Document:

Exhibit 10.36.1

                                 LOAN AGREEMENT

         THIS LOAN AGREEMENT (this  "Agreement") is made as of July 26, 2002, by
and among Probex Corp., a Delaware corporation (the "Company"),  and the lenders
listed on Exhibit A hereto (each, a "Lender" and, collectively, the "Lenders").

         WHEREAS,  the  Company  desires  to borrow  from the  Lenders,  and the
Lenders desire to lend to the Company,  the aggregate  principal amount of up to
$3,000,000,  such  indebtedness to be evidenced by promissory  notes in the form
attached  hereto as Exhibit B (as amended,  modified  and restated  from time to
time, the "Note").

         NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby  acknowledged,  the Lenders and the  Company,  intending  to be
legally bound, hereby agree as follow:

1. AGREEMENT TO LEND.  Subject to the terms and conditions of this Agreement and
the Loan  Documents  (hereinafter  defined),  each Lender  agrees to lend to the
Company the principal amount specified  opposite such Lender's name on Exhibit A
hereto and the  Company  agrees to issue to the Lender  (payable to the order of
the Lender or its nominee,  if any) a Note  evidencing  such  obligation  to the
Lender on the Closing Date (hereinafter defined). The obligations of each Lender
shall be  several  and not joint  and no Lender  shall  have any  obligation  or
liability  to any person for the  performance  or  non-performance  by any other
Lender hereunder or under any of the Loan Documents.

2. CLOSING. The closing (the "Closing") shall occur on or prior to the third day
after the satisfaction or waiver of all conditions or obligations of the Lenders
and the Company set forth in Sections 3.1 and 3.2 hereof (the "Closing Date").

3. CONDITIONS TO CLOSING; CLOSING DELIVERIES. The obligations of the Company and
the Lenders to make the  closing  deliveries  set forth in Sections  3.3 or 3.4,
respectively, shall be conditioned upon the simultaneous delivery of the closing
deliveries required to be made by the other party hereto pursuant to subsections
Sections 3.3 or 3.4.

         3.1 Company's  Conditions to Closing. The Company's obligation to issue
the Notes to the  Lenders  is  subject  to the  satisfaction,  at or before  the
Closing  Date,  of  each  of  the  following  conditions,  provided  that  these
conditions  are for the Company's  sole benefit and may be waived by the Company
at any time in its sole discretion:

         (a) Closing Deliveries.  The Company shall have received all documents,
duly  executed  in a form  reasonably  satisfactory  to the Company set forth in
Section 3.4 hereof.

         (b) Representations and Warranties.  The representations and warranties
of the Lender in this  Agreement  shall be true and correct when made and at the
time of the Closing.

         (c) No Litigation. No litigation, statute, rule, regulation,  executive
order,  decree,   ruling  or  injunction  shall  have  been  enacted,   entered,
promulgated  or  endorsed  by or in  any  court  or  governmental  authority  of
competent jurisdiction or any self-regulatory organization having authority over
the matters  contemplated  hereby that prohibits the  consummation of any of the
transactions contemplated by the Loan Documents.

<PAGE>

         3.2 Lenders' Conditions to Closing.  The Lenders' obligation to advance
the  principal  amount of the Notes to the  Company as set forth in Section  4.1
hereof  is  subject  to the  fulfillment,  prior  to or at the  Closing,  of the
following conditions:

         (a) Representation and Warranties.  The  representations and warranties
of the Company in this Agreement  shall be true and correct when made and at the
time of the Closing.

         (b)  Performance;  No Default.  The Company  shall have  performed  and
complied with all  agreements  and  conditions  contained in this  Agreement and
required  to be  performed  or complied  with by it prior to or at the  Closing,
unless  waived by the Lenders,  and after  giving  effect to the issuance of the
Notes,  no Event of Default (as defined in the Note) shall have  occurred and be
continuing.

         (c) Consent of Other Lenders.  Any consents or approvals required to be
obtained from any lender or holder of any outstanding debt for borrowed money of
the Company and any  amendments  and  agreements  pursuant to which any debt for
borrowed  money may have been  incurred by the  Company and any other  consents,
which  shall  be  necessary  to  permit  the  consummation  of  the  transaction
contemplated hereby shall have been obtained.

         (d) Closing Deliveries. Lenders shall have received all documents, duly
executed in a form  reasonably  satisfactory to the Lenders set forth in Section
3.3 hereof.

         (e) No Litigation. No litigation, statute, rule, regulation,  executive
order,  decree,   ruling  or  injunction  shall  have  been  enacted,   entered,
promulgated  or  endorsed  by or in  any  court  or  governmental  authority  of
competent jurisdiction or any self-regulatory organization having authority over
the matters  contemplated  hereby that prohibits the  consummation of any of the
transactions contemplated by the Loan Documents.

         3.3 Closing  Deliveries  of the Company.  At the  Closing,  the Company
shall  deliver to the Lenders the  following,  all of which shall be in form and
content satisfactory to the Lenders and their counsel:

         (a) Note.  The Note  made  payable  to the  order of the  Lender or its
nominee,  if any, in the maximum aggregate  principal amount specified  opposite
such Lender's name on Exhibit A hereto.

         (b) First Amendment to Intercreditor and Security Agreement.  The First
Amendment to Intercreditor and Security  Agreement,  duly executed and delivered
by the  Company,  in  substantially  the form set forth in Exhibit C hereto (the
"Amendment",  and together with the Notes and the Warrant (hereinafter defined),
collectively, the "Loan Documents").

         (c) Warrant. The Warrants, duly executed and delivered by the Company.

         (d) Evidence of Filing of Financing  Statements.  Evidence of filing of
Uniform Commercial Code financing statements with respect to the collateral that
is the subject of the  Intercreditor and Security  Agreement,  dated as of March
29,  2002,  by  and  among  the  Company  and  the  parties  thereto  ("Security
Agreement").

<PAGE>

         3.4 Closing  Deliveries  of the Lenders.  At the  Closing,  each Lender
shall  deliver  the  following,  all of which  shall  be in form  and  substance
reasonably satisfactory to the Company:

         (a) Advancement of Loan Amount.  The portion of the principal amount of
the Note set forth in Section  4.1 hereof to the  Company  by wire  transfer  in
immediately  available  funds in accordance with the  instructions  set forth in
Exhibit D attached hereto.

         (b)  Amendment and Security  Agreement.  The Amendment and the Security
Agreement, if the Lender is not

already a party thereto, duly executed and delivered by the Lender.

4.       FUNDING SCHEDULE; WARRANTS.

         4.1 Funding of Loan Proceeds.  The Lenders shall deposit in the Company
Account  (hereinafter  defined) the unadvanced  principal amount of the Notes as
follows:

         (a)      1/6th of the principal amount specified opposite such Lender's
                  name on Exhibit A hereto on the Closing Date;
         (b)      1/6th of the principal amount specified opposite such Lender's
                  name on Exhibit A hereto on August 1, 2002;
         (c)      1/6th of the principal amount specified opposite such Lender's
                  name on Exhibit A hereto on September 1, 2002;
         (d)      1/6th of the principal amount specified opposite such Lender's
                  name on Exhibit A hereto on October 1, 2002;
         (e)      1/6th of the principal amount specified opposite such Lender's
                  name on Exhibit A hereto on November 1, 2002;
         (f)      1/6th of the principal amount specified opposite such Lender's
                  name on Exhibit A hereto on December 1, 2002;

provided,  however,  if a term sheet from a lead investor for the equity portion
of the Qualified Equity Financing  (hereinafter  defined) is not received by the
Company prior to October 1, 2002,  each Lender shall not be required to fund the
amounts specified in items (d) through (f) above.

         4.2 Issuance of Warrants.  On the Closing Date, the Company shall issue
to each Lender, for no additional cash  consideration,  but as consideration for
the risks assumed by the Lender,  a warrant to purchase that number of shares of
the Company's  common stock (the "Warrant")  equal to the product of (a) 1.5 and
(b) the  principal  amount  specified  opposite  such Lender's name on Exhibit A
hereto.  The agreement  evidencing  the Warrant  shall have the exercise  price,
shall be for the term, and shall otherwise be in substantially  the form, as set
forth in Exhibit E attached hereto.  The number of shares issuable upon exercise
of the  Warrants  shall be  appropriately  adjusted to reflect any stock  split,
stock dividend, combinations,  recapitalizations or other such adjustment to the
Company's  common  stock  occurring  subsequent  to the date hereof and prior to
their  respective  issuance.  All  issuances  of common  stock  pursuant  to the
Warrants  shall be subject to any  stockholder  approvals  required  pursuant to
Section 3.20 of the Security Agreement.

5.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby represents
and warrants to the Lenders that the  following  will be true and correct at the
Closing, as if made on that date:

<PAGE>

         (a) The  representations  and  warranties  made by the  Company  in the
Security  Agreement are as fully a part of this Agreement as if set forth herein
in full.

         (b) The Company further represents and warrants to the Lenders that:

                  (i) The Notes  are duly  authorized  and,  when  issued,  will
         constitute  valid and binding  obligations of the Company,  enforceable
         against  the  Company,  in  accordance  with  their  terms,  subject to
         applicable bankruptcy,  insolvency or similar laws affecting creditors'
         rights generally and general  principles of equity and except rights to
         indemnification and contribution under the Note as may be limited under
         applicable law; and

                  (ii) Subject to any required stockholder approvals pursuant to
         Section 3.20 of the  Security  Agreement,  the shares of the  Company's
         common stock  issuable upon  conversion of the Note and exercise of the
         Warrants,  when issued, will be duly authorized,  validly issued, fully
         paid and non-assessable.

6. REPRESENTATIONS AND WARRANTIES OF THE LENDERS.  Each Lender hereby represents
and warrants to the Company that:

         6.1 Lender has all requisite power and authority to execute and deliver
this Agreement and the other agreements and instruments  contemplated  herein to
which it is a party and to  consummate  the  transactions  contemplated  by this
Agreement and the other agreements and instruments  contemplated herein to which
it is a party.

         6.2 The execution of this  Agreement and the documents  executed by the
Lender  pursuant to this  Agreement  have been duly  authorized by all necessary
actions  on the part of the  Lender,  have  been  executed  and  delivered,  and
constitute  valid,  legal,  binding and  enforceable  agreements  of the Lender,
except  as  may  be   limited   by  (a)   applicable   bankruptcy,   insolvency,
reorganization, moratorium or other similar laws of general application relating
to or  affecting  the  enforcement  of creditor  rights,  (b) laws and  judicial
decisions  regarding  indemnification for violations of federal securities laws,
(c) the availability of specific  performance or other equitable  remedies,  and
(d) with respect to any indemnification  agreements set forth herein or therein,
principles of public policy.

         6.3 Lender is aware that an investment in the Note, the Warrant and any
shares of the Company's  common stock acquirable upon the conversion of the Note
and  exercise of the Warrant (the  "Shares"  and together  with the Note and the
Warrant,  collectively,  the  "Securities"),  is speculative and involves a high
degree of risk. Lender has carefully considered the risks of this investment.

         6.4 Lender has such  knowledge and experience in financial and business
matters and is capable of  evaluating  the merits and risks of  investing in the
Securities and of protecting its interest in connection with this investment.

         6.5 Lender is purchasing the Securities for its own account, or for one
or  more  separate  accounts  maintained  by it for the  account  of one or more
pension, trust or other funds, for investment purposes only, and not with a view
to the resale or distribution of any of the Securities.  Lender understands that

<PAGE>

it must bear the economic risk of the  investment  for an  indefinite  period of
time  because  the sale and  issuance  of the  Securities  by the Company to the
Lender has not been registered under the Securities Act of 1933, as amended (the
"Act"),   pursuant  to  an  exemption  from  registration   under  Regulation  D
promulgated under the Act or such other available  exemptions thereto, nor under
any  applicable  state  securities  laws,  and the Securities may not be sold or
transferred by the Lender in the absence of evidence satisfactory to the Company
of compliance  with  applicable  laws,  which evidence may include an opinion of
counsel  satisfactory  to the Company that,  among other things,  the Securities
have been registered  under the Act and all applicable  state securities laws or
that such registrations are not required.

         6.6 Lender  represents that it is an "accredited  investor"  within the
meaning of Rule 501 of  Regulation  D, as  presently in effect,  as  promulgated
under the Act.

         6.7 Based upon the  information  provided to the Lender,  no  approval,
consent, exemption,  authorization,  or other action by, or notice to, or filing
with,  any  governmental   authority  or  any  other  individual,   corporation,
partnership,  trust, incorporated or unincorporated association,  joint venture,
joint stock company,  government (or an agency or political subdivision thereof)
or other  entity of any kind is  necessary  or required in  connection  with the
execution,  delivery and  performance  by the Lender of this  Agreement,  or any
other  documents  executed  pursuant to this  Agreement,  except for federal and
state securities filings, if any.

7. REGISTRATION RIGHTS.  Subject to any required stockholder  approvals pursuant
to Section  3.20 of the  Security  Agreement,  within  sixty (60) days after the
completion  of  project  financing,  whether  in the  form  of  debt  or  equity
securities  of the  Company,  aggregating  at least  $30  million  to be used to
finance the construction of the Company's first reprocessing facility, excluding
the outstanding  principal  balance and interest due under the Notes on the date
thereof (the "Qualified Equity Financing"), the Company shall file with the U.S.
Securities  and Exchange  Commission  ("SEC") and  thereafter  use  commercially
reasonable efforts to become effective,  a registration statement under Rule 415
of the Act, or any  similar  rule that may be adopted by the SEC,  covering  the
resale of the Shares (the "Registration Statement").  The Company may include in
such  Registration  Statement  other  securities  of the Company to be resold by
holders  other  than the  Lenders.  Except as set forth  above,  the  rights and
obligations of the Lenders with respect to the  registration of the Shares shall
be as set  forth in that  certain  Registration  Rights  Agreement,  dated as of
September  7,  2001,  by and among the  Company  and the  parties  thereto  (the
"Registration Rights Agreement"),  the terms of which are hereby incorporated by
reference herein. To the extent that any of the terms of the Registration Rights
Agreement  shall be in conflict with the terms of this  Agreement,  the terms of
this Agreement shall control.

8.       USE OF PROCEEDS; FINANCE COMMITTEE.

         8.1 Action.  The Finance  Committee  of the Board of  Directors  of the
Company (as  presently  constituted)  shall take action by majority  vote of the
members thereof.

         8.2. Use of Proceeds.

         (a) Upon each deposit in the Corporate  Account by the Lenders pursuant
to Section 4.1 hereof,  the Company  shall pay ten percent (10%) of such deposit
to  Jenkens  &  Gilchrist,  a  Professional  Corporation,  by wire  transfer  in
immediately available funds.

         (b)  Subject to Section  8.2(a)  above,  the  Finance  Committee  shall
approve the  expenditure  of funds  contained in the  Company's  corporate  bank
account (the "Company Account") as follows:
<PAGE>

                  (i) On a  monthly  basis,  the  President  or Chief  Financial
         Officer of the Company  shall  review with the  Finance  Committee  the
         proposed use of funds  deposited  and to be deposited in the  Corporate
         Account for the next  month.  Such  proposed  use of funds shall be set
         forth in sufficient  detail to allow the Finance Committee to determine
         the reasonableness of the proposed use.

                  (ii)  If the  Finance  Committee  shall  determine  that  such
         proposed  use and amount of funds is  reasonable,  the  Chairman of the
         Finance Committee shall so notify the Lenders of its approval.

         (c) The Company  will be  permitted  to use the funds  deposited by the
Lenders in the Company Account pursuant Section 8.2(a) and for the uses approved
by the Finance Committee pursuant to Section 8.2(b).

         (d) Upon request by the Lenders,  the Company shall provide the Lenders
the materials provided to the Finance Committee in Section 8.2(b)(i) hereof.

         8.3 Upon the closing of the Qualified Equity  Financing,  Sections 8.1,
8.2(b),  8.2(c) and 8.2(d) shall terminate and the Finance Committee may, in the
sole discretion of the Board of Directors of the Company, be dissolved.

         8.4 The parties  hereby  acknowledge  and agree that any and all action
taken or omitted by the members of the Finance  Committee shall for all purposes
be deemed to have been  taken or  omitted  in their  roles as  directors  of the
Company.  Nothing  contained  herein  shall  limit the  members  of the  Finance
Committee to be indemnified or seek  indemnification as directors of the Company
for any all action taken or omitted.

9. FUTURE LOANS. The Company hereby agrees that it shall not incur  indebtedness
for  borrowed  money,  nor shall it permit  any  person to become a party to the
Security  Agreement and a holder of New  Obligations (as defined in the Security
Agreement),  unless  the  material  terms  of any  such  indebtedness  are  made
available  to the Lenders and such terms are no more  favorable  to the proposed
lender  than  the  terms of the  transactions  contemplated  by this  Agreement,
without the prior written consent of the Lenders.

10.      Miscellaneous.

         10.1 No  Waiver;  Cumulative  Remedies.  No  failure on the part of the
Lenders or the Company to exercise and no delay in exercising,  and no course of
dealing with respect to, any right,  power,  or privilege  under this  Agreement
shall operate as a waiver thereof,  nor shall any single or partial  exercise of
any right,  power,  or  privilege  under this  Agreement  preclude  any  further
exercise  thereof or the exercise of any other right,  power or  privilege.  The
rights and  remedies  provided  for in this  Agreement  are  cumulative  and not
exclusive of any rights and remedies provided by law.

         10.2  Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the Lenders and the Company and their respective  heirs,
personal  representatives,  successors and assigns,  except that the Company may
not assign any of its rights or  obligations  under this  Agreement  without the
prior written consent of the Lenders.

         10.3  Amendment;  Entire  Agreement.  THIS  AGREEMENT,   INCLUDING  THE
EXHIBITS AND SCHEDULES  ATTACHED HERETO, AND THE SECURITY AGREEMENT EMBODIES THE
FINAL,  ENTIRE  AGREEMENT  AMONG THE PARTIES  HERETO AND  SUPERSEDES ANY AND ALL

<PAGE>

PRIOR  COMMITMENTS,  AGREEMENTS,  REPRESENTATIONS  AND  UNDERSTANDINGS,  WHETHER
WRITTEN  OR  ORAL,  RELATING  TO  THE  SUBJECT  MATTER  HEREOF  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.  The  provisions of this  Agreement may be amended or
waived only by an instrument in writing signed by the parties hereto.

         10.4 Governing  Law;  Severability.  This Agreement  shall be enforced,
governed  by and  construed  in  accordance  with the laws of the State of Texas
applicable to  agreements  made and to be performed  entirely  within such State
excepting  its choice of law  rules.  In the event  that any  provision  of this
Agreement is invalid or  unenforceable  under any applicable  statute or rule of
law, then such provision  shall be deemed  inoperative to the extent that it may
conflict  therewith and shall be deemed modified to conform with such statute or
rule of law. Any provision hereof that may prove invalid or unenforceable  under
any law shall not affect the validity or  enforceability  of any other provision
hereof.

         10.5  Counterparts.  This  Agreement  may be  executed in any number of
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same agreement.

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

         10.7 Other  Agreements.  Except as  specifically  set forth in the Loan
Documents,  the Loan  Documents  shall not  constitute  a waiver of the Lenders'
rights, the Company's obligations or the conditions, if any, contained any other
agreements,  instruments  or  documents,  as  previously  amended,  modified and
restated, by and between the Company and each Lender hereto.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

         IN WITNESS  WHEREOF,  the  Company  and the  Lenders  have  caused this
Agreement to be duly executed as of the day and year first above written.

                                            COMPANY:
                                            -------

                                            PROBEX CORP.,
                                            a Delaware corporation

                                            By: /s/ Bruce A. Hall
                                               ---------------------------
                                            Name: Bruce A. Hall
                                            Title: Senior Vice President

 Remainder of Signature Pages and Exhibits and Schedules Intentionally Omitted.Exhibit 10.36.2

THIS PROMISSORY  NOTE AND THE SHARES  ISSUABLE UPON  CONVERSION  HEREOF HAVE NOT
BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED,  OR ANY STATE
SECURITIES  LAWS  (COLLECTIVELY,  THE "ACTS"),  AND MAY NOT BE OFFERED,  SOLD OR
OTHERWISE  TRANSFERRED,  ASSIGNED OR DISPOSED OF EXCEPT PURSUANT TO REGISTRATION
UNDER THE ACTS OR UNLESS  MAKER HAS  RECEIVED  AN OPINION OF  COUNSEL,  OR OTHER
EVIDENCE  REASONABLY  SATISFACTORY  TO  MAKER,  THAT  SUCH  REGISTRATION  IS NOT
REQUIRED.

                           CONVERTIBLE PROMISSORY NOTE

$__________                       Dallas, Texas                    July __, 2002

         FOR VALUE RECEIVED,  this Convertible  Promissory Note (this "Note") is
made   by   Probex    Corp.,    a    Delaware    corporation    ("Maker"),    to
_________________________("Payee").  This Note is one of the  "Notes" as defined
in, and is entitled to the benefits of, that  certain Loan  Agreement,  dated of
even date herewith ("Loan Agreement"), and one of the "New Notes" as defined in,
and is entitled to the  benefits  of, that  certain  Intercreditor  and Security
Agreement,  as amended (the "Security  Agreement"),  dated as of March 29, 2002.
This Note is secured by the  Security  Agreement  and  reference  is made to the
Security  Agreement  for a description  of the  collateral  thereby  pledged and
hypothecated, the nature and extent of the security for this Note, the rights of
the holder of this Note,  the  Collateral  Agent in respect of such security and
otherwise.

         1.  Payments.  Maker  hereby  promises to pay to the order of Payee the
principal sum of __________________ and no/100 Dollars  ($___________),  or such
lesser   amount   as   is   actually    advanced   by   Payee   to   Maker,   at
______________________________,  or such other place as Payee may designate from
time to time in writing,  in lawful money of the United States of America and in
immediately  available  funds,  together with  interest on the unpaid  principal
balance hereof at the rate provided  herein from the date of  advancement  until
payment in full of the  indebtedness  advanced  under this Note or conversion of
this Note as  provided  for in Section 3 hereof.  This Note and all  accrued and
unpaid  interest  shall be due and payable in one lump sum on February  28, 2003
or, if earlier,  upon  consummation of the Qualified  Financing (herein defined)
(the "Maturity  Date").  Any payment made under this Note shall be applied first
to interest accrued and unpaid on the outstanding  principal  balance as of such
date of payment and then to the outstanding principal balance due hereunder.  If
any required payment falls due on a Saturday, Sunday or a national or state bank
holiday in Texas,  then such date shall be extended to the next  succeeding  day
that is not a Saturday, Sunday or national or state bank holiday in Texas.

         2. Interest Rate. The principal  amount  outstanding  from time to time
hereunder  shall bear  interest  calculated on the basis of a 365-day year, at a
rate equal to twelve percent (12%) per annum.

         3. Conversion. Subject to any required stockholder approval pursuant to
Section 3.20 of the Security  Agreement,  the outstanding  principal balance and
all  accrued  and  unpaid  interest  due under this Note may be  converted  into
fully-paid and non-assessable shares of Maker's common stock as provided below:

         (a)      Maker shall give Payee written  notice as soon as  practicable
                  of the closing of the Qualified Financing,  which notice shall
                  set forth the closing  date and all of the  material  terms of
                  the Qualified  Financing.  If Payee elects  conversion of this
                  Note,  then by the later of (i) the fifth day after receipt of
                  such  notice  and  (ii)  the   thirtieth   day  prior  to  the
                  anticipated closing date set forth in such notice, Payee shall
                  give  written  notice of its  election  to convert  all or any
                  portion of the  outstanding  principal  amount and accrued and
                  unpaid  interest due hereunder  into shares of common stock of
                  Maker on the terms set forth  herein.  On the closing  date of

<PAGE>

                  the Qualified  Financing,  Payee shall surrender this Note and
                  in  exchange  therefor,  Maker  shall  issue  to  Payee or its
                  designees  the  certificate  or  certificates  for  shares  of
                  Maker's common stock issuable upon such conversion.

         (b)      Maker shall not issue  fractions of shares of its common stock
                  upon conversion of this Note or scrip in lieu thereof.  If any
                  fraction of a share of Maker's common stock would,  except for
                  the provisions of this Section 3, be issuable upon  conversion
                  of all or any part of this Note,  Maker shall in lieu  thereof
                  pay to the person entitled  thereto an amount in cash equal to
                  such  fraction   times  the  Conversion   Price   (hereinafter
                  defined).

         (c)      For purposes of this Section, "Qualified Financing" shall mean
                  project  financing,  whether  in the  form of  debt or  equity
                  securities  of Maker,  aggregating  at least $30 million to be
                  used  to  construct  Maker's  initial  reprocessing  facility,
                  excluding the outstanding  principal  balance and interest due
                  under this Note on the date of consummation thereof.

         (d)      The number of shares of Maker's common stock issuable to Payee
                  upon  conversion  of this Note shall be equal to the amount of
                  the principal  balance and all accrued and unpaid interest due
                  under  this  Note  on  the  date  of the  consummation  of the
                  Qualified Financing, or such lesser amount as Payee shall have
                  elected to be converted,  divided by the Conversion Price. For
                  purposes of this Section, "Conversion Price" shall mean (i) if
                  Maker's common stock is issued and sold in connection with the
                  Qualified Financing,  the purchase price paid to Maker by such
                  purchasers  for each  share  of  Maker's  common  stock in the
                  Qualified  Financing,  (ii) if  securities  other than Maker's
                  common  stock  are  issued  and  sold in  connection  with the
                  Qualified Financing, the price at which such securities issued
                  and sold in  connection  with the  Qualified  Financing may be
                  converted into Maker's  common stock,  or (iii) if none of the
                  securities  of Maker  issued and sold in  connection  with the
                  Qualified  Financing  are Maker's  common stock or  securities
                  convertible  into Maker's common stock, the product of (A) the
                  average  closing price of Maker's  common stock as reported by
                  the American  Stock  Exchange for the twenty (20) trading days
                  prior to the  consummation of the Qualified  Financing and (B)
                  0.94.

         4. Use of  Proceeds.  Maker  and its  subsidiaries  shall  utilize  the
proceeds  from  this  Note for  general  working  capital  purposes  in a manner
consistent with the Loan Agreement.

         5. Events of Default.  An event of default  ("Event of Default")  shall
exist if:

                  (a) Maker shall fail to pay any  principal of, or any interest
         on, this Note or any other amount payable under this Note,  when and as
         the same shall become due and payable;

                  (b) any  representation  or warranty made or deemed made by or
         on behalf  of Maker in the  Security  Agreement,  or any  amendment  or
         modification   thereof  or  waiver   thereunder,   or  in  any  report,
         certificate,  financial  statement or other document furnished pursuant
         to or in connection  with the Security  Agreement,  or any amendment or
         modification  thereof or waiver  thereunder,  shall  prove to have been
         incorrect when made or deemed made;

                  (c) Maker  shall  fail to observe  or  perform  any  covenant,
         condition or agreement contained in the Security Agreement;

                                       2
<PAGE>

                  (d) Maker shall fail to make any payment (whether of principal
         or interest and  regardless of amount) in respect of any  indebtedness,
         individually  or in the  aggregate,  in excess of  $100,000  ("Material
         Indebtedness"), when and as the same shall become due and payable;

                  (e) any event or condition occurs that results in any Material
         Indebtedness  of Maker becoming due prior to its scheduled  maturity or
         that  enables or permits  (with or  without  the giving of notice,  the
         lapse of time or both) the holder or holders of  Material  Indebtedness
         of Maker, or any trustee or agent on its or their behalf,  to cause any
         Material  Indebtedness  of Maker  to  become  due,  or to  require  the
         prepayment,  repurchase, redemption or defeasance thereof, prior to its
         scheduled maturity;

                  (f)  an  involuntary  proceeding  shall  be  commenced  or  an
         involuntary   petition   shall  be  filed   seeking  (i)   liquidation,
         reorganization  or other relief in respect of Maker or its debts, or of
         a substantial part of its assets,  under any federal,  state or foreign
         bankruptcy, insolvency, receivership or similar law now or hereafter in
         effect  or (ii) the  appointment  of a  receiver,  trustee,  custodian,
         sequestrator,  conservator  or  similar  official  for  Maker  or for a
         substantial part of its assets,  and, in any such case, such proceeding
         or  petition  shall  continue  undismissed  for 60 days or an  order or
         decree approving or ordering any of the foregoing shall be entered;

                  (g) Maker shall (i)  voluntarily  commence any  proceeding  or
         file any petition seeking  liquidation,  reorganization or other relief
         under  any   federal,   state  or   foreign   bankruptcy,   insolvency,
         receivership or similar law now or hereafter in effect, (ii) consent to
         the  institution  of, or fail to contest  in a timely  and  appropriate
         manner,  any  proceeding  or petition  described  in clause (f) of this
         Section 5, (iii) apply for or consent to the appointment of a receiver,
         trustee, custodian,  sequestrator,  conservator or similar official for
         Maker or for a  substantial  part of its  assets,  (iv)  file an answer
         admitting the material  allegations  of a petition  filed against it in
         any such proceeding,  (v) make a general  assignment for the benefit of
         creditors,  or (vi) take any action for the purpose of effecting any of
         the foregoing;

                  (h) one or more  judgments  for the  payment  of  money  in an
         aggregate  amount in excess of $100,000 shall be rendered against Maker
         and the same shall remain undischarged for a period of thirty (30) days
         during which execution shall not be effectively  stayed,  or any action
         shall be legally  taken by a judgment  creditor  to attach or levy upon
         any assets of Maker to enforce any such judgment;

                  (i) any  lien  purported  to be  created  under  the  Security
         Agreement  shall  cease to be,  or shall  be  asserted  by Maker or any
         affiliate  thereof  not  to be,  a  valid  and  perfected  lien  on the
         Collateral  (as defined in the Security  Agreement),  with the priority
         required  by  the  Security  Agreement,  except  (i) as a  result  of a
         transaction  permitted under the Security Agreement or (ii) as a result
         of  the  Collateral  Agent's  failure  to  maintain  possession  of any
         promissory  notes  or  other  instruments  delivered  to it  under  the
         Security Agreement;

                  (j) there shall occur, in the reasonable  judgment of Payee, a
         material  adverse change in the business,  assets or prospects of Maker
         after the date hereof;

                  (k) there  shall occur any  material  loss,  theft,  damage or
         destruction  of any of Maker's  property or assets not fully covered by
         insurance; or

                  (l) there shall occur a cessation of a substantial part of the
         business of Maker for a period that significantly  effects its capacity
         to continue its business on a profitable  basis;  or Maker shall suffer
         the loss or  revocation  of any license or permit now held or hereafter
         acquired by it that is necessary to the  continued or lawful  operation
         of its business;  or Maker shall be enjoined,  restrained or in any way
         prevented  by  a  court,  governmental  or  administration  order  from
         conducting  all or any material  part of its business  affairs;  or any
         material part of Maker's  property shall be taken through  condemnation
         or the value of such  property  shall be  materially  impaired  through
         condemnation.

                                       3
<PAGE>

         6.       Remedies Upon an Event of Default.

                  (a)      Acceleration.

                           (i) If an Event of Default  described  in  paragraphs
                  (f) or (g) of Section 5 hereof shall occur,  this Note and the
                  obligation to pay the principal and accrued interest hereunder
                  shall automatically become immediately due and payable without
                  any action or notice on the part of the Payee.

                           (ii) If an Event of Default  described  in  paragraph
                  (a) of  Section  5  hereof  has  occurred,  and  at  any  time
                  thereafter  during the  continuance  of such event,  Payee may
                  declare the then outstanding  amounts  hereunder to be due and
                  payable in whole (or in part,  in which case any principal not
                  so declared to be due and payable may  thereafter  be declared
                  to be due and  payable)  and  thereupon  the  principal of the
                  amounts hereunder so declared to be due and payable,  together
                  with accrued  interest  thereon and all other  obligations  of
                  Maker  accrued   hereunder,   shall  become  due  and  payable
                  immediately,  without  presentment,  demand,  protest or other
                  notice of any kind, all of which are hereby waived by Maker.

                           (iii) If any  other  Event of  Default  described  in
                  Section 5 hereof has occurred,  Payee shall deliver  notice of
                  such event to Maker and thereupon Maker shall have twenty (20)
                  calendar  days to cure  such  Event of  Default,  or Events of
                  Default ("Cure  Period").  If Maker does not cure the Event of
                  Default, or Events of Default, during the Cure Period, then at
                  any time thereafter  during the continuance of such event, the
                  Payee may declare the then outstanding amounts hereunder to be
                  due and  payable  in  whole  (or in part,  in  which  case any
                  principal not so declared to be due and payable may thereafter
                  be declared to be due and payable) and thereupon the principal
                  amounts hereunder so declared to be due and payable,  together
                  with accrued  interest  thereon and all other  obligations  of
                  Maker  accrued   hereunder,   shall  become  due  and  payable
                  immediately,  without  presentment,  demand,  protest or other
                  notice of any kind, all of which are hereby waived by Maker.

         (b) Remedies  Cumulative.  The remedies available to Payee, as provided
herein,  shall be  cumulative  and  concurrent,  and may be pursued  singularly,
successively or together,  at the sole discretion of Payee, and may be exercised
as often as occasion  therefor shall arise.  No act of omission or commission of
Payee,  including  specifically  any  failure to exercise  any right,  remedy or
recourse,  shall be deemed to be a waiver or  release  of the same.  A waiver or
release with reference to any one event shall not be construed as continuing, as
a bar to, or as a waiver or release of, any subsequent right, remedy or recourse
as to a subsequent event.

         (c)  Rights  of  Other  Holders.  The  exercise  by Payee of any of its
remedies  hereunder  shall at all  times be  subject  to the  provisions  of the
Security Agreement, and Payee shall exercise its rights in a manner so as not to
prejudice the rights of any other holders of the New Notes.

         7.  Notices.  Except as otherwise  provided  for herein,  any notice or
demand that, by the  provisions  hereof,  is required or that may be given to or
served upon Maker or Payee shall be in writing  and:  if by  telecopy,  shall be
deemed to have been validly served,  given or delivered when  transmitted with a
copy  immediately  mailed  by  registered  or  certified  mail;  if by  personal
delivery,  shall be deemed to have been validly served,  given or delivered upon
actual  delivery;  and, if mailed,  shall be deemed to have been validly served,
given or delivered  three (3) business  days after  deposit in the United States
mails,  as  registered  or  certified  mail,  with  proper  postage  prepaid and
addressed to the party to be notified, as set forth in the Security Agreement or
to Payee to such other address as Payee shall hereafter give in writing to Maker
by similar notice.

                                       4
<PAGE>

         8.  Successors  and Assigns.  This Note shall be binding upon Maker and
its successors and assigns (including,  without limitation, a receiver,  trustee
or debtor-in-possession of or for Maker) and shall inure to the benefit of Payee
and its  successors  and  assigns.  Maker may not assign  its  rights  hereunder
without the prior written consent of Payee, in its sole  discretion,  other than
by operation of law. Payee may assign all or a part of its interest in this Note
or its rights hereunder to any party without the prior written consent of Maker.

         9.  GOVERNING  LAW. THIS NOTE SHALL BE DEEMED A CONTRACT AND INSTRUMENT
MADE UNDER THE LAWS OF THE STATE OF TEXAS AND  ACCEPTED  BY PAYEE IN SAID STATE,
AND ANY AND ALL  CLAIMS,  DEMANDS  OR  ACTIONS  IN ANY WAY  RELATING  THERETO OR
INVOLVING ANY DISPUTE  BETWEEN ANY OF THE PARTIES TO THIS NOTE,  WHETHER ARISING
IN CONTRACT OR TORT,  AT LAW, IN EQUITY OR  STATUTORILY,  SHALL BE CONSTRUED AND
ENFORCED IN  ACCORDANCE  WITH AND/OR  GOVERNED BY THE LAWS OF THE STATE OF TEXAS
(EXCEPTING  ITS  CHOICE  OF LAW  RULES)  AND THE LAWS OF THE  UNITED  STATES  OF
AMERICA.

         10.  Severability.  If any  provisions  of this  Note  or any  payments
pursuant to the terms  hereof shall be invalid or  unenforceable  to any extent,
the  remainder  of this  Note and any  other  payments  hereunder  shall  not be
affected  thereby and shall be enforceable to the greatest  extent  permitted by
law.  Furthermore,  in lieu of such invalid or unenforceable  provisions,  there
shall be added  automatically as part of this Note, a provision or provisions as
similar in its or their terms to such invalid or unenforceable provisions as may
be possible and be legal, valid and enforceable.

         11. No Oral Agreements.  This Note, the Loan Agreement and the Security
Agreement,  as written,  represent the final  agreement  between Maker and Payee
with  respect  to the  matters  contained  herein  and  therein  and  may not be
contradicted by evidence of prior, contemporaneous or subsequent oral agreements
between  Maker and Payee.  There are no unwritten  agreements  between Maker and
Payee.

         12. Prepayments.  This Note may be prepaid in whole or in part, subject
to any rights of the  holders of the other New Notes and the rights of any other
parties under the Security Agreement.

         IN WITNESS  WHEREOF,  Maker has executed and delivered  this Note as of
the date and year first above written.

                                     MAKER:

                                     PROBEX CORP.,
                                     a Delaware corporation

                                     By:
                                        ----------------------------------------
                                     Name:    Bruce A. Hall
                                     Title:   Senior Vice President & Chief
                                              Financial Officer

                                       5

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