3RD Amended/Restated Agreement of LTD. Partnership

EXHIBIT 10.01


THIRD AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP


OF


CRESCENT REAL ESTATE EQUITIES LIMITED
PARTNERSHIP


Dated as of January 2, 2003


TABLE OF CONTENTS


ARTICLE I DEFINED TERMS.......................................................................................... 3


ARTICLE II ORGANIZATIONAL MATTERS................................................................................ 15


Section 2.1 Continuation of Partnership........................................................... 15


Section 2.2 Name.................................................................................. 15


Section 2.3 Principal Office and Registered Agent................................................. 16


Section 2.4 Power of Attorney..................................................................... 16


Section 2.5 Term.................................................................................. 17


ARTICLE III PURPOSE.............................................................................................. 17


Section 3.1 Purpose and Business.................................................................. 17


Section 3.2 Powers................................................................................ 18


ARTICLE IV CAPITAL CONTRIBUTIONS................................................................................. 18


Section 4.1 Capital Contributions of the Partners................................................. 18


Section 4.2 Additional Funding.................................................................... 19


Section 4.3 Issuance of Additional Partnership Interests.......................................... 21


Section 4.4 No Preemptive Rights.................................................................. 23


Section 4.5 No Interest on Capital................................................................ 23


Section 4.6 Stock Incentive Plans................................................................. 23


Section 4.7 Other Equity Compensation Plans....................................................... 24


Section 4.8 Series A Preferred Partnership Units and Series B Redeemable Preferred
Partnership Units..................................................................... 26


ARTICLE V DISTRIBUTIONS.......................................................................................... 28


Section 5.1 Initial Partnership Distributions..................................................... 28


Section 5.2 Requirement and Characterization of Distributions..................................... 28


Section 5.3 Amounts Withheld...................................................................... 28


(i)


Section 5.4 Distributions In Kind................................................................. 28


Section 5.5 Distributions Upon Liquidation........................................................ 29


Section 5.6 Distribution Rights of Series A Preferred Shares and Series B Redeemable Preferred
Shares................................................................................ 29


ARTICLE VI ALLOCATIONS........................................................................................... 29


Section 6.1 Allocations For Capital Account Purposes.............................................. 29


Section 6.2 Allocation of Nonrecourse Debt........................................................ 30


Section 6.3 Allocations for Series A Preferred Partnership Units and Series B Redeemable
Preferred Partnership Units........................................................... 30


ARTICLE VII MANAGEMENT AND OPERATIONS OF BUSINESS................................................................ 31


Section 7.1 Management............................................................................ 31


Section 7.2 Certificate of Limited Partnership.................................................... 35


Section 7.3 Restrictions on General Partner's Authority........................................... 35


Section 7.4 Reimbursement of the Crescent Group................................................... 35


Section 7.5 Outside Activities of the Crescent Group.............................................. 36


Section 7.6 Contracts with Affiliates............................................................. 37


Section 7.7 Indemnification....................................................................... 37


Section 7.8 Liability of the General Partner...................................................... 39


Section 7.9 Other Matters Concerning the General Partner.......................................... 40


Section 7.10 Title to Partnership Assets........................................................... 41


Section 7.11 Reliance by Third Parties............................................................. 41


Section 7.12 Limited Partner Representatives....................................................... 41


ARTICLE VIII RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS.......................................................... 42


Section 8.1 Limitation of Liability............................................................... 42


Section 8.2 Management of Business................................................................ 42


Section 8.3 Outside Activities of Limited Partners................................................ 42


(ii)


Section 8.4 Return of Capital..................................................................... 42


Section 8.5 Rights of Limited Partners Relating to the Partnership................................ 43


Section 8.6 Exchange Rights....................................................................... 44


Section 8.7 Covenants Relating to the Exchange Rights............................................. 44


Section 8.8 Other Matters Relating to the Exchange Rights......................................... 45


ARTICLE IX BOOKS, RECORDS, ACCOUNTING AND REPORTS................................................................ 46


Section 9.1 Records and Accounting................................................................ 46


Section 9.2 Fiscal Year........................................................................... 46


Section 9.3 Reports............................................................................... 46


ARTICLE X TAX MATTERS............................................................................................ 46


Section 10.1 Preparation of Tax Returns............................................................ 46


Section 10.2 Tax Elections......................................................................... 47


Section 10.3 Tax Matters Partner................................................................... 47


Section 10.4 Organizational Expenses............................................................... 48


Section 10.5 Withholding........................................................................... 48


ARTICLE XI TRANSFERS AND WITHDRAWALS............................................................................. 49


Section 11.1 Transfer.............................................................................. 49


Section 11.2 Transfer of Partnership Interests of the General Partner.............................. 49


Section 11.3 Transfer of Partnership Interests of Limited Partners Other Than Crescent Equities.... 50


Section 11.4 Substituted Limited Partners.......................................................... 51


Section 11.5 Assignees............................................................................. 52


Section 11.6 General Provisions.................................................................... 52


Section 11.7 Acquisition of Partnership Interest by Partnership.................................... 53


ARTICLE XII ADMISSION OF PARTNERS................................................................................ 53


Section 12.1 Admission of Substituted General Partner.............................................. 53


(iii)


Section 12.2 Admission of Additional or Employee Limited Partners.................................. 53


Section 12.3 Amendment of Agreement and Certificate of Limited Partnership......................... 55


ARTICLE XIII DISSOLUTION AND LIQUIDATION......................................................................... 55


Section 13.1 Dissolution........................................................................... 55


Section 13.2 Winding Up............................................................................ 56


Section 13.3 Compliance with Timing Requirements of Regulations.................................... 57


Section 13.4 Deemed Contribution and Distribution.................................................. 58


Section 13.5 Rights of Limited Partners............................................................ 58


Section 13.6 Documentation of Liquidation.......................................................... 58


Section 13.7 Reasonable Time for Winding-Up........................................................ 58


Section 13.8 Liability of the Liquidator........................................................... 58


Section 13.9 Waiver of Partition................................................................... 59


ARTICLE XIV AMENDMENT OF AGREEMENT............................................................................... 59


Section 14.1 Amendments............................................................................ 59


ARTICLE XV PARTNER REPRESENTATIONS AND WARRANTIES................................................................ 60


Section 15.1 Representations and Warranties........................................................ 60


ARTICLE XVI ARBITRATION OF DISPUTES.............................................................................. 61


Section 16.1 Arbitration........................................................................... 61


Section 16.2 Procedures............................................................................ 61


Section 16.3 Binding Character..................................................................... 62


Section 16.4 Exclusivity........................................................................... 63


Section 16.5 No Alteration of Agreement............................................................ 63


ARTICLE XVII GENERAL PROVISIONS.................................................................................. 63


Section 17.1 Addresses and Notice.................................................................. 63


Section 17.2 Titles and Captions................................................................... 63


(iv)


Section 17.3 Pronouns and Plurals.................................................................. 63


Section 17.4 Further Action........................................................................ 64


Section 17.5 Binding Effect........................................................................ 64


Section 17.6 Creditors............................................................................. 64


Section 17.7 Waiver................................................................................ 64


Section 17.8 No Agency............................................................................. 64


Section 17.9 Entire Understanding.................................................................. 64


Section 17.10 Counterparts.......................................................................... 64


Section 17.11 Applicable Law........................................................................ 64


Section 17.12 Invalidity of Provisions.............................................................. 65


Section 17.13 Guaranty by Crescent Equities......................................................... 65


Section 17.14 Restriction on Sale of Sonoma Property................................................ 65


Exhibit A -- Partners, Partnership Units and Partnership Interests


Exhibit B -- Capital Account Maintenance


Exhibit C -- Special Tax Allocation Rules


Exhibit D -- Notice of Exchange


Exhibit E -- Listing of Approved Substituted Limited Partners


(v)


THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP


OF


CRESCENT REAL ESTATE EQUITIES LIMITED PARTNERSHIP


THIS THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated as of January 2, 2003, is entered into by and among Crescent Real Estate Equities, Ltd., a Delaware corporation, as general partner (the "General Partner"), and those parties who are Limited Partners as listed on Exhibit A hereto or who are admitted from time to time as Limited Partners as herein provided.


W I T N E S S E T H:


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


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


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


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


WHEREAS, the General Partner desires to amend and restate in its entirety the Second Amended Agreement pursuant to its authority under Sections 2.4 and 14.1.B of the Second


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Amended Agreement and the powers of attorney granted to the General Partner by the Limited Partners in order to (i) combine all of the provisions of the Second Amended Agreement into one document, and (ii) make changes to provisions of the Second Amended Agreement in accordance with Section 14.1.B(3) of the Second Amended Agreement;


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


ARTICLE I
DEFINED TERMS


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


(ii) less the sum of:


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


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


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


(d) all other expenditures and payments not deducted in
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