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                                 EXHIBIT 10.49
                                PLEDGE AGREEMENT


         PLEDGE AGREEMENT, dated as of January 12, 1999, made by DENALI
INCORPORATED, a Delaware corporation (the "Borrower") and its subsidiaries
which are signatories hereto (together with the Borrower each a "Pledgor" and
collectively the "Pledgors"), in favor of CANADIAN IMPERIAL BANK OF COMMERCE,
as administrative agent (in such capacity, the "Administrative Agent") for the
lenders (the "Lenders") and Canadian Imperial Bank of Commerce, as issuing
lender (in such capacity, the "Issuing Lender"), parties to the Credit
Agreement referred to below.

                                    RECITALS

         Pursuant to the Credit Agreement, dated as of January 12, 1999 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Borrower, the Lenders, the Administrative Agent and ING
(U.S.) Capital LLC, as documentation agent (the "Documentation Agent"), the
Lenders have severally agreed to make loans to and the Issuing Lender has
agreed to issue letters of credit for the account of the Borrower upon the
terms and subject to the conditions set forth therein, such loans to be
evidenced by the Notes issued by the Borrower thereunder. It is a condition
precedent to the obligation of the Lenders to make their respective loans to
the Borrower, and of the Issuing Lender to issue its letters of credit, under
the Credit Agreement that the Pledgors shall have executed and delivered this
Pledge Agreement to the Administrative Agent for the ratable benefit of the
Lenders and the Issuing Lender.


         NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective loans to the Borrower, and the
Issuing Lender to issue its letters of credit, under the Credit Agreement, each
Pledgor hereby agrees with the Administrative Agent, for the ratable benefit of
the Lenders, as follows:

         1. Defined Terms. (a) Unless otherwise defined herein, terms which are
defined in the Credit Agreement and used herein shall have the meanings given
to them in the Credit Agreement.

         (b) The following terms shall have the following meanings:

         "Additional Pledged Stock" shall have the meaning provided in any
supplement to this Pledge Agreement delivered pursuant to Section 5(e) hereof.

         "Additional Pledged LLC Interest" shall have the meaning provided in
any supplement to this Pledge Agreement delivered pursuant to Section 5(f)
hereof.


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         "Additional Pledged Partnership Interest" shall have the meaning
provided in any supplement to this Pledge Agreement delivered pursuant to
Section 5(g) hereof.

         "Code" means the Uniform Commercial Code from time to time in effect
in the State of New York.

         "Collateral" means the Pledged Interests and all Proceeds.

         "Collateral Account" means any account established to hold money
Proceeds, maintained under the sole dominion and control of the Administrative
Agent, subject to withdrawal by the Administrative Agent for the account of the
Lenders as provided in subsection 8(a).

         "Hedge Agreement": as to any Person, any swap, cap, collar or similar
arrangement entered into by such Person providing for protection against
fluctuations in interest rates or currency exchange rates or the exchange of
nominal interest obligations, either generally or under specific contingencies.

         "Issuer" means each of the corporations identified on Schedule I (or
in a supplement thereto) as an issuer of any Pledged Interest.

         "Limited Liability Company": any Issuer identified as a limited
liability company on Part B of Schedule I hereto or in a supplement thereto.

         "LLC Interest": any limited liability company interest.

         "Limited Liability Company Agreement": as to any Limited Liability
Company (or in any supplement hereto), its certificate of formation and
operating agreement or other Governing Documents, as each may be amended,
supplemented or otherwise modified from time to time.

         "Partnership": any Issuer identified as a partnership on Part C of
Schedule I hereto or in a supplement thereto.

         "Partnership Agreement": as to any Partnership (or in any supplement
hereto), its certificate of formation and partnership agreement or other
Governing Documents, as each may be amended, supplemented or otherwise modified
from time to time.

         "Pledge Agreement" means this Pledge Agreement, as amended,
supplemented or otherwise modified from time to time.

         "Pledged Collateral" means the Pledged Interests, and all Proceeds.

         "Pledged Interests" means the collective reference to all Pledged
Stock, Pledged LLC Interests and Pledged Partnership Interests.


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         "Pledged LLC Interest" means any and all of Borrower's interests,
including units of membership interest, in the Limited Liability Companies as
set forth in Schedule I attached hereto and any Additional Pledged LLC Interest
at any time pledged pursuant to Section 5(f), including, without limitation,
all its rights to participate in the operation or management of the Limited
Liability Companies and all its rights to properties, assets, member interests
and distributions under the Limited Liability Company Agreements in respect of
such member interests. "Pledged LLC Interest" also includes (i) all accounts
receivable arising out of the applicable Limited Liability Company Agreements
in respect of such Pledged LLC Interests ("Accounts"); (ii) all general
intangibles arising out of the applicable Limited Liability Company Agreements
in respect of, or constituted by, such Pledged LLC Interest ("General
Intangibles"); and (iii) to the extent not otherwise included, all Proceeds of
any and all of the foregoing (including within Proceeds, whether or not
otherwise included therein, and any and all contractual rights of the Borrower
under any revenue sharing or similar agreement to receive all or any portion of
the revenues or profits of the Issuer of any Pledged LLC Interest).

         "Pledged Partnership Interest" means any and all of Borrower's
interests, including units of membership interest, in the Partnerships as set
forth in Schedule I attached hereto and any Additional Pledged Partnership
Interest at any time pledged pursuant to Section 5(g), including, without
limitation, all its rights to participate in the operation or management of the
Partnership and all its rights to properties, assets, partnership interests and
distributions under the Partnership Agreements in respect of such member
interests. "Pledged Partnership Interest" also includes (i) all accounts
receivable arising out of the applicable Partnership Agreements in respect of
such Pledged Partnership Interests ("Accounts"); (ii) all general intangibles
arising out of the applicable Partnership Agreements in respect of, or
constituted by, such Pledged Partnership Interest ("General Intangibles"); and
(iii) to the extent not otherwise included, all Proceeds of any and all of the
foregoing (including within Proceeds, whether or not otherwise included
therein, and any and all contractual rights of the Borrower under any revenue
sharing or similar agreement to receive all or any portion of the revenues or
profits of the Issuer of any Pledged Partnership Interest).

         "Pledged Stock" means, as to each Pledgor, the shares of capital stock
listed on Schedule I hereto as owned by such Pledgor, together with all stock
certificates, options or rights of any nature whatsoever which may be issued or
granted by any of the Issuers to the Pledgors while this Pledge Agreement is in
effect, together with any Additional Pledged Stock at any time pledged pursuant
to Section 5(e).

         "Proceeds" means all "proceeds" as such term is defined in Section
9-306(1) of the Uniform Commercial Code in effect in the State of New York on
the date hereof and, in any event, shall include, without limitation, all
dividends or other income from the Pledged Interests, collections thereon or
distributions with respect thereto.

         "Secured Obligations" is the collective reference to (a) the
Obligations, and (b) all obligations and liabilities of each Pledgor to the
Administrative Agent and the Lenders, 


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whether direct or indirect, absolute or contingent, due or to become due, or
now existing or hereafter incurred, which may arise under, out of or in
connection with any Hedge Agreement entered into by any Pledgor with any Lender
and any other document made, delivered or given in connection therewith,
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses (including, without limitation, all fees and
disbursements of counsel to the Administrative Agent or to the Lenders that are
required to be paid by any Pledgor pursuant to the terms of such Hedge
Agreement or other documents) or otherwise.

         "Securities Act" means the Securities Act of 1933, as amended.

         (c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Pledge Agreement shall refer to this Pledge Agreement
as a whole and not to any particular provision of this Pledge Agreement, and
Section, Schedule. Annex, and Exhibit references are to this Pledge Agreement
unless otherwise specified. The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.

         2. Pledge; Grant of Security Interest. Each Pledgor hereby delivers to
the Administrative Agent all the Pledged Interests as owned by such Pledgor and
hereby grants to the Administrative Agent, for the ratable benefit of the
Lenders and the Issuing Lender, a first security interest in the Pledged
Collateral, as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Secured Obligations.

         3. Stock Powers. Concurrently with the delivery to the Administrative
Agent of each certificate representing one or more shares of Pledged Interests,
each Pledgor shall deliver an undated transfer power covering such certificate,
duly executed in blank with, if the Administrative Agent so requests, signature
guaranteed.

         4. Representations and Warranties. Each Pledgor represents and
warrants that:

         (a) the shares of Pledged Stock listed on Part A of Schedule I
    constitute all the issued and outstanding shares of all classes of the
    Capital Stock of the Issuers and are represented by the certificates listed
    thereon;

         (b) all the shares of the Pledged Stock have been duly and validly
    issued and are fully paid and nonassessable;

         (c) the Pledged LLC Interests listed on Part B of Schedule I
    constitute all the issued and outstanding limited liability company
    interests of all classes of the Issuers and, if certificated, are
    represented by the certificates listed thereon;

         (d) each Pledgor is the record and beneficial owner of, and has title
    to, the Pledged Interests attributable to such Pledgor, free of any and all
    Liens or options in 


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    favor of, or claims of, any other Person, except the Lien created by this 
    Pledge Agreement;

         (e) upon delivery to the Administrative Agent of the stock
    certificates evidencing the Pledged Stock (and assuming the continuing
    possession by the Administrative Agent of such stock certificate in
    accordance with the requirements of applicable law), the Lien granted
    pursuant to this Pledge Agreement will constitute a valid, perfected first
    priority Lien on the Pledged Interests in favor of the Administrative
    Agent, for the ratable benefit of the Lenders and the Issuing Lender,
    enforceable as such against all creditors of each Pledgor and any Persons
    purporting to purchase any Pledged Collateral from any Pledgor; and

         (f) none of the Pledged LLC Interests or Pledged Partnership Interests
    (i) are dealt in or traded on securities exchanges or in securities
    markets, (ii) are by their terms expressly subject to Article 8 of the
    Uniform Commercial Code of any jurisdiction, (iii) constitute an investment
    company security or (iv) are held in a securities account (in each case
    within the meaning of Section 8-103(c) of the Uniform Commercial Code of
    any jurisdiction which has adopted the 1994 version of Article 8 of the
    Uniform Commercial Code promulgated by the American Law Institute and the
    National Conference of Commissioners on Uniform State Laws);

         (g) all consents of each member in each Limited Liability Company to
    the grant of the security interests provided hereby and to the transfer of
    the Pledged LLC Interests to the Agent or its designee pursuant to the
    exercise of any remedies under Section 8 hereof have been obtained and are
    in full force and effect; and

         (h) upon the filing of UCC-1 financing statements required to perfect
    the security interest granted hereunder in Accounts and General Intangibles
    arising out of the Limited Liability Company Agreements in respect of the
    Pledged LLC Interests and arising out of the Partnership Agreements in
    respect of the Pledged Partnership Interests under the Uniform Commercial
    Code in effect in the applicable states in which such Limited Liability
    Companies or Partnerships were formed, the Liens granted pursuant to this
    Agreement shall constitute perfected first priority Liens on the Pledged
    Collateral consisting of Accounts, General Intangibles and Proceeds of each
    in favor of the Administrative Agent, enforceable as such against all
    creditors of each Pledgor and any Persons purporting to purchase any
    Pledged Collateral from any Pledgor.

         5. Covenants. Each Pledgor covenants and agrees with the
Administrative Agent that, from and after the date of this Pledge Agreement
until the Secured Obligations are paid in full and the Commitments have been
terminated:

         (a) If a Pledgor shall, as a result of its ownership of Pledged
    Interests, become entitled to receive or shall receive any stock
    certificate (including, without limitation, any certificate representing a
    stock dividend or a distribution in connection with any reclassification,
    increase or reduction of capital or any certificate issued in 


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    connection with any reorganization), option or rights, whether in addition
    to, in substitution for, as a conversion of, or in exchange for any shares
    of such Pledged Collateral, or otherwise in respect thereof, such Pledgor
    shall accept the same as the Administrative Agent's and the Lenders' agent,
    hold the same in trust for the Administrative Agent and the Lenders and
    deliver the same forthwith to the Administrative Agent in the exact form
    received, duly indorsed by each Pledgor to the Administrative Agent, if
    required, together with an undated stock power covering such certificate
    duly executed in blank and with, if the Administrative Agent so requests,
    signature guaranteed, to be held by the Administrative Agent, for the
    ratable benefit of the Lenders and the Issuing Lender subject to the terms
    hereof as additional collateral security for the Secured Obligations. Any
    sums paid upon or in respect of the Pledged Collateral upon the liquidation
    or dissolution of any of the Issuers shall be paid over to the
    Administrative Agent to be held by it hereunder for the ratable benefit of
    the Lenders and the Issuing Lender as additional collateral security for
    the Secured Obligations, and in case any distribution of capital shall be
    made on or in respect of the Pledged Collateral or any property shall be
    distributed upon or with respect to the Pledged Collateral pursuant to the
    recapitalization or reclassification of the capital of any of the Issuers
    or pursuant to the reorganization thereof, the property so distributed
    shall be delivered to the Administrative Agent to be held by it for the
    ratable benefit of the Lenders and the Issuing Lender and the Issuer,
    subject to the terms hereof, as additional collateral security for the
    Secured Obligations. If any sums of money or property so paid or
    distributed in respect of the Pledged Collateral shall be received by the
    Pledgors, each Pledgor shall, until such money or property is paid or
    delivered to the Administrative Agent, hold such money or property in trust
    for the Administrative Agent, the Lenders and the Issuing Lender segregated
    from other funds of the Pledgors, as additional collateral security for the
    Secured Obligations.

         (b) Without the prior written consent of the Administrative Agent, no
    Pledgor will (i) vote to enable, or take any other action to permit, any of
    the Issuers to issue any stock or other equity securities of any nature or
    to issue any other securities convertible into or granting the right to
    purchase or exchange for any stock or other equity securities of any of the
    Issuers, or (ii) sell, assign, transfer, exchange or otherwise dispose of,
    or grant any option with respect to, the Collateral, or (iii) create, incur
    or permit to exist any Lien or option in favor of, or any claim of any
    Person with respect to, any of the Collateral, or any interest therein,
    except for the Lien provided for by this Pledge Agreement, or (iv) enter
    into any agreement or undertaking restricting the right or ability of such
    Pledgor or the Administrative Agent to sell, assign or transfer any of the
    Collateral.

         (c) Each Pledgor shall maintain the security interest created by this
    Pledge Agreement as a first, perfected security interest and shall defend
    such security interest against the claims and demands of all Persons
    whomsoever. At any time and from time to time, upon the written request of
    the Administrative Agent, and at the sole expense of each Pledgor, each
    Pledgor will promptly and duly execute and deliver such further 


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    instruments and documents and take such further actions as the
    Administrative Agent may reasonably request for the purposes of obtaining
    or preserving the full benefits of this Pledge Agreement and of the rights
    and powers herein granted. If any amount payable under or in connection
    with any of the Collateral shall be or become evidenced by any promissory
    note, other instrument or chattel paper, such note, instrument or chattel
    paper shall be immediately delivered to the Administrative Agent, duly
    endorsed in a manner satisfactory to the Administrative Agent, to be held
    as Collateral pursuant to this Pledge Agreement.

         (d) Each Pledgor agrees to pay, and to save the Administrative Agent
    and the Lenders and the Issuing Lender harmless from, any and all
    liabilities with respect to, or resulting from any delay in paying, any and
    all stamp, excise, sales or other taxes which may be payable or determined
    to be payable with respect to any of the Collateral or in connection with
    any of the transactions contemplated by this Pledge Agreement.

         (e) Pursuant to Section 9.10 of the Credit Agreement, if a Pledgor
    shall at any time acquire any shares of Capital Stock of any Subsidiary
    which is not an Issuer hereunder, such Pledgor shall (i) immediately
    deliver such shares of Capital Stock, and all stock certificates evidencing
    the same, to the Administrative Agent to be held as additional collateral
    security for the Secured Obligations hereunder, (ii) promptly deliver to
    the a supplement to this Pledge Agreement, substantially in the form of
    Exhibit A to this Pledge Agreement, duly completed, adding such shares of
    Capital Stock to Part A of Schedule I hereto, and (iii) promptly cause such
    Subsidiary to execute and deliver an acknowledgment and consent
    substantially in the form appended as Annex I to Exhibit A to this Pledge
    Agreement.

         (f) Pursuant to Section 9.10 of the Credit Agreement, if a Pledgor
    shall at any time acquire any interest in any Subsidiary limited liability
    company which is not an Issuer hereunder, such Pledgor shall (i)
    immediately pledge, assign and transfer such LLC Interest to the
    Administrative Agent to be held as additional collateral security for the
    Secured Obligations hereunder, (ii) promptly deliver to the Administrative
    Agent a supplement to this Pledge Agreement, substantially in the form of
    Exhibit A to this Pledge Agreement, duly completed, adding such LLC
    Interest to Part B of Schedule I hereto, and (iii) promptly cause such
    Subsidiary to execute and deliver an acknowledgment and consent
    substantially in the form appended as Annex I to Exhibit A to this Pledge
    Agreement.

         (g) Pursuant to Section 9.10 of the Credit Agreement, if a Pledgor
    shall at any time acquire any interest in any Subsidiary partnership which
    is not an Issuer hereunder, such Pledgor shall (i) immediately pledge,
    assign and transfer such Partnership Interest to the Administrative Agent
    to be held as additional collateral security for the Secured Obligations
    hereunder, (ii) promptly deliver to the Administrative Agent a supplement
    to this Pledge Agreement, substantially in the form of Exhibit A to this
    Pledge Agreement, duly completed, adding such Partnership 


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    Interest to Part B of Schedule I hereto, and (iii) promptly cause such
    Subsidiary to execute and deliver an acknowledgment and consent
    substantially in the form appended as Annex I to Exhibit A to this Pledge
    Agreement.

         6. Cash Dividends; Voting Rights. Unless an Event of Default shall
have occurred and be continuing and the Administrative Agent shall have given
notice to the Pledgors of the Administrative Agent's intent to exercise its
corresponding rights pursuant to Section 7 below, the Pledgors shall be
permitted to receive all cash dividends paid in the normal course of business
of the Issuers and consistent with past practice, to the extent permitted in
the Credit Agreement, in respect of the Pledged Collateral and to exercise all
voting, corporate (with respect to stock), member (with respect to LLC
interests) and partnership (with respect to partnership interests rights with
respect to the Pledged Collateral; provided, however, that no vote shall be
cast or corporate right exercised or other action taken which would impair the
Collateral or which would be inconsistent with or result in any violation of
any provision of the Credit Agreement, the Notes, this Pledge Agreement or the
other Loan Documents.

         7. Rights of the Administrative Agent. (a) All money Proceeds received
by the Administrative Agent hereunder shall be held by the Administrative Agent
for the benefit of the Lenders and the Issuing Lender in a Collateral Account.
All Proceeds while held by the Administrative Agent in a Collateral Account (or
by the Pledgors in trust for the Administrative Agent and the Lenders and the
Issuing Lender) shall continue to be held as collateral security for all the
Secured Obligations and shall not constitute payment thereof until applied as
provided in Section 8(a).

         (b) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the Pledgors: (i) the Administrative Agent shall have the right to receive any
and all cash dividends paid in respect of the Pledged Interests and make
application thereof to the Secured Obligations in such order as it may
determine, and (ii) at the request of the Administrative Agent, all shares of
the Pledged Collateral shall be registered in the name of the Administrative
Agent or its nominee, and the Administrative Agent or its nominee may
thereafter exercise (A) all voting, corporate or other rights pertaining to
such shares of the Pledged Stock at any meeting of shareholders of any of the
Issuers or otherwise; (B) all member rights, powers and privileges with respect
to the Pledged LLC Interests to the same extent as a member under the
applicable Limited Liability Company Agreement; (C) all partner rights, powers
and privileges with respect to the Pledged Partnership Interests to the same
extent as a member under the applicable Partnership Agreement; and (D) any and
all rights of conversion, exchange, subscription and any other rights,
privileges or options pertaining to such shares of the Pledged Interests as if
it were the absolute owner thereof (including, without limitation, the right to
exchange at its discretion any and all of the Pledged Interests upon the
merger, consolidation, reorganization, recapitalization or other fundamental
change in the corporate structure of any of the Issuers, or upon the exercise
by the Pledgors or the Administrative Agent of any right, privilege or option
pertaining to such shares of the Pledged Interests, and in connection
therewith, the right to 


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deposit and deliver any and all of the Pledged Interests with any committee,
depository, transfer Administrative Agent, registrar or other designated agency
upon such terms and conditions as it may determine), all without liability
except to account for property actually received by it, but the Administrative
Agent shall have no duty to exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing.

         (c) The rights of the Administrative Agent hereunder shall not be
conditioned or contingent upon the pursuit by the Administrative Agent of any
right or remedy against any of the Issuers or against any other Person which
may be or become liable in respect of all or any part of the Obligations or
against any other collateral security therefor, guarantee thereof or right of
offset with respect thereto. The Administrative Agent shall not be liable for
any failure to demand, collect or realize upon all or any part of the
Collateral or for any delay in doing so, nor shall it be under any obligation
to sell or otherwise dispose of any Collateral upon the request of the Pledgors
or any other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof.

         8. Remedies. (a) If an Event of Default shall have occurred and be
continuing, at any time at the Administrative Agent's election, the
Administrative Agent may apply all or any part of the Proceeds held in any
Collateral Account in payment of the Secured Obligations in such order as the
Administrative Agent may elect.

         (b) If an Event of Default shall occur and be continuing, the
Administrative Agent may exercise, in addition to all other rights and remedies
granted in this Pledge Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of
a secured party under the Code. Without limiting the generality of the
foregoing, the Administrative Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon the Pledgors, the Issuers
or any other Person (all and each of which demands, defenses, advertisements
and notices are hereby waived), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, assign, give option or options to purchase or
otherwise dispose of and deliver the Collateral or any part thereof (or
contract to do any of the foregoing), in one or more parcels at public or
private sale or sales, in the over-the-counter market, at any exchange,
broker's board or office of the Administrative Agent or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk. The Administrative Agent or any Lender or the Issuing Lender shall
have the right upon any such public sale or sales, and, to the extent permitted
by law, upon any such private sale or sales, to purchase the whole or any part
of the Collateral so sold, free of any right or equity of redemption in the
Pledgors, which right or equity is hereby waived or released. The
Administrative Agent shall apply any Proceeds from time to time held by it and
the net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of every
kind incurred therein or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the 


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rights of the Administrative Agent and the Lenders and the Issuing Lender
hereunder, including, without limitation, reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Secured Obligations,
in such order as the Administrative Agent may elect, and only after such
application and after the payment by the Administrative Agent of any other
amount required by any provision of law, including, without limitation, Section
9-504(1)(c) of the Code, need the Administrative Agent account for the surplus,
if any, to the Pledgors. To the extent permitted by applicable law, each
Pledgor waives all claims, damages and demands it may acquire against the
Administrative Agent or any Lender or the Issuing Lender arising out of the
exercise by the Administrative Agent of any of its rights hereunder. If any
notice of a proposed sale or other disposition of Collateral shall be required
by law, such notice shall be deemed reasonable and proper if given at least 10
days before such sale or other disposition. The Pledgors shall remain liable
for any deficiency if the proceeds of any sale or other disposition of
Collateral are insufficient to pay the Secured Obligations and the fees and
disbursements of any attorneys employed by the Administrative Agent or any
Lender or the Issuing Lender to collect such deficiency.

         9. Registration Rights; Private Sales. (a) If the Administrative Agent
shall determine to exercise its right to sell any or all of the shares of
Pledged Interests pursuant to Section 8 hereof, and if in the opinion of the
Administrative Agent it is necessary or advisable to have the Pledged
Collateral, or that portion thereof to be sold, registered under the provisions
of the Securities Act, each Pledgor will cause any or all of the Issuers to (i)
execute and deliver, and cause the officers of such Issuers to execute and
deliver, all such instruments and documents, and do or cause to be done all
such other acts as may be, in the opinion of the Lender and the Issuing Lender,
necessary or advisable to register the shares of Pledged Interests, or that
portion of them to be sold, under the provisions of the Securities Act, (ii) to
use its best efforts to cause the registration statement relating thereto to
become effective and to remain effective for a period of one year from the date
of the first public offering of the shares of Pledged Interests or that portion
thereof to be sold, and (iii) to make all amendments thereto and/or to the
related prospectus which, in the opinion of the Administrative Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto. Each Pledgor agrees to cause the Issuers to
comply with the provisions of the securities or "Blue Sky" laws of any and all
jurisdictions which the Lender and the Issuing Lender shall designate and to
make available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) which will satisfy the provisions of
Section 11(a) of the Securities Act.

         (b) Each Pledgor recognizes that the Administrative Agent may be
unable to effect a public sale of any or all the Pledged Interests, by reason
of certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Pledgor acknowledges and agrees that any such private sale may result in prices
and other terms less 


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<PAGE>   11
favorable to the Administrative Agent than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The
Administrative Agent shall be under no obligation to delay a sale of any of the
Pledged Interests for the period of time necessary to permit the Issuers to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if the Issuers would agree to do so.

         (c) Each Pledgor further agrees to use its reasonable efforts to do or
cause to be done all such other acts as may be necessary to make any sale or
sales of all or any portion of the Pledged Interests pursuant to this Pledge
Agreement valid and binding and in compliance with any and all other applicable
Requirements of Law. Each Pledgor further agrees that a breach of any of the
covenants contained in this Section will cause irreparable injury to the
Administrative Agent and the Lenders and the Issuing Lender, that the
Administrative Agent and the Lenders and the Issuing Lender have no adequate
remedy at law in respect of such breach and, as a consequence, that each and
every covenant contained in this Section shall be specifically enforceable
against the Pledgors, and each Pledgor hereby waives and agrees not to assert
any defenses against an action for specific performance of such covenants
except for a defense that no Event of Default has occurred under the Credit
Agreement.

         10. Irrevocable Authorization and Instruction to Issuers. Each Pledgor
hereby authorizes and instructs each Issuer to comply with any instruction
received by it from the Administrative Agent in writing that (a) states that an
Event of Default has occurred and (b) is otherwise in accordance with the terms
of this Pledge Agreement, without any other or further instructions from the
Pledgors, and the Pledgors agrees that each Issuer shall be fully protected in
so complying.

         11. Administrative Agent's Appointment as Attorney-in-Fact. (a) Each
Pledgor hereby irrevocably constitutes and appoints the Administrative Agent
and any officer or agent of the Administrative Agent, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of the Pledgors and in the name of
the Pledgors or in the Administrative Agent's own name, from time to time in
the Administrative Agent's discretion, for the purpose of, during the
continuance of an Event of Default, carrying out the terms of this Agreement,
to take any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Pledge Agreement, including, without limitation, any financing statements,
endorsements, assignments or other instruments of transfer.

         (b) Each Pledgor hereby ratifies all that said attorneys shall
lawfully do or cause to be done pursuant to the power of attorney granted in
Section 11(a). All powers, authorizations and agencies contained in this Pledge
Agreement are coupled with an interest and are irrevocable until this Pledge
Agreement is terminated and the security interest created hereby are released.

         12. Limitation on Duties Regarding Collateral. The Administrative
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in 


                                       23
<PAGE>   12
its possession, under Section 9-207 of the Code or otherwise, shall be to deal
with it in the same manner as the Administrative Agent deals with similar
securities and property for its own account, except that the Administrative
Agent shall have no obligation to invest funds held in any Collateral Account
and may hold the same as demand deposits. Neither the Administrative Agent, any
Lender, the Issuing Lender or any of their respective directors, officers,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
the Pledgors or any other Person or to take any other action whatsoever with
regard to the Collateral or any part thereof.

         13. Execution of Financing Statements. Pursuant to Section 9-402 of
the Code, the Pledgors hereby authorizes the Administrative Agent to file
financing statements with respect to the Collateral without the signature of
the Pledgors in such form and in such filing offices as the Administrative
Agent reasonably determines appropriate to perfect the security interests of
the Administrative Agent under this Pledge Agreement. A carbon, photographic or
other reproduction of this Pledge Agreement shall be sufficient as a financing
statement for filing in any jurisdiction.

         14. Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.

         15. Notices. Notices, requests and demands to or upon the
Administrative Agent or the Pledgors hereunder shall be effected in the manner
set forth in Section 13.2 of the Credit Agreement.

         16. Authority of Administrative Agent. Each Pledgor acknowledges that
the rights and responsibilities of the Administrative Agent under this Pledge
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Pledge Agreement shall, as between the Administrative Agent
and the Lenders and the Issuing Lender, be governed by the Credit Agreement and
by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Administrative Agent and the Pledgors, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Lenders and the Issuing Lender with full and valid authority so to act or
refrain from acting, and neither the Pledgors nor any Issuer shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.

         17. Severability. Any provision of this Pledge Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.


                                       24
<PAGE>   13

         18. Paragraph Headings. The paragraph headings used in this Pledge
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.

         19. No Waiver; Cumulative Remedies. Neither the Administrative Agent
nor any Lender nor the Issuing Lender shall by any act (except by a written
instrument pursuant to Section 20 hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Lender or the
Issuing Lender, any right, power or privilege hereunder shall operate as a
waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent or
any Lender or the Issuing Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent or any Lender or the Issuing Lender would otherwise have
on any future occasion. The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.

         20. Waivers and Amendments; Successors and Assigns; Governing Law.
None of the terms or provisions of this Pledge Agreement may be waived,
amended, supplemented or otherwise modified except by a written instrument
executed by the Pledgors, and the Administrative Agent, provided that any
provision of this Pledge Agreement may be waived by the Administrative Agent in
a letter or agreement executed by the Administrative Agent or by telex or
facsimile transmission from the Administrative Agent. This Pledge Agreement
shall be binding upon the successors and assigns of the Pledgors and shall
inure to the benefit of the Administrative Agent and the Lenders and the
Issuing Lender and their respective successors and assigns. THIS PLEDGE
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

                            [SIGNATURE PAGE FOLLOWS]


                                       25
<PAGE>   14
         IN WITNESS WHEREOF, the undersigned has caused this Pledge Agreement
to be duly executed and delivered as of the date first above written.

                              DENALI INCORPORATED,

                              DENALI MANAGEMENT, INC., and

                              DENALI HOLDINGS MANAGEMENT, L.L.C.


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



                              CONTAINMENT SOLUTIONS, INC., and

                              SPECIALTY SOLUTIONS, INC.

                              By: /s/ Janice C. McCormick
                                 -------------------------------
                                 Name:  Janice C. McCormick
                                 Title:  Assistant Secretary



                                      26
<PAGE>   15
                           ACKNOWLEDGMENT AND CONSENT

         The undersigned, the Issuers referred to in the foregoing Pledge
Agreement, hereby acknowledge receipt of a copy thereof and agree to be bound
thereby and to comply with the terms thereof insofar as such terms are
applicable to it. The undersigned agree to notify the Administrative Agent
promptly in writing of the occurrence of any of the events described in Section
5(a) of the Pledge Agreement. The undersigned further agree that the terms of
Section 9(c) of the Pledge Agreement shall apply to them, mutatis mutandis,
with respect to all actions that may be required of them under or pursuant to
or arising out of Section 9 of the Pledge Agreement.

                              CONTAINMENT SOLUTIONS SERVICES, INC.

                              INSTRUMENTATION SOLUTIONS, INC.,

                              DENALI MANAGEMENT INC.,

                              DENALI HOLDINGS MANAGEMENT, L.L.C., and

                              DENALI OPERATING MANAGMENT, LTD.

                                        By:  DENALI HOLDINGS 
                                        MANAGEMENT, L.L.C.
                                        its general partner

                              By:  /s/ Janice C. McCormick
                                  -------------------------------
                                Name: Janice C. McCormick
                                Title: Assistant Secretary


                                      27