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                                                                  EXHIBIT 10.66



                     SECOND FORBEARANCE EXTENSION AGREEMENT

                  SECOND FORBEARANCE EXTENSION AGREEMENT, dated as of September
30, 2000 (this "Forbearance Extension"), among

                  (i)      DENALI INCORPORATED (the "Borrower");

                  (ii)     each of the guarantors which are signatories hereto
         (each a "Guarantor", collectively, the "Guarantors");

                  (iii)    CANADIAN IMPERIAL BANK OF COMMERCE (in its capacity
         as administrative agent for the Lenders referenced below, the
         "Administrative Agent");

                  (iv)     ING (U.S.) CAPITAL LLC (in its capacity as
         documentation agent for the Lenders referenced below, the
         "Documentation Agent"); and

                  (v)      the lenders party to the Credit Agreement
         referenced below (the "Lenders"),


in respect of the Credit Agreement referenced below.


                                  WITNESSETH:

                  WHEREAS, the Borrower, the Lenders, the Administrative Agent
and the Documentation Agent have entered into that certain Credit Agreement,
dated as of January 12, 1999 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement");

                  WHEREAS, the Guarantors are party to that certain Guarantee,
dated as of January 12, 1999 (as amended, supplemented or otherwise modified
from time to time, the "Guarantee"), in favor of the Administrative Agent for
the benefit of the Lenders;

                  WHEREAS, the Borrower, the Guarantors, the Lenders, the
Administrative Agent and the Documentation Agent have entered into that certain
Forbearance Agreement, dated as of June 30, 2000 (the "Forbearance Agreement"),
as extended by that certain Forbearance Agreement Extension, dated as of July
31, 2000 (the "First Forbearance Extension"); and

                  WHEREAS, in addition to the Specified Events of Default (as
defined in the Forbearance Agreement), (i) an Event of Default (as defined in
the Credit Agreement) shall exist under Section 11(a) of the Credit Agreement
based upon the failure of the Borrower to pay installments of principal due as
of September 30, 2000 and (ii) Events of Default shall exist under Section
11(c) of the Credit Agreement relating to the failure of the Borrower to comply
with the financial covenants contained in Section 10.1 of the Credit Agreement
as of June 30, 2000 and September 30, 2000 (collectively (i) and (ii), the
"Additional Specified Events of Default");

                  WHEREAS, the Borrower and the Guarantors have requested that
the Lenders, the Administrative Agent and the Documentation Agent extend the
Forbearance Termination Date (as defined in the Forbearance Agreement) and to
provide for certain other amendments or modifications to the Credit Agreement
and the Forbearance Agreement.

                  NOW, THEREFORE, in consideration of the premises, the mutual
covenants contained herein and for other valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Borrower, the Guarantors,
the Administrative Agent, the Documentation Agent and the Lenders hereby agree
as follows:


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                  1.       Definitions. Capitalized terms used and not otherwise
defined herein shall have the meanings ascribed thereto in the Credit
Agreement, the Forbearance Agreement or the First Forbearance Extension.

                  2.       Forbearance Extension; Additional Forbearance;
Deferral of Principal; Other Modifications.

                           (a) The Forbearance Termination Date is hereby
         amended to be the earliest to occur of (i) October 31, 2000, (ii) the
         closing of the Blair Transaction and (iii) the occurrence of a
         Forbearance Event of Default.

                           (b) In addition to the forbearance set forth in
         Section 3(a) of the Forbearance Agreement, subject to the terms and
         conditions set forth herein, none of the Administrative Agent, the
         Documentation Agent or any Lender shall exercise any of the remedies
         set forth in the Credit Agreement or in any of the other Loan
         Documents in respect of the Additional Specified Events of Default
         during the Forbearance Period.

                           (c) In addition to the deferral of payments set
         forth in Section 3(b) of the Forbearance Agreement, subject to the
         terms and conditions set forth herein, the unpaid principal
         installments of the Term Loans and the Acquisition Loans which were
         due on September 30, 2000 shall be deferred until, and shall be due
         on, the Forbearance Termination Date.

                           (d) Section 3(a) of the First Forbearance Extension
         is hereby superceded by the following. Subject to the terms and
         conditions set forth herein, interest shall accrue on all unpaid
         Obligations during the Forbearance Period at an interest rate equal to
         the highest non-default interest rate for the related Type of Loan set
         forth in Section 6.1 of the Credit Agreement and shall be paid in
         accordance with the Credit Agreement. Additional interest shall accrue
         at a rate equal to the difference between the applicable default rate
         for each Loan provided in the Credit Agreement and applicable interest
         rate set forth in the preceding sentence, which additional interest
         shall be due and payable on the Forbearance Termination Date. During
         the Forbearance Period, no Eurodollar Loan shall be made or continued
         with an Interest Period that ends later than October 31, 2000.

                           (e) Section 3(d) of the First Forbearance Extension
         is hereby superceded by the following. Subject to the terms and
         conditions set forth herein, the Lenders shall defer their rights to
         exercise any warrants held by the Lenders relating to the Borrower
         that are exercisable on July 31, 2000, on August 31, 2000 and on
         September 30, 2000 until the Forbearance Termination Date. If the
         Blair Transaction is consummated on or prior to October 31, 2000, the
         Lenders shall surrender such warrants to the Borrower for
         cancellation.

                           (f) Section 3(f) of the First Forbearance Extension
         is hereby superceded by the following. The Borrower shall deliver
         notice to the Administrative Agent if it becomes reasonably likely
         that the Blair Transaction will not close on or prior to November 30,
         2000 and shall describe the circumstances relating to the Blair
         Transaction at that time. The Borrower shall promptly give notice to
         the Administrative Agent of all material developments relating to the
         Blair Transaction.

                  3.       Termination. The forbearance and deferral of
principal payments set forth in Section 3 of the Forbearance Agreement, as
modified by Section 2 of the First Forbearance Extension and Section 2 of this
Forbearance Extension shall terminate on the Forbearance Termination Date. Upon
such termination, the Administrative Agent, the Documentation Agent and the
Lenders shall be entitled to exercise all rights and remedies granted to them
pursuant to the Credit Agreement and the other Loan Documents or under
applicable law.

                  4.       Representations and Warranties. In order to induce
the Administrative Agent, the Documentation Agent and the Lenders to enter into
this Forbearance Extension, the Borrower and each Guarantor hereby represents
and warrants to the Administrative Agent, the Documentation Agent and to each
Lender that:



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                           (a) Other than as set forth in Section 4(b), each of
         the representations and warranties made by the Borrower and each of
         the Guarantors in each Loan Document to which it is a party is true
         and correct in all material respects as of the date hereof.

                           (b) Other than the Specified Events of Default and
         the Additional Specified Events of Default, no Default or Event of
         Default has occurred and is continuing as of the date hereof.

                  5.       Conditions Precedent to Effectiveness of Forbearance
Extension. This Forbearance Extension shall not become effective unless and
until:

                           (a) the Administrative Agent has received this
         Forbearance Extension, executed and delivered by a duly authorized
         officer of the Borrower, each Guarantor, the Required Lenders, the
         Administrative Agent and the Documentation Agent;

                           (b) the Administrative Agent shall have received for
         the account of each Lender payment of all accrued interest, including
         any accrued default interest, through September 30, 2000;

                           (c) payments due to the holders of the Permanent
         Subordinated Debt as of the date hereof shall have been deferred
         pursuant to a waiver agreement, dated as of the date hereof, among the
         Borrower and the holders of the Permanent Subordinated Debt and such
         waiver agreement shall have been duly executed by the Borrower and
         each such noteholder and shall be in form and substance satisfactory
         to the Administrative Agent; and

                           (d) the Administrative Agent has received such other
         documents and information as the Administrative Agent may reasonably
         require, which documents and information shall be satisfactory to the
         Administrative Agent in its sole discretion.

                  6.       Forbearance Events of Default. The Forbearance Period
shall immediately terminate and the forbearance and deferral of principal
payments set forth in Section 3 of the Forbearance Agreement, as modified by
Section 2 of the First Forbearance Extension and Section 2 of this Forbearance
Extension shall be of no further force and effect upon the occurrence of any of
the following (each, a "Forbearance Event of Default"):

                           (a) the occurrence of one or more Defaults or Events
         of Default under the Credit Agreement (other than a Specified Event of
         Default or an Additional Specified Event of Default); or

                           (b) any representation or warranty made or deemed
         made by the Borrower or any Guarantor herein, in the Forbearance
         Agreement, the First Forbearance Extension or this Forbearance
         Extension or which is contained in any certificate, document or
         financial or other statement created and/or delivered at any time
         under or in connection with the Forbearance Agreement, the First
         Forbearance Extension or this Forbearance Extension or on or
         subsequent to the date hereof under or in connection with any other
         Loan Document shall prove to have been incorrect in any material
         respect on or as of the date made or deemed made; or

                           (c) the Borrower or any Subsidiary shall default in
         the observance or performance of any agreement contained herein or in
         the Forbearance Agreement, the First Forbearance Extension or this
         Forbearance Extension (after giving effect to the provisions hereof);
         or

                           (d) the Borrower shall make, or permit to be made by
         any Guarantor, any payment to any Person in respect of the Permanent
         Subordinated Debt so long as an Event of Default shall continue to
         exist under the Credit Agreement and such payment shall be waived by
         the holders of the Permanent Subordinated Debt or a payment blockage
         notice shall remain in effect, in each case without the prior written
         consent of the Administrative Agent, the Documentation Agent and the
         Lenders; or

                           (e) the Administrative Agent shall determine in good
         faith that the Blair Transaction will not close on or prior to
         November 30, 2000.


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                  7.       Absence of Waiver. The parties hereto agree that the
agreements set forth herein shall not be deemed to:

                           (a) be a consent to cure, or waiver of, any Default
         or Event of Default;

                           (b) except as expressly set forth herein, modify or
         limit any other term or condition of the Credit Agreement, the
         Forbearance Agreement, the First Forbearance Extension or any other
         Loan Document;

                           (c) impose upon any Lender, the Administrative Agent
         or the Documentation Agent any commitment or obligation, express or
         implied, to consent to any amendment or further modification of the
         Credit Agreement, the Forbearance Agreement, the First Forbearance
         Extension or other Loan Documents;

                           (d) impose upon any Lender, the Administrative Agent
         or any Documentation Agent any commitment or obligation, express or
         implied, to grant or extend any financial accommodations to the
         Borrower or the Guarantors (other than as expressly set forth herein)
         or to modify or extend the Forbearance Agreement, the First
         Forbearance Extension or this Forbearance Extension; or

                           (e) prejudice any right or remedy that the
         Administrative Agent, the Documentation Agent or the Lenders may now
         have or may in the future have under the Credit Agreement or under or
         in connection with the other Loan Documents or any instrument or
         agreement referred to therein including, without limitation, any right
         or remedy resulting from any Default or Event of Default.

                  8.       Release of Claims and Waiver. Each of the Borrower
and each Guarantor hereby releases, remises, acquits and forever discharges each
Lender, the Administrative Agent and the Documentation Agent and each of their
employees, agents, representative, consultants, attorneys, officers, directors,
partners, fiduciaries, predecessors, successors and assigns, subsidiary
corporations, parent corporations and related corporate divisions (collectively,
the "Released Parties"), from any and all actions, causes of action, judgments,
executions, suits, debts, claims, demands, liabilities, obligations, damages and
expenses of any and every character, known or unknown, direct or indirect, at
law or in equity, of whatever nature or kind, whether heretofore or hereafter
arising, for or because of any matter or things done, omitted or suffered to be
done by any of the Released Parties prior to and including the date of execution
hereof, and in any way directly or indirectly arising out of any or in any way
connected to this Agreement or the Loan Documents (collectively, the "Released
Matters"). Each of the Borrower and each Guarantor hereby acknowledges that the
agreements in this Section 8 are intended to be in full satisfaction of all or
any alleged injuries or damages arising in connection with the Released Matters.
Each of the Borrower and each Guarantor hereby represents and warrants to the
Administrative Agent, the Documentation Agent and each Lender that it has not
purported to transfer, assign or otherwise convey any right, title or interest
of the Borrower or any Guarantor in any Released Matter to any other Person and
that the foregoing constitutes a full and complete release of all Released
Matters.

                  9.       Miscellaneous.

                           (a) Section headings used in this Forbearance
         Extension are for convenience of reference only and shall not affect
         the construction of this Forbearance Extension.

                           (b) This Forbearance Extension may be executed by
         one or more of the parties hereto by facsimile or in any number of
         separate counterparts and all of said counterparts taken together
         shall be deemed to constitute one and the same instrument.

                           (c) This Forbearance Extension and the rights and
         obligations of the parties under this Forbearance Extension shall be
         governed by, and construed and interpreted in accordance with, the law
         of the State of New York.


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                           (d) This Forbearance Extension shall be deemed a
         "Loan Document" for purposes of the Credit Agreement and the other
         Loan Documents.

                           (e) This Forbearance Extension constitutes the
         entire agreement among the parties with respect to the subject matter
         hereof and supersedes all prior and contemporaneous oral or written
         agreements with respect to the subject matter hereof.

                           (f) Time is of the essence in this Forbearance
         Extension.

                           (g) No amendment or modification of this Forbearance
         Extension shall be effective unless made in writing and signed by all
         parties. Each of the Borrower and each of the Guarantors acknowledges
         and agrees that any and all future discussions with any Lender, the
         Administrative Agent or the Documentation Agent shall be without
         prejudice to any Lender, the Administrative Agent or the Documentation
         Agent and shall not be deemed to modify, waive, or amend any term or
         provision of this Forbearance Extension or the Loan Documents.

                  IN WITNESS WHEREOF, the parties hereto have caused this
Forbearance Extension to be duly executed and delivered as of the day and year
first above written.

                               DENALI INCORPORATED,
                               as Borrower


                               By /s/ RICHARD W. VOLK
                                  ----------------------------------------------
                                  Name:  Richard W. Volk
                                  Title:  President, CEO & Chairman of the Board




                               CANADIAN IMPERIAL BANK OF COMMERCE,
                               as Administrative Agent

                               By: /s/ GERALD GIRARDI
                                   ---------------------------------------------
                                   Name:  GERALD GIRARDI
                                   Title:  EXECUTIVE DIRECTOR




                               ING (U.S.) CAPITAL LLC,
                               as Documentation Agent and as a Lender

                               By  /s/ ROBERT L. FELLOWS
                                   ---------------------------------------------
                                   Name: ROBERT L. FELLOWS
                                   Title:  DIRECTOR




                               CIBC INC.,
                               as a Lender

                               By /s/ GERALD GIRARDI
                                  ----------------------------------------------
                                  Name:  GERALD GIRARDI
                                  Title:  EXECUTIVE DIRECTOR

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                                       6


                                          KEY CORPORATE CAPITAL INC.,
                                          as a Lender

                                          By /s/ MICHAEL D. CARROLL
                                             -----------------------------------
                                             Name:  MICHAEL D. CARROLL
                                             Title:  VICE PRESIDENT




                                          BANK OF OKLAHOMA N.A.,
                                          as a Lender

                                          By /s/ PAMELA J. BEEN
                                             -----------------------------------
                                             Name:  PAMELA J. BEEN
                                             Title:  ASSISTANT VICE PRESIDENT




                                          SOUTHWEST BANK OF TEXAS, N.A.,
                                          as a Lender

                                          By /s/ CY CLARK
                                             -----------------------------------
                                             Name: CY CLARK
                                             Title:  SENIOR VICE PRESIDENT





                                          THE GUARANTORS:



                                          CONTAINMENT SOLUTIONS, INC.

                                          By /s/ JANICE C. MCCORMICK
                                             -----------------------------------
                                             Name:  JANICE C. MCCORMICK
                                             Title:  ASSISTANT SECRETARY




                                          CONTAINMENT SOLUTIONS SERVICES, INC.

                                          By /s/ JANICE C. MCCORMICK
                                             -----------------------------------
                                             Name:  JANICE C. MCCORMICK
                                             Title:  ASSISTANT SECRETARY




                                          INSTRUMENTATION SOLUTIONS, INC.

                                          By /s/ JANICE C. MCCORMICK
                                             -----------------------------------
                                             Name:  JANICE C. MCCORMICK
                                             Title:  ASSISTANT SECRETARY
                                             Title:

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                                       7


                                     DENALI MANAGEMENT, INC.

                                     By /s/ JANICE C. MCCORMICK
                                        -----------------------------
                                        Name:  JANICE C. MCCORMICK
                                        Title:  ASSISTANT SECRETARY




                                     SPECIALTY SOLUTIONS, INC.

                                     By /s/ JANICE C. MCCORMICK
                                        -----------------------------
                                        Name:  JANICE C. MCCORMICK
                                        Title:  ASSISTANT SECRETARY




                                     BELCO MANUFACTURING COMPANY, INC.

                                     By /s/ JANICE C. MCCORMICK
                                        -----------------------------
                                        Name:  JANICE C. MCCORMICK
                                        Title:  ASSISTANT SECRETARY




                                     ERSHIGS, INC.

                                     By /s/ JANICE C. MCCORMICK
                                        -----------------------------
                                        Name:  JANICE C. MCCORMICK
                                        Title:  ASSISTANT SECRETARY




                                     SEFCO, INC.

                                     By /s/ JANICE C. MCCORMICK
                                        -----------------------------
                                        Name:  JANICE C. MCCORMICK
                                        Title:  ASSISTANT SECRETARY




                                     FIBERCAST COMPANY

                                     By /s/ JANICE C. MCCORMICK
                                        -----------------------------
                                        Name:  JANICE C. MCCORMICK
                                        Title:  ASSISTANT SECRETARY




                                     PLASTI-FAB, INC.

                                     By /s/ JANICE C. MCCORMICK
                                        -----------------------------
                                        Name:  JANICE C. MCCORMICK
                                        Title:  ASSISTANT SECRETARY


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                                       8



                                           DENALI HOLDINGS MANAGEMENT L.L.C.

                                           By /s/ JANICE C. MCCORMICK
                                              -----------------------------
                                              Name:  JANICE C. MCCORMICK
                                              Title:  ASSISTANT SECRETARY

                                           DENALI OPERATING MANAGEMENT, LTD

                                           By /s/ JANICE C. MCCORMICK
                                              -----------------------------
                                              Name:  JANICE C. MCCORMICK
                                              Title:  ASSISTANT SECRETARY