Exhibit
10.1


 


$15,000,000


 


CENTRAL PACIFIC FINANCIAL
CORP.


 


Common Stock, no par value
per share


 


Distribution Agreement


 


September 4, 2009


 


Sandler O’Neill & Partners, L.P.,

919 Third Avenue, 6th Floor,

New York, New York 10022


 


RBC
Capital Markets Corporation,


3
World Financial Center,


200
Vesey Street, 8th Floor,


New
York, New York 10006


 


Ladies and Gentlemen:


 


Central Pacific Financial Corp., a Hawaii
corporation (the “Company”), proposes to issue and sell from time to
time to or through
Sandler O’Neill & Partners, L.P. (“Sandler O’Neill & Partners”) and RBC Capital Markets Corporation (“RBC Capital
Markets”), as sales
agents and/or principals (the “Agents”), shares of the Company’s common
stock, without par value (the “Common Stock”) having aggregate sales
proceeds of up to $15,000,000, on the terms set forth in this Distribution
Agreement (this “Agreement”).  For
the purposes of this Agreement, shares of Common Stock to be sold under this
Agreement shall be referred to as “Shares.”  The Company agrees that whenever it
determines to sell Shares directly to either of the Agents, as principals, it
will enter into a separate agreement (each, a “Terms Agreement”) with
such Agent, in substantially the form of Annex I hereto, relating to such sale.


 


Section 1.                                            Representations and Warranties.  The Company represents and
warrants to the Agents that, as of the date of this Agreement, any applicable
Registration Statement Amendment Date (as defined in Section 3(i) below),
each Company Periodic Report Date (as defined in Section 3(h) below),
each Applicable Time (as defined in Section 1(a) below) and each
Settlement Date (as defined in Section 2(g) below):


 


(a)                                  The Company has filed with the Securities and Exchange Commission (the “Commission”) a
registration statement on Form S-3 (Registration No. 333-157166) for the registration of the Shares and
other securities of the Company, which registration statement has been declared effective by the
Commission under the Securities Act of 1933, as amended (the “1933 Act”),
in respect of the Shares; and no stop order suspending the effectiveness of
such registration statement or any part thereof has been issued and no
proceeding for that purpose has been initiated or, to the knowledge of the
Company, threatened by the Commission, and no 


 


1

















 


written (or, to the knowledge of the Company, oral) notice of
objection of the Commission to the use of such form of registration statement
or any post-effective amendment thereto has been received by the Company (the
base prospectus filed as part of such registration statement, in the form in
which it has most recently been filed with the Commission on or prior to the
date of this Agreement, is hereinafter called the “Basic Prospectus”;
the various parts of such registration statement, and any prospectus supplement
relating to the Shares that is filed with the Commission and deemed by virtue
of Rule 430B under the 1933 Act to be part of such registration statement,
each as amended at the time such part of the registration statement became
effective, are hereinafter collectively called the “Registration Statement”;
the prospectus supplement specifically relating to the Shares prepared and
filed with the Commission pursuant to Rule 424(b) under the 1933 Act
is hereinafter called the “Prospectus Supplement”; the Basic Prospectus,
as amended and supplemented by the Prospectus Supplement, is hereinafter called
the “Prospectus”; any reference herein to the Basic Prospectus, the
Prospectus Supplement or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act; any reference to any amendment or supplement to the Basic
Prospectus, the Prospectus Supplement or the Prospectus shall be deemed to
refer to and include any post-effective amendment to the Registration
Statement, any prospectus supplement relating to the Shares filed with the
Commission pursuant to Rule 424(b) under the 1933 Act and any
documents filed under the Securities Exchange Act of 1934, as amended (the “1934
Act”), and incorporated therein, in each case after the date of the Basic
Prospectus, the Prospectus Supplement or the Prospectus, as the case may be;
any reference to any amendment to the Registration Statement shall be deemed to
refer to and include any annual report of the Company filed pursuant to Section 13(a) or
15(d) of the 1934 Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration Statement; and
any “issuer free writing prospectus” as defined in Rule 433 under the 1933
Act relating to the Shares is hereinafter called an “Issuer Free Writing
Prospectus”).


 


At the respective times the Registration Statement was originally
declared effective and any amendment thereto was declared effective, at the
time the Company’s most recent Annual Report on Form 10-K was filed with
the Commission, at each “new effective date” with respect to the Agents
pursuant to Rule 430B(f)(2) of the rules and regulations of the
Commission under the 1933 Act (the “1933 Act Regulations”), the
Registration Statement and any amendments thereto complied, comply and will
comply in all material respects with the requirements of the 1933 Act and the
1933 Act Regulations and did not, do not and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.


 


No order preventing or suspending the use of the Basic Prospectus, the
Prospectus Supplement, the Prospectus or any Issuer Free Writing Prospectus has
been issued by the Commission, and the Basic Prospectus and the Prospectus
Supplement, at the time of filing thereof, conformed in all material respects to
the requirements of the 1933 Act and the 1933 Act Regulations and did not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.


 


For the purposes of this Agreement, the “Applicable Time” means,
with respect to any Shares, the time of sale of such Shares pursuant to this
Agreement; the Prospectus and the 


 


2

















 


applicable Issuer Free Writing
Prospectus(es) issued at or prior to such Applicable Time, taken together
(collectively, and, with respect to any Shares, together with the public
offering price of such Shares, the “General Disclosure Package”) as
of each Applicable Time and each Settlement Date, will not include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; and each applicable Issuer Free Writing
Prospectus will not conflict with the information contained in the Registration
Statement, the Prospectus Supplement or the Prospectus, and each such Issuer
Free Writing Prospectus, as supplemented by and taken together with the General
Disclosure Package as of such Applicable Time, will not include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.


 


(b)                                 The documents incorporated or deemed to
be incorporated by reference in the Prospectus Supplement or the Prospectus, at
the respective time they were or hereafter are filed with the Commission,
complied, comply and will comply in all material respects with the requirements
of the 1934 Act and the rules and regulations of the Commission thereunder
(the “1934 Act Regulations”), and did not, do not and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.


 


(c)                                  The statements set forth in the
Prospectus Supplement under the captions “Risk Factors — Risks Related to this
Offering”, “Description of Common Stock” and “Plan of Distribution” and in the
Company’s Form 8-A filed with the Commission on December 12, 2002, as
amended, insofar as they purport to constitute a summary of the terms of the
Shares or certain provisions of the Company’s charter and by-laws or Hawaii
law, and in the Basic Prospectus under the caption “Our Company - Supervision
and Regulation”, in the Prospectus Supplement under the caption “Certain United
States Tax Consequences to Non-U. S. Holders of Our Common Stock” and in the
Company’s Annual Report on Form 10-K for the year ended December 31,
2008 under the caption “Supervision and Regulation”, insofar as they purport to
describe the provisions of the laws, rules, regulations and documents referred
to therein, are accurate in all material respects and represent a fair summary
of such terms or provisions, as applicable.


 


(d)                                 The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Hawaii and the Company is qualified to do business as a foreign corporation
in each jurisdiction in which qualification is required, except where failure
to so qualify would not have a Material Adverse Effect (as defined below).  Each of the Company’s subsidiaries that is a “significant
subsidiary” as defined in Rule 1-02 of Regulation S-X (each a “Subsidiary”
and collectively the “Subsidiaries”) is listed on Exhibit 21
to the Company’s most recent Annual Report on Form 10-K/A filed with the
Commission.  Except as otherwise stated
on Exhibit 21, each Subsidiary is a direct or indirect wholly owned
subsidiary of the Company.  Each
Subsidiary is duly incorporated, validly existing and in good standing under
the laws of its jurisdiction of incorporation and is qualified to do business
as a foreign corporation in each jurisdiction in which qualification is
required, except where failure to so qualify would not have a Material Adverse
Effect.  For the purposes of this
Agreement, the term 


 


3

















 


“Material Adverse Effect” shall mean a material
adverse effect on the business, financial condition, properties, shareholder’s
equity, or results of operations of the Company and its Subsidiaries, taken as
a whole.


 


(e)                                  The Company is duly registered as a bank
holding company under the Bank Holding Company Act of 1956, as amended.  The Company’s banking subsidiary holds the
requisite authority from the Hawaii Division of Financial Institutions (the “Division”) to
do business as a state-chartered banking corporation under the laws of the
State of Hawaii as described in each of the General Disclosure Package and the
Prospectus.  The Company and each
Subsidiary are in compliance in all material respects with all laws
administered by the Board of Governors of the Federal Reserve System (the “Federal
Reserve Board”), the Federal Deposit Insurance Corporation (the “FDIC”),
the Division and any other federal or state bank regulatory authorities with
jurisdiction over the Company and its subsidiaries, except for failures to be
so in compliance that would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.


 


(f)                                    The Company is subject to the reporting
requirements of the 1934 Act and has timely filed all reports required thereby.


 


(g)                                 The Company has the authorized
capitalization set forth in the Prospectus. 
All of the issued shares of capital stock of the Company have been duly
and validly authorized and issued, are fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws, and were not
issued in violation of or subject to any preemptive rights or other similar
rights, except for such rights as may have been fully satisfied or waived.  Except as disclosed in the Prospectus and for
options, restricted stock, restricted stock units and similar securities issued
under the Company’s existing shareholder-approved equity compensation plans,
the Company does not have outstanding any options to purchase, or any
preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any contracts or commitments to
issue or sell, shares of its capital stock or any such options, rights,
convertible securities or obligations. 
With respect to each of the Subsidiaries, all the issued and outstanding
shares of such Subsidiary’s capital stock have been duly authorized and validly
issued, are fully paid and nonassessable, and, except as disclosed in the
Prospectus, are owned directly by the Company or one of its Subsidiaries free
and clear of any liens, claims or encumbrances, other than the pledge of the
capital of CPB Real Estate, Inc. to the Federal Home Loan Bank.


 


(h)                                 The Shares have been duly authorized and,
when issued, delivered and paid for in the manner set forth in this Agreement,
will be validly issued, fully paid and nonassessable, and conform in all
material respects to the description thereof contained in each of the
Registration Statement, the General Disclosure Package and the Prospectus.  No preemptive rights or other rights to
subscribe for or purchase any shares of Common Stock exist with respect to the
issuance and sale of the Shares by the Company pursuant to this Agreement,
except for such rights as may have been fully satisfied or waived prior to the
Settlement Date.  There are no
restrictions upon the voting or transfer of any of the Shares except as
required under applicable federal or state securities laws.  No further approval or authority of the
shareholders or the Board of Directors of the Company will be required for the
issuance and sale of the Shares as contemplated herein.


 


4

















 


(i)                                     The Company has full legal right,
corporate power and authority to enter into this Agreement and perform 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, and except as rights to indemnity or contribution, including
but not limited to, indemnification provisions set forth in Section 7 of
this Agreement may be limited by federal or state securities law or the public
policy underlying such laws.


 


(j)                                     KPMG LLP, who has expressed its opinion
with respect to the consolidated financial statements contained in the Company’s
Annual Report on Form 10-K/A for the year ended December 31, 2008,
are registered independent public accountants as required by the 1933 Act and
the 1933 Act Regulations and by the rules of the Public Accounting
Oversight Board and, to the knowledge of the Company after reasonable inquiry,
KPMG is not in violation of the auditor independence requirements of the
Sarbanes-Oxley Act of 2002 with respect to the Company.


 


(k)                                  The execution, delivery and performance
of this Agreement by the Company, the issuance and sale of the Shares by the
Company, the compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions herein contemplated
(including, without limitation, the use of proceeds from the sale of the Shares
as described in the Prospectus Supplement and the Prospectus under the caption “Use
of Proceeds”), do not and will not (i) violate or conflict with any
provision of the amended and restated articles of incorporation or bylaws of
the Company or the organizational documents of any Subsidiary and (ii) except
as would not reasonably be expected to result in a Material Adverse Effect and
will not materially and adversely affect the Company’s ability to consummate
the transactions contemplated by this Agreement, (x) result in the
creation of any lien, charge, security interest or encumbrance upon any assets
of the Company or any Subsidiary pursuant to the terms or provisions of, and
will not conflict with, result in the breach or violation of, or constitute,
either by itself or upon notice or the passage of time or both, a default
under, or give rise to the accelerated due date of any payment due under, any
agreement, mortgage, deed of trust, lease, franchise, license, indenture,
permit or other instrument to which any of the Company or any Subsidiary is a
party or by which any of the Company or any Subsidiary or their respective
properties may be bound or affected or (y) violate any statute or any
authorization, judgment, decree, order, rule or regulation of any court or
any regulatory body, administrative agency or other governmental agency or body
applicable to the Company or any Subsidiary or any of their respective
properties.  All consents, approvals,
licenses, qualifications, authorizations or other orders of any court,
regulatory body, administrative agency or other governmental agency or body
that are required for the execution and delivery of this Agreement or the
consummation of the transactions contemplated by this Agreement, including the
issuance, sale and delivery of the Shares, have been obtained, except such
consents, approvals authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Agents.


 


5

















 


(l)                                     Except as would not reasonably be
expected to have a Material Adverse Effect, the material contracts to which the
Company or any of its Subsidiaries is a party, have been duly and validly
authorized, executed and delivered by the Company or its Subsidiaries, as the
case may be, and constitute the legal, valid and binding agreements of the
Company or its Subsidiaries, enforceable by and against it in accordance with
their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws relating
to enforcement of creditors’ rights generally, and general 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, and except as rights to indemnity
or contribution may be limited by federal or state securities laws and the
public policy underlying such laws.


 


(m)                               The deposit accounts of the Central
Pacific Bank (the “Bank”) are insured up to the maximum amount
provided by the FDIC and no proceedings for the modification, termination or
revocation of any such insurance are pending or threatened.


 


(n)                                 Except as disclosed in each of the
General Disclosure Package and the Prospectus, there are no legal or
governmental actions, suits or proceedings pending or, to the Company’s
knowledge, threatened against the Company or any Subsidiary before or by any
court, regulatory body or administrative agency or any other governmental
agency or body, domestic, or foreign, which actions, suits or proceedings,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect; and no labor disturbance by the employees of the
Company exists or, to the Company’s knowledge, is imminent, that would
reasonably be expected to have a Material Adverse Effect.


 


(o)                                 Except as disclosed in each of the
General Disclosure Package and the Prospectus, no Subsidiary of the Company is
currently prohibited, directly or indirectly, under any order of the Federal
Reserve Board (other than orders applicable to bank holding companies and their
subsidiaries generally), under any applicable law, or under any agreement or
other instrument to which it is a party or is subject, from paying any
dividends to the Company, from making
any other distribution on such Subsidiary’s capital stock (other than as
provided in the (x) Indenture, dated December 15, 2004, by and
between the Company, as issuer, and Wilmington Trust Company, as trustee, and (y) Indenture,
dated October 10, 2003, by and between the Company, as issuer, and U.S.
Bank National Association, as trustee), from repaying to the Company any loans
or advances to such Subsidiary from the Company or from transferring any of
such Subsidiary’s properties or assets to the Company or any other Subsidiary
of the Company.


 


(p)                                 Each of the Company and its Subsidiaries
has valid title to all the properties and assets described as owned by it in
the consolidated financial statements included in the Registration Statement,
the General Disclosure Package and the Prospectus, free and clear of all liens,
mortgages, pledges, or encumbrances of any kind except (i) those, if any,
reflected in such consolidated financial statements, or (ii) those that
would not reasonably be expected to have a Material Adverse Effect.  Any real property and buildings held under
lease or sublease by the Company and each of its Subsidiaries are held by them
under valid, subsisting and enforceable leases.


 


6

















 


(q)                                 Except as disclosed in each of the
General Disclosure Package and the Prospectus, since December 31, 2008, (i) the
Company and its Subsidiaries have conducted their respective businesses in all
material respects in the ordinary course, consistent with prior practice, (ii) except
for publicly disclosed ordinary dividends on the Common Stock and dividends
paid on the Company’s Fixed Rate Cumulative Perpetual Preferred Stock, the
Company has not made or declared any distribution in cash or in kind to its
shareholders, (iii) neither the Company nor any of its Subsidiaries has
issued any capital stock or securities issuable into capital stock except for
securities issued pursuant to the Company’s existing shareholder-approved
equity incentive plans, (iv) neither the Company nor its Subsidiaries has
incurred any liabilities or obligations of any nature (absolute, accrued,
contingent or otherwise) which are not fully reflected or reserved against
in the financial statements described in Section 1(cc), except for
liabilities that have arisen since such date in the ordinary and usual course
of business and consistent with past practice and that, individually or in the
aggregate, have not had and would not reasonably be expected to have a Material
Adverse Effect and (v) no event or events have occurred that, individually
or in the aggregate, has had or would reasonably be expected to have a Material
Adverse Effect.  As used in this
paragraph, references to the General Disclosure Package and the Prospectus
exclude any amendments or supplements thereto subsequent to the date of this
Agreement.


 


(r)                                    The Company owns, is licensed or
otherwise possesses all rights to use, all patents, patent rights, inventions,
know-how (including trade secrets and other unpatented or unpatentable or
confidential information, systems, or procedures), trademarks, service marks,
trade names, copyrights and other intellectual property rights (collectively,
the “Intellectual Property”) necessary for the conduct of its business as
described in each of the General Disclosure Package and the Prospectus, except
as would not reasonably be expected to have a Material Adverse Effect.  No claims have been asserted against the
Company by any person with respect to the use of any such Intellectual Property
or challenging or questioning the validity or effectiveness of any such
Intellectual Property except as would not reasonably be expected to have a
Material Adverse Effect.


 


(s)                                  Each of the Company and its Subsidiaries
is in compliance with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting business, including, without
limitation, all applicable local, state and federal banking and environmental
laws and regulations, except where failure to be so in compliance would not
reasonably be expected to have a Material Adverse Effect.  Except as described in the General Disclosure
Package and the Prospectus, neither the Company nor any of its Subsidiaries is (a) in
violation of its charter or bylaws or other organizational documents, as
applicable, except for any immaterial failure on the part of the Subsidiaries
(other than the Bank) to comply; (b) is in default under, and no event has
occurred which, with notice or lapse of time or both, would constitute such a default
or result in the creation or imposition of any lien, charge, or encumbrance
upon any property or assets of the Company or any of its Subsidiaries, pursuant
to any agreement, mortgage, deed of trust, lease, franchise, license, indenture
or permit, except as would not reasonably be expected to have a Material
Adverse Effect or (c) a party to or subject to or has received any order,
decree, agreement, memorandum of understanding or similar arrangement with, or
a commitment letter, supervisory letter or similar submission to, any
governmental authority, and neither the Company nor any Subsidiary has been
advised by any governmental authority that such governmental authority is
contemplating issuing or requesting (or is 


 


7

















 


considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum of understanding,
commitment letter, supervisory letter or similar submission.  Neither the Company nor any Subsidiary has
received any communication from any governmental authority that it is not
acting in material compliance with any statute, regulation or ordinance.  The Bank has received a Community
Reinvestment Act rating of “Satisfactory” or better.


 


(t)                                    Each of the Company and its Subsidiaries
has filed on a timely basis (giving effect to extensions) all required
federal, state and foreign income and franchise tax returns and has paid or
accrued all taxes shown as due thereon to the extent that such taxes have
become due and are not being contested in good faith, and the Company does not
have knowledge of any tax deficiency that has been or might be asserted or
threatened against it or any Subsidiary, in each case, that could reasonably be
expected to have a Material Adverse Effect.  All material tax liabilities accrued through
the date hereof have been adequately provided for on the books of the
Company.  There is no tax lien, whether
imposed by any federal, state or other taxing authority, outstanding against
the assets of the Company or any of its Subsidiaries that would reasonably be
expected to have a Material Adverse Effect.


 


(u)                                 On the Settlement Date, all stock
transfer or other taxes (other than income taxes) that are required to be
paid in connection with the sale and transfer of the Shares will have been,
fully paid or provided for by the Company and all laws imposing such taxes will
have been fully complied with.


 


(v)                                 The Company is not and, after giving
effect to the offering and sale of the Shares and the application of the
proceeds thereof, will not be an “investment company,” as such term is defined
in the Investment Company Act of 1940, as amended.


 


(w)                               The Company and each of its Subsidiaries
maintain insurance underwritten by insurers of recognized financial responsibility,
of the types and in the amounts that the Company reasonably believes is
adequate for its business on a consolidated basis, including, but not limited
to, insurance covering real and personal property owned or leased by the
Company or any of its Subsidiaries against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against, with such
deductibles as are customary for companies in the same or similar business, all
of which insurance is in full force and effect. 
There are no material claims by the Company or any Subsidiary under any
such policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause.  Neither the Company nor any Subsidiary has
received notice from any insurance carrier that such insurance will be canceled
or that coverage thereunder will be reduced or eliminated (except any such
insurance or coverage that will be replaced by policies covering the full or
substantially the full amount of the original coverage with no lapse in
coverage), and there are presently no material claims pending under policies of
such insurance and no notices have been given by the Company or any Subsidiary
under such policies.


 


(x)                                   Neither the Company nor any affiliate of
the Company nor any person acting on their behalf has taken, nor will the
Company or any affiliate or any person acting on their behalf take, directly or
indirectly, any action which is designed to or which has constituted 


 


8

















 


or which would reasonably be expected to cause or
result in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares.


 


(y)                                 The Company shall use the net proceeds
received by it from the sale of the Shares pursuant to this Agreement in the
manner specified in each of the General Disclosure Package and the Prospectus
under the caption “Use of Proceeds.”


 


(z)                                   No transaction has occurred between or
among the Company or any Subsidiary, on the one hand, and its affiliates,
officers or directors on the other hand, that is required to have been
described under applicable securities laws in its 1934 Act filings and is not
so described in such filings.


 


(aa)                            There is no transaction, arrangement or
other relationship between the Company or any of its Subsidiaries and an
unconsolidated or other off-balance sheet entity that is required to be
disclosed by the Company in its 1934 Act filings and is not so disclosed or
that otherwise would be reasonably expected to have a Material Adverse Effect.


 


(bb)                          Each of the Company and its Subsidiaries
has all franchises, licenses, certificates and other authorizations from such
federal, state or local government or governmental agency, department or body
that are currently necessary to own, lease and operate their respective
properties and currently necessary for the operation of their respective
businesses, except where the failure to possess currently such franchises,
licenses, certificates and other authorizations would not reasonably be
expected to have a Material Adverse Effect. 
Neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such permit that,
if the subject of an unfavorable decision, ruling or finding, could reasonably
be expected to have a Material Adverse Effect.


 


(cc)                            The consolidated financial statements of
the Company and the related notes and schedules thereto included in its 1934
Act filings fairly present the financial position, results of operations,
shareholders’ equity and cash flows of the Company and its consolidated
Subsidiaries at the dates and for the periods specified therein.  Such financial statements and the related
notes and schedules thereto have been prepared in accordance with accounting
principles generally accepted in the United States consistently applied
throughout the periods involved (except as otherwise noted therein) and
all adjustments necessary for a fair presentation of results for such periods
have been made; provided, however,
that the unaudited financial statements are subject to normal year-end audit
adjustments (which are not expected to be material) and do not contain all
footnotes required under generally accepted accounting principles.


 


(dd)                          The Company is in compliance in all
material respects with the requirements of the New York Stock Exchange (“NYSE”) for
continued listing of the Common Stock thereon. 
The Company has taken no action designed to, or likely to have the effect
of, terminating the registration of the Common Stock under the 1934 Act or the
listing of the Common Stock on the NYSE, nor has the Company received any
notification that the Commission or NYSE is contemplating terminating such
registration or listing.  The
transactions contemplated by this Agreement will not contravene the rules and
regulations of NYSE.


 


9
















 


(ee)                            The Company maintains a system of
internal controls over financial reporting (as defined in Rule 13a-15
under the 1934 Act) that have been designed by, or under the supervision
of, its principal executive and financial officer, to provide reasonable assurance
that (i) transactions are executed in accordance with management’s general
or specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets; (iii) access
to assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.  The
Company has disclosure controls and procedures (as defined in Rules 13a-4
and 15d-14 under the 1934 Act) that are designed to ensure that material
information relating to the Company is made known to the Company’s principal
executive officer and the Company’s principal financial officer or persons
performing similar functions.  The
Company has not become aware of any fraud, whether or not material, that
involves management or other employees who have a significant role in the
Company’s internal control over financial reporting.  The Company is otherwise in compliance in all
material respects with all applicable provisions of the Sarbanes-Oxley Act of
2002, as amended and the rules and regulations promulgated thereunder.


 


(ff)                                Neither the Company, nor any Subsidiary,
nor, to the knowledge of the Company, any director, officer, agent, employee or
other Person acting on behalf of the Company or any Subsidiary has, in the
course of its actions for, or on behalf of, the Company (i) used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expenses relating to political activity; (ii) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made
any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful
payment to any foreign or domestic government official or employee.


 


(gg)                          Except as described in each of the
General Disclosure Package and the Prospectus, (A) there are no
outstanding rights (contractual or otherwise), warrants or options to acquire,
or instruments convertible into or exchangeable for, or agreements with respect
to the sale or issuance of, any shares of capital stock of or other equity
interest in the Company (other than this Agreement) and (B) there are
no agreements between the Company and any person granting such person the right
to require the Company to file a registration statement under the 1933 Act or
otherwise register any securities of the Company owned or to be owned by such
person.


 


(hh)                          Except as described in the Prospectus,
the Company is in compliance in all material respects with all presently
applicable provisions of the Employee Retirement Income Security Act of 1974,
as amended, including the regulations and published interpretations thereunder
(herein called “ERISA”); no “reportable event” (as defined in
ERISA) has occurred with respect to any “pension plan” (as defined in
ERISA) for which the Company would have any material liability; the
Company has not incurred and does not expect to incur any material liability under
(i) Title IV of ERISA with respect to termination of, or withdrawal from,
any “pension plan”; or (ii) Sections 412 or 4971 of the Internal Revenue
Code of 1986, as amended, including the regulations and published
interpretations thereunder (the “Code”); and each 


 


10

















 


“Pension Plan” for
which the Company would have liability that is intended to be qualified under Section 401(a) of
the Code is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which would cause the loss of such
qualification.


 


(ii)                                  There has been no storage, disposal,
generation, manufacture, transportation, handling or treatment of toxic wastes,
hazardous wastes or hazardous substances by the Company or any Subsidiary (or,
to the knowledge of the Company, any of their predecessors in
interest) at, upon or from any of the property now or previously owned or
leased by the Company or any Subsidiary in violation of any applicable law, ordinance,
rule, regulation, order, judgment, decree or permit or that would require
remedial action under any applicable law, ordinance, rule, regulation, order,
judgment, decree or permit; there has been no material spill, discharge, leak,
emission, injection, escape, dumping or release of any kind into such property
or into the environment surrounding such property of any toxic wastes, medical
wastes, solid wastes, hazardous wastes or hazardous substances due to or caused
by the Company or any Subsidiary or with respect to which the Company or any
Subsidiary have knowledge; in each of the foregoing cases, except as would not
reasonably be expected to have a Material Adverse Effect.  As used in this Section 1(ii), the terms
“hazardous wastes”, “toxic wastes”, “hazardous substances”, and “medical wastes”
shall have the meanings specified in any applicable local, state, federal and
foreign laws or regulations with respect to environmental protection.


 


(jj)                                  The Company is not, nor has ever been, a
U.S. real property holding corporation within the meaning of Section 897
of the Internal Revenue Code of 1986, as amended.


 


(kk)                            The Company is not, nor has ever been, an
issuer of the type described in Rule 144(i)(l) under the 1933 Act.


 


(ll)                                  Each of the Company and its Subsidiaries
does and will, after giving effect to the transactions contemplated hereby, own
assets the fair saleable value of which are (i) greater than the total
amount of its liabilities (including known contingent liabilities) and (ii) greater
than the amount that will be required to pay the probable liabilities of its
existing debts as they become absolute and matured considering the financing
alternatives reasonably available to it. 
The Company has no knowledge of any facts or circumstances which lead it
to believe that it or any of its Subsidiaries will be required to file for
reorganization or liquidation under the bankruptcy or reorganization laws of
any jurisdiction, and has no present intent to so file.


 


(mm)                      Neither the execution of this Agreement
nor the issuance of the Shares will trigger any rights or obligations, or
require compliance with any Hawaii “takeover” statute.


 


Section 2.                                            Sale and Delivery of Shares.


 


(a)                                  Subject to the terms and conditions set forth herein, the Company agrees
to sell through the Agents, acting as sales agents, or directly to the Agents,
acting as principals, from time to time, and the Agents agree to use their
commercially reasonable efforts to sell, as sales agents for the Company, the
Shares.  Sales of the Shares, if any,
through the Agents acting as sales agents or directly to the Agents, acting as
principals, will be made by means of ordinary 


 


11

















 


brokers’ transactions on the NYSE or
otherwise at market prices prevailing at the time of sale, at prices related to
prevailing market prices or at negotiated prices.


 


(b)                                 The Shares are to be sold on a daily basis or otherwise as shall be
agreed to by the Company and the Agent that is the exclusive sales Agent for
the sale of the Shares, pursuant to Section 2(c) below (the “Exclusive
Sales Agent”), on any trading day (other than a day on which the NYSE is
scheduled to close prior to its regular weekday closing time, each, a “Trading
Day”) that the Company has satisfied its obligations under Section 6
of this Agreement and that the Company has instructed such Exclusive Sales
Agent to make such sales.  On any Trading
Day, the Company may instruct the Exclusive Sales Agent by telephone (confirmed
promptly by telecopy or email, which confirmation will be promptly acknowledged
by the Exclusive Sales Agent) as to the maximum number of Shares to be
sold by the Exclusive Sales Agent on such day (in any event not in excess of
the number available for sale under the Prospectus and the currently effective
Registration Statement) and the minimum price per Share at which such
Shares may be sold.  Subject to the terms
and conditions hereof, the Exclusive Sales Agent shall use its commercially reasonable
efforts to sell, as sales agent, all of the Shares so designated by the
Company.  The Company and each Agent
acknowledge and agree that (A) there can be no assurance that either Agent
will be successful in selling the Shares, (B) no Agent will incur
liability or obligation to the Company or any other person or entity if it does
not sell Shares for any reason other than a failure by such Agent to use its
commercially reasonable efforts consistent with its normal trading and sales
practices and applicable law and regulations to sell such Shares as required by
this Agreement and (C) no Agent shall be obligated to purchase Shares on a
principal basis, except as otherwise specifically agreed by such Agent and the
Company pursuant to a Terms Agreement, (D) no Agent shall be liable for
executing sales in reliance upon information provided to it by the Company,
provided  that such Agent has complied with
the terms of this Agreement.  In the
event of a conflict between the terms of this Agreement and the terms of a
Terms Agreement, the terms of such Terms Agreement will control.


 


(c)                                  Sandler O’Neill & Partners shall
act as the Exclusive Sales Agent until Shares have been sold by Sandler O’Neill &
Partners with aggregate gross proceeds of Five Million Dollars
($5,000,000).  Then RBC Capital Markets
shall act as the Exclusive Sales Agent until Shares have been sold by RBC
Capital Markets with aggregate gross proceeds of Five Million Dollars
($5,000,000).  Thereafter, Sandler O’Neill &
Partners shall be the Exclusive Sales Agent until Shares have been sold by
Sandler O’Neill & Partners with aggregate gross proceeds of Two
Million Five Hundred Thousand Dollars ($2,500,000).  Thereafter, RBC Capital Markets shall be the
Exclusive Sales Agent until Shares have been sold by RBC Capital Markets with
aggregate gross proceeds of Two Million Five Hundred Thousand Dollars
($2,500,000).  The Company agrees that
any offer to sell, any solicitation of an offer to buy, or any sales of Shares
or any other equity security of the Company shall only be effected by or
through the Exclusive Sale Agent on any given Trading Day, and the Company
shall in no event request that Agents sell Shares on the same day; provided, however, that (i) the foregoing limitation
shall not apply to (A) exercise of any option, warrant, right or any conversion
privilege set forth in the instrument governing such security or (B) sales
solely to employees or security holders of the Company or its Subsidiaries, or
to a trustee or other person acquiring such securities for the accounts of such
persons and (ii) such limitation shall not apply on any day during which
no sales are made pursuant to this Agreement.


 


12

















 


(d)                                 Notwithstanding the foregoing, the Company shall not authorize the sale
of, and neither Agent, acting as sales agent, shall be obligated to use its
commercially reasonable efforts to sell, any Shares (i) at a price lower
than the minimum price therefor authorized from time to time by the Company’s
Board of Directors, or a duly authorized committee thereof, and communicated to
the Agent in writing, or (ii) when such sales would result in the
aggregate offering price or number, as the case may be, of Shares sold pursuant
to this Agreement and any Terms Agreement exceeding the aggregate offering price
or number, as the case may be, of Common Stock (x) set forth in the
preamble paragraph of this Agreement, (y) available for sale under the
Prospectus and the then currently effective Registration Statement or (z) authorized
from time to time to be sold under this Agreement or any Terms Agreement by the
Company’s Board of Directors, or a duly authorized committee thereof, and
communicated to the Agent in writing.  In
addition, the Company or the relevant Agent may, upon notice to the other party
hereto by telephone (confirmed promptly by telecopy or email, which
confirmation will be promptly acknowledged), suspend the offering of the Shares
with respect to the portion of the offering for which such Agent is acting as
sales agent for any reason and at any time; provided, however, that such
suspension or termination shall not affect or impair the parties’ respective
obligations with respect to the Shares sold hereunder prior to the giving of
such notice.


 


(e)                                  The gross sales price of any Shares sold pursuant to this Agreement by
either Agent acting as sales agent of the Company shall be the market price
prevailing at the time of sale for Common Stock sold by such Agent on the NYSE
or otherwise, at prices relating to prevailing market prices or at negotiated prices.  The compensation payable to each Agent for
sales of the Shares pursuant to this Agreement shall be equal to 1.25% of the
gross sales price of the Shares, regardless of which Agent sells the Shares.  The Company may sell Shares to either Agent
as principal at a price agreed upon between the Company and such Agent at the
relevant Applicable Time and pursuant to a separate Terms Agreement.  The gross proceeds, after deduction of 2.5%
of the gross sales price of the Shares sold by the Agents and for any transaction
fees imposed by any governmental, regulatory or self-regulatory organization in
respect of such sales, shall constitute the net proceeds to the Company for
such Shares (the “Net Proceeds”). 
The applicable Agent shall notify the Company as promptly as practicable
if any deduction referenced in the preceding sentence will be required.


 


(f)                                    Each Agent acting as the Exclusive Sales Agent for any given Trading Day
as specified in Section 2(c) above shall provide written confirmation
to the Company and the other Agent following the close of trading on the NYSE
each day in which Shares are sold under this Agreement setting forth the number
of Shares sold on such day, the aggregate gross sales proceeds of the Shares,
the Net Proceeds to the Company and the compensation payable by the Company to
such Agent with respect to such sales.


 


(g)                                 Settlement for sales of Shares pursuant to this Section 2 will
occur on the third business day that is also a Trading Day following the trade
date on which such sales are made, unless another date shall be agreed to by
the Company and the Agent who made such sale (each such day, a “Settlement
Date”).  On each Settlement Date, the
Shares sold through the Agent for settlement on such date shall be delivered by
the Company to the applicable Agent against payment from such Agent of the
gross proceeds of the Shares sold, less such Agent’s commission of 1.25% from
the sale of such Shares and the Company shall pay the other Agent (who did not
act as the Exclusive Sales Agent), in same day funds delivered to accounts


 


13

















 


designated by such other Agent, an amount
equal to 1.25% of the gross proceeds from the sale of such Shares.  Settlement for all Shares shall be effected
by book-entry delivery of Shares to an account at The Depository Trust Company
designated by the Agent against payments by the Agent of the Net Proceeds from
the sale of such Shares in same day funds delivered to an account designated by
the Company.  If the Company shall
default on its obligation to deliver Shares on any Settlement Date, the Company
shall (i) indemnify and hold the Agent who sold such Shares harmless
against any loss, claim or damage arising from or as a result of such default
by the Company and (ii) pay the Agent who sold such Shares any commission
to which it would otherwise be entitled absent such default.  Any Agent who breaches this Agreement by
failing to deliver the applicable gross proceeds, less such Agent’s commission
of 1.25% from the sale of the Shares on any Settlement Date, for Shares
delivered by the Company, will pay the Company interest based on the effective
overnight federal funds rate until such proceeds, together with such interest,
have been fully paid.


 


(h)                                 Notwithstanding any other provision of this Agreement, the Company and
the Agents agree that no sales of Shares shall take place, and the Company
shall not request the sale of any Shares that would be sold, and no Agent shall
be obligated to sell, during any period in which the Company is in possession
of material non-public information.  The
Company will notify the Agent when the Company’s insider trading policy would
prohibit the purchase or sale of Common Stock by its officers or directors.


 


(i)                                     At each Applicable Time, Settlement Date, Registration Amendment Date
and each Company Periodic Report Date, the Company shall be deemed to have
affirmed each representation and warranty contained in this Agreement.  Any obligation of the Agents to use their
commercially reasonable efforts to sell the Shares on behalf of the Company as
Exclusive Sales Agent shall be subject to the continuing accuracy of the
representations and warranties of the Company herein, to the performance by the
Company of its obligations hereunder and to the continuing satisfaction of the
additional conditions specified in Section 6 of this Agreement.


 


Section 3.                                            Covenants.  The Company covenants with each Agent as
follows:


 


(a)                                  During any period when the delivery of a prospectus is required in
connection with the offering or sale of Shares (whether physically or through
compliance with Rule 153 or Rule 172 under the 1933 Act, or in lieu
thereof, a notice referred to in Rule 173(a) under the 1933 Act), (i) to
make no further amendment or any supplement to the Registration Statement or
the Prospectus prior to any Settlement Date which shall be disapproved by
either Agent promptly after reasonable notice thereof and to advise each Agent,
promptly after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any amendment or
supplement to the Prospectus has been filed and to furnish the Agents with
copies thereof, (ii)  to file promptly all other material required to be
filed by the Company with the Commission pursuant to Rule 433(d) under
the 1933 Act, (iii) to file promptly all reports and any definitive proxy
or information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), Section 13(c), Section 14
or Section 15(d) of the 1934 Act, (iv) to advise each Agent,
promptly after it receives notice thereof, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of the
Prospectus or other prospectus in respect of the Shares, of the suspension of
the qualification of the Shares for offering or sale in


 


14

















 


any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the form of the Registration Statement or
the Prospectus or for additional information, and (v) in the event of the
issuance of any such stop order or of any such order preventing or suspending
the use of the Prospectus in respect of the Shares or suspending any such
qualification, to promptly use its commercially reasonable efforts to obtain
the withdrawal of such order; and in the event of any such issuance of a notice
of objection, promptly to take such reasonable steps as may be necessary to
permit offers and sales of the Shares by the Agents, which may include, without
limitation, amending the Registration Statement or filing a new registration
statement, at the Company’s expense (references herein to the Registration
Statement shall include any such amendment or new registration statement).


 


(b)                                 Promptly from time to time to take such action as each Agent may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as either Agent may request and to comply
with such laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the sale of the
Shares,  provided, however, that in connection therewith the Company shall not be required to qualify as
a foreign corporation or to file a general consent to service of process in any
jurisdiction; and to promptly advise each Agent of the receipt by the Company
of any notification with respect to the suspension of the qualification of the
Shares for offer or sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose.


 


(c)                                  During any period when the delivery of a prospectus is required (whether
physically or through compliance with Rule 153 or Rule 172 under the
1933 Act, or in lieu thereof, a notice referred to in Rule 173(a) under
the 1933 Act) in connection with the offering or sale of Shares, the
Company will make available to each Agent, as soon as practicable after the
execution of this Agreement, and thereafter from time to time furnish to each
Agent, copies of the most recent Prospectus in such quantities and at such
locations as each Agent may reasonably request for the purposes contemplated by
the 1933 Act.  During any period when the
delivery of a prospectus is required (whether physically or through compliance
with Rule 153 or Rule 172 under the 1933 Act, or in lieu thereof, a
notice referred to in Rule 173(a) under the 1933 Act) in
connection with the offering or sale of Shares, and if at such time any event
shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Prospectus or to file under
the 1934 Act any document incorporated by reference in the Prospectus in order
to comply with the 1933 Act or the 1934 Act, to notify the Agents and to file
such document and to prepare and furnish without charge to the Agents as many
written and electronic copies as each Agent may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus which will
correct such statement or omission or effect such compliance.


 


(d)                                 To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c) under
the 1933 Act), an earnings statement of the Company and the Subsidiaries (which
need not be audited) complying with Section 11(a) of the 1933
Act


 


15

















 


and the 1933 Act Regulations (including, at
the option of the Company, Rule 158 under the 1933 Act).


 


(e)                                  To pay the required Commission filing fees relating to the Shares within
the time required by Rule 456(b)(1) under the 1933 Act without regard
to the proviso therein and otherwise in accordance with Rule 456(b) and
Rule 457(r) under the 1933 Act.


 


(f)                                    To use the Net Proceeds received by it from the sale of the Shares
pursuant to this Agreement and any Terms Agreement in the manner specified in
the General Disclosure Package.


 


(g)                                 To file with the NYSE all documents and notices, and make all
certifications, required by the NYSE of companies that have securities that are
listed on the NYSE and maintain such listing.


 


(h)                                 At each Applicable Time, each Settlement Date, each Registration
Statement Amendment Date (as defined below) and each Company Periodic
Report Date (as defined below) and each date on which Shares are delivered
to the Agents pursuant to a Terms Agreement, the Company shall be deemed to
have affirmed each representation, warranty, covenant and other agreement
contained in this Agreement or any Terms Agreement.  In each Annual Report on Form 10-K or
Quarterly Report on Form 10-Q filed by the Company in respect of any
quarter in which sales of Shares were made by or through the Agents under this
Agreement or any Terms Agreement (each date on which any such document is
filed, and any date on which an amendment to any such document is filed, a “Company
Periodic Report Date”), or in a prospectus supplement to the Prospectus
filed pursuant to Rule 424(b) promptly after each such Company
Periodic Report Date in respect of any quarter in which sales of Shares were
made by or through the Agents under this Agreement or any Terms Agreement, the
Company shall set forth with regard to such quarter the number of Shares sold
through the Agents under this Agreement or any Terms Agreement, the Net Proceeds
received by the Company and the compensation paid by the Company to the Agents
with respect to sales of Shares pursuant to this Agreement or any Terms
Agreement.


 


(i)                                     Upon commencement of the offering of Shares under this Agreement and
each time the Shares are delivered to any Agent as principal on a Settlement
Date and promptly after each (i) date the Registration Statement or the
Prospectus shall be amended or supplemented (other than (1) by an
amendment or supplement providing solely for the determination of the terms of
the Shares, (2) in connection with the filing of a prospectus supplement
that contains solely the information set forth in Section 3(h), (3) in
connection with the filing of any current reports on Form 8-K (other than
any current reports on Form 8-K which contain financial statements,
supporting schedules or other financial data, including any current report on Form 8-K
under Item 2.02 of such form that is considered “filed” under the 1934
Act) or (4) by a prospectus supplement relating to the offering of
other securities (including, without limitation, other shares of Common
Stock)) (each such date, a “Registration Statement Amendment Date”) and
(ii) Company Periodic Report Date, the Company will furnish or cause to be
furnished forthwith to each Agent a certificate dated the date of effectiveness
of such amendment or the date of filing with the Commission of such supplement
or other document, as the case may be, in a form reasonably satisfactory to the
Agents to the effect that the statements


 


16

















 


contained in the certificate referred to in Section 6(i) of
this Agreement which were last furnished to the Agents are true and correct at
the time of such amendment, supplement or filing, as the case may be, as though
made at and as of such time (except that such statements shall be deemed to
relate to the Registration Statement, the General Disclosure Package and the
Prospectus as amended and supplemented to such time) or, in lieu of such
certificate, a certificate of the same tenor as the certificate referred to in
said Section 6(i), but modified as necessary to relate to the Registration
Statement and the Prospectus as amended and supplemented, or to the document
incorporated by reference into the Prospectus, to the time of delivery of such
certificate.  As used in this paragraph,
to the extent there shall be an Applicable Time on or following the date
referred to in clause (i) or (ii) above, promptly shall be deemed to
be on or prior to the next succeeding Applicable Time.


 


(j)                                     Upon commencement of the offering of Shares under this Agreement and
each time the Shares are delivered to each Agent as principal on a Settlement
Date, and promptly after each (i) Registration Statement Amendment Date
and (ii) Company Periodic Report Date, the Company will furnish or cause
to be furnished to each Agent and to counsel to the Agents the written opinions
and letters of counsel for the Company or other counsel reasonably satisfactory
to each Agent, dated the date of effectiveness of such amendment or the date of
filing with the Commission of such supplement or other document, as the case
may be, in a form and substance reasonably satisfactory to each Agent and
counsel to the Agents, of the same tenor as the opinions and letters referred
to in Section 6(c), (d), and (e) of this Agreement, but modified as
necessary to relate to the Registration Statement, the General Disclosure
Package and the Prospectus as amended and supplemented, or to the document
incorporated by reference into the Prospectus, to the time of delivery of such
opinions and letters or, in lieu of such opinions and letters, counsels last
furnishing such letters to the Agents shall furnish such Agents with letters
substantially to the effect that the Agents may rely on such last opinions and
letters to the same extent as though each were dated the date of the letters
authorizing reliance (except that statements in such last letters shall be
deemed to relate to the Registration Statement and the Prospectus as amended
and supplemented to the time of delivery of such letters authorizing
reliance).  As used in this paragraph, to
the extent there shall be an Applicable Time on or following the date referred
to in clause (i) or (ii) above, promptly shall be deemed to be on or
prior to the next succeeding Applicable Time.


 


(k)                                  Upon commencement of the offering of Shares under this Agreement, and at
the time Shares are delivered to each Agent as principal on a Settlement Date,
and promptly after each (i) Registration Statement Amendment Date and (ii) Company
Periodic Report Date, the Company will cause KPMG LLP, or other independent
accountants reasonably satisfactory to the Agents, to furnish to each Agent a
letter, dated the date of effectiveness of such amendment or the date of filing
of such supplement or other document with the Commission, as the case may be,
in form reasonably satisfactory to each Agent and its counsel, of the same
tenor as the letter referred to in Section 6(f) hereof, but modified
as necessary to relate to the Registration Statement, the General Disclosure
Package and the Prospectus, as amended and supplemented, or to the document
incorporated by reference into the Prospectus, to the date of such letter.  As used in this paragraph, to the extent
there shall be an Applicable Time on or following the date referred to in
clause (i) or (ii) above, promptly shall be deemed to be on or prior
to the next succeeding Applicable Time.


 


17

















 


(l)                                     The Company consents to the Agents trading in shares of Common Stock for
their own account and for the account of their clients at the same time as
sales of Shares occur pursuant to this Agreement or any Terms Agreement.


 


(m)                               If, to the knowledge of the Company, all filings required by Rule 424
in connection with this offering shall not have been made or the
representations in Section 1(a) shall not be true and correct on the
applicable Settlement Date, the Company will offer to any person who has agreed
to purchase Shares from the Company as the result of an offer to purchase
solicited by the Agents the right to refuse to purchase and pay for such
Shares.


 


(n)                                 The Company will cooperate timely with any reasonable due diligence
review conducted by the Agents or their counsel from time to time in connection
with the transactions contemplated hereby or in any Terms Agreement, including,
without limitation, and upon reasonable notice providing information and making
available documents and appropriate corporate officers, during regular business
hours and at the Company’s principal offices, as the Agents may reasonably
request.


 


(o)                                 The Company will not, without (i) giving each Agent at least five
business days’ prior written notice (or two business days’ prior written notice
on any Trading Day with respect to which the Company has not instructed either
Agent to make sales and which does not occur in any period when the delivery of
a prospectus is required in connection with the offering or sale of Shares)
specifying the nature of the proposed sale and the date of such proposed sale
and (ii) each Agent suspending activity under this program (which such
Agent shall do promptly if so requested) for such period of time as requested
by the Company or as deemed appropriate by the Agents in light of the proposed
sale, (A) sell,
offer, agree to sell, contract to sell, hypothecate, pledge, grant any option
to purchase, make any short sale of, or otherwise dispose of or hedge, directly
or indirectly, except as contemplated by this Agreement or as provided in the
last sentence of this Section 3(o), any shares of Common Stock or any
securities convertible into, exchangeable or exercisable for, or that represent
the right to receive any shares of Common Stock or any securities of the Company
substantially similar to the Common Stock or publicly announce an intention to
do any of the foregoing.  Notwithstanding
the provisions set forth in the immediately preceding sentence, the Company may
(1) issue shares, and options to purchase shares, of Common Stock pursuant
to stock option plans described in the Registration Statement and the
Prospectus, as those plans are in effect on the date of this Agreement and (2) issue
shares of Common Stock upon the exercise of stock options or other securities convertible
into or exchangeable for Common Stock that are described in the Registration
Statement and the Prospectus and that are outstanding on the date of this
Agreement, and issue shares of Common Stock upon the exercise of stock options
issued after the date of this Agreement under stock option plans referred to in
clause (2) of this sentence.


 


(p)                                 To not take, directly or indirectly, any
action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, under the 1934 Act or otherwise, the
stabilization or manipulation of the price of any securities of the Company to
facilitate the sale or resale of the Shares.


 


(q)                                 The Company will comply with all
requirements of the NYSE with respect to the issuance of the Shares and will
use its reasonable best efforts to: (i) have the Shares


 


18

















 


approved for
listing on the NYSE, subject only to notice of issuance, or (ii) file an
application for listing of the Shares on the NYSE at, or prior to, the
Settlement Date.


 


Section 4.                                            Free Writing Prospectus.


 


(a)                                  (i)                                     The Company represents and agrees that it has not made and, without the
prior consent of the Agents, will not make any offer relating to the Shares
that would constitute a “free writing prospectus” as defined in Rule 405
under the 1933 Act; and


 


(ii)                                  each Agent represents and agrees that it has not made and, without the
prior consent of the Company, will not make any offer relating to the Shares
that would constitute a free writing prospectus required to be filed with the
Commission.


 


(b)                                 The Company has complied and will comply with the requirements of Rule 433
under the 1933 Act applicable to any Issuer Free Writing Prospectus (including
any free writing prospectus identified in Section 4(a) hereof),
including timely filing with the Commission or retention where required and
legending.


 


Section 5.                                            Payment of Expenses.  The Company covenants and agrees with each Agent
that the Company will pay or cause to be paid the following:  (i) the reasonable out-of-pocket
expenses incurred by the Agents in connection with the transactions
contemplated hereby (regardless of whether the sale of the Shares is
consummated), including, without limitation, disbursements, fees and expenses of
the Agents’ counsel and the reasonable out-of-pocket expenses incurred by
Sandler O’Neill & Partners in connection with the postponed offering
of Common Stock by the Company commenced in July 2009 (regardless of
whether the sale of the Shares is consummated), including, without limitation,
disbursements, fees and expenses of Sandler O’Neill & Partners’
counsel and marketing and travel expenses; (ii) the fees, disbursements
and expenses of the Company’s counsel and accountants in connection with the
registration of the Shares under the 1933 Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Issuer Free Writing Prospectus and the Prospectus and amendments
and supplements thereto and the mailing and delivering of copies thereof to the
Agents; (iii) the cost of printing or producing this Agreement, any Terms
Agreement, any Blue Sky and legal investment memoranda, closing documents
(including any copying or compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Shares; (iv) all
expenses in connection with the qualification of the Shares for offering and
sale under state securities laws as provided in Section 3(b) hereof,
including the fees and disbursements of counsel for the Agents in connection
with such qualification and in connection with the Blue Sky and legal
investment memoranda; (v) all fees and expenses in connection with the
supplemental listing of the Shares on the NYSE; (vi) the filing fees
incident to, and the fees and disbursements of counsel for the Agents in
connection with, securing any required review by the Financial Industry
Regulatory Authority (“FINRA”) of the terms of the sale of the
Shares; (vii) the cost of preparing stock certificates; (viii) the
cost and charges of any transfer agent or registrar; (ix) any transaction fees imposed by any governmental, regulatory or
self-regulatory organization in respect of the sale of the Shares, and (x) all other costs and expenses
incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section; provided, however, that in no event will the Company be
responsible for the expenses described in clause (i) in excess of
$375,000.


 


19
















 


Section 6.              Conditions
of Agents’ Obligations.  The
obligations of the Agents hereunder shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company herein or in certificates of any officer of the Company delivered
pursuant to the provisions hereof are true and correct as of the time of the
execution of this Agreement, the date of any executed Terms Agreement and as of
each Registration Statement Amendment Date, Company Periodic Report Date,
Applicable Time and Settlement Date, to the condition that the Company shall
have performed all of its obligations hereunder theretofore to be performed,
and the following additional conditions:


 


(a)           The Prospectus
shall have been filed with the Commission pursuant to Rule 424(b) on
or prior to the date hereof and in accordance with Section 3(a) hereof;
any other material required to be filed by
the Company pursuant to Rule 433(d) shall have been filed with the
Commission within the applicable time periods prescribed for such filings by Rule 433
under the 1933 Act; no
stop order suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been complied
with; and the FINRA shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements.


 


(b)           On every date
specified in Section 3(i) hereof and on such other dates as
reasonably requested by the Agents, Manatt, Phelps & Phillips, LLP,
counsel for the Agents, shall have furnished to the Agents such written opinion
or opinions, dated as of such date, with respect to such matters as the Agents
may reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters.


 


(c)           On every date
specified in Section 3(j) hereof and on such other dates as
reasonably requested by the Agents following the filing of any current reports
on Form 8-K, the General Counsel for the Company shall have furnished to
the Agents written opinion or opinions, dated as of such date, in form and substance
satisfactory to the Agents.


 


(d)           On every date
specified in Section 3(j) hereof and on such other dates as
reasonably requested by the Agents following the filing of any current reports
on Form 8-K, Carlsmith Ball LLP, Hawaii counsel for the Company, shall
have furnished to the Agents written opinion or opinions, dated as of such
date, in form and substance satisfactory to the Agents.


 


(e)           On every date
specified in Section 3(j) hereof and on such other dates as
reasonably requested by the Agents following the filing of any current reports
on Form 8-K, Sullivan & Cromwell LLP, special counsel for the
Company, shall have furnished to the Agents written opinion or opinions, dated
as of such date, in form and substance satisfactory to the Agents.


 


(f)            At the dates
specified in Section 3(k) hereof and on such other dates as
reasonably requested by the Agents following the filing of any current reports
on Form 8-K, the independent accountants of the Company who have certified
the financial statements of the Company and the Subsidiaries included or
incorporated by reference in the Registration Statement shall have furnished to
the Agents a letter, dated as of the date of delivery thereof and 


 


20

















 


addressed to the Agents, in form and substance reasonably satisfactory
to the Agents and their counsel, containing statements and information of the
type ordinarily included in accountants’ “comfort letters” to agents with
respect to the financial statements of the Company and the Subsidiaries
included or incorporated by reference in the Registration Statement.


 


(g)           (i)            Neither
the Company nor any of its Subsidiaries shall have sustained since the date of
the latest audited financial statements included in each of the General
Disclosure Package and the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in each of the General
Disclosure Package and the Prospectus, and (ii) since the respective dates
as of which information is given in each of the General Disclosure Package and
the Prospectus there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the general
affairs, management, financial position, shareholders’ equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth or
contemplated in each of the General Disclosure Package and the Prospectus, the
effect of which, in any such case described in clause (i) or (ii), is in
the judgment of the Agents so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering or the delivery of the
Shares being delivered on the Settlement Date on the terms and in the manner
contemplated in each of the General Disclosure Package and the Prospectus.  As used in this paragraph, references to the
General Disclosure Package and the Prospectus exclude any amendments or
supplements thereto subsequent to the date of this Agreement.


 


(h)           Upon commencement of
the offering of Shares under this Agreement  and on such
other dates as reasonably requested by either Agent, the Company will furnish
or cause to be furnished promptly to the Agents a certificate of an officer in
a form satisfactory to the Agents stating the minimum price for the sale of
such Shares pursuant to this Agreement and the maximum number of Shares that
may be sold pursuant to this Agreement or, alternatively, maximum gross
proceeds from such sales, as authorized from time to time by the Company’s
Board of Directors or a duly authorized committee thereof or, in connection
with any amendment, revision or modification of such minimum price or maximum
Share number or amount, a new certificate with respect thereto;


 


(i)            On each date
specified in Section 3(i), each Agent shall have received certificates of officers of the Company
satisfactory to each Agent, dated as of such date, as to the accuracy of the
representations and warranties of the Company herein, as to the performance by
the Company of all of its obligations hereunder to be performed as of such
date, as to the matters set forth in subsections (a) and (g) of this Section and
as to such other matters as the Agents may reasonably request.


 


(j)            The Company shall
have complied with the provisions of Section 3(c) hereof with respect
to the timely furnishing of prospectuses.


 


(k)           On such dates as
reasonably requested by the Agents, the Company shall have conducted due
diligence sessions, in form and substance satisfactory to the Agents.


 


21

















 


(l)            All filings with the
Commission required by Rule 424 under the 1933 Act to have been filed by
each Applicable Time or related Settlement Date shall have been made within the
applicable time period prescribed for such filing by Rule 424 under the
1933 Act (without reliance on Rule 424(b)(8) under the 1933 Act).


 


(m)          On or after the date
hereof (i) no downgrading shall have occurred in the rating accorded to
the Company’s debt securities or preferred stock by any “nationally recognized
statistical rating organization,” as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the 1933 Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of the Company’s debt
securities or preferred stock.


 


(n)           On or after the date
hereof there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the
NYSE, the Nasdaq Global Market or the Nasdaq Global Select Market; (ii) a
suspension or material limitation in trading of any securities of the Company
on any exchange or in the over-the-counter market; (iii) a general
moratorium on commercial banking activities declared by either federal, New
York or Hawaii state authorities; (iv) any major disruption of settlements
of securities, payment, or clearance services in the United States or any other
country where such securities are listed, or (v) the outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war or a material adverse change in
general economic, political or financial conditions, or currency exchange rates
or exchange controls, including without limitation as a result of terrorist
activities after the date hereof, or any other calamity or crisis, if the
effect of any such event specified in this clause (v), in the judgment of
either Agent, is so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares
being delivered on the Settlement Date on the terms and in the manner
contemplated in either the General Disclosure Package or the Prospectus or to
enforce contracts for the sale of the Shares.


 


(o)           The Shares shall
either have been (i) approved for listing on the NYSE, subject only to
notice of issuance, or (ii) the Company shall have filed an application
for listing of the Shares on the NYSE at, or prior to, the Settlement Date.


 


Section 7.              Indemnification.


 


(a)           The Company shall indemnify and hold
harmless each Agent against any losses, claims, damages or liabilities, joint
or several, to which such Agent may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, the Basic Prospectus, the Prospectus Supplement or the Prospectus,
or any amendment or supplement thereto, any Issuer Free Writing Prospectus or
any “issuer information” filed or required to be filed pursuant to Rule 433(d) under
the 1933 Act, or arise out of or are based upon 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, and will reimburse
each Agent for any legal or other expenses reasonably incurred by such Agent in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however,
that the Company shall not be liable in any such case 


 


22

















 


to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement,
the Basic Prospectus, the Prospectus Supplement or the Prospectus, or any
amendment or supplement thereto, or any Issuer Free Writing Prospectus, in
reliance upon and in conformity with written information furnished to the
Company by the Agents expressly for use therein (provided, however, that the Company and the Agents hereby
acknowledge and agree that the only information that the Agents have furnished
to the Company specifically for inclusion in the Registration Statement, the
Basic Prospectus, the Prospectus Supplement or the Prospectus, or any amendment
or supplement thereto, or any Issuer Free Writing Prospectus, is the Agents’
names and the last sentence of the first paragraph appearing in the Prospectus
Supplement relating to no stabilizing transactions in the section entitled “Plan
of Distribution.”


 


(b)           The Agents shall indemnify and hold harmless
the Company against any losses, claims, damages or liabilities to which the
Company may become subject, under the 1933 Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement,
the Basic Prospectus, the Prospectus Supplement, or the Prospectus, or any
amendment or supplement thereto, or any Issuer Free Writing Prospectus, or
arise out of or are based upon 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, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, the Basic Prospectus,
the Prospectus Supplement, or the Prospectus, or any amendment or supplement
thereto, or any Issuer Free Writing Prospectus, in reliance upon and in
conformity with written information furnished to the Company by the Agents
expressly for use therein; and will reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with investigating
or defending any such action or claim as such expenses are incurred.


 


(c)           Promptly after receipt by an indemnified
party under subsection (a) or (b) above of notice of the commencement
of any action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party otherwise than under such subsection
except and then only to the extent such indemnifying party is materially
prejudiced thereby.  In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party, and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under this Section 7 for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof
other than reasonable costs of investigation. 
No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution 


 


23

















 


may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or
claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out
of such action or claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of any
indemnified party.


 


(d)           If
the indemnification provided for in this Section 7 is unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Agents on the
other from the offering of the Shares. 
If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party failed
to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand
and each Agent on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations.  The relative benefits received by the Company
on the one hand and the Agents on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total compensation hereunder received
by the Agents.  The relative fault shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company on the
one hand or the Agent on the other and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.  The Company and the Agents
agree that it would not be just and equitable if contributions pursuant to this
subsection (d) were determined by pro
rata allocation or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (d).  The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. 
Notwithstanding the provisions of this subsection (d), no Agent shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares were offered to the public exceeds the amount of any
damages which such Agent has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation.


 


(e)           The obligations of the Company under this
Section 7 shall be in addition to any liability which the Company may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls (within the meaning of the 1933 Act) either
Agent, or any of the respective partners, directors, officers and employees of
either Agent or any such controlling person; and the obligations of the Agents
under this Section 7 shall be in 


 


24

















 


addition to any liability which the Agents may
otherwise have and shall extend, upon the same terms and conditions, to each
director of the Company (including any person who, with his or her consent, is
named in the Registration Statement as about to become a director of the
Company), each officer of the Company who signs the Registration Statement and to
each person, if any, who controls the Company within the meaning of the 1933
Act.


 


Section 8.              Representations,
Warranties and Agreements to Survive Delivery.  The respective indemnities, agreements,
representations, warranties and other statements of the Company and the Agents,
as set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless
of any investigation (or any statement as to the results thereof) made by or
on behalf of the Agents or any controlling person of the Agents, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Shares.


 


Section 9.              No
Advisory or Fiduciary Relationship. 
The Company acknowledges and agrees that (i) the Agents are acting
solely in the capacity of an arm’s length contractual counterparty to the
Company with respect to the offering of Shares contemplated hereby (including
in connection with determining the terms of such offering) and (ii) the
Agents have not assumed an advisory or fiduciary responsibility in favor of the
Company with respect to the offering contemplated hereby or the process leading
thereto (irrespective of whether the Agent has advised or is currently advising
the Company on other matters) or any other obligation to the Company
except the obligations expressly set forth in this Agreement and (iii) the
Company has consulted its own legal and financial advisors to the extent it
deemed appropriate.  The Company agrees
that it will not claim that either Agent has rendered advisory services of any
nature or respect, or owes a fiduciary or similar duty to the Company, in
connection with such transaction or the process leading thereto.


 


Section 10.            Termination.


 


(a)           The Company shall
have the right, by giving written notice as hereinafter specified, to terminate
this Agreement with respect to either Agent or both Agents in its sole
discretion at any time.  Any such
termination shall be without liability of any party to any other party, except
that (i) with respect to any pending sale through either Agent for the
Company, the obligations of the Company, including in respect of compensation
of such Agent, shall remain in full force and effect notwithstanding such
termination; and (ii) the provisions of Section 1, Section 5, Section 7
and Section 8 of this Agreement shall remain in full force and effect
notwithstanding such termination.


 


(b)           Each Agent shall have
the right, by giving written notice as hereinafter specified, to terminate this
Agreement in its sole discretion at any time; provided, however
that such termination shall only be with respect to the Agent giving notice and
shall have no effect on any other Agent’s rights or obligations under this
Agreement.  Any such termination shall be
without liability of any party to any other party except that the provisions of
Section 1, Section 5, Section 7 and Section 8 of this
Agreement shall remain in full force and effect notwithstanding such termination.


 


25

















 


(c)           This Agreement shall
remain in full force and effect unless and until terminated pursuant to Section 10(a) or
(b) above, or otherwise by mutual agreement of the parties; provided,
however, that any such termination by mutual agreement or pursuant to this clause (c) shall
in all cases be deemed to provide that Section 1, Section 5, Section 7
and Section 8 of this Agreement shall remain in full force and effect.


 


(d)           Any termination of
this Agreement shall be effective on the date specified in such notice of
termination; provided, however, that such termination shall not be effective until the close of business on
the date of receipt of such notice by any Agent or the Company, as the case may
be.  If such termination shall occur
prior to the Settlement Date for any sale of Shares, such sale shall settle in
accordance with the provisions of Section 2(g) hereof; provided,
however that, if this Agreement is terminated with respect to either
Agent, the terminated Agent shall no longer be entitled to the compensation set
forth in Section 2 hereof from sales made by the continuing Agent and the
continuing Agent shall be entitled to the full compensation of 2.5%.


 


(e)           In the case of any
purchase by an Agent pursuant to a Terms Agreement, the Agent may terminate
this Agreement and such Terms Agreement, at any time at or prior to the
Settlement Date for such purchase as a result of the occurrence of any of the
events set forth in Sections 6(g) or 6(n) hereof.


 


Section 11.            Notices.  All statements, requests, notices and agreements
hereunder shall be in writing, and if to the Agents shall be delivered or sent
by mail, electronic or facsimile transmission to Sandler O’Neill &
Partners, L.P., 919 Third Avenue, 6th Floor, New York, NY 10022, Attention: General
Counsel and to RBC Capital Markets Corporation, 3 World Financial Center, 200
Vesey Street, 8th Floor, New York, NY 
10006; and if to the Company shall be delivered or sent by mail to 220
South King Street, Honolulu, HI 96813, Attention: Glenn K.C. Ching — Senior
Vice President and General Counsel.  Any
such statements, requests, notices or agreements shall take effect upon receipt
thereof.


 


Section 12.            Parties.  This Agreement shall be binding upon, and
inure solely to the benefit of, the Agents and the Company and, to the extent
provided in Sections 7 and 8 hereof, the officers and directors of the Company
and the Agents and each person who controls the Company or the Agents, and
their respective heirs, executors, administrators, successors and assigns, and
no other person shall acquire or have any right under or by virtue of this
Agreement.  No purchaser of Shares
through the Agents shall be deemed a successor or assign by reason merely of
such purchase.


 


Section 13.            Time
of the Essence; Business Day.  Time
shall be of the essence of this Agreement. 
As used herein, the term “business day” shall mean any day when the
Commission’s office in Washington, D.C. is open for business.


 


Section 14.            Waiver
of Jury Trial.  The Company and the
Agents hereby irrevocably waive, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of
or relating to this Agreement or the transactions contemplated hereby.


 


26

















 


Section 15.            Governing
Law.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.


 


Section 16.            Counterparts.  This Agreement and any Terms Agreement may be
executed by any one or more of the parties hereto and thereto in any number of
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.  This Agreement and any Terms Agreement may be
delivered by any party by facsimile or other electronic transmission.


 


Section 17.            Severability.  The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof.  If any Section, paragraph or provision of
this Agreement is for any reason determined to be invalid or unenforceable,
there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.


 


[Signatures
on next page]


 


27

















 


If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the parties hereto in accordance with its terms.


 


	
   

  	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CENTRAL
  PACIFIC FINANCIAL CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Dean K. Hirata

  
	
   

  	
   

  	
   

  	
  Name:
  Dean K. Hirata

  
	
   

  	
   

  	
   

  	
  Title:
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
  Accepted as of the
  date hereof:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Sandler
  O’Neill & Partners, L.P.

  	
   

  	
   

  
	
  By:

  	
  Sandler
  O’Neill & Partners Corp.,

  	
   

  	
   

  
	
   

  	
  the
  sole general partner

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Brian R. Sterling

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Brian
  R. Sterling

  	
   

  	
   

  
	
   

  	
  Title:
  

  	
  An
  Officer of the Corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  RBC
  Capital Markets Corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Joseph L. Morea

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Joseph L. Morea

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Managing Director

  	
   

  	
   

  



 


28

















 


Annex 1


 


Central
Pacific Financial Corp.


 


Common
Stock

(without par value)


 


TERMS AGREEMENT


 


[Name of Agent]


 


Ladies and Gentlemen:


 


Central Pacific Financial
Corp., a Hawaii corporation (the “Company”), proposes, subject to the
terms and conditions stated herein and in the Distribution Agreement, dated September [4],
2009 (the “Distribution Agreement”), among the Company, Sandler O’Neill &
Partners, L.P. and RBC Capital Markets Corporation, to sell to [Name of Agent]
(the “Agent”) the securities specified in the Schedule hereto (the “Purchased
Securities”).


 


Each of the provisions of
the Distribution Agreement not specifically related to the solicitation by the
Agent, as agent of the Company, of offers to purchase securities is
incorporated herein by reference in its entirety, and shall be deemed to be
part of this Terms Agreement to the same extent as if such provisions had been
set forth in full herein.  Each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Terms Agreement and the Applicable Time,
except that each representation and warranty in Section 1 of the
Distribution Agreement which makes reference to the Prospectus (as therein
defined) shall be deemed to be a representation and warranty as of the
date of the Distribution Agreement in relation to the Prospectus, and also a
representation and warranty as of the date of this Terms Agreement and the
Settlement Date in relation to the Prospectus as amended and supplemented to
relate to the Purchased Securities.


 


An amendment to the
Registration Statement (as defined in the Distribution Agreement), or a
supplement to the Prospectus, as the case may be, relating to the Purchased
Securities in the form heretofore delivered to the Agent is now proposed to be
filed with the Securities and Exchange Commission.


 


Subject to the terms and
conditions set forth herein and in the Distribution Agreement which are
incorporated herein by reference, the Company agrees to sell to the Agent and
the latter agrees to purchase from the Company the number of Purchased
Securities at the time and place and at the purchase price set forth in the
Schedule hereto.


 


29

















 


If
the foregoing is in accordance with your understanding of our agreement, please
sign and return to the Company a counterpart hereof, whereupon this instrument,
along with all counterparts, will become a binding agreement between the Agent
and the Company in accordance with its terms.


 


	
   

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Central
  Pacific Financial Corp.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
  Accepted
  as of the date hereof:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [Name
  of Agent]

  	
   

  	
   

  
	
  By:

  	
   

  	
  ,

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  



 


30

















 


SCHEDULE
OF PURCHASED SECURITIES


 


Central
Pacific Financial Corp. agrees to sell to the Agent listed below and the Agent
listed below agrees to purchase from Central Pacific Financial Corp., pursuant
to the Terms Agreement to which this schedule is attached, as follows:


 


NAME
OF AGENT:


 


NUMBER
OF PURCHASED SECURITIES:


 


TIME
AND PLACE:


 


PURCHASE
PRICE:


 


31