Document:

exv10w01

 

Exhibit 10.01

News Release 

	 	 	 	 	 
	 

	 	Company Contacts:
	 	Jeff Hall
	 

	 	 	 	Chief Financial Officer
	 

	 	 	 	(408) 875-6800
	 

	 	 	 	jeff.hall@kla-tencor.com
	 
	 	 	 	 
	 

	 	 	 	Cary Halsted (Investment Community)
	 

	 	 	 	Vice President, Investor Relations
	 

	 	 	 	(408) 875-4094
	 

	 	 	 	cary.halsted@kla-tencor.com
	 
	 	 	 	 
	 

	 	 	 	Kyra Whitten (Media)
	 

	 	 	 	Sr. Director, Corporate Communications
	 

	 	 	 	(408) 875-7819
	 

	 	 	 	Kyra.whitten@kla-tencor.com
	 
	 	 	 	 
	 

	 	Agency Contact:
	 	Jane Evans-Ryan (Media)
	 

	 	 	 	Business Press Director, MCA
	 

	 	 	 	(650) 968-8900
	 

	 	 	 	jryan@mcapr.com

FOR IMMEDIATE RELEASE

KLA-TENCOR DECLARES REGULAR CASH DIVIDEND FOR

FOURTH QUARTER FISCAL YEAR 2006

SAN
JOSE, Calif., May 5, 2006 — KLA-Tencor Corporation (NASDAQ: KLAC) today announced that its
board of directors has declared a quarterly cash dividend of $.12 per share on its common stock
payable on June 1, 2006 to KLA-Tencor stockholders of record on May 15, 2006.

About KLA-Tencor: KLA-Tencor is the world leader in yield management and process
control solutions for semiconductor manufacturing and related industries. Headquartered in
San Jose, Calif., the company has sales and service offices around the world. An S&P 500
company, KLA-Tencor was named one of the Best Managed Companies in America for 2005 by
Forbes Magazine and is the only company in the semiconductor industry to receive the
accolade for this year. KLA-Tencor is traded on the Nasdaq National Market under the symbol KLAC. Additional information about the company
is available on the Internet at http://www.kla-tencor.com

###exv10w1

 

EXHIBIT 10.1

2006 Key Executive

Incentive Compensation Plan

	 	 	 	 	 	 
	 	Name:
	 	 	 	 
	 	Title:
	 	 	 	 
	 	Effective Date:

	 	 	January 1, 2006	 
	 

Plan Description

 

	 		
	Plan Objective:     	 	To provide key executives with incentives and rewards for achieving and exceeding 2006 LTF business goals.

 

	 	 	 
	Performance

	 	• Earnings Before Taxes (EBT)
	Measure:

	 	• Capital Expenditure (CapEx)
	 
	 	 

Cash — Annualized

Target Pay: $                    

Guaranteed Pay: $                    

Incentive Details

	•	 	Performance is based on LTF 2006 Fiscal Year, 1/1/06 — 12/31/06
	 
	•	 	Monthly payout opportunity
	 
	•	 	Based on Year-To-Date EBT Actual vs. Plan as of Month-End
	 
	•	 	Year end opportunity if CapEx is below budget

 

 

2006 Key Executive

Incentive Compensation Plan

Monthly Incentive Formula

(Actual YTD EBT / Plan YTD EBT times YTD Target Pay) minus YTD Guaranteed Pay = Incentive Payout

Year-End Incentive Formula

[(Actual CapEx / Plan CapEx) minus 1] times Annual Target Pay

Examples

Compensation Data

	 	•	 	Annual Target Pay: $120,000
	 
	 	•	 	Annual Guaranteed Pay: $100,000
	 
	 	•	 	Monthly Target Pay: $10,000
	 
	 	•	 	Monthly Guaranteed Pay: $8,333

Example #1

	 	•	 	YTD EBT Plan: $1,000,000
	 
	 	•	 	YTD EBT Actual: $1,100,000
	 
	 	•	 	Percent of Plan Attained: $1,100,000 / $1,000,000 = 110%
	 
	 	•	 	Incentive Payout: (110% x $10,000) — $8,333 = $2,667

Example #2

	 	•	 	YTD EBT Plan: $1,000,000
	 
	 	•	 	YTD EBT Actual: $900,000
	 
	 	•	 	Percent of Plan Attained: $900,000 / $1,000,000 = 90%
	 
	 	•	 	Incentive Payout: (90% x $10,000) — $8,333 = $667

Example #3 (CapEx)

	 	•	 	Annual Target Pay: $120,000
	 
	 	•	 	CapEx Plan: $25,000,000
	 
	 	•	 	CapEx Actual: $24,752,475
	 
	 	•	 	Percent of Plan Attained: $25,000,000 / $24,752,475 = 1.01 (or 101%)
	 
	 	•	 	Favorable to Plan: 1.01 — 1.00 = .01 (or 1%)
	 
	 	•	 	Incentive Payout: 1% x $120,000 = $1,200

 

 

Administration

CapEx / EBT Performance

	 	•	 	If CapEx Actual vs. Plan is unfavorable during the year, the company may withhold payout on the EBT component to
offset the future negative variance.

Payout Timing

	 	•	 	All payouts for the monthly incentive will be made via the payroll run which follows the month-end close
(24th of the following month). The incentive amount reflects the previous month’s YTD performance.
	 
	 	•	 	Any year-end CapEx incentive will be made via the payroll run which follows the December month-end close,
typically January 24th of the following year.

Plan Eligibility

	 	•	 	Eligibility for a payout is cancelled when a plan participant voluntarily or involuntarily terminates employment
before the payout date.
	 
	 	•	 	If the plan participant moves to a new position during the period, which has a different target pay opportunity,
any incentive payments will be prorated for time in the respective positions.
	 
	 	•	 	Newly hired or promoted plan participants are eligible for plan participation beginning with the first day of
the month following their hire date.
	 
	 	•	 	A pro-rated payment of the earned monthly incentive payout will be made if plan participant dies or becomes
disabled during the eligibility period.

Approvals

	 	•	 	All payouts must to be approved by the Performance Pay Committee of Life Time Fitness, Inc.
	 
	 	•	 	The Performance Pay Committee of Life Time Fitness, Inc. must approve any and all exceptions to this plan in
advance of any incentive payout.

IMPORTANT NOTE:

The plan, and any terms contained in the plan does not represent an employment agreement and does
not assure or give evidence of continued employment or claim to continued employment of any plan
participant for any time or period or position at any specified pay level.

This plan may be amended or terminated at any time by the Performance Pay Committee of Life Time
Fitness, Inc. The plan, as described above, supersedes any and all plans, or earlier descriptions
of the plan.

With respect to plans for members of the senior management team, all references to the Performance
Pay Committee will instead be references to the Compensation Committee of the Board of Directors.exv10w01

 

Exhibit 10.01

FOURTH AMENDED AND RESTATED AGREEMENT OF

LIMITED PARTNERSHIP

OF

CRESCENT REAL ESTATE EQUITIES LIMITED

PARTNERSHIP

 

Dated as of April 30, 2006

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE I DEFINED TERMS
	 	 	3	 
	 
	ARTICLE II ORGANIZATIONAL MATTERS
	 	 	16	 
	 
	Section 2.1 Continuation of Partnership
	 	 	16	 
	 
	Section 2.2 Name
	 	 	16	 
	 
	Section 2.3 Principal Office and Registered Agent
	 	 	16	 
	 
	Section 2.4 Power of Attorney
	 	 	17	 
	 
	Section 2.5 Term
	 	 	18	 
	 
	ARTICLE III PURPOSE
	 	 	18	 
	 
	Section 3.1 Purpose and Business
	 	 	18	 
	 
	Section 3.2 Powers
	 	 	18	 
	 
	ARTICLE IV CAPITAL CONTRIBUTIONS
	 	 	19	 
	 
	Section 4.1 Capital Contributions of the Partners
	 	 	19	 
	 
	Section 4.2 Additional Funding
	 	 	20	 
	 
	Section 4.3 Issuance of Additional Partnership Interests
	 	 	22	 
	 
	Section 4.4 No Preemptive Rights
	 	 	24	 
	 
	Section 4.5 No Interest on Capital
	 	 	24	 
	 
	Section 4.6 Stock Incentive Plans
	 	 	24	 
	 
	Section 4.7 Other Equity Compensation Plans
	 	 	25	 
	 
	Section 4.8 Series A Preferred Partnership Units and Series B Redeemable
Preferred Partnership Units
	 	 	27	 
	 
	Section 4.9 Issuance of Partnership Interests to Employees of the Crescent Group
	 	 	28	 
	 
	ARTICLE V DISTRIBUTIONS
	 	 	31	 
	 
	Section 5.1 Initial Partnership Distributions
	 	 	31	 

(i)

 

	 	 	 	 	 
	Section 5.2 Requirement and Characterization of Distributions
	 	 	31	 
	 
	Section 5.3 Amounts Withheld
	 	 	31	 
	 
	Section 5.4 Distributions In Kind
	 	 	31	 
	 
	Section 5.5 Distributions Upon Liquidation
	 	 	32	 
	 
	Section 5.6 Distribution Rights of Series A Preferred Shares and Series
B Redeemable Preferred Shares
	 	 	32	 
	 
	ARTICLE VI ALLOCATIONS
	 	 	32	 
	 
	Section 6.1 Allocations For Capital Account Purposes
	 	 	32	 
	 
	Section 6.2 Allocation of Nonrecourse Debt
	 	 	33	 
	 
	Section 6.3 Allocations for Series A Preferred Partnership Units and
Series B Redeemable Preferred Partnership Units
	 	 	33	 
	 
	ARTICLE VII MANAGEMENT AND OPERATIONS OF BUSINESS
	 	 	34	 
	 
	Section 7.1 Management
	 	 	34	 
	 
	Section 7.2 Certificate of Limited Partnership
	 	 	38	 
	 
	Section 7.3 Restrictions on General Partner’s Authority
	 	 	38	 
	 
	Section 7.4 Reimbursement of the Crescent Group
	 	 	39	 
	 
	Section 7.5 Outside Activities of the Crescent Group
	 	 	39	 
	 
	Section 7.6 Contracts with Affiliates
	 	 	40	 
	 
	Section 7.7 Indemnification
	 	 	40	 
	 
	Section 7.8 Liability of the General Partner
	 	 	43	 
	 
	Section 7.9 Other Matters Concerning the General Partner
	 	 	43	 
	 
	Section 7.10 Title to Partnership Assets
	 	 	44	 
	 
	Section 7.11 Reliance by Third Parties
	 	 	44	 
	 
	Section 7.12 Limited Partner Representatives
	 	 	45	 
	 
	ARTICLE VIII RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
	 	 	45	 
	 
	Section 8.1 Limitation of Liability
	 	 	45	 

(ii)

 

	 	 	 	 	 
	Section 8.2 Management of Business
	 	 	45	 
	 
	Section 8.3 Outside Activities of Limited Partners
	 	 	45	 
	 
	Section 8.4 Return of Capital
	 	 	46	 
	 
	Section 8.5 Rights of Limited Partners Relating to the Partnership
	 	 	46	 
	 
	Section 8.6 Exchange Rights
	 	 	47	 
	 
	Section 8.7 Covenants Relating to the Exchange Rights
	 	 	47	 
	 
	Section 8.8 Other Matters Relating to the Exchange Rights
	 	 	48	 
	 
	ARTICLE IX BOOKS, RECORDS, ACCOUNTING AND REPORTS
	 	 	49	 
	 
	Section 9.1 Records and Accounting
	 	 	49	 
	 
	Section 9.2 Fiscal Year
	 	 	49	 
	 
	Section 9.3 Reports
	 	 	49	 
	 
	ARTICLE X TAX MATTERS
	 	 	50	 
	 
	Section 10.1 Preparation of Tax Returns
	 	 	50	 
	 
	Section 10.2 Tax Elections
	 	 	50	 
	 
	Section 10.3 Tax Matters Partner
	 	 	50	 
	 
	Section 10.4 Organizational Expenses
	 	 	51	 
	 
	Section 10.5 Withholding
	 	 	51	 
	 
	ARTICLE XI TRANSFERS AND WITHDRAWALS
	 	 	52	 
	 
	Section 11.1 Transfer
	 	 	52	 
	 
	Section 11.2 Transfer of Partnership Interests of the General Partner
	 	 	53	 
	 
	Section 11.3 Transfer of Partnership Interests of Limited Partners Other
Than Crescent Equities
	 	 	53	 
	 
	Section 11.4 Substituted Limited Partners
	 	 	55	 
	 
	Section 11.5 Assignees
	 	 	55	 
	 
	Section 11.6 General Provisions
	 	 	56	 
	 
	Section 11.7 Acquisition of Partnership Interest by Partnership
	 	 	56	 

(iii)

 

	 	 	 	 	 
	ARTICLE XII ADMISSION OF PARTNERS
	 	 	57	 
	 
	Section 12.1 Admission of Substituted General Partner
	 	 	57	 
	 
	Section 12.2 Admission of Additional or Employee Limited Partners
	 	 	57	 
	 
	Section 12.3 Amendment of Agreement and Certificate of Limited Partnership
	 	 	58	 
	 
	ARTICLE XIII DISSOLUTION AND LIQUIDATION
	 	 	58	 
	 
	Section 13.1 Dissolution
	 	 	58	 
	 
	Section 13.2 Winding Up
	 	 	59	 
	 
	Section 13.3 Compliance with Timing Requirements of Regulations
	 	 	60	 
	 
	Section 13.4 Deemed Contribution and Distribution
	 	 	61	 
	 
	Section 13.5 Rights of Limited Partners
	 	 	61	 
	 
	Section 13.6 Documentation of Liquidation
	 	 	61	 
	 
	Section 13.7 Reasonable Time for Winding-Up
	 	 	62	 
	 
	Section 13.8 Liability of the Liquidator
	 	 	62	 
	 
	Section 13.9 Waiver of Partition
	 	 	62	 
	 
	ARTICLE XIV AMENDMENT OF AGREEMENT
	 	 	62	 
	 
	Section 14.1 Amendments
	 	 	62	 
	 
	ARTICLE XV PARTNER REPRESENTATIONS AND WARRANTIES
	 	 	63	 
	 
	Section 15.1 Representations and Warranties
	 	 	63	 
	 
	ARTICLE XVI ARBITRATION OF DISPUTES
	 	 	65	 
	 
	Section 16.1 Arbitration
	 	 	65	 
	 
	Section 16.2 Procedures
	 	 	65	 
	 
	Section 16.3 Binding Character
	 	 	66	 
	 
	Section 16.4 Exclusivity
	 	 	66	 
	 
	Section 16.5 No Alteration of Agreement
	 	 	66	 
	 
	ARTICLE XVII GENERAL PROVISIONS
	 	 	66	 

(iv)

 

	 	 	 	 	 
	Section 17.1 Addresses and Notice
	 	 	66	 
	 
	Section 17.2 Titles and Captions
	 	 	67	 
	 
	Section 17.3 Pronouns and Plurals
	 	 	67	 
	 
	Section 17.4 Further Action
	 	 	67	 
	 
	Section 17.5 Binding Effect
	 	 	67	 
	 
	Section 17.6 Creditors
	 	 	67	 
	 
	Section 17.7 Waiver
	 	 	67	 
	 
	Section 17.8 No Agency
	 	 	67	 
	 
	Section 17.9 Entire Understanding
	 	 	68	 
	 
	Section 17.10 Counterparts
	 	 	68	 
	 
	Section 17.11 Applicable Law
	 	 	68	 
	 
	Section 17.12 Invalidity of Provisions
	 	 	68	 
	 
	Section 17.13 Guaranty by Crescent Equities
	 	 	68	 
	 
	Section 17.14 Restriction on Sale of Sonoma Property
	 	 	68	 

Exhibit A
— Partners, Partnership Units and Partnership Interests

Exhibit B  — Capital Account Maintenance

Exhibit C  — Special Tax Allocation Rules

Exhibit D  — Notice of Exchange

Exhibit E  — Listing of Approved Substituted Limited Partners

(v)

 

FOURTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

OF

CRESCENT REAL ESTATE EQUITIES LIMITED PARTNERSHIP

     THIS FOURTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated as of April 30, 2006,
is entered into by and among Crescent Real Estate Equities, Ltd., a Delaware corporation, as
general partner (the “General Partner”), and those parties who are Limited Partners as listed on
Exhibit A hereto or who are admitted from time to time as Limited Partners as herein provided.

     W I T N E S S E T H:

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

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

 

 

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

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

     WHEREAS, the Second Amended Agreement was amended and restated in its entirety by that certain
Third Amended and Restated Agreement of Limited Partnership of Crescent Real

 - 2 -

 

Estate Equities Limited Partnership, dated as of January 2, 2003, as amended by the First
Amendment to the Third Amended and Restated Agreement of Limited Partnership of Crescent Real
Estate Equities Limited Partnership, dated as of September 9, 2003, the Second Amendment to the
Third Amended and Restated Agreement of Limited Partnership of Crescent Real Estate Equities
Limited Partnership, dated as of October 9, 2003, the Third Amendment to the Third Amended and
Restated Agreement of Limited Partnership of Crescent Real Estate Equities Limited Partnership,
dated as of January 15, 2004, the Fourth Amendment to the Third Amended and Restated Agreement of
Limited Partnership of Crescent Real Estate Equities Limited Partnership, dated as of March 31,
2004, the Fifth Amendment to the Third Amended and Restated Agreement of Limited Partnership of
Crescent Real Estate Equities Limited Partnership, dated as of July 15, 2004, the Sixth Amendment
to the Third Amended and Restated Agreement of Limited Partnership of Crescent Real Estate Equities
Limited Partnership, dated as of January 14, 2005, the Seventh Amendment to the Third Amended and
Restated Agreement of Limited Partnership of Crescent Real Estate Equities Limited Partnership,
dated as of May 3, 2005, the Eighth Amendment to the Third Amended and Restated Agreement of
Limited Partnership of Crescent Real Estate Equities Limited Partnership, dated as of August 8,
2005, and the Ninth Amendment to the Third Amended and Restated Agreement of Limited Partnership of
Crescent Real Estate Equities Limited Partnership, dated as of April 17, 2006 (hereinafter referred
to collectively as the “Third Amended Agreement”);

     WHEREAS, the General Partner desires to amend and restate in its entirety the Third Amended
Agreement pursuant to its authority under Sections 2.4 and 14.1.B of the Third Amended Agreement
and the powers of attorney granted to the General Partner by the Limited Partners in order to
combine all of the provisions of the Third Amended Agreement into one document;

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

ARTICLE I

DEFINED TERMS

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

     “2005 Incentive Plan” has the meaning set forth in Section 4.9A hereof.

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

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

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

     “Adjusted Capital Account” means the Capital Account maintained for each Partner as of
the end of each fiscal year (i) increased by any amounts which such Partner is obligated to

 - 3 -

 

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

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

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

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

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

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

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

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

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

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

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

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

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

 - 4 -

 

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

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

     (ii) less the sum of:

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

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

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

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

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

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

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

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

 - 5 -

 

stayed within ninety (90) days of such appointment, or (h) an appointment referred to in
clause (g) is not vacated within ninety (90) days after the expiration of any such stay.

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

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

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

     “Canyon Ranch” means Canyon Ranch, Inc. an Arizona corporation.

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

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

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

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

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

 - 6 -

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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     “Deferred Distribution Amount” of a Grantee as of a particular date means the payment,
if any, due to the Grantee under the last sentence of Section 4.9.G as of such date (or, to the
extent that all or a portion of a Grantee’s Partnership Interest is unvested, the payment, if any,
that would be due to the Grantee under the last sentence of Section 4.9.G if the Partnership
Interest were vested as of such date).

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

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

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

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

     “Exchange Factor” means, effective as of March 20, 1997 (the record date on which the
two-for-one stock split of Crescent Equities common shares was effected in the form of a 100% share
dividend), 2.0, provided that in the event that Crescent Equities (i) pays a
dividend on its outstanding REIT Shares in REIT Shares or makes a distribution to all holders of
its outstanding REIT Shares in REIT Shares, (ii) subdivides its outstanding REIT Shares, or (iii)
combines its outstanding REIT Shares into a smaller number of REIT Shares, the Exchange Factor
shall be adjusted by multiplying the Exchange Factor by a fraction, the numerator of which shall be
the number of REIT Shares that would be issued and outstanding on the record date for such event if
such dividend, distribution, subdivision or combination had occurred as of such date, and the
denominator of which shall be the actual number of REIT Shares issued and outstanding on the record
date for such dividend, distribution, subdivision or combination. Any adjustment of the Exchange
Factor shall become effective immediately after the effective date of such event retroactive to the
record date for such event; provided, however, that if Crescent Equities receives a
Notice of Exchange after the record date, but prior to the effective date, of any such event, the
Exchange Factor shall be determined as if Crescent Equities had received the Notice of Exchange
immediately prior to the record date for such event. From the date of inception of the
Partnership, until March 26, 1997, the Exchange Factor was 1.0.

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

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

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

 - 8 -

 

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

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

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

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

     “General Partnership Interest” means the Partnership Interest held by the General
Partner.

     “Grant Agreement(s)” has the meaning set forth in Section 4.9.A hereof.

     “Grantee(s)” has the meaning set forth in Section 4.9.A hereof.

     “Greenbrier” means Texas Greenbrier Associates, Inc., a Texas corporation.

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

     “Gross Asset Value” of any Contributed Property or Properties contributed by a Partner
to the Partnership in connection with the execution of the First Amended Agreement means the Net
Asset Value of such Contributed Property or Properties as set forth in Exhibit A thereof, increased
by any liabilities either treated as assumed by the Partnership upon the contribution of such
property or properties or to which such property or properties are treated as subject when
contributed pursuant to the provisions of Section 752 of the Code. The Gross Asset Value of any
other Contributed Property or Properties means the fair market value of such property or properties
at the time of contribution as determined by the General Partner using such reasonable method of
valuation as it may adopt. The General Partner shall, in its sole and absolute discretion, use such
method as it deems reasonable and appropriate to allocate the aggregate of the Gross Asset Value of
Contributed Properties contributed in a single or integrated transaction among the separate
properties on a basis proportional to their respective fair market values.

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

     “High Performance Plan” has the meaning set forth in Section 4.9.A hereof.

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

 - 9 -

 

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

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

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

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

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

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

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

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

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

     “Liquidator” has the meaning set forth in Section 13.2 hereof.

     “Management Company” means Crescent Development Management Corp., a Texas corporation
that will provide management services to the Mira Vista Property, the Falcon Point Property, the
Huntington Woods Property, and certain other properties that may be acquired by the Partnership in
the future. The Partnership will own one (1) share of voting common stock and

 - 10 -

 

nine thousand eight hundred and ninety-nine (9,899) shares of nonvoting common stock of the
Management Company.

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

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

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

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

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

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

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

     “Nonrecourse Built-in Gain” means, with respect to any Contributed Properties or
Adjusted Properties that are subject to a mortgage or negative pledge securing a Nonrecourse
Liability, the amount of any taxable gain that would be allocated to the Partners pursuant to

 - 11 -

 

Section 2.B of Exhibit C if such properties were disposed of in a taxable transaction in full
satisfaction of such liabilities and for no other consideration.

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

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

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

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

     “Partner” means a General Partner or a Limited Partner, and “Partners” means
the General Partner and the Limited Partners.

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

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

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

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

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

     “Partnership Minimum Gain” has the meaning set forth in Regulations Section
1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as any net increase or decrease
in

 - 12 -

 

Partnership Minimum Gain, for a fiscal year shall be determined in accordance with the rules
of Regulations Section 1.704-2(d).

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

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

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

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

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

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

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

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

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

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

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

 - 13 -

 

     “Representative” has the meaning set forth in Section 7.12 hereof.

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

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

     “SEC” means the United States Securities and Exchange Commission.

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

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

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

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

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

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

     “Sonoma” means Rahn Sonoma, Ltd., a Florida limited partnership.

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

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

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

 - 14 -

 

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

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

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

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

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

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

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

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

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

     “Value” means, with respect to a REIT Share as of any date, the average of the
“closing price” for the ten (10) consecutive Trading Days immediately preceding such date (except
as provided to the contrary in Sections 4.2, 4.3 and 4.6 hereof). The “closing price” for each such
Trading Day means the last sale price, regular way on such day, or, if no such sale takes place on
that day, the average of the closing bid and asked prices on that day, regular way, in either case
as reported on the principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange, or if the REIT Shares are not so
listed or admitted to trading, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities exchange (including
the National Market System of the National Association of Securities Dealers, Inc. Automated
Quotation System) on which the REIT Shares are listed or admitted to trading or, if the REIT Shares
are not so listed or admitted to trading, the last quoted price or, if not quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System or, if such system is no

 - 15 -

 

longer in use, the principal automated quotation system then in use or, if the REIT Shares are
not so quoted by any such system, the average of the closing bid and asked prices as furnished by a
professional market maker selected by the board of directors of the General Partner making a market
in the REIT Shares, or, if there is no such market maker or such closing prices otherwise are not
available, the fair market value of the REIT Shares as of such day, as determined by the board of
directors of the General Partner in its sole discretion. In the event Crescent Equities issues to
all holders of REIT Shares rights, options, warrants or convertible or exchangeable securities
entitling the shareholders to subscribe for or purchase REIT Shares or any other property, then the
Value of a REIT Share shall include the value of such rights, as determined by the board of
directors of the General Partner acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate.

ARTICLE II

ORGANIZATIONAL MATTERS

     Section 2.1 Continuation of Partnership

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

     Section 2.2 Name

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

     Section 2.3 Principal Office and Registered Agent

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

 - 16 -

 

     Section 2.4 Power of Attorney

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

	 	(1)	 	execute, swear to, acknowledge, deliver, file and record in the
appropriate public offices (a) all certificates, documents and other
instruments (including, without limitation, the Certificate and all amendments
or restatements of this Agreement or the Certificate) that the General Partner
or the Liquidator deems appropriate or necessary to qualify or continue the
existence or qualification of the Partnership as a limited partnership (or a
partnership in which the limited partners have limited liability) in the State
of Delaware and in all other jurisdictions in which the Partnership may conduct
business or own property; (b) all instruments that the General Partner deems
appropriate or necessary to reflect any amendment, change, modification or
restatement of this Agreement made in accordance with its terms; (c) all
conveyances and other instruments or documents that the General Partner or
Liquidator, as the case may be, deems appropriate or necessary to reflect the
dissolution and liquidation of the Partnership pursuant to the terms of this
Agreement, including, without limitation, a certificate of cancellation; and
(d) all instruments relating to the Capital Contribution of any Partner or the
admission, withdrawal, removal or substitution of any Partner made pursuant to
the terms of this Agreement; and
	 
	 	(2)	 	execute, swear to, acknowledge and file all ballots, consents,
approvals, waivers, certificates and other instruments appropriate or
necessary, in the sole and absolute discretion of the General Partner, to make,
evidence, give, confirm or ratify any vote, consent, approval, agreement or
other action which is made or given by the Partners hereunder or is consistent
with the terms of this Agreement or appropriate or necessary, in the sole
discretion of the General Partner, to effectuate the terms or intent of this
Agreement.

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

          B. The foregoing power of attorney is hereby declared to be irrevocable and a power coupled
with an interest, in recognition of the fact that each of the Partners will be relying upon the
power of the General Partner to act as contemplated by this Agreement in any filing or other action
by it on behalf of the Partnership, and it shall survive and not be affected by the subsequent
Incapacity of any Limited Partner or the transfer of all or any portion of such Limited Partner’s
Partnership Interest and shall extend to such Limited Partner’s heirs, successors, assigns and
personal representatives. Each such Limited Partner hereby agrees to be bound by

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any representation made by the General Partner, acting in good faith pursuant to such power of
attorney; and each such Limited Partner hereby waives any and all defenses which may be available
to contest, negate or disaffirm the action of the General Partner, taken in good faith under such
power of attorney. Each Limited Partner shall execute and deliver to the General Partner or the
Liquidator, within fifteen (15) days after receipt of the General Partner’s or Liquidator’s request
therefor, such further designation, powers of attorney and other instruments as the General Partner
or the Liquidator, as the case may be, deems necessary to effectuate this Agreement and the
purposes of the Partnership.

     Section 2.5 Term 

     The term of the Partnership commenced on February 9, 1994, and shall continue in perpetuity
unless it is dissolved and required to be wound up pursuant to the provisions of Article 13, or as
required by the Act.

ARTICLE III

PURPOSE

     Section 3.1 Purpose and Business 

     The purpose and nature of the business to be conducted by the Partnership is (i) to conduct
any business that may be lawfully conducted by a limited partnership organized pursuant to the Act,
including, without limitation, to acquire, hold, own, develop, construct, improve, maintain,
operate, sell, lease, transfer, encumber, convey, exchange, and otherwise dispose of or deal with
real and personal property of all kinds; to acquire stock ownership interests in and to exercise
all of the powers of a stockholder in the Subsidiary Development Corporations and the Management
Company; (ii) to enter into any partnership, joint venture or other similar arrangement to engage
in any of the foregoing or the ownership of interests in any entity engaged in any of the
foregoing; and to exercise all of the powers of an owner in any such entity; and (iii) to do
anything necessary, appropriate, proper, advisable, desirable, convenient or incidental to the
foregoing; provided, however, that such business shall be limited to and conducted
in such a manner as to permit Crescent Equities at all times to qualify as a REIT, unless Crescent
Equities voluntarily terminates its REIT status pursuant to its Declaration of Trust. In connection
with the foregoing, and without limiting Crescent Equities’ right in its sole discretion to cease
qualifying as a REIT, the Partners acknowledge that Crescent Equities’ current status as a REIT
inures to the benefit of all the Partners and not solely the Crescent Group.

     Section 3.2 Powers 

     Subject to all of the terms, covenants, conditions and limitations contained in this Agreement
and any other agreement entered into by the Partnership, the Partnership shall have full power and
authority to do any and all acts and things necessary, appropriate, proper, advisable, desirable,
incidental to or convenient for the furtherance and accomplishment of the purposes and business
described herein and for the protection and benefit of the Partnership, including, without
limitation, full power and authority, directly or through its ownership interest in other entities,
to enter into, perform and carry out contracts of any kind, borrow money and

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issue evidences of indebtedness, whether or not secured by mortgage, deed of trust, pledge or
other lien, acquire and develop real property, and lease, sell, transfer or otherwise dispose of
real property; provided, however, that the Partnership shall not take, or refrain
from taking, any action which, in the judgment of General Partner, in its sole and absolute
discretion, (i) could adversely affect the ability of Crescent Equities to achieve or maintain
qualification as a REIT, (ii) could subject Crescent Equities to any additional taxes under Section
857 or Section 4981 of the Code, or (iii) could violate any law or regulation of any governmental
body or agency having jurisdiction over Crescent Equities or its securities, unless such action (or
inaction) shall have been specifically consented to by the General Partner in writing.

ARTICLE IV

CAPITAL CONTRIBUTIONS

Section 4.1 Capital Contributions of the Partners 

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

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

          C. The interest of each Limited Partner in Partnership Units may be evidenced by one or more
certificates in such form as the General Partner may from time to time prescribe. Upon surrender to
the General Partner of a certificate evidencing the ownership of Partnership Units accompanied by
proper evidence of authority to transfer, the General Partner shall cancel the old certificate,
issue a new certificate to the Person entitled thereto and record the transaction upon its books.
The transfer of Partnership Units may be effectuated only in connection with a transfer of a
Limited Partnership Interest pursuant to the terms of Section 8.6 or Article 11 hereof. The General
Partner may issue a new certificate or certificates in place of any certificate or certificates
previously issued, which previously-issued certificate or certificates are alleged to have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the owner claiming the
certificate or certificates to be lost, stolen or destroyed. When issuing such new certificate or
certificates, the General Partner may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates,
or its legal representative, to give the Partnership a bond in such sum as the General Partner may
direct as indemnity against any claim that may be made against the Partnership with respect to the
certificate or certificates alleged to have been lost, stolen or destroyed.

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     Section 4.2 Additional Funding 

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

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

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

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

 - 20 -

 

immediately preceding the Adjustment Date) and (ii) the amount of Contributed Funds
contributed by Crescent Equities on such Adjustment Date;

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

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

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

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

             (1) to the extent that the consideration given in exchange for such real property or interest
therein is in the form of indebtedness, Crescent Equities shall be deemed to

 - 21 -

 

have made a Crescent Loan to the Partnership pursuant to Section 4.2.A(1) hereof in an amount
equal to the amount of such indebtedness; and

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

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

     Section 4.3 Issuance of Additional Partnership Interests

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

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

 - 22 -

 

	 	 	 	Date) and (ii) the total dollar amount of the cash contributed and/or the
Net Asset Value of the property contributed by the Additional Limited
Partner as of the Contribution Date (with the Partnership Interest of the
General Partner remaining at one percent (1%), and the Partnership Interest
of Crescent Equities equal to the combined Partnership Interest determined
above in this Section 4.3(2), reduced by one percentage point (1%));
	 
	 	(3)	 	the Partnership Interest of each existing Limited Partner not
owning Partnership Units (other than Crescent Equities) shall be reduced, as of
the Contribution Date, such that the Partnership Interest of each such Limited
Partner shall be equal to a fraction, the numerator of which is equal to the
Deemed Partnership Interest Value of such Limited Partner (computed as of the
Business Day immediately preceding the Contribution Date) and the denominator
of which is equal to the sum of (i) the Deemed Value of the Partnership
(computed as of the Business Day immediately preceding the Contribution Date)
and (ii) the total dollar amount of the cash contributed and/or the Net Asset
Value of the property contributed by the Additional Limited Partner as of the
Contribution Date; and
	 
	 	(4)	 	The Partnership Interest of each existing Limited Partner
owning Partnership Units and of the Additional Limited Partner, if such
Additional Partner receives Partnership Units in connection with the receipt of
his or its Partnership Interest, shall be equal to the product of the
following: (i) the difference obtained from subtracting (x) the sum of the
combined Partnership Interest of Crescent Equities and the General Partner as
calculated in Section 4.3(2) hereof, plus the aggregate Non-Unitholder
Partnership Interests as calculated in Sections 4.2(1) and (3) hereof, from (y)
one hundred percent (100%), and (ii) a fraction, the numerator of which is
equal to the number of Partnership Units held by such Limited Partner on such
Contribution Date, and the denominator of which is equal to the total number of
Partnership Units held by all Limited Partners (including the Additional
Limited Partner) on such Contribution Date.

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

     The number of Partnership Units owned by the Limited Partners and Assignees shall not be
decreased in connection with any admission of an Additional Limited Partner pursuant to this
Section 4.3. The General Partner may (but is not required to) grant to an Additional Limited
Partner Partnership Units, which Partnership Units shall enable the Additional Limited Partner to
participate in the Exchange Rights, upon such terms and conditions as are deemed appropriate by the
General Partner. Notwithstanding anything to the contrary contained in this Agreement, if the value
of the Partnership Units granted to an Additional Limited Partner is determined based on

 - 23 -

 

the average of the “closing price” of a REIT Share for a period of time other than the ten
(10)-day period specified in the Article I definition of “Value” (including, without limitation, a
determination based on the “closing price” of a REIT Share for the Trading Day immediately
preceding the admission of such Additional Limited Partner), then such other time period shall be
used in calculating the “Value” of a REIT Share for purposes of calculating the “Deemed Value of
the Partnership” and the “Deemed Partnership Interest Value” under this Section 4.3 with respect to
the admission of such Additional Limited Partner.

     Section 4.4 No Preemptive Rights 

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

     Section 4.5 No Interest on Capital 

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

     Section 4.6 Stock Incentive Plans 

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

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

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

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

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

 - 24 -

 

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

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

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

     Section 4.7 Other Equity Compensation Plans 

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

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

          C. Upon any admission of an employee, agent or consultant of the Partnership or the Management
Company as an additional Limited Partner (an “Employee Limited Partner”) pursuant to Section 4.7.A
or 4.7.B above, the Partnership Interests of the other

 - 25 -

 

Partners shall be diluted, on a pro rata basis, in proportion to their respective Partnership
Interests, to reflect the admission of the Employee Limited Partner. Notwithstanding the foregoing,
the Partnership Interest of the General Partner shall not be diluted upon the admission of the
Employee Limited Partner; any dilution that would otherwise occur with respect to the Partnership
Interest of the General Partner in accordance with the terms of the preceding sentence shall be
allocated instead to Crescent Equities. The number of Partnership Units owned by the Limited
Partners and Assignees shall not be decreased in connection with any admission of an Employee
Limited Partner.

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

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

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

 - 26 -

 

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

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

          A. Series A Preferred Partnership Units. Pursuant to Section 8.7.C of the Agreement,
effective on February 19, 1998, the issuance date of the Series A Preferred Shares by Crescent
Equities, the Partnership issued 8,000,000 Series A Preferred Partnership Units to Crescent
Equities. On April 26, 2002, Crescent Equities issued an additional 2,800,000 Series A Preferred
Shares, and the Partnership issued an additional 2,800,000 Series A Preferred Partnership Units to
Crescent Equities. Crescent Equities shall have a zero percentage Partnership Interest with
respect to such Series A Preferred Partnership Units and shall have no voting rights other than the
right to vote on any amendment to this Agreement if such amendment would (i) convert the Series A
Preferred Partnership Units into a general partner’s interest, (ii) modify the limited liability of
Crescent Equities with respect to the Series A Preferred Partnership Units, or (iii) alter the
distribution, redemption, conversion or liquidation rights of the Series A Preferred Partnership
Units. The distribution rights of the Series A Preferred Partnership Units are set forth in
Section 5.6 below, the tax allocations with respect to the Series A Preferred Partnership Units are
set forth in Section 6.3 below, and the redemption and conversion rights of the Series A Preferred
Partnership Units are set forth in Sections 4.8.C and D below.

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

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

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

     Section 4.9 Issuance of Partnership Interests to Employees of the Crescent Group

          A. Pursuant to Section 4.7.D of the Agreement, the Partnership has adopted that certain 2004
Crescent Real Estate Equities Limited Partnership Special High Performance

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Long-Term Incentive Plan (the “High Performance Plan”) and that certain 2005 Crescent Real
Estate Equities Limited Partnership Long-Term Incentive Plan (the “2005 Incentive Plan”). Under
the High Performance Plan, the Partnership has issued (and may from time to time in the future
issue) Partnership Interests, including Partnership Units, to certain officers of the General
Partner, and under the 2005 Incentive Plan, the Partnership has issued (and may from time to time
in the future issue) Partnership Interests, including Partnership Units, to certain employees of
the General Partner or of Crescent Equities (such persons hereinafter referred to individually as a
“Grantee” and collectively as the “Grantees”) pursuant to separate grant agreements entitled “Grant
Agreement for Partnership Units and Partnership Interest” between the Partnership and each Grantee
(hereinafter referred to individually as a “Grant Agreement” and collectively as the “Grant
Agreements”).

          B. The Partnership Interests and associated Partnership Units issued to the Grantees shall
have the same benefits and obligations as other Partnership Interests and associated Partnership
Units, including without limitation voting rights and distribution rights, except as otherwise
expressly set forth in this Agreement or the Grant Agreements.

          C. Grantees may be subject to certain vesting requirements under the Grant Agreements.

          D. Grantees may be subject to certain conditions on the exercise of Exchange Rights with
respect to their Partnership Units under the Grant Agreements.

          E. Grantees may be subject to certain limitations on the amount payable to the Grantees in
connection with a transaction described in Section 11.2.B(1) under the Grant Agreements.

          F. Unless otherwise provided in the Grant Agreement, the initial Capital Contribution and
initial Capital Account balance of each Grantee with respect to the Partnership Interest awarded
under the Grant Agreement shall be zero.

          G. Each Grantee shall be entitled to receive distributions in accordance with the provisions
of this Agreement (including without limitation Article V and Section 13.2) with respect to the
vested portion of his or her Partnership Interest, commencing as of the date on which the portion
of the Partnership Interest is vested. A Grantee shall not be entitled to receive cash or in-kind
distributions under Section 5.2 with respect to the unvested portion of his or her Partnership
Interest. Upon the vesting of a Grantee’s Partnership Interest (or portion thereof), including
without limitation a vesting that occurs in connection with a transaction described in Section
11.2.B hereof or a dissolution of the Partnership, the Grantee shall be entitled to receive a
distribution from the Partnership in an amount equal to the aggregate distributions that would have
been payable to the Grantee under Section 5.2 with respect to such Partnership Interest (or portion
thereof) during the period from the date of grant to the vesting date if such Partnership Interest
(or portion thereof) had been vested on the date of grant.

          H. Each Grantee shall be allocated items of Partnership income, gain, loss and deduction with
respect to his or her Partnership Interest in accordance with the provisions of Article VI,
commencing as of the date on which the grant of the Partnership Interest is made to

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the Grantee. If the unvested portion of a Grantee’s Partnership Interest expires pursuant to
the terms of the Grant Agreement or is disclaimed by the Grantee, (1) the Grantee shall be
allocated items of gross deduction and loss in the taxable year during which such expiration or
disclaimer occurs in an amount sufficient to reduce to zero the Capital Account allocable to the
portion of the Grantee’s Partnership Interest that has expired or been disclaimed, and (2) the
Grantee shall be allocated no other items of Partnership income, gain, loss and deduction for such
taxable year or any future taxable year with respect to the expired or disclaimed portion of his or
her Partnership Interest. An expired or disclaimed Partnership Interest shall be treated for all
purposes of this Agreement as if it had been redeemed by the Partnership for no consideration,
effective as of the expiration or disclaimer date, as the case may be.

          I. The General Partner may (but shall not be required to) make tax distributions to the
Grantees with respect to the unvested portions of their Partnership Interests. Any tax
distributions to a Grantee with respect to a particular taxable year shall not exceed the lesser of
(1) an amount equal to the product of (x) the net taxable income allocated to such Grantee with
respect to his or her unvested Partnership Interest for such taxable year multiplied by forty-five
percent, and (2) the amount of distributions that the Grantee would have received under Article V
if his Partnership Interest were vested. Any tax distributions shall be made to the Grantees on a
pro rata basis, in proportion to the respective unvested Partnership Interests owned by each of the
Grantees. Tax distributions made under this Section 4.9.I shall be treated as advance payments of
the amounts that are distributable to the Grantees under the other provisions of this Agreement and
shall be offset against any such other amounts distributable to the Grantees.

          J. Upon any admission of a Grantee as an additional Limited Partner pursuant to this Section
4.9, the General Partner’s Partnership Interest shall remain unchanged, and the Partnership
Interests of Crescent Equities and the other Limited Partners shall be adjusted as set forth in
Section 4.3; provided that, (1) for purposes of calculating the “Deemed Value of the Partnership”
and the “Deemed Partnership Interest Value” under Section 4.3, the “Value” of a REIT Share shall be
the “closing price” (as such term is defined in the definition of the term “Value” in Article I
hereof) of a REIT Share as of the date on which the grant of the Partnership Interest is made to
the Grantee, and (2) the denominator used in the calculations under Section 4.3 shall be the sum of
(i) the Deemed Value of the Partnership plus (ii) an amount equal to the product of (x) the number
of Partnership Units granted to the Grantee, multiplied by (y) the Exchange Factor, multiplied by
(z) the “closing price” (as such term is defined in the definition of the term “Value” in Article I
hereof) of a REIT Share on the date on which the grant of the Partnership Interest is made to the
Grantee.

          K. Notwithstanding anything to the contrary contained in the penultimate sentence of Section
12.2B, each Grantee that receives a Partnership Interest under this Section 4.9 during December
2004 shall receive allocations under the second sentence of Section 12.2B as if such Grantee had
been admitted on the first day of December, 2004.

          L. The Partnership Interests and associated Partnership Units issued to Grantees shall be
identified in Exhibit A to this Agreement.

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          M. In addition to obtaining any required consent of the Grantees as Limited Partners to
certain amendments of the Agreement pursuant to the provisions of Section 14.1.C, the General
Partner shall be required to obtain the prior written consent of each Grantee adversely affected
prior to amending the provisions of this Section 4.9 or the provisions of Section 1.D of Exhibit B.

ARTICLE V

DISTRIBUTIONS

     Section 5.1 Initial Partnership Distributions 

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

     Section 5.2 Requirement and Characterization of Distributions 

     Subject to Section 4.9G above and Section 5.6 below, the General Partner shall cause the
Partnership to distribute quarterly all, or such portion deemed appropriate by the General Partner,
of Available Cash generated by the Partnership during such quarter to the Partners who are Partners
on the Partnership Record Date with respect to such quarter in accordance with their respective
Partnership Interests on such Partnership Record Date. The General Partner shall take such
reasonable efforts, as determined by it in its sole and absolute discretion and consistent with the
qualification of Crescent Equities as a REIT, to distribute Available Cash to the Limited Partners
so as to preclude any such distribution or portion thereof from being treated as part of a sale of
property to the Partnership by a Limited Partner under Section 707 of the Code or the Regulations
thereunder; provided that the General Partner and the Partnership shall not have
any liability to a Limited Partner under any circumstances as a result of any distribution to a
Limited Partner being so treated. Notwithstanding the foregoing, the General Partner shall use its
best efforts to cause the Partnership to distribute sufficient amounts to enable Crescent Equities
to pay shareholder dividends that will (i) allow Crescent Equities to achieve and maintain
qualification as a REIT, and (ii) avoid the imposition of any additional taxes under Section 857 or
Section 4981 of the Code.

     Section 5.3 Amounts Withheld 

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

     Section 5.4 Distributions In Kind 

     Pursuant to Section 17-605 of the Act, the General Partner has the authority to make in-kind
distributions of assets to the Partners. Any such distributions in kind shall be distributed

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among the Partners in the same manner as set forth in Section 5.2 with respect to Available
Cash (provided that distributions in kind made after commencement of the
liquidation of the Partnership shall be distributed to the Partners in accordance with Section
13.2). The General Partner shall determine the fair market value of any assets distributed in kind
using such reasonable method of valuation as it may adopt.

     Section 5.5 Distributions Upon Liquidation 

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

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

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

ARTICLE VI

ALLOCATIONS

     Section 6.1 Allocations For Capital Account Purposes 

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

          A. Net Income. After giving effect to the special allocations set forth in Section 1 of
Exhibit C, the allocations set forth in Section 4.9H above and the allocations set forth in Section
6.3 below, Net Income shall be allocated (i) first, to the General Partner to the extent that Net
Losses previously allocated to the General Partner pursuant to the last sentence of Section 6.1.B
exceed Net Income previously allocated to the General Partner pursuant to this clause (i) of
Section 6.1.A, and (ii) thereafter, Net Income shall be allocated to the Partners in accordance
with their respective Partnership Interests.

          B. Net Losses. After giving effect to the special allocations set forth in Section 1 of
Exhibit C, the allocations set forth in Section 4.9H above and the allocations set forth in Section
6.3 below, Net Losses shall be allocated to the Partners in accordance with their respective
Partnership Interests, provided that Net Losses shall not be allocated to any
Limited

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Partner pursuant to this Section 6.1.B to the extent that such allocation would cause such
Limited Partner to have an Adjusted Capital Account Deficit at the end of such taxable year (or
increase any existing Adjusted Capital Account Deficit). All Net Losses in excess of the
limitations set forth in this Section 6.1.B shall be allocated to the General Partner.

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

     Section 6.2 Allocation of Nonrecourse Debt 

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

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

     Notwithstanding Sections 6.1.A and B above, after giving effect to the special allocations set
forth in Section 1 of Exhibit C to this Agreement and the allocations set forth in Section 4.9H
above:

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

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

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funds to pay the aforementioned liquidation preferences in full), (B) second, to the Grantees,
in the amounts necessary, and in the ratio of such amounts, so as to cause the Capital Account
balance of each Grantee to equal the Deferred Distribution Amount, if any, of such Grantee, (C)
third, to the Partners in the amounts necessary, and in the ratio of such amounts, to cause the
Capital Account balance of Crescent Equities in excess of the Liquidation Preferences, the Capital
Account balance of each Grantee in excess of his or her Deferred Distribution Amount, if any, and
the Capital Account of each other Partner to be in the same ratio as their respective Partnership
Interests, and (D) thereafter, to all of the Partners in proportion to their respective Partnership
Interests.

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

          D. The provisions of Sections 6.3.B and 6.3.C above, which provide for a special allocation of
gain and loss from a sale or other disposition of all or substantially all of the assets of the
Partnership, shall continue to apply for the entire term of the Partnership, even if there are no
longer any Series A Preferred Partnership Units or Series B Redeemable Preferred Partnership Units
outstanding (in such event, the Liquidation Preferences of Crescent Equities under Sections 6.3.B
and 6.3.C shall be zero).

ARTICLE VII

MANAGEMENT AND OPERATIONS OF BUSINESS

     Section 7.1 Management 

          A. Except as otherwise expressly provided in this Agreement, all management powers over the
business and affairs of the Partnership are exclusively vested in the General Partner, and no
Limited Partner shall have any right to participate in or exercise control or management power over
the business and affairs of the Partnership. The General Partner may not be removed by the Limited
Partners with or without cause. In addition to the powers now or hereafter granted a general
partner of a limited partnership under applicable law or which are granted to the General Partner
under any other provision of this Agreement, the General Partner, subject to Section 7.3 hereof,
shall have full power and authority to do all things and perform all

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acts specified in this Agreement or otherwise deemed necessary or desirable by it to conduct
the business of the Partnership, to exercise all Partnership powers set forth in Section 3.2 hereof
and to effectuate the Partnership purposes set forth in Section 3.1 hereof (to the extent
consistent with allowing Crescent Equities at all times to qualify as a REIT, unless Crescent
Equities voluntarily terminates its REIT status pursuant to the Declaration of Trust), including,
without limitation, to:

	 	(1)	 	acquire interests in real or personal property of any kind and
type, and any and all kinds of interests therein, and determine the manner in
which title thereto is to be held; manage, insure against loss, protect and
subdivide any such property; improve, develop or redevelop any such property;
dedicate for public use, vacate any such property subdivisions or parts
thereof, or resubdivide such property or any part thereof; lease, renew or
extend leases, amend, change or modify the terms and provisions of leases, and
grant options to lease and options to renew leases and options to purchase;
partition, sell or otherwise dispose of all or any portion of such property;
exchange all or any portion of such property for other real or personal
property; grant easements or charges of any kind; release, convey or assign any
right, title or interest in or about or easement appurtenant to such property
or any part thereof; construct and reconstruct, remodel, alter, repair, add to
or take from buildings on such property; insure any Person having an interest
in or responsibility for the care, management or repair of such property;
direct the trustee of any land trust to mortgage, lease, convey or contract to
convey the real estate held in such land trust or to execute and deliver deeds,
mortgages, notes, and any and all documents pertaining to the property subject
to such land trust or in any matter regarding such trust; and execute
assignments of all or any part of the beneficial interest in such land trust;
	 
	 	(2)	 	employ, engage or contract with or dismiss from employment or
engagement Persons to the extent deemed necessary by the General Partner for
the operation and management of the Partnership business, including, but not
limited to, employees, including employees having such titles as the General
Partner may from time to time specify, such as “chairman of the board,” “chief
executive officer,” chief operating officer,” “president,” “vice president,”
“secretary,” “treasurer”; contractors; subcontractors; engineers; architects;
surveyors; mechanics; consultants; accountants; attorneys; insurance brokers;
real estate brokers; and others;
	 
	 	(3)	 	make expenditures, borrow money, procure loans and advances
from any Person for Partnership purposes (including, without limitation, borrow
money to permit the Partnership to make distributions in such amounts as will
permit Crescent Equities (so long as Crescent Equities elects to qualify as a
REIT) to avoid the payment of any federal income tax (including, for this
purpose, any excise tax pursuant to Section 4981 of the Code) and to make
distributions to its shareholders sufficient to permit Crescent Equities to
maintain REIT status) and apply for and secure, from

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	 	 	 	any Person, credit or accommodations; contract, assume or guarantee
liabilities and obligations, direct or contingent and of every kind and
nature with or without security; and repay, prepay, discharge, settle,
adjust, compromise, or liquidate any such loan, advance, credit, obligation
or liability;
	 
	 	(4)	 	pledge, hypothecate, mortgage, assign, deposit, deliver, enter
into sale and leaseback arrangements or otherwise give as security or as
additional or substitute security, any and all Partnership property, tangible
or intangible, including, but not limited to, real estate and beneficial
interests in land trusts, and make substitutions thereof, and receive any
proceeds thereof upon the release or surrender thereof; sign, execute and
deliver any and all assignments, deeds and other contracts and instruments in
writing; authorize, give, make, procure, accept and receive moneys, payments,
property, notices, demands, vouchers, receipts, releases, compromises and
adjustments; waive notices, demands, protests and authorize and execute waivers
of every kind and nature; negotiate, execute, deliver and receive written
agreements, undertakings and instruments of every kind and nature; give oral
instructions and make oral agreements; and generally to do any and all other
acts and things incidental to any of the foregoing;
	 
	 	(5)	 	acquire and enter into any contract of insurance which the
General Partner deems necessary or appropriate for the protection of the
Partnership and the Partners, for the conservation of the Partnership’s assets
or for any purpose convenient or beneficial to the Partnership;
	 
	 	(6)	 	conduct any and all banking transactions on behalf of the
Partnership; adjust and settle checking, savings, and other accounts with such
institutions as the General Partner shall deem appropriate; draw, sign,
execute, accept, endorse, guarantee, deliver, receive and pay any checks,
drafts, bills of exchange, acceptances, notes, obligations, undertakings and
other instruments for or relating to the payment of money in, into, or from any
account in the Partnership’s name; execute, procure, consent to and authorize
extensions and renewals of the same; and make deposits and withdraw the same
and negotiate or discount commercial paper, acceptances, negotiable
instruments, bills of exchange and dollar drafts;
	 
	 	(7)	 	demand, sue for, receive, and otherwise take steps to collect
or recover all debts, rents, proceeds, interests, dividends, goods, chattels,
income from property, damages and all other property, to which the Partnership
may be entitled or which are or may become due the Partnership from any Person;
commence, prosecute or enforce, or defend, answer or oppose, contest and
abandon all legal proceedings in which the Partnership is or may hereafter be
interested; settle, compromise or submit to arbitration any accounts, debts,
claims, disputes and matters which may arise between the Partnership and any
other Person and grant an extension of time for the payment or satisfaction
thereof on any terms, with or without security; and

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	 	 	 	indemnify any Indemnitees against liabilities and contingencies in
accordance with the provisions of Section 7.7 of this Agreement or
otherwise;
	 
	 	(8)	 	take all reasonable measures necessary to insure compliance by
the Partnership with applicable laws, and other contractual obligations and
arrangements entered into by the Partnership from time to time in accordance
with the provisions of this Agreement, including periodic reports as required
to lenders; and use all due diligence to insure that the Partnership is in
compliance with its contractual obligations;
	 
	 	(9)	 	form, acquire a debt or equity ownership interest in, and
contribute or loan property to, any further corporations, limited or general
partnerships, joint ventures, real estate investment trusts, or other entities
upon such terms and conditions as General Partner deems appropriate;
	 
	 	(10)	 	invest assets of the Partnership on a temporary basis in
commercial paper, government securities, checking or savings accounts, money
market funds, or any other highly liquid investments deemed appropriate by the
General Partner; make loans, including participating or convertible loans, to
other Persons (including, without limitation, the Subsidiary Development
Corporation(s) and the Management Company) upon such terms and conditions, and
for such security, as deemed appropriate by the General Partner; repay
obligations of any Person in which the Partnership has an equity investment
(including, without limitation, the Subsidiary Development Corporation(s) and
the Management Company); and purchase existing debt obligations held by other
Persons, including participating or convertible debt obligations, upon such
terms and conditions, and for such security, as deemed appropriate by the
General Partner;
	 
	 	(11)	 	negotiate, execute and perform any contracts, conveyance or
other instruments that the General Partner considers useful or necessary to the
conduct of the Partnership’s operations or the implementation of the General
Partner’s powers under this Agreement;
	 
	 	(12)	 	distribute Partnership cash or other assets in accordance with
this Agreement;
	 
	 	(13)	 	maintain the Partnership’s books and records;
	 
	 	(14)	 	prepare and deliver all financial, regulatory, tax and other
filings or reports to governmental or other agencies having jurisdiction over
the Partnership; and
	 
	 	(15)	 	take any action in connection with the Partnership’s direct or
indirect investment in any other Person.

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

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

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

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

     Section 7.2 Certificate of Limited Partnership 

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

     Section 7.3 Restrictions on General Partner’s Authority 

     The General Partner shall not have the authority to:

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

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

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

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

     Section 7.4 Reimbursement of the Crescent Group 

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

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

     Section 7.5 Outside Activities of the Crescent Group 

     The Crescent Group shall not directly or indirectly enter into or conduct any business, other
than in connection with the ownership, acquisition and disposition of Partnership Interests and the
management of the business of the Partnership, and such activities as are incidental thereto. The
Crescent Group shall not own any assets other than Partnership Interests in the Partnership, and
such bank accounts or similar instruments as it deems necessary to carry out its responsibilities
contemplated under this Agreement and the Declaration of Trust. The Crescent

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Group shall not borrow funds for the purpose of making distributions to the shareholders of
any member of the Crescent Group unless such borrowing is effectuated through the Partnership.
Notwithstanding anything to the contrary contained above in this Section 7.5, (1) Crescent Equities
may form additional direct or indirect wholly owned subsidiary entities to serve as general
partners of partnerships or managing members of limited liability companies in which the
Partnership also owns a direct or indirect ownership interest, provided that (i)
the General Partner determines that the formation of the subsidiary entities is necessary or
appropriate to further the business objectives of the Partnership and (ii) the subsidiary entities
(a) make capital contributions in exchange for their ownership interests in the partnerships and
limited liability companies on a pro rata basis with the Partnership and (b) do not own more than
one percent (1%) of the total ownership interests in any such partnership or limited liability
company, and (2) the Crescent Group may own such other assets as the General Partner determines are
necessary and appropriate to further the business interests of the Partnership, upon such terms and
conditions as the General Partner determines are necessary and appropriate to protect the interests
of the Partnership.

     Section 7.6 Contracts with Affiliates 

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

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

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

     Section 7.7 Indemnification 

          A. The Partnership shall indemnify each Indemnitee from and against any and all losses,
claims, damages, liabilities, joint or several, expenses (including, without limitation, attorneys’
fees and other legal fees and expenses), judgments, fines, settlements, and other amounts arising
from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or
investigative, that relate to the operations of the Partnership as set forth in this Agreement in
which such Indemnitee may be involved, or is threatened to be involved, as a party or otherwise,
unless it is established that: (i) the act or omission of the Indemnitee was material to the matter
giving rise to the proceedings and either was committed in

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bad faith or was the result of active and deliberate dishonesty; (ii) the Indemnitee actually
received an improper personal benefit in money, property or services; or (iii) in the case of any
criminal proceeding, the Indemnitee had reasonable cause to believe that the act or omission was
unlawful. Without limitation, the foregoing indemnity shall extend to any liability of any
Indemnitee, pursuant to a loan guaranty or otherwise, for any indebtedness of the Partnership or
any subsidiary entity (including, without limitation, any indebtedness which the Partnership or any
subsidiary entity has assumed or taken subject to), and the General Partner is hereby authorized
and empowered, on behalf of the Partnership, to enter into one or more indemnity agreements
consistent with the provisions of this Section 7.7 in favor of any Indemnitee having or potentially
having liability for any such indebtedness. The termination of any proceeding by judgment, order or
settlement does not create a presumption that the Indemnitee did not meet the requisite standard of
conduct set forth in this Section 7.7.A. The termination of any proceeding by conviction of an
Indemnitee or upon a plea of nolo contendre or its equivalent by an Indemnitee, or an entry of an
order of probation against an Indemnitee prior to judgment, creates a rebuttable presumption that
such Indemnitee acted in a manner contrary to that specified in this Section 7.7.A with respect to
the subject matter of such proceeding.

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

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

          D. If a claim under Sections 7.7.A, 7.7.B or 7.7.C is not paid in full by the Partnership
within thirty (30) calendar days after a written claim has been received by the Partnership, the
Indemnitee making such claim may at any time thereafter (but prior to payment of the claim) bring
suit against the Partnership to recover the unpaid amount of the claim and, if successful, in whole
or in part, such Indemnitee shall be entitled to be paid also the expense of prosecuting such
claim. It shall be a defense to any such action (other than an action brought to enforce a claim
for expenses incurred in defending any proceeding in advance of its final disposition where the
required undertaking, if any, has been tendered to the Partnership) that the Indemnitee has not met
the standards of conduct set forth above which make it permissible for

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the Partnership to indemnify the Indemnitee for the amount claimed, but the burden of proving
such defense shall be on the Partnership. Neither the failure of the Partnership to have made a
determination prior to the commencement of such action that indemnification of the Indemnitee is
proper in the circumstances because he or she has met the applicable standard of conduct set forth
herein nor an actual determination by the Partnership that the Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a presumption that the
Indemnitee has not met the applicable standard of conduct.

          E. Following any “change in control” of Crescent Equities of the type required to be reported
under Item 1 of Form 8-K promulgated under the Exchange Act, any determination as to entitlement to
indemnification shall be made by independent legal counsel selected by the Indemnitee, which such
independent legal counsel shall be retained by the General Partner on behalf of the Partnership and
at the expense of the Partnership.

          F. The right to indemnification and the payment of expenses incurred in defending a proceeding
in advance of its final disposition conferred in this Section 7.7 shall not be exclusive of any
other right which any person may have or hereafter acquire under any statute or agreement, or
pursuant to any vote of the Partners, or otherwise.

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

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

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

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

          K. The provisions of this Section 7.7 are for the benefit of the Indemnitees, their heirs,
successors, assigns, executors and administrators, and shall not be deemed to create any rights for
the benefit of any other Person. Any amendment, modification or repeal of this

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Section 7.7 or any provision hereof shall be prospective only and shall not in any way affect
the limitations on the Partnership’s liability to any Indemnitee under this Section 7.7 as in
effect immediately prior to such amendment, modification or repeal with respect to claims arising
from or relating to matters occurring, in whole or in part, prior to such amendment, modification
or repeal, regardless of when such claims may arise or be asserted.

     Section 7.8 Liability of the General Partner 

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

          B. The Limited Partners expressly acknowledge that the General Partner is acting on behalf of
the Partnership and the shareholders of Crescent Equities collectively, that the General Partner is
under no obligation to consider the separate interests of the Limited Partners (including, without
limitation, the tax consequences to Limited Partners) in deciding whether to cause the Partnership
to take (or decline to take) any actions, and that the General Partner shall not be liable to the
Partnership or to any Partner for monetary damages for losses sustained, liabilities incurred, or
benefits not derived by Limited Partners in connection with such decisions, provided
that the General Partner has acted in good faith.

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

          D. Any amendment, modification or repeal of this Section 7.8 or any provision hereof shall be
prospective only and shall not in any way affect the limitations on the General Partner’s liability
to the Partnership and the Limited Partners under this Section 7.8 as in effect immediately prior
to such amendment, modification or repeal with respect to claims arising from or relating to
matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless
of when such claims may arise or be asserted.

     Section 7.9 Other Matters Concerning the General Partner 

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

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

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

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

     Section 7.10 Title to Partnership Assets 

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

     Section 7.11 Reliance by Third Parties 

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

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was in full force and effect, (ii) the Person executing and delivering such certificate,
document or instrument was duly authorized and empowered to do so for and on behalf of the
Partnership, and (iii) such certificate, document or instrument was duly executed and delivered in
accordance with the terms and provisions of this Agreement and is binding upon the Partnership.

     Section 7.12 Limited Partner Representatives 

     Any Limited Partner may (but shall not be required to) appoint a representative (the
“Representative”) who shall have full power and authority to exercise all rights, including consent
rights, of such Limited Partner under this Agreement. Any such appointment shall be made in a
writing delivered by the Limited Partner to the General Partner. The same Person may serve as
Representative for more than one Limited Partner. Any action taken by a Representative on behalf of
a Limited Partner shall be fully binding on such Limited Partner. The General Partner shall be
entitled to rely on the actions taken by a Representative without further evidence of its authority
or further action by the Limited Partner who appointed such Representative. Any appointment of a
Representative shall remain effective until rescinded in a writing delivered by the Limited Partner
to the General Partner. A Limited Partner may revoke its designation of a Representative, or
replace a designated Representative with a different Representative, at any time by delivering
written notice of such action to the General Partner.

ARTICLE VIII

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

     Section 8.1 Limitation of Liability 

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

     Section 8.2 Management of Business 

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

     Section 8.3 Outside Activities of Limited Partners 

     Subject to Section 7.5 hereof, and subject to any agreements entered into pursuant to Section
7.6.C hereof and any other agreements entered into by a Limited Partner or its Affiliates with the
Partnership, any Limited Partner and any officer, director, employee, agent, trustee, Affiliate or
shareholder of any Limited Partner shall be entitled to and may have business interests and engage
in business activities in addition to those relating to the Partnership, including business
interests and activities in direct competition with the Partnership. Neither the

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Partnership nor any Partners shall have any rights by virtue of this Agreement in any business
ventures of any Limited Partner. None of the Limited Partners nor any other Person shall have the
rights by virtue of this Agreement or the partnership relationship established hereby in any
business ventures of any other Person, other than the Crescent Group, and such Person shall have no
obligation pursuant to this Agreement to offer any interest in any such business ventures to the
Partnership, any Limited Partner or any such other Person, even if such opportunity is of a
character which, if presented to the Partnership, any Limited Partner or such other Person, could
be taken by such Person.

     Section 8.4 Return of Capital 

     Except pursuant to the Exchange Rights set forth in Section 8.6, no Limited Partner shall be
entitled to the withdrawal or return of his Capital Contribution, except to the extent of
distributions made pursuant to this Agreement or upon termination of the Partnership as provided
herein. No Limited Partner shall have priority over any other Limited Partner either as to the
return of Capital Contributions or, except to the extent provided by Exhibit C hereof or as
permitted by Section 8.7.C, or otherwise expressly provided in this Agreement, as to profits,
losses or distributions.

     Section 8.5 Rights of Limited Partners Relating to the Partnership 

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

	 	(1)	 	to obtain a copy of the Partnership’s federal, state and local
income tax returns for each fiscal year;
	 
	 	(2)	 	to obtain a current list of the name and last known business,
residence or mailing address of each Partner; provided,
however, that the General Partner may require, as a condition of
providing such list to the Limited Partner, that the Limited Partner confirm in
writing to the General Partner that the names of the Partners and other
information provided by the list will be held in strictest confidence and no
distribution of the list will be made;
	 
	 	(3)	 	to obtain a copy of this Agreement and the Certificate, and all
amendments to the Agreement and the Certificate, together with executed copies
of all powers of attorney pursuant to which this Agreement, the Certificate and
all amendments to the Agreement and the Certificate have been executed; and
	 
	 	(4)	 	to obtain true and full information regarding the amount of
cash and a description and statement of any other property or services
contributed by each Partner and which each Partner has agreed to contribute in
the future, and the date on which each became a Partner.

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

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

     Section 8.6 Exchange Rights 

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

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

     Section 8.7 Covenants Relating to the Exchange Rights

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

          B. As long as Crescent Equities shall be obligated to file periodic reports under the Exchange
Act, Crescent Equities shall use its best efforts to file such reports in such manner as shall
enable any recipient of REIT Shares issued pursuant to Section 8.6 in reliance upon an exemption
from registration under the Securities Act to continue to be eligible to utilize

 - 47 -

 

Rule 144 promulgated by the SEC pursuant to the Securities Act, or any successor rule or
regulation or statute thereunder, for the resale thereof.

          C. Crescent Equities shall not issue any additional REIT Shares (other than REIT Shares
contemplated by Sections 4.2 and 8.6 and REIT Shares issued pursuant to a Stock Incentive Plan)
other than on a pro rata basis to all holders of REIT Shares. Crescent Equities shall not issue any
preferred stock or rights, options, warrants or convertible or exchangeable securities containing
the right to subscribe for or purchase REIT Shares (“New Securities”) other than to all holders of
REIT Shares unless (i) the General Partner shall cause the Partnership to issue to Crescent
Equities preferred equity ownership interests or rights, options, warrants or convertible or
exchangeable securities of the Partnership (“New Interests”) having designations, preferences and
other rights, all such that the economic interests are substantially similar to those of the New
Securities, and (ii) Crescent Equities contributes the proceeds from the issuance of such New
Securities and from the exercise of rights contained in such New Securities to the Partnership. The
Partners hereby acknowledge and agree that the proceeds received by Crescent Equities in exchange
for the issuance of New Securities may be cash or real property or an interest therein. If any New
Securities are subsequently converted or exchanged for REIT Shares, (i) Crescent Equities shall, as
of the date on which the conversion or exchange is consummated, be deemed to have contributed to
the Partnership as Contributed Funds pursuant to Section 4.2.A(2) hereof an amount equal to the
Value (computed as of the Business Day immediately preceding the date on which such conversion or
exchange of the New Securities is consummated) of the REIT Shares delivered by Crescent Equities to
such holder of New Securities, and (ii) the Partnership Interests of Crescent Equities and the
other Limited Partners shall be adjusted as set forth in Section 4.2. The number of Partnership
Units held by the Limited Partners shall not be decreased in connection with the issuance of any
New Securities or in connection with any subsequent conversion or exchange of any New Securities
for REIT Shares.

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

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

     Section 8.8 Other Matters Relating to the Exchange Rights 

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

          B. Upon any transfer of Partnership Units by an Exchanging Person to Crescent Equities
pursuant to Section 8.6 above, the Partnership Interest of such Limited Partner

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

ARTICLE IX

BOOKS, RECORDS, ACCOUNTING AND REPORTS

     Section 9.1 Records and Accounting 

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

     Section 9.2 Fiscal Year 

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

     Section 9.3 Reports

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

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ARTICLE X

TAX MATTERS

     Section 10.1 Preparation of Tax Returns 

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

     Section 10.2 Tax Elections 

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

     Section 10.3 Tax Matters Partner 

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

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

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

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	 	(2)	 	in the event that a notice of a final administrative adjustment
at the Partnership level of any item required to be taken into account by a
Partner for tax purposes (a “final adjustment”) is mailed to the tax matters
partner, to seek judicial review of such final adjustment, including the filing
of a petition for readjustment with the Tax Court or the United States Claims
Court, or the filing of a complaint for refund with the District Court of the
United States for the district in which the Partnership’s principal place of
business is located;
	 
	 	(3)	 	to intervene in any action brought by any other Partner for
judicial review of a final adjustment;
	 
	 	(4)	 	to file a request for an administrative adjustment with the IRS
at any time and, if any part of such request is not allowed by the IRS, to file
an appropriate pleading (petition or complaint) for judicial review with
respect to such request;
	 
	 	(5)	 	to enter into an agreement with the IRS to extend the period
for assessing any tax which is attributable to any item required to be taken
into account by a Partner for tax purposes, or an item affected by such item;
and
	 
	 	(6)	 	to take any other action on behalf of the Partners of the
Partnership in connection with any tax audit or judicial review proceeding to
the extent permitted by applicable law or regulations.

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

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

     Section 10.4 Organizational Expenses 

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

     Section 10.5 Withholding 

     Each Limited Partner hereby authorizes the Partnership to withhold from or pay on behalf of or
with respect to such Limited Partner any amount of federal, state, local, or foreign taxes that the
General Partner determines that the Partnership is required to withhold or pay with respect to any
amount distributable or allocable to such Limited Partner pursuant to this

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Agreement, including, without limitation, any taxes required to be withheld or paid by the
Partnership pursuant to Sections 1441, 1442, 1445, or 1446 of the Code. Any amount paid on behalf
of or with respect to a Limited Partner shall constitute a loan by the Partnership to such Limited
Partner, which loan shall be repaid by such Limited Partner within fifteen (15) days after notice
from the General Partner that such payment must be made unless (i) the Partnership withholds such
payment from a distribution which would otherwise be made to the Limited Partner, or (ii) the
General Partner determines, in its sole and absolute discretion, that such payment may be satisfied
out of the available funds of the Partnership which would, but for such payment, be distributed to
the Limited Partner. Any amounts withheld pursuant to the foregoing clauses (i) or (ii) shall be
treated as having been distributed to such Limited Partner. Each Limited Partner hereby
unconditionally and irrevocably grants to the Partnership a security interest in such Limited
Partner’s Partnership Interest to secure such Limited Partner’s obligation to pay to the
Partnership any amounts required to be paid pursuant to this Section 10.5. In the event that a
Limited Partner fails to pay any amounts owed to the Partnership pursuant to this Section 10.5 when
due, the General Partner may, in its sole and absolute discretion, elect to make the payment to the
Partnership on behalf of such defaulting Limited Partner, and in such event shall be deemed to have
loaned such amount to such defaulting Limited Partner and, until repayment of such loan, shall
succeed to all rights and remedies of the Partnership as against such defaulting Limited Partner
(including, without limitation, the right to receive distributions). Any amounts payable by a
Limited Partner hereunder shall bear interest at the base rate on corporate loans at large United
States money center commercial banks, as published from time to time in the Wall Street
Journal, plus four percentage points (but not higher than the maximum lawful rate) from the
date such amount is due (i.e., fifteen (1 5) days after demand) until such amount is paid
in full. Each Limited Partner shall take such actions as the Partnership or the General Partner
shall request in order to perfect or enforce the security interest created hereunder.

ARTICLE XI

TRANSFERS AND WITHDRAWALS

     Section 11.1 Transfer 

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

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

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     Section 11.2 Transfer of Partnership Interests of the General Partner 

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

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

	 	(1)	 	includes a merger of the Partnership or sale of substantially
all of the assets of the Partnership, as a result of which all Limited Partners
will receive for each Partnership Unit an amount of cash, securities, or other
property equal to the product of the Exchange Factor and the greatest amount of
cash, securities or other property paid to a holder of one REIT Share in
consideration of one REIT Share at any time during the period from and after
the date on which the Transaction is consummated, provided that
if, in connection with the Transaction, a purchase, tender or exchange offer
shall have been made to and accepted by the holders of more than fifty percent
(50%) of the outstanding REIT Shares, the holders of Partnership Units shall
receive the greatest amount of cash, securities, or other property which a
Limited Partner would have received had it exercised the Exchange Right and
received REIT Shares in exchange for all of its Partnership Units immediately
prior to the expiration of such purchase, tender or exchange offer; or
	 
	 	(2)	 	provides that the Partnership shall continue as a separate
entity and grants to the Limited Partners exchange rights with respect to the
ownership interests in the new entity that are substantially equivalent to the
Exchange Rights provided for in Section 8.6.

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

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

          A. Subject to the provisions of Sections 11.3.C, 11.3.D, 11.3.E, 11.3.F and 11.3.G hereof, any
Limited Partner other than Crescent Equities may freely transfer all or any portion of its
Partnership Interest. Any transferee of a Limited Partnership Interest (whether such transferee is
a Substituted Limited Partner or an Assignee) shall also become the owner of any

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Partnership Units associated with such Limited Partnership Interest, and shall be entitled to
exercise the Exchange Rights with respect to such Partnership Units in accordance with the terms
and conditions set forth in Section 8.6 above.

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

          C. The General Partner may prohibit any transfer otherwise permitted under this Section 11.3
by a Limited Partner of its Partnership Interest if, in the opinion of legal counsel to the
Partnership, such transfer would require filing of a registration statement under the Securities
Act or would otherwise violate any federal or state securities laws or regulations applicable to
the Partnership or the Partnership Interest.

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

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

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

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     Section 11.4 Substituted Limited Partners 

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

          B. A transferee who has been admitted as a Substituted Limited Partner in accordance with this
Article 11 shall have all the rights and powers and be subject to all the restrictions and
liabilities of a Limited Partner under this Agreement. The admission of any transferee as a
Substituted Limited Partner shall be subject to the transferee executing and delivering to the
Partnership an acceptance of all of the terms and conditions of this Agreement (including, without
limitation, the provisions of Section 2.4) and such other documents or instruments as may be
required to effect the admission.

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

     Section 11.5 Assignees 

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

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     Section 11.6 General Provisions 

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

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

          C. If any Partnership Interest is exchanged pursuant to Section 8.6 or transferred pursuant to
this Article 11 at any time other than the end of a fiscal year, Net Income, Net Loss, each item
thereof and all other items attributable to such interest for such fiscal year shall be allocated
between the transferor Partner and the transferee Partner in the same ratio as the number of days
in such fiscal year before and after such transfer, except that gain or loss attributable to the
sale or other disposition of all or any substantial portion of the Partnership assets or to other
extraordinary non-recurring items shall be allocated to the owner of the Partnership Interest as of
the date of closing of the sale or other disposition, or, with respect to other extraordinary
non-recurring items, the date the profit is realized or the loss is incurred, as the case may be.
Solely for purposes of the allocations to be made under the preceding sentence (but not for any
other purpose), (i) any Partnership Interest that is exchanged or otherwise transferred prior to
the eighth day of a month shall receive allocations under the preceding sentence as if it had been
transferred on the first day of the month, (ii) any Partnership Interest that is exchanged or
otherwise transferred on or after the eighth day of a month and prior to the twenty-third day of
such month shall receive allocations under the preceding sentence as if it had been transferred on
the fifteenth day of the month, and (iii) any Partnership Interest that is exchanged or otherwise
transferred on or after the twenty-third day of a month shall receive allocations under the
preceding sentence as if it had been transferred on the first day of the next succeeding month. All
distributions of Available Cash with respect to which the Partnership Record Date is before the
date of such transfer or exchange shall be made to the transferor Partner, and all distributions of
Available Cash thereafter shall be made to the transferee Partner.

     Section 11.7 Acquisition of Partnership Interest by Partnership 

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

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ARTICLE XII

ADMISSION OF PARTNERS

     Section 12.1 Admission of Substituted General Partner 

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

     Section 12.2 Admission of Additional or Employee Limited Partners 

          A. After the admission to the Partnership of the Limited Partners on the date hereof, a Person
who makes a Capital Contribution to the Partnership in accordance with Section 4.3 hereof or
receives a Limited Partnership Interest pursuant to Section 4.7 hereof shall be admitted to the
Partnership as an Additional Limited Partner or Employee Limited Partner, as the case may be, only
upon furnishing to the General Partner (i) evidence of acceptance in form satisfactory to the
General Partner of all of the terns and conditions of this Agreement, including, without
limitation, the power of attorney granted in Section 2.4 hereof, and (ii) such other documents or
instruments as may be required in the discretion of the General Partner in order to effect such
Person’s admission as an Additional Limited Partner or Employee Limited Partner, as the case may
be. The admission of any Person as an Additional Limited Partner or Employee Limited Partner, as
the case may be, shall become effective on the date upon which the name of such Person is recorded
on the books and records of the Partnership, following the consent of the General Partner to such
admission.

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

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month shall receive allocations under the preceding sentence as if such Partner had been
admitted on the fifteenth day of the month, and (iii) any Additional Limited Partner or Employee
Limited Partner that is admitted to the Partnership on or after the twenty-third day of a month
shall receive allocations under the preceding sentence as if such Partner had been admitted on the
first day of the next succeeding month. All distributions of Available Cash with respect to which
the Partnership Record Date is before the date of admission of such Additional Limited Partner or
Employee Limited Partner shall be made solely to Partners other than the Additional Limited Partner
or Employee Limited Partner, and all distributions of Available Cash thereafter shall be made to
all Partners including the Additional Limited Partner or Employee Limited Partner.

          C. Greenbrier has executed and delivered to the General Partner the Greenbrier Agreement. The
General Partner, exercising its discretion pursuant to Section 12.2.A hereof, hereby agrees that
the Greenbrier Agreement is the sole document required to effectuate the admission to the
Partnership of Greenbrier as an Additional Limited Partner. The Greenbrier Agreement contains an
“evergreen” provision so that it shall be deemed reexecuted and delivered to the General Partner by
Greenbrier if, as and whenever it shall acquire future installments of Partnership Units under the
Consultant Unit Agreement if, prior to the acquisition of any such future installment, it shall
have exchanged all of its Partnership Units and consequently ceased to be a Limited Partner
pursuant to Section 11.6.B hereof. Accordingly, if, as and whenever Greenbrier receives Partnership
Units pursuant to the terms of the Consultant Unit Agreement, the General Partner shall
automatically admit Greenbrier as an Additional Limited Partner without requiring any additional
documentation from Greenbrier, even if Greenbrier is not at that time a Limited Partner of the
Partnership.

     Section 12.3 Amendment of Agreement and Certificate of Limited Partnership 

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

ARTICLE XIII

DISSOLUTION AND LIQUIDATION

     Section 13.1 Dissolution 

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

          A. an event of withdrawal of the General Partner, as defined in the Act (other than (i) a
liquidation of the General Partner into Crescent Equities, in which event Crescent

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Equities shall become the General Partner, or (ii) an event of Bankruptcy), unless within
ninety (90) days after the withdrawal remaining Partners owning a majority-in-interest of the total
Partnership Interests of the remaining Partners agree in writing to continue the business of the
Partnership and to the appointment, effective immediately prior to the date of withdrawal, of a
substitute General Partner;

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

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

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

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

          F. any other dissolution event under the Act.

     Section 13.2 Winding Up 

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

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

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	 	(2)	 	Second, to the payment and discharge of all of the
Partnership’s debts and liabilities to the Partners; and
	 
	 	(3)	 	The balance, if any, to the General Partner and Limited
Partners in accordance with their positive Capital Account balances, after
giving effect to all contributions, distributions, and allocations for all
periods.

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

          B. Notwithstanding the provisions of Section 13.2.A hereof which require liquidation of the
assets of the Partnership, but subject to the order of priorities set forth therein, if prior to or
upon dissolution of the Partnership the Liquidator determines that an immediate sale of part or all
of the Partnership’s assets would be impractical or would cause undue loss to the Partners, the
Liquidator may, in its sole and absolute discretion, defer for a reasonable time the liquidation of
any assets except those necessary to satisfy liabilities of the Partnership (including to those
Partners as creditors) and/or distribute to the Partners, in lieu of cash, as tenants in common and
in accordance with the provisions of Section 13.2.A hereof, undivided interests in such Partnership
assets as the Liquidator deems not suitable for liquidation. Any such distributions in kind shall
be made only if, in the good faith judgment of the Liquidator, such distributions in kind are in
the best interest of the Partners, and shall be subject to such conditions relating to the
disposition and management of such properties as the Liquidator deems reasonable and equitable and
to any agreements governing the operation of such properties at such time. The Liquidator shall
determine the fair market value of any property distributed in kind using such reasonable method of
valuation as it may adopt.

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

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

     Section 13.3 Compliance with Timing Requirements of Regulations 

     In the event the Partnership is “liquidated” within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g), distributions shall be made pursuant to this Article 13 to the General
Partner and Limited Partners who have positive Capital Accounts in compliance with Regulations
Section 1.704-1(b)(2)(ii)(b)(2). If any Partner has a deficit balance in its Capital Account
(after giving effect to all contributions, distributions and allocations for all taxable years,
including the year during which such liquidation occurs), such Partner shall have no obligation to
make any contribution to the capital of the Partnership with respect to such deficit, and such
deficit shall

 - 60 -

 

not be considered a debt owed to the Partnership or to any other Person for any purpose
whatsoever. In the discretion of the Liquidator, a pro rata portion of the distributions that would
otherwise be made to the General Partner and Limited Partners pursuant to this Article 13 may be:

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

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

     Section 13.4 Deemed Contribution and Distribution 

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

     Section 13.5 Rights of Limited Partners 

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

     Section 13.6 Documentation of Liquidation 

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

- 61 -

 

all documents or instruments required to effect the dissolution, liquidation and termination
of the Partnership.

     Section 13.7 Reasonable Time for Winding-Up 

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

     Section 13.8 Liability of the Liquidator 

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

	 	(1)	 	a matter entirely unrelated to the Liquidator’s action or
conduct pursuant to the provisions of this Agreement; or
	 
	 	(2)	 	the proven willful misconduct or gross negligence of the
Liquidator.

     Section 13.9 Waiver of Partition 

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

ARTICLE XIV

AMENDMENT OF AGREEMENT

     Section 14.1 Amendments 

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

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

	 	(1)	 	to add to the obligations of the General Partner or surrender
any right or power granted to the General Partner or any Affiliate of the
General Partner for the benefit of the Limited Partners;
	 
	 	(2)	 	to reflect the admission, substitution, termination, or
withdrawal of Partners in accordance with this Agreement (including, without
limitation,

- 62 -

 

	 	 	 	adjustments to Exhibit A to reflect such events, as set forth in Section
4.1.B hereof); and
	 
	 	(3)	 	to reflect a change that is of an inconsequential nature and
does not adversely affect the Limited Partners in any material respect, or to
cure any ambiguity, correct or supplement any provision in this Agreement not
inconsistent with law or with other provisions, or make other changes with
respect to matters arising under this Agreement that will not be inconsistent
with law or with the provisions of this Agreement.

          C. Notwithstanding anything to the contrary contained in Section 14.1.A hereof, this Agreement
shall not be amended without the prior written consent of each Partner adversely affected if such
amendment would (i) convert a Limited Partner’s interest in the Partnership into a general
partner’s interest, (ii) modify the limited liability of a Limited Partner, (iii) alter rights of
the Partner to receive distributions pursuant to Article 5, or the allocations specified in Article
6 (except as permitted pursuant to Sections 4.2, 4.3, 4.6, 4.7, 8.7 and Section 14.1.B(3) hereof),
(iv) alter or modify the Exchange Rights set forth in Section 8.6, or the right set forth in
Section 11.2.B, (v) cause the termination of the Partnership prior to the time set forth in
Sections 2.5 or 13.1, or (vi) amend this Section 14.1.C. Further, no amendment may alter the
restrictions on the General Partner’s authority set forth in Section 7.3 without the consent of all
Limited Partners.

ARTICLE XV

PARTNER REPRESENTATIONS AND WARRANTIES

     Section 15.1 Representations and Warranties 

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

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

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

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

               (4) No Conflict with Other Documents or Violation of Law. The execution of this
Agreement by such Partner and such Partner’s performance of the transactions contemplated herein
will not violate any document, instrument, agreement, stipulation,

- 63 -

 

judgment, order, or any applicable federal, state or local law, ordinance or regulation to
which such Partner is a party or by which such Partner is bound.

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

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

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

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

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

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

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

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

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

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

- 64 -

 

ARTICLE XVI

ARBITRATION OF DISPUTES

     Section 16.1 Arbitration

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

     Section 16.2 Procedures 

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

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

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

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

- 65 -

 

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

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

     Section 16.3 Binding Character 

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

     Section 16.4 Exclusivity 

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

     Section 16.5 No Alteration of Agreement 

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

ARTICLE XVII

GENERAL PROVISIONS

     Section 17.1 Addresses and Notice 

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

- 66 -

 

     Section 17.2 Titles and Captions 

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

     Section 17.3 Pronouns and Plurals 

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

     Section 17.4 Further Action 

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

     Section 17.5 Binding Effect 

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

     Section 17.6 Creditors 

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

     Section 17.7 Waiver 

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

     Section 17.8 No Agency 

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

- 67 -

 

     Section 17.9 Entire Understanding 

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

     Section 17.10 Counterparts

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

     Section 17.11 Applicable Law 

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

     Section 17.12 Invalidity of Provisions 

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

     Section 17.13 Guaranty by Crescent Equities 

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

     Section 17.14 Restriction on Sale of Sonoma Property 

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

- 68 -

 

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

	 	 	 
	 

	 	GENERAL PARTNER:
	 
	 	 
	 

	 	CRESCENT REAL ESTATE EQUITIES, LTD.,
	 

	 	a Delaware corporation
	 
	 	 
	 

	 	By:                                                            
	 

	 	Name:                                                        
	 

	 	Title:                                                         
	 
	 	 
	 

	 	LIMITED PARTNERS:
	 

	 	as set forth in Exhibit A hereto:

	 	 	 	 	 	 	 
	 

	 	By:
	 	CRESCENT REAL ESTATE EQUITIES,	 	 
	 

	 	 	 	LTD., as attorney-in-fact pursuant to	 	 
	 

	 	 	 	Sections 2.4 and 14.1.B of the Agreement	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	By:                                                            
Name:                                                         
	 	 
	 

	 	 	 	Title:                                                         	 	 

 

 

EXHIBIT A

PARTNERS, PARTNERSHIP UNITS AND PARTNERSHIP INTERESTS

	 	 	 	 	 	 	 	 	 
	 	 	Partnership	 	 	Partnership	 
	Name and Address of Partner	 	Units	 	 	Interests	 
	General Partner:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Crescent Real Estate Equities, Ltd.
	 	 	 	 	 	 	 	 
	777 Main Street
	 	 	 	 	 	 	 	 
	Suite 2100
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76102
	 	None	 	 	1.000000	%
	 
	 	 	 	 	 	 	 	 
	Limited Partners:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Crescent Real Estate Equities Company
	 	 	 	 	 	 	 	 
	777 Main Street
	 	 	 	 	 	 	 	 
	Suite 2100
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76102
	 	None	 	 	80.203072	%
	 
	 	 	 	 	 	 	 	 
	Anderson, John H.
	 	 	 	 	 	 	 	 
	P.O. Box 460430
	 	 	 	 	 	 	 	 
	Fort Lauderdale, FL 33346
	 	 	286,389	 	 	 	0.471029	%
	 
	 	 	 	 	 	 	 	 
	Big Bend III Investments, L.P.
	 	 	 	 	 	 	 	 
	c/o Morton H. Meyerson
	 	 	 	 	 	 	 	 
	3401 Armstrong Avenue
	 	 	 	 	 	 	 	 
	Dallas, TX 75205
	 	 	18,989	 	 	 	0.031232	%
	 
	 	 	 	 	 	 	 	 
	Blalock, Myron G. III
	 	 	 	 	 	 	 	 
	12 Greenway Plaza, Suite 1400
	 	 	 	 	 	 	 	 
	Houston, TX 77046
	 	 	20,857	 	 	 	0.034304	%

A-1

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	Partnership	 	 	Partnership	 
	Name and Address of Partner	 	Units	 	 	Interests	 
	Canyon Ranch, Inc.
	 	 	 	 	 	 	 	 
	8600 E. Rockcliff Rd.
	 	 	 	 	 	 	 	 
	Tucson, AZ 85750
	 	 	333,429	 	 	 	0.548396	%
	 
	 	 	 	 	 	 	 	 
	Cruce, Ervin D.
	 	 	 	 	 	 	 	 
	6233 Indian Creek
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76107
	 	 	2,110	 	 	 	0.003470	%
	 
	 	 	 	 	 	 	 	 
	Friedman, Alan D.
	 	 	 	 	 	 	 	 
	4211 Versailles
	 	 	 	 	 	 	 	 
	Dallas, TX 75205
	 	 	11,150	 	 	 	0.018339	%
	 
	 	 	 	 	 	 	 	 
	Goff, John C.
	 	 	 	 	 	 	 	 
	Attn: Mark Collier
	 	 	 	 	 	 	 	 
	777 Main Street, Suite 2100
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76102
	 	 	906,485	 	 	 	1.490911	%
	 
	 	 	 	 	 	 	 	 
	Haddock, Diane
	 	 	 	 	 	 	 	 
	c/o Haddock Investments
	 	 	 	 	 	 	 	 
	210 W. 6th Street
	 	 	 	 	 	 	 	 
	Suite 1206
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76102
	 	 	1,000	 	 	 	0.001645	%
	 
	 	 	 	 	 	 	 	 
	Haddock, Gerald W.
	 	 	 	 	 	 	 	 
	c/o Haddock Investments
	 	 	 	 	 	 	 	 
	210 W. 6th Street
	 	 	 	 	 	 	 	 
	Suite 1206
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76102
	 	 	62,919	 	 	 	0.103484	%

A-2

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	Partnership	 	 	Partnership	 
	Name and Address of Partner	 	Units	 	 	Interests	 
	Joost, Peter M. and Joost, Lindsay M.,
	 	 	 	 	 	 	 	 
	Trustees U/T/A dated April 11, 2002
	 	 	 	 	 	 	 	 
	555 California Street, Suite 5180
	 	 	 	 	 	 	 	 
	San Francisco, CA 94104
	 	 	25,000	 	 	 	0.041118	%
	 
	 	 	 	 	 	 	 	 
	Kelly, Thomas L., II
	 	 	 	 	 	 	 	 
	c/o CHB Capital Partners
	 	 	 	 	 	 	 	 
	511 16th Street, Suite 600
	 	 	 	 	 	 	 	 
	Denver, CO 80202
	 	 	8,440	 	 	 	0.013881	%
	 
	 	 	 	 	 	 	 	 
	Kelly, W. Whitney
	 	 	 	 	 	 	 	 
	777 Main Street, Suite 1160
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76102
	 	 	1,285	 	 	 	0.002113	%
	 
	 	 	 	 	 	 	 	 
	Lewis, Michael S.
	 	 	 	 	 	 	 	 
	4405 Hanover
	 	 	 	 	 	 	 	 
	Dallas, TX 75225
	 	 	960	 	 	 	0.001579	%
	 
	 	 	 	 	 	 	 	 
	Luce, Thomas W., III, Trustee
	 	 	 	 	 	 	 	 
	David N. Meyerson 1982 Trust UA
	 	 	 	 	 	 	 	 
	8/16/82
	 	 	 	 	 	 	 	 
	3401 Armstrong Avenue
	 	 	 	 	 	 	 	 
	Dallas, TX 75205
	 	 	4,220	 	 	 	0.006941	%
	 
	 	 	 	 	 	 	 	 
	Luce, Thomas W., III, Trustee
	 	 	 	 	 	 	 	 
	Marti A. Meyerson 1982 Trust UA
	 	 	 	 	 	 	 	 
	8/16/82
	 	 	 	 	 	 	 	 
	3401 Armstrong Avenue
	 	 	 	 	 	 	 	 
	Dallas, TX 75205
	 	 	4,220	 	 	 	0.006941	%

A-3

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	Partnership	 	 	Partnership	 
	Name and Address of Partner	 	Units	 	 	Interests	 
	Moore, Darla
	 	 	 	 	 	 	 	 
	777 Main Street, Suite 2250
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76102
	 	 	259,805	 	 	 	0.427306	%
	 
	 	 	 	 	 	 	 	 
	Office Towers LLC
	 	 	 	 	 	 	 	 
	639 Isbell Road, #390
	 	 	 	 	 	 	 	 
	Reno, NV 89509
	 	 	 	 	 	 	 	 
	Attn: Ms. Jan George
	 	 	3,135,481	 	 	 	5.156978	%
	 
	 	 	 	 	 	 	 	 
	Rainwater, Inc.
	 	 	 	 	 	 	 	 
	777 Main Street, Suite 2250
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76102
	 	 	 	 	 	 	 	 
	Attn: Karen Reynolds
	 	 	24,753	 	 	 	0.040712	%
	 
	 	 	 	 	 	 	 	 
	Rainwater, Courtney E.
	 	 	 	 	 	 	 	 
	777 Main Street, Suite 2250
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76102
	 	 	 	 	 	 	 	 
	Attn: Karen Reynolds
	 	 	21,098	 	 	 	0.034700	%
	 
	 	 	 	 	 	 	 	 
	Rainwater, Matthew J.
	 	 	 	 	 	 	 	 
	777 Main Street, Suite 2250
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76102
	 	 	 	 	 	 	 	 
	Attn: Karen Reynolds
	 	 	21,098	 	 	 	0.034700	%
	 
	 	 	 	 	 	 	 	 
	Rainwater, Richard Todd
	 	 	 	 	 	 	 	 
	777 Main Street, Suite 2250
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76102
	 	 	 	 	 	 	 	 
	Attn: Karen Reynolds
	 	 	21,098	 	 	 	0.034700	%

A-4

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	Partnership	 	 	Partnership	 
	Name and Address of Partner	 	Units	 	 	Interests	 
	Rainwater, Richard E.
	 	 	 	 	 	 	 	 
	777 Main Street, Suite 2250
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76102
	 	 	 	 	 	 	 	 
	Attn: Karen Reynolds
	 	 	2,303,628	 	 	 	3.788815	%
	 
	 	 	 	 	 	 	 	 
	Roberts, Peter H.
	 	 	 	 	 	 	 	 
	2857 Paradise Road, Apartment 3004
	 	 	 	 	 	 	 	 
	Las Vegas, NV 89109
	 	 	339,543	 	 	 	0.558452	%
	 
	 	 	 	 	 	 	 	 
	Rosewood Property Company
	 	 	 	 	 	 	 	 
	500 Crescent Court
	 	 	 	 	 	 	 	 
	Suite 300
	 	 	 	 	 	 	 	 
	Dallas, TX 75201
	 	 	 	 	 	 	 	 
	Attn: Paul E. Rowsey, III
	 	 	629,330	 	 	 	1.035069	%
	 
	 	 	 	 	 	 	 	 
	Senterra Corporation
	 	 	 	 	 	 	 	 
	12 Greenway Plaza, Suite 1400
	 	 	 	 	 	 	 	 
	Houston, TX 77046
	 	 	 	 	 	 	 	 
	Attn: Douglas Schnitzer
	 	 	83,441	 	 	 	0.137237	%
	 
	 	 	 	 	 	 	 	 
	Taurus Investment Group, Inc.
	 	 	 	 	 	 	 	 
	1400 E. Newport Center Drive, Suite 209
	 	 	 	 	 	 	 	 
	Deerfield Beach, FL 33442
	 	 	1,205	 	 	 	0.001982	%
	 
	 	 	 	 	 	 	 	 
	Tofsky, Neil H.
	 	 	 	 	 	 	 	 
	12 Greenway Plaza, Suite 1400
	 	 	 	 	 	 	 	 
	Houston, TX 77046
	 	 	20,857	 	 	 	0.034304	%
	 
	 	 	 	 	 	 	 	 
	Wassel, James S.
	 	 	 	 	 	 	 	 
	14 Hartshorne Lane
	 	 	 	 	 	 	 	 
	Rumson, NJ 07760
	 	 	598	 	 	 	0.000984	%

A-5

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	Partnership	 	 	Partnership	 
	Name and Address of Partner	 	Units	 	 	Interests	 
	Yates, Murphy C.
	 	 	 	 	 	 	 	 
	10016 Robin Hill Lane
	 	 	 	 	 	 	 	 
	Dallas, TX 75238
	 	 	1,285	 	 	 	0.002113	%
	 
	 	 	 	 	 	 	 	 
	Grantee Limited Partners1
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	John C. Goff
	 	 	 	 	 	 	 	 
	Attn: Mark Collier
	 	 	 	 	 	 	 	 
	777 Main Street, Suite 2100
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76102
	 	 	690,000	 	 	 	1.134854	%
	 
	 	 	 	 	 	 	 	 
	Dennis H. Alberts
	 	 	 	 	 	 	 	 
	777 Main Street, Suite 2100
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76102
	 	 	450,000	 	 	 	0.740122	%
	 
	 	 	 	 	 	 	 	 
	Kenneth S. Moczulski
	 	 	 	 	 	 	 	 
	3417 Acorn Run
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76109
	 	 	135,000	 	 	 	0.222037	%
	 
	 	 	 	 	 	 	 	 
	Jane E. Mody
	 	 	 	 	 	 	 	 
	3301 Princeton
	 	 	 	 	 	 	 	 
	Highland Park, TX 75205
	 	 	132,500	 	 	 	0.217925	%

 

			
	1	 	The following Partnership Interests and associated
Partnership Units were issued to such Limited Partners as Grantees under Grant
Agreements, as more fully described in Section 4.9 of the Effective Agreement.

A-6

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	Partnership	 	 	Partnership	 
	Name and Address of Partner	 	Units	 	 	Interests	 
	Jerry R. Crenshaw, Jr.
	 	 	 	 	 	 	 	 
	7003 Whippoorwill Court
	 	 	 	 	 	 	 	 
	Colleyville, TX 76034
	 	 	125,000	 	 	 	0.205590	%
	 
	 	 	 	 	 	 	 	 
	David M. Dean
	 	 	 	 	 	 	 	 
	3221 WT Parr Road
	 	 	 	 	 	 	 	 
	Grapevine, TX 76051
	 	 	125,000	 	 	 	0.205590	%
	 
	 	 	 	 	 	 	 	 
	Jane B. Page
	 	 	 	 	 	 	 	 
	221 Kensington Court
	 	 	 	 	 	 	 	 
	Houston, TX 77024
	 	 	125,000	 	 	 	0.205590	%
	 
	 	 	 	 	 	 	 	 
	John L. Zogg, Jr.
	 	 	 	 	 	 	 	 
	3525 Dartmouth
	 	 	 	 	 	 	 	 
	Dallas, TX 75205
	 	 	125,000	 	 	 	0.205590	%
	 
	 	 	 	 	 	 	 	 
	Thomas G. Miller
	 	 	 	 	 	 	 	 
	925 Via Panorama
	 	 	 	 	 	 	 	 
	Palos Verdes Estates, CA 90274
	 	 	125,000	 	 	 	0.205590	%
	 
	 	 	 	 	 	 	 	 
	Paul R. Smith
	 	 	 	 	 	 	 	 
	6107 Woodland Drive
	 	 	 	 	 	 	 	 
	Dallas, TX 75225
	 	 	125,000	 	 	 	0.205590	%
	 
	 	 	 	 	 	 	 	 
	Suzanne M. Stevens
	 	 	 	 	 	 	 	 
	2321 Danielle Drive
	 	 	 	 	 	 	 	 
	Colleyville, TX 76034
	 	 	52,500	 	 	 	0.086348	%

A-7

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	Partnership	 	 	Partnership	 
	Name and Address of Partner	 	Units	 	 	Interests	 
	Robert H. Boykin, Jr.
	 	 	 	 	 	 	 	 
	435 Prestwick Court
	 	 	 	 	 	 	 	 
	Houston, TX 77057
	 	 	45,000	 	 	 	0.074012	%
	 
	 	 	 	 	 	 	 	 
	Joe D. Dobbs
	 	 	 	 	 	 	 	 
	7608 Dunoon Avenue
	 	 	 	 	 	 	 	 
	Dallas, TX 75248
	 	 	45,000	 	 	 	0.074012	%
	 
	 	 	 	 	 	 	 	 
	Michael S. Lewis
	 	 	 	 	 	 	 	 
	4405 Hanover
	 	 	 	 	 	 	 	 
	Dallas, TX 75225
	 	 	45,000	 	 	 	0.074012	%
	 
	 	 	 	 	 	 	 	 
	Christopher T. Porter
	 	 	 	 	 	 	 	 
	2217 Laurel Court
	 	 	 	 	 	 	 	 
	Bedford, TX 76021
	 	 	45,000	 	 	 	0.074012	%
	 
	 	 	 	 	 	 	 	 
	James H. Wilson
	 	 	 	 	 	 	 	 
	13906 Wilde Forest Court
	 	 	 	 	 	 	 	 
	Sugar Land, TX 77478
	 	 	45,000	 	 	 	0.074012	%
	 
	 	 	 	 	 	 	 	 
	Anthony B. Click
	 	 	 	 	 	 	 	 
	3709 Marquette
	 	 	 	 	 	 	 	 
	Dallas, TX 75225
	 	 	8,750	 	 	 	0.014391	%
	 
	 	 	 	 	 	 	 	 
	James D. Dockal
	 	 	 	 	 	 	 	 
	2805 Springbranch Court
	 	 	 	 	 	 	 	 
	Grapevine, TX 76051
	 	 	16,250	 	 	 	0.026727	%

A-8

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	Partnership	 	 	Partnership	 
	Name and Address of Partner	 	Units	 	 	Interests	 
	Dana L. Donahoe
	 	 	 	 	 	 	 	 
	5339 Emerson Avenue
	 	 	 	 	 	 	 	 
	Dallas, TX 75209
	 	 	15,000	 	 	 	0.024671	%
	 
	 	 	 	 	 	 	 	 
	C. Alan Hopkins
	 	 	 	 	 	 	 	 
	1109 Winding Creek West
	 	 	 	 	 	 	 	 
	Greapevine, TX 76051
	 	 	23,750	 	 	 	0.039062	%
	 
	 	 	 	 	 	 	 	 
	W. Whitney Kelly
	 	 	 	 	 	 	 	 
	777 Main Street, Suite 1160
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76102
	 	 	1,500	 	 	 	0.002467	%
	 
	 	 	 	 	 	 	 	 
	Randy C. Kostroske
	 	 	 	 	 	 	 	 
	1721 Bellechase Drive
	 	 	 	 	 	 	 	 
	Roanoke, TX 76262
	 	 	16,250	 	 	 	0.026727	%
	 
	 	 	 	 	 	 	 	 
	John P. Albright
	 	 	 	 	 	 	 	 
	1435 Eagle Bend Drive
	 	 	 	 	 	 	 	 
	Southlake, TX 76092
	 	 	41,250	 	 	 	0.067845	%
	 
	 	 	 	 	 	 	 	 
	Jason E. Anderson
	 	 	 	 	 	 	 	 
	2214 Racquet Club Court
	 	 	 	 	 	 	 	 
	Arlington, TX 76017
	 	 	17,500	 	 	 	0.028783	%
	 
	 	 	 	 	 	 	 	 
	Connie S. Angelot
	 	 	 	 	 	 	 	 
	777 Main Street, Suite 2100
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76102
	 	 	16,250	 	 	 	0.026727	%

A-9

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	Partnership	 	 	Partnership	 
	Name and Address of Partner	 	Units	 	 	Interests	 
	Bruce M. Basham
	 	 	 	 	 	 	 	 
	9446 South Morning Glory Lane
	 	 	 	 	 	 	 	 
	Highlands Ranch, CO 80130
	 	 	7,500	 	 	 	0.012335	%
	 
	 	 	 	 	 	 	 	 
	Theresa E. Black
	 	 	 	 	 	 	 	 
	3221 WT Parr Road
	 	 	 	 	 	 	 	 
	Grapevine, TX 76051
	 	 	16,250	 	 	 	0.026727	%
	 
	 	 	 	 	 	 	 	 
	Robert R. Carlen
	 	 	 	 	 	 	 	 
	1531 Pecan Crossing
	 	 	 	 	 	 	 	 
	Richmond, TX 77469
	 	 	16,250	 	 	 	0.026727	%
	 
	 	 	 	 	 	 	 	 
	Kiera B. Moody
	 	 	 	 	 	 	 	 
	8144 Hosta Way
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76123
	 	 	5,500	 	 	 	0.009046	%
	 
	 	 	 	 	 	 	 	 
	Jason T. Phinney
	 	 	 	 	 	 	 	 
	8313 Fern Leaf Court
	 	 	 	 	 	 	 	 
	North Richland Hills, TX 76180
	 	 	16,250	 	 	 	0.026727	%
	 
	 	 	 	 	 	 	 	 
	Jeannette I. Rice
	 	 	 	 	 	 	 	 
	2625 Mockingbird Court
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76109
	 	 	13,750	 	 	 	0.022615	%
	 
	 	 	 	 	 	 	 	 
	Clifford M. Rudolph
	 	 	 	 	 	 	 	 
	4213 Oak Park Court
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76109
	 	 	16,250	 	 	 	0.026727	%

A-10

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	Partnership	 	 	Partnership	 
	Name and Address of Partner	 	Units	 	 	Interests	 
	Thomas Shaw, Jr.
	 	 	 	 	 	 	 	 
	121 Woodland Cove
	 	 	 	 	 	 	 	 
	Coppell, TX 75019
	 	 	17,500	 	 	 	0.028783	%
	 
	 	 	 	 	 	 	 	 
	Eric S. Siegrist
	 	 	 	 	 	 	 	 
	1442 NW 138 Terrace
	 	 	 	 	 	 	 	 
	Pembroke Pines, FL 33028
	 	 	8,750	 	 	 	0.014391	%
	 
	 	 	 	 	 	 	 	 
	Daniel E. Smith
	 	 	 	 	 	 	 	 
	7702 Leesburg Drive
	 	 	 	 	 	 	 	 
	Colleyville, TX 76034
	 	 	41,250	 	 	 	0.067845	%
	 
	 	 	 	 	 	 	 	 
	Brent R. Somers
	 	 	 	 	 	 	 	 
	4220 Galway
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76109
	 	 	16,250	 	 	 	0.026727	%
	 
	 	 	 	 	 	 	 	 
	Frank B. Staats
	 	 	 	 	 	 	 	 
	9415 Braewick
	 	 	 	 	 	 	 	 
	Houston, TX 77096
	 	 	16,250	 	 	 	0.026727	%
	 
	 	 	 	 	 	 	 	 
	Jeffrey L. Stevens
	 	 	 	 	 	 	 	 
	777 Main Street, Suite 2100
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76102
	 	 	20,000	 	 	 	0.032894	%
	 
	 	 	 	 	 	 	 	 
	Brenna A. Wadleigh
	 	 	 	 	 	 	 	 
	777 Main Street, Suite 2100
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76102
	 	 	16,250	 	 	 	0.026727	%

A-11

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	Partnership	 	 	Partnership	 
	Name and Address of Partner	 	Units	 	 	Interests	 
	Debra A. Wilson
	 	 	 	 	 	 	 	 
	726 Last Arrow
	 	 	 	 	 	 	 	 
	Houston, TX 77079
	 	 	8,750	 	 	 	0.014391	%
	 
	 	 	 	 	 	 	 	 
	Walt J. Zartman
	 	 	 	 	 	 	 	 
	603 Dene Court
	 	 	 	 	 	 	 	 
	Southlake, TX 76092
	 	 	11,250	 	 	 	0.018503	%
	 
	 	 	 	 	 	 	 	 
	Charles D. Coleman
	 	 	 	 	 	 	 	 
	10020 Charlemont Drive
	 	 	 	 	 	 	 	 
	Las Vegas, NV 89134
	 	 	1,000	 	 	 	0.001645	%
	 
	 	 	 	 	 	 	 	 
	Lee Moreland
	 	 	 	 	 	 	 	 
	2311 Briarpark
	 	 	 	 	 	 	 	 
	Houston, TX 77042
	 	 	10,000	 	 	 	0.016447	%
	 
	 	 	 	 	 	 	 	 
	Jana Ammons
	 	 	 	 	 	 	 	 
	7739 Bridlewood Court
	 	 	 	 	 	 	 	 
	North Richland Hills, TX 76180
	 	 	10,000	 	 	 	0.016447	%
	 
	 	 	 	 	 	 	 	 
	Todd Bicknell
	 	 	 	 	 	 	 	 
	5425 Drane Drive
	 	 	 	 	 	 	 	 
	Dallas, TX 76209
	 	 	5,000	 	 	 	0.008224	%
	 
	 	 	 	 	 	 	 	 
	Peggy S. Haynes
	 	 	 	 	 	 	 	 
	777 Main Street, Suite 2100
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76102
	 	 	2,500	 	 	 	0.004112	%
	 
	 	 	 	 	 	 	 	 
	Joseph Pitchford
	 	 	 	 	 	 	 	 
	777 Main Street, Suite 2100
	 	 	 	 	 	 	 	 
	Fort Worth, TX 76102
	 	 	10,000	 	 	 	0.016447	%
	 
	 
	 	 	11,428,673	 	 	 	100	%
	 
	 	 	 	 	 	 

A-12

 

 

 

Series A Preferred Partnership Unit Holders:

	 	 	 	 	 	 	 	 	 
	 	 	Number of Series A Preferred	 	 
	Holder	 	Partnership Units	 	Issue Date
	Crescent Real Estate Equities
	 	 	 	 	 	 	 	 
	Company
	 	 	 	 	 	 	 	 
	777 Main Street, Suite 2100
	 	 	 	 	 	 	 	 
	Fort Worth, Texas 76102
	 	 	8,000,000	 	 	 	2/19/98	 
	 
	 	 	 	 	 	 	 	 
	Crescent Real Estate Equities
	 	 	 	 	 	 	 	 
	Company
	 	 	 	 	 	 	 	 
	777 Main Street, Suite 2100
	 	 	 	 	 	 	 	 
	Fort Worth, Texas 76102
	 	 	2,800,000	 	 	 	4/26/02	 
	 
	 	 	 	 	 	 	 	 
	Crescent Real Estate Equities
	 	 	 	 	 	 	 	 
	Company
	 	 	 	 	 	 	 	 
	777 Main Street, Suite 2100
	 	 	 	 	 	 	 	 
	Fort Worth, Texas 76102
	 	 	3,400,000	 	 	 	1/15/04	 
	 
	 	 	 	 	 	 	 	 

A-13

 

 

 

Series B Redeemable Preferred Partnership Unit Holders:

	 	 	 	 	 	 	 	 	 
	 	 	Number of Series B Redeemable Preferred	 	 
	Holder	 	Partnership Units	 	Issue Date
	Crescent Real Estate Equities
	 	 	 	 	 	 	 	 
	Company
	 	 	 	 	 	 	 	 
	777 Main Street, Suite 2100
	 	 	 	 	 	 	 	 
	Fort Worth, Texas 76102
	 	 	3,000,000	 	 	 	05/17/02	 
	 
	 	 	 	 	 	 	 	 
	Crescent Real Estate Equities
	 	 	 	 	 	 	 	 
	Company
	 	 	 	 	 	 	 	 
	777 Main Street, Suite 2100
	 	 	 	 	 	 	 	 
	Fort Worth, Texas 76102
	 	 	400,000	 	 	 	06/06/02	 

A-14

 

 

 

EXHIBIT B

CAPITAL ACCOUNT MAINTENANCE

1. Capital Accounts of the Partners 

	 	A.	 	The Partnership shall maintain for each Partner a separate Capital Account in
accordance with the rules of Regulations Section 1.704-1(b)(2)(iv). Such Capital
Account shall be increased by (i) the amount of all Capital Contributions made by such
Partner to the Partnership pursuant to this Agreement and (ii) such Partner’s share of
Net Income allocated to such Partner pursuant to Section 6.1.A of the Agreement, all
items of Partnership income and gain allocated to such Partner pursuant to Section 6.3
of the Agreement, and all items of Partnership income and gain (including income and
gain exempt from tax) computed in accordance with Section 1.B hereof and allocated to
such Partner pursuant to Exhibit C hereof, and decreased by (x) the amount of cash or
Net Asset Value of all actual and deemed distributions of cash or property made to such
Partner pursuant to this Agreement and (y) such Partner’s share of Net Loss allocated
to such Partner pursuant to Section 6.1.A of the Agreement, all items of Partnership
deduction and loss allocated to such Partner pursuant to Section 6.3 of the Agreement,
and all items of Partnership deduction and loss computed in accordance with Section 1.B
hereof and allocated to such Partner pursuant to Exhibit C hereof.
	 
	 	B.	 	For purposes of computing the amount of any item of income, gain, deduction or
loss to be reflected in the Partners’ Capital Accounts, unless otherwise specified in
this Agreement, the determination, recognition and classification of any such item
shall be the same as its determination, recognition and classification for federal
income tax purposes determined in accordance with Section 703(a) of the Code (for this
purpose all items of income, gain, loss or deduction required to be stated separately
pursuant to Section 703(a)(l) of the Code shall be included in taxable income or loss),
with the following adjustments:

	 	(1)	 	Except as otherwise provided in Regulations Section
1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss and
deduction shall be made without regard to any election under Section 754 of the
Code which may be made by the Partnership, provided that the
amounts of any adjustments to the adjusted bases of the assets of the
Partnership made pursuant to Section 734 of the Code as a result of the
distribution of property by the Partnership to a Partner (to the extent that
such adjustments have not previously been reflected in the Partners’ Capital
Accounts) shall be reflected in the Capital Accounts of the Partners in the
manner and subject to the limitations prescribed in Regulations Section
1.704-1(b)(2)(iv)(m).
	 
	 	(2)	 	The computation of all items of income, gain, loss and
deduction shall be made without regard to the fact that items described in
Sections 705(a)(l)(B) or 705(a)(2)(B) of the Code are not includable in gross

B-1

 

 

 

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

	 	(3)	 	Any income, gain or loss attributable to the taxable
disposition of any Partnership property shall be determined as if the adjusted
basis of such property as of such date of disposition were equal in amount to
the Partnership’s Carrying Value with respect to such property as of such date.
	 
	 	(4)	 	In lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable income or
loss, there shall be taken into account Depreciation for such fiscal year.
	 
	 	(5)	 	In the event the Carrying Value of any Partnership Asset is
adjusted pursuant to Section 1.D hereof, the amount of any such adjustment
shall be taken into account as gain or loss from the disposition of such asset.
	 
	 	(6)	 	Any items specially allocated under Section 2 of Exhibit C
hereof shall not be taken into account.

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

	 	(2)	 	Such adjustments shall be made as of the following times: (a)
immediately prior to the acquisition of an additional interest in the
Partnership by any new or existing Partner in exchange for more than a de
minimis Capital Contribution; (b) immediately prior to the distribution by the
Partnership to a Partner of more than a de minimis amount of property as
consideration for an interest in the Partnership; and (c) immediately prior to
the grant of an interest in the Partnership (other than a de minimis interest)
on or after May 6, 2004 as consideration for the provision of services to or
for the benefit of the Partnership by an existing Partner acting in a partner
capacity or by a new Partner acting in a partner capacity or in anticipation of
being a partner; and (d) immediately prior to the liquidation of the
Partnership, provided however that adjustments pursuant to
clauses (a), (b) and (c) above shall be made only if the General Partner
determines that such adjustments are necessary or appropriate to reflect the
relative economic interests of the Partners in the Partnership.

B-2

 

 

 

	 	(3)	 	In accordance with Regulations Section 1.704-1(b)(2)(iv)(e) the
Carrying Value of Partnership assets distributed in kind shall be adjusted
upward and downward to reflect any Unrealized Gain or Unrealized Loss
attributable to such Partnership property, as of the time any such asset is
distributed, as if such Unrealized Gain or Unrealized Loss had been recognized
on an actual sale of such Partnership property and allocated pursuant to
Article 6 of the Agreement.
	 
	 	(4)	 	In determining such Unrealized Gain or Unrealized Loss the
aggregate cash amount and fair market value of all Partnership assets
(including cash or cash equivalents) shall be determined by the General Partner
using such reasonable method of valuation as it may adopt, or in the case of a
liquidating distribution pursuant to Article 13 of the Agreement, be determined
and allocated by the Liquidator using such reasonable methods of valuation as
it may adopt. The General Partner, or the Liquidator, as the case may be, shall
allocate such aggregate value among the assets of the Partnership (in such
manner as it determines in its sole and absolute discretion to arrive at a fair
market value for individual properties).

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

B-3

 

 

 

EXHIBIT C

SPECIAL TAX ALLOCATION RULES

1. Special Allocation Rules. 

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

	 	A.	 	Minimum Gain Chargeback. Notwithstanding the provisions of Article 6 of the
Agreement or any other provisions of this Exhibit C, if there is a net decrease in
Partnership Minimum Gain during any fiscal year (except as a result of certain
conversions and refinancings of Partnership indebtedness, certain capital
contributions, or certain revaluations of the Partnership property as further described
in Regulations Sections 1.704-2(d)(4), 1.704-2(f)(2) or 1.704-2(f)(3)), each Partner
shall be specially allocated items of Partnership income and gain for such year (and,
if necessary, subsequent years) in an amount equal to such Partner’s share of the net
decrease in Partnership Minimum Gain, as determined under Regulations Section
1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion
to the respective amounts required to be allocated to each Partner pursuant thereto.
The items to be so allocated shall be determined in accordance with Regulations
Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 1.A is intended to comply with
the minimum gain chargeback requirements in Regulations Section 1.704-2(f) and for
purposes of this Section 1.A. only, each Partner’s Adjusted Capital Account Deficit
shall be determined prior to any other allocations pursuant to Article 6 of the
Agreement with respect to such fiscal year and without regard to any decrease in
Partner Minimum Gain during such fiscal year.
	 
	 	B.	 	Partner Minimum Gain Chargeback. Notwithstanding any other provision of Article
6 of the Agreement or any other provisions of this Exhibit C (except Section 1.A
hereof), if there is a net decrease in Partner Minimum Gain attributable to a Partner
Nonrecourse Debt during any fiscal year (except as a result of certain conversions and
refinancings of Partnership indebtedness, certain capital contributions, or certain
revaluations of the Partnership property as further described in Regulations Sections
1.704-2(i)(3) and 1.704-2(i)(4)), each Partner who has a share of the Partner Minimum
Gain attributable to such Partner Nonrecourse Debt, determined in accordance with
Regulations Section 1.704-2(i)(5), shall be specially allocated items of Partnership
income and gain for such year (and, if necessary, subsequent years) in an amount equal
to such Partner’s share of the net decrease in Partner Minimum Gain attributable to
such Partner Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each General Partner
and Limited Partner pursuant thereto. The items to be so allocated shall be determined
in accordance with Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section
1.B is intended to comply with the minimum gain chargeback

C-1

 

 

 

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

	 	C.	 	Qualified Income Offset. In the event any Partner unexpectedly receives any
adjustments, allocations or distributions described in Regulations Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-l(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), and after
giving effect to the allocations required under Sections 1.A and 1.B hereof, such
Partner has an Adjusted Capital Account Deficit, items of Partnership income and gain
shall be specifically allocated to such Partner in an amount and manner sufficient to
eliminate, to the extent required by the Regulations, its Adjusted Capital Account
Deficit created by such adjustments, allocations or distributions as quickly as
possible. This Section 1.C is intended to constitute a “qualified income offset” under
Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.
	 
	 	D.	 	Nonrecourse Deductions. Nonrecourse Deductions for any taxable period shall be
allocated to the Partners in accordance with their respective Partnership Interests. If
the General Partner determines in its good faith discretion that the Partnership’s
Nonrecourse Deductions must be allocated in a different ratio to satisfy the safe
harbor requirements of the Regulations promulgated under Section 704(b) of the Code,
the General Partner is authorized, upon notice to the Limited Partners, to revise the
prescribed ratio to the numerically closest ratio which does satisfy such requirements.
	 
	 	E.	 	Partner Nonrecourse Deductions. Any Partner Nonrecourse Deductions for any
fiscal year shall be specially allocated to the Partner who bears the economic risk of
loss with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse
Deductions are attributable in accordance with Regulations Sections 1.704-2(b)(4) and
1.704-2(i).
	 
	 	F.	 	Code Section 754 Adjustments. To the extent an adjustment to the adjusted tax
basis of any Partnership asset pursuant to Section 734(b) or 743(b) of the Code is
required, pursuant to Regulations Section l .704-1(b)(2)(iv)(m), to be taken into
account in determining Capital Accounts, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the basis of
the asset) or loss (if the adjustment decreases such basis), and such item of gain or
loss shall be specially allocated to the Partners in a manner consistent with the
manner in which their Capital Accounts are required to be adjusted pursuant to such
Section of the Regulations.
	 
	 	G.	 	Sections 1245/1250 Recapture. If any portion of gain from the sale of property
is treated as Recapture Income, such Recapture Income shall be allocated among the
Partners in accordance with the provisions of Regulations Sections 1.1245-1(e) and
1.1250-1(f).

C-2

 

 

 

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

	2.	 	Allocations for Tax Purposes 

	 	A.	 	Except as otherwise provided in this Section 2, for federal income tax
purposes, each item of income, gain, loss and deduction shall be allocated among the
Partners in the same manner as its correlative item of “book” income, gain, loss or
deduction is allocated pursuant to Article 6 of the Agreement and Section 1 of this
Exhibit C.
	 
	 	B.	 	Notwithstanding any other provision in this Agreement, in an attempt to
eliminate Book-Tax Disparities attributable to a Contributed Property or Adjusted
Property, items of income, gain, loss, and deduction shall be allocated for federal
income tax purposes (and not for “book” purposes) among the Partners as follows:

	 	(1)	 	(a) In the case of a Contributed Property, such items
attributable thereto shall be allocated among the Partners consistent with the
principles of Section 704(c) of the Code that takes into account the variation
between the Gross Asset Value of such property and its adjusted basis at the
time of contribution; and
	 
	 	(b)	 	any item of Residual Gain or Residual Loss attributable to a Contributed
Property shall be allocated among the Partners in the same manner as its
correlative item of “book” gain or loss is allocated pursuant to Article 6
of the Agreement and Section 1 of this Exhibit C.
	 
	 	(2)	 	(a) In the case of an Adjusted Property, such items shall

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

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

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

C-3

 

 

 

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

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

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

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

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

C-4

 

 

 

	3.	 	General Partner Allocation.

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

C-5

 

 

 

EXHIBIT D

NOTICE OF EXCHANGE

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

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

	 	 	 
	Dated:                                         
	 	 
	 
	 	 
	Name of Limited Partner:

	 	                                                            
	 
	 	 
	Signature of Limited Partner:

	 	                                                            
	 

	 	By:                                                      
	 

	 	Title:                                                   
	 
	 	 
	Address:

	 	 
	 

	 	                                                            
	 

	 	(Street Address)
	 
	 	 
	 

	 	                                                            
	 

	 	(City) (State) (Zip Code)
	 
	 	 
	 

	 	Signature [Attested]
	 

	 	[Witnessed] by:
	 
	 	 
	 

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

D-1

 

 

 

EXHIBIT E

LISTING OF APPROVED SUBSTITUTED

LIMITED PARTNERS

777 Main Operating, Ltd.

Agnew, David B.

American Airlines Fixed Benefit Plan

AMSTAR Capital Management Corporation

AMSTAR Continental Plaza Limited Partnership

AMSTAR Group, Ltd.

APL General, Ltd.

Autem, Joseph W.

Bankers Trust Company

Bartlett, James R.

Brooks, Steven D.

Bush, George W.

Caroline Hunt Trust Estate

Chappel, J. Randell

Continental Plaza Ventures

Courtney Elizabeth Rainwater Trust

Cruce, Ervin D.

David N. Meyerson 1982 Trust

Frampton, Harry H., III

Friedman, Alan D.

Friedman, Bayard H.

Goff, John C.

Hackstock, Nick J.

Haddock, Gerald W.

Hana Development, Inc.

Happel, Dr. Otto, Ing.

Harkness, Randall L.

Hersh, Kenneth A.

Isakson, Mark J.

J.R. Bartlett, Inc.

JFI, L.P.

Joost 1991 Children’s Trust

Joost, Peter M.

Joost, William E.

Kelly, Thomas L. III

Kelly, W. Whitney

Korenvaes, Harlan B.

Kosac, Michael J.

Marti A. Meyerson 1982 Trust

Matthew James Rainwater Trust

Meyerson, Morton H.

E-1

 

 

 

Mira Vista Investors, L.P.

Mira Vista Partners

Moore, Samuel S.

Nick J. Hackstock, Inc.

O’Brien, Christopher J.

P.E.P. II Investors, Inc.

Rainwater Investor Partners, Ltd.

Rainwater RainAm Investors

Rainwater, Richard E.

Rainwater, Walter J.

Retirement Plan of Aluminum Company of America Master Trusts

Richard Todd Rainwater Trust

Rosewood Real Estate Equities, Inc.

Small, Robert I.

Squires, Richard D.

The Rosewood Corporation

Thomason MacArthur, Ltd.

Tower Holdings, Inc.

Wilson, Thomas L.

Yates, Murphy C.

E-2

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