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              SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT 
                             AND LOAN DOCUMENTS 

THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT AND LOAN DOCUMENTS (this 
"Amendment"), dated as of April 10, 1998, is between NATIONAL BANK OF 
CANADA, a Canadian chartered bank ("Lender"), and CET ENVIRONMENTAL
SERVICES, INC., a California corporation ("Borrower").


                                   RECITALS

A.  Lender and Borrower entered into a Loan and Security Agreement dated 
    May 29, 1997, as amended by an Amendment to Loan and Security Agreement 
    and Loan Documents dated as of August 29, 1997 (as amended, the "Loan 
    Agreement"), providing for the Revolving Loans, Equipment Loans, a Term Loan
    and Letters of Credit in the aggregate maximum available amount not to 
    exceed $10,000,000. Defined terms used herein and not defined herein shall 
    have the meaning set forth in the Loan Agreement.

B.  The Loans are secured by the Collateral.

C.  The Borrower and Lender desire to enter into this Amendment in order to 
    extend the Maturity Date and in order to make certain other changes to the 
    terms of the Loan Agreement.

                                   AGREEMENT

IN CONSIDERATION of the foregoing and other good and valuable consideration, 
the receipt and sufficiency of which are hereby acknowledged, Lender and 
Borrower agree as follows:

1.  EXTENSION OF MATURITY DATE. In order to extend the Maturity Date of the
    Loans, Section 1(t) of the Loan Agreement is hereby revised by substituting 
    the date "May 3O, 1999" for the date "November 30, 1998" in Subsection (i) 
    in the second line of the section.

2.  ELIGIBLE UNBILLED ACCOUNTS. Section 1(c)(ii) of the definition of "Revolving
    Loan Availability" relating to Eligible Unbilled Accounts is amended and 
    restated in its entirety to read as follows:

           (ii)   up to the lesser of (A) fifty percent (50%) of the face amount
       (less maximum discounts, credits and allowances which may be taken by or
       granted to Account Debtors in connection therewith) then outstanding 
       under Eligible Unbilled Accounts at such time, less such reserves as 
       Lender in its sole discretion elects to establish or (B) $2,500,000.

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       Lender may at any time and from time to time in its sole discretion 
       change the advance percentage as set forth above.

3.  NET PROFIT AFTER TAXES. Section 12(r)(ii) of the Loan Agreement regarding 
    net profit after taxes and before extraordinary gains is amended to require 
    Borrower's compliance therewith commencing December 31, 1998 by substituting
    the date "December 31, 1998" for the date "December 31, 1997" in the last 
    line thereof.

4.  LOAN DOCUMENTS.

    a.  Lender and Borrower agree that any and all notes to other documents
        executed in connection with the Loans (collectively, the "Loan 
        Documents") are hereby amended to reflect the amendments set forth 
        herein and that no further amendments to any Loan Documents are 
        required to reflect the foregoing.

    b.  All references in any document to the Loan Agreement or any other Loan
        Document shall refer to the Loan Agreement or such Loan Document as
        amended pursuant to this Amendment.

5.  CONDITIONS PRECEDENT. The obligations of Lender under this Amendment are
    subject to the satisfaction of the following conditions:

    a.  Borrower shall have executed and delivered this Amendment;

    b.  Borrower shall have paid to Lender a modification fee in the amount
        of $10,000;

    c.  Borrower shall have executed and delivered to Lender and Lender shall 
        have filed with the Environmental Protection Agency a Notice of 
        Assignment complying with the Assignment of Claims Act and acceptable 
        to Lender; and

    d.  No Event of Default or event that with notice or the passage of time, 
        or both, would constitute an Event of Default shall have occurred as of
        the date hereof.

6.  REPRESENTATIONS AND WARRANTIES. Borrower hereby certifies to the Lender that
    as of the date of this Amendment (taking into consideration the transactions
    contemplated by this Amendment), all of Borrower's representations and 
    warranties contained in the Loan Agreement and all Loan Documents are true, 
    accurate and complete in all material respects, and no Event of Default or 
    event that with notice or the passage of time or both would constitute an 
    Event of Default has occurred under the Loan Agreement or any Loan Document.
    Without limiting the generality of the foregoing, Borrower represents and
    warrants that the execution and delivery of this Amendment has been 
    authorized by all necessary action on the part of Borrower, that the person
    executing this Amendment on

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    behalf of Borrower is duly authorized to do so and that this Amendment 
    constitutes the legal, valid, binding and enforceable obligation of 
    Borrower.

7.  ADDITIONAL DOCUMENTS. Borrower shall execute and deliver to Lender at any 
    time and from time to time such additional amendments to the Loan Agreement
    and the Loan Documents as the Lender may request to confirm and carry out 
    the transactions contemplated hereby or to confirm, correct and clarify the
    security for the Loan.

8.  CONTINUATION OF THE LOAN AGREEMENT, ETC. Except as specified in this 
    Amendment, the provisions of the Loan Agreement and the Loan Documents shall
    remain in full force and effect, and if there is a conflict between the 
    terms of this Amendment and those of the Loan Agreement or the Loan 
    Documents, the terms of this Amendment shall control.

9.  MISCELLANEOUS.

    a.  This Amendment shall be governed by and construed under the laws of 
        the State of Colorado and shall be binding upon and inure to the
        benefit of the parties hereto and their successors and permissible 
        assigns.

    b.  This Amendment may be executed in two or more counterparts, each of 
        which shall be deemed an original and all of which together shall 
        constitute one instrument.

    c.  This Amendment and all documents to be executed and delivered hereunder 
        may be delivered in the form of a facsimile copy, subsequently confirmed
        by delivery of the originally executed document.

    d.  Time is of the essence hereof with respect to the dates, terms and 
        conditions of this Amendment and the documents to be delivered pursuant
        hereto.

    e.  This Amendment constitutes the entire agreement between Borrower and the
        Lender concerning the subject matter of this Amendment. This Amendment 
        may not be amended or modified orally, but only by a written agreement 
        executed by Borrower and the Lender and designated as an amendment or
        modification of the Loan Agreement as amended by this Amendment.

    f.  If any provision of this Amendment shall be held invalid, illegal or 
        unenforceable, the validity, legality and enforceability of the 
        remaining provisions of this Amendment shall not be impaired thereby.

    g.  The section headings herein are for convenience only and shall not 
        affect the construction hereof.

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    h.  Execution of this Amendment is not intended to and shall not constitute
        a waiver by the Lender of any Event of Default or event that with
        notice or the passage of time, or both, would constitute an Event of 
        Default.

    EXECUTED as of the date first set forth above.


                                       BORROWER:

                                       CET ENVIRONMENTAL SERVICES,
                                       INC., a California corporation


                                       By: /s/ Rick C. Townsend
                                          ---------------------------
                                          Rick C. Townsend
                                          Executive Vice President



                                       LENDER:

                                       NATIONAL BANK OF CANADA, a
                                       Canadian chartered bank


                                       By: /s/ Andrew M. Conneen, Jr.
                                          ---------------------------
                                          Andrew M. Conneen, Jr.
                                          Vice President


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