AGREEMENT AND PLAN OF MERGER

EXECUTION COPY

CRESCENT REAL ESTATE EQUITIES COMPANY,

CRESCENT REAL ESTATE EQUITIES LIMITED PARTNERSHIP,

MOON ACQUISITION HOLDINGS LLC,

MOON ACQUISITION LLC

and

MOON ACQUISITION LIMITED PARTNERSHIP

Dated as of May 22, 2007

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS			2
Section 1.01 Definitions			2
Section 1.02 Interpretation and Rules of Construction			12
ARTICLE II THE MERGERS; REDEMPTIONS			13
Section 2.01 Mergers			13
Section 2.02 Operating Agreement; Partnership Agreement			14
Section 2.03 Effective Times			14
Section 2.04 Closing			15
Section 2.05 Manager of the Surviving Entity			15
Section 2.06 Partnership Matters			15
Section 2.07 Redemption of Preferred Shares			15
ARTICLE III EFFECTS OF THE MERGERS			16
Section 3.01 Effects of REIT Merger on Shares and Membership Interests			16
Section 3.02 Effect on Partnership Interests			16
Section 3.03 Equity Awards			17
Section 3.04 Dissenter’s Rights			18
Section 3.05 Paying Agent; Exchange Procedure			18
Section 3.06 Withholding Rights			21
Section 3.07 Redemption of Notes			21
Section 3.08 Employee Stock Purchase Plan			21
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE OPERATING PARTNERSHIP			22
Section 4.01 Organization; Minute Books			22
Section 4.02 Subsidiaries and Related Entities			23
Section 4.03 Capital Structure			23
Section 4.04 Authority			24
Section 4.05 Consents and Approvals; No Violations			25
Section 4.06 SEC Documents and Other Reports			26
Section 4.07 Absence of Material Adverse Effect			28
Section 4.08 Information Supplied			29
Section 4.09 Compliance with Laws			29
Section 4.10 Tax Representations			29
Section 4.11 Benefit Plans			34
Section 4.12 Litigation			36
Section 4.13 State Takeover Statutes			36
Section 4.14 Intellectual Property			36
Section 4.15 Properties			37
Section 4.16 Environmental Laws			43
Section 4.17 Employment and Labor Matters			44

Section 4.18 Material Contracts			46
Section 4.19 Insurance Policies			47
Section 4.20 Affiliate Transactions			48
Section 4.21 Opinion of the Company’s Financial Advisor			48
Section 4.22 Brokers			48
Section 4.23 Board Approval			48
Section 4.24 Employee Loans			49
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT, REIT MERGER SUB AND PARTNERSHIP MERGER SUB			49
Section 5.01 Organization			49
Section 5.02 No Prior Activities			50
Section 5.03 Corporate Organization			50
Section 5.04 No Conflict; Required Filings and Consents			50
Section 5.05 Information Supplied			51
Section 5.06 Absence of Litigation			51
Section 5.07 Financing			51
Section 5.08 Guarantees			52
Section 5.09 No Ownership of Company Capital Stock			52
Section 5.10 Brokers			52
ARTICLE VI COVENANTS RELATING TO CONDUCT OF BUSINESS			52

Section 6.01 Conduct of Business by the Company, the Operating Partnership and the Company’s Other Subsidiaries and Related Entities Pending the Merger			52
ARTICLE VII ADDITIONAL AGREEMENTS			57
Section 7.01 Proxy Statement; Partnership Information Statement; Other Filings			57
Section 7.02 Company Shareholders’ Meeting			58
Section 7.03 Access to Information; Confidentiality			59
Section 7.04 No Solicitation of Transactions			60
Section 7.05 Employee Benefits Matters			62
Section 7.06 Managers’ and Officers’ Indemnification and Insurance			64
Section 7.07 Further Action; Reasonable Efforts			67
Section 7.08 Transfer Taxes			68
Section 7.09 Public Announcements			68
Section 7.10 Financing			69
Section 7.11 Tax Matters			70
Section 7.12 Resignations			71
Section 7.13 Redemption			71
Section 7.14 Satisfaction of Employee Loans			71
Section 7.15 Payoff Letters			71
Section 7.16 Asset Sale Transactions			71
Section 7.17 WARN Act Notices			73

ARTICLE VIII CONDITIONS TO THE MERGERS			73
Section 8.01 Conditions to the Obligations of Each Party			73
Section 8.02 Conditions to the Obligations of Parent, REIT Merger Sub and Partnership Merger Sub			74
Section 8.03 Conditions to the Obligations of the Company			76
Section 8.04 Delay			76
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER			76
Section 9.01 Termination			76
Section 9.02 Effect of Termination			78
Section 9.03 Fees and Expenses			78
Section 9.04 Escrow of Company Expenses			80
Section 9.05 Waiver			80
ARTICLE X GENERAL PROVISIONS			81
Section 10.01 Non-Survival of Representations and Warranties			81
Section 10.02 Notices			81
Section 10.03 Severability			82
Section 10.04 Amendment			82
Section 10.05 Entire Agreement; Assignment			83
Section 10.06 Performance Guarantee			83
Section 10.07 Remedies; Specific Performance			83
Section 10.08 Parties in Interest			84
Section 10.09 Governing Law; Forum			84
Section 10.10 Headings			84
Section 10.11 Counterparts			84
Section 10.12 Waiver of Jury Trial			84
EXHIBITS
Exhibit A — Knowledge of the Company
Exhibit B — Knowledge of Parent
Exhibit C — Form of Surrender Instrument
Exhibit D — Form of Pillsbury Winthrop Shaw Pittman LLP Opinion
Exhibit E — Form of Pillsbury Winthrop Shaw Pittman LLP Certificate
Exhibit F — Company Subsidiaries
Exhibit G — Primarily Controlled Companies
Exhibit H — Partially Controlled Companies
Exhibit I — Additional Companies
Exhibit J — Change of Control Severance Program

AGREEMENT AND PLAN OF MERGER

     THIS AGREEMENT AND PLAN OF MERGER, dated as of May 22, 2007 (this “ Agreement ”), is made and entered into by and among Crescent Real Estate Equities Company, a Texas real estate investment trust (the “ Company ”), Crescent Real Estate Equities Limited Partnership, a Delaware limited partnership (the “ Operating Partnership ” and together with the Company, the “ Crescent Parties ”), Moon Acquisition Holdings LLC, a Delaware limited liability company (“ Parent ”), Moon Acquisition LLC, a Delaware limited liability company and a wholly-owned subsidiary of Parent (“ REIT Merger Sub ”) and Moon Acquisition Limited Partnership, a Delaware limited partnership (“ Partnership Merger Sub ”, and together with Parent and REIT Merger Sub, the “ Purchaser Parties ”).

     WHEREAS, the parties wish to effect a business combination through a merger of the Company with and into REIT Merger Sub (the “ REIT Merger ”) on the terms and subject to the conditions set forth in this Agreement and in accordance with the Texas Real Estate Investment Trust Act (the “ Texas REIT Law ”) and the Delaware Limited Liability Company Act (the “ DLLCA ”);

     WHEREAS, the parties also wish to effect a merger of the Partnership Merger Sub with and into the Operating Partnership (the “ Partnership Merger ” and, together with the REIT Merger, the “ Mergers ”), on the terms and subject to the conditions set forth in this Agreement and in accordance with Section 17-211 of the Delaware Revised Uniform Limited Partnership Act, as amended (“ DRULPA ”);

     WHEREAS, the Board of Trust Managers of the Company (the “ Company Board ”) has approved this Agreement, the REIT Merger and the other transactions contemplated by this Agreement and declared that the REIT Merger and the other transactions contemplated by this Agreement are advisable and in the best interests of the Company and its shareholders, on the terms and subject to the conditions set forth herein;

     WHEREAS, Crescent Real Estate Equities, Ltd., a Delaware corporation (“ General Partner ”), as the sole general partner of the Operating Partnership, has approved this Agreement, the Partnership Merger, and the other transactions contemplated by this Agreement and deemed it advisable for the Operating Partnership and its limited partners to enter into this Agreement and to consummate the Partnership Merger on the terms and conditions set forth herein;

     WHEREAS, Parent, as the managing member of REIT Merger Sub, has approved this Agreement, the REIT Merger and the other transactions contemplated by this Agreement and declared that this Agreement and the REIT Merger are advisable on the terms and subject to the conditions set forth herein;

     WHEREAS, Parent, as the general partner of Partnership Merger Sub, has approved this Agreement, the Partnership Merger and the other transactions contemplated by this Agreement and deemed it advisable and in the best interests of the limited partners of the Partnership Merger Sub for the Partnership Merger Sub to enter into this Agreement and consummate the Partnership Merger on the terms and subject to the conditions set forth herein; and

     WHEREAS, concurrently with the execution of this Agreement, Parent has delivered to the Company two guarantees of the obligations arising under this Agreement of the Purchaser Parties executed by one or more affiliates of Parent (the “ Guarantors ”, and such instruments, the “ Guarantees ”);

     WHEREAS, as an inducement to the Purchaser Parties entering into this Agreement and incurring the obligations set forth herein, concurrently with the execution of this Agreement, the Company and the General Partner have entered into a voting agreement with the Purchaser Parties relating to partnership interests of the Operating Partnership held by the Company and the General Partner, respectively (the “ Voting Agreement ”);

     WHEREAS, the parties intend that for federal, and applicable state, income tax purposes the REIT Merger will be treated as a taxable sale by the Company of all of the Company’s assets to REIT Merger Sub in exchange for the consideration provided for in Article III to be provided to the shareholders of the Company (the “ REIT Merger Consideration ”) and the assumption of all of the Company’s liabilities, followed by a distribution of such REIT Merger Consideration to the shareholders of the Company in liquidation pursuant to Section 331 and Section 562 of the Code, and that this Agreement shall constitute a “plan of liquidation” of the Company for federal income tax purposes;

     WHEREAS, the parties intend that for federal, and applicable state, income tax purposes the Partnership Merger will be treated as a taxable sale of interests in the Operating Partnership to the extent of interests exchanged for cash; and

     WHEREAS, the parties hereto desire to make certain representations, warranties, covenants and agreements in connection with the Mergers, and also to prescribe various conditions to such transactions.

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

          Section 1.01 Definitions .

               (a) For purposes of this Agreement:

               “ Acquisition Proposal ” means: (i) any proposal or offer received after the date hereof from any person other than Parent and REIT Merger Sub relating to any direct or indirect acquisition (in one or a series of related transactions) of (A) more than 25% of the assets of the Company and its Subsidiaries, taken as a whole, or (B) more than 25% of the outstanding equity securities of the Company or of the Operating Partnership; (ii) any tender offer or exchange offer, as defined pursuant to the Exchange Act, that, if consummated, would result in any person or “group” (as such term is defined under the Exchange Act) beneficially owning 25% or more of the outstanding equity securities of the Company or of the Operating Partnership; (iii) any merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar

transaction involving the Company, other than the REIT Merger, pursuant to which the shareholders of the Company prior to consummation of such transaction would hold less than 75% of the outstanding shares or equity interests of the surviving or resulting person or parent thereof; or (iv) any transaction which is similar in form, substance or purpose to any of the foregoing transactions (other than the REIT Merger).

          “ Action ” means any claim, action, suit, proceeding, arbitration, mediation, inquiry or other investigation.

          “ Additional Company ” means any entity listed on Exhibit I attached hereto and its Subsidiaries.

          “ Affiliate ” or “ affiliate ” of a specified person means a person who, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified person.

          “ AmeriCold ” means AmeriCold Realty Trust, a Maryland real estate investment trust.

          “ AmeriCold Business ” means the business of owning and operating temperature controlled warehouses and related logistics businesses by AmeriCold.

          “ Benefit Plan ” means any bonus, pension, profit sharing, deferred compensation, incentive compensation, stock ownership, stock purchase, stock option, options to acquire units, phantom stock, deferred stock, retirement, vacation, severance, disability, death benefit, hospitalization, medical, employee stock purchase, stock appreciation, restricted stock or units or other employee benefit plan, program, agreement or arrangement as to which the Company, any of its Subsidiaries, any Primarily Controlled Company or any ERISA Affiliate sponsors, maintains, contributes or is obligated to contribute for the benefit of any current or former employee, officer, director, consultant or independent contractor of the Company, any of its Subsidiaries or any Primarily Controlled Company, including any ERISA Benefit Plan.

          “ Business Day ” or “ business day ” means any day on which the principal offices of the SEC in Washington, D.C. are open to accept filings, or, in the case of determining a date when any payment is due, any day (other than a Saturday or Sunday) other than a day on which banks are required or authorized to close in the City of New York.

          “ Canyon Ranch ” means CR Operating, LLC, CR Spa, LLC and their respective Subsidiaries.

          “ Canyon Ranch Business ” means collectively the businesses operated by CR Operating, LLC and CR Spa, LLC.

          “ Canyon Ranch Subsidiaries ” means the collective Subsidiaries of CR Operating, LLC and CR Spa, LLC.

          “ Certificate ” or “ Certificates ” means any certificate evidencing, or any other instrument deemed by the Company or Operating Partnership, as applicable, to be sufficient

evidence of, Company Common Shares, Company Series A Preferred Shares, Company Series B Preferred Shares, Restricted Units, Units or Options.

          “ Change-in-Control Agreements ” means the employment and other agreements set forth in Item 4.11(j) of the Disclosure Letter.

          “ Class of Company ” means any of Company Subsidiaries, Primarily Controlled Companies, Partially Controlled Companies or Additional Companies.

          “ Code ” means the U.S. Internal Revenue Code of 1986, as amended.

          “ Company Business ” means any one of the Office Business, Hotel Business, Resort Residential Business, Canyon Ranch Business and AmeriCold Business.

          “ Company Bylaws ” means the Company Fourth Amended and Restated Bylaws adopted on December 15, 2005, as amended.

          “ Company Charter ” means the Restated Declaration of Trust of the Company dated September 28, 1997, as amended.

          “ Company Common Shares ” means common shares of beneficial interest, par value $0.01 per share, of the Company.

          “ Company Material Adverse Effect ” means any event, circumstance, change or effect that, individually or in the aggregate, is materially adverse to the business, properties, financial condition or results of operations of the Company, its Subsidiaries and the Related Entities, taken as a whole, provided , however , that in no event shall any of the following, to the extent occurring after the date hereof, alone or in combination with each other, be deemed to constitute, nor shall any of the following be taken into account in determining whether there has been, a Company Material Adverse Effect: (A) any change in the market price or trading volume of the Company Common Shares, the Series A Preferred Shares or the Series B Preferred Shares of the Company, (B) any change in general economic or business conditions except to the extent that such changes have a materially disproportionate adverse effect on one or more Company Businesses relative to other similarly situated participants in the business or industry in which such Company Business or Businesses operates, (C) any change in financial or securities market conditions generally, except to the extent that such changes have a materially disproportionate adverse effect on one or more Company Businesses relative to other similarly situated participants in the business or industry in which such Company Business or Businesses operate, (D) any events, circumstances, changes or effects generally affecting the United States commercial real estate industry except to the extent that such changes have a materially disproportionate adverse effect on one or more Company Businesses relative to other similarly situated participants in the business or industry and in any geographic region in which such Company Business or Businesses operates, (E) any change in legal, political or regulatory conditions generally or in any geographic region in which the Company or any of its Subsidiaries or Related Entities operates, (F) the announcement of the execution of this Agreement or anticipation of the Mergers or the pendency thereof, (G) any events, circumstances, changes or effects arising from the taking of any action required or expressly contemplated by this Agreement or the failure to take any action prohibited by this Agreement, (H) acts of war, armed hostilities,

sabotage or terrorism, or any escalation of any such acts of war, armed hostilities, sabotage or terrorism threatened or underway as of the date of this Agreement, except to the extent that such changes have a materially disproportionate adverse effect on one or more Company Businesses relative to other similarly situated participants in the business or industry and in any geographic region in which such Company Business or Businesses operates, (I) changes in Law or GAAP or (J) any failure to meet any internal or published projections, forecasts or revenue or earnings predictions for any period. References in this Agreement to dollar amount thresholds shall not be deemed to be evidence of materiality or of a Company Material Adverse Effect. Notwithstanding the foregoing, for purposes of Section 4.07, the proviso to the preceding sentence shall be read without giving effect to the words “to the extent occurring after the date hereof”.

          “ Company Properties ” means, collectively, the Leased Real Property and the Owned Real Property.

          “ Company Series A Preferred Shares ” means shares of 6 ³ / 4 % Series A Convertible Cumulative Preferred Shares of the Company, par value $0.01 per share.

          “ Company Series B Preferred Shares ” means shares of 9.50% Series B Cumulative Redeemable Preferred Shares of the Company, par value $0.01 per share.

          “ Contract ” means any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other binding commitment, instrument or obligation.

          “ control ” (including the terms “ controlled by ” and “ under common control with ”) means the possession, directly or indirectly of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, as trustee or executor, by contract or credit arrangement or otherwise.

          “ Designated Employee ” means any current or former employee of the Company, and of its subsidiaries or any third party manager of any property owned by the Company who Parent, in its discretion, believes should receive a notice pursuant to WARN or any similar “mass layoff” or “plant closing” law.

          “ Disclosure Letter ” means the disclosure letter delivered by the Company to Parent concurrently with the execution of this Agreement for which the disclosure of any fact or item in any Section of such disclosure letter shall, should the existence of such fact or item be relevant to any other section, be deemed to be disclosed with respect to that other Section so long as the relevance of such disclosure to such other Section is reasonably apparent from the nature of such disclosure. Nothing in the Disclosure Letter is intended to broaden the scope of any representation or warranty of the Company made herein.

          “ Environmental Law ” means the applicable Law of any Governmental Entity relating to the prevention of pollution, regulating discharge or emission of Hazardous Substances, remediation of contamination, protection of natural resources or the environment, preservation of environmental quality or the protection of human health from exposure to Hazardous Substances.

          “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, together with the rules and regulations promulgated thereunder.

          “ Junior Subordinated Notes ” means (i) certain unsecured junior subordinated notes issued to evidence loans made to the Operating Partnership, maturing on June 30, 2035, of the proceeds from the issuance by Crescent Real Estate Statutory Trust I of beneficial interests in its assets; and (ii) certain unsecured junior subordinated notes issued to evidence loans made to the Operating Partnership, maturing on July 30, 2035, of the proceeds from the issuance by Crescent Real Estate Statutory Trust II of beneficial interests in its assets.

          “ Knowledge of the Company ” means the actual knowledge of those individuals listed on Exhibit A .

          “ Knowledge of Parent ” means the actual knowledge of those individuals listed on Exhibit B .

          “ Law ” means any United States national, state, provincial, municipal or local statute, law, ordinance, regulation, rule, code, executive order, injunction, judgment, decree or other order.

          “ Leased Real Property ” means all material real property leased (including Ground Leases) or otherwise occupied (as lessee, sublessee, assignee or otherwise) as of the date hereof by the Company, any of its Subsidiaries, any Primarily Controlled Company or any Partially Controlled Company, as applicable, from a third party other than the Company or any of its Subsidiaries or any of its Primarily Controlled Companies, including the improvements thereon.

          “ Liens ” means with respect to any asset (including any security), any mortgage, claim, lien, pledge, charge, security interest or encumbrance of any kind in respect to such asset.

          “ Merger Consideration ” means the Company Common Share Merger Consideration, Partnership Merger Consideration, Restricted Unit Consideration, Option Consideration, Preferred Redemption Amount, Series A Consideration, and Series B Consideration.

          “ Office Business ” means the business of owning and/or operating office properties directly or through joint ventures.

          “ Operating Partnership Agreement ” means that certain Fourth Amended and Restated Agreement of Limited Partnership of the Operating Partnership, dated as of April 30, 2006, as amended.

          “ Owned Real Property ” means all real property owned by the Company, any of its Subsidiaries, any Primarily Controlled Company or any Partially Controlled Company as of the date hereof, together with all buildings, structures, other improvements and fixtures located on or under such real property and all easements, rights, and other appurtenances thereto.

          “ Parent Material Adverse Effect ” means any event, circumstance, change or effect that would reasonably be expected to prevent, hinder or materially delay Parent, REIT Merger Sub or Partnership Merger Sub from consummating the Mergers or any other transactions contemplated by this Agreement.

          “ Partially Controlled Company ” means any company listed on Exhibit H attached hereto.

          “ Permitted Liens ” means (i) Liens for Taxes not yet delinquent and Liens for Taxes being contested in good faith and for which there are adequate reserves on the financial statements of the Company if such reserves are required pursuant to GAAP; (ii) inchoate mechanics’ and materialmen’s Liens for construction in progress; (iii) inchoate workmen’s, repairmen’s, warehousemen’s and carriers’ Liens arising in the ordinary course of business of the Company, any of its Subsidiaries, any Primarily Controlled Company or any Partially Controlled Company; (iv) zoning restrictions, survey exceptions, utility easements, rights of way and similar Liens that are imposed by any Governmental Authority having jurisdiction thereon or otherwise are typical for the applicable property type and locality; (v) with respect to real property, any title exception, easement agreements and all other matters disclosed in any Company title insurance policy provided or made available to Parent, Liens and obligations arising under the Material Contracts (including but not limited to any Lien securing mortgage debt disclosed in the Disclosure Letter), the Company Leases and any other Lien or exception to title that does not interfere materially with the current use of such property (assuming its continued use in the manner in which it is currently used) or materially adversely affect the value or marketability of such property; (vi) matters that would be disclosed on current title reports or surveys that arise or have arisen in the ordinary course of business, that do not materially adversely affect the marketability of the applicable property and/or (vii) other Liens being contested in good faith in the ordinary course of business, that do not materially adversely affect the marketability of the applicable property and for which there are adequate reserves on the financial statements of the Company if such reserves are required pursuant to GAAP.

          “ person ” or “ Person ” means an individual, corporation, partnership, limited partnership, limited liability company, syndicate, person (including a “person” as defined in Section 13(d)(3) of the Exchange Act), trust, association or entity or government, political subdivision, agency or instrumentality of a government.

          “ Portfolio Purchase and Sale Agreements ” means the Walton Portfolio Purchase and Sale Agreement, and the purchase and sale agreements with respect to any other Portfolio Sales.

          “ Portfolio Sales ” means the Walton Portfolio Sale, the sales contemplated in Item 6.01(f) of the Disclosure Letter, and other sales under contracts approved in writing by the Purchaser Parties.

          “ Primarily Controlled Company ” means any entity listed on Exhibit G attached hereto.

          “ Related Entity ” means any of a Primarily Controlled Company, a Partially Controlled Company or an Additional Company.

          “ Release ” means any spilling, leaking, pumping, pouring, emitting, discharging, injecting, escaping, leaching, dumping or disposing of a Hazardous Substance into the environment.

          “ Resort Residential Business ” means the business of owning, developing, selling and operating resort residential properties directly or through joint ventures, including developing the Crescent Plaza and Ritz-Carlton Dallas property.

          “ Securities Act ” means the Securities Act of 1933, as amended, together with the rules and regulations promulgated thereunder.

          “ Strategic Plan ” means the Company’s strategic business plan publicly announced on March 1, 2007.

          “ Subsidiary ” of any Person means any corporation, partnership, limited partnership, limited liability company, joint venture or other legal entity of which (i) the Person, or its direct or indirect Subsidiary, is a general partner, managing partner, managing member, or manager, (ii) the Person, or its direct or indirect Subsidiary, has the right to designate one or more representatives to its governing board or committee, or (iii) such Person (either directly or through or together with another Subsidiary of such Person) owns at least 50% of the voting stock or common equity interest of such corporation, partnership, limited partnership, limited liability company, joint venture or other legal entity, in each case other than a Related Entity that is not in the same Class of Company as such Person .

          “ Superior Proposal ” means an Acquisition Proposal (on its most recently amended and modified terms, if amended and modified) made by a third party with respect to at least 50% of the outstanding Company Common Shares or at least 50% of the Company’s assets, which the Company Board determines in its good faith judgment (after receiving the advice of an independent financial advisor of nationally recognized reputation) is more favorable from a financial point of view to the holders of the Company Common Shares than the REIT Merger, after taking into account all of the terms and conditions of such Acquisition Proposal and such other factors as the Company Board deems relevant (including, without limitation, financing terms, any termination fee or expense reimbursement payable under this Agreement, any conditions to the consummation thereof, the likelihood of the Acquisition Proposal being consummated and the likely timing of consummating the Acquisition Proposal).

          “ Tax ” or “ Taxes ” means any and all taxes, charges, fees, levies and other assessments, including income, gross receipts, excise, property, sales, withholding, social security, occupation, use, service, license, payroll, franchise, employment, severance, stamp, premium, windfall profits, environmental (including taxes under Section 59A of the Code), customs duties, capital stock, profits, unemployment, disability, value added, alternative or add-on minimum, registration, transfer and recording taxes, fees and charges, including estimated taxes, imposed by the United States or any taxing authority (domestic or foreign), whether computed on a separate, consolidated, unitary, combined or any other basis (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any government or taxing authority.

          “ Tax Returns ” means all reports, returns, declarations, claims for refund, information returns, statements, or other information required to be supplied in writing to a taxing authority in connection with Taxes.

          “ Trust Preferred Securities ” means (i) certain beneficial interests in the assets of Crescent Real Estate Statutory Trust I issued in connection with the Junior Subordinated Notes;

and (ii) certain beneficial interests in the assets of Crescent Real Estate Statutory Trust II issued in connection with the Junior Subordinated Notes.

          “ Units ” means units of common and preferred limited partnership interest in the Operating Partnership.

          “ Walton Portfolio Sale ” means, whether effected directly or indirectly or in one transaction or a series of related transactions, any sale, transfer or other business combination involving the six (6) hotel and office properties owned by the Company and under contract for sale on the date hereof pursuant to the Walton Portfolio Purchase and Sale Agreement, as well as the Sonoma Golf property.

          “ Walton Portfolio Purchase and Sale Agreement ” means those certain Purchase and Sale Agreements made and entered into on March 5, 2007, as amended and reinstated, between Walton TCC Hotel Investors V, L.L.C. and the Sellers identified therein.

          The following terms have the meaning set forth in the sections set forth below:

		Location of
Defined Term		Definition
7 1/8% Notes		§ 4.03(a)
9.25% Senior Notes		§ 4.03(a)
Agreement		Preamble
Capitalization Date		§ 4.03(a)
CERCLA		§ 4.16(e)
Change in Recommendation		§ 7.04(c)
Claim		§ 7.06(a)
Closing		§ 2.04
Closing Date		§ 2.04
Commitment Letters		§ 5.07
Commitments		§ 5.07
Company		Preamble
Company Board		Recitals
Company Board Recommendation		§ 4.23(c)
Company Common Share Merger Consideration		§ 3.01(c)
Company Expenses		§ 9.03(e)
Company Leases		§ 4.15(o)
Company Preferred Shares		§ 4.03(a)
Company Shareholders’ Meeting		§ 7.02
Company Shareholder Approval		§ 7.02
Company Termination Fee		§ 9.03(d)
Confidentiality Agreement		§ 7.03(b)
Construction Project		§ 4.15(n)
Continuing Employees		§ 7.05(b)
Counterproposal		§ 7.04(c)
Crescent Intellectual Property		§ 4.14
Crescent Parties		Preamble

		Location of
Defined Term		Definition
Delaware Merger Certificate		§ 2.03(a)
Delayed Closing		§ 2.04(b)
Dissenter’s Rights Provisions		§ 3.04(a)
Dissenting Shareholders		§ 3.04(a)
Dissenting Shares		§ 3.04(a)
DLLCA		Recitals
Drop Dead Date		§ 9.01(b)
DRULPA		Recitals
DSOS		§ 2.03(a)
Effective Time		§ 2.03(a)
Employee Loans		§ 4.24
ESPP		§ 3.08
ESPP Date		§ 3.08
Excess Shares		§ 4.03(a)
Exchange Fund		§ 3.05(a)
Existing Units		§ 3.02(a)
Expenses		§ 7.06(a)
Financing		§ 5.07
General Partner		Recitals
Governmental Order		§ 9.01(c)
Ground Lease		§ 4.15(c)
Guarantees		Recitals
Guarantors		Recitals
Indemnified Parties		§ 7.06(a)
Lease Documents		§ 4.15(b)
Loan Documents		§ 4.15(d)
Management Agreement Documents		§ 4.15(j)
Material Contract		§ 4.18(a)
Maximum Premium		§ 7.06(c)
Merger Consideration		Recitals
Mergers		Recitals
NYSE		§ 7.02
Operating Partnership		Preamble
Option Consideration		§ 3.03(a)
Options		§ 3.03(a)
Other Filings		§ 4.08
Parent		Preamble
Parent Expenses		§ 9.03(e)
Parent Plan		§ 7.05(b)
Participation Agreements		§ 4.15(r)
Participation Interest		§ 4.15(r)
Participation Party		§ 4.15(r)
Partnership Information Statement		§ 7.01
Partnership Merger		Recitals
Partnership Merger Certificate		§ 2.03(b)
Partnership Merger Consideration		§ 3.02(a)

		Location of
Defined Term		Definition
Partnership Merger Effective Time		§ 2.03(b)
Partnership Merger Sub		Preamble
Paying Agent		§ 3.05(a)
Permits		§ 4.09
Permitted Activities		§ 7.16
Permitted Properties		§ 7.16
Post-Signing Returns		§ 7.11(b)
Preferred Redemption Amount		§ 2.07
Proxy Statement		§ 4.08
Purchaser Parties		Preamble
Qualifying Income		§ 9.04(a)
Redemption		§ 2.07
REIT		§ 4.10(c)
REIT Certificate		§8.02(d)
REIT Merger		Recitals
REIT Merger Consideration		Recitals
REIT Merger Sub		Preamble
Representatives		§ 7.04(a)
Required Shareholder Vote		§ 4.04(a)
Restricted Units		§ 3.03(b)
Restricted Unit Consideration		§ 3.03(b)
Sarbanes-Oxley Act		§ 4.06(e)
SEC Documents		§ 4.06(a)
Section 16		§ 7.05(d)
Series A Consideration		§7.13
Series B Consideration		§7.13
Surviving Entity		§ 2.01(a)
Surviving Entity Operating Agreement		§ 2.02(a)
Surviving Partnership		§ 2.01(b)
Surviving Partnership Partnership Agreement		§ 2.02(b)
Tax Protection Agreement		§ 4.10(o)
Termination Date		§ 9.01
Texas Clerk		§2.03(a)
Texas Merger Certificate		§2.03(a)
Texas REIT Law		Recitals
Third Party Franchise Agreements		§ 4.15(i)
Transfer Taxes		§ 7.08
Unitholders		§ 4.03(b)
Voting Agreement		Recitals
WARN		§ 4.17(d)

          Section 1.02 Interpretation and Rules of Construction . In this Agreement, except to the extent otherwise provided or that the context otherwise requires:

               (a) when a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated;

               (b) the table of contents and headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement;

               (c) whenever the words “include,” “includes” or “including” are used in this Agreement, they are deemed to be followed by the words “without limitation; ”

               (d) the words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement, except to the extent otherwise specified;

               (e) references to any statute, rule or regulation are to the statute, rule or regulation as amended, modified, supplemented or replaced from time to time (and, in the case of statutes, include any rules and regulations promulgated under the statute) and to any Section of any statute, rule or regulation include any successor to the section;

               (f) all terms defined in this Agreement have the defined meanings when used in any certificate or other document made or delivered pursuant hereto, unless otherwise defined therein;

               (g) the definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms;

               (h) references to a person are also to its successors and permitted assigns; and

               (i) the use of “or” is not intended to be exclusive unless expressly indicated otherwise.

ARTICLE II

          Section 2.01 Mergers .

               (a) Subject to the terms and conditions of this Agreement, and in accordance with Section 23.10 of the Texas REIT Law and Section 18-209 of the DLLCA, at the Effective Time, REIT Merger Sub and the Company shall consummate the REIT Merger pursuant to which (i) the Company shall be merged with and into REIT Merger Sub and the separate existence of the Company shall thereupon cease and (ii) REIT Merger Sub shall be the surviving entity in the Merger (the “ Surviving Entity ”). The Merger shall have the effects specified in Section 23.60 of the Texas REIT Law and Section 18-209(g) of the DLLCA.

               (b) Subject to the terms and conditions of this Agreement, and in accordance with Section 17-211 of the DRULPA, at the Partnership Merger Effective Time, Partnership Merger Sub and the Operating Partnership shall consummate the Partnership Merger pursuant to which (i) the Partnership Merger Sub shall be merged with and into the Operating Partnership and the

separate existence of the Partnership Merger Sub shall thereupon cease and (ii) the Operating Partnership shall be the surviving partnership in the Partnership Merger (the “ Surviving Partnership ”). The Partnership Merger shall have the effects specified in Section 17-211(h) of the DRULPA.

          Section 2.02 Operating Agreement; Partnership Agreement .

               (a) The certificate of formation of REIT Merger Sub, as in effect immediately prior to the Effective Time, shall be the certificate of formation of the Surviving Entity until thereafter amended as provided by Law. The operating agreement of REIT Merger Sub, as in effect immediately prior to the Effective Time shall be the operating agreement of the Surviving Entity until thereafter amended in accordance with the provisions thereof and as provided by Law (the “ Surviving Entity Operating Agreement ”).

               (b) The certificate of limited partnership of Operating Partnership shall be amended as a result of the Partnership Merger to be in the form mutually agreed upon by the parties hereto. The limited partnership agreement of Partnership Merger Sub, as in effect immediately prior to the Partnership Merger Effective Time, shall be the limited partnership agreement of the Surviving Partnership until thereafter amended in accordance with the provisions thereof and as provided by Law (the “ Surviving Partnership Partnership Agreement ”).

          Section 2.03 Effective Times .

               (a) At the Closing, REIT Merger Sub and the Company shall duly execute and file articles of merger (the “ Texas Merger Certificate ”) with the county clerk of Tarrant County, Texas (the “ Texas Clerk ”) in accordance with the Texas REIT Law and shall duly execute and file with the Secretary of State of Delaware (the “ DSOS ”) a certificate of merger (the “ Delaware Merger Certificate ”) in accordance with the DLLCA and shall make all other filings or recordings required under the Texas REIT Law or the DLLCA to effect the REIT Merger. The REIT Merger shall become effective upon the later of (A) such time as the Texas Merger Certificate has been filed with the Texas Clerk as required by Section 23.40 of the Texas REIT Law and (B) such time as the Delaware Merger Certificate has been filed with the DSOS, or such later time which the parties hereto shall have agreed upon and designated in the Delaware Merger Certificate in accordance with the DLLCA and in the Texas Merger Certificate of Merger in accordance with the Texas REIT Law as the effective time of the Merger (the “ Effective Time ”).

               (b) At the Closing, immediately after the Effective Time, the Partnership shall file with the DSOS a certificate of merger (the “ Partnership Merger Certificate ”), executed in accordance with the applicable provisions of the DRULPA and shall make all other filings or recordings required under the DRULPA to effect the Partnership Merger. The Partnership Merger shall become effective after the Effective Time upon such time as the Partnership Merger Certificate has been filed with the DSOS, or such later time which the parties hereto shall have agreed upon and designated in such filing in accordance with the DRULPA as the effective time of the Partnership Merger (the “ Partnership Merger Effective Time ”).

          Section 2.04 Closing .

               (a) Subject to Section 2.04(b), the closing of the Mergers (the “ Closing ”) shall occur as promptly as practicable (but in no event later than the second (2nd) Business Day) after all of the conditions set forth in Article VIII (other than conditions which by their terms are required to be satisfied or waived at the Closing) shall have been satisfied or waived by the party entitled to the benefit of the same, and, subject to the foregoing, shall take place at such time and on a date to be specified by the parties (the “ Closing Date ”). The Closing shall take place at the offices of Goodwin Procter LLP, 599 Lexington Avenue, New York, New York 10022, or at such other place as agreed to by the parties hereto.

               (b) The Purchaser Parties may, by giving written notice to the Company and the Operating Partnership at least three (3) Business Days prior to the Closing Date, delay the Closing to a date no later than the earlier of (x) the last Business Day of the month in which the conditions set forth in Article VIII have been satisfied or waived and (y) the Drop Dead Date (as defined hereinafter) (a “ Delayed Closing ”); provided , however , that if the Purchaser Parties elect that the Closing shall be a Delayed Closing, then, notwithstanding anything to the contrary in this Agreement but subject to Section 8.04, all conditions to Closing set forth in Section 8.02 (including those conditions that by their nature can be satisfied only at the Closing) shall be deemed to have been satisfied or (to the extent permitted by applicable Law) waived by the Purchaser Parties on and as of the Delayed Closing (other than the condition set forth in Section 8.02(b) (but only to the extent the failure to satisfy such condition resulted from an intentional breach by the Company or the Operating Partnership of the covenants and agreements required to be performed by them under this Agreement during the period between the original Closing Date and the date to which Closing is delayed pursuant to the Delayed Closing)). In the event that the Purchaser Parties cause a Delayed Closing as contemplated by this Section 2.04(b), all references in this Agreement to the Closing shall be deemed to be references to the Delayed Closing and the Closing Date shall be deemed to occur on the date on which the Delayed Closing occurs.

          Section 2.05 Manager of the Surviving Entity . The managing member of REIT Merger Sub immediately prior to the Effective Time, shall be the managing member of the Surviving Entity.

          Section 2.06 Partnership Matters . The Parent shall be the General Partner of the Surviving Partnership following the Partnership Merger Effective Time.

          Section 2.07 Redemption of Preferred Shares . Prior to the Effective Time, the Company shall redeem all of the Company Series A Preferred Shares and Company Series B Preferred Shares for cash pursuant to the terms of such securities (such cash, the “ Preferred Redemption Amount ”, and each, a “ Redemption ”). The Company’s obligation to effect the Redemptions may be conditioned upon the satisfaction or waiver of the conditions to the Mergers set forth in Article VIII.

ARTICLE III

EFFECTS OF THE MERGERS

          Section 3.01 Effects of REIT Merger on Shares and Membership Interests . As of the Effective Time, by virtue of the REIT Merger and without any action on the part of the holders of any shares of beneficial interest of the Company or the holders of any membership interests in REIT Merger Sub:

               (a) Each membership interest of REIT Merger Sub issued and outstanding immediately prior to the Effective Time shall remain as an issued and outstanding membership interest of the Surviving Entity.

               (b) Each Company Common Share that is owned by the Company or any of its Subsidiaries immediately prior to the Effective Time shall automatically be canceled and retired and shall cease to exist, and no payment shall be made with respect thereto.

               (c) Each Company Common Share issued and outstanding immediately prior to the Effective Time (other than shares to be canceled in accordance with Section 3.01(b) or Dissenting Shares) shall automatically be converted into, and canceled in exchange for, the right to receive an amount in cash, without interest, to be paid by Parent equal to $22.80, reduced by the per share amount, if any, distributed to holders of Company Common Shares pursuant to the final sentence of Section 6.01(b). (the “ Company Common Share Merger Consideration ”).

          Section 3.02 Effect on Partnership Interests . As of the Partnership Merger Effective Time, by virtue of the Partnership Merger and without any action on the part of the holder of any partnership interests of the Operating Partnership or of Partnership Merger Sub:

               (a) Each outstanding Unit other than any Restricted Unit (the “ Existing Units ”) (other than Existing Units held by the Company, General Partner or any of the Company’s Subsidiaries), subject to the terms and conditions set forth herein, shall be converted into, and shall be cancelled in exchange for, the right to receive cash in an amount, without interest, per Existing Unit equal to the product of (A) the Company Common Share Merger Consideration multiplied by (B) two (2) (the “ Partnership Merger Consideration ”).

               (b) Each Existing Unit held by the Company, General Partner or any of the Company’s Subsidiaries immediately prior to the Partnership Merger Effective Time shall automatically be cancelled and cease to exist, the holders thereof shall cease to have any rights with respect thereto and no payment shall be made with respect thereto.

               (c) The general partner interests of the Operating Partnership shall remain outstanding as general partner interests in the Surviving Partnership, entitling the holder thereof to such rights, duties and obligations as are more fully set forth in the Surviving Partnership Partnership Agreement.

               (d) Each limited partnership interest in the Partnership Merger Sub shall remain outstanding as a limited partner interest in the Surviving Partnership, entitling the holder thereof to such rights, duties and obligations as are more fully set forth in the Surviving Partnership Agreement.

               (e) The general partner interests of the Merger Partnership shall automatically be cancelled and cease to exist, the holders thereof shall cease to have any rights with respect thereto and no payment shall be made with respect thereto.

          Section 3.03 Equity Awards .

               (a) Each option to purchase Company Common Shares or Units (collectively, the “ Options ”) granted under the Incentive Plans, which is outstanding immediately prior to the Effective Time (whether or not then vested or exercisable) and which has not been exercised or canceled prior thereto shall, at the Effective Time, be canceled upon the surrender and cancellation of the option agreement representing such Option, together with the delivery of a written instrument executed by the holder thereof in the form attached hereto as Exhibit C , and, in exchange therefor, REIT Merger Sub or Partnership Merger Sub, as applicable, shall pay to the holder thereof cash in an amount equal to the product of (A) the number of Company Common Shares or Units, as applicable, issuable upon exercise of such Option (assuming full vesting) and (B) the excess, if any, of the Company Common Share Merger Consideration or the Partnership Merger Consideration, as applicable, over the exercise price per Company Common Share or Unit, as applicable, which cash payment shall be treated as compensation and shall be net of any applicable federal or state withholding tax (the “ Option Consideration ”).

               (b) Each Unit that was issued pursuant to an award granted under the 2004 Crescent Real Estate Equities Limited Partnership Long-Term Incentive Plan or the 2005 Crescent Real Estate Equities Limited Partnership Long-Term Incentive Plan (collectively, the “ Restricted Units ”), which is outstanding immediately prior to the Effective Time (whether or not then vested) and which has not been paid out or cancelled prior thereto, shall, at the Partnership Merger Effective Time, be cancelled upon the surrender of the agreement representing such Restricted Unit by the Company or the holder thereof (or a reasonably satisfactory affidavit of lost agreement), together with the delivery of a written instrument executed by the holder thereof in the form attached hereto as Exhibit C . Partnership Merger Sub shall pay to the holder thereof cash in an amount , without interest, per Restricted Unit equal to the Partnership Merger Consideration plus accrued but unpaid dividends (the “ Restricted Unit Consideration ”) other than Restricted Units listed on Item 3.03(b) of the Disclosure Letter, which shall be forfeited prior to the Effective Time. Parent, the Company and the Operating Partnership agree that the payments made to holders of Restricted Units pursuant to this Section 3.03(b) shall be treated as consideration for partnership interests and not reported as payments for services.

               (c) The Crescent Parties shall take all actions necessary to ensure that the Options, Restricted Units and the Incentive Plans shall be terminated and the provisions in any other plan, program, arrangement or agreement providing for the issuance or grant of any other interest in respect of equity interests in the Company or any of the Company Subsidiaries or any Primarily Controlled Company shall be deemed to be terminated and of no further force and effect as of the Effective Time and no holder of any Option or Restricted Unit or any participant in any Incentive Plan shall, thereafter, have any right thereunder to (i) acquire any securities of the Company, Operating Partnership, the Surviving Entity or any Subsidiary thereof or any Primarily Controlled Company, or (ii) receive any payment or benefit with respect to any award previously granted under the Incentive Plans except as provided in Section 3.02(a) or Section 3.03(b).

          Section 3.04 Dissenter’s Rights .

               (a) Notwithstanding anything in this Agreement to the contrary, any Company Common Shares that are issued and outstanding immediately prior to the Effective Time and that are held by Company shareholders who, in accordance with Section 25.20 of the Texas REIT Law (the “ Dissenter’s Rights Provisions ”), (i) properly filed a written objection prior to the Company Shareholders’ Meeting, (ii) have not voted in favor of approving this Agreement and the REIT Merger, (iii) shall have demanded properly in writing fair value for such shares, and (iv) have not effectively withdrawn, lost or failed to perfect their rights under the Dissenter’s Rights Provisions (collectively, the “ Dissenting Shares ”), will not be converted as described in Section 3.01(c) but at the Effective Time, by virtue of the REIT Merger and without any action on the part of the holder thereof, shall be cancelled and shall cease to exist and shall represent the right to receive only those rights provided under the Dissenter’s Rights Provisions; provided , however , that all Company Common Shares held by Company shareholders who shall have failed to perfect or who effectively shall have withdrawn or lost their rights to demand fair value of such Company Common Shares under the Dissenter’s Rights Provisions shall thereupon be deemed to have been canceled and to have been converted, as of the Effective Time, into the right to receive the Company Common Share Merger Consideration relating thereto, without interest, in the manner provided in Section 3.01(c). Persons who have perfected statutory rights with respect to Dissenting Shares (the “ Dissenting Shareholders ”) as described above will not be paid as provided in this Agreement and will have only such rights as are provided by the Dissenter’s Rights Provisions with respect to such Dissenting Shares.

               (b) The Company shall give Parent prompt (and in any event within two (2) Business Days of receipt) notice of any written objections received by the Company indicating an intent to exercise Dissenter’s Rights with respect to Company Common Shares and Parent shall have the right to direct all negotiations and proceedings with respect to such demands, subject, prior to the Effective Time, to consultation with the Company, provided that the Company shall not, prior to the Effective Time, be obligated by such direction to make a payment with respect to or settle or offer to settle any such demands without its consent. The Company shall not, except with the prior written consent of Parent, make any payment with respect to, or settle or offer to settle, any such demands.

               (c) Each Dissenting Shareholder who becomes entitled under the Dissenter’s Rights Provisions to payment for Dissenting Shares shall receive payment therefor after the Effective Time from the Surviving Entity (but only after the amount thereof shall have been agreed upon or finally determined pursuant to the Dissenter’s Rights Provisions).

               (d) No dissenters’ or appraisal or similar rights shall be available with respect to the Partnership Merger or any transaction contemplated hereby other than the REIT Merger.

          Section 3.05 Paying Agent; Exchange Procedure .

               (a)  Paying Agent . Prior to the Effective Time, Parent shall appoint a bank or trust company reasonably satisfactory to the Company to act as Paying Agent (the “ Paying Agent ”) for the payment in accordance with this Agreement of the Company Common Share Merger Consideration, the Preferred Redemption Amount, the Partnership Merger Consideration, the Restricted Unit Consideration, the Option Consideration, the Series A Consideration and the

Series B Consideration, as applicable (such cash being referred to as the “ Exchange Fund ”). On or before the Effective Time, REIT Merger Sub and Partnership Merger Sub shall deposit the Company Common Share Merger Consideration, the Preferred Redemption Amount, the Partnership Merger Consideration, the Restricted Unit Consideration, the Option Consideration, the Series A Consideration and the Series B Consideration with the Paying Agent for the benefit of the holders of Company Common Shares, Company Series A Preferred Shares, Company Series B Preferred Shares, Existing Units, Restricted Units and Options, as applicable. Parent shall cause the Paying Agent to make, and the Paying Agent shall make, payments of the Company Common Share Merger Consideration, the Preferred Redemption Amount, the Partnership Merger Consideration, the Restricted Unit Consideration, the Option Consideration, the Series A Consideration and the Series B Consideration out of the Exchange Fund in accordance with this Agreement. The Exchange Fund shall not be used for any other purpose. Any and all interest earned on cash deposited in the Exchange Fund shall be paid to the Surviving Entity.

               (b)  Share Transfer Books . At the Effective Time, the share transfer books of the Company and the Operating Partnership shall be closed and thereafter there shall be no further registration of transfers of the Company Common Shares, the Company Series A Preferred Shares, the Company Series B Preferred Shares, the Restricted Units, the Existing Units or the Options. From and after the Effective Time, persons who held Company Common Shares, Company Series A Preferred Shares, Company Series B Preferred Shares, Restricted Units, Existing Units or Options immediately prior to the Effective Time shall cease to have rights with respect to such shares, except as otherwise provided for herein. On or after the Effective Time, any Certificates of the Company presented to the Paying Agent, the Surviving Entity or the transfer agent for any reason shall be exchanged for the Company Common Share Merger Consideration, the Preferred Redemption Amount, the Partnership Merger Consideration, the Restricted Unit Consideration, the Option Consideration, the Series A Consideration or the Series B Consideration, as applicable, with respect to the Company Common Shares, the Company Series A Preferred Shares, the Company Series B Preferred Shares, the Existing Units, the Restricted Units or the Options formerly represented thereby.

               (c)  Exchange Procedures for Certificates . Promptly after the Effective Time (but in any event within five (5) Business Days), the Surviving Entity shall cause the Paying Agent to mail to each person who immediately prior to the Effective Time held Company Common Shares, Company Series A Preferred Shares, Company Series B Preferred Shares, Restricted Units, Existing Units or Options that were exchanged for the right to receive the Company Common Share Merger Consideration, the Preferred Redemption Amount, the Partnership Merger Consideration, the Restricted Unit Consideration, the Option Consideration, the Series A Consideration or the Series B Consideration, as applicable pursuant to this Agreement: (i) a letter of transmittal (which shall specify that delivery of Certificates shall be effected, and risk of loss and title to the Certificates shall pass to the Paying Agent, only upon delivery of the Certificates to the Paying Agent, and which letter shall be in such form and have such other provisions as Parent may reasonably specify) and (ii) instructions for use in effecting the surrender of the holder’s Certificates in exchange for the Company Common Share Merger Consideration, the Preferred Redemption Amount, the Partnership Merger Consideration, the Restricted Unit Consideration, the Option Consideration, the Series A Consideration or the Series B Consideration, as applicable, to which the holder thereof is entitled. Upon surrender of a Certificate for cancellation to the Paying Agent or to such other agent or agents reasonably

satisfactory to the Company as may be appointed by Parent, together with such letter of transmittal, duly executed and completed in accordance with the instructions thereto, and such other documents as may reasonably be required by the Paying Agent, the holder of such Certificate shall receive in exchange therefor the Company Common Share Merger Consideration, the Preferred Redemption Amount, the Partnership Merger Consideration, the Restricted Unit Consideration, the Option Consideration, the Series A Consideration or the Series B Consideration, as applicable, payable in respect of the securities previously represented by such Certificate pursuant to the provisions of this Agreement, and the Certificate so surrendered shall forthwith be canceled. In the event of a transfer of ownership of Company Common Shares, Company Common Shares, Company Series A Preferred Shares, Company Series B Preferred Shares, Restricted Units, Existing Units or Options that is not registered in the transfer records of the Company, payment may be made to a person other than the person in whose name the Certificate so surrendered is registered, if such Certificate shall be properly endorsed or otherwise be in proper form for transfer and the person requesting such payment shall pay any transfer or other Taxes required by reason of the payment to a person other than the registered holder of such Certificate or establish to the satisfaction of Parent that such tax has been paid or is not applicable. Until surrendered as contemplated by this Section 3.05, each Certificate shall be deemed at any time after the Effective Time to represent only the right to receive, upon such surrender, the appropriate form of consideration as contemplated by this Agreement. No interest shall be paid or accrue on the Merger Consideration.

               (d)  No Further Ownership Rights in Company Common Shares, Company Series A Preferred Shares, Company Series B Preferred Shares, Units, Options . As of the Effective Time, holders of Company Common Shares, Company Series A Preferred Shares, Company Series B Preferred Shares, Restricted Units, Existing Units and Options shall cease to be, and shall have no rights as, shareholders of the Company or partners in the Operating Partnership, other than the right to receive the Merger Consideration , as applicable, provided under this Agreement. The Merger Consideration paid in accordance with this Agreement shall be deemed to have been paid in full satisfaction of all rights and privileges pertaining to the Company Common Shares, Company Series A Preferred Shares, the Company Series B Preferred Shares, the Restricted Units, the Existing Units or the Options exchanged or redeemed theretofore and represented by such Certificates.

               (e)  Termination of Exchange Fund . Any portion of the Exchange Fund which remains undistributed to the holders of Company Common Shares for twelve (12) months after the Effective Time shall be delivered to the Surviving Entity and any holders of shares of Company Common Shares prior to the REIT Merger who have not theretofore complied with this Article III shall thereafter look only to the Surviving Entity for payment of the Company Common Share Merger Consideration or Preferred Redemption Amount.

               (f)  No Liability . None of Parent, REIT Merger Sub, Partnership Merger Sub, the Surviving Entity, the Company, the Operating Partnership or the Paying Agent, or any employee, officer, director, agent or Affiliate thereof, shall be liable to any person in respect of the Merger Consideration if the Exchange Fund has been delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law.

               (g) Investment of Exchange Fund . The Paying Agent shall invest the cash included in the Exchange Fund, as directed by the Surviving Entity, on a daily basis. Any net

profit resulting from, or interest or income produced by, such investments, shall be placed in the Exchange Fund. To the extent that there are losses with respect to such investments, or the Exchange Fund diminishes for other reasons below the level required to make prompt payments of the Merger Consideration as contemplated hereby, Parent shall promptly replace or restore the portion of the Exchange Fund lost through investments or other events so as to ensure that the Exchange Fund is, at all times, maintained at a level sufficient to make such payment.

               (h)  Lost Certificates . If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and, if required by the Surviving Entity or the Paying Agent, the posting by such person of a bond in such amount as the Surviving Entity or the Paying Agent reasonably may direct, the Paying Agent will issue in exchange for such lost, stolen or destroyed Certificate the appropriate form of Merger Consideration payable in respect thereof pursuant to this Agreement.

          Section 3.06 Withholding Rights . The Surviving Entity, Operating Partnership, Parent or the Paying Agent, as applicable, shall be entitled to deduct and withhold from the Merger Consideration otherwise payable pursuant to this Agreement to any holder of Company Common Shares, Company Series A Preferred Shares, Company Series B Preferred Shares, Units or Options, as applicable, such amounts as it is required to deduct and withhold with respect to the making of such payment under the Code, and the rules and regulations promulgated thereunder, or any provision of state, local or foreign tax law. To the extent that amounts are so withheld by the Surviving Entity, Operating Partnership, Parent or the Paying Agent, as applicable, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to such holder in respect of which such deduction and withholding was made by the Surviving Entity, Operating Partnership, Parent or the Paying Agent, as applicable.

          Section 3.07 Redemption of Notes . Upon the request of Parent, the Crescent Parties shall deliver a notice of redemption calling the 7 1/8% Notes due September 15, 2007, to the extent they are then outstanding, for redemption as of the Effective Time and the 9.25% Senior Notes due April 15, 2009, to the extent they are still outstanding, for redemption pursuant to their terms and shall cooperate with Parent in effecting the satisfaction and discharge of such notes and related indentures concurrent with the Closing; provided , however , that if the Crescent Parties determine in their discretion that as of the date any such notices of redemption would be required pursuant to this Section 3.07 that the Crescent Parties may not as of the Closing Date have adequate funds to effect the redemptions (without considering any financing that may be arranged by Parent but considering the Crescent Parties’ cash flow and capital expenditure requirements under their business plan assuming the Mergers do not close), the Crescent Parties shall not be required by this Agreement to redeem such notes concurrent with the Closing but shall instead be required to cooperate with Parent to effect the defeasance of such notes concurrent with the Closing.

          Section 3.08 Employee Stock Purchase Plan . The Crescent Parties shall take all actions necessary to terminate the Crescent Real Estate Equities Company Employee Stock Purchase Plan, as amended and/or modified (the “ ESPP ”) at the end of the current “Offering Period” (as such term is defined in the ESPP), which is scheduled to end on June 30, 2007 (the “ ESPP Date ”). As of the ESPP Date, no new offering or purchasing periods shall be commenced. In addition, the Crescent Parties shall take all actions as may be necessary in order

21

to freeze the rights of the participants in the ESPP, effective as of the date of this Agreement, to existing participants and (to the extent possible under the ESPP) existing participation levels.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
OPERATING PARTNERSHIP

     Except as set forth in the Disclosure Letter the Company and the Operating Partnership hereby jointly and severally represent and warrant to the Purchaser Parties as follows:

          Section 4.01 Organization; Minute Books .

               (a) The Company, each of its Subsidiaries, any Primarily Controlled Company, any Partially Controlled Company other than the Canyon Ranch Subsidiaries, and to the Knowledge of the Company, each of the Canyon Ranch Subsidiaries, are duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization and have the requisite corporate or similar power and authority to own, lease and operate their properties and to carry on their business as now being conducted. The Company, each of its Subsidiaries, any Primarily Controlled Company, any Partially Controlled Company other than the Canyon Ranch Subsidiaries, and to the Knowledge of the Company, each of the Canyon Ranch Subsidiaries, are duly qualified or licensed to do business and in good standing in each jurisdiction in which the nature of their business or the ownership or leasing of their properties makes such qualification or licensing necessary, except in such jurisdictions where the failure to be so duly qualified or licensed and in good standing has not had and would not reasonably be expected to have a Company Material Adverse Effect.

               (b) The Company has made available to the Purchaser Parties complete and correct copies of the Company Charter and Company Bylaws and has made available to the Purchaser Parties the charter and bylaws (or similar organizational documents) of each of its Subsidiaries, any Primarily Controlled Company and any Partially Controlled Company other than Canyon Ranch, except as noted on Item 4.01(b) of the Disclosure Letter. The Operating Partnership has made available to the Purchaser Parties complete and correct copies of the Operating Partnership Agreement. The charter and bylaws (or similar organizational documents) of the Company, each of its Subsidiaries, any Primarily Controlled Company, any Partially Controlled Company other than the Canyon Ranch Subsidiaries, and to the Knowledge of the Company, the Canyon Ranch Subsidiaries, are in full force and effect and no dissolution, revocation or forfeiture proceeding regarding the Company, any of its Subsidiaries, any Primarily Controlled Company or any Partially Controlled Company other than the Canyon Ranch Subsidiaries, and to the Knowledge of the Company, the Canyon Ranch Subsidiaries, shall have been commenced. None of the Company, its Subsidiaries, any Primarily Controlled Company or any Partially Controlled Company other than the Canyon Ranch Subsidiaries, and to the Knowledge of the Company, none of the Canyon Ranch Subsidiaries, is in violation of any of the provisions of its charter or bylaws (or similar organizational documents), except, in each case, for such violations that would not have a Company Material Adverse Effect.

               (c) The Company has made available to the Purchaser Parties correct and complete copies of the minute books of the Company of meetings of the Company Board and

committees of the Company Board held since January 1, 2004, except as set forth on Item 4.01(c) of the Disclosure Letter.

          Section 4.02 Subsidiaries and Related Entities .

               (a) A correct and complete list of all of the Subsidiaries of the Company and Related Entities, together with the jurisdiction of organization of each such entity and the percentage of the outstanding equity of each such entity owned by the Company and each Subsidiary of the Company, is set forth in Item 4.02 of the Disclosure Letter. All of the outstanding shares of stock of each Subsidiary of the Company, any Primarily Controlled Company, any Partially Controlled Company other than the Canyon Ranch Subsidiaries, and to the Knowledge of the Company, the Canyon Ranch Subsidiaries and any Additional Company, that is a corporation have been duly authorized and validly issued and are fully paid and nonassessable. Except as set forth in Item 4.02 of the Disclosure Letter, all of the outstanding shares of stock or equity interests and other ownership interests of each Subsidiary of the Company and any Related Entity that are owned by the Company, by one or more Subsidiaries of the Company, by one or more Primarily Controlled Companies, or by one or more Partially Controlled Companies, or by any combination thereof, are owned by such entities free and clear of all Liens. The Company does not own, directly or indirectly, any stock or other voting or equity securities or interests (or any interests convertible into or exchangeable or exercisable for any equity or similar interests) in any other Person other than the ownership interests reflected in Item 4.02 of the Disclosure Letter.

               (b) Each Company Subsidiary (as “Subsidiary” is defined without giving effect to the last clause of such definition), is listed on Exhibits F, G, H or I hereto. Each reference in Exhibits F, G, H and I hereto providing that one Related Entity is the Subsidiary of another Related Entity is true and correct. Each characterization in Exhibits F, G, H and I hereto of “Unconsolidated Entities” is true and correct.

          Section 4.03 Capital Structure .

               (a) The authorized stock of the Company consists of 250,000,000 shares of Company Common Shares, 100,000,000 shares of preferred stock, $0.01 par value per share (the “ Company Preferred Shares ”), and 350,000,000 excess shares, $0.01 par value per share (the “ Excess Shares ”). At the close of business on May 18, 2007 (the “ Capitalization Date ”), (i) 128,013,928 shares of Company Common Shares were issued, 102,893,011 of which were outstanding, all of which were duly authorized, validly issued, fully paid and nonassessable and free of preemptive rights, and none of which is subject to risks of forfeiture granted under the Incentive Plans, (ii) 14,200,000 shares of Company Series A Preferred Shares were issued and outstanding, (iii) 3,400,000 shares of Company Series B Preferred Shares were issued and outstanding, and (iv) no Excess Shares were issued and outstanding. As of the date of this Agreement, except as set forth above and in Item 4.03(a) of the Disclosure Letter, no shares of stock of the Company or options, warrants, convertible or exchangeable securities or other rights to purchase stock of the Company are issued, reserved for issuance or outstanding. Except as set forth in Item 4.03(a ) of the Disclosure Letter, there are no outstanding bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter on which the Company’s shareholders may vote. There are also outstanding 2,406,750 Restricted Units issued under the

Incentive Plans that are each exchangeable for cash equal to the value of two shares of Company Common Shares (as of May 18, 2007, adjusted for a 200,000 reduction in Restricted Units occurring as of the date hereof). As of the date of this Agreement, except as set forth above, there are no securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which the Company, any of its Subsidiaries, any Primarily Controlled Company or any Partially Controlled Company other than Canyon Ranch, is a party or by which any of them is bound obligating the Company or any of its Subsidiaries to issue, deliver or sell or create, or cause to be issued, delivered or sold or created, additional shares of stock or other voting or equity securities or interests of the Company, any of its Subsidiaries, any Primarily Controlled Company, or any Partially Controlled Company other than Canyon Ranch, or obligating the Company, any of its Subsidiaries, any Primarily Controlled Company or any Partially Controlled Company other than Canyon Ranch, to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking or relating to the voting of stock or equity securities or interests of the Company, or any Partially Controlled Company other than Canyon Ranch. As of the date of this Agreement and as set forth in Item 4.03(a) of the Disclosure Letter, other than pursuant to this Agreement, there are no outstanding contractual obligations or rights of the Company, any of its Subsidiaries, any Primarily Controlled Company or any Partially Controlled Company other than Canyon Ranch, to register or repurchase, redeem (except for (w) the exchange of Units for Company Common Shares in accordance with the Operating Partnership Agreement, (x) the conversion of Company Series A Preferred Shares in accordance with the Company Charter, (y) the purchase of the notes, due September 15, 2007 (the “ 7 1/8% Notes ”) pursuant to that certain related indenture, dated September 22, 1997, as amended and supplemented, and (z) the purchase of the notes due April 15, 2009 (the “ 9.25% Senior Notes ”) pursuant to that certain related indenture, dated April 15, 2002, as amended and supplemented) or otherwise acquire, vote, dispose of or otherwise transfer or register pursuant to any securities Laws any shares of stock or equity interests of the Company, any of its Subsidiaries, any Primarily Controlled Company or any Partially Controlled Company other than Canyon Ranch.

               (b) As of May 18, 2007 (adjusted for a 200,000 reduction in Restricted Units occurring as of the date hereof), with respect to the Operating Partnership, (1) the Company’s 81.5% limited partner interest in the Partnership is equivalent to 50,822,861.50 Units, (2) the remaining 17.5% limited partner interest in the Partnership held by persons other than the Company (the “ Unitholders ”) is equivalent to 10,917,923 Units, (3) the Company’s 1% general partner interest in the Partnership is equivalent to 623,644 Units, (4) the Company held 14,200,000 Series A Preferred Partnership Units, and (5) the Company held 3,400,000 Series B Redeemable Preferred Partnership Units.

               (c) There are no agreements or understandings to which the Company is a party with respect to the voting of any shares of Company Common Shares and, to the Knowledge of the Company as of the date of this Agreement, there are no third party agreements or understandings with respect to the voting of shares of Company Common Shares.

          Section 4.04 Authority .

               (a) The Company has the requisite corporate power and authority to execute and deliver this Agreement and, subject to approval by the Company’s shareholders of the REIT Merger, to consummate the transactions contemplated hereby. The execution, delivery and

performance of this Agreement by the Company and the consummation by the Company of the REIT Merger and the other transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Company and each applicable Company Subsidiary and Primarily Controlled Company, subject, solely with respect to the consummation of the REIT Merger, to receipt of approval of the REIT Merger by the holders of two-thirds of the outstanding Common Shares (the “ Required Shareholder Vote ”). This Agreement has been duly executed and delivered by the Company and (assuming the valid authorization, execution and delivery of this Agreement by the Purchaser Parties) constitutes the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar Laws of general applicability relating to or affecting creditors’ rights or by general equity principles.

               (b) The Operating Partnership has all requisite partnership power and authority to execute and deliver this Agreement and, subject to approval of the Company in its capacity as limited partner, to consummate the transactions contemplated hereby, subject, solely with respect to the consummation of the Partnership Merger, to the acceptance for record of the Partnership Merger Certificate by the DSOS.

               (c) The Company Board, at a meeting duly called and held has unanimously (i) approved and declared advisable and in the best interests of the Company and its shareholders this Agreement, the Mergers, and the transactions contemplated hereby and (ii) resolved to recommend approval by the shareholders of the Company of the REIT Merger, which resolutions, subject to Section 7.04, have not been subsequently rescinded, modified or withdrawn in any way. The consent of the shareholders of the Company by the Required Shareholder Vote, the consent of the General Partner as general partner of the Partnership and the consent of the Company as limited partner, which have been delivered pursuant to the Voting Agreement subject to Section 7.04 hereof, are the only votes or consents required of the holders of any class or series of the Company Common Shares or other securities of or equity interests in the Company or the Operating Partnership required to approve this Agreement and to approve and consummate the Mergers.

          Section 4.05 Consents and Approvals; No Violations . Except (a) for filings, permits, authorizations, consents and approvals as may be required under, and other applicable requirements of, the Securities Act, Exchange Act, the HSR Act, the DRULPA, the DLLCA, the Texas REIT Law and state securities Laws or as described on Item 4.05 of the Disclosure Letter and (b) as may be required in connection with the Taxes described in Section 7.08, neither the execution, delivery or performance of this Agreement by the Company and the Operating Partnership nor the consummation by the Company and the Operating Partnership of the transactions contemplated hereby will (i) except as set forth in Item 4.05 of the Disclosure Letter, conflict with or result in any breach of any provision of the Company Charter or Company Bylaws or of the similar organizational documents of any of its Subsidiaries, or any Related Entity (for the sake of clarity “organizational documents” as used in this sentence shall include any shareholder agreement to which the Company or any Primarily Controlled Company is a party), (ii) require any filing with, or permit, authorization, consent or approval of, any Governmental Entity, (iii) except as set forth in Item 4.05 of the Disclosure Letter, conflict with or result in a breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration) under,

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or result in a loss of benefit under, or give rise to a right of purchase, first offer or forced sale under, any of the terms, conditions or provisions of any Contract to which the Company, any of its Subsidiaries, any Primarily Controlled Company, any Partially Controlled Company other than the Canyon Ranch Subsidiaries, and to the Knowledge of the Company, the Canyon Ranch Subsidiaries, is a party or by which any of them or any of their properties or assets may be bound, (iv) violate any Law, order, writ, injunction, judgment, decree, statute, rule or regulation applicable to the Company, any of its Subsidiaries, any Primarily Controlled Company, any Partially Controlled Company other than the Canyon Ranch Subsidiaries, and to the Knowledge of the Company, the Canyon Ranch Subsidiaries, or any of their properties or assets, (v) result in the creation of any Lien on any properties or assets of the Company, any of its Subsidiaries, any Primarily Controlled Company, any Partially Controlled Company other than the Canyon Ranch Subsidiaries, and to the Knowledge of the Company, the Canyon Ranch Subsidiaries, except for Permitted Liens or (vi) require the Company, any of its Subsidiaries or any Primarily Controlled Company to make any payment to any third Person, except in the case of clause (ii) where the failure to obtain such permits, authorizations, consents or approvals or to make such filings or, in the case of clauses (iii) , (iv) , (v) or (vi) , for breaches, defaults, terminations, amendments, cancellations, accelerations, losses of benefits, violations, Liens or payments that have not had and would not reasonably be expected to have a Company Material Adverse Effect.

          Section 4.06 SEC Documents and Other Reports .

               (a) The Company and the Operating Partnership have filed with the SEC all forms, reports, statements, schedules, certifications, exhibits thereto and other documents required to be filed by them since January 1, 2004 under the Securities Act or the Exchange Act (collectively, including any amendments thereto, the “ SEC Documents ”). As of their respective filing dates, the SEC Documents (including any documents or information incorporated by reference therein) complied, and all documents filed by the Company and the Operating Partnership with the SEC under the Securities Act or the Exchange Act between the date of this Agreement and the date of Closing will comply, in each case subject to the accuracy of the representations and warranties set forth in Sections 4.08 and 5.05 , in all material respects with the requirements of the Securities Act and the Exchange Act, as the case may be, each as in effect on the date so filed. At the time filed with the SEC, none of the SEC Documents (including any documents or information incorporated by reference therein) contained, or, in the case of documents filed on or after the date hereof will contain, in each case subject to the accuracy of the representations and warranties set forth in Sections 4.08 and 5.05 , any untrue statement of a material fact or omitted, or, in the case of documents filed on or after the date hereof will omit, in each case subject to the accuracy of the representations and warranties set forth in Sections 4.08 and 5.05 , to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except to the extent such statements have been modified or superseded by later filings. Except to the extent disclosed in SEC Documents, the consolidated financial statements of the Company included in the SEC Documents (including the related notes and schedules thereto) complied as of their respective dates in all material respects with the then applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with GAAP (except in the case of the unaudited statements, as permitted by Form 10-Q under the Exchange Act) during the periods involved (except as may be indicated therein or in the notes thereto) and fairly present in all material respects the consolidated financial position of the Company, as the case may be, and those of its Subsidiaries,

the Primarily Controlled Companies, the Partially Controlled Companies, and the Additional Companies that are consolidated, as applicable, as of the dates thereof and the consolidated results of their operations and their consolidated cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments and to any other adjustments described therein).

               (b) The Company has made available to the Purchaser Parties correct and complete copies of all material written correspondence between the SEC, on the one hand, and the Company, any of its Subsidiaries, or any Primarily Controlled Company, on the other hand, occurring since January 1, 2004 and prior to the date hereof and will promptly following the receipt thereof, make available to the Purchaser Parties any such material correspondence sent or received after the date hereof. To the Knowledge of the Company, none of the SEC Documents is the subject of ongoing SEC review or outstanding SEC comment.

               (c) None of the Company, its Subsidiaries, any Primarily Controlled Company, any Partially Controlled Company or any Additional Company has any liability or obligation of any nature (whether accrued, absolute, contingent or otherwise) which would be required to be reflected, reserved for or disclosed in a consolidated balance sheet of the Company and those of its Subsidiaries, the Primarily Controlled Companies, the Partially Controlled Companies, and the Additional Companies that are consolidated, including the notes thereto, prepared in accordance with GAAP except (i) as reflected, reserved for or disclosed in the consolidated balance sheet of the Company and such entities as of December 31, 2006, including the notes thereto, (ii) as incurred since December 31, 2006 in the ordinary course of business consistent with past practice, (iii) as incurred or to be incurred by the Company or any such entity pursuant to, in connection with, or as a result of, the Mergers, the Portfolio Sales, the other disposition transactions the Company has been engaged in since December 31, 2006 and the other transactions contemplated by this Agreement, (iv) as would not, or would not reasonably be expected to, have a Company Material Adverse Effect, or (v) as set forth in Item 4.06(c) of the Disclosure Letter.

               (d) The management of the Company has (i) implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) to ensure that material information relating to the Company, including those of its Subsidiaries, the Primarily Controlled Companies, the Partially Controlled Companies, and the Additional Companies that are consolidated, is made known to the management of the Company, and (ii) has disclosed, based on its most recent evaluation, to the Company’s outside auditors and the audit committee of the Company Board (A) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial data and (B) any fraud or allegation of fraud whether or not material, that involves management or other employees who have a significant role in the internal controls over financial reporting of the Company, or any of its Subsidiaries or any Primarily Controlled Company.

               (e) Except as set forth on Item 4.06(e) of the Disclosure Letter, the Company has not identified any material weaknesses in the design or operation of internal controls over financial reporting. Each SEC Document filed since July 31, 2002, was accompanied by the certification required to be filed or submitted by the Company’s chief executive officer and chief

financial officer pursuant to the Sarbanes-Oxley Act of 2002 (the “ Sarbanes-Oxley Act ”) and, at the time of filing or submission of each such certification, such certification was true and accurate and complied with the Sarbanes-Oxley Act except to the extent disclosed on Item 4.06(e) of the Disclosure Letter. To the Knowledge of the Company, there is no reason to believe that its auditors and its chief executive officer and chief financial officer will not be able to give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act when next due.

          Section 4.07 Absence of Material Adverse Effect . Since December 31, 2006 and prior to the date hereof, and except (i) for the Portfolio Sales or (ii) as set forth on Item 4.07 of the Disclosure Letter, the Company, its Subsidiaries, the Primarily Controlled Companies and the Partially Controlled Companies have conducted their respective businesses in all material respects in the ordinary course consistent with past practice, and, other than in connection with the Portfolio Sales, there has not been (a) any effect, event, development, change or circumstance that, individually or in the aggregate, with all other effects, events, developments and changes, has resulted or would reasonably be expected to result in a Company Material Adverse Effect, (b) except for regular quarterly distributions to the Company’s shareholders with customary record and payment dates, any declaration, setting aside or payment of any dividend or other distribution with respect to its stock or equity interests or, any redemption, purchase or other acquisition of any of its stock or equity interests, (c) any change in accounting methods, principles or practices used by the Company, its Subsidiaries, the Primarily Controlled Companies or the Partially Controlled Companies materially affecting its assets, liabilities or business, except insofar as may have been required by a change in GAAP, (d) any material damage, destruction or loss not covered by insurance to the Owned Real Property, (e) any amendment of any term of any material outstanding debt or equity security of the Company, its Subsidiaries, the Primarily Controlled Companies or the Partially Controlled Companies other than Canyon Ranch, in each case other than in the ordinary course of business, (f) any split, combination or reclassification of any Company Common Shares or Company Preferred Shares or the stock of any Primarily Controlled Company or any Partially Controlled Company, or any issuance or the authorization of any issuance of any other securities in respect of, in lieu of or in substitution for, or giving the right to acquire by exchange or exercise, shares of stock or any ownership interest in, the Company, any of its Subsidiaries, any Primarily Controlled Company or any Partially Controlled Company, (g) any amendment of any employment, consulting, severance, incentive stock, stock option, deferred compensation, bonus, retirement, retention or any other agreement, or the adoption of any new such agreement, between (i) the Company or any Company Subsidiary or any Primarily Controlled Company or any Partially Controlled Company, on the one hand and (ii) any officer, trustee or director of the Company or any Company Subsidiary or any Primarily Controlled Company or any Partially Controlled Company, on the other hand, earning more than $150,000 per year; other than as required by any contract, agreement or Benefit Plan, (h) any direct or indirect acquisition (whether through merger or consolidation with, the purchase of a substantial equity interest in, the purchase of a substantial portion of the assets of, or otherwise) of any business or any corporation, partnership, association or other business organization or a division thereof or any significant assets other than in the ordinary course of business or in an amount not involving more than $1,000,000 individually or $5,000,000 in the aggregate, (i) any incurrence of indebtedness for borrowed money or guarantee for such indebtedness, in each case by the Company or any Company Subsidiary or any Primarily Controlled Company or any Partially Controlled Company, other than (i) as in the ordinary course of business, including construction loans and guarantees on

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residential developments, and (ii) projects currently under construction in amounts disclosed on Item 4.07 of the Disclosure Letter, or (j) any agreement by such entity involving any of the foregoing since December 31, 2006 and prior to the date hereof, in each case except as disclosed on Item 4.07 of the Disclosure Letter.

          Section 4.08 Information Supplied . None of the information supplied or to be supplied by the Company, its Subsidiaries, the Primarily Controlled Companies or the Partially Controlled Companies, or representatives for inclusion or incorporation by reference in the proxy statement relating to the Shareholders’ Meeting (together with any amendments or supplements thereto and including any related filings required pursuant to the Exchange Act, the “ Proxy Statement ”) or any other document to be filed with the SEC in connection herewith, including, but not limited to, the Partnership Information Statement (collectively, the “ Other Filings ”) will, in the case of the Proxy Statement, at the date it is first mailed to the Company’s shareholders or at the time of the Shareholders’ Meeting or at the time of any amendment or supplement thereof, or, in the case of any Other Filing, at the date it is first mailed to the Company’s shareholders, if applicable, or at the date it is first filed with the SEC, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, except that no representation or warranty is made by the Company with respect to statements made or incorporated by reference therein based on information about the Purchaser Parties that is supplied by the Purchaser Parties or any of their representatives specifically for inclusion or incorporation by reference therein.

          Section 4.09 Compliance with Laws . The businesses and assets of the Company, its Subsidiaries, the Primarily Controlled Companies, the Partially Controlled Companies other than the Canyon Ranch Subsidiaries, and to the Knowledge of the Company, the Canyon Ranch Subsidiaries, are not and have not been in violation of or subject to liability under any Law, order, writ, injunction, judgment, decree, statute, rule, ordinance or regulation of any Governmental Entity, except for any violations or liability that have not had and would not reasonably be expected to have a Company Material Adverse Effect. Each of the Company, its Subsidiaries, the Primarily Controlled Companies, the Partially Controlled Companies other than the Canyon Ranch Subsidiaries, and to the Knowledge of the Company, the Canyon Ranch Subsidiaries, has in effect all federal, state, local and provincial governmental licenses, authorizations, consents, permits and approvals (collectively, “ Permits ”) necessary for it to own, lease or operate its properties and assets and to carry on its business as now conducted, and no violation or default has occurred under any such Permit, except for the absence of Permits and for violations or defaults under Permits that have not had and would not reasonably be expected to have a Company Material Adverse Effect.

          Section 4.10 Tax Representations .

               (a) The Company and each of its Subsidiaries, the Primarily Controlled Companies, the Partially Controlled Companies other than the Canyon Ranch Subsidiaries, and to the Knowledge of the Company, the Canyon Ranch Subsidiaries, has timely filed or caused to be filed (after taking into account all applicable extensions) all federal and state returns which are based on income or profits, and other material Tax Returns required to be filed by them, and all such Tax Returns are true, correct and complete in all material respects. True, correct and complete copies of all federal Tax Returns for the Company and the Operating Partnership and

of the consolidated return of Crescent TRS Holdings Corp. with respect to the taxable years commencing on or after January 1, 1994, have been made available to representatives of Parent.

               (b) Each of the Company, its Subsidiaries, the Primarily Controlled Companies, the Partially Controlled Companies other than the Canyon Ranch Subsidiaries, and to the Knowledge of the Company, the Canyon Ranch Subsidiaries, has paid or caused to be paid or, if not yet due, will timely pay or cause to be paid all material Taxes required to be paid by them (whether or not shown as due on any Tax Returns), other than such payments as are being contested in good faith by appropriate proceedings. The most recent financial statements contained in the SEC Documents reflect an adequate reserve (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) for all material Taxes payable by the Company and its Subsidiaries for all taxable periods and portions thereof through the date of such financial statements.

               (c) The Company, (i) for all taxable years commencing with the Company’s taxable year ended December 31, 1994 through December 31, 2006, has qualified and been subject to taxation as a REIT and (ii) has operated from December 31, 2006 to the date of this Agreement, and intends to continue to operate until the Effective Time, in such a manner as would permit it to continue to qualify as a REIT, for the period beginning January 1, 2007 through the Effective Time. The Company has no Subsidiary or Related Entity that is a REIT other than AmeriCold. To the Knowledge of the Company, AmeriCold (i) for all taxable years commencing with the taxable year ended December 31, 1999 through December 31, 2006, has qualified and been subject to taxation as a REIT and (ii) has operated from December 31, 2006 to the date of this Agreement, and intends to continue to operate until the Effective Time, in such a manner as would permit it to continue to qualify as a REIT, for the period beginning January 1, 2007 through the Effective Time. To the Company’s Knowledge, no challenge to the Company’s or AmeriCold’s status as a REIT is pending or threatened. Each Subsidiary of the Company or Related Entity that is a corporation for federal income tax purposes is a “qualified REIT subsidiary” pursuant to Section 856(i) of the Code or a “taxable REIT subsidiary” pursuant to Section 856(l) of the Code. Neither the Company nor any of its Subsidiaries holds any assets the disposition of which would be subject to rules similar to Section 1374 of the Code as a result of (A) an election under IRS Notice 88-19 or Treasury Regulations Section 1.337(d)-5 or Section 1.337(d)-6 or (B) the application of Treasury Regulations Section 1.337(d)-7.

               (d) No requests for waivers of the time to assess any Taxes of the Company, its Subsidiaries, the Primarily Controlled Companies, the Partially Controlled Companies other than the Canyon Ranch Subsidiaries, or to the Knowledge of the Company, the Canyon Ranch Subsidiaries are pending.

               (e) Except as set forth on Item 4.10(e) of the Disclosure Letter, there have not been and are no pending audits, examinations, investigations or other proceedings in respect of material Taxes of the Company or the Operating Partnership and, since January 1, 2003, to the Knowledge of the Company, there have not been and are no pending audits, examinations, investigations or other proceedings in respect of material Taxes of any of the Company’s Subsidiaries (other than the Operating Partnership), the Primarily Controlled Companies, the Partially Controlled Companies other than the Canyon Ranch Subsidiaries, or to the Knowledge of the Company, the Canyon Ranch Subsidiaries.

               (f) There are no Liens for a material amount of Taxes (other than Permitted Liens) upon any of the assets of the Company, any Subsidiary of the Company, the Primarily Controlled Companies, the Partially Controlled Companies other than the Canyon Ranch Subsidiaries, or to the Knowledge of the Company, the Canyon Ranch Subsidiaries.

               (g) No claim has been made in writing by a taxing authority in a jurisdiction where the Company, any Subsidiary of the Company, the Primarily Controlled Companies, the Partially Controlled Companies other than the Canyon Ranch Subsidiaries, or to the Knowledge of the Company, the Canyon Ranch Subsidiaries does not file Tax Returns that the Company or any such entity is or may be subject to taxation by that jurisdiction.

               (h) Except as set forth on Item 4.10(h) of the Disclosure Letter, neither the Company nor Operating Partnership has requested a private letter ruling from the IRS or comparable rulings from other taxing authorities and, since January 1, 2003, no Subsidiary of the Company (other than the Operating Partnership), the Primarily Controlled Companies, the Partially Controlled Companies other than the Canyon Ranch Subsidiaries, or to the Knowledge of the Company, the Canyon Ranch Subsidiaries has requested a private letter ruling from the IRS or comparable rulings from other taxing authorities. No Tax Returns have been filed that are inconsistent with any private letter rulings received by the Company or any of its Subsidiaries.

               (i) Neither the Company nor any Subsidiary of the Company nor the Primarily Controlled Companies, the Partially Controlled Companies other than the Canyon Ranch Subsidiaries, nor to the Knowledge of the Company, the Canyon Ranch Subsidiaries, is a party to any understanding or arrangement described in Treasury Regulations Section 1.6011-4(b).

               (j) Neither the Company nor the Operating Partnership has entered into any “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law) and, since January 1, 2003, no Subsidiary of the Company (other than the Operating Partnership) has entered into any “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law).

               (k) The Company expects that the Company’s dividends paid deduction for the taxable year ending on the Closing Date will equal or exceed the sum of (i) the amount determined under Code Section 857(a)(1), but computed with the modifications described in the next sentence, and (ii) the Company’s net capital gain for such taxable year. The amount described under clause (i) shall be computed by substituting “100%” for “90%” in each place it appears in Code Section 857(a)(1).

               (l) With respect to any taxable years that are open for examination by taxing authorities, neither the Company nor any of its Subsidiaries nor the Primarily Controlled Companies, the Partially Controlled Companies other than the Canyon Ranch Subsidiaries, nor to the Knowledge of the Company, the Canyon Ranch Subsidiaries, (i) has incurred any material liability for Taxes under Sections 857(b), 857(f), 860(c) or 4981 of the Code which have not been previously paid, or (ii) has engaged in any transaction that would give rise to “redetermined rents, redetermined deductions and excess interest” described in Section 857(b)(7) of the Code.

               (m) For any taxable years that are open for examination by taxing authorities, neither the Company nor any Subsidiary of the Company nor the Primarily Controlled Companies, the Partially Controlled Companies other than the Canyon Ranch Subsidiaries, nor to the Knowledge of the Company, the Canyon Ranch Subsidiaries, (other than a “taxable REIT subsidiary” or a subsidiary of a “taxable REIT subsidiary”) has engaged in any “prohibited transactions” within the meaning of Section 857(b)(6) of the Code.

               (n) The Company, its Subsidiaries, the Primarily Controlled Companies, the Partially Controlled Companies other than the Canyon Ranch Subsidiaries, and to the Knowledge of the Company, the Canyon Ranch Subsidiaries, have complied, in all material respects, with all applicable laws, rules and regulations relating to the payment and withholding of Taxes (including, without limitation, withholding of Taxes pursuant to Sections 1441, 1442, 1445, 1446, 3121 and 3402 of the Code) and have duly and timely withheld and have paid over to the appropriate taxing authorities all material amounts required to be so withheld and paid over on or prior to the due date thereof under all applicable laws.

               (o) Neither the Company nor any of its Subsidiaries nor the Primarily Controlled Companies, the Partially Controlled Companies other than the Canyon Ranch Subsidiaries, nor to the Knowledge of the Company, the Canyon Ranch Subsidiaries, has entered into or is subject, directly or indirectly, to any Tax Protection Agreements that have not expired and no person has raised, or has threatened to raise, in writing a material claim against the Company or any Company Subsidiary for any breach of any Tax Protection Agreement. As used herein, a “ Tax Protection Agreement ” is a written agreement, (A) that, as one of its purposes, permits a person or entity to take the position that such person or entity could defer federal taxable income that otherwise might have been recognized, and (B) that (i) prohibits or restricts in any manner the disposition of any assets of the Company or any Subsidiary, the Primarily Controlled Companies, the Partially Controlled Companies other than the Canyon Ranch Subsidiaries, or to the Knowledge of the Company, the Canyon Ranch Subsidiaries, (ii) requires that the Company or any Subsidiary maintain, or put in place, or replace indebtedness, whether or not secured by one or more of the assets owned by the Company or any Subsidiary, (iii) requires that the Company or any Company Subsidiary offer to any Person at any time the opportunity to guarantee or otherwise assume, directly or indirectly, the risk of loss for federal income tax purposes for indebtedness or other liabilities of the Company or any Company Subsidiary, or (iv) requires that the Company or any Company Subsidiary make or refrain from making any Tax election.

               (p) Neither the Company nor any of its Subsidiaries nor the Primarily Controlled Companies, the Partially Controlled Companies other than the Canyon Ranch Subsidiaries, nor to the Knowledge of the Company, the Canyon Ranch Subsidiaries, has any liability for the material Taxes of another person other than the Company and its Subsidiaries under Treasury Regulations Section 1.1502–6 (or any similar provision of state, local or foreign law), as a transferee or successor, by contract, or otherwise.

               (q) The Company’s aggregate tax basis in its assets as determined for U.S. federal income tax purposes is and will be immediately before the Closing Date, in excess of the Company’s aggregate liabilities as determined for U.S. federal income tax purposes, including the Company’s allocable share of liabilities of any entities in which it owns an equity interest

where that entity is treated as other than a corporation for U.S. federal income tax purposes, as such allocable shares are determined for U.S. federal income tax purposes.

               (r) Except as set forth on Item 4.10(r) of the Disclosure Letter, there are no outstanding agreements, waivers, or arrangements extending the statutory period of limitations applicable to any claim for or the period for the collection or assessment of Taxes due and payable by the Company or any Subsidiary of the Company, the Primarily Controlled Companies, the Partially Controlled Companies other than the Canyon Ranch Subsidiaries, or to the Knowledge of the Company, the Canyon Ranch Subsidiaries, for any taxable period.

               (s) Except as set forth on Item 4.10(s) of the Disclosure Letter, no power of attorney that is currently in force has been granted by the Company or any Company Subsidiary, the Primarily Controlled Companies, the Partially Controlled Companies other than the Canyon Ranch Subsidiaries, or to the Knowledge of the Company, the Canyon Ranch Subsidiaries, with respect to any matter relating to Taxes that could affect the Company or any Subsidiary of the Company.

               (t) Except as set forth on Item 4.10(t) of the Disclosure Letter, none of the Company, the Operating Partnership, the General Partner or any of the Unitholders is a foreign person within the meaning of Section 1445(b)(2) of the Code.

               (u) The liability for income Taxes of the Company and its Subsidiaries in connection with the Walton Portfolio Sale and the sale of C-C Parkway Austin, L.P. will not exceed the amounts shown on Item 4.10(u) of the Disclosure Letter.

               (v) Except as set forth on Item 4.10(v) of the Disclosure Letter, neither the Company nor any Company Subsidiary nor the Primarily Controlled Companies, the Partially Controlled Companies other than the Canyon Ranch Subsidiaries, nor to the Knowledge of the Company, the Canyon Ranch Subsidiaries, is obligated to make any payment that would not be deductible pursuant to Section 162(m) of the Code.

               (w) The Operating Partnership is treated as a partnership for federal income tax purposes and not as a “publicly traded partnership” within the meaning of Section 7704 of the Code and no election has been made with respect to the OP under Treasury Regulation Section 301.7701-3.

               (x) The Company does not own, directly or indirectly through entities other than entities treated as U.S. corporations for U.S. federal income tax purposes (i.e., without an entity treated as a U.S. corporation in the chain of ownership), any equity interest in a company, trust, partnership, or other entity formed under the laws of a country or jurisdiction outside the United States.

               (y) With respect to the Company’s taxable year which ends on the Closing Date, the Company will satisfy the gross income tests specified in Sections 856(c)(2) and (3) of the Code for such taxable year, taking into account for this purpose the gains arising from the REIT Merger.

               (z) Except as set forth on Item 4.10(z) of the Disclosure Letter, for taxable years that are open for examination by taxing authorities, neither the Company nor any Subsidiary of

the Company is a party to any agreement, contract, arrangement or plan that has resulted or would result, separately or in the aggregate, in connection with this Agreement or any change in control, in the payment of any amount that would not be deductible by the entity paying such amount by operation of Section 280G of the Code.

          Section 4.11 Benefit Plans .

               (a)  Item 4.11(a) of the Disclosure Letter lists all Benefit Plans. With respect to each Benefit Plan, the Company has made available to the Purchaser Parties a true and correct copy of (i) each such Benefit Plan that has been reduced to writing and all amendments thereto and a summary of any unwritten Benefit Plan; (ii) each trust, insurance or administrative agreement or insurance policy or other funding medium relating to each such Benefit Plan; (iii) the most recent written explanation of each Benefit Plan provided to participants, and, if applicable, the most recent summary plan description provided to participants; (iv) if applicable, the three most recent annual reports (Form 5500) filed with the IRS, including all financial statements, schedules and accountants’ opinions; (v) the most recent determination letter and/or application thereof, if any, issued by the IRS with respect to any Benefit Plan intended to be qualified under Section 401(a) of the Code, and (vi) all correspondence to and from any state or federal agency within the last six years with respect to any Benefit Plan. Except as required or deemed advisable by law, neither the Company nor any of its Subsidiaries has adopted or amended in any material respect any Benefit Plan since December 31, 2006 and copies of any such amendments or Benefit Plans have been provided to Parent.

               (b) Except as would not reasonably be expected to have a Company Material Adverse Effect, (i) each Benefit Plan has been maintained in material compliance with its terms and, both as to form and in operation, with the requirements of applicable law and (ii) all employer or employee contributions, premiums and expenses to or in respect of each Benefit Plan have been paid in full or, to the extent not yet due, have been adequately accrued on the applicable financial statements of the Crescent Parties included in the SEC Documents in accordance with GAAP. Each asset held under any such Benefit Plan may be liquidated or terminated without the imposition of any redemption fee, surrender charge or comparable liability. Neither the Company nor any of its Subsidiaries or ERISA Affiliates have at any time during the six-year period preceding the date hereof maintained, contributed to or incurred any liability under any “multiemployer plan” (as defined in Section 3(37) of ERISA) or any ERISA Benefit Plan that is subject to Title IV of ERISA or Section 412 of the Code.

               (c) As of the date of this Agreement there are no pending or, to the Knowledge of the Company, threatened disputes, arbitrations, claims, suits, governmental administrative proceedings or investigations or grievances involving a Benefit Plan (other than routine claims for benefits payable under any such Benefit Plan) that would reasonably be expected to have a Company Material Adverse Effect.

               (d) All Benefit Plans that are intended by their terms to be qualified under Section 401(a) of the Code have been determined by the IRS to be so qualified, or a timely application for such determination is now pending and, except as would not reasonably be expected to have a Company Material Adverse Effect, the Company has no Knowledge of any reason why any such Benefit Plan is not so qualified in operation. Neither the Company nor any of its Subsidiaries or ERISA Affiliates have any liability or obligation under any welfare plan or

agreement to provide benefits after termination of employment or service to any employee, director, consultant or dependent other than as required by Section 4980B of the Code. Each Benefit Plan may be amended, terminated, or otherwise modified by the Company to the greatest extent permitted by applicable Law, including the elimination of any and all future benefit accruals and no employee communications or provision of any relevant document has failed to effectively reserve the right of the Company to so amend, terminate or otherwise modify such Benefit Plan.

               (e) Except as set forth on Item 4.11(e) of the Disclosure Letter, neither the execution and delivery of this Agreement by the Crescent Parties nor the consummation of the transactions contemplated hereby will or may (either alone or in connection with the occurrence of any additional or subsequent events) (i) result in the acceleration or creation of any rights of any Person to compensation or benefits under any Benefit Plan or other compensatory arrangement, or loan forgiveness, (ii) or result in an obligation to fund benefits with respect to any Benefit Plan or other compensatory arrangement, including any amounts that are not deductible on account of Section 280G of the Code; or (iii) constitute an event under any Benefit Plan or other arrangement that will or may result in any payment of deferred compensation subject to Section 409A of the Code. None of the Company, any Company Subsidiary or any Primarily Controlled Company has any obligation to pay or otherwise reimburse any Person for any tax imposed under Section 4999 of the Code.

               (f) Each Benefit Plan that is a “nonqualified deferred compensation plan” (as defined in Section 409A of the Code) has been operating since January 1, 2005 in good faith compliance with Section 409A of the Code and the IRS guidance promulgated thereunder. Except as described on Item 4.11(f) of the Disclosure Letter, no stock option to acquire shares of the Company Common Shares granted under any Benefit Plan has (i) to the Knowledge of the Company, an exercise price that is less than the fair market value of the Company Common Shares as of the date such stock option was granted or (ii) any feature for the deferral of income other than the deferral of recognition of income until the exercise of such option.

               (g) Neither the Company, any Company Subsidiary, an ERISA Affiliate or to th