Document:

<PAGE>
                                                                    EXHIBIT 10.7

                               SEVERANCE AGREEMENT

         This SEVERANCE AGREEMENT ("Agreement") is entered into as of September
26, 2001 by and between Chase Industries Inc., a Delaware corporation ("CSI"),
and Michael T. Segraves ("Executive") and is effective as of the Effective Date
(as defined below).

                                    Recitals

         A. Executive currently is employed by Chase Brass & Copper Company,
Inc., a Delaware corporation and a wholly-owned subsidiary of CSI ("CBCC") and
serves as (i) Vice President, Chief Financial Officer, Treasurer and Secretary
of CSI, (ii) Vice President-Finance, Chief Financial Officer, Secretary,
Treasurer and a director of CBCC and (iii) Vice President, Secretary, Treasurer,
and a director of LTC Reserve Corp., a Delaware corporation and a wholly owned
subsidiary of CSI (collectively the "Positions"), as set forth in Exhibit B.

         B. Executive and CSI hereby agree that Executive's employment with CBCC
shall terminate and Executive shall resign from all Positions, as of the date of
the Severance of Employment (as defined herein).

         C. Executive has 21 days to consider this Agreement, which Executive
agrees is a reasonable amount of time. No changes (whether material or
immaterial) to this Agreement shall restart the running of this 21-day period,
which began on September __, 2001. Executive may, at his option, sign this
Agreement before expiration of this 21-day period. In addition, Executive may
revoke this Agreement within seven days after Executive has signed it by notice
to the President of Chase Industries Inc., c/o Chase Brass & Copper Company,
Inc., 14212 County Road M-50, Montpelier, Ohio 43543 (Telecopy No.:
419-485-8150). This Agreement will not become effective or enforceable until the
seven day revocation period has expired without Executive's revocation. This
Agreement will become effective and enforceable automatically and without any
further action by any party on the Effective Date. Executive acknowledges that
if Executive accepts any of the severance benefits set forth in Section 2.a. of
this Agreement after the expiration of the seven day period, such acceptance
shall constitute an acknowledgement by Executive that Executive did not revoke
this Agreement during the seven day period.

         In consideration of the mutual agreements herein set forth and for good
and valuable consideration, receipt of which hereby is acknowledged the parties
agree as follows:

         1. Definitions. For purposes of this Agreement, the following
definitions apply unless the context requires otherwise:

                  a. Affiliate: shall mean, with respect to any Person, any
other Person that directly or indirectly controls, is controlled by, or is under
common control with the Person in question. As used in this definition of
"Affiliate," the term "control" 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 ownership of Voting Securities, by contract, or
otherwise.

<PAGE>

                  b. Base Salary: shall mean the Executive's annual base pay.
Base Salary shall not include any bonus, commission, incentive pay, overtime,
auto or travel allowance or other similar payments or compensation.

                  c. Effective Date: shall mean 12:01 a.m. eastern standard time
on the later of (i) the date immediately following the date on which Executive's
right to revoke this Agreement expires as described in paragraph C of the
Recitals of this Agreement without any revocation of this Agreement by Executive
and (ii) the date immediately following the date on which Executive's right to
revoke the Release expires as described in the first paragraph of the Release
without any revocation of the Release by Executive.

                  d. Person: shall mean any individual, group, partnership,
corporation, association, trust, or other entity or organization.

                  e. Release: shall mean the Agreement and Release described in
Section 7 and set forth in Exhibit A.

                  f. Severance of Employment: shall mean Executive's termination
or resignation from all Positions effective as of October 2, 2001.

                  g. Subsidiary: shall mean any corporation or other entity of
which a majority of the combined voting power of the outstanding Voting
Securities is owned, directly or indirectly, by CSI.

                  h. Voting Securities: shall mean (i) any securities or
interests that vote generally in the election of directors, in the admission of
general partners, or in the selection of any other similar governing body and
(ii) with respect to CSI, all shares of CSI's nonvoting common stock, par value
$.01 per share (all of which are convertible into shares of common stock, par
value $.01 per share, of CSI).

         2. Severance and Employment Benefits.

                  a. In connection with the Severance of Employment, CSI shall
pay or provide to Executive, if and only if Executive executes (and does not
revoke) the Release, severance benefits described in this Section 2.a.:

                           (i) a single lump sum which shall be paid, no earlier
         than 8 days following the execution of the Release and no later than 15
         days following such execution, in the amount of $125,000 and a single
         lump sum, which shall be paid January 2, 2002 provided that Executive
         executes the Release at least 8 days before such date, in the amount of
         $439,735;

                           (ii) the continuation in full force and effect, for
         the benefit of Executive (and, if applicable, Executive's spouse and
         dependent children) for a one-year period beginning upon the date of
         Severance of Employment, of all medical and dental insurance coverages
         as in effect, from time to time for salaried employees of CBCC, and in
         which such persons were participating immediately prior to the date of
         Severance of Employment; provided, however, that such coverage shall be
         provided on an after-tax basis and Executive

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<PAGE>

         shall be issued a Form 1099 which reflects the entire cost of such
         coverage for himself and his dependents; and provided, further, that
         any insurance coverage provided pursuant hereto shall be limited and
         reduced to the extent coverage otherwise is provided by (or available
         from or under) any other employer of Executive or Executive's spouse or
         minor children, or Social Security, medicare, medicaid or any similar
         or substitute plans available to such persons; and

                           (iii) the vesting as of the date of the Severance of
         Employment in any of Executive's outstanding stock options granted
         pursuant to the Chase Brass Industries, Inc. 1994 Long-Term Incentive
         Plan (the "Long-Term Incentive Plan") and right to exercise such
         options, regardless of anything to the contrary in the agreements
         evidencing such options, until the earlier of midnight on the third
         anniversary of the Severance of Employment or midnight on the date of
         the expiration of such options as provided in the agreements evidencing
         such options without regard to any expiration triggered by the
         Severance of Employment of the Executive; provided, however, following
         the Severance of Employment Executive shall not be entitled to any
         further stock option grants pursuant to the Long-Term Incentive Plan or
         otherwise;

                  b. Notwithstanding any other provision of this Agreement,
solely for the purpose of calculating continued medical and dental coverage
under the medical and dental plan program component of the Employee Benefit Plan
Chase Brass & Copper Co., Inc. (but not under the health care reimbursement plan
program component of the Employee Benefit Plan Chase Brass & Copper Co., Inc.)
pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, the date of Executive's Severance of Employment shall be the date
Executive's medical and dental insurance coverage expires pursuant to the terms
of Section 2.a.(ii).

                  c. Executive shall be entitled to continue to receive
Executive's prorated Base Salary through the date of the Severance of Employment
without Executive's provision of any services to CBCC; provided, however,
Executive agrees that receipt of the prorated Base Salary shall be in full
satisfaction of any remaining unused vacation days Executive may have for the
2001 calendar year and any prior calendar year.

                  d. Executive shall not be entitled to a discretionary profit
sharing contribution pursuant to the Chase Brass & Copper Company Savings and
Profit Sharing Plan for Salaried Employees for the Plan Year ending December 31,
2001.

                  e. Executive shall be entitled to any deferral contributions,
matching contributions and profit sharing contributions made, before the
Severance of Employment, by or for the account of Executive pursuant to the
terms of the Chase Brass & Copper Benefit Restoration Plan (the "BERP") and any
earnings related thereto which aggregate amount shall not include any matching
contribution that would be made for the month of the Severance of Employment had
such Severance of Employment not occurred; provided, however, that Executive
shall only be entitled to such matching contributions and profit sharing
contributions and any earnings related thereto to the extent such matching
contributions and profit sharing contributions are vested pursuant to the terms
of the BERP as of the Severance of Employment and Executive shall not be
entitled to any profit sharing contribution made pursuant to the BERP for the
plan year ending December 31, 2001; provided, further, that Executive shall
receive a single lump sum cash payment of all vested amounts

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credited to his BERP accounts as soon as administratively feasible in the
calendar year following the Severance of Employment.

                  f. If any payment is made, or benefits provided, pursuant to
Section 2.a., Executive's Change in Control Agreement dated March 31, 1997, as
amended, shall terminate at the time of such payment without any further
liability or obligation of any party thereto or CBCC or LTC, and shall be null
and void ab initio.

                  g. Following the Severance of Employment, except as provided
by law and except as provided in this Section 2, Executive shall not be entitled
to benefits, payments, expense reimbursements or perquisites from CSI or any
Affiliate of CSI.

         3. Reductions, No Mitigation.

                  a. Notwithstanding anything in this Agreement to the contrary,
the severance benefit payment received under this Agreement shall be reduced by
loans or other amounts due to CSI or any Subsidiary by the Executive, which
amount equals $0 (to be filled in by Executive); alternatively, Executive
represents and warrants that Executive does not as of the date of the Severance
of Employment have any loans or other amounts due to CSI or any Subsidiary.

                  b. Except as provided in Sections 3.a. and 5, the severance
compensation to be provided pursuant to Section 2 of this Agreement shall be
paid and provided without reduction, other than as expressly provided for
therein, regardless of any amounts of salary, compensation or other amounts
which may be paid or payable to Executive from any source or which Executive
could have obtained upon seeking other employment.

         4. Non-Disclosure, Return of Documents. Executive shall not, directly
or indirectly, at any time following the Severance of Employment with CBCC,
reveal, divulge or make known to any Person or entity, or use for Executive's
personal benefit (including without limitation for the purpose of soliciting
business, whether or not competitive with any business of CSI or any Subsidiary)
or the benefit of others, any information acquired by Executive during the
course of employment by CBCC with regard to the financial, business or other
affairs of CSI or any Subsidiary (including without limitation any list or
record of Persons or entities with which CSI or any Subsidiary has any
dealings), other than (i) information already in the public domain through no
act, omission or fault of Executive, (ii) information of a type not considered
confidential by Persons engaged in the same business or a business similar to
that conducted by CSI or any Subsidiary, (iii) as expressly authorized by CSI,
or (iv) information that Executive is required to disclose under the following
circumstances: (A) at the express direction of any authorized governmental
authority; (B) pursuant to a subpoena or other court process; (C) as otherwise
required by law or the rules, regulations, or orders of any applicable
regulatory body; or (D) as otherwise necessary, in the opinion of counsel for
Executive, to be disclosed by Executive in connection with any legal action or
proceeding involving Executive and CSI or any Subsidiary in his capacity as an
employee, officer, director, or stockholder of CSI or any Subsidiary. If
Executive is compelled, as provided in Section 4(iv)(A)-(D), to disclose the
information protected pursuant to this Section 4, regardless of whether such
action would result in a breach of this Section 4, Executive shall immediately,
but in no event later than 10 days before any disclosure of information
protected by this Section 4 notify, in writing, an officer of the Company;
provided, however, that this notice obligation shall not apply to Executive's
decision to file or

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participate in a complaint, charge or investigation by or with a government
agency. Executive shall, at any time requested by CSI (within two years after
the Severance of Employment), promptly deliver to CSI all memoranda, notes,
reports, lists and other documents (and all copies thereof) relating to the
business of CSI or any Subsidiary which Executive may then possess or have under
his control.

         5. Tax Withholding. Any payment of benefits under this Agreement will
be subject to reduction due to any and all applicable federal, state or local
income or employment taxes and other required withholdings.

         6. Overpayment. If due to mistake or any other reason, the Executive
receives benefits under this Agreement in excess of what this Agreement
provides, the Executive shall repay the overpayment to CBCC or CSI in a lump sum
within thirty (30) days of notice of the amount of overpayment. If the Executive
fails to so repay the overpayment, then without limiting any other remedies
available to CBCC or CSI, CBCC or CSI may deduct the amount of the overpayment
from any other benefits which become payable to the Executive under this
Agreement.

         7. Release and Other Agreements. Notwithstanding any other provision in
this Agreement to the contrary, if Executive fails to execute the Release or
timely revokes this Agreement or the Release within the seven day revocation
period applicable to each, then this Agreement shall be null and void ab initio.

         8. Binding Effect; Assignment

                  a. General. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and Executive's heirs and legal
representatives and CSI's and CBCC's successors and assigns. This Agreement is
assignable by CSI to any Person which acquires, directly or indirectly, by
merger, consolidation, purchase or otherwise, all or substantially all of the
assets of CSI or CBCC or a majority of the outstanding Voting Securities of
CBCC. Upon any such assignment, and the assumption by the assignee of all
obligations hereunder, CSI shall be released from all liability hereunder. This
Agreement shall not be assignable by Executive.

                  b. Assumption by Successor. CSI shall require any successor
(whether direct or indirect, by purchase, merger, consolidation, reorganization
or otherwise) to all or substantially all of the business and/or assets of CSI
to expressly assume and agree to perform this Agreement in the same manner and
to the same extent CSI or CBCC, as applicable, would be required to perform if
no such succession had taken place.

         9. Nonalienation of Benefits. Benefits payable under this Agreement
shall not be subject in any manner to alienation, sale, transfer, assignment,
pledge, encumbrance, charge, garnishment, execution or levy of any kind
(collectively "Alienate"), either voluntary or involuntary, prior to actually
being received by Executive, other than by a transfer by the Executive's will or
by the laws of descent and distribution; and any attempt to alienate, sell,
transfer, assign, pledge, encumber, charge, garnish, execute on, levy or
otherwise dispose of any right to benefits payable hereunder contrary to this
Section 9 shall be null and void ab initio and of no force or effect and CSI
shall have no obligation or liability to pay any amounts so attempted to be
Alienated.

         10. Severability. In the event that any provision of this Agreement or
the application thereof to any Person or circumstance, is held by a court of
competent jurisdiction to be invalid, illegal, or unenforceable in any respect
under present or future laws effective during the effective term

                                       5
<PAGE>

of any such provision, such invalid, illegal or unenforceable provision shall be
fully severable; and this Agreement shall then be construed and enforced as if
such invalid, illegal, or unenforceable provision had not been contained in this
Agreement; and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance from this Agreement. Furthermore, in
lieu of each such illegal, invalid, or unenforceable provision, there shall be
added automatically as part of this Agreement, a provision as similar in terms
to such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable and, subject to the following sentence, the parties
hereby request the court or any arbitrator to whom disputes relating to this
Agreement are submitted to reform any otherwise unenforceable covenants
contained in this Agreement in accordance with the preceding provision.

         11. Specific Enforcement. Executive acknowledges that the covenants of
Executive contained in Section 4 of this Agreement are special and unique, that
a breach by Executive of any term or provision of Section 4 may cause
irreparable injury to CSI and/or a Subsidiary, and that remedies at law for the
breach of any terms or provisions of Section 4 may be inadequate. Accordingly,
in addition to any other remedies it may have in the event of breach, CSI shall
be entitled to enforce specific performance of the terms and provisions of
Section 4, to obtain temporary and permanent injunctive relief to prevent the
continued breach of such terms and provisions without the necessity of posting
bond or of proving actual damage, and to obtain attorneys' fees in respect of
the foregoing if CSI prevails in such action or proceeding. For purposes of this
Section 11 and Section 4, CSI, CBCC and each Subsidiary of CBCC shall be deemed
a third party beneficiary entitled to the benefits of such Sections and shall be
entitled to enforce Section 4 in accordance with this Section 11 notwithstanding
any assignment by CSI of its rights and obligations under this Agreement.

         12. Entire Agreement; Amendment; Waiver. This Agreement, including the
Release, represents the entire agreement between the parties hereto with respect
to the subject matter hereof, and supersedes all prior or contemporaneous oral
or written negotiations, understandings and agreements between the parties
hereto. This Agreement shall not be altered, amended or modified except by
written instrument executed by CSI and Executive. No Person has any authority to
make any representation or promise on behalf of any of the parties not set forth
in this Agreement. This Agreement has not been executed in reliance upon any
representation or promise except those contained herein. A waiver of any term,
covenant, agreement or condition contained in this Agreement shall not be deemed
a waiver of any other term, covenant, agreement or condition, and any waiver of
any default in any such term, covenant, agreement or condition shall not be
deemed a waiver of any later default thereof or of any other term, covenant,
agreement or condition.

         13. Legal Fees and Expenses. Except as provided in Section 11, CSI and
its Subsidiaries shall be responsible for its own attorneys' fees and related
fees and expenses incurred to enforce this Agreement or any provision hereof. In
addition, CSI and its Subsidiaries shall reimburse Executive for any and all
attorneys' fees and related fees and expenses incurred by Executive to
successfully enforce (in whole or in part, and whether by modification of CSI's
position, agreement, compromise, settlement, or administrative or judicial
determination) this Agreement or any provision hereof as a result of CSI or any
Subsidiary failing to perform its obligations under this Agreement or any
provision hereof or CSI or any Subsidiary contesting the validity or
enforceability of this Agreement

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or any provision hereof. Such reimbursement shall only be paid following the
successful enforcement (including any appeals therefrom which uphold such
enforcement) as provided in this Section 13.

         14. Applicable Law. The provisions of this Agreement shall be
interpreted and construed in accordance with the laws of the State of Ohio
(without regard to its choice of law principles which would require the
application of some other state law) and, when applicable, the laws of the
United States.

         15. Notices. All notices, demands, requests or other communications
that may be or are required to be given, served or sent by either party to the
other party pursuant to this Agreement will be in writing and will be mailed by
first-class, registered or certified mail, return receipt requested, postage
prepaid, or transmitted by hand delivery or overnight courier, telegram or
facsimile transmission addressed as follows:

<Table>
<S>               <C>                                <C>
         (a)      If to CSI:                         c/o Chase Brass & Copper Company, Inc.
                                                     14212 County Road M-50
                                                     Montpelier, Ohio 43543
                                                     Telecopy No.: 419/485-8150
                                                     Attention: President of Chase Industries Inc.

                  with a copy (which will
                  not constitute notice) to:         Vinson & Elkins L.L.P.
                                                     2001 Ross Avenue, Suite 3700
                                                     Dallas, Texas 75201
                                                     Telecopy No.: (214) 999-7781
                                                     Attention: Rodney L. Moore

         (b)      If to Executive:                   25 Tremore Way
                                                     Holland, Ohio 43528
                                                     Attn: Michael T. Segraves
</Table>

Either party may designate by written notice a new address to which any notice,
demand, request or communication may thereafter be given, served or sent. Each
notice, demand, request or communication that is mailed, delivered or
transmitted in the manner described above will be deemed sufficiently given,
served, sent and received for all purposes at such time as it is delivered to
the addressee with the return receipt, the delivery receipt, the affidavit of
messenger or (with respect to a facsimile transmission) the answer back being
deemed conclusive evidence of such delivery or at such time as delivery is
refused by the addressee upon presentation.

         16. Warranties. Executive agrees, represents and warrants that the
benefits paid pursuant to Section 2.a. are not something to which he is
otherwise indisputably entitled and are good and sufficient consideration for
his execution of this Agreement and the Release and further agrees, represents
and warrants that he is legally and mentally competent to sign this Agreement.

         17. Consultation. Executive agrees for a period of two years from the
signing of this Severance of Employment Agreement, to make himself reasonably
available, either in person or by telephone, for the purpose of assisting CSI or
any of its Affiliates in the prosecution of defense of any

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legal or regulatory matter or dispute in which CSI reasonably believes Executive
has personal knowledge or information which was acquired as an employee of CSI
or its Affiliates. CSI agrees to reimburse Executive for reasonable costs of
travel or other reasonable expenses incurred by him pursuant to this Section 17.
If Executive fails to perform the duties set forth in this Section 17, CSI
reserves the right to suspend, discontinue or eliminate any benefits still
available to Executive pursuant to Section 2.a.; provided, however, that in the
case of any such suspension, discontinuance, or elimination, Executive agrees
that any benefits previously paid pursuant to Section 2.a. of this Agreement
shall constitute good and valuable consideration for the mutual agreements set
forth in this Agreement, including the Release.

         18. Construction. This Agreement shall be deemed drafted equally by all
the parties. Its language shall be construed as a whole and according to its
fair meaning. Any presumption or principle that the language is to be construed
against any party shall not apply. The headings in this Agreement are only for
convenience and are not intended to affect construction or interpretation. The
plural includes the singular and the singular includes the plural; "and" and
"or" are each used both conjunctively and disjunctively; "any," "all," "each,"
or "every" means "any and all, and each and every;" "including" and "includes"
are each "without limitation;" and "herein," "hereof," "hereunder" and other
similar compounds of the word "here" refer to the entire Agreement and not to
any particular paragraph, subparagraph, section or subsection.

         19. Advice to Consult Counsel. CSI hereby advises Executive to consult
with an attorney prior to executing this Agreement.

         20. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same agreement.

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

                                        CHASE INDUSTRIES INC.

                                        By:  /s/ John Steadman
                                             -----------------------------------
                                                 John Steadman, President

                                        EXECUTIVE:  /s/ Michael T. Segraves
                                                    ----------------------------
                                                            Michael T. Segraves

                                       9
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                                    EXHIBIT A
                              AGREEMENT AND RELEASE

         This Agreement and Release ("Release") is entered into between you,
Michael T. Segraves, the undersigned, and Chase Industries Inc., a Delaware
corporation ("CSI"), in connection with the Severance Agreement entered into by
and between you and CSI (the "Agreement"). You are advised to consult with an
attorney of your choosing before signing this Agreement. You have 21 days to
consider this Release, which you agree is a reasonable amount of time. No
changes (whether material or immaterial) to this Agreement shall restart the
running of this 21-day period, which began on September __, 2001. You may, at
your option, sign this Release before expiration of this 21-day period, you may
not sign it prior to the Severance of Employment (as defined in the Agreement).
In addition, but you may revoke this Release within seven days after you have
signed it by notice to the President of Chase Industries, Inc., c/o Chase Brass
& Copper Company, Inc., 14212 County Road M-50, Montpelier, Ohio 43543, Telecopy
No.: 419-485-8150). This Release will not become effective or enforceable until
the seven-day revocation period has expired without your revocation at which
time this Release shall become effective and enforceable. You acknowledge that
if you accept any of the benefits set forth in Section 2 below after the
expiration of the seven-day period, such acceptance shall constitute an
acknowledgment by you that you did not revoke this Release during the seven-day
period.

         1. Definitions.

                  a. "Released Parties" means each of CSI, Chase Brass & Copper
Company, Inc. and LTC Reserve Corp. and their past, present and future parents,
subsidiaries, divisions, successors, predecessors, employee benefit plans and
affiliated or related companies, and also each of the foregoing entities' past,
present and future owners, officers, directors, stockholders, investors,
partners, managers, principals, committees, administrators, sponsors, executors,
trustees, fiduciaries, employees, agents, assigns, representatives and
attorneys, in their personal and representative capacities. All Released Parties
are intended beneficiaries of this Release.

                  b. "Claims" means all theories of recovery of whatever nature,
whether known or unknown, recognized by the law or equity of any jurisdiction.
It includes, without limitation, any and all actions, causes of action,
lawsuits, claims, complaints, petitions, charges, rights, demands and Damages
(as defined below) to which you are or may be entitled or in which you have had
or may have an interest. It also includes, without limitation, any claim for
wages, benefits or other compensation. It also includes, without limitation,
claims asserted by you or on your behalf by some other person, entity or
government agency.

                  c. "Damages" mean all elements of recovery of whatever nature,
whether known or unknown, which are recognized by the law or equity of any
jurisdiction and includes, without limitation, all liabilities, indebtedness,
losses, damages (whether actual, incidental, indirect, consequential,
compensatory, liquidated, exemplary, punitive or other), costs and expenses
(including, without limitation, reasonable attorney's fees), interest, equitable
relief, rescission and judgments. It also includes, without limitation, damages
sought by you or on your behalf by some other person, entity or government
agency.

         2. Consideration. CSI agrees to pay you the severance benefits set
forth in Section 2.a. of the Agreement, which you acknowledge is the amount owed
you under the Agreement. If you do not revoke this Release as per the terms of
this Release, CSI will make this payment to you pursuant to the terms of the
Agreement. You acknowledge that the payment that CSI will make to you under this
Release is in addition to anything else of value to which you are entitled and
that CSI is not otherwise obligated to make this payment to you.

<PAGE>

         3. Release of Claims.

                  a. You, on behalf of yourself and your heirs, executors,
administrators, legal representatives, successors, beneficiaries, and assigns,
unconditionally release and forever discharge the Released Parties from, and
waive, any and all Claims that you have or may have against any of the Released
Parties arising from your employment, or service as an officer or a director,
with CSI or any of its Subsidiaries, the termination thereof, and any other acts
or omissions occurring on or before the date you sign this Release.

                  b. The release set forth in Section 3.a. includes, but is not
limited to, any and all Claims under (i) the common law (tort, contract or
other) of any jurisdiction; (ii) the Rehabilitation Act of 1973, the Age
Discrimination in Employment Act, the Americans with Disabilities Act, Title VII
of the Civil Rights Act of 1964, the Civil Rights Act of 1866, and any other
federal, state and local statutes, ordinances, executive orders and regulations
prohibiting discrimination or retaliation upon the basis of age, race, sex,
national origin, religion, disability, veteran status, or other unlawful factor;
(iii) the National Labor Relations Act; (iv) the Employee Retirement Income
Security Act; (v) the Family and Medical Leave Act; (vi) the Equal Pay Act; and
(vii) any other federal, state or local law.

                  c. In furtherance of this Release, you promise, covenant and
agree not to bring any Claim covered by Section 3.a. of this Release against any
of the Released Parties in or before any court or arbitral authority and agree
to indemnify any Released Party for any and all Damages suffered or incurred by
any Released Party in connection with any Claim brought by you or on your behalf
in or before any court or arbitral authority.

         4. Injunctive Relief. The parties shall be entitled to injunctive or
other equitable relief in any court of competent jurisdiction to prevent or
otherwise restrain a breach of this Release without the necessity of posting
bond or proving actual damage. This provision shall not be deemed in any way to
limit the availability of other remedies to which the parties may be entitled.

         5. Acknowledgment. You acknowledge that, by entering into this Release,
CSI does not admit to any wrongdoing in connection with your employment, and
that this Release is intended as a compromise of all Claims, if any, you have or
may have against the Released Parties. You further acknowledge that you have
carefully read this Release and understand its final and binding effect, have
had a reasonable amount of time to consider it, have had the opportunity to seek
the advice of legal counsel of your choosing, and are entering into this Release
voluntarily.

                                        CHASE INDUSTRIES INC.

                                        By: /s/ John Steadman
                                            ------------------------------------
                                                     John Steadman, President

                                        EXECUTIVE: /s/ Michael T. Segraves
                                                   -----------------------------
                                                            Michael T. Segraves

                                        2
<PAGE>

                                    EXHIBIT B

                          POSITIONS OF MICHAEL SEGRAVES

I.       OFFICER STATUS

A.       CHASE INDUSTRIES INC.

Vice President, Chief Financial Officer, Treasurer and Secretary

B.       CHASE BRASS & COPPER COMPANY, INC.

Vice President, Chief Financial Officer, Secretary and Treasurer

C.       LTC RESERVE CORP.

Vice President, Secretary and Treasurer

II.      DIRECTOR STATUS

A.       CHASE BRASS & COPPER COMPANY, INC.

B.       LTC RESERVE CORP.<PAGE>
                                                                    EXHIBIT 10.1

            SIXTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

         This Sixth Amendment to Amended and Restated Credit Agreement (this
"Sixth Amendment") is executed as of October 31, 2001, to be effective as of
October 1, 2001 (the "Effective Date"), by and among Prize Energy Resources,
L.P., a Delaware limited partnership ("Borrower"), Prize Energy Corp., a
Delaware corporation ("Parent"), Fleet National Bank, a national banking
association, as Administrative Agent ("Administrative Agent"), and the financial
institutions a party hereto as Banks ("Banks").

                                   WITNESSETH:

         WHEREAS, Borrower, Parent, Administrative Agent, the other Agents a
party thereto and Banks are parties to that certain Amended and Restated Credit
Agreement dated as of February 8, 2000 (as amended, the "Credit Agreement")
(unless otherwise defined herein, all terms used herein with their initial
letter capitalized shall have the meaning given such terms in the Credit
Agreement); and

         WHEREAS, pursuant to the Credit Agreement, Banks have made a revolving
credit/term loan to Borrower; and

         WHEREAS, Parent and Borrower have requested that Banks (i) amend
certain terms of the Credit Agreement in certain respects, and (ii) reaffirm and
establish a Borrowing Base of $375,000,000 to be effective as of the Effective
Date and continuing until the next Determination; and

         WHEREAS, subject to the terms and conditions set forth herein, Banks
have agreed to Parent's and Borrower's requests.

         NOW THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and confessed, Parent,
Borrower, Administrative Agent and each Bank hereby agree as follows:

         SECTION 1. Amendments. In reliance on the representations, warranties,
covenants and agreements contained in this Sixth Amendment, and subject to the
satisfaction of the conditions precedent set forth in Section 3 hereof, the
Credit Agreement is hereby amended effective as of the Effective Date in the
manner provided in this Section 1.

         1.1. Amendment to Definitions. The definitions of "Applicable Margin,"
"Commitment Fee Percentage" and "Loan Papers" contained in Section 2.1 of the
Credit Agreement shall be amended to read in full as follows:

                  "Applicable Margin" means, on any date with respect to each
         Eurodollar Tranche, an amount equal to 1.750%; provided, that, at any
         time that the Outstanding Credit exceeds $325,000,000, the Applicable
         Margin will be 2.125%.

                                                                               1
<PAGE>

                  "Commitment Fee Percentage" means, for any date, .375%;
         provided, that, at any time that the Outstanding Credit exceeds
         $325,000,000, the Commitment Fee will be .500%.

                  "Loan Papers" means this Agreement, the First Amendment, the
         Second Amendment, the Third Amendment, the Fourth Amendment, the Fifth
         Amendment, the Sixth Amendment, the Notes, each Facility Guaranty now
         or hereafter executed (and any ratification thereof), the Mortgages,
         the Assignments and Amendments to Mortgages, each Parent Pledge
         Agreement now or hereafter executed, each Subsidiary Pledge Agreement
         now or hereafter executed, the Borrower Assumption Agreement, and all
         other certificates, documents or instruments delivered in connection
         with this Agreement, as the foregoing may be amended from time to time.

         1.2. Additional Definition. Section 2.1 of the Credit Agreement shall
be amended to add the following definition to such Section:

                  "Qualified Purpose" means the purchase by Borrower of Proved
         Producing Mineral Interests.

         1.3. Obligation to Lend. Section 3.1(c) of the Credit Agreement shall
be amended to read in full as follows:

                  "(c) No Bank will be obligated to lend to Borrower or incur
         Letter of Credit Exposure under this Section 3.1, and Borrower shall
         not be entitled to borrow hereunder or obtain Letters of Credit
         hereunder (i) during the existence of any Borrowing Base Deficiency,
         (ii) in an amount which would cause a Borrowing Base Deficiency, (iii)
         unless otherwise approved in writing by Required Banks, if the
         Outstanding Credit prior to giving effect to such Borrowing or issuance
         of such Letter of Credit exceeds $325,000,000, or (iv) unless otherwise
         approved in writing by Required Banks, if the funding of such Borrowing
         or the issuance of such Letter(s) of Credit would cause the Outstanding
         Credit to exceed $325,000,000. Nothing in this Section 3.1(c) shall be
         deemed to limit any Bank's obligation to (A) reimburse any Letter of
         Credit Issuer with respect to such Bank's participation in Letters of
         Credit issued by such Letter of Credit Issuer as provided in Section
         3.1(b), or (B) fund any Refunding Borrowing provided that Borrower is
         in compliance with Section 5.4."

         1.4. Conditions to Borrowing. Section 7.2 of the Credit Agreement shall
be amended to add a new clause (f) thereto which shall read in full as follows:

                  "(f) if either (i) the Outstanding Credit prior to giving
         effect to such Borrowing or issuance of such Letter(s) of Credit
         exceeds $325,000,000, or (ii) the funding of such Borrowing or the
         issuance of such Letter(s) of Credit (as applicable) and all other
         Borrowings to be made and/or Letter(s) of Credit to be issued (as
         applicable) on the same day under this Agreement would cause the
         Outstanding Credit to exceed $325,000,000, Administrative Agent shall
         have received the prior written consent of Required Banks to such
         Borrowing or issuance of such Letter(s) of Credit."

                                                                               2
<PAGE>

         1.5. Use of Proceeds. Section 10.7 of the Credit Agreement shall be
amended to read in full as follows:

                  "SECTION 10.7 Use of Proceeds. The proceeds of Borrowings
         under the Commitment will not be used for any purpose other than (a) to
         finance the acquisition, exploration and development of Mineral
         Interests, (b) to finance the Merger, (c) to refinance existing
         indebtedness under the Existing Credit Agreements, and (d) for general
         corporate purposes. Notwithstanding anything to the contrary contained
         in this Agreement or any other Loan Paper, from and after October 1,
         2001, $50,000,000 of the Availability under this Agreement may be
         utilized by Borrower only for a Qualified Purpose. Borrower agrees that
         each Request for Borrowing will include, in addition to the information
         described in Section 3.2, a certification from an Authorized Officer of
         Borrower as to the purpose and utilization of the proceeds of such
         Borrowing. Additionally, none of the proceeds of the Loan nor any
         Letter of Credit issued hereunder will be used, directly or indirectly,
         (i) for the purpose, whether immediate, incidental or ultimate, of
         purchasing or carrying any Margin Stock, or (ii) in violation of
         applicable Law or regulation (including, without limitation, the Margin
         Regulations). Letters of Credit will be issued hereunder only for the
         purpose of securing bids, tenders, bonds, contracts and other
         obligations entered into in the ordinary course of business of Borrower
         or any of its Subsidiaries and to secure Borrower's obligations under
         Oil and Gas Hedge Transactions required by Section 9.14; provided,
         that, the aggregate Letter of Credit Exposure of all Banks under all
         Hedge Transaction Letters of Credit shall not exceed $15,000,000 at any
         time. Without limiting the foregoing, with the exception of Hedge
         Transaction Letters of Credit permitted pursuant to the preceding
         sentence, no Letters of Credit will be issued hereunder for the purpose
         of or providing credit enhancement with respect to any Debt or equity
         security of any Credit Party or to secure any Credit Party's
         obligations with respect to Hedge Transactions other than Hedge
         Transactions with a Bank or an Affiliate of a Bank."

         SECTION 2. Borrowing Base Effective as of the Effective Date. In
reliance on the representations, warranties, covenants and agreements contained
in this Sixth Amendment, upon the satisfaction of each condition precedent set
forth in Section 3 hereof, the Borrowing Base shall be reaffirmed at
$375,000,000 as of the Effective Date and shall remain at $375,000,000 until the
next Determination thereafter. Parent, Borrower and the Banks agree that the
Determination provided for in this Section 2 shall not be construed or deemed to
be a Special Determination for purposes of Section 5.3 of the Credit Agreement.

         SECTION 3. Conditions Precedent. The effectiveness of (a) the
amendments to the Credit Agreement contained in Section 1 hereof, and (b) the
reaffirmation of the Borrowing Base pursuant to Section 2 hereof, is subject to
the satisfaction of each of the following conditions precedent:

         3.1. No Default. No Default or Event of Default shall have occurred
which is continuing.

         3.2. Fees. Borrower shall have paid to Administrative Agent any fees
payable to Administrative Agent or any Affiliate of Administrative Agent
pursuant to this Sixth

                                                                               3
<PAGE>

Amendment and any separate agreement between Borrower, Administrative Agent or
any Affiliate of Administrative Agent in consideration for providing services in
connection with the credit facilities provided by the Credit Agreement.

         3.3. Other Documents. Administrative Agent shall have been provided
with such other documents, instruments and agreements, and Parent and Borrower
shall have taken such actions, as Administrative Agent may reasonably require in
connection with this Sixth Amendment and the transactions contemplated hereby.

         SECTION 4. Representations and Warranties of Borrower. To induce the
Banks and Administrative Agent to enter into this Sixth Amendment, Parent and
Borrower hereby jointly and severally represent and warrant to the Banks and
Administrative Agent as follows:

         4.1. Reaffirm Existing Representations and Warranties. Each
representation and warranty of each Credit Party contained in the Credit
Agreement and the other Loan Papers is true and correct on the date hereof and
will be true and correct after giving effect to the amendments set forth in
Section 1 hereof.

         4.2. Due Authorization; No Conflict. The execution, delivery and
performance by Parent and Borrower of this Sixth Amendment are within Parent's
and Borrower's corporate and partnership powers (as applicable), have been duly
authorized by all necessary action, require no action by or in respect of, or
filing with, any governmental body, agency or official and do not violate or
constitute a default under any provision of applicable law or any Material
Agreement binding upon Parent or Borrower or any other Credit Party or result in
the creation or imposition of any Lien upon any of the assets of any Credit
Party except Permitted Encumbrances.

         4.3. Validity and Enforceability; Extension of Liens. This Sixth
Amendment constitutes the valid and binding obligation of Parent and Borrower
enforceable in accordance with its terms, except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditor's rights generally, and (ii) the availability of equitable remedies may
be limited by equitable principles of general application.

         4.4. No Default or Event of Default. No Default or Event of Default has
occurred which is continuing.

         SECTION 5. Miscellaneous.

         5.1. Reaffirmation of Loan Papers. Any and all of the terms and
provisions of the Credit Agreement and the Loan Papers shall, except as amended
and modified hereby, remain in full force and effect. The amendments
contemplated hereby shall not limit or impair any Liens securing the
Obligations, each of which are hereby ratified, affirmed and extended to secure
the Obligations as they may be modified pursuant hereto.

         5.2. Parties in Interest. All of the terms and provisions of this Sixth
Amendment shall bind and inure to the benefit of the parties hereto and their
respective successors and assigns.

         5.3. Legal Expenses. Parent and Borrower hereby jointly and severally
agree to pay on demand all reasonable fees and expenses of counsel to
Administrative Agent incurred by

                                                                               4
<PAGE>

Administrative Agent in connection with the preparation, negotiation and
execution of this Sixth Amendment and all related documents.

         5.4. Counterparts. This Sixth Amendment may be executed in
counterparts, and all parties need not execute the same counterpart; however, no
party shall be bound by this Sixth Amendment until all parties have executed a
counterpart. Facsimiles shall be effective as originals.

         5.5. Complete Agreement. THIS SIXTH AMENDMENT, THE CREDIT AGREEMENT AND
THE OTHER LOAN PAPERS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF
THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN OR AMONG THE
PARTIES.

         5.6. Headings. The headings, captions and arrangements used in this
Sixth Amendment are, unless specified otherwise, for convenience only and shall
not be deemed to limit, amplify or modify the terms of this Sixth Amendment, nor
affect the meaning thereof.

         5.7. Effectiveness. This Sixth Amendment shall be effective
automatically and without necessity of any further action by Borrower, Parent,
Administrative Agent or Banks when counterparts hereof have been executed by
Borrower, Parent and Required Banks, and all conditions to the effectiveness
hereof set forth herein have been satisfied.

         IN WITNESS WHEREOF, the parties hereto have caused this Sixth Amendment
to be duly executed by their respective Authorized Officers on the date and year
first above written.

                           [Signature pages to follow]

                                                                               5
<PAGE>

                                 SIGNATURE PAGE
                                       TO
                     SIXTH AMENDMENT TO AMENDED AND RESTATED
                          CREDIT AGREEMENT BY AND AMONG
                PRIZE ENERGY CORP., PRIZE ENERGY RESOURCES, L.P.,
                  FLEET NATIONAL BANK, AS ADMINISTRATIVE AGENT,
                          AND THE BANKS A PARTY THERETO

PARENT:

PRIZE ENERGY CORP.,
a Delaware corporation

By: /s/ LON C. KILE
    --------------------------------
    Lon C. Kile,
    President

BORROWER:

PRIZE ENERGY RESOURCES, L.P.,
a Delaware limited partnership

By: Prize Operating Company,
    a Delaware corporation,
    its sole general partner

    By: /s/ LON C. KILE
        ---------------------------
        Lon C. Kile,
        President

                                [Signature Page]
<PAGE>

                                 SIGNATURE PAGE
                                       TO
                     SIXTH AMENDMENT TO AMENDED AND RESTATED
                          CREDIT AGREEMENT BY AND AMONG
                PRIZE ENERGY CORP., PRIZE ENERGY RESOURCES, L.P.,
                  FLEET NATIONAL BANK, AS ADMINISTRATIVE AGENT,
                          AND THE BANKS A PARTY THERETO

ADMINISTRATIVE AGENT:

FLEET NATIONAL BANK,
as Administrative Agent

By: /s/ JEFFREY H. RATHKAMP
    -------------------------------
    Jeffrey H. Rathkamp,
    Vice President

FLEET NATIONAL BANK,
as a Bank

By: /s/ JEFFREY H. RATHKAMP
    -------------------------------
    Jeffrey H. Rathkamp,
    Vice President

                                [Signature Page]
<PAGE>

                                 SIGNATURE PAGE
                                       TO
                     SIXTH AMENDMENT TO AMENDED AND RESTATED
                          CREDIT AGREEMENT BY AND AMONG
                PRIZE ENERGY CORP., PRIZE ENERGY RESOURCES, L.P.,
                  FLEET NATIONAL BANK, AS ADMINISTRATIVE AGENT,
                          AND THE BANKS A PARTY THERETO

FIRST UNION NATIONAL BANK

By: /s/ DAVID E. HUMPHREYS
    -------------------------------
Name: David E. Humphreys
Title: Vice President

                                [Signature Page]
<PAGE>

                                 SIGNATURE PAGE
                                       TO
                     SIXTH AMENDMENT TO AMENDED AND RESTATED
                          CREDIT AGREEMENT BY AND AMONG
                PRIZE ENERGY CORP., PRIZE ENERGY RESOURCES, L.P.,
                  FLEET NATIONAL BANK, AS ADMINISTRATIVE AGENT,
                          AND THE BANKS A PARTY THERETO

CIBC INC.

By: /s/ NORA Q. CATIIS
    -------------------------------
Name: Nora Q. Catiis
Title: Authorized Signatory

                                [Signature Page]
<PAGE>

                                 SIGNATURE PAGE
                                       TO
                     SIXTH AMENDMENT TO AMENDED AND RESTATED
                          CREDIT AGREEMENT BY AND AMONG
                PRIZE ENERGY CORP., PRIZE ENERGY RESOURCES, L.P.,
                  FLEET NATIONAL BANK, AS ADMINISTRATIVE AGENT,
                          AND THE BANKS A PARTY THERETO

BANK ONE, NA

By:
    -------------------------------
Name:
      -----------------------------
Title:
       ----------------------------

                                [Signature Page]
<PAGE>

                                 SIGNATURE PAGE
                                       TO
                     SIXTH AMENDMENT TO AMENDED AND RESTATED
                          CREDIT AGREEMENT BY AND AMONG
                PRIZE ENERGY CORP., PRIZE ENERGY RESOURCES, L.P.,
                  FLEET NATIONAL BANK, AS ADMINISTRATIVE AGENT,
                          AND THE BANKS A PARTY THERETO

CHRISTIANIA BANK

By:  /s/ WILLIAM S. PHILLIPS
    -------------------------------
Name: William S. Phillips
Title: First Vice President

By: /s/ PETER M. DODGE
    -------------------------------
Name: Peter M. Dodge
Title: Senior Vice President

                                [Signature Page]
<PAGE>

                                 SIGNATURE PAGE
                                       TO
                     SIXTH AMENDMENT TO AMENDED AND RESTATED
                          CREDIT AGREEMENT BY AND AMONG
                PRIZE ENERGY CORP., PRIZE ENERGY RESOURCES, L.P.,
                  FLEET NATIONAL BANK, AS ADMINISTRATIVE AGENT,
                          AND THE BANKS A PARTY THERETO

BANK OF SCOTLAND

By:
    -------------------------------
Name:
      -----------------------------
Title:
       ----------------------------

                                [Signature Page]
<PAGE>

                                 SIGNATURE PAGE
                                       TO
                     SIXTH AMENDMENT TO AMENDED AND RESTATED
                          CREDIT AGREEMENT BY AND AMONG
                PRIZE ENERGY CORP., PRIZE ENERGY RESOURCES, L.P.,
                  FLEET NATIONAL BANK, AS ADMINISTRATIVE AGENT,
                          AND THE BANKS A PARTY THERETO

COMERICA BANK - TEXAS

By:  /s/ THOMAS G. RAJAN
    -------------------------------
Name: Thomas G. Rajan
Title: Vice President

                                [Signature Page]
<PAGE>

                                 SIGNATURE PAGE
                                       TO
                     SIXTH AMENDMENT TO AMENDED AND RESTATED
                          CREDIT AGREEMENT BY AND AMONG
                PRIZE ENERGY CORP., PRIZE ENERGY RESOURCES, L.P.,
                  FLEET NATIONAL BANK, AS ADMINISTRATIVE AGENT,
                          AND THE BANKS A PARTY THERETO

FORTIS CAPITAL CORP.

By:   /s/ DARRELL W. HOLLEY
    -------------------------------
Name: Darrell W. Holley
Title: Managing Director

By:   /s/ DEIRDRE SANBORN
    -------------------------------
Name: Deirdre Sanborn
Title: Vice President

                                [Signature Page]
<PAGE>

                                 SIGNATURE PAGE
                                       TO
                     SIXTH AMENDMENT TO AMENDED AND RESTATED
                          CREDIT AGREEMENT BY AND AMONG
                PRIZE ENERGY CORP., PRIZE ENERGY RESOURCES, L.P.,
                  FLEET NATIONAL BANK, AS ADMINISTRATIVE AGENT,
                          AND THE BANKS A PARTY THERETO

THE BANK OF NOVA SCOTIA

By:   /s/ N. BELL
    -------------------------------
Name: N. Bell
Title: Assistant Agent

                                [Signature Page]
<PAGE>

                                 SIGNATURE PAGE
                                       TO
                     SIXTH AMENDMENT TO AMENDED AND RESTATED
                          CREDIT AGREEMENT BY AND AMONG
                PRIZE ENERGY CORP., PRIZE ENERGY RESOURCES, L.P.,
                  FLEET NATIONAL BANK, AS ADMINISTRATIVE AGENT,
                          AND THE BANKS A PARTY THERETO

THE FROST NATIONAL BANK

By: /s/ JOHN. S. WARREN
    -------------------------------
Name: John. S. Warren
Title: Senior Vice President

                                [Signature Page]
<PAGE>

                                 SIGNATURE PAGE
                                       TO
                     SIXTH AMENDMENT TO AMENDED AND RESTATED
                          CREDIT AGREEMENT BY AND AMONG
                PRIZE ENERGY CORP., PRIZE ENERGY RESOURCES, L.P.,
                  FLEET NATIONAL BANK, AS ADMINISTRATIVE AGENT,
                          AND THE BANKS A PARTY THERETO

BNP PARIBAS

By: /s/ BRIAN MALONE
    -------------------------------
Name: Brian Malone
Title: Managing Director

By: /s/ BETSY JOCHER
    -------------------------------
Name: Betsy Jocher
Title: Vice President

                                [Signature Page]
<PAGE>

                                 SIGNATURE PAGE
                                       TO
                     SIXTH AMENDMENT TO AMENDED AND RESTATED
                          CREDIT AGREEMENT BY AND AMONG
                PRIZE ENERGY CORP., PRIZE ENERGY RESOURCES, L.P.,
                  FLEET NATIONAL BANK, AS ADMINISTRATIVE AGENT,
                          AND THE BANKS A PARTY THERETO

U.S. BANK NATIONAL ASSOCIATION

By: /s/ M. WARD POLZIN
    -------------------------------
Name: M. Ward Polzin
Title: U.S. Bank

                                [Signature Page]

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