<PAGE>

                                                                  Exhibit 10.23



                   SEVENTH AMENDMENT AND FORBEARANCE AGREEMENT

         SEVENTH AMENDMENT AND FORBEARANCE AGREEMENT referred to below
("Agreement"), dated as of September 28, 2001, by and between POLYCHEM
CORPORATION, a Pennsylvania corporation ("Borrower"), and GENERAL ELECTRIC
CAPITAL CORPORATION, a Delaware corporation, successor by merger to General
Electric Capital Corporation, a New York corporation ("Lender").

                              W I T N E S S E T H:

         WHEREAS, Lender and Borrower have entered into certain financing
arrangements pursuant to the Loan and Security Agreement dated September 30,
1998 by and between Lender and Borrower (and as amended hereby, and as the same
may have heretofore been or may hereafter be further amended, modified,
supplemented, extended, renewed, restated or replaced, the "Loan Agreement", and
together with all agreements, documents and instruments at any time executed
and/or delivered in connection therewith or related thereto, collectively, the
"Financing Agreements"); and

         WHEREAS, as of the date hereof, Borrower is in default under the
Financing Agreements as more particularly described below; and

         WHEREAS, the circumstances described herein constitute Events of
Default under the Loan Agreement and the other Financing Agreements; and

         WHEREAS, Borrower has requested that Lender forbear from exercising its
rights as a result of such Events of Default, certain of which are continuing,
and that Lender provide further Revolving Credit Loans and other financial
accommodations to Borrower notwithstanding such Events of Default; and

         WHEREAS, Borrower has requested that Lender agree to extend the term of
the Loan Agreement and the other Financing Agreements; and

         WHEREAS, Lender is willing to agree to temporarily forbear from
exercising certain of its rights and remedies, extend the term of the Loan
Agreement and the other Financing Agreements and provide certain further
Revolving Credit Loans and other financial accommodations to Borrower for the
period and on the terms and conditions specified herein;

         NOW, THEREFORE, in consideration of the foregoing, and the respective
agreements, warranties and covenants contained herein, the parties hereto agree,
covenant and warrant as follows:



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SECTION 1. DEFINITIONS.

         1.1 Interpretation. All capitalized terms used herein (including the
recitals hereto) shall have the respective meanings assigned thereto in the Loan
Agreement unless otherwise defined herein.

         1.2 Additional Definition. As used herein, the following term shall
have the meaning given to it below and the Loan Agreement is hereby amended to
include, in addition and not in limitation, the following definition:

                  "Existing Defaults" shall mean the following Events of
Default: (i) Borrower's failure to meet the required Fixed Charge Coverage Ratio
for each of the Fiscal Quarters ended March 31, 2001 and June 30, 2001, and (ii)
Borrower's failure to meet the required Minimum Tangible Net Worth Covenant for
each of the Fiscal Quarters ended March 31, 2001 and June 30, 2001.

SECTION 2. ACKNOWLEDGMENT

         2.1 Acknowledgment of Obligations. Borrower hereby acknowledges,
confirms and agrees that as of the close of business on September 28, 2001,
Borrower is indebted to Lender in respect of the Loans in the principal amount
of $2,634,073.54. All such Loans, together with interest accrued and accruing
thereon, and fees, costs, expenses and other charges now or hereafter payable by
Borrower to Lender, are unconditionally owing by Borrower to Lender, without
offset, defense or counterclaim of any kind, nature or description whatsoever.

         2.2 Acknowledgment of Security Interests. Borrower hereby acknowledges,
confirms and agrees that Lender has and shall continue to have valid,
enforceable and perfected liens upon and security interests in the Collateral
heretofore granted to Lender pursuant to the Financing Agreements or otherwise
granted to or held by Lender.

         2.3 Binding Effect of Documents. The Borrower hereby acknowledges,
confirms and agrees that: (a) each of the Financing Agreements to which it is a
party has been duly executed and delivered to Lender by Borrower, and each is in
full force and effect as of the date hereof, (b) the agreements and obligations
of Borrower contained in such documents and in this Agreement constitute the
legal, valid and binding Obligations of Borrower, enforceable against it in
accordance with their respective terms, and Borrower has no valid defense to the
enforcement of such Obligations, and (c) Lender is and shall be entitled to the
rights, remedies and benefits provided for in the Financing Agreements and
applicable law.


                                       2
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SECTION 3. FORBEARANCE IN RESPECT OF CERTAIN EVENTS OF DEFAULT


         3.1 Acknowledgment of Default. Borrower hereby acknowledges and agrees
         that the Existing Defaults have occurred and are continuing, each of
         which constitutes an Event of Default and entitles Lender to exercise
         its rights and remedies under the Financing Agreements, applicable law
         or otherwise and Borrower further represents and warrants that as of
         the date hereof no other Events of Default under the Financing
         Agreements exist. Lender has not waived, presently does not intend to
         waive and may never waive such Existing Defaults and nothing contained
         herein or the transactions contemplated hereby shall be deemed to
         constitute any such waiver. Borrower hereby acknowledges and agrees
         that Lender has the presently exercisable right to declare the
         Obligations to be immediately due and payable under the terms of the
         Financing Agreements before the effectiveness of the forbearance
         contained in Section 3.2, such right and all other rights and remedies
         against the Borrower, the Collateral and/or the Guarantors available to
         Lender under the Financing Agreements and under applicable law without
         notice to the Borrower or Guarantor.

         3.2      Forbearance.

                  (a) In reliance upon the representations, warranties and
                  covenants of Borrower and Guarantor contained in this
                  Agreement, and subject to the terms and conditions of this
                  Agreement and any documents or instruments executed in
                  connection herewith, Lender agrees to forbear from exercising
                  its rights and remedies under the Financing Agreements or
                  applicable law in respect of or arising out of the Existing
                  Defaults, subject to the conditions, amendments and
                  modifications contained herein for the period (the
                  "Forbearance Period") commencing on the date hereof and ending
                  on the earlier of: (i) January 31, 2002 or (ii) the occurrence
                  or existence of any Event of Default, other than the Existing
                  Defaults.

                  (b) Upon the termination of the Forbearance Period, the
                  agreement of Lender to forbear shall automatically and without
                  further action terminate and be of no force and effect, it
                  being expressly agreed that the effect of such termination
                  will be to permit Lender to exercise such rights and remedies
                  immediately, including, but not limited to, (i) ceasing to
                  make any further Loans, (ii) the acceleration of all of the
                  Obligations; and (iii) enforce any or all of its rights
                  against the Collateral, Borrower or Guarantors; in each case
                  without any further notice, passage of time or forbearance of
                  any kind.



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         3.3      No Waivers; Reservation of Rights.

                  (a) Lender has not waived, is not by this Agreement waiving,
                  and has no intention of waiving, any Events of Default which
                  may be continuing on the date hereof or any Events of Default
                  which may occur after the date hereof (whether the same or
                  similar to the Existing Defaults or otherwise), and Lender has
                  not agreed to forbear with respect to any of its rights or
                  remedies concerning any Events of Default (other than, during
                  the Forbearance Period, the Existing Defaults to the extent
                  expressly set forth herein), which may have occurred or are
                  continuing as of the date hereof or which may occur after the
                  date hereof.

                  (b) Subject to Section 3.2 above (solely with respect to the
                  Existing Defaults), Lender reserves the right, in its
                  discretion, to exercise any or all of its rights and remedies
                  under the Loan Agreement and the other Financing Agreements as
                  a result of any Events of Default which may be continuing on
                  the date hereof or any Event of Default which may occur after
                  the date hereof, and Lender has not waived any of such rights
                  or remedies, and nothing in this Agreement, and no delay on
                  its part in exercising any such rights or remedies, should be
                  construed as a waiver of any such rights or remedies.


SECTION 4. AMENDMENTS AND SUPPLEMENTARY PROVISIONS

         4.1      Interest. Section 1.5(a) of the Loan Agreement is hereby
                  amended and restated in its entirety as follows:

                  "1.5 Interest. (a) Borrower shall pay interest to Lender on
                  the aggregate outstanding Revolving Credit Advances at a
                  floating rate equal to the Index Rate plus six and
                  three-quarters (6 3/4%) percent per annum (the "Revolving
                  Credit Rate"), and on the aggregate outstanding balance of the
                  Term Loan at a floating rate equal to the Index Rate plus
                  eight and one-half (8 1/2%) percent per annum (the "Term Loan
                  Rate").

         4.2      Representations and Warranties. The first sentence of Section
                  3.2 of the Loan Agreement is hereby deleted in its entirety
                  and the following new sentence is hereby inserted in lieu
                  thereof:



                                       4
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                  "Each Corporate Credit Party's name as it appears in official
                  filing in the state of its incorporation or organization, the
                  type of entity of each Corporate Credit Party, organizational
                  identification number issued by each such Credit Party state
                  of incorporation or organization or a statement that no such
                  number has been issued, each Corporate Credit Party's state of
                  organization or incorporation, the location of each Corporate
                  Credit Party's chief executive office, corporate offices,
                  warehouses, other locations of Collateral and locations where
                  records with respect to Collateral are kept (including in each
                  case the county of such locations) are as set forth in
                  Disclosure Schedule (3.2) and, except as set forth in such
                  Disclosure Schedule, such locations have not changed during
                  the preceding twelve months."

         4.3      Grant of Security Interest.

                  (a) Section 6.1(a) of the Loan Agreement is hereby amended and
                      restated in its entirety to read as follows:

                   "(a) As collateral security for the prompt and complete
                  payment and performance of the Obligations, each of the
                  Borrower and any other Credit Party executing this Agreement
                  hereby grants to the Lender a security interest in and Lien
                  upon all of its property and assets, whether real or personal,
                  tangible or intangible, and whether now owned or hereafter
                  acquired, or in which it now has or at any time in the future
                  may acquire any right, title, or interest, including all of
                  the following property in which it now has or at any time in
                  the future may acquire any right, title or interest: all
                  Accounts; all Deposit Accounts, other bank accounts and all
                  funds on deposit therein; all money, cash and cash
                  equivalents; all Investment Property; all Stock; all Goods
                  (including Inventory, Equipment and Fixtures); all Chattel
                  Paper, Documents and Instruments; all Books and Records; all
                  General Intangibles (including all Intellectual Property,
                  contract rights, choses in action, payment intangibles and
                  Software); all Letter-of-Credit Rights; all Supporting
                  Obligations; and to the extent not otherwise included, all
                  Proceeds, tort claims, insurance claims and other rights to
                  payment not otherwise included in the foregoing and products
                  of all and any of the foregoing and all accessions to,
                  substitutions and replacements for, and rents and profits of,
                  each of the foregoing, but excluding in all events Hazardous
                  Waste (all of the foregoing, together with any other
                  collateral pledged to the Lender pursuant to any other Loan
                  Document, collectively, the "Collateral")."

                  (b) Section 6.1(b) is hereby amended by inserting the
                      following new sentence at the end thereof:

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<PAGE>

                  "Each Credit Party executing this Agreement shall promptly,
                  and in any event within two (2) Business Days after the same
                  is acquired by it, notify Lender of any commercial tort claim
                  (as defined in the Code) acquired by it and unless otherwise
                  consented by Lender, such Credit Party shall enter into a
                  supplement to this Loan Agreement granting to Lender a Lien in
                  such commercial tort claim."

                  4.4 Attorney-in-Fact. The last sentence of Section 6.3 of the
                  Loan Agreement is hereby deleted in its entirety and the
                  following new sentences are hereby inserted in lieu thereof:

                  "Notwithstanding the foregoing, the Borrower and each other
                  Credit Party executing this Agreement also hereby (i)
                  authorizes Lender to file any financing statement,
                  continuation statement or amendment thereto that (x) indicate
                  the Collateral (1) as all assets of such Credit Party or words
                  of similar effect or (2) as being of an equal or lesser scope
                  or with greater detail and (y) contains any other information
                  required by Part 5 of Revised Article 9 of the Code for the
                  sufficiency or filing office acceptance of any financing
                  statement, continuation statement or amendment, in each case,
                  without the signature of Borrower or such Credit Party and
                  (ii) ratifies its authorization for Lender to have filed any
                  initial financial statements, or amendments thereto if filed
                  prior to the date hereof. The Borrower and each other Credit
                  Party executing this Agreement acknowledges that it is not
                  authorized to file any financing statement or amendment or
                  termination statement with respect to any financing statement
                  without the prior written consent of Lender and agrees that it
                  will not do so without the prior written consent of Lender,
                  subject to such Credit Party's rights under Section
                  9-509(d)(2) of the Code."

         4.5      Schedule A - Definitions.

                  (a)      Each definition from Schedule A to the Loan Agreement
                           set forth on Schedule A hereto is hereby amended and
                           restated in its entirety to read as set forth on
                           Schedule A hereto.

                  (b)      The following defined terms are hereby added to
                           Schedule A to the Loan Agreement in appropriate
                           alphabetical order:

                           "Deposit Accounts" means all "deposit accounts" as
                           such term is defined in the Code, now or hereafter
                           held in the name of any Person.

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<PAGE>

                           "Letter-of-Credit Rights" means "letter-of-credit
                           rights" as such term is defined in the Code, now
                           owned or hereafter acquired by any Person, including
                           rights to payment or performance under a letter of
                           credit, whether or not such Person, as beneficiary,
                           has demanded or is entitled to demand payment or
                           performance.

                           "Software" shall mean all "software" as such term is
                           defined in the Code, now owned or hereafter acquired
                           by any Person, other than software embedded in any
                           category of Goods, including all computer programs
                           and all supporting information provided in connection
                           with a transaction related to any program.

                           "Supporting Obligations" means all "supporting
                           obligations" as such term is defined in the Code,
                           including letters of credit and guaranties issued in
                           support of Accounts, Chattel Paper, Documents,
                           General Intangibles, Instruments, or Investment
                           Property.


         4.6      Borrowing Base. Section (b) of the definition of the term
                  "Borrowing Base", as set forth on Schedule A - Definitions to
                  the Loan Agreement, is hereby amended and restated as follows:

                  "(b) the lesser of (i) $750,000 minus the amount of proceeds
                  received by Lender from the sale by Borrower of Borrower's
                  machinery, equipment and inventory outside the ordinary course
                  of business from and after September 28, 2001 and (ii) up to
                  fifty percent (50%)(less reserves established by Lender
                  pursuant to Section 1.13) of the value of Borrower's Eligible
                  Inventory consisting of raw material and finished goods, in
                  each case as determined by Lender, valued on a first-in,
                  first-out basis (at the lower of cost or market), less a
                  reserve equal to $300,000 against availability."


         4.7      Maximum Amount. The definition of the term "Maximum Amount",
                  as set forth on Schedule A - Definitions to the Loan
                  Agreement, is hereby amended and restated as follows:

                  ""Maximum Amount" shall mean $3,000,000, provided that, the
                  Maximum Amount shall be further reduced by the amount of
                  proceeds received by Lender from the sale by Borrower of its
                  machinery, equipment and inventory outside the ordinary course
                  of business from and after September 28, 2001, excluding the
                  amount of such proceeds received by Lender and applied to the
                  outstanding principal balance of the Term Loan."

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         4.8      Stated Maturity Date. The definition of the term "Stated
                  Maturity Date", as set forth on Schedule A - Definitions to
                  the Loan Agreement, is hereby amended and restated as follows:

                  ""Stated Maturity Date" shall mean January 31, 2002."

         4.9      Fixed Charge Coverage Ratio. The first sentence of Section 1
                  of "Fixed Charge Coverage Ratio", as set forth on Schedule G -
                  Financial Covenants to the Loan Agreement, is hereby amended
                  and restated in its entirety as follows:

                  "1. [Intentionally omitted.]"

         4.10     Minimum Tangible Net Worth. Section 3 of Schedule G -
                  Financial Covenants to the Loan Agreement is hereby amended
                  and restated in its entirety as follows:

                  "3. [Intentionally omitted.]"

         4.11     Disclosure Schedule 3.2. Attached hereto is Disclosure
                  Schedule 3.2 reflecting the information required by Section
                  3.2 of the Loan Agreement, as amended hereby.

SECTION 5. Additional Amendments and Supplementary Provisions.

         5.1      Pretax Income. Borrower covenants and agrees that Borrower
                  shall maintain aggregate Net Income, prior to the effect of
                  taxes on income, for each month set forth below in an amount
                  exceeding the amount set forth opposite such month.

                        --------------------------------
                        Month               Amount
                        --------------------------------
                        September 2001      $11,900
                        --------------------------------
                        October 2001        $10,150
                        --------------------------------
                        November 2001       $30,450
                        --------------------------------
                        December 2001       $26,950
                        --------------------------------

         5.2 Additional Reserves. In addition to, and not in limitation of,
Lender's continuing right to establish reserves under the Financing Agreements
and in addition to all reserves established prior to the date of this Agreement
including, without limitation, the reserve in the amount of $25,000 established
on or about September, 2001, and the reserve in the amount of $25,000
established, or to be established, on or about September 28, 2001. Borrower
hereby acknowledges and confirms that from and after October 1, 2001, Borrower
hereby consents to the daily establishment of additional reserves against
Borrower in the amount of $2,500 per day on each Business Day. Such reserves
shall continue in effect until Lender determines otherwise in its sole
discretion.

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<PAGE>

         5.3      Eastwind Settlement.

                  (a)      Attached hereto as Exhibit B is a draft settlement
                           agreement ("the "Eastwind Settlement Agreement") in
                           the matter of John M. Morris, Esq., Chapter 11
                           Trustee for the Eastwind Group, Inc. v. Conmat
                           Technologies, Inc., et al. Case No. 00-33372 (SR)
                           pending in the United States Bankruptcy Court for the
                           Eastern District of Pennsylvania (the "Eastwind
                           Lawsuit"), and Borrower has advised Lender that
                           Borrower expects to enter into a substantially
                           similar agreement, satisfactory to Lender in Lender's
                           sole discretion (the "Eastwind Settlement
                           Agreement"), and any such agreement shall include,
                           without limitation, payment by Borrower in full
                           settlement of the Eastwind Lawsuit of not more than
                           $500,000 prior to January 31, 2002, and not more than
                           $1,500,000 in the aggregate.

                  (b)      By not later than October 12, 2001, Borrower shall
                           deliver to Lender evidence satisfactory to Lender
                           that the Eastwind Settlement Agreement has been
                           submitted to the United States Bankruptcy Court for
                           the Eastern District of Pennsylvania for approval.

                  (c)      By not later than October 31, 2001, Borrower shall
                           deliver to Lender evidence satisfactory to Lender
                           that the Eastwind Settlement Agreement has been
                           approved by the United States Bankruptcy Court for
                           the Eastern District of Pennsylvania.

         5.4      Asset Sales. Borrower represents, covenants and agrees that in
                  connection with the sale by Borrower of substantially all of
                  Borrower's machinery, equipment and inventory (the
                  "Manufacturing Assets") and the sale by Borrower of
                  substantially all of its intellectual property, including
                  patents, customer lists and product technology (the "Sales
                  Assets"):

                  (a)      (i) By not later than October 22, 2001 Borrower shall
                           deliver to Lender a copy of a fully executed letter
                           of intent or similar agreement with a third party
                           purchaser satisfactory to Lender, providing for the
                           sale by Borrower of the Manufacturing Assets on terms
                           and conditions satisfactory to Lender.(ii) By not
                           later than October 22, 2001 Borrower shall deliver to
                           Lender a copy of a fully executed letter of intent or
                           similar agreement with a third party purchaser
                           satisfactory to Lender, providing for the sale by
                           Borrower of the Sales Assets on terms and conditions
                           satisfactory to Lender.

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<PAGE>

                  (b)      (i) By not later than the earlier of (i) November 30,
                           2001, and (ii) thirty days after execution and
                           delivery of the Eastwind Settlement Agreement,
                           Borrower shall deliver to Lender, a copy of a fully
                           executed asset sale agreement with respect to the
                           Manufacturing Assets, with a third party purchaser or
                           purchasers satisfactory to Lender in its sole
                           discretion, on terms and conditions satisfactory to
                           Lender in its sole discretion, including application
                           to the Obligations of any amounts payable at closing
                           in immediately available funds, and a promissory note
                           for the remaining balance, which shall be assigned to
                           Lender as collateral for the Obligations. Borrower
                           shall execute and deliver all documents, instruments
                           and agreements requested by Lender in order to assign
                           all such proceeds to Lender, and to perfect Lender's
                           security interests therein.

                           (ii) By not later than the earlier of (i) November
                           30, 2001, and (ii) thirty days after execution and
                           delivery of the Eastwind Settlement Agreement,
                           Borrower shall deliver to Lender, a copy of a fully
                           executed asset sale agreement with respect to the
                           Sales Assets, with a third party purchaser
                           satisfactory to Lender, providing that the Sales
                           Assets shall remain subject to the first priority
                           Lien of Lender and such other terms and conditions
                           satisfactory to Lender in its sole discretion
                           including, without limitation, a purchase price of
                           not less than $2,900,000, including not less than
                           $500,000 payable at closing of such sale in
                           immediately available funds, for application to the
                           settlement of the Eastwind Lawsuit, Stock of the
                           Sales Asset purchaser valued at not less than
                           $1,250,000 and a promissory note for not less than
                           $1,150,000 of the remaining balance for application
                           to the settlement of the Eastwind Lawsuit.

                  (c)      By not later than October 31, 2001, Borrower shall
                           deliver to Lender a copy of Borrower's proxy
                           statement or other documents filed with the United
                           States Securities and Exchange Commission ("SEC")
                           seeking SEC approval of Borrower's sale of the
                           Manufacturing Assets and Borrower's sale of the Sales
                           Assets.

                  (d)      By not later than December 31, 2001, Borrower shall
                           deliver to Lender evidence satisfactory to Lender of
                           the SEC's approval of Borrower's sale, upon terms and
                           conditions satisfactory to Lender, of the
                           Manufacturing Assets and the Sales Assets.

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<PAGE>

                  (e)      By not later than five (5) days after receipt of each
                           of the SEC approvals described in Section (d) above,
                           Borrower shall deliver to Lender evidence
                           satisfactory to Lender of the submission for approval
                           to the shareholders of Conmat Technologies, Inc. of
                           such planned sales of the Manufacturing Assets and
                           the Sales Assets.

                  (f)      By not later than thirty (30) days after submission
                           of such planned sales to the shareholders of Conmat
                           Technologies, Inc., Borrower shall deliver to Lender
                           evidence satisfactory to Lender of the approval by
                           the shareholders of Conmat Technologies, Inc. of such
                           planned sales of the Manufacturing Assets and the
                           Sales Assets.

                  (g)      By not later than October 31, 2001, Borrower shall
                           deliver to Lender a term sheet or proposal letter
                           from a lender satisfactory to Lender with respect to
                           proposed financing of each of the proposed purchaser
                           of the Manufacturing Assets and the proposed
                           purchaser of the Sales Assets, each containing terms
                           and conditions satisfactory to Lender.

                  (h)      By not later than December 15, 2001, Borrower shall
                           deliver to Lender a fully executed commitment letter
                           from a Lender satisfactory to Lender with respect to
                           proposed financing of each of the proposed purchaser
                           of the Manufacturing Assets and the proposed
                           Purchaser of the Sales Assets, each containing Terms
                           and Conditions satisfactory to Lender.

                  5.5      Additional Reporting. Borrower shall deliver, or
                           cause to be delivered, to Lender, on or before the
                           close of business on the second Business Day of each
                           week, a report of Borrower's raw materials for the
                           immediately prior week, in form and detail
                           satisfactory to Lender. Without limiting any
                           provision of the Financing Agreements, Borrower shall
                           additionally provide to Lender and Lender's auditors
                           and field examiners all information necessary or
                           requested by Lender to analyze and verify Borrower's
                           standard costs and standard cost adjustments.

                                       11
<PAGE>

SECTION 6. REPRESENTATIONS, WARRANTIES AND COVENANTS

         Borrower hereby represents, warrants and covenants with and to Lender
as follows:

         6.1 Representations in Financing Agreements. Each of the
         representations and warranties made by or on behalf of Borrower to
         Lender in any of the Financing Agreements was true and correct when
         made and in all material respects is, except for the representation and
         warranty set forth in the Loan Agreement relating to the non-existence
         of an Event of Default, true and correct on and as of the date of this
         Agreement with the same full force and effect as if each of such
         representations and warranties had been made by Borrower on the date
         hereof and in this Agreement.

         6.2 Binding Effect of Documents. This Agreement and the other Financing
         Agreements have been duly executed and delivered to the Lender by
         Borrower and are in full force and effect, as modified hereby.

         6.3 No Conflict, Etc. The execution and delivery and performance of
         this Agreement by Borrower will not violate any Requirement of Law or
         Contractual Obligation of Borrower and will not result in, or require,
         the creation or imposition of any Lien on any of its properties or
         revenues.

         6.4 Additional Events of Default. The parties hereto acknowledge,
         confirm and agree that any misrepresentation by Borrower, or any
         failure of Borrower to comply with the covenants, conditions and
         agreements contained in any Financing Agreement, herein or in any other
         agreement, document or instrument at any time executed and/or delivered
         by Borrower with, to or in favor of Lender shall constitute an Event of
         Default hereunder, under the Loan Agreement and the other Financing
         Agreements. In the event any Person, other than Lender, shall at any
         time exercise for any reason (including by reason of any Existing
         Default, any other present or future Event of Default, or otherwise)
         any of its rights or remedies against Borrower or any obligor providing
         credit support for Borrower's obligations to such other Person, or
         against Borrower or such obligor's properties or assets, such event
         shall constitute an Event of Default hereunder.

SECTION 7. CONDITIONS TO EFFECTIVENESS OF CERTAIN PROVISIONS OF THIS AGREEMENT

         The effectiveness of the terms and provisions of Section 3 of this
Agreement shall be subject to the receipt by Lender of each of the following, in
form and substance satisfactory to Lender:

                  (a)      an original of this Agreement, duly authorized,
                           executed and delivered by Borrower; and

                  (b)      original UCC financing statements and such other
                           documents as Lender in its sole discretion deems
                           necessary;

                  (c)      payment of the fee set forth in Section 8.1 of this
                           Agreement; and

                  (d)      payment of the fees and disbursements of counsel to
                           Lender incurred in connection with the preparation,
                           negotiation, execution and delivery of this Agreement
                           and the transactions hereunder; and

                                       12
<PAGE>

SECTION 8. PROVISIONS OF GENERAL APPLICATION

         8.1      In consideration of the agreements set forth herein, Borrower
                  shall pay to Lender a fee in the amount of $50,000, which fee
                  shall be fully earned as of the date hereof and shall be
                  payable in five separate installments, with the first
                  installment in the amount of $10,000 payable contemporaneously
                  with the execution of this Agreement, the second, third and
                  fourth installments in the amount of $10,000 each payable on
                  October 31, 2001, November 30, 2001 and December 31, 2001,
                  respectively, and the fifth and final installment in the
                  amount of the entire then outstanding balance of such fee
                  payable on January 31, 2002, provided that the entire unpaid
                  balance of the earned and unpaid amendment fee shall be
                  subject to acceleration, demand and payment on the same terms
                  and conditions as the other Obligations upon an Event of
                  Default or the termination of this Agreement. Such fee is in
                  addition to all other fees, interest, costs and expenses
                  payable in connection with the Financing Agreements and may be
                  charged by Lender to any account of Borrower maintained by
                  Lender. The fee shall be fully earned by Lender
                  notwithstanding any failure by Borrower to comply with any
                  other term of this Agreement.

         8.2      Effect of this Agreement. Except as modified pursuant hereto,
                  no other changes or modifications to the Financing Agreements
                  are intended or implied and in all other respects the
                  Financing Agreements are hereby specifically ratified,
                  restated and confirmed by all parties hereto as of the
                  effective date hereof. To the extent of conflict between the
                  terms of this Agreement and the other Financing Agreements,
                  the terms of this Agreement shall control. The Loan Agreement
                  and this Agreement shall be read and construed as one
                  agreement.

         8.3      Costs and Expenses. Borrower absolutely and unconditionally
                  agrees to pay to the Lender, on demand by the Lender at any
                  time and as often as the occasion therefor may require,
                  whether or not all or any of the transactions contemplated by
                  this Agreement are consummated: all fees and disbursements of
                  any counsel to Lender in connection with the preparation,
                  negotiation, execution, or delivery of this Agreement and any
                  agreements delivered in connection with the transactions
                  contemplated hereby and expenses which shall at any time be
                  incurred or sustained by the Lender or any participant of
                  Lender or any of their respective directors, officers,
                  employees or agents as a consequence of or in any way in
                  connection with the preparation, negotiation, execution, or
                  delivery of this Agreement and any agreements prepared,
                  negotiated, executed or delivered in connection with the
                  transactions contemplated hereby.

                                       13
<PAGE>

         8.4      Further Assurances. The parties hereto shall execute and
                  deliver such additional documents and take such additional
                  action as may be necessary or desirable to effectuate the
                  provisions and purposes of this Agreement.

         8.5      Binding Effect. This Agreement shall be binding upon and inure
                  to the benefit of each of the parties hereto and their
                  respective successors and assigns.

         8.6      Survival of Representations and Warranties. All
                  representations and warranties made in this Agreement or any
                  other document furnished in connection with this Agreement
                  shall survive the execution and delivery of this Agreement and
                  the other documents, and no investigation by Lender or any
                  closing shall affect the representations and warranties or the
                  right of Lender to rely upon them.

         8.7      Severability. Any provision of this Agreement held by a court
                  of competent jurisdiction to be invalid or unenforceable shall
                  not impair or invalidate the remainder of this Agreement and
                  the effect thereof shall be confirmed to the provision so held
                  to be invalid or unenforceable.

         8.8      Reviewed by Attorneys. Borrower represents and warrants to
                  Lender that it (a) understands fully the terms of this
                  Agreement and the consequences of the execution and delivery
                  of this Agreement, (b) has been afforded an opportunity to
                  have this Agreement reviewed by, and to discuss this Agreement
                  and document executed in connection herewith with, such
                  attorneys and other persons as Borrower may wish, and (c) has
                  entered into this Agreement and executed and delivered all
                  documents in connection herewith of its own free will and
                  accord and without threat, duress or other coercion of any
                  kind by any Person. The parties hereto acknowledge and agree
                  that neither this Agreement nor the other documents executed
                  pursuant hereto shall be construed more favorably in favor of
                  one than the other based upon which party drafted the same, it
                  being acknowledged that all parties hereto contributed
                  substantially to the negotiation and preparation of this
                  Agreement and the other documents executed pursuant hereto or
                  in connection herewith.


                                       14
<PAGE>

         8.9      Governing Law: Consent to Jurisdiction and Venue. EXCEPT AS
                  OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE FINANCING
                  AGREEMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF
                  CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE
                  OTHER FINANCING AGREEMENTS AND THE OBLIGATIONS ARISING UNDER
                  THE FINANCING AGREEMENTS SHALL BE GOVERNED BY, AND CONSTRUED
                  AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
                  YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE,
                  WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICTS
                  OF LAWS, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
                  AMERICA. BORROWER HEREBY CONSENTS AND AGREES THAT THE STATE OR
                  FEDERAL COURTS LOCATED IN NEW YORK SHALL HAVE EXCLUSIVE
                  JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES
                  BETWEEN BORROWER AND LENDER PERTAINING TO THIS AGREEMENT OR
                  ANY OF THE OTHER FINANCING AGREEMENTS OR TO ANY MATTER ARISING
                  OUT OF OR RELATED TO THIS AGREEMENT OR ANY OF THE OTHER
                  FINANCING AGREEMENTS; PROVIDED, THAT LENDER AND BORROWER
                  ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
                  HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK; AND FURTHER
                  PROVIDED, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
                  OPERATE TO PRECLUDE LENDER FROM BRINGING SUIT OR TAKING OTHER
                  LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE
                  OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR ANY OTHER
                  SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR
                  OTHER COURT ORDER IN FAVOR OF LENDER. BORROWER EXPRESSLY
                  SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY
                  ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND BORROWER
                  HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK
                  OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
                  CONVENIENS AND HEREBY CONSENT TO THE GRANTING OF SUCH LEGAL OR
                  EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
                  BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS,
                  COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT
                  AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER
                  PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED
                  TO BORROWER AT THE ADDRESS SET FORTH IN SCHEDULE 1.1 OF THE
                  LOAN AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED
                  COMPLETED UPON THE EARLIER OF BORROWER'S ACTUAL RECEIPT
                  THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS,
                  PROPER POSTAGE PREPAID.

                                       15
<PAGE>

                  8.10 Mutual Waiver of Jury Trial. BECAUSE DISPUTES ARISING IN
                  CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST
                  QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT
                  PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS
                  TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE
                  THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
                  APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF
                  THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
                  PARTIES HERETO WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY
                  ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
                  WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN LENDER
                  AND BORROWER ARISING OUT OF, CONNECTED WITH, RELATED OR
                  INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
                  CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER FINANCING
                  AGREEMENTS OR THE TRANSACTIONS RELATED THERETO.

         8.11     Counterparts. This Agreement may be executed in any number of
                  counterparts, but all of such counterparts shall together
                  constitute but one and the same agreement. In making proof of
                  this Agreement, it shall not be necessary to produce or
                  account for more than one counterpart thereof signed by each
                  of the parties hereto.



                                       16
<PAGE>

         IN WITNESS WHEREOF, this Agreement is executed and delivered as of the
day and year first above written.

                                        POLYCHEM CORPORATION


                                        By:
                                            -----------------------------------
                                            Paul DeJuliis

                                        Title:
                                              ---------------------------------

                                        GENERAL ELECTRIC CAPITAL CORPORATION

                                        By:
                                            -----------------------------------

                                        Title: Duly Authorized Signatory
                                               --------------------------------


                                       17
<PAGE>

The terms and provisions of the foregoing Agreement are hereby acknowledged,
confirmed and agreed to and the undersigned hereby ratifies and confirms the
terms and provisions of the undersigned's Guarantee dated December 8, 1998 which
Guarantee remains in full force and effect in accordance with its terms without
offset, defense or counterclaim of any kind, nature or description whatsoever.

                                                     CONMAT TECHNOLOGIES, INC.


                                        By:
                                            -----------------------------------
                                            Paul DeJuliis

                                        Title:
                                              ---------------------------------





                                   SCHEDULE A

                                       18
<PAGE>


"Account Debtor" means any Person who is or may become obligated with respect
to, or on account of, an Account, Chattel Paper or General Intangibles
(including a payment intangible).

"Accounts" means all "accounts," as such term is defined in the Code, now owned
or hereafter acquired by any Person, including: (i) all accounts receivable,
other receivables, book debts and other forms of obligations (other than forms
of obligations evidenced by Chattel Paper or Instruments) (including any such
obligations that may be characterized as an account or contract right under the
Code); (ii) all of such Person's rights in, to and under all purchase orders or
receipts for goods or services; (iii) all of such Person's rights to any goods
represented by any of the foregoing (including unpaid sellers' rights of
rescission, replevin, reclamation and stoppage in transit and rights to
returned, reclaimed or repossessed goods); (iv) all right to payment due to such
Person for property sold, leased, licensed, assigned or otherwise disposed of,
for a policy of insurance issued or to be issued, for a secondary obligation
incurred or to be incurred, for energy provided or to be provided, for the use
or hire of a vessel under a charter or other contract, arising out of the use of
a credit card or charge card, or for services rendered or to be rendered by such
Person or in connection with any other transaction (whether or not yet earned by
performance on the part of such Person), ; (v) all health care insurance
receivables; and (vi) all collateral security of any kind given by any Account
Debtor or any other Person with respect to any of the foregoing.

"Chattel Paper" means all "chattel paper," as such term is defined in the Code,
including electronic chattel paper, now owned or hereafter acquired by any
Person.

"Code" means the Uniform Commercial Code as the same may, from time to time, be
in effect in the State of New York; provided, that to the extent that the Code
is used to define any term herein or in any Loan Document and such term is
defined differently in different Articles or Divisions of the Code, the
definition of such term contained in Article or Division 9 shall govern;
provided further, that in the event that, by reason of mandatory provisions of
law, any or all of the attachment, perfection or priority of, or remedies with
respect to, Lender's Lien on any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of New York,
the term "Code" shall mean the Uniform Commercial Code as in effect in such
other jurisdiction for purposes of the provisions of this Agreement relating to
such attachment, perfection, priority or remedies and for purposes of
definitions related to such provisions.

"Fixtures" means all "fixtures" as such term is defined in the Code, now owned
or hereafter acquired by any Person.



                                       19
<PAGE>

"General Intangibles" means all "general intangibles," as such term is defined
in the Code, now owned or hereafter acquired by any Person, including all right,
title and interest that such Person may now or hereafter have in or under any
Contract, all payment intangibles, customer lists, Licenses, Intellectual
Property, interests in partnerships, joint ventures and other business
associations, permits, proprietary or confidential information, inventions
(whether or not patented or patentable), technical information, procedures,
designs, knowledge, know-how, software, data bases, data, skill, expertise,
experience, processes, models, drawings, materials, Books and Records, Goodwill
(including the Goodwill associated with any Intellectual Property), all rights
and claims in or under insurance policies (including insurance for fire, damage,
loss, and casualty, whether covering personal property, real property, tangible
rights or intangible rights, all liability, life, key-person, and business
interruption insurance, and all unearned premiums), uncertificated securities,
chooses in action, deposit accounts, rights to receive tax refunds and other
payments, rights to received dividends, distributions, cash, Instruments and
other property in respect of or in exchange for pledged Stock and Investment
Property, and rights of indemnification.

"Goods" means all "goods," as such term is defined in the Code, now owned or
hereafter acquired by any Person, wherever located, including embedded software
to the extent included in "goods" as defined in the Code, manufactured homes,
standing timber that is cut and removed for sale and unborn young of animals.

"Inventory" means all "inventory," as such term is defined in the Code, now
owned or hereafter acquired by any Person, wherever located, including all
inventory, merchandise, goods and other personal property that are held by or on
behalf of such Person for sale or lease or are furnished or are to be furnished
under a contract of service or that constitute raw materials, work in process,
finished goods, returned goods, or materials or supplies of any kind, nature or
description used or consumed or to be used or consumed in such Person's business
or in the processing, production, packaging, promotion, delivery or shipping of
the same, including all supplies and embedded software.

"Proceeds" means "proceeds," as such term is defined in the Code and, in any
event, shall include: (i) any and all proceeds of any insurance, indemnity,
warranty or guaranty payable to Borrower or any other Credit Party from time to
time with respect to any Collateral; (ii) any and all payments (in any form
whatsoever) made or due and payable to Borrower or any other Credit Party from
time to time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of any Collateral by any governmental body, authority,
bureau or agency (or any person acting under color of governmental authority);
(iii) any claim of Borrower or any other Credit Party against third parties (a)
for past, present or future infringement of any Intellectual Property or (b) for
past, present or future infringement or dilution of any Trademark or Trademark
License or for injury to the goodwill associated with any Trademark, Trademark
registration or Trademark licensed under any Trademark License; (iv) any
recoveries by Borrower or any other Credit Party against third parties with
respect to any litigation or dispute concerning any Collateral, including claims
arising out of the loss or nonconformity of, interference with the use of,
defects in, or infringement of rights in, or damage to, Collateral; (v) all
amounts collected on, or distributed on account of, other Collateral, including
dividends, interest, distributions and Instruments with respect to Investment
Property and pledged Stock; and (vi) any and all other amounts , rights to
payment or other property acquired upon the sale, lease, license, exchange or
other disposition of Collateral and all rights arising out of Collateral.

                                       20
<PAGE>

                                    EXHIBIT B
                       Draft Eastwind Settlement Agreement


                          [To be provided by Borrower]



                                       21
<PAGE>



                            DISCLOSURE SCHEDULE (3.2)

                    CHIEF EXECUTIVE OFFICE & CORPORATE NAMES

                          [To be completed by Borrower]

Official Name                             Type of Entity (e.g., corporation,
                                          partnership, limited partnership,
                                          limited liability company)


Organization Identification Number
Issued by State of Incorporation or
Organization Or Statement that no such
number has been issued                    State of Incorporation or Organization




Chief Executive Office                               County/State






Locations of Inventory and other Collateral                   County/State




                                        22