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                                                                   EXHIBIT 10.49

                  ALLIANCE TERMINATION AND AMENDMENT AGREEMENT


This Agreement is entered into effective as of July 19, 2002 by and between
BECHTEL CORPORATION ("Bechtel") and PROBEX CORP. ("Probex") (together the
"Parties" and each individually a "Party").

RECITALS:

A.       The Parties entered into an Alliance Agreement dated as of January 31,
         2001 (the "Alliance Agreement") for the purpose of collaborating in the
         development and construction of used oil refining projects using the
         Probex proprietary Pro Terra(R) Process, which includes Bechtel's
         proprietary MP Refining(SM) Process.

B.       The Parties have also entered into the following other agreements
         (collectively, the "Other Joint Agreements"):

         (1)  Master Agreement for Licensing of Bechtel MP Refining(SM) Process
              and Process Engineering for Multiple Plants, dated February 28,
              2000 (the "Master License Agreement");

         (2)  License Agreement for Use of Bechtel MP Refining(SM) Process,
              dated February 28, 2000 (the "Wellsville License Agreement");

         (3)  Solvent Finishing Unit Technical Services Agreement, dated
              February 28, 2000 (the "Wellsville Finishing Unit TSA"); and

         (4)  Wellsville Plant Process Engineering and Technical Services
              Agreement, dated February 28, 2000 (the "Wellsville TSA") (the
              Wellsville Finishing Unit TSA and the Wellsville TSA together the
              "TSAs" and each individually a "TSA").

C.       Despite considerable efforts, the Parties failed to reach final
         agreement on a contract for Bechtel to provide EPC services to Probex
         and were, therefore, unable to successfully implement the Alliance
         Agreement to meet each Party's reasonable commercial expectations. It
         is, therefore, the intent of the Parties to terminate the Alliance
         Agreement, except as specifically provided for herein.

D.       Although the Parties intend to terminate the Alliance Agreement, they
         intend to continue to work together under the terms and conditions of
         the Other Joint Agreements. The Parties are amending each of the Other
         Joint Agreements to reflect the terms of this Agreement.

E.       Notwithstanding the termination of the Alliance Agreement, the Parties
         have entered into this Agreement in order to proceed to work in a
         cooperative manner under the Other Joint Agreements, to facilitate the
         completion of Probex's used



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         oil refining facility in Wellsville Ohio (the "Wellsville Project")
         with Petrofac LLC as EPC contractor for the Wellsville Project and to
         settle all outstanding payments due under the TSAs.

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

1.       Definitions. Any capitalized term used in this Agreement and not
         defined herein shall have the meaning defined in the Alliance Agreement
         or in the Other Joint Agreement(s) referenced. In addition, the
         following terms are defined as follows:

         "AAA" means the American Arbitration Association.

         "Developed Data" means the Pretreatment Stage Developed Data and IP
         Rights, the Distillation Stage Developed Data and IP Rights, and the
         Balance of Plant Developed Data and IP Rights, individually or
         collectively, as the context may require.

         "Financial Closing on the Wellsville Project" means satisfaction of all
         conditions precedent and initial disbursement under the loan agreements
         entered into by Probex Wellsville, L.P. for the construction financing
         of the Wellsville Project.

         "Probex's EPC Contractor" means the contractor chosen by Probex to
         engineer, design, and build the Wellsville Project.

         "Protected Technology" means the Bechtel Background Data and IP Rights
         (as provided for in Section 1.2(a) of Exhibit 1 to the Alliance
         Agreement), the Probex Background Data and IP Rights (as provided for
         in Section 1.2(b) of Exhibit 1) and Finishing Stage Developed Data and
         IP Rights, individually or collectively, as the context may require.

         "Settlement Amount" means the amount set forth in Section 10 of this
         Agreement, plus interest thereon as provided in that Section.

2.       Alliance Agreement and Surviving IP Rights. The Alliance Agreement is
         hereby terminated by mutual consent. The Alliance Agreement is not
         being terminated for cause, default, or for the convenience of any
         specific Party. All rights, obligations, and restrictions of the
         Parties under the Alliance Agreement shall be considered extinguished
         without further liability of either Party to the other. Notwithstanding
         the foregoing, however, Section 11.3 (regarding press announcements) of
         the Alliance Agreement shall survive and continue in effect in
         accordance with its terms until Financial Closing on the Wellsville
         Project and the provisions of Section 8.1 (limiting liability to
         exclude incidental, consequential, and punitive damages), Article 9 and
         Exhibit 1 ("Ownership of Data and Intellectual Property Rights"),
         Article 10 ("Confidential Information") and



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         Sections 11.1 (regarding Probex SEC filings) and 11.2 (regarding
         Bechtel SEC filings) shall survive and continue in effect in accordance
         with their terms, except as expressly amended as follows:

         (a)      Probex and Probex's EPC Contractor shall have the right to use
                  Bechtel Background Data and IP Rights, Developed Data, and
                  Finishing Stage Developed Data and IP Rights in connection
                  with the construction and operation of the Wellsville Project
                  only until the earlier to occur of (i) Financial Closing on
                  the Wellsville Project, or (ii) February 28, 2003, unless
                  extended by mutual agreement of the Parties. Notwithstanding
                  the foregoing, if and when Probex pays the Settlement Amount
                  to Bechtel, the rights of Probex and Probex's EPC Contractor
                  to use such Bechtel Background Data and IP Rights, Developed
                  Data, and Finishing Stage Developed Data and IP Rights shall
                  become perpetual and irrevocable, except as otherwise limited
                  in this Agreement or the Other Joint Agreements.

         (b)      Except as provided in the next sentence, Sections 1.3(b),
                  1.4(b), and 1.6(b) of Exhibit 1 are amended to provide that
                  Probex hereby grants Bechtel a nonexclusive, irrevocable,
                  royalty-free license to use Developed Data, without
                  restriction, effective as of the date of this Agreement.
                  Notwithstanding the foregoing, Bechtel shall not have the
                  right to use such Developed Data with regard to plants that
                  re-refine or re-process Used Oil or that manufacture or refine
                  oil products from Used Oil until that date which is twenty
                  (20) years after the date of this Agreement.

         (c)      Section 1.5(b)(ii) of Exhibit 1 is amended to provide that
                  Probex has a nonexclusive, irrevocable, royalty-free right to
                  use Finishing Stage Developed Data and IP Rights for any
                  project that involves or relates to the re-refining or
                  re-processing of Used Oil, or the manufacturing or refining of
                  oil products from Used Oil, without restriction, effective as
                  of the date of this Agreement; provided that Probex shall
                  notify Bechtel if and when Probex or an Affiliate uses any
                  Finishing Stage Developed Data other than in the following
                  four areas:

                  (i) concept of operating without an absorber tower to recover
                  traces of MP solvent from the overhead vapors of the solvent
                  drying tower;

                  (ii) concept of operating with only one solvent surge tank;

                  (iii) design of the oil skimming system in the solvent surge
                  tank;

                  (iv) use of unit feed as the recirculating liquid in the
                  liquid ring vacuum pumps.

                  Section 1.5(b)(iii) of Exhibit 1 is amended to provide that
                  Bechtel has a nonexclusive, irrevocable, royalty-free right to
                  use Finishing Stage



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                  Developed Data and IP Rights, without restriction, effective
                  as of the date of this Agreement; provided that, for any
                  project that involves or relates to the re-refining or
                  re-processing of Used Oil, or the manufacturing or refining of
                  oil products from Used Oil, Bechtel shall only have the right
                  to use the areas of Finishing Stage Developed Data set forth
                  in (i) through (iv) above in this paragraph.

         (d)      Section 1.8 of Exhibit 1 is superseded in its entirety by
                  Section 6 of this Agreement.

         (e)      Probex shall obtain from Probex's EPC Contractor, and from any
                  other engineering firms and contractors that Probex provides
                  with the Bechtel Background Data and IP Rights or Finishing
                  Stage Developed Data and IP Rights and that now or hereafter
                  are used by Probex or its Affiliates, and deliver to Bechtel
                  (i) a written confidentiality agreement prohibiting such
                  entity from disclosing such Bechtel Background Data or
                  Finishing Stage Developed Data to any entity that has not
                  previously executed and delivered to Bechtel such a
                  confidentiality agreement, except with Bechtel's prior
                  consent, and (ii) a restrictive covenant precluding the use of
                  any such Bechtel Background Data and IP Rights or Finishing
                  Stage Developed Data and IP Rights for any purpose other than
                  for a Probex project.

                  Bechtel shall obtain from any Bechtel subcontractors and from
                  any other engineering firms and contractors that Bechtel
                  provides with the Probex Background Data and IP Rights or
                  Finishing Stage Developed Data and IP Rights and that now or
                  hereafter are used by Bechtel or its Affiliates, and deliver
                  to Probex (i) a written confidentiality agreement prohibiting
                  such entity from disclosing such Probex Background Data or
                  Finishing Stage Developed Data to any entity that has not
                  previously executed and delivered to Probex such a
                  confidentiality agreement, except with Probex's prior consent,
                  and (ii) a restrictive covenant precluding the use of any such
                  Probex Background Data and IP Rights or Finishing Stage
                  Developed Data and IP Rights for any purpose other than for a
                  Bechtel project.

         (f)      The surviving provisions of the Alliance Agreement shall be
                  amended as follows:

                  (i) The third paragraph of Article 9 is hereby amended to
                  delete the words "and EPC Contracts" from the second and third
                  lines thereof.

                  (ii) Section 1.2, Sub-section (b) of Exhibit 1 is hereby
                  amended to delete the words "or Services under any EPC
                  Contract" from the last line thereof.



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                  (iii) Section 1.3, Sub-section (b) of Exhibit 1 is hereby
                  amended to delete the words "under any EPC Contract" from the
                  second and third lines thereof.

3.       Other Joint Agreements Generally. Contemporaneously with the execution
         of this Agreement, the Parties have executed amendments to the Other
         Joint Agreements to further effectuate the purposes of this Agreement
         and implement the intent of the Parties. The Other Joint Agreements
         shall remain in full force and effect in accordance with their terms
         except as expressly amended by this Agreement or by duly executed
         written amendments thereto.

4.       Assignment of Wellsville License Agreement. Bechtel hereby consents to
         Probex assigning its licensee interest in the Wellsville License
         Agreement to Probex Wellsville L.P., in whole and not in part,
         effective upon payment to Bechtel of $273,300.00, representing the
         portion of the royalty due under the Wellsville License Agreement that
         was previously deferred, not later than Financial Closing on the
         Wellsville Project. It is understood and agreed that subsequent to
         Financial Closing on the Wellsville Project, the rights granted under
         the Wellsville License Agreement are conditioned on the licensee
         complying with all the obligations therein, including the making of
         royalty payments as and when due and the establishment of a standby
         letter of credit as provided therein.

5.       Continuing Services and Process Guarantee Agreements. The Parties agree
         to enter into a Continuing Services Agreement and a Process Guarantee
         Agreement for the Wellsville Project as contemplated in Subsections
         2(c)(3) and 2(c)(4) of the Master License Agreement. The commercial
         terms and rates in the Continuing Services Agreement shall be similar
         to those that Bechtel offers to other licensees of the MP Refining(SM)
         Process.

6.       FEL Delivery. Bechtel shall promptly deliver to Probex all volumes of
         the FEL books prepared by Bechtel under the TSAs and not yet delivered
         to Probex, in both hard copy and electronic form to the extent readily
         available without significant additional effort. The Parties
         acknowledge that Bechtel may have been unable to fully complete certain
         portions of the FEL books.

7.       Professional Liability Under TSAs. Section 8.3 of each of the TSAs
         shall continue to apply to the FEL work, except that each Party hereby
         releases the other Party from liability arising from errors or
         omissions in FEL work to the extent that such work is deemed to be
         incomplete through no fault of the party alleged to have committed the
         errors or omissions.

8.       Process License Package. Bechtel shall perform technical services
         necessary to update the Wellsville Project process license package for
         increased capacity based on the so-called "Dallas Heavy" feedstock.
         Such services shall be deemed to be performed under the Wellsville
         Finishing Unit TSA, and shall be performed at no additional charge to
         Probex on a reasonably prompt basis, but in no event later



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         than that date which is ninety (90) days after the date of execution of
         this Agreement.

9.       Future Bechtel Services. Probex may request services under either TSA
         in accordance with their respective terms, but, except as set forth in
         this section and Section 8 (above), it is agreed that Bechtel shall not
         be obligated to perform any services under either TSA, unless and until
         the Settlement Amount has been paid. All services to be performed by
         Bechtel's Lube Oil Technology Group following delivery of the updated
         process license package referred to in Section 8 of this Agreement
         shall be performed under the Process Guaranty Agreement and Continuing
         Services Agreement referred to in Subsections 2(c)(3) and 2(c)(4) of
         the Master License Agreement.

10.      Settlement Amount. Probex agrees to pay, and Bechtel agrees to accept,
         a total amount of $5,233,932.77, plus interest which shall accrue from
         May 1, 2002 until Financial Closing on the Wellsville Project at a rate
         of LIBOR plus four percent (LIBOR+4%), in full and final settlement and
         satisfaction of all invoices, monies and claims that Bechtel asserts
         are due and owing by Probex, in cash, not later than Financial Closing
         on the Wellsville Project. The Parties and the lenders shall agree on
         mutually satisfactory payment mechanisms prior to Financial Closing on
         the Wellsville Project.

11.      Warrant Extension. Probex shall cause the expiration date for that
         certain warrant issued to Bechtel on July 27, 2000, for 200,000 shares
         of Probex stock to be extended from July 27, 2002, to December 31,
         2004, and shall furnish Bechtel with appropriate documentation thereof.

12.      Representatives. The designated representatives of the Parties for
         purposes of carrying out this Agreement shall be Dave McNiel for Probex
         and Amos Avidan for Bechtel, unless a Party designates a substitute
         representative.

13.      Governing Law. This Agreement shall be construed and enforced in
         accordance with, and the rights of the Parties shall be governed by,
         the laws of the State of Texas without regard to principles of conflict
         of laws.

14.      Successors and Assigns. This Agreement shall (a) be binding on each of
         the Parties hereto and their respective successor and assigns, and (b)
         inure to the benefit of the Parties and their respective successors and
         assigns.

15.      Counterparts. This Agreement may be executed in any number of
         counterparts, each of which shall be deemed to be an original, and all
         of which together shall constitute one and the same instrument
         notwithstanding that all parties are not signatories to each
         counterpart.

16.      Dispute Resolution. To the extent that any dispute or claim arising out
         of or relating to this Agreement or the interpretation or application
         hereof or any arrangements relating hereto or contemplated herein or
         the breach, termination or



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         invalidity of this Agreement cannot be settled after good faith
         attempts at negotiation or invocation of an appropriate alternative
         dispute resolution mechanism, such dispute or claim shall be settled
         exclusively and finally by arbitration in accordance with the
         Commercial Arbitration Rules of the AAA. Each Party's obligations and
         rights under this Agreement shall be continuing and in full force
         during the term of the arbitration proceedings until an award stating
         the occurrence and timing of termination of this Agreement has been
         rendered.

         The arbitral tribunal shall consist of three (3) arbitrators. Each
         Party shall nominate, respectively, one arbitrator and such arbitrators
         shall nominate a third arbitrator who shall act as chairman. If the two
         Party appointed arbitrators fail to agree on a third arbitrator within
         fifteen (15) calendar days from the date a demand for arbitration is
         made hereunder, the AAA shall appoint the arbitrator. Should any of the
         arbitrators so appointed die, resign, or refuse or become unable to act
         before a decision is given, the vacancy shall be filled by the method
         set forth in this Section 16 for the original appointment. The
         arbitrators shall be required to give a written decision including the
         reasons therefor.

         Each Party shall bear its own costs and share equally third party costs
         associated with any arbitration; provided, however, that the
         arbitrators may in their discretion require that the losing Party shall
         reimburse the winning Party for such expenses and costs, and for
         reasonable attorneys' fees.



EXECUTED as of the date set forth above.

PROBEX CORP.                                BECHTEL CORPORATION



By:    /s/ David McNiel                     By:    /s/ Amos Avidan
       --------------------------------            -----------------------------

Name:  David McNiel                         Name:  Amos Avidan
       --------------------------------            -----------------------------

Title: Sr. Vice President                   Title: PVP, Manager of Technology
       --------------------------------            -----------------------------



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