<PAGE>   1
                                 THIRD AMENDMENT


         THIS THIRD AMENDMENT (this "AMENDMENT") dated as of July 13, 2001 is
entered into among U.S. PLASTIC LUMBER CORP., a Nevada corporation (the
"COMPANY"), the financial institutions listed on the signature pages hereof
(collectively, the "BANKS") and Bank of America, N.A., as administrative agent
(in such capacity, the "ADMINISTRATIVE AGENT").


                              W I T N E S S E T H:
                              - - - - - - - - - -


         WHEREAS, the Company, the Banks and the Administrative Agent are
parties to a Credit Agreement dated as of June 30, 2000 (as previously amended,
the "EXISTING CREDIT AGREEMENT" and, as amended and modified by this Amendment,
the "AMENDED CREDIT AGREEMENT"); and

         WHEREAS, the parties hereto desire to amend the Existing Credit
Agreement in certain respects as hereinafter set forth;

         NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:

         SECTION 1 DEFINED TERMS. Terms defined in the Existing Credit Agreement
and not otherwise defined herein are used herein as therein defined.

         SECTION 2 AMENDMENTS TO EXISTING CREDIT AGREEMENT. Effective on the
Amendment Effective Date (as defined below), the Existing Credit Agreement is
amended as set forth in this SECTION 2.

         2.1 AMENDMENT OF DEFINITION OF BORROWING BASE. The last sentence of the
definition of "Borrowing Base" is amended in its entirety to read as follows:

                  "For purposes of the foregoing, the AR Cap Percentage means
                  100% prior to September 30, 2001, and 50% thereafter."

         2.2 ADDITIONAL MANDATORY PREPAYMENT. The following Section 6.4 is added
to the Credit Agreement in appropriate alphabetical sequence:

                  "6.4 MANDATORY PREPAYMENT FROM QUAKERTOWN PROCEEDS. (a) In
                  addition to the prepayments required by the other provisions



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<PAGE>   2


                  of this SECTION 6, concurrently with the receipt by the
                  Company or any Subsidiary of any Quakertown Proceeds, the
                  Company shall prepay Loans in an amount (rounded down, if
                  necessary, to an integral multiple of $100,000) equal to a
                  to-be-agreed-upon percentage of the excess of all Quakertown
                  Proceeds received by the Company since July 10, 2001 over all
                  Quakertown Proceeds previously applied to prepay Loans
                  pursuant to this SECTION 6.4. For purposes of the foregoing,
                  "Quakertown Proceeds" means the cash proceeds of any claim
                  against the Pennsylvania Department of Environmental
                  Protection in connection with the Quakertown Foundry Waste
                  Remediation project in Quakerstown, Pennsylvania, net of the
                  costs (including reasonable attorneys' fees) of collecting
                  such claims. The Company and the Banks agree that they will
                  negotiate in good faith to determine the to-be-agreed- upon
                  percentage referred to above (and, in the absence of agreement
                  after such negotiations, such percentage shall be determined
                  by the Required Banks acting reasonably and in good faith).

                  (b) All prepayments pursuant to this SECTION 6.4 shall be
                  applied to the remaining installments of the Term Loans in the
                  inverse order of the maturity of such installments."

         2.3 ADDITION OF COVENANTS. The following Sections 10.24 and 10.25 are
added to the Credit Agreement in proper numerical sequence:

                  "10.24 CONTINUED RETENTION OF FINANCIAL ADVISOR. Continue to
                  retain Conway MacKenzie & Dunleavy, or another firm reasonably
                  satisfactory to the Required Banks, as a financial advisor to
                  the Company and its Subsidiaries with responsibilities
                  reasonably satisfactory to the Required Banks.

                  10.25 PAYMENT OF FEES. Not later than each of the first and
                  second monthly anniversaries of the effective date of the
                  Third Amendment to this Agreement, pay 1/3 of the legal fees
                  and charges of counsel to the Administrative Agent which were
                  outstanding as of such effective date (so that all such fees
                  and charges are paid no later the two months after such
                  effective date); and not later than 45 days after the receipt
                  of an invoice therefor, pay all other legal fees and charges
                  of counsel to the Administrative Agent."

         SECTION 3 REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to the Banks and the Administrative Agent that:


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         3.1 AUTHORIZATION; NO CONFLICT. The execution and delivery by the
Company of this Amendment and the performance by the Company of its obligations
under the Amended Credit Agreement are duly authorized by all necessary
corporate action, do not require any filing or registration with or approval or
consent of any governmental agency or authority, do not and will not conflict
with, result in any violation of, or constitute any default under any provision
of the certificate of incorporation or by-laws of the Company or any of its
Subsidiaries or any material agreement or other document binding upon or
applicable to the Company or any of its Subsidiaries (or any of their respective
properties) or any material law or governmental regulation or court decree or
order applicable to the Company or any of its Subsidiaries, and will not result
in or require the creation or imposition of any Lien in any of the properties of
the Company or any of its Subsidiaries pursuant to the provisions of any
agreement binding upon or applicable to the Company or any of its Subsidiaries.

         3.2 DUE EXECUTION; ENFORCEABILITY. This Amendment has been duly
executed and delivered by the Company and, together with the Amended Credit
Agreement, is a legal, valid and binding obligation of the Company, enforceable
in accordance with its terms subject, as to enforcement only, to bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforceability of the rights of creditors generally and to general principles of
equity (regardless of whether enforcement is sought in equity or at law).

         3.3 REAFFIRMATION OF WARRANTIES. The warranties contained in Section 9
of the Existing Credit Agreement are true and correct on the date of this
Amendment, except to the extent that such warranties (a) solely relate to an
earlier date or (b) are changed by circumstances or events that do not
constitute a breach of the covenants set forth in Section 10 of the Amended
Credit Agreement.

         SECTION 4 CONDITIONS PRECEDENT. This Amendment shall become effective
as of the date hereof upon satisfaction of all of the following conditions (such
date is herein called the "AMENDMENT EFFECTIVE DATE"):

         4.1 RECEIPT OF COUNTERPARTS. The Administrative Agent shall have
received counterpart originals of this Amendment, duly executed by the Company,
the Required Banks and the Administrative Agent. For purposes hereof, a
facsimile executed copy shall be treated as an original.

         4.2 PAYMENT OF LEGAL FEES. The Company shall have paid 1/3 of the
outstanding amount of all fees and charges of counsel to the Administrative
Agent.

         4.3 EXECUTION OF LETTER AGREEMENT. The Administrative Agent shall have
received counterpart originals of an amendment to the letter agreement referred
to in Section 12.1.13 of the Existing Credit Agreement.



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         4.4 OTHER CONDITIONS. The following further conditions precedent shall
have been satisfied:

                  (a) NO DEFAULT. No Event of Default or Unmeasured Event of
         Default shall have occurred and be continuing.

                  (b) CERTIFICATE. The Administrative Agent shall have received
         a certificate, dated such date as shall be acceptable to the
         Administrative Agent and signed by the president or a vice president of
         the Company, substantially in the form of ATTACHMENT A to this
         Amendment, as to the matters set forth in SECTIONS 4.3 and 4.2(A).

         SECTION 5 MISCELLANEOUS.

         5.1 EXPENSES. The Company agrees to pay on demand all reasonable costs
and expenses of the Administrative Agent (including fees, charges and expenses
of counsel for the Administrative Agent) in connection with the preparation,
negotiation, execution, delivery and administration of this Amendment and all
other instruments or documents provided for herein or delivered or to be
delivered hereunder or in connection herewith. All obligations provided in this
SECTION 5.2 shall survive any termination of this Amendment and the Amended
Credit Agreement.

         5.2 CAPTIONS. Section captions used in this Amendment are for
convenience only and shall not affect the construction of this Amendment.

         5.3 GOVERNING LAW. THIS AMENDMENT SHALL BE A CONTRACT MADE UNDER AND
GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES. Wherever possible each provision of this Amendment shall be
interpreted in such manner as to be effective and valid under applicable laws,
but if any provision of this Amendment shall be prohibited by or invalid under
such laws, such provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Amendment.

         5.4 COUNTERPARTS. This Amendment may be executed in any number of
counterparts, and by the parties hereto on the same or separate counterparts,
and each such counterpart, when executed and delivered (including by facsimile),
shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same Amendment.

         5.5 REFERENCES TO CREDIT AGREEMENT. Except as herein amended, the
Existing Credit Agreement shall remain in full force and effect and is hereby
ratified in all respects. On and after the effectiveness of the amendment to the
Existing Credit Agreement accomplished hereby, each reference in the Amended
Credit Agreement to "this Agreement," "hereunder," "hereof," "herein" or words
of like import, and each reference to the Existing Credit Agreement in any



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<PAGE>   5



Note and in any other agreement, document or other instrument executed and
delivered pursuant to the Amended Credit Agreement, shall mean and be a
reference to the Amended Credit Agreement.

         5.6 SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon the
parties hereto and their respective successors and assigns, and shall inure to
the sole benefit of the parties hereto and the successors and assigns of the
Administrative Agent and the Banks. Notwithstanding the foregoing, the Company
shall not assign its rights or duties hereunder without the consent of the
Administrative Agent and the Banks.

         5.7 SALE OF CLEAN EARTH OF NORTH JERSEY. Notwithstanding the existing
provisions of the Credit Agreement with respect to the application of Net Cash
Proceeds from Asset Sales, if any Asset Sale includes all or substantially all
of the stock or assets of Clean Earth of North Jersey, Inc., the Required Banks
agree that they will negotiate in good faith with the Company to determine the
percentage of the Net Cash Proceeds of the sale of such stock or assets which
are to be applied to prepay the Loans, whether any such prepayment shall be
applied to pay Revolving Loans or Term Loans, whether any such prepayment of
Revolving Loans shall result in a corresponding reduction in the Revolving
Commitment Amount, and the manner in which any such prepayment of Term Loans
shall be applied to the remaining installments of principal of the Term
Loans.(and, in the absence of agreement after such negotiations, such matters
shall be determined by the Required Banks acting reasonably and in good faith).

         Delivered at Chicago, Illinois, as of the day and year first above
written.

                         U.S. PLASTIC LUMBER CORP.


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


                         BANK OF AMERICA, N.A., as Administrative
                         Agent

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




                                       S-1

<PAGE>   6



BANKS                         BANK OF AMERICA, N.A., as Issuing Bank and
-----                         Swing Line Bank

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


                              LASALLE BANK NATIONAL ASSOCIATION, as
                              a Bank

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


                              UNION PLANTERS BANK, as a Bank


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


                                       S-2

<PAGE>   7


                                    EXHIBIT A

                            U.S. PLASTIC LUMBER CORP.

                         [Vice] President's Certificate

TO:      The Administrative Agent and the Banks which are parties to the Third
         Amendment (the "Amendment") to the Credit Agreement with U.S. Plastic
         Lumber Corp.


         The undersigned, ___________________________________ , [Vice] President
of U.S. Plastic Lumber Corp. (the "COMPANY"), hereby certifies on behalf of the
Company that:

         (a) The representations and warranties of the Company contained in the
Amendment and the Credit Agreement are as true and correct at and as of the date
hereof as though made on and as of the date hereof except to the extent that
such warranties solely relate to an earlier date or are changed by circumstances
or events that do not constitute a breach of the covenants set forth in Section
10 of the Amended Credit Agreement.

         (b) As of the date hereof, no Event of Default or Unmatured Event of
Default exists.

         Capitalized terms used but not defined herein have the respective
meanings given thereto in the Amendment.

         IN WITNESS WHEREOF, I have executed this certificate as of the day of
July, 2001.

                              U.S. PLASTIC LUMBER CORP.


                              By:
                                 ----------------------------------------------
                              Name Printed:
                                           ------------------------------------
                                                        [Vice] President


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