Exhibit 10.2

 

REPURCHASE AGREEMENT

 

This REPURCHASE AGREEMENT (this “Agreement”) is entered into as of February 20,
2014, by and between Central Pacific Financial Corp., a Hawaii corporation (the
“Company”), and Carlyle Financial Services Harbor, L.P., a Delaware limited
partnership (“Seller”).

 

R E C I T A L S:

 

WHEREAS, the Company intends, but has not made any public announcement of such
intention, to conduct a public self-tender offer for up to $68,800,000 (the
“Tender Amount”) of the Company’s common shares, without par value (the
“Shares”), at a purchase price per share not greater than $21.00 nor less than
$18.50, pursuant to the terms and conditions set forth in the related Offer to
Purchase, as such terms and conditions may be amended from time to time (the
“Tender Offer”);

 

WHEREAS, as of the date hereof, Seller owns 9,463,095 Shares (the “Seller Owned
Shares”); and

 

WHEREAS, on the terms and subject to the conditions of this Agreement, the
Company desires to repurchase up to $28,100,000 of Seller Owned Shares from
Seller, as such $28,100,000 may be adjusted downward in accordance with this
Agreement, and Seller desires to have repurchased by the Company, such Shares
for the consideration set forth below.

 

NOW, THEREFORE, in consideration of the representations, warranties, covenants
and agreements herein contained, and intending to be legally bound hereby, the
Company and Seller hereby agree as follows:

 

ARTICLE I

 

REPURCHASE OF THE SHARES

 

1.1                               Repurchase.   At the Closing (as hereinafter
defined), upon the terms and subject to the conditions of this Agreement, Seller
will sell, transfer, convey, assign and deliver to the Company, and the Company
will purchase, acquire and accept from Seller, in each case, in accordance with
applicable Law (as hereinafter defined), a number of Seller Owned Shares
determined by dividing $28,100,000 by the per share purchase price paid by the
Company for each Share pursuant to the Tender Offer (the “Purchase Price”),
rounded down to the nearest whole Share (the “Seller Shares”), provided that in
the event that the product of (i) the number of Shares purchased in the Tender
Offer and (ii) the Purchase Price is less than the Tender Amount, the
$28,100,000 shall be proportionately reduced, free and clear of any and all
Liens (as hereinafter defined) excluding Permitted Liens (as hereinafter
defined).

 

1.2                               Closing.  The closing of the repurchase of the
Seller Shares under this Agreement (the “Closing”) shall take place on the
eleventh business day following expiration of the Tender Offer at the offices of
Sullivan & Cromwell LLP, 1888 Century Park East, Suite 2100, Los Angeles, CA
90067.  At the Closing, (i) Seller shall deliver to the Company the
certificate(s) representing the Seller Shares being purchased hereunder duly
endorsed for transfer or accompanied by an appropriate share transfer instrument
duly executed in blank and (ii) the Company shall (a) pay to Seller, by Federal
Funds wire transfer to the account specified in writing by Seller, an amount
equal to the product of (x) the Purchase Price and (y) the number of Seller
Shares, net of any applicable withholding taxes, and (b) to the extent Seller
delivers to the Company certificate(s) representing a number of Shares in excess
of the Seller Shares, deliver to Seller duly issued new
certificate(s) representing a number of Shares equal to the difference between
the number of Shares represented by the Company certificate(s) and the Seller
Shares sold hereunder.  For the avoidance of doubt, in no event shall the
Purchase Price be less than $18.50.

 

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1.3                               Transfer Taxes.  The Company will pay any
stock transfer taxes imposed on the repurchase of the Seller Shares (“Transfer
Taxes”).

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to Seller as follows, each of which shall
survive the Closing:

 

2.1                               Organization.  The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Hawaii, with [42,108,496] Shares outstanding as of the date hereof.

 

2.2                               Authorization.  The Company has the full legal
right, corporate power and authority to execute and deliver this Agreement and
to consummate the transactions contemplated hereby.  This Agreement has been
duly authorized, executed and delivered by the Company.  This Agreement
constitutes a legal, valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application relating to or affecting the enforcement of
creditors’ rights and the application of equitable principles relating to the
availability of remedies, and subject to 12 U.S.C. §1818(b)(6)(D) (or any
successor statute) and similar bank regulatory powers and to the application of
principles of public policy.

 

2.3                               No Violation.  The execution, delivery and
performance by the Company of this Agreement do not, and the consummation by the
Company of the transactions contemplated hereby will not: (i) violate or
conflict with any provision of the Company’s Restated Articles of Incorporation,
or Bylaws, as amended (the “Bylaws” and together with the Restated Articles of
Incorporation, the “Organizational Documents”); (ii) violate any provision of
any statute, law, code, ordinance, treaty, policy, judgment, order, injunction,
decree, rule, consent, writ, determination, arbitration award, rule or
regulation (collectively, “Laws”) of or by any federal, state, foreign or other
governmental or public body, agency or authority, or subdivision thereof,
instrumentality, subdivision, court, administrative agency, commission, official
or other authority of the United States or any other country or any state,
province, prefect, municipality, locality or other government or political
subdivision thereof, or any quasi-governmental or private body exercising any
regulatory, taxing, importing or other governmental or quasi-governmental
authority (collectively, “Governmental or Regulatory Entity”), applicable to the
Company or any of its properties or assets; or (iii) violate, conflict with,
result in a breach of or the loss of any benefit under, constitute (with due
notice or lapse of time or both) a default under, result in the termination of
or a right of termination or cancellation under, result in the creation of a
Lien upon the assets of the Company under, or accelerate the performance
required by or rights or obligations under, any of the terms, conditions or
provisions of any contract, note, bond, lease, loan agreement, mortgage,
security agreement, indenture, deed or trust, license, agreement or instrument
to which the Company or any of its affiliates is a party or by which it or any
of its affiliates is bound or to which any of its or its affiliates’ properties,
assets or business is subject, except with respect to clauses (ii) and (iii) for
such violations, conflicts or breaches that, individually or in the aggregate,
would not reasonably be expected to materially impair the ability of the Company
to consummate the transactions contemplated hereby.

 

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2.4                               Approvals or Consents.  No consents,
authorizations, waivers, filings, registrations or approvals are required in
connection with the execution and delivery of this Agreement by the Company, the
consummation of the transactions contemplated hereby or the performance by the
Company of its obligations hereunder, except for those that have been obtained.

 

2.5                               No Other Representations or Warranties. 
Except for the representations and warranties contained in this Agreement,
neither the Company nor any other person on behalf of the Company makes any
other express or implied representation or warranty with respect to the Company
or any of its subsidiaries or with respect to any other information provided by
or on behalf of the Company.

 

2.6                               No Brokers or Finders.  The Company has not
retained, employed or used any broker or finder, other than Sandler O’Neill &
Partners, L.P., that is entitled to any fee or commission from the Company or
any of its subsidiaries in connection with the transactions provided for herein
or in connection with the negotiation thereof.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller represents to the Company as follows, each of which shall survive the
Closing:

 

3.1                               Organization.  Seller is a limited partnership
duly organized, validly existing and in good standing under the laws of the
State of Delaware.

 

3.2                               Ownership of Seller Owned Shares.  Seller is
the sole record owner of the Seller Owned Shares.  There are no (i) securities
convertible into or exchangeable for any of the Seller Owned Shares;
(ii) options, warrants or other rights to purchase or subscribe for any of the
Seller Owned Shares; or (iii) contracts, commitments, agreements, understandings
or arrangements of any kind (contingent or otherwise) relating to the issuance,
sale or transfer of any of the Seller Owned Shares, other than the Investment
Agreement, dated November 4, 2010, between the Company and Seller, as amended
through the date hereof (the “Investment Agreement”) and the Tax Benefits
Preservation Plan, dated as of November 23, 2010, between the Company and Wells
Fargo Bank, National Association, as amended through the date hereof (the
“Plan”).

 

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3.3                               Title.  Seller has, and the Company will
receive, good and marketable title to the Seller Shares, free and clear of any
and all liens, security interests, mortgages, rights of first refusal,
agreements, limitation on voting rights, restrictions, levies, claims, pledges,
equities, options, contracts, assessments, conditional sale agreements, charges
and other encumbrances or interests of any nature whatsoever, including, without
limitation, voting trusts or agreements or proxies (collectively, “Liens”)
excluding any Liens created by the Company, the Organizational Documents, the
Investment Agreement and the Plan or applicable securities Laws (“Permitted
Liens”).

 

3.4                               Authorization.  Seller has the full legal
right and limited partnership power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby.  This
Agreement has been duly authorized, executed and delivered by Seller.  This
Agreement constitutes a legal, valid and binding agreement of Seller,
enforceable against Seller in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to or
affecting the enforcement of creditors’ rights and the application of equitable
principles relating to the availability of remedies, and subject to 12 U.S.C.
§1818(b)(6)(D) (or any successor statute) and similar bank regulatory powers and
to the application of principles of public policy.

 

3.5                               No Violation.  The execution, delivery and
performance by Seller of this Agreement does not, and the consummation by Seller
of the transactions contemplated hereby will not, (i) violate or conflict with
any provision of Seller’s organizational documents; (ii) violate any provision
of any Laws of or by any Governmental or Regulatory Entity applicable to Seller
or any of its properties or assets; or (iii) violate, conflict with, result in a
breach of or the loss of any benefit under, constitute (with due notice or lapse
of time or both) a default under, result in the termination of or a right of
termination or cancellation under, accelerate the performance required by or
rights or obligations under, any of the terms, conditions or provisions of any
contract, note, bond, lease, loan agreement, mortgage, security agreement,
indenture, deed or trust, license, agreement or instrument to which Seller or
any of its affiliates is a party or by which it or any of its affiliates is
bound or to which any of its or its affiliates’ properties, assets or business
is subject, except with respect to clauses (ii) and (iii) for such violations,
conflicts or breaches that, individually or in the aggregate, would not
reasonably be expected to materially impair the ability of the Seller to
consummate the transactions contemplated hereby.

 

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3.6                               Approvals and Consents.  No consents,
authorizations, waivers, filings, registrations or approvals that have not been
previously obtained are required in connection with the execution and delivery
of this Agreement by Seller, the consummation of the transactions contemplated
hereby or the performance by Seller of its obligations hereunder.

 

3.7                               Information Concerning the Company.  Seller
acknowledges that the Company may be in possession of material non-public
information about the Company and its subsidiaries not known to Seller and
hereby waives any and all claims and causes of action now or hereafter arising
against the Company based upon or relating to any alleged non-disclosure of such
information and further covenants not to assert any claims against or to sue the
Company or any of its directors, officers, employees, partners, agents or
affiliates for any loss, damage or liability arising from or relating to its
offer and sale of the Seller Shares pursuant to this Agreement arising out of,
based upon or in connection with any alleged non-disclosure of such
information.  It is understood and agreed that neither the Company nor Seller
makes any representation or warranty to the other whatsoever with respect to the
business, condition (financial or otherwise), properties, prospects,
creditworthiness, status or affairs of the Company or any of its subsidiaries,
or with respect to the value of the Seller Shares.

 

3.8                               No Other Representations or Warranties. 
Except for the representations and warranties contained in this Agreement,
neither Seller nor any other person on behalf of Seller makes any other express
or implied representation or warranty with respect to Seller or any of its
affiliates or with respect to any other information provided by or on behalf of
Seller.

 

3.9                               No Brokers or Finders.  Seller has not
retained, employed or used any broker or finder that is entitled to any fee or
commission from the Company or any of its subsidiaries in connection with the
transactions provided for herein or in connection with the negotiation thereof.

 

ARTICLE IV

 

CONDITIONS TO THE COMPANY’S OBLIGATIONS

 

4.1                               Conditions to the Company’s Obligations.  The
obligations of the Company under Section 1.2 to purchase the Seller Shares from
Seller are subject to fulfillment as of the Closing of each of the following
conditions unless waived by the Company in accordance with Section 7.6:

 

(a)                                 Representations and Warranties.  The
representations and warranties of Seller contained in Article III of this
Agreement shall be true and correct as of the date of this Agreement and as of
the date of the Closing with the same effect as though such representations and
warranties had been made on and as of the date of the Closing.

 

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(b)                                 Performance.  Seller shall have performed
and complied in all material respects with all agreements and covenants
contained in this Agreement that are required to be performed or complied with
by it on or before the Closing.

 

(c)                                  Delivery of Certificates.  Seller shall
have delivered to the Company all of the Company certificate(s) representing the
Seller Shares, along with all stock powers, assignments or any other documents,
instruments or certificates necessary for a valid transfer of the Seller Shares.

 

(d)                                 Tender Offer.  The Tender Offer shall have
expired and the Company shall have purchased Shares in the Tender Offer in
accordance with the terms thereof.

 

(e)                                  Further Assurances.  No Governmental or
Regulatory Entity shall have advised or notified the Company that the
consummation of the transactions contemplated hereunder would constitute a
violation of any applicable Law, which notification or advice shall not have
been withdrawn after the exhaustion of the Company’s good faith efforts to cause
such withdrawal.

 

ARTICLE V

 

CONDITIONS TO SELLER’S OBLIGATIONS

 

5.1                               Conditions to Seller’s Obligations.  The
obligations of Seller under Section 1.2 to sell the Seller Shares are subject to
fulfillment as of the Closing of each of the following conditions unless waived
by Seller in accordance with Section 7.6:

 

(a)                                 Representations and Warranties.  The
representations and warranties of the Company contained in Article II of this
Agreement shall be true and correct as of the date of this Agreement and as of
the Closing with the same effect as though such representations and warranties
had been made on and as of the date of the Closing.

 

(b)                                 Performance.  The Company shall have
performed and complied in all material respects with all agreements and
covenants contained in this Agreement that are required to be performed or
complied with by it on or before the date of the Closing.

 

(c)                                  Tender Offer.  The Tender Offer shall have
expired and the Company shall have purchased Shares in the Tender Offer in
accordance with the terms thereof.

 

(d)                                 Further Assurances.  No Governmental or
Regulatory Entity shall have advised or notified Seller that the consummation of
the transactions contemplated hereunder would constitute a violation of any Law,
which notification or advice shall not have been withdrawn after the exhaustion
of Seller’s good faith efforts to cause such withdrawal.

 

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ARTICLE VI

COVENANTS

 

6.1                               No Purchase of Shares.  From the date of this
Agreement until the Closing, subject to earlier termination of this Agreement
pursuant to Section 7.1, Seller agrees that it will not, directly or indirectly,
purchase any Shares.

 

6.2                               No Sale of Shares.  Other than pursuant hereto
or in the Tender Offer, from the date of this Agreement until the Closing,
subject to earlier termination of this Agreement pursuant to Section 7.1, Seller
agrees that it will not, directly or indirectly, sell any Shares; provided that
the foregoing shall not apply in respect of any Shares or interest therein
acquired by Butterfield (as defined below) pursuant to that certain guarantee
and pledge agreement, dated June 28, 2013, among Carlyle Financial Services BU,
L.P., Seller, and The Bank of N.T. Butterfield & Son Limited (“Butterfield”), in
connection with a $95.0 million term loan credit facility letter (the “Term
Loan”) entered into by CGFSP Margin Loan L.P. (“CGFSP”) and Butterfield.

 

6.3                               Most Favored Nation.  The Company represents
that no other person has any right to sell Shares to the Company on terms more
favorable than the terms set forth herein (including without limitation as to
the proportion of Shares to be sold relative to the aggregate Shares owned,
pricing, timing, ability to participate in the Tender Offer, or any other term
relating to any such sale), and the Company covenants and agrees that during the
period from the date of this Agreement until the Closing it shall not enter into
any agreement with respect to the sale or potential sale of Shares to the
Company containing, or modify (through amendment, waiver or otherwise) any
existing agreement to provide for, terms more favorable than the terms set forth
herein, unless, in any such case, Seller has been provided with the same such
beneficial terms.

 

ARTICLE VII

 

MISCELLANEOUS

 

7.1                               Termination.  This Agreement shall terminate
if the purchase of Shares by the Company pursuant to the Tender Offer is not
consummated by May 31, 2014 or upon a termination (including expiration) of the
Tender Offer pursuant to which the Company did not purchase any Shares.  Upon
termination of this Agreement pursuant to this Section 7.1, none of the parties
hereto shall have any liability hereunder except to the extent of any damages
resulting from a knowing and intentional breach of this Agreement during its
term.

 

7.2                               Expenses.  The Company and Seller shall each
bear their own expenses incurred in connection with this Agreement and the
consummation of the transactions contemplated hereby.

 

7.3                               Further Assurance.  From time to time, at the
Company’s request and without further consideration, Seller will execute and
deliver to the Company such documents and take such other action as the Company
may reasonably request in order to consummate the repurchase of the Seller
Shares contemplated hereby.  From time to time, at Seller’s request and without
further consideration, the Company will execute and deliver to Seller such
documents and take such other action as Seller may reasonably request in order
to consummate such repurchase.

 

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7.4                               Specific Performance.  Nothing herein shall be
construed to prevent the Company or Seller from enforcing, by legal action or
otherwise, the terms of this Agreement.  The Company and Seller hereby declare
that it is impossible to measure in money the damages which will accrue to
either party or to such party’s successors or permitted assignees by reason of a
failure to perform any of the obligations under this Agreement and agree that
either party or its successors or permitted assignees shall be entitled to a
decree of specific performance of the terms of this Agreement, which right will
be in addition to any other remedies available to such party or its successors
or permitted assignees.  If the Company or Seller or such party’s successors or
permitted assignees institute any action or proceeding to specifically enforce
the provisions hereof, any party against whom such action or proceeding is
brought hereby waives the claim or defense therein that such party or its
successors or permitted assignees has an adequate remedy at law, and such party
or its successors or permitted assignees shall not offer in any such action or
proceeding the claim or defense that such remedy at law exists.

 

7.5                               No Third-Party Beneficiaries.  This Agreement
is for the sole benefit of the Company and Seller and their respective
successors and permitted assignees and nothing herein, express or implied, is
intended to or shall confer upon any other person or entity any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.

 

7.6                               Delays or Omissions.  It is agreed that no
delay or omission to exercise any right, power or remedy accruing to either
party upon any breach or default of the other party hereto shall impair any such
right, power or remedy, nor shall it be construed to be a waiver of any such
breach or default, or any acquiescence therein, or of any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring.  It is further agreed that any waiver, permit, consent or
approval of any kind or character of any breach or default under this Agreement,
or any waiver of any provisions or conditions of this Agreement must be in
writing and shall be effective only to the extent specifically set forth in
writing, and that all remedies, either under this Agreement, by law or
otherwise, shall be cumulative and not alternative.

 

7.7                               Notices.  All notices and other communications
required hereunder shall be in writing and delivered personally, delivered by a
recognized next-day courier service or mailed by registered or certified mail. 
All such notices and communications shall be delivered as set forth below, or
pursuant to such other instructions as may be designated in writing by the party
to receive such notice:

 

(a)

if to the Company, to:

 

 

 

Central Pacific Financial Corp.

 

220 South King Street, Suite 2200 (Legal Division)

 

Honolulu, Hawaii 96813

 

Attention: General Counsel

 

 

 

with a copy (which shall not constitute notice) to:

 

 

 

Sullivan & Cromwell LLP

 

1888 Century Park East

 

Los Angeles, California 90067

 

Attention: Alison S. Ressler

 

 

(b)

if to Seller, to

 

 

 

Carlyle Financial Services Harbor, L.P.
c/o The Carlyle Group
520 Madison Avenue
New York, NY 10022

 

 

 

Attention: John Redett

 

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7.8                               Entire Agreement; Amendments.  This Agreement
contains the entire understanding of the parties relating to the subject matter
hereof and supersedes all prior agreements and understandings (oral or written)
between the parties with respect thereto, other than the Investment Agreement,
which remains in effect in accordance with its terms.  This Agreement may be
amended only by a written instrument duly signed by the Company and Seller.

 

7.9                               Binding Effect.  This Agreement shall be
binding upon and inure to the benefit of the Company and Seller and their
respective successors and permitted assignees.

 

7.10                        Assignment.  Neither the Company nor Seller shall
transfer or assign this Agreement or any of its rights, interests, or
obligations hereunder, in whole or in part, whether voluntarily, by operation of
law or otherwise, without the prior written approval of the other party.

 

7.11                        Headings.  The article and section headings
contained in this Agreement are for reference purposes only and will not affect
in any way the meaning or interpretation of any provision of this Agreement.

 

7.12                        Severability.  The invalidity of any term or terms
of this Agreement will not affect any other term of this Agreement, which will
remain in full force and effect.

 

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7.13                        Governing Law. This Agreement shall be construed,
performed and enforced in accordance with, and governed by, the laws of the
State of Hawaii, without giving effect to the principles of conflicts of laws
thereof.

 

7.14                        Counterparts.  This Agreement may be executed
simultaneously in counterparts, both of which shall be deemed an original, but
all counterparts so executed will constitute one and the same agreement.

 

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IN WITNESS WHEREOF, this Agreement has been duly executed on behalf of each of
the parties hereto as of the day and year first above written.

 

 

 

CENTRAL PACIFIC FINANCIAL CORP.

 

 

 

 

 

By:

/s/ Denis K. Isono

 

 

Name:

Denis K. Isono

 

 

Title:

Executive Vice President & Chief Financial Officer

 

 

 

 

 

 

 

 

 

CARLYLE FINANCIAL SERVICES HARBOR, L.P.

 

 

 

 

 

By:

TCG Financial Services, L.P., its general partner

 

 

 

 

 

By:

Carlyle Financial Services, Ltd., its general partner

 

 

 

 

 

 

 

 

 

By:

/s/ James F. Burr

 

 

Name:

James F. Burr

 

 

Title:

Managing Director

 

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