PROBEX CORP
EXHIBIT 10.30 - SHREVEPORT SERVICE AGREEMENT
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>11
<FILENAME>0011.txt
<DESCRIPTION>EXHIBIT 10.30 - SHREVEPORT SERVICE AGREEMENT
<TEXT>



                               SERVICES AGREEMENT

                                     BETWEEN

                          PENNZOIL-QUAKER STATE COMPANY

                                  PROBEX CORP.

                                       AND

                          PROBEX FLUIDS RECOVERY, INC.

                                       FOR

                                 SES OPERATIONS

                                       AT

                              SHREVEPORT, LOUISIANA


<PAGE>



          PENNZOIL-QUAKER STATE COMPANY - PROBEX FLUIDS RECOVERY, INC.

                               SERVICES AGREEMENT

                              Shreveport, Louisiana

                                TABLE OF CONTENTS

ARTICLE                                                                     PAGE

    I         DEFINITIONS....................................................  1
    II        TERM...........................................................  2
    III       SERVICES.......................................................  3
    IV        COST OF SERVICES...............................................  3
    V         INSURANCE......................................................  3
    VI        CLAIMS.........................................................  4
    VII       FORCE MAJEURE..................................................  4
    VIII      TAXES..........................................................  5
    IX        ASSIGNMENT.....................................................  5
    X         NOTICE.........................................................  5
    XI        GOVERNING LAW..................................................  6
    XII       TITLE..........................................................  7
    XIII      INDEMNIFICATION................................................  7
    XIV       MODIFICATIONS TO FACILITIES.................................... 12
    XV        ARBITRATION.................................................... 13
    XVI       MISCELLANEOUS PROVISIONS....................................... 14

EXHIBITS

    EXHIBIT 3.1   GENERAL SERVICES
    EXHIBIT 3.1A  INCIDENT RESPONSE SERVICES

                                       i
<PAGE>



         This  Agreement  made  this  29th day of  September,  2000  ("Effective
Date"), among Pennzoil-Quaker State Company, a Delaware corporation ("PQS"), and
Probex Fluids  Recovery,  Inc., a Delaware  corporation  ("Probex"),  and Probex
Corp., a Delaware corporation  ("Parent").  PQS, Probex and Parent are sometimes
referred to herein individually as a "Party" and collectively as the "Parties".

                                    PURPOSE:

         The purpose of this  Agreement  is to set out the terms and  conditions
under which PQS will provide certain  operating,  management and  administrative
services support to Probex.

         NOW, THEREFORE, the Parties hereto agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

         As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms  defined).  Capitalized  terms  used but not  defined in this
Agreement  have the respective  meanings  assigned to them in the Asset Purchase
Agreement.

     Section 1.1 "Agreement" means this Services Agreement among PQS, Probex and
                 Parent, and all Exhibits attached hereto.

     Section 1.2 "Asset Purchase  Agreement" means the Asset Purchase  Agreement
                 between PQS, Probex and Parent dated as of  September  6, 2000,
                 as amended.

     Section 1.3 "Facilities" means those facilities, equipment and other assets
                 owned or leased by Probex at the at the Location.

     Section 1.4 "General  Services" means the services PQS agrees to provide to
                 Probex described on Exhibit 3.1.

     Section 1.5 "Incident  Response  Services" means the services PQS agrees to
                 provide to Probex described on Exhibit 3.1A.

     Section 1.6  "Location"  means  the  location  at PQS'  packaging  plant in
                  Shreveport,  Louisiana  where  PQS  conducted  a  part  of the
                  Business  prior  to  Closing  and where some of the Assets are
                  located.

     Section 1.7 "Month" means a calendar month.

     Section 1.8 "Party" means either PQS, Probex or Parent.

     Section 1.9 "Product" means those products received,  stored, tested and/or
                 shipped by Probex at the Location which are  comprised  of used
                 oil collected  for  recycle,  used  oil  filters  for  disposal
                 and used anti-freeze for recycle.

                                       1

<PAGE>

     Section 1.10 "Regulated  Substance" means any substance regulated as of the
                  Closing Date or  during the term  of this  Services  Agreement
                  under any Environmental Law (as defined  in  Section  13.1.1),
                  whether  as  pollutants,  contaminants,  or  chemicals,  or as
                  industrial,  toxic  or  hazardous  substances  or  wastes,  or
                  otherwise, including, but not limited  to,  petroleum  and its
                  fractions, used oil, waste oil, or constituents thereof.

     Section 1.11 "Services" means,  collectively,  the General Services and the
                  Incident Response Services.

                                   ARTICLE II
                                      TERM

         Section 2.1 The  initial  term of this  Agreement  shall  terminate  on
December 31, 2010,  and shall  automatically  renew for  successive one (1) year
terms,  unless  written  notice of termination is given by either party at least
six (6) months prior to the end of the initial term or any  successive  term. In
the event that PQS sells the  Location,  PQS shall  include the  assignment  and
assumption of this  Agreement to the purchaser of the Location as a condition of
such sale. If after the initial term such assignment cannot be consummated, this
Agreement  shall terminate as of the date of the sale of the Location by PQS. In
the event that PQS chooses after the initial term,  in its sole  discretion,  to
close the  Location,  PQS will give Probex at least twelve (12) month's  written
notice of such closure,  and this Agreement  shall  terminate upon at the end of
such twelve (12) month notice period.

         Section 2.2 If, after  receiving  written notice from PQS,  pursuant to
Section  2.1, of PQS' intent to: (a)  terminate  this  Agreement  or (b) sell or
close the Location, Probex arranges to remain at the Location beyond the term of
this Agreement, it shall give written notice to PQS of its decision to remain at
the Location as soon as practicable,  but in any event no later than thirty (30)
days prior to the date of termination,  sale, or closure provided in the written
notice given by PQS pursuant to Section 2.1. After  providing the written notice
to PQS pursuant to the preceding  sentence,  Probex may cause to be conducted at
its expense a Phase II environmental assessment and report,  including,  without
limitation,   procedures  recognized  under  American  Society  of  Testing  and
Materials  Standards,  for the purpose of  assessing  the presence or absence of
Regulated Substances in the soil or groundwater at any real property occupied or
used by Probex in connection  with the Business at the Location,  which shall be
prepared by a firm  selected  by Probex  with the consent of PQS (which  consent
shall  not  be  unreasonably  withheld).   The  environmental  report  shall  be
completed,   and  Probex  shall   provide  a  full  and  complete  copy  of  the
environmental  report  to  PQS,  no  later  than 30 days  prior  to the  date of
termination,  sale,  or closure  provided  in the  written  notice  given by PQS
pursuant to Section 2.1. The  environmental  assessment and report shall contain
such  information  as Probex  deems  necessary  or  advisable.  The  information
obtained  pursuant  to this  Section  2.1.1 may  include  soil and ground  water
sampling of any real property  occupied or used by Probex in connection with the
Business  at the  Location.  PQS  agrees  (to  the  extent  reasonable  and  not
financially  burdensome  to PQS) to  cooperate  in the  preparation  of any such
environmental assessment and report.

                                       2
<PAGE>


                                   ARTICLE III
                                    SERVICES

         Section 3.1 PQS hereby  agrees to perform the  Services as described in
Exhibits 3.1 and 3.1A at the Location at Probex's reasonable direction.

         Section 3.2 PQS's  status shall be that of an  independent  contractor,
and the  relationship  of PQS  and  Probex  shall  not be  construed  as that of
principal and agent or that of master and servant.

         Section 3.3 PQS shall exercise its  reasonable  judgment to provide the
Services in a professional  manner consistent with past practices.  In addition,
all actions will be consistent  with PQS's policies and  procedures  relating to
operations,  health, safety and security, copies of which have been furnished or
made available to Probex.

         Section  3.4  PROBEX  agrees  and  warrants  that  whenever  any of its
employees  are  present or working at the  Location  such  employees  will fully
comply  with all  rules,  regulations  and  procedures  of PQS.  These  policies
include, but are not limited to, Abuse of Drugs and/or Alcohol and Harassment.

         Section 3.5 PQS agrees to provide Probex with reasonable  access to the
Facilities during the term of this Agreement.

                                   ARTICLE IV
                                COST OF SERVICES

         Section  4.1 Probex  agrees to pay the costs for  General  Services  as
specified in Exhibit 3.1.  Probex agrees to pay the actual costs incurred by PQS
in  performing  the  Incident  Response  Services  described  on  Exhibit  3.1A.
Beginning in the 2001 calendar year, the costs referenced in Exhibit 3.1 will be
reviewed in October of each year and the costs will be revised to reflect actual
costs with the revised costs effective the following January 1.

         Section 4.2 To the extent Probex  requests  services in addition to the
Services, Probex will bear the actual costs for the additional services.

         Section  4.3 All costs  and fees  payable  by Probex to PQS under  this
Agreement will be due on presentment of invoice and payable within 30 days after
receipt of invoice.

                                    ARTICLE V
                                    INSURANCE

         The  fee  specified  herein  does  not  include  any  insurance  on the
Facilities,  Equipment  or the  Product  covered  by this  Agreement  while such
Products  are  located on PQS's  property.  It is  understood  and  agreed  that
insurance,  if any be desired by Probex,  shall be carried by Probex at Probex's
own expense.  Each Party agrees to secure a waiver from its insurance carrier of
the  insurance  carrier's  rights of  subrogation  against  the other Party with
respect to matters covered by the indemnification  provisions of this Agreement,
except that such waiver shall not apply to a Party's gross negligence or willful
misconduct.

                                       3

<PAGE>

                                   ARTICLE VI
                                     CLAIMS

         In connection with performing the Services, PQS shall have no liability
to Probex for any loss or damage to the  Facilities  or  Equipment or loss of or
defect in quality of the  Product  except as such loss or defect in quality  was
caused by PQS's gross negligence or willful misconduct.

                                   ARTICLE VII
                                  FORCE MAJEURE

         Section 7.1  Neither  Party shall be liable to the other for failure or
delay in performance hereunder to the extent that the failure or delay is due to
force majeure,  which is herein  defined to include,  but is not limited to, war
(whether declared or undeclared), fire, flood, lightning,  earthquake, storm, or
any  act  of  God;  strikes,  lockouts,  or  other  labor  difficulties;   civil
disturbances,  riot,  sabotage,  accident;  any official  order,  directive,  or
industry-wide   request;   or  suggestion  by  any  governmental   authority  or
instrumentality  thereof which in the reasonable  judgment of the Party affected
makes it necessary to cease or reduce  performance;  any disruption or breakdown
of  labor;  or any  inability  to  secure  materials  by  reason of or any other
contingency  beyond the control of the affected Party which  interferes with the
performance  hereunder.  Notwithstanding the foregoing,  economic hardship alone
involving a Party shall not constitute a force majeure event.

         Section 7.2 Performance under this Agreement shall be suspended (except
for the  payment of money due or to become due for past  performance  hereunder)
during the period of such force  majeure  to the extent  made  necessary  by the
force  majeure;  provided  the  settlement  of  strikes,  lockouts,   industrial
disputes,  or disturbances  shall be entirely within the discretion of the Party
so settling to accede to the demands of any  opposing  party when such course is
inadvisable in the discretion of the Party having the difficulty.

         Section 7.3 No  curtailment,  suspension,  or acceptance of performance
pursuant to this Article  shall  operate to extend the period of or to terminate
this Agreement. Performance under this Agreement shall resume to the extent made
possible by the end or amelioration of the force majeure event.

         Section 7.4 As soon as practicable after the occurrence of any event of
the force majeure, the Party claiming force majeure shall notify the other Party
in writing of such event and, to the extent possible,  inform the other Party of
the  expected  duration of the force  majeure  event and the  performance  to be
affected by the suspension or curtailment under this Agreement.

         Section 7.5 The Party  claiming  force  majeure  shall notify the other
Party in writing of the end of the force  majeure  event and shall  provide  the
other  Party  with a  schedule  for the  resumption  of  performance  under this
Agreement.

                                       4

<PAGE>

         Section 7.6 In the event of disruption or breakdown of labor, the Party
affected will use reasonable  efforts to allocate the available work force so as
to continue performance hereunder.

                                  ARTICLE VIII
                                      TAXES

         Section 8.1 Any and all taxes, fees, or other charge,  other than taxes
on income,  imposed or assessed on PQS by governmental or regulatory bodies, the
taxable incident of which is the performance of Services  hereunder,  regardless
of the character or measure of the levy or assessment shall be borne by Probex.

         Section 8.2 Notwithstanding any other provision of this Agreement,  any
tax or  governmental  charge (except income taxes) or increase in the same which
becomes effective after the effective date of this Agreement,  and which has the
effect of increasing the cost to PQS for providing Services will be added to the
direct expense and be borne by Probex;  provided, that Probex agrees to pay only
that portion of such tax or governmental charge that is reasonably  allocable to
operation  of Probex's  business  at the  location  or PQS'  performance  of the
Services.

                                   ARTICLE IX
                                   ASSIGNMENT

         Section 9.1 Except as provided in this Section 9.1,  neither  Party may
assign this Agreement  (including by operation of law) without the prior written
consent of the other Party.  PQS may assign this  Agreement to any  successor in
interest to  substantially  all of PQS's assets whether by merger,  acquisition,
consolidation or otherwise,  or to any successor in interest to real property on
which any of the services are being performed  under this Agreement.  Probex may
assign this  Agreement  to any  successor  in interest to  substantially  all of
Probex's  assets  whether by merger,  acquisition,  consolidation  or otherwise,
provided  that the  successor is not a person  reasonably  deemed by PQS to be a
competitor.  Neither  Party  shall  unreasonably  withhold  its  consent  to  an
assignment of this Agreement.

                                    ARTICLE X
                                     NOTICE

         Section 10.1 Any notice, request, instruction, correspondence, or other
document to be given hereunder by either Party to the other (herein collectively
called  "Notice")  shall be in writing  and  delivered  personally  or mailed by
certified mail, postage prepaid and return receipt requested, overnight courier,
or by telegram or facsimile as follows:


                                       5
<PAGE>


If to PQS, addressed to:

         By Mail or Courier:
                           Pennzoil-Quaker State Company
                           Pennzoil Place
                           P.O. Box 2967
                           Houston, Texas 77252 - 2967
                           Attention:  Vice President of Distribution
                           Facsimile: 713/217-3286

If to Probex or Parent, addressed to:

              By Mail or Courier:
                           Probex Fluids Recovery, Inc.
                           One Galleria Tower, Suite 1200
                           13355 Noel Road
                           Dallas, Texas 75240
                           Attention: Chief Financial Officer
                           Facsimile: 972/466-1556

              With a copy only for matters regarding Articles XIII and XV to:

                           Hallett & Perrin, P.C.
                           717 N. Harwood
                           Suite 1400
                           Dallas, TX 75201
                           Attention:  Timothy R. Vaughan, Esq.
                           Facsimile:  214/922-4193

         Section  10.2  Notice  given  by  personal  delivery  or mail  shall be
effective upon actual  receipt.  Notice given by telegram,  facsimile,  or telex
shall be effective upon actual receipt if received during the recipient's normal
business  hours or at the beginning of the  recipient's  next business day after
receipt if not received  during the recipient's  normal  business hours.  Either
Party may  change  any  address  to which  Notice is to be given to it by giving
notice as provided above of such change of address.

         Section 10.3 The foregoing is not intended to preclude  normal informal
communication with respect to operational matters.

                                   ARTICLE XI
                                  GOVERNING LAW

         All provisions of this Agreement  shall be governed by and construed in
accordance with the laws of the State of Texas,  excluding any  conflicts-of-law
rule or principle that might apply the laws of another jurisdiction.


                                       6
<PAGE>


                                   ARTICLE XII
                                      TITLE

         Title and risk of loss to the Product  handled  hereunder  shall always
remain in Probex while at the Facility  even though  Product is located on PQS's
property.

                                  ARTICLE XIII
                                 INDEMNIFICATION

         Section 13.1      Special Definitions.  As used in this Article 13, the
following terms have the meanings ascribed to them:

   13.1.1 "Environmental Law" and/or  "Environmental  Laws" shall  mean  any and
          all  federal,  state,  local  and  foreign  laws  (including,  without
          limitation,  common law) or rules,  regulations,  orders,  decrees, or
          judgments or  Environmental  Permits  relating to (i) the  environment
          and/or to emissions,  discharges,  releases or threatened  releases of
          pollutants, contaminants, chemicals, or industrial, toxic or hazardous
          substances,  toxic or hazardous  wastes,  petroleum and its fractions,
          used oil, or waste oil into the  environment  including  ambient  air,
          surface water,  ground water,  land, or otherwise,  including all such
          laws  relating  to the  manufacture,  processing,  distribution,  use,
          treatment,  storage,  disposal,  transport, or handling of pollutants;
          and all such laws relating to any Regulated  Substance;  (ii) noise or
          odors, (iii) wetlands protection, and (iv) worker safety and health.

   13.1.2 "Environmental  Liability" shall  mean  any Damages or other liability
          of any kind  relating  to or  arising  out of (a) noise or odors;  (b)
          actual or threatened  pollution or contamination of the ecology,  air,
          groundwater,  surface water,  land,  soils or subsurface  strata;  (c)
          solid,  gaseous,  or liquid  waste  generation,  handling,  treatment,
          storage, disposal, or transportation;  (d) any release of, or exposure
          to,  any  Regulated   Substances  or  related   conditions;   (e)  the
          manufacturing,  processing,  distribution in commerce, use, or storage
          of chemical substances,  petroleum or petroleum products,  used oil or
          waste oil; (f) working  conditions  and safety or health of employees;
          (g) violations of, or requirements under,  Environmental Laws; (h) the
          off-site transportation,  treatment,  storage, or disposal from any of
          the  Assets or  Business  activities  or  operation  of any  Regulated
          Substance;  (i) Environmental  Cleanup;  or (j) wetlands or ecological
          protection.

   13.1.3  "PQS   Environmental   Claim"   shall   mean  any  and   all  claims,
          liabilities, (including, without limitation, contractual liability and
          strict liability),  demands,  rights,  obligations,  causes of action,
          suits,  contribution and indemnity  actions,  and other proceedings of
          any  kind  or  character,  however  denominated,  of or by any  Person
          whether at law or at equity, known or unknown, potential,  asserted or
          unasserted,  accrued or unaccrued, direct, indirect, contingent, third
          party,  or subrogated,  or derivative of any of the above  (including,
          without limitation, any claims asserted by, or obligations imposed by,


                                       7
<PAGE>


          any  Governmental  Body with actual or alleged  jurisdiction  over the
          Assets or the Business) that accrues during the term of this Agreement
          with respect to the Assets or the operation of the Business at or from
          the  Location  and  relating  to  or  arising  out  of   Environmental
          Liability,  including, without limitation, all closure or post-closure
          costs and obligations  imposed under Environmental Laws, or otherwise,
          on Probex or any other Person due to such  Person's  activities at the
          Location  or on account of an  Environmental  Permit held by Probex or
          any  other  Person  at the  Location;  provided,  however,  that  "PQS
          Environmental Claim" shall not include any claim,  liability,  demand,
          right,  obligation,  cause of action, suit,  contribution or indemnity
          action,  or other  proceeding of any kind or character with respect to
          which  Probex is  obligated  to  indemnify  PQS  pursuant  to  Section
          13.2.2(iv),  (v) or (vi)  of  this  Agreement.  For  purposes  of this
          Agreement,  a PQS  Environmental  Claim  "accrues"  when the  event or
          condition giving rise to the PQS Environmental  Claim first occurs and
          not when the event is first  discovered  or first  becomes  subject to
          correction, abatement, regulatory enforcement, or response action.

         Section 13.2      General Indemnification.

                  13.2.1  Subject to the terms and  conditions  of this  Article
         XIII, PQS and Parent, jointly and severally,  shall indemnify,  defend,
         and hold harmless Probex,  and any of its officers and directors,  from
         and against all Damages  that may be asserted  against,  resulting  to,
         imposed upon, or incurred by any such Person by reason of, relating to,
         or  resulting  from  any PQS  Environmental  Claim  including,  without
         limitation, PQS' performance of the actions described in Section 14.7.

                  13.2.2  Subject to the terms and  conditions  of this  Article
         XIII, Probex shall indemnify, defend, and hold harmless PQS, and any of
         its  officers and  directors,  from and against all Damages that may be
         asserted  against,  resulting to, imposed upon, or incurred by any such
         Person by reason  of,  relating  to, or  resulting  from:  (i) loss of,
         damage to, or loss of use of, Facility and Product unless caused by the
         gross  negligence  or  willful  misconduct  of  PQS in  performing  the
         Services or unless otherwise caused by PQS while engaging in activities
         unrelated to performing the Services;  (ii) loss of, damage to, or loss
         of use of, equipment, facilities and properties of PQS caused by Probex
         or Parent or their employees, agents or representatives; (iii) personal
         injury  or  death  of  PQS,  Probex  or  Parent  employees,  agents  or
         representatives  arising in connection  with the Services unless caused
         by the  gross  negligence  or  willful  misconduct  of  PQS;  (iv)  the
         violation  of  any  of the  Environmental  Laws  by  Probex  or  Parent
         subsequent  to  the  Closing  in  connection  with  the  Assets  or the
         operation of the  Business,  including but not limited to violations of
         any such  law by  Probex  or  Parent  with  respect  to the use of,  or
         activities  conducted  on or from the  Location,  including  the use by
         Probex of underground storage tanks thereunder, but in cases where such
         violations  are  caused  by a release  of  Regulated  Substances,  or a
         release is itself a  violation,  only to the extent  such  Damages  are
         attributable to an Identifiable  Event;  (v) an Identifiable  Event; or
         (vi) Probex's performance of the actions described in Sections 14.5 and
         14.6

                                       8
<PAGE>


         Section 13.3  Conditions of  Indemnification.  The  obligations of PQS,
Probex or Parent, as the case may be (the "indemnifying Party") to other Persons
(the  "Party  to be  indemnified")  with  respect  to any  claim or  demand  for
indemnification shall be subject to the following terms and conditions:

                  13.3.1 The Party to be indemnified  shall promptly give notice
         to the indemnifying Party of any claim,  whether between the Parties or
         brought by a third party,  specifying both the basis for and the amount
         of such claim, to the extent specified or otherwise known. If the claim
         or demand for  indemnification  relates to a claim,  action,  suit,  or
         proceeding  asserted or filed by a Third Party  against the Party to be
         indemnified (a "Third-Party Claim"), then such notice shall be given by
         the Party to be indemnified  within twenty (20) days of receipt thereof
         (or such  earlier  time as might be required to avoid  prejudicing  the
         indemnifying  Party's  position).  The  failure  of  the  Party  to  be
         indemnified  to give such notice  shall not  relieve  the  indemnifying
         Party  of  its  obligations   hereunder,   except  to  the  extent  the
         indemnifying Party is actually prejudiced thereby.

                  13.3.2  Following  receipt  of  notice  from  the  Party to be
         indemnified of a claim or demand for indemnification,  the indemnifying
         Party  shall have twenty  (20) days to make such  investigation  of the
         claim or demand as the indemnifying Party deems necessary or desirable.
         For the  purposes of such  investigation,  the Party to be  indemnified
         agrees to make available to the  indemnifying  Party (or its authorized
         representatives)  the  information  relied  upon  by  the  Party  to be
         indemnified  to  substantiate  the claim or demand.  If the Party to be
         indemnified  and  the  indemnifying   Party  agree  at  or  before  the
         expiration of such twenty (20) day period (or any mutually  agreed upon
         extension  thereof) to the validity and amount of such claim or demand,
         then the  indemnifying  Party shall  immediately pay to the Party to be
         indemnified  the full  amount of the claim or demand to the extent that
         such Party to be indemnified is entitled to indemnification pursuant to
         this Section 13.3. If the Party to be indemnified and the  indemnifying
         Party do not agree  within  such  period (or any  mutually  agreed upon
         extension  thereof),  then the Party to be  indemnified  may  pursue or
         exercise any remedies or rights available to it.

                  13.3.3  After  receipt  of  notice  of   commencement  of  any
         Third-Party  Claim  evidenced  by service  of  process  or other  legal
         pleading,  or with reasonable  promptness  after any other assertion in
         writing of any  Third-Party  Claim,  the Party to be indemnified  shall
         give the indemnifying Party written notice thereof together with a copy
         of such claim,  process,  or other legal pleading within the period set
         forth in the second sentence of Section 13.3.1.  The failure of a Party
         to be indemnified to give the indemnifying  Party such notice shall not
         relieve the  indemnifying  Party of its obligations  under Section 13.3
         except to the  extent the  indemnifying  Party is  actually  prejudiced
         thereby.  The indemnifying  Party shall have the right to undertake the
         defense,  compromise,  or  settlement  of  the  Third-Party  Claim,  by
         representatives  of its own  choosing and at its own expense so long as
         the  indemnifying  Party agrees to assume and conduct,  and  diligently
         conducts,  such defense (or, if applicable,  compromise or settlement).
         In such  event  the  Party to be  indemnified  may  participate  in the
         defense,  compromise,  or settlement with counsel of its own choice and
         at its own expense.


                                       9
<PAGE>


                  13.3.4 If the indemnifying  Party, by the thirtieth (30th) day
         after receipt of notice of any such claim (or, if earlier, by the tenth
         (10th) day preceding the day on which an answer or other  pleading must
         be served  in order to  prevent  judgment  by  default  in favor of the
         plaintiff),  does not elect to defend such Third-Party  Claim, then the
         Party to be  indemnified  shall have the right (upon further  notice to
         the  indemnifying  Party) to retain  counsel and undertake the defense,
         compromise,  or settlement of such Third-Party  Claim on behalf of, and
         for  the  account  and  risk  of,  the  indemnifying  Party  and at the
         indemnifying Party's expense,  subject to the right of the indemnifying
         Party to participate,  with its own counsel and at its own expense,  in
         the defense,  settlement or compromise.  If the Party to be indemnified
         and the  indemnifying  Party agree at or before the  expiration  of the
         period set forth in this Section  13.3.4 (or any  mutually  agreed upon
         extension  thereof)  to the  validity  and  amount of such  Third-Party
         Claim,  then the indemnifying  Party shall immediately pay to the Party
         to be indemnified the amount so agreed.

                  13.3.5 If there is a conflict of  interests  which  renders it
         inappropriate  for the same counsel to represent both the  indemnifying
         Party and the Party to be  indemnified in defending,  compromising,  or
         settling  a  Third-Party   Claim,  the  indemnifying   Party  shall  be
         responsible  for  paying  for  separate  counsel  for the  Party  to be
         indemnified. In such event, however, if there is more than one Party to
         be  indemnified,  the  indemnifying  Party shall not be responsible for
         paying  for more  than one  separate  counsel  (which  may be a firm of
         attorneys)  to represent the Parties to be  indemnified,  regardless of
         the number of Parties to be indemnified.

                  13.3.6  The  indemnifying  Party may  compromise,  settle,  or
         resolve any  Third-Party  Claim  without the consent of the Party to be
         indemnified if such compromise, settlement, or resolution involves only
         the  payment of money by the  indemnifying  Party  (whether  on its own
         behalf or on behalf of the Party to be  indemnified)  and the  claimant
         provides to the Party to be indemnified a release from all Liability in
         respect  of such  claim.  Otherwise,  the  indemnifying  Party  may not
         compromise,  settle,  or resolve the claim  without  the prior  written
         consent  of the  Party  to be  indemnified,  which  consent  may not be
         unreasonably withheld.

                  13.3.7 The Party to be indemnified and the indemnifying  Party
         must cooperate with all reasonable requests of the other in the defense
         of any Third-Party Claim.

                  13.3.8  Notwithstanding  anything  to  the  contrary  in  this
         Section 13.3, with respect to an obligation of PQS to indemnify  Probex
         pursuant to Section  13.2.1 above with  respect to a PQS  Environmental
         Claim that  requires any  Remediation,  PQS may elect to implement  and
         complete such Remediation. If PQS elects to conduct the Remediation:

               (i)  PQS,  in good faith,  will  coordinate  the  schedule of the
                    Remediation  with  Probex so that  disruptions  of  Probex's
                    operations will be minimized;

               (ii) PQS will obtain the prior written approval of Probex,  which
                    approval  will  not  be  unreasonably   withheld,   for  any


                                       10
<PAGE>



                    consultant  or  contractor  retained by PQS to  investigate,
                    design or implement the Remediation;

               (iii)PQS will  conduct the  Remediation  in  compliance  with all
                    applicable federal, state and local laws and regulations and
                    as directed by the appropriate Governmental Body; and

               (iv) PQS will not agree to or select any Remediation that imposes
                    any  material  obligation  on  Probex,  including,   without
                    limitation,  the  obligation  to sign  manifests  or  obtain
                    permits,  without the prior  written  consent of the Probex,
                    which consent shall not be reasonably withheld.

               (v)  During the period in which PQS is  conducting a  Remediation
                    pursuant to this Section  13.3.8,  Probex shall  provide PQS
                    and its consultants and contractors reasonable access to the
                    affected  property for the purpose of conducting  activities
                    related to the  Remediation,  including  where necessary the
                    use of heavy equipment.  Any such access shall be subject to
                    reasonable   restrictions  imposed  by  Probex,   including,
                    without limitation,  restrictions  related to worker safety.
                    PQS shall  expeditiously  remove from the property all drill
                    cuttings,  soil,  debris  or  liquids  generated  from or in
                    connection  with  the  Remediation  and  shall  restore  the
                    property and any existing structures or equipment removed or
                    damaged  in the  course of the  Remediation  to a  condition
                    substantially   the  same  as  the  condition  that  existed
                    immediately   prior  to  the   Remediation.   PQS  or  their
                    consultants  and  contractors  shall provide Probex at least
                    five (5)  business  days'  notice  of the  activities  to be
                    conducted on the  property,  which notice may be in the form
                    of a schedule of activities.

               (vi) PQS and  Probex  agree that any  Remediation  shall meet all
                    requirements of the  Governmental  Body or Bodies  directing
                    the Remediation and shall not materially  impede or increase
                    the cost of Probex's  business  operations  on the  affected
                    property.  Probex acknowledges that the Remediation may be a
                    "risk-based"  Remediation  pursuant to, and consistent  with
                    applicable  federal,  state and local laws and  regulations,
                    which may require the establishment of certain  restrictions
                    or   conditions   affecting   the   property  on  which  the
                    Remediation is being conducted.  Probex agrees not to object
                    to  any  such  "risk-based"   Remediation   unless  Probex's
                    agreement will, in the good faith judgment of Probex, expose
                    Probex to liability to third parties.

               (vii)PQS  shall  not take any  action  or make any  communication
                    which has a material  effect on the resolution or outcome of
                    any Environmental Claim which could lead to the filing of an
                    Environmental  Claim against  Probex,  without  providing at
                    least  five  (5)  business  days  advance   notice   (unless
                    otherwise required by law) to Probex. Any material breach of
                    this   obligation   shall   relieve   Probex  or  Parent  of
                    Liabilities   under  this  Agreement  with  respect  to  the
                    applicable  Environmental  Claim  to the  extent  Probex  or

                                       11
<PAGE>


                    Parent  has  been  prejudiced  by the  lack  of  timely  and
                    adequate notice.  This  notification  requirement  shall not
                    apply to  communications  which  are part of or  relate to a
                    judicial or  administrative  proceeding in which the Parties
                    are litigating claims against each other.

         Section 13.4 Express Negligence  Acknowledgement.  THE  INDEMNIFICATION
PROVISIONS  CONTAINED  HEREIN  ARE  INTENDED  TO,  AND SHALL HAVE THE EFFECT OF,
INDEMNIFYING A PERSON AGAINST THE RESULTS OF ITS OWN NEGLIGENCE OTHER THAN GROSS
NEGLIGENCE  OR WILLFUL  MISCONDUCT.  Nevertheless,  no Person to be  indemnified
shall be relieved of responsibility  for any negligence in responding,  once the
claim or demand for  indemnification  arises, to any matter that is the basis or
subject of any claim or demand for  indemnification  by such  Person  under this
Article XIII.

         Section 13.5 No Special  Damages.  Neither party shall be liable to the
other under any circumstances for PUNITIVE,  special,  consequential or indirect
damages  regardless  of whether it has been advised of the  possibility  of such
damages.

                                   ARTICLE XIV
                           MODIFICATIONS TO FACILITIES

         Section  14.1  If  improvements,   alterations,  or  additions  to  the
Facilities are required to meet the needs of Probex's  business  during the Term
of this Agreement, Probex and PQS shall negotiate in good faith in an attempt to
agree  to  make  such  alterations,  additions,  and  modifications  in a  safe,
expeditious,  and cost efficient manner and in accordance with all local,  state
and  federal  requirements.  The  expense of such  alterations,  additions,  and
modifications shall be borne by Probex, using funds provided by Probex.

         Section  14.2 If as a result of  governmental  rules,  regulations,  or
orders it becomes necessary to make improvements,  alterations,  or additions to
the Facilities  during the Term of this Agreement in order for the Facilities to
continue to function in support of Probex's  business,  PQS shall cooperate with
Probex to make such alterations,  additions,  and  modifications.  To the extent
such alterations, additions, or modifications are to the sole benefit of Probex,
the expense of such alterations,  additions,  or modifications shall be borne by
Probex. If the required alterations,  additions, or modifications are of benefit
to both Parties, then the expenses shall be borne proportionately by the Parties
to the use.

         Section  14.3 If the cost to PQS of  providing  the Services to support
Probex's  business  should  increase or decrease as a result of Section  14.1 or
14.2, PQS shall have the right,  at PQS's sole  discretion,  to increase the fee
referred to in Article IV by the amount of the  increase and the  obligation  to
decrease the fee by the amount of the actual decrease.  The increase in fee will
be limited to actual costs incurred by PQS.

         Section  14.4  Notwithstanding  anything to the  contrary  contained in
Sections 14.1, 14.2 and 14.3 of this Agreement, Probex shall have no obligations
to pay or reimburse PQS for any alteration, addition, or modification referenced
in  Sections  14.1,  14.2 and 14.3 to the extent  such  alteration,  addition or


                                       12
<PAGE>


modification  is covered by PQS' indemnity to Probex under Section 9.2(a) of the
Asset Purchase Agreement or Section 13.2.1 of this Agreement.

         Section  14.5 Upon  permanent  removal  of any of the  Facilities  from
service by or on behalf of Probex,  or the  vacation of the  Location by Probex,
Probex will be solely responsible for (i) removal of tanks, piping,  containment
walls,  concrete,  pumps,  and pump  sheds,  (ii)  loading of tanks and  related
equipment  on trucks,  (iii)  salvage of  reusable  parts,  and (iv)  removal of
related  construction  debris,  and all  costs  and  expenses  related  to these
responsibilities.

         Section  14.6 At any time  after the third  anniversary  of the date of
this Agreement,  or if Probex chooses to vacate the Location prior to such third
anniversary  due to reasons  other than a PQS  decision to sell or shut down the
Location,  Probex will be solely responsible for removing  Regulated  Substances
from the interior of tanks and related pipelines and other  Facilities,  and the
subsequent  transportation  and disposal of such Regulated  Substances,  and all
costs and expenses related to these responsibilities.

         Section 14.7 If at any time before the third anniversary of the date of
this  Agreement,  Probex  vacates the  Location due to a PQS decision to sell or
shut down the Location,  PQS will be solely  responsible for removing  Regulated
Substances  from  the  interior  of  tanks  and  related   pipelines  and  other
Facilities,  and the  subsequent  transportation  and disposal of such Regulated
Substances, and all costs and expenses related to these responsibilities.

                                   ARTICLE XV
                                   ARBITRATION

         Section 15.1  Negotiation.  If any dispute  relating to this  Agreement
arises  between  the  Parties,  the  Parties  will  first  enter into good faith
negotiations  to resolve the dispute in a commercially  reasonable  manner.  The
negotiations  will  be held  by  representatives  of each  Party  who  have  the
authority to settle any claims arising out of the dispute.

         Section 15.2 Arbitration.  If a dispute cannot be resolved through good
faith  negotiations,  the dispute will be submitted for resolution by a panel of
three  arbitrators in accordance  with the Commercial  Arbitration  Rules of the
American  Arbitration  Association.  The arbitrators  will apply the laws of the
State of Texas to  resolve  the  dispute.  The  arbitration  will take  place in
Houston,  Texas, no later than one hundred twenty (120) days after a request for
arbitration  is filed  by a Party  with the  American  Arbitration  Association.
Judgement  upon an  arbitration  award  shall be final and may be entered in any
court having  jurisdiction over the Party against which  enforcement  thereof is
sought.  All fees and expenses of the arbitration  shall be borne by the parties
equally. However, each party shall bear the expense of its own counsel, experts,
witnesses and preparation of proofs. This arbitration provision will survive the
termination of this Agreement and the dissolution of the Parties.

         Section  15.3  Alternative  Arbitration.   As  an  alternative  to  the
arbitration  procedure set forth in paragraph  15.2 above,  the Parties may (but
will not be required to) agree to an expedited dispute  resolution process which
will be  completed  no later than  thirty  (30) days after the date the  Parties
agree in writing to pursue this expedited process.  Under the expedited process,
the dispute will be  submitted  to a panel  consisting  of one  executive  level

                                       13
<PAGE>



manager from each Party who has the  authority to settle any claims  arising out
of the dispute.  These managers will attempt to resolve the dispute within seven
(7)  business  days after the date the  Parties  agree to pursue  the  expedited
process.  If the  managers  are unable to  resolve  the  dispute  with this time
period,   such  dispute  will  be  submitted  to  a  single  arbitrator  from  a
pre-approved  list of qualified,  independent  arbitrators.  The arbitrator will
conduct the remainder of the expedited process in Houston, Texas, and will apply
the laws of the  State  of Texas  and the  Commercial  Arbitration  Rules of the
American  Arbitration  Association  to resolve the dispute.  The decision of the
arbitrator  will be final and may be entered into any court having  jurisdiction
over the  Party  against  which  enforcement  thereof  is  sought.  All fees and
expenses of the arbitration shall be borne by the parties equally. However, each
party  shall  bear  the  expense  of its own  counsel,  experts,  witnesses  and
preparation of proofs.

         Section 15.4 Performance  Pending  Arbitration.  The Parties agree that
their  respective   obligations   under  this  Agreement,   including,   without
limitation,  PQS'  obligation  to provide the  Services and to perform its other
obligations  hereunder,  and  Probex's  obligation  to pay for the  Services and
perform its other obligations  hereunder,  shall not be excused by the existence
of any dispute  that the Parties  are,  in good  faith,  endeavoring  to resolve
pursuant to, and in accordance with, the provisions of this Article XV.

                                   ARTICLE XVI
                            MISCELLANEOUS PROVISIONS

         Section 16.1 The section  headings  contained in this Agreement are for
the convenience of the Parties only and shall not be interpreted as part of this
Agreement.

         Section  16.2 This  Agreement  shall not be modified  except by written
instrument  executed  by  duly  authorized  representatives  of  the  respective
Parties.

         Section 16.3 Waiver by one Party of the other's breach of any provision
of this  Agreement  shall not be deemed a waiver of any subsequent or continuing
breach of such  provision or of the breach of any other  provision or provisions
hereof.

         Section  16.4 In the  event of a  conflict  between  the  terms of this
Agreement and any Exhibit attached  hereto,  the terms of the Agreement shall be
controlling.

         Section 16.5 Any  provision of this  Agreement  which is  prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability  without  invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render  unenforceable such provision in any
other jurisdiction.

         Section  16.6  This   Agreement  may  be  executed  in  any  number  of
counterparts,  and each of such counterparts shall for all purposes be deemed to
be an original.

         Section  16.7  This  Agreement  shall  inure to the  benefit  of and be
binding upon the successors and assigns of the respective Parties hereto.

                                       14
<PAGE>


         Section 16.8 The  provisions of Articles I, V, VI, X, XI, XII, XIII, XV
and XVI,  and Sections  14.5 and 14.6,  will remain in full force and effect and
survive after the term of this Agreement or any  termination of this  Agreement.
Also,  any  amounts  owed by a Party  to the  other  Party on  termination  will
continue to be  obligations  of the owing  Party and  nothing in this  Agreement
shall relieve  either Party from  liability to the other Party for any breach of
this  Agreement,  and  each  Party  will be  entitled  to any  remedies  in this
Agreement, at law or in equity, or otherwise for any such breach.

                                       15
<PAGE>


         IN WITNESS WHEREOF,  the Parties hereto have executed this Agreement on
the day and year first above written.

                                                  PENNZOIL-QUAKER STATE COMPANY

                                                  By:___________________________

                                                  Printed Name:_________________

                                                  Title:________________________



                                                  PROBEX FLUIDS RECOVERY, INC.

                                                  By:___________________________

                                                  Printed Name:_________________

                                                  Title:________________________



                                                  PROBEX CORP.

                                                  By:___________________________

                                                  Printed Name:_________________

                                                  Title:________________________


                                       16
<PAGE>


<TABLE>
<CAPTION>

                                                  EXHIBIT 3.1

                                    GENERAL SERVICES AND COSTS OF SERVICES

                                                AT THE LOCATION

                                                                                            Monthly Charge
                                                                                            --------------
<S>                                                                                   <C>
Tank Farm Access / Space                                                                         $325
o    Located  outside.  Separate  from new oil  tank  farm.  Need to make  lease
     arrangements or move tank farm. Tank farm occupies 5603 sq. ft.

Warehouse Access / Space                                                                       $2,550
o    Located inside. 650 sq. ft. will be allocated to SES.
o    Box truck can be parked at DC.

Office Space - 8,200 sq. ft.                                                                   $5,223

Administrative Support                                                                (Service Not Provided)
o    Order Entry
o    Ticket and Manifest Preparation
o    Record Keeping
o    Sample Mailing and Log
o    Drum Ordering
o    Outbound Transportation Coordination

Management Support                                                                    (Service Not Provided)
o    Driver Coordination
o    Asset Oversight(Truck tags, tank maintenance, etc.)
o    Problem Resolution Coordination

Bulk Support                                                                          (Service Not Provided)
o    Tank Management (day tanks to outbound tanks)
o    Sample Taking
o    Outbound Loading

Warehouse Support                                                                     (Service Not Provided)
o    Empty drum unloading
o    Outbound drum loading
o    Daily pick-up put away
o    Empty drum staging loading for route trucks

Utilities/Other Expenses

o    Specific identifiable expenses (long distance phone calls,
     postage, uniforms on PQS contract, etc.)                                         $(Bill per specific invoice)

o    Wastewater Handling

                                                                                      (No additional charge
                                                                                       - See Attachment I)

TOTAL MONTHLY CHARGE:                                                                          $8,100
                                                                                                =====
</TABLE>


<PAGE>


                                  ATTACHMENT I

                                 TO EXHIBIT 3.1

             GENERAL SERVICES AND COSTS OF SERVICES AT THE LOCATION

1.   Commencing on the Closing  Date,  PQS agrees to receive and  discharge,  in
     compliance with applicable laws, regulations, and other legally enforceable
     requirements,  wastewater  originating on the premises  occupied or used by
     Probex  pursuant  to the  Agreement  ("Premises")  and  received  by  PQS's
     wastewater handling and treatment facilities ("Facilities"), subject to the
     following conditions:

     a.   all wastewater received by the Facilities shall be strictly limited to
          (i) wastewater periodically generated by washing down, through the use
          of  municipally-supplied  water  only,  the tank farm and other  areas
          associated with Probex operations on the Premises; and (ii) stormwater
          generated on the Premises.

     b.   Probex shall remain the owner of and be responsible for all wastewater
          received by PQS from the Premises.

     c.   all  wastewater  received  by PQS will not  interfere  with the normal
          operation  of the  Facilities  and will not cause a violation  of: (i)
          PQS's NPDES permit,  (ii) any other permit issued to PQS by the United
          States  Environmental  Protection  Agency  ("EPA")  or  the  State  of
          Louisiana or any of its  subdivisions,  or (iii) any other  applicable
          law, regulation, or other legally enforceable requirement.

     d.   all  wastewater  received  by PQS shall be free of any used oil,  used
          antifreeze,  or any other  substances  regulated as solid or hazardous
          wastes  pursuant to  applicable  laws,  regulations,  or other legally
          enforceable  requirements,  except to the extent the  presence of such
          substances  in the  wastewater  does  not  cause  a  violation  of any
          applicable law, regulation, or other legally enforceable requirement.

     e.   Probex  shall  demonstrate  on a  monthly  basis to  PQS's  reasonable
          satisfaction,  through  chemical  analysis or other  means  reasonably
          acceptable to PQS, that all  wastewater  received by PQS satisfies all
          conditions and requirements specified in this Services Agreement.

2.   PQS shall  have no  obligation  to  receive  or  discharge  any  wastewater
     generated by Probex unless all conditions  specified at section 1 above are
     satisfied at all times.  Moreover,  PQS shall have no obligation to receive
     or  discharge  wastewater  from  Probex if at any time its  receipt of such
     wastewater (a) causes the Facilities to become a privately  owned treatment
     works as defined at 40 CFR 122.2,  (b)  requires  PQS to obtain a new NPDES
     permit or to amend or modify its current NPDES permit,  (c) requires PQS to
     obtain an additional  permit or authorization for the Facilities or for the
     discharge of wastewater from the  Facilities,  or (d) causes PQS to violate
     the  terms of its  NPDES  permit or any  other  law,  regulation,  or other
     legally  enforceable  requirement,  unless Probex agrees to pay the cost of
     any actions  required to eliminate  such  violations  or to obtain any new,
     additional,  amended, or modified permit. PQS and Probex shall cooperate in


<PAGE>



     good faith to evaluate any potential  issues of the nature described in the
     preceding  sentence  and to  identify  methods  to avoid  such  issues.  In
     addition,  PQS shall not be required to receive or discharge wastewater for
     Probex if  modifications  or improvements are required to the Facilities to
     discharge Probex's wastewater in compliance with PQS's NPDES permit and any
     other applicable law, regulation, or other legally enforceable requirement,
     unless  Probex  agrees  to pay  the  cost  of  any  such  modifications  or
     improvements.

3.   PQS's obligation to receive and discharge  wastewater  received from Probex
     shall terminate upon the occurrence of any of the following:

     a.   the failure of any condition specified at 1. above to be satisfied;

     b.   Probex's cessation of operations at or vacation of the Premises;

     c.   any change in the  operations  of Probex  after the Closing Date which
          has a material  effect on the  quantity  or quality of the  wastewater
          received  by  PQS,   unless  such  change  is  accomplished  to  PQS's
          reasonable  satisfaction through the procedures described in 2. above;
          or

     d.   the  expiration of this Services  Agreement as provided in Section 2.1
          of the Services Agreement.



<PAGE>


                                  EXHIBIT 3.1A

                           INCIDENT RESPONSE SERVICES

Incident Response                                   $(Bill per specific invoice)

o    PQS  will  implement  the  appropriate  portions  of the  facility's  Spill
     Prevention  Control and  Countermeasure  Plan and/or Facility Response Plan
     with  respect to an incident  requiring  a response  pursuant to such plans
     upon: (i) receipt of timely  notification  of the incident by Probex or any
     other person,  or (ii) discovery of the incident by an employee of PQS. The
     response may include the use of a third party response  contractor  engaged
     by PQS. As soon as practicable,  PQS will notify Probex whether it believes
     the incident constitutes an Identifiable Event as defined at Section 1.1 of
     the Asset Purchase Agreement.  Probex will reimburse PQS, within 30 days of
     receipt  of an  invoice,  for all  costs  associated  with  response  to an
     Identifiable Event.



</TEXT>
</DOCUMENT>
