EX-10.2 3 mp10102.txt AGMT. RE: DISTRIBUTION & PLAN OF REORGANIZATION AGREEMENT REGARDING DISTRIBUTION AND PLAN OF REORGANIZATION THIS AGREEMENT REGARDING DISTRIBUTION AND PLAN OF REORGANIZATION (referred to herein as the "Agreement"), dated as of February 12, 2001, by and between RPC, INC., a Delaware corporation ("RPC"), and MARINE PRODUCTS CORPORATION, a Delaware corporation ("Marine"). RECITALS A. RPC has formed Marine as a wholly-owned subsidiary for the purpose of taking title to the stock of Chaparral Boats, Inc. ("Chaparral"), a wholly owned subsidiary of RPC, the assets and liabilities of which constitute RPC's boat manufacturing operations (the "Boat Manufacturing Business"). B. The Board of Directors of RPC has determined that it is in the best interests of RPC and its shareholders to transfer and assign to Marine, effective prior to the Effective Time (as defined herein), the capital stock of Chaparral, as a capital contribution, and to receive in exchange therefor additional shares of Marine Common Stock (as defined herein). C. The Board of Directors of RPC has further determined that it is in the best interests of RPC and its shareholders to make a distribution (the "Distribution") to the holders of RPC Common Stock (as defined herein) of all of the outstanding shares of Marine Common Stock at the rate of 0.6 shares of Marine Common Stock for every one share of RPC Common Stock outstanding as of the Record Date (as defined herein). E. The parties have received a favorable ruling letter from the Internal Revenue Service (the "IRS") concerning the non-taxability of the Distribution to RPC or its shareholders pursuant to Section 355 of the Code (as defined herein), if consummated pursuant to the terms and conditions contained in the request therefor. F. The parties have determined that it is necessary and desirable to set forth the principal corporate transactions required to effect the Distribution and to set forth other agreements that will govern certain other matters following the Distribution. NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements and covenants contained in this Agreement and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: ARTICLE I DEFINITIONS Section 1.01 Definitions. As used herein, the following terms have the following meaning: "Action" means any claim, suit, arbitration, inquiry, proceeding or investigation by or before any court, governmental or other regulatory or administrative agency or commission or any other tribunal. "Ancillary Agreements" means all of the written agreements, instruments, understandings, assignments and other arrangements entered into in connection with the transactions contemplated hereby, including, without limitation, the Employee Benefits Agreement, the Transition Support Services Agreement, and the Tax Sharing Agreement. "Assets" means all properties, rights, contracts, leases and claims, of every kind and description, wherever located, whether tangible or intangible, and whether real, personal or mixed. "Chaparral" has the meaning set forth in the Recitals to this Agreement. "Chaparral Stock" means the capital stock of Chaparral to be transferred at or prior to the Effective Time by RPC to Marine. "Code" means the Internal Revenue Code of 1986, as amended. "Commission" means the Securities and Exchange Commission. "Distribution" has the meaning set forth in the Recitals to this Agreement. "Distribution Agent" means SunTrust Bank, Atlanta, in its capacity as agent for RPC in connection with the Distribution. "Distribution Date" means the date upon which the Distribution shall be effective, as determined by the Board of Directors of RPC. "Effective Time" means 5:00 p.m. Atlanta time on the Distribution Date. "Employee Benefits Agreement" means the Employee Benefits Agreement entered into at or prior to the Effective Time between RPC, Marine and Chaparral, as amended from time to time. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Form 10" means the Registration Statement on Form 10 filed by Marine with the Commission pursuant to the Exchange Act. "Group" means the RPC Group or the Marine Group, as the context so requires. 2 "Indemnifiable Loss" means any and all damage, loss, liability and expense (including, without limitation, reasonable expenses of investigation and reasonable attorneys' fees and expenses) in connection with any and all Actions or threatened Actions indemnifiable pursuant to Article IV. "Information Statement" means that certain Information Statement filed by Marine with the Securities and Exchange Commission and provided to RPC shareholders, pursuant to the Exchange Act. "Boat Manufacturing Business Assets" means all Assets used or useful in the conduct of the Boat Manufacturing Business. "Liabilities" means any and all claims, debts, liabilities and obligations, absolute or contingent, matured or not matured, liquidated or unliquidated, accrued or unaccrued, known or unknown, whenever arising, including all costs and expenses relating thereto, and including, without limitation, those debts, liabilities and obligations arising under this Agreement or any Ancillary Agreement, any law, rule, regulation, action, order or consent decree of any governmental entity or any award of any arbitrator of any kind, and those arising under any contract, commitment or undertaking. "Marine Business" means the Boat Manufacturing Business which will be conducted by the Marine Group at and after the Effective Time. "Marine Bylaws" means the bylaws of Marine in the form filed as an exhibit to the Form 10 at the time they become effective. "Marine Common Stock" means the outstanding shares of common stock, $.10 par value, of Marine. "Marine Group" means Marine and any of its subsidiaries and any other subsidiary or division of any member of the RPC Group that, immediately prior to the Effective Time, is included in the operations of the Marine Business. "Marine Liabilities" means (a) Liabilities of any member of the Marine Group under this Agreement or any Ancillary Agreement, and (b) except as otherwise expressly provided in this Agreement or any Ancillary Agreement, Liabilities incurred in connection with the conduct or operation of the Marine Business or the ownership of the Chaparral Stock, whether arising before, at or after the Effective Time. "Prime Rate" means the prime rate of interest as determined from time to time by SunTrust Bank, Atlanta. "Record Date" means the date designated by RPC's Board of Directors as the record date for determining the shareholders of RPC entitled to receive the Distribution. 3 "RPC Business" means the business conducted by RPC and its subsidiaries, joint ventures and partnerships, other than the Marine Business. "RPC Common Stock" means the outstanding shares of common stock, $.10 par value, of RPC. "RPC Group" means RPC and its subsidiaries, joint ventures and partnerships, excluding any member of the Marine Group. "RPC Liabilities" means (i) Liabilities of any member of the RPC Group under this Agreement or any Ancillary Agreement, and (ii) Liabilities, other than Marine Liabilities, incurred in connection with the operation of the RPC Business, whether arising before, at or after the Effective Time. "Securities Act" means the Securities Act of 1933, as amended. "Tax" shall have the meaning given to such term in the Tax Sharing Agreement. "Tax Sharing Agreement" means the Tax Sharing Agreement entered into at or before the Effective Time between RPC and Marine, as amended from time to time. "Transition Support Services Agreement" means the Transition Support Services Agreement entered into at or prior to the Effective Time between RPC and Marine, as amended from time to time. ARTICLE II REORGANIZATION; TRANSFER OF CHAPARRAL STOCK; ASSETS AND LIABILITIES; AND TRANSITION ARRANGEMENTS Section 2.01 Reorganization. At or before the Effective Time the following transactions shall occur: (a) Anchor Crane and Hoist Company, Inc., a wholly owned subsidiary of RPC, shall transfer all of its assets and liabilities to RPC, in complete liquidation under Section 332 of the Code; (b) Chaparral will distribute all of the issued and outstanding capital stock of RPC Investment Company to RPC; (c) the RPC Intercompany Balance (as defined in Section 8.03 below) shall be adjusted as provided in Section 8.03 below. (d) RPC shall contribute to Marine all of the Chaparral Stock, in exchange for a number of shares of Marine Common Stock that when combined with the shares of Marine Common Stock then owned by RPC shall equal approximately 16,981,811 shares. 4 Section 2.02 Assets and Liabilities. Except as otherwise expressly provided in this Agreement or in any of the Ancillary Agreements, RPC and Marine covenant and agree that: (a) Marine shall at and after the Effective Time be responsible for timely payment and discharge of all of the Marine Liabilities. (b) RPC shall at and after the Effective Time be responsible for timely payment and discharge of all of the RPC Liabilities. (c) It is the understanding of the parties hereto that as of the date hereof and immediately prior to the Effective Time, there are and will be no Boat Manufacturing Business Assets that are not Assets of Chaparral, there are and will be no Marine Liabilities that are not Liabilities of Chaparral, and there are and will be no Assets or Liabilities of Chaparral or Marine other than the Boat Manufacturing Business Assets and Marine Liabilities; however, in the event that any conveyance of an Asset or assumption of a Liability is required to reflect this understanding and is not effected at or before the Effective Time, the obligation to transfer such Asset and assume such Liability shall continue past the Effective Time and shall be accomplished as soon thereafter as practicable. (d) If any Asset may not be transferred by reason of the requirement to obtain the consent of any third party and such consent has not been obtained by the Effective Time, then such Asset shall not be transferred until such consent has been obtained, and RPC and Marine, as the case may be, shall cause the owner of such Asset to use all reasonable efforts to provide to the appropriate member of the other Group all the rights and benefits associated with such Asset. Both parties shall otherwise cooperate and use all reasonable efforts to provide the economic and operational equivalent of an assignment or transfer of the Asset. (e) From and after the Effective Time, each party shall promptly transfer or cause the members of its Group promptly to transfer to the other party or the appropriate member of the other party's Group, from time to time, any property received that is an Asset of the other party or a member of its Group. Without limiting the foregoing, funds received by a member of one Group upon the payment of accounts receivable that belong to a member of the other Group shall be transferred to the other Group by check or wire transfer not more than five business days after receipt of such payment. (f) Except as expressly set forth in this Agreement or any Ancillary Agreement, or in any instrument or document contemplated by this Agreement or any Ancillary Agreement, no member of the RPC Group nor any member of the Marine Group has made or may be deemed to have made any representation or warranty as to (i) the Assets, business or Liabilities retained, transferred or assumed as contemplated hereby or thereby, (ii) any consents or approvals required in connection with the transfer or assumption by such party of any Asset or Liability contemplated hereby or thereby, (iii) the value or freedom from any lien, claim, equity or other encumbrance of, or any other matter concerning, any Assets of such party or (iv) the absence of any defenses or right of setoff or freedom from counterclaim with respect to any claim or other Asset of such party. EXCEPT AS MAY BE EXPRESSLY SET FORTH IN THIS AGREEMENT OR ANY ANCILLARY AGREEMENT, ALL ASSETS WERE, OR ARE BEING, TRANSFERRED, OR ARE BEING RETAINED ON AN "AS IS", "WHERE IS" BASIS AND THE RESPECTIVE TRANSFEREES WILL BEAR THE ECONOMIC AND LEGAL RISKS THAT ANY CONVEYANCE SHALL PROVE TO BE INSUFFICIENT TO VEST IN THE TRANSFEREE A TITLE THAT IS FREE AND CLEAR OF ANY LIEN, CLAIM, EQUITY OR OTHER ENCUMBRANCE. 5 Section 2.03 Ancillary Agreements. At or before the Effective Time, RPC and Marine will execute and deliver: (a) A duly executed Employee Benefits Agreement; (b) A duly executed Tax Sharing Agreement; (c) A duly executed Transition Support Services Agreement; and (d) Such other agreements, leases, documents or instruments as the parties may agree are necessary or desirable in order to achieve the purposes hereof. Section 2.04 Issuance of Marine Common Stock. At the Effective Time and in exchange for the transfer by RPC to Marine of the Chaparral Stock as provided in this Agreement, Marine will issue and deliver to RPC a certificate representing 16,981,811 shares, which, together with the 100 shares of Marine Common Stock initially issued to RPC will constitute all the shares to be distributed as provided in Section 3.03 below. Section 2.05 Resignations. Prior to the Effective Time, Marine will deliver or cause to be delivered to RPC the resignation, effective as of the Effective Time, of James A. Lane, Jr. as a director and Executive Vice President of RPC. Section 2.06 Insurance. (a) If the Distribution occurs, Marine will use its best efforts to procure and maintain directors' and officers' liability insurance coverage in commercially reasonable amounts consistent with industry practice with respect to directors and officers of RPC who will become directors and officers within the Marine Group as of the Distribution Date for acts of such directors and officers as members within the Marine Group for periods from and after the Distribution Date. (b) If the Distribution occurs, RPC will use its best efforts to maintain directors' and officers' liability insurance coverage in commercially reasonable amounts consistent with industry practice for a period of five years from the Distribution Date with respect to the directors and officers of RPC who will become directors and officers of members of the Marine Group as of the Distribution Date for acts of such directors and officers as members of the RPC Group during periods prior to the Distribution Date. ARTICLE III THE DISTRIBUTION Section 3.01 Cooperation Prior to the Distribution. 6 (a) RPC and Marine shall prepare, and Marine shall mail to the holders of RPC Common Stock, the Information Statement, which shall set forth appropriate disclosures concerning Marine, the Distribution and any other appropriate matters. (b) RPC shall, as the sole shareholder of Marine, approve, and Marine shall adopt, the Marine employee benefit plans contemplated by the Employee Benefits Agreement and RPC and Marine shall cooperate in preparing, filing with the Commission under the Securities Act or the Exchange Act and causing to become effective any registration statements or amendments thereto that are appropriate to reflect the establishment of or amendments to any employee benefit plan of Marine contemplated by the Employee Benefits Agreement. (c) RPC and Marine shall take all such action as may be necessary or appropriate under the securities or blue sky laws of states or other political subdivisions of the United States in connection with the transactions contemplated by this Agreement or any Ancillary Agreement. (d) Marine shall prepare, file and use its best efforts to cause to be approved prior to the Record Date, the application to permit listing, subject to official notice of issuance, of the Marine Common Stock on the American Stock Exchange or such other quotation system as the Marine Board of Directors shall deem appropriate. (e) RPC shall use its best efforts to cause the RPC Common Stock to remain listed on the New York Stock Exchange. Section 3.02 RPC Board Action; Conditions Precedent to the Distribution. RPC's Board of Directors, or a duly appointed committee thereof, shall, in its sole discretion, establish the Record Date and the Distribution Date and any appropriate procedures in connection with the Distribution. In no event shall the Distribution occur unless the following conditions shall have been satisfied: (a) all necessary regulatory approvals shall have been received; (b) the Form 10 shall have become effective under the Exchange Act; (c) the Marine Board of Directors, as named in the Form 10, shall have been elected by RPC as sole shareholder of Marine, and the Marine Bylaws shall have been adopted and be in effect; (d) the Marine Common Stock shall have been approved for listing on the American Stock Exchange, subject to official notice of issuance, or such other quotation system as the Marine Board of Directors shall deem appropriate; (e) the RPC Common Stock shall remain listed on the New York Stock Exchange, or shall be listed on such other quotation system as the RPC Board of Directors shall deem appropriate. (f) the Information Statement forming part of the Form 10 referenced above shall have been mailed to all stockholders of RPC of record as of the Record Date; and 7 (g) no order, injunction or decree issued by any court of competent jurisdiction or other legal restraint or prohibition preventing consummation of the Distribution shall be in effect. Section 3.03 The Distribution. On or before the Distribution Date, subject to satisfaction or waiver of the conditions set forth in this Agreement, RPC shall deliver to the Distribution Agent a certificate or certificates representing all of the then outstanding shares of Marine Common Stock held by RPC, endorsed in blank, and shall instruct the Distribution Agent, except as otherwise provided in Section 3.04, to distribute to each holder of record of RPC Common Stock on the Record Date 0.6 shares of Marine Common Stock for each one share of RPC Common Stock so held either by crediting the holder's brokerage account or by delivering a certificate or certificates representing such shares. Marine agrees to provide all certificates for shares of Marine Common Stock that the Distribution Agent shall require in order to effect the Distribution. Section 3.04 Fractional Shares. The Distribution Agent shall not distribute any fractional share of Marine Common Stock. The Distribution Agent shall aggregate all such fractional shares and sell them in an orderly manner after the Distribution Date in the open market and, after completion of such sales, distribute a pro rata portion of the proceeds from such sales, based upon the average gross selling price of all such Marine Common Stock, less a pro rata portion of the aggregate brokerage commissions payable in connection with such sales, to each holder of RPC Common Stock who would otherwise have received a fractional share of Marine Common Stock in the Distribution. ARTICLE IV INDEMNIFICATION Section 4.01 Marine Indemnification of the RPC Group. If the Distribution occurs, on and after the Effective Time, Marine shall indemnify, defend and hold harmless each member of the RPC Group, and each of their respective directors, officers, employees and agents (the "RPC Indemnitees") from and against any and all Indemnifiable Losses incurred or suffered by any of the RPC Indemnitees and arising out of, or due to, (a) the failure of Marine or any member of the Marine Group to pay, perform or otherwise discharge, any of the Marine Liabilities and (b) any untrue statement or alleged untrue statement of any material fact contained in the preliminary or final Form 10, the preliminary or final Information Statement or any amendment or supplement thereto or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (other than the information provided by RPC for use therein). Section 4.02 RPC Indemnification of Marine Group. If the Distribution occurs, on and after the Effective Time, RPC shall indemnify, defend and hold harmless each member of the Marine Group and each of their respective directors, officers, employees and agents (the "Marine Indemnitees") from and against any and all Indemnifiable Losses incurred or suffered by any of the Marine Indemnitees and arising out of, or due to, (a) the failure of RPC or any member of the RPC Group to pay, perform or otherwise discharge, any of the RPC Liabilities and (b) any untrue statement or alleged untrue statement of any 8 material fact contained in the preliminary or final Form 10, the preliminary or final Information Statement or any amendment or supplement thereto or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading based on information provided by RPC for use therein. Section 4.03 General Mutual Indemnity. RPC and Marine shall indemnify and hold each other harmless from and against any Indemnifiable Losses, which may be imposed or incurred as a result of litigation in which RPC or Marine is a party by virtue of their prior corporate affiliation and not as a result of or attributable to the indemnified party's fault or participation. RPC and Marine shall promptly notify each other, as the case may be, of the existence of any claim against the other as a result of the aforesaid circumstances and shall give the indemnifying party reasonable opportunity to defend such litigation at such party's expense and with counsel of its own selection; in which case the indemnifying party shall have the right reasonably to control the defense or settlement of such claim, provided that the indemnified party shall at all times have the right to fully participate in such defense at its own expense. If the indemnifying party shall, within a reasonable time after such notice, fail to defend, the indemnified party shall have the right (but not the obligation) at the expense (including reasonable legal fees and expenses) of the indemnifying party, to undertake the defense of and to compromise or settle, exercising reasonable business judgment, such litigation on behalf, for the account, and at the risk of the indemnifying party. In the event of such litigation, each party shall make available all information and assistance as the other party may reasonably request. Section 4.04 Insurance and Third Party Obligations. No insurer or any other third party shall be, by virtue of the foregoing indemnification provisions (a) entitled to a benefit it would not be entitled to receive in the absence of such provisions, (b) relieved of the responsibility to pay any claims to which it is obligated, or (c) entitled to any subrogation rights with respect to any obligation hereunder. ARTICLE V INDEMNIFICATION PROCEDURES Section 5.01 Notice and Payment of Claims. If any RPC Indemnitee or Marine Indemnitee (the "Indemnified Party") determines that it is or may be entitled to indemnification by a party (the "Indemnifying Party") under Article IV (other than in connection with any Action or claim subject to Section 5.02), the Indemnified Party shall deliver to the Indemnifying Party a written notice specifying, to the extent reasonably practicable, the basis for its claim for indemnification and the amount for which the Indemnified Party reasonably believes it is entitled to be indemnified. After the Indemnifying Party shall have been so notified, the Indemnifying Party shall, within 30 days after receipt of such notice, pay the Indemnified Party such amount in cash or other immediately available funds (or reach agreement with the Indemnified Party as to a mutually agreeable alternative payment schedule) unless the Indemnifying Party objects to the claim for indemnification or the amount thereof. If the Indemnifying Party does not give the Indemnified Party written notice objecting to such claim and setting forth the grounds therefor within the same 30 day period, the Indemnifying Party shall be deemed to have acknowledged its liability for such claim and the Indemnified Party may exercise any and all of its rights under applicable law to collect such amount. Any amount owed under this Section 5.01 that is not paid within such 30 day period, or is otherwise 9 past due, shall bear interest at a simple rate of interest per annum equal to the Prime Rate plus 2%. Section 5.02 Notice and Defense of Third Party Claims. Promptly following the earlier of (a) receipt of notice of the commencement by a third party of any Action against or otherwise involving any Indemnified Party or (b) receipt of information from a third party alleging the existence of a claim against an Indemnified Party, in either case with respect to which indemnification may be sought pursuant to this Agreement (a "Third Party Claim"), the Indemnified Party shall give the Indemnifying Party written notice thereof. The failure of the Indemnified Party to give notice as provided in this Section 5.02 shall not relieve the Indemnifying Party of its obligations under this Agreement, except to the extent that the Indemnifying Party is prejudiced by such failure to give notice. Within 30 days after receipt of such notice, the Indemnifying Party shall by giving written notice thereof to the Indemnified Party (a) acknowledge, as between the parties hereto, liability for, and at its option assumption of the defense of such Third Party Claim at its sole cost and expense or (b) object to the claim of indemnification set forth in the notice delivered by the Indemnified Party pursuant to the first sentence of this Section 5.02 setting forth the grounds therefor; provided that if the Indemnifying Party does not within the same 30 day period give the Indemnified Party written notice acknowledging liability and electing to assume the defense or objecting to such claim and setting forth the grounds therefor, the Indemnifying Party shall be deemed to have acknowledged, as between the parties hereto, its liability to the Indemnified Party for such Third Party Claim. Any contest of a Third Party Claim as to which the Indemnifying Party has elected to assume the defense shall be conducted by attorneys employed by the Indemnifying Party and reasonably satisfactory to the Indemnified Party; provided that the Indemnified Party shall have the right to participate in such proceedings and to be represented by attorneys of its own choosing at the Indemnified Party's sole cost and expense. If the Indemnifying Party assumes the defense of a Third Party Claim, the Indemnifying Party may settle or compromise the claim without the prior written consent of the Indemnified Party; provided that the Indemnifying Party may not agree to any such settlement pursuant to which any remedy or relief, other than monetary damages for which the Indemnifying Party shall be responsible hereunder, shall be applied to or against the Indemnified Party, without the prior written consent of the Indemnified Party, which consent shall not be unreasonably withheld. If the Indemnifying Party does not assume the defense of a Third Party Claim for which it has acknowledged liability for indemnification under Article IV, the Indemnified Party may require the Indemnifying Party to reimburse it on a current basis for its reasonable expenses of investigation, reasonable attorney's fees and reasonable out-of-pocket expenses incurred in defending against such Third Party Claim and the Indemnifying Party shall be bound by the result obtained with respect thereto by the Indemnified Party; provided that the Indemnifying Party shall not be liable for any settlement effected without its consent, which consent shall not be unreasonably withheld. The Indemnifying Party shall pay to the Indemnified Party in cash the amount for which the Indemnified Party is entitled to be indemnified (if any) within 15 days after the final resolution of such Third Party Claim (whether by the final nonappealable judgment of a court of competent jurisdiction or otherwise), or, in the case of any Third Party Claim as to which the Indemnifying Party has not acknowledged liability, within 15 days after such Indemnifying Party's objection has been resolved by settlement, compromise or the final nonappealable judgment of a court of competent jurisdiction. 10 ARTICLE VI EMPLOYEE MATTERS Section 6.01 Employee Benefits Agreement. All matters relating to or arising out of any employee benefit, compensation or welfare arrangement in respect of any employee of Marine or Chaparral shall be governed by the Employee Benefits Agreement. In the event of any inconsistency between the Employee Benefits Agreement, this Agreement or any other Ancillary Agreement, the Employee Benefits Agreement shall govern. Section 6.02 Dual Employees. Several current executive officers of RPC will be executive officers of both RPC and Marine immediately after the Distribution Date. Two-thirds of each such executive officer's RPC options and performance restricted stock awards that have not been earned and issued into escrow will remain subject to the RPC 1994 Employee Stock Incentive Plan and will be adjusted as provided in the Employee Benefits Agreement, and one-third of such options and awards will be replaced with options and awards under the Marine 2001 Employee Stock Incentive Plan as provided in the Employee Benefits Agreement. ARTICLE VII TAX MATTERS Section 7.01 Tax Sharing Agreement. All matters relating to Taxes shall be governed exclusively by the Tax Sharing Agreement. In the event of any inconsistency between the Tax Sharing Agreement, this Agreement or any other Ancillary Agreement, the Tax Sharing Agreement shall govern. ARTICLE VIII ACCOUNTING MATTERS Section 8.01 Allocation of Prepaid Items and Reserves. All prepaid items and reserves that have been maintained by RPC on a consolidated basis but that relate in part to Assets or Liabilities of Chaparral or the Boat Manufacturing Business shall be allocated between RPC and Marine as determined by RPC in its reasonable discretion. Section 8.02 Accounting Treatment. The transfer by RPC of Chaparral Stock and any other Boat Manufacturing Business Assets to Marine pursuant to this Agreement shall constitute a capital contribution by RPC to Marine. Section 8.03 Fifteen Million Dollar Cash Balance and Cancellation of Intercompany Accounts. As used herein, "RPC Intercompany Balance" means the net intercompany account balance payable by members of the RPC Group to members of the Marine Group as of the Effective Time. On or before the Distribution Date, RPC shall prepare and deliver to Marine a preliminary Boat Manufacturing Business balance sheet which shall set forth a good faith estimate of the RPC Intercompany Balance as of the Effective Time. On or before the Distribution 11 Date, RPC shall pay to Marine that portion of the RPC Intercompany Balance equal to (i) $15 million less (ii) the amount of cash or cash equivalents shown on the preliminary Boat Manufacturing Business balance sheet as an asset of the Marine Group (the "Preliminary Payment Amount"). Within thirty (30) business days after the Effective Time, RPC shall prepare and deliver to Marine a final Boat Manufacturing Business balance sheet which shall set forth the final calculation of the RPC Intercompany Balance and a calculation of an amount equal to (i) $15 million less (ii) the amount of cash or cash equivalents shown on the final Boat Manufacturing Business balance sheet as an asset of the Marine Group (the "Definitive Payment Amount") as of the Effective Time. Within ten (10) business days after the delivery of the final Boat Manufacturing Business balance sheet, RPC shall pay to Marine any amount by which the Definitive Payment Amount exceeds the Preliminary Payment Amount (or Marine shall pay to RPC any amount by which the Preliminary Payment Amount exceeds the Definitive Payment Amount, as the case may be). All amounts paid by RPC to Marine hereunder shall be credited against the RPC Intercompany Balance on Marine's balance sheet (and debited against RPC's balance sheet). Any remaining RPC Intercompany Balance on the books of Marine and RPC in excess of all such amounts so paid by RPC to Marine hereunder shall be cancelled by Marine and RPC. Any disputes arising from the adjustments required by the final Boat Manufacturing Business balance sheet shall be resolved in accordance with Section 12.10 hereof. ARTICLE IX TRANSITION SUPPORT Section 9.01 Transition Support Services Agreement. All matters relating to the provision of support services by the RPC Group to the Marine Group after the Effective Time shall be governed exclusively by the Transition Support Services Agreement. In the event of any inconsistency between the Transition Support Agreement, this Agreement or any other Ancillary Agreement, the Transition Support Services Agreement shall govern. ARTICLE X INFORMATION Section 10.01 Provision of Corporate Records. As soon as practicable following the Effective Time, RPC and Marine shall each arrange for the provision to the other of existing corporate documents (e.g. minute books, stock registers, stock certificates, documents of title, contracts, etc.) in its possession relating to the other or its business and affairs or to any other entity that is part of such other's respective Group or to the business and affairs of such other entity. Section 10.02 Access to Information. From and after the Effective Time, RPC and Marine shall each afford the other and its accountants, counsel and other designated representatives reasonable access (including using reasonable efforts to give access to persons or firms possessing information) and duplicating rights during normal business hours to all records, books, contracts, instruments, computer data and other data and information in its possession relating to the business and affairs of the other or a member of its Group 12 (other than data and information subject to an attorney/client or other privilege), insofar as such access is reasonably required by the other including, without limitation, for audit, accounting and litigation purposes. Section 10.03 Litigation Cooperation. RPC and Marine shall each use reasonable efforts to make available to the other, upon written request, its officers, directors, employees and agents, and the officers, directors, employees and agents of its subsidiaries, as witnesses to the extent that such persons may reasonably be required in connection with any legal, administrative or other proceedings arising out of the business of the other, or of any entity that is part of the others' respective Group, prior to the Effective Time in which the requesting party or one of its subsidiaries may from time to time be involved. Section 10.04 Retention of Records. Except as otherwise required by law or agreed to in writing, each party shall, and shall cause the members of its Group to, retain all information relating to the other's business in accordance with the past practice of such party. Notwithstanding the foregoing, either party may destroy or otherwise dispose of any information at any time in accordance with the corporate record retention policy maintained by such party with respect to its own records. Section 10.05 Confidentiality. Each party shall, and shall cause each member of its Group to, hold and cause its directors, officers, employees, agents, consultants and advisors to hold, in strict confidence, unless compelled to disclose by judicial or administrative process or, in the opinion of its counsel, by other requirements of law, all information concerning the other party (except to the extent that such information can be shown to have been (a) in the public domain through no fault of such disclosing party or (b) lawfully acquired after the Effective Time on a non-confidential basis from other sources by the disclosing party), and neither party shall release or disclose such information to any other person, except its auditors, attorneys, financial advisors, bankers and other consultants and advisors who shall be advised of the provisions of this Section 10.05 and be bound by them. Each party shall be deemed to have satisfied its obligation to hold confidential information concerning or supplied by the other party if it exercises the same care as it takes to preserve confidentiality for its own similar information. ARTICLE XI INTEREST ON PAYMENTS Section 11.01 Interest. Except as otherwise expressly provided in this Agreement or an Ancillary Agreement, all payments by one party to the other under this Agreement or any Ancillary Agreement shall be paid, by check or wire transfer of immediately available funds to an account in the United States designated by the recipient, within 30 days after receipt of an invoice or other written request for payment setting forth the specific amount due and a description of the basis therefor in reasonable detail. Any amount remaining unpaid beyond its due date, including disputed amounts that are ultimately determined to be payable, shall bear interest at a rate of simple interest per annum equal to the Prime Rate plus 2%. 13 ARTICLE XII MISCELLANEOUS Section 12.01 Expenses. Except as specifically provided in this Agreement or any Ancillary Agreement and except as to salaries of any persons who as of the Effective Time are employees of both RPC and Marine, all costs and expenses incurred prior to the Effective Time in connection with the preparation, execution, delivery and implementation of this Agreement and the Ancillary Agreements and with the consummation of the transactions contemplated by this Agreement (including transfer taxes and the fees and expenses of the Distribution Agent and of all counsel, accountants and financial and other advisors) shall be paid by RPC and all such costs incurred at or after the Effective Time shall be paid by the party incurring such costs. Section 12.02 Notices. All notices and communications under this Agreement shall be deemed to have been given (a) when received, if such notice or communication is delivered by facsimile, hand delivery or overnight courier, and, (b) three (3) business days after mailing if such notice or communication is sent by United States registered or certified mail, return receipt requested, first class postage prepaid. All notices and communications, to be effective, must be properly addressed to the party to whom the same is directed at its address as follows: If to RPC, to: RPC, Inc. 2170 Piedmont Road, N.E. Atlanta, Georgia 30324 Attention: Richard A. Hubbell Facsimile: 404-321-5483 with a copy to: Robert P. Finch, Esq. Arnall Golden & Gregory LLP 2800 One Atlantic Center 1201 West Peachtree Street Atlanta, Georgia 30309-3450 Facsimile: 404-873-8617 If to Marine, to: Marine Products Corporation 2170 Piedmont Road, N.E. Atlanta, Georgia 30324 Attention: Ben M. Palmer Facsimile: 404-321-5483 with a copy to: Robert P. Finch, Esq. Arnall Golden & Gregory LLP 2800 One Atlantic Center 1201 West Peachtree Street Atlanta, Georgia 30309 Facsimile: 404-873-8617 14 Either party may, by written notice delivered to the other party in accordance with this Section 12.02, change the address to which delivery of any notice shall thereafter be made. Section 12.03 Amendment and Waiver. This Agreement may not be altered or amended, nor may any rights hereunder be waived, except by an instrument in writing executed by the party or parties to be charged with such amendment or waiver. No waiver of any terms, provision or condition of or failure to exercise or delay in exercising any rights or remedies under this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, provision, condition, right or remedy or as a waiver of any other term, provision or condition of this Agreement. Section 12.04 Entire Agreement. This Agreement, together with the Ancillary Agreements, constitutes the entire understanding of the parties hereto with respect to the subject matter hereof, superseding all negotiations, prior discussions and prior agreements and understandings relating to such subject matter. To the extent that the provisions of this Agreement are inconsistent with the provisions of any Ancillary Agreement, the provisions of such Ancillary Agreement shall prevail with respect to the subject matter hereof. Section 12.05 Parties in Interest. Neither of the parties hereto may assign its rights or delegate any of its duties under this Agreement without the prior written consent of the other party. This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and permitted assigns. Nothing contained in this Agreement, express or implied, is intended to confer any benefits, rights or remedies upon any person or entity other than members of the RPC Group and the Marine Group and the RPC Indemnitees and Marine Indemnitees under Articles IV and V hereof. Section 12.06 Further Assurances and Consents. In addition to the actions specifically provided for elsewhere in this Agreement, each of the parties hereto will use its reasonable efforts to (a) execute and deliver such further instruments and documents and take such other actions as any other party may reasonably request in order to effectuate the purposes of this Agreement and to carry out the terms hereof and (b) take, or cause to be taken, all actions, and do, or cause to be done, all things, reasonably necessary, proper or advisable under applicable laws, regulations and agreements or otherwise to consummate and make effective the transactions contemplated by this Agreement, including, without limitation, using its reasonable efforts to obtain any consents and approvals, make any filings and applications and remove any liens, claims, equity or other encumbrance on an Asset of the other party necessary or desirable in order to consummate the transactions contemplated by this Agreement; provided that no party hereto shall be obligated to pay any consideration therefor (except for filing fees and other similar charges) to any third party from whom such consents, approvals and amendments are requested or to take any action or omit to take any action if the taking of or the omission to take such action would be unreasonably burdensome to the party or its Group or the business thereof. Section 12.07 Severability. The provisions of this Agreement are severable and should any provision hereof be void, voidable or unenforceable under any applicable law, such provision shall not affect or invalidate any other provision of this Agreement, which shall continue to govern the relative rights and duties of the parties as though such void, voidable or unenforceable provision were not a part hereof. 15 Section 12.08 Governing Law. This Agreement shall be construed in accordance with, and governed by, the laws of the State of Georgia, without regard to the conflicts of law rules of such state. Section 12.09 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original instrument, but all of which together shall constitute but one and the same Agreement. Section 12.10 Disputes. (a) All disputes arising from or in connection with this Agreement including, without limitation, any arising from Articles IV or V hereof, whether based on contract, tort, statute or otherwise, including, but not limited to, disputes in connection with claims by third parties (collectively, "Disputes"), shall be resolved only in accordance with the provisions of this Section 12.10; provided, however, that nothing contained herein shall preclude either party from seeking or obtaining (i) injunctive relief to prevent an actual or threatened breach of any of the provisions of this Agreement, or (ii) equitable or other judicial relief to enforce the provisions of this Section 12.10 hereof or to preserve the status quo pending resolution of Disputes hereunder. (b) Either party may give the other party written notice of any Dispute not resolved in the normal course of business. Within 10 days after delivery of the notice of a Dispute, the receiving party shall submit to the other a written response. The notice and the response shall include a statement of such party's position and a summary of arguments supporting that position and the name and title of the executive who will represent that party and of any other person who will accompany such executive in resolving the Dispute. Within twenty (20) days after delivery of the first notice, the executives of both parties shall meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary, and shall negotiate in good faith to attempt to resolve the Dispute. All reasonable requests for information made by one party to the other will be honored. (c) If the Dispute has not been resolved by negotiation within sixty (60) days of the first party's notice, the Dispute shall be submitted, upon application of either party, for resolution by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the "Rules"). Arbitration shall be by a single arbitrator experienced in the matters that are at issue in the Dispute, which arbitrator shall be selected by the parties in accordance with the Rules. The arbitration shall be conducted in Atlanta, Georgia. The decision of the arbitrator shall be final and binding as to all matters at issue in the Dispute; provided, however, if necessary such decision may be enforced by either party in any court of law having jurisdiction over the parties or the subject matter of the Dispute. Unless the arbitrator shall assess the costs and expenses of the arbitration proceeding and of the parties differently, each party shall pay its costs and expenses incurred in connection with the arbitration proceeding, and the costs and expenses of the arbitrator shall be shared equally by the parties. 16 IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the day and year first above written. RPC, INC., a Delaware corporation By: _______________________________ Name:______________________________ Its:_______________________________ MARINE PRODUCTS CORPORATION, a Delaware corporation By:_______________________________ Name: ____________________________ Its:______________________________ 17 1225896