<PAGE>

                                                                   Exhibit 10.16

                GREAT LAKES/NORTH AMERICAN SITE DEVELOPERS, INC.
                       JUNIOR SUBORDINATED PROMISSORY NOTE

$750,000                                                 Dated:  April 24, 2001

                  For Value Received, the undersigned, Great Lakes/North
American Site Developers, Inc., a Massachusetts corporation (the "Company"),
promises to pay to Joseph K. Berardi, an individual residing in Massachusetts
("Payee"), the principal amount of Seven Hundred Fifty Thousand Dollars
($750,000), together with interest from the date hereof on the principal amount
from time to time outstanding at the rate which as of the date hereof, is the
greater of (i) six percent (6%) per annum or (ii) the interest rate required to
be earned by the Internal Revenue Code of 1986, as amended, to avoid the
imputation of interest. Subject to Section 4 hereof, all outstanding principal
shall be payable in a single installment on March 31, 2004 (the "Payment Date").
All interest shall be payable in arrears annually on the anniversary date
hereof.

                  This Junior Subordinated Promissory Note (this "Note") is
issued subject to the following additional terms and conditions:

                  1. TYPE OF PAYMENT. Payments of both principal and interest on
this Note shall be made in coin or currency of the United States of America
which at the time of payment shall be legal tender for the payment of public and
private debts.

                  2. PLACE OF PAYMENT. Payment shall be made to Payee at the
then principal office of the Company, or such other address as a Payee shall
direct the Company in writing.

                  3. OPTIONAL PAYMENT. Anything herein to the contrary
notwithstanding, the Company may prepay this Note, in whole or in part, at any
time and from time to time, without a premium or penalty.

                  4. RIGHTS TO DEFER PAYMENT DATE.

                  (a) If the Company has failed to average EBITDA (as
hereinafter defined) of at least $10 Million for the fiscal years ended December
31, 2001, 2002 and 2003 THEN the Company shall have the option in its sole
discretion to defer the Payment Date from March 31, 2004 to December 31, 2004.

                  (b) EBITDA shall be determined based on the Company's annual
financial statements.

                  (c) For purposes hereof, "EBITDA" shall mean the earnings of
the Company before interest expense, income taxes, depreciation and amortization
expense, and any management fees charged by Great Lakes Dredge & Dock
Corporation ("GLD Corporation") or any affiliate of GLD Corporation; PROVIDED,
HOWEVER, fees or charges of GLD Corporation or any affiliate thereof for the
provision of services which directly benefit the Company shall not constitute
management fees.

<PAGE>

                  5. INTEREST ON OVERDUE PAYMENTS. All payments of principal
unpaid after the same shall become due and payable shall bear interest at the
per annum interest rate of 9%; PROVIDED, HOWEVER, that principal amounts which
are unpaid because they are prohibited by the subordination terms set forth in
ANNEX A hereto shall continue to accrue interest at the interest rate provided
for in the first paragraph of this Note.

                  6. DEFAULT. If one or more of the following events, herein
called "Events of Default," shall occur and be continuing:

                  (a) If the Company defaults in the payment of any principal
of, or interest on, this Note when the same becomes due and payable and such
default continues for a period of 30 days following receipt by the Company of
written notice of such default; PROVIDED, HOWEVER, it shall not constitute an
Event of Default if such failure is because such payments are prohibited by the
subordination terms set forth in ANNEX A hereto;

                  (b) If a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver or liquidator or trustee or assignee
in bankruptcy or insolvency of the Company or a substantial part of its
property, or for the winding up or liquidation of its affairs, shall have been
entered, and such decree or order shall have remained in force undischarged and
unstayed for a period of 60 days; or if any substantial part of the property of
the Company shall be sequestered or attached and shall not be returned to the
possession of the Company or released from such attachment within 60 days
thereafter; or

                  (c) If a decree or order by a court having jurisdiction in the
premises shall have been entered adjudging the Company a bankrupt or insolvent,
or approving as properly filed a petition seeking reorganization, readjustment,
arrangement, composition or similar relief of the Company under the federal
bankruptcy laws, or any other similar applicable federal or state laws; or if
the Company shall institute proceedings to be adjudicated a voluntary bankrupt,
or shall consent to the filing of a bankruptcy proceeding against it, or shall
file a petition or answer or consent seeking reorganization, readjustment,
arrangement, composition or similar relief under federal bankruptcy laws, or any
other similar applicable federal or state law, or shall consent to the filing of
any such petition, or shall consent to the appointment of a receiver or
liquidator or trustee or assignee in bankruptcy or insolvency of it or a
substantial part of its property, or shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts generally as
they become due, or if corporate action shall be taken by the Company in
furtherance of any of the aforesaid purposes;

then, and in each such case, the Payee at its election and by notice to the
Company and at any time and from time to time, may declare all or part of the
principal of and interest on this Note immediately payable, and thereupon the
same shall become immediately payable.

                  7. MANDATORY PRE-PAYMENT. (a) Upon the occurrence of a Sale
Event (as hereinafter defined), the Company shall on or prior to the
consummation of such Sale Event pre-pay in full the outstanding principal and
interest balance on this Note.

                                       2

<PAGE>

                  (b) For purposes hereof, "Sale Event" shall mean (i) a sale of
all or substantially all of the assets of the Company; (ii) a sale of common
stock of the Company resulting in the Operating Stockholders (as defined in the
Acquisition Agreement) and GLD Corporation (and its affiliates) owning less than
50.1% of the outstanding common stock of the Company; (iii) a merger,
consolidation or reorganization of the Company pursuant to which the Operating
Stockholders and GLD Corporation (and its affiliates) own less than 50.1% of the
outstanding common stock of the Company; or (iv) a "change in control" of GLD
Corporation occurs as that term is defined in its Indenture for the $115 million
of 11 1/4% Senior Subordinated Notes due 2008. Notwithstanding anything
contained herein to the contrary, the merger of the Company and North American
Site Developers, Inc. ("NASDI") shall not constitute a Sale Event.

                  8. SUBORDINATION.

                  (a) The Payee by its acceptance of this Note acknowledges and
agrees that the payment of principal and interest on this Note and the
obligations of the Company hereunder are subordinate and junior in right of
payment to all Senior Indebtedness on the terms and conditions set forth in
ANNEX A hereto, which ANNEX A is herein incorporated by reference and made a
part hereof as if set forth in its entirety herein.

                  (b) "Senior Indebtedness" shall have the meaning provided in
SECTION 1.07 of ANNEX A hereto.

                  (c) The Payee by its acceptance of this Note acknowledges and
agrees that (i) the payment of principal and interest on this Note and the
obligations hereunder are and will be subordinated and junior in right of
payment to (A) any refinancing of the Senior Indebtedness with different
financial institutions or holders and (B) any indebtedness for borrowed money
hereafter incurred by the Company for the purpose of working capital, capital
expenditure or the acquisition of new business by the Company; and (ii) he shall
execute such documents, instruments and agreements to effect the foregoing as
may be reasonably requested by the Company from time to time.

                  9. SET OFF. The Company shall have the right from time to time
to set off against and reduce any amounts it owes the Payee under this Note any
claims it may have against the Stockholders (as that term is defined in the
Acquisition Agreement (as hereinafter defined)) under the Acquisition Agreement
which the Stockholders fail to satisfy in accordance with the terms of the
Acquisition Agreement, subject to the terms thereof. As used herein,
"Acquisition Agreement" means that certain Stock Purchase Agreement dated as of
April 17, 2001 among the Company, GLD Corporation, NASDI and the stockholders of
NASDI, as from time amended, supplemented or otherwise modified as therein
provided.

                                       3

<PAGE>

                  10. MISCELLANEOUS.

                  (a) The Company agrees to pay all reasonable costs of
collection and reasonable attorneys' fees paid or incurred in enforcing any of
the rights hereunder of the Payee or any other holder hereof.

                  (b) This Note shall be binding upon the Company and its
successors and assigns.

                  (c) The Payee may not pledge, transfer or assign this Note or
Payee's rights under this Note without the prior written consent of the Company.

                  (d) If any provision hereof shall be held invalid or
unenforceable by any court of competent jurisdiction or as a result of future
legislative action, such holding or action shall be strictly construed and shall
not affect the validity or effect of any other provision hereof.

                  (e) The validity, interpretation and effect of this Note shall
be exclusively governed by, and construed in accordance with, the laws of the
State of Illinois, excluding the "conflict of laws" rules of that state.

                  (f) The Company has not, directly or indirectly, through any
broker, agent, representative or otherwise, offered this Note or any similar
securities for sale to, or solicited any offer to buy the same from, or
otherwise approached or negotiated or communicated in respect thereof, with such
number of persons, or under such circumstances, so as to bring the issuance or
sale of this Note within the provisions of Section 5 of the Securities Act of
1933, as amended (the "1933 Act"). Each holder of this Note, by its acceptance
thereof, represents and warrants that it holds the Note for its own account for
investment and with no present intention of reselling, offering or distributing
this Note, that this Note will not be resold, offered or distributed except in a
manner which would not be in violation of, nor require registration under, the
1933 Act as at the time in effect, and that this Note will at all times be held
of record by one holder, whether or not held for the account of such holder or
by such holder for the account of others.

                  (g) All notices, requests, demands and other communications
under this Note shall be in writing and delivered in person or sent by courier
service or certified mail, postage prepaid, and properly addressed as follows:

               To the Company: Great Lakes/North American Site Developers, Inc.
                               2122 York Road
                               Oak Brook, Illinois 60523-1981
                               Attention: Chief Executive Officer

               To the Payee:   13 Pingry Way
                               Ayer, MA  01432

                                       4

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All notices and other communications required or permitted under this Note which
are addressed as provided in this Section 9(g), if delivered personally or by
courier service, shall be effective upon delivery, and, if delivered by
certified mail, shall be effective 3 days after deposit in the United States
mail, postage prepaid.

                  Any party may from time to time change its address for the
purposes of notices to that party by a similar notice specifying a new address,
but no such change shall be deemed to have been given until it is actually
received by the party sought to be charged with the contents thereof.

                  (h) For purposes of any action or proceeding in connection
with this Note, the parties hereto each hereby expressly submit to the
jurisdiction of the state and federal Courts located in the State of
Massachusetts. Further, the parties hereto each consent that any order, process,
notice of motion or other application to or by any said court or a judge thereof
may be served within or without such court's jurisdiction by registered mail or
by personal service, provided a reasonable time for appearance is allowed (but
not less than the time otherwise afforded by any law or rule), and waives any
right to contest the appropriateness of any action brought in any such court
based upon lack of personal jurisdiction, improper venue or forum non
conveniens.

                            [signature page follows]

                                       5

<PAGE>

                  IN WITNESS WHEREOF, the Company has caused this Note to be
executed the day and year first above written.



                                          GREAT LAKES/NORTH AMERICAN SITE
                                          DEVELOPERS, INC.

                                          By:      /s/ DOUGLAS B. MACKIE
                                             ---------------------------------
                                          Name:    DOUGLAS B. MACKIE
                                                   ---------------------------
                                          Title:   PRESIDENT
                                                ------------------------------

<PAGE>

                                     ANNEX A
                                       TO
                       JUNIOR SUBORDINATED PROMISSORY NOTE



         Section 1.01. SUBORDINATION OF LIABILITIES. Great Lakes/North American
Site Developers, Inc., a Delaware corporation (the "COMPANY"), for itself, its
successors and assigns, covenants and agrees and each holder of the Junior
Subordinated Promissory Note to which this ANNEX A is attached (the "PROMISSORY
NOTE") by its acceptance thereof likewise covenants and agrees that the payment
of the principal of, and interest on, and all other amounts owing in respect of,
the Promissory Note is hereby expressly subordinated, to the extent and in the
manner hereinafter set forth, to the prior payment in full in cash of all Senior
Indebtedness (as defined in SECTION 1.07). The provisions of this ANNEX A shall
constitute a continuing offer to all Persons which, in reliance upon such
provisions, become holders of, or continue to hold, Senior Indebtedness, and
such provisions are made for the benefit of the holders of Senior Indebtedness,
and such holders are hereby made obligees hereunder the same as if their names
were written herein as such, and they are/or each of them may proceed to enforce
such provisions.

         Section 1.02. COMPANY NOT TO MAKE PAYMENTS WITH RESPECT TO PROMISSORY
NOTE IN CERTAIN CIRCUMSTANCES. (a) Upon the maturity of any Senior Indebtedness
(including interest thereon or fees or any other amounts owing in respect
thereof), whether at stated maturity, by acceleration or otherwise, all Senior
Indebtedness owing in respect thereof, in each case to the extent due and owing,
shall first be paid in full, in cash, or such payment duly provided for in cash
in a manner satisfactory to the holder or holders of such Senior Indebtedness,
before any payment is made on account of the principal of (including
installments thereof), or interest on, or any amount otherwise owing in respect
of, the Promissory Note. The Company may not, directly or indirectly, make any
payment of any principal of, or any interest on, or any other amount owing in
respect of the Promissory Note and may not acquire all or any part of the
Promissory Note for cash or property until all Senior Indebtedness has been paid
in full in cash if any Event of Default (as defined below), or event which with
notice or lapse of time or both would constitute an Event of Default in respect
of any Senior Indebtedness is then in existence. Each holder of the Promissory
Note hereby agrees that, so long as an Event of Default, or event which with
notice or lapse of time or both would constitute an Event of Default, in respect
of any Senior Indebtedness exists, it will not ask, demand, accelerate, sue for,
or otherwise take, accept or receive, any amounts owing in respect of the
Promissory Note. As used herein, the term "EVENT OF DEFAULT" shall mean an Event
of Default, under and as defined in, the relevant documentation governing any
Senior Indebtedness and in any event shall include any payment default with
respect to any Senior Indebtedness.

                  (b) Until repayment in full in cash of all of the Senior
Indebtedness, no direct or indirect payment by or on behalf of the Company in
respect any amounts owing in respect of the Promissory Note (including any such
payment by any guarantor thereof) whether pursuant to the terms of the
Promissory Note, upon acceleration or otherwise, shall be made other than a
scheduled payment of principal and interest under and as set forth in the
Promissory Note; PROVIDED, HOWEVER, that the Company may make mandatory
prepayments of principal and

                                  Annex A - 1

<PAGE>

interest under the Promissory Note if no Event of Default exists at the time of
such payment or would result therefrom.

                  (c) In the event that notwithstanding the provisions of the
preceding subsections (a) and (b) of this SECTION 1.02, any payment shall be
made on account of the principal of, or interest on, or amounts otherwise owing
in respect of the Promissory Note, at a time when payment is not permitted by
the terms of the Promissory Note or by said subsection (a), such payment shall
be held by the holder of the Promissory Note, in trust for the benefit of, and
shall be paid forthwith over and delivered to, the holders of Senior
Indebtedness or their representative or representatives under the agreements
pursuant to which the Senior Indebtedness may have been issued, as their
respective interests may appear, for application pro rata to the payment of all
Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in cash in accordance with the terms of such Senior
Indebtedness, after giving effect to any concurrent payment or distribution to
or for the holders of Senior Indebtedness. Without in any way modifying the
provisions of this ANNEX A or affecting the subordination effected hereby if
such notice is not given, the Company shall give the holder of the Promissory
Note prompt written notice of any maturity of Senior Indebtedness after which
such Senior Indebtedness remains unsatisfied.

         Section 1.03. PROMISSORY NOTE SUBORDINATED TO PRIOR PAYMENT OF ALL
SENIOR INDEBTEDNESS ON DISSOLUTION, LIQUIDATION OR REORGANIZATION OF COMPANY.
Upon any distribution of assets of the Company upon any dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
or otherwise):

                  (a) the holders of all Senior Indebtedness shall first be
entitled to receive payment in full in cash of all Senior Indebtedness
(including, without limitation, post-petition interest) before the holder of the
Promissory Note is entitled to receive any payment on account of the principal
of or interest on or any other amount owing in respect of the Promissory Note;

                  (b) any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities to which the
holder of the Promissory Note would be entitled except for the provisions of
this ANNEX A, shall be paid by the liquidating trustee or agent or other Person
making such payment or distribution, whether a trustee in bankruptcy, a receiver
or liquidating trustee or other trustee or agent, directly to the holders of
Senior Indebtedness or their representative or representatives under the
agreements pursuant to which the Senior Indebtedness may have been issued, to
the extent necessary to make payment in full of all Senior Indebtedness
remaining unpaid, after giving effect to any concurrent payment or distribution
to the holders of such Senior Indebtedness; and

                  (c) in the event that, notwithstanding the foregoing
provisions of this SECTION 1.03, any payment or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, shall
be received by the holder of the Promissory Note on account of principal of, or
interest or other amounts due on, the Promissory Note before all Senior
Indebtedness is paid in full in cash, or effective provision made for its
payment in cash, such payment or distribution shall be received and held in
trust for and shall be paid over to the holders of the Senior Indebtedness
remaining unpaid or unprovided for or their representative or

                                  Annex A - 2

<PAGE>

representatives under the agreements pursuant to which the Senior Indebtedness
may have been issued, for application to the payment of such Senior Indebtedness
until all such Senior Indebtedness shall have been paid in full in cash, after
giving effect to any concurrent payment or distribution to the holders of such
Senior Indebtedness.

                  Without in any way modifying the provisions of this ANNEX A or
affecting the subordination effected hereby if such notice is not given, the
Company shall give prompt written notice to the holder of the Promissory Note of
any dissolution, winding up, liquidation or reorganization of the Company
(whether in bankruptcy, insolvency or receivership proceedings or upon
assignment for the benefit of creditors or otherwise).

         Section 1.04. SUBROGATION. Subject to the prior indefeasible payment in
full of all Senior Indebtedness in cash, the holder of the Promissory Note shall
be subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of assets of the Company applicable to the Senior
Indebtedness until all amounts owing on the Promissory Note shall be paid in
full, and for the purpose of such subrogation no payments or distributions to
the holders of the Senior Indebtedness by or on behalf of the Company or by or
on behalf of the holder of the Promissory Note by virtue of this ANNEX A which
otherwise would have been made to the holder of the Promissory Note shall, as
between the Company, its creditors other than the holders of Senior
Indebtedness, and the holders of the Promissory Note, be deemed to be payment by
the Company to or on account of the Senior Indebtedness, it being understood
that the provisions of this ANNEX A are and are intended solely for the purpose
of defining the relative rights of the holder of the Promissory Note, on the one
hand, and the holders of the Senior Indebtedness, on the other hand.

         Section 1.05. OBLIGATION OF COMPANY UNCONDITIONAL. Nothing contained in
this ANNEX A or in the Promissory Note is intended to or shall impair, as
between the Company and the holder of the Promissory Note, the obligation of the
Company, which is absolute and unconditional, to pay to the holder of the
Promissory Note the principal of and interest on the Promissory Note as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the holder of the Promissory
Note and creditors of the Company other than the holders of the Senior
Indebtedness, nor shall anything herein or therein, except as expressly
provided, prevent the holder of the Promissory Note from exercising all remedies
otherwise permitted by applicable law, subject to the rights, if any, under this
ANNEX A of the holders of Senior Indebtedness in respect of cash, property, or
securities of the Company received upon the exercise of any such remedy. Upon
any distribution of assets of the Company referred to in this ANNEX A, the
holder of the Promissory Note shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such dissolution, winding
up, liquidation or reorganization proceedings are pending, or a certificate of
the liquidating trustee or agent or other person making any distribution to the
holders of the Promissory Note, for the purpose of ascertaining the persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this ANNEX A.

         Section 1.06.     SUBORDINATION  RIGHTS NOT IMPAIRED BY ACTS OR
OMISSIONS OF COMPANY OR HOLDERS OF SENIOR INDEBTEDNESS. No right of any present
or future holders of any Senior

                                  Annex A - 3

<PAGE>

Indebtedness to enforce subordination as herein provided at any time in any way
be prejudiced or impaired by any act or failure to act on the part of the
Company or by any act or failure to act in good faith by any such holder, or by
any noncompliance by the Company with the terms and provisions of the Promissory
Note, regardless of any knowledge thereof which any such holder may have or be
otherwise charged with. The holders of the Senior Indebtedness may, without in
any way affecting the obligations of the holder of the Promissory Note with
respect thereto, at any time or from time to time and in their absolute
discretion, change the manner, place or terms of payment of, change or extend
the time of payment of, or renew or alter, any Senior Indebtedness, or amend,
modify or supplement any agreement or instrument governing or evidencing such
Senior Indebtedness or any other document referred to therein, or exercise or
refrain from exercising any other of their rights under the Senior Indebtedness
including, without limitation, the waiver of default thereunder and the release
of any collateral securing such Senior Indebtedness, all without notice to or
assent from the holder of the Promissory Note.

         Section 1.07. DEFINITIONS. As used in this ANNEX A, the terms set forth
below shall have the respective meanings provided below:

                  "BONDING AGREEMENT" means the Second Amended and Restated
Underwriting and Continuing Indemnity Agreement dated as of August 19, 1998 by
and among Holdings, certain Subsidiaries (including, without limitation, the
Company) from time to time party thereto as Indemnitors, Reliance Insurance
Company, United Pacific Insurance Company, Reliance National Insurance Company
and Reliance Surety Company, as the same may be amended, modified, extended,
renewed, replaced, restated, supplemented, restructured or refinanced in whole
or in part from time to time, and including any agreement extending the maturity
of, refinancing or restructuring (including any increase in the amount of bonds
available and the inclusion of additional indemnitors or guarantors thereunder
that are Subsidiaries of Holdings) of all or any portion of, the indebtedness
under such agreement or any successor agreements.

                  "CREDIT AGREEMENT" means the Credit Agreement dated as of
August 19, 1998 by and among Holdings, the other Loan Parties (including,
without limitation, the Company) from time to time party thereto, the financial
institutions from time to time party thereto as Lenders, Bank of Montreal,
Chicago Branch, as Documentation Agent, and Bank of America, N.A. (as successor
to Bank of America National Trust and Savings Association), as Administrative
Agent, as the same may be amended, modified, extended, renewed, replaced,
restated, supplemented, restructured or refinanced in whole or in part from time
to time, and including any agreement extending the maturity of, refinancing or
restructuring (including any increase in the amount borrowed and the inclusion
of additional guarantors thereunder that are Subsidiaries of Holdings) of all or
any portion of, the indebtedness under such agreement or any successor
agreements.

                  "HOLDINGS" means Great Lakes Dredge & Dock Corporation, a
Delaware corporation.

                  "OBLIGATIONS" means any principal, interest, reimbursement
obligations under letters of credit, premium, penalties, fees, indemnities and
other liabilities and obligations (including any guaranty of the foregoing)
payable under the documentation governing any Senior Indebtedness (including,
without limitation, all interest after the commencement of any

                                  Annex A - 4

<PAGE>

bankruptcy, insolvency, receivership or similar proceeding at the rate provided
in the governing documentation, whether or not such interest is an allowed claim
in such proceeding).

                  "PERSON" means any natural person, corporation, limited
liability company, partnership, firm, joint venture, joint-stock company, trust,
association, Governmental Authority, unincorporated entity or organization of
any kind.

                  "SENIOR INDEBTEDNESS" means all Obligations of Holdings and
each of its Subsidiaries (including, without limitation, the Company) under (i)
the Credit Agreement and the other Loan Documents (as such term is defined in
the Credit Agreement) and any renewal, extension, replacement, restatement,
refinancing or refunding thereof, (ii) any interest rate protection agreement,
foreign exchange contract, currency swap agreement or any other similar
agreement or arrangement to which Holdings or any of its Subsidiaries is a
party, whether outstanding on the date hereof or hereafter created, incurred,
assumed or guaranteed, and any renewal, extension, restatement, refinancing or
refunding thereof, (iii) the Bonding Agreement and the other Underwriting
Documents (as such term is defined in the Bonding Agreement) and any renewal,
extension, replacement, restatement, refinancing or refunding thereof, (iv) the
Senior Subordinated Indenture and the Notes and Subsidiary Guarantees (as such
terms are defined in the Senior Subordinated Indenture) and any renewal,
extension, replacement, restatement, refinancing or refunding thereof, and (v)
any other loan or credit agreement or other similar agreement between Holdings
and/or any of its Subsidiaries and any lender or group of lenders pursuant to
which Holdings or any of its Subsidiaries has incurred, issued, guaranteed,
assumed or otherwise become liable for any indebtedness for borrowed money,
whether outstanding on the date hereof or hereafter created, incurred, assumed
or guaranteed, and any renewal, extension, restatement, refinancing or refunding
thereof.

                  "SENIOR SUBORDINATED INDENTURE" means the Indenture dated as
of August 19, 1998 by and among Holdings, the Subsidiary Guarantors (including,
without limitation, the Company) from time to time party thereto and The Bank of
New York, as Trustee, as the same may be amended, modified, extended, renewed,
replaced, restated, supplemented, restructured or refinanced in whole or in part
from time to time, and including any agreement extending the maturity of,
refinancing or restructuring (including any increase in the amount of notes
issued thereunder and the inclusion of additional guarantors thereunder that are
Subsidiaries of Holdings) of all or any portion of, the indebtedness under such
agreement or any successor agreements.

                  "SUBSIDIARY" means any corporation, association, partnership,
limited liability company, joint venture or other business entity of which more
than 50% of the voting stock, membership interests or other equity interests (in
the case of Persons other than corporations), is owned or controlled directly or
indirectly by the Person, or one or more of the Subsidiaries of the Person, or a
combination thereof. Unless the context otherwise clearly requires, references
herein to a "Subsidiary" refer to a Subsidiary of the Company.

         Section 1.08. MISCELLANEOUS. If, at any time, all or part of any
payment with respect to Senior Indebtedness theretofore made by the Company or
any other Person is rescinded or must otherwise be returned by the holders of
Senior Indebtedness for any reason whatsoever (including, without limitation,
the insolvency, bankruptcy or reorganization of the Company or

                                  Annex A - 5


<PAGE>

such other Persons), the subordination provisions set forth herein shall
continue to be effective or be reinstated, as the case may be, all as though
such payment had not been made.


                                  Annex A - 6