Document:

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                                                                    EXHIBIT 10.1

[LOGO OF NETSOLVE]
                  Management Services Purchase and Resale Agreement
                  --------------------------------------------------------------

                               Table of Contents
                               -----------------

Agreement

Exhibit A    NetSolve Services

Exhibit B    Licensed Software

Exhibit C    NetSolve's Standard Design Review Criteria

Exhibit D    Services: Pricing and Discounts

Exhibit E    Territory

Exhibit F    Form of CSO

Exhibit G    NetSolve Service Level Agreement

Exhibit H    Trademark Usage Guidelines

Confidential treatment has been requested for portions of this exhibit.  The
copy filed herewith omits the information subject to the confidentiality
request.  Omissions are designated as [*].  A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.

                                  Page 1 of 73
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[LOGO OF NETSOLVE]
                  Management Services Purchase and Resale Agreement
                  -------------------------------------------------------------

This Management Services Purchase and Resale Agreement (this "Agreement") is
entered into between the following and is effective upon the Effective Date (as
defined herein).

     NetSolve, Incorporated ("NetSolve")        International Business Machines
                                                Corporation ("IBM")
          a Delaware Corporation                     a New York Corporation
     12331 Riata Trace Parkway                  6301 N.W. 5th Way
     Austin, TX 78727                           Fort Lauderdale, FL 33309

     Facsimile: 512-340-3220                    Facsimile:  954-958-6968
     Notices to: Attention CFO                  Notices to:  *

Whereas NetSolve provides implementation, management, and maintenance of
advanced data networks; and

Whereas IBM desires to utilize NetSolve's services in connection with the
services IBM provides to its customers;

1.   Definitions.
     -----------

1.1  "Affiliates" means entities that control, are controlled by, or under
common control with IBM during the Term of this Agreement and which are approved
by NetSolve to resell the NetSolve Services under this Agreement, such approval
not to be unreasonably withheld.

1.2  "CSO (Customer Service Order)" shall mean NetSolve's ordering document in
the form attached hereto as Exhibit F.  NetSolve shall prepare and submit a CSO
to IBM's designated contact(s) based on information provided by IBM. IBM may
approve or reject a CSO in its sole discretion.

1.3  "Customer" means any end user to whom IBM sells NetSolve Services pursuant
to a Customer Agreement, as defined below.

1.4  "Customer Agreement" means a contract for sale of the NetSolve Services
between IBM and a Customer.

1.5  "End User" means anyone who acquires Services for its own use and not for
resale.

1.6.  "Licensed Software" means any copy of the object code of the computer
software identified in Exhibit B of this Agreement, if any, and all Enhancements
to such Licensed

                                  Page 2 of 73
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Software made during the Term of this Agreement which NetSolve elects to make
available to IBM under this Agreement.

1.7  "NetSolve Services" means the services made available to IBM under this
Agreement  by NetSolve, and which are listed in Exhibit A, "Covered NetSolve
Services." and which are more fully described in the Service Description
Attachments to Exhibit A.

1.8  "Program Manager" means the following: Each party shall designate a program
manager ("Program Manager") who will meet at least once a quarter to coordinate
the parties' activities hereunder.  NetSolve's Program Manager will coordinate
and provide, at a mutually agreeable time and place, training of IBM's employees
in the sales of the NetSolve Services. The IBM Program Manager, will coordinate
IBM's activities hereunder.  The IBM Program Manager will help schedule
training.  Either party may change the designation of its Program Manager upon
written notice to the other party's Program Manager.  The NetSolve Program
Manager and the IBM Program Manager shall each serve as the principal point of
contact for the other party for the resolution of any issues or problems that
may arise hereunder.  The services of the NetSolve Program Manager and the IBM
Program Manager shall be at no charge to the other party.

1.9  "Service Term" has the meaning set forth in Section 6, "Service Term and
Start of Service"

2.   Appointment.
     -----------

(a)  NetSolve hereby appoints IBM and its Affiliates, and IBM accepts
     appointment to market and sell NetSolve Services on a non-exclusive basis
     to the Customers in the Territory (as set forth on Exhibit E). To enable
     IBM to effectively market the NetSolve Services, NetSolve grants IBM the
     non-exclusive right and license to use, copy, reproduce, display, market
     and distribute, in any medium or distribution technology whatsoever,
     whether known or unknown, the trademarks and trade names, and associated
     marketing materials, to Customers in the Territory in accordance with the
     provisions of Section 18 - "Trademarks." IBM agrees that it shall identify
     to Customers that NetSolve Services purchased by such Customers are
     provided by NetSolve Incorporated. End Users shall not be located in
     locations outside the Territory (whether such locations be divisions,
     affiliates, parent companies, or otherwise related to such Customer, or not
     related to such Customer) unless (i) the purchase for such locations was
     controlled by IBM's Customer located in the Territory; and (ii) the sale of
     such Services was made directly by IBM. NetSolve further grants IBM and its
     Affiliates (subject to Section 1.1) a non-exclusive, nontransferable, right
     during the term of this Agreement to resell and distribute the NetSolve
     Services and marketing materials to Customers under the terms of this
     Agreement, and to allow potential Customers to evaluate NetSolve Services
     free of charge (limited to 90 days of trial use and a cap on the maximum
     number of devices under evaluation free of charge at any given time, such
     cap to be mutually agreed from time to time), promote and demonstrate the
     NetSolve Services, and to train IBM employees on the sale of the NetSolve
     Services.

(b)  IBM's Global Services Division will use commercially reasonable efforts to
     develop and implement a market support plan for the NetSolve Services.  The
     market support plan may include, at IBM's sole discretion and reasonable
     expense, if any, the following

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     marketing activities for the NetSolve Services: identify Customers for the
     NetSolve Services; demonstrate the NetSolve Services to Customers; develop
     sales proposals; include NetSolve Services in trade shows, executive
     conferences, and other marketing events;; and electronically publish
     information about NetSolve Services. IBM shall not knowingly sell the
     NetSolve Services to third parties for purposes of resale by such third
     parties.

(c)  NetSolve agrees to provide the NetSolve Services in accordance with the
     terms and conditions of this Agreement.   IBM is responsible for pricing,
     ordering, and billing and accounts receivable activities related to the
     NetSolve Services it resells to Customers.

(e)  While this Agreement is in effect and at all times thereafter, NetSolve
     shall have the unrestricted right to appoint other value-added-resellers,
     distributors, sales agents, or the like to sell (and / or to utilize its
     own sales personnel to sell or attempt to sell) services that may be
     similar, the same as, or substantially the same as the NetSolve Services
     for installation in the Territory or any portion thereof.

3.   Term.
     ----

The Term of this Agreement shall commence on the date when executed by both
parties (Effective Date) and will continue for one (1) year unless it is
terminated earlier in accordance with the provisions hereof.  This Agreement
will automatically renew upon each annual anniversary of the Effective Date for
subsequent one (1) year terms unless either party gives the other written notice
of non-renewal at least thirty (30) days prior to expiration of the then-current
term.  Notwithstanding any such termination, this Agreement shall continue in
effect beyond the Term with respect to Service Terms (see Paragraph 5) which
extend beyond the Term of this Agreement.

4.   Purchase Price.
     --------------

(a)  The prices to be paid by IBM to NetSolve for NetSolve Services purchased by
     IBM under this Agreement (the "Purchase Price") shall be  as set forth in
     Exhibit D.

(b)  The Purchase Prices in effect at the inception of this Agreement are set
     forth in Exhibit D.  Such Purchase Prices may be reduced by NetSolve at any
     time, and, subject to this Agreement, may be increased by NetSolve no
     earlier than twelve (12) months after the Effective Date upon ninety (90)
     days prior written notice, or may be modified by mutual agreement of
     NetSolve and IBM at any time.  Purchase Price decreases will be provided to
     IBM as of the effective date of the Purchase Price decrease with respect to
     all CSO's in effect with expired Service Terms (but where the Customer is
     still receiving NetSolve Services) on the date of the Purchase Price
     decrease.  Purchase Price decreases will be provided to IBM for all other
     CSO's at the end of the Service Term of each CSO. Increases, if any, will
     not apply (i) during the Service Term of CSO's accepted prior to the
     effective date of such changes or (ii) additional quantities for Customers
     that have previously purchased the affected NetSolve Services until the end
     of the Service Term of the first CSO for the affected Services from that
     Customer. Furthermore,: (i) Purchase Price increases will not apply to any
     outstanding IBM proposals to its customers or prospects until expiration of
     the proposal, not to exceed one-hundred-eighty (180) days

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     after IBM's receipt of the notice from NetSolve of the Purchase Price
     increase, subject to IBM providing a list of all such proposals to NetSolve
     within thirty (30) days of receipt of notice of the Purchase Price
     increase; and (ii) No Purchase Price increase shall exceed * percent (*%)
     of the highest Purchase Price in the previous year paid by IBM for NetSolve
     Services resold to any Customer.

(c)  Notwithstanding anything to the contrary set forth herein, NetSolve agrees
     to permit IBM to purchase NetSolve Services for internal use at prices no
     higher than the wholesale pricing set forth in Schedule D.;

5.   Rights and Obligations of the Parties.
     --------------------------------------

NetSolve will:
--------------

(a)  deliver the NetSolve Services to Customers within sixty (60) days of IBM's
     documented order to NetSolve and in accordance with the terms hereof and as
     set forth in a "CSO".  IBM can accept NetSolve's proposed delivery schedule
     or cancel the CSO without liability by providing written notice to NetSolve
     on the earlier of (i) five (5) business days after receipt of NetSolve's
     confirmation copy of the CSO or (ii) the commencement of the NetSolve
     Services.  If requested by IBM, NetSolve agrees to electronically confirm
     to IBM within 1 working day the date of any shipment to Customers.
     NetSolve agrees to pay all transportation charges required for any shipment
     to the location IBM specifies. NetSolve may reject CSO's which do not
     conform with NetSolve's Standard Design Review Criteria as defined in
     Exhibit C or which are not within the scope of the NetSolve Services.

(b)  provide IBM with monthly mutually agreed upon data sorted by Customer in a
     file format mutually agreed upon to enable IBM to bill its Customers
     separately.  During the Term of this Agreement, including the Service Terms
     of all CSO's, IBM shall be solely responsible for billing Customers for
     their use of NetSolve Services;

(c)  maintain at NetSolve's expense: (i) comprehensive general or public
     liability insurance with a minimum limit per occurrence or accident of
     $1,000,000; (ii) workers' compensation or employer's liability as required
     by local law, such policies waiving any subrogation rights against IBM; and
     (iii) automobile liability insurance as required by local statute but not
     less than $1,000,000 if a vehicle will be used in the performance of this
     Agreement;

(d)  provide NetSolve  Services per the Service Level Agreement (SLA) specified
     in Schedule G;

(e)  be responsible for the maintenance and security of NetSolve Services and
     other NetSolve products and services and facilities, including but not
     limited to NetSolve's and NetSolve's personnel's compliance with laws,
     rules and regulations, and the terms and conditions of this Agreement;

(f)  be responsible for the supervision, control, compensation, withholdings,
     health and safety of its personnel;

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(g)  ensure that its personnel performing services on IBM's or a Customer's
     premises comply with any of each such party's on-premises guidelines;

(h)  inform IBM if a former employee of IBM, to the extent NetSolve knows from
     employment application data provided by the employee or is otherwise aware
     of former employment by IBM, will be assigned work under this Agreement,
     such assignment to be subject to IBM's prior approval;

(i)  maintain (and make available for inspection upon prior reasonable notice
     and during NetSolve's normal business hours) relevant accounting records to
     support invoices under this Agreement and proof of required permits and
     professional licenses for three (3) years following the termination of this
     Agreement. All accounting records shall be maintained in accordance with
     generally accepted accounting principles;

(j)  provide the following market support services to IBM as reasonably
     requested during the term of this Agreement, at no additional charge:

     Marketing Events: NetSolve agrees to participate in trade shows, executive
     ----------------
     conferences, and other marketing events, on dates and at locations mutually
     agreed to by the parties, with NetSolve paying the travel and all other
     costs of its personnel (including but not limited to salaries and other
     compensation, payroll taxes, and benefits);
     Telephone Support: NetSolve agrees to provide IBM telephone consulting
     -----------------
     services and e-mail support during its normal business hours to address
     technical questions related to demonstration, marketing, operation, use and
     installation of the NetSolve Services;
     Pre-sales Support:  NetSolve agrees to provide pre-sales technical support
     ------------------
     services and demonstration assistance for the NetSolve Services to IBM
     Customers on dates and at locations mutually agreed to by the parties; and
     Training:  During each 12-month period during the Term, NetSolve agrees to
     -----------
     conduct two (2) one-day marketing/technical training classes related to the
     demonstration and sales of NetSolve Services, or otherwise as agreed to by
     the parties' Program Managers and;

(k)  ensure that the CSO: (i) does not contain terms or conditions inconsistent
     with this Agreement; (ii) does not create or imply any obligation for IBM
     except as expressly set forth in this Agreement; and (iii) except as may be
     expressly provided in this Agreement, shall not restrict or limit IBM's
     ability to resell the NetSolve Services under IBM's terms, conditions and
     prices to be selected by IBM at IBM's sole discretion.

     All NetSolve personnel providing market support will have sufficient
     NetSolve Services knowledge and skills to perform the support services
     requested

NetSolve will not:
------------------

(l)  without IBM's prior written approval, issue press releases, or other
     publicity regarding this Agreement or NetSolve's and IBM's relationship
     under it, or use IBM trademarks, trade names, service marks or logos; and

(m)  during the term of the Agreement, NetSolve will not knowingly solicit
     Customers. NetSolve will first respond to requests initiated by such
     Customers by referring them to IBM.

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6.   Service Term and Start of Service.
     ---------------------------------

NetSolve Services will commence on the date on which the applicable NetSolve
Services are made available to IBM or the Customer by NetSolve (the "Service
Date"), in accordance with the IBM or Customer Requested Date ("CRD"), and shall
continue for the number of months specified by IBM (the "Service Term"), all as
set forth on the applicable CSO.  NetSolve Services and the related charges
shall commence on the Service Date and shall continue throughout the Service
Term. Upon expiration of the Service Term or termination of this Agreement under
Section 11, NetSolve Services will continue to be provided by NetSolve to IBM on
a month to month basis at the Purchase Prices, as amended, less applicable
Discounts.  In no event shall NetSolve be obligated to provide Service Terms in
excess of thirty-six (36) months unless IBM and NetSolve agree otherwise.

7.   Representations and Warranties.
     ------------------------------

(a)  NetSolve Services Warranty. NetSolve represents and warrants that on an
     --------------------------
     ongoing basis:  (i) it has the right to enter into this Agreement and its
     performance of this Agreement will not breach the terms of any contract,
     obligation, law, regulation or ordinance to which it is or becomes subject;
     (ii) no claim, lien, or action exists or is threatened against NetSolve
     that would interfere with IBM's rights under this Agreement; (iii) the
     NetSolve Services will substantially conform to the NetSolve Service
     Description (as set forth in Exhibit A, including the attachments thereto);
     (iv)  the NetSolve Services do not infringe any patent, copyright,
     trademark, trade secret or any other intellectual property rights of any
     third party, and do not contain any virus or other harmful code;  (v) will
     comply with any and all laws and/or regulations, including but not limited
     to, export laws and/or regulations regarding (1) the classification of the
     NetSolve Services; and (2) distribution of encrypted code contained in the
     NetSolve Services;  (vi) NetSolve has sufficient  rights to the NetSolve
     Services (including associated marks and names) to grant IBM the rights
     specified in this Agreement; and ( vii) NetSolve will  ensure that all
     Customer content while resident at or being processed in NetSolve equipment
     or facilities, shall be secure and free from unauthorized physical or
     electronic intrusion or interception.

(b)  Disclaimer of Warranty.  THE WARRANTIES SET FORTH IN SECTION 7(a) AND
     ----------------------
EXHIBIT G ARE IBM'S EXCLUSIVE WARRANTIES AND REPLACE ALL OTHER WARRANTIES
(EXPRESS, IMPLIED, OR OTHERWISE) INCLUDING, WITHOUT LIMITATION, WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

8.   IBM Warranties.
     --------------

NetSolve shall not be responsible to IBM or any third party for any warranty
offered by IBM to its Customers, other than its obligations set forth herein.

9.   Taxes.
     -----

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Each party is responsible for complying with the collection, payment, and
reporting of all taxes imposed by any governmental authority applicable to its
activities in connection with the sale, lease, delivery or license of the
NetSolve Services under this Agreement.  Neither party is responsible for taxes
that may be imposed on the other party. Situations may arise where governmental
authorities require IBM to withhold from amounts payable to NetSolve.  In such
cases, IBM may withhold the amount of taxes due from payments to be made to
NetSolve under this Agreement and remit the taxes withheld to the governmental
authority.  Upon request, IBM will provide NetSolve  with documentation
justifying the withholding amount.  In addition, IBM will provide resale
exemption certificates to NetSolve for applicable jurisdictions requested in the
United States.

10.  Payment Terms.
     -------------

(a)  Fees for recurring Services shall be invoiced to IBM on a monthly basis at
     the beginning of each month. Fees for nonrecurring Services shall be
     invoiced to IBM on a monthly basis for Services performed in the previous
     month. Payment for all charges owed hereunder shall be due * (*) days from
     receipt of invoice.  A Late Fee shall be assessed against the unpaid
     balance for payments not received within * days after the due date at the
     lesser of the maximum rate allowed by law or *% per month.

(b)  No late fees shall be imposed upon disputed amounts, provided such disputed
     amounts are documented in writing to NetSolve not later than the due date
     for payment of such NetSolve Services and further provided that the
     undisputed portion(s) of any charges are paid by the due date. Following
     receipt of a dispute notice by NetSolve, IBM and NetSolve shall negotiate
     the disputed charges in good faith within thirty days, and following
     resolution, any amounts agreed to be owing shall be remitted within twenty
     (20) days. In the event the parties cannot resolve the amounts owing, then
     provided (i) NetSolve has billed the disputed items in amounts not greater
     than the amount agreed to by IBM as indicated on a CSO; (ii) IBM has not
     notified NetSolve in writing to cancel such Services; and (iii) the
     Services were not billed for periods prior to the CRD, then the parties may
     escalate the dispute for resolution to senior management within their
     respective companies. Nothing contained in this Section 10(b) shall
     preclude NetSolve from instituting any legal action with respect to any
     unpaid amounts.

(c)  Electronic Commerce.  The parties will conduct transactions using an
     -------------------
     electronic commerce approach under which the parties will electronically
     transmit and receive legally binding purchase and sale obligations
     ("Documents"), including purchase orders, invoices and electronic credit
     entries transmitted by IBM to the NetSolve account specified.  Each party,
     at its own expense, will provide and maintain the equipment, software,
     services and testing necessary for it to effectively and reliably transmit
     and receive such Documents.  Either party may use a third party service
     provider for network services, provided  the other party is given sixty
     (60) days prior written notice of any changes to such services.  A Document
     will be deemed received upon arrival at the receiving party's mailbox or
     Internet address.  The receiving party will promptly notify the originating
     party if a Document is received in an unintelligible form, provided that
     the originating party can be identified.  In the absence of such notice,
     the originating party's record of the contents of such Document will
     prevail.  Each party will authenticate Documents using a digital signature
     or User ID, as mutually agreed, and will maintain security procedures to
     prevent its unauthorized use.

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11.  Cancellation.
     ------------

Subject to the provisions of Section 6 regarding the continuation of NetSolve
Services for unexpired Service Terms at the termination of this Agreement, upon
one hundred eighty (180) days written notice, either party may cancel for
convenience this Agreement (but not individual CSO's prior to the expiration of
the initial Service Term of such CSO).  In the case of such cancellation IBM
shall be responsible for payment in full for all NetSolve Services actually
provided in, and through, such one hundred eighty (180) days and for all
NetSolve Services provided with respect to unexpired Service Terms until the
expiration of all such Service Terms.

Notwithstanding the preceding, CSOs for NetSolve Services may be canceled prior
to expiration of the Service Term: (i)  at IBM's option, if NetSolve Services
are not begun within sixty (60) days of the date agreed to by NetSolve in a CSO;
(ii)  for Customer locations that are closed for business reasons; (iii)  for
any Customer(s) who express dissatisfaction with the Services in writing to IBM
(with a copy to NetSolve from IBM or the Customer) which NetSolve is not able to
cure within thirty (30) days from receipt of notice; or (iv) if a Customer
cancels for any other reason.

12.  Relationship of Parties.
     -----------------------

The relationship of the parties is that of independent contractors.  No
partnership, joint venture, franchise, agency, employment, fiduciary or other
similar relationship is created by this Agreement. Neither party has any express
or implied authority to incur any obligation for, or in any manner otherwise
make any commitments on behalf of, the other party except as expressly allowed
under this Agreement (including any Exhibits or Attachments hereto). Each party
shall employ its own personnel and shall be responsible for them and their acts
and neither party shall be liable to the other, its employees, or any third
parties for any losses, injuries, damages, or the like occasioned by the other
party's activities in connection with this Agreement, except as expressly
provided herein.

13.  Indemnity
     ---------

NETSOLVE WILL INDEMNIFY, DEFEND AND HOLD HARMLESS, (INCLUDING WITHOUT LIMITATION
ANY DAMAGES THAT A COURT FINALLY AWARDS, ANY SETTLEMENT AGREED TO BY NETSOLVE,
AND ALL REASONABLE ATTORNEYS' FEES AND COSTS OF INVESTIGATION) IBM, ITS
AFFILIATES, AND ITS CUSTOMERS AGAINST ANY THIRD PARTY CLAIM AGAINST THEM TO THE
EXTENT THAT SUCH ACTION OR OTHER PROCEEDING IS BASED ON ANY BREACH OF ANY OF THE
REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 7.  NETSOLVE WILL HAVE NO
OBLIGATION UNDER THIS SECTION 13 AS TO ANY ACTION, PROCEEDING OR CLAIM UNLESS:
(A) NETSOLVE IS NOTIFIED OF IT PROMPTLY; (B) NETSOLVE HAS SOLE CONTROL OF ITS
DEFENSE AND SETTLEMENT; AND (C) IBM PROVIDES NETSOLVE WITH REASONABLE ASSISTANCE
IN ITS DEFENSE (PROVIDED HOWEVER, ANY SETTLEMENT SHALL BE SUBJECT TO IBM'S
APPROVAL WHICH SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED). IF AN
INFRINGEMENT OR MISAPPROPRIATION CLAIM IS MADE AGAINST IBM, ITS AFFILIATES,
CUSTOMERS OR THEIR END USERS, OR IF NETSOLVE AND IBM REASONABLY AGREE THAT SUCH
A CLAIM IS LIKELY, ABOUT THE NETSOLVE

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SERVICES, NETSOLVE WILL OBTAIN THE NECESSARY RIGHTS FOR IBM, AND CUSTOMERS TO
CONTINUE EXERCISING ALL RIGHTS GRANTED UNDER THIS AGREEMENT, OR NETSOLVE WILL
MODIFY THE NETSOLVE SERVICES OR ITS NAME SO THAT IT IS NON-INFRINGING, OR
REPLACE IT WITH SERVICES (INCLUDING ANY PORTION THEREOF) THAT IS FUNCTIONALLY
EQUIVALENT, OR ALLOW IBM TO CANCEL ALL NETSOLVE SERVICES. NETSOLVE'S INDEMNITY
OBLIGATIONS FOR INFRINGEMENT SHALL NOT APPLY TO THE EXTENT OF MODIFICATIONS TO,
OR COMBINATIONS OF THE NETSOLVE SERVICES WITH, ANY OTHER ITEMS BY IBM OR ITS
CUSTOMERS TO THE EXTENT NOT REASONABLY ANTICIPATED BY, OR OTHER THAN AT THE
DIRECTION OF, REQUEST OF, OR IN ACCORDANCE WITH SPECIFICATIONS PROVIDED BY
NETSOLVE. THE OBLIGATIONS OF NETSOLVE IN THE THIRD SENTENCE OF THIS SECTION 13,
ARE NOT EXCLUSIVE OF ITS OBLIGATIONS UNDER THE FIRST SENTENCE OF THIS SECTION
13.

14.  Limitation of Liability
     -----------------------

EXCEPT FOR OBLIGATIONS ARISING UNDER SECTION 13, AND DAMAGES FOR BODILY INJURY
(INCLUDING DEATH) AND DAMAGE TO REAL AND TANGIBLE PERSONAL PROPERTY, AND AMOUNTS
OWING BY IBM PURSUANT TO SECTION 4 OF THIS AGREEMENT, IT IS THE PARTIES' EXPRESS
INTENTION THAT: (A) FOR ANY CLAIM ARISING UNDER SECTION 7A(III) OF THIS
AGREEMENT, NETSOLVE'S LIABILITY SHALL BE LIMITED TO THE AMOUNTS SPECIFIED IN
EXHIBIT G; AND (B) FOR ALL OTHER CLAIMS ARISING UNDER THIS AGREEMENT, EITHER
PARTY'S LIABILITY SHALL BE LIMITED TO THE AMOUNTS DUE OR PAID BY IBM UNDER THIS
AGREEMENT  IN THE  TWELVE  (12) MONTHS PRIOR TO THE OCCURRENCE OF THE CLAIM OR
CAUSE OF ACTION, PROVIDED, HOWEVER , SUCH LIABILITY UNDER THIS CLAUSE (B) SHALL
IN NO EVENT  EXCEED $*.  EXCEPT FOR INFRINGEMENT CLAIMS ARISING UNDER SECTION
13, NEITHER NETSOLVE NOR IBM SHALL, UNDER ANY CIRCUMSTANCES, BE LIABLE TO ANY
PARTY FOR ANY INDIRECT, CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR OTHER SPECIAL
TYPES OF DAMAGES, INCLUDING WITHOUT LIMITATION ANY CONSEQUENTIAL DAMAGES
INCLUDING LOST PROFITS OR SAVINGS OR LOSSES TO BUSINESS PROSPECTS, EVEN IF SUCH
DAMAGES RESULT FROM THE BREACH OR OTHER FAULT OF IBM OR NETSOLVE OR EVEN IF
ADVISED THAT SUCH DAMAGES MAY OCCUR.

15.  Notices.
     -------

Unless specifically provided otherwise herein, notices under this Agreement
shall be in writing and delivered by a means evidenced by delivery receipt to
the address specified below, and the effective date for any notice under this
Agreement shall be the date of delivery of such notice, not the date of mailing
or transmission, unless specifically provided otherwise herein.  Either party
may from time to time change its address by giving the other party notice of the
change in accordance with this section.

If to NetSolve:          NetSolve, Inc.
                         12331 Riata Trace Parkway
                         Austin, Texas 78727
                         Attn.:  CFO

                                 Page 10 of 73
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If to IBM:               IBM Corporation
                         6301 NW 5th Way
                         Fort Lauderdale, FL 33309
                         Attn.:  *

                         with a copy to:
                         IBM Global Services
                         Route 100
                         Somers, New York 10589
                         Attention: General Counsel

16.  Force Majeure.
     -------------

Either party's performance of any part of this Agreement shall be excused on a
day-to-day basis to the extent that it is hindered by flood, fire, strike, riot,
governmental action, or any other cause (whether similar or dissimilar to those
listed) beyond that party's reasonable control. If any such event occurs, the
affected party shall make reasonable efforts to notify the other of the nature
of any such condition and the extent of the delay, and shall make reasonable,
good faith efforts to resume performance as soon as possible. If such failure of
performance shall be for ten (10) days or less, then the NetSolve Services
affected thereby shall continue as-is (but NetSolve shall issue a pro-rata
credit of the charges for the affected Services if NetSolve is the party whose
performance has been excused); if for more than thirty (30) days, the affected
Services may be canceled by IBM on ten (10) days written notice without
liability or penalty other than IBM's liability for payment for Services
provided prior to cancellation.

17.  Confidentiality.
     ---------------

(a)  All information disclosed hereunder by one party to the other party will be
     non-confidential.  If the parties require the disclosure of confidential
     information, such disclosure will be made under the written existing
     AGREEMENT FOR EXCHANGE OF CONFIDENTIAL INFORMATION" (AECI) between the
     parties, signed by NetSolve on December 6, 2000, and signed by IBM on
     January 9, 2001.  It is understood that any disclosure of confidential
     information to be covered and protected under this Agreement may be added
     to the AECI by way of a Supplement.

(b)  Notwithstanding anything in Section 17(a) to the contrary, NetSolve
     specifically authorizes IBM to publish its own prices for the NetSolve
     Services, the NetSolve Service Descriptions, and any other product
     information (except for such other product information which NetSolve
     notifies IBM in writing may not be so disclosed) to its sales organization
     and to its actual or potential Customers.

(c)  Either party may disclose the existence and nature of their relationship
     hereunder only to the extent required by law, or order of a court, or order
     or regulations of any regulatory body, except that in each such instance
     the disclosing party shall utilize  reasonable efforts to provide the other
     party an opportunity to review and, other than with respect to required
     filings with the Securities and Exchange Commission, to contest the
     disclosure prior to its being released. Notwithstanding the foregoing, a
     party may not contest a required filing with the Securities and Exchange
     Comission (SEC); however, the party making the filing shall provide the
     other party reasonable opportunity to review and make additions to the
     filing

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     party's request to the SEC for confidential treatment with respect to the
     inclusion of any portion this Agreement.

18.  Trademarks.
     ----------

(a)  Use of Trademarks by IBM - NetSolve hereby grants to IBM the nonexclusive
     ------------------------
     right and license to use, copy, reproduce and display the trademarks and
     tradenames associated with the NetSolve Services of NetSolve (collectively
     "Trademarks") both internally and externally in connection with the
     business of marketing and selling the NetSolve Services for installation in
     the Territory, subject to the guidelines set forth in this Paragraph 18,
     and shall not use the Trademarks in any other manner without the express
     written consent of NetSolve. The use of the Trademarks shall apply only
     during the Term of this Agreement (and shall not apply for any Service
     Terms which extend beyond the Term of this Agreement) and shall be used
     only in connection with the NetSolve Services.

(b)  Guidelines for Trademark Usage - See Exhibit H for Guidelines for Trademark
     ------------------------------
     Usage.

(c)  Protection of Trademarks - IBM recognizes the right, title, and interest of
     -------------------------
     NetSolve in and to all the Trademarks in connection with the marketing and
     sale of NetSolve Services by NetSolve and agrees not to engage in any
     activities or commit any acts, directly or indirectly, which may contest,
     dispute, or otherwise impair such right, title, or interest of NetSolve
     therein.  IBM shall neither acquire nor claim any right, title or interest
     in or to the Trademarks adverse to the rights of NetSolve whether by virtue
     of this Agreement or through any use by IBM of the Trademarks which may be
     permitted by NetSolve through advertising and sale of the NetSolve Services
     or otherwise.  The parties agree that any and all uses of such Trademarks
     by IBM as may be permitted by NetSolve herein or in writing from time to
     time shall be in such manner as to inure at all times to the benefit of
     NetSolve.

19.  Termination.
     -----------

(a)  Right to Terminate. This Agreement (but not individual CSO's prior to the
     ------------------
     expiration of the initial Service Term of such CSO) may be terminated with
     one hundred eighty (180) days prior written notice of either of the
     parties.  Termination of this Agreement other than by the above written
     notice shall be in accordance with the provisions of one or more of the
     following Subsections:

     (i) If either party materially breaches its obligations under this
     Agreement, the other party may notify the Defaulting Party in writing of
     the default and the Defaulting Party shall have a period of thirty (30)
     days from receipt of notice to cure the default. If, at the end of said
     thirty (30) day period the Defaulting Party has not cured the default, the
     other party may immediately terminate this Agreement (and any related
     CSO's) by giving written notice to that effect to the Defaulting Party; and

     (ii) This Agreement may be terminated by one party, upon written notice of
     termination to the other party, in the event any bankruptcy,
     reorganization, general assignment for the benefit of creditors, or
     insolvency proceeding is initiated against the other party and is not
     dismissed within sixty (60) days thereafter.

                                 Page 12 of 73
<PAGE>

(b)  Effect of Termination or Cancellation.
     -------------------------------------

     (i) Termination of this Agreement for any reason shall not relieve either
     party from any liability which at the time of termination has already
     accrued to the other party hereto or which thereafter may accrue in respect
     of any act or omission prior to termination, or from any obligation which
     is expressly stated herein to survive termination.

     (ii) Upon any termination or expiration of this Agreement, NetSolve and IBM
     will immediately return to each other or at the other party's request
     destroy any Confidential Information of NetSolve or IBM in its possession
     or control.

     (iii) Upon any early termination of this Agreement by either party, other
     than for an uncured and undisputed default by IBM of its payment
     obligations under this Agreement, NetSolve shall continue to provide
     NetSolve Services to existing Customers for the remainder of their
     respective Service Terms, (the "Transition Period"), subject to the terms
     and conditions of this Agreement. In addition, upon any other termination
     of this Agreement other than for an uncured and undisputed default by IBM
     of its payment obligations under this Agreement, IBM shall be entitled to
     purchase and resell any NetSolve Services for which IBM has submitted a CSO
     received by NetSolve prior to such termination. In addition, any licenses
     granted to IBM and Customers herein shall continue through the end of the
     respective Service Terms for any CSOs not canceled unless IBM has
     indisputably defaulted on, and not cured its payment obligations under this
     Agreement.

     (iv) Nonexclusive Remedy. The exercise by either party of any remedy
          -------------------
     under this Agreement will be without prejudice to its other remedies under
     this Agreement or otherwise except as limited by Section 14.

     (v) Survival. The rights and obligations of the parties as set forth in
         --------
     this Agreement which by their nature extend beyond the day this Agreement
     ends remain in effect until fulfilled and apply to respective successors
     and assignees will survive any termination or expiration of this Agreement.

20.  Entire Agreement.
     ----------------

All of the Exhibits (including attachments thereto) attached to this Agreement
and listed on the cover page are a part of this Agreement and are incorporated
herein by reference. This Agreement and such Exhibits and the AECI referenced in
Paragraph 17 constitute the entire agreement between the parties, and supersede
any prior agreements between the parties with respect to the subject matter
hereof, unless otherwise specifically agreed to by the parties in writing. Any
addition, deletion or modification to the terms and conditions contained in this
Agreement shall not be binding until accepted by the authorized representatives
of both IBM and NetSolve.

21.  Binding Nature. Assignment.
     --------------------------

Neither party will assign their rights or delegate their duties under this
Agreement to third parties or Affiliates without the prior written consent of
the other party, such consent not to be

                                 Page 13 of 73
<PAGE>

withheld unreasonably, except that IBM may assign this Agreement in conjunction
with the sale (other than to a competitor of NetSolve) of a substantial part of
its business utilizing this Agreement. Any unauthorized assignment of this
Agreement is void. The following is a current list of NetSolve's competitors
which shall be updated in writing to IBM periodically by NetSolve.

     * LIST OMITTED PURSUANT TO CONFIDENTIALITY REQUEST

                                 Page 14 of 73
<PAGE>

22.  Facsimile Signature.
     -------------------

Any and all CSO's or other documents received by facsimile transmission by
either party containing signatures of approval of the other party shall be
deemed originals and fully enforceable.

23.  Compliance with Laws.
     --------------------

IBM and NetSolve will at all times have all necessary legal permits and licenses
required by any governmental unit or agency and will comply with all applicable
international, national, state, regional and local laws and regulations,
including United States export laws, in performing its duties hereunder.

24.  Governing Law.
     -------------

This Agreement shall be governed by and construed according to the laws of the
State of New York without giving effect to its principles of conflict of laws.
No cause of action may be asserted against either party which accrued more than
two (2) years prior to the time when the cause of action arose.  The parties
expressly waive any right to a jury trial regarding disputes related to this
Agreement.  Failure by either party to demand strict performance or to exercise
a right does not prevent either party from doing so later.  The United Nations'
Convention on the International Sale of Goods does not apply.

25.  Severability.
     ------------

If any provision(s) of this Agreement shall be held to be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby and the parties
further agree to substitute a valid provision that most closely approximates the
effect of the invalid provision.

26.  Freedom of Action.
     -----------------

This Agreement is nonexclusive and either party may design, develop,
manufacture, acquire or market competitive Services.  IBM will independently
establish prices for resale of NetSolve Services.  IBM does not guarantee the
success of any marketing effort it engages in for the NetSolve Services. Either
party may independently develop, acquire, and market materials, equipment, or
programs that may be competitive with (despite any similarity to) the other
party's products or services.  Each party is responsible for its own costs,
including all business, travel and living expenses incurred by the performance
of this Agreement.

27.  Headings.
     --------

The descriptive headings in this Agreement shall not define or limit any of the
provisions of this Agreement.

28.  No Other Promises or Inducements.
     ---------------------------------

                                 Page 15 of 73
<PAGE>

There are no promises or inducements which have been made to either party to
this Agreement to cause such party to enter into the Agreement other than those
which are set forth in the Agreement and its Exhibits.  This Agreement is not to
be construed as a commitment or obligation, express or implied, on the part of
IBM that IBM will market, sell, purchase, or license any NetSolve Services under
this Agreement.  Each party acknowledges that its authorized officers and/or
representatives have thoroughly read and reviewed the terms and provisions of
this Agreement and are familiar with them, and that the terms and provisions are
clearly understood by and have been fully and unconditionally consented to by
each party.

29.  Privacy.
     -------

In the course of conducting its business, IBM collects and processes certain
personal information about its Customers, Business Partners, prospects,
suppliers and other business contacts. This might include an individual's name,
business address, business telephone number, business e-mail address, and other
relevant business information about the individual. As a global company, IBM's
business processes extend to more than one country and may result in worldwide
processing and use of such personal data internally, and in appropriate
circumstances, outside IBM. Subject to any rights and obligations of either
party with respect to confidential information exchanged under the terms of a
separate written confidentiality agreement between the parties, NetSolve agrees
that IBM may use and share such personal information within its enterprise and,
with other third parties in connection with this Agreement. NetSolve agrees to
make reasonable attempts to fulfill legal requirements necessary to make such
disclosures, use and transfer of such information lawful. Nothing contained in
this Section 29 shall require an employee of NetSolve to consent to the release
of such information and IBM will not release any information related to
individuals NetSolve identifies in writing as objecting to such release.

Accepted and Agreed to:

<TABLE>
<S>                                                  <C>
=============================================================================================================
 NetSolve Incorporated                                International Business Machines Corporation
-----------------------------------------------      --------------------------------------------------------
 By:  /s/ Craig S. Tysdal                             By:  *
-----------------------------------------------      --------------------------------------------------------
 Name:  Craig S. Tysdal                               Name:  *
-----------------------------------------------      --------------------------------------------------------
 Title:  President & CEO                              Title:  Contract Administrator
-----------------------------------------------      --------------------------------------------------------
 Date: 3-9-01                                         Date: March 7, 2001
-----------------------------------------------      --------------------------------------------------------
</TABLE>

                                 Page 16 of 73
<PAGE>

Management Services Purchase and Resale Agreement
--------------------------------------------------------------------------------

                                   Exhibit A
                   Description of Covered NetSolve Services
                   ----------------------------------------

See attached Service Description documents for the descriptions and deliverables
for each of the following:

(1)  ProWatch for LANS Remote Network Management Service

(2)  ProWatch for WANS Remote Network Management Service

(3)  ProWatch Secure Remote Security Management Services

(4)  Moves, Adds and Changes (MAC)

(5)  Optional Service

       ENTIRE EXHIBIT (PAGES 18-50) OMITTED PURSUANT TO CONFIDENTIALITY
                                    REQUEST

                                 Page 17 of 73
<PAGE>

   Management Services Purchase and Resale Agreement
   -----------------------------------------------------------------------------

                                   Exhibit B
                               List of Software
                               ----------------

As of the Effective Date no software is currently licensed by NetSolve to IBM or
its Customers under this Agreement. IBM and its Customers will have access to
NetSolve's ProWatch Exchange offering as set forth in Exhibit D - Services:
Pricing and Discounts."

                                 Page 51 of 73
<PAGE>

Management Services Purchase and Resale Agreement
--------------------------------------------------------------------------------

                                   Exhibit C
                  NetSolve's Standard Design Review Criteria
                  ------------------------------------------

Use NetSolve-assigned IP address space on all router WAN and loopback interfaces
and as secondaries on all router LAN interfaces.

Avoid static routes.  Use static routes only where necessary.

Run a single dynamic IP routing protocol on the WAN.  Use either EIGRP or OSPF
(avoid RIP).  Use OSPF if there is considerable meshing on the WAN.

For OSPF, use a single OSPF area (zero) if the projected three-year network
growth is limited to 60 or fewer total routers, otherwise, configure multiple
OSPF areas using good OSPF design practices.

For larger networks, the IP addressing scheme should accommodate route
summarization.  Use OSPF stub areas and NSSA's where possible.

Configure loopback interfaces with NetSolve managed IP addresses on all routers.

Use routing process network statements for all connected interfaces.  Avoid
"redistribute connected".  Use passive interface statements to prevent routing
updates on LAN interfaces except where necessary.

Avoid extending WAN routing domain to NON-managed routers.  Rather, use a
separate routing process and redistribute.

Use NetSolve-provided router configuration templates (contact NetSolve, Customer
Engineering).

                                 Page 52 of 73
<PAGE>

NetSolve Technical Interview:

     .  ProWatch for WANs
     .  ProWatch for LANs
     .  ProWatch Secure

This document initiates the generation of a customer service order that
eventually results in the turn up of active monitoring and management by the
Network Operations Center in Austin, Texas.

  ---------------------------------------------------------------------------

General Network Information:
---------------------------

<TABLE>
<S>                 <C>
     Status         Existing Network [_]                  New Network [_]
                    # of sites/devices at each site____________ # of sites/devices
planned________

     Protocols      IP [_]      Other [_] _______________ (Please list)

     Maintenance
                    Equipment under maintenance  Yes [_]  No [_]
                    Contract Expiration Date   __/__/__
                    [_]24x7      4hr    [_]8x5 4hrs     [_]Next Business Day
     [_]None
                    if other please
     list:___________________________________________
                    List
     vendors:_______________________________________________

            Out-of-band access to managed devices:      [_]Yes   [_]No
            (dedicated POTS line and modem)      __________________________
</TABLE>

                                 Page 53 of 73
<PAGE>

ProWatch for WANs specific:
--------------------------

     Carrier    AT&T[_]        MCI Worldcom[_]  Sprint
           Qwest[_]      Other[_] ______________________

     Transport  Frame[_] Private Line (point to point) [_]    ATM [_]
     Technology

     LEC Access 56k[_] T-1[_]   DS-3[_]

     Router            RIP[_]        RIP2[_]     OSPF[_]     EIGRP
     [_]
     Protocols  BGP[_]

     Routers        Cisco            (1700, 2600, 3600, 4500, 7200, 7500)

     Current IOS version(s) ______   List Router Models _________

     CSU/DSU     Adtran[_]   Larscom[_]   Racal[_]   Paradyne[_]

                 Visual Networks[_]   Internal router[_]

                                 Page 54 of 73
<PAGE>

ProWatch for LANs specific:
--------------------------

     LAN Topology      Ethernet[_]   FastEther[_]   GigaEther[_]
                 Token Ring[_]       FDDI[_]               ATM[_]

     Switches/Hubs       (Cisco Only)
     Please list models, indicate total numbers, and types of optional modules
     in use:
     _________________________________________________________________________
     _________________________________________________________________________
     _________________________________________________________________________
     _________________________________________________________________________
     ____________________________

     If other manufacturer's equipment exists and needs to be considered on an
     Individual Case basis (please list and will require NMC Ops approval):

     _________________________________________________________________________
     _________________________________________________________________________
     _________________________________________________________________________
     _________________________________________________________________________

                                 Page 55 of 73
<PAGE>

--------------------------------------------------------------------------------
Additional WAN Requirements:
----------------------------

          Internet Connectivity                  Yes [_] No [_]
          Firewall in place                      Yes [_] No [_]

          Network Addressing Schema in place:
                                 _______________________________________________
                                 _______________________________________________

          Registered IP Network                  Yes [_] No [_]
          List IP addresses or ranges:

          Domain Name ___________

          Name of ISP  ___________

          Vendor Phone  ___________
          (Number to contact regarding circuit/internet outages)

          Carrier ID  ___________
          (ISP circuit id or account number associated with this Internet
          connection)

          Dial Backup    [_]Yes     [_]No

          Method     [_]ISDN     [_]POTS
          Ratio of simultaneous remote connections to hub location:

                                 Page 56 of 73
<PAGE>

ProWatch Secure specific:
------------------------

ISP name      _________________

  Account number   __________________

  Contact info     __________________

Dial in information
     POTS line # ___________________
     Equipment for Out-of-band management
          Modem   ________________

          Smart switch ___________

          Serial cabling _________

Cisco SMARTnet Maintenance
     Contract number   _________________

     Provider          _________________

     Term (1yr, 24x7xNBD)  _________________

Customer 24x7 security contact _________________

            Phone_____________________

            Email_____________________

            Pager_____________________

            Cell  ____________________

Access Passwords___________________________________________

DNS Server (for use with monthly reports)_________________________

Diagram that depicts logical network connectivity and interface addresses:
(Attach)

                                 Page 57 of 73
<PAGE>

For Managed Firewall Service:

PIX Hardware Model  _____________________________

PIX hardware version     ________________________

PIX code version (5.x.x)  _______________________

IPSEC licenses  __________________________________
Copy of the installed configuration:

Details of existing crypto map(s): (Attach)

Log host installed  (we supply software, not equip)  _________________

For ProWatch Secure Services Remote Intrusion Detection Services (RID):

Cisco Secure IDS Model  _______________

IDS Hardware version __________________

Copy of IDS config files (managed.conf, packetd.conf) (Attach)

IDS software version___________________

SKIP software license (today)  _______________

IPSec license (future) _______________________

IDS signature version installed ______________

Is there a director or centralized management server installed? _________

          If yes, will you keep it or replace with NetSolve's ___________

                                 Page 58 of 73
<PAGE>

For Managed Internet Router Services:

     Router hardware Model  _____________________

     Router hardware version _____________________

     Installed IOS version   _______________________

     Installed IOS modules _______________________
     Installed configurations:
________________________________________________________________________________

          Special Requirements:

          Management Contract Term     [_]2 year   [_]3 year

________________________________________________________________________________
     Technical Comments or Instructions for Engineering:
________________________________________________________________________________

                                 Page 59 of 73
<PAGE>

  Management Services Purchase and Resale Agreement
  ------------------------------------------------------------------------------

                                   Exhibit D
                        Services: Pricing and Discounts
                        -------------------------------

       ENTIRE EXHIBIT (PAGES 60-66) OMITTED PURSUANT TO CONFIDENTIALITY
                                    REQUEST

                                 Page 60 of 73
<PAGE>

Management Services Purchase and Resale Agreement
-------------------------------------------------------------------------------

                                   Exhibit E
                                   Territory
                                   ---------

1.   IBM may sell NetSolve Services in any area in the Continental United
     States.

                                 Page 67 of 73
<PAGE>

Management Services Purchase and Resale Agreement
-------------------------------------------------

                                   Exhibit F
                                  SAMPLE CSO
                                  ----------

IBM acknowledges receipt of a sample CSO.

                                 Page 68 of 73
<PAGE>

Management Services Purchase and Resale Agreement
-------------------------------------------------

                                   Exhibit G
                       NetSolve Service Level Agreement
                       --------------------------------

                             All NetSolve Services
                             ---------------------

     If NetSolve fails to deliver any NetSolve Services on or before the
     requested delivery date per a CSO accepted by NetSolve (or on or before any
     other date requested by IBM and agreed to in writing by NetSolve), NetSolve
     shall refund IBM * percent (*%) of the implementation charges for the
     affected device if the delivery is five (5) days or less late, and *
     percent (*%)of the implementation charges for the affected device if
     delivery is more than five (5) days late.

                               ProWatch for WANS
                               -----------------

     Network Availability
     --------------------

     Network availability extends up to and including Layer 3 of the OSI Model,
     provided that the source of the problem(s) is a Network Component, and is
     calculated as follows:

     NetSolve represents and warrants that Network Availability, will be equal
     to or greater than *% for each month during the SERVICE TERM. In the event
     such Network Availability goal for any given calendar month is not achieved
     for any particular Customer, NetSolve will credit IBM *% of the ProWatch
     FOR WANS charges for that month for that Customer, up to a maximum credit
     of $*, if the cause is a carrier outage beyond NetSolve's reasonable
     control, or up to a maximum credit of the lesser of $*, or *% of the
     monthly pro rata portion of the purchase price of the ProWatch for WANS
     charges for that Customer for all other covered causes (see exclusions from
     covered causes below). Notwithstanding the preceding, for any failure to
     achieve the stated Network Availability which was caused by Downtime at
     locations outside the continental United States, the credits will be
     calculated by applying the above amounts and percentages to only the
     amounts billed for the affected non-US locations.

     For purposes of determining whether the monthly Network Availability goal
     is met, Downtime excludes outages resulting from (i) VPN sites; (ii)
     failures of any facilities, equipment, services, or the like which are not
     Network Components, including but not limited to LAN components; (iii)
     failure of Customer to perform its responsibilities defined in Exhibit A,
     or any fault, negligence, operator error, act or omission of Customer,
     including the supplying of inaccurate information to NetSolve; and (iv)
     unavailability of Customer personnel to grant NetSolve access to Customer
     facilities. For Customer accounts with payments to IBM greater than $* per
     month or Customers desiring *% availability, Downtime also excludes outages
     resulting from: (v) failure of equipment or carrier facilities at
     headquarters / hub locations unless redundant equipment, and redundant and
     diverse carrier facilities are in place and operating; (vi) unavailability
     of any other required (per the NetSolve-approved

                                 Page 69 of 73
<PAGE>

     network design) dial back-up or other redundant facilities or equipment;
     (vii) failure of equipment not covered by a maintenance agreement with
     NetSolve unless Customer or its third party maintenance provider restores
     the equipment within agreed upon time frames; or (viii) mass outages,
     defined as catastrophic outages of Customer's carrier's network affecting
     multiple end users, beyond NetSolve's reasonable control.

                     ProWatch for LANS and ProWatch Secure
                     -------------------------------------

     WITH RESPECT TO PROWATCH FOR LANS AND PROWATCH SECURE SERVICES, NETSOLVE'S
     WARRANTS THAT THE SERVICES SHALL BE PERFORMED IN A WORKMANLIKE FASHION. IN
     ANY MONTH IN WHICH CUSTOMER (OR IBM ON CUSTOMER'S BEHALF), IN CUSTOMER'S
     (OR IBM'S) SOLE OPINION, BELIEVES NETSOLVE HAS BREACHED THIS WARRANTY,
     NETSOLVE WILL CREDIT IBM UP TO * PERCENT (*%) OF THE AMOUNTS BILLED TO IBM
     FOR THAT MONTH FOR THE AFFECTED CUSTOMER FOR THE PRO WATCH FOR LAN OR
     SECURE SERVICES. IN ORDER TO RECEIVE THIS CREDIT, IBM MUST NOTIFY NETSOLVE
     IN WRITING WITHIN THIRTY (30) DAYS FOLLOWING THE END OF THE MONTH THE
     SERVICES WERE PROVIDED STATING (i) THE REASON CUSTOMER IS DISSATISFIED WITH
     THE SERVICES AND (ii) THE AMOUNT OF THE SERVICE FEES IBM REQUESTS TO BE
     CREDITED. UPON RECEIPT OF SUCH NOTICE, NETSOLVE WILL CREDIT IBM THE
     REQUESTED AMOUNT (UP TO * PERCENT (*%) OF THE SERVICE FEES BILLED TO IBM
     FOR THAT CUSTOMER FOR THAT MONTH) ON THE NEXT BILLING CYCLE. NETSOLVE SHALL
     NOT BE OBLIGATED TO CREDIT IBM AN AGGREGATE AMOUNT EXCEEDING TWO MONTHS
     SERVICE FEES IN ANY TWELVE MONTH PERIOD FOR ANY GIVEN CUSTOMER, OR AN
     AGGREGATE AMOUNT EXCEEDING THREE MONTHS SERVICE FEES IN ANY EIGHTEEN (18)
     MONTH PERIOD FOR A GIVEN CUSTOMER, BUT MAY ELECT TO DO SO BASED ON IBM'S
     REQUEST.

                                ProWatch Secure
                                ---------------

     BECAUSE OF THE CONTINUOUS EVOLUTION OF THE SOPHISTICATION OF "HACKERS",
     NETSOLVE DOES NOT, AND IT IS ACKNOWLEDGED THAT NETSOLVE CANNOT MAKE ANY
     WARRANTY OR REPRESENTATION THAT ANY SYSTEM ATTACK OR INTRUSION WILL BE
     DETECTED OR PREVENTED, NOR DOES NETSOLVE REPRESENT THAT ANY LICENSED ITEMS
     ARE ERROR FREE.

     WITH RESPECT TO NETRANGER PRODUCTS PURCHASED FROM NETSOLVE, IF ANY,
     NETSOLVE'S LIMITED WARRANTY IS THAT, FOR A PERIOD OF ONE YEAR FOLLOWING
     DELIVERY, THE NETRANGER PRODUCTS, UNDER NORMAL USE AND SERVICE, WILL
     SUBSTANTIALLY PERFORM ALL OF THE FUNCTIONS DESCRIBED IN THE SPECIFICATIONS
     (A COPY OF WHICH SHALL BE PROVIDED TO IBM AT IBM's REQUEST) FOR THE
     NETRANGER PRODUCTS. IN THE EVENT NETSOLVE BREACHES THIS WARRANTY, IBM'S
     REMEDY SHALL BE, AT NETSOLVE'S OPTION AND EXPENSE, (i) TO HAVE NETSOLVE
     CORRECT ANY DISCREPANCY IN PERFORMANCE THAT MATERIALLY IMPAIRS THE
     FUNCTIONALITY OF THE NETRANGER PRODUCTS, OR (ii) NETSOLVE SHALL REFUND THE
     PRICE PAID TO NETSOLVE FOR THE NETRANGER PRODUCTS.

                                 Page 70 of 73
<PAGE>

     NETSOLVE ASSUMES NO RESPONSIBILITY TO BACK-UP AND/OR OTHERWISE PROTECT ALL
     DATA AGAINST LOSS, DAMAGE, OR DESTRUCTION, EXCEPT FOR SECURITY
     CONFIGURATION DATA WHICH WILL BE BACKED-UP BY NETSOLVE.

                                 Page 71 of 73
<PAGE>

Management Services Purchase and Resale Agreement
-------------------------------------------------

                                   Exhibit H
                          TRADEMARK USAGE GUIDELINES

IBM's license to utilize the NetSolve marks is limited to use in the United
States only. Any use outside the United States requires NetSolve's written
approval in advance.

IBM will not alter the marks in any way, including but not limited to color,
capitalization, and spelling.

IBM will in all instances properly identify the NetSolve marks and indicate they
belong to NetSolve.

The following NetSolve trademarks are federally registered. For any use of these
federally registered trademarks, use a superscript symbol "(R)" with the
trademark.

       NetSolve(R)                ProWatch for LANS(R)
       The NetSolve Logo            ProWatch Secure(R)
       ProWatch(R)                         ProWatch
     Exchange(R)
       ProWatch for WANS(R)

The following NetSolve marks are not federally registered. For any use of these
marks, use a superscript "TM" for trademarks and a superscript "SM" for service
marks, as indicated.

       Active Map(TM)                            Canvass(TM)

It is not necessary to use the trademark or service mark symbols "TM", "SM", or
"(R)" for each repeated use of the mark on a given page, article or
advertisement, but the symbol should be used on the first or most prominent use
of the mark.

In addition to the use of the appropriate symbol, a short statement must be
included, e.g., in the form of a footnote, declaring the trademark or service
mark is owned by NetSolve, Incorporated and, for federally registered
trademarks, a statement to that effect. Examples:

     "Active Map is a trademark of NetSolve Incorporated for its Web-based
          network status map."

     "ProWatch Exchange is a registered trademark of NetSolve Incorporated for
     its Web-based network management tools."

The roles of the NetSolve brands and IBM brands must be clearly defined. The
NetSolve marks should not be combined with any IBM or other marks in a way that
could be confusing or in a way that they could be implied or understood to apply
to non-NetSolve services. Examples of correct usage:

                                 Page 72 of 73
<PAGE>

     IBM's Remote Network Management Service provided by NetSolve
     IBM's Remote Network Management Service, a NetSolve ProWatch remote network
     management service
     ProWatch  remote network management service from IBM

The marks must not be used as a noun when used in a sentence, but as an
adjective followed by the generic name of the service.

          Correct: ProWatch for WANS remote network management service can
          provide users with increased network availability.

          Incorrect: ProWatch for WANS can provide users with increased network
          availability.

Variations of the same mark must not be used and every usage of the marks must
be absolutely consistent. Hyphenated variations must not be used and the marks
may not be combined with other words. The marks must not be punctuated or
pluralized except as identified in the list above.

Phraseology that implies that the trademark is other than a unique indicator of
the source of the goods or services must be avoided. For example, in the
following incorrect example it may be construed to imply that there is one
ProWatch line owned by NetSolve Incorporated and another ProWatch line owned by
someone else.

          Correct: The ProWatch remote network management and Internet security
          services, which are provided exclusively by NetSolve Incorporated,
          have been enthusiastically received by IT managers.

          Incorrect: NetSolve Incorporated's ProWatch remote network management
          and Internet security services have been enthusiastically received by
          IT managers.

Do not use the trademark in the plural or possessive form.

          Correct: The ProWatch Exchange Active Map is refreshed upon a change
          in network status.

          Incorrect: ProWatch Exchange's Active Map is refreshed upon a change
          in network status.

Do not use the trademark as a verb.

          Correct: IT managers can verify the network status by reviewing
          ProWatch Exchange.

          Incorrect: IT managers can ProWatch Exchange network status.

                                 Page 73 of 73<PAGE>

                                                                    EXHIBIT 10.1

                             THIRD AMENDMENT TO THE

                  SECOND AMENDED AND RESTATED CREDIT AGREEMENT

     THIS THIRD AMENDMENT TO THE SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(the "Amendment") dated as of October 26, 2001, is executed by and among IMCO
Recycling Inc., a Delaware corporation ("Borrower"), the Subsidiary Guarantors
party to the Credit Agreement (hereinafter defined), the Lenders party to the
Credit Agreement and The Chase Manhattan Bank (successor by merger to Chase Bank
of Texas, National Association) in its capacity as Administrative Agent under
the Credit Agreement (in such capacity, "Administrative Agent").

                                    RECITALS

A.   Borrower, Subsidiary Guarantors, Lenders and Administrative Agent are
     parties to that certain Second Amended and Restated Credit Agreement, dated
     as of October 25, 1999, as amended by that certain First Amendment to the
     Second Amended and Restated Credit Agreement dated as of January 5, 2000,
     and as further amended by that certain Second Amendment to the Second
     Amended and Restated Credit Agreement dated as of October 20, 2000 (the
     "Credit Agreement"), pursuant to which Lenders have made revolving credit
     commitments to Borrower in the amount of up to $175,000,000.

B.   Borrower, Subsidiary Guarantors, Lenders and Administrative Agent desire to
     amend the Credit Agreement in accordance with the terms hereinafter set
     forth pursuant to the amendment procedures specified in Section 12.04 of
     the Credit Agreement.

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

                                   ARTICLE I

                                  Definitions
                                  -----------

     1.1       Defined Terms.  All capitalized terms used herein and not
otherwise defined herein shall have the respective meanings given to such terms
in the Credit Agreement.

                                  ARTICLE II

                                  Amendments
                                  ----------

     2.1       Commitment Reduction; Amendment of Annex A.  The amount of the
                                                  -------
Revolving Credit Commitments is reduced to $160,000,000 and the respective
Revolving Credit Commitment of each Lender is reduced accordingly as reflected
in Annex A to the Credit Agreement as amended hereby.  Accordingly, Annex A to
   -------                                                          -------
the Credit Agreement is hereby amended to read in its entirety as set forth in
Exhibit A hereto.
---------

     2.2       Amendment to Defined Terms.  The following definitions set forth
in Section 1.01 of the Credit Agreement are hereby amended to read in their
respective entireties as follows:
<PAGE>

               "Applicable Margin" shall mean (i) during the period commencing
                -----------------
     on October 26, 2001 and continuing until the Delivery Date, 1.75% per annum
     for Alternate Base Rate Loans and 3.25% per annum for LIBOR Loans; and (ii)
     thereafter a percentage per annum based on the Leverage Ratio determined
                             --- -----
     from the most recently delivered Interest Rate Certificate and financial
     statements delivered under Sections 9.01(a), (b) and (e), which percentage
     per annum shall be equal to the percentage per annum set forth opposite
     --- -----                                  --- -----
     such Leverage Ratio below:

<TABLE>
<CAPTION>
     ================================================================================================
                                                              Alternate
           Leverage Ratio                                  Base Rate Loans              LIBOR Loans
     ------------------------------------------------------------------------------------------------
<S>                                                        <C>                          <C>
     (greater than) 4.25:1.00                                   1.75%                      3.25%
     ------------------------------------------------------------------------------------------------
     (greater than) 4.00:1.00 and (less than) 4.25:1.0          1.50%                      3.00%
     ------------------------------------------------------------------------------------------------
     (greater than) 43.75:1.00 and (less than) 4.00:1.00        1.25%                      2.50%
     ------------------------------------------------------------------------------------------------
     (greater than) 43.50:1.00 and (less than) 3.75:1.00        1.00%                      2.25%
     ------------------------------------------------------------------------------------------------
     (greater than) 43.00:1.00 and (less than) 3.50:1.00        0.50%                      2.00%
     ------------------------------------------------------------------------------------------------
     (greater than) 42.25:1.00 and (less than) 3.00:1.00        0.00%                      1.75%
     ------------------------------------------------------------------------------------------------
     (less than) 2.25:1.00                                      0.00%                      1.50%
     ================================================================================================
</TABLE>

     Any change in the Leverage Ratio shall be effective to adjust the
     Applicable Margin as of the date of receipt by the Administrative Agent of
     the Interest Rate Certificate delivered for any period ending on or after
     September 30, 2001, and most recently delivered pursuant to Section
     9.01(e).  If Borrower fails to deliver the Interest Rate Certificates and
     financial statements after September 30, 2001 within the times specified in
     Sections 9.01(a), (b) and (e), such ratio shall be deemed to be  4.25 to
     1.0 until Borrower delivers such Interest Rate Certificates and financial
     statements.

               "Delivery Date" shall mean the date an Interest Rate Certificate
                -------------
     is delivered to the Lenders for the fiscal quarter ended September 30,
     2001, as required by Section 9.01(e).

               "Dividend Payment" shall mean dividends (in cash, Property or
                ----------------
     obligations) on, or other payments or distributions on account of, or the
     setting apart of money for a sinking or other analogous fund for, or the
     purchase, redemption, retirement or other acquisition of, any shares of any
     class of stock of Borrower or any Subsidiary, or of any Equity Rights,
     including without limitation any payment under a Synthetic Purchase
     Agreement relating to any Equity Interests, but excluding dividends payable
     in respect of shares of common stock through the issuance of additional
     shares of common stock and any redemption or exchange of any capital stock
     for common stock.

                                       2
<PAGE>

               "Mortgage" shall mean the various mortgages and deeds of trust
                --------
     entered into in connection with this Agreement, each of which evidence a
     Lien on Mortgaged Real Property in favor of Administrative Agent for the
     benefit of the Lenders, as each may at any time be amended, modified or
     supplemented in accordance with the terms thereof and hereof.

               "Revolving Credit Commitments" shall mean the aggregate sum of
                ----------------------------
     the Revolving Credit Commitment of all of the Lenders. The aggregate
     principal amount of the Revolving Credit Commitments as of October 26, 2001
     is $160,000,000.

               "Total Capitalization" shall mean at any date the sum (without
                --------------------
     duplication) of (a) Total Debt plus (b) Consolidated Net Worth plus (c) to
     the extent Consolidated Net Worth is reduced thereby, amounts representing
     impairment of goodwill as a result of implementing Financial Accounting
     Standards Board Statement No. 142.

     2.3       Amendment to Definition of "Net Available Proceeds". Clause (iii)
of the definition of "Net Available Proceeds" set forth in Section 1.01 of the
Credit Agreement is hereby amended to read as follows:

               (iii)  in the case of any Equity Issuance or any Debt Issuance,
     the aggregate amount of all cash received by Borrower and the Subsidiaries
     in respect thereof net of all reasonable investment and commercial banking
     fees, discounts and commissions, original issue discount, placement fees,
     legal fees, consulting fees, accountants' fees, underwriting discounts and
     commissions and other customary fees and expenses, actually incurred and
     satisfactorily documented in connection therewith;

     2.4       Amendment to Definition of "Eligible Person".  Clause (iv) of the
definition of "Eligible Person" set forth in Section 1.01 of the Credit
Agreement is hereby amended to read as follows:

               (iv)   any Lender Affiliate of a Lender;

     2.5       Addition of New Defined Terms. Section 1.01 of the Credit
Agreement is hereby amended by adding the following definitions, such
definitions to read in their respective entireties as follows:

               "Collateral Due Date" shall mean February 15, 2002, or such later
                -------------------
     date as the Administrative Agent may approve in the exercise of its sole
     and absolute discretion.

               "Debt Issuance" shall mean the incurrence by any Borrower or any
                -------------
     Subsidiary of any Indebtedness after October 26, 2001 (other than
     Indebtedness permitted by clauses (a), (b), (c), (d), (e), (f) and (j) of
     Section 9.08); provided that nothing herein shall limit the covenant set
     forth in Section 9.08 and any Indebtedness not permitted by Section 9.08
     shall not be incurred without the prior written consent of Majority
     Lenders, and provided further that neither the Administrative Agent nor any
     Lender has any obligation to, nor has made any representation that it will,
     grant any such consent.

                                       3
<PAGE>

               "Equity Interests" shall mean shares of the capital stock,
                ----------------
     partnership interests, membership interests in a limited liability company,
     beneficial interests in a trust or other equity interests in the Borrower
     or any Subsidiary or any warrants, options or other rights to acquire such
     interests.

               "Lender Affiliate" shall mean, (a) with respect to any Lender,
                ----------------
     (i) an Affiliate of such Lender or (ii) any entity (whether a corporation,
     partnership, trust or otherwise) that is engaged in making, purchasing,
     holding or otherwise investing in bank loans and similar extensions of
     credit in the ordinary course of its business and is administered or
     managed by a Lender or an Affiliate of such Lender and (b) with respect to
     any Lender that is a fund which invests in bank loans and similar
     extensions of credit, any other fund that invests in bank loans and similar
     extensions of credit and is managed by the same investment advisor as such
     Lender or by an Affiliate of such investment advisor.

               "Maintenance Capital Expenditures" shall mean Capital
                --------------------------------
     Expenditures (i) for the replacement and maintenance of existing fixed or
     capital assets or (ii) for new fixed or capital assets that Borrower or a
     Subsidiary determines are necessary for the health and safety of its
     employees or operations or that are required by applicable law or by any
     Governmental Authority, all in an aggregate amount not to exceed
     $15,000,000 during any fiscal year.

               "Restricted Indebtedness" shall mean Indebtedness of the Borrower
                -----------------------
     or any Subsidiary, the payment, prepayment, redemption, repurchase or
     defeasance of which is at any time restricted under the terms of this
     Agreement.

               "Synthetic Purchase Agreement" shall mean any swap, derivative or
                ----------------------------
     other agreement or combination of agreements pursuant to which the Borrower
     or a Subsidiary is or may become obligated to make (i) any payment in
     connection with a purchase by any third party from a Person other than the
     Borrower or a Subsidiary of any Equity Interest or Restricted Indebtedness
     or (ii) any payment (other than on account of a permitted purchase by it of
     any Equity Interest or any Restricted Indebtedness ) the amount of which is
     determined by reference to the price or value at any time of any Equity
     Interest or Restricted Indebtedness; provided that no phantom stock,
     performance unit, performance share unit or similar plan or agreement
     providing for payments only to current or former directors, officers or
     employees of the Borrower or the Subsidiaries (or to their heirs or
     estates) shall be deemed to be a Synthetic Purchase Agreement.

     2.6       Amendment to Section 2.10.  Section 2.10 of the Credit Agreement
is hereby amended by adding subsection (ii) thereto, which subsection (ii) shall
read in its entirety as follows:

               (ii)   Equity Issuance; Debt Issuance.  Upon any Equity Issuance
                      ------------------------------
     or any Debt Issuance on or after October 26, 2001, in an aggregate
     principal amount equal to 25% of the Net Available Proceeds of such Equity
     Issuance or 100% of the Net Available Proceeds of such Debt Issuance, as
     the case may be.

                                       4
<PAGE>

     2.7       Amendment to Section 9.06.  Section 9.06 is hereby amended as
follows:

               (a)  Clause (b) is amended to read as follows:

                    (b)  Acquisitions permitted by Section 9.09 (k) or (u) and
               other Investments permitted by Section 9.09;

               (b)  The word "and" appearing at the end of clause (n) is
     deleted, and the period appearing at the end of clause (o) is deleted and
     replaced with a semicolon followed by the word "and".

               (c)  Clause (p) is added immediately following clause (o), which
     clause (p) shall read as follows:

                         (p)  the transfer by IMCO Indiana Partnership L.P.
                    directly or indirectly to IMCO Reciclaje de Mexico, S. de
                    R.L. de C.V. of certain furnace equipment that is not
                    currently in use.

     2.8       Amendment to Section 9.07. Section 9.07 of the Credit Agreement
is hereby amended by deleting clause (j) thereof in its entirety.

     2.9       Amendment to Section 9.08. Section 9.08 of the Credit Agreement
is hereby amended by adding the following sentence to the end thereof, which
sentence shall read in its entirety as follows:

     Notwithstanding anything to the contrary contained herein, any and all
     Indebtedness (other than the Permitted Receivables Financing and related
     obligations) incurred on or after October 26, 2001 by an Obligor or
     Subsidiary, as permitted by this Section 9.08, shall have a stated maturity
     after December 31, 2003.

     2.10      Amendment to Section 9.09. Section 9.09 of the Credit Agreement
is hereby amended as follows:

               (a)  Clause (k) is amended to read in its entirety as follows:

                         (k)  Investments made in order to consummate any
               Acquisitions with the 75% portion of Net Available Proceeds from
               any Equity Issuance remaining after compliance with Section 2.10;
               provided, however, that (v) no Default or Event of Default exists
               or will result therefrom, (w) on a pro forma basis, after giving
                                                  --- -----
               effect to such Acquisition(s), Borrower would have been in
               compliance with Section 9.11 on the last day of the most recently
               completed fiscal quarter (assuming, for purposes of Section 9.11,
               that such Acquisition had occurred on the first day of the
               Measurement Period ending on such last day) as evidenced in an
               Officers Certificate delivered to the Administrative Agent and
               each Lender at least 10 days prior to the consummation thereof,
               (x) the aggregate amount of the consideration (which for each
               Acquisition shall be measured at the date of

                                       5
<PAGE>

               consummation thereof and which shall include debt incurred or
               assumed, working capital deficits and deferred payments) paid for
               all such Acquisitions shall not exceed the amount equal to 75% of
               the Net Available Proceeds of Equity Issuances, and (y) such
               Acquisition shall be effected through Borrower or a Wholly Owned
               Subsidiary which is an Obligor;

          (b)       Clause (o) is amended to read in its entirety as follows:

                         (o)  Capital Expenditures permitted by Section 9.11(f)
               and provided no Default or Event of Default exists or will result
               therefrom;

          (c)       Clause (p) is amended to read in its entirety as follows:

                         (p)  investments by Borrower or any Subsidiary in any
               non-Wholly Owned Subsidiary or any Subsidiary which is not an
               Obligor (including Foreign Subsidiaries), in each case to the
               extent made in the ordinary course to fund or support the
               ordinary course operations of such Subsidiary so long as no Event
               of Default shall have occurred and be continuing; provided,
               however, that (x) the amount of such Investments made pursuant to
               this clause (p) shall not exceed $15,000,000 in the aggregate
               outstanding at any time (without giving effect to any write-down
               or write-off thereof) and (y) all such Investments evidenced by
               intercompany notes (other than intercompany notes relating to the
               Permitted Receivables Financing) shall be pledged to the
               Administrative Agent pursuant to the Security Agreement;

          (d)       Clause (w) is amended to read in its entirety as follows:

                         (w)  investments in VAW-IMCO for Capital Expenditures
               and working capital needs, provided that such investments shall
               be limited to reinvestments of dividends declared and paid by
               VAW-IMCO after October 26, 2001, and in any event shall not
               exceed $10,000,000 in the aggregate;

          (e)       Clauses (v), (bb) and (dd) are hereby deleted in their
               entirety.

     2.11      Amendment to Section 9.10. Clause (b) of Section 9.10 of the
Credit Agreement is hereby amended to read in its entirety as follows:

               (b)  From and after such time as the Leverage Ratio is equal to
     or less than 3.00 to 1.0, as shown in the Interest Rate Certificate and
     financial statements most recently delivered pursuant to Section 9.01(a),
     (b) and (e), Borrower may declare and make cash Dividend Payments on its
     capital stock not to exceed $8,000,000 in the aggregate in any fiscal year,
     provided that no Default or Event of Default shall have occurred and be
     continuing at the time of such Dividend Payment nor would result therefrom,
     and provided further that Borrower's right to declare and pay such cash

                                       6
<PAGE>

     Dividend Payments shall terminate at any time thereafter that the Leverage
     Ratio exceeds 3.00 to 1.0.

     2.12      Amendment to Section 9.11.  Section 9.11 of the Credit Agreement
is hereby amended to read in its entirety as follows:

               9.11   Financial Covenants.
                      -------------------

               (a)       Maximum Debt to Capitalization Ratio. Borrower shall
                         ------------------------------------
     not permit the Debt to Capitalization Ratio for each Measurement Period
     specified below to be greater than the ratio set forth opposite such
     Measurement Period in the table below:

<TABLE>
<CAPTION>
     ==================================================================
                    Period                                      Ratio
     ------------------------------------------------------------------
<S>                                                            <C>
     9/30/2001 and 12/31/2001                                  0.60:1.0
     ------------------------------------------------------------------
     3/31/2002, 6/30/2002, 9/30/2002 and 12/31/2002            0.55:1.0
     ------------------------------------------------------------------
     3/31/2003 and thereafter                                  0.50:1.0
     ==================================================================
</TABLE>

               (b)       Minimum Interest Coverage Ratio. Borrower shall not
                         -------------------------------
     permit the Interest Coverage Ratio for each Measurement Period specified
     below to be less than the ratio set forth opposite such Measurement Period
     in the table below:

<TABLE>
<CAPTION>
     =================================================================
          Measurement Period Ending                             Ratio
     -----------------------------------------------------------------
<S>                                                           <C>
     9/30/2001, 12/31/2001, 3/31/2002, 6/30/2002              1.75:1.0
     and 9/30/2002
     -----------------------------------------------------------------
     12/31/2002                                               2.00:1.0
     -----------------------------------------------------------------
     3/31/2003 and thereafter                                 2.75:1.0
     =================================================================
</TABLE>

               (c)       Minimum Consolidated Net Worth. Borrower shall not
                         ------------------------------
     permit Consolidated Net Worth at any time to be less than $154,600,000 plus
                                                                            ----
     the sum of (x) 50% of consolidated net income of Borrower determined in
     accordance with GAAP for each such fiscal quarter (if positive) occurring
     after June 30, 1999 and (y) 100% of the net proceeds of all Equity
     Issuances occurring after the date hereof and minus, to the extent
     Consolidated Net Worth is reduced thereby, amounts representing impairment
     of goodwill as a result of implementing Financial Accounting Standards
     Board Statement No. 142.

               (d)       Leverage Ratio.  Borrower shall not permit the Leverage
                         --------------
     Ratio for each Measurement Period specified below to exceed the ratio set
     forth opposite such Measurement Period in the table below:

                                       7
<PAGE>

<TABLE>
<CAPTION>
               ================================================
                  Measurement Period Ending              Ratio
               ------------------------------------------------
<S>                                                    <C>
               9/30/2001 and 12/31/2001                5.00:1.0
               ------------------------------------------------
               3/31/2002                               4.75:1.0
               ------------------------------------------------
               6/30/2002                               4.50:1.0
               ------------------------------------------------
               9/30/2002 and 12/31/2002                4.00:1.0
               ------------------------------------------------
               3/31/2003 and thereafter                3.00:1.0
               ================================================
</TABLE>

               (e)       Measurement Dates.  The covenants in clauses (a), (b),
                         -----------------
     (c) and (d) of this Section 9.11 shall be measured as of the end of each
     fiscal quarter, beginning with September 30, 2001.

               (f)       Capital Expenditures. Borrower shall not permit the
                         --------------------
     aggregate Capital Expenditures of the Borrower and the Subsidiaries during
     any fiscal year, other than Maintenance Capital Expenditures, to exceed the
     sum of (i) the aggregate amount of cash and cash equivalent investments of
     the Foreign Subsidiaries as of the beginning of such fiscal year, provided
     that such cash and cash equivalent investments represent cash from foreign
     operations, plus (ii) cash from operations for the domestic and foreign
     operations of Borrower and the Subsidiaries for such fiscal year.

     2.13      Amendment of Section 9.12. Section 9.12 of the Credit Agreement
is hereby amended by adding the following paragraph, which paragraph shall read
in its entirety as follows:

               On or before the Collateral Due Date, the Borrower shall grant or
     cause to be granted to the Administrative Agent, for the pro rata benefit
     of the Lenders, a first priority Lien (subject to Permitted Liens) on all
     rights, titles and interests of the Borrower and the Subsidiary Guarantors
     in all real property described on Schedule 1.01(b) and identified therein
                                       ----------------
     as "Additional Properties" (herein so called).  In connection with the
     foregoing, on or before the Collateral Due Date, Borrower shall execute and
     deliver or cause to be executed and delivered to the Administrative Agent
     appropriate security documents and other documents and instruments, all in
     form and substance satisfactory to the Administrative Agent, as the
     Administrative Agent in its sole discretion deems necessary or desirable to
     create, evidence, preserve, and perfect its Liens in the Additional
     Properties and all other Collateral, and shall deliver or cause to be
     delivered to the Administrative Agent such information regarding the
     Additional Properties as the Administrative Agent in its sole discretion
     deems necessary or desirable, including without limitation deeds of trust,
     mortgages, assignments, security agreements, Uniform Commercial Code
     financing statements, legal opinions, corporate and partnership (and other
     applicable entity) documents and certificates, title commitments, title
     policies, appraisals, surveys, flood plain certification, and other such
     documents and information as the Administrative Agent may require in
     connection with such property and Liens.  As soon as possible and in any
     event before the Collateral Due Date, the Borrower shall deliver or cause
     to be delivered to the Administrative Agent all information and reports

                                       8
<PAGE>

     that the Borrower or any Subsidiary has regarding environmental matters in
     respect of the Additional Properties.  In the event the Administrative
     Agent at any time elects (in the exercise of its sole and absolute
     discretion) to require any additional environmental assessment of any of
     the Additional Properties or other Collateral, the Borrower will and will
     cause the Subsidiaries to cooperate in all respects in obtaining such
     assessments and pay all related fees, costs and expenses.

     2.14      Amendment to Section 9.13. Section 9.13 of the Credit Agreement
is hereby amended by adding clause (c) to the end thereof, which clause (c)
shall read in its entirety as follows:

               (c)  Without in any way limiting the foregoing provisions of this
     Section, each Obligor and each Subsidiary shall execute and deliver or
     cause to be executed and delivered to the Administrative Agent such
     instruments, documents and information as the Administrative Agent may
     require in light of revised Article 9 of the Uniform Commercial Code as in
     effect in the State of Texas or any other applicable jurisdiction,
     including without limitation any appropriate amendments to the Security
     Documents, any information needed for filing new financing statements or
     amendments, any additional lien searches, and any and all information
     relevant to determining appropriate entity names and jurisdictions for
     Uniform Commercial Code searches and filings, and shall take or cause to be
     taken any and all actions necessary to cause or maintain the validity,
     perfection and priority of the Liens of the Administrative Agent in the
     Collateral.

     2.15      Amendment to Section 9.24. Section 9.24 is hereby amended by
adding the following sentence to the end thereof, which sentence shall read in
its entirety as follows:

               Notwithstanding anything to the contrary contained herein, any
     and all Contingent Obligations incurred on or after October 26, 2001 in
     respect of any Indebtedness shall have a stated maturity after December 31,
     2003.

     2.16      Addition of Section 9.26. Section 9 of the Credit Agreement is
hereby amended by adding the following Section 9.26 to the end thereof, which
Section 9.26 shall read in its entirety as follows:

               Section 9.26   Synthetic Repurchases. The Borrower will not, and
                              ---------------------
     will not permit any Subsidiary to, enter into or be party to, or make any
     payment under, any Synthetic Purchase Agreement unless (i) in the case of
     any Synthetic Purchase Agreement related to any Equity Interest, the
     payments required to be made by the Borrower or its Subsidiaries are
     limited to amounts permitted to be paid under Section 9.10, (ii) in the
     case of any Synthetic Purchase Agreement related to any Restricted
     Indebtedness, the payments required to be made by the Borrower or its
     Subsidiaries thereunder are limited to the amounts permitted under this
     Agreement to be made in respect of Restricted Indebtedness, and (iii) in
     the case of any Synthetic Purchase Agreement, the obligations of the
     Borrower and the Subsidiaries thereunder are subordinated to the
     Obligations on terms satisfactory to the Administrative Agent.

                                       9
<PAGE>

     2.17      Amendment to Events of Default. Section 10 of the Credit
Agreement is hereby amended as follows:

               (a)       Clause (n) is amended by replacing the period and the
     end of such clause with a semicolon and adding the word "or" immediately
     following the semicolon.

               (b)       The following clause (o) is added immediately following
     clause (n), such clause (o) to read in its entirety as follows:

                              (o)  Any termination of the commitment or
                    availability under the Permitted Receivables Financing, or
                    any reduction of the total amount of such commitment or
                    availability by an amount greater than 30% of the total
                    amount of such commitment or availability as of October 26,
                    2001.

     2.18      Amendment to Section 12.06. Effective as of the date hereof, each
reference to "any Lender's Affiliate" appearing in clauses (i) and (ii) of
Section 12.06(b) of the Credit Agreement is hereby amended to read "any Lender's
Lender Affiliate."

     2.19      Amendment to Section 12.11. Effective as of the date hereof,
clause (f) of Section 12.11 of the Credit Agreement is hereby amended to read as
follows:

               (f)  to any actual or potential transferee or Participant or to
     any actual or potential counterparty (or its advisors) to any swap or
     derivative transaction relating to the Borrower or any Subsidiary and their
     respective obligations; provided that such transferee or other party agrees
     to comply with the provisions of this Section 12.11.

     2.20      Amendment to Schedule 1.01(b). Schedule 1.01(b) to the Credit
                            ----------------  ----------------
Agreement is hereby amended to read in its entirety as set forth on Exhibit B
                                                                    ---------
hereto.

                                  ARTICLE III

                             Conditions Precedent
                             --------------------

     3.1       Conditions. The effectiveness of this Amendment is subject to the
satisfaction of the following conditions precedent:

               (a)  Amendment Fee. Borrower shall have paid to the
                    -------------
     Administrative Agent, for the account of each Lender that executes and
     delivers this Amendment on or before October 26, 2001, an amendment fee in
     an amount equal to the Revolving Credit Commitment of each such Lender
     multiplied by 0.0030.

               (b)  Collateral Instruments. Borrower shall have delivered or
                    ----------------------
     caused to be delivered to the Administrative Agent the originals of all
     instruments included in the Collateral, including without limitation all
     promissory notes evidencing any Investments, endorsed to the order of the
     Administrative Agent pursuant to an endorsement in form and substance
     satisfactory to the Administrative Agent.

                                       10
<PAGE>

               (c)  Representations and Warranties. The representations and
     warranties contained herein and in all other Basic Documents, as amended
     hereby, shall be true and correct as of the date hereof as if made on the
     date hereof (except for those representations and warranties specifically
     made as of a particular date or dates, in which case such representations
     and warranties shall remain true and correct with respect to the particular
     date or dates referred to).

               (d)  No Default. No Default or Event of Default shall have
                    ----------
     occurred and be continuing.

               (e)  Corporate Matters. All corporate proceedings taken in
                    -----------------
     connection with the transactions contemplated by this Amendment and all
     documents, instruments, and other legal matters incident thereto shall be
     satisfactory to the Administrative Agent and its legal counsel, Locke
     Liddell & Sapp LLP.

               (f)  Additional Documentation. The Administrative Agent shall
                    ------------------------
     have received such additional approvals, opinions, or documents as the
     Administrative Agent or its legal counsel, Locke Liddell & Sapp LLP, may
     reasonably request.

               (g)  Fees, Costs and Expenses. Borrower shall have paid any and
                    ------------------------
     all fees, costs and expenses payable pursuant to the Credit Agreement or
     any fee letter or agreement entered into by such parties.

                                  ARTICLE IV

                 Ratifications, Representations and Warranties
                 ---------------------------------------------

     4.1       Ratifications. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Credit Agreement and except as expressly modified and superseded by
this Amendment, the terms and provisions of the Credit Agreement and the other
Basic Documents are ratified and confirmed and shall continue in full force and
effect. The Obligors agree that the Credit Agreement, as amended hereby, and the
other Basic Documents shall continue to be legal, valid, binding and enforceable
in accordance with their respective terms. The Obligors ratify and confirm that
all guaranties, assurances and Liens granted, conveyed or assigned to
Administrative Agent under the Basic Documents (as they may have been renewed,
extended and amended) are not released, reduced or otherwise adversely affected
by this Amendment and continue to guarantee, assure and secure full payment and
performance of the present and future Obligations, and agree to perform such
acts and duly authorize, execute, acknowledge, deliver, file and record such
additional documents and certificates as Administrative Agent may reasonably
request in order to create, perfect, preserve and protect those guaranties,
assurances and Liens.

     4.2       Representations and Warranties. Each Obligor hereby represents
and warrants to the Administrative Agent and the Lenders that (a) the execution,
delivery, and performance by the Obligors of this Amendment and compliance with
the terms and provisions hereof have been duly authorized by all requisite
action on the part of each such Person and do not and will not violate or
conflict with, or result in a breach of, or require any consent under (i) the
articles of

                                       11
<PAGE>

incorporation, certificate of incorporation, bylaws, partnership agreement,
regulations or other organizational documents of any such Person, (ii) any
applicable law, rule, or regulation or any order, writ, injunction, or decree of
any Governmental Authority, or (iii) any material agreement or instrument to
which any such Person is a party or by which any of them or any of their
property is bound or subject, (b) the representations and warranties contained
in the Credit Agreement, as amended hereby, and any other Basic Document are
true and correct on and as of the date hereof as though made on and as of the
date hereof (except for those representations and warranties specifically made
as of a particular date or dates, in which case such representations and
warranties shall remain true and correct with respect to the particular date or
dates referred to), (c) appropriate UCC financing statements have been filed in
all appropriate filing offices and jurisdictions so as to perfect the security
interests granted to the Administrative Agent under the Security Agreement, and
(d) no Default or Event of Default has occurred and is continuing.

                                   ARTICLE V

                                 Miscellaneous
                                 -------------

     5.1       Survival of Representations and Warranties. All representations
and warranties made in this Amendment shall survive the execution and delivery
of this Amendment, and no investigation by the Administrative Agent or any
Lender or any closing shall affect the representations and warranties or the
right of the Administrative Agent or any Lender to rely upon them.

     5.2       Reference to Credit Agreement. Each of the Basic Documents,
including the Credit Agreement and any and all other agreements, documents, or
instruments now or hereafter executed and delivered pursuant to the terms hereof
or pursuant to the terms of the Credit Agreement as amended hereby, are hereby
amended so that any reference in such Basic Documents to the Credit Agreement
shall mean a reference to the Credit Agreement as amended hereby.

     5.3       Expenses of the Administrative Agent. Borrower agrees to pay on
demand all costs and expenses incurred by the Administrative Agent in connection
with the preparation, negotiation, and execution of this Amendment and any and
all amendments, modifications, and supplements thereto, including without
limitation the costs and fees of the Administrative Agent's legal counsel, and
all costs and expenses incurred by the Administrative Agent in connection with
the enforcement or preservation of any rights under the Credit Agreement, as
amended hereby, or any other Basic Document, including without limitation the
costs and fees of the Administrative Agent's legal counsel.

     5.4       Severability. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.

     5.5       APPLICABLE LAW. THIS AMENDMENT SHALL BE DEEMED TO HAVE BEEN MADE
AND TO BE PERFORMABLE IN DALLAS, DALLAS COUNTY, TEXAS

                                       12
<PAGE>

AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF TEXAS.

     5.6       Successors and Assigns. This Amendment is binding upon and shall
inure to the benefit of the Obligors, Lenders, the Syndication Agent, the
Documentation Agent, the Administrative Agent and their respective successors
and assigns, except Obligors shall not assign or transfer any of their
respective rights or obligations hereunder without the prior written consent of
the Administrative Agent.

     5.7       Counterparts. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument. This Amendment shall not be effective unless and until the
Administrative Agent, the Lenders which constitute "Majority Lenders" as defined
in the Credit Agreement and the Obligors have each executed and delivered a
counterpart hereof and all conditions to the effectiveness hereof have been
satisfied in full, whereupon this Amendment shall become a binding agreement,
enforceable in accordance with its terms and the amendments effectuated hereby
shall become effective as of the date first above written.

     5.8       Headings. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.

     5.9       Release of Claims. The Obligors each hereby acknowledge and agree
that none of them has any and there are no claims or offsets against or defenses
or counterclaims to the terms and provisions of or the obligations of any
Obligor created or evidenced by the Credit Agreement or any of the other Basic
Documents, and to the extent any such claims, offsets, defenses or counterclaims
exist, each Obligor hereby waives, and hereby releases the Administrative Agent,
the Syndication Agent, the Documentation Agent and each of the Lenders from, any
and all claims, offsets, defenses and counterclaims, whether known or unknown,
such waiver and release being with full knowledge and understanding of the
circumstances and effects of such waiver and release and after having consulted
legal counsel with respect thereto.

     5.10      ENTIRE AGREEMENT. THIS AMENDMENT, THE OTHER BASIC DOCUMENTS AND
ALL OTHER INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN
CONNECTION WITH THIS AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS
AMONG THE PARTIES HERETO.

                    [REMAINDER OF PAGE INTENTIONALLY BLANK]

                                       13
<PAGE>

     EXECUTED as of the date first written above.

                              OBLIGORS:

                              IMCO RECYCLING INC.

                              By:    /s/ JAMES B. WALBURG
                                 -----------------------------------------------
                                  Name:  James B. Walburg
                                  Title: Senior Vice President

                              IMCO INVESTMENT COMPANY
                              IMCO RECYCLING OF INDIANA INC.
                              IMCO ENERGY CORP.
                              IMCO RECYCLING OF ILLINOIS INC.
                              ALCHEM ALUMINUM, INC.
                              IMCO RECYCLING OF MICHIGAN, L.L.C.
                              PITTSBURG ALUMINUM, INC.
                              INTERAMERICAN ZINC, INC.
                              IMCO RECYCLING OF CALIFORNIA, INC.
                              IMCO INTERNATIONAL, INC.
                              IMCO RECYCLING OF OHIO INC.
                              IMSAMET, INC.
                              IMCO RECYCLING OF IDAHO INC.
                              IMCO RECYCLING OF UTAH INC.
                              ROCK CREEK ALUMINUM, INC.
                              U.S. ZINC CORPORATION
                              GULF REDUCTION CORPORATION
                              MIDWEST ZINC CORPORATION
                              WESTERN ZINC CORPORATION
                              METALCHEM, INC.
                              U.S. ZINC EXPORT CORPORATION
                              ALCHEM ALUMINUM SHELBYVILLE INC.
                              INDIANA ALUMINUM INC.
                              IMCO RECYCLING SERVICES COMPANY
                              IMCO OPERATIONS SERVICES COMPANY

                              By:    /s/ JAMES B. WALBURG
                                 -----------------------------------------------
                                  Name:  James B. Walburg
                                  Title: Vice President of each of
                                         the above-named entities

                                       14
<PAGE>

                              IMCO INDIANA PARTNERSHIP L.P.

                              By  IMCO Energy Corp., its General Partner

                                  By:    /s/ JAMES B. WALBURG
                                     -------------------------------------------
                                      Name:  James B. Walburg
                                      Title: Vice President

                              IMCO MANAGEMENT PARTNERSHIP, L.P.

                              By  IMCO Recycling Inc., its General Partner

                                  By:    /s/ JAMES B. WALBURG
                                     -------------------------------------------
                                      Name:  James B. Walburg
                                      Title: Senior Vice President

                              LENDERS:

                              THE CHASE MANHATTAN BANK (successor by merger to
                              Chase Bank of Texas, National Association), as
                              Administrative Agent and a Lender

                              By:    /s/ ALLEN K. KING
                                 -----------------------------------------------
                                     Allen K. King
                                     Vice President

                              BANK OF AMERICA, N.A.,
                              as Syndication Agent and a Lender

                              By:    /s/ MICHAEL W. COLON
                                 -----------------------------------------------
                                  Name:  Michael W. Colon
                                  Title: Principal

                                       15
<PAGE>

                              MERRILL LYNCH CAPITAL CORPORATION
                              as a Lender

                              By:    /s/ CAROL J.E. FEELEY
                                 -----------------------------------------------
                                  Name:  Carol J.E. Feeley
                                  Title: Vice President

                              BANK OF TOKYO-MITSUBISHI, LTD.,
                              as a Lender

                              By:    /s/ D. BARNELL
                                 -----------------------------------------------
                                  Name:  D. Barnell
                                  Title: Vice President

                              By:    /s/ JOHN M. MEANS
                                 -----------------------------------------------
                                  Name:  J. Means
                                  Title: VP & Manager

                              BANK ONE, NA (formerly known as The First National
                              Bank of Chicago) (Main Office Chicago),
                              as a Lender

                              By:    /s/ DIANNE M. STARK
                                 -----------------------------------------------
                                  Name:  Dianne M. Stark
                                  Title: First Vice President

                              PNC BANK, NATIONAL ASSOCIATION,
                              as Documentation Agent and a Lender

                              By:    /s/ RICHARD C. MUNSICK
                                 -----------------------------------------------
                                  Name:  Richard C. Munsick
                                  Title: Managing

                                       16
<PAGE>

                              DG BANK DEUTSCHE
                              GENOSSENSCHAFTSBANK, AG, as a Lender

                              By:    /s/  [ILLEGIBLE]
                                 -----------------------------------------------
                                  Name:  [ILLEGIBLE]
                                  Title: Vice President

                              By:    /s/ BRUCE T. FRITZ
                                 -----------------------------------------------
                                  Name:  Bruce T. Fritz
                                  Title: VP

                              AMSOUTH BANK (successor in interest by merger to
                              First American National Bank), as a Lender

                              By:    /s/ E. T. HUTTON, II
                                 -----------------------------------------------
                                  Name:  E. T. Hutton, II
                                  Title: Vice President

                              NATIONAL CITY BANK, as a Lender

                              By:    /s/ WILMER J. JACOBS
                                 -----------------------------------------------
                                  Name:  Wilmer J. Jacobs
                                  Title: Vice President

                              COMERICA BANK, as a Lender

                              By:    /s/ CAROL S. GERAGHTY
                                 -----------------------------------------------
                                  Name:  Carol S. Geraghty
                                  Title: Vice President

                                       17
<PAGE>

                              WELLS FARGO BANK TEXAS, NATIONAL ASSOCIATION, as a
                              Lender

                              By:    /s/ E. J. D. PINDER
                                 -----------------------------------------------
                                  Name:  E. J. D. Pinder
                                  Title: Relationship Manager

                              BANK HAPOALIM B.M., NEW YORK BRANCH, as a Lender

                              By:    /s/ C. V. WAGNER
                                 -----------------------------------------------
                                  Name:  C. V. Wagner
                                  Title:

                              By:    /s/ SHAUN BREDBART
                                 -----------------------------------------------
                                  Name:  Shaun Bredbart
                                  Title: Vice President

                                       18
<PAGE>

                                   Exhibit A

                                    ANNEX A

                         Revolving Credit Commitments
                         ----------------------------

<PAGE>

                                    Annex A

                         Revolving Credit Commitments
                         ----------------------------

<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------
                                                                               Revolving Credit
                        Institution                                               Commitment
                        -----------                                               ----------
----------------------------------------------------------------------------------------------------
<S>                                                                         <C>
The Chase Manhattan Bank                                                         $ 19,200,000

----------------------------------------------------------------------------------------------------
Bank of America, N.A.                                                            $ 19,200,000

----------------------------------------------------------------------------------------------------
PNC Bank, National Association                                                   $ 19,200,000

----------------------------------------------------------------------------------------------------
Bank One, NA                                                                     $ 16,000,000

----------------------------------------------------------------------------------------------------
Wells Fargo Bank Texas, National Association                                     $ 16,000,000

----------------------------------------------------------------------------------------------------
Comerica Bank                                                                    $ 16,000,000

----------------------------------------------------------------------------------------------------
AmSouth Bank                                                                     $ 13,440,000

----------------------------------------------------------------------------------------------------
Bank of Tokyo - Mitsubishi, Ltd.                                                 $  9,600,000

----------------------------------------------------------------------------------------------------
DG Bank Deutsche Genossenschaftsbank, AG                                         $  9,600,000

----------------------------------------------------------------------------------------------------
National City Bank                                                               $  9,600,000

----------------------------------------------------------------------------------------------------
Merrill Lynch Capital Corporation                                                $  6,400,000

----------------------------------------------------------------------------------------------------
Bank Hapoalim, San Francisco Branch                                              $  5,760,000

----------------------------------------------------------------------------------------------------
                       Total                                                     $160,000,000
---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

                                   Exhibit B

                               SCHEDULE 1.01(b)

                Mortgaged Real Property; Additional Properties
                ----------------------------------------------
<PAGE>

                               Schedule 1.01(b)

                            Mortgaged Real Property
                            -----------------------

1.        Bedford, Lawrence County, Indiana
          IMCO Indiana Partnership, L.P.
          1005 4th Street
          Bedford, IN  47421

2.        Chicago Heights, Cook County, Illinois
          IMCO Recycling of Illinois Inc.
          400 E. Lincoln Hwy.
          P.O. Box 751
          Chicago, IL  60411

3.        Morgantown, Butler County, Kentucky
          IMCO Recycling Inc.
          609 Gardner Camp Road
          Highway 1468
          Morgantown, KY  42261

4.        Post Falls, Kootenai County, Idaho
          IMCO Recycling of Idaho Inc.
          West 4000 Prairie Avenue
          Post Falls, ID  83854

5.        Loudon, Loudon County, Tennessee
          IMCO Recycling Inc.
          388 Williamson Drive
          Blair Bend Industrial Park
          Loudon, TN  37774

6.        Rockwood, Roane County, Tennessee
          IMCO Recycling Inc.
          Highway 27 South
          Rockwood, TN  37854

7.        Sapulpa, Creek County, Oklahoma
          IMCO Recycling Inc.
          1508 North 8th Street
          Highway 97 North
          Sapulpa, OK  74066

                             Additional Properties
                             ---------------------

8.        IMCO Recycling of Ohio
          7335 Newport Road SE
          Uhrichsville, OH
<PAGE>

9.        Interamerican Zinc, Inc.
          245 N. Fillmore Road
          Coldwater, MI

10.       Alchem Aluminum, Inc.
          430 W. Garfield Avenue
          Coldwater, MI

11.       IMCO Recycling of Michigan
          267 N. Fillmore Road
          Coldwater, MI

12.       Alchem Aluminum, Inc.
          2600 Nodular Drive
          Saginaw, MI

13.       Gulf Reduction Corporation
          6020 Esperson
          Houston, TX

14.       U.S. Zinc Corporation
          6020 Navigation
          Houston, TX

15.       Alchem Aluminum Shelbyville
          1605 Railroad Avenue
          Shelbyville, TN

16.       Midwest Zinc Corporation
          3380 Fite Road
          Millington, TN

17.       Midwest Zinc Corporation
          480 International Blvd.
          Clarksville, TN

18.       Rock Creek Aluminum, Inc.
          2539 E. Water Street
          Rock Creek, OH

19.       Rock Creek Aluminum, Inc.
          320 Huron Street
          Elyria, OH

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