<PAGE>
                                                                   EXHIBIT 10.1


                    AMENDMENT TO LOAN AND SECURITY AGREEMENT

                         AND LIMITED WAIVER OF DEFAULTS

                  This Amendment to Loan and Security Agreement and Limited
Waiver of Defaults (this "Amendment") is entered into as of May 13, 2003 by and
between GUARANTY BUSINESS CREDIT CORPORATION ("GBCC") and U.S. PLASTIC LUMBER
LTD., a Delaware Corporation ("Borrower"), with respect to the following:

                  A.       GBCC and Borrower have entered into that certain
Loan and Security Agreement dated as of December 19, 2002 (as amended,
restated, modified and supplemented from time to time, the "Loan Agreement").
Capitalized terms used but not defined in this Amendment shall have the
meanings given them in the Loan Agreement.

                  B.       Pursuant to an Asset Purchase Agreement between
Borrower and Illinois Tool Works Inc., a Delaware corporation ("Buyer") dated
as of May 12, 2003 (the "Asset Purchase Agreement") and the documents and
instruments delivered or executed in connection therewith, Borrower is selling
certain of its assets constituting its corner board division, as set forth in
Section 1.1 of the Asset Purchase Agreement (the "Purchased Assets"). Pursuant
to the Asset Purchase Agreement, Buyer will pay Borrower a purchase price of
$8,247,419 in cash (subject to an escrow as set forth in Section 1.7, and
payments to certain lienholders as set forth in Section 1.8, of the Asset
Purchase Agreement) and Borrower will deliver the Purchased Assets to Buyer. As
used in this Amendment, "Closing Date" and "Closing" shall have the meanings
given to them in the Asset Purchase Agreement.

                  C.       Pursuant to a Lease Agreement between Borrower and
Buyer dated as of May 12, 2003 (the Lease Agreement), and in connection with
the Asset Purchase Agreement, Borrower is leasing to Buyer the "Premises",
defined in the Lease Agreement as Suite No. 102 located in the building located
at 1909 NE 25th Ave., Ocala, Florida, 34470, for initial base rent of $233,472
per annum.

                  D.       Borrower has requested waivers of certain Events of
Default, amendments to the Loan Agreement and GBCC's consent to the Asset
Purchase Agreement and the Lease Agreement and GBCC has agreed to issue certain
waivers, amend the Loan Agreement and to consent to the Asset Purchase
Agreement and the Lease Agreement on the terms and conditions set forth herein.

                  NOW, THEREFORE, in consideration of the foregoing and the
terms and conditions hereof, the parties hereto agree as follows:

                  1.       CONSENT TO SALE OF THE ASSETS. On the terms and
subject to the conditions of this Amendment, GBCC hereby consents to the Asset
Purchase Agreement and the Lease Agreement, such consent being subject to the
documentation thereof being in the form delivered by Borrower by electronic
mail on April 30,2003 and GBCC approving all schedules to the Asset Purchase
Agreement. This is a one-time consent and not a consent to any future
transaction whether or not similar to the foregoing. Buyer may rely on this
document as consent by GBCC under the terms and conditions herein unless
informed to the contrary prior to the Closing Date


                                       1
<PAGE>
of the Asset Purchase Agreement.

                  2.       USE OF PROCEEDS. As a condition to GBCC's consent to
the sale of the Purchased Assets, Borrower agrees that all funds payable to
Borrower as a result of the Asset Purchase Agreement, in excess of the payment
amounts to be made as set forth on Schedule 1 hereto, shall be made by Buyer
directly to GBCC on the Closing Date, to be applied in accordance with this
Section 2.

                  (a)      Seven Hundred Fifty Thousand Dollars ($750,000)
         shall be used to pay GBCC in satisfaction of the value of certain
         equipment comprising a portion of the Purchased Assets, such equipment
         constituting Collateral. The sum received by GBCC under this Section
         2(a) shall be applied to the Term Advance in the inverse order of
         maturity of payments without affecting the payments otherwise due
         under Section 2.8 of the Loan Agreement.

                  (b)      All amounts received by GBCC in excess of the sum of
         the amounts set forth on Schedule 1 hereto and the amounts set forth
         in Section 2(b) above shall be applied to the Revolving Advances as
         set forth in Section 2.1 of the Loan Agreement and otherwise in
         accordance with the terms of the Loan Agreement. All rent payments
         made to Borrower under the Lease Agreement shall be remitted to GBCC
         in accordance with the terms of the Loan Agreement.

                  3.       RESERVES. So long as Borrower's Total Debt Service
Coverage Ratio is less than 1.0 to 1.0 for the twelve month period ending on
the date of calculation, and for all times while such ratio is not met, GBCC
may institute a reserve under the Borrowing Base in the amount of Eight Hundred
Fifty Thousand Dollars ($850,000).

                  4.       RELEASE OF LIENS. Borrower agrees that upon the
Closing Date, the amount of $6,969,062.97 shall be paid to GBCC and upon GBCC's
receipt of such good funds, and so long as the payments to the parties set
forth on Schedule 1 hereto do not exceed the disbursement amounts corresponding
thereto and no other distributions of the Purchase Price (as defined in the
Asset Purchase Agreement) are made by Buyer at Closing, GBCC shall release all
of its liens on all Purchased Assets and provide Buyer with recordable evidence
thereof within 30 days of payment. GBCC agrees not to disturb Buyer's lease of
the Premises as long as Buyer is not in default under the Lease Agreement.
Buyer may rely on this agreement.

                  5.       INSTRUCTIONS TO ESCROW. As a condition precedent to
GBCC's consent to the Asset Purchase Agreement, Borrower shall issue an
irrevocable instruction to Escrow Agent under the Escrow Agreement by and among
Borrower, Buyer and Bank One National Association and dated as of May 12, 2003,
instructing Escrow Agent that all funds otherwise payable to Borrower, in
excess of the payment amounts to be made as set forth on Schedule 1 hereto,
shall be remitted directly to GBCC.

                  6.       WAIVER OF DEFAULTS. Borrower hereby acknowledges
that the following Defaults or Events of Default have occurred and/or are
continuing (the "Existing Defaults"): (i) Borrower has failed to maintain an
EBITDA during the month of January, 2003 as required by Section 7.2 of the Loan
Agreement, (ii) Borrower has failed to maintain a Senior Debt Service


                                       2
<PAGE>
Coverage Ratio as required by Section 7.3 of the Loan Agreement, (iii) Borrower
has failed to maintain a Total Debt Service Coverage Ratio as required by
Section 7.4 of the Loan Agreement, and (iv) Borrower has exceeded the Capital
Expenditures allowed for the month of January 2003 by Section 7.5 of the Loan
Agreement.

         Conditioned upon consummation of the sale contemplated by the Asset
Purchase Agreement on the terms and conditions of this Amendment, GBCC waives
each of the Existing Defaults through the date hereof. The waiver granted in
this Amendment is a one-time waiver only, is a waiver only of the Existing
Defaults, shall be limited strictly as written and shall not be deemed to
constitute a waiver of, or any consent to noncompliance with, any term or
provision of this Amendment, the Agreement or any other Transaction Document
whether or not similar to the Existing Defaults, except as expressly set forth
herein.

                  7.       AMENDMENT OF DEFINITIONS.

                  (a)      The definition of Senior Debt Service Coverage Ratio
in Section 1.1 of the Loan Agreement is hereby deleted and replaced in its
entirety with the following:

                  "'Senior Debt Service Coverage Ratio' means, as of any date,
                  the ratio of EBITDA less non-financed Capital Expenditures
                  less taxes paid less cash dividends paid less distributions
                  or other cash transfers to Affiliates for the applicable
                  period ending on such date to the sum of (a) the Interest
                  Expense (other than non-cash Interest Expense) incurred by
                  Company during such period and (b) all scheduled principal
                  payments on the Obligations or assets financed under
                  capitalized leases by Company for such period ending on such
                  date."

                  (b)      The definition of Total Debt Service Coverage Ratio
in Section 1.1 of the loan Agreement is hereby deleted and replaced in its
entirety with the following:

                  "'Total Debt Service Coverage Ratio' means, as of any date,
                  the ratio of EBITDA less non-financed Capital Expenditures
                  less taxes paid less cash dividends paid less distributions
                  or other cash transfers to Affiliates for the applicable
                  period ending on such date to the sum of (a) the Interest
                  Expense (other than non-cash Interest Expense) incurred by
                  Company during such period and (b) all scheduled principal
                  payments on all Debt for money borrowed or assets financed
                  under capitalized leases by Company (including the
                  Obligations) for such period ending on such date (including
                  all scheduled principal payments on Debt expected to be
                  incurred during such period)."

                  8.       AMENDMENT OF COVENANTS.

                  (a)      Section 7.3 of the Loan Agreement is hereby deleted
and replaced in its entirety with the following:


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<PAGE>
                  "7.3 Company shall maintain a Senior Debt Service Coverage
                  Ratio during the periods indicated below of not less than the
                  corresponding amounts indicated for the cumulative period
                  from May 12, 2003 through each date of calculation: (a) (.20)
                  to 1.0 for the period from May 12, 2003 to May 31, 2003; (b)
                  .60 to 1.0 for the period from June 1,2003 to June 30, 2003;
                  (c) .93 to 1.0 for the period from July 1, 2003 to July 31,
                  2003; (d) 1.0 to 1.0 for the period from August 1, 2003 to
                  December 31, 2003; (i) 1.1 to 1.0 for the period from January
                  1, 2004 to April 30, 2004. Beginning on May 1, 2004 and
                  thereafter, the Company shall maintain a Senior Debt Service
                  Coverage Ratio of not less than 1.1 to 1.0 for the twelve
                  month period ending on the date of calculation."

                  (b)      Section 7.4 of the Loan Agreement is hereby deleted
and replaced in its entirety with the following:

                  "7.4 Company shall maintain a Total Debt Service Coverage
                  Ratio during the periods indicated below of not less than the
                  corresponding amounts indicated for the cumulative period
                  from May 12, 2003 through the date of calculation: (a) (.25)
                  to 1.0 for the period from May 12, 2003 to May 31, 2003; (b)
                  .50 to 1.0 for the period from June 1, 2003 to June 30, 2003;
                  (c) .75 to 1.0 for the period from July 1, 2003 to July 31,
                  2003; (d) .88 to 1.0 for the period from August 1, 2003 to
                  September 30, 2003; (e) .84 to 1.0 for the period from
                  October 1, 2003 to October 31, 2003; (f) .86 to 1.0 for the
                  period from November 1, 2003 to December 31, 2003; (g) 1.0 to
                  1.0 during the period from January 1, 2004 to April 30, 2004.
                  Beginning on May 1, 2004 and thereafter, the Company shall
                  maintain a Total Debt Service Coverage Ratio of not less than
                  1.0 to 1.0 for the twelve month period ending on the date of
                  calculation."

                  9.       AMENDMENT AND WAIVER FEE. In consideration for the
accommodations granted by GBCC herein and in addition to all other fees and
costs, Borrower hereby agrees to pay to GBCC a nonrefundable Amendment and
Waiver Fee of Sixty Three Thousand Dollars ($63,000), which shall be fully
earned as of the date hereof (the "Amendment Fee"). The Amendment Fee shall be
paid in equal monthly installments over twelve months from the date hereof,
and, at GBCC's election, each of the monthly installments required by this
Section 5 may be charged as a Revolving Advance.

                  10.      NO MODIFICATION OF LEASE AGREEMENT. Borrower hereby
agrees that the Lease Agreement shall not be modified or amended in any manner
that alters the "Lease Term", as defined therein, from an initial period of 12
months with an option for Buyer to renew on a month-to-month basis.

                  11.      MISCELLANEOUS.


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<PAGE>
                  (a)      Reference to the Loan Agreement and the Transaction
Documents.

                           (i)      Except as specifically amended by this
Amendment, the Loan Agreement and the Transaction Documents shall remain in
full force and effect in accordance with their respective terms and are hereby
ratified and confirmed.

                           (ii)     Borrowers hereby warrant and represent to
GBCC that there does not exist a Default or an Event of Default other than the
Existing Defaults and Borrower reaffirms, as of the date hereof, that all of
the warranties and representations of Borrower contained in the Loan Agreement
and in the Transaction Documents are true and correct.

                  (b)      Counterparts. This Amendment may be executed in one
or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.

                  (c)      Governing Law. This Amendment shall be governed by
and construed according to the laws of the State of California.

                  (d)      Attorneys' Fees. Borrower shall pay, on written
demand, all fees and costs incurred by GBCC in connection with the negotiation,
documentation and execution of this Amendment, including the reasonable fees
and expenses of attorneys. If any legal action or proceeding shall be commenced
at any time by any party to this Amendment in connection with its
interpretation or enforcement, the prevailing party or parties in such action
or proceeding shall be entitled to reimbursement of its reasonable attorneys'
fees and costs in connection therewith, in addition to all other relief to
which the prevailing party or parties may be entitled.

                  (e)      Jury Trial Waiver. EACH OF THE PARTIES HERETO WAIVES
ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION TO ENFORCE, DEFEND, INTERPRET OR
OTHERWISE CONCERNING THIS AMENDMENT.


                  [Remainder of Page Intentionally Left Blank]


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<PAGE>
         IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment as of the date first written above.


                                    U.S. PLASTIC LUMBER LTD., a Delaware
                                    corporation


                                    By:
                                    Name:    Bruce C. Rosetto
                                    Title:   Secretary



                                    GUARANTY BUSINESS CREDIT CORPORATION,
                                    a Delaware corporation


                                    By
                                      -----------------------------------------
                                    Name:
                                         --------------------------------------
                                    Title
                                         --------------------------------------


                                       6
<PAGE>
         The undersigned hereby consents to and acknowledges the terms and
conditions of the foregoing Amendment and agrees that its Continuing Guaranty
and each other document executed in favor of GBCC remain in full force and
effect.


                                    U.S. PLASTIC LUMBER IP CORPORATION


                                    By:
                                       ----------------------------------------
                                    Name:
                                         --------------------------------------
                                    Title:
                                          -------------------------------------


                                    U.S. PLASTIC LUMBER CORP.


                                    By:
                                       ----------------------------------------
                                    Name:
                                         --------------------------------------
                                    Title:
                                          -------------------------------------


                                    U.S. PLASTIC LUMBER FINANCE CORPORATION


                                    By:
                                       ----------------------------------------
                                    Name:
                                         --------------------------------------
                                    Title:
                                          -------------------------------------


                                       7
<PAGE>
                                   SCHEDULE 1


<TABLE>
<CAPTION>
PAYMENT AMOUNT                              WIRE TRANSFER INSTRUCTIONS
--------------                              --------------------------
<S>                          <C>
$521,292.80                                   J.P. Morgan Chase Bank
                                                 ABA No. 021000021
                                  For Credit to: Siemens Financial Services, Inc.
                                              Account No. 9102694362
                                           Contact Name: Peter Donaldson
                                          Contact Number: (908) 429-6000
                                        Reference: U.S. Plastic Lumber Sale

$134,332.16                                    Bank of America, N.A.
                                                 ABA No. 121000358
                                      For Credit to: CIT/Equipment Financing
                                              Account No. 1233518855
                                            Contact Name: Michael Vlcek
                                          Contact Number: (480) 784-9633
                                        Reference: U.S. Plastic Lumber Sale

$250,000.00                                Bank One National Association
                                                  BANK ONE, N.A.
                                                 ABA # 044-000-037
                                                  DDA #980219416
                                                 Attn: Escrow Unit
                                 Ref.: SEI Acct # 2600119700 ITW/US Plastic Lumber

$300,000.00                                              Citibank, N.A.
                                                        ABA # 021-000-089
                                           A/C Credit Suisse First Boston Corp., N.Y.
                                                         A/C # 4080-4003
                                                      FFC Halifax Fund, LP
                                                         Account # 70025
                                           Attn: Equity Finance/Prime Broker Services

$55,555.86                                             Via Cashiers Check
                                                       Thomas "Mac" Olson,
                                                   Marion County Tax Collector
                                                          P.O. Box 970
                                                      Ocala, FL 34478-0970
                             (Please send Remittance Copy with Check and forward a copy to USPL for
                                                          our records)
</TABLE>


                                       8
<PAGE>
<TABLE>
<S>                          <C>
$17,175.21                                             Via Cashiers Check
                                                       Thomas "Mac" Olson,
                                                   Marion County Tax Collector
                                                          P.O. Box 970
                                                      Ocala, FL 34478-0970
                             (Please send Remittance Copy with Check and forward a copy to USPL for
                                                          our records)
</TABLE>



                                      9