Document:

<PAGE>   1

                                 FIRST AMENDMENT
                                       TO
                               SEVERANCE AGREEMENT

         This First Amendment to Severance Agreement (the "Amendment") is
entered into as of May 10, 2001, between Tom Brown, Inc., a Delaware corporation
(the "Company"), and ___________________ ("Executive").

         In consideration of the mutual agreements set forth herein, the
consideration set forth in that certain Severance Agreement dated as of
____________________ between the Company and Executive (the "Agreement") and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and Executive hereby amend the Agreement as of
May 10, 2001 as follows:

         1.       Section 6 of the Agreement is deleted in its entirety and is
replaced with the following:

         "6.      TREATMENT OF PAYMENTS.

                  (a) Tax Gross-up. To the extent that any of the payments or
         benefits (excluding payments to be made pursuant to this Section 6)
         received or to be received by Executive (the "Total Payments") in
         connection with a Change in Control or Executive's termination of
         employment (whether or not such payments or benefits are provided
         pursuant to the terms of this Agreement or any other plan, arrangement
         or agreement with the Company, with any Persons whose actions result in
         a Change in Control, or with any Person affiliated with the Company or
         such Person) will be subject to the excise tax imposed by Section 4999
         of the U.S. Internal Revenue Code of 1986, as amended (the "Code"), or
         any successor provision of the Code (any such excise tax is referred to
         in this Section as the "Excise Tax"), then the benefit or payment shall
         be increased by an amount (referred to in this Section as the
         "Additional Payment") such that the net amount received by Executive,
         after paying any applicable Excise Tax and any federal, state or local
         income or FICA taxes on such Additional Payment, shall be equal to the
         amount that Executive would have received if such Excise Tax were not
         applicable to the Total Payments.

                  (b) Parachute Payment Determination. For purposes of
         determining whether any of the Total Payments will be subject to the
         Excise Tax and the amount of such Excise Tax, (i) all of the Total
         Payments shall be treated as "parachute payments" within

                                       1
<PAGE>   2

         the meaning of Section 280G(b)(2) of the Code unless, in the opinion of
         Arthur Andersen LLP or such other accounting firm as may be agreed upon
         by the Company and Executive (the "Accounting Firm"), such payments or
         benefits (in whole or in part) do not constitute parachute payments,
         including by reason of Section 280G(b)(4)(A) of the Code; (ii) all
         "excess parachute payments" within the meaning of Section 280G(b)(1) of
         the Code shall be treated as subject to the Excise Tax unless, in the
         opinion of the Accounting Firm, such excess parachute payments (in
         whole or in part) represent reasonable compensation for services
         actually rendered in excess of the base amount allocable to such
         reasonable compensation, or are otherwise not subject to the Excise
         Tax; and (iii) the value of any noncash benefits or any deferred
         payment or benefit shall be determined by the Accounting Firm in
         accordance with the principles of Section 280G(d)(3) and (4) of the
         Code. For purposes of determining the amount of the Additional Payment,
         Executive shall be deemed to pay federal income tax at the highest
         marginal rate of federal income taxation in the calendar year in which
         the Additional Payment is to be made and State and local income taxes
         at the highest marginal rate of taxation in the State and locality of
         Executive's residence on the date of Termination (or if there is no
         date of Termination, then on the date of the applicable Transaction),
         net of the maximum reduction in federal income taxes which could be
         obtained from deduction of such State and local taxes. All
         determinations made by the Accounting Firm shall be made within 60 days
         of the date of Termination and shall be binding on the Company and
         Executive. All fees and expenses of the Accounting Firm shall be borne
         solely by the Company.

                  (c) Subsequent Adjustment. In the event that the Excise Tax is
         finally determined to be less than the amount taken into account
         hereunder in calculating the Additional Payment, Executive shall repay
         to the Company, within ten business days immediately following the date
         that the amount of such reduction in the Excise Tax is finally
         determined, the portion of the Additional Payment attributable to the
         amount of such reduction (including the Excise Tax component and the
         federal, State and local income and employment tax components of the
         Additional Payment) to the extent that such repayment results in a
         reduction in the Excise Tax and a dollar-for-dollar reduction in
         Executive's taxable income and wages for purposes of federal, State and
         local income and employment taxes, plus interest on the amount of such
         repayment at the prime rate of The Chase Manhattan Bank, N.A.

                                       2
<PAGE>   3

         In the event that the Excise Tax is determined to exceed the amount
         taken into account hereunder in calculating the Additional Payment
         (including by reason of any payment the existence or amount of which
         cannot be determined at the time of the Additional Payment), the
         Company shall make another Additional Payment in respect of such excess
         (plus any interest, penalties or additions payable by Executive with
         respect to such excess) within the ten (10) business days immediately
         following the date that the amount of such excess is finally
         determined. Executive and the Company shall each reasonably cooperate
         with the other in connection with any administrative or judicial
         proceedings concerning the existence or amount of liability for Excise
         Tax with respect to the Total Payments."

         2.       The first sentence of Section 7 of the Agreement is amended by
deleting "2003" and inserting in its place "2006".

         3.       As amended hereby, the Agreement is specifically ratified and
reaffirmed.

         The Company has caused this Amendment to be duly executed by its duly
authorized officer and Executive has executed this Amendment as of May 10, 2001.

                                 TOM BROWN, INC.

                                 By:
                                    --------------------------------------------
                                    James D. Lightner
                                    President and Chief Executive Officer

                                 EXECUTIVE

                                 By:
                                    --------------------------------------------

                                       3<PAGE>   1
                                                                  EXHIBIT 10.118

February 5, 2001

Richard P. Knight
Crescent Operating, Inc.
306 W. 7th Street, Suite 1000
Fort Worth, Texas 76102

                                   Re: Arrangement regarding Severance Payment

Dear Rick:

Because of your status as the Chief Financial Officer of Crescent Operating and
Crescent Machinery Company (collectively referred to as "Crescent"), you are
familiar with discussions between Crescent Operating and Crescent Real Estate
Equities Limited Partnership concerning a possible transaction opportunity which
was made possible by the REIT Modernization Act. The possibility of this
transaction has been disclosed in our periodic SEC filings, but since the matter
at this time remains completely in flux and unsettled, no details about the
discussions have been made public.

Companies, like Crescent, engaged in discussions about a transaction or series
of transactions which could materially alter the future direction of its
business, find it especially important to be able to rely upon the continued
efforts of key employees and officers. The risk to Crescent of losing valuable
officers and employees just when they are most needed becomes an issue that must
be addressed.

If you continue your current relationship with Crescent as an officer and
employee through May 1, 2001, then upon the termination of your employment at
any time after that date, whether voluntarily or involuntarily, Crescent
Operating or Crescent Machinery Company will pay you the following severance
fee: for the 12 month period ending on the first anniversary of the date of
termination, Crescent Operating (i) will continue to pay your salary (but not
bonus) at the higher of the annual rate in effect at the time of termination or
the annual rate in effect as of the date of this letter and (ii) will continue
your welfare benefits as in effect at the time of your termination.

Crescent's obligation to pay that severance fee is conditioned upon your
agreement that, from and after the date of your termination, you will:

o        refrain from making any disparaging statements or comments about
         Crescent

o        not attempt or encourage any person having a business or employment
         relationship with Crescent to discontinue or curtail that relationship

<PAGE>   2

o        except as may be required by law, not disclose to any person any
         confidential or proprietary information of Crescent acquired during the
         course of your employment

o        resign from all other offices at any subsidiary or affiliate of
         Crescent Operating

o        waive and release any and all claims you have or might have against
         Crescent arising out of or with respect to your employment with
         Crescent or the termination of your employment, except for the right to
         receive the severance payment described in this letter

o        not encourage or assist any other person in any action against
         Crescent, and

o        except as required by law, keep confidential the existence and contents
         of this letter and all instruments and documents relating to the
         subject matter of this letter.

To accept our offer, please sign and return this letter to us. If we have not
received your signed letter within five business days from the date of your
receipt of this letter, then we will assume that you have declined our offer and
our offer will automatically terminate.

                                             Very truly yours,

CRESCENT OPERATING, INC.                     CRESCENT MACHINERY COMPANY

By:                                          By:
   -------------------------------------        --------------------------------
Its:                                         Its:
    ------------------------------------         -------------------------------

ACCEPTED AND AGREED:

----------------------------
Richard P. Knight

Dated:
      ----------------------

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00025-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00025-of-00352.parquet"}]]