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                                                                    EXHIBIT 2.01

                          AGREEMENT AND PLAN OF MERGER

         THIS AGREEMENT AND PLAN OF MERGER, dated as of January 16, 1998 (this
"Agreement"), is entered into by and among Crescent Real Estate Equities
Company, a Texas real estate investment trust ("Crescent") and Station Casinos,
Inc., a Nevada corporation (the "Company") (Crescent and the Company being
hereinafter collectively referred to as the "Constituent Entities").

                                   WITNESSETH:

         WHEREAS, Crescent and the Company contemplate the merger of the Company
with and into Crescent (the "Merger"), upon the terms and subject to the
conditions set forth herein, whereby each issued and outstanding share of Common
Stock, $.01 par value, of the Company ("Company Common Stock"), not owned by
Crescent, the Company or their respective wholly owned subsidiaries will be
converted into common shares of beneficial interest, par value $.01 per share,
of Crescent ("Common Shares");

         WHEREAS, the Board of Trust Managers of Crescent and the Board of
Directors of the Company each has determined that the Merger is in furtherance
of and consistent with their respective long-term business strategies and is
fair to and in the best interest of their respective shareholders or
stockholders, as the case may be; and

         WHEREAS, the parties to this Agreement intend that the Merger shall be
treated as a nontaxable merger of the Company with and into Crescent; 

         NOW, THEREFORE, in consideration of the premises, representations,
warranties and agreements herein contained, the parties agree as follows.


                                    ARTICLE I

                                   THE MERGER

         Section 1.1 The Merger. Upon the terms and subject to the conditions
hereof, and in accordance with the Nevada Revised Statutes chapters 78 and 92A,
collectively known as the Nevada General Corporation Law, as amended (the
"NGCL") and Sections 23.10 through 23.60 of the Texas Real Estate Investment
Trust Act, as amended (the "REIT Act"), the Company shall be merged with and
into Crescent as of the Effective Time (as defined in Section 1.2). Following
the Merger, the separate corporate existence of the Company shall cease and
Crescent shall continue as the surviving corporation (the "Surviving
Corporation") and shall succeed to and assume all the rights and obligations of
the Company in accordance with the NGCL and the REIT Act.

         To facilitate the combination of the businesses of the Company and
Crescent, the parties to this Agreement will (i) reincorporate the Company in
any other state that would permit the merger of the Company with and into
Crescent and, at the request of either party

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to this Agreement, each of the reincorporation of the Company and the merger of
the Company with and into Crescent will be authorized by separate vote of the
Company's stockholders with respect to each of such reincorporation and the
merger, or (ii) merge the Company with and into a wholly owned subsidiary of
Crescent.

         Section 1.2 Effective Time. As soon as practicable after all of the
conditions set forth in Article VI have been satisfied or waived, but not more
than 30 days prior to the contemplated date of Closing (as hereinafter defined)
pursuant to Section 1.15, Articles of Merger (the "Articles of Merger") shall be
duly prepared and executed by Crescent and the Company and delivered to the
Secretary of State of the State of Nevada and the County Clerk of Tarrant
County, Texas, for filing. The Merger shall become effective when the Articles
of Merger, executed in accordance with the relevant provisions of the NGCL and
the REIT Act, are filed with the Secretary of State of the State of Nevada and
the County Clerk of Tarrant County, Texas; provided, however, that, upon mutual
consent of the Constituent Entities, the Articles of Merger may provide for a
later date of effectiveness of the Merger not more than 30 days after the date
the Articles of Merger are filed. When used in this Agreement, the term
"Effective Time" shall mean the later of the date and time at which the Articles
of Merger are accepted for record in Nevada and in Texas or such later time
established by the Articles of Merger.

         Section 1.3 Effects of the Merger. The Merger shall have the effects
set forth in Section 92A.250 of the NGCL and in Section 23.60 of the REIT Act.

         Section 1.4 Declaration of Trust and Bylaws; Trust Managers.

         (a) At the Effective Time, the Declaration of Trust of Crescent, as in
effect immediately prior to the Effective Time, shall be the Declaration of
Trust of the Surviving Entity until thereafter changed or amended as provided
therein or by applicable law. At the Effective Time, the Bylaws of Crescent, as
in effect immediately prior to the Effective Time, shall be the Bylaws of the
Surviving Entity until thereafter changed or amended as provided therein or in
the Declaration of Trust.

         (b) The trust managers of Crescent at the Effective Time shall be the
trust managers of the Surviving Entity until the earlier of their resignation or
removal or until their respective successors are duly elected and qualified, as
the case may be.

         (c) Crescent shall use all reasonable efforts to cause the Board of
Trust Managers of Crescent to be increased in size, effective at the Effective
Time, by two members, with such new members being Mr. Frank J. Fertitta III and
Mr. Lorenzo J. Fertitta.

         Section 1.5 Conversion of Securities. As of the Effective Time, by
virtue of the Merger and without any action on the part of Crescent, the Company
or the holders of any securities of the Constituent Entities:


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              (a) (i) Subject to the provisions of Sections 1.8 and 1.10 hereof,
         each share of Company Common Stock (including restricted shares of
         Company Common Stock issued under the Company Plans (as defined below))
         issued and outstanding immediately prior to the Effective Time (other
         than shares to be canceled in accordance with Section 1.5(d)) together
         with the associated Right shall as of the Effective Time be converted
         into the right to receive the number of validly issued, fully paid and
         nonassessable Common Shares equal to the Exchange Ratio (as defined
         below). All such shares of Company Common Stock (and the associated
         Rights), when so converted, shall no longer be outstanding and shall
         automatically be canceled and retired and shall cease to exist and each
         holder of a certificate representing any such shares (and the
         associated Rights) shall cease to have any rights with respect thereto,
         except the right to receive (A) any dividends and other distributions
         in accordance with Section 1.7, (B) certificates representing the
         Common Shares into which such shares (and the associated Rights) are
         converted and (C) any cash, without interest, in lieu of fractional
         Common Shares to be issued or paid in consideration therefor upon the
         surrender of such Certificate in accordance with Sections 1.6 and 1.8.

              (ii) The Exchange Ratio shall be .466.

              (b) Subject to the provisions of Sections 1.8 and 1.10 hereof,
         each share of the Company's $3.50 Convertible Preferred Stock (the
         "Convertible Preferred Stock") issued and outstanding immediately prior
         to the Effective Time shall as of the Effective Time be converted into
         the right to receive one validly issued, fully paid and nonassessable
         $3.50 Convertible Preferred Share of Crescent (the "Crescent
         Convertible Preferred Shares") having the terms required in Section
         7(h) of the Certificate of Resolutions Establishing Designation,
         Preferences and Rights of $3.50 Convertible Preferred Stock of the
         Company dated March 25, 1996 (the "Certificate of Designation"). All
         such shares of Convertible Preferred Stock, when so converted into
         Crescent Convertible Preferred Shares, shall no longer be outstanding
         and shall automatically be canceled and retired and shall cease to
         exist and each holder of a certificate representing any such shares of
         Convertible Preferred Stock shall cease to have any rights with respect
         thereto, except the right to receive (A) any dividends and other
         distributions in accordance with Section 1.7 and (B) certificates
         representing the Crescent Convertible Preferred Shares into which such
         shares of Convertible Preferred Stock are converted to be issued in
         consideration therefor upon the surrender of such Certificate in
         accordance with Section 1.6.

              (c) Subject to the provisions of Sections 1.8 and 1.10 hereof,
         each share of the Company's Redeemable Preferred Stock (as hereinafter
         defined) issued and outstanding immediately prior to the Effective Time
         shall as of the Effective Time be canceled and no cash, capital stock
         of Crescent or other consideration shall be delivered in exchange
         therefor.

              (d) All shares of Company Common Stock that are held in the
         treasury of the Company and shares of Company Common Stock owned by
         Crescent (together, in 


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         each case, with the associated Right (as defined in Section 3.2))
         shall be canceled and no cash, capital stock of Crescent or other
         consideration shall be delivered in exchange therefor. All shares of
         Company Common Stock that are held by any wholly owned Subsidiary (as
         defined in Section 2.1) of the Company or Crescent (together, in each
         case, with the associated Right (as defined in Section 3.2)) shall be
         converted into validly issued, fully paid and nonassessable Common
         Shares, par value $.01 per share, of the Surviving Entity.

         Section 1.6 Crescent to Make Certificates Available.

         (a) Exchange of Certificates. Crescent shall authorize BankBoston, N.A.
(or such other person or persons as shall be acceptable to Crescent and the
Company) to act as the Exchange Agent hereunder (the "Exchange Agent"). As soon
as practicable after the Effective Time, Crescent shall deposit with the
Exchange Agent, in trust for the holders of shares of Company Common Stock and
Convertible Preferred Stock converted in the Merger, certificates representing
the Common Shares or Crescent Convertible Preferred Shares, as the case may be,
issuable in exchange for outstanding shares of Company Common Stock or
Convertible Preferred Stock, as the case may be, cash required to make payments
in lieu of any fractional shares pursuant to Section 1.8 and cash or other
property to pay or make any dividends or distributions pursuant to Section 1.7
(such cash and Common Shares or Crescent Convertible Preferred Shares, as the
case may be, together with any dividends or distributions with respect thereto,
being hereinafter referred to as the "Exchange Fund"). The Exchange Agent shall
invest any cash included in the Exchange Fund as directed by Crescent, on a
daily basis. Any interest or other income resulting from such investments shall
be paid to Crescent. The Exchange Agent shall deliver the Common Shares and the
Crescent Convertible Preferred Shares contemplated to be issued and cash or
other property distributable pursuant to Section 1.7 out of the Exchange Fund.

         (b) Exchange Procedures. As soon as practicable after the Effective
Time, the Exchange Agent shall mail to each record holder of a certificate or
certificates that immediately prior to the Effective Time represented
outstanding shares of Company Common Stock or Convertible Preferred Stock, as
the case may be, converted in the Merger (the "Certificates"), a letter of
transmittal in form reasonably acceptable to the Company (which shall specify
that delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon actual delivery of the Certificates to the Exchange Agent,
and shall contain instructions for use in effecting the surrender of the
Certificates in exchange for certificates representing Common Shares or Crescent
Convertible Preferred Shares, as the case may be, and cash or other property
distributable pursuant to Sections 1.7 and 1.8). Upon surrender for cancellation
to the Exchange Agent of a Certificate, together with such letter of
transmittal, duly executed, the holder of such Certificate shall be entitled to
receive in exchange therefor a certificate representing that number of whole
Common Shares or Crescent Convertible Preferred Shares and cash into which the
Company Common Stock (and the associated Rights) or the Convertible Preferred
Stock, as the case may be, represented by the surrendered Certificate shall have
been converted at the Effective Time pursuant to this Article I, cash in lieu of
any fractional Common Shares in accordance with Section 1.8 and any dividends or
other 


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distributions in accordance with Section 1.7, and any Certificate so
surrendered shall forthwith be canceled.

         Section 1.7 Dividends; Transfer Taxes; Withholding. No dividends or
other distributions that are declared on or after the Effective Time on the
Common Shares or Crescent Convertible Preferred Shares, as the case may be, or
are payable to the holders of record thereof on or after the Effective Time,
will be paid to any person entitled by reason of the Merger to receive a
certificate representing Common Shares or Crescent Convertible Preferred Shares,
as the case may be, until such person surrenders the related Certificate or
Certificates, as provided in Section 1.6, and no cash payment pursuant to
Section 1.8 will be paid to any such person until such person shall so surrender
the related Certificate or Certificates. Subject to the effect of applicable
law, there shall be paid to each record holder of a new certificate representing
such Common Shares or Crescent Convertible Preferred Shares, as the case may be:
(i) at the time of such surrender or as promptly as practicable thereafter, the
amount, if any, of any dividends or other distributions theretofore paid with
respect to the Common Shares or Crescent Convertible Preferred Shares, as the
case may be, represented by such new certificate and having a record date on or
after the Effective Time and a payment date prior to such surrender; (ii) at the
appropriate payment date or as promptly as practicable thereafter, the amount,
if any, of any dividends or other distributions payable with respect to such
Common Shares or Crescent Convertible Preferred Shares, as the case may be, and
having a record date on or after the Effective Time but prior to such surrender
and a payment date on or subsequent to such surrender; and (iii) at the time of
such surrender or as promptly as practicable thereafter, the amount of any cash
payable pursuant to Section 1.8 to which such holder is entitled pursuant to
Section 1.8. In no event shall the person entitled to receive such dividends or
other distributions or cash be entitled to receive interest on such dividends or
other distributions or cash. If any certificate representing Common Shares or
Crescent Convertible Preferred Shares, as the case may be, or cash or other
property is to be issued or delivered in a name other than that in which the
Certificate surrendered in exchange therefor is registered, it shall be a
condition of such exchange that the Certificate so surrendered shall be properly
endorsed and otherwise in proper form for transfer and that the person
requesting such exchange shall pay to the Exchange Agent any transfer or other
taxes required by reason of the issuance of certificates for such Common Shares
or Crescent Convertible Preferred Shares, as the case may be, in a name other
than that of the registered holder of the Certificate surrendered, or shall
establish to the satisfaction of the Exchange Agent that such tax has been paid
or is not applicable. Crescent or the Exchange Agent shall be entitled to deduct
and withhold from the consideration otherwise payable pursuant to this Agreement
to any holder of shares of Company Common Stock or Convertible Preferred Stock,
as the case may be, such amounts as Crescent or the Exchange Agent is required
to deduct and withhold with respect to the making of such payment under the
Internal Revenue Code of 1986, as amended (the "Code"), or under any provision
of state, local or foreign tax law. To the extent that amounts are so withheld
by Crescent or the Exchange Agent, such withheld amounts shall be treated for
all purposes of this Agreement as having been paid to the holder of the shares
of Company Common Stock or Convertible Preferred Stock, as the case may be, in
respect of which such deduction and withholding was made by Crescent or the
Exchange Agent.


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         Section 1.8 No Fractional Securities. No certificates or scrip
representing fractional Common Shares shall be issued upon the surrender for
exchange of Certificates pursuant to this Article I, and no Crescent dividend or
other distribution or stock split shall relate to any fractional share, and no
fractional share shall entitle the owner thereof to vote or to any other rights
of a security holder of Crescent. In lieu of any such fractional share, each
holder of Company Common Stock who would otherwise have been entitled to a
fraction of a Common Share upon surrender of Certificates for exchange pursuant
to this Article I will be paid an amount of cash (without interest), rounded to
the nearest cent, determined by multiplying (i) the Market Price of a Common
Share on the second NYSE trading day prior to the Company Stockholder Meeting
(as defined in Section 5.1) by (ii) the fractional interest to which such holder
would otherwise be entitled. The "Market Price" of a Common Share or a share of
Company Common Stock, as applicable, on any date means the average of the daily
closing prices per Common Share (or share of Company Common Stock, as
applicable) as reported on the NYSE Composite Transactions reporting system (as
published in The Wall Street Journal or, if not published therein, in another
authoritative source mutually selected by the Company and Crescent) for the 20
consecutive NYSE trading days (the "Averaging Period") immediately preceding
such date. As promptly as practicable after the determination of the amount of
cash to be paid to holders of fractional share interests, the Exchange Agent
shall so notify Crescent, and Crescent shall deposit such amount with the
Exchange Agent and shall cause the Exchange Agent to forward payments to such
holders of fractional share interests subject to and in accordance with the
terms of Section 1.6, Section 1.7 and this Section 1.8. For purposes of paying
such cash in lieu of fractional shares, all Certificates surrendered for
exchange by a Company stockholder shall be aggregated, and no such Company
stockholder will receive cash in lieu of fractional shares in an amount equal to
or greater than the value of one full Common Share with respect to such
Certificates surrendered.

         Section 1.9 Return of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the former stockholders of the Company for one
year after the Effective Time shall be delivered to Crescent and any such former
stockholders who have not theretofore complied with this Article I shall
thereafter look only to Crescent for payment of their claim for Common Shares,
any cash payable pursuant to Section 1.8 and any dividends or distributions with
respect to Common Shares. Crescent shall not be liable to any former holder of
Company Common Stock for any such Common Shares, cash and dividends and
distributions held in the Exchange Fund which is delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.

         Section 1.10 Adjustment of Exchange Ratio. In the event that, prior to
the Effective Time, Crescent effects any reclassification, stock split or stock
dividend or other distribution of rights, assets or securities with respect to
Common Shares, any change or conversion of Common Shares into other securities
or any other dividend or distribution with respect to the Common Shares, other
than:

         (a) any extraordinary dividend paid or to be paid by Crescent which
Crescent reasonably determines is or are in the aggregate sufficient, when
considered together with all 


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dividends anticipated to be paid within the tax year including the Effective
Time, to equal all anticipated current and accumulated earnings and profits for
such tax year of the Company and Crescent, in which case, Crescent shall give
prior written notice to the Company which shall contain the basis for, and
computations and calculations of, the extraordinary dividend; or

         (b) distributions in the aggregate not to exceed the greater of (i) the
amount of any quarterly dividend that may be paid by Crescent in the ordinary
course, including customary increases thereof, and (ii) distributions of "real
estate investment taxable income" (as such term is defined for purposes of the
Code) without regard to any net capital gains or the deduction for dividends
paid,

then appropriate and proportionate adjustments, if any, shall be made to the
Exchange Ratio, and all references to the Exchange Ratio in this Agreement shall
be deemed to be to the Exchange Ratio as so adjusted.

         Section 1.11 No Further Ownership Rights in Company Capital Stock. All
Common Shares or Crescent Convertible Preferred Shares, as the case may be, and
cash issued or paid upon the surrender for exchange of Certificates in
accordance with the terms hereof (including any cash or other property paid
pursuant to Section 1.8) shall be deemed to have been issued in full
satisfaction of all rights pertaining to the shares of Company Common Stock (and
associated Rights) or Convertible Preferred Stock, as the case may be,
represented by such Certificates subject, however, to the Surviving Entity's
obligation to pay any dividends or make any other distributions with a record
date prior to the Effective Time which may have been declared or made by the
Company on such shares of Company Common Stock or Convertible Preferred Stock,
as the case may be, prior to the date of this Agreement and which remain unpaid
at the Effective Time.

         Section 1.12 Closing of Company Transfer Books. At the Effective Time,
the stock transfer books of the Company shall be closed and no transfer of
shares of Company Common Stock shall thereafter be made on the records of the
Company. If, after the Effective Time, Certificates are presented to the
Exchange Agent or Crescent, such Certificates shall be canceled and exchanged as
provided in this Article I.

         Section 1.13 Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and, if
required by Crescent or the Exchange Agent, the posting by such person of a bond
in such reasonable amount as Crescent or the Exchange Agent may direct (but
consistent with the practices Crescent applies to its own shareholders) as
indemnity against any claim that may be made against them with respect to such
Certificate, the Exchange Agent will issue in exchange for such lost, stolen or
destroyed Certificate the Common Shares, any cash payable pursuant to Section
1.8 to which the holders thereof are entitled and any dividends or other
distributions to which the holders thereof are entitled pursuant to Section 1.7.


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<PAGE>   8

         Section 1.14 Further Assurances. Each party hereto will, prior to the
Effective Time, execute such further deeds, bills of sale, assignments or
assurances or any other acts or things as are reasonably requested by the other
to consummate the Merger, to vest the Surviving Entity with full title to all
assets, properties, privileges, rights, approvals and franchises of either of
the Constituent Entities or to effect the other purposes of this Agreement. If
at any time after the Effective Time the Surviving Entity shall consider or be
advised that any deeds, bills of sale, assignments or assurances or any other
acts or things are necessary, desirable or proper (a) to vest, perfect or
confirm, of record or otherwise, in the Surviving Entity its right, title or
interest in, to or under any of the rights, privileges, powers, franchises,
properties or assets of either of the Constituent Entities, or (b) otherwise to
carry out the purposes of this Agreement, the Surviving Entity and its proper
officers or trustees or their designees shall be authorized to execute and
deliver, in the name and on behalf of either of the Constituent Entities, all
such deeds, bills of sale, assignments and assurances and to do, in the name and
on behalf of either Constituent Entity, all such other acts and things as may be
necessary, desirable or proper to vest, perfect or confirm the Surviving
Entity's right, title or interest in, to or under any of the rights, privileges,
powers, franchises, properties or assets of such Constituent Entity and
otherwise to carry out the purposes of this Agreement.

         Section 1.15 Closing. The closing of the Merger (the "Closing") and all
actions contemplated by this Agreement to occur at the Closing shall take place
at the offices of Shaw Pittman Potts & Trowbridge, 2300 N Street N.W.,
Washington, D.C. 20037, at 10:00 a.m., local time, on a date to be specified by
the parties, which (subject to fulfillment or waiver of the conditions set forth
in Article VI) shall be within the first 15 days of the calendar quarter
following the calendar quarter in which the last of the conditions set forth in
Article VI shall have been fulfilled or waived, or at such other time and place
as Crescent and the Company shall agree.


                                   ARTICLE II

                   REPRESENTATIONS AND WARRANTIES OF CRESCENT

         Crescent represents and warrants to the Company as follows:

         Section 2.1 Organization, Standing and Power. Crescent has been formed
as a real estate investment trust under the laws of the State of Texas in
accordance with the REIT Act. The County Clerk of Tarrant County, Texas, has
certified in writing that the Restated Declaration of Trust of the Company (the
"Declaration of Trust") is recorded in Volume 12645, beginning at Page 1811, in
the records of the County Clerk. The Declaration of Trust is in effect, and no
dissolution, revocation or forfeiture proceedings regarding the Company have
been commenced. The Company has power and authority under its Declaration of
Trust, Amended and Restated Bylaws, as amended (the "Crescent Bylaws") and the
REIT Act to own, lease and operate its properties and to conduct the business in
which it is engaged. Each Subsidiary of Crescent is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
organized and has the requisite corporate (in the case of a Subsidiary that is a
corporation) or other power and authority to carry on its business as now 


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<PAGE>   9

being conducted, except where the failure to be so organized, existing or in
good standing or to have such power or authority, individually or in the
aggregate, has not had, and would not reasonably be expected to have, a Material
Adverse Effect (as hereinafter defined) on Crescent. Crescent and each of its
Subsidiaries are duly qualified to do business, and are in good standing, in
each jurisdiction where the character of their properties owned or held under
lease or the nature of their activities makes such qualification necessary,
except where the failure to be so qualified, individually or in the aggregate,
has not had, and would not reasonably be expected to have, a Material Adverse
Effect on Crescent.

         For all purposes of this Agreement, any reference to any state of
facts, event, change or effect having a "Material Adverse Effect" on or with
respect to Crescent or the Company, as the case may be, means such state of
facts, event, change or effect which has had, or would reasonably be expected to
have, a material adverse effect on the business, properties, results of
operations or financial condition of Crescent and its Subsidiaries, taken as a
whole, or the Company and its Subsidiaries, taken as a whole, as the case may
be; provided, however that a "Material Adverse Effect" shall not include any
state of facts, event, change or effect (i) disclosed on or prior to the date of
this Agreement in (a) any of the Company SEC Documents (as hereinafter defined)
or the Crescent SEC Documents (as hereinafter defined), other than as disclosed
in any forward looking statement disclaimer or general or economic risk factors
contained in such Crescent SEC Documents or Company SEC Documents, (b) in this
Agreement, or (c) in any schedule, exhibit or related document furnished to the
other party in connection herewith, (ii) generally affecting companies in the
industries in which the Company or Crescent operates or (iii) relating to
Missouri gaming laws, regulations and licenses to the extent that they affect
the Company's property or operations in Kansas City, Missouri. For all purposes
of this Agreement, "Subsidiary" means any corporation, partnership, limited
liability company, joint venture or other legal entity of which Crescent or the
Company, as the case may be (either alone or through or together with any other
Subsidiary), (i) owns, directly or indirectly, more than 50% of the stock or
other equity interests the holders of which are generally entitled to vote for
the election of the board of directors or other governing body of such
corporation, partnership, limited liability company, joint venture or other
legal entity or (ii) is a general partner, trustee or other entity performing
similar functions. Any reference in this Agreement to disclosure letters shall
be deemed to include matters described in the Crescent SEC Documents or the
Company SEC Documents, provided, however, that Crescent and the Company shall
use their reasonable best efforts to include in any disclosure letter relevant
matters described in the Crescent SEC Documents or the Company SEC Documents,
respectively.

         Section 2.2 Capital Structure. At the date hereof, the authorized
capital stock of Crescent solely consists of 250,000,000 Common Shares,
250,000,000 excess shares issuable in exchange for Common Shares ("Excess Common
Shares"), 100,000,000 preferred shares of beneficial interest, par value $.01
per share (the "Preferred Shares"), and 100,000,000 excess shares issuable in
exchange for Preferred Shares ("Excess Preferred Shares"). At the close of
business on January 16, 1998, 118,151,909 Common Shares were issued and
outstanding. At the close of business on January 16, 1998, Crescent had no
shares reserved for issuance, except (i) 12,620,870 Common Shares reserved for
issuance upon the exchange of 6,310,435 units of 


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<PAGE>   10

ownership interest (the "Units") of Crescent Real Estate Equities Limited
Partnership, a Delaware limited partnership (the "Operating Partnership"), (ii)
15,704,163 Common Shares reserved for issuance pursuant to the 1994 Crescent
Real Estate Equities, Inc. Stock Incentive Plan, the Second Amended and Restated
1995 Crescent Real Estate Equities Company Stock Incentive Plan, the 1995
Crescent Real Estate Equities Limited Partnership Unit Incentive Plan and the
1996 Crescent Real Estate Equities Limited Partnership Unit Incentive Plan
(collectively with the Crescent Real Estate Equities, Ltd. 401(k) Plan, as
amended, the "Crescent Stock Plans"), (iii) the possible issuance of up to
664,294 Common Shares upon the exchange of a portion of a partnership interest
in Desert Mountain Properties Limited Partnership, and (iv) an outstanding
option to acquire 217,530 Common Shares. Except as set forth above, at the close
of business on January 16, 1998, no shares of capital stock or other voting
securities of Crescent were issued, reserved for issuance or outstanding. All
the outstanding Common Shares are validly issued, fully paid and nonassessable
and free of preemptive rights. All Common Shares issuable in exchange for
Company Common Stock at the Effective Time in accordance with this Agreement
will be, when so issued, duly authorized, validly issued, fully paid and
nonassessable and free of preemptive rights. As of the date of this Agreement,
except as identified in this paragraph and except for (a) this Agreement, (b)
stock options issued and unexercised pursuant to the Crescent Stock Plans
covering not in excess of 8,938,000 Common Shares (collectively, the "Crescent
Stock Options"), (c) 12,620,870 Common Shares issuable upon the exchange of
6,310,435 Units, (d) Common Shares issuable pursuant to the Forward Stock
Purchase Contract agreement dated as of August 12, 1997 (the "UBS Forward
Purchase Contract") with an affiliate of Union Bank of Switzerland, and (e)
Common Shares issuable pursuant to the Swap Agreement dated as of December 12,
1997 (the "Merrill Lynch Swap Agreement") with an affiliate of Merrill Lynch &
Co., Inc., there are no options, warrants, calls, rights or agreements to which
Crescent or any of its Subsidiaries is a party or by which any of them is bound
obligating Crescent or any of its Subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock of
Crescent or any of its Subsidiaries or obligating Crescent or any of its
Subsidiaries to grant, extend or enter into any such option, warrant, call,
right or agreement. Each outstanding share of capital stock of each Subsidiary
of Crescent that is a corporation is duly authorized, validly issued, fully paid
and nonassessable and, except as disclosed in the Crescent SEC Documents (as
defined in Section 2.5) filed prior to the date of this Agreement, each such
share that is owned by Crescent or another Subsidiary of Crescent, is owned free
and clear of all security interests, liens, claims, pledges, mortgages, options,
rights of first refusal, agreements, limitations on voting rights, charges and
other encumbrances of any nature whatsoever (each, a "Lien"). As of the date of
this Agreement, none of Crescent or any Subsidiary has outstanding any bonds,
debentures, notes or other indebtedness of Crescent having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote) on
any matters on which shareholders of Crescent may vote. As of the date of this
Agreement, there are no outstanding contractual obligations of Crescent or any
of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock of Crescent or any of its Subsidiaries, except those pursuant to
the UBS Forward Purchase Agreement and the Merrill Lynch Swap Agreement. Exhibit
21 to the Annual Report on Form 10-K of Crescent for the year ended December 31,
1996 (the "Crescent Annual Report"), as filed with the Securities and Exchange
Commission (the "SEC"), is a true, accurate and correct statement


                                      -10-

<PAGE>   11

in all material respects of all the information that was required to be set
forth therein by the rules and regulations of the SEC.

         Section 2.3 Authority. The Board of Trust Managers of Crescent has
approved and adopted this Agreement, and (i) has authorized the filing of a
registration statement on Form S-4 with the SEC by Crescent under the Securities
Act of 1933, as amended (together with the rules and regulations promulgated
thereunder, the "Securities Act"), for the purpose of registering the Common
Shares to be issued in connection with the Merger as contemplated by this
Agreement (together with any amendments or supplements thereto, whether prior to
or after the effective date thereof, the "Registration Statement"), and (ii) has
authorized the purchase of Redeemable Preferred Stock of the Company in an
amount not to exceed $115,000,000. Crescent has all requisite power and
authority to enter into this Agreement and, to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Crescent
and the consummation by Crescent of the transactions contemplated hereby have
been duly authorized by all necessary action on the part of Crescent. This
Agreement has been duly executed and delivered by Crescent and (assuming the
valid authorization, execution and delivery of this Agreement by the Company and
the validity and binding effect of this Agreement on the Company) constitutes
the valid and binding obligation of Crescent enforceable against it in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar law
affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

         Section 2.4 Consents and Approvals; No Violation. Assuming that all
consents, approvals, authorizations and other actions described in this Section
2.4 have been obtained and all filings and obligations described in this Section
2.4 have been made, the execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated hereby and compliance with the
provisions hereof will not, result in any violation of, or default or loss of a
material benefit (with or without notice or lapse of time, or both) under, or
give to others a right of termination, cancellation or acceleration of any
obligation under, or result in the creation of any lien upon any of the
properties, assets or operations of Crescent or any of its Subsidiaries under,
any provision of (i) the Declaration of Trust or Crescent Bylaws, as applicable,
(ii) any provision of the comparable charter or organizational documents of any
Subsidiary of Crescent, (iii) any loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, instrument, permit, concession,
franchise or license applicable to Crescent or any of its Subsidiaries or (iv)
any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Crescent or any of its Subsidiaries or any of their respective
properties, assets or operations, other than, in the case of clauses (ii), (iii)
or (iv), any such violations, defaults, losses, rights or liens that,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on Crescent, materially impair the ability of Crescent
to perform its obligations hereunder or prevent the consummation of any of the
transactions contemplated hereby. No filing or registration with, or
authorization, consent or approval of, any domestic (federal or state), foreign
or supranational court, commission, governmental body, regulatory agency,
authority or 


                                      -11-
<PAGE>   12

tribunal (a "Governmental Entity") is required by or with respect to Crescent or
any of its Subsidiaries in connection with the execution and delivery of this
Agreement by Crescent or is necessary for the consummation of the Merger and the
other transactions contemplated by this Agreement, except (i) in connection, or
in compliance, with the provisions of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), the Securities Act and the
Securities Exchange Act of 1934, as amended (together with the rules and
regulations promulgated thereunder, the "Exchange Act"), including, but not
limited to, the filing of any registration statements on Forms S-4 and S-8, (ii)
the filing of the Articles of Merger with the Secretary of State of the State of
Nevada and with the County Clerk of Tarrant County, Texas and appropriate
documents with the relevant authorities of other states in which Crescent or any
of its Subsidiaries are qualified to do business, (iii) such filings and
consents as may be required under any environmental, health or public or work
safety law or regulation pertaining to any notification, disclosure or required
approval triggered by the Merger or by the transactions contemplated by this
Agreement, (iv) such filings as may be required in connection with the taxes
described in Section 5.11, (v) applicable requirements, if any, of, or filings
with, state securities or "blue sky" laws ("Blue Sky Laws") and the NYSE, (vi)
as may be required under foreign laws, (vii) filings with and approvals by any
regulatory authority with jurisdiction over the Company's gaming operations
required under any federal, state, local or foreign statute, ordinance, rule,
regulation, permit, consent, approval, license, judgment, order, decree,
injunction or other authorization governing or relating to the current or
contemplated casino and gaming and/or liquor activities and operations of the
Company, including the Nevada Gaming Control Act and the rules and regulations
promulgated thereunder, the Missouri Gaming Law and the Missouri Riverboat
Gambling Act and the respective rules and regulations promulgated thereunder,
and the Louisiana Video Draw Poker Devices Control Act and the rules and
regulations promulgated thereunder (collectively, the "Gaming Laws"), (viii)
such other consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under the laws of any foreign
country in which the Company or any of its subsidiaries conducts any business or
owns any property or assets, and (ix) such other consents, orders,
authorizations, registrations, declarations and filings the failure of which to
be obtained or made, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on Crescent, materially impair the
ability of Crescent to perform its respective obligations hereunder or prevent
the consummation of any of the transactions contemplated hereby.

         Section 2.5 SEC Documents and Other Reports. Crescent has filed all
required documents with the SEC since January 1, 1996 (together with all other
filings by Crescent with the SEC since January 1, 1996, the "Crescent SEC
Documents"). As of their respective dates, the Crescent SEC Documents complied
in all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and, at the respective times they were filed,
none of the Crescent SEC Documents contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The consolidated financial statements
(including, in each case, any notes thereto) of Crescent included in the
Crescent SEC Documents complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with 


                                      -12-
<PAGE>   13

respect thereto as of their respective dates of filing, were prepared in
accordance with generally accepted accounting principles (except, in the case of
the unaudited statements, as permitted by Regulation S-X of the SEC) applied on
a consistent basis during the period involved (except as may be indicated
therein or in the notes thereto) and fairly presented the consolidated financial
position of Crescent and its consolidated Subsidiaries as of the respective
dates thereof and the consolidated results of their operations and their
consolidated cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments and to any other
adjustments described therein). Except as disclosed in the Crescent SEC
Documents or as required by generally accepted accounting principles, Crescent
has not, since December 31, 1996, made any change in the accounting practices or
policies applied in the preparation of its financial statements.

         Section 2.6 Registration Statement and Proxy Statement. None of the
information to be supplied by Crescent for inclusion or incorporation by
reference in the Registration Statement or the proxy statement/prospectus
included therein (together with any amendments or supplements thereto, the
"Proxy Statement") relating to the Company Stockholder Meeting (as defined in
Section 5.1) will (i) in the case of the Registration Statement, at the time it
becomes effective and at the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading or (ii) in
the case of the Proxy Statement, at the time of the mailing of the Proxy
Statement and at the time of the Stockholder Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. If at any time
prior to the Effective Time any event with respect to Crescent, its officers and
trust managers or any of its Subsidiaries shall occur that is required to be
described in the Proxy Statement or the Registration Statement, such event shall
be so described, and an appropriate amendment or supplement shall be promptly
filed with the SEC and, as required by law, disseminated to the stockholders of
the Company.

         Section 2.7 Absence of Certain Changes or Events. Except as disclosed
in the Crescent SEC Documents filed prior to the date of this Agreement, since
December 31, 1996, (a) Crescent and its Subsidiaries have not sustained any loss
or interference with their business or properties from fire, flood, windstorm,
accident or other calamity (whether or not covered by insurance) that,
individually or in the aggregate, has had, or would reasonably be expected to
have, a Material Adverse Effect on Crescent, (b) there have not been any events,
changes or developments that, individually or in the aggregate, have had or
would reasonably be expected to have, a Material Adverse Effect on Crescent and
(c) there has not been any split, combination or reclassification of any of the
capital stock of Crescent or any issuance or the authorization of any issuance
of any other securities in respect of, in lieu of or in substitution for shares
of such capital stock, except as contemplated by this Agreement.

         Section 2.8 Permits and Compliance. Each of Crescent and its respective
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any 


                                  -13-
<PAGE>   14
Governmental Entity necessary for Crescent or any of its Subsidiaries to own,
lease and operate its properties or to carry on its business as it is now being
conducted (the "Crescent Permits"), except where the failure to have any of the
Crescent Permits, individually or in the aggregate, has not had, and would not
reasonably be expected to have, a Material Adverse Effect on Crescent, and, as
of the date of this Agreement, no suspension or cancellation of any of the
Crescent Permits is pending or, to the Knowledge of Crescent (as hereinafter
defined), threatened, except where the suspension or cancellation of any of the
Crescent Permits, individually or in the aggregate, has not had, and would not
reasonably be expected to have, a Material Adverse Effect on Crescent. None of
Crescent or any of its Subsidiaries is in violation of (A) its respective
declaration of trust, charter, by-laws or other organizational documents, (B)
any applicable law, ordinance, administrative or governmental rule or regulation
or (C) any order, decree or judgment of any Governmental Entity having
jurisdiction over Crescent or any of its Subsidiaries, except, in the case of
clauses (A), (B) and (C), for any violations that, individually or in the
aggregate, have not had, and would not reasonably be expected to have a Material
Adverse Effect on Crescent. Except as disclosed in the Crescent SEC Documents
filed prior to the date of this Agreement, as of the date hereof, there is no
contract or agreement that is material to the business, properties, results of
operations or financial condition of Crescent and its Subsidiaries, taken as a
whole. Except as set forth in the Crescent SEC Documents, prior to the date of
this Agreement, no event of default or event that, but for the giving of notice
or the lapse of time or both, would constitute an event of default exists or,
upon the consummation by Crescent of the transactions contemplated by this
Agreement, will exist under any indenture, mortgage, loan agreement, note or
other agreement or instrument for borrowed money, any guarantee of any agreement
or instrument for borrowed money or any lease, license or other agreement or
instrument to which Crescent or any of its Subsidiaries is a party or by which
Crescent or any such Subsidiary is bound or to which any of the properties,
assets or operations of Crescent or any such Subsidiary is subject, other than
any defaults that, individually or in the aggregate, have not had, and would not
reasonably be expected to have, a Material Adverse Effect on Crescent. For
purposes of this Agreement, the term "Knowledge" when used with respect to
Crescent means the actual knowledge as of the date hereof and as of the
Effective Time of the individuals identified in Schedule 2.8.

         Section 2.9 Tax Matters. Except as otherwise set forth in a disclosure
letter making reference to this section, (i) Crescent and each of its
Subsidiaries have timely filed all federal, state, local, foreign and provincial
income and Franchise Tax Returns and all other material Tax Returns required to
have been filed or appropriate extensions therefor have been properly obtained,
and such Tax Returns are, true, correct and complete, except to the extent that
any failure to so file or any failure to be true, correct and complete,
individually or in the aggregate, has not had, and would not reasonably be
expected to have, a Material Adverse Effect on Crescent; (ii) all Taxes required
to have been paid by Crescent and each of its Subsidiaries have been timely paid
or extensions for payment have been property obtained, except to the extent that
any failure to pay any such Taxes or to properly obtain an extension for such
payment, individually or in the aggregate, has not held, and would not
reasonably be expected to have, a Material Adverse Effect on Crescent; (iii)
Crescent and each of its Subsidiaries have complied in all material respects
with all rules and regulations relating to the 


                                      -14-

<PAGE>   15

withholding of Taxes except to the extent that any failure to comply with such
rules and regulations, individually or in the aggregate, has not had, and would
not reasonably be expected to have, a Material Adverse Effect on Crescent; (iv)
none of Crescent or any of its Subsidiaries has waived in writing any statute of
limitations in respect of its federal, state, local, foreign or provincial
income or franchise Taxes and no deficiency with respect to any Taxes has been
proposed, asserted or assessed against Crescent or any of its Subsidiaries,
except to the extent that any such waiver or deficiency, individually or in the
aggregate, has not had, and would not reasonably be expected to have, a Material
Adverse Effect on Crescent; (v) all Federal income Tax Returns referred to in
clause (i) for all years through 1993 have been examined by and settled with the
Internal Revenue Service or the period for assessment of Taxes in respect of
which such Tax returns were required to be filed has expired; (vi) as of the
date hereof and at the Effective Time, no material issues that have been raised
in writing by the relevant taxing authority in connection with the examination
of the Tax Returns referred to in clause (i) are currently pending; (vii) all
material deficiencies asserted or material assessments made as a result of any
examination of any Tax Returns referred to in clause (i) by any taxing authority
have been paid in full; (viii) the most recent financial statements contained in
the Crescent SEC Documents reflect an adequate reserve for all Taxes payable by
Crescent and its Subsidiaries for all taxable periods and portions thereof
through the date of such financial statements; and (ix) there are no material
liens for Taxes (other than for current Taxes not yet due and payable) on the
assets of Crescent or any of its Subsidiaries. For purposes of this Agreement:
(i) "Taxes" means any federal, state, local, foreign or provincial income, gross
receipts, property, sales, use, license, excise, franchise, employment, payroll,
withholding, alternative or add on minimum, ad valorem, value-added, transfer or
excise tax, or other tax, custom, duty, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or
penalty imposed by any Governmental Entity, and (ii) "Tax Return" means any
return, report or similar statement (including the attached schedules) required
to be filed with respect to any Tax, including, without limitation, any
information return, claim for refund, amended return or declaration of estimated
Tax.

         Section 2.10 Actions and Proceedings. Except as set forth in the
Crescent SEC Documents filed prior to the date of this Agreement, there are no
outstanding orders, judgments, injunctions, awards or decrees of any
Governmental Entity against or involving Crescent or any of its Subsidiaries, or
against or involving any of the trust managers, directors, officers or employees
of Crescent or any of its Subsidiaries, as such, any of its or their properties,
assets or business or any of the Crescent Stock Plans that, individually or in
the aggregate, have had, or would reasonably be expected to have, a Material
Adverse Effect on Crescent. As of the date of this Agreement, there are no
actions, suits or claims or legal, administrative or arbitrative proceedings or
investigations pending or, to the Knowledge of Crescent, threatened against or
involving Crescent or any of its Subsidiaries or any of its or their trust
managers, directors, officers or employees, as such, or any of its or their
properties, assets or business or any Crescent Stock Plan that, individually or
in the aggregate, have had, or would reasonably be expected to have, a Material
Adverse Effect on Crescent. As of the date hereof, there are no actions, suits,
labor disputes or other litigation, legal or administrative proceedings or
governmental investigations pending or, to the Knowledge of Crescent, threatened
against or affecting Crescent or any of its Subsidiaries or any of its or


                                      -15-
<PAGE>   16

their trust managers, directors, officers or employees, as such, or any of its
or their properties, assets or business relating to the transactions
contemplated by this Agreement.

         Section 2.11 Compliance with Worker Safety and Environmental Laws.

         (a) Except as otherwise set forth in a disclosure letter making
reference to this section, (i) the properties, assets and operations of Crescent
and its Subsidiaries are in compliance with all applicable federal, state,
local, regional and foreign laws, rules and regulations, orders, decrees, common
law judgments, permits and licenses relating to public and worker health and
safety (collectively, "Worker Safety Laws") and the protection, regulation and
clean-up of the indoor and outdoor environment and activities or conditions
related thereto, including, without limitation, those relating to the
generation, handling, disposal, transportation or release of hazardous or toxic
materials, substances, wastes, pollutants and contaminants including, without
limitation, asbestos, petroleum, radon and polychlorinated biphenyls
(collectively, "Environmental Laws"), except for any violation that,
individually or in the aggregate, has not had, or would not reasonably be
expected to have, a Material Adverse Effect on Crescent; and (ii) with respect
to such properties, assets and operations, including any previously owned,
leased or operated properties, assets or operations, as of the date hereof and
at the Effective Time, there are no past, present or reasonably anticipated
future events, conditions, circumstances, activities, practices, incidents,
actions or plans of Crescent or any of its Subsidiaries that may interfere with
or prevent compliance or continued compliance with applicable Worker Safety Laws
and Environmental Laws, other than any such interference or prevention that,
individually or in the aggregate, has not had, or would not reasonably be
expected to have, a Material Adverse Effect on Crescent.

         (b) (i) Crescent and its Subsidiaries have not caused or permitted any
property, asset, operation, including any previously owned property, asset or
operation, to use generate, manufacture, refine, transport, treat, store,
handle, dispose, transfer or process hazardous or toxic materials, substances,
wastes, pollutants or contaminants, except in material compliance with all
Environmental Laws and Worker Safety Laws, other than any such activity that,
individually or in the aggregate, has not had, and would not reasonably be
expected to have, a Material Adverse Effect on Crescent; (ii) Crescent and its
Subsidiaries have not reported to any Governmental Entity any material violation
of an Environmental Law or any release, discharge or emission of any hazardous
or toxic materials, substances, wastes, pollutants or contaminants, other than
any such violation, release, discharge or emission that, individually or in the
aggregate, has not had, and would not reasonably be expected to have, a Material
Adverse Effect on Crescent, and (iii) as of the date hereof and at the Effective
Time, Crescent has no Knowledge of any pending, threatened or anticipated claims
or liabilities under CERCLA, 42 U.S.C. sec. 9601 et seq., RCRA, 42 U.S.C. sec.
6901 et seq., or equivalent state law provisions and no Knowledge that any
current or former property, asset or operation is identified or currently
proposed for the National Priorities List at 40 CFR sec. 300, Appendix B, or the
CERCLIS or equivalent state lists or hazardous substances release sites, other
than with respect to Crescent's Poydras property.


                                      -16-
<PAGE>   17

         Section 2.12 Liabilities. Except as set forth in the Crescent SEC
Documents filed prior to the date hereof, Crescent and its Subsidiaries have no
liabilities, absolute or contingent, other than liabilities that, individually
or in the aggregate, have not had, and would not reasonably be expected to have,
a Material Adverse Effect on Crescent.

         Section 2.13 Intellectual Property. Crescent and its Subsidiaries own
or have the right to use all patents, patent rights, trademarks, trade names,
service marks, trade secrets, copyrights and other proprietary intellectual
property rights (collectively, "Intellectual Property Rights") as are necessary
in connection with the business of Crescent and its Subsidiaries, taken as a
whole, except where the failure to have such Intellectual Property Rights,
individually or in the aggregate, has not had, and would not reasonably be
expected to have, a Material Adverse Effect on Crescent. Neither Crescent nor
any of its Subsidiaries has infringed any Intellectual Property Rights of any
third party other than any infringements that, individually or in the aggregate,
have not had, and would not reasonably be expected to have, a Material Adverse
Effect on Crescent.

         Section 2.14 No Required Vote of Crescent Shareholders. No vote of the
shareholders of Crescent is required by law, the organizational documents of
Crescent or otherwise in order for Crescent to consummate the Merger and the
transactions contemplated hereby.

         Section 2.15 REIT Status. Crescent is a "real estate investment trust"
for federal income tax purposes. The consummation of the transactions
contemplated by this Agreement will not cause Crescent to cease to qualify as a
"real estate investment trust" for federal income tax purposes.

         Section 2.16 Brokers. No broker, investment banker or other person is
entitled to any broker's, finder's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Crescent.

         Section 2.17 ERISA.

         (a) Except as would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect on Crescent, nor any of its ERISA
Affiliates (as hereinafter defined) has withdrawn from any Company Multiemployer
Plan (as hereinafter defined) at any time within the past six years or
instituted, or is currently considering taking, any action to do so.

         (b) There has been no failure to make any contribution or pay any
amount due to any Crescent Plan as required by Section 412 of the Code, Section
302 of ERISA, or the terms of any such Plan, and no Crescent Plan, nor any trust
created thereunder, has incurred any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived.


                                      -17-

<PAGE>   18

         (c) As of the date hereof and at the Effective Time, neither Crescent
nor any of its ERISA Affiliates has been notified by any Crescent Multiemployer
Plan that such Crescent Multiemployer Plan is currently in reorganization or
insolvency under and within the meaning of Section 4241 or 4245 of ERISA or that
such Crescent Multiemployer Plan intends to terminate or has been terminated
under Section 4041A of ERISA. As of the date hereof and at the Effective Time,
neither the Company nor any of its ERISA Affiliates has any liability or
obligation under any welfare plan to provide life insurance or medical benefits
after termination of employment to any employee or dependent other than as
required by (i) Part 6 of Title I of ERISA or (ii) the laws of a jurisdiction
outside the United States.

         (d) As used herein, (i) "Crescent Plan" means a "pension plan" (as
defined in Section 3(2) of ERISA (other than a Crescent Multiemployer Plan)), a
"welfare plan" (as defined in Section 3(1) of ERISA), or any material bonus,
profit sharing, deferred compensation, incentive compensation, stock ownership,
stock purchase, stock option, phantom stock, vacation, severance, death benefit,
insurance or other plan, arrangement or understanding, in each case established
or maintained or contributed to by Crescent or any of its ERISA Affiliates or as
to which Crescent or any of its ERISA Affiliates otherwise may have any
liability, (ii) "Crescent Multiemployer Plan" means a "multiemployer plan" (as
defined in Section 4001(a)(3) of ERISA) to which Crescent or any of its ERISA
Affiliates is or has been obligated to contribute or otherwise may have any
liability.


                                   ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         The Company represents and warrants to Crescent as follows:

         Section 3.1 Organization, Standing and Power. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Nevada and has the requisite corporate power and authority to
carry on its business as now being conducted. Each Subsidiary of the Company is
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized and has the requisite corporate (in the
case of a Subsidiary that is a corporation) or other power and authority to
carry on its business as now being conducted, except where the failure to be so
organized, existing or in good standing or to have such power or authority,
individually or in the aggregate, has not had, and would not reasonably be
expected to have, a Material Adverse Effect on the Company. The Company and each
of its Subsidiaries are duly qualified to do business, and are in good standing,
in each jurisdiction where the character of their properties owned or held under
lease or the nature of their activities makes such qualification necessary,
except where the failure to be so qualified, individually or in the aggregate,
has not had, and would not reasonably be expected to have, a Material Adverse
Effect on the Company.


         Section 3.2 Capital Structure. At the date hereof, the authorized
capital stock of the Company consists of 90,000,000 shares of Company Common
Stock, and 5,000,000 shares of Preferred Stock, $.01 par value per share
("Company Preferred Stock"). At the close of 


                                      -18-

<PAGE>   19

business on January 16, 1998, (i) 35,306,657 shares of Company Common Stock (and
associated Rights) were issued and outstanding, (ii) 2,070,000 shares of
Convertible Preferred Stock were issued and outstanding, (iii) no shares of
Company Common Stock were held in the treasury of the Company or by its
Subsidiaries, (iv) 6,307,000 shares of Company Common Stock were reserved for
issuance pursuant to the Company Stock Compensation Program, as amended, options
to purchase 5,485,743 shares of Company Common Stock had been issued and were
outstanding pursuant to such Stock Compensation Program, (v) 1,000,000 shares of
Company Common Stock were reserved for issuance pursuant to the Company's 401(k)
Plan, dated as of October 14, 1993, as amended, and as of December 31, 1997, no
shares of Company Common Stock had been issued and were outstanding pursuant to
such 401(k) Plan, (vi) 6,742,671 shares of Company Common Stock were reserved
for issuance pursuant to the Certificate of Designation, and (vi) no shares of
Company Common Stock were reserved in connection with the Rights Agreement dated
October 6, 1997 (the "Rights Agreement") between the Company and Continental
Stock Transfer & Trust Company pursuant to which the Company declared a dividend
on October 6, 1997 of one preferred share purchase right (a "Right") for each
outstanding share of Company Common Stock. Except as set forth above, at the
close of business on January 16, 1998, no shares of capital stock or other
voting securities of the Company were issued, reserved for issuance or
outstanding. All the outstanding shares of Company Common Stock were validly
issued, fully paid and nonassessable and free of preemptive rights. Except as
otherwise set forth in a disclosure letter making reference to this section,
there are no options, warrants, calls, rights or agreements to which the Company
or any of its Subsidiaries is a party or by which any of them is bound
obligating the Company or any of its Subsidiaries to issue, deliver, or sell, or
cause to be issued, delivered or sold, additional shares of capital stock of the
Company or any of its Subsidiaries or obligating the Company or any of its
Subsidiaries to grant, extend or enter into any such option, warrant, call,
right or agreement. Except as otherwise set forth in a disclosure letter making
reference to this section, each outstanding share of capital stock of each
Subsidiary of the Company that is a corporation is duly authorized, validly
issued, fully paid and nonassessable and, except as disclosed in the Company SEC
Documents (as defined in Section 3.5) filed prior to the date of this Agreement,
each such share that is owned by the Company or another Subsidiary of the
Company, is owned free and clear of all Liens. As of the date of this Agreement,
the Company does not have outstanding any bonds, debentures, notes or other
indebtedness of the Company having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
stockholders of the Company may vote. Except as otherwise set forth in a
disclosure letter making reference to this section, there are no outstanding
contractual obligations of the Company or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any shares of capital stock of the Company or any of
its Subsidiaries. Exhibit 21 to the Company's Annual Report on Form 10-K for the
year ended March 31, 1997, as filed with the SEC (the "Company Annual Report"),
is a true, accurate and correct statement in all material respects of all the
information required to be set forth therein by the rules and regulations of the
SEC.

         Section 3.3 Authority. The Board of Directors of the Company (i) has
unanimously approved and adopted this Agreement, (ii) has resolved to recommend
the approval of this Agreement by the Company's stockholders and has directed
that this 


                                      -19-
<PAGE>   20

Agreement be submitted to the Company's stockholders for approval, (iii) has
adopted amendments to the Company's Stock Compensation Program providing that a
Company employee's options shall not terminate if, in connection with the
Merger, the employee becomes employed by an entity other than the Company, (iv)
has approved the modification of the vesting schedule for the options granted
under the Company's Stock Compensation Program on September 29, 1997 to provide
that such options will vest in equal installment amounts over five years; and
(v) has directed the filing of the Proxy Statement with the SEC. The Company has
all requisite corporate power and authority to enter into this Agreement and,
subject to approval by the stockholders of the Company of this Agreement, to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, subject to approval of this
Agreement by the stockholders of the Company. This Agreement has been duly
executed and delivered by the Company and (assuming the valid authorization,
execution and delivery of this Agreement by Crescent and the validity and
binding effect of this Agreement on Crescent) constitutes the valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar law affecting the enforcement of
creditors' rights generally and by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law.

         Section 3.4 Consents and Approvals; No Violation. Assuming that all
consents, approvals, authorizations and other actions described in this Section
3.4 or set forth in a disclosure letter making reference to this section, have
been obtained and all filings and obligations described in this Section 3.4 have
been made, the execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated hereby and compliance with the
provisions hereof will not, result in any violation of, or default or the loss
of a material benefit (with or without notice or lapse of time, or both) under,
or give to others a right of termination, cancellation or acceleration of any
obligation under, or result in the creation of any Lien, upon any of the
properties, assets or operations of the Company or any of its Subsidiaries under
any provision of (i) the Amended and Restated Articles of Incorporation of the
Company (the "Articles of Incorporation"), or the Restated Bylaws of the
Company, as amended (the "Company Bylaws"), (ii) any provision of the comparable
charter or organization documents of any Subsidiary of the Company, (iii) any
loan or credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise or license applicable to
the Company or any of its Subsidiaries or (iv) any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the Company or any of
its Subsidiaries or any of their respective properties, assets or operations,
other than, in the case of clauses (ii), (iii) or (iv), any such violations,
defaults, losses, rights or liens that, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect on the Company,
materially impair the ability of the Company to perform its obligations
hereunder or prevent the consummation of any of the transactions contemplated
hereby. Except as set forth in a disclosure letter making reference to this
section, no filing or registration with, or authorization, consent or approval
of, any 


                                      -20-
<PAGE>   21

Governmental Entity or any other person is required by or with respect to the
Company or any of its Subsidiaries in connection with the execution and delivery
of this Agreement by the Company or is necessary for the consummation of the
Merger and the other transactions contemplated by this Agreement, except (i) in
connection, or in compliance, with the provisions of the HSR Act, the Securities
Act and the Exchange Act, (ii) in connection, or in compliance, with the
provisions of the Articles of Merger with the Secretary of State of the State of
Nevada and with the County Clerk of Tarrant County, Texas and appropriate
documents with the relevant authorities of other states in which the Company or
any of its Subsidiaries is qualified to do business, (iii) such filings and
consents as may be required under any environmental, health or public or worker
safety law or regulation pertaining to any notification, disclosure or required
approval triggered by the Merger or by the transactions contemplated by this
Agreement, (iv) such filings as may be required in connection with the taxes
described in Section 5.11, (v) applicable requirements, if any, of Blue Sky Laws
and the NYSE, (vi) as may be required under foreign laws, (vii) filings with and
approvals, consents, findings of suitability, registrations, licenses, permits,
orders and authorizations in respect of the Gaming Laws, (viii) for the
requisite approval by the vote of the holders of the Company Common Stock and
Convertible Preferred Stock in accordance with applicable law and the Articles
of Incorporation and Bylaws of the Company, and (viii) such other consents,
orders, authorizations, registrations, declarations and filings the failure of
which to be obtained or made, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on the Company,
materially impair the ability of the Company to perform its obligations
hereunder or prevent the consummation of any of the transactions contemplated
hereby.

         Section 3.5 SEC Documents and Other Reports. The Company has filed all
required documents with the SEC since March 31, 1996 (together with all other
filings by the Company with the SEC since March 31, 1996, the "Company SEC
Document"). As of their respective dates, the Company SEC Documents complied in
all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and, at the respective times they were filed,
none of the Company SEC Documents contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The consolidated financial statements
(including, in each case, any notes thereto) of the Company included in the
Company SEC Documents complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto as of their respective dates of filing, were
prepared in accordance with generally accepted accounting principles (except, in
the case of the unaudited statements, as permitted by Regulation S-X of the SEC)
applied on a consistent basis during the periods involved (except as may be
indicated therein or in the notes thereto) and fairly presented the consolidated
financial position of the Company and its consolidated Subsidiaries as of the
respective dates thereof and the consolidated results of operations and their
consolidated cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments and to any other
adjustments described therein). Except as disclosed in the Company SEC Documents
or as required by generally


                                      -21-
<PAGE>   22
accepted accounting principles, the Company has not, since March 31, 1997, made
any change in the accounting practices or policies applied in the preparation of
its financial statements.

     Section 3.6  Registration Statement and Proxy Statement. Except as
contemplated by the next sentence, none of the information to be supplied by the
Company for inclusion or incorporation by reference in the Registration
Statement or the Proxy Statement will (i) in the case of the Registration
Statement, at the time it becomes effective and at the Effective Time, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading or (ii) in the case of the Proxy Statement, at the time
of the mailing of the Proxy Statement and at the time of the Company Stockholder
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. If at any time prior to the Effective Time any event with respect to
the Company, its officers and directors or any of its Subsidiaries shall occur
that is required to be described in the Proxy Statement or the Registration
Statement, such event shall be so described, and an appropriate amendment or
supplement shall be promptly filed with the SEC and, as required by law.

     Section 3.7  Absence of Certain Changes or Events. Except as disclosed in
this Agreement, as set forth in a disclosure letter making reference to this
section or in the Company SEC Documents filed prior to the date of this
Agreement, since March 31, 1997, (a) the Company and its Subsidiaries have not
sustained any loss or interference with their business or properties from fire,
flood, windstorm, accident or other calamity (whether or not covered by
insurance) that, individually or in the aggregate, has had, or would reasonably
be expected to have, a Material Adverse Effect on the Company and (b)(i) there
has been no change in the capital stock of the Company (except for the issuance
of shares of the Company Common Stock pursuant to Company Plans) and no dividend
or distribution of any kind declared, paid or made by the Company on any class
of its stock (except for dividends declared and paid on the Convertible
Preferred Stock or the Redeemable Preferred Stock in the ordinary course of
business and consistent with past practice) and (ii) there have not been any
events, changes or developments that, individually or in the aggregate, have had
or would reasonably be expected to have a Material Adverse Effect on the
Company. The aggregate amount of indebtedness of the Company and its
Subsidiaries as of September 30, 1997, is set forth in Schedule 3.7.

     Section 3.8  Permits and Compliance. Except as set forth in a disclosure
letter making reference to this section, each of the Company and its
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Entity necessary for the Company or any
of its Subsidiaries to own, lease and operate its properties or to carry on its
business as it is now being conducted (the "Company Permits"), except where the
failure to have any of the Company Permits, individually or in the aggregate,
has not had, and would not reasonably be expected to have, a Material Adverse
Effect on the Company, and, as of the date of this Agreement, no suspension or
cancellation of any of the Company Permits is pending or, to the Knowledge of
the Company (as hereinafter defined), threatened, except 

                                      -22-
<PAGE>   23

where the suspension or cancellation of any of the Company Permits, individually
or in the aggregate, has not had, and would not reasonably be expected to have,
a Material Adverse Effect on the Company. Neither the Company nor any of its
Subsidiaries is in violation of (A) its charter, by-laws or other organizational
documents, (B) any applicable law, ordinance, administrative or governmental
rule or regulation or (C) any order, decree or judgment of any Governmental
Entity having jurisdiction over the Company or any of its Subsidiaries, except,
in the case of clauses (A), (B) and (C), for any violations that, individually
or in the aggregate, has not had, and would not reasonably be expected to have,
a Material Adverse Effect on the Company. Except as disclosed in the Company SEC
Documents filed prior to the date of this Agreement or as set forth in a
disclosure letter making reference to this section, as of the date hereof, there
is no contract or agreement that is material to the business, properties,
results of operations or financial condition of the Company and its
Subsidiaries, taken as a whole. Except as set forth in the Company SEC Documents
or in a disclosure letter making reference to this section, prior to the date of
this Agreement, no event of default or event that, but for the giving of notice
or the lapse of time or both, would constitute an event of default exists or,
upon the consummation by the Company of the transactions contemplated by this
Agreement, will exist under any indenture, mortgage, loan agreement, note or
other agreement or instrument for borrowed money, any guarantee of any agreement
or instrument for borrowed money or any lease, license or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which the Company or any such Subsidiary is bound or to which any of the
properties, assets or operations of the Company or any such Subsidiary is
subject, other than any defaults that, individually or in the aggregate, have
not had, and would not reasonably be expected to have, a Material Adverse Effect
on the Company. For purposes of this Agreement, the term "Knowledge" when used
with respect to the Company means the actual knowledge as of the date hereof and
at the Effective Time of the individuals identified in Schedule 3.8.

     Section 3.9  Tax Matters. Except as otherwise set forth in a disclosure
letter making reference to this section, (i) the Company and each of its
Subsidiaries have timely filed all federal, state, local, foreign and provincial
income and franchise Tax Returns and all other material Tax Returns required to
have been filed or appropriate extensions therefor have been properly obtained,
and such Tax Returns are true, correct and complete, except to the extent that
any failure to so file or any failure to be true, correct and complete,
individually or in the aggregate, has not had, and would not reasonably be
expected to have, a Material Adverse Effect on the Company; (ii) all Taxes
required to have been paid by the Company and each of its Subsidiaries have been
timely paid or extensions for payment have been properly obtained, except to the
extent that any failure to pay any such Taxes or to properly obtain an extension
for such payment, individually or in the aggregate, has not had, and would not
reasonably be expected to have, a Material Adverse Effect on the Company; (iii)
the Company and each of its Subsidiaries have complied in all material respects
with all rules and regulations relating to the withholding of Taxes except to
the extent that any failure to comply with such rules and regulations,
individually or in the aggregate, has not had, and would not reasonably be
expected to have, a Material Adverse Effect on the Company; (iv) neither the
Company nor any of its Subsidiaries has waived in writing any statute of
limitations in respect of its federal, state, local, foreign or provincial
income or franchise Taxes and no deficiency with respect to 

                                      -23-

<PAGE>   24

any Taxes has been proposed, asserted or assessed against the Company or any of
its Subsidiaries, except the extent that any such waiver or deficiency,
individually or in the aggregate has not had, and would not reasonably be
expected to have, a Material Adverse Effect on the Company; (v) all federal
income Tax Returns referred to in clause (i) for all years through May 31, 1993
have been examined by and settled with the Internal Revenue Service or the
period for assessment of the Taxes in respect of which such Tax Returns were
required to be filed has expired; (vi) as of the date hereof and at the
Effective Time, no material issues that have been raised in writing by the
relevant taxing authority in connection with the examination of the Tax Returns
referred to in clause (i) are currently pending; and (vii) all material
deficiencies asserted or material assessments made as a result of any
examination of any Tax Returns referred to in clause (i) by any taxing authority
have been paid in full; (viii) the most recent financial statements contained in
the Company SEC Documents reflect an adequate reserve for all Taxes payable by
the Company and its Subsidiaries for all taxable periods and portions thereof
through the date of such financial statements; and (ix) there are no material
liens for Taxes (other than for current Taxes not yet due and payable) on the
assets of the Company or any of its Subsidiaries.

     Section 3.10 Actions and Proceedings. Except as set forth in the Company
SEC Documents filed prior to the date of this Agreement or as set forth in a
disclosure letter making reference to this section, there are no outstanding
orders, judgments, injunctions, awards or decrees of any Governmental Entity
against or involving the Company or any of its Subsidiaries, or against or
involving any of the directors, officers or employees of the Company or any of
its Subsidiaries, as such, any of its or their properties, assets for business
or any Company Plan (as hereinafter defined) that, individually or in the
aggregate, have had, or would reasonably be expected to have, a Material Adverse
Effect on the Company. Except as otherwise set forth in a disclosure letter
making reference to this section, as of the date of this Agreement, there are no
actions, suits, labor disputes or claims or legal, administrative or arbitrative
proceedings or investigations pending or, to the Knowledge of the Company,
threatened against or involving the Company or any of its Subsidiaries or any of
its or their directors, officers or employees as such, or any of its or their
properties, assets or business or any Company Plan that, individually or in the
aggregate, have had, or would reasonably be expected to have, a Material Adverse
Effect on the Company. Except as otherwise set forth in a disclosure letter
making reference to this section, as of the date hereof, there are no actions,
suits, labor disputes or other litigation, legal or administrative proceedings
or governmental investigations pending or, to the Knowledge of the Company,
threatened against or affecting the Company or any of its Subsidiaries or any of
its or their officers, directors or employees, as such, or any of its or their
properties, assets or business relating to the transactions contemplated by this
Agreement.

     Section 3.11 Certain Agreements. Except as otherwise set forth in a
disclosure letter making reference to this section, neither the Company nor any
of its Subsidiaries is a party to any oral or written agreement or plan,
including any stock option plan, stock appreciation rights plan, restricted
stock plan or stock purchase plan, any of the benefits of which will be
increased, or the vesting of the benefits of which will be accelerated, by the
occurrence of any of the transactions contemplated by this Agreement or the
value of any of the benefits of which will be calculated on the basis of any of
the transactions contemplated by this Agreement or the value of any of the
benefits of 

                                      -24-
<PAGE>   25

which will be calculated on the basis of any of the transactions contemplated by
this Agreement. Subject to Section 5.8 and except as set forth in a disclosure
letter making reference to this section, no holder of any option to purchase
shares of Company Common Stock or Company Preferred Stock, or shares of Company
Common Stock or Company Preferred Stock granted in connection with the
performance of services for the Company or its Subsidiaries, is or will be
entitled to receive cash from the Company or any Subsidiary in lieu of or in
exchange for such option or shares as a result of the transactions contemplated
by this Agreement.

     Section 3.12   ERISA.

     (a) Schedule 3.12(a) contains a list of each Company Plan (as hereinafter
defined) maintained by the Company and each material Company Plan maintained by
a Subsidiary of the Company. To the extent applicable, with respect to each
Company Plan, the Company has made, or will as soon as practicable after the
date hereof, make available to Crescent a true and correct copy of (i) the most
recent annual report (Form 5500) filed with the IRS, (ii) such Company Plan and
all amendments thereto, (iii) each trust agreement, insurance contract or
administration agreement relating to such Company Plan, (iv) the most recent
summary plan description for each Company Plan for which a summary plan
description is required, (v) the most recent actuarial report or valuation
relating to a Company Plan subject to Title IV of ERISA, (vi) the most recent
determination letter, if any, issued by the IRS with respect to any Company Plan
intended to be qualified under section 401(a) of the Code, (vii) any request for
a determination currently pending before the IRS and (viii) all correspondence
with the IRS, the Department of Labor or the Pension Benefit Guaranty
Corporation relating to any outstanding controversy. Except as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company, (i) each Company Plan complies with ERISA, the
Code and all other applicable statutes and governmental rules and regulations,
(ii) no "reportable event" (within the meaning of Section 4043 of ERISA) has
occurred within the past three years with respect to any Company Plan which is
likely to result in liability to the Company, (iii) neither the Company nor any
of its ERISA Affiliates (as hereinafter defined) has withdrawn from any Company
Multiemployer Plan (as hereinafter defined) at any time within the past six
years or instituted, or is currently considering taking, any action to do so,
and (iv) no action has been taken, or is currently being considered, to
terminate any Company Plan subject to Title IV of ERISA.

     (b) There has been no failure to make any contribution or pay any amount
due to any Company Plan as required by Section 412 of the Code, Section 302 of
ERISA, or the terms of any such Plan, and no Company Plan, nor any trust created
thereunder, has incurred any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived.

     (c) As of the date hereof and at the Effective Time, with respect to the
Company Plans, no event has occurred and, to the Knowledge of the Company, there
exists no 

                                      -25-
<PAGE>   26

condition or set of circumstances in connection with which the Company or any
ERISA Affiliate would be subject to any liability under the terms of such
Company Plans, ERISA, the Code or any other applicable law which has had, or
would reasonably be expected to have, a Material Adverse Effect on the Company.
All Company Plans that are intended to be qualified under Section 401(a) of the
Code have been determined by the IRS to be so qualified, or a timely application
for such determination is now pending or will be filed on a timely basis and, to
the Knowledge of the Company, there is no reason why any Company Plan is not so
qualified in operation. As of the date hereof and at the Effective Time, neither
the Company nor any of its ERISA Affiliates has been notified by any Company
Multiemployer Plan that such Company Multiemployer Plan is currently in
reorganization or insolvency under and within the meaning of Section 4241 or
4245 of ERISA or that such Company Multiemployer Plan intends to terminate or
has been terminated under Section 4041A of ERISA. As of the date hereof and at
the Effective Time, neither the Company nor any of its ERISA Affiliates has any
liability or obligation under any welfare plan to provide life insurance or
medical benefits after termination of employment to any employee or dependent
other than as required by (i) Part 6 of Title I of ERISA or (ii) the laws of a
jurisdiction outside the United States.

     (d) As used herein, (i) "Company Plan" means a "pension plan" (as defined
in Section 3(2) of ERISA (other than a Company Multiemployer Plan)), a "welfare
plan" (as defined in Section 3(1) of ERISA), or any material bonus, profit
sharing, deferred compensation, incentive compensation, stock ownership, stock
purchase, stock option, phantom stock, vacation, severance, death benefit,
insurance or other plan, arrangement or understanding, in each case established
or maintained or contributed to by the Company or any of its ERISA Affiliates or
as to which the Company or any of its ERISA Affiliates otherwise may have any
liability, (ii) "Company Multiemployer Plan" means a "multiemployer plan" (as
defined in Section 4001(a)(3) of ERISA) to which the Company or any of its ERISA
Affiliates is or has been obligated to contribute or otherwise may have any
liability, and (iii) with respect to any person, "ERISA Affiliate" means any
trade or business (whether or not incorporated) which is under common control or
would be considered a single employer with such person pursuant to Section
414(b), (c), (m) or (o) of the Code and the regulations promulgated under those
sections or pursuant to Section 4001(b) of ERISA and the regulations promulgated
thereunder.

     (e) Schedule 3.12(e) contains a list, as of the date of this Agreement, of
all (i) severance and employment agreements with officers of the Company and
each ERISA Affiliate, (ii) severance programs and related formal policies of the
Company with or relating to its employees and (iii) plans, programs, agreements
and other arrangements of the Company with or relating to its employees which
contain change of control or similar provisions, in each case involving a
severance or employment agreement or arrangement with an individual officer or
employee, only to the extent such agreement or arrangement provides for minimum
annual payments in excess of $150,000. The Company has provided to Crescent a
true and complete copy of each of the foregoing.

                                      -26-
<PAGE>   27

     (f) Except as otherwise set forth in a disclosure letter making reference
to this section, all compensation issued pursuant to the Stock Plans is
"qualified performance based compensation" and is deductible under section
162(m) of the Code.


     Section 3.13   Compliance with Worker Safety and Environmental Laws.



     (a) Except as otherwise set forth in a disclosure letter making reference
to this section, (i) the properties, assets and operations of the Company and
its Subsidiaries are in compliance with all applicable federal, state, local,
regional and foreign laws, rules and regulations, orders, decrees, common law,
judgments, permits and licenses relating to public and worker health and safety
(collectively, "Worker Safety Laws") and the protection, regulation and clean-up
of the indoor and outdoor environment and activities or conditions related
thereto, including, without limitation, those relating to the generation,
handling, disposal, transportation or release of hazardous or toxic materials,
substances, wastes, pollutants and contaminants including, without limitation,
asbestos, petroleum, radon and polychlorinated biphenyls (collectively,
"Environmental Laws"), except for any violations that, individually or in the
aggregate, have not had, and would not reasonably be expected to have, a
Material Adverse Effect on the Company; and (ii) with respect to such
properties, assets and operations, including any previously owned, leased or
operated properties, assets or operations, as of the date hereof and at the
Effective Time, there are no past, present or reasonably anticipated future
events, conditions, circumstances, activities, practices, incidents, actions or
plans of the Company or any of its Subsidiaries that may interfere with or
prevent compliance or continued compliance with applicable Worker Safety Laws
and Environmental Laws, other than any such interference or prevention that,
individually or in the aggregate, has not had, and would not reasonably be
expected to have, a Material Adverse Effect on the Company.


     (b) Except as set forth in a disclosure letter making reference to this
section, (i) the Company and its Subsidiaries have not caused or permitted any
property, asset, operation, including any previously owned property, asset or
operation, to use, generate, manufacture, refine, transport, treat, store,
handle, dispose, transfer or process hazardous or toxic materials, substances,
wastes, pollutants or contaminants, except in material compliance with all
Environmental Laws and Worker Safety Laws, other than any such activity that,
individually or in the aggregate, has not had, and would not reasonably be
expected to have, a Material Adverse Effect on the Company; (ii) the Company and
its Subsidiaries have not reported to any Governmental Entity any material
violation of an Environmental Law or any release, discharge or emission of any
hazardous or toxic materials, substances, wastes, pollutants or contaminants,
other than any such violation, release, discharge or emission that, individually
or in the aggregate, has not had, and would not reasonably be expected to have,
a Material Adverse Effect on the Company, and (iii) as of the date hereof and at
the Effective Time, the Company has no knowledge of any pending, threatened or
anticipated claims or liabilities under CERCLA, 42 U.S.C. sec. 9601 et seq.,
RCRA, 42 U.S.C. sec. 6901 et seq., or equivalent state law provisions and no
knowledge that any current or former property, asset or operation is identified
or currently proposed for the National Priorities List at 40 CFR sec. 300,
appendix B, or the CERCLIS or equivalent state lists or hazardous substances
release sites.

                                      -27-
<PAGE>   28

     Section 3.14 Liabilities. Except as otherwise set forth in a disclosure
letter making reference to this section or reserved against in the balance sheet
of the Company set forth in its Annual Report on Form 10-K for the fiscal year
ended March 31, 1997, as of the date hereof and as of the Effective Time, the
Company and its Subsidiaries have no liabilities, absolute or contingent, other
than liabilities that, individually or in the aggregate, have not had, and would
not reasonably be expected to have, a Material Adverse Effect on the Company.

     Section 3.15 Intellectual Property. Except as set forth in a disclosure
letter making reference to this section, the Company and its Subsidiaries own or
have the right to use all Intellectual Property Rights as are necessary in
connection with the business of the Company and its Subsidiaries, taken as a
whole, except where the failure to have such Intellectual Property Rights,
individually or in the aggregate, has not had, and would not reasonably be
expected to have, a Material Adverse Effect on the Company. Neither the Company
nor any of its Subsidiaries has infringed any Intellectual Property Rights of
any third party other than any infringements that, individually or in the
aggregate, have not had, and would not reasonably be expected to have, a
Material Adverse Effect on the Company. The Company has provided to Crescent in
a disclosure letter making reference to this section a list of all of its
Intellectual Property Rights material to the conduct of its business.

     Section 3.16 Rights Agreement. The Company has taken all necessary action
to (i) render the Rights inapplicable to the Merger and the other transactions
contemplated by this Agreement and (ii) ensure that (y) neither Crescent nor any
of its affiliates is an Acquiring Person (as defined in the Rights Agreement)
and (z) a Distribution Date (as defined in the Rights Agreement) does not occur
by reason of the announcement or consummation of the Merger or the consummation
of any of the other transactions contemplated by this Agreement.

     Section 3.17 Parachute Payments to Disqualified Individuals. Except as set
forth in a disclosure letter making reference to this section, there will be no
"excess parachute payments" (as such term is defined in Section 280G(a) of the
Code) payable to employees of the Company and its Subsidiaries who are
"disqualified individuals" under Section 280G of the Code, whether or not such
employee's employment is terminated in connection with the transactions
contemplated under this Agreement.

     Section 3.18 State Takeover Statutes. The Board of Directors of the Company
has, to the extent such statutes are applicable, taken (or, with respect to
Sections 78.378 to 78.3793 and Sections 78.411 to 78.444 of the NGCL, will take
prior to the Effective Time) all action necessary to exempt Crescent, its
Subsidiaries and affiliates, the Merger, this Agreement and the transactions
contemplated hereby from Sections 78.378 to 78.3793 and Sections 78.411 to
78.444 of the NGCL, or to satisfy the requirements thereof. To the Knowledge of
the Company, no other state takeover statutes are applicable to the Merger, this
Agreement or the transactions contemplated hereby.

                                      -28-

<PAGE>   29

     Section 3.19 Required Vote of Company Stockholders. The affirmative vote of
the holders of 66 2/3% of the outstanding shares of Company Common Stock and 66
2/3% of the outstanding shares of Company Preferred Stock is required to approve
this Agreement. No other vote of the stockholders of the Company is required by
law, the Articles of Incorporation or the Company Bylaws or otherwise in order
for the Company to consummate the Merger and the transactions contemplated
hereby.

     Section 3.20 Brokers. No broker, investment banker or other person, other
than Salomon Smith Barney, the fees and expenses of which will be paid by the
Company (as reflected in agreements between such firms and the Company, copies
of which have been furnished to Crescent), is entitled to any broker's finder's
or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Company.

     Section 3.21   Labor Matters.

     (a) As of the date hereof and at the Effective Time, neither the Company
nor any of its Subsidiaries is a party to or otherwise bound by any collective
bargaining agreement, contract or other agreement or understanding with a labor
union or labor organization, nor is the Company or any of its Subsidiaries the
subject of any material proceeding asserting that the Company or any of its
Subsidiaries has committed an unfair labor practice or seeking to compel it to
bargain with any labor union or labor organization.

     (b) As of the date hereof and at the Effective Time, there are no pending
or, to the Knowledge of the Company, threatened, nor has there been for the past
five years, any labor strike, dispute, walk-out, work stoppage, slow-down or
lockout involving the Company or any of its Subsidiaries that, individually or
in the aggregate, have not had, and would not reasonably be expected to have, a
Material Adverse Effect on the Company.

     Section 3.22 Title. The Company and its Subsidiaries have good and valid
title to or, in the case of leased properties, a good and valid leasehold
interest in, all of the assets which they purports to own or lease, including
all assets (real, personal or mixed, tangible or intangible) reflected in the
September 30, 1997 consolidated financial statements of the Company, or acquired
by the Company thereafter, except those assets disposed of in the ordinary
course of business after September 30, 1997, and the title to each such property
and asset is free and clear of any title defects, objections, liens, mortgages,
security interests, pledges, charges and encumbrances, adverse claims, equities
or other adverse interests of any kind including without limitation, leases,
chattel mortgages, conditional sales contracts, collateral security arrangements
and other title or interest retention arrangements (collectively,
"Encumbrances"), except (i) any lien for taxes or other governmental charges not
yet delinquent, or the validity of which is being contested in good faith by
appropriate proceedings and as to which adequate reserves have been established
by the Company, (ii) any Encumbrances reflected on the financial statements
contained in the Company SEC Documents, with such changes in the amount thereof
as may have occurred since September 30, 1997 in the ordinary course of business
and which changes will not materially reduce the 

                                      -29-


<PAGE>   30

aggregate value of the property and assets held by the Company or its
Subsidiaries, (iii) such other imperfections of title or Encumbrances which, as
of the Effective Time, will not materially reduce the aggregate value of the
property and assets of the Company or its Subsidiaries, and (iv) any
Encumbrances or other matters identified in a disclosure letter delivered to
Crescent pursuant to this Agreement.

     Section 3.23 Leases. All leases of real or personal property having a term
of one year or more and with aggregate remaining lease payments due of $50,000
or more to which the Company and/or its Subsidiaries are a party are in good
standing, valid and effective in accordance with their respective terms, and
there is not under any of such leases any existing default or event of default
(or event which with notice or lapse of time, or both, would constitute a
default and in respect of which the Company has not taken adequate steps to
prevent a default from occurring) that would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company,
materially impair the ability of the Company to perform its obligations
hereunder or prevent the consummation of any of the transactions contemplated
hereby.

                                   ARTICLE IV
                                       
                    COVENANTS RELATING TO CONDUCT OF BUSINESS

     Section 4.1  Conduct of Business by the Company Pending the Merger. Except
as contemplated by Section 6.3, during the period from the date of this
Agreement to the Effective Time, the Company shall, and shall cause each of its
Subsidiaries to, carry on its business in the usual, regular and ordinary course
in substantially the same manner as heretofore conducted and, to the extent
consistent therewith, use all reasonable efforts to keep available the services
of its current officers and employees and preserve its relationships with
customers, suppliers, licensors, lessors and others having business dealings
with it to the end that its goodwill and ongoing business shall be unimpaired at
the Effective Time; provided, however, that the Company shall be permitted to
terminate or modify the business and operations of the Company's hotel/casino
facility located in Kansas City, Missouri in the event that an order, judgment,
injunction, award or decree of any Governmental Entity against the Company or
its Subsidiaries is granted or issued which results in the suspension,
termination or revocation of the gaming licenses for such hotel/casino facility.
Except as otherwise expressly permitted by this Agreement, the Company shall
not, and shall not permit any of its Subsidiaries to, without the prior written
consent of Crescent:

         (a) (i) declare, set aside or pay any dividends on, or make any other
      actual, constructive or deemed distributions in respect of, any of its
      capital stock, or otherwise make any payments to its stockholders in their
      capacity as such (other than dividends declared and paid on the Company
      Preferred Stock or the Redeemable Preferred Stock in the ordinary course
      of business and customary with past practice, and dividends and other
      distributions by direct or indirect wholly owned Subsidiaries), (ii) other
      than in the case of any direct or indirect wholly owned Subsidiary, split,
      combine or reclassify any of its capital stock or issue or authorize the
      issuance of any other securities in

                                      -30-

<PAGE>   31

      respect of, in lieu of or in substitution for shares of its capital stock
      or (iii) purchase, redeem or otherwise acquire any shares of capital stock
      of the Company or any of its Subsidiaries or any other securities thereof
      or any rights, warrants or options to acquire any such shares or other
      securities;

         (b) except as set forth in Section 5.17, issue, deliver, sell, pledge,
      dispose of or otherwise encumber any shares of its capital stock, any
      other voting securities or equity equivalent or any securities convertible
      into, or any rights, warrants or options to acquire any such shares,
      voting securities, equity equivalent or convertible securities, other than
      (i) the issuance of shares of Company Common Stock (and associated Rights)
      upon the exercise of employee stock options pursuant to the Company Plans
      outstanding on the date of this Agreement in accordance with their current
      terms and (ii) the issuance of Company Common Stock upon the conversion of
      shares of Company Preferred Stock or Redeemable Preferred Stock;

         (c) amend its articles or certificate of incorporation or by-laws or
      other comparable organizational documents;

         (d) except as set forth in Section 5.23, acquire or agree to acquire
      (i) by merging or consolidating with, or by purchasing a substantial
      portion of the assets of or equity in, or by any other manner, any
      business or any corporation, partnership, association or other business
      organization or division thereof or (ii) any assets that are, individually
      or in the aggregate material to the Company and its Subsidiaries taken as
      a whole, other than transactions that are in the ordinary course of
      business consistent with past practice and not material to the Company and
      its Subsidiaries taken as a whole;

         (e) except as set forth in a disclosure letter making reference to this
      section, sell, lease, license, mortgage, grant an interest in or easement
      in, or otherwise encumber or subject to any Lien or otherwise dispose of,
      or agree to sell, lease, license, mortgage, grant an interest in or
      easement in, or otherwise encumber or subject to any Lien or otherwise
      dispose of, any of its assets, other than transactions that are in the
      ordinary course of business consistent with past practice and not material
      to the Company and its Subsidiaries taken as whole;

         (f) incur any indebtedness for borrowed money, guarantee any such
      indebtedness, issue or sell any debt securities or warrants or other
      rights to acquire any debt securities, guarantee any debt securities or
      make any loans, advances or capital contributions to, or other investments
      in, any other person, or enter into any arrangement having the economic
      effect of any of the foregoing, other than (i) indebtedness incurred in
      the ordinary course of business consistent with past practice and (ii)
      indebtedness, loans, advances, capital contributions and investments
      between the Company and any of its wholly owned Subsidiaries or between
      any of such wholly owned Subsidiaries;

                                      -31-
<PAGE>   32

         (g) except as set forth in Section 5.23, alter (through merger,
      liquidation, reorganization, restructuring or in any other fashion) the
      corporate structure or ownership of the Company or any Subsidiary;

         (h) except as provided in Sections 5.8 and 5.18, enter into or adopt
      any new, or amend any existing severance plan, agreement or arrangement or
      enter into any new compensation or other welfare arrangement or plan, or
      amend any existing Company Plan or employment or consulting agreement,
      other than as required by law, except that the Company or its Subsidiaries
      may enter into (a) employment agreements if such agreements (i) are no
      longer than one year in duration (ii) provide for an annual base salary of
      less than $150,000, and (iii) provide, in the aggregate, for annual base
      salaries of less than $1,000,000, and (b) consulting agreements in the
      ordinary course of business that are terminable on no more than 90 days'
      notice without penalty;

         (i) except (1) as permitted under Section 4.1(h), or (2) to the extent
      required by written employment agreements existing on the date of this
      Agreement, increase the compensation payable or to become payable to its
      officers or employees, except for (i) increases in the ordinary course of
      business consistent with past practice in salaries or wages of non-officer
      employees of the Company or any of its Subsidiaries and (ii) except to the
      extent required under the terms of any applicable incentive plan;

         (j) grant or award any stock options, restricted stock, performance
      shares, stock appreciation rights or other equity-based incentive awards;

         (k) take any action, other than reasonable and usual actions in the
      ordinary course of business consistent with past practice, with respect to
      accounting policies or procedures (other than actions required to be taken
      by generally accepted accounting principles);

         (l) except as set forth in a disclosure letter making reference to this
      section, make or agree to make any new capital expenditure or expenditures
      which, individually, is in excess of $1,000,000 or which, in the
      aggregate, are in excess of $10,000,000;

         (m) pay, discharge or satisfy any claims, liabilities or obligations
      (absolute, accrued, asserted or unasserted, contingent or otherwise),
      other than the payment, discharge or satisfaction, in the ordinary course
      of business (i) consistent with past practice, of liabilities reflected or
      reserved against in, or contemplated by, (a) the most recent consolidated
      financial statements (or the notes thereto) of the Company included in the
      Company SEC Documents or (b) the condensed consolidated balance sheets of
      the Company and its Subsidiaries as set forth in a disclosure letter
      making reference to this section, or (ii) incurred in the ordinary course
      of business consistent with past practice;

                                      -32-
<PAGE>   33

         (n) settle or compromise any material federal, state, local or foreign
      tax liability; or

         (o) authorize, recommend, propose or announce an intention to do any of
      the foregoing, or enter into any contract, agreement, commitment or
      arrangement to do any of the foregoing.

     Section 4.2 Conduct of Business by Crescent Pending the Merger. Except as
contemplated by Section 6.3, during the period from the date of this Agreement
to the Effective Time, Crescent shall, and shall cause each of its Subsidiaries
to, carry on its or their respective businesses in the usual, regular and
ordinary course in substantially the same manner as heretofore conducted and, to
the extent consistent therewith, use all reasonable efforts to keep available
the services of its or their respective current officers and employees and
preserve their respective relationships with customers, suppliers, licensors,
lessors and others having business dealings with them to the end that their
goodwill and ongoing business shall be unimpaired at the Effective Time. Except
as otherwise expressly permitted by this Agreement, Crescent shall not, and
shall not permit any of its Subsidiaries to, without the prior written consent
of the Company:

      (a) (i) declare, set aside or pay any dividends on, or make any other
      actual, constructive or deemed distributions in respect of, any of its
      capital stock, or otherwise make any payments to its shareholders or
      stockholders, as applicable, in their capacity as such (other than (A) any
      extraordinary dividend paid or to be paid by Crescent which Crescent
      reasonably determines is sufficient, when considered together with all
      dividends anticipated to be paid within the tax year including the
      Effective Time, to equal all anticipated current and accumulated earnings
      and profits for such tax year of the Company and Crescent, (B)
      distributions in the aggregate not to exceed the greater of (i) the amount
      of any quarterly dividend that may be paid by Crescent in the ordinary
      course and (ii) distributions of "real estate investment taxable income"
      (as such term is defined for purposes of the Code) without regard to any
      net capital gains or the deduction for dividends paid (provided that this
      Section 4.2(a) shall not be deemed to restrict any increases in the
      dividend rate of Crescent in the ordinary course consistent with past
      practice) and (C) dividends and other distributions by direct, indirect or
      wholly owned Subsidiaries) or (ii) other than in the case of any
      Subsidiary, split, combine or reclassify any of its capital stock or issue
      or authorize the issuance of any other securities in respect of, in lieu
      of or in substitution for Common Shares;

         (b) in the case of Crescent only, amend its Declaration of Trust;

         (c) take or omit any action that would reasonably be expected to cause
      Crescent to cease to qualify as a "real estate investment trust" for
      federal income tax purposes; or

                                      -33-
<PAGE>   34

         (d) authorize, recommend, propose or announce an intention to do any of
      the foregoing, or enter into any contract, agreement, commitment or
      arrangement to do any of the foregoing.

     Section 4.3  No Solicitation.

    (a) Except as may be required pursuant to this Agreement, the Company shall
not, nor shall it permit any of its Subsidiaries to, nor shall it authorize or
permit any officer, director or employee of or any investment banker, attorney,
accountant, agent or other advisor or representative of the Company or any of
its Subsidiaries to, (i) solicit, initiate, or encourage the submission of, any
takeover proposal, (ii) except to the extent permitted by paragraph (b), enter
into any agreement with respect to any takeover proposal or (iii) participate in
any discussions or negotiations regarding or furnish to any person any
information with respect to the Company's business, properties or assets, or
take any other action to facilitate any inquiries or the making of any proposal
that constitutes, or may reasonably be expected to lead to, any takeover
proposal; provided, however, that if prior to the Company Stockholder Meeting
(as defined in Section 5.1), the Company shall have received an unsolicited
written takeover proposal from a reputable buyer which offer, in the written
opinion of Salomon Smith Barney, as the Company's financial advisors, appears to
be a "superior proposal" (as defined below) and which, in the written opinion of
legal counsel to the Company reasonably acceptable to Crescent, the Company's
Board of Directors is legally obligated to consider by principles of fiduciary
duty to stockholders under the NGCL, the foregoing restrictions shall not apply
to such proposal. Without limiting the foregoing, it is understood that any
violation of the restrictions set forth in the preceding sentence by any
officer, director or employee of or any investment banker, attorney, accountant,
agent or other advisor or representative of the Company or any of its
Subsidiaries, whether or not such person is purporting to act on behalf of the
Company or otherwise, shall be deemed to be a breach of this paragraph by the
Company. For all purposes of this Agreement, "takeover proposal" means any
proposal, other than a proposal by Crescent or an affiliate of Crescent for a
merger, consolidation, share exchange, business combination or other similar
transaction involving the Company or any of its Significant Subsidiaries or any
proposal or offer (including, without limitation, any proposal or offer to
stockholders of the Company), other than a proposal or offer by Crescent or an
affiliate of Crescent (i) to acquire in any manner, directly or indirectly, an
equity interest in or any voting securities of, the Company or any of its
Significant Subsidiaries or (ii) to acquire or lease in any manner, directly or
indirectly, any property, business or other assets that, individually or in the
aggregate, would satisfy any of the tests for a "significant subsidiary" within
the meaning of Rule 1-02 of Regulation S-X of the SEC. The Company immediately
shall cease and cause to be terminated all existing discussions or negotiations
with any persons conducted heretofore with respect to, or that could reasonably
be expected to lead to, any takeover proposal. As used herein, a "Significant
Subsidiary" means any Subsidiary that would constitute a "significant
subsidiary" within the meaning of Rule 1-02 of Regulation S-X of the SEC.


    (b) Neither the Board of Directors of the Company nor any committee thereof
shall (i) withdraw or modify, or propose to withdraw or modify, in a manner
adverse to Crescent, 

                                      -34-

<PAGE>   35

the approval or recommendation by the Board of Directors of the Company or any
such committee of this Agreement, any of the transactions contemplated by this
Agreement, or the Merger, (ii) approve or recommend, or propose to approve or
recommend, any takeover proposal, or (iii) take action to render the Rights
inapplicable to any takeover proposal. Notwithstanding the foregoing, the Board
of Directors of the Company, to the extent required by the fiduciary obligations
thereof, as determined by and set forth in the written opinion of legal counsel
to the Company reasonably acceptable to Crescent, may approve or recommend (and,
in connection therewith, withdraw or modify its approval or recommendation of
this Agreement or the Merger) a Superior Proposal (as defined below), subject to
the terms set forth in this Section 4.3(b). Prior to approving or recommending a
Superior Proposal, entering into a binding written agreement with respect to the
transaction contemplated by any such Superior Proposal or withdrawing or
modifying its approval or recommendation of this Agreement, the Company (i)
shall notify Crescent in writing that it intends to accept a Superior Proposal
and enter into such a binding, written agreement with respect to the transaction
contemplated thereby, and (ii) attach the most current version of such agreement
to such notice. Crescent shall have the opportunity, within ten business days of
receipt of the Company's written notification of its intention to enter into a
binding agreement for a Superior Proposal, to make an offer that the Board of
Directors of the Company determines, in good faith after consultation with its
financial advisors, is at least as favorable, from a financial point of view, to
the shareholders of the Company as the Superior Proposal. The Company agrees
that it will not enter into a binding agreement referred to in clause (i) above
until at least the eleventh business day after it has provided the notice to
Crescent required thereby and to notify Crescent promptly if its intention to
enter into a written agreement referred to in its notification shall change at
any time after giving such notification. For all purposes of this Agreement,
"superior proposal" means a bona fide written proposal made by a third party to
acquire the Company pursuant to a tender or exchange offer, a merger, a share
exchange, a sale of all or substantially all its assets or otherwise on terms
which, in the written opinion of Salomon Smith Barney, are financially superior
to those provided for in the Merger, and for which financing, to the extent
required, is then fully committed or which, in the good faith judgment of
Salomon Smith Barney is reasonably capable of being financed by such third
party. If, to the extent permitted by this Section 4.3(b), the Board of
Directors of the Company approves or recommends a superior proposal, the Company
may take appropriate action to render the Rights inapplicable to such superior
proposal.

    (c) Each of Frank J. Fertitta III, Lorenzo J. Fertitta III and Blake L.
Sartini, by such individual's execution of this Agreement, agrees to vote the
shares of capital stock of the Company owned by such individual that have the
power to vote in favor of the Merger; provided that such individuals shall be
free to vote their shares in their sole discretion if the Board of Directors of
the Company terminates this Agreement in accordance with Section 7.1(g) hereof.

    (d) The Company promptly shall immediately advise Crescent orally and in
writing of any takeover proposal or any inquiry with respect to or which could
reasonably be expected to lead to any takeover proposal, the material terms and
conditions of such takeover

                                      -35-
<PAGE>   36
proposal or inquiry and the identity of the person making any such takeover
proposal or inquiry. The Company will keep Crescent fully informed of the status
and details of any such takeover proposal or inquiry.

     Section 4.4  Third Party Standstill Agreements. Except to the extent
reasonably required in connection with the Company's obligations under this
Agreement, during the period from the date of this Agreement through the
Effective Time, the Company shall not terminate, amend, modify or waive any
provision of any confidentiality or standstill or similar agreement to which the
Company or any of its Subsidiaries is a party (other than any involving
Crescent) unless, in the written opinion of counsel to the Company reasonably
acceptable to Crescent, failure to take such action would violate the fiduciary
obligations of the Board of Directors of the Company, under applicable law.
During such period, the Company agrees to enforce, to the fullest extent
permitted under applicable law, the provisions of any such agreements,
including, but not limited to, obtaining injunctions to prevent any breaches of
such agreements and to enforce specifically the terms and provisions thereof in
any court of the United States or any state thereof having jurisdiction.

                                   ARTICLE V

                              ADDITIONAL AGREEMENTS

     Section 5.1  Stockholders Meeting. The Company shall, as soon as 
practicable following the date of this Agreement, duly call, give notice
of, convene and hold, a meeting of its stockholders, (the "Company Stockholder
Meeting") for the purpose of considering the approval of this Agreement. The
Company will, through its Board of Directors, recommend to its stockholders,
approval of such matters and shall not withdraw such recommendation except to
the extent that the Board of Directors of the Company shall have withdrawn or
modified its approval or recommendation of this Agreement of the Merger as
permitted by Section 4.3(b). Without limiting the generality of the foregoing,
the Company agrees that its obligations pursuant to the first sentence of this
Section 5.1 shall not be affected by the commencement, public proposal, public
disclosure or communication to the Company of any takeover proposal. The Company
and Crescent shall coordinate and cooperate with respect to the timing of such
meeting.

     Section 5.2  Filings; Other Actions.

     (a) The Company and Crescent shall promptly prepare and file with the SEC
the Proxy Statement and Crescent shall prepare and file with the SEC the
Registration Statement, in which the Proxy Statement will be included as a
prospectus. Each of Crescent and the Company shall use all reasonable efforts to
have the Registration Statement declared effective under the Securities Act as
promptly as practicable after such filing. As promptly as practicable after the
Registration Statement shall have become effective, the Company shall mail the
Proxy Statement to its stockholders. Crescent shall also take any action (other
than qualifying to do business in any jurisdiction in which they are currently
not so qualified) required to be taken under any applicable state securities
laws in connection with the issuance 



                                      -36-
<PAGE>   37

of Common Shares and Crescent Convertible Preferred Shares in the Merger and
upon the exercise of the Substitute Options (as defined in Section 5.8), and the
Company shall furnish all information concerning the Company and the holders of
Company Common Stock as may be reasonably requested in connection with any such
action, including information relating to the number of Common Shares and
Crescent Convertible Preferred Shares required to be registered.

     (b) Each party hereto agrees, subject to applicable laws relating to the
exchange of information, promptly to furnish the other parties hereto with
copies of written communications (and memoranda setting forth the substance of
all oral communications) received by such party, or any of its subsidiaries,
affiliates or associates (as such terms are defined in Rule 12b-2 under the
Exchange Act as in effect on the date hereof), from, or delivered by any of the
foregoing to, any Governmental Entity in respect of the transactions
contemplated hereby; provided, however, that neither party shall be required to
provide the other with copies of individuals' gaming applications and other
information provided to gaming regulators with respect thereto.

     (c) Each of the Company and Crescent will promptly, and in any event within
twenty business days after execution and delivery of this Agreement, make all
filings or submissions as are required under the HSR Act. Each of the Company
and Crescent will promptly furnish to the other such necessary information and
reasonable assistance as the other may request in connection with its
preparation of any filing or submissions necessary under the HSR Act. Without
limiting the generality of the foregoing, each of the Company and Crescent will
promptly notify the other of the receipt and content of any inquiries or
requests for additional information made by any Governmental Entity in
connection therewith and will promptly (i) comply with any such inquiry or
request and (ii) provide the other with a description of the information
provided to any Governmental Entity with respect to any such inquiry or request.
In addition, each of the Company and Crescent will keep the other apprised of
the status of any such inquiry or request.

     Section 5.3 Comfort Letters.

     (a) The Company shall use all reasonable efforts to cause to be delivered
to Crescent "comfort" letters of Arthur Andersen LLP, the Company's independent
public accountants, dated the date on which the Registration Statement shall
become effective and as of the Effective Time, and addressed to Crescent and the
Company, in form and substance reasonably satisfactory to Crescent and
reasonably customary in scope and substance for letters delivered by independent
public accountants in connection with transactions such as those contemplated by
this Agreement.

     (b) Crescent shall use all reasonable efforts to cause to be delivered to
the Company "comfort" letters of Arthur Andersen LLP, Crescent's independent
public accountants, dated the date on which the Registration Statement shall
become effective and as of the Effective Time, and addressed to the Company and
Crescent, in form and substance reasonably 


                                      -37-
<PAGE>   38

satisfactory to the Company and reasonably customary in scope and substance
for letters delivered by independent public accountants in connection with
transactions such as those contemplated by this Agreement.

     Section 5.4  Access to Information. Subject to currently existing
contractual and legal restrictions applicable to Crescent or to the Company or
any of its Subsidiaries, each of Crescent and the Company shall, and shall cause
each of its Subsidiaries to, afford to the accountants, counsel, financial
advisors and other representatives of the other party hereto reasonable access
to, and permit them to make such inspections as they may reasonably require,
during normal business hours during the period from the date of this Agreement
through the Effective Time, all their respective properties, books, tax returns,
contracts, commitments and records (including, without limitation, the work
papers of independent accountants, if available and subject to the consent of
such independent accountants) and, during such period, each of Crescent and the
Company shall, and each shall cause each of its Subsidiaries to, furnish
promptly to the other (i) a copy of each report, schedule, registration
statement and other document filed by it during such period pursuant to the
requirements of federal or state securities laws and (ii) all other information
concerning its business, properties and personnel as the other may reasonably
request. No investigation pursuant to this Section 5.4 shall affect any
representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto.

     Section 5.5  Compliance with the Securities Act. Within 30 days following
the date of this Agreement, the Company shall cause to be prepared and delivered
to Crescent a list (reasonably satisfactory to counsel for Crescent) identifying
all persons who, at the time of the Company Stockholder Meeting, in the
Company's reasonable judgment may be deemed "affiliates" of the Company as that
term is used in paragraphs (c) and (d) of Rule 145 under the Securities Act (the
"Rule 145 Affiliates"). The Company shall use all reasonable efforts to cause
each person who is identified as a Rule 145 Affiliate in such list to deliver to
Crescent on or prior to the Effective Time a written agreement in substantially
the form of Schedule 5.5 hereto, executed by such person.

     Section 5.6  Stock Exchange Listings. Crescent shall use all reasonable
efforts to list on the NYSE, upon official notice of issuance, the Common Shares
and the Crescent Convertible Preferred Shares to be issued in connection with
the Merger.

     Section 5.7  Fees and Expenses.

     (a) Except as provided in Section 5.7(b) and (c), whether or not the Merger
is consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby, including the fees and
disbursements of counsel, financial advisors and accountants, shall be paid by
the party incurring such costs and expenses, except that expenses incurred in
connection with printing and mailing the Proxy Statement and the Registration
Statement shall be borne equally by Crescent and the Company.


                                      -38-
<PAGE>   39

     (b) Provided that Crescent is not in material breach of its
representations, warranties and agreements under this Agreement, (i) if this
Agreement is terminated by either Crescent or the Board of Directors of the
Company pursuant to Section 7.1(e), (ii) if this Agreement is terminated by
Crescent pursuant to Section 7.1(f), or (iii) if this Agreement is terminated by
the Board of Directors of the Company pursuant to Section 7.1(g), then the
Company shall pay to Crescent $54,000,000 (the "Crescent Termination Fee") in
same-day funds, plus (notwithstanding paragraph (a) of this Section 5.7) all the
expenses (as defined below), on the date of such termination or if Crescent
elects, over a two-year period beginning on the date of termination with payment
amounts and dates to be determined by Crescent. For purposes of this Section
5.7, the "transaction value" shall mean the aggregate value of the consideration
to be paid by Crescent for the Company's equity securities, plus aggregate
liabilities of the Company as shown on its most recent financial statement.

     (c) If this Agreement is terminated and, as a result of such termination,
Crescent is entitled to the Crescent Termination Fee as provided in Section
5.7(b) above, then the Company shall (notwithstanding paragraph (a) of this
Section 5.7), on the date of such termination, pay to Crescent the cash amount
necessary to permit Crescent fully to reimburse itself and its affiliates for
all out-of-pocket fees and expenses incurred at any time prior to such
termination by any of them or on their behalf in connection with the Merger, the
preparation of this Agreement and the transactions contemplated by this
Agreement (including any currency or interest rate hedging activities in
connection with the transactions contemplated hereby), including (x) all fees
and expenses of counsel, investment banking firms, financial advisors
(regardless of whether such financial advisors are affiliates of Crescent),
accountants, experts and consultants to Crescent or any of their affiliates and
(y) all fees and expenses payable to banks, investment banking firms and other
financial institutions and their respective counsel, accountants and agents in
connection with arranging or providing financing) (fees and expenses under
clause (y) collectively, "Financing Fees," and the fees and expenses
contemplated by this paragraph (c), collectively, the "Expenses").

     (d) The parties acknowledges that the agreements contained in paragraphs
(b) and (c) of this Section 5.7 are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, neither
would enter into this Agreement; accordingly, if any person fails to pay
promptly any amount due pursuant to this Section 5.7 and, in order to obtain
such payment, another party commences a suit that results in a judgment for any
such amount, the party against whom the judgment is rendered shall pay to the
complaining party its cost and expenses (including attorneys' fees) in
connection with such suit together with interest on the amount of the fee at the
prime or base rate of Citibank, N.A. from the date such payment was due under
this Agreement.

     Section 5.8  Stock Options.

     (a) As of the Effective Time, each Company Stock Option that is outstanding
immediately prior to the Effective Time pursuant to the stock option plans that
are part of the Company's Stock Compensation Program (and excluding any "stock
purchase plan" within the meaning of Section 423 of the Code) in effect on the
date hereof (the "Stock Plans") shall 



                                      -39-
<PAGE>   40

be assumed by Crescent and become and represent a fully exercisable option to
purchase the number of Common Shares (a "Substitute Option") (decreased to the
nearest full share) determined by multiplying (i) the number of shares of
Company Common Stock subject to such Company Stock Option immediately prior to
the Effective Time by (ii) the Exchange Ratio, at an exercise price per Common
Share (rounded up to the nearest tenth of a percent) equal to the exercise price
per share of Company Common Stock immediately prior to the Effective Time.
Crescent shall pay cash to holders of Company Stock Options in lieu of issuing
fractional Common Shares upon the exercise of Substitute Options. As of the
Effective Time, each Substitute Option shall be subject to the same terms and
conditions as were applicable immediately prior to the Effective Time under the
related Company Stock Option and Stock Plan under which it was granted,
including those providing for the accelerated exercisability and other special
rights arising upon an "Acceleration Event" in accordance with the terms of such
Stock Plan. The Company agrees to use all reasonable efforts to obtain any
necessary consents of holders of Company Stock Options and take such other
actions as may be necessary to effect this Section 5.8. The accelerated lapse of
restrictions and other special rights with respect to any shares of restricted
Company Common Stock issued under the Stock Plans shall also be preserved
following the Effective Time in accordance with the terms of the Stock Plans.

     (b) In respect of each Company Stock Option as converted into a Substitute
Option pursuant to Section 5.8(a) and assumed by Crescent, and the Common Shares
underlying such option, Crescent shall file and keep current a registration
statement on Form S-8 (or a post-effective amendment to a Registration Statement
on Form S-8) or other appropriate form for as long as such options remain
outstanding and shall reserve sufficient Common Shares for issuance upon
exercise of such Substitute Options.

     (c) The provisions of this Section 5.8 are intended to be for the benefit
of, and shall be enforceable by, each person who is or has been an employee of
the Company or any of its Subsidiaries and is a holder of Company Stock Options
under the Stock Plans, and such employee's heirs and personal representatives
and shall be binding on all successors and assigns of Crescent.

     Section 5.9 Reasonable Efforts.

     (a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use all reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to assist
and cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger and the other transactions contemplated by this
Agreement, including, but not limited to: (i) obtaining all necessary actions or
non-actions, waivers, consents and approvals from all Governmental Entities and
making all necessary applications, registrations and filings (including filings
with Governmental Entities) and taking all reasonable steps as may be necessary
to obtain an approval or waiver from, or to avoid an action or proceeding by,
any Governmental Entity (including those in connection with the HSR Act, state
takeover statutes and Gaming Laws), (ii) obtaining all necessary consents,



                                      -40-
<PAGE>   41

approvals or waivers from third parties, (iii) defending any lawsuits or other
legal proceedings, whether judicial or administrative, challenging this
Agreement or the consummation of the transactions contemplated hereby, including
seeking to have any stay or temporary restraining order entered by any court or
other Governmental Entity with respect to the Merger or this Agreement vacated
or reversed, (iv) taking any and all actions necessary to satisfy all of the
conditions applicable to such party as set forth in Article VI of this
Agreement, and (v) executing and delivering any additional instruments necessary
to consummate the transactions contemplated by this Agreement.

     (b) Each of the Company and Crescent shall use all reasonable efforts not
to take any action that, in any such case, might reasonably be expected to (i)
cause any of the representations or warranties made by it in this Agreement that
is qualified as to materiality to be untrue, (ii) cause any of the
representations or warranties made by it contained in this Agreement that is not
so qualified to be untrue in any material respect, (iii) result in a breach of
any covenant made by it in this Agreement, (iv) result directly or indirectly in
any of the conditions to the Merger set forth in Article VI not being satisfied
or (v) impair the ability of the parties to consummate the Merger at the
earliest practicable time (regardless of whether such action would otherwise be
permitted or not prohibited hereunder).

     (c) The Company shall use its reasonable best efforts to restructure its
existing leases prior to the Effective Time so that the terms thereof shall
conform to the provisions of Section 22.3 of the Master Lease Agreement (as
hereinafter defined).

     Section 5.10 Public Announcements. Crescent and the Company will not issue
any press release with respect to the transactions contemplated by this
Agreement or otherwise issue any written public statements with respect to such
transactions (i) prior to ten business days from the date hereof, unless
otherwise agreed, and (ii) without prior consultation with each other party,
except as may be required by applicable law.

     Section 5.11 Transfer and Gains Tax. Crescent will pay any federal, state,
local, foreign or provincial tax which is attributable to the transfer of the
beneficial ownership of the Company's or its Subsidiaries' real and personal
property, if any (collectively, the "Gains Taxes"), any penalties or interest
with respect to the Gains Taxes, payable in connection with the consummation of
the Merger (except as otherwise provided in Section 1.7), any federal, state,
local, foreign or provincial tax which is attributable to the transfer of
Company Common Stock or Common Shares pursuant to the terms of this Agreement
(collectively, "Stock Transfer Taxes") and any penalties or interest with
respect to any such Stock Transfer Taxes. The Company and Crescent agree to
cooperate with the other in the filing of any returns with respect to the Gains
Taxes, including supplying in a timely manner a complete list of all real
property interests held by the Company and its Subsidiaries and any information
with respect to such property that is reasonably necessary to complete such
returns. The portion of the consideration allocable to the real property of the
Company and its Subsidiaries shall be agreed to between Crescent and the
Company. The stockholders of the Company shall be deemed to have agreed to be
bound by the allocation established pursuant to this Section 5.11 in the
preparation of any return with respect to the Gains Taxes.


                                      -41-
<PAGE>   42

     Section 5.12 State Takeover Laws. If any "fair price," "business
combination" or "control share acquisition" statute or other similar statute or
regulation shall become applicable to the transactions contemplated hereby,
Crescent and the Company and their respective Boards of Trust Managers or
Directors, as the case may be, shall use all reasonable efforts to grant such
approvals and take such actions as are necessary so that the transactions
contemplated hereby may be consummated as promptly as practicable on the terms
contemplated hereby and shall otherwise act to minimize the effects of any such
statute or regulation on the transactions contemplated hereby.

     Section 5.13 Indemnification; Directors and Officers Insurance.

     (a) Crescent agrees that all rights to indemnification and exculpation from
liabilities for acts or omissions occurring prior to the Effective Time now
existing in favor of the current or former directors or officers of the Company
and its Subsidiaries as provided in their respective articles or certificates of
incorporation or by-laws (or comparable organizational documents) and any
indemnification agreements of the Company shall survive the Merger and shall
continue in full force and effect in accordance with their terms for a period of
not less than five years from the Effective Time and the obligations of the
Company in connection therewith shall be assumed by Crescent. Crescent shall
provide, or shall cause the Surviving Entity to provide, the Company's current
directors and officers an insurance and indemnification policy (including any
fiduciary liability policy) that provides coverage with respect to any claims
made during the five-year period following the Effective Time for events
occurring prior to the Effective Time (the "D&O Insurance") that is
substantially similar to the Company's existing policies or, if substantially
equivalent insurance coverage is unavailable, the best available coverage;
provided, however, that the Surviving Entity shall not be required to pay an
annual premium for the D&O insurance in excess of 120 percent of the last annual
premium paid prior to the date hereof (which premium the Company represents and
warrants to be approximately $540,000 in the aggregate), but if such annual
premium would but for this proviso exceed such amount, then Crescent shall
purchase as much coverage as possible for such amount.

     (b) The provisions of this Section 5.13 are intended to be for the benefit
of, and shall be enforceable by, each person who is or has been a director or
officer of the Company or a subsidiary of the Company, and such director's or
officer's heirs and personal representatives and shall be binding on all
successors and assigns of Crescent.

     Section 5.14 Notification of Certain Matters. Crescent shall use all
reasonable efforts to give prompt notice to the Company, and the Company shall
use all reasonable efforts to give prompt notice to Crescent, of: (i) the
occurrence, or nonoccurrence, of any event the occurrence, or nonoccurrence, of
which it is aware and which would be reasonably likely to cause (x) any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect or (y) any covenant, condition or agreement
contained in this Agreement not to be complied with or satisfied in all material
respects, (ii) any failure of either Crescent or the Company, as the case may
be, to comply in a timely manner with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder 


                                      -42-
<PAGE>   43

or (iii) any event, change or development that, individually or in the
aggregate, has had, or would reasonably be expected to have, a Material Adverse
Effect on Crescent or the Company, as the case may be; provided, however, that
the delivery of any notice pursuant to this Section 5.14 shall not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice.

     Section 5.15 Rights Agreement. The Board of Directors of the Company shall
take all further action (in addition to that referred to in Section 3.16)
requested in writing by Crescent (including redeeming the Rights immediately
prior to the Effective Time of the Merger or amending the Rights Agreement) in
order to render the Rights inapplicable to the Merger and the other transactions
contemplated by this Agreement. Except as requested in writing by Crescent,
prior to the Company Stockholder Meeting, the Board of Directors of the Company
shall not (i) amend the Rights Agreement or (ii) take any action with respect
to, or make any determination under, the Rights Agreement (including a
redemption of the Rights).

     Section 5.16 Schedules, Exhibits and Disclosure Letters. Whenever, in this
Agreement, reference is made to a schedule, exhibit or disclosure letter (or
other similar provision for information to be made available), such schedule,
exhibit or disclosure letter (or other similar provision of information) must be
provided in writing and by the appropriate party on the date of execution of
this Agreement, and actually received by the other parties hereto, and no such
schedule, exhibit or disclosure letter (or other similar provision of
information) shall be effective if provided after such date.

     Section 5.17 Preferred Stock Investment. At the option of the Company,
Crescent agrees to purchase from the Company up to an aggregate of 115,000
shares of a new series of preferred stock of the Company with the designations,
rights, preferences and other terms set forth in the Certificate of Resolution
attached hereto as Schedule 5.17 (the "Redeemable Preferred Stock"). Each share
of Redeemable Preferred Stock shall be purchased at a price of $1,000 per share
(plus accrued dividends from the previous regular quarterly dividend payment
date or, if there has not yet been a regular quarterly dividend payment date,
then as of the date hereof, based on a 365-day year) in cash in increments of
5,000 shares. Subject to the conditions below, Crescent must fund the purchase
price for the purchase of shares on the 10th business day following the date of
a notice from the Company to Crescent (a "Draw Notice") stating the number of
shares of Redeemable Preferred Stock to be sold to Crescent on such 10th
business day and the aggregate amount to be paid for such shares; provided that
for purchases of 25,000 shares or more, the date of such purchase shall be the
20th business day following the date of such Draw Notice. Notwithstanding the
foregoing, Crescent shall not be required to purchase shares of Redeemable
Preferred Stock (i) more than two times in any 30-day period (ii) unless, on the
purchase date set forth in a Draw Notice (A) the representations and warranties
of the Company set forth in Article II are true and correct in all material
respects and (B) the Company has not breached any of its covenants set forth in
this Agreement in any material respect, and (iii) unless the number of shares 
to be purchased, plus the aggregate number of shares then outstanding, does
not exceed 115,000. Unless written consent is received from Crescent, the
Company agrees to use the net proceeds from sales of



                                      -43-
<PAGE>   44

shares of Redeemable Preferred Stock to repay indebtedness under the Company's
Amended and Restated Reducing Revolving Loan Agreement dated as of March 19,
1996, as amended, borrowings under which were used for acquisitions and
master-planned expansions. The parties agree that the provisions of this Section
5.17 shall survive any termination of this Agreement. Crescent agrees to vote
all shares of the Company's equity securities held by Crescent in favor of the
Merger, and any transferee of the Redeemable Preferred Stock shall be subject to
such agreement to vote in favor of the Merger.

     Section 5.18 Joint Venture. The parties anticipate that Crescent Operating,
Inc. ("COI") will serve as one of the parties to an Agreement of Limited
Partnership by and among (i) COI and certain of its affiliates and (ii) entities
owned by certain members of the Company's existing management (the "Operating
Joint Venture"). Pursuant to the obligation of Crescent Real Estate Equities
Limited Partnership ("Crescent OP") to offer the opportunity to participate in
the Operating Joint Venture to COI under that certain Intercompany Agreement to
which they are parties, promptly following the date of this Agreement, Crescent
will cause Crescent OP to make such offer. In the event that COI does not accept
the offer to become a party to the Operating Joint Venture, Crescent shall
promptly take all necessary action to provide another entity to serve in that
capacity at the Effective Time (COI or the entity serving in such capacity being
referred to herein as the "JV Parent"). Frank J. Fertitta III, Lorenzo J.
Fertitta and Blake L. Sartini (the "Ownership Group") shall form an entity (the
"Company JV Parent") and cause such entity to enter into the Agreement of
Limited Partnership, and the Company shall cause an additional entity (i) to be
formed by other members of its management and (ii) to enter into the Agreement
of Limited Partnership. A form of the Agreement of Limited Partnership is
attached hereto as Schedule 5.18(i).

         The Company shall sell, assign, transfer and convey, prior to the
Effective Time, to the Operating Joint Venture, as directed by Crescent and with
Crescent's approval, certain of the Company's non-real estate assets pursuant to
the Bill of Sale attached hereto as Schedule 5.18(ii).

         At the Effective Time, Crescent shall enter into, through Crescent OP,
and shall cause the JV Parent and the Ownership Group shall cause the Company JV
Parent to enter into, on behalf of the Operating Joint Venture, one or more
master lease agreements, in the form of Schedule 5.18(iii) attached hereto (the
"Master Lease Agreement"), with the Operating Joint Venture; provided, however,
that (i) Crescent shall have the option (on a lease-by-lease basis), prior to
the Effective Date, to include a provision in the Master Lease Agreement that,
as to any sublease that does not conform to the requirements of the Master Lease
Agreement as to subleases, the percentage rent provided for in the Master Lease
Agreement will be computed to exclude any revenues from such sublease, and (ii)
the parties shall make such revisions to the definition of "Gross Revenues" and
"Gross Winnings" contained in the Master Lease Agreement as shall be necessary
to comply with the provisions of Section 856 of the Code relating to rents from
real property not based on profits.. The parties acknowledge that Crescent and
the Ownership Group have entered into a letter agreement of even date herewith
regarding the terms upon which the Master Lease Agreement will be executed.


                                      -44-
<PAGE>   45

         At or prior to the Effective Time, the Company shall assign, and
Crescent , the Company and the Ownership Group shall cause the Operating Joint
Venture to assume the employment agreements (the "Employment Agreements") of
each of Frank J. Fertitta III, Glenn C. Christenson, Blake L. Sartini, Scott M.
Nielson, and William W. Warner (the "Key Executives") and the other management
employees listed on Schedule 5.18(iv) hereto (the "Management Employees") and
the Company Plans other than the Stock Plans. At such time, Crescent shall cause
the JV Parent to guarantee, in the form of Schedule 5.18(v), the performance by
the Operating Joint Venture of its obligations under such Employment Agreements
and Company Plans (the "JV Parent Guarantee"); provided that the JV Parent
Guarantee shall be subordinate to all obligations of the JV Parent to Crescent.
In addition, Crescent shall unconditionally guarantee, in the form of Schedule
5.18(vi), the performance by the JV Parent of its obligations under the JV
Parent Guarantee with respect only to the Key Executives (the "Crescent
Guarantee"), without regard to any such subordination. The obligations of the JV
Parent to execute the JV Parent Guarantee and Crescent to execute the Crescent
Guarantee as to any person shall be conditioned on such person accepting
employment with the Operating Joint Venture. The Company shall use its best
efforts to cause each of the Management Employees and the Key Executives to
consent to the assignment of such employee's employment agreement to the
Operating Joint Venture. The rights and benefits of the Management Employees and
the Key Executives under the employment agreements after the assignment to the
Operating Joint Venture shall be at least as favorable to such persons as they
were immediately prior to such assignment: with the only changes being: (i) the
substitution of the Operating Joint Venture as the employer; (ii) the
substitution of the Operating Joint Venture as the primary obligor under such
Company Plans and (iii) an amendment to the Employment Agreement of Frank J.
Fertitta III to include a non-competition provision identical to that included
in the other Employment Agreements in the form of Schedule 5.18(vii). Any such
assignment and acceptance of employment shall not be deemed to imply in any way
that the change-of-control provisions of such agreements and plans have not been
triggered with respect to changes-of-control payments or terminations after a
change-of-control. In addition, the parties agree that all securities issuable,
or any compensation based on the market value of specified securities, under any
of the Company Plans other than the Stock Plans shall be issued in the form of,
and shall be based on the market value of, the common stock of the JV Parent.

     Section 5.19 Intentionally omitted.

     Section 5.20 Third Party Beneficiary. Crescent's obligations under (i)
Section 5.18 with respect to the employment of the Key Executives, (ii) Section
6.2(i) with respect to the appointment of Frank J. Fertitta III and Lorenzo J.
Fertitta to the Board of Trust Managers of Crescent, and (iii) Section 5.22 with
respect to the Registration Rights and Lock-Up Agreements shall be deemed to be
for the benefit of each of those individuals, and the Ownership Group,
respectively, as well as the Company, and each of those individuals,
respectively, shall have a direct right of action, as a third party beneficiary
or otherwise, against Crescent for any breach thereof. Neither the Company nor
Crescent shall amend, modify or waive any of the aforementioned provisions,
without the express written consent of each of the aforementioned individuals
affected thereby.



                                      -45-
<PAGE>   46

     Section 5.21 Liability of Crescent under Company Plans and Employment
Agreements. Except for the Stock Plans referred to in Section 5.8 and the
obligations of Crescent described in Section 5.18, Crescent shall not have, and
the Company shall take all steps within its control to assure that Crescent
shall not have, any obligation or liability under any of the Company Plans or
any employment agreement to which the Company is a party that is now or
hereafter in effect.

     Section 5.22 Agreement with Management. Crescent and each member of the
Ownership Group shall enter into Registration Rights and Lock-Up Agreements in
the form of Schedule 5.22 attached hereto.

     Section 5.23 ARTICLE V.23 Corporate Restructuring. The Company shall merge
all of its Subsidiaries with and into itself, such that on the Closing Date the
Company shall have no Subsidiaries.

     Section 5.24 REIT-Related Transactions. The Company shall take such further
actions and engage in such further transactions as determined by Crescent to be
reasonably necessary, in the opinion of counsel to Crescent, to preserve
Crescent's status as a "real estate investment trust" under the Code, so long as
such actions have no adverse economic effect on the Company and its stockholders
in the event the Merger is not consummated.

                                   ARTICLE VI

                       CONDITIONS PRECEDENT TO THE MERGER

     Section 6.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of the parties to effect the Merger shall be subject to
the fulfillment (or waiver by such party) at or prior to the Effective Time of
the following conditions:

     (a) Stockholder Approval. At or prior to the Effective Time, this Agreement
shall have been duly approved by the requisite vote of holders of the Company
Common Stock and Convertible Preferred Stock in accordance with applicable law
and the Articles of Incorporation and Bylaws of the Company.

     (b) Stock Exchange Listings. The Common Shares and the Crescent Convertible
Preferred Shares issuable in the Merger and pursuant to the Substitute Options
shall have been authorized for listing on the NYSE, subject to official notice
of issuance.

     (c)  HSR and Other Approvals.

                                      -46-
<PAGE>   47

          (i) The waiting period (and any extension thereof) applicable to the
consummation of the Merger under the HSR Act shall have expired or been earlier
terminated.

          (ii) All consents, approvals, orders or authorizations of or
registrations, declarations or filings with any Governmental Entity, which the
failure to obtain, make or occur would reasonably be expected to have a Material
Adverse Effect on the Company (assuming the Merger had taken place), shall have
been obtained, shall have been made or shall have occurred, and shall be in full
force and effect.

          (iii) All consents, approvals, findings of suitability, licenses,
permits, orders or authorizations of and registrations, declarations or filings
with any Governmental Entity with jurisdiction in respect of Gaming Laws, in
each case, required or necessary in connection with the Merger and this
Agreement and the transactions contemplated by this Agreement (including, but
not limited to, approval, licensing or registration of (i) Crescent and its
officers, trust managers and shareholders, as necessary and (ii) the Operating
Joint Venture and any of its subsidiaries) shall have been obtained and made and
shall be in full force and effect.

     (d) Registration Statement. The Registration Statement shall have become
effective in accordance with the provisions of the Securities Act. No stop order
suspending the effectiveness of the Registration Statement shall have been
issued by the SEC and no proceedings for that purposes shall have been initiated
or, to the knowledge of Crescent or the Company, threatened by the SEC. All
necessary state securities or blue sky authorizations shall have been received.

     (e) No Order. No court or other Governmental Entity having jurisdiction
over the Company or Crescent, or any of its respective Subsidiaries, shall
(after the date of this Agreement) have enacted, issued, promulgated, enforced
or entered any law, rule, regulation, executive order, decree, injunction or
other order (whether temporary, preliminary or permanent) which is then in
effect and has the effect of making the Merger or any of the transactions
contemplated hereby illegal; provided, however, that each of the parties shall
have used all reasonable efforts to prevent and to appeal as promptly as
possible any such law, rule, regulation, executive order, decree, injunction or
other order.

     (f) Change in Tax Laws.

          (i) There shall not have been any federal legislative or regulatory
change that would cause Crescent to cease to qualify as a "real estate
investment trust" for federal income tax purposes.

          (ii) There shall not have been any federal legislative or regulatory
change that would cause the Merger to be taxable to any of Crescent, the
Company, the shareholders of Crescent or the stockholders of the Company.



                                      -47-
<PAGE>   48



     (g) Agreements with Management. The Operating Joint Venture, the Company JV
Parent and the Ownership Group shall have entered into a Right of First Refusal
and Non-Competition Agreement in the form of Schedule 6.1(g).


     Section 6.2 Conditions to Obligation of the Company to Effect the Merger.
The obligation of the Company to effect the Merger shall be subject to the
fulfillment (or waiver by the Company) at or prior to the Effective Time of the
following additional conditions:


     (a) Performance of Obligations; Representations and Warranties. Crescent
shall have performed each of its agreements contained in this Agreement required
to be performed at or prior to the Effective Time, each of the representations
and warranties of Crescent contained in this Agreement that is qualified as to
materiality shall be true and correct at and as of the Effective Time as if made
at and as of such time (other than representations and warranties which address
matters only as of a certain date, which shall be true and correct as of such
certain date) and each of the representations and warranties that is not so
qualified shall be true and correct in all material respects at and as of the
Effective Time as if made on and as of such date (other than representations and
warranties which address matters only as of a certain date, which shall be true
and correct in all material respects as of such certain date), in each case
except as contemplated or permitted by this Agreement, and the Company shall
have received certificates signed on behalf of each of Crescent by its Vice
Chairman, President and Chief Executive Officer or Senior Vice President, Law
and Secretary and its Senior Vice President, Chief Financial and Accounting
Officer to such effect.


     (b) Consents Under Agreements. Crescent shall have obtained the consent or
approval of each person that is not a Governmental Entity whose consent or
approval shall be required in connection with the transactions contemplated
hereby under any loan or credit agreement, note, mortgage, indenture, lease,
hotel management agreement, joint venture agreement or other agreement or
instrument to which Crescent or a Subsidiary is a party, except as to which the
failure to obtain such consents and approvals, individually or in the aggregate,
would not be expected, in the reasonable opinion of Company, to have a Material
Adverse Effect on the Crescent or upon the consummation of the transactions
contemplated in this Agreement.


     (c) No Litigation. There shall not be pending or threatened any suit,
action or proceeding by any Governmental Entity or any other person, or before
any court or governmental authority, agency or tribunal, domestic or foreign, in
each case that has a significant likelihood of success challenging the
acquisition by Crescent of any shares of Company Common Stock, seeking to
restrain or prohibit the consummation of the Merger or any of the other
transactions contemplated by this Agreement or seeking to obtain from Crescent
any damages that are material in relation to the Company, Crescent and its
Subsidiaries taken as a whole.


     (d) Tax Opinion. On the Closing Date, the opinion of Shaw, Pittman, Potts &
Trowbridge, counsel to Crescent, shall have been delivered to the Company in
form and substance reasonably satisfactory to the Company stating (i) that
Crescent is a "real estate 



                                      -48-

<PAGE>   49

investment trust" for federal income tax purposes, (ii) that consummation of the
transactions contemplated by this Agreement will not cause Crescent to cease to
qualify as a "real estate investment trust" for federal income tax purposes, and
(iii) that the Merger will be treated for Federal income tax purposes as a
reorganization within the meaning of section 368(a) of the Code, and that each
of Crescent and the Company will be a party to that reorganization within the
meaning of section 368(b) of the Code. Such counsel shall not unreasonably
refuse to deliver such opinion, and issues relating to the subsequent transfer
of the assets from Crescent to the Crescent OP shall not constitute a reasonable
basis for refusal to render such opinion. In rendering such opinion, such
counsel shall be entitled to rely upon representations made in this Agreement or
requested by such counsel and made by Crescent and the Crescent OP, and on
representations requested by such counsel and made by the Company.


     (e) Legal Opinion. The Company shall have received an opinion of Shaw,
Pittman, Potts & Trowbridge, counsel to Crescent, dated the Closing Date,
substantially in the form attached as Schedule 6.2(e).


     (f) Comfort Letter. The Company shall have received, in form and substance
reasonably satisfactory to the Company, from Arthur Anderson LLP, Crescent's
independent public accountants, the "comfort" letter described in Section
5.3(b).


     (g) Preferred Stock Investment. Crescent shall have performed all of its
obligations, if any, pursuant to Section 5.17 hereof, in all material respects.


     (h) Company Plans. The Operating Joint Venture shall have assumed all
obligations under and adopted the Company Plans (other than the Stock Plans
referred to in Section 5.8), without regard to materiality. The Operating Joint
Venture shall have agreed to honor without modification or contest, and to make
required payments when due under, all Company Plans (as defined herein, but
without regard to materiality) in accordance with their terms as of the date of
this Agreement (as modified to the extent permitted by this Agreement). The
Operating Joint Venture shall have agreed to employ at their current locations
each person who is an employee of the Company immediately prior to the Effective
Time (the "Affected Employees") on terms no less favorable in the aggregate
(including with respect to position, duties, responsibilities, compensation,
incentives and location) than those provided on the date hereof to the Affected
Employees. The Operating Joint Venture shall have agreed to provide each
Affected Employee with benefits that are at least equivalent in the aggregate to
the benefits provided to each such Affected Employee immediately prior to the
Effective Time. Crescent agrees that, for purposes of all employee benefit plans
(including, but not limited to, all "employee benefit plans" within the meaning
of Section 3(3) of ERISA, and all policies and employee fringe benefit programs,
including vacation policies) of the Operating Joint Venture (such plans,
programs, policies and arrangements, the "Buyer Plans") in which the Affected
Employees may participate following the Effective Time under which an employee's
eligibility or benefits depends, in whole or in part, on length of service,
credit will be given to the Affected Employees for service previously credited
with the Company or any affiliates of the Company prior to the Effective Time,
provided, that such crediting of 



                                      -49-

<PAGE>   50

service does not result in duplication of benefits, and provided that such
crediting of service shall not be given for benefit accrual purposes under any
Buyer Plan that is a defined benefit plan. Affected Employees shall also be
given credit for any deductible or co-payment amounts paid in respect of the
plan year in which the Effective Time occurs, to the extent that, following the
Effective Time, they participate in any Buyer Plan for which deductibles or
co-payments are required. The Operating Joint Venture shall have caused each
Buyer Plan to waive (i) any preexisting condition restriction or (ii) waiting
period limitation which would otherwise be applicable to an Affected Employee on
or after the Effective Time. On or prior to the Effective Time, the Operating
Joint Venture shall have assumed all liabilities and obligations whatsoever for
all accrued benefits under the Company 401(k) Plan in respect of the Affected
Employees and Crescent shall be relieved of all such liabilities and
obligations. Crescent and the Company shall cooperate in the filing of documents
required, if any, by the transfer of assets and liabilities described herein.


     (i) Additional Directors. Frank J. Fertitta III and Lorenzo J. Fertitta
shall have become members of the Boards of Trust Managers of Crescent and the
Board of Directors of the JV Parent.


     Section 6.3 Conditions to Obligations of Crescent to Effect the Merger. The
obligations of Crescent to effect the Merger shall be subject to the fulfillment
(or waiver by Crescent) at or prior to the Effective Time of the following
additional conditions:


     (a) Performance of Obligations; Representations and Warranties. The Company
shall have performed each of its agreements contained in this Agreement required
to be performed at or prior to the Effective Time, each of the representations
and warranties of the Company contained in this Agreement that is qualified as
to materiality shall be true and correct at and as of the Effective Time as if
made at and as of such time (other than representations and warranties which
address matters only as of a certain date, which shall be true and correct as of
such certain date) and each of the representations and warranties that is not so
qualified shall be true and correct in all material respects at and as of the
Effective Time as if made on and as of such date (other than representations and
warranties which address matters only as of a certain date, which shall be true
and correct in all material respects as of such certain date), in each case
except as contemplated or permitted by this Agreement, and Crescent shall have
received a certificate signed on behalf of the Company by its Chief Executive
Officer and its Chief Financial Officer to such effect.


     (b) Consents Under Agreements. The Company shall have obtained any
amendments, waivers, consents or approvals with respect to the agreements and
documents listed on Schedule 6.3(b) attached hereto, as Crescent shall
reasonably request.


     (c) Letters from Company Affiliates. Crescent shall have received from each
person named in the list referred to in Section 5.5 an executed copy of an
agreement substantially in the form of Schedule 6.3(c) hereto.




                                      -50-
<PAGE>   51


     (d) No Litigation. There shall not be pending or threatened any suit,
action or proceeding by any Governmental Entity or any other person that has a
significant likelihood of success (i) seeking to restrain or prohibit the
consummation of the Merger or any of the other transactions contemplated by this
Agreement or seeking to obtain from the Company any damages that are material in
relation to the Company, Crescent and their respective Subsidiaries taken as a
whole, (ii) seeking to prohibit or limit the ownership or operation by the
Company, Crescent or any of its respective Subsidiaries of any material portion
of the combined business or assets of the Company, Crescent and their respective
Subsidiaries, or to compel the Company, Crescent or their respective
Subsidiaries to dispose of or hold separate any material portion of the combined
business or assets of the Company, Crescent and their respective Subsidiaries,
as a result of the Merger or any of the other transactions contemplated by this
Agreement, (iii) seeking to impose limitations on the ability of Crescent to
acquire or hold, or exercise full rights of ownership of, any shares of Company
Common Stock or Convertible Preferred Stock, including, without limitation, the
right to vote any Company Common Stock or Convertible Preferred Stock purchased
by it on all matters properly presented to the stockholders of the Company, (iv)
except as set forth in the Company SEC Documents, seeking to prohibit Crescent
or any of its Subsidiaries from effectively controlling in any material respect
the business or operations of the Company or its Subsidiaries or (v) which
otherwise would reasonably be expected to have a Material Adverse Effect on the
Company; other than any suit, action or proceedings against the Company or its
Subsidiaries seeking to revoke any gaming licenses or require any modification
of the Company's hotel/casino facility located in Kansas City, Missouri.


     (e) Rights Agreement. The Rights shall not have become nonredeemable,
exercisable, distributed or triggered pursuant to the terms of the Rights
Agreement.


     (f) Tax Opinion. On the Closing Date, the opinion of Shaw, Pittman, Potts &
Trowbridge, counsel to Crescent, shall have been delivered to Crescent in form
and substance reasonably satisfactory to Crescent stating (i) that Crescent is a
"real estate investment trust" for federal income tax purposes, (ii) that
consummation of the transactions contemplated by this Agreement will not cause
Crescent to cease to qualify as a "real estate investment trust" for federal
income tax purposes, and (iii) that the Merger will be treated for Federal
income tax purposes as a reorganization within the meaning of section 368(a) of
the Code, and that each of Crescent and the Company will be a party to that
reorganization within the meaning of section 368(b) of the Code. Also on the
Closing Date, the opinion of Shaw, Pittman, Potts & Trowbridge shall have been
delivered to Crescent in form and substance reasonably satisfactory to Crescent
stating that, except as disclosed in this Agreement or in the SEC Documents, (i)
the transactions contemplated by Section 5.18 shall have complied in all
respects with applicable law, (ii) to the extent applicable, such transactions
shall have been effective to transfer the full and complete interest in and
rights with respect to the disposed assets and (iii) such transactions are not
the subject of any pending or threatened claim or challenge by any person. Such
counsel shall not unreasonably refuse to deliver such opinions, and issues
relating to the subsequent transfer of the assets from Crescent to Crescent OP
shall not constitute a reasonable basis for refusal to render the opinions. In
rendering such 




                                      -51-

<PAGE>   52


opinions, such counsel shall be entitled to rely upon representations requested
by such counsel and made by Crescent.


     (g) Resignations. Crescent shall have received the resignations of each
officer and director of the Company and each of its Subsidiaries.


     (h) Comfort Letter. Crescent shall have received, in form and substance
reasonably satisfactory to Crescent, from Arthur Anderson LLP, the Company's
independent public accountants, the "comfort" letter described in Section
5.3(a).


                                  ARTICLE VII

                        TERMINATION, AMENDMENT AND WAIVER


     Section 7.1 Termination. This Agreement may be terminated at any time prior
to the Effective Time, whether before or after approval of any matters presented
in connection with the Merger by the stockholders of the Company:


     (a) by mutual written consent of Crescent and the Company;


     (b) by either Crescent or the Company if there has been a material breach
of the representations, warranties, covenants and agreements on the part of the
other set forth in this Agreement, which breach has not been cured within ten
business days following receipt by the breaching party of notice of such breach
from the nonbreaching party;


     (c) by either Crescent or the Company if any permanent order, decree,
ruling or other action of a court or other competent authority restraining,
enjoining or otherwise preventing the consummation of the Merger shall have
become final and non-appealable;


     (d) by either Crescent or the Company if the Merger shall not have been
consummated before January 31, 1999, unless the failure to consummate the Merger
is the result of a material breach of this Agreement by the party seeking to
terminate this Agreement; provided, however, that the passage of such period
shall be tolled for any part thereof during which any party shall be subject to
a nonfinal order, decree, ruling or other action restraining, enjoining or
otherwise preventing the consummation of Merger;


     (e) by either Crescent or the Board of Directors of the Company if any
required approval of the Merger by the holders of each class of capital stock of
the Company shall not have been obtained by reason of the failure to obtain the
required vote upon a vote held at a duly held meeting of such stockholders or at
any adjournment thereof;


     (f) by Crescent if the Board of Directors of the Company shall or shall
resolve to (i) not recommend, or withdraw its approval or recommendation of,
the Merger, this Agreement or any of the transactions contemplated hereby, (ii)
modify such approval or recommendation

                                      -52-

<PAGE>   53

in a manner adverse to Crescent or (iii) approve or recommend a superior 
proposal pursuant to Section 4.3(b); or


     (g) by the Board of Directors of the Company if (i) to the extent permitted
by Section 4.3(b), the Board of Directors of the Company authorizes the Company
to enter into a binding written agreement concerning a transaction that
constitutes a Superior Proposal and the Company provides notification to
Crescent in accordance with Section 4.3(b), and (ii) Crescent does not make,
within ten business days of receipt of the Company's written notification of its
intention to enter into a binding agreement for a Superior Proposal, an offer
that the Board of Directors of the Company determines, in good faith after
consultation with its financial advisors, is at least as favorable, from a
financial point of view, to the shareholders of the Company as the Superior
Proposal, and (iii) the Company, prior to such termination has paid to Crescent
an amount in cash equal to the sum of the Crescent Termination Fee plus all
Expenses as provided by Section 5.7.


     Section 7.2 Effect of Termination. In the event of termination of this
Agreement by either Crescent or the Company, as provided in Section 7.1, this
Agreement shall forthwith become void and there shall be no liability hereunder
on the part of the Company, Crescent or their respective officers, directors or
trust managers (except for Sections 2.16, 3.20 and 5.7, this Section 7.2 and
Article VIII, which shall survive the termination); provided, however, that
nothing contained in this Section 7.2 shall relieve any party hereto from any
liability for any breach of this Agreement and the obligations under Section
5.17 shall survive the termination.


     Section 7.3 Amendment. This Agreement may be amended by the parties hereto,
by or pursuant to action taken by their respective Boards of Directors or Trust
Managers, as the case may be, at any time before or after approval of the
matters presented in connection with the Merger by the stockholders of the
Company, but, after any such approval, no amendment shall be made which by law
requires further approval by such stockholders without such further approval.
This Agreement may not be amended except by an instrument in writing duly
executed by each of the parties hereto.


     Section 7.4 Waiver. At any time prior to the Effective Time, the parties
hereto may (i) extend the time for performance of any of the obligations or
other acts of the other parties hereto, (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any of the Agreements or
conditions contained herein which may legally be waived. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing duly executed by such party. The failure
of any party to this Agreement to assert any of its rights under this Agreement
or otherwise shall not constitute a waiver of such rights.


                                      -53-

<PAGE>   54

                                  ARTICLE VIII

                               GENERAL PROVISIONS


     Section 8.1 Non-Survival of Representations and Warranties. The
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall terminate at the Effective Time.


     Section 8.2 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given when delivered personally, one day after
being delivered to a nationally recognized overnight courier or when telecopied
(with a confirmatory copy sent by such overnight courier) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):


     (a) if to Crescent, to

                  Crescent Real Estate Equities Company
                  777 Main Street
                  Suite 2100
                  Fort Worth, TX 76102
                  Attention:  Gerald W. Haddock
                  President and Chief Executive Officer
                  Facsimile No.: (817) 878-0429

          with copies to:

                  Crescent Real Estate Equities Company
                  777 Main Street
                  Suite 2100
                  Fort Worth, TX 76102
                  Attention:  David M. Dean
                  Senior Vice President, Law
                  Facsimile No.: (817) 878-0429

                  Robert B. Robbins
                  Shaw, Pittman, Potts & Trowbridge
                  2300 N Street, N.W.
                  Washington, D.C. 20037
                  Facsimile No.: (202) 663-8007

     (b) if to the Company, to

                  Station Casinos, Inc.
                  2411 W. Sahara Avenue
                  Las Vegas, NV 89120
                  Attention:  Scott M Nielson
                  Facsimile No.:  (702) 367-2424


                                      -54-

<PAGE>   55

        with a copy to:

                  Milbank, Tweed, Hadley & McCloy
                  601 South Figueroa Street
                  Thirtieth Floor
                  Los Angeles, CA 90017
                  Attention:  Kenneth J. Baronsky
                              Eric H. Schunk
                  Facsimile No.:  (213) 629-5063


     Section 8.3 Interpretation. When a reference is made in this Agreement to a
Section or Article, such reference shall be to a Section or Article of this
Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation".

     Section 8.4 Counterparts. This Agreement may be executed in counterparts,
all of which shall be considered one and the same agreement, and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties.

     Section 8.5 Entire Agreement; No Third-Party Beneficiaries. This Agreement
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, except that the confidentiality and standstill agreement
between the parties shall remain in full force and effect, provided, further,
however, that the Company agrees that such agreement shall not prohibit
Crescent's purchases of the Convertible Preferred Stock. Any shares so purchased
shall be voted in favor of the Merger and any subsequent transferee from
Crescent of the Convertible Preferred Stock shall be bound by the foregoing
voting agreement. Except as set forth in Section 5.20, this Agreement is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.


     Section 8.6 Governing Law. Except to the extent that the laws of the States
of Nevada, Missouri and Louisiana are mandatorily applicable to the Merger,
including, without limitation, the Gaming Laws, this Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.


     Section 8.7 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties.


     Section 8.8 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other 



                                      -55-
<PAGE>   56

terms, conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic and legal substance of the
transactions contemplated hereby are not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties shall negotiate
in good faith to modify this Agreement so as to effect the original intent of
the parties as closely as possible in a mutually accepted manner in order that
the transactions contemplated by this Agreement may be consummated as originally
contemplated to the fullest extent possible.


     Section 8.9 Enforcement of this Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific wording or were
otherwise breached. It is accordingly agreed that the parties hereto shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to obtain specific performance of the terms and provisions hereof in any
court of the United States or any state having jurisdiction, such remedy being
in addition to any other remedy to which any party is entitled at law or in
equity. In any arbitration, suit or other proceeding that may be initiated to
enforce any of the rights or obligations created hereunder, the prevailing party
shall be entitled to the award of its costs and expenses, including attorneys'
fees in connection with such arbitration, suit or other proceeding, together
with interest on any damages or other amounts awarded, from the dates on which
such damages, costs or expenses were incurred and until paid, at the prime or
base rate of Citibank, N.A.





                                      -56-
<PAGE>   57



     Section 8.10 Limited Liability of Shareholders. All persons dealing with
Crescent must look solely to Crescent's property for the enforcement of any
claims against Crescent, as the trust managers, officers, agents and
shareholders of Crescent assume no personal obligations of Crescent, and their
respective properties shall not be subject to claims of any person relating to
such obligation. 

     IN WITNESS WHEREOF, Crescent and the Company have caused this Agreement 
to be signed by their respective officers thereunto duly authorized, and the 
members of the Ownership Group have signed this Agreement, all as of the
date first written above.


                                       CRESCENT REAL ESTATE EQUITIES COMPANY


                                       By: /s/ DAVID M. DEAN
                                          ------------------------------------
                                          Name: David M. Dean
                                          Title: SVP, Law


                                            STATION CASINOS, INC.

                                       By: /s/ FRANK J. FERTITTA III
                                          ------------------------------------
                                          Name:  Frank J. Fertitta III
                                          Title: Chairman of the Board 
                                                 and President


                                       SOLELY FOR PURPOSES OF SECTIONS 4.3(c) 
                                       AND 5.18:

                                       /s/ FRANK J. FERTITTA III
                                       --------------------------------
                                       Frank J. Fertitta III

                                       /s/ LORENZO J. FERTITTA
                                       --------------------------------
                                       Lorenzo J. Fertitta

                                       /s/ BLAKE L. SARTINI
                                       --------------------------------
                                       Blake L. Sartini





<PAGE>   58
               LIST OF SCHEDULES TO AGREEMENT AND PLAN OF MERGER

Included Schedules:
       Schedule 5.22 -- Form of Registration Rights and Lock-Up Agreement

Omitted Schedules:
       Schedule 2.8 -- Crescent persons with "Knowledge"
       Schedule 3.7 -- Aggregate Indebtedness of Station
       Schedule 3.8 -- Station persons with "Knowledge"
       Schedule 3.12(a) -- Company Plans
       Schedule 3.12(e) -- Material Severance and Employment Agreements and
                           other Plans
       Schedule 5.5 -- Letter from Company Affiliates
       Schedule 5.17 -- Form of Certificate of Resolution of Redeemable
                        Preferred Stock
       Schedule 5.18(i) -- Form of Agreement of Limited Partnership
       Schedule 5.18(ii) -- Form of Bill of Sale
       Schedule 5.18(iii) -- Form of Master Lease Agreement
       Schedule 5.18(iv) -- Employment Agreements assumed by the Operating
                             Joint Venture
       Schedule 5.18(v) -- Form of JV Parent Guarantee
       Schedule 5.18(vi) -- Form of Crescent Guarantee
       Schedule 5.18(vii) -- Amendment to Fertitta Employment Agreement
       Schedule 6.1(g) -- Form of Right of First Refusal and Non-Competition
                          Agreement
       Schedule 6.2(e) -- Form of Legal Opinion of Counsel to Crescent
       Schedule 6.3(b) -- Required Consents
       Schedule 6.3(c) -- Letter from Company Affiliates (same as Schedule 5.5)
       Disclosure Letter

       The Registrant agrees to furnish supplementally to the Commission a copy
of any omitted schedule upon request.
<PAGE>   59
                                                                   SCHEDULE 5.22

                    REGISTRATION RIGHTS AND LOCK-UP AGREEMENT

     This Registration Rights and Lock-Up Agreement (the "Agreement") is entered
into as of __________, 1998 by and among Crescent Real Estate Equities Company,
a Texas real estate investment trust (the "Company"), _________________, a
Delaware limited partnership (the "Operating Joint Venture") and Blake Sartini,
Lorenzo J. Fertitta, and Frank J. Fertitta III (each, individually, a
"Shareholder" and collectively, the "Shareholders").

     WHEREAS, each of the Shareholders currently owns shares of Common Stock,
par value $.01 per share (the "Station Common Stock"), of Station Casinos, Inc.,
a Nevada corporation ("Station"), options to acquire shares of Common Stock of
Station, and also currently owns or may in the future own shares of the $3.50
Convertible Preferred Stock of Station (the "Station Preferred Stock");

     WHEREAS, each of the Shareholders is to receive, in exchange for shares of
Station Common Stock currently owned by such Shareholders, common shares of
beneficial interest of the Company, $.01 par value per share (the "Common
Shares"), which shares are to be issued under the Securities Act of 1933, as
amended (the "Securities Act"), in connection with the merger of Station, with
and into the Company (the "Merger");

     WHEREAS, each of the Shareholders is to receive, in exchange for options to
acquire Station Common Stock, options to purchase Common Shares in connection
with the Merger;

     WHEREAS, each or certain of the Shareholders are to receive or may receive,
in exchange for shares of Station Preferred Stock, shares of beneficial interest
in the form of $3.50 Convertible Preferred Shares (the "Preferred Shares")
issued under the Securities Act in connection with the Merger;

     WHEREAS, in order to induce the Company to enter into the Agreement and
Plan of Merger (the "Merger Agreement"), dated as of January 16, 1998, by and
between the Company and Station, the Shareholders have agreed to the lock-up set
forth in Section 2 hereof;

     WHEREAS, in order to induce the Shareholders to consummate certain
transactions relating to the Merger, the Company has agreed to provide the
Shareholders with the registration rights set forth in Section 3 hereof;

     NOW, THEREFORE, in consideration of the foregoing, the mutual promises and
agreements set forth herein, and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows.


<PAGE>   60


1.   Certain Definitions.

     As used in this Agreement, the following capitalized defined terms shall
have the following meanings:

     "Agreement" shall have the meaning set forth above in the recitals hereto.

     "Common Shares" shall have the meaning set forth above in the recitals
hereto and, in addition, shall include any equity securities of the Company or
any corporate successor of the Company into or for which Common Shares are
converted or exchanged.

     "Company" shall have the meaning set forth above in the recitals hereto.

     "Merger" shall have the meaning set forth above in the recitals hereto.

     "Merger Agreement" shall have the meaning set forth above in the recitals
hereto.

     "NASD" shall mean the National Association of Securities Dealers, Inc.

     "Operating Joint Venture" shall have the meaning set forth above in the
recitals hereto.

     "Person" shall mean an individual, partnership, corporation, trust, or
incorporated organization, or a government agency or political subdivision
thereof.

     "Preferred Shares" shall mean the $3.50 Convertible Preferred Shares of the
Company or any corporate successor of the Company.

     "Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Shares covered by such Registration Statement, and by
all other amendments and supplements to such prospectus, including
post-effective amendments, and in each case including all material incorporated
by reference therein.

     "Registrable Shares" shall mean the Shares, excluding (i) Shares that
previously were, but no longer are, outstanding, (ii) Shares for which a
Registration Statement relating to the sale thereof shall have become effective
under the Securities Act and which have been disposed of under such Registration
Statement, (iii) Shares sold pursuant to Rule 144 under the Securities Act, (iv)
Shares eligible for sale pursuant to Rule 144(k) under the Securities Act, and
(v) Shares for which sale under a Registration Statement is no longer required
under the Securities Act; provided, however, that in no event shall the
Registrable Shares exceed the number of Shares having a Value (measured at the
time of the first sale of a Share pursuant to a Registration Statement) of $30
million (a Value of $10 million per Shareholder, including for this purpose all
transferees of such Shareholder).


                                       2
<PAGE>   61

     "Registration Expenses" shall mean any and all expenses incident to the
performance of or compliance with this Agreement, including, without limitation:
(i) all SEC, stock exchange or NASD registration and filing fees; (ii) all fees
and expenses incurred in connection with state securities or "blue sky" laws
(including reasonable fees and disbursements of counsel in connection with "blue
sky" qualification of any of the Registrable Shares and the preparation of a
Blue Sky Memorandum) and compliance with the rules of the NASD; (iii) all
expenses of any Persons in preparing or assisting in preparing, word processing,
printing and distributing any Registration Statement, any Prospectus,
certificates and other documents relating to the performance of and compliance
with this Agreement; (iv) all fees and expenses incurred in connection with the
listing, if any, of any of the Registrable Shares on any securities exchange or
exchanges pursuant to Section 3(c) hereof; and (v) the fees and disbursements of
counsel for the Company and of the independent public accountants of the
Company, including the expenses of any "cold comfort" letters required by or
incident to such performance and compliance. Registration Expenses shall
specifically exclude any brokerage or underwriting discounts and commissions
relating to the sale or disposition of Registrable Shares by any selling
Shareholder, the fees and disbursements of counsel representing a selling
Shareholder, and transfer taxes, if any, relating to the sale or disposition of
Registrable Shares by a selling Shareholder, all of which shall be borne by such
Shareholder in all cases.

     "Registration Statement" shall mean any registration statement of the
Company and any other entity required to be a registrant with respect to such
registration statement pursuant to the requirements of the Securities Act which
covers any of the Registrable Shares, on an appropriate form, and all amendments
and supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all materials incorporated by reference therein.

     "SEC" shall mean the Securities and Exchange Commission.

     "Securities Act" shall have the meaning set forth above in the recitals
hereto.

     "Shareholder(s)" shall mean (i) each of the Persons identified as
Shareholders in the recitals hereto and (ii) any Person identified in Section 2
(A) to whom any of the Persons identified in the recitals hereto makes a
Transfer of Shares and (B) who executes a counterpart of this Agreement agreeing
to be bound by its terms and provisions.

     "Shares" shall mean (i) the shares of Station Common Stock beneficially
owned (as such term is defined in Rule 13d-3 under the Securities Exchange Act
of 1934, as amended (the "Exchange Act")) by each of the Shareholders as of the
close of business on the date hereof, (ii) the shares of Station Common Stock
or, as the case may be, the Common Shares which are acquired during the term
hereof as a result of the exercise of options to purchase shares of Station
Common Stock or Common Shares, (iii) the shares of Station Common Stock which
are acquired during the term hereof as a result of the conversion of shares of
Station Preferred Stock that are beneficially owned by each of the Shareholders,
(iv) the Common Shares which are acquired during the term hereof as a result of
the conversion of Preferred Shares that are beneficially owned by each of the
Shareholders as of the close of business on the date hereof, 


                                       3
<PAGE>   62

and (v) any shares of Station Common Stock, Station Preferred Stock, Common
Shares or Preferred Shares acquired by, or underlying options, warrants, or
similar securities granted to, any of the Shareholders subsequent to the date
hereof.

     "Station" shall have the meaning set forth above in the recitals hereto.

     "Station Common Stock" shall have the meaning set forth above in the
recitals hereto and, in addition, shall include any equity securities of Station
or any corporate successor of the Company into or for which shares of Station
Common Stock are converted or exchanged.

     "Station Preferred Stock" shall mean the shares of $3.50 Convertible
Preferred Stock of Station or any corporate successor of Station.

     "Value" shall mean, with respect to any shares of Station Common Stock or
any Common Shares, the average of the "closing price" of such shares or Common
Shares for the ten consecutive trading days immediately preceding the date of a
sale of Shares. The "closing price" for a trading day means (i) the last sale
price, regular way, on such trading day or, if no such sale takes place on that
day the average of the closing bid and asked prices on that day, regular way, in
either case as reported on the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange, or (ii) if the shares of Station Common Stock or the Common
Shares being sold pursuant to Section 2 are not so listed or admitted to
trading, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which such shares or Common Shares are listed or admitted to trading or (iii)
if the shares of Station Common Stock or the Common Shares are not so listed or
admitted to trading, the last quoted price or, if not quoted, the average of the
high and low bid and asked prices in the over-the-counter market, as reported by
the National Association of Securities Dealers, Inc. Automated Quotation System
or (iv) if such system is no longer in use, the principal automated quotation
system then in use or (v) if the shares of Station Common Stock or the Common
Shares are not so quoted by any such system, as determined in good faith by the
board of directors of Station for shares of Station Common Stock and by the
board of directors of the Company for Common Shares.

     2.  Lock-Up Agreement

         (a) Each Shareholder hereby agrees that, except as set forth in Section
2(b) or 2(c) below, from the date hereof until 18 months following such date
(the "Lock-Up Period"), such Shareholder will not offer, pledge, sell, contract
to sell, transfer by gift, grant any options for the sale of or otherwise
transfer, distribute or dispose of, directly or indirectly (collectively, for
purposes of this Section 2, a "Transfer"), any Shares (the "Lock-Up").

         (b) Notwithstanding the provisions of (a), after the expiration of 12
months from the date hereof, each Shareholder (including for this purpose the
transferees of such Shareholder) may Transfer Shares with a Value of $10 million
or less, provided, however, that 


                                       4
<PAGE>   63

the Shareholders (including for this purpose all transferees of the
Shareholders) may not Transfer Shares with an aggregate Value in excess of $30
million pursuant to this exception.

         (c) The following Transfers of Shares shall not be subject to the
Lock-Up set forth in Section 2(a):

             (i) a Shareholder may Transfer Shares to his spouse, siblings,
parents or any natural or adopted children or other descendants or to any
personal trust in which such family member or such Shareholder retains the
entire beneficial interest;

             (ii) a Shareholder may Transfer Shares on his death to such
Shareholder's estate, executor, administrator or personal representative or to
such Shareholder's beneficiaries pursuant to a devise or bequest or by laws of
descent and distribution;

             (iii) a Shareholder may Transfer Shares pursuant to a pledge, grant
of security interest or other encumbrance effected in a bona fide transaction
with an unrelated and unaffiliated pledgee if such pledgee agrees that, upon any
foreclosure of such pledge, the Shares so acquired shall remain subject to all
of the terms and provisions of this Agreement.

provided , however, that in the case of any Transfer of Shares, the transferor
shall, at the Company's request, provide evidence (which may include, without
limitation, an opinion of counsel satisfactory in form, scope and substance to
the Company in its sole discretion as the issuer thereof) satisfactory to the
Company that the transfer is exempt from the registration requirements of the
Securities Act.

     In the event any Shareholder Transfers Shares described in this Section
2(c), such Shares shall remain subject to this Agreement, and any Transfer or
purported Transfer of Shares by a Shareholder to a Person who does not execute a
counterpart of this Agreement shall be void ab initio and of no force or effect.
If the transferee executes and delivers a counterpart of this Agreement, such
transferee shall be deemed to be a Shareholder for all purposes of this
Agreement.

     3.  Registration.

         (a) Filing of Registration Statements. Subject to the conditions set
forth in this Agreement, the Company (i) shall file a Registration Statement
with the SEC covering all of the Registrable Shares, (ii) shall use reasonable
best efforts to cause such Registration Statement to be declared effective on or
before the effective date of the Merger, and (iii) agrees to use reasonable
efforts to keep such Registration Statement continuously effective until the
date on which the Shareholders no longer hold any Registrable Shares.

         (b) Notice of Effectiveness. The Company shall notify each Shareholder
of the effectiveness of the Registration Statement and shall furnish to each
Shareholder such number of copies of the Registration Statement (including any
amendments, supplements and 


                                       5
<PAGE>   64

exhibits), the Prospectus contained therein (including each preliminary
prospectus and all related amendments and supplements), and any documents
incorporated by reference in such Registration Statement or such other documents
as the Shareholder may reasonably request in order to facilitate its sale of the
Registrable Shares covered thereby in the manner described in the Registration
Statement.

         (c) Amendments and Supplements to Registration Statement; Listing. The
Company shall prepare and file with the SEC from time to time such amendments
and supplements to each Registration Statement and prospectus used in connection
therewith as may be necessary to keep the Registration Statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all the Shares covered by the Registration Statement until such
time as all of such Registrable Shares have been disposed of in accordance with
the intended methods of disposition by the Shareholders as set forth in the
Registration Statement. Upon five business days' notice, the Company shall file
any supplement or post-effective amendment to the applicable Registration
Statement with respect to the plan of distribution of such Shareholder's
ownership interests in Registrable Shares that is necessary to permit the sale
of the Shareholder's Registrable Shares pursuant to the Registration Statement,
including supplements or post-effective amendments required to give effect to
the designation of any underwriter or underwriting syndicate specified by such
Shareholder. The Company shall file any necessary listing applications or
amendments to the existing applications to cause the Shares registered under any
Registration Statement to be then listed or quoted on the primary exchange or
quotation system on which the Common Shares are then listed or quoted.

         (d) SEC Requests. The Company shall promptly notify each Shareholder
of, and confirm in writing, any request by the SEC for amendments or supplements
to any Registration Statement or the Prospectus related thereto or for
additional information. In addition, the Company shall promptly notify each
Shareholder of, and confirm in writing, the filing of the Registration Statement
or any Prospectus, amendment or supplement related thereto or any post-effective
amendment to the Registration Statement and the effectiveness of any
post-effective amendment.

         (e) Prospectus Delivery. At any time when a Prospectus relating to a
Registration Statement is required to be delivered under the Securities Act, the
Company shall immediately notify each Shareholder of the happening of any event
as a result of which (i) the Prospectus included in the Registration Statement,
as then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and (ii) an amendment or supplement to the Registration
Statement is a requirement (an "Event Notice"). In such event, the Company shall
promptly prepare and furnish to each Shareholder a reasonable number of copies
of a supplement to such Prospectus (or, after declaration of effectiveness by
the SEC, of any amendment to the Prospectus required to be filed as an amendment
to the Registration Statement) as may be necessary so that, as thereafter
delivered to the purchasers of Shares covered by the Registration Statement,
such prospectus shall not include an untrue statement of a material fact or omit
to state a 


                                       6
<PAGE>   65

material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Company will, if necessary, amend the Registration Statement of
which such Prospectus is a part to reflect such amendment or supplement and use
its best efforts promptly to obtain an effectiveness order for such amendment
from the SEC. From and after the date of any Event Notice, no Shareholder shall
offer or sell any Shares covered by the Registration Statement until such time
as the Company delivers any such Prospectus supplement or amendment to the
Shareholder.

         (f) State Securities Laws. Subject to the conditions set forth in this
Agreement, the Company shall, in connection with the filing of any Registration
Statement hereunder, file such documents as may be necessary to register or
qualify the Shares covered by the Registration Statement under the securities or
"Blue Sky" laws of such states as any Shareholder may reasonably request, and
the Company shall use its best efforts to cause such filings to become
effective; provided, however, that the Company shall not be obligated to qualify
as a foreign corporation to do business under the laws of any such state in
which it is not then qualified or to file any general consent to service of
process in any such state, provided that the Company shall file a Uniform
Consent to Service of Process on Form U-2 or its successor in any state that
requires such a filing in connection with the offering of the Shares covered by
the Registration Statement and in which the Shareholder proposes to offer such
Shares. Once effective, the Company shall use its best efforts to keep such
filings effective until the earliest of such time as (i) the Shareholders no
longer hold any Registrable Shares, or (ii) in the case of a particular state, a
Shareholder has notified the Company that it no longer requires an effective
filing in such state in accordance with its original request for filing. The
Company shall promptly notify each Shareholder of, and confirm in writing, the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Registrable Shares for sale under the securities or "Blue
Sky" laws of any jurisdiction or the initiation or threat of any proceeding for
such purpose.

         (g) Expenses. The Company shall bear all Registration Expenses incurred
in connection with the registration of the Registrable Shares pursuant to this
Agreement. Each Shareholder shall bear its pro rata share of all other expenses
resulting from any disposition, sale or transfer of such Registrable Shares by
such Shareholder.

         (h) Cooperation. Each Shareholder hereby agrees (i) to cooperate with
the Company and to furnish to the Company in a timely manner all information
that the Company may reasonably request in connection with the preparation of
any Registration Statement and any filings with any state securities commissions
concerning its plan of distribution and ownership interests with respect to such
Shareholder's Registrable Shares and any other information and (ii) to deliver
or cause delivery of the Prospectus contained in the Registration Statement to
any purchaser of the shares covered by the Registration Statement from the
Shareholder except to the extent provided to the contrary in Section 3(e) above.

         (i) Suspension of Registration Requirement. The Company shall promptly
notify each Shareholder of, and confirm in writing, the issuance by the SEC of
any stop order 


                                       7
<PAGE>   66

suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose. Each Shareholder agrees not to effect any
sales from the date of such notice until the Company obtains the withdrawal of
any such order suspending the effectiveness of the applicable Registration
Statement. The Company shall use its best efforts to obtain the withdrawal of
any order suspending the effectiveness of the Registration Statement and shall
notify each Shareholder of such withdrawal within two business days thereafter.
Each Shareholder whose Registrable Shares are covered by a Registration
Statement filed pursuant to Section 3 (a) hereof agrees, if requested by the
Company in the case of a Company-initiated non-underwritten offering or if
requested by the managing underwriter or underwriters in a Company-initiated
underwritten offering, not to effect any public sale or distribution of any of
the securities of the Company of any class included in such Registration
Statement (or any security the value of which is determined with reference to
the value of such securities), including a sale pursuant to Rule 144A or Rule
144 under the Securities Act (except as part of such Company-initiated
registration), during the 15-day period prior to, and during the 90-day period
beginning on the date of effectiveness of each Company-initiated offering made
pursuant to such Registration Statement, to the extent timely notified in
writing by the Company or the managing underwriters; provided, however, that
such 90-day period shall be extended by the number of days from (and including)
the date of the giving of any notice pursuant to Section 3(d) or (e) hereof to
(and including) the date when each seller of Registrable Shares covered by such
Registration Statement shall have received the copies of the supplemented or
amended Prospectus contemplated by Section 3(e) hereof.

         (j) Additional Shares. The Company, at its option, may register, 
under any Registration Statement and any filings with any state securities 
commissions filed pursuant to this Agreement, any number of unissued Common 
Shares of the Company or any Common Shares of the Company owned by any other 
shareholder or shareholders of the Company unless the underwriter or 
underwriters specified by the Shareholder asserts in writing that such
additional shares will, in its opinion, have a significant adverse effect on the
marketing of the Shareholder's Shares covered by the Registration Statement.


     4.  Indemnification.

         (a) Indemnification by the Company. The Company agrees to indemnify and
hold harmless each Shareholder as follows:

         (i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereto) pursuant to which the Registrable Shares were registered
under the Securities Act, including all documents incorporated therein by
reference, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue statement of
a material fact contained in any Prospectus (or any amendment or supplement
thereto), including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material 


                                       8
<PAGE>   67

fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;

         (ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of the
Company; and

         (iii) against any and all expense whatsoever, as incurred (including
reasonable fees and disbursements of counsel), reasonably incurred in
investigating, preparing or defending against any litigation, or investigation
or proceeding by any governmental agency or body, commenced or threatened, in
each case whether or not a party, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under subparagraph (i) or (ii)
above;

provided, however, that the indemnity provided pursuant to this Section 4 does
not apply to any Shareholder with respect to any loss, liability, claim, damage
or expense to the extent arising out of (1) any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by such Shareholder expressly
for use in the Registration Statement (or any amendment thereto) or the
Prospectus (or any amendment or supplement thereto) or (2) such Shareholder's
failure to deliver an amended or supplemental Prospectus if such loss,
liability, claim, damage or expense would not have arisen had such delivery
occurred.

         (b) Indemnification by Shareholders. Each Shareholder severally agrees
to indemnify and hold harmless the Company and the other selling Shareholders,
and each Person, if any, who controls the Company (including each officer and
director of the Company who signed the Registration Statement) within the
meaning of Section 15 of the Securities Act, to the same extent as the indemnity
contained in Section 4(a) hereof (except that any settlement described in
Section 4 (a)(ii) shall be effected with the written consent of such
Shareholder), but only insofar as such loss, claim, damage or expense arises out
of or is based upon (1) any untrue statements or omissions made in the
Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such Shareholder expressly for use in
such Registration Statement (or any amendment thereto) or such Prospectus (or
any amendment or supplement thereto) or (2) such Shareholder's failure to
deliver an amended or supplemental Prospectus if such loss, liability, claim,
damage or expense would not have arisen had such delivery occurred.

         (c) Conduct of Indemnification Proceedings. The indemnified party shall
give reasonably prompt notice to the indemnifying party of any action or
proceeding commenced against it in respect of which indemnity may be sought
hereunder, but failure so 


                                       9
<PAGE>   68

to notify the indemnifying party (1) shall not relieve it from any liability
which it may have under the indemnity agreement provided in paragraphs (a) or
(b) of this Section 4, unless and to the extent it did not otherwise learn of
such action and the lack of notice by the indemnified party results in the
forfeiture by the indemnifying party of substantial rights and defenses and (2)
shall not, in any event, relieve the indemnifying party from any obligations to
the indemnified party other than the indemnification obligation provided under
paragraphs (a) or (b) of this Section 4. If the indemnifying party so elects
within a reasonable time after receipt of such notice, the indemnifying party
may assume the defense of such action or proceeding at such indemnifying party's
own expense with counsel chosen by the indemnifying party and approved by the
indemnified party, which approval shall not be unreasonably withheld; provided,
however, that, if the indemnified party reasonably determines that a conflict of
interest exists where it is advisable for the indemnified party to be
represented by separate counsel or that, upon advice of counsel, there may be
legal defenses available to it which are different from or in addition to those
available to the indemnifying party, then the indemnifying party shall not be
entitled to assume such defense, and the indemnified party shall be entitled to
separate counsel at the indemnifying party's expense. If the indemnifying party
is not entitled to assume the defense of such action or proceeding as a result
of the provisions of the preceding sentence, the indemnifying party's counsel
shall be entitled to conduct the indemnifying party's defense and counsel for
the indemnified party shall be entitled to conduct the defense of the
indemnified party, it being understood that both such counsel will cooperate
with each other to conduct the defense of such action or proceeding as
efficiently as possible. If the indemnifying party is not so entitled to assume
the defense of such action or does not assume such defense, after having
received the notice referred to in the first sentence of this paragraph, the
indemnifying party will pay the reasonable fees and expenses of counsel for the
indemnified party. In such event, however, the indemnifying party will not be
liable for any settlement effected without the written consent of the
indemnifying party, with such consent not to be unreasonably withheld. If an
indemnifying party is entitled to assume, and assumes, the defense of such
action or proceeding in accordance with this paragraph, the indemnifying party
shall not be liable for any fees and expenses of counsel for the indemnified
party incurred thereafter in connection with such action or proceeding, subject
to the proviso set forth in the second sentence of this paragraph (c).

     5.  Contribution. In order to provide for just and equitable contribution 
in circumstances in which the indemnity agreement provided for in Section 4 is
for any reason held to be unenforceable although applicable in accordance with
its terms, the Company and each Shareholder shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
such indemnity agreement incurred by the Company and each such Shareholder, in
such proportion as is appropriate to reflect the relative fault of the Company
on the one hand and such Shareholder on the other, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of the indemnifying party and indemnified party shall be
determined by reference to, among other things, whether the action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, has been made by, or relates to,


                                       10
<PAGE>   69

information supplied by, the indemnifying party or the indemnified party, and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such action.

     The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section 5 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5, each Shareholder shall be
required to contribute the amount of any damages which such Shareholder is
required to pay by reason of such untrue statement or omission, provided,
however, that no Shareholder shall be required under such circumstances to pay
any amount in excess of the total price at which the Registrable Shares of such
Shareholder were offered to the public. Notwithstanding the foregoing, no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section 5,
each director of the Company, each officer of the Company who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Company.

     6.  No Other Obligation to Register Shares. Except as otherwise expressly
provided in this Agreement, the Company shall have no obligation to a
Shareholder to register all or any portion of the Registrable Shares under the
Securities Act.

     7.  Shareholder Representations, Warranties and Agreements. Each
Shareholder, jointly and not severally, and solely on behalf of itself,
represents and warrants to, and agrees with, the Company, that:

         (a) This Agreement has been duly executed and delivered by such
Shareholder, and is the legal, valid and binding obligation of such Shareholder,
and is enforceable as to such Shareholder in accordance with its terms. No
consent of any party to any contract, agreement, instrument, lease, license,
arrangement or understanding to which such Shareholder is a party, or to which
any of such Shareholder's properties or assets are subject, which has not been
obtained, is required for the execution, delivery and performance of this
Agreement, and the execution, delivery and performance of this Agreement will
not violate, result in a breach of, conflict with or (with or without the giving
of notice or the passage of time or both) entitle any party to terminate or call
a default under any such contract, agreement, instrument, lease, license,
arrangement or understanding.

         (b) Neither such Shareholder nor any of such Shareholder's affiliates
(as defined in the regulations under the Securities Act), will take, directly or
indirectly, during the term of this Agreement, any action designed to stabilize
(except as may be permitted by applicable law) or manipulate the price of any
security of the Company.

         (c) Such Shareholder shall promptly furnish to the Company any and all
information as may be required by, or as may be necessary or advisable to comply
with the 


                                       11
<PAGE>   70

provisions of, the Securities Act, the Exchange Act, and the rules and
regulations of the SEC thereunder in connection with the preparation and filing
of any Registration Statement pursuant hereto, or any amendment or supplement
thereto, or any Preliminary Prospectus or Prospectus included therein. All
information to be furnished to the Company by or on behalf of such Shareholder
expressly for use in connection with the preparation of any Preliminary
Prospectus, the Prospectus, the Registration Statement, or any amendment or
supplement thereto, will not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading.

     8.  Underwritten Registration. No Shareholder of Registrable Securities may
participate in any underwritten registration hereunder unless such Shareholder
(i) executes and delivers the underwriting agreement or similar documents
relating thereto pursuant to which such Shareholder shall agree to sell, upon
the terms and subject to the conditions therein set forth, such Shareholder's
Shares on the basis provided therein, and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, custodial or escrow agreements
and such other documents as may be necessary, advisable or required pursuant to
the terms thereof or as may be from time to time reasonably requested by the
underwriter or underwriters named therein, the Company, or their respective
legal counsel, in connection therewith. The Company will cooperate to the extent
reasonably required to permit the Shareholders to conduct an underwritten
offering and will enter into customary underwriting arrangements. The Company
shall have approval rights with respect to the underwriter, which approval shall
not be unreasonably withheld. The Shareholders shall be entitled to no more than
two underwritten offerings in any year.

     In the event of any conflict between the indemnification and contribution
terms as herein set forth and as set forth in any underwriting agreement entered
pursuant hereto, the underwriting agreement shall control.

     9.  Survival of Representations and Agreements. All representations,
warranties, covenants and agreements contained in this Agreement shall be deemed
to be representations, warranties, covenants and agreements at the effective
date of each Registration Statement contemplated by this Agreement, and such
representations, warranties, covenants and agreements, including the indemnity
and contribution agreements contained in Sections 4 and 5 hereof, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of the Company, any Shareholder or any Person which is entitled to
be indemnified under Section 4 hereof, and shall survive termination of this
Agreement.

     10. Amendments and Waivers. The provisions of this Agreement may not be
amended, modified, supplemented or waived without the prior written consent of
the Company and the Shareholders.

     11. Notices. Except as set forth below, all notices and other
communications provided for or permitted hereunder shall be in writing and shall
be deemed to have been duly given if delivered personally or sent by telex or
telecopier, registered or certified mail (return receipt requested), postage
prepaid, or courier or overnight delivery service to the respective parties at
the following addresses (or at such other address for any party as shall be
specified by like notice, provided that notices of a change of address shall be
effective only upon receipt thereof), and further provided that in case of
directions to amend the Registration Statement pursuant to Section 3(c), a
Shareholder must confirm such notice in writing by overnight express delivery
with confirmation of receipt:


                                       12
<PAGE>   71

 If to the Company:        Crescent Real Estate Equities Company
                           c/o Crescent Real Estate Equities Limited Partnership
                           777 Main Street, Suite 2700
                           Fort Worth, Texas 76102
                           
                           Attn:  Gerald W. Haddock, President
                           Telephone:  (817) 878-0444
                           Telecopier:  (817) 878-0429

 with copies to:           Crescent Real Estate Equities Company       
                           c/o Crescent Real Estate Equities Limited Partnership
                           777 Main Street, Suite 2700                 
                           Fort Worth, Texas 76102                 
                           
                           Attn:  David M. Dean, Senior Vice President-Law
                           Telephone:  (817) 878-0442
                           Telecopier:  (817) 878-0429

 and to:                   Shaw, Pittman, Potts & Trowbridge
                           2300 N Street, N.W.
                           Washington, D.C. 20037
                           Attn:  Sylvia M. Mahaffey
                           Telephone:  (202) 663-8027
                           Telecopier:  (202) 663-8007

 If to the Shareholders:

In addition to the manner of notice permitted above, notices given pursuant to
Sections 3(b) and 3(i) hereof may be effected telephonically and confirmed in
writing thereafter in the manner described above.

     12. Successors and Assigns. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of the parties hereto. This Agreement may not be assigned by any
Shareholder, and any attempted assignment hereof by any Shareholder will be void
and of no effect and shall terminate all obligations of the Company hereunder;
provided, however, that any Shareholder may assign its rights hereunder to any
Person who executes a counterpart of this Agreement, as the same may be amended.


                                       13
<PAGE>   72

     13. Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

     14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed wholly within said State.

     15. Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.

     16. Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be the complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein,
with respect to such subject matter. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.

     17. No Shareholder Liability. No shareholder or other equity owner of the
Company assumes any personal liability for the obligations listed herein or for
the Company's performance of such obligations.


                                       14
<PAGE>   73

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

                                         CRESCENT REAL ESTATE EQUITIES COMPANY



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



                                       15
<PAGE>   74



                           SHAREHOLDER SIGNATURE PAGE



                                                       ------------------------
                                                       Frank J. Fertitta III




                                                       ------------------------
                                                       Lorenzo J. Fertitta




                                                       ------------------------
                                                       Blake L. Sartini


                                       16
<PAGE>   75
                                FIRST AMENDMENT
                        TO AGREEMENT AND PLAN OF MERGER


      This FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this "AMENDMENT") is
dated as of February 17, 1998 and entered into by and between Station Casinos,
Inc., a Nevada corporation (the "COMPANY") and Crescent Real Estate Equities
Company, a Texas real estate investment trust ("CRESCENT") with reference to
that certain Agreement and Plan of Merger, dated as of January 16, 1998 by and
between the Company and Crescent ("MERGER AGREEMENT").  Capitalized terms used
in this Amendment without definition shall have the meanings set forth in the
Merger Agreement.

                         AMENDMENTS TO MERGER AGREEMENT

      1.1   Amendment to Subsection 5.2(c).  Subsection 5.2(c) of the Merger 
Agreement is hereby amended by deleting such subsection in its entirety and
substituting for such subsection the following:

            "(c)  Each of the Company and Crescent will, or will cause the 
      appropriate party to, as soon as practicable after execution and delivery
      of this Agreement and in a manner designed not to delay the Closing, make
      all filings or submissions that may be required under the HSR Act.  Each
      of the Company and Crescent will, or will cause the appropriate party to,
      promptly furnish to the other such necessary information and reasonable
      assistance as the other may request in connection with the preparation of
      any filing or submissions necessary under the HSR Act.  Without limiting
      the generality of the foregoing, each of the Company and Crescent will
      promptly notify the other of the receipt and content of any inquiries or
      requests for additional information made by any Governmental Entity in
      connection therewith and will, or will cause the appropriate party to,
      promptly (i) comply with any such inquiry or request and (ii) provide the
      other with a description of the information provided to any Governmental
      Entity with respect to any such inquiry or request.  In addition, each of
      the Company and Crescent will keep the other apprised of the status of
      any such inquiry or request."

                                 MISCELLANEOUS

      2.1   Effect on Merger Agreement.  On and after the date of this
Amendment, each reference in the Merger Agreement to "this Agreement,"
"hereunder," "hereof," "herein," or words of like import referring to the Merger
Agreement shall mean and be a reference to the Merger Agreement, as amended by
this Amendment. Except as specifically amended by this Amendment, the Merger
Agreement shall remain in full force and effect and is hereby ratified and
confirmed.

      2.2   Applicable Law.  This Amendment shall be governed by and construed
in accordance with the laws of the State of Delaware applicable to contracts
made and to be performed entirely within such State.
<PAGE>   76
      IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers thereunto authorized
as of the date first written above.


                              STATION CASINOS, INC.


                                    By: /s/ GLENN C. CHRISTENSON
                                        ----------------------------------------
                                            Glenn C. Christenson
                                            Executive Vice President, Chief
                                                Administrative Officer and Chief
                                                Financial Officer



                              CRESCENT REAL ESTATE EQUITIES COMPANY


                                    By:  /s/ DALLAS E. LUCAS
                                        ----------------------------------------
                                            Name: Dallas E. Lucas
                                            Title: Senior Vice President and 
                                                   Chief Financial Officer



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