Document:

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                                                                   EXHIBIT 10.27

             2004 CRESCENT REAL ESTATE EQUITIES LIMITED PARTNERSHIP
                            LONG-TERM INCENTIVE PLAN

                                    ARTICLE I
                                    THE PLAN

      1.1   NAME. This plan shall be known as the "2004 Crescent Real Estate
Equities Limited Partnership Long-Term Incentive Plan."

      1.2   PURPOSE. The purpose of the 2004 Plan is to promote the growth and
general prosperity of the Partnership by permitting the Partnership to grant to
Officers Awards of Partnership Units and associated Partnership Interests that
qualify as profits interests under the Code.

      1.3   EFFECTIVE DATE. The Plan shall become effective upon the Effective
Date.

      1.4   ELIGIBILITY TO PARTICIPATE. Any Officer shall be eligible to
participate in the 2004 Plan.

      1.5   NUMBER OF PARTNERSHIP UNITS SUBJECT TO AWARDS. Subject to adjustment
pursuant to the provisions of Section 4.2, and subject to any additional
restrictions elsewhere in the 2004 Plan, the maximum aggregate number of
Partnership Units that may be granted from time to time under the 2004 Plan
shall be 1,802,500. If unvested Partnership Units granted under the 2004 Plan
are forfeited, cancelled or reacquired by the Partnership, those Partnership
Units shall again be available for grant under the 2004 Plan.

      1.6   RESERVATION OF SHARES OF COMMON STOCK. During the term of the 2004
Plan, Crescent Equities shall at all times reserve and keep available such
number of Common Shares as may be necessary to satisfy the requirements of the
2004 Plan and the number of Partnership Units granted hereunder. In addition,
Crescent Equities shall from time to time, as is necessary to accomplish the
purposes of the 2004 Plan, use its best efforts to obtain from any regulatory
agency having jurisdiction any requisite authority necessary to issue Common
Shares upon the exercise of Exchange Rights related to Partnership Interests
granted hereunder. The inability of Crescent Equities to obtain from any
regulatory agency having jurisdiction the authority deemed by Crescent Equities'
counsel to be necessary for the lawful issuance of any Common Shares shall
relieve Crescent Equities of any liability in respect of the nonissuance of
Common Shares as to which the requisite authority has not been obtained.

      1.7   TAX WITHHOLDING. Grants of Awards under the 2004 Plan are subject to
the condition that if at any time the General Partner determines, in its
discretion, that the satisfaction of withholding tax or other withholding
liabilities under any federal, state or local law is necessary or desirable as a
condition of, or in connection with such issuances, then the issuances shall not
be effective unless the withholding has been effected or obtained in a manner
acceptable to the General Partner.

      1.8   EFFECT ON EMPLOYMENT. Nothing in the 2004 Plan or in any Award
granted hereunder shall confer upon any Participant any right to continued
employment by the Partnership, the General Partner, Crescent Equities or any of
their subsidiaries or limit in any way the right of

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the Partnership, the General Partner, Crescent Equities or any subsidiary at any
time to terminate or alter the terms of that employment.

                                   ARTICLE II
                                 ADMINISTRATION

      2.1   IN GENERAL. The Plan and Awards granted under the 2004 Plan shall be
administered by the General Partner as set forth in the Grant Agreements. Awards
granted under the 2004 Plan are in part designed to replace the General
Partner's current Dividend Incentive Unit program, which will be terminated as
to new grants and awards for all periods after 2004. As a condition to the
initial grants made under this Plan, the CEO, COO and each Managing Director of
the General Partner will be required to relinquish options on Crescent Equities
common stock and/or on units in the Partnership in an amount equal to their
prior DIU grants, as follows:

<TABLE>
<CAPTION>
                  EXCHANGE RATIO
                  --------------
<S>               <C>
$15.01 to $16.00       .800
$16.01 to $17.00       .857
$17.01 to $18.00       .923
$18.01 to $19.00      1.000
$19.01 to $20.00      1.091
$20.01 to $21.00      1.200
$21.01 to $22.00      1.333
$22.01 to $23.00      1.500
$23.01 to $24.00      1.714
$24.01 to $25.00      2.000
$25.01 to $26.00      2.400
$26.01 to $27.00      3.000
$27.01 to $28.00      4.000
$28.01 to $29.00      6.000
$29.01 and above     12.000
</TABLE>

Likewise, Senior Vice Presidents of the General Partner will be required to give
up options in the same manner in an amount equal to 80% of the foregoing
exchange ratios and Vice Presidents of the General Partner will be required to
give up options in the same manner in an amount equal to 60% of the foregoing
exchange ratios. Notwithstanding the foregoing, the General Partner shall have
the right, but not the obligation, to waive or otherwise modify the foregoing
requirements in the event that it determines that such waiver or modification is
necessary to mitigate disparities in the treatment of any particular Officer
when compared to other similarly situated Officers.

      2.2   ELIGIBILITY. Subject to the other provisions of the 2004 Plan, the
General Partner shall have the sole discretion and authority to determine from
time to time, taking into account recommendations from the Compensation
Committee, the Officers to whom Awards shall be granted and the number of
Partnership Units subject to each Award.

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      2.3   GRANTS AFTER EFFECTIVE DATE. The General Partner's discretion and
authority to make grants (with the same vesting schedule and other terms as set
forth in the attached model Grant Agreements) shall continue until the
termination of the 2004 Plan; provided, however, that in the case of Awards
granted after the Effective Date, the Compensation Committee shall have the
right to approve the recipients of such grants in its discretion.

      2.4   DISCRETION WITH RESPECT TO CERTAIN TRANSACTIONS. The Compensation
Committee shall have at all times the discretionary authority, in the event of
an actual or threatened Change in Control of Company (as defined in the model
Grant Agreement attached hereto as Exhibit A) to direct the General Partner to
(i) accelerate the vesting of all or a portion of the Award, (ii) waive any
conditions or restrictions applicable to any Award, or (iii) repurchase the
unvested portion of any Award for an amount not less than (x) the taxes paid by
the Participant on the Participant's share of the Partnership's income reduced
by (y) the amount, if any, of prior distributions with respect to such unvested
portion.

                                   ARTICLE III
                                     AWARDS

      3.1   TERMS AND CONDITIONS. The terms and conditions of each Award granted
under the 2004 Plan shall be set forth in a written Grant Agreement, which
generally shall be in the form of the model Grant Agreement attached hereto as
Exhibit A.

      3.2   DISCLAIMERS. A Participant may disclaim all or any portion of the
unvested portion of the Award, in which case the Award or such portion of the
Award shall be treated the same as if it had been forfeited.

                                   ARTICLE IV
                      TERMINATION, AMENDMENT AND ADJUSTMENT

      4.1   TERMINATION AND AMENDMENT. The Plan shall terminate at 6:00 p.m.,
Fort Worth, Texas time, on June 30, 2010. No Awards shall be granted under the
2004 Plan after that date of termination, although Awards granted prior to such
date, to the extent they are vested, shall remain outstanding in accordance with
their terms. Subject to the provisions of the 2004 Plan and the applicable Grant
Agreement, the General Partner shall have the sole discretion and authority to
modify or amend the 2004 Plan and any outstanding Grant Agreement; provided,
however, that the Grant Agreement (and the 2004 Plan to the extent that the
amendment affects the Grant Agreement) may be amended only by an instrument in
writing signed by both the Partnership and the Participant.

      4.2   ADJUSTMENT. If the outstanding Common Shares are increased,
decreased, changed into or exchanged for a different number or kind of shares or
securities through merger, consolidation, combination, exchange of shares, other
reorganization, recapitalization, reclassification, stock dividend, stock split
or reverse stock split, an appropriate and proportionate adjustment shall be
made to the Exchange Rights provided under the Awards granted hereunder in
accordance with the Partnership Agreement and in the number of Partnership Units
that may be granted under the 2004 Plan.

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                                    ARTICLE V
                                  MISCELLANEOUS

      5.1   OTHER COMPENSATION PLANS. The adoption of the 2004 Plan shall not
affect any other incentive or other compensation plans in effect for the
Partnership, the General Partner or Crescent Equities, nor shall the 2004 Plan
preclude Crescent Equities, the General Partner or the Partnership, or any of
their respective subsidiaries, from establishing any other forms of incentive or
other compensation.

      5.2   PLAN BINDING ON SUCCESSORS. The Plan shall be binding upon the
successors and assigns of the Partnership and the General Partner.

      5.3   NUMBER AND GENDER. Whenever used herein, nouns in the singular shall
include the plural where appropriate, and the masculine pronoun shall include
the feminine gender.

      5.4   HEADINGS. Headings of articles and sections hereof are inserted for
convenience of reference and constitute no part of the 2004 Plan.

                                   ARTICLE VI
                                   DEFINITIONS

      As used herein with initial capital letters, the following terms have the
meanings set forth unless the context clearly indicates to the contrary. All
capitalized terms used but not defined herein shall have the meanings ascribed
to those terms in the Partnership Agreement.

      6.1   "2004 Plan" means this 2004 Crescent Real Estate Equities Limited
Partnership Long-Term Incentive Plan, as amended from time to time.

      6.2   "Award" means a grant of Partnership Units and an associated
Partnership Interest.

      6.3   "Code" means the Internal Revenue Code of 1986, as amended.

      6.4   "Compensation Committee" means the Compensation Committee of the
General Partner or, if requested by the General Partner as to any particular act
or determination, the Executive Compensation Committee of the Board of Trust
Managers of Crescent Equities.

      6.5   "Common Shares" means REIT Shares or, in the event that the
outstanding REIT Shares are hereafter changed into or exchanged for shares of a
different stock or security of Crescent Equities or some other corporation, such
other stock or security.

      6.6   "Crescent Equities" means Crescent Real Estate Equities Company, a
Texas real estate investment trust, or any successor thereto.

      6.7   "Effective Date" means October 1, 2004.

      6.8   "Employee" means an employee of the General Partner.

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      6.9 "Officer" means an officer of the General Partner.

      6.10 "Participant" means an Officer to whom an Award has been granted
hereunder.

      6.11 "Partnership" means Crescent Real Estate Equities Limited
Partnership, a Delaware limited partnership.

      6.12 "Partnership Agreement" means the Third Amended and Restated
Agreement of Limited Partnership of Crescent Real Estate Limited Partnership (as
the same has been and in the future may be amended and/or restated).

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                                                                       EXHIBIT A

                          CRESCENT REAL ESTATE EQUITIES
                               LIMITED PARTNERSHIP

                                 GRANT AGREEMENT

                                       FOR

                              PARTNERSHIP UNITS AND

                              PARTNERSHIP INTEREST

                      -------------------------------------

                           [NAME OF OFFICER/EMPLOYEE]
                      -------------------------------------

                                 EFFECTIVE AS OF
                                DECEMBER 1, 2004

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                CRESCENT REAL ESTATE EQUITIES LIMITED PARTNERSHIP
                                 GRANT AGREEMENT

      This Grant Agreement (this "Grant Agreement") is being made and entered
into effective as of [DECEMBER __], 2004 (the "Grant Date"), by and between
Crescent Real Estate Equities Limited Partnership, a Delaware limited
partnership (the "Partnership"), and [NAME OF OFFICER/EMPLOYEE] ("Grantee").

                                    RECITALS

      Grantee is a valued employee of Crescent Real Estate Equities, Ltd. (the
"General Partner"), the sole general partner of the Partnership, and in that
capacity provides services to the Partnership. Crescent Real Estate Equities
Company ("Crescent Equities") is the sole stockholder of the General Partner and
owns a majority of the limited partner interests in the Partnership.

      Section 4.7.D of the Third Amended and Restated Agreement of Limited
Partnership of Crescent Real Estate Equities Limited Partnership (as the same
has been or in the future may be amended and/or restated, the "Partnership
Agreement"), authorizes the General Partner to adopt incentive compensation
plans, including plans granting "Partnership Interests" and "Partnership Units"
(as defined therein) for the benefit of employees, agents or consultants of any
member of the Crescent Group (as defined therein) or the Partnership in respect
of services performed, directly or indirectly, for the Crescent Group or the
Partnership, upon such terms and conditions as might be deemed necessary or
appropriate by the General Partner.

      Section 4.9 of the Partnership Agreement provides that Partnership
Interests and Partnership Units granted under Section 4.9 generally have the
same benefits and obligations as other Partnership Interests and Partnership
Units, except as otherwise set forth in Section 4.9.

      The General Partner has adopted the 2004 Crescent Real Estate Equities
Limited Partnership Long-Term Incentive Plan (the "Plan") pursuant to Section
4.7.D of the Partnership Agreement authorizing the grant of Partnership
Interests and Partnership Units subject to certain conditions. The General
Partner believes that the Plan and this Grant Agreement come within the scope of
that authorization.

      To reward Grantee for services he has rendered in the past and to induce
Grantee to continue his involvement with, and enthusiastic and productive
efforts for, the benefit of Crescent Equities, the General Partner and the
Partnership, the General Partner has directed, that Grantee be issued a
Partnership Interest and Partnership Units pursuant to the Plan and on the terms
and subject to the conditions set forth in this Grant Agreement.

      All capitalized terms used in this Grant Agreement but not defined herein
have the meanings ascribed to those terms in the Partnership Agreement or the
Plan.

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                                    AGREEMENT

      In consideration of the foregoing recitals and mutual promises and
covenants made herein, the parties hereby agree as follows:

      1. GRANT OF PARTNERSHIP INTEREST AND PARTNERSHIP UNITS. Subject to the
terms and conditions hereof, pursuant to Sections 4.7.D and 4.9 of the
Partnership Agreement and the Plan, the Partnership awards and grants to Grantee
__________ Partnership Units and an associated Partnership Interest (together,
the "Award"). The amount of the Partnership Interest for the Award shall be
calculated in accordance with the provisions of the Partnership Agreement.

      2. VESTING.

            (a) Stock Price Performance Targets. The Award shall vest in
      increments equal to 20% of the overall Award (each such increment being a
      "Tranche") when the trailing forty (40) trading-day average of the last
      sale price of REIT Shares, as reported on the New York Stock Exchange,
      reaches each of the levels set forth below:

                                  TRAILING 40-
                                   TRADING DAY
                               AVERAGE SALE PRICE
                                     $19.00
                                     $20.00
                                     $21.00
                                     $22.50
                                     $24.00

      Vesting prices are subject to appropriate adjustments, to be determined by
      the General Partner in its good faith, reasonable discretion, for events
      such as stock splits and stock dividends.

      If (i) Crescent Equities enters into, or the shareholders of Crescent
      Equities approve Crescent Equities' entry into, an agreement to dispose of
      all or substantially all of the assets of Crescent Equities by means of a
      sale, merger or other reorganization, or (ii) the shareholders receive a
      tender offer for at least 15% of the REIT Shares, the price per share to
      be paid pursuant to such agreement or tender offer (as determined by the
      General Partner in good faith either (A) based on the overall value of the
      transaction or (B) if applicable, using the value attributed to REIT
      Shares in the context of the transaction) shall be treated as the trailing
      forty (40) trading-day average last sale price per share of REIT Shares on
      the date that the agreement becomes effective or the tender offer
      commences.

            (b) Annual Performance Targets. In addition, the General Partner
      may, but shall not be obligated to, establish one or more objective annual
      performance targets for Crescent Equities for any fiscal year within 90
      days following beginning of each year. As soon as possible after the end
      of the fiscal year, the Compensation Committee will determine in good
      faith whether such targets were achieved or surpassed. In the event that

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<PAGE>

      any such target is achieved or surpassed, then an additional Tranche of
      the Award shall vest with respect to such fiscal year, with such vesting
      being effective as of the last day of such fiscal year.

      Except as specifically provided in this Section 2 or below, the fact that
      the Award is not vested shall have no effect on Grantee's rights and
      obligations under the Partnership Agreement.

            (c) Effect of Certain Transactions. Any portion of the Award that is
      not already vested shall become fully vested:

                  (i) in the event of a Company Capital Transaction unless (A)
            there is a surviving entity and (B) Grantee receives Exchange Rights
            in the surviving entity and rights to distributions upon vesting and
            special tax loss allocations on expiration or forfeiture with
            respect to the Award on substantially the same terms and conditions
            as contained in this Grant Agreement, the current Plan, and the
            current Partnership Agreement (with appropriate adjustments to
            reflect the transaction, provided that that they do not reduce the
            value of the Exchange Rights or Grantee's right to distributions
            upon vesting); or

                  (ii) in the event of a Partnership Capital Transaction unless
            (A) there is a surviving entity and (B) the surviving entity
            provides or agrees to provide a replacement award that contains tax
            allocation, book-up and other provisions enabling Grantee to obtain
            Exchange Rights, distributions upon vesting, and special tax loss
            allocations on expiration or forfeiture, with respect to the Award
            on substantially the same terms and conditions as contained in this
            Grant Agreement, the current Plan, and the current Partnership
            Agreement (with appropriate adjustments to reflect the transaction,
            provided that that they do not reduce the value of the Exchange
            Rights or Grantee's right to distributions upon vesting).

      3. TERM OF AWARD. The unvested portion of the Award shall expire at 6:00
p.m., Fort Worth, Texas time, on June 30, 2010 or at such earlier time, if any,
as Grantee is no longer an officer or employee of the General Partner, and
Grantee shall have no further rights under such unvested portion after that
date. Grantee shall not be treated as having terminated employment with the
General Partner for this purpose if such termination

            (a) occurs because of Grantee's death or Disability, provided that
      the unvested portion of the Award shall then expire at 6:00 pm on the
      Applicable Anniversary of the date of death or the date of Grantee's first
      absence as a result of incapacity due to mental or physical illness or
      injury giving rise to the determination of Disability; or

            (b) occurs upon or within twelve (12) months following a Change in
      Control, Change in Management, Company Capital Transaction, or Partnership
      Capital Transaction, and is without Just Cause and either (i) involuntary
      on the part of Grantee or (ii) voluntary on the part of Grantee but with
      Good Reason; provided that no Company Capital Transaction or Partnership
      Capital Transaction shall be deemed to have occurred for

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      this purpose on account of any agreement of merger or other reorganization
      when the shareholders of Crescent Equities immediately before the
      consummation of the transaction will own at least fifty percent (50%) of
      the total combined voting power of all classes of stock entitled to vote
      of the surviving entity immediately after the consummation of the
      transaction.

      4. COMPLIANCE WITH SECURITIES LAWS. No portion of the Award shall be
granted unless the grant complies with all relevant provisions of federal and
state law, including without limitation the Securities Act of 1933, as amended,
the rules and regulations promulgated thereunder and the requirements of any
stock exchange upon which the Shares might then be listed, and shall be further
subject to the approval of counsel for Crescent Equities with respect to such
compliance. The General Partner may also require Grantee to furnish evidence
satisfactory to the General Partner and Crescent Equities, including, without
limitation, a written and signed representation letter and consent to be bound
by any transfer restrictions imposed by law, legend, condition or otherwise, and
a representation that the Partnership Interest and Partnership Units that
comprise the Award are being acquired only for investment and without any
present intention to sell or distribute them in violation of any federal or
state law, rule or regulation. Further, Grantee hereby consents to the
imposition of a legend on any certificate representing the Partnership Interest
and Partnership Units and any REIT Shares issued upon the exchange therefore
restricting their transferability as required by law, the Partnership Agreement,
the constitutive documents of Crescent Equities or this Section 4.

      5. COMPLIANCE WITH PARTNERSHIP AGREEMENT. The Partnership Interest and
Partnership Units that comprise the Award are governed by, and subject to each
of the terms and conditions of, the Partnership Agreement. Upon the grant of the
Award, Grantee shall be admitted to the Partnership in accordance with the terms
of the Partnership Agreement and the procedures established by the General
Partner. Grantee accepts and agrees to be bound by all of the terms and
conditions of the Partnership Agreement, including, without limitation, the
power of attorney granted in Section 2.4 of the Partnership Agreement.

      6. TRANSFERABILITY. No portion of the Award shall be transferable other
than by will or by the laws of descent and distribution, even if such transfer
is otherwise permitted by Article 11 of the Partnership Agreement. However,
beginning two (2) years after the Grant Date, Grantee, with the approval of the
General Partner, may transfer all or a portion of an Award for no consideration
to or for the benefit of Grantee's Immediate Family (including, without
limitation, to a trust for the benefit of Grantee's Immediate Family or to a
partnership or limited liability company for one or more members of Grantee's
Immediate Family), subject to such limits as the General Partner may establish,
and the transferee shall remain subject to all the terms and conditions
applicable to the Award before such transfer. If the original Grantee ceases to
be an Officer or Employee, the Award in the hands of the transferee shall be
subject to the same treatment as if it were still held by the original Grantee.
The term "Immediate Family" shall mean Grantee's spouse, parents, children,
stepchildren, adoptive relationships, sisters, brothers and grandchildren (and,
for this purpose, shall also include Grantee). The General Partner may withhold
its approval only if it determines, in its discretion, that permitting the
transfer could create or contribute to a risk of adverse tax or similar
consequences for the Partnership, including but

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<PAGE>

not limited to a risk that the Partnership will be treated as a publicly-traded
partnership within the meaning of the Internal Revenue Code (the "Code").

      7. APPLICATION OF CERTAIN PROVISIONS IN PARTNERSHIP AGREEMENT.

            (a) Exchange Rights. The Exchange Rights associated with the Award
      shall be determined under the Partnership Agreement in the same manner as
      they are determined with respect to other Partnership Interests; provided,
      however, that (i) Grantee may not exercise the Exchange Rights until two
      (2) years after the Grant Date, (ii) Grantee may not exercise the Exchange
      Rights unless and until, as a result of one or more book-up events after
      the Grant Date or otherwise, the portion of Grantee's Capital Account
      associated with the vested portion of the Award (relative to the size of
      the Partnership Interest associated with such vested portion) is at least
      equal to the Capital Account of Crescent Equities (relative to the size of
      its Partnership Interest) (the date on which such Capital Account
      equivalence is achieved referred to hereinafter as the "Capital Account
      Equivalence Date"), and (iii) Grantee may not exercise the Exchange Rights
      with respect to any unvested portion of the Award. In addition, the
      Partnership Units shall be exchangeable solely for cash (and Crescent
      Equities may not refuse to accept the Notice of Exchange under Section
      8.6.B. of the Partnership Agreement) unless and until all of the following
      have occurred:

            (A)   the obtaining of approval from the shareholders of Crescent
                  Equities of the Exchange Rights associated with the Award;

            (B)   the admission of the REIT Shares to listing on all stock
                  exchanges on which REIT Shares are then listed, unless the
                  General Partner determines in its sole discretion that such
                  listing is neither necessary nor advisable;

            (C)   the completion of any registration or other qualification of
                  the sale of the REIT Shares under any federal or state law or
                  under the rulings or regulations of the Securities and
                  Exchange Commission or any other governmental regulatory body
                  that the General Partner in its sole discretion deems
                  necessary or advisable; and

            (D)   The obtaining of any approval or other clearance from any
                  federal or state governmental agency that the General Partner
                  in its sole discretion determines to be necessary or
                  advisable.

      As soon as practicable after the date of approval of the Exchange Rights
      by the shareholders of Crescent Equities, the General Partner shall, at
      its own expense, cause the sale of the REIT Shares to be registered under
      applicable federal and state laws. No exchange for cash may occur until
      at least six (6) months after the date that the portion of the Award to
      which it applies becomes vested.

            (b) Transactions Described in Section 11.2B of the Partnership
      Agreement. If a transaction described in Section 11.2B(1) of the
      Partnership Agreement occurs before the Capital Account Equivalence Date,
      the consideration paid in such transaction to Grantee with respect to the
      Award shall be limited to the amount that Grantee would receive

                                       -6-
<PAGE>

      if the Partnership (i) sold its assets at a value determined by the
      General Partner in good faith either (A) based on the overall value of
      such transaction, taking into account any allocations that occur in
      connection with such transaction or that would occur in connection with
      such transaction if the assets of the Partnership were sold at the price
      paid or to be paid in such transaction or (B) if applicable, using the
      value attributed to the Partnership Interest and Units in the context of
      such transaction, and (ii) immediately thereafter distributed the proceeds
      in liquidation under Section 13.2 of the Partnership Agreement. If a
      transaction described in Section 11.2B(2) of the Partnership Agreement
      occurs before the Capital Account Equivalence Date, the General Partner
      will use commercially reasonable best efforts to enter into an agreement
      with the successor entity that will contain tax allocation, book-up and
      other provisions enabling Grantee to obtain Exchange Rights, distributions
      upon vesting, and special tax loss allocations on expiration or forfeiture
      with respect to the Award on substantially the same terms and conditions
      as contained in this Grant Agreement, the Plan, and the Partnership
      Agreement (with appropriate adjustments to reflect the transaction
      provided that that they do not reduce the value of the Exchange Rights or
      Grantee's right to distributions upon vesting).

      8. ADMINISTRATION.

            (a) Compensation Committee. This Grant Agreement and the Plan shall
      be administered by the Compensation Committee. Subject to the provisions
      of this Grant Agreement and the Plan, the Compensation Committee shall
      have the sole discretion and authority to interpret this Grant Agreement
      and the Plan, to prescribe, amend and rescind any rules and regulations
      necessary or appropriate for the administration of this Grant Agreement
      and the Plan, to determine and interpret the details and provisions of
      this Grant Agreement and the Plan, to modify or amend this Grant Agreement
      and the Plan or waive any conditions or restrictions applicable to the
      Award, and to make all other determinations necessary or advisable for the
      administration of this Grant Agreement and the Plan; provided, however,
      that this Grant Agreement (and the Plan to the extent that the amendment
      affects this Grant Agreement) may be amended only by an instrument in
      writing signed by both the Partnership and Grantee.

            (b) Delegation of Authority. The Compensation Committee may delegate
      all or any portion of its authority under paragraph (a) of this Section 8
      to the General Partner to the extent consistent with the regulations of
      the Code, the rules of the NYSE in effect at such time and other
      applicable law or regulation, in which case appropriate references herein
      to the Compensation Committee that relate to the administration of this
      Grant Agreement and the Plan shall be deemed to be references to the
      General Partner.

            (c) Assistance. The Partnership shall supply full and timely
      information to the General Partner and/or the Compensation Committee on
      all matters relating to Grantee, his employment, death, retirement,
      Disability or other termination of employment, and such other pertinent
      facts as the General Partner or the Compensation Committee might require.
      The Partnership shall furnish the General Partner and the Compensation
      Committee with such clerical and other assistance as is necessary to the
      performance of its duties.

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<PAGE>

      9. CERTAIN DEFINITIONS. The following terms, to the extent used herein
with an initial capital letter and not otherwise defined, shall have the
meanings set forth in this Section 9, unless the context clearly requires
otherwise.

            (a) The term "Just Cause" means (i) an act or acts of or at the
      direction of Grantee involving a felony, fraud, willful misconduct,
      commission of any act that causes or reasonably may be expected to cause
      substantial injury to the Partnership, the General Partner or Crescent
      Equities, or (ii) commission of any act that is against the material best
      interests of the Operating Partnership, the General Partner or Crescent
      Equities, or (iii) any uncured breach of any of Grantee's material duties
      under any written employment or other personal services contract with the
      Operating Partnership or its affiliates or (iv) any uncured breach of any
      material provision of any written non-competition agreement between the
      Operating Partnership or any of its affiliates and the Grantee.

            (b) The term "Change in Control" refers to the acquisition of
      fifteen percent (15%) or more of the voting securities of Crescent
      Equities by any Person or by Persons acting as a group within the meaning
      of Section 13(d)(3) of the Exchange Act (other than an acquisition by (x)
      a Person or group meeting the requirements of clauses (i) and (ii) of Rule
      13d-l(b)(1) promulgated under the Exchange Act, or (y) any employee
      pension benefit plan (within the meaning of Section 3(2) of ERISA) of
      Crescent Equities, the Partnership or of the subsidiaries of either,
      including a trust established pursuant to such plan); provided that no
      Change in Control will be deemed to have occurred (i) if, before the
      acquisition of, or offer to acquire, fifteen percent (15%) or more of the
      voting securities of Crescent Equities, there has not been a Change in
      Management of Crescent Equities and the full Board of Trust Managers of
      Crescent Equities has adopted by not less than a two-thirds vote a
      resolution specifically approving such acquisition or offer or (ii) from
      either (A) a transfer of the voting securities by Richard E. Rainwater
      ("Rainwater") or a Person, trust or other entity described in any of the
      following clauses (A)(i) through (A)(v) of this subsection to (i) a member
      of Rainwater's immediate family (within the meaning of Rule 16a-1(e) of
      the Exchange Act) either during Rainwater's lifetime or by will or the
      laws of descent and distribution; (ii) any trust as to which Rainwater or
      a member (or members) of his immediate family (within the meaning of Rule
      16a-1(e) of the Exchange Act) is the beneficiary; (iii) any trust as to
      which Rainwater is the settlor with sole power to revoke; (iv) any entity
      over which Rainwater has the power, directly or indirectly, to direct or
      cause the direction of the management and policies of the entity, whether
      through the ownership of voting securities, by contract or otherwise; (v)
      any charitable trust, foundation or corporation under Section 501(c)(3) of
      the Code that is funded by Rainwater; or (vi) Rainwater; or (B) the
      acquisition of voting securities of Crescent Equities by either (i)
      Rainwater or (ii) a Person, trust or other entity described in any of the
      foregoing clauses (A)(i) through (A)(v) of this subsection.

            (c) The term "Change in Management" shall be deemed to occur upon
      the replacement of a majority of the members of the Board of Trust
      Managers of Crescent Equities over any consecutive 24-month period, unless
      a majority of the members of the Board of Trust Managers of Crescent
      Equities at the end of such 24-month period consists of trust managers who
      either also ere serving as trust managers at the beginning of

                                       -8-
<PAGE>

      the 24-month period or whose election or nomination to the Board of Trust
      Managers of Crescent Equities was previously approved by a majority of
      such trust managers then still in office.

            (d) The term "Disability" means the absence of the Grantee from the
      Grantee's duties with the General Partner on a full time basis for 180
      consecutive business days as a result of incapacity due to mental or
      physical illness or injury which renders Grantee unable to perform all of
      the material and substantial duties of his employment, as it existed
      immediately prior to such illness or injury, and which is reasonably
      expected to be permanent.

            (e) The term "Applicable Anniversary" means the (i) the first
      anniversary for a Grantee that is a Vice President or Senior Vice
      President at the time of the Award, (ii) the second anniversary for a
      Grantee that is a Managing Director at the time of the Award, or (iii) the
      third anniversary for a Grantee that is the Chief Executive Officer or
      Chief Operating Officer at the time of the Award.

            (f) The term "Good Reason" means the occurrence, without Grantee's
      prior written consent, of one or more of the following events:

                  (i) (A) the assignment of Grantee to any employment status or
            position other than a position reasonably equivalent to the position
            or offices that the Grantee performs (including without limitation a
            diminution in the nature or scope of Grantee's authority or
            responsibilities, his reporting responsibilities or the duties that
            Grantee performs), or (B) an adverse change in Grantee's titles or
            offices (including without limitation, membership on the Board of
            Trust Managers of Crescent Equities);

                  (ii) a reduction in Grantee's aggregate cash compensation
            (including base salary and any bonus potential); or

                  (iii) with regard to the CEO, COO or Managing Director only,
            the relocation of such Grantee's office from its present location to
            a location more than 50 miles from its current location without his
            prior written consent;

      Grantee's continued employment shall not constitute consent to, or a
      waiver of rights with respect to, any event or condition constituting Good
      Reason. Grantee must give written notice of a termination with Good Reason
      to the Compensation Committee at least 30 days before the effective date
      of such termination, and give the Partnership, the General Partner and
      Crescent Equities (or their successors) the opportunity to cure, if
      curable, the circumstances that otherwise would constitute Good Reason
      within such 30-day period.

            (g) A "Company Capital Transaction" occurs when Crescent Equities
      enters into, or the shareholders of Crescent Equities approve Crescent
      Equities' entry into, (i) an agreement to merge, consolidate or otherwise
      combine with or into or be acquired by another

                                       -9-
<PAGE>

      Person, regardless of whether Crescent Equities is the surviving entity,
      or sell all or substantially all of its assets, or (ii) any plan or
      proposal for the reclassification, recapitalization or exchange of
      outstanding REIT Shares or (iii) any plan or proposal for the liquidation
      or dissolution of Crescent Equities. A "Partnership Capital Transaction"
      occurs when the Partnership enters into, or the partners of the
      Partnership approve the Partnership's entry into (A) an agreement to
      merge, consolidate or otherwise combine with or into or be acquired by
      another Person, regardless of whether the Partnership is the surviving
      entity, or sell all or substantially all of its assets, or (B) any plan or
      proposal for the liquidation or dissolution of the Partnership.

      10. ACKNOWLEDGEMENTS BY GRANTEE. Grantee acknowledges that neither this
Grant Agreement nor the Plan grants him any right of continued employment with
the Partnership, the General Partner or Crescent Equities. Accordingly, he may
be removed as an employee of the Partnership, the General Partner or Crescent
Equities in accordance with applicable law. Grantee agrees that no duty of good
faith or fair dealing shall be read into this Grant Agreement or the Plan
against the Partnership. Grantee understands and intends that neither this Grant
Agreement nor the Plan creates a partnership, joint venture, or fiduciary
relationship between Grantee and the Partnership except as set forth in the
Partnership Agreement.

      11. POWER OF ATTORNEY. Grantee constitutes and appoints the General
Partner and authorized officers and attorneys-in-fact of each, and each of those
acting singly, in each case with full power of substitution, as its true and
lawful agent and attorney-in-fact, with full power and authority in its name,
place and stead to execute, swear to, acknowledge, deliver, file and record in
the appropriate public offices all certificates, documents and other instruments
(including, without limitation, an amendment to the Partnership Agreement) that
the General Partner deems appropriate or necessary in connection with the grant
of the Award.

      12. MISCELLANEOUS. This Grant Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware, and shall be binding upon and
inure to the benefit of any successor or assign of the Partnership and any
executor, administrator, trustee, guarantor or other legal representative of
Grantee. Headings of Sections and paragraphs of this Grant Agreement are
inserted for convenience of reference and constitute no part of this Grant
Agreement. The Partnership shall request Crescent Equities to furnish to Grantee
copies of annual reports, proxy statements and all other reports sent to
Crescent Equities' shareholders and, upon Grantee's written request, a copy of
its most recent Annual Report on Form 10-K and each quarterly report to
shareholders issued since the end of Crescent Equities' most recent fiscal year.

                                      -10-
<PAGE>

      Executed as of the day and year first written above.

                                      CRESCENT REAL ESTATE EQUITIES LIMITED
                                      PARTNERSHIP

                                      By: Crescent Real Estate Equities, Ltd.
                                          its General Partner

                                      By: ______________________________________
                                          John C. Goff, Chief Executive Officer

                                      ___________________________________
                                      [NAME OF OFFICER]

                                      ___________________________________
                                      Social Security Number of [NAME OF
                                      OFFICER /EMPLOYEE]

                                      -11-<PAGE>

                                                                   Exhibit 10.28

                           REVOLVING CREDIT AGREEMENT

                             DATED FEBRUARY 8, 2005

                                      AMONG

                     CRESCENT REAL ESTATE FUNDING VIII, L.P.

                                       AND

                          KEYBANK NATIONAL ASSOCIATION

                           THE OTHER BANKS WHICH ARE A
                             PARTY TO THIS AGREEMENT

                                       AND

                          OTHER BANKS WHICH MAY BECOME
                            PARTIES TO THIS AGREEMENT

                                       AND

              KEYBANK NATIONAL ASSOCIATION, AS ADMINISTRATIVE AGENT

                                       AND

           DEUTSCHE BANK TRUST COMPANY AMERICAS, AS SYNDICATION AGENT

                                       AND

                             KEYBANC CAPITAL MARKETS

                                       AND

                         DEUTSCHE BANK SECURITIES, INC.,

                            AS SOLE CO-LEAD ARRANGERS

                                       AND

                              BANK OF AMERICA, N.A.

                                       AND

                            JPMORGAN CHASE BANK, N.A.

                           AS CO-DOCUMENTATION AGENTS

<PAGE>

                           REVOLVING CREDIT AGREEMENT

      THIS REVOLVING CREDIT AGREEMENT is made the 8th day of February, 2005, by
and among CRESCENT REAL ESTATE FUNDING VIII, L.P. (the "Borrower"), a Delaware
limited partnership having its principal place of business at 777 Main Street,
Suite 2100, Fort Worth, Texas 76102, and KEYBANK NATIONAL ASSOCIATION, a
national banking association ("KeyBank"), the other Banks which are a party
hereto, and the other lending institutions which may become parties hereto
pursuant to Section 18 (the "Banks"), and KEYBANK NATIONAL ASSOCIATION, a
national banking association, as Administrative Agent for the Banks (the
"Agent").

                                    RECITALS.

      WHEREAS, Borrower has requested that the Banks make available to it a
revolving credit facility; and

      WHEREAS, the Banks and the Agent are willing to make a revolving credit
facility available to the Borrower on the terms and conditions set forth in this
Agreement;

      NOW, THEREFORE, in consideration of the recitals herein and the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:

Section 1. DEFINITIONS AND RULES OF INTERPRETATION.

      Section 1.1 Definitions. The following terms shall have the meanings set
forth in this Section l or elsewhere in the provisions of this Agreement
referred to below:

      Adjusted EBITDA. As of the end of any fiscal quarter, the sum of (a) (i)
(A) (1) the aggregate EBITDA attributable to the Office Properties for such
quarter and the immediately preceding fiscal quarter calculated for this purpose
without including any lease termination fees or insurance or condemnation
proceeds otherwise includable therein for such periods in accordance with the
definition of EBITDA (for purposes of this definition, such excluded amounts are
referred to as "One-Time Receipts"), multiplied by (2) two (2), plus (B) the
amount of One-Time Receipts, minus (ii) the Capital Expenditure Reserve for such
Office Properties, plus (b) the aggregate EBITDA for the Hotel Properties for
such quarter and the three (3) immediately preceding fiscal quarters minus the
Capital Expenditure Reserve for such Hotel Properties plus (c) all interest,
fees and other amounts (other than principal) received in connection with
Eligible Notes Receivable.

      Affiliates. As applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For purposes of this definition, "control" (including, with correlative
meanings, the terms "controlling", "controlled by" and "under common control
with"), as applied to any Person, means (a) the possession, directly or
indirectly, of the power to vote ten percent (10%) or more of the stock, shares,
voting trust certificates, beneficial interests, partnership interests, member
interests or other interests having voting power for the election of directors
of such Person or otherwise to direct or cause the direction of the management
and policies of that Person, whether through the ownership of voting securities
or by contract or otherwise, or (b) the ownership of (i) a general partnership

                                       2
<PAGE>

interest, (ii) a managing member's interest in a limited liability company or
(iii) a limited partnership interest or preferred stock (or other ownership
interest) representing ten percent (10%) or more of the outstanding limited or
general partnership interests, preferred stock or other ownership interests of
such Person.

      Agent. KeyBank, acting as Administrative Agent for the Banks, its
successors and assigns.

      Agent's Head Office. The Agent's head office located at 127 Public Square,
Cleveland, Ohio 44114-1306, or at such other location as the Agent may designate
from time to time by notice to the Borrower and the Banks.

      Agent's Special Counsel. McKenna Long & Aldridge LLP or such other counsel
as may be approved by the Agent.

      Agreement. This Revolving Credit Agreement, including the Schedules and
Exhibits hereto.

      Agreement Regarding Fees. That certain Agreement Regarding Fees and
Accordion between the Borrower and KeyBank dated of even date herewith.

      Appraisal. An MAI appraisal of the value of a Property, determined on a
fair value basis, performed by an independent appraiser selected by the Agent
who is not an employee of the Borrower, the Guarantor, Crescent REIT, any of
Crescent OP's Subsidiaries, the Agent or a Bank, the form and substance of such
appraisal and the identity of the appraiser to be in compliance with the
Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended,
the regulations adopted pursuant thereto and all other regulatory laws and
policies (both regulatory and internal) applicable to the Banks and otherwise
reasonably acceptable to the Agent.

      Appraised Value. The fair market value of a Property determined by the
most recent Appraisal of such parcel or update obtained pursuant to this
Agreement, subject, however, to such changes or adjustments to the value
determined thereby as may be required by the appraisal department of the Agent
in its good faith business judgment.

      Authorized Officer. As to any Person, the chief financial or chief
accounting officer, treasurer or assistant treasurer of such Person.

      Balance Sheet Date. September 30, 2004 as to Crescent OP, and September
30, 2004 as to the Borrower and Subsidiary Guarantor (as adjusted for purchases
and sales subsequent to such date and prior to the date hereof); provided that
upon and after availability of the 2004 10-K Report and approval thereof by the
Requisite Banks as provided in the definition of "10-K Report", the Balance
Sheet Date shall be December 31, 2004.

      Bankruptcy Code. Title 11, U.S.C.A., as amended from time to time or any
successor statute thereto.

                                       3
<PAGE>

      Banks. KeyBank, the other lenders that are a party to this Agreement and
any other Person who becomes an assignee of a Bank pursuant to Section 18.

      Bond Indenture. The Indenture dated as of April 15, 2002 among Crescent OP
and Crescent Finance Company, as Issuers, and UMB Bank, N.A., as Trustee,
relating to the 9.25% Senior Notes due 2009, Series A-1, 9.25% Senior Notes due
2009, Series A-2 and 9.25% Senior Notes due 2009, Series B, as supplemented by
that certain First Supplemental Indenture dated as of December 29, 2004 among
Crescent OP and Crescent Finance Company, as Issuers, and UMB Bank, N.A., as
Trustee, as the same may be amended from time to time.

      Borrower. As defined in the preamble hereto.

      Business Day. Any day on which banking institutions in Cleveland, Ohio are
open for the transaction of banking business and, in the case of LIBOR Loans,
which also is a LIBOR Business Day.

      Capital Expenditure Reserve. With respect to any Real Estate now or
hereafter owned or leased by Crescent OP or any of its Subsidiaries, a reserve
for capital expenditures calculated as follows: (a) for office assets, fifty
cents ($0.50) multiplied by the Net Rentable Area contained therein; (b) for
resort and hotel assets, three and one-half percent (3.5%) of annual Gross
Revenues from such assets; and (c) the amount mutually agreed upon in good faith
by the Agent and Crescent OP with respect to any other type of Real Estate now
or hereafter owned or leased by Crescent OP or any of its Subsidiaries.

      Capitalization Value - Borrower. As of any Financial Statement Date of the
Borrower, the sum of the following for the Borrower and the Subsidiary
Guarantors: (a) the Office Properties Capitalization Value, plus (b) the Hotel
Properties Capitalization Value, plus (c) the Par Value of Eligible Notes
Receivable.

      Capitalization Value - Crescent OP. As of any Financial Statement Date for
Crescent OP and its Subsidiaries, the sum of the following (but without
duplication):

            (a)   the gross acquisition cost to Crescent OP and its Subsidiaries
of all income-producing assets of Crescent OP and its Subsidiaries that have not
been owned by Crescent OP and its Subsidiaries for a period of at least four (4)
full fiscal quarters; plus

            (b)   (i)(A)(x)(1) the Consolidated EBITDA of Crescent OP and its
Subsidiaries attributable to Held Office Assets for such quarter and the
immediately preceding fiscal quarter calculated for this purpose without
including any lease termination fees or insurance or condemnation proceeds
otherwise includable therein for such periods in accordance with the definition
of Consolidated EBITDA (for purposes of this definition, such excluded amounts
are referred to as the "One-Time Receipts"), multiplied by (2) two (2) plus (y)
the amount of the One-Time Receipts, minus (B) the Capital Expenditure Reserve
for such office assets, divided by (ii) 0.0875 (the capitalization rate); plus

            (c)   (i)(A) the Consolidated EBITDA of Crescent OP and its
Subsidiaries attributable to Held Resort/Hotel Assets for such quarter and the
three (3) immediately preceding

                                       4
<PAGE>

fiscal quarters minus (B) the Capital Expenditure Reserve for such resort or
hotel assets, divided by (ii) 0.10 (the capitalization rate); plus

            (d)   the Consolidated EBITDA of Crescent OP and its Subsidiaries
attributable to Residential Development Assets, Temperature Controlled Logistics
Assets and other cash-flowing operating Real Estate directly owned by Crescent
OP or its Subsidiaries for such quarter and the three (3) immediately preceding
fiscal quarters, divided by 0.11 (the capitalization rate); plus

            (e)   Crescent OP's beneficial share of unrestricted Cash and Short
Term Investments (i.e., Cash and Short Term Investments that are not pledged or
encumbered or the use of which is not restricted by the terms of any document or
agreement) of Crescent OP and its Subsidiaries and Unconsolidated Joint
Ventures, as of the end of such quarter; plus

            (f)   the aggregate book value (on a cost basis) of the Real Estate
of Crescent OP and its Subsidiaries under development; plus

            (g)   Crescent OP's beneficial interest in the book value (on a cost
basis) of the Real Estate of the Unconsolidated Joint Ventures under
development; plus

            (h)   the aggregate book value of Crescent OP's or its Subsidiaries'
interest in notes receivable; plus

            (i)   the aggregate book value (on a cost basis) of undeveloped
commercial land parcels of Crescent OP and its Subsidiaries.

      Notwithstanding anything herein to the contrary, Capitalization Value -
Crescent OP shall not include any assets, income or other value from assets
which are pledged for defeasance of Indebtedness.

      Capitalized Lease. A lease under which a Person is the lessee or obligor,
the discounted future rental payment obligations under which are required to be
capitalized on the balance sheet of the lessee or obligor in accordance with
generally accepted accounting principles; provided that if the total of such
future rental payment obligations is less than $250,000.00, then such lease
shall be treated as an expense of such Person and not as a Capitalized Lease.

      Cash. At any time, the sum of any Person's cash, marketable securities and
other cash equivalents, including restricted cash.

      CERCLA. See Section 6.17(a).

      Change of Control. A Change of Control shall exist upon the occurrence of
any of the following:

            (a)   any Person (including a Person's Affiliates and associates) or
group (as that term is understood under Section 13(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and the rules and regulations
thereunder) (other than a Permitted Holder) shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange

                                       5
<PAGE>

Act) of a percentage (based on voting power, in the event different classes of
stock shall have different voting powers) of the voting stock of Crescent REIT
equal to at least thirty percent (30%);

            (b)   as of any date a majority of the Board of Directors of
Crescent REIT consists of individuals who were not either (i) directors of
Crescent REIT as of the corresponding date of the previous year, (ii) selected
or nominated to become directors by the Board of Directors of Crescent REIT of
which a majority consisted of individuals described in clause (b)(i) above, or
(iii) selected or nominated to become directors by the Board of Directors of
Crescent REIT of which a majority consisted of individuals described in clause
(b)(i) above and individuals described in clause (b)(ii), above;

            (c)   Crescent REIT fails to directly own, free of any lien,
encumbrance or other adverse claim, all of the economic interest and Voting
Interest of CREEL;

            (d)   CREEL shall fail to be the sole general partner of Crescent
OP, shall fail to own such general partnership interest in Crescent OP free of
any lien, encumbrance or other adverse claim, or shall fail to control the
management and policies of Crescent OP;

            (e)   Crescent REIT fails to own, directly or indirectly, free of
any lien,encumbrance or other adverse claim, at least seventy-five percent (75%)
of the economic interest and Voting Interest of Crescent OP; or

            (f)   Crescent OP fails to own, free of any lien, encumbrance or
other adverse claim, at least one hundred percent (100%) of the economic
interest and Voting Interest of the Borrower and each Subsidiary Guarantor
(other than Crescent Spectrum Center); or

            (g)   for so long as Crescent Spectrum Center is a Subsidiary
Guarantor, Borrower fails to own, free of any lien, encumbrance or other adverse
claim (whether on its interest or on that of any Spectrum Entity), at least one
hundred percent (100%) of the economic interest and Voting Interest of Crescent
Spectrum Center (except for the limited partnership interest in SMA held by
outside limited partners as of the date of this Agreement).

      Closing Date. The first date on which all of the conditions set forth
in  Section 10 and  Section 11 have been satisfied.

      Code. The Internal Revenue Code of 1986, as amended.

      Co-Documentation Agents. Bank of America, N.A. and JPMorgan Chase Bank,
N.A.

      Commitment. With respect to each Bank, the amount set forth on Schedule I
hereto as the amount of such Bank's Commitment to make or maintain Loans to the
Borrower (other than Swing Loans), or purchase participations in Letters of
Credit issued by the Issuing Bank to the Borrower, as the same may be reduced
from time to time in accordance with the terms of this Agreement.

      Commitment Percentage. With respect to each Bank, the percentage set forth
on Schedule I hereto as such Bank's percentage of the aggregate Commitments of
all of the Banks.

                                       6
<PAGE>

      Compliance Certificate. See Section 7.4(d).

      Consolidated or combined. With reference to any term defined herein, that
term as applied to the accounts of a Person and its Subsidiaries, consolidated
or combined in accordance with generally accepted accounting principles.

      Consolidated EBITDA. With respect to any period of any Person, an amount
as of the most recent Financial Statement Date equal to the EBITDA of such
Person and its Subsidiaries on a consolidated basis, determined in accordance
with generally accepted accounting principles.

      Consolidated Tangible Net Worth. As of any Financial Statement Date, the
amount by which Consolidated Total Assets exceeds Consolidated Total
Liabilities, and less the sum of:

            (a)   the total book value of all assets of a Person and its
Subsidiaries properly classified as of such Financial Statement Date as
intangible assets under generally accepted accounting principles, including such
items as goodwill, the purchase price of acquired assets in excess of the fair
market value thereof, trademarks, trade names, service marks, brand names,
copyrights, patents and licenses, and rights with respect to the foregoing; plus

            (b)   all amounts representing any write-up in the book value of any
assets (other than marketable securities) of such Person or its Subsidiaries as
of such Financial Statement Date resulting from a revaluation thereof subsequent
to the Balance Sheet Date; plus

            (c)   all amounts representing minority interests as of such
Financial Statement Date which are applicable to third parties.

      Consolidated Total Assets. As of any Financial Statement Date, all assets
of a Person and its Subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles. All real estate assets
shall be valued on a gross book value basis (that is, an undepreciated cost
basis). Crescent OP shall account for its investments which are not consolidated
in accordance with the equity method of accounting. Assets which are pledged for
defeasance of Indebtedness will be excluded from Consolidated Total Assets.

      Consolidated Total Indebtedness. As of any Financial Statement Date, an
amount equal to Consolidated total Indebtedness of a Person and its
Subsidiaries.

      Consolidated Total Liabilities. As of any Financial Statement Date, all
liabilities of a Person and its Subsidiaries determined on a consolidated basis
in accordance with generally accepted accounting principles and all Indebtedness
of such Person and its Subsidiaries, whether or not so classified. Indebtedness
or other liabilities of a Person and its Subsidiaries that would otherwise be
included in Consolidated Total Liabilities that has been defeased in accordance
with its terms shall not be deemed part of Consolidated Total Liabilities.

      Contribution Agreement. The Contribution Agreement dated of even date
herewith between the Borrower, Crescent OP and the Subsidiary Guarantor a party
thereto as of the date hereof, and each other Subsidiary Guarantor which may
hereafter become a party thereto.

                                       7
<PAGE>

      Conversion Request. A notice given by the Borrower to the Agent of its
election to convert or continue a Loan in accordance with Section 4.1.

      COPI Share Issuance. The issuance by Crescent REIT of its common shares to
the shareholders of Crescent Operating, Inc. in accordance with the Settlement
Agreement, dated as of February 14, 2002, among Crescent REIT, Crescent OP,
Crescent Operating, Inc. and the other parties thereto, as amended.

      CREEL. Crescent Real Estate Equities, Ltd., a Delaware corporation, having
a usual place of business at 777 Main Street, Suite 2100, Fort Worth, Texas
76102.

      Crescent OP. Crescent Real Estate Equities Limited Partnership, a Delaware
limited partnership, having a usual place of business at 777 Main Street, Suite
2100, Fort Worth, Texas 76102.

      Crescent OP's Compliance Certificate. The compliance certificate which
Crescent OP is required to provide to the Agent pursuant to the terms of its
Guaranty.

      Crescent OP's Share of UJV Combined Outstanding Indebtedness. The sum of
the products obtained by multiplying each of the Unconsolidated Joint Venture's
UJV Combined Outstanding Indebtedness by Crescent OP's respective beneficial
fractional interests in each such Unconsolidated Joint Venture.

      Crescent REIT. Crescent Real Estate Equities Company, a Texas real estate
investment trust, having a usual place of business at 777 Main Street, Suite
2100, Fort Worth, Texas 76102.

      Crescent Spectrum Center. Crescent Spectrum Center, L.P., a Delaware
limited partnership.

      Debt Offering. The issuance and sale to the general public or as a private
placement by Crescent OP or Crescent REIT subsequent to the date of this
Agreement of any debt securities of Crescent OP or Crescent REIT for cash or the
right to receive payment in the future.

      Debt Service. For any period, the sum of all Interest Incurred and
mandatory principal payments due and payable during such period (including any
payments due under any Capitalized Leases) excluding any balloon payments due
upon maturity of any Indebtedness.

      Default. See Section 12.1.

      Distribution. With respect to Crescent REIT, the declaration or payment of
any dividend or distribution on or in respect of any shares of any class of
capital stock or beneficial interest of Crescent REIT, other than dividends or
distributions payable solely in equity securities of Crescent REIT; the
purchase, redemption, exchange or other retirement of any shares of any class of
capital stock or beneficial interest of Crescent REIT, directly or indirectly
through a Subsidiary of Crescent REIT or otherwise; the return of capital by
Crescent REIT to its shareholders as such; or any other distribution on or in
respect of any shares of any class of capital stock or beneficial interest of
Crescent REIT. With respect to Borrower or any Guarantor, the declaration or
payment of any distribution of cash or cash flow to the respective

                                       8
<PAGE>

partners, members or other owners of Borrower or such Guarantor; the return of
capital by Borrower or such Guarantor to its respective partners, members or
other owners; or any other distribution on or in respect of any partnership,
membership or other ownership interests in Borrower or such Guarantor, or the
purchase, redemption, exchange or other retirement of any partnership,
membership or other ownership interest of any partner, member or other owner of
such Borrower or Guarantor, directly or indirectly, by such Borrower or
Guarantor, Crescent REIT, or any of their respective Subsidiaries.

      Dollars or $. Dollars in lawful currency of the United States of America.

      Domestic Lending Office. Initially, the office of each Bank designated as
such in Schedule I hereto; thereafter, such other office of such Bank, if any,
located within the United States that will be making or maintaining Prime Rate
Loans.

      Drawdown Date. The date on which any Loan is made or is to be made, and
the date on which any Loan is converted or combined in accordance with Section
4.1.

      EBITDA. With respect to any period of any Person or any asset of a Person,
an amount as of the most recent Financial Statement Date equal to the sum of the
following amounts of such Person or such asset: (a) the Net Income (or Deficit)
for such period, plus (b) depreciation and amortization, interest expense, and
any extraordinary or non-recurring losses deducted in calculating such Net
Income, plus (c) income taxes (other than income taxes (either positive or
negative) attributable to extraordinary and non-recurring gains or losses or
sales of assets), minus (d) any extraordinary or nonrecurring gains included in
calculating such Net Income, all as determined in accordance with generally
accepted accounting principles. Notwithstanding the foregoing, for purposes of
determining EBITDA attributable to an Office Property or a Hotel Property, (i)
income for a Property attributable to leasing commissions or management fees
shall be excluded, and (ii) the expense of management fees attributable to a
Property shall be calculated based upon the greater of (A) actual property
management expenses of such Property or (B) 3.5% of gross receipts from such
Property. EBITDA shall not include any income or other items from assets which
are pledged for defeasance of Indebtedness.

      Eligible Note Receivable or Eligible Notes Receivable. A loan which
satisfies each of the following requirements:

            (a)   Such loan shall either be (i) a first priority mortgage loan
to a Person other than the Borrower, General Partner, any Guarantor, a Crescent
OP Subsidiary or any Affiliate of any thereof originated or purchased by
Borrower or a Subsidiary Guarantor, secured by a first mortgage lien on (A) a
completed existing resort or hotel asset or office asset located in the United
States which is an income producing operating property or (B) a residential
development property located in the United States, or (ii) a mezzanine loan to a
Person other than the Borrower, General Partner, any Guarantor, a Crescent OP
Subsidiary or any Affiliate of any thereof, originated or purchased by Borrower
or a Subsidiary Guarantor, secured by (in addition to any other collateral for
the loan) a first priority pledge of the equity interests in a special purpose,
bankruptcy remote person, which owns, directly or through one or more other
special purpose, bankruptcy remote entities (A) a completed existing resort or
hotel asset or office asset

                                       9
<PAGE>

located in the United States which is an income producing operating property or
(B) a residential development property located in the United States;

            (b)   Such loan is performing in accordance with its payment terms,
and no event of default or other event which would permit the acceleration of
such loan shall have occurred under the applicable documents;

            (c)   Borrower or the Subsidiary Guarantor, as applicable, is in
control of all major decisions with respect to such loan (including the granting
of waivers, the execution of amendments, the declaration of defaults and
acceleration of such loan, the exercise of remedies and the sale of such loan)
subject to customary and reasonable rights of participants in such loan, and
there has occurred no event or circumstance which entitles the holder of any
loan or interest therein to reduce or stop payments to Borrower or a Subsidiary
Guarantor, as applicable, as the holder of such loan or participation interest
therein;

            (d)   The underlying real estate is subject to no debt or liens
securing Indebtedness other than the Eligible Note Receivable, if such loan is a
mortgage loan, or a first priority mortgage loan and any senior mezzanine loans
made to separate special purpose, bankruptcy remote entities if such Eligible
Note Receivable is a mezzanine loan;

            (e)   The interest of Borrower or a Subsidiary Guarantor, as
applicable, in such loan or any participation interest therein is free and clear
of all Liens (and if Borrower or a Subsidiary Guarantor does not own the loan,
such loan is free and clear of all Liens) (provided that customary rating agency
restrictions on transfers of such loan or interests therein shall not be
considered Liens for the purposes of this clause);

            (f)   Borrower or such Subsidiary Guarantor shall either (a) own the
entire loan free of any participations or other claims, (b) have its own note
representing an undivided interest in the entire loan or (c) own a participation
interest in such loan subject to a written participation agreement in customary
form and otherwise in compliance with the terms of this definition;

            (g)   The remaining term to maturity (including any extension
options) of such Eligible Note Receivable is not more than five (5) years from
the date of the first inclusion of such loan as an Eligible Note Receivable; and

            (h)   The outstanding principal balance of such Eligible Note
Receivable (plus the outstanding principal balance of the mortgage loan if such
Eligible Note Receivable is a mezzanine loan) shall not exceed eighty-five
percent (85%) of the value of the underlying real estate, as determined by an
MAI appraisal of the value of the related property, determined on a fair value
basis not less than three (3) months prior to the date of this Agreement with
respect to Eligible Notes Receivable existing as of the date of this Agreement,
or three (3) months prior to the addition or substitution of such Eligible Note
Receivable pursuant to Section 5.2, as applicable, performed by an independent
appraiser reasonably acceptable by the Agent who is not an employee of the
Borrower, the Guarantor, Crescent REIT, any of Crescent OP's Subsidiaries, the
Agent or a Bank, the borrower under the Eligible Note Receivable or any of its
Affiliates, the form and substance of such appraisal and the identity of the
appraiser to be in compliance with

                                       10
<PAGE>

the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as
amended, the regulations adopted pursuant thereto and all other regulatory laws
and policies (both regulatory and internal) applicable to the Banks and
otherwise reasonably acceptable to the Agent.

References in this Agreement to Eligible Notes Receivable shall refer to the
underlying loan as described in this definition and as the context permits or
requires, any interest of Borrower or any Subsidiary Guarantor in such loan.

      Employee Benefit Plan. Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained or contributed to by the Borrower or the
Guarantor or any ERISA Affiliate, other than a Multiemployer Plan.

      Environmental Laws. See Section 6.17(a).

      Equity Offering. The issuance and sale to the general public or as a
private placement by Crescent OP or Crescent REIT subsequent to the date of this
Agreement of any partnership interests or equity securities of Crescent OP or
Crescent REIT, as applicable, for cash or the right to receive payment in the
future (it being acknowledged that an Equity Offering shall not include (a) the
issuance of limited partnership interests in Crescent OP other than for cash to
a seller or partner thereof in connection with the acquisition of Real Estate or
the conversion thereof into equity securities of Crescent REIT, or (b) the
exercise or conversion of options to acquire equity securities of Crescent REIT
or Crescent OP or the issuance of restricted stock under incentive compensation
plans maintained by Crescent OP or Crescent REIT for itself or its Subsidiaries,
directors, officers and employees).

      Equity Ownership Interests. Any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation),
including partnership interests and limited liability company membership
interests, and any and all warrants, rights or options to purchase any of the
foregoing (excluding buy/sell arrangements so long as the obligations to
purchase the interests in respect thereof are contingent).

      ERISA. The Employee Retirement Income Security Act of 1974, as amended and
in effect from time to time.

      ERISA Affiliate. Any Person which is treated as a single employer with the
Borrower or the Guarantor under Section 414(b), Section 414(c), Section 414(m)
or Section 414(o) of the Code.

      ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.

      Event of Default. See Section 12.1.

      Existing Letter of Credit. The Letter of Credit issued by Bank of America,
N.A. and described on Schedule 2.8 hereto.

                                       11
<PAGE>

      Excluded Taxes. Collectively, income or franchise taxes imposed on or
measured in whole or in part by the Agent or any Bank's overall net income by
(i) any jurisdiction (or political subdivision thereof) in which the Agent or
such Bank is organized or maintains its principal office or LIBOR Lending
Office, and (ii) any jurisdiction (or political subdivision thereof) in which
the Agent or Bank is "doing business" and any taxes which are payable due to
non-compliance with Section 18.10 as provided in Section 18.10.

      Facility Outstandings. At any time, without duplication, the aggregate
Outstanding Loans plus the Outstanding Letters of Credit.

      Federal Funds Effective Rate. For any day, the rate per annum announced by
the Federal Reserve Bank of Cleveland on such day as being the weighted average
of the rates on overnight federal funds transactions arranged by federal funds
brokers on the previous trading day, as computed and announced by such Federal
Reserve Bank in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate."

      Financial Statement Date. The last day of each fiscal quarter of the
reporting Person, being each March 31, June 30, September 30 and December 31.

      Fixed Charges. With respect to Crescent OP and its Subsidiaries for any
fiscal period, an amount equal to the sum of the Debt Service of Crescent OP and
its Subsidiaries, plus the aggregate Capital Expenditure Reserve, plus the
Preferred Distributions of Crescent REIT, Crescent OP and Crescent OP's
Subsidiaries. With respect to any Real Estate owned or leased by Crescent OP or
its Subsidiaries for less than the full Test Period, the Capital Expenditure
Reserve with respect to such Real Estate shall be an amount equal to (a) the
Capital Expenditure Reserve applicable to such Real Estate multiplied by (b) a
fraction, the numerator of which is the number of days such Real Estate was
owned or leased by Crescent OP or its Subsidiaries, and the denominator of which
is 365.

      Funds from Operations. With respect to any Person for any fiscal period,
the Net Income (or Deficit) of such Person computed in accordance with generally
accepted accounting principles, excluding gains (or losses) from sales of
property, plus depreciation and amortization, plus (in the case of Crescent OP)
the COPI Charge, and after adjustments for unconsolidated partnerships and joint
ventures. Adjustments for unconsolidated partnerships and joint ventures will be
calculated to reflect funds from operations on the same basis.

      generally accepted accounting principles. With respect to any Person,
principles that are (a) consistent with the principles promulgated or adopted by
the Financial Accounting Standards Board and its predecessors, as in effect from
time to time and (b) consistently applied with past financial statements of such
Person adopting the same principles; provided that a certified public accountant
would, insofar as the use of such accounting principles is pertinent, be in a
position to deliver an unqualified opinion (other than a qualification regarding
changes in generally accepted accounting principles) as to financial statements
in which such principles have been properly applied.

                                       12
<PAGE>

      General Partner. CRE Management VIII, LLC, a Delaware limited liability
company, the general partner of the Borrower.

      Gross Revenues. Gross Revenues shall mean, without duplication, all
revenues and receipts of any Person from operation of a parcel of Real Estate of
which all or any portion thereof is operated as a hotel or resort, or otherwise
arising in respect of such parcel of Real Estate which are properly allocable to
such parcel of Real Estate for the applicable period in accordance with
generally accepted accounting principles, including, without limitation, all
hotel receipts, revenues and credit card receipts collected from guest rooms,
restaurants and bars (including, without limitation, service charges for
employees and staff), meeting rooms, banquet rooms, all rents, revenues and
receipts now existing or hereafter arising or created out of the sale, lease,
sublease, license, concession or other grant of the right of the possession, use
or occupancy of all or any portion of such parcel of Real Estate or personalty
located thereon, or rendering of service by such Person or any operator or
manager of the hotel or commercial space (including, without limitation, from
the rental of any office space, retail space, guest rooms or other space, halls,
stores and deposits securing reservations of such space (only to the extent such
deposits are not required to be returned or refunded to the depositor)),
proceeds from rental or business interruption insurance relating to business
interruption or loss of income for the period in question and any other items of
revenue which would be included in operating revenues under the Uniform System
of Accounts for the Lodging Industry; but excluding proceeds from the sale of
furniture, fixtures and equipment, abatements, reductions or refunds of real
estate or personal property taxes relating to such parcel of Real Estate,
condemnation proceeds, security and other deposits until they are forfeited by
the depositor, advance rentals until they are earned, proceeds from a sale,
financing or other disposition of such parcel of Real Estate or any part thereof
or interest therein, insurance proceeds (other than proceeds from rental or
business interruption insurance), capital contributions or loans to such Person
and, as reasonably determined by Agent, other non-recurring revenues.

      Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Borrower or
the Guarantor or any ERISA Affiliate the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to Title IV of ERISA, other
than a Multiemployer Plan.

      Guarantor. Collectively, Crescent OP and each Subsidiary Guarantor, and
individually any one such Guarantor.

      Guaranty. Collectively, the Unconditional Guaranty of Payment and
Performance, dated of even date herewith, made by Crescent OP in favor of the
Agent and the Banks, the Unconditional Guaranty of Payment and Performance,
dated of even date herewith, made by Crescent Spectrum Center and 3930 HHP in
favor of the Agent and the Banks, and each Unconditional Guaranty of Payment and
Performance which is executed by a Subsidiary Guarantor, as the same may be
modified or amended, each such Guaranty to be in form and substance satisfactory
to the Agent.

      Hazardous Substances. See Section 6.17(b).

                                       13
<PAGE>

      Held Office Assets. Office assets that have been, directly or indirectly
and in whole or in part, owned by Crescent OP or one of its Subsidiaries for a
period of at least four (4) full fiscal quarters.

      Held Resort/Hotel Assets. Resort or hotel assets that have been, directly
or indirectly and in whole or in part, owned by Crescent OP or one of its
Subsidiaries for a period of at least four (4) full fiscal quarters.

      Highest Lawful Rate. With respect to Agent or any Bank, the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Obligations under
laws applicable to Agent or such Banks which are currently in effect or, to the
extent allowed by law, under such applicable laws which may hereafter be in
effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow. On each day, if any, that Texas law establishes the
Highest Lawful Rate, the Highest Lawful Rate shall be the "weekly ceiling" (as
defined in Section 303 of the Texas Finance Code) for that day.

      Hotel Properties. Collectively, the Properties improved primarily with
hotel or resort Improvements, which Hotel Properties as of the Closing Date are
identified as such on Schedule II.

      Hotel Properties Capitalization Value. For any Hotel Property, as of the
end of any fiscal quarter, (a) if such Hotel Property has not been owned or
leased by Borrower or a Subsidiary Guarantor for a period of at least four (4)
full fiscal quarters, the gross acquisition cost to Borrower or a Subsidiary
Guarantor, as applicable, of such Hotel Property, or (b) if such Hotel Property
has been owned or leased by Borrower or a Subsidiary Guarantor for a period of
at least four (4) full fiscal quarters, (i)(A) the EBITDA attributable to such
Hotel Property for such quarter and the three (3) immediately preceding fiscal
quarters minus (B) the Capital Expenditure Reserve for such Hotel Property,
divided by (ii) 0.10 (the capitalization rate).

      Improvements. For each Property, all improvements now or hereafter located
thereon, including, without limitation, those improvements identified on
Schedule II for such Property.

      Increase Notice. See Section 2.10(a).

      Indebtedness. With respect to a Person, at the time of computation
thereof, all of the following (without duplication): (a) all obligations of such
Person in respect of money borrowed or the deferred purchase price of property
or services (other than trade payables incurred in the ordinary course of
business and not past due for more than sixty (60) days past the date on which
such trade payable was due); (b) all obligations of such Person, whether or not
for money borrowed, (i) represented by notes payable or drafts accepted, (ii)
evidenced by bonds, debentures, loan agreements, notes or similar instruments,
or (iii) with respect to any purchase money, conditional sale, title retention
or other similar instrument; (c) all obligations of such Person to purchase,
redeem, retire, defease or otherwise make any payment in respect of any
mandatorily redeemable stock issued by such Person or any other Person, valued
at the greater of its voluntary or involuntary liquidation preference plus
accrued and unpaid dividends, (d) all liabilities secured by any mortgage,
pledge, security interest, lien, charge or other encumbrance

                                       14
<PAGE>

existing on property owned or acquired subject thereto, whether or not the
liability secured thereby shall have been assumed or recourse is limited; (e)
all guarantees, endorsements and other contingent obligations, whether direct or
indirect, in respect of indebtedness or other obligations payable or performable
by others (not including obligations under Non-Recourse Carveout Guaranties
until a claim is made with respect thereto), including liability as a general
partner in respect of liabilities of a partnership in which it is a general
partner which would constitute "Indebtedness" hereunder, any obligation to
supply funds to or in any manner to invest directly or indirectly in a Person,
to maintain working capital or equity capital of a Person or otherwise to
maintain net worth, solvency or other financial condition of a Person, to
purchase indebtedness, or to assure the owner of indebtedness against loss,
including, without limitation, through an agreement to purchase property,
securities, goods, supplies or services for the purpose of enabling the debtor
to make payment of the indebtedness held by such owner or otherwise, excluding,
however, any such guarantees, endorsements and other contingent obligations
which when satisfied, funded or vested give rise to corresponding assets under
generally accepted accounting principles; (f) the obligation to reimburse the
issuer in respect of any letter of credit or obligations under acceptance
facilities or similar instruments, and obligations under interest rate swaps and
similar agreements; (g) any obligation as a lessee or obligor under a
Capitalized Lease; (h) all subordinated debt; (i) all obligations to purchase
under agreements to acquire, or otherwise to contribute money with respect to,
properties under "development" within the meaning of Section 8.9; and (j) all
obligations of a Person in respect of any equity or equity index swap, forward
equity transaction, equity or equity index option or any other similar
transaction; provided that (x) Indebtedness that would otherwise meet one of the
requirements above that has been defeased in accordance with its terms shall not
be deemed Indebtedness; and (y) the amount of any obligation under clause (e)
shall for the purposes hereof be deemed to be the stated or determinable amount
of the related primary obligation, or portion thereof, in respect of which such
guaranty or contingent liability is made or, if not stated or determinable at
the time of determination, the maximum reasonably anticipated liability in
respect thereof as determined by the guaranteeing Person in good faith.

      Interest Incurred. For any period, the sum of all interest due and payable
for such period (including amortization of original issue discount and debt
issuance costs on any Indebtedness and the interest portion of any deferred
payment obligation, calculated in accordance with generally accepted accounting
principles, capitalized interest and non-cash interest expenses, all
commissions, discounts and other fees and expenses owed with respect to letters
of credit and bankers' acceptance financing, the net costs associated with any
type of interest rate protection agreements (including caps, swaps, options,
futures or similar agreements or arrangements with respect to interest rates)
and Indebtedness that is secured by assets of Crescent OP or any of its
Subsidiaries, and all but the principal component of rentals in respect of
Capitalized Leases paid, accrued or due to be paid or to be accrued by Crescent
OP or any of its Subsidiaries). Interest paid on Indebtedness that has been
defeased in accordance with its terms shall not be included within Interest
Incurred.

      Interest Payment Date. As to each Prime Rate Loan and Swing Loan, the
first day of each calendar month, and as to each LIBOR Loan, the last day of the
Interest Period for such LIBOR Loan; provided that if such Interest Period is
for six months, the Interest Payment Date shall also be the dates that would be
(x) the last day of the Interest Period were such Interest Period a three month
Interest Period and (y) the last day of the actual six-month Interest Period.

                                       15
<PAGE>

      Interest Period. With respect to each LIBOR Loan (other than a Swing Loan)
(a) initially, the period commencing on the Drawdown Date of such Loan and
ending one, two, three or six months thereafter, and (b) thereafter, each period
commencing on the day following the last day of the next preceding Interest
Period applicable to such Loan and ending on the last day of one of the periods
set forth above, as selected by the Borrower in a Conversion Request; provided
that all of the foregoing provisions relating to Interest Periods are subject to
the following:

            (A)   if any Interest Period with respect to a LIBOR Loan would
otherwise end on a day that is not a LIBOR Business Day, that Interest Period
shall end and the next Interest Period shall commence on the next preceding or
succeeding LIBOR Business Day as determined conclusively by the Reference Bank
in accordance with the then current bank practice in London;

            (B)   if the Borrower shall fail to give notice as provided in
Section 4.1, the Borrower shall be deemed to have requested a conversion of the
affected LIBOR Loan to a Prime Rate Loan on the last day of the then current
Interest Period with respect thereto; and

            (C)   no Interest Period relating to any LIBOR Loan shall extend
beyond the Maturity Date.

      Investments. With respect to any Person, all shares of capital stock,
evidences of Indebtedness and other securities issued by any other Person, all
loans, advances, or extensions of credit to, or contributions to the capital of,
any other Person, all purchases of the securities or business or integral part
of the business of any other Person and commitments and options to make such
purchases, all interests in real property, and all other investments; provided,
however, that the term "Investment" shall not include (i) equipment, inventory
and other tangible personal property acquired in the ordinary course of
business, or (ii) current trade and customer accounts receivable for services
rendered in the ordinary course of business and payable in accordance with
customary trade terms.

      Issuing Bank. KeyBank National Association. Bank of America, N.A. shall be
the Issuing Bank as to the Existing Letter of Credit, and upon the satisfaction
of the conditions of Section 33, the Eagle Ranch Letter of Credit.

      KeyBank. As defined in the preamble hereto.

      Letter of Credit Fee. See Section 2.8(e).

      Lead Arrangers. KeyBanc Capital Markets and Deutsche Bank Securities, Inc.

      Leases. Leases, licenses and agreements whether written or oral,
permitting the use or occupation of space in or on the Real Estate by Persons
other than the Borrower, the Guarantor or any Affiliates thereof.

      Letter of Credit. An irrevocable standby letter of credit (or, in the case
of the Eagle Ranch Letter of Credit only, an irrevocable direct pay letter of
credit) in respect of obligations of the Borrower (or, in the case of the Eagle
Ranch Letter of Credit only, a Subsidiary of Crescent

                                       16
<PAGE>

OP) incurred pursuant to contracts made or performance undertaken or to be
undertaken in the ordinary course of the Borrower's (or such Subsidiary of
Crescent OP's) business which is payable upon presentation of a sight draft and
other documents described in the Letters of Credit, if any, as originally issued
pursuant to this Agreement, or as amended, modified, extended, reviewed or
supplemented.

      Letter of Credit Request. See Section 2.8(a).

      LIBOR. For any LIBOR Loan for any Interest Period, the average rate as
shown in Dow Jones Markets (formerly Telerate) (Page 3750) at which deposits in
U.S. dollars are offered by first class banks in the London Interbank Market at
approximately 11:00 a.m. (London time) on the day that is two (2) LIBOR Business
Days prior to the first day of such Interest Period with a maturity
approximately equal to such Interest Period and in an amount approximately equal
to the amount to which such Interest Period relates, adjusted for reserves and
taxes if required by future regulations. If Dow Jones Markets no longer reports
such rate or Agent determines in good faith that the rate so reported no longer
accurately reflects the rate available to Agent in the London Interbank Market,
Agent may select a replacement index. For any period during which a Reserve
Percentage shall apply, LIBOR with respect to LIBOR Loans shall be equal to the
amount determined above divided by an amount equal to 1 minus the Reserve
Percentage.

      LIBOR Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London,
England.

      LIBOR Lending Office. Initially, the office of each Bank designated as
such in Schedule I hereto; thereafter, such other office of such Bank, if any,
that shall be making or maintaining LIBOR Loans.

      LIBOR Loans. Loans bearing interest calculated by reference to LIBOR.

      Liens. See Section 8.2.

      Loan or Loans. An individual loan or the aggregate loans (including Swing
Loans), as the case may be, made by the Banks hereunder. Amounts drawn under
Letters of Credit, including, without limitation, the Eagle Ranch Letter of
Credit, shall also be considered Loans as provided in Section 2.8(f) and Section
33.

      Loan Documents. This Agreement, the Notes, the Guaranty and all other
documents, instruments or agreements now or hereafter executed or delivered by
or on behalf of the Borrower or a Guarantor in connection with the Loans.

      Loan Request. See Section 2.6.

      Material Adverse Effect. A materially adverse change in or effect on (i)
the business, assets, liabilities, financial condition or results of operations
of the Borrower and the Subsidiary Guarantors taken as a whole, (ii) the
business, assets, liabilities, financial condition or results of operations of
Crescent OP, (iii) the ability of the Borrower, a Subsidiary Guarantor or
Crescent OP to perform its obligations under any Loan Document to which it is a
party, (iv) the validity or

                                       17
<PAGE>

enforceability of any of the Loan Documents, or (v) any rights and remedies of
the Lenders and the Agent under any of the Loan Documents.

      Maturity Date. December 31, 2006, or such earlier date on which the Loans
shall become due and payable pursuant to the terms hereof.

      Multiemployer Plan. Any multiemployer plan within the meaning of Section
3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.

      Net Income (or Deficit). With respect to any Person (or any asset of any
Person) for any fiscal period ending on a Financial Statement Date, the net
income (or deficit) of such Person (or attributable to such asset), before
minority interests, after deduction of all expenses, taxes and other proper
charges, determined in accordance with generally accepted accounting principles.

      Net Rentable Area. With respect to any Real Estate, the floor area of any
buildings, structures or improvements available for leasing to tenants
determined in accordance with Crescent OP's standard procedures for such Real
Estate of the same type, the manner of such determination to be consistent for
all Real Estate unless otherwise approved by the Agent.

      Non-Recourse Carveout Guaranty. With respect to any Non-Recourse
Indebtedness, a guaranty for customary exceptions to non-recourse liability for
fraud, misapplication of funds, environmental indemnities and other similar
exceptions to recourse liability for which liability is limited solely to the
loss arising from such act; provided, however, that a Non-Recourse Carveout
Guaranty shall not include any exceptions related to bankruptcy, insolvency,
receivership or other similar events, or any other event which may result in
full recourse for the underlying Indebtedness.

      Non-Recourse Indebtedness. Indebtedness of Crescent OP or a Subsidiary of
Crescent OP which is secured by one or more parcels of Real Estate and related
personal property or interests therein and Short-term Investments and is not a
general obligation of Crescent OP or any such Subsidiary, the holder of such
Indebtedness having recourse solely to the parcels of Real Estate securing such
Indebtedness, the improvements and leases thereon and the rents and profits
thereof and the Short-term Investments securing such Indebtedness.

      Notes. Collectively, the Revolving Credit Notes and the Swing Loan Note.

      Notice. See Section 19.

      Obligations. All indebtedness, obligations and liabilities of the Borrower
to any of the Banks and the Agent, individually or collectively, under this
Agreement or any of the other Loan Documents or in respect of any of the Loans,
the Letters of Credit or the Notes, or other instruments at any time evidencing
any of the foregoing, whether existing on the date of this Agreement or arising
or incurred hereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise.

      OFAC. Office of Foreign Asset Control of the Department of the Treasury of
the United States of America.

                                       18
<PAGE>

      Office Properties. Collectively, the Properties improved primarily with
office Improvements, which Office Properties as of the Closing Date are
identified as such on Schedule II.

      Office Properties Capitalization Value. For any Office Property, as of the
end of any fiscal quarter, (a) if such Office Property has not been owned or
leased by Borrower or a Subsidiary Guarantor for a period of at least four (4)
full fiscal quarters, the gross acquisition cost to Borrower or a Subsidiary
Guarantor, as applicable, of such Office Property, or (b) if such Office
Property has been owned or leased by Borrower or a Subsidiary Guarantor for a
period of at least four (4) full fiscal quarters, (i)(A)(x)(1) the EBITDA
attributable to such Office Property for such quarter and the immediately
preceding fiscal quarter calculated for this purpose without including any lease
termination fees or insurance or condemnation proceeds otherwise includable
therein for such periods in accordance with the definition of EBITDA (for
purposes of this definition, such excluded amounts are referred to as the
"One-Time Receipts"), multiplied by (2) two (2) plus (y) the amount of the
One-Time Receipts, minus (B) the Capital Expenditure Reserve for such Office
Property, divided by (ii) 0.0875 (the capitalization rate).

      Outstanding. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination. With respect to Letters of Credit, the
aggregate undrawn face amount of issued Letters of Credit plus the aggregate
amount of any unreimbursed advances or draws thereunder (other than Loans).

      Par Value. With respect to any Eligible Note Receivable, (a) the product
obtained by multiplying (i) the fractional interest of Borrower or a Subsidiary
Guarantor, as applicable, in an Eligible Note Receivable by (ii) the outstanding
principal balance of such Eligible Note Receivable if the same was originated by
Borrower or a Subsidiary Guarantor, or (b) the product obtained by multiplying
(i) the fractional interest of Borrower or a Subsidiary Guarantor, as
applicable, in an Eligible Note Receivable by (ii) the lesser of (A) the sum of
(1) the acquisition cost of an Eligible Note Receivable if acquired by Borrower,
a Subsidiary Guarantor or the holder of any other interest in such Eligible Note
Receivable, less (2) any principal payments made with respect to such Eligible
Note Receivable, and (B) the outstanding principal balance of such Eligible Note
Receivable.

      Patriot Act. The Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as
the same may be amended from time to time, and corresponding provisions of
future laws.

      PBGC. The Pension Benefit Guaranty Corporation created by Section 4002 of
ERISA and any successor entity or entities having similar responsibilities.

      Permitted Acquisition. Any acquisition, consisting of a single transaction
or a series of related transactions, by Crescent OP or any one or more of its
Subsidiaries (excluding the Borrower and the Subsidiary Guarantor) of all the
Equity Ownership Interests of or all or any part of the assets of, or of a
business, unit or division of, any Person organized under the laws of the United
States of America or any State (such business, unit or division, the "Acquired
Business"), provided the following conditions are satisfied: (i) such
acquisition, either individually or together with all previous Permitted
Acquisitions in such fiscal year, does not

                                       19
<PAGE>

increase the Consolidated Total Assets of Crescent OP in excess of fifty percent
(50%) of the Consolidated Total Assets of Crescent OP as of the end of the
previous fiscal year; (ii) the Acquired Business has as its core business the
ownership, operation and/or management of office, resort/hotel, residential
development, multi-family, retail or industrial properties; (iii) no Default
(other than a Default (except for a Default relating to a breach of Section 7.3
or Section 7.4 of this Agreement or Paragraph 10 of the Crescent OP Guaranty)
which arises from an event or condition subject to Section 12.1(e), (k) or (s),
which is in the grace period before such event or condition becomes an Event of
Default and which, during such grace period, has not had and could not
reasonably be expected to have a Material Adverse Effect) or Event of Default
shall have occurred and be continuing or would occur after giving effect to such
acquisition; (iv) such acquisition shall constitute a so-called "friendly"
acquisition; and (v) Crescent OP or such Subsidiary shall be the continuing or
surviving entity following the consummation of such acquisition.

      Permitted Holders. Each of Richard E. Rainwater, John C. Goff, Dennis H.
Alberts, David M. Dean, Jane E. Mody, Kenneth S. Moczulski, Jerry R. Crenshaw,
Jr., Jane B. Page and John L. Zogg, Jr., and their respective Affiliates.

      Permitted Liens. Liens, security interests and other encumbrances
permitted by Section 8.2.

      Person. Any individual, corporation, partnership, limited liability
company, trust, unincorporated association, business, or other legal entity, and
any government or any governmental agency or political subdivision thereof.

      Preferred Distributions. For any period, the amount of any and all
Distributions paid, declared but not yet paid or otherwise due and payable to
the holders of any form of preferred stock or partnership interest (whether
perpetual, convertible or otherwise) or other ownership or beneficial interest
in Crescent REIT, Crescent OP or any Subsidiary of Crescent OP that entitles the
holders thereof to preferential payment or distribution priority with respect to
dividends, distributions, assets or other payments over the holders of any other
stock, partnership interest or other ownership or beneficial interest in such
Person.

      Prime Rate. The greater of (a) the variable annual rate of interest
announced from time to time by Agent at Agent's Head Office as its "Prime Rate"
or (b) one-half of one percent (0.5%) above the Federal Funds Effective Rate.
The Prime Rate is a reference rate and does not necessarily represent the lowest
or best rate being charged to any customer. Any change in the rate of interest
payable hereunder resulting from a change in the Prime Rate shall become
effective as of the opening of business on the day on which such change in the
Prime Rate becomes effective, without notice or demand of any kind.

      Prime Rate Loans. Those Loans bearing interest calculated by reference to
the Prime Rate.

      Pro Forma Debt Service. For any period, the sum of all interest and
principal payments that would be due and payable during such period on a loan
having a principal balance equal to the amount of the outstanding principal
balance of the Loans bearing interest at a rate per annum equal to the
then-current annual yield on ten (10) year obligations issued by the United
States

                                       20
<PAGE>

Treasury most recently prior to the date of determination plus two percent
(2.00%), payable based on a twenty-five (25) year mortgage-style amortization
schedule (expressed as a mortgage constant percentage). The Pro Forma Debt
Service shall be calculated by the Borrower and approved by the Agent. The
approval of the Pro Forma Debt Service and the components thereof by the Agent
shall, so long as the same shall be approved in good faith, be conclusive and
binding absent manifest error.

      Property. Each of the parcels of Real Estate owned by the Borrower or a
Subsidiary Guarantor and described on Schedule II attached hereto, in each case
located and with the Improvements shown on Schedule II, as the same may be
amended from time to time as contemplated hereby.

      Rating Agencies. Standard & Poor's Corporation and Moody's Investors
Service, Inc.

      Real Estate. For any Person, all real property at any time owned or leased
(as lessee or sublessee) by such Person or any of its Subsidiaries.

      Record. The grid attached to any Note, or the continuation of such grid,
or any other similar record, including computer records, maintained by any Bank
with respect to any Loan referred to in such Note.

      Reference Bank. KeyBank.

      Register. See Section 18.2.

      REIT Status. With respect to Crescent REIT, its status as a real estate
investment trust as defined in Section 856(a) of the Code.

      Release. See Section 6.17(c)(iii).

      Rent Adjustments. For any Person, straight line adjustments to rent
payable under Leases, as determined in accordance with generally accepted
accounting principles.

      Rent Roll. A report that the Borrower or Subsidiary Guarantor causes to be
prepared and certified by an officer of such Person showing for each Property
the tenants, lease expiration date, lease rent and such other information as may
be reasonably requested by the Agent, in substantially the form presented to the
Banks prior to the date hereof or in such other form as may have been approved
by the Agent, such approval not to be unreasonably withheld.

      Requisite Banks. As of any date, the Bank or Banks whose aggregate
Commitment Percentage exceeds fifty percent (50%), provided that there shall
always be at least two (2) Banks included in the Requisite Banks.

      Reserve Percentage. For any Interest Period, that percentage which is
specified three (3) Business Days before the first day of such Interest Period
by the Board of Governors of the Federal Reserve System (or any successor) or
any other governmental or quasi-governmental authority with jurisdiction over
Agent or any Bank for determining the maximum reserve requirement (including,
but not limited to, any marginal reserve requirement) for Agent or any

                                       21
<PAGE>

Bank with respect to liabilities constituting of or including (among other
liabilities) Eurocurrency liabilities in an amount equal to that portion of the
Loan affected by such Interest Period and with a maturity equal to such Interest
Period.

      Residential Development Assets. Assets included in the "Residential
Development" segment within Crescent OP's 10-Q and 10-K reports filed with the
SEC.

      Revocation Costs. See Section 2.6.

      Revolving Credit Notes. See Section 2.4.

      SEC. The federal Securities and Exchange Commission.

      Secured Indebtedness. Indebtedness of a Person that is pursuant to a
Capitalized Lease or is directly or indirectly secured by a Lien.

      Short-term Investments. Investments described in subsections (a) through
(g), inclusive, of Section 8.3.

      SMA. Spectrum Mortgage Associates, L.P., a Delaware limited partnership,
of which Borrower is the sole general partner and Borrower is a limited partner
and from which Borrower has the right to receive a substantial majority of the
distributions from SMA as of the date of this Agreement.

      Spectrum Entities. So long as Crescent Spectrum Center is a Subsidiary
Guarantor, each of SMA, CSC Holdings Management, LLC, Crescent SC Holdings, L.P.
and CSC Management LLC. At all other times, "Spectrum Entities" shall not be
deemed to refer to any entity, such that any such reference shall not have any
effect.

      State. A state of the United States of America.

      Subsidiary. (a) Any corporation, association, partnership, trust, or other
business entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes or controlling interests) of the outstanding Voting Interests, and (b)
with respect to Crescent OP, any other entity the accounts of which are
consolidated with the accounts of Crescent OP. As to Crescent OP as the
designated parent, such term shall include, without limitation, the Borrower and
the Subsidiary Guarantor.

      Subsidiary Guarantor. Collectively, Crescent Spectrum Center, 3930 HHP and
each additional Subsidiary of Crescent OP which becomes a Subsidiary Guarantor
pursuant to Section 5.3, until any such entity is released from its Subsidiary
Guaranty pursuant to Section 5.3(b).

      Swing Loans. See Section 2.1A.

      Swing Loan Bank. Collectively, KeyBank, in its capacity as Swing Loan Bank
and any other Bank who shall agree to make Swing Loans.

                                       22
<PAGE>

      Swing Loan Commitment. The sum of $15,000,000.00, as the same may be
changed from time to time in accordance with the terms of this Agreement.

      Swing Loan Note. See Section 2.1A.

      Syndication Agent. Deutsche Bank Trust Company Americas.

      Temperature Controlled Logistics Assets. Assets included in the
"Temperature Controlled Logistics" segment within Crescent OP's 10-Q and 10-K
reports filed with the SEC.

      10-K Report. The 10-K of Crescent REIT and Crescent OP dated December 31,
2003 and filed with the SEC, as supplemented by all current and periodic reports
filed with the SEC and all other information made publicly available (with
copies provided to the Agent prior to the Closing Date) by Crescent OP or
Crescent REIT from January 1, 2004, through the Closing Date, and, provided the
final 2004 10-K of Crescent REIT and Crescent OP has been made available to, and
approved by, the Requisite Banks in writing (such approval not to be
unreasonably withheld), the final 2004 10-K of Crescent REIT and Crescent OP.

      Test Period. Any period of four consecutive fiscal quarters (treated as a
single accounting period).

      3930 HHP. 3930 HHP LLC, a Delaware limited liability company.

      Total Commitment. The sum of the Commitments of the Banks set forth on
Schedule I hereto, as in effect from time to time.

      Type. As to any Loan, its nature as a Prime Rate Loan or a LIBOR Loan.

      UJV Combined Outstanding Indebtedness. Collectively, as of any time, all
Indebtedness and liability for borrowed money (which shall be deemed to include
obligations as lessee under Capitalized Leases but shall not include trade
Indebtedness), secured or unsecured, of the Unconsolidated Joint Ventures, on a
combined basis, including mortgage and other notes payable but excluding any
Indebtedness which is margin Indebtedness on Cash and Short Term Investments,
all as reflected in the balance sheets of each of the Unconsolidated Joint
Ventures, prepared in accordance with generally accepted accounting principles.

      Unconsolidated Joint Ventures. Collectively, the unconsolidated joint
ventures (including general and limited partnerships) in which Crescent OP
directly or indirectly owns a beneficial interest and which are accounted for
under the equity method in Crescent OP's Consolidated financial statements.

      Variable Rate Debt. Indebtedness that is payable by reference to a rate of
interest that may vary, float or change during the term of such Indebtedness
(that is, a rate of interest that is not fixed for the entire term of such
Indebtedness).

      Voting Interests. Stock, partnership, member or similar ownership
interests, of any class or classes (however designated), the holders of which
are at the time entitled, as such holders, (a) to vote for the election of a
majority of the directors (or persons performing similar functions) of

                                       23
<PAGE>

the corporation, limited liability company, association, partnership, trust or
other business entity involved, or (b) to control, manage, or conduct the
business of the corporation, limited liability company, partnership,
association, trust or other business entity involved.

      Section 1.2 Rules of Interpretation.

            (a)   A reference to any document or agreement shall include such

document or agreement as amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Agreement.

            (b)   The singular includes the plural and the plural includes the
singular. Without limiting the foregoing, a reference to Guarantor shall be a
reference to any or all Guarantors as the context may permit or require.

            (c)   A reference to any law includes any amendment or modification
to such law.

            (d)   A reference to any Person includes its permitted successors
and permitted assigns.

            (e)   Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles applied on
a consistent basis by the accounting entity to which they refer.

            (f)   The words "include", "includes" and "including" are not
limiting.

            (g)   The words "approval" and "approved", as the context so
determines, means an approval in writing given to the party seeking approval
after full and fair disclosure to the party giving approval of all material
facts necessary in order to determine whether approval should be granted.

            (h)   All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the State of Texas, have the meanings assigned
to them therein.

            (i)   Reference to a particular "Section", refers to that section of
this Agreement unless otherwise indicated.

            (j)   The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Agreement as a whole and not to any particular
section or subdivision of this Agreement.

            (k)   In the event of any change in generally accepted accounting
principles after the date hereof or any other change in accounting procedures
pursuant to Section 7.3 which would affect the computation of any financial
covenant, ratio or other requirement set forth in any Loan Document, then upon
the request of Borrower or Administrative Agent, the Borrower, the Guarantor,
the Agent and the Banks shall negotiate promptly, diligently and in good faith
in order to amend the provisions of the Loan Documents such that such financial
covenant, ratio or

                                       24
<PAGE>

other requirement shall continue to provide substantially the same financial
tests or restrictions of the Borrower, the Subsidiary Guarantors and/or Crescent
OP as in effect prior to such accounting change, as determined by the Required
Banks in their good faith judgment. Until such time as such amendment shall have
been executed and delivered by the Borrower, the Agent and the Requisite Banks,
such financial covenants, ratio and other requirements, and all financial
statements and other documents required to be delivered under the Loan
Documents, shall be calculated and reported as if such change had not occurred.

Section 2. THE REVOLVING CREDIT FACILITY.

      Section 2.1 Commitment to Lend. Subject to the terms and conditions set
forth in this Agreement, each of the Banks severally agrees to lend to the
Borrower, and the Borrower may borrow (and repay and reborrow) from time to time
between the Closing Date and the Maturity Date, upon notice by the Borrower to
the Agent given in accordance with Section 2.6, such sums as are requested by
the Borrower for the purposes set forth in Section 2.9 (but subject to the
limitations set forth in Section 2.9) up to a maximum aggregate principal amount
outstanding (after giving effect to all amounts requested and the amount of
Letters of Credit outstanding, including Letters of Credit accepted but unpaid)
at any one time equal to such Bank's Commitment; provided, that, in all events
no Default or Event of Default shall have occurred and be continuing; and
provided, further, that the outstanding principal amount of the Loans (after
giving effect to all amounts requested and the amount of Letters of Credit
outstanding, including Letters of Credit accepted but unpaid) shall not at any
time exceed the Total Commitment. The Loans (other than Swing Loans) shall be
made pro rata in accordance with each Bank's Commitment Percentage. Each request
for a Loan hereunder shall constitute a representation and warranty by the
Borrower that all of the conditions set forth in Section 10 and Section 11, in
the case of the initial Loan, and Section 11, in the case of all other Loans,
have been satisfied on the date of such request (except as otherwise permitted
in Paragraph 4 of the form of Loan Request with respect to warranties and
representations). No Bank shall have any obligation to make Loans to the
Borrower in the maximum aggregate principal amount outstanding of more than the
principal face amount of its Note.

      Section 2.1A Swing Loan Commitment.

            (a)   Subject to the terms and conditions set forth in this
Agreement, Swing Loan Bank agrees to lend to the Borrower, and the Borrower may
borrow (and repay and reborrow) from time to time between the Closing Date and
the date which is seven (7) Business Days prior to the Maturity Date upon notice
by the Borrower to the Swing Loan Bank given in accordance with this Section
2.1A, such sums as are requested by the Borrower for the purposes set forth in
Section 2.9 in an aggregate principal amount at any one time outstanding not
exceeding the Swing Loan Commitment (the "Swing Loans"); provided that (i) at no
time shall the aggregate principal balance of Swing Loans then outstanding, when
added to the Swing Loan Bank's Commitment Percentage of all other outstanding
Loans (after giving effect to all amounts requested and the amount of Letters of
Credit outstanding, including Letters of Credit accepted but unpaid), exceed
such Bank's Commitment; (ii) in all events no Default or Event of Default shall
have occurred and be continuing; (iii) the outstanding principal amount of the
Loans (after giving effect to all amounts requested and the amount of Letters of
Credit outstanding, including Letters of Credit accepted but unpaid) shall not
at any time exceed the Total Commitment; and (iv) no Swing Loan shall be used to
repay a Swing Loan. Swing Loans shall constitute "Loans"

                                       25
<PAGE>

for all purposes hereunder, but shall not be considered the utilization of a
Bank's Commitment. The funding of a Swing Loan hereunder shall constitute a
representation and warranty by the Borrower that all of the conditions set forth
in Section 11 have been satisfied on the date of such funding.

            (b)   The Swing Loans shall be evidenced by a separate promissory
note of the Borrower in substantially the form of Exhibit B hereto (the "Swing
Loan Note"), dated the date of this Agreement and completed with appropriate
insertions. The Swing Loan Note shall be payable to the order of the Swing Loan
Bank in such amount as may be outstanding from time to time thereunder and shall
be payable as set forth below. The Borrower irrevocably authorizes the Swing
Loan Bank to make or cause to be made, at or about the time of the Drawdown Date
of any Swing Loan or at the time of receipt of any payment of principal thereof,
an appropriate notation on the Swing Loan Bank's Record reflecting the making of
such Swing Loan or (as the case may be) the receipt of such payment. The
outstanding amount of the Swing Loans set forth on the Swing Loan Bank's Record
shall be prima facie evidence of the principal amount thereof owing and unpaid
to the Swing Loan Bank, but the failure to record, or any error in so recording,
any such amount on the Swing Loan Bank's Record shall not limit or otherwise
affect the obligations of the Borrower hereunder or under the Swing Loan Note to
make payments of principal of or interest on any Swing Loan Note when due.

            (c)   Each borrowing of a Swing Loan shall be in a minimum principal
amount of $500,000.00 or an integral multiple of $100,000.00 in excess thereof.
Borrower shall request a Swing Loan by delivering to the Swing Loan Bank a Loan
Request no later than 1:00 p.m. (Atlanta time) on the requested Drawdown Date
specifying the amount of the requested Swing Loan. The Loan Request shall also
contain the statements and certifications required by Section 2.6. Each such
Loan Request shall be irrevocable and binding on the Borrower and shall obligate
the Borrower to accept such Swing Loan on the Drawdown Date. Notwithstanding
anything herein to the contrary, a Swing Loan shall either be a Prime Rate Loan
or a LIBOR Loan having an Interest Period of one week, and in the event that the
Borrower fails to specify whether it has selected a Prime Rate Loan or a LIBOR
Loan, the Borrower shall be deemed conclusively to have selected a LIBOR Loan
with an Interest Period of one week. Notwithstanding the foregoing, upon the
date that the Banks shall be required to fund the Loans pursuant to Section
2.1A(d) to refund such Swing Loan, the interest rate shall be refunded as a
LIBOR Loan with an Interest Period as specified in the Loan Request given by the
Borrower to the Agent in connection with such Swing Loan, or if no Interest
Period is specified, then as a Prime Rate Loan. The proceeds of the Swing Loan
will be made available by the Swing Loan Bank to the Borrower at the Agent's
Head Office by crediting the account of the Borrower at such office with such
proceeds no later than 2:00 p.m. (Atlanta time) on the requested Drawdown Date.

            (d)   The Swing Loan Bank shall within four (4) Business Days after
the Drawdown Date with respect to such Swing Loan request each Bank, including
the Swing Loan Bank, to make a Loan pursuant to Section 2.1 in an amount equal
to such Bank's Commitment Percentage of the amount of the Swing Loan outstanding
on the date such notice is given; provided that in any event a Swing Loan shall
be repaid on the earlier to occur of the Maturity Date and the date that is
seven (7) Business Days after such Swing Loan is made. Borrower hereby
irrevocably authorizes and directs the Swing Loan Bank to so act on its behalf,
and agrees that any amount advanced to the Agent for the benefit of the Swing
Loan Bank pursuant to this

                                       26
<PAGE>

Section 2.1A(d) shall be considered a Loan pursuant to Section 2.1. Unless any
of the events described in paragraph (h), (i) or (j) of Section 12.1 shall have
occurred (in which event the procedures of Section 2.1A(e) shall apply), each
Bank shall make the proceeds of its Loan available to the Swing Loan Bank for
the account of the Swing Loan Bank at the Agent's Head Office prior to 11:00
a.m. (Atlanta time) in funds immediately available no later than the third (3rd)
Business Day after the date such notice is given just as if the Banks were
funding directly to the Borrower, so that thereafter such Obligations shall be
evidenced by the Revolving Credit Notes. The proceeds of such Loan shall be
immediately applied to repay the Swing Loans.

            (e)   Immediately upon the making of a Swing Loan, each Bank will be
deemed to have made, and hereby irrevocably and unconditionally agrees to,
purchase an undivided participating interest in the Swing Loan in an amount
equal to its Commitment Percentage of such Swing Loan. If for any reason a Swing
Loan cannot be refinanced by a Loan as provided in Section 2.1A(d), then any
request for a Loan shall be deemed a request that each Bank fund its
participation in the applicable Swing Loan, and each Bank will immediately
transfer to the Swing Loan Bank in immediately available funds the amount of its
participation and upon receipt thereof the Swing Loan Bank will deliver to such
Bank a Swing Loan participation certificate dated the date of receipt of such
funds and in such amount.

            (f)   Whenever at any time after the Swing Loan Bank has received
from any Bank such Bank's participating interest in a Swing Loan, the Swing Loan
Bank receives any payment on account thereof, the Swing Loan Bank will
distribute to such Bank its participating interest in such amount (appropriately
adjusted in the case of interest payments to reflect the period of time during
which such Bank's participating interest was outstanding and funded); provided,
however, that in the event that such payment received by the Swing Loan Bank is
required to be returned, such Bank will return to the Swing Loan Bank any
portion thereof previously distributed by the Swing Loan Bank to it.

            (g)   Each Bank's obligation to fund a Loan as provided in Section
2.1A(d) or to purchase participating interests pursuant to Section 2.1A(e) shall
be absolute and unconditional and shall not be affected by any circumstance,
including, without limitation, (i) any setoff, counterclaim, recoupment, defense
or other right which such Bank or the Borrower or Guarantor may have against the
Swing Loan Bank, the Borrower or Guarantor or anyone else for any reason
whatsoever; (ii) the occurrence or continuance of a Default or an Event of
Default; (iii) any adverse change in the condition (financial or otherwise) of
the Borrower or Guarantor or any of their respective Subsidiaries; (iv) any
breach of this Agreement or any of the other Loan Documents by the Borrower or
Guarantor or any Bank; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing. Any portions of a
Swing Loan not so purchased or converted may be treated by the Swing Loan Bank
as a Loan which was not funded by the non-purchasing Bank as contemplated by
Section 2.7 and Section 12.5. Each Swing Loan, once so sold or converted, shall
cease to be a Swing Loan for the purposes of this Agreement, but shall be a Loan
made by each Bank under its Commitment.

      Section 2.2 Facility Fee. The Borrower agrees to pay to the Agent for the
accounts of the Banks in accordance with their respective Commitment Percentages
a facility fee calculated at the rate per annum set forth below on the daily
amount by which the Total Commitment exceeds the Facility Outstandings during
each calendar quarter or portion thereof commencing on the

                                       27
<PAGE>

date hereof and ending on the Maturity Date. The facility fee shall be
calculated for each day based on the ratio (expressed as a percentage) of (a)
the daily amount of the outstanding principal amount of the Loans during such
quarter to (b) the Total Commitment, and shall be payable based upon the ratios
set forth below:

<TABLE>
<CAPTION>
Ratio of Loans to Total Commitment      Commitment Fee
----------------------------------      --------------
<S>                                     <C>
Less than or equal to 50%                    0.375%

Greater than 50%                              0.20%
</TABLE>

The facility fee shall be payable quarterly in arrears on the fifth day of each
calendar quarter for the immediately preceding calendar quarter or portion
thereof, or on any earlier date on which the Commitments shall be reduced or
shall terminate as provided in Section 2.3, with a final payment on the Maturity
Date. Any payment due under this Section 2.2 shall be prorated for any partial
calendar quarter.

      Section 2.3 Reduction of Commitment. The Borrower shall have the right at
any time and from time to time upon five Business Days' prior written notice to
the Agent to reduce by $5,000,000 or an integral multiple of $500,000 in excess
thereof or to terminate entirely the unborrowed portion of the Commitments,
whereupon (i) the Commitments of the Banks shall be reduced pro rata in
accordance with their respective Commitment Percentages of the amount specified
in such notice or, as the case may be, terminated, any such reduction to be
without penalty (unless such reduction requires repayment of a LIBOR Loan); and
(ii) the Swing Loan Commitment and the limitation on the amount of outstanding
Letters of Credit described in Section 2.8(a) shall be reduced in proportion to
the percentage reduction in the Total Commitment. Promptly after receiving any
notice of the Borrower delivered pursuant to this Section 2.3, the Agent will
notify the Banks of the substance thereof. Upon the effective date of any such
reduction or termination, the Borrower shall pay to the Agent for the respective
accounts of the Banks the full amount of any facility fee under Section 2.2 then
accrued on the amount of the reduction. No reduction or termination of the
Commitment may be reinstated. Notwithstanding the foregoing, unless the
Commitments are terminated in full, in no event shall the aggregate Commitments
be reduced to less than $200,000,000.00.

      Section 2.4 Revolving Credit Notes. The Loans (other than Swing Loans)
shall be evidenced by separate promissory notes of the Borrower in substantially
the form of Exhibit A hereto (collectively, the "Revolving Credit Notes"), dated
of even date with this Agreement and completed with appropriate insertions. One
Revolving Credit Note shall be payable to the order of each Bank in the
principal amount equal to such Bank's Commitment or, if less, the outstanding
amount of all Loans made by such Bank, plus interest accrued thereon, as set
forth below. The Borrower irrevocably authorizes each Bank to make or cause to
be made, at or about the time of the Drawdown Date of any Loan (other than Swing
Loans) or at the time of receipt of any payment of principal thereof, an
appropriate notation on such Bank's Record reflecting the making of such Loan
(other than Swing Loans) or (as the case may be) the receipt of such payment.
The outstanding amount of the Loans (other than Swing Loans) set forth on such
Bank's Record shall be prima facie evidence of the principal amount thereof
owing and unpaid to such Bank, but the failure to record, or any error in so
recording, any such amount on such

                                       28
<PAGE>

Bank's Record shall not limit or otherwise affect the obligations of the
Borrower hereunder or under any Revolving Credit Note to make payments of
principal of or interest on any Revolving Credit Note when due.

      Section 2.5 Interest on Loans.

            (a)   Each Prime Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the date on which such
Prime Rate Loan is paid in full or is converted to a LIBOR Loan from a Prime
Rate Loan at the per annum rate equal to the sum of the Prime Rate plus one-half
of one percent (0.50%).

            (b)   Each LIBOR Loan shall bear interest for the period commencing
with the Drawdown Date thereof and ending on the last day of the Interest Period
with respect thereto at the rate per annum equal to the sum of the LIBOR
determined for such Interest Period plus two percent (2.0%).

            (c)   The Borrower promises to pay interest in arrears on each Loan
on each Interest Payment Date with respect thereto.

            (d)   Prime Rate Loans and LIBOR Loans may be converted to Loans of
the other Type as provided in Section 4.1.

      Section 2.6 Requests for Loans. Except with respect to Swing Loans, the
Borrower shall give to the Agent written notice in the form of Exhibit C hereto
(or telephonic notice confirmed in writing in the form of Exhibit C hereto) of
each Loan requested hereunder (a "Loan Request") no later than 12:00 noon
(Atlanta time) three (3) Business Days prior to the proposed Drawdown Date if
such Loan is to be a LIBOR Loan or no later than 11:00 a.m.(Atlanta time) on a
Business Day that is the proposed Drawdown Date if such Loan is to be a Prime
Rate Loan. Each such notice shall specify with respect to the requested Loan the
proposed principal amount, Drawdown Date, Interest Period (if applicable) and
Type. Each such notice shall also contain a certification by an Authorized
Officer of the Borrower and Crescent OP that the Borrower and Crescent OP are
and will be in compliance with all covenants under the Loan Documents after
giving effect to the making of such Loan. Promptly upon receipt of any such
notice, the Agent shall notify each of the Banks thereof. Except as provided in
this Section 2.6, each such Loan Request shall be irrevocable and binding on the
Borrower and shall obligate the Borrower to accept the Loan requested from the
Banks on the proposed Drawdown Date, provided that, in addition to the
Borrower's other remedies against any Bank which fails to advance its
proportionate share of a requested Loan, such Loan Request may be revoked by the
Borrower by notice received by the Agent no later than the Drawdown Date if any
Bank fails to advance its proportionate share of the requested Loan in
accordance with the terms of this Agreement, provided further that the Borrower
shall be liable in accordance with the terms of this Agreement to any Bank which
is prepared to advance its proportionate share of the requested Loan for any
costs, expenses or damages incurred by such Bank as a result of the Borrower's
election to revoke such Loan Request (the "Revocation Costs"). Nothing herein
shall prevent the Borrower from seeking recourse against any Bank that fails to
advance its proportionate share of a requested Loan as required by this
Agreement. The Borrower may, without any liability for the payment of the
Revocation Costs or other cost or penalty, revoke a Loan Request for a LIBOR
Loan by

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<PAGE>

delivering notice thereof to each of the Banks no later than 3:00 p.m. (Atlanta
time) three (3) Business Days prior to the Drawdown Date. Each Loan Request
shall be (a) for a Prime Rate Loan in a minimum aggregate amount of $1,000,000
or an integral multiple of $100,000 in excess thereof, or (b) for a LIBOR Loan
in a minimum aggregate amount of $1,000,000 or an integral multiple of $100,000
in excess thereof; provided, however, that there shall be no more than seven (7)
LIBOR Loans (excluding Swing Loans) outstanding at any one time.

      Section 2.7 Funds for Loans.

            (a)   Not later than 2:00 p.m. (Atlanta time) on the proposed
Drawdown Date of any Loans (other than Swing Loans), each of the Banks will make
available to the Agent, at the Agent's Head Office, in immediately available
funds, the amount of such Bank's Commitment Percentage of the amount of the
requested Loans which may be disbursed pursuant to Section 2.1. Upon receipt
from each Bank of such amount, and upon receipt of the documents required by
Section 10 and Section 11 and the satisfaction of the other conditions set forth
therein, to the extent applicable, the Agent will make available to the Borrower
the aggregate amount of such Loans made available to the Agent by the Banks by
wire transfer in accordance with Borrower's instructions. The failure or refusal
of any Bank to make available to the Agent at the aforesaid time and place on
any Drawdown Date the amount of its Commitment Percentage of the requested Loans
to the extent it is obligated to fund such Loan hereunder shall not relieve any
other Bank from its several obligation hereunder to make available to the Agent
the amount of such other Bank's Commitment Percentage of any requested Loans,
including any additional Loans that may be requested by the Borrower subject to
the terms and conditions hereof to provide funds to replace those not advanced
by the Bank so failing or refusing, provided that the Borrower may by notice
received by the Agent no later than the Drawdown Date refuse to accept any Loan
which is not fully funded in accordance with the Borrower's Loan Request subject
to the terms of Section 2.6 (except that such refusal shall not relieve the
Borrower of its obligation to pay the Revocation Costs); provided further that
no Bank shall be obligated to advance any amount in excess of the limits set
forth in Section 2.1. In the event of any such failure or refusal, the Banks not
so failing or refusing shall be entitled to a priority position as against the
Bank or Banks so failing or refusing for such Loans as provided in Section 12.5.

            (b)   Unless Agent shall have been notified by any Bank prior to the
applicable Drawdown Date that such Bank will not make available to Agent such
Bank's pro rata share of a proposed Loan, Agent may in its discretion assume
that such Bank has made such Loan available to Agent in accordance with the
provisions of this Agreement and Agent may, if it chooses, in reliance upon such
assumption make such Loan available to Borrower, and such Bank shall be liable
to the Agent for the amount of such advance. If such Bank does not pay such
corresponding amount upon the Agent's demand therefor, the Agent will promptly
notify the Borrower, and the Borrower shall promptly pay such corresponding
amount to the Agent. The Agent shall also be entitled to recover from such Bank
or the Borrower, as the case may be, interest on such corresponding amount in
respect of each day from the date such corresponding amount was made available
by the Agent to the Borrower to the date such corresponding amount is recovered
by the Agent at a per annum rate equal to (i) from the Borrower at the
applicable rate for such Loan or (ii) from such Bank at the Federal Funds
Effective Rate.

      Section 2.8 Letters of Credit.

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<PAGE>

            (a)   Subject to the terms and conditions set forth in this
Agreement, at any time and from time to time from the Closing Date through the
day that is thirty (30) days prior to the Maturity Date, the Issuing Bank shall
issue such Letters of Credit as the Borrower may request for the benefit of
itself and its Affiliates upon the delivery of a written request in the form of
Exhibit D hereto (a "Letter of Credit Request") to the Issuing Bank and Agent,
provided that (i) no Default or Event of Default shall have occurred and be
continuing, (ii) upon issuance of such Letter of Credit, the outstanding Letters
of Credit (including Letters of Credit accepted but unpaid) shall not exceed
Thirty-Five Million and No/100 Dollars ($35,000,000.00), (iii) in no event shall
the amount of the Loans outstanding and the amount of Letters of Credit
outstanding (after giving effect to all Letters of Credit requested and any
Letters of Credit accepted but unpaid) exceed the Total Commitment, (iv) the
conditions set forth in Section Section 10 and 11 shall have been satisfied, (v)
if such Letter of Credit is to be issued for the benefit of a Person other than
Borrower, as a condition to the issuance of such Letter of Credit, Agent shall
receive a favorable non-consolidation opinion addressed to the Banks and the
Agent, in form and substance reasonably satisfactory to Agent, from counsel of
Borrower, the General Partner, the Guarantor and the beneficiary of such Letter
of Credit, and (vi) except as provided in Section 33 with respect to the Eagle
Ranch Letter of Credit, in no event shall any amount drawn under a Letter of
Credit be available for reinstatement or a subsequent drawing under such Letter
of Credit. Each Letter of Credit Request shall be executed by the chief
financial or accounting officer of the Borrower. The Issuing Bank shall be
entitled to conclusively rely on such Person's authority to request a Letter of
Credit on behalf of such Borrower. The Issuing Bank shall have no duty to verify
the authenticity of any signature appearing on a Letter of Credit Request. The
Borrower assumes all risks with respect to the use of the Letters of Credit.
Except as provided in Section 33(c)(i), unless the Issuing Bank and the
Requisite Banks otherwise consent, the term of any Letter of Credit shall not
exceed a period of time commencing on the issuance of the Letter of Credit and
ending on the date which is fifteen (15) days prior to the Maturity Date (but in
any event the term shall not extend beyond the Maturity Date). The amount
available to be drawn under any Letter of Credit shall reduce on a dollar for
dollar basis the amount available to be drawn under the Total Commitment as a
Loan. The Existing Letter of Credit shall upon the Closing Date be deemed to be
a Letter of Credit under this Agreement. The Banks acknowledge that Borrower has
advised them that Main Street Partners Funding, L.P., the applicant on the
Existing Letter of Credit, and each other Person other than Borrower for which a
Letter of Credit may be issued, has a separate existence and credit from
Borrower.

            (b)   Each Letter of Credit Request shall be submitted to the
Issuing Bank and Agent at least ten (10) Business Days prior to the date upon
which the requested Letter of Credit is to be issued. Following the receipt of a
Letter of Credit Request, the Issuing Bank shall promptly notify each of the
Banks of the Letter of Credit Request. Each such Letter of Credit Request shall
contain (i) a statement as to the purpose for which such Letter of Credit shall
be used (which purpose shall be in accordance with the terms of this Agreement),
and (ii) a certification by an Authorized Officer of the Borrower that the
Borrower is and will be in compliance with all covenants under the Loan
Documents after giving effect to the issuance of such Letter of Credit. The
Borrower shall further deliver to the Issuing Bank such additional applications
and documents as the Issuing Bank may reasonably require, in conformity with the
then standard practices of its letter of credit department, in connection with
the issuance of such Letter of Credit; provided that in the event of any
conflict, the terms of this Agreement shall control.

                                       31
<PAGE>

            (c)   The Issuing Bank shall, if it approves of the content of the
Letter of Credit Request, and subject to the conditions set forth in this
Agreement, issue the Letter of Credit on or before ten (10) Business Days
following receipt of the documents last due pursuant to Section 2.8(a) and (b).
Each Letter of Credit shall be in form and substance satisfactory to the Issuing
Bank in its reasonable discretion. Upon issuance of a Letter of Credit, the
Issuing Bank shall provide copies of each Letter of Credit to the Banks.

            (d)   Upon the issuance of a Letter of Credit, each Bank shall be
deemed to have purchased a participation therein from Issuing Bank in an amount
equal to its respective Commitment Percentage of the amount of such Letter of
Credit.

            (e)   Upon the issuance of each Letter of Credit, the Borrower shall
pay to the Issuing Bank (i) for its own account, a Letter of Credit fee
calculated at the rate of one-eighth of one percent (0.125%) per annum of the
amount available to be drawn under such Letter of Credit (which fee shall not be
less than $1,000.00 in any event), and (ii) for the accounts of the Banks in
accordance with their respective percentage shares of participation in such
Letter of Credit, a Letter of Credit fee (the "Letter of Credit Fee") calculated
at the rate of two percent (2.0%) per annum on the amount available to be drawn
under such Letter of Credit. Such fees shall be payable in quarterly
installments in advance with respect to each Letter of Credit commencing on its
date of issuance and continuing on each quarter or portion thereof thereafter,
as applicable. Without otherwise limiting the terms of this Section 2.8(e), any
amounts available to be reinstated under the Eagle Ranch Letter of Credit shall,
for the purpose of calculating the Letter of Credit issuance fee with respect to
the Eagle Ranch Letter of Credit, be deemed a part of the face amount of the
Eagle Ranch Letter of Credit and therefore included in determining the Letter of
Credit issuance fee due with respect thereto.

            (f)   If and to the extent that any amounts are drawn upon any
Letter of Credit, the Issuing Bank shall promptly notify the Agent and the
amounts so drawn shall, from the date of payment thereof by the Issuing Bank, be
considered Loans for all purposes hereunder bearing interest as provided in
Section 2.5. The Banks shall be required to make such Loans regardless of
whether all of the conditions to disbursement set forth in Section 10 and
Section 11 have been satisfied (it being acknowledged that Borrower shall not be
required to remake the representations and warranties in the Loan Documents as a
condition to such Loan).

            (g)   If after the issuance of a Letter of Credit pursuant to
Section 2.8(c) by the Issuing Bank, but prior to the funding of any portion
thereof by a Bank, one of the events described in Section 12.1(h), (i) or (j)
shall have occurred, each Bank will, on the date such Loan pursuant to Section
2.8(f) was to have been made, purchase an undivided participating interest in
the Letter of Credit in an amount equal to its Commitment Percentage of the
amount of such Letter of Credit. Each Bank will immediately transfer to the
Agent for payment to the Issuing Bank in immediately available funds the amount
of its participation and upon receipt thereof the Issuing Bank will deliver to
such Bank a Letter of Credit participation certificate dated the date of receipt
of such funds and in such amount.

            (h)   Whenever at any time after the Issuing Bank has received from
any Bank such Bank's payment of funds under a Letter of Credit and thereafter
the Issuing Bank receives any payment on account thereof, then the Issuing Bank
will distribute to Agent for payment to

                                       32
<PAGE>

such Bank its participating interest in such amount (appropriately adjusted in
the case of interest payments to reflect the period of time during which such
Bank's participating interest was outstanding and funded); provided, however,
that in the event that such payment received by the Issuing Bank is required to
be returned, such Bank will return to the Issuing Bank any portion thereof
previously distributed by the Issuing Bank to it.

            (i)   Upon the receipt by the Issuing Bank of any draw or other
presentation for payment of a Letter of Credit and the payment of any amount
under a Letter of Credit, the Issuing Bank shall, without notice to or the
consent of the Borrower, direct the Agent to direct the Banks to fund to the
Issuing Bank in accordance with Section 2.7 on or before 11:00 a.m. (Atlanta
time) on the next Business Day their respective Commitment Percentages of the
amount so paid by the Issuing Bank. The proceeds of such funding shall be paid
to Agent for payment to the Issuing Bank to reimburse the Issuing Bank for the
payment made by it under the Letter of Credit. The provisions of Section 2.7
shall apply to any Bank or Banks failing or refusing to fund its Commitment
Percentage of any such draw.

            (j)   The issuance of any supplement, modification, amendment,
renewal or extension to or of any Letter of Credit requested by the Borrower or
other beneficiary of the Letter of Credit shall be treated in all respects the
same as the issuance of a new Letter of Credit.

            (k)   The obligations of the Borrower to the Banks under this
Agreement with respect to Letters of Credit shall be absolute, unconditional and
irrevocable, and shall be paid and performed strictly in accordance with the
terms of this Agreement, under all circumstances whatsoever, including, without
limitation, the following circumstances: (i) any improper use which may be made
of any Letter of Credit or any improper acts or omissions of any beneficiary or
transferee of any Letter of Credit in connection therewith; (ii) the existence
of any claim, set-off, defense or any right which the Borrower may have at any
time against any beneficiary or any transferee of any Letter of Credit (or
persons or entities for whom any such beneficiary or any such transferee may be
acting) or the Banks (other than the defense of payment to the Banks in
accordance with the terms of this Agreement) or any other person, whether in
connection with any Letter of Credit, this Agreement, any other Loan Document,
or any unrelated transaction; (iii) any statement or any other documents
presented under any Letter of Credit proving to be insufficient, forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever, provided that the Issuing Bank shall not
have been grossly negligent or acted with willful misconduct in connection
therewith; (iv) any breach of any agreement between Borrower and any beneficiary
or transferee of any Letter of Credit; (v) any irregularity in the transaction
with respect to which any Letter of Credit is issued, including any fraud by the
beneficiary or any transferee of such Letter of Credit; (vi) payment by the
Issuing Bank under any Letter of Credit against presentation of a sight draft or
a certificate which does not comply with the terms of such Letter of Credit,
provided that such payment shall not have constituted gross negligence or
willful misconduct on the part of the Issuing Bank, and (vii) any other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing, provided that such other circumstances or happenings shall not have
been the result of gross negligence or willful misconduct on the part of the
Issuing Bank.

      Section 2.9 Use of Proceeds. The Borrower will use or cause to be used the
proceeds of the Loans and issuances of Letters of Credit solely to provide
short-term financing (a) for the

                                       33
<PAGE>

repayment of the outstanding Indebtedness under that certain Revolving Credit
Agreement dated as of May 11, 2001 (the "Fleet Facility"), (b) to pay (or make
distributions to Crescent OP or Crescent REIT to enable them to pay) all closing
costs and expenses with respect to the Loan and the Loan Documents, (c) for
working capital and investment purposes, (d) subject to the terms of this
Agreement, to make Distributions to Crescent OP for working capital, investment
purposes and other lawful purposes, and (e) for such other purposes as may be
approved by the Agent.

      Section 2.10 Increase of Commitment.

            (a)   Provided that no Default or Event of Default shall have
occurred and be continuing on the date of the Increase Notice and on the date
the Total Commitment is increased, the Borrower shall have the one-time option,
by giving written notice to the Agent (the "Increase Notice"), subject to the
terms and conditions set forth in this Agreement, to increase the Total
Commitment by an amount up to $100,000,000.00 (the "Available Increase Amount"),
which assuming no previous reduction in the Commitments, would result in a
maximum Total Commitment of $400,000,000.00. The amount of the requested
increase (the "Increase Amount") shall be set forth in the Increase Notice;
provided, however, the Increase Amount shall not be less than $10,000,000.00).
The increase in the Total Commitment pursuant to this Section 2.10 must be
effective, if at all, on or before December 31, 2005. The execution and delivery
of the Increase Notice by Borrower shall constitute a representation and
warranty by the Borrower that all the conditions set forth in this Section 2.10
shall have been satisfied on the date of such Increase Notice.

            (b)   The obligation of the Agent and the Banks to increase the
Total Commitment pursuant to this Section 2.10 shall be conditioned upon
satisfaction of the following conditions precedent which must be satisfied prior
to the effectiveness of any increase of the Total Commitment:

                  (i)   The Borrower shall pay (i) to the Agent such fees as it
may require in connection therewith, and (ii) to the Banks acquiring the
Increase Amount such fees as they may require in connection therewith, which
fees shall, when paid, be fully earned and non-refundable under any
circumstances; and

                  (ii)  On the date such Increase Notice is given and on the
date such increase becomes effective, both immediately before and after the
Commitment is increased, there shall exist no Default or Event of Default; and

                  (iii) The representations and warranties made by or on behalf
of the Borrower and the Guarantor in the Loan Documents or in any other document
or instrument delivered pursuant to or in connection therewith shall have been
true and correct in all respects when made and shall also be true and correct in
all respects on the date of such Increase Notice and on the date the Total
Commitment is increased, both immediately before and after the Total Commitment
is increased (except to the extent of changes resulting from transactions
contemplated or permitted by this Agreement and the other Loan Documents and
changes occurring in the ordinary course of business that singly or in the
aggregate have not had and could not reasonably be expected to have a Material
Adverse Effect, and except to the extent that such representations and
warranties relate expressly to an earlier date);

                                       34
<PAGE>

                  (iv)  Agent shall have received satisfactory evidence that
following such increase, the Total Commitment as increased shall continue to
constitute the "Line of Credit" as defined in and used in the Bond Indenture;

                  (v)   The Borrower shall (and shall cause Guarantor to) also
execute and deliver to Agent and the Banks such additional documents,
instruments, certifications and opinions as the Agent may require in its
reasonable discretion, including, without limitation, replacement Notes, a
Compliance Certificate demonstrating compliance with all covenants set forth in
the Loan Documents after giving effect to the increase and any amendments to the
Loan Documents, as Agent may request; and

                  (vi)  One or more Banks or potential assignees shall have
agreed to acquire the Increase Amount, provided, however, no Bank (including,
specifically, but without limitation, KeyBank) shall be obligated to acquire
such increase without the express written consent of such Bank, which consent
may be withheld in such Bank's sole and absolute discretion. Upon the request of
Borrower, KeyBank shall endeavor to solicit Banks to acquire the Increase
Amount. Borrower shall cooperate and actively assist with KeyBank in connection
with any such solicitation and shall reimburse KeyBank for any reasonable
out-of-pocket fees or expenses incurred in connection with such solicitation.

            (c)   Upon satisfaction of the terms and conditions set forth above,
(i) the Increase Amount shall become a part of the Commitment and Total
Commitment and be available to be disbursed subject to the terms of this
Agreement, and, subject to the payment of any breakage costs pursuant to Section
4.7, the Banks shall make such adjustments to the outstanding Loans and
Commitment Percentages of such Banks, so that, after giving effect to such
increase, the outstanding Loans and Commitment Percentages are consistent with
their respective Commitments; and (ii) the Agent may unilaterally revise
Schedule I to reflect the increased Commitment.

Section 3. REPAYMENT OF THE LOANS.

      Section 3.1 Stated Maturity. The Borrower promises to pay on the Maturity
Date and there shall become absolutely due and payable on the Maturity Date, all
of the Loans outstanding on such date, together with any and all accrued and
unpaid interest thereon.

      Section 3.2 Mandatory Prepayments. The Borrower promises to pay principal
of the Loans prior to stated maturity, as follows:

            (a)   If at any time the aggregate outstanding principal amount of
the Loans and outstanding Letters of Credit (including Letters of Credit
accepted but unpaid) exceed the Total Commitment, then the Borrower shall
immediately upon demand from Agent pay the amount of such excess to the Agent
for the respective accounts of the Banks for application first to Prime Rate
Loans and then to LIBOR Loans, except that the amount of any Swing Loans shall
be paid solely to the Swing Loan Bank.

            (b)   Unless the Borrower shall have provided to the Agent a
Compliance Certificate with respect to any proposed or completed sale, transfer,
casualty, condemnation or other disposition of any of the Properties or Eligible
Notes Receivable or partial or full principal

                                       35
<PAGE>

payment or defeasance of any Eligible Notes Receivable (or any interest of
Borrower or a Subsidiary Guarantor in an Eligible Note Receivable), together
with an updated list of the Properties and Eligible Notes Receivable remaining
after such event, as applicable, adjusted in the best good-faith estimate of the
Borrower to give effect to such sale, transfer, casualty, condemnation, other
disposition or prepayment and demonstrating that no Default or Event of Default
shall have occurred and be continuing and that no Default or Event of Default
shall result from such sale, transfer, casualty, condemnation, other disposition
or prepayment, all of the Borrower's interest in (i) the gross proceeds of each
and every sale, transfer, casualty, condemnation, other disposition of any of
the Properties or Eligible Notes Receivable (or interest owned therein) owned by
the Borrower or a Subsidiary Guarantor, less all reasonable costs, expenses and
commissions paid to unrelated parties as a part of such sale, transfer,
casualty, condemnation or other disposition, or (ii) such prepayment of the
Eligible Notes Receivable (or interest owned therein) owned by the Borrower or a
Subsidiary Guarantor, shall be promptly paid by the Borrower to the Agent for
the account of the Banks as a prepayment of the Loans to the extent of the
outstanding balance of the Loans.

      Section 3.3 Optional Prepayments. The Borrower shall have the right, at
its election, to prepay the outstanding amount of the Loans, as a whole or in
part, at any time; provided, that if the full or partial prepayment of the
outstanding amount of any LIBOR Loans pursuant to this Section 3.3 is made on
any day prior to the last day of the Interest Period relating thereto, the
Borrower shall also pay such amounts as shall be due and payable under Section
4.8. The Borrower shall give the Agent, no later than 10:00 a.m., Atlanta time,
at least one (1) Business Day's prior written notice of any prepayment pursuant
to this Section 3.3, in each case specifying the proposed date of payment of
Loans and the principal amount to be paid. Notwithstanding the foregoing, no
prior notice shall be required for the prepayment of any Swing Loan.

      Section 3.4 Partial Prepayments. Each partial prepayment of the Loans
under Section 3.3 shall be in the minimum amount of $500,000.00 or an integral
multiple of $100,000 in excess thereof (unless the Loans are being prepaid in
full), shall be accompanied by the payment of accrued interest on the principal
prepaid to the date of payment and, after payment of such interest, shall be
applied, in the absence of instruction by the Borrower, first to the principal
of any outstanding Swing Loans, and then pro rata to the Banks in the same
proportions that the aggregate Obligations owed to each Bank under the Loan
Documents bear to the aggregate Obligations owed under the Loan Documents to all
the Banks, without priority or preference among the Banks. In either case, the
payment shall be applied first to the principal of Prime Rate Loans and then to
the principal of LIBOR Loans.

      Section 3.5 Effect of Prepayments. Amounts of the Loans prepaid under
Section 3.2 or Section 3.3 prior to the Maturity Date may be reborrowed as
provided in Section 2.1 and Section 2.1A. Except as otherwise expressly provided
herein, (a) all partial prepayments made pursuant to Section 3.2 or Section 3.3
shall first be applied to accrued but unpaid interest on the amount so prepaid
and then to principal, and (b) all other payments shall first be applied to
accrued but unpaid interest and then to principal.

Section 4. CERTAIN GENERAL PROVISIONS.

      Section 4.1 Conversion Options.

                                       36
<PAGE>

            (a)   The Borrower may elect from time to time to convert all of any
outstanding Loan to a Loan of another Type and such Loan shall thereafter bear
interest as a Prime Rate Loan or a LIBOR Loan, as applicable; provided that (i)
with respect to any such conversion of a LIBOR Loan to a Prime Rate Loan, the
Borrower shall give the Agent at least one (1) Business Day's prior written
notice of such election, and such conversion shall only be made on the last day
of the Interest Period with respect to such LIBOR Loan; (ii) with respect to any
such conversion of a Prime Rate Loan to a LIBOR Loan, the Borrower shall give
the Agent at least three (3) LIBOR Business Days' prior written notice of such
election and the Interest Period requested for such Loan, the principal amount
of the Loan so converted shall be in a minimum aggregate amount of $1,000,000 or
an integral multiple of $100,000 in excess thereof and, after giving effect to
the making of such Loan, there shall be no more than seven (7) LIBOR Loans
outstanding at any one time (not counting Swing Loans); and (iii) no Loan may be
converted into a LIBOR Loan when any Default or Event of Default has occurred
and is continuing. All or any part of the outstanding Loans of any Type may be
converted as provided herein, provided that no partial conversion shall result
in a Prime Rate Loan in an aggregate principal amount of less than $1,000,000 or
a LIBOR Loan in an aggregate principal amount of less than $1,000,000 and that
the aggregate principal amount of each Loan shall be in an integral multiple of
$100,000. On the date on which such conversion is being made, each Bank shall
take, to the extent it deems it necessary to do so, such action as is necessary
to transfer its Commitment Percentage of such Loans to its Domestic Lending
Office or its LIBOR Lending Office, as the case may be. Each Conversion Request
relating to the conversion of a Prime Rate Loan to a LIBOR Loan shall be
irrevocable by the Borrower.

            (b)   Any LIBOR Loan may be continued as such Type upon the
expiration of an Interest Period with respect thereto by compliance by the
Borrower with the terms of Section 4.1; provided that no LIBOR Loan may be
continued as such when any Default or Event of Default has occurred and is
continuing, but shall be automatically converted to a Prime Rate Loan on the
last day of the Interest Period relating thereto ending during the continuance
of any Default or Event of Default.

            (c)   In the event that the Borrower does not notify the Agent of
its election hereunder with respect to any Loan, such Loan shall be
automatically converted to a Prime Rate Loan at the end of the applicable
Interest Period.

      Section 4.2 Closing Fee. The Borrower has paid to KeyBank certain closing
fees pursuant to the Agreement Regarding Fees.

      Section 4.3 Agent's Fee. The Borrower shall pay to the Agent, for the
Agent's own account, an Agent's fee as set forth in the Agreement Regarding
Fees. The Agent's fee shall be payable as provided in the Agreement Regarding
Fees.

      Section 4.4 Funds for Payments.

            (a)   All payments of principal, interest, facility fees, Agent's
fees, closing fees, Letter of Credit fees and any other amounts due hereunder or
under any of the other Loan Documents shall be made to the Agent, for the
respective accounts of the Banks and the Agent, as the case may be, at the
Agent's Head Office, not later than 3:00 p.m. (Atlanta time) on the day

                                       37
<PAGE>

when due, in each case in lawful money of the United States in immediately
available funds. To the extent funds are available in such account, the Agent is
hereby authorized to charge the account of the Borrower with KeyBank, on the
dates when the amount thereof shall become due and payable, with the amounts of
the principal of and interest on the Loans and all fees, charges, expenses and
other amounts owing to the Agent and/or the Banks (including the Swing Loan
Bank) under the Loan Documents.

            (b)   All payments by the Borrower hereunder and under any of the
other Loan Documents shall be made without setoff or counterclaim and free and
clear of and without deduction for any taxes, levies, imposts, duties, charges,
fees, deductions, withholdings, compulsory loans, restrictions or conditions of
any nature now or hereafter imposed or levied by any jurisdiction or any
political subdivision thereof or taxing or other authority therein unless the
Borrower is compelled by law to make such deduction or withholding. Subject to
Section 4.9(a) and Section 18.10 below, if any such obligation is imposed upon
the Borrower with respect to any amount payable by it hereunder or under any of
the other Loan Documents, the Borrower will pay to the Agent, for the account of
the Banks (including the Swing Loan Bank) or (as the case may be) the Agent, on
the date on which such amount is due and payable hereunder or under such other
Loan Document, such additional amount in Dollars as shall be necessary to enable
the Banks or the Agent to receive the same net amount which the Banks or the
Agent would have received on such due date had no such obligation been imposed
upon the Borrower. The Borrower will deliver promptly to the Agent certificates
or other valid vouchers for all taxes or other charges deducted from or paid
with respect to payments made by the Borrower hereunder or under such other Loan
Document.

      Section 4.5 Computations. All computations of interest on the Loans and of
other fees to the extent applicable shall be based on a 360-day year (or a
365-day year in the case of Prime Rate Loans) and paid for the actual number of
days elapsed. Except as otherwise provided in the definition of the term
"Interest Period" with respect to LIBOR Loans, whenever a payment hereunder or
under any of the other Loan Documents becomes due on a day that is not a
Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension. The
outstanding amount of the Loans as reflected on the records of the Agent from
time to time shall be considered prima facie evidence of such amount.

      Section 4.6 Inability to Determine LIBOR. In the event that, prior to the
commencement of any Interest Period relating to any LIBOR Loan, the Agent shall
determine in the exercise of its good faith business judgment that adequate and
reasonable methods do not exist for ascertaining the LIBOR for such Interest
Period, the Agent shall forthwith give notice of such determination (which shall
be conclusive and binding on the Borrower and the Banks) to the Borrower and the
Banks. In such event (a) any Loan Request with respect to LIBOR Loans shall be
automatically withdrawn and shall be deemed a request for Prime Rate Loans and
(b) each LIBOR Loan will automatically, on the last day of the then current
Interest Period thereof, become a Prime Rate Loan, and the obligations of the
Banks to make LIBOR Loans shall be suspended until the Agent determines in the
exercise of its good faith business judgment that the circumstances giving rise
to such suspension no longer exist, whereupon the Agent shall so notify the
Borrower and the Banks.

                                       38
<PAGE>

      Section 4.7 Illegality. Notwithstanding any other provisions herein, if
any present or future law, regulation, treaty or directive or the interpretation
or application thereof shall make it unlawful, or any central bank or other
governmental authority having jurisdiction over a Bank or its LIBOR Lending
Office shall assert that it is unlawful, for any Bank to make or maintain LIBOR
Loans, such Bank shall forthwith give notice of such circumstances to the Agent
and the Borrower and thereupon (a) the commitment of the Banks to make LIBOR
Loans or convert Loans of another type to LIBOR Loans shall forthwith be
suspended and (b) the LIBOR Loans then outstanding shall be converted
automatically to Prime Rate Loans on the last day of each Interest Period
applicable to such LIBOR Loans or within such earlier period as may be required
by law; provided that the affected Bank agrees to designate a different LIBOR
Lending Office if such designation will permit such Bank to make or maintain
LIBOR Loans and will not, in the good faith judgment of such Bank, otherwise be
materially disadvantageous to such Bank.

      Section 4.8 Additional Interest. If any LIBOR Loan or any portion thereof
is repaid or is converted to a Prime Rate Loan for any reason on a date which is
prior to the last day of the Interest Period applicable to such LIBOR Loan or if
repayment of the Loans has been accelerated as provided in Section 12.1, the
Borrower will pay to the Agent upon demand for the account of the Banks in
accordance with their respective Commitment Percentages (or to the Swing Loan
Bank with respect to a Swing Loan), in addition to any amounts of interest
otherwise payable hereunder, any amounts required to compensate the Banks for
any losses, costs or expenses which may reasonably be incurred as a result of
such payment or conversion.

      Section 4.9 Additional Costs, Etc. Notwithstanding anything herein to the
contrary, if any future applicable law or change in or phasing in of any
presently existing law, which expression, as used herein, includes statutes,
rules and regulations thereunder and legally binding interpretations thereof by
any competent court or by any governmental or other regulatory body or official
with appropriate jurisdiction charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time hereafter made upon or otherwise issued to any Bank or
the Agent by any central bank or other fiscal, monetary or other authority
(whether or not having the force of law), shall:

            (a)   subject any Bank or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this
Agreement, the other Loan Documents, such Bank's Commitment (including the Swing
Loan Commitment), a Letter of Credit or the Loans (other than the Excluded
Taxes), or

            (b)   materially change the basis of taxation (except for changes in
the Excluded Taxes) of payments to any Bank of the principal of or the interest
on any Loans or any other amounts payable to any Bank under this Agreement or
the other Loan Documents, or

            (c)   impose or increase or render applicable any special deposit,
reserve, assessment, liquidity, capital adequacy or other similar requirements
(whether or not having the force of law) against assets held by, or deposits in
or for the account of, or loans by, or commitments of an office of any Bank, or

            (d)   impose on any Bank or the Agent any other conditions or
requirements with respect to this Agreement, the other Loan Documents, the
Loans, such Bank's Commitment

                                       39
<PAGE>

(including the Swing Loan Commitment), a Letter of Credit, or any class of loans
or commitments of which any of the Loans or such Bank's Commitment (including
the Swing Loan Commitment) forms a part; and the result of any of the foregoing
is

                  (i)   to increase the cost to any Bank of making, funding,
issuing, renewing, extending or maintaining any of the Loans or Letters of
Credit or such Bank's Commitment (including the Swing Loan Commitment), or

                  (ii)  to reduce the amount of principal, interest or other
amount payable to such Bank or the Agent hereunder on account of such Bank's
Commitment (including the Swing Loan Commitment) or any of the Loans or Letters
of Credit, or

                  (iii) to require such Bank or the Agent to make any payment or
to forego any interest or other sum payable hereunder, the amount of which
payment or foregone interest or other sum is calculated by reference to the
gross amount of any sum receivable or deemed received by such Bank or the Agent
from the Borrower hereunder,

      then, and in each such case, the Borrower will, within thirty (30) days of
demand made by such Bank or (as the case may be) the Agent at any time and from
time to time and as often as the occasion therefor may arise, pay to such Bank
or the Agent such additional amounts as such Bank or the Agent shall determine
in good faith to be sufficient to compensate such Bank or the Agent for such
additional cost, reduction, payment or foregone interest or other sum. Each Bank
and the Agent in determining such amounts may use any reasonable averaging and
attribution methods, generally applied by such Bank or the Agent.
Notwithstanding the foregoing, the Borrower shall have the right, in lieu of
making the payment referred to in this Section 4.9, to prepay the Loan of the
applicable Bank within thirty (30) days of such demand and avoid the payment of
the amounts otherwise due under this Section 4.9, provided, however, that the
Borrower shall be required to pay together with such prepayment of the Loan all
other costs, damages and expenses otherwise due under Section 4.8 of this
Agreement as a result of such prepayment, and following such prepayment, the
Total Commitment shall be reduced by the amount of the Loan so prepaid, and the
Commitment Percentages of the remaining Banks shall be adjusted based on the
percentage that each Bank's Commitment bears to the adjusted Total Commitment.

      Section 4.10 Capital Adequacy. If after the date hereof any Bank
reasonably determines that (a) the adoption after the date hereof of, or phasing
in or change in, any law, rule, regulation or guideline regarding capital
requirements for banks or bank holding companies or any change in the
interpretation or application thereof by any governmental authority charged with
the administration thereof, or (b) compliance by such Bank or its parent bank
holding company with any guideline, request or directive of any such entity
regarding capital adequacy (whether or not having the force of law) issued or
phased in after the date hereof, has the effect of reducing the return on such
Bank's or such holding company's capital as a consequence of such Bank's
commitment to make Loans hereunder to a level below that which such Bank or
holding company could have achieved but for such adoption, change or compliance
(taking into consideration such Bank's or such holding company's then existing
policies with respect to capital adequacy and assuming the full utilization of
such entity's capital) by any amount deemed by such Bank to be material, then
such Bank may notify the Borrower thereof. The Borrower agrees to pay to such
Bank the amount of such reduction in the return on capital as and

                                       40
<PAGE>

when such reduction is determined, upon presentation by such Bank of a statement
of the amount setting forth the Bank's calculation thereof. In determining such
amount, such Bank may use any reasonable averaging and attribution methods.

      Section 4.11 Indemnity of Borrower. THE BORROWER AGREES TO INDEMNIFY EACH
BANK AND TO HOLD EACH BANK HARMLESS FROM AND AGAINST ANY LOSS, COST OR EXPENSE
THAT SUCH BANK MAY REASONABLY SUSTAIN OR INCUR AS A CONSEQUENCE OF (A) DEFAULT
BY THE BORROWER IN PAYMENT OF THE PRINCIPAL AMOUNT OF OR ANY INTEREST ON ANY
LIBOR LOANS AS AND WHEN DUE AND PAYABLE, INCLUDING ANY SUCH LOSS OR EXPENSE
ARISING FROM INTEREST OR FEES PAYABLE BY SUCH BANK TO LENDERS OF FUNDS OBTAINED
BY IT IN ORDER TO MAINTAIN ITS LIBOR LOANS, OR (B) DEFAULT BY THE BORROWER IN
MAKING A BORROWING OR CONVERSION AFTER THE BORROWER HAS GIVEN (OR IS DEEMED TO
HAVE GIVEN) A LOAN REQUEST OR A CONVERSION REQUEST (EXCLUDING, HOWEVER, ANY LOAN
REQUEST THAT PURSUANT TO Section 2.6 MAY BE REVOKED WITHOUT PENALTY AND THE
DEEMED WITHDRAWAL OF A LOAN REQUEST PURSUANT TO Section 4.6). THE BORROWER
AGREES THAT THE INDEMNIFICATION OF THE BANKS BY BORROWER SET FORTH IN THIS
Section 4.11 INCLUDES INDEMNIFICATION IN THE EVENT OR ORDINARY NEGLIGENCE ON THE
PART OF THE BANKS BUT DOES NOT INCLUDE INDEMNIFICATION OF A BANK FOR SUCH BANK'S
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

      Section 4.12 Interest on Overdue Amounts; Late Charge. To the extent
required by the Requisite Banks following the occurrence anD during the
continuance of any Event of Default, and regardless of whether or not the Agent
or the Banks shall have accelerated the maturity of the Loans, all Loans shall
bear interest payable on demand at a rate per annum equal to two percent (2%)
above the rate that would otherwise be applicable at such time, until such
amount shall be paid in full (after as well as before judgment), and the Letter
of Credit Fee shall be increased to a rate per annum equal to two percent (2%)
above the Letter of Credit Fee that would otherwise be applicable at such time,
or if such rate shall exceed the maximum rate permitted by law, then at the
maximum rate permitted by law. In addition, the Borrower shall pay a late charge
equal to three percent (3%) of any amount of interest and/or principal payable
on the Loans or any other amounts payable hereunder or under the Loan Documents,
which is not paid within ten (10) days of the date when due.

      Section 4.13 Certificate. A certificate, prepared in good faith by a Bank
consistent with such Bank's practice in calculating such amounts, setting forth
any amounts payable pursuant to Section 4.8, Section 4.9, Section 4.10, Section
4.11 or Section 4.12 and a brief explanation of such amounts which are due,
submitted by any Bank or the Agent to the Borrower, shall be prima facie
evidence of any such amounts. Any such Certificate setting forth any amounts
payable pursuant to Section 4.8, Section 4.9 or Section 4.10 must be delivered
to the Agent and the Borrower within one hundred twenty (120) days after the
affected Bank becomes aware of the basis for any such claim; provided that if
such Certificate is not delivered to the Agent and the Borrower within one
hundred twenty (120) days after the affected Bank becomes aware of the basis for
any such claim, such Bank shall only be entitled to receive payment pursuant to
Section 4.8, Section 4.9 or Section 4.10, as applicable, with respect to amounts
which arose

                                       41
<PAGE>

during the one hundred twenty (120) day period prior to the date such Bank
delivered such Certificate to the Agent and the Borrower.

      Section 4.14 Limitation on Interest.

            (a) Notwithstanding anything in this Agreement or the other Loan
Documents to the contrary, it is the intent of the Agent, the Banks and the
Borrower to conform to and contract in strict compliance with all applicable
usury laws from time to time in effect. All agreements (including the Loan
Documents) between Agent, the Banks and the Borrower (or any other party liable
with respect to any indebtedness under the Loan Documents) are hereby limited by
the provisions of this Section which shall override and control all such
agreements, whether now existing or hereafter arising and whether written or
oral. In no way, nor in any event or contingency (including but not limited to
prepayment, default, demand for payment, or acceleration of the maturity of any
obligation), shall the interest taken, reserved, contracted for, charged or
received under this Agreement, any other Loan Document, or otherwise, exceed the
maximum nonusurious amount permissible under applicable law. If, from any
possible construction of this Agreement, any other Loan Document, or any other
document, interest would otherwise be taken, reserved, contracted for, charged
or payable in excess of the maximum nonusurious amount, any such construction
shall be subject to the provisions of this Section and this Agreement, such
other Loan Document, and such other document shall be automatically reformed and
the interest taken, reserved, contracted for, charged or payable shall be
automatically reduced to the maximum nonusurious amount permitted under
applicable law, without the necessity of execution of any amendment or new
document. If any Bank shall ever receive anything of value which is interest or
characterized as interest under applicable law and which would apart from this
provision be in excess of the maximum lawful nonusurious amount, an amount equal
to the amount which would have been excessive interest shall, without penalty,
be applied to the reduction of the principal amount owing on the Loans to it (in
inverse order of maturity) and not to the payment of interest, or refunded to
the Borrower if and to the extent such amount which would have been excessive
exceeds such unpaid principal. The right to accelerate maturity of the Loans and
the other Obligations does not include the right to accelerate any interest
which has not otherwise accrued on the date of such acceleration, and the Agent
and the Banks do not intend to charge or receive any unearned interest in the
event of acceleration. All interest paid or agreed to be paid to the Banks on
the Loans shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full stated term (including any
renewal or extension) of the Loans so that the amount of interest on account of
the Loans does not exceed the maximum nonusurious amount permitted by applicable
law. As used in this Section, the term "applicable law" shall mean such laws as
they now exist or may be changed or amended or come into effect in the future.
As used in this Section, the term "interest" includes all amounts that
constitute, are deemed, or are characterized as interest under applicable law.

            (b) If at any time the interest rate (the "Stated Rate") called for
under this Agreement or any other Loan Document exceeds or would exceed the
Highest Lawful Rate, the rate at which interest shall accrue hereunder or
thereunder shall automatically be limited to the Highest Lawful Rate, and shall
remain at the Highest Lawful Rate until the total amount of interest accrued
equals the total amount of interest which would have accrued but for the
operation of this sentence. Thereafter, interest shall accrue at the Stated Rate
unless and until the

                                       42
<PAGE>

Stated Rate would again exceed the Highest Lawful Rate, in which case the
immediately preceding sentence shall apply.

            (c) Borrower hereby agrees that as a condition precedent to any
claim seeking usury penalties against Banks, Borrower will provide written
notice to Agent, advising Agent in reasonable detail of the nature and amount of
the violation, and Banks shall have sixty (60) days after receipt of such notice
in which to correct such usury violation, if any, by either refunding such
excess interest to Borrower or crediting such excess interest against the Loans
and/or any other indebtedness then owing by Borrower to Banks. To the extent
that Banks are relying on Chapter 303, as amended, of the Texas Finance Code to
determine the Highest Lawful Rate, Banks will utilize the weekly rate ceiling
from time to time in effect as provided in such Chapter 303, as amended. To the
extent United States federal law permits a greater amount of interest than is
permitted under Texas law, Banks will rely on United States federal law instead
of such Chapter 303, as amended, for the purpose of determining the Highest
Lawful Rate. Additionally, to the extent permitted by applicable law now or
hereafter in effect, Banks may, at Banks' option and from time to time,
implement any other method of computing the maximum lawful rate under such
Chapter 303, as amended, or under other applicable law by giving notice, if
required, to Borrower as provided by applicable law now or hereafter in effect.
This Section 4.14 will control all agreements between Borrower, Agents and
Banks.

            (d) Borrower and Banks expressly agree that in no event shall the
provisions of Chapter 346 of the Texas Finance Code (which regulates certain
revolving credit loan accounts and revolving triparty accounts) apply to Loans
or to any advance of Loans made pursuant to the terms of this Agreement.

      Section 4.15 Certain Provisions Relating to Increased Costs. If no Default
or Event of Default shall have occurred and be continuing, and if any Bank has
requested payment or compensation for any losses or costs to be reimbursed
pursuant to any one or more of the provisions of Section 4.9 or Section 4.10
(each, an "Affected Bank"), then, within thirty (30) Business Days after such
notice or request for payment or compensation, Borrower shall have the one-time
right as to such Affected Bank, to be exercised by delivery of written notice
delivered to the Agent and the Affected Bank within thirty (30) Business Days of
receipt of such notice, to elect to cause the Affected Bank to transfer its
Commitment to a replacement Bank or Banks reasonably approved by Agent unless
following receipt of such notice such Bank withdraws such request for payment or
compensation (it being acknowledged that Agent may reasonably disapprove a
replacement Bank if such Bank is currently a Bank and the assignment of some or
all of the Commitment of the Affected Bank would result, in Agent's judgment, in
such Bank holding a disproportionately great Commitment Percentage). Upon any
such purchase of the Commitment of the Affected Bank, the Affected Bank's
interest in the Obligations and its rights hereunder and under the Loan
Documents shall terminate at the date of purchase (other than those rights of a
Bank that expressly survive termination of this Agreement), and the Affected
Bank shall promptly execute all documents reasonably requested to surrender and
transfer such interest. The purchase price for the Affected Bank's Commitment
shall equal any and all amounts outstanding and owed by Borrower to the Affected
Bank, including principal and all accrued and unpaid interest or fees and
amounts due pursuant to Section 4.9 and Section 4.10.

                                       43
<PAGE>

Section 5. UNSECURED OBLIGATIONS; GUARANTY.

      Section 5.1 Unsecured Obligations. The Banks have agreed to make the Loans
to the Borrower on an unsecured basis. Notwithstanding the foregoing, the
Obligations shall be guaranteed by Guarantor pursuant to the Guaranty.

      Section 5.2 Addition and Removal of Properties and Eligible Note
Receivable.

            (a) Subject to the terms of this Agreement and the satisfaction of
all of the conditions set forth below in this Section 5.2, thE Borrower shall
have the right from time to time to add a parcel or parcels of Real Estate to
the Properties, or to add an Eligible Note Receivable to the Eligible Notes
Receivable, or remove an Eligible Note Receivable or parcel or parcels of Real
Estate as a Property.

            (b) Each parcel of Real Estate (whether included as of the date of
this Agreement or hereafter added) shall be owned one hundred percent (100%) in
fee simple by the Borrower, or subject to the provisions of Section 5.3, a
Subsidiary Guarantor, or Borrower oR such Subsidiary Guarantor shall hold a
leasehold interest in a parcel of Real Estate pursuant to a mortgageable ground
lease as provided herein, and in any case shall satisfy all of the following
conditions:

                  (i) such Real Estate shall be free and clear of all Liens
other than the Liens permitted in Section 8.2(i) and (iii);

                  (ii) such Real Estate shall be a completed existing resort or
hotel asset or office asset located in the United States which is an income
producing operating property;

                  (iii) such Real Estate shall not have any environmental,
structural, title, survey, zoning or other defects that would give rise to a
materially adverse effect as to the value, use of or ability to sell or
refinance such Real Estate;

                  (iv) if Borrower or such Subsidiary Guarantor shall own a
leasehold interest in such Real Estate, Borrower shall certify to Agent that (A)
such ground lease is granted by the fee owner of such Real Estate, (B) the
leasehold interest therein may be encumbered, transferred and/or assigned
without the consent of the lessor, (C) such ground lease has a remaining term
(including any renewal terms exercisable at the sole option of the lessee) of at
least forty (40) years, (D) no default (after the expiration of any applicable
grace or notice and cure periods) has occurred thereunder and is continuing, and
(E) such ground lease contains mortgagee protection provisions to the effect
that (1) the lessor shall notify any holder of a security interest in such lease
of the occurrence of any default by the lessee under such lease and shall afford
such holder a reasonable period of time to cure such default, (2) the lessor
shall not terminate the lease because of a default by the lessee thereunder
during any period in which any holder of the security interest in such lease is
in the process of prosecuting remedies to obtain possession of the leasehold
estate in the Real Estate, and (3) in the event that such lease is terminated,
any holder of a security interest in such lease shall have the option to enter
into a new lease with the lessor for the remainder of the term thereof that has
terms substantially identical to those contained in the terminated lease;
provided, however, that at any one time the Properties or the real estate owned
by a borrower underlying the Eligible Notes Receivable consisting of leasehold
estates, shall not cause a violation of the covenant set forth in Section 9.5(d)
and

                                       44
<PAGE>

the remainder must be owned in fee simple (provided further that if Borrower or
such Subsidiary Guarantor owns both leasehold and fee simple title to a
Property, it shall not be counted as a leasehold estate);

                  (v) on the date the information in Section 5.2(d)(iii) is
submitted to the Agent, office assets shall be at least seventy percenT (70%)
leased pursuant to fully executed Leases to tenants taking occupancy within the
immediately succeeding 180 days; and

                  (vi) on the date the information in Section 5.2(d)(iii) is
submitted to the Agent, resort or hotel assets shall have had sixty percent
(60%) average occupancy over the immediately preceding twelve (12) months.

            (c) Each Eligible Note Receivable shall be owned one hundred percent
(100%) by the Borrower (it being acknowledged that participations in the
underlying loan may be sold to other institutional investors) or, subject to the
provisions of Section 5.3, a Subsidiary Guarantor, and in any case shall satisfy
all of the following conditions:

                  (i) Such Eligible Note Receivable (whether included as of the
date of this Agreement or hereafter added) shall satisfy each of the provisions
within the definition of Eligible Note Receivable;

                  (ii) The underlying real estate directly or indirectly
securing such Eligible Note Receivable shall not have any environmental,
structural, title, survey, zoning or other defects that would give rise to a
material adverse effect as to the value, use or ability to sell or refinance
such real estate;

                  (iii) If the borrower under such Eligible Note Receivable
shall own a leasehold interest in such real estate, Borrower shall deliver a
certification to Agent of the type described in Section 5.2(b)(iv) with respect
thereto, and such interest shall be subject to the limit in Section 9.5(d); and

                  (iv) Upon the request of Agent, Borrower shall deliver to
Agent copies of any agreements evidencing or securing such Eligible Note
Receivable (and if such Eligible Note Receivable is a mezzanine loan, any
agreements relating to any senior mortgage or mezzanine loan any and
participation agreement), and operating statements, rent rolls and other
property level information relating to the real estate.

            (d) The addition of any Real Estate as a Property, and the addition
of any Eligible Note Receivable shall also be subject to the satisfaction of the
following conditions, in addition to the conditions set forth above in Section
5.2(b) and (c):

                  (i) in connection with an addition, no Event of Default shall
have occurred and be continuing and no Default or Event of Default would result
from such addition;

                  (ii) each of the Real Estate and Eligible Note Receivable
specific representations and warranties set forth in this Agreement shall be
true and correct in all material respects with respect to any such added Real
Estate and Eligible Note Receivable ;

                                       45
<PAGE>

                  (iii) in connection with any addition, the Agent shall have
received written notice from the Borrower of its desire to obtain such addition
no later than one (1) Business Day prior to the date on which such addition is
to be effected, together with the following items in form and substance
satisfactory to the Agent:

                        (A) a Certification from an Authorized Officer of
Borrower and Crescent OP that no Event of Default exists and no Default or Event
of Default will arise as of the date of the addition of such Real Estate or
Eligible Note Receivable, taking into account the addition of such Real Estate
or Eligible Note Receivable;

                        (B) a Guaranty if the Agent has approved ownership of
such Real Estate or Eligible Note Receivable by a Subsidiary Guarantor in
accordance with Section 5.3; and

                        (C) such other documents, opinions and assurances as
Agent may reasonably request, all in form and substance satisfactory to Agent;
and

                  (iv) Agent shall have received payment of all its reasonable
out-of-pocket expenses in connection with the addition of such Property or
Eligible Note Receivable, including the reasonable fees and expenses of Agent's
Special Counsel.

            (e) The removal of any Property or any Eligible Note Receivable
shall also be subject to the satisfaction of the following conditions:

                  (i) in connection with the removal of a Property, no Default
or Event of Default shall have occurred and be continuing and no Default or
Event of Default will result from such removal (provided that if a Default shall
have occurred and be continuing but shall be fully cured (without any other
Default or Event of Default arising) by the removal of such Property, the
existence of such Default shall not prevent the removal of such Property);

                  (ii) in connection with the removal of an Eligible Note
Receivable, no Event of Default shall have occurred and be continuing and no
Default or Event of Default will result from such removal;

                  (iii) the Agent shall have received written notice from the
Borrower of its desire to obtain such removal no later than five (5) Business
Days prior to the date on which such removal is to be effective, together with
the following items:

                        (A) a Compliance Certificate, together with an updated
list of the Properties and the Eligible Notes Receivable remaining after such
removal, adjusted to give effect to such removal and demonstrating that no
Default (in connection with the removal of a Property) or Event of Default (in
connection with the removal of a Property or an Eligible Note Receivable) shall
have occurred and be continuing and that no Default or Event of Default shall
result from such removal; and

                        (B) payment on the date of such removal to Agent on
behalf of the Banks of any amounts required to be paid pursuant to Section
3.2(b); and

                                       46
<PAGE>

                  (iv) the Agent shall have received payment of all of its
reasonable out-of-pocket expenses in connection with the removal of such
Property or Eligible Note Receivable, including the reasonable fees and expenses
of Agent's special counsel.

            (f) In the event that an Eligible Note Receivable shall no longer
meet the requirements under this Agreement of an Eligible Note Receivable, it
shall no longer be considered as an Eligible Note Receivable and may, subject to
the terms of this Agreement, be removed by transfer (including by dividend or
distribution) to Crescent OP or one of its Subsidiaries at any time thereafter.

            (g) Schedule II shall be deemed amended to reflect any addition or
removal of a Property in accordance with this Section 5.2 or Section 5.3, as
applicable.

      Section 5.3 Subsidiary Guarantors.

            (a) In the event that the Agent approves ownership of a Property or
an Eligible Note Receivable after the Closing Date pursuant to Section 5.2 by
any Subsidiary of Crescent OP in which Crescent OP directly or indirectly owns a
one hundred percent (100%) interest and in which Crescent OP has control over
all major day-to-day decisions with respect to the operation of such entity,
Crescent OP shall cause such Subsidiary to execute and deliver to Agent a
Guaranty, and such Subsidiary shall become a Subsidiary Guarantor hereunder.
Crescent OP shall further cause such Subsidiary to become a party to the
Contribution Agreement. The organizational agreements of such Subsidiary
Guarantor or such other resolutions or consents satisfactory to Agent shall
specifically authorize such Subsidiary Guarantor to guarantee the Obligations.
Crescent OP shall further cause all representations, covenants and agreements in
the Loan Documents with respect to or applicable to Subsidiary Guarantors to be
true and correct with respect to such Subsidiary Guarantor. In connection with
the delivery of such Guaranty, Crescent OP shall deliver to the Agent such
organizational documents, resolutions, consents, opinions and other documents
and instruments as the Agent may reasonably require (provided that in any event
Borrower shall provide a favorable non-consolidation opinion addressed to the
Banks and the Agent, in form and substance satisfactory to the Agent, from
counsel to the Borrower, the General Partner and the Guarantors).

            (b) The Borrower may request in writing that the Agent release, and
the Agent shall release, a Subsidiary Guarantor from the Guaranty so long as:

                  (i) if such Subsidiary Guarantor owns a Property, no Default
or Event of Default shall then be in existence or would occur as a result of
such release, including without limitation, a Default or Event of Default
resulting from a violation of any of the covenants contained in Section 9;

                  (ii) if such Subsidiary Guarantor does not own a Property, no
Event of Default shall then be in existence and no Default or Event of Default
would occur as a result of such release, including without limitation a Default
or Event of Default resulting from a violation of any of the covenants contained
in Section 9;

                  (iii) the Agent shall have received such written request at
least five (5) Business Days prior to the requested date of release; and

                                       47
<PAGE>

                  (iv) compliance by Borrower with the requirements of Section
5.2(e)(iii).

Delivery by the Borrowers to the Agent of any such request for a release shall
constitute a representation by the Borrowers that the matters set forth in the
preceding sentence (both as of the date of the giving of such request and as of
the date of the effectiveness of such request) are true and correct with respect
to such request. The definition of "Subsidiary Guarantor" shall be deemed
amended to reflect any addition or removal of a Subsidiary Guarantor in
accordance with this Section 5.3.

      Section 5.4 Right to Obtain Appraisals. The Agent on behalf of the Banks
shall have the right upon the request of the Requisite Banks to obtain from time
to time, at the Borrower's cost and expense, Appraisals of the Properties or
properties subject to Eligible Notes Receivable which will be ordered by the
Agent, provided that so long as no Event of Default shall have occurred and be
continuing, the Borrower shall only be obligated to pay for the costs and
expenses associated with such Appraisals once during the term of the Loans. The
costs and expenses incurred by the Agent in obtaining such Appraisals shall be
paid by the Borrower forthwith upon billing or request by the Agent for
reimbursement therefor.

Section 6. REPRESENTATIONS AND WARRANTIES.

            The Borrower and the Guarantor represent and warrant to the Agent
and the Banks as follows:

      Section 6.1 Corporate Authority, Etc.

            (a) Organization; Good Standing. The Borrower is a Delaware limited
partnership duly organized pursuant to a limited partnership agreement and a
limited partnership certificate dated January 21, 2000, and amendments thereto,
filed with the Secretary of State of Delaware and is validly existing and in
good standing under the laws of Delaware. The General Partner is a Delaware
limited liability company duly organized pursuant to its certificate of
organization and amendments thereto filed with the Secretary of State of
Delaware and is validly existing and in good standing under the laws of
Delaware. Crescent OP is a Delaware limited partnership duly organized pursuant
to a limited partnership agreement, as amended, and a limited partnership
certificate dated February 9, 1994, and amendments thereto, filed with the
Secretary of State of Delaware and is validly existing and in good standing
under the laws of Delaware. CREEL is a Delaware corporation duly organized
pursuant to its articles of incorporation, and amendments thereto, filed with
the Secretary of State of Delaware and is validly existing and in good standing
under the laws of Delaware. Crescent REIT is a Texas real estate investment
trust duly organized pursuant to its Restated Declaration of Trust and
amendments thereto filed in Tarrant County, Texas and is validly existing and in
good standing under the laws of the State of Texas. Each Subsidiary Guarantor
and Spectrum Entity is a limited partnership, limited liability company or other
entity duly organized and validly existing and in good standing under the laws
of its respective State of organization. Each of the Borrower, the General
Partner, the Guarantor and the Spectrum Entities (i) has all requisite power to
own its respective properties and conduct its respective business as now
conducted and as presently contemplated, and (ii) as to the Borrower, the
Guarantor and the Spectrum Entities, is in good standing as a foreign entity and
is duly authorized to do business in the jurisdictions

                                       48
<PAGE>

where its respective Real Estate is located or in which the real estate subject
to an Eligible Note Receivable is located to the extent required, and as to the
Borrower, the General Partner and the Guarantor, in each other jurisdiction
where a failure to be so qualified in such other jurisdiction has had or could
have a Material Adverse Effect. Crescent REIT is a real estate investment trust
in full compliance with and entitled to the benefits of Section 856 of the Code.
Each oF Crescent OP and Borrower is a qualified subsidiary of a real estate
investment trust within the meaning of the Code.

            (b) Subsidiaries. Each of the Subsidiaries of Crescent OP (other
than the Borrower, the Subsidiary Guarantor and the Spectrum Entities, as to
which Section 6.1(a) applies) (i) is a corporation, limited partnership, limited
liability company or trust dulY organized under the laws of its State of
organization and is validly existing and in good standing under the laws
thereof, (ii) has all requisite power to own its property and conduct its
business as now conducted and as presently contemplated and (iii) is in good
standing and is duly authorized to do business in each jurisdiction where a
failure to be so qualified or in good standing has had or could have a Material
Adverse Effect.

            (c) Authorization. The execution, delivery and performance of this
Agreement and the other Loan Documents to which the Borrower, the General
Partner, Crescent REIT or the Guarantor is or is to become a party and the
transactions contemplated hereby and thereby (i) are within the authority of
such Person, (ii) have been duly authorized by all necessary proceedings on the
part of such Person, (iii) do not and will not conflict with or result in any
breach or contravention of any provision of law, statute, rule or regulation to
which such Person is subject or any judgment, order, writ, injunction, license
or permit applicable to such Person, (iv) do not and will not conflict with or
constitute a default (whether with the passage of time or the giving of notice,
or both) under any provision of the articles of incorporation, partnership
agreement, certificate of formation, operating agreement, declaration of trust
or other charter documents or bylaws of, or any mortgage, indenture (including,
without limitation, the Bond Indenture), agreement, contract or other instrument
binding upon, such Person or any of its properties, and (v), except as provided
in the Loan Documents, do not and will not result in or require the imposition
of any lien or other encumbrance on any of the properties, assets or rights of
such Person.

            (d) Enforceability. The execution and delivery of this Agreement and
the other Loan Documents to which the Borrower, the General Partner, Crescent
REIT or the Guarantor is or is to become a party are valid and legally binding
obligations of such Person enforceable in accordance with the respective terms
and provisions hereof and thereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors' rights and except to the
extent that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding
therefor may be brought.

      Section 6.2 Governmental Approvals. The execution, delivery and
performance of this Agreement and the other Loan Documents to which the
Borrower, the General Partner, Crescent REIT or the Guarantor is or is to become
a party and the transactions contemplated hereby and thereby do not require the
approval or consent of, or filing with, any governmental agency or authority
other than those already obtained.

                                       49
<PAGE>

      Section 6.3 Title to Properties; Leases. Borrower and Subsidiary Guarantor
own all of the Properties and Eligible Notes Receivable, subject to no
mortgages, conditional sales agreements, title retention agreements, liens or
other encumbrances except for Liens permitted by this Agreement. Crescent OP and
its Subsidiaries have good and marketable (or with respect to any properties in
Texas, good and indefeasible) fee simple title to or leasehold estate in all
real property reasonably necessary for the operation of their respective
business, free from all liens or encumbrances of any nature whatsoever, except
for Permitted Liens. Crescent OP or a Subsidiary of Crescent OP is the insured
under owners' policies of title insurance covering all real property owned by
such Person, in each case in an amount not less than the purchase price for such
real property.

      Section 6.4 Financial Statements. Crescent OP has furnished or caused to
be furnished to each of the Banks: (a) the consolidateD balance sheets of
Crescent OP and its Subsidiaries and Crescent REIT and its Subsidiaries as of
the Balance Sheet Date certified by an Authorized Officer of Crescent OP and
Crescent REIT, respectively, as fairly presenting the balance sheet of such
Persons for such period, (b) the balance sheet of the Borrower as of the Balance
Sheet Date certified by Authorized Officer of the Borrower as fairly presenting
the balance sheet of the Borrower for such period, (c) the statement of
operating income for each Property for fiscal year 2003 and for the fiscal year
2004 through September 30, 2004, certified by an Authorized Officer of the
Borrower or the Subsidiary Guarantor, as applicable, as fairly presenting the
operating income for each Property for such periods, and (d) certain other
financial information relating to the Borrower, Crescent OP, Crescent REIT and
their respective Subsidiaries and the Properties and Eligible Notes Receivable
requested by the Agent. Such balance sheets and statements have been prepared in
accordance with generally accepted accounting principles and fairly present the
respective financial conditions of the Borrower, Crescent OP, Crescent REIT and
their respective Subsidiaries as of such dates and the results of the operations
of the Borrower, Crescent OP, Crescent REIT and their respective Subsidiaries
for such periods. There are no liabilities, contingent or otherwise, of the
Borrower, Crescent OP, Crescent REIT or any of their respective Subsidiaries
required by generally accepted accounting principles to be shown on such
financial statements if prepared in accordance with generally accepted
accounting principles involving material amounts not disclosed in said financial
statements (including the related notes thereto).

      Section 6.5 No Material Adverse Effect. Since the Balance Sheet Date,
there has occurred no event or circumstance that has had oR could reasonably be
expected to have a Material Adverse Effect.

      Section 6.6 Franchises, Patents, Copyrights, Etc. The Borrower, the
Guarantor and Crescent OP's Subsidiaries possess all franchises, patents,
copyrights, trademarks, trade names, service marks, licenses and permits, and
rights in respect of the foregoing, adequate for the conduct of their business
substantially as now conducted without known violation of any rights of others,
except where a failure to possess such rights has not had or could not
reasonably be expected to have a Material Adverse Effect. None of the Properties
is owned or operated under or by reference to any registered or protected
trademark, tradename, service mark or logo material to operation of such
Properties which is not owned or licensed pursuant to a license agreement in
full force and effect to Crescent OP or one of its Subsidiaries.

                                       50
<PAGE>

      Section 6.7 Litigation. Except as stated on Schedule 6.7, there are no
actions, suits, proceedings or investigations of any kind pending or to the best
of the Borrower's and Guarantor's knowledge and belief threatened against the
Borrower, the General Partner, the Guarantor or any of Crescent OP's
Subsidiaries before any court, tribunal or administrative agency or board has
had or could reasonably be expected to have a Material Adverse Effect or which
question the validity of this Agreement or any of the other Loan Documents.
Except as set forth on Schedule 6.7, as of the date of this Agreement, there are
no judgments outstanding against or affecting any of the Borrower, the
Guarantor, any Spectrum Entity or any of the Properties or Eligible Notes
Receivable.

      Section 6.8 No Materially Adverse Contracts, Etc. Neither the Borrower,
the General Partner, the Guarantor nor any of Crescent OP's Subsidiaries is
subject to any charter, corporate or other legal restriction, or any judgment,
decree, order, rule or regulation that has had or could reasonably be expected
to have a Material Adverse Effect. Neither the Borrower, the General Partner,
the Guarantor nor any of Crescent OP's Subsidiaries is a party to any contract
or agreement that has or is expected, in the reasonable judgment of the partners
or officers of such Person, to have a Material Adverse Effect.

      Section 6.9 Compliance with Other Instruments, Laws, Etc. Without limiting
the terms of Section 6.29, Section 7.20 and Section 8.12, neither the Borrower,
the General Partner, the Guarantor nor any of Crescent OP's Subsidiaries is in
violation of any provision of its partnership agreement, charter or other
organizational documents, bylaws, or any agreement or instrument to which it may
be subject or by which it or any of its properties may be bound or any decree,
order, judgment, statute, license, rule or regulation, in any of the foregoing
cases in a manner that has had or could reasonably be expected to have a
Material Adverse Effect.

      Section 6.10 Tax Status. The Borrower, the General Partner, the Guarantor
and each of Crescent OP's Subsidiaries (a) has made or filed all federal and
state income and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject, if applicable or required, except to the
extent such Person has obtained an extension of the deadline to file such
return, (b) has paid all taxes and other governmental assessments and charges
shown or determined to be due on such returns, reports and declarations, if
applicable or required, except those being contested in good faith and by
appropriate proceedings or where a failure to so pay has not had and could not
reasonably be expected to have a Material Adverse Effect, and (c) has set aside
on its books provisions reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply, if applicable or required. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction except for
those that are being contested as permitted by this Agreement, and the partners
or officers of such Person know of no basis for any such claim.

      Section 6.11 No Event of Default. No Default or Event of Default has
occurred and is continuing.

      Section 6.12 Holding Company and Investment Company Acts. Neither the
Borrower, the General Partner, the Guarantor nor any of Crescent OP's
Subsidiaries is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company", as such terms are defined in
the Public Utility Holding Company Act of 1935; nor is it an

                                       51
<PAGE>

"investment company", or an "affiliate company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.

      Section 6.13 Absence of UCC Financing Statements, Etc. Except with respect
to the Permitted Liens, there is no financing statement, security agreement,
chattel mortgage, real estate mortgage or other document filed or recorded with
any filing records, registry, or other public office, that purports to cover,
affect or give notice of any present or possible future lien on, or security
interest or security title in, any property of the Borrower or the Subsidiary
Guarantor or rights thereunder.

      Section 6.14 Certain Transactions. Except as set forth in the 10-K Report
or as otherwise disclosed in writing to the Agent, none of the members,
partners, officers, trustees, directors, or employees of the Borrower, the
General Partner, the Guarantor or any of Crescent OP's Subsidiaries is a party
to any material transaction with the Borrower (other than for services as
members, partners, employees, officers, trustees and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any member, partner, officer,
trustee, director or such employee or, to the knowledge of the Borrower and the
Guarantor, any corporation, partnership, trust, limited liability company or
other entity in which any member, partner, officer, trustee, director, or any
such employee has a substantial interest or is a member, officer, director,
trustee or partner, unless such contract, agreement or other arrangement is an
arms-length arrangement with terms comparable to those which would be obtained
from an unaffiliated Person or is otherwise approved by the Agent (such approval
not to be unreasonably withheld). For the purposes of this Section 6.14, a
transaction shall be deemed "material" to the extent such transaction would be
required to be disclosed to the shareholders of Crescent REIT pursuant to
applicable securities laws (including, without limitation, Item 404 of
Regulation SK promulgated by the SEC).

      Section 6.15 Employee Benefit Plans. The Borrower, the Guarantor and each
ERISA Affiliate has fulfilled its obligations under the minimum funding
standards of ERISA and the Code with respect to each Employee Benefit Plan,
Multiemployer Plan or Guaranteed Pension Plan and either is in compliance in all
material respects with the presently applicable provisions of ERISA and the Code
with respect to each Employee Benefit Plan, Multiemployer Plan or Guaranteed
Pension Plan, or if not in compliance, any such noncompliance has not had or is
not reasonably likely to have a Material Adverse Effect. Neither the Borrower,
the Guarantor nor any ERISA Affiliate has (a) sought a waiver of the minimum
funding standard under Section 412 of the Code in respect of any Employee
Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan, (b) failed to make
any contribution or payment to any Employee Benefit Plan, Multiemployer Plan or
Guaranteed Pension Plan, or made any amendment to any Employee Benefit Plan,
Multiemployer Plan or Guaranteed Pension Plan, which has resulted or could
result in the imposition of a Lien or the posting of a bond or other security
under ERISA or the Code, or (c) incurred any liability under Title IV of ERISA
other than a liability to the PBGC for premiums under Section 4007 of ERISA.
None of the Real Estate, Properties or Eligible Notes Receivable constitutes a
"plan asset" of any Employee Plan, Multiemployer Plan or Guaranteed Pension
Plan.

                                       52
<PAGE>

      Section 6.16 Regulations T, U and X. No portion of any Loan is to be used
by Borrower or Guarantor for the purpose of purchasing or carrying any "margin
security" or "margin stock" as such terms are used in Regulations T, U and X of
the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 220, 221
and 224. Neither the Borrower nor the Guarantor is engaged, and neither the
Borrower nor the Guarantor will engage, principally or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying any "margin security" or "margin stock" as such terms are used in
Regulations T, U and X of the Board of Governors of the Federal Reserve System,
12 C.F.R. Parts 220, 221 and 224.

      Section 6.17 Environmental Compliance. The Borrower and Guarantor or an
affiliate or agent thereof have taken or caused to be taken all commercially
reasonable steps necessary to investigate the past and present conditions and
usage of the Real Estate and the operations conducted thereon and, based upon
such investigation, makes the following representations and warranties:

            (a) To the best of the Borrower's and Guarantor's knowledge, none of
the Borrower, the General Partner, the Guarantor or Crescent OP's Subsidiaries
or any operator of the Real Estate, or any operations thereon is in violation,
or alleged violation, of any judgment, decree, order, law, license, rule or
regulation pertaining to environmental matters, including without limitation,
those arising under the Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 as
amended ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986
("SARA"), the Federal Clean Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act, or any state or local statute, regulation, ordinance,
order or decree relating to the environment (hereinafter "Environmental Laws"),
which violation involves the Real Estate and has had or could reasonably be
expected to have a Material Adverse Effect.

            (b) Neither the Borrower, the General Partner, the Guarantor nor any
of Crescent OP's Subsidiaries has received notice from any third party
including, without limitation, any federal, state or local governmental
authority, (i) that it has been identified by the United States Environmental
Protection Agency ("EPA") as a potentially responsible party under CERCLA with
respect to a site listed on the National Priorities List, 40 C.F.R. Part 300
Appendix B (1986); (ii) that any hazardous waste, as defined by 42 U.S.C.
Section 9601(5), any hazardous substances as defined by 42 U.S.C.Section
9601(14), any pollutant or contaminant as defined by 42 U.S.C.Section 9601(33)
or any toxic substances, oil or hazardous materials or other chemicals or
substances regulated by any Environmental Laws ("Hazardous Substances") which it
has generated, transported or disposed of have been found at any site at which a
federal, state or local agency or other third party has conducted or has ordered
that the Borrower, the General Partner, the Guarantor or any of Crescent OP's
Subsidiaries conduct a remedial investigation, removal or other response action
pursuant to any Environmental Law; or (iii) that it is or shall be a named party
to any claim, action, cause of action, complaint, or legal or administrative
proceeding (in each case, contingent or otherwise) arising out of any third
party's incurrence of costs, expenses, losses or damages of any kind whatsoever
in connection with the release of Hazardous Substances (provided that with
respect to clauses (i), (ii) and (iii) as they relate to Crescent OP and its
Subsidiaries (other than Borrower and the Subsidiary Guarantors), such
representations shall be limited to the matters described therein that have had
or could reasonably be expected to have a Material Adverse Effect).

                                       53
<PAGE>

            (c) To the best of the Borrower's and Guarantor's knowledge, or in
the case of Real Estate acquired after the date hereof, to the best of the
Borrower's and Guarantor's knowledge except as may be disclosed to Agent in
writing upon the acquisition of the same: (i) no portion of the Real Estate has
been used as a landfill or for dumping or for the handling, processing, storage
or disposal of Hazardous Substances except in accordance with applicable
Environmental Laws, and no underground tank or other underground storage
receptacle for Hazardous Substances is located on any portion of the Real Estate
in violation of any applicable Environmental Law; (ii) in the course of any
activities conducted by the Borrower, the General Partner, the Guarantor or
Crescent OP's Subsidiaries or the operators of any of their Real Estate, no
Hazardous Substances have been generated or are being used on the Real Estate
except in the ordinary course of business and in accordance in all material
respects with applicable Environmental Laws; (iii) there has been no past or
present releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, disposing or dumping (a "Release") or
threatened Release of Hazardous Substances on, upon, into or from the Real
Estate, which Release would have a material adverse effect on the value of any
of the Real Estate or adjacent properties or the environment; (iv) there have
been no Releases on, upon, from or into any real property in the vicinity of any
of the Real Estate which, through soil or groundwater contamination, may have
come to be located on, and which would have a material adverse effect on the
value of, the Real Estate; and (v) any Hazardous Substances that have been
generated on any of the Real Estate have been transported off-site only by
carriers having an identification number issued by the EPA or approved by a
state or local environmental regulatory authority having jurisdiction regarding
the transportation of such substance and treated or disposed of only by
treatment or disposal facilities maintaining valid permits as required under all
applicable Environmental Laws, which transporters and facilities have been and
are, to the best of the Borrower's and the Guarantor's knowledge, operating in
compliance with such permits and applicable Environmental Laws (provided that
with respect to clauses (i)-(v) above as they relate to Crescent OP, its
Subsidiaries and their Real Estate (other than Borrower, the Subsidiary
Guarantors and the Properties), such representations shall be limited to the
matters described therein that have had or could reasonably be expected to have
a Material Adverse Effect); and with respect to clauses (i)-(v) above as they
relate to Borrower, the Subsidiary Guarantors and the Properties, such
representations shall be limited to the matters described therein that have had
or could reasonably be expected to have a Material Adverse Effect on the
Borrower and the Subsidiary Guarantors or a material adverse effect on the
value, use of or ability to sell or refinance any of the Properties.

            (d) No Environmental Law requires (i) the performance of any
Hazardous Substances site assessments, (ii) the removal or remediation of
Hazardous Substances, or (iii) the giving of notice to any governmental agency
or the recording or delivery to other Persons of an environmental disclosure
document or statement, in each case by virtue of the transactions set forth
herein and contemplated hereby, or to the effectiveness of any other
transactions contemplated hereby.

      Section 6.18 Subsidiaries. Schedule 6.18 sets forth, as of the date
hereof, all of the Subsidiaries of Crescent OP, the form and jurisdiction of
organization of each of the Subsidiaries, and Crescent OP's ownership interest
therein.

                                       54
<PAGE>

      Section 6.19 Loan Documents. All of the representations and warranties
made by or on behalf of the Borrower and the Guarantor in this Agreement and the
other Loan Documents or any document or instrument delivered to the Agent or the
Banks pursuant to or in connection with any of such Loan Documents are true and
correct in all material respects, and neither the Borrower nor the Guarantor has
failed to disclose such information as is necessary to make such representations
and warranties not misleading.

      Section 6.20 Property. All of the Borrower's, Guarantors' and Crescent
OP's Subsidiaries' Real Estate are in good condition and working order in all
material respects subject to ordinary wear and tear, other than with respect to
deferred maintenance existing as of the date of acquisition of such property
which is being corrected or repaired in the ordinary course of business. The
Borrower and Crescent OP have completed an appropriate investigation of the
environmental condition of each such property owned or leased by the Borrower,
the Guarantor and Crescent OP's Subsidiaries as of the later of the date of the
Borrower's, the Guarantor's or such Subsidiary's purchase thereof or the date
upon which such property was last security for Indebtedness of the Borrower, the
Guarantor or such Subsidiary, including preparation or updating of a "Phase I"
report and, if recommended by the "Phase I" report, a "Phase II" report, in each
case prepared by a recognized environmental engineer in accordance with
customary standards which discloses that such property is not in violation (or
with respect to properties of Crescent OP and its Subsidiaries (other than those
of Borrower and the Subsidiary Guarantors), not in violation in any material
respect) of the representations and covenants set forth in this Agreement,
unless satisfactory remediation actions are being taken. There are no unpaid or
outstanding real estate or other taxes or assessments on or against any property
of the Borrower, the Guarantor or any of Crescent OP's Subsidiaries which are
payable by the Borrower, the Guarantor or such Subsidiary (except only real
estate or other taxes or assessments, that are not yet due and payable or are
being contested as permitted by this Agreement). There are no pending eminent
domain proceedings against any property of the Borrower, the Guarantor or its
Subsidiaries or any part thereof, and, to the knowledge of the Borrower and the
Guarantor, no such proceedings are presently threatened or contemplated by any
taking authority which in any such case or in the aggregate has had or could
reasonably be expected to have a Material Adverse Effect. None of the property
of the Borrower, the Guarantor or Crescent OP's Subsidiaries is now damaged as a
result of any fire, explosion, accident, flood or other casualty in any manner
which has had or could reasonably be expected to have a Material Adverse Effect.
Neither the Borrower nor any Subsidiary Guarantor is in default under any ground
lease relating to any of the Properties after expiration of any grace or notice
and cure period provided therein.

      Section 6.21 Brokers. Neither the Borrower nor the Guarantor has engaged
or otherwise dealt with any broker, finder or similar entity in connection with
this Agreement or the Loans contemplated hereunder.

      Section 6.22 Ownership. General Partner is the sole general partner of the
Borrower and owns a 1% partnership interest in the Borrower. Crescent OP is the
sole limited partner of the Borrower and owns a 99% partnership interest in the
Borrower. Crescent OP is the sole member of the General Partner. CREEL is the
sole general partner of Crescent OP and owns a 1% partnership interest in
Crescent OP. Crescent REIT is the sole shareholder of CREEL. Crescent REIT is a
limited partner of Crescent OP and, as of the date of this Agreement, owns
approximately an 81% limited partnership interest in Crescent OP. Crescent REIT
owns no

                                       55
<PAGE>

assets other than its stock in CREEL, its interest in Crescent OP as the Limited
Partner, Cash and Short-Term Investments.

      Section 6.23 Solvency. As of the Closing Date and after giving effect to
the transactions contemplated by this Agreement and the other Loan Documents,
including all of the Loans to be made hereunder, and as of the date of each
advance of a Loan or issuance of a Letter of Credit, neither the Borrower nor
any Guarantor is insolvent on a balance sheet basis such that the sum of such
Person's assets exceeds the sum of such Person's liabilities, each such Person
is able to pay its respective debts as they become due, and each such Person has
sufficient capital to carry on its respective businesses.

      Section 6.24 Other Debt. As of the date of this Agreement, none of the
Borrower, the Guarantor nor any of Crescent OP's Subsidiaries is in default of
the payment of any Indebtedness or in any of the material terms of any other
mortgage, deed of trust, security agreement, financing agreement, indenture or
other material lease or agreement to which any of them is a party (provided that
with respect to Crescent OP and its Subsidiaries only, such representation shall
be limited to Indebtedness or other obligations which individually or in the
aggregate exceed $5,000,000.00). Neither the Borrower nor the Guarantor is a
party to or bound by any agreement, instrument or indenture that may require the
subordination in right or time of payment of any of the Obligations to any other
indebtedness or obligation of the Borrower or the Guarantor. The Borrower and
the Guarantor have made available to the Agent copies of all mortgages, deeds of
trust, financing agreements or other material agreements binding upon the
Borrower and the Guarantor and Crescent OP's Subsidiaries or their respective
Real Estate and entered into by the Borrower, the Guarantor and Crescent OP's
Subsidiaries as of the date of this Agreement with respect to any Indebtedness
of such Person.

      Section 6.25 [Intentionally omitted.]

      Section 6.26 No Bankruptcy Filing. None of the Borrower, the General
Partner, the Guarantor, Crescent REIT or any of Crescent OP's Subsidiaries is
contemplating either the filing of a petition by it under any state or federal
bankruptcy or insolvency laws or the liquidation of its assets or property, and
the Borrower and the Guarantor have no knowledge of any Person threatening the
filing of any such petition against it or any of such other Persons.

      Section 6.27 No Fraudulent Intent. Neither the execution and delivery of
this Agreement or any of the other Loan Documents nor the performance of any
actions required hereunder or thereunder is being undertaken by the Borrower or
the Guarantor with or as a result of any actual intent by any of such Persons to
hinder, delay or defraud any entity to which any of such Persons is now or will
hereafter become indebted.

      Section 6.28 Transaction in Best Interests of Parties; Consideration. The
transaction evidenced by this Agreement and the other Loan Documents is in the
best interests of the Borrower, the Guarantor. The direct and indirect benefits
to inure to the Borrower and the Guarantor pursuant to this Agreement and the
other Loan Documents constitute more than "reasonably equivalent value" (as such
term is used in Section 548 of the Bankruptcy Code) and "valuable
consideration," "fair value," and "fair consideration," (as such terms are used
in any applicable

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state fraudulent conveyance law), in exchange for the benefits to be provided by
the Borrower and the Guarantor pursuant to this Agreement and the other Loan
Documents.

      Section 6.29 Special Purpose Entity. The Borrower and Subsidiary Guarantor
(and any of their constituent entities, including, without limitation, the
Spectrum Entities) are in full and complete compliance with the separateness and
special purpose entity covenants contained in their respective partnership
agreements, operating agreements, articles of incorporation, bylaws or other
organizational or charter documents, as applicable, and in all other material
respects with respect to such organizational documents.

      Section 6.30 Contribution Agreement. The Borrower, Crescent OP and the
Subsidiary Guarantor have executed and delivered the Contribution Agreement, and
the Contribution Agreement constitutes the valid and legally binding obligations
of such parties enforceable against them in accordance with the terms and
provisions thereof, except as enforceability is limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the extent that
availability of the remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding therefor may
be brought.

      Section 6.31 OFAC. The Borrower and the Guarantor are not (and will not
be) a person with whom any Bank is restricted from doing business under OFAC
(including, those Persons named on OFAC's Specially Designated and Blocked
Persons list) or under any statute, executive order (including the September 24,
2001 Executive Order Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism), or other governmental
action and are not and shall not engage in any dealings or transactions or
otherwise be associated with such persons. In addition, each of Borrower and
Guarantor hereby agrees to provide to the Banks any additional information that
a Bank deems necessary from time to time in order to ensure compliance with all
applicable laws concerning money laundering and similar activities.

      Section 6.32 Line of Credit. This Agreement, the other Loan Documents, the
Total Commitment and the credit facility and other transactions contemplated by
this Agreement constitute the "Line of Credit" as defined in an used in the Bond
Indenture.

      Section 6.33 Effectiveness of First Supplemental Indenture. All of the
conditions to the effectiveness of the First Supplemental Indenture dated as of
December 29, 2004 among Crescent OP and Crescent Finance Company, as Issuers,
and UMB Bank, N.A., as Trustee, have been satisfied and such First Supplemental
Indenture is in full force and effect.

Section 7. AFFIRMATIVE COVENANTS.

      The Borrower and Guarantor covenant and agree that, so long as any Loan,
Note or Letter of Credit is outstanding or any Bank has any obligation to make
any Loans or the Issuing Bank has any obligation to issue any Letters of Credit:

      Section 7.1 Punctual Payment. The Borrower will duly and punctually pay or
cause to be paid the principal and interest on the Loans and all interest and
fees provided for in this

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Agreement, all in accordance with the terms of this Agreement and the Notes as
well as all other sums owing pursuant to the Loan Documents.

      Section 7.2 Maintenance of Office. The Borrower will maintain its chief
executive office at 777 Main Street, Suite 2100, Tarrant County, Fort Worth,
Texas, or at such other place in the United States of America as the Borrower
shall designate upon prior written notice to the Agent and the Banks, where
notices, presentations and demands to or upon the Borrower in respect of the
Loan Documents may be given or made.

      Section 7.3 Records and Accounts. The Borrower will (a) keep true and
accurate records and books of account in which full, true and correct entries
will be made in accordance with generally accepted accounting principles and (b)
maintain reasonably adequate accounts and reserves for all taxes (including
income taxes), depreciation and amortization of its properties. The Borrower
shall not, except as required by generally accepted accounting principles or as
required to improve internal controls over financial reporting or otherwise
comply with the Sarbanes-Oxley Act of 2002 (but subject to the terms of Section
1.2) or otherwise permitted with the prior written consent of the Requisite
Banks, make any material change to the accounting procedures used by it in
preparing the financial statements and other information described in Section
6.4.

      Section 7.4 Financial Statements, Certificates and Information. The
Borrower will deliver or cause to be delivered to the Agent:

            (a) as soon as practicable, but in any event not later than 105 days
after the end of each fiscal year, the unaudited consolidating balance sheet of
the Borrower at the end of such year, and the related unaudited statements of
income, changes in capital and cash flows for such year, each setting forth in
comparative form the figures for the previous fiscal year and all such
statements to be in reasonable detail, prepared in accordance with generally
accepted accounting principles, and accompanied by any other information the
Banks may reasonably request to complete a financial analysis of the Borrower,
together with a written statement from an Authorized Officer of the Borrower to
the effect that they have read a copy of this Agreement, and that, in making the
examination necessary to said certification, they have obtained no knowledge of
any Default or Event of Default, or, if such Authorized Officer shall have
obtained knowledge of any then existing Default or Event of Default they shall
disclose in such statement any such Default or Event of Default;

            (b) as soon as practicable, but in any event not later than 45 days
after the end of each fiscal quarter (other than the fourth fiscal quarter in
each year), copies of the unaudited balance sheet of the Borrower as at the end
of such quarter, and the related unaudited statements of income, changes in
capital and cash flows for the portion of the Borrower's fiscal year then
elapsed, all in reasonable detail and prepared in accordance with generally
accepted accounting principles, together with a certification by an Authorized
Officer of the Borrower that the information contained in such financial
statements fairly presents the financial position of the Borrower on the date
thereof (subject to year-end adjustments);

            (c) contemporaneously with the delivery of the financial statements
referred to in clause (a) above, a statement of all contingent liabilities of
the Borrower which are not

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<PAGE>

reflected in such financial statements or referred to in the notes thereto
(including, without limitation, all guarantees, endorsements and other
contingent obligations in respect of indebtedness of others, and obligations to
reimburse the issuer in respect of any letters of credit) all in reasonable
detail and certified by an Authorized Officer of the Borrower;

            (d) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement (a "Compliance
Certificate") certified by an Authorized Officer of the Borrower and the
Subsidiary Guarantor in the form of Exhibit E hereto setting forth in reasonable
detail computations evidencing compliance with the covenants contained in
Section 9 and the other covenants described therein, and (if applicable)
reconciliations to reflect changes in generally accepted accounting principles
since the Balance Sheet Date;

            (e) as soon as practicable but in any event not later than 45 days
after the end of each fiscal quarter (including the fourth fiscal quarter in
each year), a list of each of the Properties, a statement showing the aging of
all receivables (for those receivables sixty (60) days or more past due) and
payables for the Properties, updated Rent Rolls with respect to the Properties,
a summary of each Rent Roll in form reasonably satisfactory to the Agent, a
leasing activity report with respect to each Property and operating and cash
statements for each Property and the Borrower, a list of the Eligible Notes
Receivable, including the outstanding principal balance, acquisition cost (if
acquired), maturity date and collateral for each Eligible Note Receivable, any
delinquencies under the Eligible Notes Receivable, and whether such Eligible
Note Receivable satisfies each and every requirement in this Agreement to
qualify as an Eligible Note Receivable, all certified by an Authorized Officer
of the Borrower and the Subsidiary Guarantor, as applicable;

            (f) as soon as available and in any event within sixty (60) days
after the end of each fiscal year, a schedule of such fiscal year's capital
expenditures, a budget for the next fiscal year's planned capital expenditures
and a detailed operating budget for such next fiscal year, including supporting
schedules, all for each Property owned by the Borrower and the Subsidiary
Guarantor and all certified by an Authorized Officer of the Borrower and the
Subsidiary Guarantor, as applicable;

            (g) upon the request of Agent, copies of all annual federal income
tax returns and amendments thereto of the Borrower, the General Partner, the
Guarantor and Crescent REIT;

            (h) contemporaneously with the filing or mailing thereof, copies of
all material of a financial nature filed with the SEC by Crescent REIT or
Crescent OP or sent to the stockholders or partners of Crescent REIT or Crescent
OP, provided that any such material as to Crescent REIT that is filed with the
SEC and is publicly available pursuant to the SEC's Edgar Filing System or any
successor thereto, and of which the Agent has been notified by Borrower of the
filing thereof, shall be deemed to have been delivered to the Agent upon such
filing;

            (i) upon the request of Agent, such other financial information
concerning Crescent REIT as the Agent may reasonably request;

            (j) such information (including, without limitation, rent rolls,
operating statements and budgets) as the Agent may reasonably request with
respect to any real estate

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<PAGE>

supporting an Eligible Note Receivable as may be in Borrower's or a Subsidiary
Guarantor's possession or reasonably obtainable by such Person; and

            (k) from time to time such other financial data and information in
the possession of the Borrower, the Guarantor or Crescent OP's Subsidiaries
(including without limitation auditors' management letters, property inspection
and environmental reports and information as to zoning and other legal and
regulatory changes affecting the Borrower, the Guarantor or Crescent OP's
Subsidiaries) as the Agent or the Requisite Banks may reasonably request.

      Section 7.5 Notices.

            (a) Defaults. The Borrower or Crescent OP will promptly notify the
Agent in writing of the occurrence of any Default or Event of Default. If any
Person shall give any notice or take any other action in respect of a claimed
default (whether or not constituting an Event of Default) under this Agreement
or under any note, obligation or other evidence of indebtedness to which or with
respect to which the Borrower, the General Partner, the Guarantor or any of
Crescent OP's Subsidiaries is a party or obligor, whether as principal or
surety, and such default would permit the holder of such note or obligation or
other evidence of indebtedness to accelerate the maturity thereof, which
acceleration would constitute a Default or Event of Default or has had or could
reasonably be expected to have a Material Adverse Effect, the Borrower or
Crescent OP shall forthwith give written notice thereof to the Agent describing
the notice or action and the nature of the claimed default.

            (b) Environmental Events. The Borrower or Crescent OP will promptly
give notice to the Agent (i) upon such Person obtaining knowledge of any
potential or known Release, or threat of any Release, of any Hazardous
Substances at or from any Real Estate of the Borrower, the Guarantor or Crescent
OP's Subsidiaries; (ii) of any violation of any Environmental Law that the
Borrower, the Guarantor or any of Crescent OP's Subsidiaries reports in writing
or is reportable by such Person in writing (or for which any written report
supplemental to any oral report is required to be made) to any federal, state or
local environmental agency and (iii) upon becoming aware thereof, of any
inquiry, proceeding, investigation, or other action, including a notice from any
agency of potential environmental liability, of any federal, state or local
environmental agency or board, that in either case involves any Property or has
had or could reasonably be expected to have a Material Adverse Effect.

            (c) Notice of Litigation and Judgments. The Borrower or Crescent OP
will give notice to the Agent in writing within fifteen (15) days of becoming
aware of any litigation or proceedings threatened in writing or any pending
litigation and proceedings affecting the Borrower, the General Partner, the
Guarantor or any of Crescent OP's Subsidiaries or to which any of such Persons
is or is to become a party involving an uninsured claim against any of such
Persons that could reasonably be expected to have a Material Adverse Effect and
stating the nature and status of such litigation or proceedings. The Borrower or
Crescent OP will give notice to the Agent, in writing, in form and detail
reasonably satisfactory to the Agent within ten (10) days of any judgment not
covered by insurance, whether final or otherwise, against the Borrower, the
General Partner, the Guarantor or any of Crescent OP's Subsidiaries in an amount
in excess of $500,000.00.

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<PAGE>

            (d) Notice of Proposed Sales, Encumbrances, Refinance or Transfer of
Property. The Borrower or applicable Subsidiary Guarantor will give notice to
the Agent of any sale or transfer of any Property or Eligible Note Receivable of
Borrower or any Subsidiary Guarantor as required by Section 3.2 and Section 5.2.
In addition, the Borrower or Crescent OP will give notice to the Agent of (i)
any proposed sale or transfer subject to a written agreement by Borrower or any
Subsidiary Guarantor of any Property or Eligible Notes Receivable of Borrower or
such Subsidiary Guarantor during the following fiscal quarter of Borrower, and
(ii) any completed sale, encumbrance, refinance or transfer by Crescent OP or
Crescent OP's Subsidiaries of any Real Estate or Eligible Notes Receivable
during each fiscal quarter of the Borrower and any probable proposed sale,
encumbrance, refinance or transfer of any such Real Estate or Eligible Notes
Receivable during the following fiscal quarter, such notice to be submitted
together with the Compliance Certificate or Crescent OP's Compliance Certificate
provided or required to be provided to the Agent under Section 7.4 or Crescent
OP's Guaranty with respect to such fiscal quarter. The Compliance Certificate or
Crescent OP's Compliance Certificate shall with respect to any proposed sale,
encumbrance, refinance or transfer subject to a written agreement or any
completed sale, encumbrance, refinance or transfer, as applicable, be adjusted
in the best good-faith estimate of the Borrower or Crescent OP to give effect to
such sale, encumbrance, refinance or transfer and demonstrate that no Default or
Event of Default with respect to the covenants referred to therein shall exist
after giving effect to such sale, encumbrance, refinance or transfer.
Notwithstanding the foregoing, in the event of any sale or transfer (whether
individually or in a series of transactions) by Crescent OP or Crescent OP's
Subsidiaries of any assets involving an amount in excess of ten percent (10%) of
the Consolidated Total Assets of Crescent OP as of the beginning of such
calendar year, Crescent OP shall promptly give notice to the Agent of such
transaction, which notice shall be accompanied by Crescent OP's Compliance
Certificate prepared using the financial statements of Crescent OP, as
applicable, most recently provided or required to be provided to the Banks under
Crescent OP's Guaranty, adjusted as provided in the preceding sentence.

      Section 7.6 Existence; Maintenance of Properties; Business Lines.

            (a) The Borrower and Guarantor will do or cause to be done all
things necessary to preserve and keep in full force and effect their respective
legal existence. Crescent OP will cause each of its Subsidiaries and Crescent
REIT to do or cause to be done all things necessary to preserve and keep in full
force and effect their respective legal existence except for such of its
Subsidiaries (other than Borrower, any Subsidiary Guarantor, any Spectrum Entity
or any other partner, member or manager thereof) as Crescent OP shall determine
are no longer necessary for the conduct of its business. The Borrower and
Guarantor will do or cause to be done all things necessary to preserve and keep
in full force all of their respective material rights and franchises and those
of Crescent OP's Subsidiaries and of Crescent REIT except for such rights and
franchises of Crescent OP's Subsidiaries (other than Borrower, any Subsidiary
Guarantor, any Spectrum Entity or any other partner, member or manager thereof)
which Crescent OP shall determine are no longer necessary for the conduct of
such Subsidiaries' business.

            (b) Irrespective of whether proceeds of the Loans are available for
such purpose, the Borrower and Guarantor (i) will cause all of its properties
and those of the Guarantor and Crescent OP's Subsidiaries used or useful in the
conduct of its business or the

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<PAGE>

business of Crescent OP's Subsidiaries to be maintained and kept in good
condition, repair and working order in all material respects (ordinary wear and
tear excepted) and supplied with all necessary equipment, and (ii) will cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof in all cases in which the failure so to do would have a
Material Adverse Effect.

      Section 7.7 Insurance. The Borrower or Guarantor, as applicable, will
procure and maintain or cause to be procured and maintained insurance covering
the Borrower, the Guarantor and Crescent OP's Subsidiaries and their respective
properties (the cost of such insurance to be borne by the insured thereunder) in
such amounts and against such risks and casualties as are customary for
properties of similar character and location, due regard being given to the type
of improvements thereon, their construction, location, use and occupancy.

      Section 7.8 Taxes. The Borrower, the Guarantor and each of Crescent OP's
Subsidiaries and Crescent REIT will duly pay and discharge, or cause to be paid
and discharged, before the same shall become overdue, all taxes, assessments and
other governmental charges imposed upon it and upon the Real Estate, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a lien or charge upon any of its property; provided that any such tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall promptly and diligently be contested (or caused to be contested)
in good faith by appropriate proceedings (or in the case of claims for labor,
materials or supplies in the aggregate of not more than $500,000.00, if the
Borrower, Guarantor, or such Subsidiary or Crescent REIT is taking commercially
reasonably steps approved by Agent to negotiate for the removal of such liens or
claims or otherwise cause the release of such liens or claims) and if the
Borrower, the Guarantor or such Subsidiary or Crescent REIT shall have set aside
on its books reasonably adequate reserves with respect thereto; and provided,
further, that forthwith upon the commencement of proceedings to foreclose any
lien that may have attached as security therefor against (i) any Property or
Eligible Notes Receivable of Borrower or any Subsidiary Guarantor,(ii) any asset
of Crescent OP or any of its Subsidiaries which could reasonably be expected to
have a Material Adverse Effect, the Borrower, the Guarantor and each Subsidiary
or Crescent REIT either (x) will provide a bond issued by a surety reasonably
acceptable to the Agent and sufficient to stay all such proceedings or (y) if no
such bond is provided, will pay each such tax, assessment, charge, levy or
claim.

      Section 7.9 Inspection of Properties and Books. The Borrower and the
Guarantor shall permit the Banks, the Agent or any representative designated by
the Agent, to visit and inspect any of the Real Estate of the Borrower or the
Subsidiary Guarantors, to examine the books of account of the Borrower, the
Guarantor and Crescent OP's Subsidiaries (and to make copies thereof and
extracts therefrom) and to discuss the affairs, finances and accounts of the
Borrower, the Guarantor and Crescent OP's Subsidiaries with, and to be advised
as to the same by, its officers, all at such reasonable times and intervals as
the Agent or any Bank may reasonably request. The Agent and the Banks shall use
good faith efforts to coordinate such visits and inspections so as to minimize
the interference with and disruption to the Borrower's and Guarantor's normal
business operations. From and after the occurrence of an Event of Default which
is continuing, the Borrower shall bear the costs and expenses incurred by Agent
or its representatives in conducting such visits or inspections.

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<PAGE>

      Section 7.10 Compliance with Laws, Contracts, Licenses, and Permits. The
Borrower and Guarantor will comply with, and Crescent OP will cause each of its
Subsidiaries to comply in all respects with (i) all applicable laws and
regulations now or hereafter in effect wherever its business is conducted,
including all Environmental Laws, (ii) the provisions of its certificate of
formation, operating agreement, corporate charter, partnership agreement or
declaration of trust, as the case may be, and other charter documents and
bylaws, (iii) all agreements and instruments (other than the Loan Documents) to
which it is a party or by which it or any of its properties may be bound, (iv)
all applicable decrees, orders, and judgments, (v) all licenses and permits
required by applicable laws and regulations for the conduct of its business or
the ownership, use or operation of its properties, and (vi) all ground leases of
Property with respect to which the Borrower or a Subsidiary Guarantor is the
lessee, except when a failure to so comply with the foregoing (i) - (v) could
not reasonably be expected to have a Material Adverse Effect. If at any time
while any Loan, Note or Letter of Credit is outstanding or the Banks have any
obligation to make Loans hereunder or the Agent has any obligation to issue any
Letters of Credit hereunder, any authorization, consent, approval, permit or
license from any officer, agency or instrumentality of any government shall
become necessary or required in order that the Borrower or the Guarantor may
fulfill any of its obligations hereunder, the Borrower or the Guarantor will
immediately take or cause to be taken all steps necessary to obtain such
authorization, consent, approval, permit or license.

      Section 7.11 Further Assurances. The Borrower and Guarantors will
cooperate with the Agent and the Banks and execute such further instruments and
documents as the Banks or the Agent shall reasonably request to carry out to
their satisfaction the transactions contemplated by this Agreement and the other
Loan Documents.

      Section 7.12 Ownership of Real Estate. Except as provided in Section 5.2
and Section 5.3 above, all interests (whether direct or indirect) of the
Borrower in income-producing real estate assets or notes receivable acquired or
originated after the date hereof shall be owned directly by the Borrower.

      Section 7.13 Investment Advisor. The Borrower and the Guarantors shall be,
and Crescent OP and its Subsidiaries taken as a whole shall be, self-directed
and shall not retain or otherwise rely on any other Person to make its
investment decisions, provided that the Borrower, the Guarantor and Crescent
OP's Subsidiaries shall not be prohibited from consulting with investment
bankers and other advisors in the conduct of their respective businesses.

      Section 7.14 Business Operations. The Borrower and Guarantors shall
operate, and Crescent OP and its Subsidiaries taken as a whole shall operate,
their business substantially as described in the 10-K Report, shall continue to
engage primarily in the businesses described in the 10-K Report and related
businesses (unless otherwise consented to by the Requisite Banks) and in
compliance with the terms and conditions of this Agreement and the Loan
Documents.

      Section 7.15 Limiting Agreements.

            (a) Neither the Borrower nor the Subsidiary Guarantor shall enter
into (nor shall the Borrower permit Crescent OP to enter into) any agreement,
instrument or transaction which has or may have the effect of prohibiting or
limiting the Borrower's or the Subsidiary

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<PAGE>

Guarantor's ability to pledge to Agent Real Estate or Eligible Notes Receivable
which are owned by the Borrower or the Subsidiary Guarantor and are free and
clear of all Liens other than the Liens permitted in Section 8.2(i) and (iii) or
any other assets of the Borrower or the Subsidiary Guarantor as security for the
Loans. The Borrower and the Subsidiary Guarantor shall take (and shall cause
Crescent OP to take) such actions as are necessary to preserve the right and
ability of the Borrower and the Subsidiary Guarantor to pledge such Real Estate
and other assets as security for the Loans without any such pledge after the
date hereof causing or permitting the acceleration (after the giving of notice
or the passage of time, or otherwise) of any other Indebtedness of the Borrower
or the Guarantor.

            (b) The Borrower and the Guarantor shall, upon demand, provide to
the Agent such evidence as the Agent may reasonably require to evidence
compliance with this Section 7.15, which evidence shall include, without
limitation, copies of any agreements or instruments which would in any way
restrict or limit the Borrower's or the Subsidiary Guarantor's ability to pledge
assets as security for Indebtedness, or which provide for the occurrence of a
default (after the giving of notice or the passage of time, or otherwise) if
assets are pledged in the future as security for Indebtedness of the Borrower or
the Subsidiary Guarantor.

      Section 7.16 More Restrictive Agreements. Should the Borrower or the
Guarantor enter into or modify any agreements or documents pertaining to any
existing or future Indebtedness, Debt Offering or Equity Offering, which
agreements or documents include covenants, whether affirmative or negative (or
any other provision which may have the same practical effect as any of the
foregoing), which are individually or in the aggregate more restrictive (the
"More Restrictive Provisions") against the Borrower, the Guarantor or Crescent
OP's Subsidiaries than those set forth in Articles 8 or 9 of this Agreement or
Paragraph 11 of Crescent OP's Guaranty, the Borrower shall promptly notify the
Agent and, if requested by the Requisite Banks, the Borrower, the Guarantor, the
Agent, and the Requisite Banks shall promptly amend this Agreement and the other
Loan Documents to include some or all of such More Restrictive Provisions as
determined by the Requisite Banks in their sole discretion. In determining
whether a covenant is more restrictive, the applicable covenant and all relevant
definitions shall be considered. Notwithstanding the foregoing, any amendments
to provisions contained in this Agreement and the other Loan Documents made
pursuant to this Section 7.16 shall only be effective for such period of time as
the applicable More Restrictive Provision is in full force and effect (or
continues to be more restrictive), and upon the termination of the effectiveness
of such More Restrictive Provision (or upon such More Restrictive Provision
becoming less restrictive than the corresponding original provision of the Loan
Documents), the provisions affected by such amendment shall return to the
applicable original provisions.

      Section 7.17 [Intentionally Omitted.]

      Section 7.18 [Intentionally Omitted.]

      Section 7.19 Covenants Regarding Crescent REIT. The Borrower shall cause
Crescent REIT to comply with (and by execution of this Agreement Crescent REIT
agrees to comply with) the following covenants:

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<PAGE>

            (a) Crescent REIT shall not directly or indirectly enter into or
conduct any business other than in connection with the ownership, acquisition
and disposition of interests in Crescent OP and the management of the business
of Crescent OP, and such activities as are incidental thereto, all of which
shall be solely in furtherance of the business of Crescent OP. Crescent REIT
shall not own any assets other than (i) limited partnership interests in
Crescent OP, (ii) all of the stock of CREEL, (iii) ownership interests in
Subsidiaries of Crescent OP duly formed in accordance with clause (1) of Section
7.5 of the Third Amended and Restated Limited Partnership Agreement of Crescent
OP in effect as of the date hereof or acquired in an acquisition permitted by
Section 7.19(d) (provided that Crescent REIT shall own no more than one percent
(1%) of the ownership interests therein and Crescent OP shall directly or
indirectly own all of the remaining ownership interests in such Subsidiary),
(iv) assets that have been distributed to Crescent REIT by its Subsidiaries that
are held on a short-term basis pending further distribution to security holders
of Crescent REIT and (v) such bank accounts or similar instruments as it deems
necessary to carry out its responsibilities under the Crescent OP partnership
agreement and the Crescent REIT Declaration of Trust of Crescent OP. Crescent
REIT shall not incur any Indebtedness or otherwise have, by any voluntary or
consensual act by Crescent REIT or any other Person in which Crescent REIT is a
general partner, any direct or indirect contingent liabilities (including
without limitation, any guaranty or other agreement having similar effect) other
than liabilities for taxes not due and payable (or if due and payable, which are
being contested in a manner consistent with provisions of Section 7.8) and
inter-company indebtedness with CREEL or Crescent OP.

            (b) Crescent REIT shall comply with its obligations under the Third
Amended and Restated Limited Partnership Agreement of Crescent OP in effect as
of the date hereof and shall not permit CREEL to amend Sections 4.2A, 7.5 or
8.7C thereof without the consent of the Requisite Banks.

            (c) Crescent REIT shall promptly contribute or otherwise downstream
to Crescent OP any net assets received by Crescent REIT from third parties
(including, without limitation, the proceeds from any Equity Offering) except to
the extent of proceeds which are used to retire an existing issue of preferred
equity of Crescent REIT);

            (d) Without limiting any other restrictions in the Loan Documents on
mergers by Crescent OP and its Subsidiaries, Crescent REIT shall not, and shall
not permit any of its Subsidiaries to, become a party to any merger,
consolidation or other business combination, except (i) the merger or
consolidation of one or more of the Subsidiaries of Crescent REIT with and into
Crescent REIT, (ii) the merger or consolidation of two or more Subsidiaries of
Crescent REIT, (iii) the acquisition by merger of an entity that will become a
Subsidiary of Crescent REIT that Crescent REIT would have been able to form
itself pursuant to Section 7.19(a)(iii) or (iv) any Permitted Acquisition;

            (e) subject to the terms of Section 7.19(f), Crescent REIT shall at
all times comply with all requirements of applicable laws and regulations
necessary to maintain REIT Status, shall elect to be treated as a real estate
investment trust under the Code and shall operate its business in compliance
with the terms and conditions of this Agreement and the other Loan Documents;

                                       65
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            (f) in the event that an Event of Default shall have occurred and be
continuing, Crescent REIT shall make no Distributions other than the minimum
Distributions required under the Code or the laws of the State of Texas to
maintain the REIT Status of Crescent REIT, as evidenced by a certification of an
Authorized Officer of Crescent REIT containing calculations in reasonable detail
satisfactory in form and substance to Agent;

            (g) the common shares of Crescent REIT shall at all times be listed
for trading and be traded on the New York Stock Exchange or another national
stock exchange approved by the Requisite Banks; and

            (h) Crescent REIT shall not dissolve, liquidate or otherwise wind-up
its business, affairs or assets.

      Section 7.20 Special Purpose Entity. The Borrower and the Subsidiary
Guarantor (and any of their constituent entities, including, without limitation,
the Spectrum Entities) shall conduct their respective businesses in full
compliance with and not violate the terms and conditions of their respective
partnership agreement, operating agreement, articles of incorporation, bylaws or
other organizational or charter documents, and shall use their best efforts to
monitor and enforce the separateness and special purpose entity covenants
contained in such organizational documents.

Section 8. CERTAIN NEGATIVE COVENANTS.

      The Borrower and the Subsidiary Guarantor covenant and agree that, so long
as any Loan, Note or Letter of Credit is outstanding or any of the Banks has any
obligation to make any Loans or the Issuing Bank has any obligation to issue any
Letters of Credit:

      Section 8.1 Restrictions on Indebtedness. Subject to the provisions of
Section 9, the Borrower and the Subsidiary Guarantor will not create, incur,
assume, guarantee or be or remain liable, contingently or otherwise (or permit
any Spectrum Entity to create, incur, assume, guarantee or be or remain liable
contingently or otherwise), with respect to any Indebtedness other than:

            (a) Indebtedness of Borrower and Subsidiary Guarantor to the Banks
arising under any of the Loan Documents;

            (b) Current liabilities of the Borrower and the Subsidiary Guarantor
incurred in the ordinary course of business but not incurred through (i) the
borrowing of money, or (ii) the obtaining of credit except for credit on an open
account basis customarily extended and in fact extended in connection with
normal purchases of goods and services;

            (c) Indebtedness of Borrower and Subsidiary Guarantor in respect of
taxes, assessments, governmental charges or levies and claims for labor,
materials and supplies to the extent that payment therefor shall not at the time
be required to be made in accordance with the provisions of Section 7.8;

            (d) Indebtedness of Borrower and Subsidiary Guarantor in respect of
judgments or awards the existence of which does not create an Event of Default;

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            (e) Endorsements by Borrower and Subsidiary Guarantor for
collection, deposit or negotiation and warranties of products or services, in
each case incurred in the ordinary course of business;

            (f) Indebtedness of Borrower and Subsidiary Guarantor in respect of
reverse repurchase agreements having a term of not more than 180 days with
respect to Investments described in Section 8.3(d) or (e); and

            (g) Capitalized Leases of Borrower and Subsidiary Guarantor solely
for energy management purposes in an aggregate amount up to $5,000,000.00;
provided, however, that such Capitalized Leases shall be approved in writing by
Agent, such approval not to be unreasonably withheld.

      Notwithstanding anything herein to the contrary, neither Borrower, any
Subsidiary Guarantor nor any Spectrum Entity may provide a Non-Recourse Carveout
Guaranty.

      Section 8.2 Restrictions on Liens, Etc. Each of the Borrower and the
Subsidiary Guarantor will not (and will not permit any Spectrum Entity to) (a)
create or incur or suffer to be created or incurred or to exist any lien,
encumbrance, mortgage, pledge, negative pledge, charge, restriction or other
security interest of any kind upon any of its property or assets of any
character whether now owned or hereafter acquired, or upon the income or profits
therefrom; (b) transfer any of its property or assets or the income or profits
therefrom for the purpose of subjecting the same to the payment of Indebtedness
or performance of any other obligation in priority to payment of its general
creditors; (c) acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title retention or purchase money security
agreement, device or arrangement; (d) suffer to exist for a period of more than
60 days after the same have come due any Indebtedness or claim or demand against
it that if unpaid might by law or upon bankruptcy or insolvency, or otherwise,
be given any priority whatsoever over its general creditors; (e) pledge or
otherwise encumber any accounts, contract rights, general intangibles, chattel
paper or instruments, with or without recourse; or (f) incur or maintain any
obligation to any holder of Indebtedness of such Person which prohibits the
creation or maintenance of any lien securing the Obligations (collectively
"Liens"); provided that the Borrower and the Subsidiary Guarantor may create or
incur or suffer to be created or incurred or to exist:

                  (i) liens on properties of Borrower and Subsidiary Guarantor
to secure taxes, assessments and other governmental charges or claims for labor,
material or supplies in respect of obligations not overdue or which are being
contested or otherwise addressed as permitted by Section 7.8;

                  (ii) liens on properties of Borrower and Subsidiary Guarantor
in respect of judgments, awards or indebtedness, the Indebtedness with respect
to which is permitted by Section 8.1(d);

                  (iii) encumbrances on properties of Borrower and Subsidiary
Guarantor consisting of easements, rights of way, zoning restrictions,
restrictions on the use of real property, landlord's or lessor's liens under
leases to which the Borrower or such Subsidiary Guarantor is a party, tenant
leases and other minor non-monetary liens or encumbrances none of

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which interferes materially with the use of the property affected in the
ordinary conduct of the business of the Borrower or such Subsidiary Guarantor,
which encumbrances or liens individually or in the aggregate have not had or
could not reasonably be expected to have a Material Adverse Effect;

                  (iv) liens granted by Borrower and Subsidiary Guarantor in
favor of the Agent and the Banks under the Loan Documents; and

                  (v) liens granted by Borrower and Subsidiary Guarantor on
equipment financed under Capitalized Leases for energy management purposes in
favor of the applicable lessor thereunder, such liens approved by Agent in
accordance with Section 8.1(g).

      Section 8.3 Restrictions on Investments. The Borrower and the Subsidiary
Guarantor will not make or permit to exist or to remain outstanding any
Investment except Investments in:

            (a) marketable direct or guaranteed obligations of the United States
of America that mature within one (1) year from the date of purchase by the
Borrower or a Subsidiary Guarantor;

            (b) marketable direct obligations of any of the following: Federal
Home Loan Mortgage Corporation, Student Loan Marketing Association, Federal Home
Loan Banks, Federal National Mortgage Association, Government National Mortgage
Association, Bank for Cooperatives, Federal Intermediate Credit Banks, Federal
Financing Banks, Export-Import Bank of the United States, Federal Land Banks, or
any other agency or instrumentality of the United States of America;

            (c) demand deposits, certificates of deposit, bankers acceptances
and time deposits of United States banks having total assets in excess of
$100,000,000; provided, however, that the aggregate amount at any time so
invested with any single bank having total assets of less than $1,000,000,000
will not exceed $200,000;

            (d) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States of
America or any State which at the time of purchase are rated by Moody's
Investors Service, Inc. or by Standard & Poor's Corporation at not less than "P
2" if then rated by Moody's Investors Service, Inc., and not less than "A 2", if
then rated by Standard & Poor's Corporation;

            (e) mortgage-backed securities guaranteed by the Government National
Mortgage Association, the Federal National Mortgage Association or the Federal
Home Loan Mortgage Corporation and other mortgage-backed bonds which at the time
of purchase are rated by Moody's Investors Service, Inc. or by Standard & Poor's
Corporation at not less than "Aa" if then rated by Moody's Investors Service,
Inc. and not less than "AA" if then rated by Standard & Poor's Corporation;

            (f) repurchase agreements having a term not greater than 90 days and
fully secured by securities described in the foregoing subsection (a), (b) or
(e) with banks described in the foregoing subsection (c) or with financial
institutions or other corporations having total assets in excess of
$500,000,000;

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            (g) shares of so-called "money market funds" registered with the SEC
under the Investment Company Act of 1940 which maintain a level per-share value,
invest principally in investments described in the foregoing subsections (a)
through (f) and have total assets in excess of $50,000,000;

            (h) Subject to the provisions of Section 5.2 and Section 9.4,
Investments in fee and leasehold interests in the Office Properties and Hotel
Properties and related assets associated therewith, including earnest money
deposits relating thereto and transaction costs; and

            (i) Subject to Section 9.5, Investments in notes receivable that are
intended to be Eligible Notes Receivable.

      Section 8.4 Merger, Consolidation. None of the Borrower, the Subsidiary
Guarantor nor any of the Spectrum Entities will become a party to any merger,
consolidation or other business combination.

      Section 8.5 Sale and Leaseback. The Borrower and the Subsidiary Guarantor
will not enter into any arrangement, directly or indirectly, whereby such Person
shall sell or transfer any Property owned by it in order that then or thereafter
such Person shall lease back such Real Estate.

      Section 8.6 Compliance with Environmental Laws. The Borrower and the
Subsidiary Guarantor will not, and will not permit any tenants or other
occupants of any of the Properties, to do any of the following: (a) use any of
the Properties or any portion thereof as a facility for the handling,
processing, storage or disposal of Hazardous Substances, except for normal
quantities of Hazardous Substances used in the ordinary course of business and
in compliance in all material respects with all applicable Environmental Laws,
(b) cause or permit to be located on any of the Properties any underground tank
or other underground storage receptacle for Hazardous Substances except in
compliance with applicable Environmental Laws, (c) generate any Hazardous
Substances on any of the Properties except in compliance with applicable
Environmental Laws, (d) conduct any activity at any Properties or use any
Properties in any manner so as to cause a Release of Hazardous Substances on,
upon or into the Properties or any surrounding properties or any threatened
Release of Hazardous Substances which might give rise to liability under CERCLA
or any other Environmental Law, or (e) directly or indirectly transport or
arrange for the transport of any Hazardous Substances (except in compliance with
all Environmental Laws), in any case that has had or could reasonably be
expected to give rise to a material adverse effect as to the value, use or
ability to sell or refinance such Property.

      The Borrower and the Subsidiary Guarantor shall:

                  (i) in the event of any change in Environmental Laws governing
the assessment, release or removal of Hazardous Substances, which change would
lead a prudent lender to require additional testing of the Properties as
necessary to avail itself of any otherwise available statutory insurance or
limited liability, perform additional testing at the sole expense of the
Borrower to confirm that no Hazardous Substances are or ever were Released or
disposed of on the Properties; and

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                  (ii) if any Release or disposal of Hazardous Substances shall
occur or shall have occurred on a Property (including without limitation any
such Release or disposal occurring prior to the acquisition of such Property by
the Borrower or Subsidiary Guarantor in violation of applicable Environmental
Laws), cause the prompt containment and removal of such Hazardous Substances and
remediation of the Property in compliance with all applicable laws and
regulations; provided, that the Borrower or Subsidiary Guarantor shall be deemed
to be in compliance with Environmental Laws for the purpose of this clause (ii)
so long as it or a responsible third party with sufficient financial resources
is taking reasonable action to remediate or manage any event of noncompliance in
accordance with applicable Environmental Laws and no action shall have been
commenced by any enforcement agency. The Requisite Banks may engage their own
environmental engineer to review the environmental assessments and the
Borrower's and Subsidiary Guarantor's compliance with the covenants contained
herein.

      At any time that the Agent or the Requisite Banks shall have reasonable
grounds to believe that a Release or threatened Release of Hazardous Substances
may have occurred, relating to any Property, or that any Property is not in
compliance with the Environmental Laws in any case that has had or could
reasonably be expected to give rise to a material adverse effect as to the
value, use or ability to sell or refinance such Property, the Agent may at its
election (and will at the request of the Requisite Banks) obtain such
environmental assessments of such Property prepared by an environmental engineer
as may be necessary or advisable. Environmental assessments may include detailed
visual inspections of such Property including, without limitation, any and all
storage areas, storage tanks, drains, dry wells and leaching areas, and the
taking of soil samples, as well as such other investigations or analyses as are
necessary or appropriate for a complete determination of the compliance of such
Property and the use and operation thereof with all applicable Environmental
Laws. All such environmental assessments shall be at the sole cost and expense
of the Borrower.

      Section 8.7 Distributions. After (i) a Default or Event of Default under
Section 12.1(a) or (b) shall have occurred and be continuing, or (ii) an Event
of Default under Section 12.1(h), (i) or (j) shall have occurred and be
continuing, or (ii) any other Event of Default shall have occurred and the
maturity of the Loans shall have been accelerated, neither the Borrower nor the
Subsidiary Guarantor shall pay any Distributions to its respective partners or
members.

      Section 8.8 Asset Sales. Neither the Borrower nor Subsidiary Guarantor
shall sell, assign, lease or dispose of all or substantially all of their
respective businesses or assets (whether now owned or hereafter acquired),
either in a single transaction or in a series of transactions, or to enter into
any agreement to do any of the foregoing. Neither the Borrower nor any
Subsidiary Guarantor shall sell, transfer or otherwise dispose of any asset
other than for fair market value. Notwithstanding the foregoing, notes
receivable which have ceased to be Eligible Notes Receivable and any Real Estate
that has been removed as a Property pursuant to Section 5.2 may be transferred
to, or sold by, Crescent OP or one of its Subsidiaries, and any entity that has
ceased to be a Subsidiary Guarantor (including all Spectrum Entities if Crescent
Spectrum Center ceases to be a Subsidiary Guarantor) pursuant to Section 5.3 may
be transferred to, or sold by, Crescent OP or one of its Subsidiaries.

      Section 8.9 Development Activity. Neither the Borrower nor any Subsidiary
Guarantor shall engage, directly or indirectly, in the development, construction
or substantial renovation or

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rehabilitation of commercial real estate (provided that the foregoing shall not
be deemed to be breached by the restoration or rehabilitation of commercial real
estate following damage by casualty or condemnation or which does not materially
change the character or size of such commercial real estate).

      Section 8.10 Restriction on Prepayment of Indebtedness. The Borrower and
the Subsidiary Guarantor shall not prepay, redeem or purchase the principal
amount, in whole or in part, of any Indebtedness other than the Obligations
after the occurrence and during the continuance of any Event of Default.

      Section 8.11 Subsidiaries. Without the prior written consent of the
Requisite Banks, the Borrower and the Subsidiary Guarantor shall not create any
Subsidiaries other than, as to Borrower, the Spectrum Entities and Crescent
Spectrum Center.

      Section 8.12 Additional Covenants with Respect to Indebtedness,
Operations, Fundamental Changes. Each of the Borrower and the Subsidiary
Guarantor represent, warrant and covenant as of the date hereof and until such
time as the Obligations are paid in full, the Banks have no further obligations
to make any Loans and the Issuing Bank has no further obligation to issue
Letters of Credit, that each of the Borrower and the Subsidiary Guarantor and
the Spectrum Entities:

            (a) does not own and will not own any assets other than (i) the
Properties and incidental personal property necessary for, or associated with,
the operation of the Properties and (ii) notes receivable which are intended to
be Eligible Notes Receivable, (iii) as to Borrower, the Spectrum Entities and
Crescent Spectrum Center and (iv) as to the Spectrum Entities, the other
Spectrum Entities and Crescent Spectrum Center;

            (b) is not engaged and will not engage in any business other than
the direct or indirect ownership, management and operation of the Properties and
related assets associated with the operation of the Properties and the ownership
of notes receivable which are intended to be Eligible Notes Receivable, together
with activities incidental thereto;

            (c) except as otherwise permitted hereby, will not enter into any
contract or agreement with any partner, member, shareholder, principal or
affiliate of the Borrower or Guarantor or any affiliate of any such partner,
member, shareholder, principal or affiliate, except upon terms and conditions
that are on commercially reasonable terms that are no less favorable than those
that would be available on an arms - length basis with third parties other than
an affiliate;

            (d) other than notes receivable of Borrower and Subsidiary Guarantor
which are intended to be Eligible Notes Receivable, has not made and will not
make any loans or advances to any third party (including any affiliate of such
Persons or any member, partner or shareholder of such Persons);

            (e) is and will remain solvent and pay its debts (including, without
limitation, employment and overhead expenses) from its assets as the same shall
become due;

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            (f) has done or caused to be done and will do all things necessary
to observe limited liability company, corporate or partnership formalities, as
applicable, and to preserve its existence, and will not, nor will any member,
shareholder, officer, director or partner thereof, as applicable, amend, modify
or otherwise change its operating agreement, articles of incorporation, bylaws,
partnership agreement or other organizational documents in a manner which
adversely affects such Person's existence as a single purpose entity, if such
Person is a single purpose entity;

            (g) will maintain books and records and bank accounts (if any)
separate from those of its affiliates, including the General Partner, Crescent
OP and its partners or members;

            (h) will be, and at all times will hold itself out to the public as,
a legal entity separate and distinct from any other entity (including any
affiliate thereof and any partner, member or shareholder of any affiliate
thereof);

            (i) will file its own separate tax returns, or if such returns are
filed jointly or on a consolidated basis, such Persons shall be reflected as
separate entities thereon;

            (j) will maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations;

            (k) will not, nor shall any member, partner, shareholder or
affiliate, seek the dissolution or winding up, in whole or in part, of the
Borrower or the Subsidiary Guarantor;

            (l) will not commingle the funds and other assets of the Borrower or
the Subsidiary Guarantor or any Spectrum Entity with those of any partner,
member, shareholder, any affiliate or any other Person ;

            (m) has and will maintain its assets in such a manner that it is not
costly or difficult to segregate, ascertain or identify its individual assets
from those of any affiliate or any other Person;

            (n) does not and will not hold itself out to be responsible for the
debts or obligations of any other Person except (i) with respect to the
Subsidiary Guarantors and the Borrower and (ii) with respect to any Spectrum
Entity which serves as a general partner of Crescent Spectrum Center or (but
without limiting the limitations on Indebtedness of the Spectrum Entities)
another Spectrum Entity;

            (o) does not and will not have any Subsidiaries (other than as to
Borrower and the Spectrum Entities, the Spectrum Entities and Crescent Spectrum
Center);

            (p) will comply with the provisions of its operating agreement,
articles of incorporation, bylaws, partnership agreement or other organizational
documents, as applicable; and

            (q) will be organized and conduct its business so that, and
otherwise cause, the assumptions of fact made with respect to the Borrower,
Subsidiary Guarantor and the

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Spectrum Entities in that certain opinion letter dated of even date herewith
delivered by Shaw Pittman with respect to non-consolidation issues to be true
and correct, in all material respects at all times.

Section 9. FINANCIAL COVENANTS.

      The Borrower and the Subsidiary Guarantor covenant and agree that, so long
as any Loan, Note or Letter of Credit is outstanding or any Bank has any
obligation to make any Loans or the Issuing Bank has any obligation to issue any
Letters of Credit it will comply with the following:

      Section 9.1 Consolidated Total Indebtedness to Capitalization Value -
Borrower Ratio. The Borrower will not permit the ratio of the Consolidated Total
Indebtedness of the Borrower and the Subsidiary Guarantor to the Capitalization
Value - Borrower to exceed .55 to 1. In the event that Appraisals of the
Properties shall be obtained pursuant to Section 5.4, compliance with the
foregoing covenant shall be determined by reference to the lesser of (i) the
Capitalization Value - Borrower as determined herein, or (ii) the aggregate
Appraised Values of the Properties plus the Par Value of the Eligible Notes
Receivable.

      Section 9.2 Debt Service Coverage. The Borrower will not permit the
Adjusted EBITDA of the Borrower and the Subsidiary Guarantor determined as of
the end of any fiscal quarter to be less than 2.0 times the Debt Service of the
Borrower and the Subsidiary Guarantor for the Test Period.

      Section 9.3 Pro Forma Debt Service Coverage. The Borrower will not permit
the Adjusted EBITDA of the Borrower and the Subsidiary Guarantor determined as
of the end of any calendar quarter to be less than 1.5 times the Pro Forma Debt
Service of the Borrower and the Subsidiary Guarantor for the Test Period.

      Section 9.4 Office Properties Capitalization Value to Capitalization Value
- Borrower Ratio. The Borrower and the Subsidiary Guarantor shall not permit the
ratio of the Office Properties Capitalization Value to the Capitalization Value
- Borrower to be less than .65 to 1.

      Section 9.5 Properties; Eligible Notes Receivable.

            (a) The Office Properties in the aggregate shall be at least eighty
percent (80%) leased pursuant to arms-length leases which are not in default.

            (b) Neither (i) the Office Properties Capitalization Value
attributable to any individual Office Property nor (ii) the Hotel Properties
Capitalization Value attributable to any individual Hotel Property shall exceed
twenty percent (20%) of the Capitalization Value - Borrower. The Par Value of
any Eligible Note Receivable shall not exceed ten percent (10%) of the
Capitalization Value - Borrower.

            (c) The aggregate Par Value of the Eligible Notes Receivable shall
not exceed ten percent (10%) of the Capitalization Value - Borrower.

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            (d) The aggregate number of (i) Properties consisting of leasehold
estates plus (ii) properties securing or relating to Eligible Notes Receivable
pursuant to which the borrower thereunder has a leasehold estate, shall not
exceed three (3).

            (e) The sum of (i) the aggregate Par Value of the Eligible Notes
Receivable of Borrower and the Subsidiary Guarantors, plus (ii) the aggregate
Office Properties Capitalization Value, plus (iii) the aggregate Hotel
Properties Capitalization Value, shall not be less than $275,000,000.00.

Section 10. CLOSING CONDITIONS.

      The obligations of the Agent and the Banks to make the initial Loans shall
be subject to the satisfaction of the following conditions precedent on or prior
to February 8, 2005. For the purposes of determining the satisfaction by
Borrower and Guarantor of the conditions set forth in this Section 10, each Bank
shall be deemed to have approved or be satisfied with the compliance by the
Borrower and Guarantor of each condition hereunder unless the Agent shall have
received notice from such Bank prior to the proposed closing date of any
objection that such Bank has to any of the matters described herein.

      Section 10.1 Loan Documents. Each of the Loan Documents shall have been
duly executed and delivered by the respective parties thereto, shall be in full
force and effect and shall be in form and substance reasonably satisfactory to
the Requisite Banks in their good faith determination. The Agent shall have
received a fully executed copy of each such document, except that each Bank
shall have received a fully executed counterpart of its Revolving Credit Note
and the Swing Loan Bank shall have received a fully executed counterpart of its
Swing Loan Note.

      Section 10.2 Certified Copies of Organizational Documents. The Agent shall
have received from the Borrower a copy, certified as of a recent date by the
appropriate officer of each State in which the Borrower, the General Partner,
Guarantor or Crescent REIT, as applicable, is organized or in which the Real
Estate is located and a duly authorized partner or officer of such Person, as
applicable, to be true and complete, of the partnership agreement, operating
agreement or corporate charter of the Borrower, the General Partner, such
Guarantor or Crescent REIT, as applicable, or its qualification to do business,
as applicable, as in effect on such date of certification.

      Section 10.3 Bylaws; Resolutions. All action on the part of the Borrower,
the General Partner, the Guarantor and Crescent REIT necessary for the valid
execution, delivery and performance by such Person of this Agreement and the
other Loan Documents to which such Person is or is to become a party shall have
been duly and effectively taken, and evidence thereof satisfactory to the Agent
shall have been provided to the Agent. The Agent shall have received from CREEL
and Crescent REIT true copies of their respective bylaws and the resolutions
adopted by its board of directors authorizing the transactions described herein,
each certified by its secretary as of a recent date to be true and complete.

      Section 10.4 Incumbency Certificate; Authorized Signers. The Agent shall
have received from CREEL and Crescent REIT an incumbency certificate, dated as
of the Closing Date, signed by a

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duly authorized officer of CREEL and Crescent REIT and giving the name and
bearing a specimen signature of each individual who shall be authorized to sign,
in the name and on behalf of the Borrower, each Guarantor and Crescent REIT,
each of the Loan Documents to which such Person is or is to become a party. The
Agent shall have also received from the Borrower a certificate, dated as of the
Closing Date, signed by a duly authorized partner of the Borrower and giving the
name and specimen signature of each individual who shall be authorized to make
Loan and Conversion Requests, and give notices and to take other action on
behalf of the Borrower under the Loan Documents.

      Section 10.5 Opinion of Counsel. The Agent shall have received a favorable
opinion addressed to the Banks and the Agent and dated as of the Closing Date,
in form and substance reasonably satisfactory to the Agent, from counsel of the
Borrower, the General Partner, the Guarantor and Crescent REIT, and counsel in
such other states as may be reasonably required by the Agent, as to such matters
as the Agent shall reasonably request (including, without limitation, a
non-consolidation opinion).

      Section 10.6 Payment of Fees and Expenses. The Borrower shall have paid to
KeyBank the fees required to be paid pursuant to Section 4.2 and any Expenses
due and payable under Section 15.

      Section 10.7 Performance; No Default. The Borrower shall have performed
and complied with all terms and conditions herein required to be performed or
complied with by it on or prior to the Closing Date, and on the Closing Date
there shall exist no Default or Event of Default.

      Section 10.8 Representations and Warranties. The representations and
warranties made by the Borrower, the General Partner, the Guarantor and Crescent
REIT in the Loan Documents or otherwise made by or on behalf of the Borrower and
the Guarantor in connection therewith or after the date thereof shall have been
true and correct in all material respects when made and shall also be true and
correct in all material respects on the Closing Date.

      Section 10.9 Proceedings and Documents. All proceedings in connection with
the transactions contemplated by this Agreement and the other Loan Documents
shall be reasonably satisfactory to the Agent and the Agent's Special Counsel in
form and substance, and the Agent shall have received all information and such
counterpart originals or certified copies of such documents and such other
certificates, opinions or documents as the Agent and the Agent's Special Counsel
may reasonably require.

      Section 10.10 Compliance Certificates. A Compliance Certificate and
Crescent OP's Compliance Certificate dated as of the date of the Closing Date
demonstrating compliance with each of the covenants calculated therein as of the
most recent fiscal quarter end for which the Borrower, the Subsidiary Guarantor
and Crescent OP have provided financial statements under Section 6.4 or Crescent
OP's Guaranty, as applicable, adjusted in the best good faith estimate of the
Borrower and the Subsidiary Guarantor or Crescent OP, as applicable, dated as of
the date of the Closing Date, shall have been delivered to the Agent.

      Section 10.11 Repayment of Indebtedness under Fleet Facility. The
outstanding Indebtedness of the Borrower under the Fleet Facility shall be paid
in full on the Closing Date and the credit agreement relating thereto shall be
terminated.

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      Section 10.12 Financial Statements. The Borrower shall have provided to
the Agent and the Agent shall have approved the financial statements described
in Section 6.4 above, and financial projections for the Borrower and Crescent OP
for the four fiscal quarters immediately succeeding the Closing Date.

      Section 10.13 Contribution Agreement. The Agent shall have received a
fully executed counterpart of the Contribution Agreement.

      Section 10.14 Other. The Agent shall have reviewed such other documents,
instruments, certificates, opinions, assurances, consents and approvals as the
Agent or the Agent's Special Counsel may reasonably have requested.

Section 11. CONDITIONS TO ALL BORROWINGS.

      The obligations of the Banks to make any Loan or of the Issuing Bank to
issue any Letter of Credit, whether on or after the Closing Date, shall also be
subject to the satisfaction of the following conditions precedent:

      Section 11.1 Representations True; No Default. Each of the representations
and warranties made by or on behalf of the Borrower and the Guarantor contained
in this Agreement, the other Loan Documents or in any document or instrument
delivered pursuant to or in connection with this Agreement shall be true as of
the date as of which they were made and shall also be true at and as of the time
of the making of such Loan, with the same effect as if made at and as of that
time (except to the extent of changes resulting from transactions contemplated
or permitted by this Agreement and the other Loan Documents and changes
occurring in the ordinary course of business that singly or in the aggregate
have not had or could not reasonably be expected to have a Material Adverse
Effect, and except to the extent that such representations and warranties relate
expressly to an earlier date) and no Default or Event of Default shall have
occurred and be continuing.

      Section 11.2 Borrowing Documents. In the case of any request for a Loan,
the Agent shall have received a copy of the request for a Loan required by
Section 2.6 in the form of Exhibit C hereto, fully completed. In the case of any
request for a Letter of Credit, the Agent shall have received a copy of the
request for a Letter of Credit required by Section 2.8 in the form of Exhibit D
hereto, fully completed.

      Section 11.3 Other Documents. The Agent shall have received, in form and
substance satisfactory to the Agent, such other assurances, certificates,
documents, consents or opinions related to the foregoing as the Agent may
reasonably require.

Section 12. EVENTS OF DEFAULT; ACCELERATION; ETC.

      Section 12.1 Events of Default and Acceleration. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:

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            (a) the Borrower shall fail to pay any principal of the Loans when
the same shall become due and payable, whether pursuant to Section 3.2 at the
stated date of maturity or any accelerated date of maturity or at any other date
fixed for payment;

            (b) the Borrower shall fail to pay any interest on the Loans or any
other sums due hereunder or under any of the other Loan Documents, when the same
shall become due and payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for payment, and such
failure shall continue for a period of five (5) Business Days (provided,
however, that no such grace period shall apply to any payments due upon the
maturity of the Notes);

            (c) the Borrower shall fail to comply with any covenant contained in
Section 7.4(d), Section 7.5(a), Section 7.15, Section 7.19, Section 7.20, or any
default expressly excluded from any provision of cure of defaults contained in
any other of the Loan Documents shall occur;

            (d) the Borrower or any Subsidiary Guarantor shall fail to comply
with any covenant contained in Section 9, and such failure shall continue for
thirty (30) days (ninety (90) days in the case of Section 9.5) after written
notice thereof shall have been given to the Borrower or Subsidiary Guarantor by
the Agent;

            (e) the Borrower or the Guarantor shall fail to perform or cause to
be performed any other term, covenant or agreement contained herein or in any of
the other Loan Documents (other than those specified in this Section 12) and
such failure shall continue for a period of thirty (30) days after the earlier
of (i) the date upon which the Borrower or the Guarantor obtains knowledge of
such failure or (ii) the date upon which the Borrower has received written
notice of such failure from the Agent;

            (f) any representation or warranty made by or on behalf of the
Borrower or the Guarantor in this Agreement or any other Loan Document, report,
certificate, financial statement, request for a Loan or Letter of Credit, or in
any other document or instrument delivered pursuant to or in connection with
this Agreement, any advance of a Loan or any of the other Loan Documents shall
prove to have been false in any material respect upon the date when made or
deemed to have been made or repeated;

            (g) the Borrower, any of its general partners, the Guarantor or any
of Crescent OP's Subsidiaries shall fail to pay at maturity, or within any
applicable period of grace, any obligation for borrowed money or credit
received, or fail to observe or perform any material term, covenant or agreement
contained in any agreement by which it is bound which evidences or secures any
such borrowed money or credit received for such period of time as would permit
(assuming the giving of appropriate notice if required) the holder or holders
thereof or of any obligations issued thereunder to accelerate the maturity
thereof or require the redemption or repurchase thereof; provided that with
respect to the obligations of Borrower and the Subsidiary Guarantor only under
Capitalized Leases, the events described in this Section 12.1(g) shall not
constitute an Event of Default unless such failure to pay, observe or perform,
together with other failures to pay, observe or perform under other Capitalized
Leases, involve singly or in the aggregate obligations totaling in excess of
$500,000.00 (it being acknowledged that with respect to any other events
described in this Section 8.1(g) as to Borrower or any Subsidiary Guarantor,
there

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shall be no requirement that a dollar threshold must be exceeded before an Event
of Default shall occur); and provided further that with respect to Crescent OP
and its Subsidiaries only (other than Borrower or any Subsidiary Guarantor), the
events described in this Section 12.1(g) shall not constitute an Event of
Default unless such failure to pay, observe or perform, together with other
failures to pay, observe or perform, involve singly or in the aggregate
obligations totaling in excess of $5,000,000.00;

            (h) the Borrower, any of its general partners, the Guarantor,
Crescent REIT or any of Crescent OP's Subsidiaries, (1) shall make an assignment
for the benefit of creditors, or admit in writing its general inability to pay
or generally fail to pay its debts as they mature or become due, or shall
petition or apply for the appointment of a trustee or other custodian,
liquidator or receiver of the Borrower, any of its general partners, the
Guarantor, Crescent REIT or any of the Crescent OP's Subsidiaries or of any
substantial part of the assets of any thereof, (2) shall commence any case or
other proceeding relating to the Borrower, any of its general partners, the
Guarantor, Crescent REIT or any of Crescent OP's Subsidiaries under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or hereafter
in effect, or (3) shall take any action to authorize or in furtherance of any of
the foregoing;

            (i) a petition or application shall be filed for the appointment of
a trustee or other custodian, liquidator or receiver of the Borrower, any of its
general partners, the Guarantor, Crescent REIT or any of Crescent OP's
Subsidiaries or any substantial part of the assets of any thereof, or a case or
other proceeding shall be commenced against the Borrower, any of its general
partners, the Guarantor, Crescent REIT or any of Crescent OP's Subsidiaries
under any bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law of any jurisdiction, now or
hereafter in effect, and the Borrower, any of its general partners, the
Guarantor, Crescent REIT or any of Crescent OP's Subsidiaries shall indicate its
approval thereof, consent thereto or acquiescence therein or such petition,
application, case or proceeding shall not have been dismissed within 90 days
following the filing or commencement thereof;

            (j) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower, any of its
general partners, the Guarantor, Crescent REIT or any of Crescent OP's
Subsidiaries bankrupt or insolvent, or approving a petition in any such case or
other proceeding, or a decree or order for relief is entered in respect of the
Borrower, any of its general partners, the Guarantor, Crescent REIT or any of
Crescent OP's Subsidiaries, in an involuntary case under federal bankruptcy laws
as now or hereafter constituted;

            (k) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than 60 days, any uninsured final judgment against the
Borrower, any of its general partners, the Guarantor, Crescent REIT or any of
Crescent OP's Subsidiaries that, with other outstanding uninsured final
judgments, undischarged, against the Borrower, any of its general partners, the
Guarantor, Crescent REIT or any of Crescent OP's Subsidiaries exceeds in the
aggregate $10,000,000.00;

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            (l) if any of the Loan Documents shall be canceled, terminated,
revoked or rescinded otherwise than in accordance with the terms thereof or with
the express prior written agreement, consent or approval of the Banks, or any
action at law, suit in equity or other legal proceeding to cancel, revoke or
rescind any of the Loan Documents shall be commenced by or on behalf of the
Borrower, any of its general partners, the Guarantor, any of Crescent OP's
Subsidiaries or any of their respective stockholders, partners or beneficiaries,
or any court or any other governmental or regulatory authority or agency of
competent jurisdiction shall as a result of or in connection with any claim or
assertion by or on behalf of the Borrower, General Partner, the Guarantor, any
of Crescent OP's Subsidiaries or any of their respective stockholders, partners
or beneficiaries, make a determination that, or issue a judgment, order, decree
or ruling to the effect that, any one or more of the Loan Documents is illegal,
invalid or unenforceable in accordance with the terms thereof;

            (m) any dissolution, termination, partial or complete liquidation,
merger or consolidation of the Borrower, any of its general partners, the
Guarantor, any Spectrum Entity or Crescent REIT, any resignation or other
withdrawal by any Spectrum Entity as a member or partner (whether regular or
special) of any other Spectrum Entity or Crescent Spectrum Center, or any sale,
transfer or other disposition of the assets of the Borrower, any of its general
partners, the Guarantor, any Spectrum Entity or Crescent REIT, other than as
permitted under the terms of this Agreement or the other Loan Documents;

            (n) any suit or proceeding shall be filed or commenced against the
Borrower or any Subsidiary Guarantor or any of their respective assets, which in
the good faith business judgment of all of the Banks after giving consideration
to the likelihood of success of such suit or proceeding and the availability of
insurance to cover any judgment with respect thereto and based on the
information available to them, if adversely determined, would have a Material
Adverse Effect;

            (o) the Borrower, any of its general partners, the Guarantor,
Crescent REIT or any of Crescent OP's Subsidiaries shall be indicted for a
federal crime, a punishment for which could include the forfeiture of any assets
of such Person;

            (p) with respect to any Guaranteed Pension Plan, an ERISA Reportable
Event shall have occurred and the Requisite Banks shall have determined in their
reasonable discretion that such event reasonably could be expected to result in
liability of the Borrower, any of its general partners, the Guarantor, Crescent
REIT or any of Crescent OP's Subsidiaries to the PBGC or such Guaranteed Pension
Plan in an aggregate amount exceeding $1,000,000 and such event in the
circumstances occurring reasonably could constitute grounds for the termination
of such Guaranteed Pension Plan by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer such
Guaranteed Pension Plan; or a trustee shall have been appointed by the United
States District Court to administer such Plan; or the PBGC shall have instituted
proceedings to terminate such Guaranteed Pension Plan;

            (q) the Guarantor denies that it has any liability or obligation
under the Guaranty, or shall notify the Agent or any of the Banks of the
Guarantor's intention to attempt to cancel or terminate the Guaranty, or shall
fail to make payment as and when required under the

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Guaranty, or Crescent OP shall fail to comply with the covenant contained in
Paragraph 10(d) of the Guaranty executed by Crescent OP;

            (r) the occurrence of a Change of Control;

            (s) any default or Event of Default, as defined in any of the other
Loan Documents, shall occur and shall continue to exist beyond any applicable
grace or notice or cure period provided in such other Loan Documents; or

            (t) Crescent OP shall fail to comply with any covenant contained in
Paragraphs 11(o)-(v), inclusive, of the Guaranty executed by Crescent OP, and
such failure shall continue for thirty (30) days after written notice thereof
shall have been given to the Borrower by the Agent;

then, and in any such event, the Agent, upon the request of the Requisite Banks,
shall by notice in writing to the Borrower declare all amounts owing with
respect to this Agreement, the Notes and the other Loan Documents to be, and
they shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower; provided that in the event of any Event
of Default specified in Section 12.1(h), Section 12.1(i) or Section 12.1(j), all
such amounts shall become immediately due and payable automatically and without
any requirement of notice from any of the Banks or the Agent. Without limiting
the foregoing, if an Event of Default occurs, the Agent may (and upon the
request of the Requisite Banks shall), in its sole discretion, and without
limiting any other rights of the Agent and the Banks under the Loan Documents,
notify the Trustee in writing that an Event of Default has occurred and direct
that the Trustee deliver notice of a Mandatory Purchase Date (as defined in the
Trust Agreement) in accordance with the Trust Agreement, as contemplated in the
Eagle Ranch Letter of Credit.

      Section 12.2 [Intentionally Omitted.]

      Section 12.3 Termination of Commitments. If any one or more Events of
Default specified in Section 12.1(h), Section 12.1(i) or Section 12.1(j) shall
occur, then immediately and without any action on the part of the Agent or any
Bank any unused portion of the credit hereunder shall terminate and the Banks
shall be relieved of all obligations to make Loans to the Borrower or issue
Letters of Credit. If any other Event of Default shall have occurred, the Agent,
upon the election of the Requisite Banks, may by notice to the Borrower
terminate the obligation to make Loans to the Borrower or issue Letters of
Credit. No termination under this Section 12.3 shall relieve the Borrower of its
obligations to the Banks arising under this Agreement or the other Loan
Documents. Nothing in this Section 12.3 shall limit or impair the terms of this
Agreement (including Section 2.1) which provide that the Banks shall have no
obligation to make Loans or issue Letters of Credit upon the occurrence of a
Default or Event of Default.

      Section 12.4 Remedies. In case any one or more of the Events of Default
shall have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Loans pursuant to Section 12.1, the Agent on
behalf of the Banks, shall, with the consent of the Requisite Banks but not
otherwise, proceed to protect and enforce their rights and remedies under this
Agreement, the Notes or any of the other Loan Documents by suit in equity,
action at law or

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other appropriate proceeding, whether for the specific performance of any
covenant or agreement contained in this Agreement and the other Loan Documents
or any instrument pursuant to which the Obligations are evidenced, including to
the full extent permitted by applicable law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right. No remedy herein conferred upon the Agent or the
holder of any Note is intended to be exclusive of any other remedy and each and
every remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by statute
or any other provision of law. In the event that all or any portion of the
Obligations is collected by or through an attorney-at-law, the Borrower shall
pay all reasonable costs of collection including, but not limited to, reasonable
attorney's fees. Notwithstanding anything herein to the contrary, if demanded by
Agent or the Requisite Banks in their absolute and sole discretion after the
occurrence of an Event of Default, Borrower will deposit with and pledge to
Agent cash in an amount equal to the amount of all outstanding Letters of
Credit. Such amounts will be pledged to and held by Agent for the benefit of the
Banks as security for any amounts that become payable under the Letters of
Credit and all other Obligations. Upon any draws under Letters of Credit, at
Agent's sole discretion, Agent may apply any such amounts to the repayment of
amounts drawn thereunder and upon the expiration of the Letters of Credit any
remaining amounts will be applied to the payment of all other Obligations or if
there are no outstanding Obligations and the Banks have no further obligation to
make Loans or issue Letters of Credit to the Borrower. Notwithstanding the
provisions of this Agreement providing that the Loans may be evidenced by
multiple Notes in favor of the Banks, the Banks acknowledge and agree that only
the Agent may exercise any remedies arising by reason of a Default or Event of
Default.

      Section 12.5 Distribution of Proceeds. In the event that, following the
occurrence or during the continuance of any Event of Default, any monies are
received in connection with the enforcement of any of the Loan Documents, or
otherwise with respect to the realization upon any of the assets of the Borrower
or the Guarantor, such monies shall be distributed for application as follows:

            (a) First, to the payment of, or (as the case may be) the
reimbursement of, the Agent for or in respect of all reasonable costs, expenses,
disbursements and losses which shall have been incurred or sustained by the
Agent to protect or preserve any collateral or in connection with the collection
of such monies by the Agent, for the exercise, protection or enforcement by the
Agent of all or any of the rights, remedies, powers and privileges of the Agent
under this Agreement or any of the other Loan Documents or in support of any
provision of adequate indemnity to the Agent against any taxes or liens which by
law shall have, or may have, priority over the rights of the Agent to such
monies;

            (b) Second, to all other Obligations in such order or preference as
the Requisite Banks shall determine; provided, however, that (i) Swing Loans
shall be repaid first; (ii) distributions in respect of such other Obligations
shall be made pari passu among Obligations with respect to the Agent's fee
payable pursuant to Section 4.3 and all other Obligations, (iii) in the event
that any Bank shall have wrongfully failed or refused to make an advance under
Section 2.1A(e), Section 2.7 or Section 2.8(e) and such failure or refusal shall
be continuing, advances made by other Banks during the pendency of such failure
or refusal shall be entitled to be repaid as to principal and

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accrued interest in priority to the other Obligations described in this
subsection (b), and (iv) Obligations owing to the Banks with respect to each
type of Obligation such as interest, principal, fees and expenses (but excluding
Swing Loans), shall be made among the Banks pro rata; and provided further that
the Requisite Banks may in their discretion make proper allowance to take into
account any Obligations not then due and payable; and

            (c) Third, the excess, if any, shall be returned to the Borrower or
to such other Persons as are entitled thereto.

Section 13. SETOFF.

      Regardless of the adequacy of any collateral, during the continuance of
any Event of Default, any deposits (general or specific, time or demand,
provisional or final, regardless of currency, maturity, or the branch of where
such deposits are held) or other sums credited by or due from any of the Banks
to the Borrower or the Guarantor and any securities or other property of the
Borrower or the Guarantor in the possession of such Bank may be applied to or
set off against the payment of Obligations and any and all other liabilities,
direct, or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, of the Borrower to such Bank. Each of the Banks agrees
with each other Bank that if such Bank shall receive from the Borrower or the
Guarantor, whether by voluntary payment, exercise of the right of setoff, or
otherwise, and shall retain and apply to the payment of the Note or Notes held
by such Bank any amount in excess of its ratable portion of the payments
received by all of the Banks with respect to the Notes held by all of the Banks,
such Bank will make such disposition and arrangements with the other Banks with
respect to such excess, either by way of distribution, pro tanto assignment of
claims, subrogation or otherwise as shall result in each Bank receiving in
respect of the Notes held by it its proportionate payment as contemplated by
this Agreement; provided that if all or any part of such excess payment is
thereafter recovered from such Bank, such disposition and arrangements shall be
rescinded and the amount restored to the extent of such recovery, but without
interest.

Section 14. THE AGENT.

      Section 14.1 Authorization. The Agent is authorized to take such action on
behalf of each of the Banks and to exercise all such powers as are hereunder and
under any of the other Loan Documents and any related documents delegated to the
Agent, together with such powers as are reasonably incident thereto, provided
that no duties or responsibilities not expressly assumed herein or therein shall
be implied to have been assumed by the Agent. The obligations of Agent hereunder
are primarily administrative in nature, and nothing contained in this Agreement,
or any of the other Loan Documents shall be construed to constitute the Agent as
a trustee for any Bank or to create an agency or fiduciary relationship. Agent
shall act as the contractual representative of the Banks hereunder, and
notwithstanding the use of the term "Agent", it is understood and agreed that
the Agent shall not have any fiduciary duties or responsibilities to any Bank by
reason of this Agreement or any other Loan Document and is acting as an
independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents. The Borrower
and any other Person shall be entitled to conclusively rely on a statement from
the Agent that it has the authority to act for and bind the Banks pursuant to
this Agreement and the other Loan Documents.

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      Section 14.2 Employees and Agents. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Agreement and the other Loan Documents. The Agent
may utilize the services of such Persons as the Agent may reasonably determine,
and all reasonable fees and expenses of any such Persons shall be paid by the
Borrower.

      Section 14.3 No Liability. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent, or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, shall be liable for losses due to its willful
misconduct or gross negligence. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default, except with
respect to defaults in the payment of principal, interest and fees required to
be paid to the Agent for the account of the Banks, unless the Agent has received
notice from a Bank or the Borrower referring to the Loan Documents and
describing with reasonable specificity such Default or Event of Default and
stating that such notice is a "notice of default".

      Section 14.4 No Representations. The Agent shall not be responsible for
the execution or validity or enforceability of this Agreement, the Notes, any of
the other Loan Documents or any instrument at any time constituting, or intended
to constitute, collateral security for the Notes, or for the value of any such
collateral security or for the validity, enforceability or collectability of any
such amounts owing with respect to the Notes, or for any recitals or statements,
warranties or representations made herein, or any agreement, instrument or
certificate delivered in connection therewith or in any of the other Loan
Documents or in any certificate or instrument hereafter furnished to it by or on
behalf of the Borrower or the Guarantor, or be bound to ascertain or inquire as
to the performance or observance of any of the terms, conditions, covenants or
agreements herein or in any other of the Loan Documents. The Agent shall not be
bound to ascertain whether any notice, consent, waiver or request delivered to
it by the Borrower or the Guarantor or any holder of any of the Notes shall have
been duly authorized or is true, accurate and complete. The Agent has not made
nor does it now make any representations or warranties, express or implied, nor
does it assume any liability to the Banks, with respect to the creditworthiness
or financial condition of the Borrower, the Guarantor or any of Crescent OP's
Subsidiaries. Each Bank acknowledges that it has, independently and without
reliance upon the Agent or any other Bank, and based upon such information and
documents as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon the Agent or any other Bank, based upon
such information and documents as it deems appropriate at the time, continue to
make its own credit analysis and decisions in taking or not taking action under
this Agreement and the other Loan Documents. Agent's Special Counsel has only
represented Agent and KeyBank in connection with the Loan Documents and the only
attorney-client relationship or duty of care is between Agent's Special Counsel
and Agent or KeyBank. Each Bank has been independently represented by separate
counsel on all matters regarding the Loan Documents.

      Section 14.5 Payments.

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            (a) A payment by the Borrower or the Guarantor to the Agent
hereunder or under any of the other Loan Documents for the account of any Bank
shall constitute a payment to such Bank. The Agent agrees to distribute to each
Bank not later than one Business Day after the Agent's receipt of good funds,
determined in accordance with the Agent's customary practices, such Bank's pro
rata share of payments received by the Agent for the account of the Banks except
as otherwise expressly provided herein or in any of the other Loan Documents. In
the event that the Agent fails to distribute such amounts within one Business
Day as provided above, the Agent shall pay interest on such amount at a rate per
annum equal to the Federal Funds Effective Rate from time to time in effect.

            (b) If in the opinion of the Agent the distribution of any amount
received by it in such capacity hereunder, under the Notes or under any of the
other Loan Documents might involve it in liability, it may refrain from making
distribution until its right to make distribution shall have been adjudicated by
a court of competent jurisdiction. If a court of competent jurisdiction shall
adjudge that any amount received and distributed by the Agent is to be repaid,
each Person to whom any such distribution shall have been made shall either
repay to the Agent its proportionate share of the amount so adjudged to be
repaid or shall pay over the same in such manner and to such Persons as shall be
determined by such court.

            (c) Notwithstanding anything to the contrary contained in this
Agreement or any of the other Loan Documents, any Bank that fails (i) to make
available to the Agent its pro rata share of any Loan or participation in a
Swing Loan or Letter of Credit or (ii) to comply with the provisions of Section
13 with respect to making dispositions and arrangements with the other Banks,
where such Bank's share of any payment received, whether by setoff or otherwise,
is in excess of its pro rata share of such payments due and payable to all of
the Banks, in each case as, when and to the full extent required by the
provisions of this Agreement, shall be deemed delinquent (a "Delinquent Bank")
and shall be deemed a Delinquent Bank until such time as such delinquency is
satisfied. In addition to the rights and remedies that may be available to the
Agent at law and in equity, a Delinquent Bank's right to participate in the
administration of the Loan Documents, including, without limitation, any rights
to consent to or direct any action or inaction of the Agent pursuant to this
Agreement or otherwise, or to be taken into account in the calculation of
Requisite Banks or any matter requiring approval of all of the Banks, shall be
suspended while such Bank is a Delinquent Bank. A Delinquent Bank shall be
deemed to have assigned any and all payments due to it from the Borrower and the
Guarantor, whether on account of outstanding Loans, interest, fees or otherwise,
to the remaining nondelinquent Banks for application to, and reduction of, their
respective pro rata shares of all outstanding Loans. The Delinquent Bank hereby
authorizes the Agent to distribute such payments to the nondelinquent Banks in
proportion to their respective pro rata shares of all outstanding Loans. The
provisions of this Section shall apply and be effective regardless of whether an
Event of Default occurs and is then continuing, and notwithstanding (i) any
other provision of this Agreement to the contrary or (ii) any instruction of
Borrower as to its desired application of payments. The Agent shall be entitled
to (i) withhold or set off, and to apply to the payment of the obligations of
any Delinquent Bank any amounts to be paid to such Delinquent Bank under this
Agreement, (ii) to collect interest from such Bank for the period from the date
on which the payment was due at the rate per annum equal to the Federal Funds
Effective Rate plus two percent (2%), for each day during such period, and (iii)
bring an action or suit against such Delinquent Bank in a court of competent
jurisdiction to recover the defaulted obligations of such Delinquent Bank. A

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Delinquent Bank shall be deemed to have satisfied in full a delinquency when and
if, as a result of application of the assigned payments to all outstanding Loans
of the nondelinquent Banks or as a result of other payments by the Delinquent
Banks to the nondelinquent Banks, the Banks' respective pro rata shares of all
outstanding Loans have returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment causing such
delinquency.

      Section 14.6 Holders of Notes. Subject to the terms of Article 18, the
Agent may deem and treat the payee of any Note as the absolute owner or
purchaser thereof for all purposes hereof until it shall have been furnished in
writing with a different name by such payee or by a subsequent holder, assignee
or transferee.

      Section 14.7 Indemnity. THE BANKS RATABLY AGREE HEREBY TO INDEMNIFY AND
HOLD HARMLESS THE AGENT FROM AND AGAINST ANY AND ALL CLAIMS, ACTIONS AND SUITS
(WHETHER GROUNDLESS OR OTHERWISE), LOSSES, DAMAGES, COSTS, EXPENSES (INCLUDING
ANY EXPENSES FOR WHICH THE AGENT HAS NOT BEEN REIMBURSED BY THE BORROWER AS
REQUIRED BY SECTION 15), AND LIABILITIES OF EVERY NATURE AND CHARACTER ARISING
OUT OF OR RELATED TO THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED OR EVIDENCED HEREBY OR THEREBY, OR
THE AGENT'S ACTIONS TAKEN HEREUNDER OR THEREUNDER, EXCEPT TO THE EXTENT THAT ANY
OF THE SAME SHALL BE DIRECTLY CAUSED BY THE AGENT'S WILLFUL MISCONDUCT OR GROSS
NEGLIGENCE. BANKS AGREE THAT THE INDEMNIFICATION OF AGENT BY BANKS SET FORTH IN
THIS SECTION 14.7 INCLUDES INDEMNIFICATION IN THE EVENT OF ORDINARY NEGLIGENCE
ON THE PART OF AGENT BUT DOES NOT INCLUDE INDEMNIFICATION OF AGENT FOR AGENT'S
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

      Section 14.8 Agent as Bank. In its individual capacity, KeyBank shall have
the same obligations and the same rights, powers and privileges in respect to
its Commitment and the Loans made by it, and as the holder of any of the Notes
as it would have were it not also the Agent.

      Section 14.9 Resignation. Subject to the terms of Section 18.1, the Agent
may resign at any time by giving 30 calendar days' prior written notice thereof
to the Banks and the Borrower. Upon any such resignation, the Requisite Banks,
subject to the terms of Section 18.1, shall have the right to appoint as a
successor Agent any Bank or any bank whose senior debt obligations are rated not
less than "A" or its equivalent by Moody's Investors Service, Inc. or not less
than "A" or its equivalent by Standard & Poor's corporation and which has a net
worth of not less than $500,000,000. Unless an Event of Default shall have
occurred and be continuing, such successor Agent shall be reasonably acceptable
to the Borrower. If no successor Agent shall have been appointed and shall have
accepted such appointment within thirty (30) days after the retiring Agent's
giving of notice of resignation, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent, which shall be a bank whose debt obligations
are rated not less than "A" or its equivalent by Moody's Investors Service, Inc.
or not less than "A" or its equivalent by Standard & Poor's Corporation and
which has a net worth of not less than $500,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor

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Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Agent, and the retiring Agent
shall be discharged from its duties and obligations hereunder as Agent. After
any retiring Agent's resignation, the provisions of this Agreement and the other
Loan Documents shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent. Upon
any change in the Agent under this Agreement, the resigning Agent shall execute
such assignments of and amendments to the Loan Documents as may be necessary to
substitute the successor Agent for the resigning Agent.

      Section 14.10 Duties in the Case of Enforcement. In case one or more
Events of Default have occurred and shall be continuing, and whether or not
acceleration of the Obligations shall have occurred, the Agent shall, if (a) so
requested by the Requisite Banks and (b) the Banks have provided to the Agent
such additional indemnities and assurances in accordance with their respective
Commitment Percentages against expenses and liabilities as the Agent may
reasonably request, proceed to exercise all or any legal and equitable and other
rights or remedies as it may have. The Requisite Banks may direct the Agent in
writing as to the method and the extent of any such exercise, the Banks hereby
agreeing to indemnify and hold the Agent harmless in accordance with their
respective Commitment Percentages from all liabilities incurred in respect of
all actions taken or omitted in accordance with such directions, provided that
the Agent need not comply with any such direction to the extent that the Agent
reasonably believes the Agent's compliance with such direction to be unlawful in
any applicable jurisdiction or commercially unreasonable under the Uniform
Commercial Code as enacted in any applicable jurisdiction.

      Section 14.11 Bankruptcy. In the event a bankruptcy or other insolvency
proceeding is commenced by or against Borrower or any Guarantor with respect to
the Obligations, the Agent shall have the sole and exclusive right to file and
pursue a joint proof claim on behalf of all Banks. Any votes with respect to
such claims or otherwise with respect to such proceedings shall be subject to
the vote of the Requisite Banks or all of the Banks as required by this
Agreement. Each Bank irrevocably waives its right to file or pursue a separate
proof of claim in any such proceedings unless Agent fails to file such claim
within thirty (30) days after receipt of written notice from the Banks
requesting that Agent file such proof of claim.

Section 15. EXPENSES.

      The Borrower agrees to pay (a) the reasonable costs of producing and
reproducing this Agreement, the other Loan Documents and the other agreements
and instruments mentioned herein, (b) except as otherwise specifically provided
herein, any taxes (including any interest and penalties in respect thereto)
payable by the Agent or any of the Banks, including any recording, mortgage,
documentary or intangibles taxes in connection with the Loan Documents, or other
taxes payable on or with respect to the transactions contemplated by this
Agreement (other than the Excluded Taxes), (c) the reasonable fees, expenses and
disbursements of the counsel to the Agent and any reasonably necessary local
counsel to the Agent incurred in connection with the preparation, administration
or interpretation of the Loan Documents and other instruments mentioned herein
(excluding, however, the preparation of agreements evidencing participations
granted under Section 18.4), each closing hereunder, and amendments,
modifications, approvals, consents or waivers hereto or hereunder, (d) the
reasonable out-of-pocket expenses and

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disbursements of the Agent incurred by the Agent in connection with the
preparation, administration or interpretation of the Loan Documents and other
instruments mentioned herein, and the making of each advance hereunder, (e) all
reasonable out-of-pocket expenses (including reasonable attorneys' fees and
costs, and the fees and costs of appraisers, engineers, investment bankers or
other experts retained by any Bank or the Agent) incurred by any Bank or the
Agent in connection with (i) the enforcement of or preservation of rights under
any of the Loan Documents against the Borrower, any of its general partners or
the Guarantor or the administration thereof after the occurrence and during the
continuance of an Event of Default and (ii) any litigation, proceeding or
dispute whether arising hereunder or otherwise, in any way related to the
Agent's or any of the Bank's relationship with the Borrower, any of its general
partners, the Guarantor or any of Crescent OP's Subsidiaries (other than any
litigation, proceeding or dispute solely among or between one or more Banks or
the Agent) unless the Borrower, such general partner, such Guarantor or such
Subsidiary is the prevailing party in such litigation, proceeding or dispute,
(f) all reasonable fees, expenses and disbursements of the Agent incurred in
connection with UCC searches, UCC filings, title rundowns, title searches or
document recordings; (g) all reasonable out-of-pocket expenses and disbursements
(including reasonable attorneys' fees and costs) of KeyBank in connection with
the syndication of the Loan (except for expenses for assignments occurring more
than ninety (90) days after the Closing Date). The covenants of this Section 15
shall survive payment or satisfaction of payment of amounts owing with respect
to the Notes.

Section 16. INDEMNIFICATION.

      THE BORROWER AGREES TO INDEMNIFY AND HOLD HARMLESS THE AGENT AND THE BANKS
AND EACH DIRECTOR, OFFICER, EMPLOYEE, AGENT AND PERSON WHO CONTROLS THE AGENT OR
ANY BANK FROM AND AGAINST ANY AND ALL CLAIMS, ACTIONS AND SUITS, WHETHER
GROUNDLESS OR OTHERWISE, AND FROM AND AGAINST ANY AND ALL LIABILITIES, LOSSES,
DAMAGES AND EXPENSES OF EVERY NATURE AND CHARACTER ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY INCLUDING, WITHOUT LIMITATION, (A) ANY LEASING
FEES AND ANY BROKERAGE, FINDERS OR SIMILAR FEES ASSERTED AGAINST ANY PERSON
INDEMNIFIED UNDER THIS SECTION 16 BASED UPON ANY AGREEMENT, ARRANGEMENT OR
ACTION MADE OR TAKEN, OR ALLEGED TO HAVE BEEN MADE OR TAKEN, BY THE BORROWER,
ANY OF ITS GENERAL PARTNERS, THE GUARANTOR OR ANY OF CRESCENT OP'S SUBSIDIARIES
(PROVIDED THAT THE BORROWER SHALL NOT BE REQUIRED TO INDEMNIFY A BANK FROM AND
AGAINST ANY AGREEMENT THAT IS PROVEN TO HAVE BEEN MADE BY A BANK TO PAY ANY
LEASING FEES OR BROKERAGE, FINDERS OR SIMILAR FEES), (B) ANY CONDITION OF THE
REAL ESTATE NOT CAUSED SOLELY BY THE AGENT AND/OR THE BANKS AS FINALLY
DETERMINED BY A COURT OF COMPETENT JURISDICTION AFTER THE EXPIRATION OF ALL
APPLICABLE APPEAL PERIODS, (C) ANY ACTUAL OR PROPOSED USE BY THE BORROWER OF THE
PROCEEDS OF ANY OF THE LOANS OR ANY ACTUAL OR PROPOSED USE OF A LETTER OF CREDIT
BY ANY BENEFICIARY OF A LETTER OF CREDIT, (D) ANY ACTUAL OR ALLEGED

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INFRINGEMENT OF ANY PATENT, COPYRIGHT, TRADEMARK, SERVICE MARK OR SIMILAR RIGHT
OF THE BORROWER, ANY OF ITS GENERAL PARTNERS, THE GUARANTOR OR ANY OF CRESCENT
OP'S SUBSIDIARIES, (E) THE BORROWER, THE GUARANTOR OR CRESCENT REIT ENTERING
INTO OR PERFORMING THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, (F) ANY
ACTUAL OR ALLEGED VIOLATION OF ANY LAW, ORDINANCE, CODE, ORDER, RULE,
REGULATION, APPROVAL, CONSENT, PERMIT OR LICENSE RELATING TO THE REAL ESTATE
(OTHER THAN THOSE CAUSED SOLELY BY THE AGENT AND/OR THE BANKS AS FINALLY
DETERMINED BY A COURT OF COMPETENT JURISDICTION AFTER THE EXPIRATION OF ALL
APPLICABLE APPEAL PERIODS), (G) WITH RESPECT TO THE BORROWER, EACH OF ITS
GENERAL PARTNERS, THE GUARANTOR, CRESCENT OP'S SUBSIDIARIES AND THEIR RESPECTIVE
PROPERTIES AND ASSETS, THE VIOLATION OF ANY ENVIRONMENTAL LAW, THE RELEASE OR
THREATENED RELEASE OF ANY HAZARDOUS SUBSTANCES OR ANY ACTION, SUIT, PROCEEDING
OR INVESTIGATION BROUGHT OR THREATENED WITH RESPECT TO ANY HAZARDOUS SUBSTANCES
(INCLUDING, BUT NOT LIMITED TO CLAIMS WITH RESPECT TO WRONGFUL DEATH, PERSONAL
INJURY OR DAMAGE TO PROPERTY), (H) ANY INVESTIGATIVE, ADMINISTRATIVE, OR
JUDICIAL PROCEEDING (INCLUDING PRE-TRIAL DISCOVERY), WHETHER OR NOT THE AGENT OR
SUCH BANK SHALL BE DESIGNATED A PARTY THERETO, WHICH MAY BE INCURRED BY THE
AGENT OR ANY BANK, DIRECTLY OR INDIRECTLY RELATING TO OR ARISING OUT OF ANY
ACTUAL OR PROPOSED USE OF THE PROCEEDS OF THE EAGLE RANCH LETTER OF CREDIT, (I)
ANY UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OF ANY MATERIAL FACT CONTAINED
OR INCORPORATED BY REFERENCE IN ANY PRIVATE PLACEMENT MEMORANDUM, OFFICIAL
STATEMENT, PRELIMINARY OFFICIAL STATEMENT, REMARKETING MEMORANDUM OR OTHER
AGREEMENT RELATING TO THE BONDS OR THE EAGLE RANCH LETTER OF CREDIT PROVIDED IN
CONNECTION THEREWITH (OTHER THAN INFORMATION RELATING TO THE ISSUING BANK AND
PROVIDED BY THE ISSUING BANK FOR INCLUSION THEREIN), OR THE OMISSION OR ALLEGED
OMISSION TO STATE IN ANY PRIVATE PLACEMENT MEMORANDUM, OFFICIAL STATEMENT,
PRELIMINARY OFFICIAL STATEMENT, REMARKETING MEMORANDUM OR OTHER AGREEMENT
RELATING TO THE BONDS OR THE EAGLE RANCH LETTER OF CREDIT ANY MATERIAL FACT
NECESSARY TO MAKE SUCH STATEMENTS, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH
THEY ARE OR WERE MADE, NOT MISLEADING; (J) THE EXECUTION AND DELIVERY OR
TRANSFER OF, OR EXCEPT AS SPECIFICALLY PROVIDED IN SECTION 2.8(K) PAYMENT OR
FAILURE TO PAY UNDER, THE EAGLE RANCH LETTER OF CREDIT; (F) THE ISSUANCE AND
SALE OF THE BONDS; OR (G) THE USE OF THE PROCEEDS OF THE BONDS; IN EACH CASE
INCLUDING, WITHOUT LIMITATION, THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL
AND, WITHOUT DUPLICATION, ALLOCATED COSTS OF INTERNAL COUNSEL INCURRED IN
CONNECTION WITH ANY SUCH INVESTIGATION, LITIGATION OR OTHER PROCEEDING;
PROVIDED,

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HOWEVER, THAT THE BORROWER SHALL NOT BE OBLIGATED UNDER THIS SECTION 16 TO
INDEMNIFY ANY PERSON FOR LIABILITIES TO THE EXTENT THEY ARISE FROM SUCH PERSON'S
OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, FOR LIABILITIES ARISING AS A RESULT
OF A BREACH OF SUCH PERSON'S OBLIGATIONS UNDER THE LOAN DOCUMENTS AS FINALLY
DETERMINED BY A COURT OF COMPETENT JURISDICTION AFTER THE EXPIRATION OF ALL
APPLICABLE APPEAL PERIODS OR FOR LIABILITIES ARISING IN CONNECTION WITH ANY
DISPUTES SOLELY BETWEEN OR AMONG ANY BANKS OR BETWEEN ANY BANK OR BANKS AND THE
AGENT WITH RESPECT TO THE LOANS. IN LITIGATION, OR THE PREPARATION THEREFOR, THE
BANKS AND THE AGENT SHALL BE ENTITLED TO SELECT A SINGLE LAW FIRM AS THEIR OWN
COUNSEL AND, IN ADDITION TO THE FOREGOING INDEMNITY, THE BORROWER AGREES TO PAY
PROMPTLY THE REASONABLE FEES AND EXPENSES OF SUCH COUNSEL. IF ANY SUIT, ACTION,
PROCEEDING (INCLUDING ANY GOVERNMENTAL OR REGULATORY INVESTIGATION), CLAIM OR
DEMAND SHALL BE BROUGHT OR ASSERTED AGAINST ANY INDEMNITEE, SUCH INDEMNITEE
SHALL PROMPTLY NOTIFY THE BORROWER IN WRITING; PROVIDED THAT THE FAILURE TO
NOTIFY THE BORROWER SHALL NOT RELIEVE THE BORROWER FROM ANY LIABILITY THAT IT
MAY HAVE UNDER THIS AGREEMENT AND PROVIDED, FURTHER, THAT THE FAILURE TO NOTIFY
THE BORROWER SHALL NOT RELIEVE IT FROM ANY LIABILITY THAT IT MAY HAVE TO AN
INDEMNITEE OTHERWISE THAN UNDER THIS AGREEMENT. IF, AND TO THE EXTENT THAT THE
OBLIGATIONS OF THE BORROWER UNDER THIS SECTION 16 ARE UNENFORCEABLE FOR ANY
REASON, THE BORROWER HEREBY AGREES TO MAKE THE MAXIMUM CONTRIBUTION TO THE
PAYMENT IN SATISFACTION OF SUCH OBLIGATIONS WHICH IS PERMISSIBLE UNDER
APPLICABLE LAW. THE PROVISIONS OF THIS SECTION 16 SHALL SURVIVE THE REPAYMENT OF
THE LOANS AND THE TERMINATION OF THE OBLIGATIONS OF THE BANKS HEREUNDER.
BORROWER AGREES THAT THE INDEMNIFICATION OF AGENT AND THE BANKS BY BORROWER SET
FORTH IN THIS SECTION 16 INCLUDES INDEMNIFICATION IN THE EVENT OF ORDINARY
NEGLIGENCE ON THE PART OF AGENT AND THE BANKS BUT DOES NOT INCLUDE
INDEMNIFICATION OF AGENT OR A BANK FOR AGENT'S OR SUCH BANK'S GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT.

Section 17. SURVIVAL OF COVENANTS, ETC.

      All covenants, agreements, representations and warranties made herein, in
the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the Borrower or the Guarantor pursuant
hereto or thereto shall be deemed to have been relied upon by the Banks and the
Agent, notwithstanding any investigation heretofore or hereafter made by any of
them, and shall survive the making by the Banks of any of the Loans, as herein
contemplated, and shall continue in full force and effect so long as any amount
due under this Agreement or the Notes or any of the other Loan Documents remains
outstanding or any Bank has any obligation to make any Loans. The
indemnification obligations of the Borrower provided herein and the other Loan
Documents shall survive the full repayment of amounts due

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and the termination of the obligations of the Banks hereunder and thereunder to
the extent provided herein and therein. All statements contained in any
certificate or other paper delivered to any Bank or the Agent at any time by or
on behalf of the Borrower or the Guarantor pursuant hereto or in connection with
the transactions contemplated hereby shall constitute representations and
warranties by the Borrower or the Guarantor hereunder.

Section 18. ASSIGNMENT AND PARTICIPATION.

      Section 18.1 Conditions to Assignment by Banks. Except as provided herein,
each Bank may assign to one or more bankS or other entities all or a portion of
its interests, rights and obligations under this Agreement (including all or a
portion of its Commitment Percentage and Commitment and the same portion of the
Loans at the time owing to it, and the Notes held by it); provided that (a) the
Agent and, provided no Event of Default shall have occurred and be continuing,
the Borrower shall have given their prior written consent to such assignment,
which consent shall not be unreasonably withheld (provided that such consent
shall not be required for any assignment to another Bank, to a wholly-owned
subsidiary of such Bank or to a Person controlling, controlled by or under
common control with such Bank, provided that such assignee shall remain a
wholly-owned subsidiary of such Bank or remain a Person controlling, controlled
by or under common control with such Bank, as applicable), (b) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Bank's rights and obligations under this Agreement, (c) the parties to
such assignment shall execute and deliver to the Agent, for recording in the
Register (as hereinafter defined), an Assignment and Acceptance Agreement in the
form attached hereto as Exhibit F and by this reference incorporated herein (the
"Assignment"), together with any Notes subject to such assignment, (d) in no
event shall any assignment be made to any Person controlling, controlled by or
under common control with, or which is otherwise acting in concert with the
Borrower, any of its general partners, the Guarantor, Crescent REIT or Crescent
OP's Subsidiaries, (e) such assignee shall have a net worth as of the date of
such assignment of not less than $500,000,000 unless such requirement is waived
in writing by the Borrower and the Agent, (f) such assignment is subject to the
terms of any intercreditor agreement among the Banks and the Agent, (g) such
assignee shall acquire an interest in the Loans of not less than $5,000,000.00
unless, pursuant to such assignment, such Assignee is acquiring all of the
assigning Bank's Commitment, and (h) if applicable, such assignee shall deliver
the documents required under Section 18.10. Upon such execution, delivery,
acceptance and recording, of such Assignment, (i) the assignee thereunder shall
be a party hereto and all other Loan Documents executed by the Banks and, to the
extent provided in such Assignment, have the rights and obligations of a Bank
hereunder, (ii) the assigning Bank shall, to the extent provided in such
Assignment and upon payment to the Agent of the registration fee referred to in
Section 18.2, be released from its obligations under this Agreement, and (iii)
the Agent may unilaterally amend Schedule I to reflect such Assignment. In
connection with each Assignment, the assignee shall represent and warrant to the
Agent, the assignor and each other Bank that such assignee is not controlling,
controlled by, under common control with and is otherwise not acting in concert
with the Borrower, its general partners, the Guarantor, Crescent REIT or
Crescent OP's Subsidiaries.

      Section 18.2 Register. The Borrower hereby designates the Agent to serve
as the Borrower's agent, solely for the purpose of this Section 18.2, to
maintain a register (the "Register") for the recordation of the names and
addresses of the Banks and the Commitment Percentages of, and

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<PAGE>

principal amount of the Loans owing to the Banks from time to time. The Agent
shall also maintain a copy of each Assignment delivered to it. The entries in
the Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Agent and the Banks may treat each Person whose name is recorded
in the Register as a Bank hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower and the Banks at any
reasonable time and from time to time upon reasonable prior notice. Upon each
such recordation, the assigning Bank agrees to pay to the Agent a registration
fee in the sum of $3,500. Except as provided in Section 15(g), the Borrower
shall not be responsible for the payment of any fees, expenses or disbursements
in connection with any assignment by a Bank.

      Section 18.3 New Notes. Upon its receipt of an executed Assignment,
together with each Note subject to such Assignment, the Agent shall (a) record
the information contained therein in the Register, and (b) give prompt notice
thereof to the Borrower and the Banks (other than the assigning Bank). Within
five Business Days after receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Agent, in exchange for each
surrendered Note, a new Note to the order of such assignee in an amount equal to
the amount assumed by such assignee pursuant to such Assignment and, if the
assigning Bank has retained some portion of its obligations hereunder, a new
Note to the order of the assigning Bank in an amount equal to the amount
retained by it hereunder. Such new Notes shall provide that they are
replacements for the surrendered Notes, shall be in an aggregate principal
amount equal to the aggregate principal amount of the surrendered Notes, shall
be dated the effective date of such Assignment and shall otherwise be in
substantially the form of the assigned Notes. The surrendered Notes shall be
canceled and returned to the Borrower. All requests for a new Note shall be made
to the Agent or Agent's Special Counsel (with a copy of such request delivered
to the Agent).

      Section 18.4 Participations. Each Bank may sell participations to one or
more banks or other entities in all or a portion of such Bank's rights and
obligations under this Agreement and the other Loan Documents; provided that (a)
any such sale or participation shall not affect the rights and duties of the
selling Bank hereunder to the Borrower, (b) such participation shall not entitle
such participant to any rights or privileges under this Agreement or the Loan
Documents, including, without limitation, the right to approve waivers,
amendments or modifications, (c) such participant shall have no direct rights
against the Borrower, any of its general partners, the Guarantor or any of
Crescent OP's Subsidiaries, and (d) such sale is effected in accordance with all
applicable laws.

      Section 18.5 Pledge by Bank. Any Bank may at any time pledge all or any
portion of its interest and rights under this Agreement (including all or any
portion of its Note) to any of the twelve Federal Reserve Banks organized under
Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. Any Bank may with
the consent of the Agent and compliance with the terms of this Agreement pledge
all or any portion of its interests and rights under this Agreement (including
all or any portion of its Note) to a Person approved by the Agent. No such
pledge or the enforcement thereof shall release the pledgor Bank from its
obligations hereunder or under any of the other Loan Documents.

      Section 18.6 No Assignment by Borrower. The Borrower shall not assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Banks.

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      Section 18.7 Disclosure. The Borrower agrees that any Bank may disclose
information obtained by such Bank pursuant to this Agreement to its Affiliates,
assignees or participants and potential assignees or participants hereunder,
subject to the terms of Section 32.

      Section 18.8 Co-Agents. Neither the Syndication Agent, the
Co-Documentation Agents nor the Co-Arrangers shall have any additional rights or
obligations under the Loan Documents, except for those rights, if any, as a
Bank.

      Section 18.9 Mandatory Assignment. In the event Borrower requests that
certain amendments, modifications or waivers be made to this Agreement or any of
the other Loan Documents which request is approved by Agent but is not approved
by one or more of the Banks (any such non-consenting Bank shall hereafter be
referred to as the "Non-Consenting Bank"), then, within thirty (30) Business
Days after Borrower's receipt of notice of such disapproval by such
Non-Consenting Bank, Borrower shall have the right as to such Non-Consenting
Bank, to be exercised by delivery of written notice delivered to the Agent and
the Non-Consenting Bank within thirty (30) Business Days of receipt of such
notice, to elect to cause the Non-Consenting Bank to transfer its Commitment.
The Agent shall promptly notify the remaining Banks that each of such Banks
shall have the right, but not the obligation, to acquire a portion of the
Commitment, pro rata based upon their relevant Commitment Percentages, of the
Non-Consenting Bank (or if any of such Banks does not elect to purchase its pro
rata share, then to such remaining Banks in such proportion as approved by the
Agent). In the event that the Banks do not elect to acquire all of the
Non-Consenting Bank's Commitment, then the Agent shall endeavor to find a new
Bank or Banks to acquire such remaining Commitment. Upon any such purchase of
the Commitment of the Non-Consenting Bank, the Non-Consenting Bank's interests
in the Obligations and its rights hereunder and under the Loan Documents shall
terminate at the date of purchase, and the Non-Consenting Bank shall promptly
execute and deliver any and all documents reasonably requested by Agent to
surrender and transfer such interest, including, without limitation, an
Assignment and Acceptance Agreement in the form attached hereto as Exhibit F and
such Non-Consenting Bank's original Note. The purchase price for the
Non-Consenting Bank's Commitment shall equal any and all amounts outstanding and
owed by Borrower to the Non-Consenting Bank, including principal and all accrued
and unpaid interest or fees, plus any applicable amounts payable pursuant to
Section 4.8 which would be owed to such Non-Consenting Bank if the Loans were to
be repaid in full on the date of such purchase of the Non-Consenting Bank's
Commitment (provided that the Borrower may pay to such Non-Consenting Bank any
interest, fees or other amounts (other than principal) owing to such
Non-Consenting Bank).

      Section 18.10 Foreign Banks and Participants. Each Bank that is
incorporated or otherwise organized under the laws oF a jurisdiction other than
the United States of America or any State thereof or the District of Columbia (a
"Non-US Bank") shall deliver to the Agent on or before the Closing Date (or on
or before accepting an assignment under Section 18.1 or receiving a
participation interest herein pursuant to Section 18.4) two duly completed and
executed copies, of either Form W8-BEN or W-8ECI (relating to such Bank and
entitling it to a complete exemption from withholding on all payments to be made
to such Bank by the Borrower pursuant to this Agreement) of the United States
Internal Revenue Service or such other evidence (including, if reasonably
necessary, Form W-9) satisfactory to the Agent such that no withholding under
the federal income tax laws is required with respect to such Bank. Thereafter
and from time to time,

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each such Bank shall (a) promptly submit to the Agent such additional duly
completed and signed copies of one of such forms (or such successor forms as
shall be adopted from time to time by the relevant United States taxing
authorities) as may then be available under then current United States laws and
regulations to avoid, or such evidence as is satisfactory to the Borrower and
the Agent establishing such Bank's eligibility for any available exemption from,
United States withholding taxes in respect of all payments to be made to such
Bank by the Borrower pursuant to this Agreement and (b) take such steps as shall
not be materially disadvantageous to it, in the reasonable judgment of such
Bank, and as may be reasonably necessary (including the re-designation of its
LIBOR Lending Office, if any) to avoid any applicable requirement of law that
the Borrower make any deduction or withholding for taxes from amounts payable to
such Bank. The Borrower shall not be required to pay any additional amount to
any Non-US Bank under Section 4.4(b) with respect to any withholding under
federal income tax laws if such Bank shall fail to satisfy the requirements of
this Section 18.10; provided, however, that in the event that a Bank or
participant described herein shall, after the date such Bank or participant has
first acquired its interest in the Loan, become unable to avoid any requirement
that the Borrower make any deduction or withholding for taxes from amounts
payable to such Persons as a result of any change in law or activities of such
Bank, then such Bank or participant shall no longer be required to provide to
Agent the above-described forms and the provisions of Section 4.4 shall apply.
In the event that a participation has been granted pursuant to Section 18.4 to a
financial institution that is incorporated or otherwise organized under the laws
of a jurisdiction other than the United States of America, any State thereof or
the District of Columbia, then, the Bank which granted such participation shall
cause such participant financial institution to deliver the same documents and
information to the Agent and such Bank as would be required under this Section
18.10 if such financial institution were a Bank.

Section 19. NOTICES.

      Each notice, demand, election or request provided for or permitted to be
given pursuant to this Agreement (hereinafter in this Section 19 referred to as
"Notice") must be in writing and shall be deemed to have been properly given or
served by personal delivery or by sending same by overnight courier or by
depositing same in the United States Mail, postpaid and registered or certified,
return receipt requested, or as expressly permitted herein, by telecopy, in each
such case addressed as follows and effective as provided below:

      If to the Agent or any Bank, at the address set forth on the signature
page for the Agent or such Bank; and

      If to the Borrower:

            Crescent Real Estate Funding VIII, L.P.
            777 Main Street
            Suite 2100
            Fort Worth, Texas 76102
            Attn: Christopher T. Porter
            Telecopy No.: 817/321-2000

      with a copy to:

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            Crescent Real Estate Equities Limited Partnership
            777 Main Street
            Suite 2100
            Fort Worth, Texas 76102
            Attn: David M. Dean, Esq.
            Telecopy No.: 817/321-2000

and to each other Bank which may hereafter become a party to this Agreement at
such address as may be designated by such Bank. Each Notice shall be effective
upon being personally delivered or upon being sent by overnight courier or upon
being deposited in the United States Mail as aforesaid, or if transmitted by
telegraph, telecopy, telefax or telex is permitted, upon being sent and
confirmation of receipt. The time period in which a response to such Notice must
be given or any action taken with respect thereto (if any), however, shall
commence to run from the date of receipt if personally delivered or sent by
overnight courier or telecopy, or if so deposited in the United States Mail, on
the date of receipt as disclosed on the return receipt, or if transmitted by
telegraph, telecopy, telefax or telex is permitted, upon being sent and
confirmation of receipt. Rejection or other refusal to accept or the inability
to deliver because of changed address for which no notice was given shall be
deemed to be receipt of the Notice sent. By giving at least five (5) Business
Days prior Notice thereof, the Borrower, a Bank or Agent shall have the right
from time to time and at any time during the term of this Agreement to change
their respective addresses and each shall have the right to specify as its
address any other address within the United States of America.

Section 20. RELATIONSHIP.

      NEITHER THE AGENT NOR ANY BANK HAS ANY FIDUCIARY RELATIONSHIP WITH OR
FIDUCIARY DUTY TO THE BORROWER, THE GUARANTOR OR CRESCENT OP'S SUBSIDIARIES
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS
OR THE TRANSACTIONS CONTEMPLATED HEREUNDER OR THEREUNDER, AND THE RELATIONSHIP
BETWEEN EACH BANK AND THE BORROWER IS SOLELY THAT OF A LENDER AND BORROWER, AND
NOTHING CONTAINED HEREIN OR IN ANY OF THE OTHER LOAN DOCUMENTS SHALL IN ANY
MANNER BE CONSTRUED AS MAKING THE PARTIES HERETO PARTNERS, JOINT VENTURERS OR
ANY OTHER RELATIONSHIP OTHER THAN LENDER AND BORROWER.

Section 21. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE.

      THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS UNDER THE LAWS OF THE STATE OF
TEXAS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF SUCH STATE (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF
LAW). THE BORROWER AND CRESCENT REIT AGREE THAT ANY SUIT FOR THE ENFORCEMENT OF
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS

                                       94
<PAGE>

OF THE STATE OF TEXAS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENT TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH
SUIT BEING MADE UPON THE BORROWER AND CRESCENT REIT BY MAIL AT THE ADDRESS
SPECIFIED IN SECTION 19. THE BORROWER AND CRESCENT REIT HEREBY WAIVE ANY
OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR
ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.

Section 22. HEADINGS.

      The captions in this Agreement are for convenience of reference only and
shall not define or limit the provisions hereof.

Section 23. COUNTERPARTS.

      This Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when so
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Agreement it shall not be necessary
to produce or account for more than one such counterpart signed by the party
against whom enforcement is sought.

Section 24. ENTIRE AGREEMENT, ETC.

      The Loan Documents and any other documents executed in connection herewith
or therewith express the entire understanding of the parties with respect to the
transactions contemplated hereby. Neither this Agreement nor any term hereof may
be changed, waived, discharged or terminated, except as provided in Section 27.

Section 25. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS.

      EACH OF THE BORROWER, CRESCENT REIT, THE AGENT AND THE BANKS HEREBY WAIVES
ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY
DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY NOTE OR ANY OF THE OTHER LOAN
DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE
OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT TO THE EXTENT EXPRESSLY PROHIBITED BY
LAW, THE BORROWER AND CRESCENT REIT HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO
CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES. THE BORROWER AND CRESCENT REIT (A) CERTIFY THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY BANK OR THE AGENT HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH BANK OR THE AGENT WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGE THAT THE AGENT AND THE
BANKS HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS TO WHICH THEY ARE PARTIES

                                       95
<PAGE>

BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED IN THIS Section
25.

Section 26. DEALINGS WITH THE BORROWER.

      The Agent, the Banks and their affiliates may accept deposits from, extend
credit to and generally engage in any kind of banking, trust or other business
with the Borrower, the Guarantor, Crescent OP's Subsidiaries or any of their
affiliates regardless of the capacity of the Agent or the Bank hereunder. The
Banks acknowledge that, pursuant to such activities, the Agent, a Bank or its
Affiliates may receive information regarding such Persons (including information
that may be subject to confidentiality obligations in favor of such Person) and
acknowledge that the Agent or such Bank, as applicable, shall be under no
obligation to provide such information to them.

Section 27. CONSENTS, AMENDMENTS, WAIVERS, ETC.

      Except as otherwise expressly provided in this Agreement, any consent or
approval required or permitted by this Agreement may be given, and any term of
this Agreement or of any other instrument related hereto or mentioned herein may
be amended, and the performance or observance by the Borrower of any terms of
this Agreement or such other instrument or the continuance of any Default or
Event of Default may be waived (either generally or in a particular instance and
either retroactively or prospectively) with, but only with, the written consent
of the Requisite Banks. Notwithstanding the foregoing, none of the following may
occur without the written consent of each Bank: a decrease in the rate of
interest on the Notes; except as provided in Section 2.10, an increase in the
amount of the Commitments of any Banks; a reduction or waiver of the principal
of any unpaid Loan or any interest thereon; a reduction in the amount of any fee
payable to a Bank hereunder; an extension of the Maturity Date; the release of
the Borrower or the Guarantor except as otherwise provided herein; any
modification to require a Bank to fund a pro rata share of a request for an
advance of the Loans made by the Borrower other than based on its Commitment
Percentage; a change to this Section 27; any postponement of any date fixed for
any payment of principal of or interest on the Loan; any change in the manner of
distribution of any payments to the Banks or Agent; a change to the provisions
of Section 2.1 which provide that the Banks shall not be required to make an
advance of proceeds of the Loan following a Default or Event of Default
(provided that the foregoing shall not limit the ability of the Requisite Banks
to waive a Default or Event of Default or agree to make an advance
notwithstanding such Default of Event of Default); or an amendment of the
definition of Requisite Banks; or an amendment of any provision of this
Agreement or the Loan Documents which requires the approval of all of the Banks
or the Requisite Banks to require a lesser number of Banks to approve such
action. Notwithstanding the requirement for approval of an amendment,
modification or waiver by the Requisite Banks, there shall be no amendment,
modification or waiver of any provisions in the Loan Documents with respect to
Swing Loans without also obtaining the consent of the Swing Loan Bank. The
amount of the Agent's fee payable for the Agent's account and the provisions of
Section 14 may not be amended without the written consent of the Agent. No
waiver shall extend to or affect any obligation not expressly waived or impair
any right consequent thereon. No course of dealing or delay or omission on the
part of the Agent or any Bank in exercising any right shall operate as a waiver
thereof or otherwise be prejudicial thereto. No notice to or demand upon the

                                       96
<PAGE>

Borrower shall entitle the Borrower to other or further notice or demand in
similar or other circumstances.

Section 28. SEVERABILITY.

      The provisions of this Agreement are severable, and if any one clause or
provision hereof shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Agreement in any jurisdiction.

Section 29. [INTENTIONALLY OMITTED.]

Section 30. TIME OF THE ESSENCE.

      Time is of the essence with respect to each and every covenant, agreement
and obligation of the Borrower and the Guarantor under this Agreement and the
other Loan Documents.

Section 31. REPLACEMENT NOTES.

      Upon receipt of evidence reasonably satisfactory to the Borrower of the
loss, theft, destruction or mutilation of any Note, and in the case of any such
loss, theft or destruction, upon delivery of an indemnity agreement reasonably
satisfactory to the Borrower or, in the case of any such mutilation, upon
surrender and cancellation of the applicable Note, the Borrower will execute and
deliver, in lieu thereof, a replacement Note, identical in form and substance to
the applicable Note and dated as of the date of the applicable Note and upon
such execution and delivery all references in the Loan Documents to such Note
shall be deemed to refer to such replacement Note.

Section 32. NON-DISCLOSURE.

      Each Bank agrees for itself that it shall use reasonable efforts in
accordance with its customary procedures to hold confidential all non-public
information obtained from the Crescent REIT, Borrower or any Guarantor that has
been identified verbally or in writing as confidential by any of them, and shall
use reasonable efforts in accordance with its customary procedures to not
disclose such information to any other Person, it being understood and agreed
that, notwithstanding the foregoing, a Bank may make (a) disclosures to its
participants (provided such Persons are advised of the provisions of this
Section 32), (b) disclosures to its directors, officers, employees, Affiliates,
accountants, appraisers, legal counsel and other professional advisors of such
Bank (provided that such Persons who are not employees of such Bank are advised
of the provision of this Section 32), (c) disclosures customarily provided or
reasonably required by any potential or actual bona fide assignee, transferee or
participant or their respective directors, officers, employees, Affiliates,
accountants, appraisers, legal counsel and other professional advisors in
connection with a potential or actual assignment or transfer by such Bank of any
Loans or any participations therein (provided such Persons are advised of the
provisions of this Section 32), (d) disclosures to bank regulatory authorities
with jurisdiction over such Bank, or (e) disclosures required or requested by
any other governmental authority or representative thereof or pursuant to legal
process; provided that, unless specifically prohibited by applicable law or

                                       97
<PAGE>

court order, each Bank shall notify Crescent OP of any request by any
governmental authority or representative thereof prior to disclosure (other than
any such request in connection with any examination of such Bank by such
government authority) for disclosure of any such non-public information prior to
disclosure of such information. In addition, each Bank may make disclosure of
such information to any contractual counterparty in swap agreements or such
contractual counterparty's professional advisors (so long as such contractual
counterparty or professional advisors agree to be bound by the provisions of
this Section 32). Non-public information shall not include any information which
is or subsequently becomes publicly available other than as a result of a
disclosure of such information by a Bank, or prior to the delivery to such Bank
is within the possession of such Bank if such information is not known by such
Bank to be subject to another confidentiality agreement with or other
obligations of secrecy to Crescent REIT, the Borrower or the Guarantors, or is
disclosed with the prior approval of Crescent OP. Nothing herein shall prohibit
the disclosure of non-public information to the extent necessary to enforce the
Loan Documents.

Section 33. EAGLE RANCH LETTER OF CREDIT.

      Section 33.1 Definitions. The following terms shall have the meanings set
forth in this Section 33.1:

      Alternate Letter of Credit. As defined in the Trust Agreement.

      Bonds. The Eagle Ranch Metropolitan District (Eagle County, Colorado) Golf
Course Enterprise Revenue Variable Rate Bonds, Series 1999-B.

      Bond Documents. Each document, agreement or instrument executed and
delivered by any Person evidencing, securing or otherwise relating to the Bonds.

      Developer-Owned Bonds. Any Bonds purchased with the proceeds of a draw
under the Eagle Ranch Letter of Credit and registered pursuant to the Trust
Agreement as Developer-Owned Bonds or any similar name.

      District. Eagle Ranch Metropolitan District.

      Eagle Ranch. West Eagle Ranch, LLC, a Delaware limited liability company.

      Eagle Ranch Letter of Credit. The direct pay letter of credit to be issued
by the Issuing Bank in a form approved by the Issuing Bank and Agent with
respect to the Bonds.

      Fixed Interest Rate. As defined in the Trust Agreement.

      Interest Drawing. As defined in the Eagle Ranch Letter of Credit.

      Official Statement. The Remarketing Memorandum with respect to the
re-offering and sale of the Bonds, or any supplement or subsequent remarketing
or offering memorandum.

      Principal Drawing. As defined in the Eagle Ranch Letter of Credit.

      Purchase Drawing. As defined in the Eagle Ranch Letter of Credit.

                                       98
<PAGE>

      Purchase Price. As defined in the Eagle Ranch Letter of Credit.

      Remarketing Agent. As defined in the Trust Agreement.

      Reimbursement Amount. The amount Borrower is obligated to pay to Agent on
behalf of Issuing Bank under Section 33 in respect of a draft drawn or drawn and
accepted under the Eagle Ranch Letter of Credit, which amount will be the amount
of the draft or acceptance.

      Trust Agreement. That certain Indenture of Trust dated June 1, 1999 among
the Trustee and the District relating to the Series B Bonds, and any amendment
or replacement thereof.

      Trustee. As defined in the Trust Agreement.

      Weekly Mode.  As defined in the Trust Agreement.

      Section 33.2 Agreement to Issue the Eagle Ranch Letters of Credit.
Notwithstanding any other provision in this Agreement or the other Loan
Documents to the contrary, including, without limitation, Sections 6.29 and
8.12, but subject to the terms of this Section 33.2, and provided no Default or
Event of Default exists or will arise as a result thereof, subject to the terms
and conditions hereinafter set forth, the Issuing Bank may upon the request of
Borrower issue the Eagle Ranch Letter of Credit, provided, however, the issuance
of the Eagle Ranch Letter of Credit shall not obligate Issuing Bank to issue any
additional direct pay letters of credit and the provisions of Section 2.8 of
this Agreement shall apply with respect to the issuance of all future Letters of
Credit. A Letter of Credit with respect to the Bonds had previously been issued
by Fleet National Bank pursuant to the Fleet Facility. Notwithstanding anything
herein to the contrary, Issuing Bank may not issue the Eagle Ranch Letter of
Credit pursuant to this Agreement (which may include the existing Letter of
Credit with respect to the Bonds issued by Fleet National Bank, with such
changes thereto as Issuing Bank and Agent may reasonably require) until such
time as Agent receives evidence reasonably satisfactory to it that Fleet
National Bank has merged into Bank of America, N.A., and Borrower agrees to
promptly have the Eagle Ranch Letter of Credit issued pursuant to this Agreement
following such merger. As a condition to the issuance of the Eagle Ranch Letter
of Credit, Borrower shall deliver a favorable non-consolidation opinion (or
favorable bring down of a non-consolidation opinion previously delivered in
connection with the Loan) with respect to the issuance of the Eagle Ranch Letter
of Credit, in form and substance satisfactory to Agent. The Eagle Ranch Letter
of Credit shall be issued in an amount equal to the sum of (i) the aggregate
principal amount of the Bonds (being the sum of $7,480,000), plus (ii) an amount
equal to 198 days' interest on the Bonds, computed as though the Bonds bore
interest at the rate of nine percent (9%) per annum, notwithstanding the actual
rate borne by the Bonds from time to time, and based on a 360 day year for the
actual number of days elapsed (or such other amount of interest as may be
approved by Agent and Issuing Bank). The Eagle Ranch Letter of Credit shall
reduce the amount of Letters of Credit available to be issued pursuant to
Section 2.8 of this Agreement. Any amount drawn under the Eagle Ranch Letter of
Credit that is available for reinstatement thereunder shall be considered
outstanding for the purposes thereof.

      Section 33.3 Term of Eagle Ranch Letter of Credit; Extensions of the Term;
Cancellation.

            (a) The term of the Eagle Ranch Letter of Credit shall be such date
as approved by Agent and Issuing Bank (but in any event not later than the
Maturity Date).

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<PAGE>

            (b) The Eagle Ranch Letter of Credit may be cancelled or replaced at
any time without penalty or premium at the request of the Borrower upon
satisfaction of the following conditions (in addition to satisfaction of the
requirements of the Trust Agreement pertaining to the substitution of the Eagle
Ranch Letter of Credit);

                  (i) the Borrower shall have given not less than thirty (30)
days prior written notice to the Agent and Issuing Bank that the Borrower
desires to cancel or replace the Eagle Ranch Letter of Credit; and

                  (ii) the Eagle Ranch Letter of Credit shall have been returned
to the Issuing Bank for cancellation.

      Section 33.4 Reimbursement of Drawings under the Eagle Ranch Letter of
Credit.

            (a) Notwithstanding anything in the Credit Agreement to the
contrary, the Borrower agrees to pay to the Agent, for the account of the Banks,
an amount equal to all amounts drawn under the Eagle Ranch Letter of Credit
pursuant to a Principal Drawing, an Interest Drawing or a Purchase Drawing,
payable without any requirement of notice or demand by the Agent or the Banks,
no later than two (2) Business Days after the date on which such drawing is paid
by the Issuing Bank (the "Period for Payment"). Issuing Bank shall notify Agent
within one (1) Business Day of the payment of any drawing under the Eagle Ranch
Letter of Credit. Interest shall accrue at the rate set forth in Section 2.5(a)
of this Agreement from the date of such drawing until payment of the
Reimbursement Amount.

            (b) Notwithstanding the foregoing Section 33.4(a), if on the date of
any Purchase Drawing, no Event of Default has occurred and is continuing, the
Borrower shall not be required to pay to the Agent, for the account of the
Issuing Bank, the amount of any Purchase Drawing on the date of such drawing. If
Borrower does not pay the Agent, for the account of the Issuing Bank, the amount
of any such Purchase Drawing within the Period for Payment, the Banks, without
notice to or consent of the Borrower and regardless of whether the terms and
conditions in this Agreement for Loans are satisfied, shall make a Loan under
this Agreement in the amount of the Reimbursement Amount. Within one (1)
Business Day after the expiration of the Period for Payment, the Agent shall
provide each Bank with notice that the Borrower has not paid such Reimbursement
Amount in connection with any drawing under the Eagle Ranch Letter of Credit,
that a Loan in the amount of the Reimbursement Amount will be made by the Banks
to the Borrower, and stating such Bank's Commitment Percentage of the amount of
the Loan (a "Letter of Credit Borrowing Notice"). Not later than 12:00 (noon),
Atlanta time on the date which is one (1) Business Day after Agent delivers the
Letter of Credit Borrowing Notice to the Bank, each Bank shall make available
the amount of such Bank's Commitment Percentage of the amount of the Loan, in
Federal or other immediately available funds, to the Agent at the Agent's Head
Office. Agent shall deliver the proceeds of such Loan to Issuing Bank to pay the
Reimbursement Amount.

            (c) If the Issuing Bank or the Banks are not reimbursed for any
Interest Drawing or Principal Drawing (other than a Purchase Drawing) within the
Period for Payment, without notice to or consent of the Borrower and regardless
of whether the terms and conditions in this Agreement for Loans are satisfied,
(i) the Issuing Bank shall notify the Trustee that the

                                      100
<PAGE>

Banks have not been reimbursed for said drawing and such amounts shall not be
reinstated and (ii) the Banks shall make a Loan under this Agreement in the
amount of the Reimbursement Amount as provided below. Within one (1) Business
Day after the expiration of the Period for Payment, the Agent shall provide each
Bank with a Letter of Credit Borrowing Notice. Not later than 12:00 (noon),
Atlanta time on the date which is one (1) Business Day after Agent delivers the
Letter of Credit Borrowing Notice to the Bank, each Bank shall make available
the amount of such Bank's Commitment Percentage of the amount of the Loan, in
Federal or other immediately available funds, to the Agent at the Agent's Head
Office. Agent shall deliver the proceeds of such Loan to Issuing Bank to pay the
Reimbursement Amount. Each Loan made pursuant to this Section 33.4 shall be a
Prime Rate Loan. Such Loan shall bear interest from the date of any such
Purchase Drawing, Interest Drawing or Principal Drawing (which date shall
constitute the Drawdown Date) at the rate set forth in Section 2.5(a) of this
Agreement.

      Section 33.5 Reduction of Eagle Ranch Letter of Credit Amount; Restoration
of Eagle Ranch Letter of Credit. Without limiting the provisions of the Eagle
Ranch Letter of Credit, the portion of the Eagle Ranch Letter of Credit
allocated to interest shall be reduced in an amount equal to any draw to pay
interest on the Bonds to which the Eagle Ranch Letter of Credit relates
(including interest constituting a portion of the Purchase Price of such Bonds),
but shall be reinstated automatically ten (10) calendar days after such drawing
unless the Issuing Bank shall have notified Trustee that (a) the Issuing Bank or
the Banks have not been reimbursed for said drawing (or been repaid for any Loan
into which such draw may have been converted as provided in this Agreement) or
(b) that an Event of Default has occurred. In addition, and without limiting the
provisions of the Eagle Ranch Letter of Credit, the portion of the Eagle Ranch
Letter of Credit allocated to principal shall be reduced in an amount equal to
any draw to pay principal of the Bonds relating thereto (including any Purchase
Drawing), but with respect to any Purchase Drawing only, such amount will be
reinstated upon receipt by the Trustee of notice from the Issuing Bank that the
Reimbursement Amount with respect to such Purchase Drawing has been repaid. The
Issuing Bank is authorized to provide notices to the Trustee as provided in the
Eagle Ranch Letter of Credit. The Issuing Bank agrees to timely provide the
notice described in Section 33.5(a) and required by Section 33.4(c)(i). The
Issuing Bank shall only provide the notice described in Section 33.5(b) upon the
direction of the Requisite Banks.

      Section 33.6 Additional Waivers. Borrower hereby agrees that its
obligations under this Agreement and the Loan Documents are absolute and
unconditional and shall not be affected or impaired by, and hereby waives and
agrees not to assert or take advantage of any defense based on: (a) the
incapacity or lack of authority of the District or any other Person, or the
failure of Agent, Issuing Bank or any other Bank to file or enforce a claim
against the estate (either in administration, bankruptcy or in any other
proceeding) of the District or any other Person; (b) the voluntary or
involuntary liquidation, sale or other disposition of all or substantially all
of the assets of the District; (c) the voluntary of involuntary receivership,
insolvency, bankruptcy, assignment for the benefit of creditors, reorganization,
assignment, composition, or readjustment of, or any similar proceeding affecting
the District or any other Person, or any of the District's or such other
Person's properties or assets; (d) the failure of the Agent, Issuing Bank or any
other Bank to give notice of the existence, creation or incurring of any new or
additional Indebtedness or of any action or nonaction on the part of any other
Person whomsoever in connection with any Indebtedness; (e) any failure or delay
of the Agent, Issuing Bank or any other Bank to commence an action against the
District under any document, or to realize upon any security; (f) any failure

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<PAGE>

of any duty on the part of the Agent, Issuing Bank or any other Bank to disclose
to Borrower any facts it may now or hereafter know regarding the District or the
Bonds, whether such facts materially increase the risk to Borrower or not; (g)
the invalidity or unenforceability of the Bonds, any documents delivered in
connection therewith; (h) the compromise, settlement, release or termination of
any or all of the obligations of the District under any documents delivered in
connection with the Bonds or the issuance of the Eagle Ranch Letter of Credit in
connection therewith; (i) any waiver or modification of any document or
agreement with the District or otherwise executed in connection with the Bonds;
and (j) to the fullest extent permitted by law, any other legal, equitable or
surety defenses whatsoever to which Borrower might otherwise be entitled, it
being the intention that the obligations of Borrower hereunder are absolute,
unconditional and irrevocable. Borrower further expressly waives any and all
rights of subrogation to Agent, Issuing Bank or any other Bank against any
Person having any liability with respect to the Bonds (including, without
limitation, the District), and any rights to participate in any collateral for
such Person's obligations.

      Section 33.7 Official Statement. The Borrower hereby warrants and
represents to the Agent and the Banks that the information contained in the
Official Statement is correct in all material respects and does not contain an
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made therein, in light of the circumstances under which
they were made, not misleading; provided, however, that the Borrower makes no
representation as to information in the Official Statement relating to and
provided by the Issuing Bank for inclusion therein.

      Section 33.8 Eagle Ranch. The Borrower represents and warrants to the
Agent and the Banks that the Borrower does noT own an interest in Eagle Ranch,
which is the owner of the project benefitted by the Eagle Ranch Letter of
Credit, and that Eagle Ranch has a separate existence and credit from Borrower,
and covenants and agrees that it shall not own an interest in Eagle Ranch. The
Banks acknowledge that Borrower has advised them that Eagle Ranch has a separate
existence and credit from Borrower.

      Section 33.9 Non-Consolidation. The reference in Section 8.12(r) to the
opinion letter of Shaw Pittman with respect to non-consolidation issues shall be
deemed to include any bring-downs or updates to such opinion, including, without
limitation, any bring down opinion delivered in connection with the issuance of
the Eagle Ranch Letter of Credit.

Section 34. PATRIOT ACT.

      Each Bank and the Agent (for itself and not on behalf of any Bank) hereby
notifies Borrower and Guarantor that, pursuant to the requirements of the
Patriot Act, it is required to obtain, verify and record information that
identifies Borrower and Guarantor, which information includes names and
addresses and other information that will allow such Bank or the Agent, as
applicable, to identify Borrower and Guarantor in accordance with the Patriot
Act.

                                      102
<PAGE>

      IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as a
sealed instrument the date first set forth above.

                                   BORROWER:

                                   CRESCENT REAL ESTATE FUNDING VIII,
                                   L.P., a Delaware limited partnership

                                   By: CRE Management VIII, LLC, a Delaware
                                       limited liability company, its general
                                       partner

                                       By: Crescent Real Estate Equities
                                           Limited Partnership, a Delaware
                                           limited partnership, its sole member

                                           By: Crescent Real Estate
                                               Equities, Ltd., a Delaware
                                               corporation, its general
                                               partner

                                               By: /s/ Christopher T. Porter
                                                   -----------------------------
                                               Name: Christopher T. Porter
                                               Title: Senior Vice President
                                                 & Treasurer

                       [Signatures continued on next page]
<PAGE>

                                     CRESCENT REIT:

                                     CRESCENT REAL ESTATE EQUITIES
                                     COMPANY, a Texas real
                                     estate investment trust

                                     By: /s/ Christopher T. Porter
                                         ---------------------------------------
                                     Name: Christopher T. Porter
                                     Title: Senior Vice President & Treasurer

                                     Crescent Real Estate Equities Company joins
                                     in the execution of this Agreement solely
                                     for the purpose of being bound by the
                                     provisions of Section 7.19, Section 21 and
                                     Section 25.

                       [Signatures continued on next page]

<PAGE>

                                     KEYBANK NATIONAL ASSOCIATION, a
                                     national banking association, individually
                                     and as Administrative Agent

                                     By: /s/ Daniel P. Stegemoeller
                                         ---------------------------------------
                                     Its: Vice President

KeyBank National Association
1200 Abernathy Road, N.E.
Suite 1550
Atlanta, Georgia  30328
Attn:  Daniel Stegemoeller
Facsimile:  770/510-2195

and

KeyBank National Association
1200 Abernathy Road, N.E.
Suite 1550
Atlanta, Georgia  30328
Attn:    Douglas E. Frazer
         Real Estate Division
Facsimile:  770/510-2195

                 [SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]

<PAGE>

                                     DEUTSCHE BANK TRUST COMPANY
                                     AMERICAS, individually and as Syndication
                                     Agent

                                     By: /s/ James Rolison
                                         ---------------------------------------
                                     Its: Director

                                     Attest: /s/ Linda Wang
                                             -----------------------------------
                                     Its: Vice President

Deutsche Bank Trust Company Americas
60 Wall Street
New York, New York  10005
Attn:  Linda Wang
Facsimile:  212/797-4496

                 [SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]

<PAGE>

                                     BANK OF AMERICA, N.A., a national banking
                                     association, individually and as Co-
                                     Documentation Agent

                                     By: /s/ Will Bowers, Jr.
                                         ---------------------------------------
                                     Its: Senior Vice President

Bank of America, N.A.
901 Main Street, 64th Floor
Dallas, Texas  75202
Attn:  Will Bowers
Facsimile:  214/209-0995

                 [SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]

<PAGE>

                                     JPMORGAN CHASE BANK, N.A., individually
                                     and as Co-Documentation Agent

                                     By: /s/ Susan M. Tate
                                         ---------------------------------------
                                     Its: Vice President

JPMorgan Chase Bank, N.A.
707 Travis
6th Floor North
Houston, Texas  77002
Attn:  Susan M. Tate
Facsimile:  713/216-2391

                 [SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]

<PAGE>

THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

                                     BORROWER:

                                     CRESCENT REAL ESTATE FUNDING VIII,
                                     L.P., a Delaware limited partnership

                                     By: CRE Management VIII, LLC, a Delaware
                                         limited liability company, its general
                                         partner

                                         By: Crescent Real Estate Equities
                                             Limited Partnership, a Delaware
                                             limited partnership, its sole
                                             member

                                             By: Crescent Real Estate Equities,
                                                 Ltd., a Delaware corporation,
                                                 its general partner

                                                 By:/s/ Christopher T. Porter
                                                    -------------------------
                                                 Name: Christopher T. Porter
                                                 Title:  Senior Vice President
                                                   & Treasurer

                                     CRESCENT REIT:

                                     CRESCENT REAL ESTATE EQUITIES COMPANY, a
                                     Texas real estate investment trust

                                     By: /s/ Christopher T. Porter
                                         ---------------------------------------
                                     Name: Christopher T. Porter
                                     Title: Senior Vice President & Treasurer

                                     Crescent Real Estate Equities Company joins
                                     in the execution of this Agreement solely
                                     for the purpose of being bound by the
                                     provisions of Section 7.19, Section 21 and
                                     Section 25.

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                           <C>
Section 1. DEFINITIONS AND RULES OF INTERPRETATION.......................................      1

       Section 1.1     Definitions.......................................................      1
       Section 1.2     Rules of Interpretation...........................................     23

Section 2. THE REVOLVING CREDIT FACILITY.................................................     24

       Section 2.1     Commitment to Lend................................................     24
       Section 2.1A    Swing Loan Commitment.............................................     24
       Section 2.2     Facility Fee......................................................     26
       Section 2.3     Reduction of Commitment...........................................     27
       Section 2.4     Revolving Credit Notes............................................     27
       Section 2.5     Interest on Loans.................................................     28
       Section 2.6     Requests for Loans................................................     28
       Section 2.7     Funds for Loans...................................................     29
       Section 2.8     Letters of Credit.................................................     29
       Section 2.9     Use of Proceeds...................................................     32
       Section 2.10    Increase of Commitment............................................     33

Section 3. REPAYMENT OF THE LOANS........................................................     34

       Section 3.1     Stated Maturity...................................................     34
       Section 3.2     Mandatory Prepayments.............................................     34
       Section 3.3     Optional Prepayments..............................................     35
       Section 3.4     Partial Prepayments...............................................     35
       Section 3.5     Effect of Prepayments.............................................     35

Section 4. CERTAIN GENERAL PROVISIONS....................................................     35

       Section 4.1     Conversion Options................................................     35
       Section 4.2     Closing Fee.......................................................     36
       Section 4.3     Agent's Fee.......................................................     36
       Section 4.4     Funds for Payments................................................     36
       Section 4.5     Computations......................................................     37
       Section 4.6     Inability to Determine LIBOR......................................     37
       Section 4.7     Illegality........................................................     38
       Section 4.8     Additional Interest...............................................     38
       Section 4.9     Additional Costs, Etc.............................................     38
       Section 4.10    Capital Adequacy..................................................     39
       Section 4.11    Indemnity of Borrower.............................................     40
       Section 4.12    Interest on Overdue Amounts; Late Charge..........................     40
       Section 4.13    Certificate.......................................................     40
       Section 4.14    Limitation on Interest............................................     41
       Section 4.15    Certain Provisions Relating to Increased Costs....................     42

Section 5. UNSECURED OBLIGATIONS; GUARANTY...............................................     42

       Section 5.1      Unsecured Obligations............................................     43
       Section 5.2      Addition and Removal of Properties and Eligible Note Receivable..     43
       Section 5.3      Subsidiary Guarantors............................................     46
</TABLE>

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<PAGE>

                           TABLE OF CONTENTS CONTINUED

<TABLE>
<S>                                                                                            <C>
       Section 5.4     Right to Obtain Appraisals........................................      47

Section 6. REPRESENTATIONS AND WARRANTIES................................................      47

       Section 6.1     Corporate Authority, Etc..........................................      47
       Section 6.2     Governmental Approvals............................................      48
       Section 6.3     Title to Properties; Leases.......................................      49
       Section 6.4     Financial Statements..............................................      49
       Section 6.5     No Material Adverse Effect........................................      49
       Section 6.6     Franchises, Patents, Copyrights, Etc..............................      49
       Section 6.7     Litigation........................................................      50
       Section 6.8     No Materially Adverse Contracts, Etc..............................      50
       Section 6.9     Compliance with Other Instruments, Laws, Etc......................      50
       Section 6.10    Tax Status........................................................      50
       Section 6.11    No Event of Default...............................................      50
       Section 6.12    Holding Company and Investment Company Acts.......................      50
       Section 6.13    Absence of UCC Financing Statements, Etc..........................      51
       Section 6.14    Certain Transactions..............................................      51
       Section 6.15    Employee Benefit Plans............................................      51
       Section 6.16    Regulations T, U and X............................................      52
       Section 6.17    Environmental Compliance..........................................      52
       Section 6.18    Subsidiaries......................................................      53
       Section 6.19    Loan Documents....................................................      54
       Section 6.20    Property..........................................................      54
       Section 6.21    Brokers...........................................................      54
       Section 6.22    Ownership.........................................................      54
       Section 6.23    Solvency..........................................................      55
       Section 6.24    Other Debt........................................................      55
       Section 6.25    [Intentionally omitted.]..........................................      55
       Section 6.26    No Bankruptcy Filing..............................................      55
       Section 6.27    No Fraudulent Intent..............................................      55
       Section 6.28    Transaction in Best Interests of Parties; Consideration...........      55
       Section 6.29    Special Purpose Entity............................................      56
       Section 6.30    Contribution Agreement............................................      56
       Section 6.31    OFAC..............................................................      56
       Section 6.32    Line of Credit....................................................      56
       Section 6.33    Effectiveness of First Supplemental Indenture.....................      56

Section 7. AFFIRMATIVE COVENANTS.........................................................      56

       Section 7.1     Punctual Payment..................................................      56
       Section 7.2     Maintenance of Office.............................................      57
       Section 7.3     Records and Accounts..............................................      57
       Section 7.4     Financial Statements, Certificates and Information................      57
       Section 7.5     Notices...........................................................      59
       Section 7.6     Existence; Maintenance of Properties; Business Lines..............      60
       Section 7.7     Insurance.........................................................      61
       Section 7.8     Taxes.............................................................      61
</TABLE>

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<PAGE>

                          TABLE OF CONTENTS CONTINUED

<TABLE>
<S>                                                                                            <C>
       Section 7.9     Inspection of Properties and Books................................      61
       Section 7.10    Compliance with Laws, Contracts, Licenses, and Permits............      62
       Section 7.11    Further Assurances................................................      62
       Section 7.12    Ownership of Real Estate..........................................      62
       Section 7.13    Investment Advisor................................................      62
       Section 7.14    Business Operations...............................................      62
       Section 7.15    Limiting Agreements...............................................      62
       Section 7.16    More Restrictive Agreements.......................................      63
       Section 7.17    [Intentionally Omitted.]..........................................      63
       Section 7.18    [Intentionally Omitted.]..........................................      63
       Section 7.19    Covenants Regarding Crescent REIT.................................      63
       Section 7.20    Special Purpose Entity............................................      65

Section 8. CERTAIN NEGATIVE COVENANTS....................................................      65

       Section 8.1     Restrictions on Indebtedness......................................      65
       Section 8.2     Restrictions on Liens, Etc........................................      66
       Section 8.3     Restrictions on Investments.......................................      67
       Section 8.4     Merger, Consolidation.............................................      68
       Section 8.5     Sale and Leaseback................................................      68
       Section 8.6     Compliance with Environmental Laws................................      68
       Section 8.7     Distributions.....................................................      69
       Section 8.8     Asset Sales.......................................................      69
       Section 8.9     Development Activity..............................................      69
       Section 8.10    Restriction on Prepayment of Indebtedness.........................      70
       Section 8.11    Subsidiaries......................................................      70
       Section 8.12    Additional Covenants with Respect to Indebtedness, Operations,
                       Fundamental Changes...............................................      70

Section 9. FINANCIAL COVENANTS...........................................................      72

       Section 9.1     Consolidated Total Indebtedness to Capitalization
                       Value - Borrower Ratio............................................      72
       Section 9.2     Debt Service Coverage.............................................      72
       Section 9.3     Pro Forma Debt Service Coverage...................................      72
       Section 9.4     Office Properties Capitalization Value to Capitalization
                       Value - Borrower Ratio............................................      72
       Section 9.5     Properties; Eligible Notes Receivable.............................      72

Section 10. CLOSING CONDITIONS...........................................................      73

       Section 10.1    Loan Documents....................................................      73
       Section 10.2    Certified Copies of Organizational Documents......................      73
       Section 10.3    Bylaws; Resolutions...............................................      73
       Section 10.4    Incumbency Certificate; Authorized Signers........................      73
       Section 10.5    Opinion of Counsel................................................      74
       Section 10.6    Payment of Fees and Expenses......................................      74
       Section 10.7    Performance; No Default...........................................      74
       Section 10.8    Representations and Warranties....................................      74
       Section 10.9    Proceedings and Documents.........................................      74
</TABLE>

                                      -iii-
<PAGE>

                          TABLE OF CONTENTS CONTINUED

<TABLE>
<S>                                                                                            <C>
       Section 10.10   Compliance Certificates...........................................      74
       Section 10.11   Repayment of Indebtedness under Fleet Facility....................      74
       Section 10.12   Financial Statements..............................................      75
       Section 10.13   Contribution Agreement............................................      75
       Section 10.14   Other.............................................................      75

Section 11. CONDITIONS TO ALL BORROWINGS.................................................      75

       Section 11.1    Representations True; No Default..................................      75
       Section 11.2    Borrowing Documents...............................................      75
       Section 11.3    Other Documents...................................................      75

Section 12. EVENTS OF DEFAULT; ACCELERATION; ETC.........................................      75

       Section 12.1    Events of Default and Acceleration................................      75
       Section 12.2    [Intentionally Omitted.]..........................................      79
       Section 12.3    Termination of Commitments........................................      79
       Section 12.4    Remedies..........................................................      79
       Section 12.5    Distribution of Proceeds..........................................      80

Section 13. SETOFF.......................................................................      81

Section 14. THE AGENT....................................................................      81

       Section 14.1    Authorization.....................................................      81
       Section 14.2    Employees and Agents..............................................      82
       Section 14.3    No Liability......................................................      82
       Section 14.4    No Representations................................................      82
       Section 14.5    Payments..........................................................      82
       Section 14.6    Holders of Notes..................................................      84
       Section 14.7    Indemnity.........................................................      84
       Section 14.8    Agent as Bank.....................................................      84
       Section 14.9    Resignation.......................................................      84
       Section 14.10   Duties in the Case of Enforcement.................................      85
       Section 14.11   Bankruptcy........................................................      85

Section 15. EXPENSES.....................................................................      85

Section 16. INDEMNIFICATION..............................................................      86

Section 17. SURVIVAL OF COVENANTS, ETC...................................................      88

Section 18. ASSIGNMENT AND PARTICIPATION.................................................      89

       Section 18.1    Conditions to Assignment by Banks.................................      89
       Section 18.2    Register..........................................................      89
       Section 18.3    New Notes.........................................................      90
       Section 18.4    Participations....................................................      90
       Section 18.5    Pledge by Bank....................................................      90
       Section 18.6    No Assignment by Borrower.........................................      90
</TABLE>

                                      -iv-
<PAGE>

                          TABLE OF CONTENTS CONTINUED

<TABLE>
<S>                                                                                           <C>
       Section 18.7    Disclosure........................................................      91
       Section 18.8    Co-Agents.........................................................      91
       Section 18.9    Mandatory Assignment..............................................      91
       Section 18.10   Foreign Banks and Participants....................................      91

Section 19. NOTICES......................................................................      92

Section 20. RELATIONSHIP.................................................................      93

Section 21. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE...........................      93

Section 22. HEADINGS.....................................................................      94

Section 23. COUNTERPARTS.................................................................      94

Section 24. ENTIRE AGREEMENT, ETC........................................................      94

Section 25. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS...............................      94

Section 26. DEALINGS WITH THE BORROWER...................................................      95

Section 27. CONSENTS, AMENDMENTS, WAIVERS, ETC...........................................      95

Section 28. SEVERABILITY.................................................................      96

Section 29. [INTENTIONALLY OMITTED.].....................................................      96

Section 30. TIME OF THE ESSENCE..........................................................      96

Section 31. REPLACEMENT NOTES............................................................      96

Section 32. NON-DISCLOSURE...............................................................      96

Section 33. EAGLE RANCH LETTER OF CREDIT.................................................      97

       Section 33.1    Definitions.......................................................      97
       Section 33.2    Agreement to Issue the Eagle Ranch Letters of Credit..............      98
       Section 33.3    Term of Eagle Ranch Letter of Credit; Extensions of
                       the Term; Cancellation............................................      98
       Section 33.4    Reimbursement of Drawings under the Eagle Ranch Letter
                       of Credit.........................................................      99
       Section 33.5    Reduction of Eagle Ranch Letter of Credit Amount;
                       Restoration of Eagle Ranch Letter of Credit.......................     100
       Section 33.6    Additional Waivers................................................     100
       Section 33.7    Official Statement................................................     101
       Section 33.8    Eagle Ranch.......................................................     101
       Section 33.9    Non-Consolidation.................................................     101

Section 34. PATRIOT ACT..................................................................     101
</TABLE>

                                       -v-
<PAGE>

                                LIST OF EXHIBITS:

A   FORM OF REVOLVING CREDIT NOTE
B   FORM OF SWING LOAN NOTE
C   FORM OF LOAN REQUEST
D   FORM OF LETTER OF CREDIT REQUEST
E   FORM OF COMPLIANCE CERTIFICATE
F   FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

                               LIST OF SCHEDULES:

Schedule I         Banks and Commitments
Schedule II        Properties
Schedule 2.8       Existing Letter of Credit
Schedule 6.7       Litigation
Schedule 6.18(a)   Subsidiaries of Crescent OP

The foregoing exhibits and schedules have been omitted and will be furnished to
the Commission upon request.

                                      -vi-
<PAGE>

                UNCONDITIONAL GUARANTY OF PAYMENT AND PERFORMANCE

      FOR AND IN CONSIDERATION OF the sum of Ten and No/100 Dollars ($10.00) and
other good and valuable consideration paid or delivered to the undersigned
CRESCENT REAL ESTATE EQUITIES LIMITED PARTNERSHIP, a Delaware limited
partnership (hereinafter referred to as "Guarantor"), the receipt and
sufficiency whereof are hereby acknowledged by Guarantor, and for the purpose of
seeking to induce KEYBANK NATIONAL ASSOCIATION, a national banking association
(hereinafter referred to as "Lender," which term shall also include each other
lender which may now or hereafter become party to the "Credit Agreement" (as
hereinafter defined) and shall also include any such individual lender acting as
agent for all of the lenders), to extend credit or otherwise provide financial
accommodations to CRESCENT REAL ESTATE FUNDING VIII, L.P., a Delaware limited
partnership ("Borrower"), which extension of credit and provision of financial
accommodations, including the issuance of Letters of Credit, will be to the
direct interest, advantage and benefit of Guarantor, Guarantor does hereby
absolutely, unconditionally and irrevocably guarantee to Lender:

            (a) the full and prompt payment when due, whether by acceleration or
otherwise, either before or after maturity thereof, of those certain Notes dated
February __, 2005, made by Borrower to the order of KeyBank National Association
and the other Banks that are parties to the "Credit Agreement" (as hereinafter
defined) as of the date hereof in the aggregate principal face amount of Three
Hundred Million and No/100 Dollars ($300,000,000.00), together with interest as
provided in the Notes, together with any replacements, supplements, renewals,
modifications, consolidations, restatements and extensions thereof; and

            (b) the full and prompt payment when due, whether by acceleration or
otherwise, either before or after maturity thereof, of each other note as may be
issued under that certain Revolving Credit Agreement dated as of February __,
2005 (herein referred to as the "Credit Agreement"), among Borrower, KeyBank
National Association, for itself and as Agent, and the other Banks, including
without limitation, the Swing Loan Note, together with interest as provided in
each such note, together with any replacements, supplements, renewals,
modifications, consolidations, restatements and extensions thereof (the Notes
described in subparagraph (a), above, and each of the notes described in this
subparagraph (b) are hereinafter referred to collectively as the "Note"); and

            (c) the full and prompt payment and performance of all obligations
of Borrower to Lender under the terms of the Credit Agreement, including without
limitation the reimbursements of all draws under Letters of Credit and payment
and performance of the obligations of Borrower concerning hazardous materials
contained in Section 8.6 of the Credit Agreement, together with any
replacements, supplements, renewals, modifications, consolidations, restatements
and extensions thereof; and

            (d) the full and prompt payment and performance of any and all other
obligations of Borrower to Lender under the other Loan Documents.

      All terms used herein and not otherwise defined herein shall have the
meanings set forth in the Credit Agreement.

<PAGE>

      1. Agreement to Pay and Perform; Costs of Collection.

            (a) Guarantor does hereby agree that if the Note is not paid by
Borrower in accordance with its terms, or if any and all sums which are now or
may hereafter become due from Borrower to Lender under the Loan Documents are
not paid by Borrower in accordance with the terms of the Loan Documents, or if
any and all other obligations of Borrower to Lender under the Note and the other
Loan Documents are not performed by Borrower in accordance with their terms,
Guarantor will immediately upon demand from Agent make such payments and perform
such obligations. Guarantor further agrees to pay Lender on demand from Agent
all reasonable costs and expenses (including court costs and reasonable
attorneys' fees and disbursements) paid or incurred by Lender in endeavoring to
collect the indebtedness guaranteed hereby, to enforce any of the other
obligations of Borrower guaranteed hereby, or any portion thereof, or to enforce
this Guaranty, and until paid to Lender, such sums shall bear interest at the
default rate set forth in the Credit Agreement unless collection from Guarantor
of interest at such rate would be contrary to applicable law, in which event
such sums shall bear interest at the highest rate which may be collected from
Guarantor under applicable law. This is a continuing guaranty of all amounts
advanced to Borrower under the Notes and the Credit Agreement and all other
Obligations, whether advanced or incurred on or subsequent to the date hereof.

            (b) Notwithstanding anything in this Guaranty or the other Loan
Documents to the contrary, it is the intent of Lender and Guarantor to conform
to and contract in strict compliance with all applicable usury laws from time to
time in effect. All agreements (including the Loan Documents) between Lender and
Guarantor (or any other party liable with respect to any indebtedness under the
Loan Documents) are hereby limited by the provisions of this Section which shall
override and control all such agreements, whether now existing or hereafter
arising and whether written or oral. In no way, nor in any event or contingency
(including but not limited to prepayment, default, demand for payment, or
acceleration of the maturity of any obligation), shall the interest taken,
reserved, contracted for, charged or received under this Guaranty, any other
Loan Document, or otherwise, exceed the maximum nonusurious amount permissible
under applicable law. If, from any possible construction of this Guaranty, any
other Loan Document, or any other document, interest would otherwise be taken,
reserved, contracted for, charged or payable in excess of the maximum
nonusurious amount, any such construction shall be subject to the provisions of
this Section and this Guaranty, such other Loan Document, and such other
document shall be automatically reformed and the interest taken, reserved,
contracted for, charged or payable shall be automatically reduced to the maximum
nonusurious amount permitted under applicable law, without the necessity of
execution of any amendment or new document. If any Lender shall ever receive
anything of value which is interest or characterized as interest under
applicable law and which would apart from this provision be in excess of the
maximum lawful nonusurious amount, an amount equal to the amount which would
have been excessive interest shall, without penalty, be applied to the reduction
of the principal amount owing on the Loans to it (in inverse order of maturity)
and not to the payment of interest, or refunded to Borrower or Guarantor, as
applicable, if and to the extent such amount which would have been excessive
exceeds such unpaid principal. The right to accelerate maturity of the Loans and
the other Obligations does not include the right to accelerate any interest
which has not otherwise accrued on the date of such acceleration, and Lender
does not intend to charge or receive any unearned interest in the event of
acceleration. All interest paid or agreed to be paid to Lender on the Loans
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full stated term (including any renewal or

                                        2
<PAGE>

extension) of the Loans so that the amount of interest on account of the Loans
does not exceed the maximum nonusurious amount permitted by applicable law. As
used in this Section, the term "applicable law" shall mean such laws as they now
exist or may be changed or amended or come into effect in the future. As used in
this Section, the term "interest" includes all amounts that constitute, are
deemed, or are characterized as interest under applicable law.

            (c) If at any time the interest rate (the "Stated Rate") called for
under this Guaranty or any other Loan Document exceeds or would exceed the
Highest Lawful Rate, the rate at which interest shall accrue hereunder or
thereunder shall automatically be limited to the Highest Lawful Rate, and shall
remain at the Highest Lawful Rate until the total amount of interest accrued
equals the total amount of interest which would have accrued but for the
operation of this sentence. Thereafter, interest shall accrue at the Stated Rate
unless and until the Stated Rate would again exceed the Highest Lawful Rate, in
which case the immediately preceding sentence shall apply.

            (d) Guarantor hereby agrees that as a condition precedent to any
claim seeking usury penalties against Lender, Guarantor will provide written
notice to Agent, advising Lender in reasonable detail of the nature and amount
of the violation, and Lender shall have sixty (60) days after receipt of such
notice in which to correct such usury violation, if any, by either refunding
such excess interest to Borrower or Guarantor, as applicable, or crediting such
excess interest against the Loans and/or any other indebtedness then owing by
Borrower or Guarantor, as applicable, to Lender. To the extent that Lender is
relying on Chapter 303, as amended, of the Texas Finance Code to determine the
Highest Lawful Rate, Lender will utilize the weekly rate ceiling from time to
time in effect as provided in such Chapter 303, as amended. To the extent United
States federal law permits a greater amount of interest than is permitted under
Texas law, Lender will rely on United States federal law instead of such Chapter
303, as amended, for the purpose of determining the Highest Lawful Rate.
Additionally, to the extent permitted by applicable law now or hereafter in
effect, Lender may, at Lender's option and from time to time, implement any
other method of computing the maximum lawful rate under such Chapter 303, as
amended, or under other applicable law by giving notice, if required, to
Guarantor as provided by applicable law now or hereafter in effect. This Section
will control all agreements between Guarantor and Lender.

      2. Reinstatement of Refunded Payments. If, for any reason, any payment to
any Lender of any of the obligations guaranteed hereunder is required to be
refunded by such Lender to Borrower, or paid or turned over to any other person,
including, without limitation, by reason of the operation of bankruptcy,
reorganization, receivership or insolvency laws or similar laws of general
application relating to creditors' rights and remedies now or hereafter enacted,
Guarantor agrees to pay the amount so required to be refunded, paid or turned
over (the "Turnover Payment"), the obligations of Guarantor shall not be treated
as having been discharged by the original payment to such Lender giving rise to
the Turnover Payment, and this Guaranty shall be treated as having remained in
full force and effect for any such Turnover Payment so made by such Lender, as
well as for any amounts not theretofore paid to such Lender on account of such
obligations.

      3. Rights of Lender to Deal with Collateral, Borrower and Other Persons.
Guarantor hereby consents and agrees that Lender may at any time, and from time
to time, without thereby releasing Guarantor from any liability hereunder and
without notice to or further consent from Guarantor, either with or without
consideration: release or surrender any lien or other security of

                                        3
<PAGE>

any kind or nature whatsoever held by Lender or by any person, firm or
corporation on Lender's behalf or for Lender's account (including Agent),
securing any indebtedness or liability hereby guaranteed; substitute for any
collateral so held by Lender, other collateral of like kind, or of any kind;
modify the terms of the Note or the other Loan Documents; extend or renew the
Note for any period; grant releases, compromises and indulgences with respect to
the Note or the other Loan Documents and to any persons or entities now or
hereafter liable thereunder or hereunder; release any other Guarantor, surety,
endorser or accommodation party of the Note or any other Loan Documents; or take
or fail to take any action of any type whatsoever. No such action which Lender
shall take or fail to take in connection with the Note or the other Loan
Documents, or any of them, or any security for the payment of the indebtedness
of Borrower to Lender or for the performance of any obligations or undertakings
of Borrower, nor any course of dealing with Borrower or any other person, shall
release Guarantor's obligations hereunder, affect this Guaranty in any way or
afford Guarantor any recourse against Lender. The provisions of this Guaranty
shall extend and be applicable to all replacements, supplements, renewals,
amendments, extensions, consolidations, restatements and modifications of the
Note and the other Loan Documents, and any and all references herein to the Note
and the other Loan Documents shall be deemed to include any such replacements,
supplements, renewals, extensions, amendments, consolidations, restatements or
modifications thereof. Without limiting the generality of the foregoing,
Guarantor acknowledges the terms of Section 18.3 of the Credit Agreement and
agrees that this Guaranty shall extend and be applicable to each new or
replacement Note delivered by Borrower pursuant thereto.

      4. No Contest with Lender; Subordination. So long as any obligation hereby
guaranteed remains unpaid or undischarged, Guarantor will not, by paying any sum
recoverable hereunder (whether or not demanded by Lender) or by any means or on
any other ground, claim any set-off or counterclaim against Borrower in respect
of any liability of Guarantor to Borrower or, in proceedings under federal
bankruptcy law or insolvency proceedings of any nature, prove in competition
with Lender in respect of any payment hereunder or be entitled to have the
benefit of any counterclaim or proof of claim or dividend or payment by or on
behalf of Borrower or the benefit of any other security for any obligation
hereby guaranteed which, now or hereafter, Lender may hold or in which Lender
may have any share. Except as provided in the Contribution Agreement, Guarantor
hereby expressly waives any right of contribution from or indemnity against
Borrower, whether at law or in equity, arising from any payments made by
Guarantor pursuant to the terms of this Guaranty, and Guarantor acknowledges
that Guarantor has no right whatsoever to proceed against Borrower for
reimbursement of any such payments. In connection with the foregoing, Guarantor
expressly waives any and all rights of subrogation to Lender against Borrower,
and Guarantor hereby waives any rights to enforce any remedy which Lender may
have against Borrower and any rights to participate in any collateral for
Borrower's obligations under the Loan Documents. Guarantor hereby subordinates
any and all indebtedness of Borrower now or hereafter owed to Guarantor to all
indebtedness of Borrower to Lender, and agrees with Lender that (a) Guarantor
shall not demand or accept any payment from Borrower on account of such
indebtedness; provided that, without modifying any limitations on Indebtedness
in the Credit Agreement, Guarantor shall be entitled to receive and retain
payments of indebtedness made from Borrower to Guarantor so long as no Default
or Event of Default shall exist at the time of such payment and no Default or
Event of Default shall occur as a result of any such payment, (b) Guarantor
shall not claim any offset or other reduction of Guarantor's obligations
hereunder because of any such indebtedness, and (c) Guarantor shall not take any
action to obtain any interest in any of the security described in and encumbered
by the Loan

                                       4
<PAGE>

Documents or any other assets of Borrower or any other guarantor or surety of
the Obligations because of any such indebtedness; provided, however, that, if
Agent so requests during the continuance of an Event of Default, such
indebtedness shall be collected, enforced and received by Guarantor as trustee
for Lender and be paid over to Agent for the benefit of Lender on account of the
indebtedness of Borrower to Lender, but without reducing or affecting in any
manner the liability of Guarantor under the other provisions of this Guaranty
except to the extent the principal amount of such outstanding indebtedness shall
have been reduced by such payment by Guarantor over to Agent on account of the
indebtedness of Borrower to Lender guaranteed hereby.

      5. Waiver of Defenses. Guarantor hereby agrees that its obligations
hereunder shall not be affected or impaired by, and hereby waives and agrees not
to assert or take advantage of any defense based on:

            (a) any statute of limitations in any action hereunder or for the
collection of the Note or for the payment or performance of any obligation
hereby guaranteed;

            (b) the incapacity, lack of authority, death or disability of
Borrower or any other person or entity, or the failure of Lender to file or
enforce a claim against the estate (either in administration, bankruptcy or in
any other proceeding) of Borrower or Guarantor or any other person or entity;

            (c) the dissolution or termination of existence of Borrower or
Guarantor;

            (d) the voluntary or involuntary liquidation, sale or other
disposition of all or substantially all of the assets of Borrower;

            (e) the voluntary or involuntary receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization, assignment,
composition, or readjustment of, or any similar proceeding affecting, Borrower,
Guarantor, or any of Guarantor's Subsidiaries or any of their respective
properties or assets;

            (f) the damage, destruction, condemnation, foreclosure or surrender
of all or any part of the Properties;

            (g) the failure of Lender to give notice of the existence, creation
or incurring of any new or additional indebtedness or obligation of Borrower or
of any action or nonaction on the part of any other person whomsoever in
connection with any obligation hereby guaranteed;

            (h) any failure or delay of Lender to commence an action against
Borrower or any other Person, to assert or enforce any remedies against Borrower
under the Note or the other Loan Documents, or to realize upon any security;

            (i) any failure of any duty on the part of Lender to disclose to
Guarantor any facts it may now or hereafter know regarding Borrower, the
Properties or any of the improvements located thereon, or the Eligible Notes
Receivable whether such facts materially increase the risk to Guarantor or not;

            (j) failure to accept or give notice of acceptance of this Guaranty
by Lender;

                                       5
<PAGE>

            (k) failure to make or give notice of presentment and demand for
payment of any of the indebtedness or performance of any of the obligations
hereby guaranteed;

            (l) failure to make or give protest and notice of dishonor or of
default to Guarantor or to any other party with respect to the indebtedness or
performance of obligations hereby guaranteed;

            (m) any and all other notices whatsoever to which Guarantor might
otherwise be entitled;

            (n) any lack of diligence by Lender in collection, protection or
realization upon any collateral securing the payment of the indebtedness or
performance of obligations hereby guaranteed;

            (o) the invalidity or unenforceability of the Note or any of the
other Loan Documents;

            (p) the compromise, settlement, release or termination of any or all
of the obligations of Borrower under the Note or the other Loan Documents;

            (q) any transfer by Borrower or any other Person of all or any part
of the security, if any, encumbered by the Loan Documents;

            (r) the failure of Lender to perfect any security or to extend or
renew the perfection of any security;

            (s) any defense of Borrower, including without limitation, the
invalidity, illegality or unenforceability of any of the Obligations;

            (t) either with or without notice to Guarantor, any renewal,
extension, modification, amendment or another changes in the Obligations,
including but not limited to any material alteration of the terms of payment or
performance of the Obligations; or

            (u) to the fullest extent permitted by law, any other legal,
equitable or surety defenses whatsoever to which Guarantor might otherwise be
entitled, it being the intention that the obligations of Guarantor hereunder are
absolute, unconditional and irrevocable. This waiver includes, without
limitation, Guarantor's express waiver of all rights pursuant to Rule 31 of the
Texas Rules of Civil Procedure, Section 17.001 of the Texas Civil Practice and
Remedies Code, Chapter 34 of the Texas Business and Commerce Code, and all
amendments or recodifications of such laws. In addition, Guarantor hereby waives
all rights under Sections 51.003, 51.004 and 51.005 of the Texas Property Code
and any amendments or recodifications thereof.

      6. Guaranty of Payment and Performance and Not of Collection. This is a
Guaranty of payment and performance and not of collection. The liability of
Guarantor under this Guaranty shall be primary, direct and immediate and not
conditional or contingent upon the pursuit of any remedies against Borrower or
any other person, nor against securities or liens available to Lender, its
successors, successors in title, endorsees or assigns. Guarantor hereby waives
any right to require that an action be brought against Borrower or any other
Person or to

                                       6
<PAGE>

require that resort be had to any security or to any balance of any deposit
account or credit on the books of Lender in favor of Borrower or any other
Person.

      7. Rights and Remedies of Lender. If an Event of Default shall have
occurred and be continuing, Agent shall have the right to enforce the rights,
powers and remedies of Lender under this Guaranty and the other Loan Documents,
in any order, and all rights, powers and remedies available to Lender in such
event shall be nonexclusive and cumulative of all other rights, powers and
remedies provided thereunder or hereunder or by law or in equity. Accordingly,
Guarantor hereby authorizes and empowers Agent upon the occurrence and
continuance of any Event of Default, at its sole discretion, and without notice
to Guarantor, to exercise any right or remedy which Lender may have, including,
but not limited to, judicial foreclosure, exercise of rights of power of sale,
acceptance of a deed or assignment in lieu of foreclosure, appointment of a
receiver to collect rents and profits, exercise of remedies against personal
property, or enforcement of any assignment of leases, as to any collateral or
security, whether real, personal or intangible. At any public or private sale of
any security or collateral for any indebtedness or any part thereof guaranteed
hereby, whether by foreclosure or otherwise, any Lender may, in its discretion,
purchase all or any part of such security or collateral so sold or offered for
sale for its own account and may apply against the amount bid therefor all or
any part of the balance due it pursuant to the terms of the Note or the other
Loan Documents without prejudice to Lender's remedies hereunder against
Guarantor for deficiencies. If the indebtedness guaranteed hereby is partially
paid by reason of the election of Lender to pursue any of the remedies available
to Lender, or if such indebtedness is otherwise partially paid, this Guaranty
shall nevertheless remain in full force and effect, and Guarantor shall remain
liable for the entire balance of the indebtedness guaranteed hereby even though
any rights which Guarantor may have against Borrower may be destroyed or
diminished by the exercise of any such remedy.

      8. Application of Payments. Guarantor hereby authorizes Lender, without
notice to Guarantor, to apply all payments and credits received from Borrower or
from Guarantor and its Subsidiaries or realized from any security in such manner
and in such priority as Agent in its sole judgment shall see fit to the
indebtedness, obligation and undertakings which are the subject of this
Guaranty.

      9. Business Failure, Bankruptcy or Insolvency. In the event of the
business failure of Guarantor or if there shall be pending any bankruptcy or
insolvency case or proceeding with respect to Guarantor under federal bankruptcy
law or any other applicable law or in connection with the insolvency of
Guarantor, or if a liquidator, receiver, or trustee shall have been appointed
for Guarantor or Guarantor's properties or assets, Agent on behalf of Lender may
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of Lender allowed in any proceedings
relative to Guarantor, or any of Guarantor's properties or assets, and,
irrespective of whether the indebtedness or other obligations of Borrower
guaranteed hereby shall then be due and payable, by declaration or otherwise,
Agent on behalf of Lender shall be entitled and empowered to file and prove a
claim for the whole amount of any sums or sums owing with respect to the
indebtedness or other obligations of Borrower guaranteed hereby, and to collect
and receive any moneys or other property payable or deliverable on any such
claim. Guarantor covenants and agrees that upon the commencement of a voluntary
or involuntary bankruptcy proceeding by or against Borrower, Guarantor shall not
seek a supplemental stay or otherwise pursuant to 11 U.S.C. Section 105 or any
other provision of the Bankruptcy Code or any other debtor relief law (whether
statutory, common law, case law, or

                                       7
<PAGE>

otherwise) of any jurisdiction whatsoever, now or hereafter in effect, which may
be or become applicable, to stay, interdict, condition, reduce or inhibit the
ability of Agent to enforce any rights of Lender against Guarantor by virtue of
this Guaranty or otherwise.

      10. Financial Statements and Other Information. Guarantor hereby
represents and warrants to Lenders that all financial statements of the
Borrower, Guarantor, Crescent REIT and their respective Subsidiaries heretofore
delivered by Guarantor to Lenders have been prepared in accordance with
generally accepted accounting principles and fairly present the respective
financial condition of the Borrower, Guarantor, Crescent REIT and their
respective Subsidiaries as of such dates and the results of the operations of
the Borrower, the Guarantor, Crescent REIT and their respective Subsidiaries for
such periods. There are no liabilities, contingent or otherwise, of the
Borrower, Guarantor, Crescent REIT or any of their respective Subsidiaries
required by generally accepted accounting principles to be shown on a balance
sheet prepared in accordance with generally accepted accounting principles
involving material amounts in such financial statements (including the related
notes thereto). Guarantor hereby further represents and warrants to Lenders that
since the Balance Sheet Date, there has occurred no event or circumstance that
has had or could reasonably be expected to have a Material Adverse Effect.
Guarantor hereby agrees that until all indebtedness guaranteed hereby has been
completely repaid and all obligations and undertakings of Borrower under, by
reason of, or pursuant to the Notes and the other Loan Documents have been
completely performed and no Lender has any further obligation to make Loans or
issue Letters of Credit, Guarantor will deliver to Agent on behalf of Lenders:

            (a) as soon as practicable and in any event within 105 days after
the end of each fiscal year of Guarantor, the audited consolidated balance sheet
of Guarantor and its Subsidiaries as of the end of such year, and the related
audited consolidated statements of income, statement of changes in capital and
statement of cash flows for such year, each setting forth in comparative form
the figures for the previous fiscal year and all such statements to be in
reasonable detail, prepared in accordance with generally accepted accounting
principles, and accompanied by an auditor's report prepared without
qualification by Ernst & Young or by another nationally recognized accounting
firm, the Form 10-K filed by Guarantor with the SEC (unless the SEC has approved
an extension, in which event Guarantor will deliver to Agent a copy of the Form
10-K simultaneously with delivery to the SEC), and any other information the
Lender reasonably may request to complete a financial analysis of Guarantor and
its Subsidiaries, together with a written statement from such accountants to the
effect that they have read a copy of this Guaranty and the Credit Agreement, and
that, in making the examination necessary to said certification, they have
obtained no knowledge of any Default or Event of Default under this Guaranty or
the Credit Agreement, or, if such accountants shall have obtained knowledge of
any then existing Default or Event of Default they shall disclose in such
statement any such Default or Event of Default; provided that such accountants
shall not be liable to Lender for failure to obtain knowledge of any Default or
Event of Default;

            (b) as soon as practicable and in any event within 45 days after the
end of each fiscal quarter of Guarantor (other than the fourth fiscal quarter in
each year so long as a Form 10-K is filed by Guarantor with the SEC as required
above), copies of the Form 10-Q filed by Guarantor with the SEC (unless the SEC
has approved an extension in which event Guarantor will deliver such copies of
the Form 10-Q to Agent simultaneously with delivery to the SEC), or if no Form
10-Q is required to be filed with the SEC, copies of the unaudited consolidated

                                       8
<PAGE>

balance sheet of Guarantor and its Subsidiaries as of the end of such quarter
(including the fourth fiscal quarter in each year), and the related unaudited
consolidated statement of income, statement of changes in capital and statement
of cash flows for the portion of Guarantor's fiscal year then elapsed, all in
reasonable detail and prepared in accordance with generally accepted accounting
principles, together with a certification by an Authorized Officer of Guarantor
that the information contained in such financial statements fairly presents the
financial position of Guarantor and its Subsidiaries on the date thereof
(subject to year end adjustment);

            (c) contemporaneously with the delivery of the financial statements
referred to in clause (a) above, a statement of all contingent liabilities
included in Indebtedness (or which could be included upon the occurrence of some
event or circumstance) of Guarantor and its Subsidiaries which are not reflected
in such financial statements or referred to in the notes thereto (including,
without limitation, all guarantees, endorsements and other contingent
obligations in respect of indebtedness of others, and obligations to reimburse
the issuer in respect of any letters of credit), a statement of projected
sources and uses of funds and a statement of projected cash flows of Guarantor
and its Subsidiaries for the current fiscal year, all in reasonable detail and
certified by an Authorized Officer of Guarantor;

            (d) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, and at such other times as may be
required by the Credit Agreement, a statement (a "Compliance Certificate")
certified by an Authorized Officer of the Guarantor in the form of Exhibit A
hereto setting forth in reasonable detail computations evidencing compliance
with the covenants contained in this Guaranty, and (if applicable)
reconciliations to reflect changes in generally accepted accounting principles
since the Balance Sheet Date;

            (e) [INTENTIONALLY OMITTED];

            (f) promptly upon becoming aware thereof, written notice from
Guarantor of any event or condition which has had or could reasonably be
expected to have a Material Adverse Effect (including but not limited to,
litigation commenced or threatened in writing against Guarantor, judgments
rendered against Guarantor, liens filed against any property of Guarantor,
defaults claimed under indebtedness for borrowed money for which Guarantor is
primarily or secondarily liable, in each case which has had or could reasonably
be expected to have a Material Adverse Effect, or any bankruptcy, insolvency or
trustee or receivership proceedings commenced against Guarantor), such notice to
specify the nature and the period of existence of such event or condition, the
anticipated effect thereof, and what action Guarantor is taking or proposes to
take with respect thereto;

            (g) not later than five (5) Business Days after Guarantor receives
notice of the same from either of the Rating Agencies or otherwise learns of the
same, notice of the issuance of any change in the rating by either of the Rating
Agencies in respect of any debt of Guarantor, together with the details thereof,
and of any announcement by either of the Rating Agencies that any such rating is
"under review" or that any such rating has been placed on a watch list or that
any similar action has been taken by either of the Rating Agencies (collectively
a "Rating Notice"); and

                                       9
<PAGE>

            (h) with reasonable promptness, such other information respecting
the business, operations, assets, liabilities and financial condition of
Guarantor or its Subsidiaries as Agent or the Requisite Banks may from time to
time reasonably request;

provided that any such material may be delivered electronically directly to
Agent provided that such material is in a format reasonably acceptable to Agent,
and such material shall be deemed to have been delivered to Agent upon Agent's
receipt thereof. Upon the request of Agent, Guarantor shall deliver paper copies
thereof to Agent.

      Guarantor will permit any officer designated by Lender, at Guarantor's
expense, to examine the records and books of account of Guarantor (and to make
copies thereof and extracts therefrom) and to discuss the affairs, finances and
accounts of Guarantor with, and to be advised as to the same by, its officers,
all at such reasonable times and intervals Lender may reasonably request. Lender
shall use good faith efforts to coordinate such visits and inspections so as to
minimize the interference with and disruption to the normal business operations
of Guarantor. From and after the occurrence of an Event of Default which is
continuing, Guarantor shall bear the costs and expenses incurred by Agent or its
representatives in conducting such visits or inspections.

      11. Covenants of Guarantor. Guarantor hereby covenants and agrees with
Lender that until all indebtedness guaranteed hereby has been completely repaid
and all obligations and undertakings of Borrower under, by reason of, or
pursuant to the Note and the other Loan Documents have been completely performed
and Lender has no further obligation to make Loans or issue Letters of Credit:

            (a) [Intentionally omitted];

            (b) Guarantor will operate its business substantially as described
in the 10-K Report and in compliance with the terms and conditions of this
Guaranty and the Credit Agreement;

            (c) Intentionally omitted];

            (d) Intentionally omitted];

            (e) Intentionally omitted];

            (f) Guarantor will keep, and will cause each of its Subsidiaries to
keep, complete, proper and accurate records and books of account in which full,
true and correct entries will be made in accordance with generally accepted
accounting principles and will maintain adequate accounts and reserves for all
taxes (including income taxes), all depreciation, depletion, and amortization of
its properties and the properties of its Subsidiaries, all other contingencies,
and all other proper reserve. Guarantor will not, except as required by
generally accepted accounting principles or as required to improve internal
controls over financial reporting or otherwise as required to comply with the
Sarbanes-Oxley Act of 2002 or as otherwise permitted with the prior written
consent of the Requisite Banks, make any material changes to the accounting
procedures used by it in preparing the financial statements and other
information described in Paragraph 10 above (Guarantor acknowledging and
agreeing that this

                                       10
<PAGE>

provision is subject to the terms of Section 1.2 of the Credit Agreement, and
Guarantor agrees to be bound thereby);

            (g) Guarantor will not, and will not permit any of its Subsidiaries
to, become a party to any merger, consolidation or other business combination,
except (A) the merger or consolidation of one or more of the Subsidiaries of
Guarantor (other than Borrower or a Subsidiary Guarantor) with and into
Guarantor, (B) the merger or consolidation of two or more Subsidiaries of
Guarantor (other than Borrower or a Subsidiary Guarantor), or (C) any Permitted
Acquisition;

            (h) Guarantor will not, and will not permit any of its Subsidiaries
to, sell, assign, lease or dispose of all or substantially all of their
respective businesses or assets (whether now owned or hereafter acquired),
either in a single transaction or in a series of transactions, or to enter into
any agreement to do any of the foregoing, or sell, transfer or otherwise dispose
of any asset other than for fair market value (except in any such case in
connection with a transfer by a Subsidiary of Guarantor (other than Borrower or
any Subsidiary Guarantor) to another Subsidiary of Guarantor); provided,
however, that a Subsidiary of Guarantor, other than Borrower or any Subsidiary
Guarantor, may do any of the foregoing provided that the same could not
reasonably be expected to result in a Material Adverse Effect and no Default or
Event of Default shall arise as a result thereof);

            (i) Guarantor shall not at any time permit or suffer (i) the failure
of Guarantor to be the sole member of the sole general partner of Borrower or
the failure of Borrower or the Subsidiary Guarantor (other than with respect to
the minority limited partnership interest in SMA held by outside limited
partners with respect to Crescent Spectrum Center as of the date hereof) to be
wholly-owned and controlled direct or indirect Subsidiaries of Guarantor; or
(ii) the pledge or encumbrance of any direct or indirect ownership interest in
Borrower, General Partner or the Subsidiary Guarantor; or (iii) the occurrence
of a Change of Control;

            (j) [intentionally omitted];

            (k) Guarantor will be self-directed and will not retain or otherwise
rely on any other Person to make its investment decisions, provided that
Borrower and Guarantor shall not be prohibited from consulting with investment
bankers and other advisors in the conduct of its business;

            (l) Guarantor shall cause all of its Subsidiaries to promptly
distribute to Guarantor (but not less frequently than once each fiscal quarter
of Guarantor), whether in the form of dividends, Distributions or otherwise, all
profits, proceeds or other income relating to or arising from such Subsidiaries'
use, operation, financing, refinancing, sale or other disposition of their
respective assets and properties after (a) the payment by each Subsidiary of its
Debt Service, operating expenses and other obligations for such quarter and (b)
the establishment of reasonable reserves to fund the operations of such
Subsidiary; provided that, notwithstanding the foregoing, Guarantor shall
enforce its rights at law and in equity to receive Distributions from
Subsidiaries of Guarantor in which Guarantor owns less than a majority (by
number of votes or controlling interests) of the outstanding Voting Interests as
required to meet its obligations under the Loan Documents or to prevent the
occurrence of any event which could reasonably be expected to result in a
Material Adverse Effect;

                                       11
<PAGE>

            (m) In the event that a Default under Section 12.1(a) or (b) of the
Credit Agreement or an Event of Default shall have occurred and be continuing,
Guarantor shall make no Distributions other than Distributions to Crescent REIT
in an amount equal to the minimum Distributions required under the Code or the
laws of the State of Texas to maintain REIT Status of Crescent REIT, as
evidenced by a certification of an Authorized Officer of Guarantor containing
calculations in reasonable detail satisfactory in form and substance to Agent;

            (n) Guarantor will cooperate with Lender and execute such further
instruments and documents as Agent shall reasonably request to carry out to
Agent's satisfaction the transactions contemplated by this Guaranty and the
other Loan Documents;

            (o) Guarantor will not permit the ratio of the Consolidated Total
Indebtedness of Guarantor and its Subsidiaries to the Consolidated Total Assets
of Guarantor and its Subsidiaries to exceed .60 to 1;

            (p) Guarantor will not permit the ratio of (i) the sum of (A) the
Consolidated Total Indebtedness of Guarantor and its Subsidiaries plus (B)
Crescent OP's Share of UJV Combined Outstanding Indebtedness to (ii) the
Capitalization Value - Crescent OP to exceed .70 to 1;

            (q) Guarantor will not permit the ratio of the Secured Indebtedness
of Guarantor and its Subsidiaries to the Consolidated Total Assets of Guarantor
and its Subsidiaries to exceed .40 to 1;

            (r) Guarantor will not permit its Consolidated Tangible Net Worth to
be less than the sum of (i) $1,750,000,000.00 plus (ii) ninety percent (90%) of
the aggregate net proceeds received by Guarantor or Crescent REIT after the date
hereof in connection with any Equity Offering to any other Person (except to the
extent of proceeds of any such Equity Offering which are used to retire an
existing issue of preferred equity of Crescent REIT or Guarantor);

            (s) Guarantor will not permit the Consolidated EBITDA of Guarantor
and its Subsidiaries for the Test Period to be less than 1.75 times the Interest
Incurred of Guarantor and its Subsidiaries for the Test Period. Consolidated
EBITDA and Interest Incurred shall be adjusted in the best good-faith estimate
of Guarantor to give effect to the acquisition or disposition of assets and the
incurrence or repayment of Indebtedness or other items included within the
definition of Interest Incurred with the Test Period;

            (t) Guarantor will not permit the Consolidated EBITDA of Guarantor
and its Subsidiaries for the Test Period to be less than 1.3 times the Fixed
Charges of Guarantor and its Subsidiaries for the Test Period;

            (u) (i) Guarantor shall not pay any Distribution to the partners of
Guarantor except as follows (provided that such Distributions shall in each case
be subject to subparagraph (m) above):

                  (A) for any calendar quarter through and including the
calendar quarter ending December 31, 2005, (1) the Preferred Distributions
payable during such period plus (2) Distributions to Crescent REIT to enable
Crescent REIT to pay a Distribution on its

                                       12
<PAGE>

issued and outstanding common stock (excluding any such common stock held by
Crescent REIT, Guarantor or any Affiliate thereof, other than individual holders
and their Affiliates that are not otherwise Affiliates of Crescent REIT or
Guarantor); provided that in no event shall the Distributions paid pursuant to
this clause (u)(i)(A)(2) for such calendar quarter and the three (3) preceding
calendar quarters exceed the sum of One Dollar and Fifty Cents ($1.50) per such
share; and

                  (B) for the calendar quarter ending March 31, 2006 and each
calendar quarter thereafter, Guarantor shall not pay any Distribution to the
partners of Guarantor which for any period of four (4) successive calendar
quarters is in excess of the sum of (1) ninety-five percent (95%) of its Funds
from Operations for such calendar quarters plus (B) the cash flow received by
Guarantor or its Subsidiaries in excess of the Net Income of Guarantor in each
case attributable to Guarantor's residential development business segment for
such calendar quarters; provided that the limitation contained in this
subparagraph (u)(i)(B) shall not preclude Guarantor from making Distributions to
Crescent REIT in an amount equal to the minimum distributions required under the
Code to maintain the REIT Status of Crescent REIT, as evidenced by a
certification of the principal financial or accounting officer of Guarantor
containing calculations in detail reasonably satisfactory in form and substance
to the Lender; and

            (ii) Notwithstanding anything to the contrary contained in this
Guaranty, Guarantor may, (A) make the COPI Share Issuance, and (B) subject to
the limitations set forth in this Guaranty or any of the other Loan Documents
(including, specifically, but without limitation, those contained in Section
11(u) of this Guaranty), make Distributions in order to enable Crescent REIT,
Guarantor and each of their respective Subsidiaries (collectively, the
"Repurchase Parties") to repurchase up to an aggregate of $125,000,000.00 of
equity securities of Crescent REIT, provided that such Distributions to
repurchase such equity securities shall only be made in the event that (1) no
Event of Default shall have occurred and be continuing on the date of any such
repurchase, (2) no Default or Event of Default shall occur as a result of any
such repurchase, and (3) none of the Repurchase Parties shall be permitted to
repurchase any equity securities of Crescent REIT except as permitted by this
Section 11(u). Any Distributions made to Crescent REIT from Guarantor or
otherwise to enable Crescent REIT to acquire shares of equity securities of
Crescent REIT from Guarantor or any other Repurchase Party, which equity
securities have been previously purchased from public shareholders and are to be
retired by Crescent REIT, shall not be double-counted for the purposes of this
Section 11(u), provided that an amount equal to the amount of such Distributions
to Crescent REIT to repurchase and retire such equity securities from such
Repurchase Party is used to satisfy obligations owed by a Repurchase Party to
Guarantor or one of its Subsidiaries or is otherwise repaid to Guarantor or one
of its Subsidiaries in connection therewith. Guarantor covenants and agrees that
simultaneously with the delivery of the financial statements required to be
delivered to Agent pursuant Section 10(b) hereof, Guarantor shall deliver to
Agent a certification from an Authorized Officer of Guarantor stating that
Guarantor is in compliance with this Section 11(u) together with such
documentation and computations as Agent shall require evidencing such
compliance. Notwithstanding anything to the contrary contained herein, the
making of Distributions by any of the Repurchase Parties in connection with any
repurchases of equity securities of Crescent REIT by any of the Repurchase
Parties shall be limited only by the provisions of this Section 11(u).

            (v) Guarantor will not permit more than thirty percent (30%) of its
Consolidated Total Indebtedness to be Variable Rate Debt that is not hedged by
an interest rate

                                       13
<PAGE>

cap, swap, collar or similar agreement providing interest rate protection
reasonably satisfactory to Agent;

            (w) Guarantor will not modify, amend or terminate Section 7.5 of the
Third Amended and Restated Agreement of Limited Partnership of Crescent Real
Estate Equities Limited Partnership dated as of November 1, 1997, as amended
through the date of this Agreement; and

            (x) Guarantor will comply with any and all covenants applicable to
Guarantor set forth in the Credit Agreement.

      12. Rights of Set-off. Regardless of the adequacy of any collateral or
other means of obtaining repayment, during the continuance of any Event of
Default, any deposits (general or specific, time or demand, provisional or
final, regardless of currency, maturity, or the branch of where such deposits
are held) or other sums credited by or due from any of Lenders to the Guarantor
and any securities or other property of Guarantor in the possession of such
Lender may be applied to or set off against the payment of the obligations
guaranteed pursuant to this Guaranty and any and all other liabilities, direct,
or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Guarantor to such Lender.

      13. Changes in Writing; No Revocation. This Guaranty may not be changed
orally, and no obligation of Guarantor can be released or waived by Lender
except as provided in Section 27 of the Credit Agreement. This Guaranty shall be
irrevocable by Guarantor until all indebtedness guaranteed hereby has been
completely repaid and all obligations and undertakings of Borrower under, by
reason of, or pursuant to the Note and the Loan Documents have been completely
performed and Borrower has no further right to receive Loans or obtain Letters
of Credit.

      14. Notices. All notices, demands or requests provided for or permitted to
be given pursuant to this Guaranty (hereinafter in this paragraph referred to as
"Notice") must be in writing and shall be deemed to have been properly given or
served by personal delivery or by sending same by overnight courier or by
depositing the same in the United States mail, postpaid and registered or
certified, return receipt requested, at the addresses set forth below, and
effective as provided below. Each Notice shall be effective upon being delivered
personally or upon being sent by overnight courier or upon being deposited in
the United States Mail as aforesaid. The time period in which a response to any
such Notice must be given or any action taken with respect thereto, however,
shall commence to run from the date of receipt if personally delivered or sent
by overnight courier or, if so deposited in the United States Mail, on the date
of receipt as disclosed on the return receipt. Rejection or other refusal to
accept or the inability to deliver because of changed address of which no Notice
was given shall be deemed to be receipt of the Notice sent. By giving at least
five (5) Business Days prior Notice thereof, Guarantor or Lender shall have the
right from time to time and at any time during the term of this Guaranty to
change their respective addresses and each shall have the right to specify as
its address any other address within the United States of America. For the
purposes of this Guaranty:

      The address of Lender is:

           KeyBank National Association, as Agent
           1200 Abernathy Road, N.E., Suite 1550
           Atlanta, Georgia  30328

                                       14
<PAGE>

           Attn:  Daniel Stegemoeller

      with a copy to:

           KeyBank National Association, as Agent
           1200 Abernathy Road, N.E., Suite 1550
           Atlanta, Georgia  30328
           Attn:    Douglas E. Frazer

      The address of Guarantor is:

           Crescent Real Estate Equities Limited Partnership
           777 Main Street, Suite 2100
           Fort Worth, Texas  76102
           Attn: Christopher T. Porter

      with a copy to:

           Crescent Real Estate Equities Limited Partnership
           777 Main Street, Suite 2100
           Fort Worth, Texas  76102
           Attn:    David Dean, Esq.
           Senior Vice President - Law

      and with a copy to:

           Shaw Pittman LLP
           2300 N Street, NW
           Washington, DC 20037
           Attn:  William L. Horton, Jr.

      15. Governing Law. THIS GUARANTY AND THE OBLIGATIONS OF GUARANTOR
HEREUNDER SHALL BE GOVERNED BY AND INTERPRETED AND DETERMINED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW).

      16. CONSENT TO JURISDICTION; WAIVERS. GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY (A) SUBMITS TO PERSONAL JURISDICTION IN THE STATE OF TEXAS OVER
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY, AND
(B) WAIVES ANY AND ALL PERSONAL RIGHTS UNDER THE LAWS OF ANY STATE (I) TO THE
RIGHT, IF ANY, TO TRIAL BY JURY (LENDER HAVING ALSO WAIVED SUCH RIGHT TO TRIAL
BY JURY), (II) TO OBJECT TO JURISDICTION WITHIN THE STATE OF TEXAS OR VENUE IN
ANY PARTICULAR FORUM WITHIN THE STATE OF TEXAS, AND (III) TO THE RIGHT, IF ANY,
TO CLAIM OR RECOVER ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR
ANY DAMAGES OTHER THAN ACTUAL DAMAGES. GUARANTOR AGREES THAT, IN ADDITION TO ANY
METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW,

                                       15
<PAGE>

ALL SERVICE OF PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO GUARANTOR AT
THE ADDRESS SET FORTH IN PARAGRAPH 14 ABOVE, AND SERVICE SO MADE SHALL BE DEEMED
RECEIVED AS PROVIDED FOR THE EFFECTIVENESS OF DELIVERY OF NOTICES PURSUANT TO
PARAGRAPH 14 ABOVE. NOTHING CONTAINED HEREIN, HOWEVER, SHALL PREVENT LENDER FROM
BRINGING ANY SUIT, ACTION OR PROCEEDING OR EXERCISING ANY RIGHTS AGAINST ANY
SECURITY AND AGAINST GUARANTOR PERSONALLY, AND AGAINST ANY PROPERTY OF
GUARANTOR, WITHIN ANY OTHER STATE. INITIATING SUCH SUIT, ACTION OR PROCEEDING OR
TAKING SUCH ACTION IN ANY STATE SHALL IN NO EVENT CONSTITUTE A WAIVER OF THE
AGREEMENT CONTAINED HEREIN THAT THE LAWS OF THE STATE OF TEXAS SHALL GOVERN THE
RIGHTS AND OBLIGATIONS OF GUARANTOR AND LENDER HEREUNDER OR OF THE SUBMISSION
HEREIN MADE BY GUARANTOR TO PERSONAL JURISDICTION WITHIN THE STATE OF TEXAS.
GUARANTOR HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT. GUARANTOR CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH LENDER
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND
ACKNOWLEDGES THAT EACH LENDER HAS BEEN INDUCED TO ENTER INTO THIS GUARANTY AND
THE OTHER LOAN DOCUMENTS TO WHICH SUCH LENDER IS A PARTY BY, AMONG OTHER THINGS,
THE WAIVERS AND CERTIFICATIONS CONTAINED IN THIS PARAGRAPH 16. GUARANTOR
ACKNOWLEDGES THAT IT HAS HAD AN OPPORTUNITY TO REVIEW THIS PARAGRAPH 16 WITH ITS
LEGAL COUNSEL AND THAT GUARANTOR AGREES TO THE FOREGOING AS ITS FREE, KNOWING
AND VOLUNTARY ACT

      17. Successors and Assigns. The provisions of this Guaranty shall be
binding upon Guarantor and its heirs, successors, successors in title, legal
representatives, and assigns, and shall inure to the benefit of Lender, its
successors, successors in title, legal representatives and assigns.

      18. Assignment by Lender. This Guaranty is assignable by Lender in whole
or in part in conjunction with any assignment of the Note or portions thereof
pursuant to Section 18 of the Credit Agreement, and any assignment hereof or any
transfer or assignment of the Note or portions thereof by Lender shall operate
to vest in any such assignee the rights and powers, in whole or in part, as
appropriate, herein conferred upon and granted to Lender.

      19. Severability. If any term or provision of this Guaranty shall be
determined to be illegal or unenforceable, all other terms and provisions hereof
shall nevertheless remain effective and shall be enforced to the fullest extent
permitted by law.

      20. Disclosure. Guarantor agrees that Lender may disclose information
obtained by Lender pursuant to this Guaranty to assignees or participants and
potential assignees or participants hereunder, subject to the terms of Section
32 of the Credit Agreement.

      21. No Unwritten Agreements. THIS GUARANTY REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY

                                       16
<PAGE>

EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

      22. Time of the Essence. Time is of the essence with respect to each and
every covenant, agreement and obligation of Guarantor under this Guaranty.

      23. Ratification. Guarantor does hereby restate, reaffirm and ratify each
and every warranty and representation regarding Guarantor or its Subsidiaries
set forth in the Credit Agreement as if the same were more fully set forth
herein.

      24. Limitation on Liability. NO OBLIGATION OR LIABILITY WHATSOEVER OF THE
GUARANTOR WHICH MAY ARISE AT ANY TIME UNDER THIS GUARANTY SHALL BE PERSONALLY
BINDING UPON, NOR SHALL RESORT FOR THE ENFORCEMENT THEREOF BE HAD TO, THE
PRIVATE PROPERTY OF ANY OF THE GUARANTOR'S PARTNERS REGARDLESS OF WHETHER SUCH
OBLIGATION OR LIABILITY IS IN THE NATURE OF CONTRACT, TORT OR OTHERWISE. NOTHING
HEREIN SHALL DIMINISH OR IMPAIR THE RIGHTS OF LENDER AND THE BANKS TO PURSUE ANY
REMEDY AGAINST ANY ASSETS OF THE GUARANTOR.

      25. No Assignment by Guarantor. The Guarantor shall not assign or transfer
any of its rights or obligations under this Guaranty or any of the Loan
Documents without the prior written consent of each of the Banks.

      26. Corporate Separateness. Lender and all other direct and indirect
beneficiaries of this Guaranty, by accepting the benefits provided in this
Guaranty, agree that Guarantor, Subsidiary Guarantor, Borrower and General
Partner are separate and distinct legal entities, with separate and distinct
credit.

      27. Acknowledgment. GUARANTOR ACKNOWLEDGES THAT THE OBLIGATIONS GUARANTEED
HEREUNDER INCLUDE THE OBLIGATION OF THE BORROWER TO INDEMNIFY THE LENDER, AS SET
FORTH IN THE LOAN AGREEMENT, AND THAT SUCH OBLIGATIONS INCLUDE INDEMNIFICATION
IN THE EVENT OF THE LENDER'S OWN ORDINARY NEGLIGENCE.

                      [SIGNATURES BEGIN ON FOLLOWING PAGE]

                                       17
<PAGE>

      IN WITNESS WHEREOF, Guarantor has executed this Guaranty under seal as of
the 8th day of February, 2005.

                                CRESCENT REAL ESTATE EQUITIES
                                LIMITED PARTNERSHIP, a Delaware limited
                                partnership, by its sole general partner

                                By: Crescent Real Estate Equities, Ltd., a
                                    Delaware corporation

                                    By: /s/ Christopher T. Porter
                                        ----------------------------------------
                                    Name: Christopher T. Porter
                                    Title: Senior Vice President & Treasurer

                                       18
<PAGE>

STATE OF     Texas

COUNTY OF    Tarrant

      This instrument was acknowledged before me on January 31st, 2005, by
Christopher T. Porter, the SVP and Treasurer of Crescent Real Estate Equities
Ltd., a Delaware corporation, on behalf of said corporation as the sole general
partner of Crescent Real Estate Equities Limited Partnership.

                                    /s/ Leslie Elaine Balboa
                                    -------------------------
                                    Notary Public, in and for
                  (SEAL)            THE STATE OF  Texas

                                    My Commission Expires: 06/07/07

                                       19
<PAGE>

      Lender joins in the execution of this Guaranty for the sole and limited
purpose of evidencing its agreement to waiver of the right to trial by jury
contained in Section 16(B)(I) hereof and Section 25 of the Credit Agreement.

                                    KEYBANK NATIONAL ASSOCIATION, as
                                    Agent for Lender

                                    By: /s/ Daniel P. Stegemoeller
                                       -----------------------------
                                    Name: Daniel P. Stegemoeller
                                    Title: Vice President

                                       20
<PAGE>
                                   EXHIBIT A

                   FORM OF GUARANTOR'S COMPLIANCE CERTIFICATE

     The foregoing exhibit has been omitted and will be furnished to the
Commission upon request.

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