to resolve
such Deadlock.  If, however, after 20 Business Days such Deadlock remains, any
Member, by giving notice to the other Members, may request that such Deadlock
be referred for resolution to the Chief Executive Officer of Charter Inc. and 
the Chief Executive Officer of Crescent Operating (the "Chief Executive 
Officers") (or, if a Member's Chief Executive Officer is on the Company's
Governing Board, another senior officer or director designated by the Member).
The Chief Executive Officers shall meet within 20 Business Days thereafter and
shall attempt in good faith to resolve such Deadlock.  Any resolution agreed to
in writing by the Chief Executive Officers shall be final and binding on the
Company and the Members, so long as the resolution is not inconsistent with any
provision of this Agreement.
<PAGE>   54
                                                                              54


       15.3   BUY/SELL OPTION

       In the event of a failure to resolve a Deadlock pursuant to Section 15.2
within forty (40) Business Days after a Member makes the request for resolution
by the Chief Executive Officers (an "UNRESOLVED DEADLOCK"), either Member, at
any time thereafter, shall be authorized to offer to purchase all of the
Interest of the other Member pursuant to the procedures set forth in the
following provisions:

       (a)    Either Crescent Operating or Charter Inc. (the initiating party 
being hereinafter referred to as the "OFFERING PARTY") may by written notice to
the other party (the "RESPONDING PARTY") state the aggregate fair value of all
of the outstanding Interests in the Company (the "STATED VALUE").  The giving of
such notice of Stated Value by the Offering Party shall constitute the
irrevocable offer of such party to purchase all of the Responding Party's
Interest in the Company or to sell to the Responding Party all of the Offering
Party's Interest in the Company for the respective purchase price provided for
hereinafter.

       (b)    Within thirty (30) days after receipt of said notice, the
Responding Party shall determine whether it shall sell its Interest or purchase
the Offering Party's Interest in the Company as provided herein and shall give
written notice to the Offering Party of its decision and shall designate in
that notice which party will be the "SELLING PARTY" and which party shall be
the "PURCHASING PARTY."  If the Responding Party shall fail to give notice of
its election within the said 15-day period, then the Responding Party shall be
deemed to have given notice of its election to sell all of its Interest in the
Company pursuant to the provisions hereof.

       (c)    Within forty-five (45) days after the date on which the
Responding Party receives the notice of Stated Value from the Offering Party,
Crescent Operating and Charter Inc. shall close the purchase of all of the 
Interest in the Company then owned by the Selling Party.  The purchase price 
for such Interest shall be the product obtained by multiplying the Stated 
Value times the Percentage Interest owned by the Selling Party.  The Purchasing
Party shall pay the purchase price for such Interest in cash or by certified
check at the closing.  The Selling Party shall deliver to the Purchasing Party
at the closing such documents and instruments as may be necessary or desirable,
in the opinion of counsel for the Purchasing Party, to effect the transfer of
the Selling Party's Interest to the Purchasing Party, which Interest shall be
free and clear of all Encumbrances.

       (d)    If the Selling Party is Charter Inc. and, after the close of the
purchase of Charter Inc.'s Interest by Crescent Operating, the Company fails to
pay to Franchisor all amounts due Franchisor under the Franchise Agreement, 
Crescent Operating acknowledges that Charter Inc. shall have the rights 
granted to Franchisor under Section 15 of the Franchise Agreement.
<PAGE>   55
                                                                              55


       15.4   CONTINUATION OF BUSINESS.

       During the pendency of any Deadlock relating to the approval of any
Annual Budget for an ensuing Fiscal Year, the Governing Board and the President
shall conduct the Business of the Company in accordance with Section 8.3(c) of
this Agreement.


                                  SECTION 16.

                                 MISCELLANEOUS

       16.1   TIME.

       In computing any period of time pursuant to this Agreement, the day of
the act, event or default from which the designated period of time begins to
run shall not be included, but the time shall begin to run on the next
succeeding day.  The last day of the period so computed shall be included,
unless it is a Saturday, Sunday or legal holiday, in which event the period
shall run until the end of the next day which is not a Saturday, Sunday or
legal holiday.

       16.2   NOTICES.

       Any notice, payment, demand, or communication required or permitted to
be given by any provision of this Agreement shall be in writing and shall be
deemed to have been delivered, given, and received for all purposes (i) if
delivered personally to the Person or to an officer of the Person to whom the
same is directed or (ii) when the same is actually received, if sent either by
registered or certified mail, postage and charges prepaid, or by facsimile, if
such facsimile is followed by a hard copy of the facsimile communication sent
promptly thereafter by registered or certified mail, postage and charges
prepaid, addressed as follows, or to such other address as such Person may from
time to time specify by notice to the Members and Governing Board:

       (a)    If to the Governing Board or Company, to the address determined
pursuant to Section 2.4(a) hereof;

       (b)    If to the Directors, to the addresses set forth in Section 8.1
hereto and thereafter at such address notified by such Director to the Company
in writing; and

       (c)    If to a Member, to the appropriate address set forth in Section
2.4(b) or 2.4(c) hereof and thereafter at such address notified by such Member
to the Company in writing.
<PAGE>   56
                                                                              56

       16.3   BINDING EFFECT

       Except as otherwise provided in this Agreement, every covenant, term,
and provision of this Agreement shall be binding upon and inure to the benefit
of the Members and their respective successors, transferees, and assigns.

       16.4   CONSTRUCTION.

       Every covenant, term, and provision of this Agreement shall be construed
simply according to its fair meaning and not strictly for or against any
Member.

       16.5   HEADINGS.

       Section and other headings contained in this Agreement are for reference
purposes only and are not intended to describe, interpret, define, or limit the
scope, extent, or intent of this Agreement or any provision hereof.

       16.6   SEVERABILITY.

       Except as otherwise provided in the succeeding sentence, every provision
of this Agreement is intended to be severable, and, if any term or provision of
this Agreement is illegal or invalid for any reason whatsoever, such illegality
or invalidity shall not affect the validity or legality of the remainder of
this Agreement.  The preceding sentence of this Section 16.6 shall be of no
force or effect if the consequence of enforcing the remainder of this Agreement
without such illegal or invalid term or provision would be to cause any Member
to lose the material benefit of its economic bargain.

       16.7   INCORPORATION BY REFERENCE.

       No exhibit, schedule, or other appendix attached to this Agreement and
referred to herein is incorporated in this Agreement by reference unless this
Agreement expressly otherwise provides.

       16.8   VARIATION OF TERMS.

       All terms and any variations thereof shall be deemed to refer to
masculine, feminine, or neuter, singular or plural, as the identity of the
Person or Persons may require.

       16.9   GOVERNING LAW.

       The laws of the State of Delaware (other than the choice of law
provisions thereof) shall govern the validity of this Agreement, the
construction of its terms, and the interpretation of the rights and duties
arising hereunder.
<PAGE>   57
                                                                              57

       16.10  WAIVER OF JURY TRIAL.

       Each of the Members irrevocably waives, to the extent permitted by law,
all rights to trial by jury and all rights to immunity by sovereignty or
otherwise in any action, proceeding or counterclaim arising out of or relating
to this Agreement.

       16.11  COUNTERPART EXECUTION.

       This Agreement may be executed in any number of counterparts with the
same effect as if all of the Members had signed the same document.  All
counterparts shall be construed together and shall constitute one agreement.

       16.12  NO MATERIAL IMPAIRMENT.

       No Member shall take any action that could impair materially such
Member's ability to perform its duties and obligations under this Agreement.
<PAGE>   58
                                                                              58

       IN WITNESS WHEREOF, the parties have executed and entered into this
Operating Agreement of the Company as of the day first above set forth.


                                        CHARTER BEHAVIORAL HEALTH SERVICES, INC.



                                                                                
                                        ---------------------------------------
                                        Name:
                                        Title:



                                        CRESCENT OPERATING, INC.



                                                                                
                                        ---------------------------------------
                                        Name:
                                        Title: