Document:

Exhibit 10.3

 

 

MANAGEMENT
EQUITY AGREEMENT

 

AMONG

 

GLDD
ACQUISITIONS CORP.

 

AND

 

EACH
OF THE PERSONS

LISTED ON THE

SCHEDULE OF EXECUTIVES HERETO

 

 

Dated
as of December 22, 2003

 

 

 

THE SECURITIES DESCRIBED
HEREIN HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR REGISTERED OR QUALIFIED UNDER STATE SECURITIES LAWS.  THE SECURITIES ARE BEING SOLD IN RELIANCE
UPON EXEMPTIONS FROM SUCH REGISTRATION AND QUALIFICATION REQUIREMENTS.  THE SECURITIES CANNOT BE SOLD, TRANSFERRED,
ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE RESTRICTIONS ON
TRANSFERABILITY SET FORTH IN THIS AGREEMENT AND APPLICABLE FEDERAL AND STATE
SECURITIES LAWS.

 

i

 

MANAGEMENT
EQUITY AGREEMENT

 

THIS MANAGEMENT EQUITY
AGREEMENT (this “Agreement”) is made as of December 22, 2003, among GLDD
Acquisitions Corp., a Delaware corporation (the “Company”), and each of
the persons identified on the Schedule of Executives attached hereto
(each an “Executive”).

 

The Company and each
Executive desire to enter into an agreement pursuant to which such Executive
shall purchase, and the Company shall sell, certain shares of the Company’s
Common Stock, par value $.01 per share (the “Common Stock”) and Series B
Preferred Stock, par value $.01 per share (the “Series B Preferred”), on
the terms and subject to the conditions set forth in this Agreement.  Capitalized terms not otherwise defined
herein have the meanings set forth in Section 13 of this Agreement.

 

The parties hereto agree
as follows:

 

1.                                       Purchase
and Sale of Common Stock.

 

(a)                                  Purchase
and Sale.  Upon execution of this
Agreement, each Executive shall purchase, and the Company shall sell, the
number of shares of Common Stock and Series B Preferred set forth on the Schedule
of Executives attached hereto, at a price of $10.00 per share of Common
Stock and $1,000 per share of Series B Preferred.  The Company shall deliver to each Executive a copy of, and a
receipt for, the certificate representing such shares of Common Stock and
Series B Preferred purchased by such Executive, and, as payment therefor, such
Executive shall deliver to the Company (i) the amount of cash set forth
opposite such Executive’s name on the Schedule of Executives attached
hereto and/or (ii) the number of shares of Class A Common Stock of Great Lakes
Dredge & Dock Corporation set forth opposite such Executive’s name on the Schedule
of Executives attached hereto (the “GLDD Shares”).  By his or her execution hereof, each
Executive agrees that a portion of the cash payment to which such Executive is
entitled under the Bonus Compensation Plan (as defined in the Merger Agreement)
shall be reduced by the amount set forth opposite such Executive’s name on the Schedule
of Executives attached hereto and that the cash portion of the purchase
price for the Series B Preferred.  Each
Executive shall pay for the Common Stock and Series B Preferred by delivering
such cash by wire transfer of immediately available funds and/or by delivering
the GLDD Shares, together with stock transfer powers duly executed in favor of
the Company (or, at the direction of the Company, GLDD Merger Sub, Inc.) to
reflect the transfer of the GLDD Shares. 
For purposes of this Agreement, each GLDD Share delivered in
consideration of the shares acquired by Executive shall be deemed to have a
value of $603.36 per share.

 

(b)                                 Section 83(b)
Election.  Within 30 days after each
Executive purchases any Incentive
Shares from the Company, such Executive shall make an effective election
with the Internal Revenue Service under Section 83(b) of the Code in the
form of Annex A attached hereto.

 

1

 

2.                                       Representations
and Warranties; Acknowledgments.

 

(a)                                  In
connection with the purchase and sale of Executive Stock, each Executive
represents and warrants as follows:

 

(i)                                     Executive
Stock being acquired by such Executive pursuant to this Agreement shall be
acquired for such Executive’s own account and not with a view to, or the
intention of, distribution thereof in violation of the 1933 Act, or any
applicable state securities laws, and Executive Stock so acquired shall not be
disposed of in contravention of the 1933 Act or any applicable state securities
laws.

 

(ii)                                  Such
Executive is sophisticated in financial matters and is able to evaluate the
risks and benefits of the investment in the Executive Stock.

 

(iii)                               Such Executive is able
to bear the economic risk of  such
Executive’s investment in Executive Stock acquired hereunder for an indefinite
period of time and acknowledges that the Executive Stock has not been
registered under the 1933 Act and, therefore, cannot be sold unless
subsequently registered under the 1933 Act or an exemption from such
registration is available.

 

(iv)                              Such
Executive has had an opportunity to ask questions of and receive answers
concerning the terms and conditions of the offering of Executive Stock.  Such Executive has been advised of certain
risks associated with such Executive’s purchase of Executive Stock and has had
full access to such other requested information concerning the Company.  Such Executive has reviewed, or has had an
opportunity to review, the following documents:  (A) the Company’s Certificate of Incorporation and By-laws,
and any amendment or restatement thereto; (B) the Company’s public securities
law filings, and (C) the Merger Agreement.

 

(v)                                 This
Agreement constitutes the legal, valid and binding obligation of such
Executive, enforceable in accordance with its terms, and the execution,
delivery and performance of this Agreement by such Executive do not and will
not conflict with, violate or cause a breach of any agreement, contract or
instrument to which such Executive is a party or any judgment, order or decree
to which such Executive is subject.

 

(b)                                 As
an inducement to the Company to issue Executive Stock hereunder to each
Executive, and as a condition thereto, each such Executive acknowledges and
agrees that:

 

(i)                                     neither
the issuance of the Executive Stock hereunder to such Executive nor any
provision contained herein shall entitle such Executive to remain in the
employment of the Company or its Subsidiaries or affect the right of the
Company to terminate such Executive’s employment at any time; and

 

(ii)                                  the
Company shall have no duty or obligation to disclose to such Executive, and
such Executive shall have no right to be advised of, any material information
regarding the Company and its Subsidiaries at any time prior to, upon or in
connection with the repurchase of Incentive Shares upon the termination of such
Executive’s employment with the Company and its Subsidiaries, the transfer of
Executive Stock pursuant to this Agreement, or as otherwise provided hereunder.

 

2

 

3.                                       Vesting
of Incentive Shares.

 

(a)                                  Except
as otherwise provided in this Section 3, each Executive’s Incentive
Shares(1) shall become vested in accordance with the following schedule, if as
of each such date such Executive is and has continued to be employed by the
Company or any of its Subsidiaries:

 

	
  Vesting Date

  	
   

  	
  Cumulative
  Percentage of

  Incentive Shares Vested

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December
  22, 2004

  	
   

  	
  20

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  December
  22, 2005

  	
   

  	
  40

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  December
  22, 2006

  	
   

  	
  60

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  December
  22, 2007

  	
   

  	
  80

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  December
  22, 2008

  	
   

  	
  100

  	
  %

  

 

(b)                                 Incentive
Shares which have become vested are referred to herein as “Vested Shares,”
and all other Incentive Shares are referred to herein as “Unvested Shares.”  If any Executive ceases to be employed by
the Company or its Subsidiaries on any date other than any Vesting Date set
forth above prior to December 22, 2008, the cumulative percentage of such
Executive’s Incentive Shares to become vested shall be determined on a pro rata
basis according to the number of days elapsed since the immediately preceding
Vesting Date.

 

(c)                                  Upon
the occurrence of a Sale of the Company, all Incentive Shares which have not
yet become vested shall become vested at the time of such event; provided that
in the event of a Sale of the Company, as a condition to each Executive’s
Unvested Shares becoming vested upon such event, such Executive shall, if
requested by the purchaser of the Company and for no additional consideration
therefor, agree to continued employment for up to 12 months following such Sale
of the Company so long as such Executive’s compensation package and job
description immediately following such Sale of the Company is reasonably
similar with respect to remuneration, scope of duties, responsibility and job
location to such Executive’s compensation package and job description
immediately prior to such event.

 

4.                                       Repurchase
Option.

 

(a)                                  In
the event any Executive ceases to be employed by the Company or its
Subsidiaries for any reason (such Executive’s “Termination”), all of
such Executive’s Incentive Shares (whether held by such Executive or one or
more of such Executive’s transferees) shall be subject to repurchase by the
Company and the Investors pursuant to the terms and conditions set forth in
this Section 4 (the “Repurchase Option”).

 

(b)                                 In
the case of any Termination without Cause, or by reason of Executive’s death,
disability (as determined by the Board) or normal retirement at age 65 or more
under the

 

(1)               Note
that it is our expectation that all Common Stock acquired will be Incentive
Shares.

 

3

 

Company’s normal
retirement policies, the purchase price for each Unvested Share shall be the
lower of such Executive’s Original Cost for such share and the Fair Market
Value of such share, and the purchase price for each Vested Share shall be the
Fair Market Value for such share.  In
the event of an Executive’s termination for any other reason (including,
without limitation, voluntary termination by Executive or termination by the
Company for Cause), the purchase price for each Unvested Share and each Vested
Share shall be the lower of (i) the Fair Market Value of such share and
(ii) the Original Cost for such share.

 

(c)                                  The
Company may elect to purchase all or any portion of an Executive’s Unvested
Shares and Vested Shares by delivering written notice (the “Repurchase
Notice”) to the holder or holders of such Executive’s Incentive Shares
within 180 days after such Executive’s effective date of Termination (the “Termination
Date”).  The Repurchase Notice shall
set forth the number of Unvested Shares and Vested Shares to be acquired from
each holder of such Executive’s Incentive Shares, the aggregate consideration
to be paid for such shares and the time and place for the closing of the
transaction.  The number of shares to be
repurchased by the Company shall first be satisfied to the extent possible from
the Incentive Shares held by such Executive at the time of delivery of the
Repurchase Notice.  If the number of
Incentive Shares then held by such Executive is less than the total number of
Incentive Shares the Company has elected to purchase, the Company shall
purchase the remaining shares elected to be purchased from the other holder(s)
of such Executive’s Incentive Shares under this Agreement, pro rata according
to the number of shares of such Executive’s Incentive Shares held by such other
holder(s) at the time of delivery of such Repurchase Notice (determined as
close as practicable to the nearest whole shares).  The number of Unvested Shares and Vested Shares to be repurchased
hereunder shall be allocated among such Executive and the other holders of such
Executive’s Incentive Shares (if any) as the Company and/or MDCP, as the case
may be, may elect.

 

(d)                                 If
for any reason following an Executive’s Termination, the Company does not elect
to purchase all of such Executive’s Incentive Shares pursuant to the Repurchase
Option, MDCP shall be entitled to exercise the Repurchase Option for the
Incentive Shares the Company has not elected to purchase in accordance with Section 4(c)
(the “Available Shares”).  As soon
as practicable after the Company has determined that there will be Available
Shares, but in any event within 45 days after such Executive’s Termination, the
Company shall give written notice (the “Repurchase Option Notice”) to
MDCP setting forth the number of Available Shares and the aggregate purchase
price therefor.  MDCP may elect to
purchase any or all of the Available Shares by giving written notice to the
Company within 30 days after the Repurchase Option Notice has been given by the
Company.  As soon as practicable, and in
any event within ten days after the expiration of the 30-day period set forth
above, the Company shall notify each holder of Incentive Shares as to the
number of shares being purchased from such holder hereunder by MDCP (the “Supplemental
Repurchase Notice”).  At the time
the Company delivers the Supplemental Repurchase Notice to the holder(s) of
Incentive Shares, the Company shall also deliver written notice to MDCP setting
forth the number of shares MDCP is entitled to purchase, the aggregate purchase
price and the time and place of the closing of the transaction.  The number of Unvested Shares and Vested
Shares to be repurchased under Section 4(c) and this Section 4(d)
shall be allocated among the Company and MDCPas the Company and/or MDCP may elect.

 

4

 

(e)                                  The
closing of the purchase and sale of the Incentive Shares pursuant to the
Repurchase Option shall take place on the date designated by the Company in the
Repurchase Notice or Supplemental Repurchase Notice (as the case may be), which
date shall not be more than 60 days nor less than five days after the delivery
of the later of either such notice to be delivered.  The Company and/or MDCP shall pay for the Incentive Shares to be
purchased pursuant to the Repurchase Option by delivery of a check or wire
transfer of funds in the aggregate amount of the purchase price for such
shares.  In addition, the Company may
pay the purchase price for such shares by offsetting any bona fide debts owed
by such Executive to the Company or guaranteed by the Company on behalf of such
Executive and any payments received by such Executive hereunder shall be
applied first to repayment of any obligations of such Executive (or his or her
affiliates or family members) to the Company or for which the Company may be
responsible.  The purchasers of
Incentive Shares hereunder shall be entitled to receive customary
representations and warranties from the sellers regarding such sale of shares
(including representations and warranties regarding good title to such shares
free and clear of any liens or encumbrances) and to require all sellers’
signatures be guaranteed by a national bank or reputable securities broker.

 

(f)                                    Notwithstanding
anything to the contrary contained in this Agreement, all repurchases of
Incentive Shares by the Company shall be subject to applicable restrictions
contained in the Delaware General Corporation Law and in the Company’s and its
Subsidiaries’ debt and equity financing agreements.  If any such restrictions prohibit the repurchase of Incentive
Shares hereunder which the Company is otherwise entitled or required to make,
the time periods provided in this Section 4 shall be suspended, and the
Company may make such repurchases as soon as it is permitted to do so.

 

(g)                                 If
the Company or MDCP exercises purchase or repurchase rights under this Section
4 with respect to any or all of the Incentive Shares of any Executive whose
employment with the Company was terminated by the Company without Cause (the “Called
Shares”), and if within six months after the closing pursuant to such
exercise of such purchase or repurchase rights by the Company or its designee:

 

(i)                                               the
Company is merged into, consolidated with or otherwise combined with or acquired
by another Person, or there is a liquidation of the Company, or there is a
Public Offering (a “Subsequent Offering”) of the Company’s Common Stock
pursuant to an effective registration statement under the Securities Act in
which other Executives participate as selling Executives (other than (1) a
registration statement on Form S-8 or any successor forms or any other
registration statement relating to a special offering to the Company’s
employees or (2) a registration statement relating to a Unit Offering); and

 

(ii)                                            the
per share consideration received by the Executives of the Company in such
transaction, or the per share net proceeds received for the Company’s Common
Stock in the Subsequent Offering, as the case may be (in each case after being
adjusted downward to reflect what the per share consideration or per share net
offering proceeds, as the case may be, would have been had the Common Stock of
such terminated Executive purchased by the Company or its designee pursuant to
the Purchase Option been outstanding on the date of the closing of such
transaction or Subsequent

 

5

 

Offering), exceeds
the Fair Market Value used in calculating the purchase price pursuant to Section
4(b) hereof,

 

then such Executive shall
be entitled to receive from the Company or MDCP an amount per Called Share
equal to such excess multiplied by the applicable FMV Price Percentage within
30 days after the closing of any such transaction or Subsequent Offering. “FMV
Price Percentage” means 20% multiplied by the number of full years elapsed
between the Effective Time of the Merger and the Termination Date for such
Executive.

 

5.                                       Restrictions
on Transfer.

 

(a)                                  Transfer
of Executive Stock.  No Executive
shall, without the prior written consent of the Company, sell, transfer,
assign, pledge or otherwise dispose of (whether with or without consideration
and whether voluntarily or involuntarily or by operation of law) (a “Transfer”)
any interest in any shares of Executive Stock, except pursuant to the
provisions of Section 4 hereof, this Section 5 or in connection
with a Sale of the Company.

 

(b)                                 Certain
Permitted Transfers.  The
restrictions contained in this Section 5 shall not apply with
respect to transfers of shares of Executive Stock (i) pursuant to
applicable laws of descent and distribution or (ii) among an Executive’s
family group; provided that such restrictions shall continue to be applicable
to shares of such Executive Stock after any such transfer and the transferees of
such Executive Stock shall have agreed in writing to be bound by the provisions
of this Agreement.  An Executive’s “family
group” means such Executive’s spouse and descendants (whether natural or
adopted) and any trust solely for the benefit of such Executive and/or such
Executive’s spouse and/or descendants.

 

(c)                                  Participation
Rights.  At least 30 days prior to
any Significant Transfer by MDCP of any Preferred Stock or Common Stock (other
than a Public Sale, any Sale of the Company for which rights pursuant to Section
8 hereof are exercised or any Transfer to any of its members or Affiliates
or their direct or indirect respective members, partners or shareholders), MDCP
shall deliver written notice (the “Sale Notice”) to each Executive
specifying in reasonable detail the identity of the prospective transferee(s),
the number of the type of shares to be sold and the terms and conditions of the
proposed Transfer.  Each Executive may
elect to participate in the contemplated Transfer at the same price per share
and on the same terms by delivering written notice to MDCP within 30 days after
delivery of the Sale Notice (which, for the avoidance of doubt, shall include a
requirement to sell such Executive’s pro rata piece (as determined in
accordance with the immediately following sentence) of each type of security to
be sold).  If any Executive has elected
to participate in such Transfer, each of MDCP and each such Executive shall be
entitled to sell in the contemplated Transfer, at the same price and on the
same terms, a number of shares of the applicable type of stock equal to the
product of (i) the quotient determined by dividing (A) the percentage
of shares of such type of stock owned by such Person by (B) the aggregate
percentage of shares of the type of stock collectively owned by all Persons
participating in such Transfer and (ii) the aggregate number of shares of
such type of stock to be sold in the contemplated Transfer.

 

For example,
if the Sale Notice contemplated a sale of 100 shares of Common Stock, and if
MDCP at such time owns 40% of all

 

6

 

shares of Common Stock
and if an Executive elects to participate and such Executive owns 2% of all
shares of Common Stock and if other persons owning an aggregate of 10% of all shares
of Common Stock elect to participate in the contemplated sale, MDCP would be
entitled to sell 76.9 shares (40% ÷ 52% x 100 shares), such
Executive would be entitled to sell 3.9 shares (2% ÷ 52% x
100 shares) and the other persons would be entitled to sell 19.2 shares in
the aggregate (10% ÷ 52% x 100 shares).

 

Each Person transferring
shares of Common Stock pursuant to this Section 5(c) shall pay his,
her or its pro rata share (based on the number of shares of Common Stock to be
sold) of the expenses incurred by the persons transferring shares in connection
with such Transfer and shall be obligated to join in any indemnification or
other obligations that MDCP agrees to provide in connection with such Transfer
(other than any such obligations that relate specifically to another person
such as indemnification with respect to representations and warranties given by
such other person regarding such other person’s title to and ownership of
shares of Common Stock).

 

(d)                                 No
Termination of Restrictions.  The restrictions
on Transfer of shares of Executive Stock set forth in this Section 5
shall continue with respect to each share of Executive Stock following any
Transfer thereof.

 

6.                                       Additional
Restrictions on Transfer.

 

(a)                                  The
certificates representing Executive Stock shall bear the following legend:

 

“THE SECURITIES
REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON DECEMBER 22, 2003,
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER.  THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER, CERTAIN
REPURCHASE OPTIONS AND CERTAIN OTHER AGREEMENTS SET FORTH IN A MANAGEMENT
EQUITY AGREEMENT BETWEEN THE COMPANY AND CERTAIN OF ITS EMPLOYEES DATED AS OF
DECEMBER 22, 2003, AS AMENDED AND MODIFIED FROM TIME TO TIME.  A COPY OF SUCH AGREEMENT MAY BE OBTAINED BY
THE HOLDER HEREOF AT THE COMPANY’S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE.”

 

(b)                                 The
certificates representing Incentive Shares to be purchased by any Executive
shall bear the following additional legend:

 

7

 

“THE SECURITIES REPRESENTED
BY THIS CERTIFICATE ARE ALSO SUBJECT FOR A PERIOD OF TIME TO A PURCHASE OPTION
OF THE COMPANY APPLICABLE TO “INCENTIVE SHARES” AS DESCRIBED IN THE MANAGEMENT
EQUITY AGREEMENT BETWEEN THE COMPANY AND CERTAIN OF ITS EMPLOYEES DATED AS OF
DECEMBER 22, 2003, AS AMENDED AND MODIFIED FROM TIME TO TIME.  A COPY OF SUCH AGREEMENT MAY BE OBTAINED BY
THE HOLDER HEREOF AT THE COMPANY’S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE.”

 

(c)                                  No
holder of Executive Stock may Transfer any Executive Stock (except pursuant to
an effective registration statement under the 1933 Act) without first
delivering to the Company an opinion of counsel (reasonably acceptable in form
and substance to the Company) that neither registration nor qualification under
the 1933 Act and applicable state securities laws is required in connection
with such transfer.

 

(d)                                 Each
holder of Executive Stock agrees not to effect any public sale or distribution
of any Executive Stock or other equity securities of the Company, or any
securities convertible into or exchangeable or exercisable for any of the
Company’s equity securities, during the seven days prior to and the 180 days
after the effectiveness of any underwritten public offering, except as part of
such underwritten public offering or if otherwise permitted by the Company.

 

7.                                       Company’s
Right of First Refusal.

 

(a)                                  If
an Executive or his Permitted Transferees proposes to sell any or all of such
Executive’s or Permitted Transferee’s Executive Stock to a third party in a
bona fide transaction, and provided such transaction is permitted by the
Company pursuant to Section 5(a), the Executive, or his Permitted
Transferees, may not Transfer such Executive Stock without first offering to
sell such Executive Stock to the Company pursuant to this Section 7.

 

(b)                                 The
Executive, or his Permitted Transferees, shall deliver a written notice (a “First
Refusal Sale Notice”) to the Company describing in reasonable detail the
Executive Stock being offered, the name of the offeree, the purchase price
requested and all other material terms of the proposed Transfer. Upon receipt
of the First Refusal Sale Notice, the Company, or a designee selected by MDCP,
shall have the right and option to purchase all or any portion of the Executive
Stock being offered at the price and on the terms of the proposed Transfer set
forth in the First Refusal Sale Notice. 
Within 30 days after receipt of the First Refusal Sale Notice, the
Company shall notify such Executive, or his Permitted Transferees, whether or
not it wishes to purchase any or all of the offered Executive Stock.

 

(c)                                  If
the Company elects to purchase any of the offered Executive Stock, the closing
of the purchase and sale of such Executive Stock shall be held at the place and
on the date established by the Company in its notice to the Executive, or his
Permitted Transferees, in response to the First Refusal Sale Notice, which in
no event shall be less than ten or more than

 

8

 

60 days from the date of
such notice. In the event that the Company does not elect to purchase all the
offered Executive Stock, the Executive, or his Permitted Transferees, may,
subject to the other provisions of this Agreement, Transfer the remaining
offered Executive Stock to the offeree specified in the First Refusal Sale
Notice at a price no less than the price specified in the First Refusal Sale
Notice and on other terms no more favorable to the transferee(s) thereof than
specified in the First Refusal Sale Notice during the l80-day period immediately
following the last date on which the Company could have elected to purchase the
offered Executive Stock. Any such Executive Stock not transferred within such
l80-day period will be subject to the provisions of this Section 7 upon
subsequent Transfer.

 

(d)                                 The
provisions of this Section 7, insofar as they relate to Executive Stock
other than Incentive Shares shall terminate effectively immediately after the
consummation of:  (i) a Sale of the
Company and (ii) the Company’s initial Public Offering.

 

8.                                       Sale
of the Company.

 

(a)                                  If
the Board and MDCP approve a Sale of the Company (the “Approved Sale”),
all holders of Executive Stock shall consent to, vote for and raise no
objections against the Approved Sale, and if the Approved Sale is structured as
a sale of stock, the holders of Executive Stock shall agree to sell their
shares of Executive Stock on the terms and conditions approved by the Board and
MDCP.  The holders of Executive Stock
shall take all necessary and desirable actions in connection with the consummation
of the Approved Sale.  In furtherance of
the foregoing, if the Approved Sale is structured as (A) a merger or
consolidation, each holder of Executive Stock shall vote its Executive Stock to
approve such merger or consolidation, whether by written consent or at a
stockholders meeting (as requested by MDCP), and waive all dissenter’s rights,
appraisal rights and similar rights in connection with such merger or
consolidation, (B) a sale of stock, each holder of Executive Stock shall agree
to sell, and shall sell, all of its Executive Stock and rights to acquire
Executive Stock on the terms and conditions so approved, or (C) a sale of
assets, each holder of Executive Stock shall vote its Executive Stock to
approve such sale and any subsequent liquidation of the Company or other
distribution of the proceeds therefrom, whether by written consent or at a
stockholders meeting (as requested by MDCP), and waive all dissenter’s rights,
appraisal rights and similar rights in connection with such sale of assets.

 

(b)                                 In
furtherance of its obligations under Section 8(a) above, (I) each
holder of Executive Stock will take all necessary or desirable actions
reasonably requested by MDP in connection with the consummation of the Approved
Sale and (II) each holder of Executive Stock will make the same
representations, warranties, indemnities and agreements as each other holder,
including without limitation, voting to approve such transaction and executing
all documents requested by MDCP to be executed by such holder, including the
applicable purchase agreement, stockholders agreement and/or indemnification
and/or contribution agreement.  Without
limiting the generality of the foregoing, in any Approved Sale, (i) each holder
of Executive Stock shall be obligated to make representations and warranties as
to such holder’s title to and ownership of Executive Stock, authorization,
execution and delivery of relevant documents by such holder, enforceability of
relevant agreements against such holder and other matters relating to such
holder, to enter into covenants in respect of a Transfer of such holder’s
Executive Stock in connection with such Approved Sale (including, without
limitation, the delivery of certificates,

 

9

 

stock powers and other
instruments of transfer) and to enter into indemnification obligations with
respect to the foregoing, in each case to the extent that each other holder of
the same type of Executive Stock is similarly obligated; provided that
no holder shall be obligated to enter into indemnification obligations with
respect to any of the foregoing to the extent relating to any other holder of
Executive Stock or such other holder’s Executive Stock, and (ii) in no event
shall any holder of Executive Stock be liable in respect of any indemnity
obligations pursuant to any Approved Sale in an aggregate amount in excess of
the total consideration payable to such holder in such Approved Sale.

 

(c)                                  The
obligations of the holders of Executive Stock with respect to the Approved Sale
are subject to the satisfaction of the following conditions:  (i) upon the consummation of the
Approved Sale, all of the holders of the Common Stock shall receive the same
form and amount of consideration per share of the Common Stock, or if any
holders of the Common Stock are given an option as to the form and amount of
consideration to be received, all holders shall be given the same option; and
(ii) all holders of then currently exercisable rights to acquire shares of
the Common Stock shall be given an opportunity to either (A) exercise such
rights prior to the consummation of the Approved Sale and participate in such
sale as holders of the Common Stock or (B) upon the consummation of the
Approved Sale, receive in exchange for such rights consideration equal to the
amount determined by multiplying (1) the same amount of consideration per
share of the Common Stock received by the holders of the Common Stock in
connection with the Approved Sale less the exercise price per share of the Common
Stock of such rights to acquire the Common Stock by (2) the number of
shares of the Common Stock represented by such rights.

 

(d)                                 If
the Company or the holders of the Company’s securities enter into any
negotiation or transaction for which Rule 506 (or any similar rule then in
effect) promulgated by the Securities Exchange Commission may be available with
respect to such negotiation or transaction (including a merger, consolidation
or other reorganization), the holders of Executive Stock shall, at the request
of the Company, appoint a “purchaser representative” (as such term is defined
in Rule 501) reasonably acceptable to the Company.  If any holder of Executive Stock appoints a
purchaser representative designated by the Company, the Company shall pay the
fees of such purchaser representative. 
However, if any holder of Executive Stock declines to appoint the
purchaser representative designated by the Company, such holder shall appoint
another purchaser representative (reasonably acceptable to the Company), and
such holder shall be responsible for the fees of the purchaser representative
so appointed.

 

(e)                                  Each
holder of Executive Stock shall bear his or her pro rata share (based on an
aggregate proceeds received) of the costs of any sale of Executive Stock
pursuant to an Approved Sale to the extent such costs are incurred for the
benefit of all holders of the Common Stock and are not otherwise paid by the
Company or the acquiring party.  Costs
incurred by each such holder of Executive Stock on his or her own behalf shall
not be considered costs of the transaction hereunder.

 

9.                                       Distributions
Upon Sale of the Company.  In the
event of a Sale of the Company (whether or not such Sale of the Company
constitutes an Approved Sale pursuant to Section 8 above), (a) each
holder of Executive Stock shall receive in exchange for the Executive Stock
held by such holder, the same portion of the aggregate consideration from such
sale or

 

10

 

exchange that such holder
of Executive Stock would have received if such aggregate consideration had been
distributed by the Company in complete liquidation pursuant to the rights and
preferences set forth in the Company’s certificate of incorporation as in
effect immediately prior to such sale or exchange (as reduced in the case of
holders of rights to acquire any class of capital stock by the exercise price
per share thereof) and (b) each holder of Executive Stock shall be obligated to
join in any indemnification or other obligations that MDCP agrees to provide
(including, without limitation, by way of escrow or holdback of any sale
proceeds) in connection with such Sale of the Company (other than any such
obligations that relate specifically to a holder of Executive Stock such as
indemnification with respect to representations and warranties given by a
holder regarding such holder’s title to and ownership of Executive Stock), with
such holders bearing such liabilities or obligations with the same economic
effect, consistent with clause (a) of the foregoing, as if such liabilities or
obligations reduced the aggregated consideration payable to the Company’s
stockholders in such Sale of the Company prior to the consummation thereof;
provided, however, that in no case shall any such holder’s indemnity obligation
exceed the dollar value of the proceeds received by such holder in such Sale of
the Company.

 

10.                                 Preemptive
Rights.

 

(a)                                  If
the Company proposes to issue and sell any of its shares of Common Stock or any
securities containing options or rights to acquire any shares of Common Stock
or any securities convertible or exchangeable into shares of Common Stock to
MDCP or any of their respective Affiliates, the Company will offer to each of
the Executives a portion of the number or amount of such securities proposed to
be sold in any such transaction or series of related transactions equal to the
product of (i) the percentage each such Executive and such Executive’s
Permitted Transferees holds of all shares of Common Stock then held by the  Executives and MDCP  and (ii) the number of shares represented
by the securities proposed to be issued and sold by the Company in any such
transaction or series of related transactions, all for the same price and upon
the same terms and conditions as the securities that are being offered to MDCP
and their respective Affiliates in such transaction or series of transactions.

 

(b)                                 Notwithstanding
the foregoing, the provisions of this Section 10 shall not be applicable
to the issuance of shares of Common Stock (i) upon the conversion of shares of
one class of Common Stock into shares of another class; (ii) as a dividend on
all the outstanding shares of Common Stock; (iii) in any transaction in respect
of a security that is available to all holders of such security on a pro rata
basis, provided, that for purposes of this clause (iii) all classes of Common
Stock shall be treated as a single security; (iv) in connection with grants of
stock or options to employees or directors of the Company; or (v) in an
offering or sale of securities pursuant to a registration statement filed with,
and declared effective by, the Securities and Exchange Commission pursuant to
the Securities Act.

 

(c)                                  The
Company will deliver or cause to be delivered to each Executive a written
notice setting forth the terms and conditions (including the consideration per
share) upon which an Executive may purchase such shares or other securities
(the “Preemptive Notice”). After receiving a Preemptive Notice, an
Executive must deliver or cause to be delivered to the Company a written notice
(the “Preemptive Reply”) within 45 days of the date of such Preemptive
Notice that such Executive agrees to purchase the shares or other securities
offered

 

11

 

pursuant to this Section
10 on the date of sale to MDCP and their respective Affiliates. If any
Executive fails to make a Preemptive Reply in accordance with this Section
10, shares or other securities offered to such Executive in accordance with
this Section 10 may thereafter, for a period not exceeding six months
following the expiration of such 45-day period, be issued, sold or subjected to
rights or options to MDCP and its Affiliates at a price not less than that at
which they were offered to the Executives and on such other terms and
conditions no more favorable than those offered to the Executives. Any such
shares or other securities not so issued, sold or subjected to rights or
options to MDCP and their respective Affiliates during such six-month period
will thereafter again be subject to the preemptive rights provided for in this Section
10.

 

11.                                 Covenant
Not To Compete.

 

(a)                                  In
consideration of the opportunity to participate in the equity offering of the
Company, each Executive covenants and agrees that, for one (1) year after
termination of such Executive’s employment with the Company or any of its
Subsidiaries, neither Executive nor any of his or her Affiliates shall engage,
directly or indirectly, in lines of business similar to the business of the
Company or any of its Subsidiaries anywhere in the world. Each Executive and
the Company agrees that the foregoing covenant is intended to prohibit each
Executive from engaging in such activities, as the case may be, as owner,
creditor (except as a trade creditor in the ordinary course of business),
partner, Executive, lender, consultant, officer, director, manager, employee,
contractor or agent for any person, firm or corporation (except (i) with
respect to the Company or (ii) as a holder of equity or debt securities in a
corporation which has a class of securities that is publicly traded on a stock
exchange or the recognized over-the-counter market, and then only to the extent
of owning not more than two percent (2%) of the issued and outstanding debt or
equity securities of such corporation).

 

(b)                                 Each
Executive acknowledges and agrees that the remedy at law for any breach, or
threatened breach, of any of the provisions of this Section 11 will be
inadequate and, accordingly, each Executive covenants and agrees that the
Company shall, in addition to any other rights and remedies which the Company
may have, be entitled to equitable relief, including injunctive relief, and to
the remedy of specific performance with respect to any breach or threatened
breach of such covenant, as may be available from any court of competent
jurisdiction. Such right to obtain equitable relief may be exercised, at the
option of the Company, concurrently with, prior to, after, or in lieu of, the
exercise of any other rights or remedies which the Company may have as a result
of any such breach or threatened breach.In the event that the provisions of
this Section 11 shall be determined by a court of competent jurisdiction
to be unenforceable under applicable law as to that jurisdiction (the parties
agreeing that such decision shall not be binding, res judicata or collateral
estoppel in any other jurisdiction) for any reason whatsoever, then any such
provision or provisions shall not be deemed void, but the parties hereto agree
that said limits may be modified by the court and that said covenant contained
in this Section 11 shall be amended in accordance with said
modifications, it being specifically agreed by each Executive and the Company
that it is their continuing desire that this covenant be enforced to the full
extent of its terms and conditions or if a court finds the scope of the
covenant unenforceable, the court should redefine the covenant so as to comply
with applicable law.

 

12

 

12.                                 Board
of Directors.

 

(a)                                  From
and after the date hereof and until the provisions of this Section 12
cease to be effective, each Executive and MDCP shall vote all of his, her or
its shares of capital stock which are voting shares and any other voting
securities of the Company over which such Executive or MDCP has voting control
and shall take all other necessary or desirable actions within his control
(whether in his, her or its capacity as a executive, director, shareholder,
member of a board committee or officer of the Company or otherwise, and
including, without limitation, attendance at meetings in person or by proxy for
purposes of obtaining a quorum and execution of written consents in lieu of
meetings), and the Company shall take all necessary or desirable actions within
its control (including, without limitation, calling special board and executive
meetings), so that:

 

(i)                                     the
authorized number of directors on the Board shall be established at five (5)
directors;

 

(ii)                                  the
following individuals shall be elected to the Board:

 

(A)                              up
to four (4) representatives designated by MDCP (the “MDCP Directors”),
who shall initially be Samuel M. Mencoff, Thomas S. Souleles and Douglas
Grissom; and

 

(B)                                Douglas
Mackie (“Mackie”) as long as he serves as the Company’s chief executive
officer.

 

(iii)                               unless
otherwise agreed by MDCP, the composition of the board of directors of each of
the Company’s Subsidiaries (a “Sub Board”) shall be the same as that of
the Board;

 

(iv)                              Mackie
shall resign, or be removed as a member of the Board, any Sub Board and any
committees by a vote of a majority of the Common Stock then outstanding as of
any date that he no longer is employed as the chief executive officer of the
Company (with it being understood that in the event that Mackie does not
resign, each holder of Common Stock shall take any and all actions necessary to
effectuate such removal);

 

(v)                                 the
removal from the Board or a Sub Board (with or without cause) of any MDCP
Director shall be immediately at the written request of holders of MDCP, but
only upon such written request and under no other circumstances.

 

(b)  The Company shall pay the reasonable
out-of-pocket expenses incurred by each director in connection with attending
the meetings of the Board, any Sub Board and any committee thereof.

 

(c)  If any party fails to designate a
representative to fill a directorship pursuant to the terms of this Section
12, the election of an individual to such directorship shall be
accomplished in accordance with the Company’s bylaws and applicable law.

 

13

 

(d)                                 Each
Executive hereby agrees that such Executive will vote, or cause to be voted,
all voting Executive Stock over which such Executive has the power to vote or
direct the voting, either in person or by proxy, whether at a stockholders
meeting, or by written consent, in the manner in which MDCP directs in
connection with (i) approval of any amendment or amendments to the Company’s
Certificate of Incorporation or bylaws, (ii) any merger, combination or
consolidation of the Company with any Independent Third Party, (iii) the sale,
lease or exchange of all or substantially all of the assets of the Company and
its Subsidiaries on a consolidated basis to an Independent Third Party, or (iv)
the reorganization, recapitalization, liquidation, dissolution or winding-up of
any of the Company and its Subsidiaries; provided, however, that no such
action shall (a) contravene the terms of this Agreement, or (b) have
a material adverse effect on the rights or interests of any Executive in
respect of any of its Executive Stock that would be borne disproportionately by
such Executive relative to the effect of such action on the rights or interests
of other Executives in respect of holdings of Executive Stock of the same
class, unless approved by holders of a majority of the Executive Stock so
adversely affected.

 

(e)                                  In
order to secure the obligations of each Executive who now or hereafter holds
any voting securities to vote such Person’s Executive Stock in accordance with
the provisions of this Agreement, each Executive hereby appoints MDCP as his or
its true and lawful proxy and attorney-in-fact, with full power of
substitution, to vote all of his or its Executive Stock, which irrevocable
proxy MDCP may exercise at any time any such Executive fails to comply with the
provisions of this Agreement.  The
proxies and powers granted by each such Executive pursuant to this Section 12(e)
are coupled with an interest and are given to secure the performance of such
Executive’s obligations under this Agreement. 
Such proxies and powers shall be irrevocable until termination of this Section 12
and shall survive the death, incompetency, disability, bankruptcy or
dissolution of each Executive and the subsequent holders of his or its
Executive Stock.  No Executive shall
grant any proxy or become party to any voting trust or other agreement which is
inconsistent with, conflicts with or violates any provision of this Agreement.

 

(f)                                    The
provisions of this Section 12 shall terminate effectively immediately
after the consummation of:  (i) a Sale
of the Company and (ii) the Company’s initial Public Offering.

 

13.                                 Definitions.

 

(a)                                  “1933
Act” means the Securities Act of 1933, as amended from time to time.

 

(b)                                 “Affiliate”
has the meaning set forth in Rule 12b-2 of the Rules promulgated under the
Exchange Act.

 

(c)                                  “Board”
shall mean the Board of Directors of the Company.

 

(d)                                 “Cause”
shall mean the Executive’s (i) act or acts of dishonesty, moral turpitude or
criminality, (ii) continued failure to perform such Executive’s duties as an
employee, as reasonably determined by the Board of Directors of the Company
acting in good faith, after reasonable notice of such failure is given to such
employee by the Board of Directors of the Company, for a period of 30 days
after such notice and opportunity to cure such failure, or (iii)

 

14

 

willful or deliberate
violations of such Executive’s obligations to the Company that result in injury
to the Company.

 

(e)                                  “Code”
shall mean the Internal Revenue Code of 1986 and the regulations promulgated
thereunder, as it may be amended from time to time.

 

(f)                                    “Effective
Time” has the meaning set forth in the Merger Agreement.

 

(g)                                 “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

(h)                                 “Executive
Stock” shall mean all shares of Common Stock and Series B Preferred issued
hereunder or acquired hereinafter by any Executive.  Executive Stock shall continue to be Executive Stock in the hands
of any holder other than an Executive (except for the Company and MDCP and
except for transferees in a Public Sale), and except as otherwise provided
herein, each such other holder of Executive Stock shall succeed to all rights
and be subject to all and obligations attributable to an Executive as a holder
of Executive Stock hereunder.  Executive
Stock shall also include shares of the Company’s capital stock and other
securities issued with respect to Executive Stock by way of a stock split or
stock dividend or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization.

 

(i)                                     “Fair
Market Value” of each share of Executive Stock means the average of the
closing prices of the sales of the Common Stock on all securities exchanges on
which the Common Stock may at the time be listed, or, if there have been no
sales on any such exchange on any day, the average of the highest bid and
lowest asked prices on all such exchanges at the end of such day, or, if on any
day the Common Stock is not so listed, the average of the representative bid
and asked prices quoted in the NASDAQ System as of 4:00 P.M., New York
time, or, if on any day the Common Stock is not quoted in the NASDAQ System,
the average of the highest bid and lowest asked prices on such day in the
domestic over-the-counter market as reported by the National Quotation Bureau
Incorporated, or any similar successor organization, in each such case averaged
over a period of 21 days consisting of the day as of which the Fair Market
Value is being determined and the 20 consecutive business days prior to such
day.  If at any time the Common Stock is
not listed on any securities exchange or quoted in the NASDAQ System or the
over-the-counter market, the Fair Market Value shall be the fair value of the
Common Stock as of the date of Termination determined in good faith by the
Board (without taking into account the effect of any contemporaneous repurchase
of Unvested Shares under Section 4 hereof).  Notwithstanding the foregoing, “Fair Market
Value” of any share of Series B Preferred means the aggregate liquidation
value plus accrued and unpaid dividends thereon.

 

(j)                                     “Incentive
Shares” means all shares of Common Stock owned by each Executive, and all
other securities of the Company (or a successor to the Company) received on
account of ownership of such shares, including any and all incentive securities
issued in connection with any merger, consolidation, stock dividend, stock
distribution, stock split, reverse stock split, stock combination,
recapitalization, reclassification, subdivision, conversion or similar
transaction in respect thereof.

 

15

 

(k)                                  “Independent
Third Party” means any person who, immediately prior to the contemplated
transaction, does not own in excess of 5% of the Company’s Common Stock on a
fully-diluted basis, who is not controlling, controlled by or under common
control with any such 5% owner of the Company’s Common Stock and who is not the
spouse or descendent (by birth or adoption) of any such 5% owner of the
Company’s Common Stock.

 

(l)                                     “MDCP”  means Madison Dearborn Capital Partners IV,
L.P.

 

(m)                               “Merger”
has the meaning set forth in the Merger Agreement.

 

(n)                                 “Merger
Agreement” means that certain Amended and Restated Agreement and Plan of
Merger, dated as of December 22, 2003, among the Company, GLDD Merger Sub,
Inc., a Delaware corporation, Great Lakes Dredge & Dock Corporation, a
Delaware corporation and, solely in its capacity as Executive Representative thereunder
and for purposes of Sections 2.9, 2.10, 2.11, Article VIII and Article IX
thereof, Vectura Holding Company LLC, as the same has been and may be amended,
modified, supplemented or waived from time to time.

 

(o)                                 “Original
Cost” of each share of Common Stock purchased hereunder shall be equal to
$10.00 (as proportionately adjusted for all subsequent stock splits, stock
dividends and other recapitalizations).

 

(p)                                 “Person”
mean any individual, corporation, limited liability company, partnership, firm,
association, joint venture, joint stock company, trust or other entity, or any
government or regulatory administrative or political subdivision or agency,
department or instrumentality thereof.

 

(q)                                 “Permitted
Transferee” means any holder of Executive Stock who acquired such stock
pursuant to a transfer permitted by Section 5(b).

 

(r)                                    “Preferred
Stock” means the Series A Preferred or Series B Preferred.

 

(s)                                  “Public
Offering” means the sale, in an underwritten public offering registered
under the 1933 Act, of shares of the Company’s Common Stock.

 

(t)                                    “Public
Sale” means any sale pursuant to a registered public offering under the
1933 Act or any sale to the public pursuant to Rule 144 (or similar rule
then in effect) promulgated under the 1933 Act effected through a broker,
dealer or market maker.

 

(u)                                 “Sale
of the Company” means the sale of the Company to an Independent Third Party
or affiliated group of Independent Third Parties pursuant to which such party
or parties acquire (i) capital stock (or rights to acquire capital stock)
of the Company possessing the voting power (or the right to acquire capital
stock of the Company possessing the voting power) to elect a majority of the
Company’s board of directors (whether by merger, consolidation or sale or
transfer of the Company’s capital stock) or (ii) all or substantially all
of the Company’s assets determined on a consolidated basis.

 

(v)                                 “Series
B Preferred” means Series B Preferred Stock, par value $0.01 per share.

 

16

 

(w)                               “Securities
Act” means the Securities Act of 1933, as amended.

 

(x)                                   “Significant
Transfer” means a Transfer, alone or in the aggregate, to any Person (i) in
the case of Transfer of Common Stock of 30% or more of the total number of
shares of Common Stock held by MDCP or (ii) in the case of Transfer of
Preferred Stock of 10% or more of the total number of shares of Preferred Stock
held by MDCP.

 

(y)                                 “Subsidiary”
means any corporation of which the Company owns securities having a majority of
the ordinary voting power in electing the board of directors directly or
through one or more subsidiaries.

 

(z)                                   “Unit
Offering” means an underwritten public offering of a combination of debt
securities and Common Stock (or warrants or exchange rights to purchase Common
Stock) of the Company in which not more than 15% of the gross proceeds received
for the sale of such securities is attributed to Common Stock.

 

14.                                 Notices.  Any notice provided for in this Agreement
must be in writing and must be either personally delivered, mailed by first
class mail (postage prepaid and return receipt requested), sent by reputable
overnight courier service (charges prepaid) or sent by facsimile (hard copy to
follow) to the recipient at the address or facsimile number indicated below:

 

	
   

  	
  To the Company:

  
	
   

  	
   

  
	
   

  	
  GLDD Acquisitions Corp.

  
	
   

  	
  c/o Madison Dearborn
  Partners, LLC

  
	
   

  	
  Three First National
  Plaza

  
	
   

  	
  70 W. Madison, Suite
  3800

  
	
   

  	
  Chicago, IL 60602

  
	
   

  	
  Fax:  (312) 895-1100

  
	
   

  	
  Attention:

  	
  Samuel M. Mencoff

  
	
   

  	
   

  	
  Thomas S. Souleles

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Kirkland & Ellis
  LLP

  
	
   

  	
  200 E. Randolph Dr.

  
	
   

  	
  Chicago, IL 60601

  
	
   

  	
  Fax:  (312) 861-2200

  
	
   

  	
  Attention:  William S. Kirsch, P.C.

  
	
   

  	
   

  
	
   

  	
  To Executive:

  
	
   

  	
   

  
	
   

  	
  At the address listed
  below Executive’s name on the Schedule of Executives attached hereto

  

 

or such other address or
facsimile number or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party.  Any notice under this

 

17

 

Agreement shall be deemed
to have been given when so delivered or sent or, if mailed, five days after
deposit in the U.S. mail.

 

15.                                 General
Provisions.

 

(a)                                  Transfers
in Violation of Agreement.  Any
Transfer or attempted Transfer of any Executive Stock in violation of any
provision of this Agreement shall be void, and the Company shall not record
such Transfer on its books or treat any purported transferee of such Executive
Stock as the owner of such stock for any purpose.  No action, consent, amendment or approval of the Company shall be
deemed effective hereunder, and no officer of the Company shall be entitled to
act on behalf of the Company with respect to the Company, unless approved by
the Board by written consent or at a meeting duly convened.

 

(b)                                 Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision or any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

 

(c)                                  Complete
Agreement.  This Agreement, those
documents expressly referred to herein and other documents of even date
herewith embody the complete agreement and understanding among the parties and
supersede and preempt any prior understandings, agreements or representations
by or among the parties, written or oral, which may have related to the subject
matter hereof in any way.

 

(d)                                 Counterparts.  This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.

 

(e)                                  Successors
and Assigns.  Except as otherwise
provided herein, this Agreement shall bind and inure to the benefit of and be
enforceable by each Executive, the Company, MDCP and their respective
successors and assigns (including subsequent holders of Executive Stock);
provided that the rights and obligations of Executive under this Agreement
shall not be assignable except in connection with a permitted transfer of
Executive Stock hereunder.

 

(f)                                    Choice
of Law.  The corporate law of the
State of Delaware shall govern all questions concerning the relative rights of
the Company and its Executives.  All
other questions concerning the construction, validity, enforcement and
interpretation of this Agreement and the exhibits hereto shall be governed by
the internal law, and not the law of conflicts, of the State of Illinois.

 

(g)                                 Remedies.  Each of the parties to this Agreement (including
MDCP) shall be entitled to enforce its rights under this Agreement
specifically, to recover damages and costs (including reasonable attorney’s
fees) caused by any breach of any provision of this Agreement and to exercise
all other rights existing in its favor. 
The parties hereto agree and acknowledge

 

18

 

that money damages would
not be an adequate remedy for any breach of the provisions of this Agreement
and that any party may in its sole discretion apply to any court of law or
equity of competent jurisdiction (without posting any bond or deposit) for
specific performance and/or other injunctive relief in order to enforce or
prevent any violations of the provisions of this Agreement.

 

(h)                                 Amendment
and Waiver.  The provisions of this
Agreement may be amended and waived with respect to any Executive only with the
prior written consent of the Company and either (i) such Executive or (ii) the
holders of a majority of the shares of Common Stock  held by all Executives; provided that this Agreement may be
amended and waived with respect to MDCP’s rights hereunder only with the prior
written consent of MDCP.

 

(i)                                     Third-Party
Beneficiaries.  Certain provisions
of this Agreement are entered into for the benefit of and shall be enforceable
by MDCP as provided herein.

 

(j)                                     Business
Days.  If any time period for giving
notice or taking action hereunder expires on a day which is a Saturday, Sunday
or legal holiday in the state in which the Company’s chief executive office is
located, the time period shall be automatically extended to the business day
immediately following such Saturday, Sunday or holiday.

 

(k)                                  Rights
of the Company.  Nothing in this
Agreement shall interfere with or limit in any way the right of the Company to
terminate an Executive’s employment at any time (with or without cause), nor
confer upon any Executive any right to continue in the employ of the Company
for any period of time or to continue his or her present (or any other) rate of
compensation.

 

(l)                                     Termination.  Unless otherwise specified herein, the
rights and obligations of the parties hereunder shall terminate automatically
and without further action on the part of any party hereto on a Sale of the
Company; provided that no such termination shall impair the rights of
any party hereto with respect to any breach of this Agreement arising prior to
such termination.

 

(m)                               Interpretation.  When used herein, the Common Stock shall be
deemed to be one “type” of capital stock of the Company and the Preferred Stock
shall be deemed to be a different “type” of capital stock of the Company.

 

16.                                 Code
Section 280G.  Notwithstanding
any provision of this Agreement to the contrary, if all or any portion of the
payments or benefits received or realized by any Executive pursuant to this
Agreement either alone or together with other payments or benefits which such
Executive receives or realizes or is then entitled to receive or realize from
the Company or any of its affiliates would constitute an “excess parachute
payment” within the meaning of Section 280G of the Code and/or any
corresponding and applicable state law provision, such payments or benefits
provided to such Executive shall be reduced by reducing the amount of payments
or benefits payable to such Executive to the extent necessary so that no
portion of such payments or benefits shall be subject to the excise tax imposed
by Section 4999 of the Code and any corresponding and/or applicable state
law provision; provided that such reduction shall only be made if, by reason of
such reduction, such Executive’s net after tax benefit shall exceed the

 

19

 

net after tax benefit if
such reduction were not made.  For
purposes of this paragraph, “net after tax benefit” shall mean the sum of
(i) the total amount received or realized by such Executive pursuant to
this Agreement that would constitute a “parachute payment” within the meaning
of Section 280G of the Code and any corresponding and applicable state law
provision, plus (ii) all other payments or benefits which such Executive
receives or realizes or is then entitled to receive or realize from the Company
and any of its affiliates that would constitute a “parachute payment” within
the meaning of Section 280G of the Code and any corresponding and
applicable state law provision, less (iii) the amount of federal or state
income taxes payable with respect to the payments or benefits described in
(i) and (ii) above calculated at the maximum marginal individual income
tax rate for each year in which payments or benefits shall be realized by such
Executive (based upon the rate in effect for such year as set forth in the Code
at the time of the first receipt or realization of the foregoing), less
(iv) the amount of excise taxes imposed with respect to the payments or
benefits described in (i) and (ii) above by Section 4999 of the Code and
any corresponding and applicable state law provision.

 

17.                                 Public
Offering.  In the event that the
Board and the holders of a majority of the shares of Common Stock (voting as a
single class) then outstanding approve a Public Offering, each Executive shall
take all necessary or desirable actions in connection with the consummation of
the Public Offering as requested by the Company.  In the event that such Public Offering is an underwritten
offering and the managing underwriters advise the Company in writing that in
their opinion the capital stock structure would adversely affect the
marketability of the offering, each Executive shall consent to and vote for a
recapitalization, reorganization and/or exchange of Common Stock and Preferred
Stock into securities that the managing underwriters, the Board and the holders
of a majority of the shares of Common Stock and Preferred Stock then outstanding
(voting as a single class) find acceptable, and each Executive shall take all
necessary or desirable actions in connection with the consummation of the
recapitalization, reorganization and/or exchange as requested by the Company;
provided that the resulting securities reflect and are consistent with the
rights and preferences set forth in the Company’s Certificate of Incorporation
as in effect immediately prior to such Public Offering.

 

*  * 
*  *  *

 

20

 

IN WITNESS
WHEREOF, this Management Equity Agreement has been executed as of the date
first written above.

 

	
   

  	
  GLDD
  Acquisitions Corp.

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Douglas B. Mackie

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  President
  and Chief Executive Officer

  

 

	
   

  	
   

  	
  /s/ Steven R. Auernhamer

  
	
   

  	
   

  	
  Steven R. Auernhamer

  

 

 

	
   

  	
   

  	
  /s/ Steven W. Becker

  
	
   

  	
   

  	
  Steven W. Becker

  

 

 

	
   

  	
   

  	
  /s/ Leslie A. Braun

  
	
   

  	
   

  	
  Leslie A. Braun

  

 

 

	
   

  	
   

  	
  /s/ David C. Cizek

  
	
   

  	
   

  	
  David C. Cizek

  

 

 

	
   

  	
   

  	
  /s/ Arthur S. Fletcher

  
	
   

  	
   

  	
  Arthur S. Fletcher

  

 

 

	
   

  	
   

  	
  /s/ James C. Gillespie

  
	
   

  	
   

  	
  James C. Gillespie

  

 

 

	
   

  	
   

  	
  /s/ William E. Hannum

  
	
   

  	
   

  	
  William E. Hannum

  

 

 

	
   

  	
   

  	
  /s/ Bradley T. J. Hansen

  
	
   

  	
   

  	
  Bradley T. J. Hansen

  

 

 

	
   

  	
   

  	
  /s/ William H. Hanson

  
	
   

  	
   

  	
  William H. Hanson

  

 

 

	
   

  	
   

  	
  /s/ Patrick C. Hughes

  
	
   

  	
   

  	
  Patrick C. Hughes

  

 

 

	
   

  	
   

  	
  /s/ Kyle D. Johnson

  
	
   

  	
   

  	
  Kyle D. Johnson

  

 

 

	
   

  	
   

  	
  /s/ John F. Karas

  
	
   

  	
   

  	
  John F. Karas

  

 

 

	
   

  	
   

  	
  /s/ Richard M. Lowry

  
	
   

  	
   

  	
  Richard M. Lowry

  

 

 

	
   

  	
   

  	
  /s/ Donald J. Luce

  
	
   

  	
   

  	
  Donald J. Luce

  

 

 

	
   

  	
   

  	
  /s/ Michael J. Luetlers

  
	
   

  	
   

  	
  Michael J. Luetlers

  

 

 

	
   

  	
   

  	
  /s/ Robert F. Mackay

  
	
   

  	
   

  	
  Robert F. Mackay

  

 

 

	
   

  	
  Christopher T. Mackie 1998 Trust

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W. L. Coleman

  
	
   

  	
  Its:

  	
  Trustee

  

 

 

	
   

  	
   

  	
  /s/ Douglas B. Mackie

  
	
   

  	
   

  	
  Douglas B. Mackie

  

 

 

	
   

  	
  Kathleen J. Mackie 1998 Trust

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W. L. Coleman

  
	
   

  	
  Its:

  	
  Trustee

  

 

 

	
   

  	
  Madeline C. Mackie 1998 Trust

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W. L. Coleman

  
	
   

  	
  Its:

  	
  Trustee

  

 

 

	
   

  	
  Natalie A. Mackie 1998 Trust

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W. L. Coleman

  
	
   

  	
  Its:

  	
  Trustee

  

 

 

	
   

  	
  Philip D. Mackie 1998 Trust

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W. L. Coleman

  
	
   

  	
  Its:

  	
  Trustee

  

 

 

	
   

  	
   

  	
  /s/ John R. Maszezyk

  
	
   

  	
   

  	
  John R. Maszezyk

  

 

 

	
   

  	
   

  	
  /s/ Sam R. Morrison

  
	
   

  	
   

  	
  Sam R. Morrison

  

 

 

	
   

  	
   

  	
  /s/ William A. Murchison

  
	
   

  	
   

  	
  William A. Murchison

  

 

 

	
   

  	
   

  	
  /s/ John T. O’Brien

  
	
   

  	
   

  	
  John T. O’Brien

  

 

 

	
   

  	
   

  	
  /s/ Steven F. O’Hara

  
	
   

  	
   

  	
  Steven F. O’Hara

  

 

 

	
   

  	
   

  	
  /s/ William F. Pagendarm

  
	
   

  	
   

  	
  William F. Pagendarm

  

 

 

	
   

  	
   

  	
  /s/ Robert C. Ramsdell

  
	
   

  	
   

  	
  Robert C. Ramsdell

  

 

 

	
   

  	
   

  	
  /s/ T. Christopher Roberts

  
	
   

  	
   

  	
  T. Christopher Roberts

  

 

 

	
   

  	
   

  	
  /s/ Michael R. Sayer

  
	
   

  	
   

  	
  Michael R. Sayer

  

 

 

	
   

  	
   

  	
  /s/ David E. Simonelli

  
	
   

  	
   

  	
  David E. Simonelli

  

 

 

	
   

  	
   

  	
  /s/ George T. Strawn

  
	
   

  	
   

  	
  George T. Strawn

  

 

 

	
   

  	
   

  	
  /s/ Mark R. Thomas

  
	
   

  	
   

  	
  Mark R. Thomas

  

 

 

	
   

  	
   

  	
  /s/ Russell F. Zimmerman

  
	
   

  	
   

  	
  Russell F. Zimmerman

  

 

 

	
   

  	
  Deborah A. Wensel Trust
  June 4, 1999

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Deborah A. Wensel

  
	
   

  	
  Its:

  	
  Trustee

  

 

 

	
   

  	
   

  	
  /s/ Deborah A. Wensel

  
	
   

  	
   

  	
  Deborah A. Wensel

  

 

 

	
   

  	
   

  	
  /s/ James G. McNally

  
	
   

  	
   

  	
  James G. McNally

  

 

 

	
   

  	
   

  	
  /s/ Seann M. Perez

  
	
   

  	
   

  	
  Seann M. PerezExhibit
10.4

 

SUBSCRIPTION
AGREEMENT

 

DATED AS
OF DECEMBER 22, 2003

 

BY AND
AMONG

 

GLDD
ACQUISITIONS CORP.

 

AND THE
PURCHASERS LISTED ON

 

THE
SCHEDULE OF PURCHASERS

 

ATTACHED
HERETO

 

i

 

GLDD
ACQUISITIONS CORP.

 

SUBSCRIPTION
AGREEMENT

 

THIS AGREEMENT is made as of December 22, 2003, by and
among GLDD Acquisitions Corp., a Delaware corporation (the “Company”),
and the Persons set forth on the “Schedule of Purchasers” attached
hereto (hereinafter referred to collectively as the “Purchasers” and
individually as a “Purchaser”). 
The Purchasers will purchase, severally and not jointly, the Securities
listed on the Schedule of Purchasers attached hereto.  Capitalized terms used, but not otherwise
defined herein, are defined in Section 9 hereof.

 

The parties hereto agree
as follows:

 

Section 1.               Authorization
and Closing.

 

1A.          Authorization
of the Securities.  The Company will
(prior to Closing, as defined below) authorize the issuance and sale to the
Purchasers of (i) an aggregate of 84,625 shares of the Company’s Series A
Preferred Stock, par value $0.01 per share (the “Preferred Stock”),
having the rights and preferences set forth in the Amended and Restated
Certificate of Incorporation attached hereto as Exhibit A (the “Certificate
of Incorporation”), at a purchase price of $1,000 per share, and (ii) an
aggregate of 850,000 shares of the Company’s Common Stock, par value $0.01 per
share (the “Common Stock”), at a purchase price of $10 per share.  The Preferred Stock and the Common Stock are
sometimes collectively referred to herein as “Securities”.

 

1B.          Purchase
of Securities.   On the basis of the
representations, warranties, covenants and agreements set forth herein, at the
Closing, the Company will sell to each Purchaser, and, subject to the terms and
conditions set forth herein, each Purchaser will purchase from the Company, the
Securities set forth beside such Purchaser’s name on the Schedule of
Purchasers attached hereto, at the purchase price per share set forth in Section
1 above.  The sale to and purchase
by each Purchaser of the Securities to be purchased by such Purchaser hereunder
will constitute a separate sale and purchase.

 

1C.          The
Closing.  The closing of the
purchase and sale of the Securities (the “Closing”) shall take place at
the offices of Kirkland & Ellis LLP, 200 East Randolph Drive, Chicago, IL
60601 simultaneously with the Closing of the Acquisition, as defined
below.  At the Closing, the Company
shall deliver to each Purchaser instruments evidencing the Securities to be
purchased by such Purchaser registered in the Purchaser’s name upon payment of
the purchase price thereof by wire transfer of immediately available funds in
the aggregate amount set forth on the Schedule of Purchasers to an
account specified by the Company prior to the Closing.

 

Section 2.               Conditions
of Each Purchaser’s Obligation at the Closing.  The obligation of each Purchaser to purchase and pay for the
Securities at the Closing is subject to the satisfaction as of the Closing of
the following conditions:

 

2A.          Representations
and Warranties; Covenants.  The
representations and warranties contained in Section 6 hereof shall
be true and correct in all material respects at and

 

1

 

as of the Closing as though then made, except to the extent of changes
caused by the execution, delivery and performance of the agreements expressly
referred to in this Section 2, and the Company shall have performed in
all material respects all of the covenants and agreements required to be
performed by it hereunder prior to or at the Closing.

 

2B.          Amendment
of Certificate of Incorporation. 
The Company’s Certificate of Incorporation shall have been amended to
include the provisions set forth in Exhibit A hereto, shall be in full
force and effect under the laws of Delaware as of the Closing as so amended and
shall not have been further amended or modified.

 

2C.          Amendment
of the Company’s Bylaws.  The
Company’s Bylaws shall have been amended and restated in the form set forth in Exhibit
B hereto and shall be in full force and effect as of the Closing as so
amended and restated and shall not have been further amended or modified.

 

2D.          Registration
Rights Agreement.  The Company and
the Purchasers shall have entered into a registration rights agreement in form
and substance as set forth in Exhibit C attached hereto (the “Registration
Rights Agreement”), and the Registration Rights Agreement shall be in full
force and effect as of the Closing.

 

2E.           Management
Agreement.  The Company shall have
entered into a Management Equity Agreement, in form and substance as set forth
in Exhibit D attached hereto (the “Management Agreement”), and
the Management Agreement shall not have been amended or modified and shall be
in full force and effect as of the Closing.

 

2F.           Securities
Law Compliance.  The Company shall
have made all filings under all applicable federal and state securities laws
necessary to consummate the issuance of the Securities pursuant to this
Agreement in compliance with such laws.

 

2G.          Closing
Fee to MDP.  At the Closing, the
Company shall, or shall cause its Subsidiaries to, pay to Madison Dearborn
Capital Partners IV, L.P. (“MDP”) or its designee, a closing fee of
$3,570,000.

 

2H.          Merger
Agreement.  The Agreement and Plan
of Merger, dated as of November 12, 2003, among the Company, GLDD Merger Sub,
Inc., Great Lakes Dredge & Dock Corporation (“GLDD”) and Vectura
Holding Company LLC (the “Merger Agreement”), shall be in full force and
effect as of the Closing, and the Merger Agreement shall not have been amended
or modified in any material respect. 
The acquisition contemplated by the Merger Agreement (the “Acquisition”)
shall have been consummated without waiver of any condition to GLDD’s
obligations thereunder.

 

2I.            Bank
Agreement.  The Company, GLDD,
certain Subsidiaries of GLDD, Lehman Brothers Inc., Credit Suisse First Boston,
acting through its Cayman Islands Branch, Bank of America N.A., the financial
institutions from time to time party thereto, as lenders, GLDD and certain
Subsidiaries of GLDD shall have entered into that certain Credit Agreement and
related documents (collectively, the “Bank Agreement”) in form and
substance satisfactory

 

2

 

to MDP and the Bank Agreement shall not have been amended or modified
and shall be in full force and effect as of the Closing.

 

2J.           HYD
Offering.  GLDD shall have received
not less than $170,000,000 in an offering of GLDD’s Senior Subordinated Notes
on terms reasonably satisfactory to MDP.

 

2K.          Closing
Documents.  The Company shall have
delivered to each Purchaser all of the following documents:

 

(i)            an Officer’s
Certificate, dated the date of the Closing, stating that the conditions
specified in Section 1, Sections 2A through 2J,
inclusive, and Sections 2L and 2N have been fully satisfied;

 

(ii)           certified copies of
(a) the resolutions duly adopted by the Company’s board of directors
authorizing the execution, delivery and performance of this Agreement, the
Registration Rights Agreement, the Management Agreement, the Merger Agreement,
the Bank Agreement, and each of the other agreements and instruments
contemplated hereby and thereby (collectively, the “Transaction Agreements”),
the filing of the amendment and restatement of the Certificate of Incorporation
referred to in Section 2B, the amendment and restatement of the
Company’s Bylaws referred to in Section 2C, the issuance and sale of the
Securities and the consummation of all other transactions contemplated by this
Agreement and the other Transaction Agreements (the “Transactions”), and
(b) the resolutions duly adopted by the Company’s stockholders adopting
the amendment and restatement of the Certificate of Incorporation referred to
in Section 2B;

 

(iii)          certified copies of
the Company’s Certificate of Incorporation and Bylaws, each as in effect at the
Closing;

 

(iv)          instruments
evidencing the Securities registered in each Purchaser’s name; and

 

(v)           copies of all third
party and governmental consents, approvals and filings required in connection
with the consummation of the Transactions (including all blue sky law filings).

 

2L.           Proceedings.  All corporate and other proceedings taken or
required to be taken by the Company in connection with the Transactions to be
consummated at or prior to the Closing and all documents incident thereto shall
be reasonably satisfactory in form and substance to MDP.

 

2M.         Compliance
with Applicable Laws.  The purchase
of the Securities by each Purchaser hereunder shall not be prohibited by any
applicable law or governmental rule or regulation.

 

2N.          Government
Consents; Waiting Periods.  The
Company shall have obtained all necessary government consents and approvals,
made all required governmental

 

3

 

filings (including under the HSR Act), and all waiting periods
applicable under the HSR Act shall have expired or been terminated.

 

2O.          Waiver.  Any condition specified in this Section 2
may be waived on behalf of the Purchasers if consented to in writing by MDP.

 

Section 3.               Transfer
of Restricted Securities.

 

3A.          General
Provisions.  In addition to any
other restrictions on transfer to which such shares may be subject, Restricted
Securities are transferable only pursuant to (i) Public Offerings registered
under the Securities Act, (ii) Rule 144 or Rule 144A of the Securities and
Exchange Commission (or any similar rule or rules then in force) if such rule
is available and (iii) subject to the conditions specified in Section
3B below, any other legally available means of transfer.

 

3B.          Opinion
Delivery.  In connection with the
transfer of any Restricted Securities (other than a transfer described in Section
3A(i) or (ii) above), upon the request of the Company, the holder
thereof shall deliver written notice to the Company describing in reasonable
detail the transfer or proposed transfer, together with an opinion of
Kirkland & Ellis LLP or other counsel which (to the Company’s
reasonable satisfaction) is knowledgeable in securities law matters to the effect
that such transfer of Restricted Securities may be effected without
registration of such Restricted Securities under the Securities Act.  In addition, if the holder of the Restricted
Securities delivers to the Company an opinion of Kirkland & Ellis LLP
or such other counsel that no subsequent transfer of such Restricted Securities
shall require registration under the Securities Act, the Company shall promptly
upon such contemplated transfer deliver new certificates for such Restricted
Securities which do not bear the Securities Act legend set forth in Section
3C.  If the Company is not required
to deliver new certificates for such Restricted Securities not bearing such
legend, the holder thereof shall not transfer the same until the prospective
transferee has confirmed to the Company in writing its agreement to be bound by
the conditions contained in this Section 3.

 

3C.          Legend.  Each certificate or instrument representing
Restricted Securities shall be imprinted with a legend in substantially the
following form:

 

“The securities represented by this certificate were
originally issued on December 22, 2003, and have not been registered under the
Securities Act of 1933, as amended or any applicable state securities
laws.  The transfer of the securities
represented by this certificate is subject to the conditions specified in the
Subscription Agreement dated as of December 22, 2003, as amended and modified
from time to time, between the issuer (the “Company”) and certain
investors, and the Company reserves the right to refuse the transfer of such
securities until such conditions have been fulfilled with respect to such
transfer.  A copy of such conditions
shall be furnished by the Company to the holder hereof upon written request and
without charge.”

 

3D.          Legend
Removal.  If any Restricted
Securities become eligible for sale pursuant to Rule 144(k), the Company shall,
upon the request of the holder of such Restricted

 

4

 

Securities, remove the legend set forth in Section 3C from the
certificates for such Restricted Securities.

 

3E.             Additional
Transfer Restrictions.  No Purchaser
shall transfer, sell or otherwise dispose (whether voluntarily, involuntarily
or by operation of law) of any Preferred Stock or Common Stock acquired
hereunder or hereafter acquired by any such Purchaser without the prior written
consent of MDP and any transfer, sale or disposition of Preferred Stock or
Common Stock in violation of this Section 3E shall be void ab initio.  As a condition to any such transfer, sale or disposition, the
Purchaser (or any transferee thereof) will cause the transferee or purchaser
thereof to execute a counterpart to this Agreement (and any other agreement
reasonably requested by MDP) and become party to this Agreement (and such other
agreements) as a Purchaser.

 

Section 4.               Sale
of the Company.

 

4A.          Approved
Sale.  If the Board and MDP approve
a Sale of the Company (the “Approved Sale”), all holders of Restricted
Securities shall consent to, vote for and raise no objections against the
Approved Sale, and if the Approved Sale is structured as a sale of stock, the
holders of Restricted Securities shall agree to sell their Restricted
Securities on the terms and conditions approved by the Board and MDP.  The holders of Restricted Securities shall
take all necessary and desirable actions in connection with the consummation of
the Approved Sale and shall not impair or delay the Approved Sale.  In furtherance of the foregoing, if the
Approved Sale is structured as (A) a merger or consolidation, each holder of
Restricted Securities shall vote its Restricted Securities to approve such
merger or consolidation, whether by written consent or at a stockholders
meeting (as requested by MDP), and waive all dissenter’s rights, appraisal
rights and similar rights in connection with such merger or consolidation, (B)
a sale of stock, each holder of Restricted Securities shall agree to sell, and
shall sell, all of its Restricted Securities and rights to acquire Restricted
Securities on the terms and conditions so approved, or (C) a sale of assets,
each holder of Restricted Securities shall vote its Restricted Securities to
approve such sale and any subsequent liquidation of the Company or other
distribution of the proceeds therefrom, whether by written consent or at a
stockholders meeting (as requested by MDP), and waive all dissenter’s rights,
appraisal rights and similar rights in connection with such sale of assets.

 

4B.          Additional
Obligations.  In furtherance of its
obligations under Section 4A above, (I) each holder of Restricted
Securities will take all necessary or desirable actions reasonably requested by
MDP in connection with the consummation of the Approved Sale and (II) each
holder of Restricted Securities will make the same representations, warranties,
indemnities and agreements as each other holder, including without limitation,
voting to approve such transaction and executing all documents requested by MDP
to be executed by such holder, including the applicable purchase agreement,
stockholders agreement and/or indemnification and/or contribution
agreement.  Without limiting the
generality of the foregoing, in any Approved Sale, (i) each holder of
Restricted Securities shall be obligated to make representations and warranties
as to such holder’s title to and ownership of Restricted Securities,
authorization, execution and delivery of relevant documents by such holder,
enforceability of relevant agreements against such holder and other matters
relating to such holder, to enter into covenants in respect of a transfer of
such holder’s Restricted Securities in connection with such Approved

 

5

 

Sale (including, without limitation, the delivery of certificates,
stock powers and other instruments of transfer) and to enter into
indemnification obligations with respect to the foregoing, in each case to the
extent that each other holder of the same type of Restricted Securities is
similarly obligated; provided that no holder shall be obligated to enter
into indemnification obligations with respect to any of the foregoing to the
extent relating to any other holder of Restricted Securities or such other
holder’s Restricted Securities (other than, in the case of a Rollover Investor,
a transferee of such holder’s Restricted Securities), and (ii) in no event
shall any holder of Restricted Securities be liable in respect of any indemnity
obligations pursuant to any Approved Sale in an aggregate amount in excess of
the total consideration payable to such holder in such Approved Sale.

 

4C.          Conditions
to Obligations.  The obligations of
the holders of Restricted Securities with respect to the Approved Sale are
subject to the satisfaction of the following conditions:  (i) upon the consummation of the Approved
Sale, all of the holders of the Common Stock shall receive the same form and
amount of consideration per share of the Common Stock, or if any holders of the
Common Stock are given an option as to the form and amount of consideration to
be received, all holders shall be given the same option; and (ii) all
holders of then currently exercisable rights to acquire shares of the Common
Stock shall be given an opportunity to either (A) exercise such rights
prior to the consummation of the Approved Sale and participate in such sale as
holders of the Common Stock or (B) upon the consummation of the Approved
Sale, receive in exchange for such rights consideration equal to the amount
determined by multiplying (1) the same amount of consideration per share
of the Common Stock received by the holders of the Common Stock in connection
with the Approved Sale less the exercise price per share of the Common Stock of
such rights to acquire the Common Stock by (2) the number of shares of the
Common Stock represented by such rights.

 

4D.          Purchaser
Representative.  If the Company or
the holders of the Company’s securities enter into any negotiation or
transaction for which Rule 506 (or any similar rule then in effect)
promulgated by the Securities Exchange Commission may be available with respect
to such negotiation or transaction (including a merger, consolidation or other
reorganization), the holders of Restricted Securities shall, at the request of
the Company, appoint a “purchaser representative” (as such term is defined in
Rule 501) reasonably acceptable to the Company.  If any holder of Restricted Securities appoints a purchaser
representative designated by the Company, the Company shall pay the fees of
such purchaser representative.  However,
if any holder of Restricted Securities declines to appoint the purchaser
representative designated by the Company, such holder shall appoint another
purchaser representative (reasonably acceptable to the Company), and such
holder shall be responsible for the fees of the purchaser representative so
appointed

 

4E.           Cost
Sharing.  Each holder of Restricted
Securities shall bear his or her pro rata share (based upon the number of
shares sold) of the costs of any sale of Restricted Securities pursuant to an
Approved Sale to the extent such costs are incurred for the benefit of all
holders of the Common Stock and are not otherwise paid by the Company or the
acquiring party.  Costs incurred by each
such holder of Restricted Securities on his or her own behalf shall not be
considered costs of the transaction hereunder.

 

6

 

Section 5.               Distributions
Upon Sale of the Company.  In the
event of a Sale of the Company (whether or not such Sale of the Company
constitutes an Approved Sale pursuant to Section 4 above), (a) each
holder of Restricted Securities shall receive in exchange for the Restricted
Securities held by such holder, the same portion of the aggregate consideration
from such sale or exchange that such holder of Restricted Securities would have
received if such aggregate consideration had been distributed by the Company in
complete liquidation pursuant to the rights and preferences set forth in the
Company’s certificate of incorporation as in effect immediately prior to such
sale or exchange (as reduced in the case of holders of rights to acquire any
class of Stockholder Shares by the exercise price per share thereof) and (b)
each holder of Restricted Securities shall be obligated to join in any
indemnification or other obligations that MDCP agrees to provide (including,
without limitation, by way of escrow or holdback of any sale proceeds) in
connection with such Sale of the Company (other than any such obligations that
relate specifically to a holder of Restricted Securities such as indemnification
with respect to representations and warranties given by a holder regarding such
holder’s title to and ownership of Restricted Securities), with such holders
bearing such liabilities or obligations with the same economic effect,
consistent with clause (a) of the foregoing, as if such liabilities or
obligations reduced the aggregated consideration payable to the Company’s
stockholders in such Sale of the Company prior to the consummation thereof;
provided, however, that in no case shall any such holder’s indemnity obligation
exceed the dollar value of the proceeds received by such holder in such Sale of
the Company.

 

Section 6.               Representations
and Warranties of the Company.  As a
material inducement to the Purchasers to enter into this Agreement and purchase
the Securities hereunder, the Company hereby represents and warrants to each
Purchaser as of the date hereof as follows:

 

6A.          Organization,
Corporate Power and Licenses.  The
Company is a corporation duly organized, validly existing and in good standing
under the laws of Delaware and is qualified to do business in every
jurisdiction in which the failure to so qualify would reasonably be expected to
have a material adverse effect on the financial condition, operating results,
assets, operations or business prospects of the Company and its Subsidiaries
taken as a whole.  The Company possesses
all requisite corporate power and authority and all material licenses, permits
and authorizations necessary to own and operate its properties, to carry on its
businesses as now conducted and presently proposed to be conducted and to carry
out the transactions contemplated by this Agreement (including, without
limitation, the issuance of the Securities hereunder).  The copies of the Company’s Certificate of
Incorporation and Bylaws which have been furnished to the Purchasers’ reflect
all amendments made thereto at any time prior to the date of this Agreement and
are correct and complete.

 

6B.          Capital
Stock and Related Matters.

 

(i)            As of the Closing
and immediately thereafter, the authorized capital stock of the Company shall
consist of (a) 100,000 shares of Preferred Stock, consisting of 90,000 shares
of Series A Preferred Stock and 10,000 shares of Series B Preferred Stock, and
(b) 1,500,000 shares of Common Stock.  The
attached Capitalization Schedule sets forth the ownership of the Company
as of and immediately after the Closing. 
As of the Closing, the Company shall not have outstanding (or any
commitments to issue) any stock or securities convertible or exchangeable for
any shares

 

7

 

of its capital
stock or containing any profit participation features, nor shall it have
outstanding any rights or options to subscribe for or to purchase its capital
stock or any stock or securities convertible into or exchangeable for its
capital stock or any stock appreciation rights or phantom stock plans, except
as set forth on the attached Capitalization Schedule.  As of the Closing, the Company shall not be
subject to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any shares of its capital stock or any warrants, options or
other rights to acquire its capital stock except pursuant to the Management
Agreement.  As of the Closing, all of
the outstanding shares of the Company’s capital stock (including the Preferred
Stock and the Common Stock) shall be validly issued, fully paid and
nonassessable.

 

(ii)           There are no
statutory or, to the Company’s knowledge, contractual stockholders preemptive
rights or rights of refusal with respect to the issuance of the Securities
hereunder or any other capital stock or other securities of the Company, except
as set forth in the Management Agreement. 
Based upon the representations and warranties of the Purchasers set
forth herein and of management set forth in the Management Agreement, the
Company has not violated any applicable federal or state securities laws in
connection with the offer, sale or issuance of any of its capital stock or
other securities, and the offer, sale and issuance of the Securities hereunder
do not require registration under the Securities Act or any applicable state
securities laws.  To the Company’s
actual knowledge, there are no agreements between the Company’s stockholders
with respect to the voting or transfer of the Company’s capital stock or with
respect to any other aspect of the Company’s affairs, except for the Management
Agreement and the Registration Rights Agreement.  The Company has not granted any registration rights other than under
the Registration Rights Agreement.

 

6C.          Subsidiaries;
Investments.   Upon consummation of
the transactions contemplated in the Merger Agreement, the Company shall own
(directly or indirectly) all of the outstanding capital stock of GLDD.

 

6D.          Authorization;
No Breach.  The execution, delivery
and performance of this Agreement (including the issuance and delivery of the
Securities hereunder) and the other Transaction Agreements to which the Company
is a party, the amendment and restatement of the Company’s Certificate of
Incorporation and the amendment and restatement of the Company’s Bylaws have
been duly and validly authorized by the Company’s board of directors and (as
applicable) approved by the required vote of the Company’s stockholders.  This Agreement and the other Transaction
Agreements to which the Company is a party each constitutes a valid and binding
obligation of the Company, enforceable in accordance with its terms.  The execution and delivery by the Company of
this Agreement and the other Transaction Agreements to which the Company is a
party, the offering, sale and issuance of the Securities hereunder, the
amendment and restatement of the Certificate of Incorporation and the Company’s
Bylaws and the fulfillment of and compliance with the respective terms hereof
and thereof by the Company, do not and shall not (i) conflict with or
result in a breach of the terms, conditions or provisions of,
(ii) constitute a default under, (iii) result in the creation of any
lien, security interest, charge or encumbrance upon the Company’s capital stock
or assets pursuant to, (iv) give any third party the right to modify,
terminate or accelerate any obligation under, (v) result in a violation
of, or (vi) require any authorization, consent, approval, exemption or
other action by or notice or declaration to, or

 

8

 

filing with, any court or administrative or governmental body or agency
or other Person pursuant to, the Certificate of Incorporation or Bylaws of the
Company, or any law, statute, rule or regulation to which the Company is
subject, or any agreement, instrument, order, judgment or decree to which the
Company is subject.

 

6E.           Conduct
of Business.  Except in connection
with the transactions contemplated hereby and by the Merger Agreement (and
before giving effect to the Acquisition), the Company has no assets, has not
conducted any business, incurred any material expenses, obligations or
liabilities or entered into any written contract, lease, license, agreement,
letter agreement or other instrument.

 

6F.           Litigation,
etc.  There are no actions, suits,
proceedings, orders, investigations or claims pending or, to the Company’s
knowledge, threatened against the Company or pending or threatened by the
Company against any third party, at law or in equity, or before or by any
governmental department, commission, board, bureau, agency or instrumentality
(including any actions, suit, proceedings or investigations with respect to the
transactions contemplated by this Agreement and the Transaction Agreements).

 

6G.          Brokerage.  There are no claims for brokerage
commissions, finders’ fees or similar compensation in connection with the
transactions contemplated by this Agreement based on any arrangement or
agreement binding upon the Company.

 

6H.          Governmental
Consent, etc. To the actual knowledge of the Company:  (i) no permit, consent, approval or
authorization of, or declaration to or filing with, any governmental authority
is required in connection with the execution, delivery and performance by the
Company of this Agreement or the other Transaction Agreements, or the
consummation by the Company of the Transactions and (ii) no permit, consent,
approval or authorization of, or declaration to or filing with, any governmental
authority was required in connection with the formation of the Company, other
than filing with the Delaware Secretary of State, except for the matters
disclosed in or contemplated by the Merger Agreement and except for filings
required under the HSR Act.

 

6I.            Solvency,
etc.  The Company is solvent as of
the date of this Agreement and shall not become insolvent as a result of the
consummation of the Transactions.  The
Company is, and after giving effect to the Transactions shall be, able to pay
its debts as they become due, and the Company’s property now has, and after
giving effect to the Transactions shall have, a fair salable value greater than
the amounts required to pay its debts (including a reasonable estimate of the
amount of all contingent liabilities). 
The Company has adequate capital to carry on its business, and after
giving effect to the Transactions, the Company shall have adequate capital to
conduct its business.  No transfer of
property is being made and no obligation is being incurred in connection with
the Transactions with the intent to hinder, delay or defraud either present or
future creditors of the Company.

 

6J.           Investment
Company.  The Company is not an
“investment company” as defined under the Investment Company Act of 1940, as
amended.

 

9

 

6K.          Bank
Agreement.  As of the date hereof,
neither the Company nor any borrower or guarantor party to the Bank Agreement
is in breach of any representation or warranty contained therein.

 

Section 7.               Representations
and Warranties of the Purchasers.

 

7A.          Purchaser’s
Investment Representations.  As a
material inducement to the Company to enter into this Agreement and to sell the
Securities hereunder, each Purchaser represents and warrants (severally as to
itself only) to the Company as of the date hereof as follows:

 

(i)            Such Purchaser is
acquiring the Restricted Securities purchased hereunder for its own account
with the present intention of holding such securities for purposes of
investment, and that it has no intention of selling such securities in a public
distribution in violation of the federal securities laws or any applicable
state securities laws; provided that nothing contained herein shall prevent any
Purchaser and subsequent holders of Restricted Securities from transferring
such securities in compliance with the provisions of Section 3
hereof.

 

(ii)           Such Purchaser is
an “accredited investor” (as defined) under Regulation D under the
Securities Act, is sophisticated in financial matters and is able to evaluate
the risks and benefits of the investment in the Securities.

 

(iii)          Such Purchaser is
able to bear the economic risk of its investment in the Securities for an
indefinite period of time because the Securities have not been registered under
the Securities Act and, therefore, cannot be sold unless subsequently
registered under the 1933 Act or an exemption from such registration is
available.

 

(iv)          Such Purchaser has
had an opportunity to ask questions and receive answers concerning the terms
and conditions of the offering of Securities and has had full access to such
other information concerning the Company as it has requested. Such Purchaser
represents that such Purchaser has reviewed, or has had an opportunity to
review, a copy of the Merger Agreement, and Purchaser is familiar with the
transactions contemplated thereby. 
Purchaser has also reviewed, or has had an opportunity to review, the
following documents:  (A) the
Company’s Certificate of Incorporation and Bylaws as amended and in effect at
Closing; and (B) the loan agreements, notes and related documents with the
Company’s senior and subordinated lenders.

 

(v)           This Agreement
constitutes the legal, valid and binding obligation of such Purchaser,
enforceable in accordance with its terms, and the execution, delivery and
performance of this Agreement by such Purchaser does not and shall not conflict
with, violate or cause a breach of any agreement, contract or instrument to
which such Purchaser is a party or any judgment, order or decree to which such
Purchaser is subject.

 

(vi)          Such Purchaser is a
resident of the state indicated in its address as listed on the Schedule of
Purchasers.

 

10

 

Section 8.               Covenants.

 

8A.          Financial
Statements and Other Information. 
The Company shall deliver to each holder of more than 15% of the
Restricted Securities acquired hereunder:

 

(i)            as soon as
available but in any event within 30 days after the end of each monthly
accounting period in each fiscal year, unaudited consolidating and consolidated
statements of income and cash flows of the Company and its Subsidiaries for
such monthly period and for the period from the beginning of the fiscal year to
the end of such month, and unaudited consolidating and consolidated balance
sheets of the Company and its Subsidiaries as of the end of such monthly
period, setting forth in each case comparisons to the Company’s annual budget
and to the corresponding period in the preceding fiscal year, and all such
items shall be prepared in accordance with generally accepted accounting
principles, consistently applied and shall be certified by a senior executive
officer of the Company;

 

(ii)           within 30 days
after the end of each quarterly accounting period in each fiscal year, an Officer’s
Certificate stating that neither the Company nor any of its Subsidiaries is in
default under any of its other material agreements or, if any such default
exists, specifying the nature and period of existence thereof and what actions
the Company and its Subsidiaries have taken and propose to take with respect
thereto;

 

(iii)          within 90 days
after the end of each fiscal year, consolidating and consolidated statements of
income, cash flows and shareholders’ equity of the Company and its Subsidiaries
for such fiscal year, and consolidating and consolidated balance sheets of the
Company and its Subsidiaries as of the end of such fiscal year, setting forth
in each case comparisons to the Company’s annual budget and to the preceding
fiscal year, all prepared in accordance with generally accepted accounting
principles, consistently applied, and accompanied by (a) with respect to the
consolidated portions of such statements, an opinion containing no material
exceptions or qualifications (except for qualifications regarding specified
contingent liabilities) of an independent accounting firm of recognized
national standing reasonably acceptable
to the Purchasers holding a majority of the outstanding Series A Preferred
Stock held by all of the Purchasers, (b) a certificate from such accounting
firm, addressed to the Company’s board of directors, stating that in the course
of its examination nothing came to its attention that caused it to believe that
there was any default by the Company or any Subsidiary in the fulfillment of or
compliance with any of the terms, covenants, provisions or conditions of any
material agreement to which the Company or any Subsidiary is a party or, if
such accountants have reason to believe any such default by the Company or any
Subsidiary exists, a certificate specifying the nature and period of existence
thereof, and (c) a copy of such firm’s annual management letter to the
Company’s board of directors;

 

(iv)          promptly upon
receipt thereof, any additional reports, management letters or other detailed
information concerning significant aspects of the Company’s or its
Subsidiaries’ operations or financial affairs given to the Company by its
independent accountants (and not otherwise contained in other materials
provided hereunder);

 

11

 

(v)           at least 30 days but
not more than 90 days prior to the beginning of each fiscal year, an annual
budget prepared on a monthly basis for the Company and its Subsidiaries for
such fiscal year (displaying anticipated statements of income and cash flows
and balance sheets), and promptly upon preparation thereof any other
significant budgets prepared by the Company and any revisions of such annual or
other budgets;

 

(vi)          promptly (but in any
event within five business days) after the discovery or receipt of notice of
any default under any material agreement to which it or any of its Subsidiaries
is a party, any condition or event which is reasonably likely to result in any
material liability under any federal, state or local statute or regulation
relating to public health and safety, worker health and safety or pollution or
protection of the environment or any other material adverse change, event or
circumstance affecting the Company or any Subsidiary (including, without
limitation, the filing of any material litigation against the Company or any
Subsidiary or the existence of any dispute with any Person which involves a
reasonable likelihood of such litigation being commenced), an Officer’s
Certificate specifying the nature and period of existence thereof and what
actions the Company and its Subsidiaries have taken and propose to take with
respect thereto;

 

(vii)         within ten days
after transmission thereof, copies of all financial statements, proxy
statements, reports and any other general written communications which the
Company sends to its stockholders and copies of all registration statements and
all regular, special or periodic reports which it files, or any of its officers
or directors file with respect to the Company, with the Securities and Exchange
Commission or with any securities exchange on which any of its securities are
then listed, and copies of all press releases and other statements made
available generally by the Company to the public concerning material
developments in the Company’s and its Subsidiaries’ businesses; and

 

(viii)        with reasonable
promptness, such other information and financial data concerning the Company
and its Subsidiaries as any Person entitled to receive information under this Section
8A may reasonably request.

 

Each of the financial statements referred to in subparagraph (i) and
(iii) above shall be true and correct in all material respects as of the dates
and for the periods stated therein, subject in the case of the unaudited financial
statements to changes resulting from normal year-end adjustments for recurring
accruals (none of which would, alone or in the aggregate, be materially adverse
to the business, condition (financial or otherwise), operating results, assets,
liabilities, operations, business prospects or customer, supplier or employee
relations of the Company and its Subsidiaries taken as a whole).

 

8B.          Inspection
Rights.  The Company shall permit
any representatives designated by any holder of more than 15% of the Restricted
Securities acquired hereunder, upon reasonable notice and during normal
business hours and at such other times as any such Purchaser may reasonably
request, to (i) visit and inspect any of the properties of the Company and its
Subsidiaries, (ii) examine the corporate and financial records of the Company
and its Subsidiaries and make copies thereof or extracts therefrom and (iii)
discuss the affairs, finances and accounts of any such corporations with the
directors, officers, key employees and

 

12

 

independent accountants of the Company and its Subsidiaries.  The presentation of an executed copy of this
Agreement by any such holder to the Company’s independent accountants shall
constitute the Company’s permission to its independent accountants to
participate in discussions with such Persons.

 

8C.          Restrictions.  The Company shall not, without the prior
written consent of MDP:

 

(i)            directly or
indirectly declare or pay, or permit any Subsidiary to declare or pay, any
dividends or make any distributions upon any of its capital stock or other
equity securities other than the Preferred Stock pursuant to the terms of the
Certificate of Incorporation, except that the Company may declare and pay
dividends payable in shares of Common Stock issued upon the outstanding shares
of Common Stock and any Subsidiary may declare and pay dividends or make
distributions to the Company or any Wholly-Owned Subsidiary;

 

(ii)           directly or
indirectly redeem, purchase or otherwise acquire, or permit any Subsidiary to
redeem, purchase or otherwise acquire, any of the Company’s or any Subsidiary’s
capital stock or other equity securities (including, without limitation,
warrants, options and other rights to acquire such capital stock or other
equity securities) other than the Preferred Stock pursuant to the terms of the
Certificate of Incorporation or directly or indirectly redeem, purchase or make
any payments with respect to any stock appreciation rights, phantom stock plans
or similar rights or plans, except for acquisitions of capital stock pursuant
to agreements or plans, including equity incentive agreements with service
providers, which allow the Company to repurchase shares of Common Stock upon
the termination of services or an exercise of the Company’s right of first
refusal upon a proposed transfer.

 

(iii)          except as expressly
contemplated by this Agreement and the Merger Agreement, authorize, issue or
enter into any agreement providing for the issuance (contingent or otherwise)
of, (a) any notes or debt securities containing equity features (including,
without limitation, any notes or debt securities convertible into or
exchangeable for capital stock or other equity securities, issued in connection
with the issuance of capital stock or other equity securities or containing
profit participation features) or (b) any capital stock or other equity
securities (or any securities convertible into or exchangeable for any capital
stock or other equity securities);

 

(iv)          make, or permit any
Subsidiary to make, any loans or advances to, guarantees for the benefit of, or
Investments in, any Person (other than a Wholly-Owned Subsidiary), except for
(a) reasonable advances to employees in the ordinary course of business,
(b) acquisitions permitted pursuant to subparagraph (viii) below,
(c) Investments having a stated maturity no greater than one year from the
date the Company or any Subsidiary makes such Investment in (1) obligations of
the United States government or any agency thereof or obligations guaranteed by
the United States government, (2) certificates of deposit of commercial banks
having combined capital and surplus of at least $50 million or (3) commercial
paper with a rating of at least “Prime-1” by Moody’s Investors Service, Inc.,
or (d) loans for acquisitions of capital stock pursuant

 

13

 

to agreements or
plans, including equity incentive agreements with service providers, which
allow the Company to repurchase shares of Common Stock upon the termination of
services or an exercise of the Company’s right of first refusal upon a proposed
transfer;

 

(v)           merge or consolidate
with any Person or, except as permitted by subparagraph (viii) below, permit
any Subsidiary to merge or consolidate with any Person (other than such
Subsidiary with a Wholly-Owned Subsidiary);

 

(vi)          sell, lease or
otherwise dispose of, or permit any Subsidiary to sell, lease or otherwise
dispose of, more than 25% of the consolidated assets of the Company and its
Subsidiaries (computed on the basis of book value, determined in accordance
with generally accepted accounting principles consistently applied, or fair
market value, determined by the Company’s board of directors in its reasonable
good faith judgment) in any transaction or series of related transactions or
sell or permanently dispose of any of its or any Subsidiary’s Intellectual
Property Rights;

 

(vii)         liquidate, dissolve
or effect a recapitalization or reorganization in any form of transaction
(including, without limitation, any reorganization into a limited liability
company, a partnership or any other non-corporate entity which is treated as a
partnership for federal income tax purposes);

 

(viii)        acquire or enter
into, or permit any Subsidiary to acquire or enter into, any interest in any
company or business (whether by a purchase of assets, purchase of stock, merger
or otherwise), except acquisitions for purchase consideration of not more than
$2,500,000 in the aggregate, or any joint venture;

 

(ix)           reclassify or recapitalize
any securities of the Company or any of its Subsidiaries;

 

(x)            enter into, or
permit any Subsidiary to enter into, the ownership, active management or
operation of any business other than dredging and demolition;

 

(xi)           become subject to,
or permit any of its Subsidiaries to become subject to, (including, without
limitation, by way of amendment to or modification, extension or renewal of)
any agreement or instrument which by its terms would (under any circumstances)
restrict (a) the right of any Subsidiary to make loans or advances or pay
dividends or distributions to, transfer property to, or repay any Indebtedness
owed to, the Company or another Subsidiary or (b) the Company’s right to
perform the provisions of this Agreement or the other Transaction Agreements,
the Certificate of Incorporation or the Company’s bylaws (including, without
limitation, provisions relating to the declaration and payment of dividends on
and the making of redemptions of the Series A Preferred Stock);

 

(xii)          except as expressly
contemplated by this Agreement, make any amendment to or rescind any provision
of the certificate of incorporation or articles of incorporation, or the
by-laws, of the Company or any of its Subsidiaries, or file any

 

14

 

resolution of the
board of directors with the secretary of state of the state of incorporation of
the Company or any of its Subsidiaries;

 

(xiii)         enter into, amend,
modify or supplement, or permit any Subsidiary to enter into, amend, modify or
supplement, any agreement, transaction, commitment or arrangement with any of
its or any Subsidiary’s officers, directors, employees, stockholders or
Affiliates or with any individual related by blood, marriage or adoption to any
such individual or with any entity in which any such Person or individual owns
a beneficial interest, except for customary employment arrangements and benefit
programs on reasonable terms and except as otherwise expressly contemplated by
this Agreement;

 

(xiv)        hire or fire the
chief executive officer and/or the chief financial officer of the Company or
persons exercising the authority and/or performing the functions customarily
associated with such job titles, or any other executive officers or key
employees;

 

(xv)         approve or materially
modify any annual strategic and operating plan of the Company;

 

(xvi)        establish or acquire
any Subsidiaries other than Wholly-Owned Subsidiaries;

 

(xvii)       create, incur, assume
or suffer to exist, or permit any Subsidiary to create, incur, assume or suffer
to exist, Indebtedness exceeding an aggregate principal amount of $5,000,000
outstanding at any time on a consolidated basis;

 

(xviii)      create, incur, assume
or suffer to exist, or permit any Subsidiary to create, incur, assume or suffer
to exist, any Liens other than Permitted Liens;

 

(xix)         make, or permit any
Subsidiary to make, any capital expenditures (including, without limitation,
payments with respect to capitalized leases, as determined in accordance with
generally accepted accounting principles consistently applied) exceeding
$100,000 in the aggregate on a consolidated basis during any twelve-month
period;

 

(xx)          enter into, or
permit any Subsidiary to enter into, any leases or other rental agreements
(excluding capitalized leases, as determined in accordance with generally
accepted accounting principles consistently applied) under which the amount of
the aggregate lease payments for all such agreements exceeds $500,000 on a
consolidated basis for any twelve-month period;

 

(xxi)         issue or sell, or
permit any Subsidiary to issue or sell, any shares of the capital stock, or
rights to acquire shares of the capital stock, of any Subsidiary to any Person
other than the Company or a Wholly-Owned Subsidiary; or

 

(xxii)        select the auditors
for the Company.

 

15

 

8D.          Affirmative
Covenants.  The Company shall, and
shall cause each Subsidiary to, unless it has received the prior written
consent of the holders of Securities holding at least a majority of the Common
Stock held by all such holders:

 

(i)            at all times cause
to be done all things necessary to maintain, preserve and renew its corporate
existence and all material licenses, authorizations and permits necessary to
the conduct of its businesses;

 

(ii)           maintain and keep
its material properties in good repair, working order and condition, and from
time to time make all necessary or desirable repairs, renewals and
replacements, so that its businesses may be properly and advantageously
conducted in all material respects at all times;

 

(iii)          pay and discharge
when payable all taxes, assessments and governmental charges imposed upon its
properties or upon the income or profits therefrom (in each case before the
same becomes delinquent and before penalties accrue thereon) and all claims for
labor, materials or supplies which if unpaid would by law become a Lien upon
any of its property, unless and to the extent that the same are being contested
in good faith and by appropriate proceedings and adequate reserves (as
determined in accordance with generally accepted accounting principles,
consistently applied) have been established on its books and financial
statements with respect thereto;

 

(iv)          comply with all
other material obligations which it incurs pursuant to any contract or
agreement, whether oral or written, express or implied, as such obligations
become due, unless and to the extent that the same are being contested in good
faith and by appropriate proceedings and adequate reserves (as determined in
accordance with generally accepted accounting principles, consistently applied)
have been established on its books and financial statements with respect
thereto;

 

(v)           comply with all
applicable laws, rules and regulations of all governmental authorities, the violation
of which would reasonably be expected to have a material adverse effect upon
the business, condition (financial or otherwise), operating results, assets,
liabilities, operations, business prospects or customer, supplier or employee
relations of the Company and its Subsidiaries taken as a whole;

 

(vi)          apply for and
continue in force with good and responsible insurance companies adequate
insurance covering risks of such types and in such amounts as are customary for
well-insured companies of similar size engaged in similar lines of business;
and

 

(vii)         maintain proper
books of record and account which present fairly in all material respects its
financial condition and results of operations and make provisions on its
financial statements for all such proper reserves as in each case are required
in accordance with generally accepted accounting principles, consistently
applied.

 

16

 

8E.           Compliance
with Agreements.  The Company shall
perform and observe (i) all of its obligations to each holder of the Preferred
Stock and Common Stock set forth in its certificate of incorporation and
bylaws, and (ii) all of its obligations under the Registration Rights Agreement
and the other Transaction Agreements.

 

Section 9.               Definitions.

 

9A.          Definitions.  For the purposes of this Agreement, the
following terms have the meanings set forth below:

 

“Board” means the Company’s Board of Directors.

 

“HSR Act” shall mean the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended.

 

“Independent Third Party” means any Person who,
immediately prior to the contemplated transaction, does not own in excess of 5%
of the Company’s Common Stock on a fully-diluted basis (a “5% Owner”),
who is not controlling, controlled by or under common control with any such 5%
Owner and who is not the spouse or descendent (by birth or adoption) of any
such 5% Owner or a trust for the benefit of such 5% Owner and/or such other
Persons.

 

“Officer’s Certificate” means a certificate
signed by the Company’s president or its chief financial officer, stating that
(i) the officer signing such certificate has made or has caused to be made
such investigations as are necessary in order to permit him to verify the
accuracy of the information set forth in such certificate and (ii) to the
best of such officer’s actual knowledge, such certificate does not misstate any
material fact and does not omit to state any fact necessary to make the
certificate not misleading.

 

“Person” means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock
company, a trust, a joint venture, an unincorporated organization and a
governmental entity or any department, agency or political subdivision thereof.

 

“Public Offering” means any offering by the
Company’s equity securities to the public pursuant to an effective registration
statement under the Securities Act, or any comparable statement under any
similar federal statute then in force.

 

“Restricted Securities” means (i) the
Securities issued hereunder, and (ii) any securities issued with respect
to the securities referred to in clause (i) above by way of a stock dividend or
stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization. 
As to any particular Restricted Securities, such securities shall cease
to be Restricted Securities when they have (a) been effectively registered
under the Securities Act and disposed of in accordance with the registration
statement covering them, or (b) been distributed to the public through a
broker, dealer or market maker pursuant to Rule 144 (or any similar provision
then in force) under the Securities Act or become eligible for sale pursuant to
Rule 144(k) (or any similar provision then in force) under the Securities
Act.  Whenever any particular securities
cease to be Restricted Securities, the holder thereof shall be

 

17

 

entitled to receive from the Company, without expense, new securities of
like tenor not bearing a Securities Act legend of the character set forth in Section
3C.

 

“Sale of the Company” means the sale of the
Company to an Independent Third Party or group of Independent Third Parties
pursuant to which such party or parties acquire (i) capital stock of the
Company possessing the voting power under normal circumstances to elect a
majority of the Board (whether by merger, consolidation or sale or transfer of
the Company’s capital stock) or (ii) all or substantially all of the Company’s
assets determined on a consolidated basis.

 

“Securities Act” means the Securities Act of
1933, as amended, or any similar federal law then in force.

 

“Securities and Exchange Commission” means the
U.S. Securities and Exchange Commission and includes any governmental body or
agency succeeding to the functions thereof.

 

“Securities Exchange Act” means the Securities
Exchange Act of 1934, as amended, or any similar federal law then in force.

 

“Subsidiary” means, with respect to any Person,
any corporation, limited liability company, partnership, association or other
business entity of which (i) if a corporation, a majority of the total
voting power of shares of stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof, or (ii) if a limited liability company, partnership, association
or other business entity, a majority of the partnership or other similar
ownership interest thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more Subsidiaries of that Person or a
combination thereof.  For purposes
hereof, a Person or Persons shall be deemed to have a majority ownership
interest in a limited liability company, partnership, association or other
business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association or other business entity
gains or losses or shall be or control any managing director or general partner
of such limited liability company, partnership, association or other business
entity.

 

Section 10.             Certain
Voting Agreements.

 

10A.        Each
Purchaser hereby agrees that such Purchaser will vote, or cause to be voted,
all voting Restricted Securities over which such Purchaser has the power to
vote or direct the voting, either in person or by proxy, whether at a
stockholders meeting, or by written consent, in the manner in which MDCP
directs in connection with (i) approval of any amendment or amendments to the
Company’s Certificate of Incorporation or bylaws, (ii) any merger, combination
or consolidation of the Company with any Independent Third Party, (iii) the
sale, lease or exchange of all or substantially all of the assets of the
Company and its Subsidiaries on a consolidated basis to an Independent Third
Party, or (iv) the reorganization, recapitalization, liquidation, dissolution
or winding-up of any of the Company and its Subsidiaries; provided,
however, that no such action shall (a) contravene the terms of this
Agreement, or (b) have a material adverse effect on the rights or
interests of any Purchaser in respect of any of its

 

18

 

Restricted Securities that would be borne disproportionately by such
Purchaser relative to the effect of such action on the rights or interests of
other Purchasers in respect of holdings of Restricted Securities of the same
class, unless approved by holders of a majority of the Restricted Securities so
adversely affected.

 

10B.        In
order to secure the obligations of each Purchaser who now or hereafter holds
any voting securities to vote such Person’s Restricted Securities in accordance
with the provisions of this Agreement, each Purchaser hereby appoints MDP as
his or its true and lawful proxy and attorney-in-fact, with full power of
substitution, to vote all of his or its Restricted Securities, which irrevocable
proxy MDP may exercise at any time.  The
proxies and powers granted by each such Purchaser pursuant to this Section 10B
are coupled with an interest and are given to secure the performance of such
Purchaser’s obligations under this Agreement. 
Such proxies and powers shall be irrevocable until termination of this Section 10
and shall survive the death, incompetency, disability, bankruptcy or
dissolution of each Purchaser and the subsequent holders of his or its
Restricted Securities.  No Purchaser shall
grant any proxy or become party to any voting trust or other agreement which is
inconsistent with, conflicts with or violates any provision of this Agreement.

 

Section 11.             Miscellaneous.

 

11A.        Expenses.  The Company shall pay to MDP, and hold MDP
harmless against liability for the payment of, (i) the fees and expenses
of its special counsel arising in connection with the negotiation and execution
of this Agreement and the consummation of the transactions contemplated by this
Agreement, which shall be payable at the Closing or, if the Closing does not
occur, payable upon demand, (ii) the fees and expenses incurred with
respect to any amendments or waivers (whether or not the same become effective)
under or in respect of this Agreement, the agreements contemplated hereby or
the Certificate of Incorporation, (iii) the fees and expenses incurred
with respect to the enforcement of the rights granted under this Agreement, the
agreements contemplated hereby and the Certificate of Incorporation, (iv) the fees
and expenses incurred by MDP in connection with any transaction, claim or event
which MDP believes affects the Company and as to which MDP seeks the advice of
outside professionals, (v) the fees and expenses incurred by MDP in connection
with any investment initiative pursued prior to the date hereof with the
Company’s Chief Executive Officer and (vi) the fees and expenses incurred by
MDP in connection with (A) the monitoring and management of the Company and its
Subsidiaries and (B) a Sale of the Company.

 

11B.        Indemnification.  The Company hereby covenants and agrees to
indemnify and hold harmless each of the Purchasers, their respective officers,
directors, stockholders, affiliates, successors, assigns, agents and other
representatives, from and against any and all damages, losses, claims,
liabilities, deficiencies, costs and expenses (including, without limitation,
reasonable attorneys’ fees), resulting from any material breach of any of the
representations, warranties or covenants of the Company under this Agreement.

 

11C.        Survival
of Representations and Warranties. All representations and warranties
contained herein or made in writing by any party in connection herewith shall
survive the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby through the first anniversary of the
Closing; provided, however, that the

 

19

 

representations and warranties contained in Section 6B, Section
6D and Section 6G hereof shall survive the Closing for the
applicable statute of limitations.

 

11D.        Remedies.  The Purchasers shall have all rights and
remedies set forth in this Agreement and all rights and remedies which the
Purchasers have been granted at any time under any other agreement or contract
and all of the rights which the Purchasers have under any law.  The Purchasers shall be entitled to enforce
all rights they have under this Agreement, the other Transaction Agreements and
the Securities specifically (without posting a bond or other security), to
recover damages by reason of any breach of any provision of this Agreement and
to exercise all other rights granted by law.

 

11E.         Consent
to Amendments.  Except as otherwise
expressly provided herein, the provisions of this Agreement may be amended and
the Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company has obtained the
written consent of MDP.

 

11F.         Successors
and Assigns.  Except as otherwise
expressly provided herein, all covenants and agreements contained in this
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not.  In
addition, and whether or not any express assignment has been made, the
provisions of this Agreement which are for any Purchaser’s benefit as a
purchaser or holder of Securities are also for the benefit of, and enforceable
by, any subsequent holder of such Securities.

 

11G.        Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.

 

11H.        No
Third Party Beneficiaries.  Nothing
herein expressed or implied is intended or shall be construed to confer upon or
give to any Person other than the parties hereto and their respective permitted
successors and assigns, any rights or remedies under or by reason of this
Agreement.

 

11I.          Counterparts.  This Agreement may be executed simultaneously
in two or more counterparts (including by facsimile), any one of which need not
contain the signatures of more than one party, but all such counterparts taken
together shall constitute one and the same Agreement.

 

11J.         Descriptive
Headings; Interpretation.  The
descriptive headings of this Agreement are inserted for convenience only and do
not constitute a substantive part of this Agreement.  The use of the word “including” in this Agreement shall be by way
of example rather than by limitation.

 

11K.       Governing Law.  All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement and
the exhibits and schedules

 

20

 

hereto shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without giving
effect to any choice of law or conflict of law rules or provisions (whether of
the State of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of
Delaware.  In furtherance of the
foregoing, the internal law of the State of Delaware shall control the
interpretation and construction of this Agreement (and all schedules and exhibits
hereto), even though under that jurisdiction’s choice of law or conflict of law
analysis, the substantive law of some other jurisdiction would ordinarily
apply.

 

11L.         Notices.  All notices, demands or other communications
to be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient, sent to the recipient by reputable overnight
courier service (charges prepaid) or mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid.  Such notices, demands and other
communications shall be sent to the Purchasers at the addresses indicated on
the Schedule of Purchasers attached hereto, to the Company at the
following address:

 

	
  GLDD Acquisitions Corp.

  
	
  c/o Madison Dearborn Capital Partners IV, L.P.

  
	
   

  
	
  70 W. Madison, Suite 3800

  
	
  Three First National Plaza

  
	
  Chicago, Illinois 60602

  
	
  Facsimile: (312) 422-2424

  
	
  Attention:

  	
  Samuel M. Mencoff

  
	
   

  	
  Thomas S. Souleles

  
	
   

  
	
  with a copy to:

  
	
   

  
	
  Kirkland & Ellis LLP

  
	
  200 East Randolph Drive

  
	
  Chicago, IL 60601

  
	
  Facsimile: (312) 861-2200

  
	
  Attention:

  	
  William S. Kirsch, P.C.

  

 

or to such other address or to the attention of such other person as
the recipient party has specified by prior written notice to the sending party.

 

11M.       No
Strict Construction.  The parties
hereto have participated jointly in the negotiation and drafting of this
Agreement.  In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any of the provisions of this Agreement.

 

* * * * * * * *

 

21

 

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on the date first written above.

 

 

	
  GLDD ACQUISITIONS CORP.

  
	
   

  
	
  By:

  	
  /s/ Douglas B. Mackie

  	
   

  
	
   

  
	
  Its:

  	
  President and Chief Executive Officer

  	
   

  
	
   

  
	
   

  

 

 

	
  SCHEDULE OF PURCHASERS:

  
	
   

  
	
   

  
	
  MADISON DEARBORN CAPITAL PARTNERS IV, L.P.

  
	
   

  
	
  By:

  	
  Madison Dearborn Partners IV, L.P.

  
	
  Its:

  	
  General Partner

  
	
   

  
	
  By: 

  	
  Madison Dearborn Partners, L.L.C.

  
	
  Its: 

  	
  General Partner

  
	
   

  
	
  By:

  	
    /s/ Thomas S. Souleles

  	
   

  
	
   

  	
  Name:

  	
  Thomas S. Souleles

  
	
   

  	
  Title:

  	
  Member

  
	
   

  
	
  SPECIAL CO-INVEST I

  
	
   

  
	
  By:

  	
    /s/ Thomas S. Souleles

  	
   

  
	
   

  
	
  Its:

  	
    Member

  	
   

  
						

 

2

 

	
  NORTHWESTERN UNIVERSITY

  
	
   

  
	
  By:

  	
    /s/ William H. McLean

  	
   

  
	
   

  
	
  Its:

  	
    Vice President and Chief Investment
  Officer

  	
   

  
	
   

  
	
   

  
	
  RANDOLPH STREET PARTNERS VI

  
	
   

  
	
  By:

  	
    /s/ William S. Kirsch, P.C.

  	
   

  
	
   

  
	
  Its:

  	
    Partner

  	
   

  
				

 

2

 

LIST OF
EXHIBITS AND DISCLOSURE SCHEDULES

 

Exhibits

 

	
  Exhibit A

  	
   

  	
  -

  	
   

  	
  Amended and Restated of
  Certificate of Incorporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit B

  	
   

  	
  -

  	
   

  	
  Amended and Restated
  Bylaws

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit C

  	
   

  	
  -

  	
   

  	
  Registration Rights
  Agreement

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit D

  	
   

  	
  -

  	
   

  	
  Management Agreement

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Disclosure Schedules

  
	
   

  
	
  Schedule of Purchasers

  
	
   

  
	
  Capitalization Schedule

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