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Exhibit 3.01

RESTATED

CERTIFICATE OF INCORPORATION

OF

GREAT LAKES DREDGE & DOCK CORPORATION

1. Name. The name of the Corporation is Great Lakes Dredge & Dock
Corporation.

2. Registered Office and Agent. The address of the Corporations
registered office in the State of Delaware is 1209 Orange Street, in the City
of Wilmington, County of New Castle, DE 19801. The name of the Corporations
registered agent at such address is The Corporation Trust Company.

3. Purpose. The purposes for which the Corporation is formed are to engage
in any lawful act or activity for which corporations may be organized under the
General Corporation Law of Delaware and to possess and exercise all of the
powers and privileges granted by such law and any other law of Delaware.

4. Authorized Capital. The aggregate number of shares of stock which the
Corporation shall have authority to issue is 750,000 shares, divided into three
(3) classes consisting of 250,000 shares of Preferred Stock, par value $.01 per
share (Preferred Stock); 250,000 shares of Class A Common Stock, par value
$.01 per share (Class A Common Stock); and 250,000 shares of Class B Common
Stock, par value $.01 per share (Class B Common Stock). Class A Common Stock
and Class B Common Stock are hereinafter sometimes collectively referred to as
Common Stock.

The following is a statement of the designations, preferences,
qualifications, limitations, restrictions and the special or relative rights
granted to or imposed upon the shares of each such class and upon the shares of
the first series of Preferred Stock.

A. PREFERRED STOCK

1. Issue in Series. Preferred Stock may be issued from time to
time in one or more series, each such series to have the terms
stated herein and in the resolution of the Board of Directors of
the Corporation providing for its issue. All shares of any one
series of Preferred Stock will be identical, but shares of
different series of Preferred Stock need not be identical or rank
equally except insofar as provided by law or herein.

2. Creation of Series. In addition to the 12% Series A
Cumulative Compounding Preferred Stock (Series A Preferred Stock)
provided for herein, the Board of Directors will have the authority
to adopt amendments to these Articles to cause to be created one or
more series of Preferred Stock, and to
determine and fix with respect to each series prior to the
issuance of the series to which such resolution relates:





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a. The distinctive designation of the series and the
number of shares which will constitute the series, which
number may be increased or decreased (but not below the
number of shares then outstanding) from time to time by
action of the Board of Directors;

b. The dividend rate and the times of payment of
dividends on the shares of the series, whether dividends will
be cumulative, and if so, from what date or dates;

c. The price or prices at which, and the terms and
conditions on which, the shares of the series may be redeemed
at the option of the Corporation;

d. Whether or not the shares of the series will be
entitled to the benefit of a retirement or sinking fund to be
applied to the purchase or redemption of such shares and, if
so entitled, the amount of such fund and the terms and
provisions relative to the operation thereof;

e. Whether or not the shares of the series will be
convertible into, or exchangeable for, any other shares of
stock of the Corporation or other securities, and if so
convertible or exchangeable, the conversion price or prices,
or the rates of exchange, and any adjustments thereof, at
which such conversion or exchange may be made, and any other
terms and conditions of such conversion or exchange;

f. The rights of the shares of the series in the event
of voluntary or involuntary liquidation, dissolution or
winding up of the Corporation;

g. Whether or not the shares of the series will have
priority over or be on a parity with or be junior to the
shares of any other series or class in any respect or will be
entitled to the benefit of limitations restricting the
issuance of shares of any other series or class having
priority over or being on a parity with the shares of such
series in any respect, or restricting the payment of
dividends on or the making of other distributions in respect
of shares of any other series or class ranking junior to the
shares of the series as to dividends or assets, or
restricting the purchase or redemption of the shares of any
such junior series or class, and the terms of any such
restriction;

h. Whether the series will have voting rights, in
addition to any voting rights provided by law, and, if so,
the terms of such voting rights; and

i. Any other preferences, qualifications, privileges,
options and other relative or special rights and limitations
of that series.

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3. Dividends. Holders of Preferred Stock shall be entitled to
receive, when and as declared by the Board of Directors, out of
funds legally available for the payment thereof, dividends at the
rates fixed by the Board of Directors for the respective series,
and no more, before any dividends shall be declared and paid, or
set apart for payment, on Common Stock with respect to the same
dividend period.

4. Preference on Liquidation. In the event of the voluntary or
involuntary liquidation, dissolution or winding up of the
Corporation, holders of each series of Preferred Stock will be
entitled to receive the amount fixed for such series plus, in the
case of any series on which dividends will have been determined by
the Board of Directors to be cumulative, an amount equal to all
dividends accumulated and unpaid thereon to the date of final
distribution whether or not earned or declared before any
distribution shall be paid, or set aside for payment, to holders of
Common Stock. If the assets of the Corporation are not sufficient
to pay such amounts in full, holders of all shares of Preferred
Stock will participate in the distribution of assets ratably in
proportion to the full amounts to which they are entitled or in
such order or priority, if any, as will have been fixed in the
resolution or resolutions providing for the issue of the series of
Preferred Stock. Neither the merger nor consolidation of the
Corporation into or with any other corporation, nor a sale,
transfer or lease of all or part of its assets, will be deemed a
liquidation, dissolution or winding up of the corporation within
the meaning of this paragraph except to the extent specifically
provided for herein.

5. Redemption. The Corporation, at the option of the Board of
Directors, may redeem all or part of the shares of any series of
Preferred Stock on the terms and conditions fixed for such series.

6. Voting Rights. Except as otherwise required by law, as
otherwise provided herein or as otherwise determined by the Board
of Directors as to the shares of any series of Preferred Stock
prior to the issuance of any such shares, the holders of Preferred
Stock shall have no voting rights and shall not be entitled to any
notice of meeting of stockholders.

B. 12% SERIES A CUMULATIVE COMPOUNDING PREFERRED STOCK

1. Designation; Number of Shares. The first series of
Preferred Shares shall be designated as 12% Series A Cumulative
Compounding Preferred Stock (Series A Preferred Stock), and the
number of shares which shall constitute such series shall be
250,000. The par value of the Series A Preferred Stock shall be
$.01 per share.

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2. Accrual and Payment of Dividends.

a. The holders of Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of
Directors out of funds of the Corporation legally available
therefor, cumulative cash dividends at the rate of $120 per
share per annum.

Dividends on the Series A Preferred Stock shall be
payable in annual installments in arrears commencing
September 30, 1999 and thereafter on the thirtieth day of
September (unless such day is not a business day in which
event on the last preceding business day) in each such year
(hereinafter referred to as a Dividend Accrual Date),
except that the dividend payment payable on September 30,
1999 shall be calculated from the date of original issuance
through September 30, 1999. Each such dividend on Series A
Preferred Stock when paid shall be payable to holders of
record as they appear on the stock books of the Corporation
on the date established by the Board of Directors of the
Corporation as the record date for the payment of such
dividend (which record date shall not precede the date upon
which the resolution fixing such record date is adopted and
which record date shall be not more than sixty days prior to
such action). If no record date is fixed, the record date for
determining holders for such purpose shall be at the close of
business on the date on which the Board of Directors adopts
the resolution relating to such dividend payment. Dividends
with respect to any shares of Series A Preferred Stock shall
accrue (whether or not earned or declared) from the date of
issuance of such shares.

b. Dividends on the Series A Preferred Stock shall be
cumulative, whether or not earned or declared, so that if at
any time full cumulative dividends at the rate aforesaid on
all Series A Preferred Stock then outstanding to the end of
the annual dividend period next preceding such time shall not
have been paid, the amount of the deficiency shall be paid
before any sum shall be set aside for or applied by the
Corporation to the purchase, redemption or other acquisition
for value of any Junior Shares (as such term is defined in
Section 4.B(9)) (either pursuant to any applicable sinking
fund requirement or otherwise) or any dividend or other
distribution shall be paid or declared and set apart for
payment on any Junior Shares (other than a dividend payable
in Junior Shares); provided, however, that the foregoing
shall not prohibit the Corporation from repurchasing Junior
Shares from a former employee of the Corporation (or a
subsidiary of the Corporation) where such repurchase arises
from the Corporations option to repurchase such shares upon
the termination of such employees employment with the
Corporation (or a subsidiary) pursuant to a written agreement
between the Corporation and such employee. Accrued dividends
on the Series A Preferred Stock if not paid on the first or
any subsequent Dividend Accrual Date following accrual shall
thereafter accrue additional dividends in respect thereof
(the

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Additional Dividends), compounded annually, at the
rate of 12% per annum.

c. When dividends are not paid in full upon the Series A
Preferred Stock and any other stock ranking on a parity as to
dividends with the Series A Preferred Stock, all dividends
paid upon Series A Preferred Stock and any other Shares
ranking on a parity as to dividends with the Series A
Preferred Stock shall be paid pro rata so that in all cases
the amount of dividends paid per share of Series A Preferred
Stock and such other Shares shall bear the same ratio that
accrued dividends per share on the Series A Preferred Stock
and such other shares bear to each other. Except as provided
in the preceding sentence, unless full cumulative dividends
on the Series A Preferred Stock have been paid, no dividends
shall be declared or paid or set aside for payment upon any
other shares of the Corporation ranking on a parity with the
Series A Preferred Stock as to dividends.

d. An annual dividend period shall commence on the day
following a Dividend Accrual Date and shall end on the next
succeeding Dividend Accrual Date.

3. Preference on Liquidation.

a. In the event that the Corporation shall be
liquidated, dissolved or wound up, whether voluntarily or
involuntarily, after all creditors of the Corporation shall
have been paid in full, the holders of the Series A Preferred
Stock shall be entitled to receive, out of the assets of the
Corporation legally available for distribution to its
shareholders, whether from capital, surplus or earnings,
before any amount shall be paid to the holders of any Junior
Shares, an amount equal to $1000 in cash per share plus an
amount equal to full cumulative dividends (whether or not
earned or declared) accrued and unpaid thereon (including
Additional Dividends) to the date of final distribution, and
no more. If upon any liquidation, dissolution or winding up
of the Corporation, the net assets of the Corporation shall
be insufficient to pay the holders of all outstanding Series
A Preferred Stock and of any shares ranking on a parity with
the Series A Preferred Stock the full amounts to which they
respectively shall be entitled, such assets, or the proceeds
thereof, shall be distributed ratably among the holders of
the Series A Preferred Stock and of any shares of stock
ranking on a parity with the Series A Preferred Stock.
Holders of Series A Preferred Stock shall not be entitled,
upon the liquidation, dissolution or winding up of the
Corporation, to receive any amounts with respect to such
shares other than the amounts referred to in this Section
4.B(3)(a).

b. Neither the purchase nor redemption by the
Corporation of any shares of any class in any manner
permitted by these Articles or any

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amendment hereof, nor the merger or consolidation of the
Corporation with or into any other corporation or
corporations, nor a sale, transfer or lease of all or
substantially all of the Corporations assets shall be deemed
to be a liquidation, dissolution or winding up of the
Corporation for the purposes of this Section 4.B(3);
provided, however, that any consolidation or merger of the
Corporation in which the Corporation is not the surviving
entity shall be deemed to be a liquidation, dissolution or
winding up of the affairs of the Corporation within the
meaning of this Section 4.B(3) if, (A) in connection
therewith, the holders of Common Shares of the Corporation
receive as consideration, whether in whole or in part, for
such Common Shares (1) cash, (2) notes, debentures or other
evidences of indebtedness or obligations to pay cash or (3)
preferred stock of the surviving entity (whether or not the
surviving entity is the Corporation) which ranks on a parity
with or senior to the preferred shares received by holders of
the Series A Preferred Stock with respect to liquidation or
dividends or (B) the holders of the Series A Preferred Stock
do not receive preferred shares of the surviving entity with
rights, powers and preferences equal to (or more favorable to
the holders than) the rights, powers and preferences of the
Series A Preferred Stock.

4. Redemption.

a. The Series A Preferred Stock may be redeemed from
funds legally available therefor, in whole or in part, at the
election of the Corporation, expressed by resolution of the
Board of Directors, at any time and from time to time at a
price per share equal to $1000 plus an amount per share equal
to full cumulative dividends (whether or not earned or
declared) accrued and unpaid thereon (including Additional
Dividends) to the date of redemption. The date on which
shares of Series A Preferred Stock are redeemed by the
Corporation pursuant to this paragraph 4.B(4)(a) shall be
referred to herein as the Redemption Date.

b. The aggregate amount of the redemption price pursuant
to Section 4.B(4)(a) is hereinafter referred to as the
Series A Redemption Price with respect to such redemption.

5. Redemption Procedure.

a. A redemption pursuant to Section 4.B(4) shall be
accomplished in the manner and with the effect as set forth
in this Section 4.B(5).

b. Notice of the redemption of Series A Preferred Stock
pursuant to Section 4.B(4) shall be given by mail not less
than ten (10) days prior to the Redemption Date. If less than
all the outstanding Series A Preferred Stock is to be
redeemed, the selection of shares for redemption shall be
made pro rata and the notice of redemption to a holder shall
state

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the number of Series A Preferred Stock of such holder to
be redeemed. The amount of the Series A Redemption Price
shall be deposited on or before the Redemption Date in trust
for the account of the holders of Series A Preferred Stock
entitled thereto with a bank or trust company in good
standing doing business in the State of New York and having
capital and surplus of at least $100,000,000 (the date of
such deposit being hereinafter in this Section 4.B(5)
referred to as the date of deposit).

c. Notice of the date on which, and the name and address
of the bank or trust company with which, the deposit has been
or will be made shall be included in the notice of
redemption. On and after the Redemption Date (unless default
shall be made by the Corporation in providing money for the
payment of the Series A Redemption Price pursuant to the
notice of redemption), or if the Corporation shall make such
deposit on or before the date specified therefor in the
notice of redemption, then on and after the date of deposit
(provided notice of redemption has been duly given), all
dividends on the Series A Preferred Stock so called for
redemption shall cease to accrue and, notwithstanding that
any certificate for Series A Preferred Stock is not
surrendered for cancellation, the shares represented thereby
shall no longer be deemed outstanding and all rights of the
holders thereof as shareholders of the Corporation with
respect to such shares shall cease and terminate, except the
right to receive the Series A Redemption Price as hereinafter
provided.

d. At any time on or after the Redemption Date, or if
the Corporation shall deposit the money for such redemption
prior to the Redemption Date, then at any time on or after
the date of deposit, which time shall be specified by the
Corporation in the notice of redemption and which shall not
be later than the Redemption Date, the holders of record of
the Series A Preferred Stock to be redeemed shall be entitled
to receive the Series A Redemption Price upon actual delivery
to the bank or trust company with which such deposit shall be
made of certificates for the shares to be redeemed, such
certificates, if required, to be duly endorsed in blank or
accompanied by proper instruments of assignment and transfer
duly endorsed in blank. The making of such deposit with any
such bank or trust company shall not relieve the Corporation
of liability for payment of the Series A Redemption Price.

e. Any money so deposited which shall remain unclaimed
by the holders of such Series A Preferred Stock at the end of
two (2) years after the Redemption Date shall be paid by such
bank or trust company to the Corporation, which shall
thereafter, to the extent of the money so repaid, be liable
for the payment of the Series A Redemption Price. Any
interest accrued on money so deposited shall be paid to the
Corporation from time to time.

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6. Optional Exchange. The Series A Preferred Stock may be
exchanged, at the Corporations option at any time and from time to
time, in whole or in part, for junior subordinated debentures to be
issued by the Corporation in substantially the form attached as
Annex A hereto (Exchange Debentures) at the rate of $1000 per
share plus an amount per share equal to full cumulative dividends
(whether or not earned or declared) accrued and unpaid thereon
(including all dividends which have accrued since the most recent
Dividend Accrual Date) to the date established by the Board of
Directors for such exchange (the Exchange Date) (the aggregate of
such amounts is hereinafter referred to as the Exchange Amount).
The Exchange Debentures shall bear interest at a rate equal to the
lesser of 12% and the maximum interest rate permitted to be
deducted as accrued under the relevant provisions of the Internal
Revenue Code of 1986 and the rules and regulations promulgated
thereunder in effect on the Exchange Date. If less than all the
shares of Series A Preferred Stock is to be exchanged, the
selection of shares to be exchanged shall be pro rata. The election
of the Corporation to exchange the shares of Series A Preferred
Stock for Exchange Debentures pursuant to this Section 4.B(6) must
be made by the affirmative vote of at least eighty percent (80%) of
all the directors of the Corporation then in office.

7. Exchange Procedure

a. Any exchange pursuant to Section 4.B(6) shall be
accomplished in the manner and with the effect as set forth
in this Section 4.B(7).

b. Notice of the exchange of Series A Preferred Stock
pursuant to Section 4.B(6) shall be given by first class mail
to each holder of record on the record date for such exchange
at such holders address as the same appears on the stock
register of the Corporation not less than ten (10) days and
not more than sixty (60) days prior to the Exchange Date.
Each such notice shall state: (A) the Exchange Date, (B) the
place or places where certificates for such shares of Series
A Preferred Stock are to be surrendered for exchange into the
Exchange Debentures, (C) that dividends on the Series A
Preferred Stock to be exchanged will cease to accrue on such
Exchange Date and (D) if less than all the shares of Series A
Preferred Stock is to be exchanged the number of shares of
the holder to be exchanged. The form of the Exchange
Debentures may not be amended or supplemented before the
Exchange Date without the affirmative vote or consent of the
holders of a majority of the outstanding shares of Series A
Preferred Stock, except for those changes which would not
adversely affect the legal rights of the holders.

c. On and after the Exchange Date, all dividends on the
Series A Preferred Stock so called for exchange shall cease
to accrue and, notwithstanding that any certificate for
shares of Series A Preferred Stock is not surrendered for
cancellation, the shares represented thereby shall no

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longer be deemed outstanding and all rights of the
holders thereof as stockholders of the Corporation shall
cease and terminate, except the right to receive the Exchange
Debentures as herein provided.

d. At any time on or after the Exchange Date, the
holders of record of the Series A Preferred Stock to be
exchanged shall be entitled to receive the amount of Exchange
Debentures set forth herein upon actual delivery to the
Corporation of certificates for the shares to be exchanged,
such certificates, if required, to be duly endorsed in blank
or accompanied by proper instruments of assignment and
transfer duly endorsed in blank. The person or persons
entitled to receive the Exchange Debentures issuable upon
exchange shall be treated for all purposes as the registered
holder or holders of such Exchange Debentures.

e. The Corporation shall not be required to honor any
request to register a transfer or exchange of the Series A
Preferred Stock for the fifteen (15) days prior to the
Exchange Date. The Corporation will cause the Exchange
Debentures to be authenticated on the Exchange Date.

8. Voting. Except as required by law and except for any voting
by the holders of the Series A Preferred Stock as part of a
separate class or series pursuant to Section 4.B(7) hereunder or
any other provision of these Articles, no holder of Series A
Preferred Stock, as such holder, shall be entitled to vote on any
matter submitted to a vote of shareholders. On any matters on which
the holders of the Series A Preferred Stock shall be entitled to
vote, they shall be entitled to one vote for each share held.
Except as otherwise required by law or as otherwise provided
herein, the holders of Series A Preferred Stock shall not be
entitled to notice of any meeting of shareholders.

9. Other Rights. Without the written consent of the holders of
a majority of the outstanding shares of Series A Preferred Stock or
the vote of the holders of a majority of the outstanding shares of
Series A Preferred Stock at a meeting of the holders of Series A
Preferred Stock called for such purpose, the Corporation shall not
(i) exchange the shares of Series A Preferred Stock for Exchange
Debentures pursuant to Section 4.B(6), (ii) create, authorize or
issue any other class or series of stock entitled to a preference
prior to Series A Preferred Stock upon any dividend or distribution
or any liquidation, distribution of assets, dissolution or winding
up of the Corporation, or increase the authorized amount of any
such other class or series, or (iii) amend, alter or repeal any
provision of the Corporations Certificate of Incorporation so as
to adversely affect the relative rights and preferences of the
Series A Preferred Stock; provided however, that any such amendment
that changes the dividend payable on the Series A Preferred Stock
shall require the affirmative vote of the holder of each shares of
Series A Preferred Stock at a meeting of such holders called for
such purpose or the written consent of the holder of each such
share of Series A Preferred Stock.

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10. Acknowledgment. Each holder of Series A Preferred Stock,
by acceptance thereof, acknowledges and agrees that payments of
dividends, interest, premium and principal on, and redemption and
repurchase of, such securities by the Corporation are subject to
restrictions contained in certain credit and financing agreements
of the Corporation.

11. Definitions. The following terms, when used in this
Section 4.B, shall have the meanings set forth below:

a. As used herein, the amount of dividends accrued on
any share of Series A Preferred Stock as at any date shall be
calculated as the amount of any unpaid dividends accumulated
thereon to and including the last preceding Dividend Accrual
Date with respect to which dividends have not been paid,
whether or not earned or declared (including the amount of
any dividends accumulated on any share of Series A Preferred
Stock from the preceding Dividend Accrual Date in the event
of an optional redemption pursuant to Section 4.B(5)(b) or in
the event of an exchange pursuant to Section 4.B(6)).

b. corporation shall mean a corporation, partnership,
business trust, unincorporated organization, association,
limited liability company or joint stock company.

c. Junior Shares shall mean any series or class of the
capital stock of the Corporation now or hereafter authorized
or issued by the Corporation, including any series or class
of preferred shares, ranking junior to the Series A Preferred
Stock with respect to dividends or distributions or upon the
liquidation, distribution of assets, dissolution or
winding-up of the Corporation, including without limitation
the Common Shares.

d. person shall mean an individual, a corporation,
partnership, trust, organization, association, government or
any department or agency thereof, or any other individual or
entity.

C. CLASS A AND CLASS B COMMON STOCK

Except as otherwise provided herein, all shares of Class A
Common Stock and Class B Common Stock will be identical and will
entitle the holders thereof to the same rights and privileges.

1. Dividends. Holders of Common Stock will be entitled to
receive such dividends as may be declared by the Board of
Directors, provided that if dividends are declared which are
payable in shares of Class A Common Stock or Class B Common Stock,
dividends will be declared which are payable at the same rate on
each class of Common Stock and the dividends payable in shares of
Class A Common Stock will be payable to holders of Class A Common
Stock and the

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dividends payable in shares of Class B Common Stock will be
payable to holders of Class B Common Stock.

2. Conversion. Each record holder of Class A Common Stock will
be entitled to convert any or all of such holders Class A Common
Stock into the same number of shares of Class B Common Stock and
each record holder of Class B Common Stock will be entitled to
convert any or all of the shares of such holders Class B Common
Stock into the same number of shares of Class A Common Stock;
provided, however, that at the time of conversion of shares of
Class B Common Stock into shares of Class A Common Stock such
holder would be permitted, pursuant to applicable law, to hold the
total number of shares of Class A Common Stock which such holder
would hold after giving effect to such conversion; and provided,
further, that the determination of a holder of Class B Common Stock
that such holder is permitted pursuant to applicable law to convert
Class B Common Stock into Class A Common Stock pursuant to this
Section 2 shall be final and binding upon the Company.

Each conversion of shares of one class of Common Stock into
shares of another class of Common Stock will be effected by the
surrender of the certificate or certificates representing the
shares to be converted at the principal office of the Corporation
at any time during normal business hours, together with a written
notice by the holder of such shares stating the number of shares
that any such holder desires to convert into the other class of
Common Stock. Such conversion will be deemed to have been effected
as of the close of business on the date on which such certificate
or certificates have been surrendered and such notice has been
received by the Corporation, and at such time the rights of any
such holder with respect to the converted class of Common Stock
will cease and the person or persons in whose name or names the
certificate or certificates for shares of the other class of Common
Stock are to be issued upon such conversion will be deemed to have
become the holder or holders of record of the shares of such other
class of Common Stock represented thereby.

Promptly after such surrender and the receipt by the
Corporation of the written notice from the holder hereinbefore
referred to, the Corporation will issue and deliver in accordance
with the surrendering holders instructions the certificate or
certificates for the other class of Common Stock issuable upon such
conversion and a certificate representing any shares of Common
Stock which were represented by the certificate or certificates
delivered to the Corporation in connection with such conversion but
which were not converted. The issuance of certificates for the
other class of Common Stock upon conversion will be made without
charge to the holder or holders of such shares for any issuance tax
(except stock transfer taxes) in respect thereof or other cost
incurred by the Corporation in connection with such conversion.

3. Transfers. The Corporation will not close its books against
the transfer of any share of Common Stock, or of any share of
Common Stock issued or issuable upon conversion of shares of the
other class of Common Stock, in any

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manner that would interfere with the timely conversion of such
shares of Common Stock.

4. Subdivision and Combinations of Shares. If the Corporation
in any manner subdivides or combines the outstanding shares of any
class of Common Stock, the outstanding shares of the other class of
Common Stock will be proportionately subdivided or combined.

5. Reservation of Shares for Conversion. So long as any shares
of any class of Common Stock are outstanding, the Corporation will
at all times reserve and keep available out of its authorized but
unissued shares of Class A Common Stock and Class B Common Stock
(or any shares of Class A Common Stock or Class B Common Stock
which are held as treasury shares), the number of shares sufficient
for issuance upon conversion.

6. Distribution of Assets. In the event of the voluntary or
involuntary liquidation, dissolution or winding up of the
Corporation, holders of Common Stock will be entitled to receive
all of the remaining assets of the Corporation available for
distribution to its stockholders after all amounts to which the
holders of Preferred Stock are entitled have been paid or set aside
in cash for payment.

7. Voting Rights. The holders of Class A Common Stock shall
have the general right to vote for all purposes as provided by law.
Each holder of Class A Common Stock shall be entitled at all
elections of directors to as many votes as shall equal the number
of votes which such holder would be entitled to cast for the
election of directors with respect to his shares of stock
multiplied by the number of directors to be elected, and such
holder may cast all of such votes for a single director or may
distribute them among the number to be voted for, or for any two or
more of them as he may see fit, and to one vote for each share upon
all other matters. Except as otherwise required by law, the holders
of Class B Common Stock shall have no voting rights.

8. Merger, etc. In connection with any merger, consolidation,
or recapitalization in which holders of Class A Common Stock
generally receive, or are given the opportunity to receive,
consideration for their shares (a) all holders of Class B Common
Stock shall be given the opportunity to receive the same form of
consideration for their shares as is received by holders of Class A
Common Stock and (b) holders of Class B Common Stock shall be
entitled to receive the same amount of consideration per share as
received by holders of Class A Common Stock.

5. Bylaws. The board of directors of the Corporation is authorized to
adopt, amend or repeal the bylaws of the Corporation, except as otherwise
specifically provided therein.

6. Elections of Directors. Elections of directors need not be by written
ballot unless the bylaws of the Corporation shall so provide.

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7. Right to Amend. The Corporation reserves the right to amend any
provision contained in this Certificate as the same may from time to time be in
effect in the manner now or hereafter prescribed by law, and all rights
conferred on stockholders or others hereunder are subject to such reservation.

8. Limitation on Liability. The directors of the Corporation shall be
entitled to the benefits of all limitations on the liability of directors
generally that are now or hereafter become available under the General
Corporation Law of Delaware. Without limiting the generality of the foregoing,
no director of the Corporation shall be liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the directors duty of loyalty to
the Corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the Delaware General Corporation Law, or (iv) for
any transaction from which the director derived an improper personal benefit.
Any repeal or modification of this Section 8 shall be prospective only, and
shall not affect, to the detriment of any director, any limitation on the
personal liability of a director of the Corporation existing at the time of
such repeal or modification.

ANNEX A IS ATTACHED HERETO.





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IN WITNESS WHEREOF, Great Lakes Dredge & Dock Corporation has caused this
Restated Certificate of Incorporation to be duly executed by its Secretary this
6th day of November, 2003.

By:
    
    /s/ Leslie A. BraunName:   Leslie A. Braun
Title:     Secretary










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ANNEX A

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE SECURITIES ACT), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT
BE TRANSFERRED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE
STATE SECURITIES LAWS OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY,
THAT SUCH REGISTRATION IS NOT REQUIRED.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO THE TERMS
AND CONDITIONS OF A SECURITIES PURCHASE AND HOLDERS AGREEMENT BY AND AMONG THE
COMPANY AND THE HOLDERS SPECIFIED THEREIN, A COPY OF WHICH AGREEMENT IS ON FILE
AT THE PRINCIPAL OFFICE OF THE COMPANY. THE SALE, TRANSFER OR OTHER DISPOSITION
OF THE SECURITIES IS SUBJECT TO THE TERMS OF SUCH AGREEMENT AND THE SECURITIES
ARE TRANSFERABLE ONLY UPON PROOF OF COMPLIANCE THEREWITH.

No.

PAYMENTS UNDER THIS NOTE ARE SUBJECT TO
THE SUBORDINATION PROVISIONS OF SECTION 7 HEREOF

GREAT LAKES DREDGE & DOCK CORPORATION

_____% JUNIOR SUBORDINATED DEBENTURES DUE SEPTEMBER 30, 2009

GREAT LAKES DREDGE & DOCK CORPORATION, a Delaware corporation (the
Corporation, which term includes any successor corporation), for value
received, hereby promises to pay to       , a       , or its
successors or permitted assigns (Holder), the principal sum of
       on September 30, 2009, and to pay interest on the unpaid
balance of the principal amount of this Note at the rate of    % per annum.
This Note will accrue interest annually for the periods ending September 30 of
each calendar year commencing       ,       (each date of payment being an
Interest Payment Date). Interest on this Note will accrue from the most
recent date to which interest has been paid or accrued as provided in the
preceding sentence or, if no interest has been paid, from the issuance date
hereof. Interest will be computed on the basis of a 365-day year for the
actual days elapsed. This Note may be prepaid at any time in whole or in part
without premium, penalty or discount. All permitted prepayments in respect of
this Note shall be applied first to accrued interest on the principal amount
prepaid which interest has not been added to the principal amount, and then to
principal outstanding hereunder.





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This Note shall be binding upon the successors and assigns of the
Corporation and shall inure to the benefit of the successors and permitted
assigns of the Holder. The Holder may assign, transfer or dispose of its
rights with respect to this Note only upon registration of this Note under the
Securities Act, and any applicable state securities laws, or pursuant to an
exemption from such registration.

1. Method of Payment

The Holder shall note any payment of principal on the Note, but the
obligation of the Corporation shall be reduced by such payment notwithstanding
any failure by Holder to note such payment. The Corporation will pay principal
and interest in money of the United States of America that at the time of
payment is legal tender for payment of public and private debts (payment may be
made by check payable in such money). All interest due on any Interest Payment
Date prior to the Maturity Date shall be deemed to be paid by such amount being
added to the outstanding principal amount on the Interest Payment Date therefor
and shall accrue interest as a portion of the principal amount of this Note
from such Interest Payment Date to the maximum extent permitted by law.

2. Maturity Date

This Note shall be repaid in full on September 30, 2009 (the Maturity
Date)1.

3. Defined Terms

(a) Acceleration Notice shall have the meaning set forth in Section
8(b).

(b) Agent shall have the meaning set forth in Section 7(a).

(c) Bank Debt shall have the meaning set forth in Section 7(a).

(d) Bankruptcy Law shall mean Title 11, U.S. Code or any similar federal
or state law for the relief of debtors.

(e) Bonding Agreement shall mean the Amended and Restated Underwriting
and Continuing Indemnity Agreement among the sureties party thereto, the
Corporation and certain of the
Corporations Subsidiaries, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, as
amended, restated, modified, renewed, refunded, replaced or refinanced from
time to time.

(f) Capital Stock shall mean (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether



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1 The Board of Directors in its discretion shall have the power to set the
Maturity Date on or after September 30, 2009, but in no event later than
September 30, 2018.






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general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.

(g) Change in Control shall have the meaning set forth in Section 4(b).

(h) Citicorp shall mean Citicorp, a Delaware corporation, or any
successor thereto by merger or consolidation.

(i) Continuing Director shall have the meaning set forth in Section
4(b).

(j) Corporation shall have the meaning set forth in the first paragraph
of this Note.

(k) Credit Agreement shall have the meaning set forth in Section 7(b).

(l) Custodian means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law or in connection with
any insolvency proceeding.

(m) CVC means Citicorp Venture Capital Ltd., a New York corporation, or
any successor thereto by merger or consolidation.

(n) Equity Swap shall have the meaning set forth in Section 5(g).

(o) Event of Default shall have the meaning set forth in Section 8(a).

(p) Exchange Act shall mean the Securities Exchange Act of 1934, as
amended.

(q) GLI shall mean Great Lakes International, Inc., a Delaware
corporation and wholly-owned subsidiary of the Corporation.

(r) Great Lakes shall mean Great Lakes Dredge & Dock Company, a New
Jersey corporation and wholly-owned subsidiary of GLI.

(s) Holder shall have the meaning set forth in the first paragraph of
this Note and, for purposes of Section 7, as set forth in Section 7.

(t) Indebtedness shall have the meaning set forth in Section 7(a).

(u) Indenture shall have the meaning set forth in Section 7(a).

(v) Insolvency Proceeding shall have the meaning set forth in Section
7(j).

(w) Interest Payment Date shall have the meaning set forth in the first
paragraph of this Note.

(x) Junior Indebtedness shall have the meaning set forth in Section
5(g)(iv).

(y) Lenders shall have the meaning set forth in Section 7(a).





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(z) Loan Parties shall have the meaning set forth in Section 7(a).

(aa) Majority Holders shall have the meaning set forth in Section 8(b).

(bb) Maturity Date shall have the meaning set forth in Section 2.

(cc) Non-payment Default shall have the meaning set forth in Section 7(a).

(dd) Payment Blockage Period shall have the meaning set forth in Section
7(c)(iii).

(ee) Payment Default shall have the meaning set forth in Section 7(a).

(ff) Person shall mean any individual, partnership, corporation, trust
or unincorporated organization or a government or agency or political
subdivision thereof.

(gg) Post-Petition Interest shall have the meaning set forth in Section 5(a).

(hh) Principal shall have the meaning set forth in Section 4(b).

(ii) Principal Securities shall have the meaning set forth in Section 4(d).

(jj) QIB shall have the meaning set forth in Section 4(c).

(kk) Redemption Price shall have the meaning set forth in Section 4(a).

(ll) Related Party shall have the meaning set forth in Section 4(b).

(mm) Representative shall mean (i) the Agent for so long as the Bank
Debt is outstanding, (ii) at such time as the Bank Debt is no longer
outstanding, the sureties under the Bonding Agreement, for so long as
obligations of the Corporation are outstanding under such agreement, (iii) at
such time as obligations under the Bonding Agreement are no longer outstanding,
the Trustee, for so long as the Senior Subordinated Notes are outstanding, and
(iv) at such time as the Bank Debt, obligations under the Bonding Agreement and
the Senior Subordinated Notes are no longer outstanding, the representative
selected by holders of 50% or more of the Senior Debt of the applicable Senior
Creditor.

(nn) Sale shall have the meaning set forth in Section 4(d).

(oo) SEC shall mean the Securities and Exchange Commission.

(pp) Securities Act shall mean the Securities Act of 1933, as amended.

(qq) Senior Creditors shall have the meaning set forth in Section 7(a).

(rr) Senior Debt shall have the meaning set forth in Section 7(a).

(ss) Senior Default shall have the meaning set forth in Section 7(a).





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(tt) Senior Loan Documents shall have the meaning set forth in Section
7(a).

(uu) Senior Subordinated Notes shall have the meaning set forth in
Section 7(a).

(vv) Series A Preferred shall mean the Corporations 12% Series A
Cumulative Compounding Preferred Stock.

(ww) Significant Subsidiary shall have the meaning set forth in Section
7(a).

(xx) Stockholders Agreement shall mean the Securities Purchase and
Holders Agreement dated as of August    , 1998, by and among the Corporation,
Vectura, and Management Investors.

(yy) Subordinated Debt shall have the meaning set forth in Section 7(a).

(zz) Subsidiary shall have the meaning set forth in Section 7(a).

(aaa) Subsidiary Guarantor shall have the meaning given such term in the
Indenture.

(bbb) Transfer shall have the meaning set forth in Section 10.

(ccc) Trustee shall have the meaning set forth in Section 7(a).

(ddd) Vectura shall mean Vectura Holdings, LLC, a Delaware limited
liability company.

(eee) Voting Stock of any Person as of any date means the Capital Stock
of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.

(fff) Wholly Owned Restricted Subsidiary shall have the meaning defined
in the Indenture.

(ggg) 399 shall mean 399 Venture Partners Inc. or its successors and
assigns.

4. Redemption

(a) Optional Redemption. The Corporation may, at any time and from time
to time, redeem this Note, in whole or in part, at a redemption price equal to
the principal amount being redeemed plus accrued and unpaid interest, if any,
to the date of redemption (the Redemption Price).

(b) Change in Control. Upon the occurrence of a Change in Control, the
Corporation shall, upon the expiration of any offer to purchase or repayment or
redemption of any Senior Debt required as a result of such Change in Control,
redeem this Note in full at the Redemption Price. For purposes of this Section
4, the term Change in Control shall mean the occurrence of any of the
following: (i) the sale, lease, transfer, conveyance or other disposition





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(other than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the assets of the
Corporation and its Subsidiaries (determined on a consolidated basis), in each
case, to any person (as such term is used in Section 13(d)(3) of the Exchange
Act) other than the Corporation or a Wholly Owned Restricted Subsidiary or any
Principal or a Related Party of a Principal, (ii) the adoption of a plan
relating to the liquidation or dissolution of the Corporation (other than a
merger, consolidation or sale of assets), (iii) the consummation of any
transaction (including, without limitation, any merger or consolidation) the
result of which is that any person (as defined above), other than one or more
Principals or their Related Parties, becomes the beneficial owner (as such
term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except
that a person shall be deemed to have beneficial ownership of all securities
that such person has the right to acquire, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition), directly or indirectly, of more than 50% of the Voting Stock of the
Corporation (measured by voting power rather than number of shares) and the
Principals do not beneficially own as much or more of the Voting Stock of the
Corporation (measured by voting power rather than by number of shares) than
such person or (iv) the first day on which a majority of the members of the
Board of Directors of the Corporation are not Continuing Directors.
Continuing Directors means, as of any date of determination, any member of
the Board of Directors of the Corporation who (i) was a member of such Board of
Directors on the date of the Indenture or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election or was designated by a Principal or a Related Party of a
Principal. Principals means (i) CVC and the Management Investors and (ii)
any Related Party of a Person referred to in clause (i). Related Party means
(a) with respect to CVC (i) Citicorp, any direct or indirect wholly owned
subsidiary of Citicorp, and any officer, director or employee of CVC, Citicorp
or any wholly owned subsidiary of Citicorp, (ii) any spouse or lineal
descendant (including by adoption and stepchildren) of the officers, directors
and employees referred to in clause (a) (i) above, (iii) any trust, corporation
or partnership 100%-in-interest of the beneficiaries, stockholders or partners
of which consists of one or more of the persons described in clause (a) (i) or
(ii) above or (iv) Vectura, so long as CVC or any of its Related Parties
described in (i), (ii) or (iii) above holds at least 50% of the Great Lakes
membership interests in Vectura; and (b) with respect to any officer or
employee of the Corporation or a Subsidiary of the Corporation (i) any spouse
or lineal descendant (including by adoption and stepchildren) of such officer
or employee and (ii) any trust, corporation or partnership 100%-in-interest of
the beneficiaries, stockholders or partners of which consists of such officer
or employee, any of the persons described in clause (b) (i) above or any
combination thereof.

(c) Restricted Payments. The Corporation shall redeem this Note in full
to the extent then outstanding immediately upon any violation of Section 5(g).

(d) Limitations on Redemption Obligations. Anything in this Section 4 to
the contrary notwithstanding, the Corporation shall not be obligated to redeem
all or any portion of the Note to the extent the Corporation is prohibited from
doing so by the terms of any Senior Debt outstanding at the time of the
occurrence of the event giving rise to such requirement to redeem.





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(e) Interest on Securities Called for Redemption. On and after the
redemption date, interest will cease to accrue on the Note or portion thereof
called for redemption.

5. Covenants; Representations

(a) Payment of Note. The Corporation shall pay the principal of and
interest on this Note on the dates and in the manner provided in this Note.
The Corporation shall pay interest (including post-petition interest (Post
Petition Interest) in any proceeding under any Bankruptcy Law at the relevant
contractual rate, whether or not such interest is an allowed claim enforceable
against the debtor in a bankruptcy case under Title 11 of the U.S. Code) on
overdue installments of principal and interest on this Note at the applicable
rate set forth above plus 2%.

(b) SEC Reports. The Corporation shall deliver to the Holder promptly
(and in any event within 5 days after it files them with the SEC), copies of
the annual reports, quarterly reports and other periodic reports which the
Corporation may be required to file with the SEC pursuant to Section 13, 14 or
15(d) of the Exchange Act.

To the extent that the Corporation is required to prepare and deliver any
periodic reports to the holders of Senior Debt or to 399 or Vectura, the
Corporation shall deliver copies of such reports to the Holder, at the same
time the Corporation is required to deliver such reports to the holders of the
Senior Debt or to 399 or Vectura, as applicable. The Corporation shall, upon
reasonable notice, provide officers, employees and representatives of Holder
and the proposed transferees with reasonable access to the Corporations
premises, properties, books, records and personnel as may reasonably be
requested in connection with a potential transfer of the Note or any portion
thereof.

(c) Preservation of Corporate Existence; etc. Subject to Section 10, the
Corporation will do or cause to be done all things necessary to preserve and
keep in full force and effect the corporate existence and the material rights
(charter and statutory) and franchises of the Corporation and of GLI and Great
Lakes; provided, however, that the Corporation shall not be required to
preserve or cause to be preserved any such material right or franchise if the
board of directors of the Corporation shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the
Corporation and that the loss thereof is not, and will not be, adverse in any
material respect to the Holder.

(d) Payment of Taxes, Assessment, Charges and Claims. The Corporation
will and will cause the Subsidiaries to duly pay or discharge or cause to be
paid or discharged the following before they shall become delinquent: (i) all
material taxes, assessments and governmental charges levied or imposed upon the
Corporation or any of the Subsidiaries or upon the income, profit or property
of the Corporation or any of the Subsidiaries, and (ii) all material lawful
claims for labor, materials and supplies which, if unpaid, might by law become
a material lien upon the property of the Corporation or any of the
Subsidiaries; provided, however, that the Corporation or any of the
Subsidiaries shall not be required to pay or discharge or cause to be paid or
discharged (but shall make adequate provision for) any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings and for which adequate provision has been
made.





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(e) Waiver of Stay, Extension or Usury Laws. The Corporation covenants
(to the extent that it may lawfully do so) that it shall not at any time insist
upon, or plead, or in any manner whatsoever claim, and shall resist any and all
efforts to be compelled to take the benefit or advantage of, any stay or
extension law or any usury law or other law which would prohibit or forgive the
Corporation from paying all or any portion of the principal of and/or interest
on this Note as contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the performance of
this Note; and (to the extent that it may lawfully do so) the Corporation
hereby expressly waives all benefit or advantage of any such law and covenants
that it shall not hinder, delay or impede the execution of any power herein
granted to the Holder but shall suffer and permit the execution of every such
power as though no such law had been enacted.

(f) Compliance with Laws. The Corporation will, and will cause the
Subsidiaries to, comply in all material respects with all applicable statutes,
regulations, orders and restrictions of the United States, any state,
municipality or other governmental division thereof, and agencies and
instrumentalities of the foregoing, in respect of the conduct of its and their
businesses and the ownership of its and their properties (including, without
limitation, applicable statutes, regulations, orders and restrictions relating
to equal employment opportunities and environmental standards and controls),
except such as are being contested in good faith.

(g) Limitation on Restricted Payments.

(i) The Corporation (A) shall not effect the declaration, payment or
setting apart for payment of any dividend on any part of the Corporations
capital stock or any cash interest payment on any Junior Indebtedness or effect
or make any payment on account of or set apart for payment money for a sinking
or other similar fund for, the purchase, prepayment, redemption or other
retirement of, any of the Corporations capital stock (or any rights, warrants
or options to purchase or acquire any such capital stock) or Junior
Indebtedness, or make any distribution of any nature whatsoever in respect of
any thereof, either directly or indirectly, and whether in cash, or other
obligations of the Corporation or other property (except dividends or
distributions payable solely in shares, rights, warrants or options of capital
stock and except dividends or distributions payable solely to the Corporation
or its wholly-owned Subsidiaries), (B) shall not make any payment of cash
interest on Indebtedness that is pari passu with this Note at any time when the
payment of cash interest on this Note is prohibited by the terms of any Senior
Debt, (C) shall not voluntarily prepay any Indebtedness that is pari passu with
this Note, (D) shall not permit a Subsidiary or any other corporation or other
entity directly or indirectly controlled by the Corporation to purchase, redeem
or otherwise acquire any of the Corporations capital stock or Junior
Indebtedness or any Indebtedness that is pari passu with this Note and (E)
shall not permit any Subsidiary that is not a wholly-owned Subsidiary to make
any payment or distribution in respect of the capital stock of such Subsidiary
that the Corporation would be prohibited from making in respect of the capital
stock of the Corporation. The provisions of this Section 5(g) shall not
prohibit (x) the repurchase of securities of the Corporation from employees,
former employees, directors or former directors of the Corporation or any
Subsidiary (or permitted transferees of such individuals) pursuant to the terms
of Article VII of the Stockholders Agreement; provided, further, however, that
the aggregate amount of such repurchases shall not exceed the sum of (1) $10
million and (2) the aggregate amount of cash





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received by the Corporation after the date hereof from the sale of such
securities to, or the exercise of options to purchase such securities by,
employees or directors of the Corporation or any Subsidiary, (y) the exchange
of the Series A Preferred for Junior Indebtedness pursuant to the terms
thereof, or (z) the retirement, redemption or exchange of Junior Indebtedness
or Series A Preferred with or for shares of capital stock of the Corporation
(an Equity Swap).

(ii) The Corporation will not permit any Subsidiary to effect the
declaration, payment or setting apart for payment of any dividend on any part
of such Subsidiarys capital stock (other than dividends or distributions in
such Subsidiarys capital stock) except for payments of any dividend to the
Corporation or a wholly-owned Subsidiary.

(iii) None of the Corporations Junior Indebtedness shall provide for the
mandatory payment of principal by way of redemption, sinking fund or otherwise
(including, without limitation, at the option of the holder thereof) and the
Corporation will make no optional payment with respect thereto, prior to the
payment of all principal of and interest on this Note (including accrued but
unpaid interest), except that nothing herein shall prohibit any Equity Swap.

(iv) Junior Indebtedness means any Indebtedness of the Corporation
whether outstanding on the date hereof or incurred thereafter, that is
subordinated in right of payment to this Note either by its terms or by
operation of law.

(h) Limitation on Payment Restrictions.

Except as set forth herein, the Corporation will not, and will not permit
any of the Subsidiaries to, directly or indirectly, create or otherwise cause
or suffer to exist or become effective any encumbrance or restriction (other
than this Note) on the ability of any Subsidiary to (i) pay dividends or make
any other distribution on its capital stock or any other interests or
participation in, or measured by, its profits, owned by the Corporation or any
Subsidiary of the Corporation, or pay any Indebtedness owed to, the Corporation
or a Subsidiary of the Corporation, (ii) make loans or advances to the
Corporation or (iii) transfer any of its properties or assets to the
Corporation, except for such encumbrances or restrictions existing under or by
reason of (A) applicable law, (B) Senior Debt or (C) Indebtedness existing on
the date hereof.

6. Due Authorization, etc.

The Corporation hereby represents to the Holder that (i) the Corporation
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware, (ii) the Corporation has all requisite
corporate power and corporate authority to execute and deliver this Note and to
carry out the terms hereof, (iii) the Corporation has duly authorized the
execution, delivery and performance of this Note and (iv) the execution,
delivery and performance of this Note do not (a) violate any provision of the
certificate of incorporation or by-laws of the Corporation, or (b) violate any
statute, rule or regulation of any governmental authority to which the
Corporation is subject. This Note represents the valid and binding obligation
of the Corporation, enforceable against the Corporation in accordance with its
terms.





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7. Subordination

(a) Definitions. The following terms have the following meanings:

Agent means Bank of America National Trust and Savings Association, as
administrative agent for the Lenders party to the Credit Agreement, any
successor agent and any agent for the Lenders with respect to any amendment,
extension, supplement, increase, renewal, refunding, replacement, refinancing
(including successive refinancings) or other modification of the Bank Debt. If
no such agent exists, Agent shall mean the holders of a majority of the
outstanding Bank Debt.

Bank Debt means all obligations of the Corporation (and the Subsidiary
Guarantors thereunder) now or hereafter existing (a) under the Credit Agreement
as it may hereafter be amended, extended, supplemented, increased, renewed,
refunded, replaced, refinanced (including successive refinancings) or otherwise
modified from time to time, whether for principal, interest, premium,
reimbursement of amounts drawn under letters of credit issued pursuant to the
Credit Agreement, fees, expenses, indemnities or otherwise and (b) under any of
the Senior Loan Documents, as they may hereafter be amended, extended,
supplemented, increased, renewed, refunded, replaced, refinanced (including
successive refinancings) or otherwise modified from time to time.

Credit Agreement means the Credit Agreement dated as of August    , 1998
among the Corporation, as borrower, other loan parties thereto, the banks party
thereto, the Agent and BancAmerica Robertson Stephens, as lead arranger, as
such Agreement may hereafter be amended, extended, supplemented, increased,
renewed, refunded, replaced, refinanced (including successive refinancings) or
otherwise modified.

Holder as used in this Section 7 means a holder or owner of this Note
and any other holder or owner of Subordinated Debt.

Indebtedness means, without duplication, with respect to any person, (a)
the principal of and premium (if any) in respect of all indebtedness of such
person for borrowed money, (b) the principal of and premium (if any) in respect
of all obligations of such person evidenced by notes, bonds, debentures or
other similar instruments, (c) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (d) all obligations of such person as lessee under
leases that have been or should be, in accordance with generally accepted
accounting principles, recorded as capital leases, (e) all obligations,
contingent or otherwise, of such person under acceptance, letter of credit or
similar facilities, (f) all indebtedness of the type referred to in clauses (a)
through (e) above guaranteed directly or indirectly in any manner by such
person, or in effect guaranteed directly or indirectly by such person through
an agreement (1) to pay or purchase such indebtedness or to advance or supply
funds for the payment or purchase of such indebtedness, (2) to purchase, sell
or lease (as lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of such
indebtedness or to assure the holder of such indebtedness against loss, (3) to
supply funds to or in any other manner invest in the debtor (including any
agreement to pay for property or services irrespective of whether such property
is received or such services are rendered) or (4) otherwise to assure a
creditor against loss, and (i) all





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indebtedness of the type referred to in clauses (a) through (e) above
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any lien on property (including,
without limitation, accounts and contract rights) owned by such person, even
though such person has not assumed or become liable for the payment of such
indebtedness, but excluding trade and other accounts payable in the ordinary
course of business in accordance with customary trade terms and which are not
overdue for more than 90 days, or as to which a dispute exists and adequate
reserves in conformity with generally accepted accounting principles have been
established on the books of such person.

Indenture means the Indenture dated August   , 1998 between the
Corporation and The Bank of New York, as trustee, with respect to the
Corporations    % Senior Subordinated Notes due 2008.

Lenders means the Lenders as defined in the Credit Agreement.

Loan Parties shall mean the Corporation and any Subsidiary which is an
obligor under the Credit Agreement or the Senior Subordinated Notes.

Non-payment Default means any default or event of default (other than a
Payment Default) under any agreement or instrument relating to Senior Debt.
For purposes of the immediately preceding sentence, an event of default shall
exist when as a result thereof the holders of the pertinent Senior Debt are
then permitted (whether or not with the requirement that notice be given) to
cause such Senior Debt to become due prior to its scheduled maturity.

Payment Default means any default in the payment of principal of,
premium, if any, interest on, or other amounts payable on, or in connection
with, Senior Debt, irrespective of whether such default in payment results from
a failure to pay any amount when originally scheduled to be paid or upon
acceleration or otherwise.

Senior Creditors means (i) the Lenders and the Agent under the Senior
Loan Documents until the Bank Debt (including all refinancings and successive
refinancings thereof) has been finally and indefeasibly paid in full, (ii)
thereafter, the sureties under the Bonding Agreement until obligations under
such agreement are no longer outstanding, (iii) thereafter, the holders of the
Senior Subordinated Notes until they have been finally and indefeasibly paid in
full and (iv) thereafter, the holders of other Senior Debt on a pro rata basis.

Senior Debt means (a) all Indebtedness of the Corporation and the
Subsidiaries, including principal, premium, if any, and interest on such
Indebtedness, whether outstanding on the date hereof or thereafter created,
incurred or assumed, except for Indebtedness which is expressly by its terms or
the terms of the instrument creating or evidencing such Indebtedness made equal
in right of payment with this Note or subordinate in right of payment to this
Note, (b) all other amounts due on or in connection with such Indebtedness,
including all charges, fees, indemnities, and expenses (including reasonable
fees and expenses of counsel), (c) all Post Petition Interest with respect to
such Indebtedness, (d) all amendments, extensions, supplements, increases,
renewals, refundings, replacements, refinancings, modifications and deferrals
of the Indebtedness referred to in clauses (a), (b) and (c) above, and shall
include without limiting the foregoing the Bank Debt, obligations under the





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Bonding Agreement, the Senior Subordinated Notes and all guaranties
thereof by the Corporation. Notwithstanding the foregoing, Senior Debt shall
not include (i) any Indebtedness of the Corporation to any Subsidiary of the
Corporation, (ii) any Indebtedness of the Corporation which, by its terms or
the terms of any instrument creating or evidencing it (including the terms of
any instrument amending, extending, supplementing, renewing, increasing,
refunding, replacing, refinancing, modifying or deferring the same) is
expressly made pari passu with or expressly subordinate in right of payment to
this Note, (iii) Indebtedness to any employee of the Corporation; (iv) any
liability for taxes; (v) amounts payable to trade creditors for goods and
services provided in the ordinary course of business; (vi) that portion of any
Indebtedness which at the time of incurrence, creation or assumption is
incurred, created or assumed in violation of the Indenture (as in effect on the
date of issuance of the Senior Subordinated Notes and irrespective of whether
any Indebtedness is then outstanding thereunder); or (vii) Indebtedness under
the Senior Subordinated Notes (or the terms of any instrument amending,
extending, supplementing, renewing, increasing, refunding, replacing,
refinancing, modifying or deferring the same) in excess of the principal amount
outstanding on the date of original issuance of the Senior Subordinated Notes
plus any interest thereon or other Indebtedness in respect thereof.

Senior Default means a Payment Default or a Non-payment Default.

Senior Loan Documents means all Loan Documents (as defined in the Credit
Agreement).

Senior Subordinated Notes means all obligations of the Corporation and
the Subsidiary Guarantors, now or hereafter existing under the Indenture as it
may hereafter be amended, extended, supplemented, increased, renewed, refunded,
replaced, refinanced or otherwise modified from time to time, whether for
principal, interest, premium, fees, expenses, indemnities or otherwise.

Significant Subsidiary means any Subsidiary of the Corporation that
would be a significant subsidiary as defined in Rule 1.02(v) of Regulation
S-X promulgated pursuant to the Securities Act.

Subordinated Debt means (a) all obligations of the Corporation now or
hereafter existing under or with respect to this Note (whether created directly
or acquired by assignment or otherwise), as it may hereafter be amended,
extended, supplemented or otherwise modified from time to time, whether for
principal, interest (including, without limitation, Post Petition Interest),
fees, expenses, indemnities, reimbursements, damages, liabilities or otherwise,
(b) all obligations of any of the Loan Parties in respect of (i) any
Indebtedness (but in no event constituting Bank Debt) incurred by any of the
Loan Parties to amend, extend, supplement, increase, renew, refund, replace,
refinance or otherwise modify, in whole or in part, the Subordinated Debt,
including interest and premium on any such Indebtedness, (ii) any loan or
credit agreement entered into by any of the Loan Parties in connection with any
such Indebtedness, as such agreement may be amended, extended, supplemented or
otherwise modified from time to time, and (iii) all other amounts payable in
respect of any such Indebtedness or agreement, including, without limitation,
amounts payable (A) in respect of any indemnity and (B) in respect of any
breach of a representation or a warranty.





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Subsidiary means any corporation more than 50% of the outstanding voting
power of the voting stock of which is owned or controlled, directly or
indirectly, by the Corporation.

Trustee means The Bank of New York, as trustee under the Indenture, or
any successor thereto

(b) Subordinated Debt Subordinated to Senior Debt. The Corporation, for
itself and its successors, and each Holder, by its acceptance thereof, agrees
that the Subordinated Debt is and shall be subordinated in right of payment, to
the extent and in the manner provided in this Section 7, to the prior payment
in full of all Senior Debt. For the purposes of this Note, Senior Debt shall
be deemed not to have been paid in full until the holders or owners of the
Senior Debt shall have received payment of all Senior Debt in cash and as long
as any lender shall have any obligation under the Senior Loan Documents, the
Indenture or other agreement or instrument evidencing any obligations under any
Senior Debt. This Section 7 shall constitute a continuing offer to all persons
who, in reliance upon such provisions, become holders of, or continue to hold,
Senior Debt, and such provisions are made for the benefit of the holders of
Senior Debt, and such holders are made obligees hereunder and any one or more
of them may enforce such provisions.

(c) No Payment on Subordinated Debt in Certain Circumstances.

(i) Upon the maturity of all or any part of any Senior Debt by lapse of
time, acceleration (unless waived in writing) or otherwise, all Senior Debt
then due shall first be paid in full, or such payment duly provided for, in
cash or cash equivalents in a manner satisfactory to the holders of such Senior
Debt, before any payment is made on account of the Subordinated Debt, and until
the Senior Debt is paid in full, any distribution to which the Holder would be
entitled but for this Section 7 shall be made to holders of Senior Debt as
their interests may appear.

(ii) In the event that any Payment Default shall have occurred and be
continuing, unless and until such default shall have been cured or waived in
writing, then no payment (including any payment which may be payable by reason
of the payment of any other indebtedness of the Corporation being subordinated
to payment of the Subordinated Debt) shall be made by or on behalf of the
Corporation for or on account of any Subordinated Debt, and the Holder shall
not take or receive from the Corporation or any Subsidiary, directly or
indirectly, in cash or other property, or by set-off or in any other manner,
including, without limitation, from or by way of collateral, payment of all or
any of the Subordinated Debt. The Holder shall immediately deliver to the
Representative any monies, securities or other property paid in violation of
the preceding sentence and received by the Holder or its equivalent in cash,
with proper endorsement or assignment if necessary, and prior to such delivery
shall hold in trust, such monies, securities or other properties solely as
trustee for and for the benefit of the Senior Creditors as set forth in this
sentence.

(iii) Upon written notice from the Representative to the Corporation
(which shall give prompt notice to the Holder) of a Non-payment Default and if
such Non-payment Default shall not have been cured or waived in writing, no
payment (including any





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payment which may be payable by reason of the payment of any other
Indebtedness of the Corporation being subordinated to payment of the
Subordinated Debt) shall be made by or on behalf of the Corporation for or on
account of any Subordinated Debt, and the Holder shall not take or receive from
the Corporation, directly or indirectly, in cash or other property or by
set-off or in any other manner, including, without limitation, from or by way
of collateral, payment of all or any of the Subordinated Debt, during the
period (the Payment Blockage Period) commencing on the date of receipt by the
Corporation of such notice and ending (unless earlier terminated by notice from
the Representative to the Corporation (which shall give prompt notice to the
Holder), on the earlier of (A) the date when all Non-payment Defaults shall
have been cured or waived in writing, (B) the date an Event of Default occurs
under Section 8(a)(ii) (other than Section 8(a)(ii)(E)) or 8(a)(iii), and (C)
the date on which the Bank Debt or Senior Subordinated Notes are accelerated
and declared immediately due and payable.

(iv) Nothing contained in this Section 7 will limit the right of the
Holder to take any action to accelerate the maturity of the securities pursuant
to Section 8 or to pursue, subject to Section 8, any rights or remedies
hereunder; provided that so long as any Senior Debt remains outstanding the
Holder shall take no such action during the period (the Remedies Blockage
Period) commencing upon any Event of Default hereunder until the earlier of
(A) the date when all Events of Default hereunder shall have been cured or
waived in writing, (B) the date an Event of Default occurs under Section
8(a)(ii) or 8(a)(iii), and (C) the date on which the Bank Debt, obligations
under the Bonding Agreement or Senior Subordinated Notes are accelerated and
declared immediately due and payable; provided, further, that in the event that
any Subordinated Debt is declared due and payable before its stated maturity,
the holders of all Senior Debt shall be entitled to receive final and
indefeasible payment in full of all amounts due or to become due (whether or
not accelerated) on or in respect of all Senior Debt before the Holder is
entitled to receive any payment (including any payment which may be payable by
reason of the payment of any other indebtedness of the Corporation being
subordinated to the payment of the Subordinated Debt) by the Corporation on
account of the Subordinated Debt. The Holder shall immediately deliver to the
Representative any monies, securities or other property received by the Holder
or its equivalent in cash, with proper endorsement or assignment if necessary,
and prior to such delivery shall hold in trust, such monies, securities or
other properties solely as trustee for and for the benefit of the Senior
Creditors as set forth in this sentence.

(v) Nothing contained in this Section 7 shall prevent interest from
accruing to this Note as provided above until this Note is paid in full.

(d) Subordinated Debt Subordinated to Prior Payment of All Senior Debt on
Dissolution. Upon any payment or distribution of all or any of the assets or
securities of the Corporation of any kind or character upon any dissolution,
winding up, liquidation, reorganization, arrangement, adjustment, protection,
relief or other similar case or proceeding under any federal or state
bankruptcy or similar law (whether voluntary or involuntary, in bankruptcy,
insolvency, receivership, arrangement, reorganization or relief proceedings or
upon any assignment for the benefit of creditors or any marshalling of the
assets and liabilities of the Corporation or otherwise):





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(i) all Senior Debt shall first be entitled to be paid in full before the
Holder is entitled to receive any payment on account of the Subordinated Debt;
and

(ii) any payment or distribution in respect of the Subordinated Debt to
which the Holder would be entitled except for the provisions of this Section 7
(including any payment that may be payable by reason of any other Indebtedness
of the Corporation being subordinated to the payment of the Subordinated Debt),
shall be paid by the Corporation, the liquidating trustee or agent or other
person making such payment or distribution directly to the Agent (in the case
of the Bank Debt) or to the holders of the other Senior Debt or their
Representative or to the trustee under any indenture or other agreement (if
any) pursuant to which Senior Debt may have been issued, as the case may be,
for application to (in the case of cash), or as collateral (in the case of
non-cash property or securities) for, the payment or prepayment in full of all
Senior Debt remaining unpaid, after giving effect to any concurrent payment or
distribution (in the case of cash) to the holders of such Senior Debt.

(e) Holder to be Subrogated to Rights of Holders of Senior Debt. Upon
final and indefeasible payment in full of all Senior Debt, the Holder shall be
subrogated to the rights of the holders of Senior Debt to receive payments or
distributions of assets of the Corporation applicable to the Senior Debt until
all Subordinated Debt shall be paid in full, and for the purpose of such
subrogation no such payments or distributions to the holders of Senior Debt by
or on behalf of the Corporation or by or on behalf of the Holder by virtue of
this Section 7 which otherwise would have been made to the Holder shall, as
among the Corporation, its creditors other than the holders of Senior Debt and
the Holder, be deemed to be payment by the Corporation to or on account of the
Senior Debt, it being understood that the provisions of this Section 7(e) are
and are intended solely for the purpose of defining the relative rights of the
Holder, on the one hand, and the holders of Senior Debt, on the other hand.

If any payment or distribution to which the Holder would otherwise have
been entitled but for the provisions of this Section 7 shall have been applied,
pursuant to the provisions of this Section 7, to the payment of all amounts
payable under the Senior Debt, then and in such case, the Holder shall be
entitled to receive from the holders of such Senior Debt at the time
outstanding any payments or distributions received by such holders of Senior
Debt in excess of the amount sufficient to pay holders of Senior Debt all
amounts payable under or in respect of the Senior Debt in full unless the
holders of Senior Debt are otherwise directed by a court of competent
jurisdiction.

(f) Subordination Rights Not Impaired by Acts or Omissions of the
Corporation or Holders of Senior Debt. The Corporation agrees that it will not
make any payment of any Subordinated Debt, or take any other action, in
contravention of the provisions of this Section 7, and no right of any present
or future holders of any Senior Debt to enforce subordination as provided
herein shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Corporation or by any act or failure to act,
in good faith, by any such holder, or by any noncompliance by the Corporation
with the terms of this Note, regardless of any knowledge thereof which any such
holder may have or with which any such holder may be otherwise charged. The
holders of Senior Debt may amend, extend, supplement, increase, renew, refund,
replace, refinance, restructure or otherwise modify the terms of the Senior
Debt or any instrument or agreement evidencing or governing the same or any
security

therefor and release, sell or exchange any security therefor and otherwise
deal freely with any Loan Party, all without affecting the liabilities and
obligations of the Corporation and the Holder hereunder.

(g) In Furtherance of Subordination.

(i) All payments or distributions upon or with respect to the Subordinated
Debt which are received by the Holder contrary to the provisions of this
Section 7 shall be received and held by such Holder, in trust for the benefit
of, shall be segregated from other funds and property held by such Holder for
and shall be paid immediately over and delivered to the Representative of
Senior Creditors in the same form as so received (with any necessary
endorsement), for application (in the case of cash) to, or as collateral (in
the case of non-cash property or securities) for, the payment or prepayment in
full of all Senior Debt of the Senior Creditors remaining unpaid, after giving
effect to any concurrent payment or distribution (in the case of cash) to the
holders of Senior Debt and shall be applied (A) first to the final and
indefeasible payment in full of all Bank Debt, (B) next to the final and
indefeasible payment in full of the Senior Subordinated Notes and (C) finally
to the payment of any other Senior Debt on a pro rata basis.

(ii) The Corporation shall give prompt written notice to the Holder of any
Senior Default under any Senior Debt or under any agreement pursuant to which
Senior Debt may have been issued or of any dissolution, winding up,
liquidation, reorganization or other event described in Section 7(d) relating
to the Corporation; provided that, except as set forth in Section 7(i), the
failure to give any such notice shall in no way affect the obligations of the
Holder under, or the terms of subordination set forth in, this Section 7.

(iii) The Agent or the holders of Senior Debt (including the Trustee), as
the case may be, are hereby authorized to demand specific performance of the
provisions of this Section 7, whether or not the Corporation shall have
complied with any of the provisions hereof applicable to it, at any time when
the Corporation or the Holder, as the case may be, shall have failed to comply
with any of the provisions of this Section 7 applicable to it. The Holder
hereby irrevocably waives any defense based on the adequacy of a remedy at law
that might be asserted as a bar to such remedy of specific performance. The
Holder hereby acknowledges that the provisions of this Section 7 are intended
to be enforceable at all times, whether before or after the commencement of a
proceeding referred to in Section 7(d).

(h) Obligations of Corporation Unconditional. Nothing contained in this
Section 7 is intended to or shall impair, as between the Corporation and the
Holder, the obligations of the Corporation, which are absolute and
unconditional, to pay to the Holder the principal of, premium, if any, on and
interest on this Note as and when the same shall become due and payable in
accordance with its terms or is intended to or shall affect the relative rights
of the Holder and creditors of the Corporation other than the holders of the
Senior Debt, and, except as otherwise expressly provided herein, nothing
contained herein shall prevent the Holder from exercising all remedies
otherwise permitted by applicable law upon Default, subject to the rights, if
any, under this Section 7 of the holders of such Senior Debt in respect of
cash, property, security or securities of the Corporation received upon the
exercise of any such remedy. Nothing contained in this Section 7 or in this
Note shall, except during the pendency of any dissolution,





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winding-up, liquidation, reorganization, recapitalization or readjustment
of the Corporation, affect the obligation of the Corporation to make, or
prevent the Corporation from making, at any time (except under the
circumstances described in Section 7(c)) payment of principal of or interest on
this Note.

The failure to make a payment on account of principal of, premium, if any,
on or interest on this Note by reason of any provision of this Section 7 shall
not be construed as preventing the occurrence of an Event of Default under
Section 8.

Upon any payment or distribution of assets of the Corporation referred to
in this Section 7, the Holder shall be entitled to rely upon any unstayed,
final, nonappealable order or decree made by any court of competent
jurisdiction or upon any certificate of any agent or other person for the
purpose of ascertaining the persons entitled to participate in any
distribution, the holders of the Senior Debt and other Indebtedness of the
Corporation, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Section
7.

(i) Holder Entitled to Assume Payments Not Prohibited in Absence of
Notice. The Holder shall not at any time be charged with the knowledge of the
existence of any facts which would prohibit the making of any payment to such
Holder, unless and until the Holder shall have received written notice thereof
from the Corporation or one or more holders of Senior Debt or from the Agent or
Representative therefor; and, prior to the receipt of any such written notice
(and absent actual notice to the contrary on the part of the Holder), the
Holder shall be entitled to assume conclusively that no such facts exist.
Nothing contained in this Section 7 shall limit the right of the holders of
Senior Debt to recover payments as contemplated elsewhere in this Section 7.
The Holder shall be entitled to rely on the delivery to it of, and upon such
delivery will be charged with knowledge of the existence of, a written notice
by a person representing himself or itself to be a holder of such Senior Debt
(or a trustee on behalf of, or other representative of, such holder) to
establish that such notice has been given by a holder of such Senior Debt or a
trustee on behalf of any such holder.

(j) Rights in Insolvency Proceedings. The Holder irrevocably authorizes
and empowers the Representative of the Senior Creditors in any proceeding
defined in Section 8(a) (ii) or (iii) (an Insolvency Proceeding) involving or
relating to the Subordinated Debt to file a proof of claim on behalf of the
Holder with respect to the Subordinated Debt if the Holder fails to file proof
of its claims prior to 30 days before the expiration of the time period during
which such claims must be submitted to accept and receive any payment or
distribution which may be payable or deliverable at any time upon or in respect
of the Subordinated Debt in an amount not in excess of the Agents portion of
the Senior Debt then outstanding and to take such other action as may be
reasonably necessary to effectuate the foregoing. The Holder shall provide to
the Agent all information and documents reasonably necessary to present claims
or seek enforcement as aforesaid. The Holder agrees that even though it shall
retain the right to vote its claims and otherwise act in any such Insolvency
Proceedings relative to the Corporation (including, without limitation, the
right to vote to accept or reject any plan of partial or complete liquidation,
reorganization, arrangement, composition or extension), the Holder shall not
take any action or vote in any way so as to contest (i) the validity or the
enforceability of the Credit Agreement, the Senior Loan Documents or the liens
and security interests to the extent granted to





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the Agent by the Corporation with respect to the Bank Debt, (ii) the
validity or enforceability of the Indenture, (iii) the rights of the Lenders
established in the Credit Agreement, the Senior Loan Documents or any security
documents with respect to such liens and security interests, or (iv) the
validity or enforceability of terms of subordination set forth herein or any
agreement or instrument to the extent evidencing or relating to the Senior
Debt. The holders of Senior Debt agree that as a condition to Holders
obligations in this paragraph, while they shall retain the right to vote the
Senior Debt and otherwise act in any such reorganization proceeding relative to
the Corporation (including, without limitation, the right to vote or accept or
reject any plan of partial or complete liquidation, reorganization,
arrangement, composition or extension), they shall not take any action or vote
in any way so as to contest the enforceability of this Note or any other
agreement or instrument to the extent evidencing or relating to the
Subordinated Debt.

(k) Waiver of Consolidation. Each holder of this Note agrees that it will
not at any time insist upon, plead, or in any manner whatsoever, seek the entry
of any order or judgment, or take the benefit or advantage of, any substantive
consolidation, piercing of the corporate veil or any other order or judgment
that causes an effective combination of the assets and liabilities of the
Corporation and any other individual, corporation, partnership or joint venture
in any Insolvency Proceeding.

(l) Miscellaneous.

(i) The Holder and the Corporation each will, at the Corporations expense
and at any time and from time to time, promptly execute and deliver all further
instruments and documents, and take all further action that may be reasonably
necessary or desirable, or that the Agent or any Representative of the Senior
Creditors may reasonably request, in order to protect any right or interest
granted or purported to be granted by the provisions of this Section 7 or to
enable the Agent to exercise and enforce its rights and remedies hereunder.

(ii) All rights and interests under this Section 7 of the holders of the
Bank Debt, the Agent or the holders of the Senior Subordinated Notes and any
other holder of Senior Debt, and all agreements and obligations of the Holder
and the Corporation under this Section 7, shall remain in full force and effect
irrespective of:

(a) any lack of validity or enforceability of any Senior Loan Document or
any other agreement or instrument relating thereto or to any Senior Debt;

(b) any amendment, extension, renewal, increase, supplement, refunding,
replacement, refinancing or other modification in the time, manner or place of
payment of, or in any other term of, all or any of the Bank Debt, the Senior
Subordinated Notes or any other Senior Debt, or any other amendment, extension,
renewal or waiver of or any consent to any departure from any Senior Loan
Document or any other agreement or instrument relating thereto or to any other
Senior Debt, including, without limitation, any increase in obligations
resulting from the extension of additional credit to any Loan Party or any of
its subsidiaries or otherwise (provided that nothing in this paragraph shall
operate to make any Indebtedness that would not otherwise qualify as Senior
Debt so qualify).





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(c) any taking, exchange, release or non-perfection of any other
collateral, or any taking, release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Bank Debt, the Senior
Subordinated Notes or any other Senior Debt;

(d) any manner of application of collateral, or proceeds thereof, to all
or any of the Bank Debt or any other Senior Debt, or any manner of sale or
other disposition of any collateral for all or any of the Bank Debt or any
other Senior Debt, or any other assets of any Loan Party or any of its
subsidiaries;

(e) any change, restructuring or termination of the corporate structure or
existence of any Loan Party or any of its subsidiaries; or

(f) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, any Loan Party or a subordinated creditor.

(iii) The provisions of this Section 7 shall continue to be effective or
be reinstated, as the case may be, if at any time any payment of any Senior
Debt is rescinded or must otherwise be returned by the Agent, any holder of
Bank Debt, any holder of the Senior Subordinated Notes or any other holder of
Senior Debt upon the insolvency, bankruptcy or reorganization of any Loan Party
or otherwise, all as though such payment had not been made.

(iv) The Holder and the Corporation each hereby waives (to the extent each
may lawfully do so) promptness, diligence, notice of acceptance and any other
notice with respect to any of the Senior Debt and this Section 7 and any
requirement that the Agent, any holder of Bank Debt or any other holder of
Senior Debt protect, secure, perfect or insure any security interest or lien or
any property subject thereto or exhaust any right or take any action against
the Corporation or any other person or entity or any collateral.

(v) No failure on the part of the Agent, any holder of Bank Debt, any
holder of the Senior Subordinated Notes or any other holder of Senior Debt to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies hereunder provided are cumulative and not exclusive of any
remedies provided by law.

(vi) The provisions of this Section 7 constitute a continuing agreement
and shall (A) remain in full force and effect until all Senior Debt shall have
been finally and indefeasibly paid in full, (B) be binding upon the Holder and
the Corporation and their successors and assigns, and (C) inure to the benefit
of and be enforceable by any holders of Bank Debt, the Agent, the Trustee, any
holder of the Senior Subordinated Notes, any other holder of Senior Debt and
their successors, transferees and assigns.

8. Events of Default

(a) An Event of Default occurs if:





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(i) the Corporation defaults in the payment of the principal or interest
of this Note when the same becomes due and payable at maturity, upon
acceleration, or otherwise, whether or not such payment shall be prohibited by
the provisions of Section 7;

(ii) the Corporation or any Significant Subsidiary, pursuant to or within
the meaning of any Bankruptcy Law:

(A) commences a voluntary case or proceeding,

(B) consents to the entry of an order for relief against
it in an involuntary case or proceeding,

(C) consents to the appointment of a Custodian of it or
for all or substantially all of its property, or

(D) makes a general assignment for the benefit of its
creditors;

(iii) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:

(A) is for relief against the Corporation or any
Significant Subsidiary in an involuntary case or proceeding,

(B) appoints a Custodian of the Corporation or any
Significant Subsidiary or for all or substantially all of its
property, or

(C) orders the liquidation of the Corporation or any
Significant Subsidiary;

and in the case of (A) above the order or decree remains unstayed and in effect
for 60 days;

(iv) the Corporation fails to observe or perform any material covenant,
condition or agreement required on its part to be observed or performed
pursuant to Section 5, such failure continues for a period of thirty days after
notice from Holder and notice of such failure shall have been given to the
Representative (which notice may be given by the Corporation or the Holder); or

(v) the Corporation fails to pay any Indebtedness of the Corporation
within any applicable grace period after final maturity or any such
Indebtedness is accelerated by the holders thereof because of a default and the
total amount of such Indebtedness unpaid or accelerated exceeds $10 million and
such failure continues for 10 days after notice.

(b) Acceleration. Subject to the provisions of Section 7, if an Event of
Default (other than an Event of Default with respect to the Corporation
specified in clause (a)(ii) or (iii) of Section 8) occurs and is continuing,
the Holders of 25% or more of the outstanding amount of the Corporations
   % Junior Subordinated Debentures due 2009, by written notice to the
Corporation (an Acceleration Notice), may declare the unpaid principal of and
accrued interest on this Note to be immediately due and payable. Upon such
declaration, if there





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is at such time any Senior Debt outstanding, the principal, premium, if
any, and interest shall be due and payable upon the first to occur of an
acceleration under the Senior Loan Documents or the Indenture or thirty days
after receipt by the Agent (or any Representative of which the holder of this
Note has received notice if the Bank Debt is not then outstanding) of such
Acceleration Notice given hereunder and there has been no cure by such 30th
day. If an Event of Default specified in clause (a)(ii) or (iii) of Section 8
occurs with respect to the Corporation, all principal of and interest on this
Note outstanding shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Holder. The Holders of
50% or more of the outstanding amount of the Corporations    % Junior
Subordinated Debentures due 2009 (the Majority Holders) by written notice to
the Corporation may rescind an acceleration and its consequences if (i) all
existing Events of Default, other than the nonpayment of principal of or
interest on this Note which has become due solely because of the acceleration,
have been cured or waived and (ii) the rescission would not conflict with any
judgment or decree of a court of competent jurisdiction. Any amounts received
by Holder in connection with any action taken pursuant to this Section 8(b)
shall be subject to the provisions of Section 7.

(c) Other Remedies. Subject to the provisions of Section 7, if an Event
of Default occurs and is continuing, the Majority Holders may pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal of or interest on this Note or to enforce the performance of any
provision of this Note.

A delay or omission by the Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All remedies are cumulative to the extent
permitted by law.

(d) Waiver of Past Defaults. Subject to Section 8(b), the Majority
Holders may waive an existing Default or Event of Default and its consequences.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Note; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.

9. Amendment and Waiver

(a) Consent Required. Any term, covenant, agreement or condition of this
Note may, with the consent of the Corporation, be amended or compliance
therewith may be waived (either generally or in a particular instance and
either retroactively or prospectively), if the Corporation shall have obtained
the consent in writing of the Majority Holders; provided that without the
written consent of the holders of all of the Notes then outstanding, no such
waiver, modification, alteration or amendment shall be effective (i) which will
change the time of payment of the principal of or the interest on any Note or
reduce the principal amount thereof, or (ii) which will change the percentage
of holders of the Notes required to consent to any such amendment, alteration
or modification, or (iii) which will change any of the provisions of Section
8(b), Section 8(c), Section 8(d) or this Section 9. This Note may not be
amended without the consent in writing of the Agent and the Trustee.





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For the purpose of determining whether holders of the requisite principal
amount of Notes have made or concurred in any waiver, consent, approval, notice
or other communication under this Note, Notes held in the name of, or owned
beneficially by, the Corporation or any Subsidiary shall not be deemed
outstanding.

(b) Effect of Amendment or Waiver. Any amendment or waiver shall apply
equally to all of the holders of the Notes and shall be binding upon them, upon
each future holder of any Note and upon the Corporation, whether or not such
Note shall have been marked to indicate such amendment or waiver. No such
amendment or waiver shall extend to or affect any obligation not expressly
amended or waived or impair any right consequent thereon.

10. No Setoff. The rights of the Holder to receive payment hereunder
shall be absolute and not subject to any setoff or similar right.

11. When Corporation May Merge, etc.

(a) The Corporation shall not consolidate with or merge with or into, or
convey, transfer or lease, in one transaction or a series of transaction, all
or substantially all its assets to, any Person, unless:

(i) the resulting, surviving or transferee Person (the Successor
Company) shall be a Person organized and existing under the laws
of the United States of America, any State thereof or the District
of Columbia and the Successor Company (if not the Corporation)
shall expressly assume, all the obligations of the Corporation
hereunder;

(ii) immediately after giving effect to such transaction (and
treating any Indebtedness which becomes an obligation of the
Successor Company or any Subsidiary as a result of such transaction
as having been incurred by the Successor Company or such Subsidiary
at the time of such transaction), no Default shall have occurred
and be continuing;

(iii) such transaction shall be permitted by the Indenture if any
Indebtedness under the Indenture is then outstanding;

(iv) the Corporation shall have delivered to the Holder an
officers certificate and an opinion of counsel, each stating that
such consolidation, merger or transfer and such supplemental
indenture (if any) comply with this Note.

The Successor Company shall be the successor to the Corporation and shall
succeed to, and be substituted for, and may exercise every right and power of,
the Corporation under this Note, but the predecessor Corporation in the case of
a conveyance, transfer or lease shall not be released from the obligation to
pay the principal of and interest on this Note.

(b) The Corporation shall not permit any Significant Subsidiary to
consolidate with or merge with or into, or convey, transfer or lease, in one
transaction or series of transaction, all or substantially all of its assets to
any Person unless: (i) the resulting, surviving or transferee Person (if not
such Significant Subsidiary) shall be a Person organized and existing





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under the laws of the jurisdiction under which such Significant Subsidiary
was organized or under the laws of the United States of America, or any State
thereof or the District of Columbia; (ii) immediately after giving effect to
such transaction or transactions on a pro forma basis (and treating any
Indebtedness which becomes an obligation of the resulting, surviving or
transferee Person as a result of such transaction as having been issued by such
Person at the time of such transaction), no Default shall have occurred and be
continuing; and (iii) the Corporation delivers to the Holder an officers
certificate and an opinion of counsel, each stating that such consolidation,
merger or transfer complies with this Note. The provisions of clauses (i) and
(ii) above shall not apply to any one or more transactions which constitute an
Asset Disposition as defined in the Indenture if the Corporation has complied
with the applicable provisions of Section [   ] of the Indenture.

12. Denominations; Transfer and Exchange

When this Note is presented to the Corporation with a request to register
the transfer, the Corporation shall register a transfer as requested, if the
requirements for such transfer are met; provided, however, that if this Note is
presented or surrendered for registration of transfer or exchange it shall be
duly endorsed or be accompanied by a written instrument of transfer in form
satisfactory to the Corporation duly executed by the Holder or his attorney
duly authorized in writing. The Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto.

13. Replacement Note

If a mutilated Note is surrendered to the Corporation or if the Holder of
this Note presents evidence to the reasonable satisfaction of the Corporation
that this Note has been lost, destroyed or wrongfully taken, the Corporation
shall issue a replacement Note of like tenor if the requirements of the
Corporation for such transactions are met. An indemnity bond may be required
that is sufficient in the reasonable judgment of the Corporation to protect the
Corporation from any loss which it may suffer. The Corporation may charge for
its expenses in replacing this Note.

14. No Recourse Against Others

No director, officer, employee or stockholder, as such, of the Corporation
shall have any liability for any obligations of the Corporation under this Note
or for any claim based on, in respect or by reason of, such obligations or
their creation. The Holder by accepting this Note waives and releases all such
liability. This waiver and release are part of the consideration for the issue
of this Note.

15. Notice

All notices, requests, consents and demands shall be made in writing and
shall be given by registered or certified mail postage prepaid to the following
addresses: if to the Corporation, to it at Great Lakes Dredge & Dock
Corporation, 2122 York Road, Oak Brook, Illinois 60521, Attention: Bruce J.
Biemeck, Chief Financial Officer, with required copies to: 399 Venture Partners
Inc., 399 Park Avenue, Fourteenth Floor, New York, New York 10043, Attention:
Michael A. Delaney and Paul C. Schorr IV, Telecopy: (212) 888-2940, to Dechert





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Price & Rhoads, 4000 Bell Atlantic Tower, 1717 Arch Street, Philadelphia,
Pennsylvania 19103, Attention: G. Daniel ODonnell, Telecopy: (215) 994-2222 or
to such other address as may be furnished in writing to the Holder; and if to
the Holder, to it at its address listed on the transfer books of the
Corporation. Unless otherwise indicated herein, notices hereunder shall be
effective when delivered, if delivered personally, or, if sent by mail, when
sent.

Any notices given by the Representative to Holder hereunder may be made by
Representative by delivery as set forth above to the address for Holder set
forth above or such other address of which Holder shall give notice to
Representative. Any notices given by the Corporation or Holder to
Representative hereunder may be made by delivery as set forth above to the
following address or such other address of which Representative shall give
notice to the party delivering such notice:
                     .

16. Governing Law

This Note shall be deemed a contract under, and shall be governed and
construed in accordance with, the laws of the State of New York without giving
effect to principles of conflicts of laws.

17. Successors, etc.; Entire Agreement

This Note shall be binding upon and shall inure to the benefit of and be
enforceable by the respective successors and assigns of the Corporation and the
registered Holder thereof.

18. Headings

The section headings of this Note are for convenience only and shall not
affect the meaning or interpretation of this Note or any provision hereof.

IN WITNESS WHEREOF, the Corporation has caused this Note to be executed by
its duly authorized officer.

Dated:             ,

GREAT LAKES DREDGE & DOCK CORPORATIONBy:President