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                                                                   EXHIBIT 10.96

                                    AGREEMENT

         This AGREEMENT dated as of December ____, 1999 (this "Agreement") is
entered into by and among CRESCENT REAL ESTATE EQUITIES COMPANY, a Delaware
corporation ("Crescent"), CRESCENT REAL ESTATE EQUITIES LIMITED PARTNERSHIP, a
Delaware limited partnership ("CREELP"), CRESCENT OPERATING, INC., a Delaware
corporation ("COPI"), and THE WOODLANDS LAND COMPANY, INC., a Texas corporation
("Subsidiary").

                                R E C I T A L S:

         WHEREAS, on November 18, 1999 the United States House of
Representatives approved H.R. 1180, the Work Incentives Improvement Act of 1999
(the "1999 Legislation");

         WHEREAS, on November 19, 1999 the United States Senate approved the
1999 Legislation;

         WHEREAS, President Clinton has signed, or it is anticipated that he
will sign, the 1999 Legislation into law;

         WHEREAS, the 1999 Legislation could adversely impact Crescent's status
as a real estate investment trust ("REIT") unless Crescent and Subsidiary
jointly elect that Subsidiary be treated as a taxable REIT subsidiary ("TRS"),
as that term is defined in the 1999 Legislation;

         WHEREAS, CREELP and COPI (together, the "Stockholders") currently are
the owners of 100% of the issued and outstanding shares of Subsidiary, and
unless Crescent and Subsidiary jointly elect TRS status for Subsidiary, CREELP
may ultimately be prohibited from making any further equity contributions to
Subsidiary without negatively impacting Crescent's status as a REIT;

         WHEREAS, the Stockholders and Subsidiary are desirous that CREELP be
permitted to make such further equity contributions;

         WHEREAS, if Subsidiary is denied certain interest deductions solely as
a result of making a TRS election, CREELP has agreed to pay to COPI certain
amounts as described below to offset the indirect economic loss to COPI
resulting from the unavailability of such interest deductions to Subsidiary; and

         WHEREAS, the Stockholders, along with Crescent and Subsidiary, desire
that Crescent and Subsidiary make such joint TRS election.

         NOW, THEREFORE, in consideration of the foregoing premises and the
mutual promises, covenants and agreements set forth herein and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, the parties hereto agree as
follows:



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         1. Agreement. Crescent and Subsidiary will make a joint election to
cause Subsidiary to be treated as a TRS of Crescent for federal income tax
purposes. Subsidiary and the Stockholders will take all other actions reasonably
requested by Crescent that Crescent believes are prudent in connection with such
election and in light of Crescent's status as a REIT. Such election will be made
on a timely basis so that it is effective on the first day that the 1999
Legislation is effective. The parties to this Agreement agree that they will not
take any action or omit to take any action that would cause the Subsidiary to
fail to qualify as a TRS of Crescent. In furtherance of such covenants
Subsidiary will make available to Crescent and its representatives for
inspection and copying all records and information relevant to qualify and
continue Subsidiary as a TRS, and the officers and employees of Subsidiary and
COPI will make themselves available for meetings and consultations at such
reasonable times and places as may be requested by Crescent to discuss the
status of Subsidiary's businesses and operations, and any plans they may have
for future activities of Subsidiary. In addition, within ten days of Crescent's
request therefor, COPI and Subsidiary shall cause the corporate charter of
Subsidiary to be amended (in form and substance reasonably satisfactory to
Crescent) to prohibit Subsidiary from taking actions that could adversely impact
Subsidiary's status as a TRS of Crescent and/or Crescent's status as a REIT.

         2. Power of Attorney.

             (a) Subsidiary and each Stockholder does irrevocably constitute and
appoint Crescent with full power of substitution, as its true and lawful
attorney, in its name, place and stead, to execute, acknowledge, swear to,
deliver, record and file, as appropriate and in accordance with this Agreement
(i) all forms and other instruments required to qualify Subsidiary as a TRS of
Crescent and all amendments thereto required or permitted by law or the
provisions of this Agreement, and (ii) all certificates and other instruments
requiring execution by Subsidiary or any Stockholder and deemed necessary or
advisable by Crescent to qualify or continue Subsidiary as a TRS of Crescent.

             (b) The power of attorney granted pursuant to Section 2(a) is
coupled with an interest and shall be irrevocable and survive and not be
affected by the subsequent bankruptcy or dissolution of Subsidiary or any
Stockholder; may be exercised by Crescent either by signing separately as
attorney-in-fact for Subsidiary or any Stockholder or by Crescent acting as
attorneys-in-fact for all of them; and shall survive the delivery of an
assignment by any Stockholder of the whole or any fraction of its interest in
Subsidiary.

             (c) Subsidiary and each Stockholder shall execute and deliver to
Crescent, within a reasonable time after the receipt of Crescent's request
therefor, such further designations, powers of attorney and other instruments as
may be necessary or appropriate to carry out the provisions of this Agreement.

         3. Protection of COPI Parties.

             (a) If Subsidiary is denied an interest deduction for a taxable
year pursuant to Section 163(j) of the Internal Revenue Code of 1986, as
amended, solely because of Subsidiary's status as a TRS, CREELP shall pay to
COPI within 30 days after the filing of Subsidiary's federal tax return for such
taxable year an amount equal to the product of (i) the amount of the denied




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interest deduction to the extent such deduction otherwise would have offset
taxable income of the Subsidiary for such taxable year, (ii) the maximum
corporate tax rate (currently 35%), (iii) the percentage of the value of the
stock of Subsidiary owned by COPI, without taking into account any premium or
discount for the voting or non-voting rights associated with the stock of
Subsidiary) (currently 95%) at the end of such taxable year and (iv) 10%.

             (b) Notwithstanding any provision herein to the contrary, if COPI
and Subsidiary have timely and fully disclosed to Crescent all information
regarding Subsidiary's business operations relevant to maintaining its TRS
status, and COPI and Subsidiary have fully and timely implemented all actions
suggested by Crescent relative to preserving Subsidiary's TRS status, then in no
event and under no circumstances shall COPI, Subsidiary or any of their
directors, managers, officers, employees, agents or representatives
(collectively, the "COPI Parties"), have any liability whatsoever for any
failure of Subsidiary to qualify or continue to qualify as a TRS of Crescent, or
any adverse consequence to Crescent or CREELP in any way related to any such
failure. Provided such conditions are satisfied, such COPI Parties are hereby
fully and forever released by Crescent and CREELP from any and all liability,
claims and costs related to or associated with any failure of Subsidiary to
qualify or continue as a TRS of Crescent.

             (c) Notwithstanding any provision herein to the contrary, in no
event and under no circumstances, shall COPI be required to, in any way,
diminish its economic interests in, or diminish or surrender any stockholder
voting rights with respect to, Subsidiary.

         4. Representations of Parties. Each of the parties hereto severally
represents, each with respect only to itself, as of the date hereof, as follows:

             (a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power and authority to execute and
deliver this Agreement, to enter into the transactions contemplated hereby and
to perform all the duties and obligations to be performed by it hereunder;

             (b) It has duly authorized this Agreement and the transactions
contemplated hereby and the performance of all the duties and obligations to be
performed hereunder by all necessary corporate action; and

             (c) It has duly executed and delivered this Agreement and this
Agreement constitutes its valid, legal and binding obligation.

         5. Specific Performance. Subsidiary and each Stockholder acknowledges
that any failure to comply with the requirements of this Agreement would result
in irreparable injury to Crescent for which no adequate remedy at law may be
available. Accordingly, Subsidiary and each Stockholder consents to an
injunction requiring specific performance by them for their respective
obligations under this Agreement, without the necessity of showing actual or
threatened harm and without requiring to furnish a bond or other security.



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         6. Miscellaneous.

             (a) Modifications and Amendments. This Agreement may only be
modified, altered or amended by an agreement in writing executed by each of the
parties hereto.

             (b) Headings. The headings of the sections and subsections of this
Agreement are for convenience and reference only and shall not be considered a
part hereof nor shall they be deemed to limit or otherwise affect any of the
terms or provisions hereof.

             (c) Construction. This Agreement shall be construed in accordance
with the laws of the State of Texas without regard to the principles of
conflicts of laws.

             (d) Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns.

             (e) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which shall
constitute one agreement. It shall not be necessary for the same counterpart to
be signed by all of the parties in order for this instrument to be fully binding
upon any party signing at least one counterpart.


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         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized representatives all as of the date
and year first above written.

                          CRESCENT:

                          CRESCENT REAL ESTATE EQUITIES COMPANY,
                          a Delaware corporation,


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


                          CREELP:

                          CRESCENT REAL ESTATE EQUITIES LIMITED PARTNERSHIP,
                          a Delaware limited partnership,

                          By:     CRESCENT REAL ESTATE EQUITIES, LTD.,
                                  a Delaware corporation, its general partner,


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


                          COPI:

                          CRESCENT OPERATING, INC.,
                          a Delaware corporation,


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


                          SUBSIDIARY:

                          THE WOODLANDS LAND COMPANY, INC.,
                          a Texas corporation,


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



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