<PAGE>   1
                                                                   EXHIBIT 10.63



                              AMENDMENT AND WAIVER

                  AMENDMENT AND WAIVER, dated as of June 30, 1999 (this
"Amendment"), to the Credit Agreement, dated as of January 12, 1999 (as modified
hereby and as further amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among DENALI INCORPORATED., a Delaware
corporation (the "Borrower"), the several lenders from time to time parties
thereto (the "Lenders"), CANADIAN IMPERIAL BANK OF COMMERCE ("CIBC"), as
administrative agent (in such capacity, the "Administrative Agent") for the
Lenders, and ING (U.S.) CAPITAL LLC, as documentation agent (the "Documentation
Agent").

                                    RECITALS

                  On March 18, 1999 the Borrower signed a letter of intent to
acquire (the "Welna Acquisition") Welna N.V. ("Welna"). The Borrower has
requested the Administrative Agent and the Lenders to amend certain provisions
of the Credit Agreement as set forth in this Amendment to permit, among other
things, the acquisition of Welna, and to agree to waive certain provisions of
the Credit Agreement to provide for the consummation of the Acquisition.
Additionally, the Borrower has requested the Administrative Agent and the
Lenders to amend certain provisions of the Credit Agreement as set forth in this
Amendment to permit, among other things, swing line credit facilities from both
Bank of Oklahoma N.A. and Southwest Bank of Texas, N.A. The Administrative
Agent, the Documentation Agent and the Lenders parties hereto are willing to
agree to such waivers and amendments, but only on the terms and subject to the
conditions set forth in this Amendment.

                  NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Borrower, the Administrative Agent, the Documentation Agent
and the Lenders hereby agree as follows:

1.       Defined Terms. Unless otherwise defined herein, terms defined in the
Credit Agreement are used herein as therein defined.

2.       Amendments. The Credit Agreement is hereby amended as follows:

         (a) Section 1.1 is hereby amended by adding the following new
definitions:

                           "'Adjusted Domestic EBITDA': for any period during
                  which the Borrower or any Domestic Subsidiary has consummated
                  (or proposes to consummate) a Permitted Acquisition, the
                  Consolidated Domestic EBITDA of the Borrower for such period
                  plus, for each such Permitted Acquisition, the Consolidated
                  EBITDA of the Acquired Business for such period in respect of
                  such Permitted Acquisition, calculated on a pro forma basis
                  without duplication,

<PAGE>   2

                  as if such Permitted Acquisition had occurred on the first day
                  of such period (and for purposes of this definition, Adjusted
                  Domestic EBITDA shall in any event exclude the amount of any
                  non-cash income recognized during any period for which
                  Adjusted Domestic EBITDA is determined) plus hard cash savings
                  in connection with the Permitted Acquisition identified by the
                  Borrower and acceptable to the Required Lenders.

                           'Amendment and Waiver': the Amendment and Waiver,
                  dated as of June 30, 1999, among the Borrower, the
                  Administrative Agent, the Documentation Agent and the Lenders
                  parties thereto.

                           'Amendment Effective Date': the date on which all
                  conditions precedent to the effectiveness of the Amendment and
                  Waiver have been satisfied.

                           'Bank of Oklahoma': Bank of Oklahoma N.A., a national
                  banking association.

                           'Bank of Oklahoma Swing Facility': that certain Loan
                  Agreement, dated as of June __, 1999, between Bank of Oklahoma
                  and Specialty Solutions, Inc., providing for unsecured swing
                  notes in the maximum aggregate principal amount of
                  $1,000,000.00.

                           'Consolidated Domestic EBITDA': for any period, the
                  sum for such period of (a) Consolidated Domestic Net Income
                  for such period, (b) the sum of provisions for such period for
                  income taxes, interest expense, and depreciation and
                  amortization expense used in determining such Consolidated
                  Domestic Net Income, (c) amounts deducted in such period in
                  respect of non-cash expenses in accordance with GAAP, (d) the
                  amount of any aggregate net loss (or minus the amount of any
                  gain) during such period arising from the sale, exchange or
                  other disposition of capital assets and (e) non-cash expenses
                  deducted in such period in connection with any earn-out
                  agreements, stock appreciation rights, "phantom" stock plans,
                  employment agreements, non-competition agreements,
                  subscription and stockholders agreements and other incentive
                  and bonus plans and similar arrangements made in connection
                  with acquisitions of Persons or businesses by the Borrower or
                  its Domestic Subsidiaries or the retention of executives,
                  officers or employees by the Borrower or its Domestic
                  Subsidiaries, including (but without duplication) any Person
                  that has become a Domestic Subsidiary during such period, on a
                  pro forma basis as if such acquisition had occurred on the
                  first day of such period; provided, that Consolidated Domestic
                  EBITDA shall in any event exclude, from and after the Closing
                  Date, (x) the effect of any write-up of any assets acquired in
                  any Permitted Acquisitions and (y) the amount of any non-cash
                  income recognized during any period for which Consolidated
                  Domestic EBITDA is determined.

                           'Consolidated Domestic Fixed Charges': for any
                  period, the sum of (i) the amounts deducted for the cash
                  portion of Consolidated Domestic Interest


<PAGE>   3

                  Expense in determining Consolidated Domestic Net Income for
                  such period, (ii) the amount of scheduled payments of
                  principal of Indebtedness during such period and (iii) the
                  amount of cash income taxes paid during such period.

                           'Consolidated Domestic Funded Debt': for any period
                  of twelve consecutive calendar months, the sum of (a)
                  Consolidated Senior Indebtedness for such period and (b) all
                  Indebtedness of the Borrower and its Domestic Subsidiaries of
                  the type set forth in clauses (a), (b), (c), (d) and (e) of
                  Indebtedness (excluding the Permanent Subordinated Debt) as of
                  the last day of such period, determined on a consolidated
                  basis in accordance with GAAP, including, in any event any
                  purchase money Indebtedness.

                           'Consolidated Domestic Interest Expense': for any
                  period, the amount which, in conformity with GAAP, would be
                  set forth opposite the caption "interest expense" or any like
                  caption (including without limitation, imputed interest
                  included in payments under Financing Leases) on a consolidated
                  income statement of the Borrower and the Domestic Subsidiaries
                  for such period excluding the amortization of any original
                  issue discount.

                           'Consolidated Domestic Net Income': for any period,
                  the consolidated net income (or deficit) of the Borrower and
                  the Domestic Subsidiaries for such period (taken as a
                  cumulative whole), determined in accordance with GAAP;
                  provided that there shall be excluded (a) the income (or
                  deficit) of any Person accrued prior to the date it becomes a
                  Domestic Subsidiary or is merged into or consolidated with the
                  Borrower or any Domestic Subsidiary, (b) the income (or
                  deficit) of any Person (other than a Domestic Subsidiary) in
                  which the Borrower or any Domestic Subsidiary has an ownership
                  interest, except to the extent that any such income has been
                  actually received by the Borrower or such Domestic Subsidiary
                  in the form of dividends or similar distributions, (c) the
                  undistributed earnings of any Domestic Subsidiary to the
                  extent that the declaration or payment of dividends or similar
                  distributions by such Domestic Subsidiary is not at the time
                  permitted by the terms of any Contractual Obligation,
                  Governing Document or Requirement of Law applicable to such
                  Domestic Subsidiary, (d) any restoration to income of any
                  contingency reserve, except to the extent that provision for
                  such reserve was made out of income accrued during such
                  period, (e) any aggregate net gain (but not any aggregate net
                  loss) during such period arising from the sale, exchange or
                  other disposition of capital assets (such term to include all
                  fixed assets, whether tangible or intangible, all inventory
                  sold in conjunction with the disposition of fixed assets and
                  all securities), (f) any write-up of any asset, (g) any net
                  gain from the collection of the proceeds of life insurance
                  policies, (h) any gain arising from the acquisition of any
                  securities, or the extinguishment, under GAAP, of any
                  Indebtedness, of the Borrower or any Domestic Subsidiary, (i)
                  in the case of a successor to the Borrower by consolidation or
                  merger or as a transferee of its assets, any earnings of the
                  successor corporation prior to such consolidation, merger or
                  transfer of assets,


<PAGE>   4

                  and (j) any deferred credit representing the excess of equity
                  in any Domestic Subsidiary at the date of acquisition over the
                  cost of the investment in such Domestic Subsidiary.

                           'Domestic Subsidiary': any Subsidiary of the Borrower
                  that is not a Foreign Subsidiary.

                           'Domestic Leverage Ratio': at any time, the ratio of
                  Consolidated Domestic Funded Debt to Consolidated Domestic
                  EBITDA for the immediately preceding period of four
                  consecutive fiscal quarters; provided that, in calculating the
                  Domestic Leverage Ratio for any period during which a
                  Permitted Acquisition was consummated, Adjusted Domestic
                  EBITDA shall be substituted for Consolidated Domestic EBITDA.

                           'Dutch Credit Facility': collectively, (a) the
                  Short-Term Loan Agreement among Welna, the Foreign
                  Subsidiaries and ABN AMRO Bank N.V., (b) the Credit Agreement
                  among Welna, the Foreign Subsidiaries and ABN AMRO Bank N.V.
                  providing for overdraft, rollover and contingent liability
                  facilities up to $40,000,000 Guilders in the aggregate, (c)
                  the Roll-Over Loan Agreement between Denali Welna Europe N.V.
                  or Denali International Holdings B.V., as the case may be, ABN
                  AMRO Bank N.V. and ING Bank N.V. providing for an acquisition
                  facility of up to 15,000,000 Guilders, and (d) the Roll-Over
                  Loan Agreement between Welna N.V. c.s., ABN AMRO Bank N.V. and
                  ING Bank N.V. providing for a working capital loan of up to
                  15,000,000 Guilders.

                           'Foreign Subsidiary': any Subsidiary of the Borrower
                  which is organized under the laws of a jurisdiction, or is
                  located, outside the United States of America.

                           'Permanent Equity Financing': $4,500,000 of common
                  equity securities issued by the Borrower, having terms and
                  otherwise in form and substance satisfactory to the
                  Administrative Agent, the proceeds of which will be used to
                  finance a portion of the purchase price of the Welna
                  Acquisition and fees and expenses incurred in connection
                  therewith.

                           'Permanent Subordinated Debt': $15,000,000 aggregate
                  principal amount of subordinated debt securities, issued by
                  the Borrower, subordinated to the Obligations on terms
                  satisfactory to, and otherwise in form and substance
                  satisfactory to, the Administrative Agent, the proceeds of
                  which will be used to finance a portion of the purchase price
                  of the Welna Acquisition and fees and expenses incurred in
                  connection therewith.

                           'Permanent Welna Acquisition Financing':
                  collectively, the Permanent Subordinated Debt and the
                  Permanent Equity Financing.

<PAGE>   5

                           'Senior Domestic Leverage Ratio': at any time, the
                  ratio of Consolidated Senior Indebtedness to Consolidated
                  Domestic EBITDA for the immediately preceding period of four
                  consecutive fiscal quarters (or such other period as provided
                  herein); provided, that in calculating the Domestic Leverage
                  Ratio for any period during which a Permitted Acquisition was
                  consummated, Adjusted Domestic EBITDA shall be substituted for
                  Consolidated Domestic EBITDA.

                           'Southwest Bank of Texas': Southwest Bank of Texas,
                  N.A., a national banking association.

                           'Southwest Bank of Texas Swing Facility': that
                  certain Loan Agreement, dated June 1, 1998, between Southwest
                  Bank of Texas and the Borrower, providing for unsecured swing
                  notes in the maximum aggregate principal amount of
                  $1,000,000.00, as amended.

                           'Welna': Welna, N.V., a Netherlands corporation.

                           'Welna Acquisition': the acquisition by the Borrower
                  or one of its Subsidiaries of 100% of the issued and
                  outstanding Capital Stock of Welna pursuant to the Welna
                  Acquisition Documents."

                           'Welna Acquisition Closing Date': in respect of the
                  Welna Acquisition, the date on which all of the conditions
                  described in Section 8.2 shall have been satisfied (or waived
                  by the Administrative Agent and the Required Lenders in
                  writing) for the Welna Acquisition to be financed thereby.

                           'Welna Acquisition Documents': collectively (a) the
                  Letter of Intent between the Borrower and Welna, (b) the Dutch
                  Offer Document to the Welna shareholders, and (c) any
                  documents related thereto."

         (b) Section 1.1 is hereby amended by inserting the phrase "(except that
in calculating Consolidated EBITDA, any such restrictions on dividends contained
in the Dutch Credit Facility shall be disregarded)" immediately following the
word "Subsidiary" in the twelfth line of the definition of "Consolidated Net
Income".

         (c) Section 1.1 is hereby amended by inserting the phrase "(excluding
any Foreign Subsidiary which is acquired using exclusively proceeds other than
financing under this Agreement and any Foreign Subsidiary which is prohibited
from becoming a Guarantor by applicable law)" immediately after the word
"Subsidiary" in the definition of "Guarantor".

         (d) Section 1.1 is hereby amended by deleting the definition of
"Permitted Acquisition and substituting in lieu thereof the following new
definition:

                           "Permitted Acquisition:" an acquisition of (a) 100%
                  of the common stock or other ownership interests of a Person
                  (by means of stock purchase or merger) or (b) the assets of a
                  Person, or of a

<PAGE>   6

                  business unit, division or subdivision of a Person, in each
                  case primarily engaged in or relating to a line of business
                  substantially similar to the line of business engaged in by
                  the Borrower or any Subsidiary on the Closing Date or any
                  natural and logical extension thereof; provided, that, with
                  respect to acquisitions consummated after the Closing Date,
                  (i) the Domestic Leverage Ratio, as of the last day of the
                  calendar month in which the Acquisition Closing Date occurs,
                  for the twelve consecutive months immediately preceding such
                  date (calculated on a pro forma basis, taking into account the
                  acquisition of the Acquired Business, as if such Permitted
                  Acquisition had been consummated on the first day of such
                  twelve month period) is not greater than 4.00 to 1.00 for such
                  period, (ii) the Senior Domestic Leverage Ratio, as of the
                  last day of the calendar month preceding the calendar month in
                  which the Acquisition Closing Date occurs, for the twelve
                  consecutive months immediately preceding such date (calculated
                  on a pro-forma basis, taking into account the acquisition of
                  the Acquired Business, as if such Permitted Acquisition had
                  been consummated as of the first day of such twelve month
                  period) is not greater than 3.50 to 1.00 for such period,
                  (iii) the Senior Leverage Ratio, as of the last day of the
                  calendar month preceding the calendar month in which the
                  Acquisition Closing Date occurs, for the twelve consecutive
                  months immediately preceding such date (calculated on a
                  pro-forma basis, taking into account the acquisition of the
                  Acquired Business, as if such Permitted Acquisition had been
                  consummated as of the first day of such twelve month period)
                  is not greater than 3.50 to 1.00 for such period, (iv) the
                  Leverage Ratio, as of the last day of the calendar month
                  preceding the calendar month in which the Acquisition Closing
                  Date occurs, for the twelve consecutive months immediately
                  preceding such date (calculated on a pro-forma basis as if
                  such Permitted Acquisition had been consummated as of the
                  first day of such twelve month period) is not greater than
                  4.25 to 1.00 for such period, if such Acquisition Closing Date
                  occurs on or prior to December 31, 1999, and 4.00 to 1.00 for
                  such period, if such Acquisition Closing Date occurs
                  thereafter, (v) each applicable Loan Party shall have granted
                  a security interest in favor of the Administrative Agent to
                  assets acquired in accordance with Section 9.10, (vi) if the
                  Acquisition Consideration for such acquisition is $7,500,000
                  or greater, such acquisition shall require the consent and
                  approval of (A) Lenders having a Credit Exposure Percentage of
                  51% or more in the aggregate and (B) at least three Lenders
                  (if there are three or more Lenders holding Commitments at
                  such time) and (vi) if the Acquisition Consideration for such
                  acquisition is $12,500,000 or

<PAGE>   7

                  greater, such acquisition shall require the consent and
                  approval of (A) the Required Lenders and (B) at least three
                  Lenders (if there are three or more Lenders holding
                  Commitments at such time). For the purposes of this Agreement,
                  acquisitions described in clauses (a) and (b) above which have
                  been consummated prior to the Closing Date shall be deemed
                  Permitted Acquisitions (and therefore an Acquired Business for
                  purposes of calculation of Adjusted EBITDA and otherwise).

         (e) Section 1.1 is hereby amended by deleting the word "and" at the end
of subsection (p) of the definition of "Permitted Encumbrances", changing the
lettering of the last subsection from "(f)" to "(q)", deleting the reference to
"Section 10.2(c)" and substituting in lieu thereof "Section (e) of the
definition of 'Permitted Indebtedness", replacing the period at the end of
subsection "(q)" with a semicolon and adding the following new subsections:

                           "(r) Lien on, and security interest in, all right,
                  title and interest of the assets acquired in the Welna
                  Acquisition and in the stock or other ownership interest of
                  the Subsidiaries of Welna, in favor of ING Bank N.V. or ABN
                  AMRO Bank N.V., as applicable, to secure the obligations under
                  Dutch Credit Facility;

                           (s) Lien on, and security interest in, all right,
                  title and interest of the assets acquired in any Foreign
                  Subsidiary in a Permitted Acquisition, and in the stock or
                  other ownership interest of the Subsidiaries of such Foreign
                  Subsidiary, in favor of ING Bank N.V. or ABN AMRO Bank N.V.,
                  as applicable, to secure the obligations under Dutch Credit
                  Facility; and

                           (t) Pledge in favor of the holders of the Permanent
                  Subordinated Debt of the Capital Stock of Denali Welna Europe
                  N.V. or Denali International Holdings B.V."

         (f) Section 1.1 is hereby amended by deleting the word "and" at the end
of subsection (f) of the definition of "Permitted Indebtedness", replacing the
period at the end of subsection (g) with a semicolon and adding the following
subsections:

                           "(h) indebtedness under the Dutch Credit Facility;

                           (i) indebtedness under the Permanent Subordinated
                  Debt;

                           (j) indebtedness under the Bank of Oklahoma Swing
                  Facility; and

                           (k) indebtedness under the Southwest Bank of Texas
                  Swing Facility."

         (g) Section 6.5(c) is hereby amended by inserting at the end of clause
(i) thereof the following phrase:


<PAGE>   8

                           ", but excluding the securities issued pursuant to
                  the Permanent Welna Acquisition Financing so long as the
                  proceeds of any such securities under the Permanent Welna
                  Acquisition Financing are applied as contemplated by the terms
                  of this Agreement,"

         (h) Section 7.16(c) is hereby amended by deleting such Subsection in
its entirety and substituting in lieu thereof the following new Subsection:

                           "(c) Neither the Borrower nor any Subsidiary owns any
                  property, or has any interest in any property, that is not
                  subject to a fully perfected first priority Lien on, or
                  security interest in, such property in favor of the
                  Administrative Agent, other than the assets purchased in
                  connection with the Welna Acquisition or any other acquisition
                  of a Foreign Subsidiary funded exclusively from sources other
                  than financing under this Agreement, or any property having an
                  aggregate fair market value at any one time not exceeding
                  $100,000."

         (i) Section 9.2(c) of the Credit Agreement is hereby amended by
deleting the word "thirty" from the first line thereof and substituting in lieu
thereof the word "forty-five".

         (j) Section 9.10(a) of the Credit Agreement is hereby amended by (i)
inserting in the second line thereof immediately following the phrase "or any
Subsidiary" the phrase "(other than Welna, any Subsidiary of Welna or any other
Foreign Subsidiary which is acquired using exclusively proceeds other than
financing under this Agreement)", and (ii) deleting the phrase "Section 10.3(g)"
and substituting in lieu thereof the phrase "Section 10.3".

         (k) Section 9.10(b) of the Credit Agreement is hereby amended by
inserting in the second line thereof immediately following the phrase "such
Subsidiary" the phrase "(other than Welna, any Subsidiary of Welna, any other
Foreign Subsidiary which is acquired using exclusively proceeds other than
financing under this Agreement or any Foreign Subsidiary which is prohibited
from becoming a Guarantor by applicable law)".

         (l) Section 10.1 of the Credit Agreement is hereby amended by deleting
such section in its entirety and substituting in lieu thereof the following new
Section:


<PAGE>   9


         "10.1 Financial Condition Covenants.

                  (a) Maximum Leverage Ratio. Permit the Leverage Ratio of the
         Borrower and its Subsidiaries as of the last day of any fiscal quarter
         of the Borrower ending on any test date set forth on the table below to
         be greater than the ratio set forth opposite such test date below:

<TABLE>
<CAPTION>
Test Date        Ratio
---------        -----
<S>              <C>
  3/31/99         4.00
  6/30/99         4.25
  9/30/99         4.25
 12/31/99         4.25
  3/31/00         4.00
  6/30/00         4.00
  9/30/00         3.75
 12/31/00         3.75
  3/31/01         3.75
  6/30/01         3.75
  9/30/01         3.50
 12/31/01         3.50
  3/31/02         3.50
  6/30/02         3.50
  9/30/02         3.25
 12/31/02         3.25
  3/31/03         3.25
  6/30/03         3.25
  9/30/03         3.00
 12/31/03         3.00
  3/31/04         3.00
</TABLE>


<PAGE>   10



                  (b) Maximum Senior Leverage Ratio. Permit the Senior Leverage
         Ratio of the Borrower and its Subsidiaries as of the last day of any
         fiscal quarter of the Borrower ending on any test date set forth on the
         table below to be greater than the ratio set forth opposite such test
         date below:

<TABLE>
<CAPTION>
Test Date        Ratio
---------        -----
<S>              <C>
  3/31/99         3.50
  6/30/99         3.50
  9/30/99         3.50
 12/31/99         3.50
  3/31/00         3.50
  6/30/00         3.50
  9/30/00         3.25
 12/31/00         3.25
  3/31/01         3.00
  6/30/01         3.00
  9/30/01         2.75
 12/31/01         2.75
  3/31/02         2.50
  6/30/02         2.50
  9/30/02         2.25
 12/31/02         2.25
  3/31/03         2.25
  6/30/03         2.25
  9/30/03         2.25
 12/31/03         2.25
  3/31/04         2.25
</TABLE>


<PAGE>   11


                  (c) Minimum Interest Coverage. Permit the ratio of
         Consolidated EBITDA (or Adjusted EBITDA, in the case of any period
         during which the Borrower or any Subsidiary has consummated a Permitted
         Acquisition) to Consolidated Interest Expense for any period of four
         consecutive fiscal quarters (or if less than four fiscal quarters have
         occurred after the Closing Date, such full fiscal quarters as have been
         elapsed since the Closing Date) of the Borrower ending on any test date
         set forth on the table below to be less than the ratio set forth
         opposite such test date below:


<TABLE>
<CAPTION>
Test Date        Ratio
---------        -----
<S>              <C>
  3/31/99         3.00
  6/30/99         3.00
  9/30/99         3.00
 12/31/99         3.00
  3/31/00         3.00
  6/30/00         3.00
  9/30/00         3.25
 12/31/00         3.25
  3/31/01         3.25
  6/30/01         3.25
  9/30/01         3.50
 12/31/01         3.50
  3/31/02         3.50
  6/30/02         3.50
  9/30/02         3.50
 12/31/02         3.50
  3/31/03         3.50
  6/30/03         3.50
  9/30/03         3.50
 12/31/03         3.50
  3/31/04         3.50
</TABLE>


<PAGE>   12


                  (d) Minimum Fixed Charge Coverage. Permit the ratio of
         Consolidated EBITDA (or Adjusted EBITDA, in the case of any period
         during which the Borrower or any Subsidiary has consummated a Permitted
         Acquisition) less consolidated capital expenditures of the Borrower and
         its Subsidiaries to Consolidated Fixed Charges for any period of four
         consecutive fiscal quarters (or if less than four fiscal quarters have
         occurred after the Closing Date, such full fiscal quarters as have been
         elapsed since the Closing Date) of the Borrower ending on any test date
         set forth on the table below to be less than the ratio set forth
         opposite such test date below:

<TABLE>
<CAPTION>
Test Date        Ratio
---------        -----
<S>              <C>
  3/31/99         1.15
  6/30/99         1.15
  9/30/99         1.15
 12/31/99         1.15
  3/31/00         1.15
  6/30/00         1.15
  9/30/00         1.15
 12/31/00         1.15
  3/31/01         1.15
  6/30/01         1.15
  9/30/01         1.25
 12/31/01         1.25
  3/31/02         1.25
  6/30/02         1.25
  9/30/02         1.25
 12/31/02         1.25
  3/31/03         1.25
  6/30/03         1.25
  9/30/03         1.25
 12/31/03         1.25
  3/31/04         1.25
</TABLE>


<PAGE>   13


                  (e) Maximum Domestic Leverage Ratio. Permit the Domestic
         Leverage Ratio of the Borrower and its Domestic Subsidiaries as of the
         last day of any fiscal quarter of the Borrower ending on any test date
         set forth on the table below to be greater than the ratio set forth
         opposite such test date below:

<TABLE>
<CAPTION>
Test Date        Ratio
---------        -----
<S>              <C>
  3/31/99         4.00
  6/30/99         4.00
  9/30/99         4.00
 12/31/99         4.00
  3/31/00         4.00
  6/30/00         4.00
  9/30/00         3.75
 12/31/00         3.75
  3/31/01         3.50
  6/30/01         3.50
  9/30/01         3.25
 12/31/01         3.25
  3/31/02         3.00
  6/30/02         3.00
  9/30/02         2.75
 12/31/02         2.75
  3/31/03         2.75
  6/30/03         2.75
  9/30/03         2.75
 12/31/03         2.75
  3/31/04         2.75
</TABLE>



<PAGE>   14



                  (f) Maximum Senior Domestic Leverage Ratio. Permit the Senior
         Domestic Leverage Ratio of the Borrower and its Domestic Subsidiaries
         as of the last day of any fiscal quarter of the Borrower ending on any
         test date set forth on the table below to be greater than the ratio set
         forth opposite such test date below:

<TABLE>
<CAPTION>
Test Date        Ratio
---------        -----
<S>              <C>
  3/31/99         3.50
  6/30/99         3.50
  9/30/99         3.50
 12/31/99         3.50
  3/31/00         3.50
  6/30/00         3.50
  9/30/00         3.25
 12/31/00         3.25
  3/31/01         3.00
  6/30/01         3.00
  9/30/01         2.75
 12/31/01         2.75
  3/31/02         2.50
  6/30/02         2.50
  9/30/02         2.25
 12/31/02         2.25
  3/31/03         2.25
  6/30/03         2.25
  9/30/03         2.25
 12/31/03         2.25
  3/31/04         2.25
</TABLE>


<PAGE>   15


                  (g) Minimum Domestic Interest Coverage. Permit the ratio of
         Consolidated Domestic EBITDA (or Adjusted Domestic EBITDA, in the case
         of any period during which the Borrower or any Domestic Subsidiary has
         consummated a Permitted Acquisition) to Consolidated Domestic Interest
         Expense for any period of four consecutive fiscal quarters (or if less
         than four fiscal quarters have occurred after the Closing Date, such
         full fiscal quarters as have been elapsed since the Closing Date) of
         the Borrower ending on any test date set forth on the table below to be
         less than the ratio set forth opposite such test date below:


<TABLE>
<CAPTION>
Test Date        Ratio
---------        -----
<S>              <C>
  3/31/99         3.00
  6/30/99         3.00
  9/30/99         3.00
 12/31/99         3.00
  3/31/00         3.00
  6/30/00         3.00
  9/30/00         3.25
 12/31/00         3.25
  3/31/01         3.25
  6/30/01         3.25
  9/30/01         3.50
 12/31/01         3.50
  3/31/02         3.50
  6/30/02         3.50
  9/30/02         3.50
 12/31/02         3.50
  3/31/03         3.50
  6/30/03         3.50
  9/30/03         3.50
 12/31/03         3.50
  3/31/04         3.50
</TABLE>


<PAGE>   16


                  (h) Minimum Domestic Fixed Charge Coverage. Permit the ratio
         of Consolidated Domestic EBITDA (or Adjusted Domestic EBITDA, in the
         case of any period during which the Borrower or any Domestic Subsidiary
         has consummated a Permitted Acquisition) less consolidated capital
         expenditures of the Borrower and its Domestic Subsidiaries to
         Consolidated Domestic Fixed Charges for any period of four consecutive
         fiscal quarters (or if less than four fiscal quarters have occurred
         after the Closing Date, such full fiscal quarters as have been elapsed
         since the Closing Date) of the Borrower ending on any test date set
         forth on the table below to be less than the ratio set forth opposite
         such test date below:

<TABLE>
<CAPTION>
Test Date        Ratio
---------        -----
<S>              <C>
  3/31/99         1.15
  6/30/99         1.15
  9/30/99         1.15
 12/31/99         1.15
  3/31/00         1.15
  6/30/00         1.15
  9/30/00         1.15
 12/31/00         1.15
  3/31/01         1.15
  6/30/01         1.15
  9/30/01         1.25
 12/31/01         1.25
  3/31/02         1.25
  6/30/02         1.25
  9/30/02         1.25
 12/31/02         1.25
  3/31/03         1.25
  6/30/03         1.25
  9/30/03         1.25
 12/31/03         1.25
  3/31/04         1.25
</TABLE>

       (m) Section 10.4 of the Credit Agreement is hereby amended by deleting
the word "and" at the end of subsection (a), replacing the period at the end of
subsection (b) with a semicolon and adding the following new subsections:

                  "(c) any guaranty executed in connection with the Bank of
         Oklahoma Swing Facility;


<PAGE>   17

                  (d) any guaranty executed in connection with the Southwest
         Bank of Texas Swing Facility; and

                  (e) any guaranty executed in connection with the Permanent
         Subordinated Debt."

         (n) Section 10.8 of the Credit Agreement is hereby amended by (i)
inserting the phrase "and excluding any expenditures made in respect of any
Foreign Subsidiary" immediately before the closed parenthetical in the fifth
line thereof; and (ii) inserting the word "Domestic" immediately before the word
"Subsidiaries" in the sixth line thereof.

         (o) Section 10.10 of the Credit Agreement is hereby amended by deleting
subsection (a) in its entirety and substituting in lieu thereof a new subsection
(a) as follows:

                  "(a) Make any optional payment or prepayment on or redemption
         or purchase of any Indebtedness (other than (i) the Loans and (ii) the
         Dutch Credit Facility),"

         (p) Section 10.10 of the Credit Agreement is hereby amended by
inserting the following phrase at the end of subsection (c) and before the
period, ", provided, however that nothing contained in this Agreement shall
prohibit payments made pursuant to the terms of the Bank of Oklahoma Swing
Facility and the Southwest Bank of Texas Swing Facility."

         (q) Section 11 of the Credit Agreement is hereby amended by inserting
the phrase "or (iii) any `change of control' or similar event or contingency as
defined in the Permanent Welna Acquisition Facility, shall occur" immediately
before the colon in the tenth line of subsection (k) thereof.

         (r) Schedule 1 of the Credit Agreement is hereby amended by deleting
such Schedule in its entirety and substituting in lieu thereof a new Schedule 1
attached hereto.

3.       Waivers and Consent. Each of the Administrative Agent, the
Documentation Agent and each of the Lenders hereby waives any Default or Event
of Default based solely on the consummation of the Welna Acquisition and the
requirements of Sections 8.2(c) (iii) and (iv) and Section 8.3(f), of the Credit
Agreement in connection with the Welna Acquisition. Each of the Administrative
Agent, the Documentation Agent and each of the Lenders hereby consents to the
Welna Acquisition and the making of an Acquisition Loan in the aggregate amount
of $11,500,000 in connection therewith.


<PAGE>   18



4.       Effectiveness. This Amendment shall become effective upon the
satisfaction of the following conditions precedent:

         (a) the Administrative Agent shall have received evidence satisfactory
to the Administrative Agent that this Amendment has been duly executed and
delivered by the Borrower, the Required Lenders and each of the Guarantors;

         (b) the Administrative Agent shall have received a legal opinion from
counsel to the Borrower in form and substance satisfactory to the Administrative
Agent;

         (c) the Administrative Agent shall have been reimbursed for all fees
and expenses required to be paid pursuant to the Credit Agreement or this
Amendment;

         (d) the Administrative Agent shall have received the Welna Acquisition
Documents;

         (e) the Administrative Agent shall have received evidence satisfactory
to the Administrative Agent that definitive documentation for the Permanent
Subordinated Debt has been duly executed and delivered by the Borrower and the
purchasers of the notes relating to the Permanent Subordinated Debt and the
Administrative Agent shall have received confirmation that the Permanent
Subordinated Debt shall fund concurrently with the funding by the Lenders of the
Acquisition Loans referenced herein;

         (f) the Administrative Agent shall have received evidence satisfactory
to the Administrative Agent that the Dutch Credit Facility documents have been
duly executed and delivered by the Borrower;

         (g) the Administrative Agent shall have received evidence satisfactory
to the Administrative Agent that the definitive documents for the Permanent
Equity Financing have been duly executed and delivered by the Borrower and the
equity investors and the Administrative Agent shall have received confirmation
that the Permanent Equity Financing shall fund concurrently with the funding by
the Lenders of the Acquisition Loans referenced herein;

         (h) the Administrative Agent shall have received evidence satisfactory
to the Administrative Agent that the conditions precedent contained in Section
8.2 of the Credit Agreement relating to the Welna Acquisition have been
satisfied or waived by the Administrative Agent and the Lenders; and

         (i) the Administrative Agent shall have received any other documents
relating hereto that shall be reasonably requested by the Administrative Agent.

5.       Effectiveness of Swing Facilities. Prior to the first draw under the
Bank of Oklahoma Swing Facility or the Southwest Bank of Texas Swing Facility,
the following conditions precedent shall be satisfied, the failure of which to
comply with shall result in this Amendment becoming immediately null and void.


<PAGE>   19

         (a) the Administrative Agent shall have received evidence satisfactory
to the Administrative Agent that the definitive documents for the Bank of
Oklahoma Swing Facility have been duly executed and delivered by the Borrower
and Bank of Oklahoma;

         (b) the Administrative Agent shall have received evidence satisfactory
to the Administrative Agent that the definitive documents for the Southwest Bank
of Texas Swing Facility have been duly executed and delivered by the Borrower
and the Southwest Bank of Texas;

6.       Representations and Warranties. To induce the Administrative Agent, the
Documentation Agent and the Lenders to enter into this Amendment, the Borrower
hereby represents and warrants to the Administrative Agent, the Documentation
Agent and the Lenders that, after giving effect to the amendments and waivers
provided for herein, the representations and warranties contained in the Credit
Agreement and the other Loan Documents will be true and correct in all material
respects as if made on and as of the date hereof and that no Default or Event of
Default will have occurred and be continuing.

7.       No Other Amendments or Waivers. Except as expressly amended or waived
hereby, the Credit Agreement, the Notes and the other Loan Documents shall
remain in full force and effect in accordance with their respective terms,
without any waiver, amendment or modification of any provision thereof.

8.       Counterparts. This Amendment may be executed by one or more of the
parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.

9.       Expenses. The Borrower agrees to pay and reimburse the Administrative
Agent for all of the out-of-pocket costs and expenses incurred by the
Administrative Agent in connection with the preparation, execution and delivery
of this Amendment, including, without limitation, the fees and disbursements of
Cadwalader, Wickersham & Taft, counsel to the Administrative Agent.

10.      Applicable Law. this Amendment shall be governed by, and construed and
interpreted in accordance with, the law of the state of New York.

                            [SIGNATURE PAGES FOLLOW]


<PAGE>   20


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



                                       DENALI INCORPORATED.

                                       By:  /s/ R. KEVIN ANDREWS
                                          --------------------------------------
                                          Name:  R. Kevin Andrews
                                          Title:  CFO/Treasurer



                                       CANADIAN IMPERIAL BANK OF COMMERCE,
                                       as Administrative Agent

                                       By:  /s/ MICHAEL P. DAVEN
                                          --------------------------------------
                                          Name:  Michael P. Daven
                                          Title:  As Agent



                                       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/ MICHAEL P. DAVEN
                                          --------------------------------------
                                          Name:  Michael P. Daven
                                          Title:  As Agent


<PAGE>   21


                                       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:  Asst. Vice President



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

                                       By:  /s/ BROOKS H. MCGEE
                                          --------------------------------------
                                          Name:  Brooks H. McGee
                                          Title:  Sr. Vice President


<PAGE>   22


         The undersigned guarantors hereby consent and agree to the foregoing
Amendment:



                                       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




                                        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


<PAGE>   23


                                        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



<PAGE>   24



                                        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