Document:

Exhibit 10.8

 

EXECUTION VERSION

 

	
 
    

 

MASTER REORGANIZATION AGREEMENT

 

BY AND AMONG

 

BANCWEST CORPORATION

(TO BE RENAMED FIRST HAWAIIAN, INC.),

 

BANCWEST HOLDING INC.,

 

BWC HOLDING INC.

 

AND

 

BNP PARIBAS

 

dated as of April 1, 2016

 

	
 
    

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Pages
    
	
 
    	
 
    	
 
    
	
Recitals
    	
 
    	
1
    
	
 
    	
 
    	
 
    
	
Section 1.
    	
Definitions of Terms
    	
2
    
	
 
    	
 
    	
 
    
	
Section 2.
    	
The Reorganization   Transactions
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.1
    	
The Reorganization Transactions
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.2
    	
Settlement
    	
7
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.3
    	
Transfer Documents
    	
7
    
	
 
    	
 
    	
 
    	
 
    
	
Section 3.
    	
Other Agreements   between the Parties
    	
7
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
3.1
    	
Tax Agreements
    	
7
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
3.2
    	
Expense Reimbursement Agreement
    	
8
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
3.3
    	
Future Expense Reimbursement   Agreement
    	
8
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
3.4
    	
Transitional Services Agreement
    	
8
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
3.5
    	
Treatment of Non-TSA Third   Party Agreements
    	
8
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
3.6
    	
Stockholder Agreement
    	
10
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
3.7
    	
Registration Rights Agreement
    	
10
    
	
 
    	
 
    	
 
    	
 
    
	
Section 4.
    	
Representations and   Warranties
    	
10
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.1
    	
Representations and Warranties   of BWHI
    	
10
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.2
    	
Representations and Warranties   of BNPP
    	
11
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.3
    	
Representations and Warranties   of BWC Holding
    	
12
    
	
 
    	
 
    	
 
    	
 
    
	
Section 5.
    	
Releases and   Indemnification
    	
13
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.1
    	
Release of Claims
    	
13
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.2
    	
Indemnification by BWHI
    	
14
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.3
    	
Indemnification by BNPP
    	
15
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.4
    	
Indemnification by BWC
    	
15
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.5
    	
Indemnification Obligations Net   of Insurance Proceeds and Other Amounts
    	
16
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.6
    	
Procedures for Indemnification   of Third-Party Claims
    	
17
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.7
    	
Additional Matters
    	
18
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.8
    	
Remedies Cumulative
    	
19
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.9
    	
Survival of Indemnities
    	
19
    
	
 
    	
 
    	
 
    	
 
    
	
Section 6.
    	
Dispute Resolution
    	
19
    

 

i

 

	
 
    	
6.1
    	
Disputes
    	
19
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.2
    	
Escalation; Mediation
    	
19
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.3
    	
Court Actions
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
Section 7.
    	
Further Assurances
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
Section 8.
    	
Miscellaneous
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.1
    	
Counterparts
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.2
    	
Access to Corporate and Other   Books and Records
    	
21
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.3
    	
Complete Agreement;   Construction
    	
21
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.4
    	
Governing Law
    	
21
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.5
    	
Assignment
    	
21
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.6
    	
Successors and Assigns
    	
21
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.7
    	
Third-Party Beneficiaries
    	
21
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.8
    	
Notices
    	
21
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.9
    	
Severability
    	
23
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.10
    	
Title and Headings
    	
23
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.11
    	
Survival of Agreements
    	
23
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.12
    	
Waivers
    	
23
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.13
    	
Amendments
    	
23
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.14
    	
Jurisdiction; Service of   Process
    	
23
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.15
    	
Waiver of Jury Trial
    	
24
    
	
 
    	
 
    	
 
    	
 
    
	
Schedule 2.1(a) — Assets to be Transferred
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Schedule 2.1(b) — Assumed Obligations
    	
 
    

 

ii

 

Master Reorganization Agreement (this “Agreement”), dated as of April 1, 2016 (the “Effective Date”), by and among BancWest Corporation (to be renamed First Hawaiian, Inc. on the Effective Date), a Delaware corporation, BancWest Holding Inc., a Delaware corporation (“BWHI”), BWC Holding Inc., a Delaware corporation (“BWC Holding”), and BNP Paribas, a corporation organized and domiciled in France (“BNPP” and, together with BWC (as defined below), BWC Holding and BWHI, the “Parties”, and each, a “Party”).

 

Recitals

 

WHEREAS, BNPP has decided to effect a series of reorganization transactions, including the transactions described herein, and is contemplating a potential initial public offering (the “IPO”) of a portion of the shares of common stock, par value $0.01, of BWC owned directly by BNPP and indirectly by BNPP through French American Banking Corporation, a wholly-owned subsidiary of BNPP (“FABC”);

 

WHEREAS, immediately prior to the Separation Time, BWC was the direct holding company of First Hawaiian Bank, a Hawaii state-chartered bank (“FHB”), and Bank of the West, a California state-chartered bank (“BoW”);

 

WHEREAS, BWC caused BWHI to be incorporated in Delaware on March 22, 2016;

 

WHEREAS, in order to proceed with the potential IPO, FHB and BoW will be separated under independent bank holding companies, which separation will be affected through the consummation of a series of transactions, as described more fully in Section 2 hereof, including, but not limited to:  (i) BWC’s contribution of the Contributed Assets (as defined below) to BWHI (the “Contribution”); (ii) BWHI’s assumption of the Assumed Obligations (as defined below), (iii) BWHI’s issuance of shares of its Class A common stock, par value $0.01 (the “BWHI Class A Common Stock”), and its Class B common stock, par value $0.01 (the “BWHI Class B Common Stock”), to BWC as consideration for the Contribution and the Assumed Obligations; and (iv) the declaration by the board of directors of BWC, and the payment by BWC, of a dividend of all of the outstanding shares of BWHI Class A Common Stock and BWHI Class B Common Stock (the “Dividend”) to BNPP and FABC, as the sole shareholders of BWC;

 

WHEREAS, BNPP, as the holder of approximately 99% of the outstanding voting shares of BWC, has authorized and approved the Contribution and the Dividend pursuant to a written consent in lieu of a special meeting of stockholders dated as of March 31, 2016;

 

WHEREAS, BNP Paribas USA, Inc., a Delaware corporation and wholly-owned subsidiary of BNPP (“BNPP USA”), caused BWC Holding to be incorporated in Delaware on March 22, 2016, and has caused BWC Holding to issue 1,200,000 shares of its common stock, par value of $0.01 per share, to BNPP USA in exchange for $120,000,000 prior to the Reorganization Transactions;

 

WHEREAS, in connection with the Reorganization Transactions and in accordance with Section 2.1 below, BWC Holding shall purchase shares of Class C common stock, par value $0.01 per share, of BWHI (the “BWHI Class C Common Stock”) in exchange

 

 

for a cash payment in the amount of $120,000,000, which shall occur following the Contribution, and before the Dividend on the Effective Date;

 

WHEREAS, the Parties wish to enter into this Agreement and to cause the Reorganization Transactions (as defined below) to be effected as described herein; and

 

WHEREAS, the Parties intend to enter into, and cause their Subsidiaries (as defined below) to enter into, as applicable, additional agreements in connection with the Reorganization Transactions and the potential IPO as provided in Section 3 hereof.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged by this Agreement, the Parties agree as follows:

 

Section 1.                                           Definitions of Terms.

 

“Action” means any demand, action, suit, countersuit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority or any federal, state, local, foreign or international arbitration or mediation tribunal.

 

“Agreement” has the meaning set forth in the preamble.

 

“Ancillary Agreements” means, collectively, (i) all of the written agreements, instruments, assignments and other documents (other than this Agreement) executed by one or more of the Parties hereto in connection with the implementation of the transactions contemplated by this Agreement and entered into as of the same date of this Agreement, including the Tax Sharing Agreement and the Expense Reimbursement Agreement.  Following the Effective Date, BWC and BWHI may mutually agree in writing to include within the definition of Ancillary Agreements any agreements executed by one or more Parties hereto following the Effective Date in connection with this Agreement, including, without limitation, the Transitional Services Agreement, the Future Tax Allocation Agreement, the Future Expense Reimbursement Agreement, the Stockholder Agreement and the Registration Rights Agreement.

 

“Assumed Obligations” has the meaning set forth in Section 2.1(b).

 

“BNPP” has the meaning set forth in the preamble.

 

“BNPP USA” has the meaning set forth in the recitals.

 

“BoW” has the meaning set forth in the recitals.

 

“BWC” means BancWest Corporation, a Delaware corporation, which, as provided in Section 2.1(f), will be renamed “First Hawaiian, Inc.”  For the avoidance of doubt, references to BWC do not mean BWC Holding, which will be renamed “BancWest Corporation” on the Effective Date.

 

“BWC Holding” has the meaning set forth in the preamble.

 

“BWHI” has the meaning set forth in the preamble.

 

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“BWHI Business” means the business and operations of BoW and its Subsidiaries and the business and operations of BWC prior to the Separation Time as a standalone entity not related to the business and operations of FHB (including the Assumed Obligations, which are to be assumed by BWHI pursuant to Section 2.1).  For the avoidance of doubt, the FHI Business shall be deemed never to have been a part of the BWHI Business.

 

“BWHI Class A Common Stock” has the meaning set forth in the recitals.

 

“BWHI Class B Common Stock” has the meaning set forth in the recitals.

 

“BWHI Class C Common Stock” has the meaning set forth in the recitals.

 

“BWHI Group” means, collectively, BWHI and its Subsidiaries (including BoW).  For the avoidance of doubt, the BWHI Group shall not include any members of the FHI Group.

 

“BWHI Indemnitees” has the meaning set forth in Section 5.4.

 

“Contributed Assets” has the meaning set forth in Section 2.1(a).

 

“Contribution” has the meaning set forth in the recitals.

 

“Current Tax Allocation Agreements” has the meaning assigned to the term “Tax Allocation Agreements” in the Tax Sharing Agreement.

 

“Dividend” has the meaning set forth in the recitals.

 

“Effective Date” has the meaning set forth in the preamble.

 

“Encumbrance” means any mortgage, pledge, lien, charge, security interest, claim or other encumbrance.

 

“Escalation Notice” has the meaning set forth in Section 6.2(a).

 

“Expense Reimbursement Agreement” has the meaning set forth in Section 3.2.

 

“FABC” has the meaning set forth in the recitals.

 

“FHB” has the meaning set forth in the recitals.

 

“FHI Business” means the business and operations of FHB and its Subsidiaries and the business and operations of BWC (for all periods prior to the Separation Time as a standalone entity related solely to the business and operations of FHB), all as more fully described in BWC’s Registration Statement on Form S-1.  For the avoidance of doubt, the business and operations of BoW and any of its Subsidiaries and the business and operations of BWC as a standalone entity not related to the business and operations of FHB shall be deemed never to have been a part of the FHI Business.

 

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“FHI Group” means, collectively, BWC, FHB and FHB’s Subsidiaries.  The FHI Group shall not include any member of the BWHI Group.

 

“FHI Indemnitees” has the meaning set forth in Section 5.2.

 

“Future Expense Reimbursement Agreement” has the meaning set forth in Section 3.3.

 

“Future Tax Allocation Agreement” means a new tax allocation agreement, by and between BNPP USA, BWC Holding Inc., BWC (following its name change to First Hawaiian, Inc.) and BWHI.

 

“Governmental Authority” means any federal, state, local, foreign or international court, government, department, commission, board, bureau, agency, official or other legislative, judicial, regulatory, administrative or governmental authority.

 

“Group” means either the FHI Group or the BWHI Group, as the context requires.

 

“Indemnifying Party” has the meaning set forth in Section 5.5(a).

 

“Indemnitee” has the meaning set forth in Section 5.5(a).

 

“Indemnity Payment” has the meaning set forth in Section 5.5(a).

 

“Insurance Proceeds” means those monies:

 

(a)                                 received by an insured (or its successor-in-interest) from an insurance carrier;

 

(b)                                 paid by an insurance carrier on behalf of the insured (or its successor-in-interest); or

 

(c)                                  received (including by way of set-off) from any third party in the nature of insurance, contribution or indemnification in respect of any Liability;

 

in any such case net of any applicable premium adjustments (including reserves and retrospectively rated premium adjustments) and net of any costs or expenses incurred in the collection thereof.

 

“IPO” has the meaning set forth in the recitals.

 

“IPO Date” has the meaning set forth in Section 3.4.

 

“Liabilities” means any and all claims, debts, demands, actions, causes of action, suits, damages, obligations, accruals, accounts payable, reckonings, bonds, indemnities and similar obligations, agreements, promises, guarantees, make-whole agreements and similar obligations, and other liabilities and requirements, including all contractual obligations, whether absolute or contingent, matured or unmatured, liquidated or unliquidated, accrued or unaccrued,

 

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known or unknown, whenever arising, and including those arising under any law, rule, regulation, Action, threatened or contemplated Action (including the costs and expenses of demands, assessments, judgments, settlements and compromises relating thereto and attorneys’ fees and any and all costs and expenses whatsoever reasonably incurred in investigating, preparing or defending against any such Actions or threatened or contemplated Actions), order or consent decree of any Governmental Authority or any award of any arbitrator or mediator of any kind, and those arising under any contract, commitment or undertaking, including those arising under this Agreement or any Ancillary Agreement (to the extent provided therein), in each case, whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of any Person, of any nature or kind, whether or not the same would properly be reflected on a balance sheet.

 

“Party” has the meaning set forth in the preamble.

 

“Person” means an individual, a general or limited partnership, a corporation, a trust, a joint venture, an unincorporated organization, a limited liability entity, any other entity and any Governmental Authority.

 

“Registration Rights Agreement” has the meaning set forth in Section 3.7.

 

“Reorganization Transactions” has the meaning set forth in Section 2.1.

 

“Separation Time” means 12:03 A.M., Honolulu, Hawaii time, on the Effective Date.

 

“Stockholder Agreement” has the meaning set forth in Section 3.6.

 

“Subsidiary” of any Person means any corporation or other organization whether incorporated or unincorporated of which at least a majority of the securities or interests having by the terms thereof ordinary voting power to elect at least a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries; provided, however, that no Person that is not directly or indirectly wholly owned by any other Person shall be a Subsidiary of such other Person unless such other Person controls, or has the right, power or ability to control, that Person.

 

“Tax Sharing Agreement” means the Tax Sharing Agreement, by and among BNPP, BWC and BWHI, dated as of the Effective Date.

 

“Third-Party Claim” means any assertion by a Person (including any Governmental Authority) who is not a member of the FHI Group or the BWHI Group of any claim, or the commencement by any such Person of any Action, against any member of the FHI Group or the BWHI Group.

 

“Transitional Services Agreement” has the meaning set forth in Section 3.4.

 

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Section 2.                                           The Reorganization Transactions.

 

2.1                               The Reorganization Transactions.  On the Effective Date, each of BWC, BWHI, BNPP and BWC Holding shall effect, or cause to be effected, each of the following transactions (collectively, the “Reorganization Transactions”), as applicable to the respective party, which transactions shall be accomplished substantially in the order described below and subject to the terms, conditions and limitations, if any, described below:

 

(a)                                 Effective as of 12:01 A.M. Honolulu, Hawaii time on the Effective Date, BWC shall contribute, assign, transfer, convey and deliver to BWHI, and BWHI shall accept and acquire from BWC all of BWC’s rights, title and interest in and to all of the assets set forth on Schedule 2.1(a) in accordance with their respective terms (collectively, the “Contributed Assets”).

 

(b)                                 Effective as of 12:01 A.M. Honolulu, Hawaii time on the Effective Date, BWHI shall accept, assume and agree to pay, perform, discharge and fulfill, the Liabilities set forth on Schedule 2.1(b) in accordance with their respective terms (the “Assumed Obligations”).

 

(c)                                  As consideration for the Contributed Assets and the assumption by BWHI of the Assumed Obligations, effective as of 12:01 A.M. Honolulu, Hawaii time on the Effective Date, BWHI shall issue and deliver to BWC an aggregate number of shares of BWHI Class A Common Stock equal to 100,000,000 and an aggregate number of shares of BWHI Class B Common Stock equal in value to $120,000,000.

 

(d)                                 Effective as of 12:02 A.M. Honolulu, Hawaii time on the Effective Date, BWHI shall issue and deliver to BWC Holding an aggregate number of shares of BWHI Class C Common Stock equal in value to $120,000,000 in exchange for a cash payment from BWC Holding in the amount of $120,000,000.

 

(e)                                  Effective as of 12:03 A.M. Honolulu, Hawaii time on the Effective Date, BWC shall pay a dividend of all of the then-outstanding BWHI Class A Common Stock and all of the then-outstanding BWHI Class B Common Stock pro rata to its sole shareholders, BNPP and FABC.

 

(f)                                   Pursuant to and in accordance with an amendment to BWC’s Certificate of Incorporation, which shall have been filed with the Secretary of State of the State of Delaware on the Effective Date, BWC shall be renamed “First Hawaiian, Inc.”, effective as of 12:04 A.M. Honolulu, Hawaii time on the Effective Date.

 

(g)                                  Pursuant to and in accordance with an amendment to BWC Holding’s Certificate of Incorporation, which shall have been filed with the Secretary of State of the State of Delaware, on the Effective Date, BWC Holding shall be renamed “BancWest Corporation”, effective as of 12:05 A.M. Honolulu, Hawaii time on the Effective Date.

 

(h)                                 Effective as of 12:06 A.M. Honolulu, Hawaii time on the Effective Date, BWHI shall issue and deliver to BNPP an aggregate number of shares of BWHI Class A

 

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Common Stock equal in value to $261,000,000 in exchange for a cash payment from BNPP in the amount of $261,000,000.

 

2.2                               Settlement.  The Parties hereto agree that that payment of the amounts and the issuance and/or delivery of the shares of stock to the appropriate Parties in connection with the Reorganization Transactions may occur following the Effective Date but shall occur as promptly as possible following the Effective Date; provided, that the Parties agree such payments, issuances and deliveries shall have been deemed to have occurred at the respective times on the Effective Date as provided in Section 2.1 hereof.

 

2.3                               Transfer Documents.  In furtherance of the contribution, sale, assignment, transfer, conveyance and delivery of the Contributed Assets pursuant to Section 2.1(a) and the assumption of the Assumed Obligations pursuant to Section 2.1(b), on or promptly following the Effective Date:

 

(i)                                     BWC and BWHI, as applicable, shall execute and deliver, and shall cause their respective Subsidiaries to execute and deliver, such stock powers, certificates and other instruments of transfer, conveyance and assignment as and to the extent reasonably necessary to evidence the transfer, conveyance and assignment of all right, title and interest in and to the Contributed Assets to the other Party; and

 

(ii)                                  BWC and BWHI shall execute and deliver, and shall cause their respective Subsidiaries to execute and deliver, such assumptions of contracts and other instruments of assumption as and to the extent necessary to evidence the valid and effective assumption of the Assumed Obligations by BWHI.

 

(b)                                 In furtherance of the transfer of the shares of stock of BoW pursuant to Section 2.1(a) herein, BWC, in accordance with its obligations thereof, shall, as the case may be, deliver certificates representing the shares of stock so transferred, along with any appropriate endorsements or stock powers to effect such transfer.

 

Section 3.                                           Other Agreements between the Parties.

 

3.1                               Tax Agreements.

 

(a)                                 On the Effective Date, each of BWC, BWHI and BNPP shall execute and deliver the Tax Sharing Agreement, which shall be effective as of the Effective Date.  Notwithstanding anything in this Agreement to the contrary, to the extent any provision of this Agreement and any provision of the Tax Sharing Agreement address the same matter, the Tax Sharing Agreement shall exclusively govern such matter and, for the avoidance of doubt, to the extent any provision of this Agreement contradicts any provisions of the Tax Sharing Agreement, the Tax Sharing Agreement shall govern.

 

(b)                                 As of the Effective Date, one or more of the Parties hereto and their respective Subsidiaries are subject to one or more of the Current Tax Allocation Agreements.  Notwithstanding anything in this Agreement to the contrary, to the extent any

 

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provision of this Agreement and any provision of the Current Tax Allocation Agreements or the Future Tax Allocation Agreement address the same matter, the Current Tax Allocation Agreements or the Future Tax Allocation Agreement, as applicable, shall exclusively govern such matter and, for the avoidance of doubt, to the extent any provision of this Agreement contradicts any provisions of the Current Tax Allocation Agreements or the Future Tax Allocation Agreement, the Current Tax Allocation Agreements or the Future Tax Allocation Agreement, respectively, shall govern.

 

3.2                               Expense Reimbursement Agreement.  On the Effective Date, BWC and BWHI shall execute and deliver an expense reimbursement agreement covering the period beginning on the Effective Date and terminating July 1, 2016 (the “Expense Reimbursement Agreement”), governing the reimbursement of certain expenses of BWC and its Subsidiaries by BWHI.

 

3.3                               Future Expense Reimbursement Agreement.  BWC shall, and BNPP shall cause one of its U.S. affiliates to, cooperate in negotiating, executing and delivering an agreement (the “Future Expense Reimbursement Agreement”), between BWC, on one hand, and one of BNPP’s U.S. affiliates (other than BWC or its Subsidiaries), on the other hand, governing the reimbursement by such U.S. affiliate of BNPP of certain expenses incurred by BWC or any of its Subsidiaries following the termination of the Expense Reimbursement Agreement.  The Future Expense Reimbursement Agreement shall be on arm’s-length terms and shall be effective no later than July 1, 2016.

 

3.4                               Transitional Services Agreement.  BNPP, BWC and BWHI shall, and shall cause FHB and BoW to, cooperate in negotiating, executing and delivering an agreement (the “Transitional Services Agreement”), between BWC and its Subsidiaries, including FHB, on one hand, and BNPP and BWHI and its Subsidiaries, including BoW, on the other hand, governing the transition of certain shared services, which primarily consist of shared services provided pursuant to agreements with third party vendors, during specified transitional periods following the date of the consummation of the potential IPO (the “IPO Date”).  All shared services provided pursuant to an agreement with a third-party vendor and which BWC and BWHI wish to continue receiving after the IPO Date shall be covered by the Transitional Services Agreement and any terms and pricing related to the inclusion of such shared services in the Transitional Services Agreement shall be agreed upon by the parties to the Transitional Services Agreement on arm’s-length terms and in accordance with the governance terms contained therein.  The Transitional Services Agreement shall be effective no later than the IPO Date.  For the avoidance of doubt, to the extent any shared services provided pursuant to agreements with third party vendors are identified after the IPO Date, the Parties may agree to supplement the Transitional Services Agreement in accordance with the terms and governance procedures contained therein.

 

3.5                               Treatment of Non-TSA Third Party Agreements.

 

(a)                                 The Parties hereby agree that any third party agreement to which BWC is a party that is not, as of the Effective Date, contemplated by the Parties to be included in the Transitional Services Agreement referred to in Section 3.4 hereof, has been, or will be promptly following the Effective Date, identified to BWC or FHB by BWHI or BoW and in any case will be identified no later than thirty (30) days following the Effective Date.

 

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(b)                                 With respect to any contracts identified pursuant to clause (a) above, the Parties agree as follows:

 

(i)                                     with respect to any contract related solely to the FHI Business, BWC shall have the right to determine whether such contract will be terminated, retained, amended or otherwise treated and shall be responsible for any fees, costs or expenses arising from the termination, assignment, amendment or other treatment of any contract pursuant to this Section 3.5(b)(i);

 

(ii)                                  with respect to any contract related solely to the BWHI Business, BWHI shall have the right to determine whether such contract will be terminated, retained, amended or otherwise treated and shall be responsible for any fees, costs or expenses arising from the termination, assignment, amendment or other treatment of any contract pursuant to this Section 3.5(b)(ii); provided, that BWHI must make such determination and effect the desired treatment of such contract promptly following the Effective Date and in any case prior to the IPO Date;

 

(iii)                               with respect to any contract identified pursuant to Section 3.5(a) not covered by clause (i) or clause (ii) of this Section 3.5(b), BWC, on one hand, and BWHI, on the other hand, shall mutually determine whether such contract should be retained or should be assigned by BWC and assumed by BWHI, in which latter case, the Parties shall cooperate to effect such assignment promptly following the Effective Date and in any case within 30 days following the Effective Date, or be terminated, in which case, the Parties shall cooperate in terminating such contract prior to the IPO Date; provided, that (A) BWC shall have the right to terminate such contract if there is no mutual agreement by the Parties with respect to the treatment of such contract prior to the IPO Date and (B) BWHI shall be responsible for any fees, costs or expenses arising from the termination of any contract pursuant to this Section 3.5(b)(iii);

 

(iv)                              to cooperate in good faith in order to share equitably any fees, costs or expenses arising from the assignment, amendment or other treatment (other than termination, which is provided in clause (iii) above) of any contract pursuant to Section 3.5(b)(iii) that is payable by any Party as a result of the treatment of such contract thereunder as may be reasonably agreed by the Parties; and

 

(v)                                 to cooperate in good faith in order to affect this Section 3.5.

 

(c)                                  Notwithstanding any provision to the contrary under any third party contract identified pursuant to Section 3.5(a), BWC and BWHI agree that, with respect to any such contract, any obligation under such contract of BWC or BWHI, respectively, to indemnify, defend or hold harmless the other and any member of the other’s Group, from and

 

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against any and all Liabilities relating to, arising out of or resulting from, directly or indirectly, such contract shall be governed exclusively by Section 5 of this Agreement.

 

3.6                               Stockholder Agreement.  BWC and BNPP shall cooperate in negotiating, executing and delivering a stockholder agreement (the “Stockholder Agreement”) governing, the relationship between BWC and BNPP and their respective affiliates following the IPO Date, including, among other matters, corporate governance,  director appointment rights, consent and approval rights and information sharing and disclosure obligations.  The Stockholder Agreement shall be effective no later than the IPO Date.

 

3.7                               Registration Rights Agreement.  BWC and BNPP shall cooperate in negotiating, executing and delivering a registration rights agreement (the “Registration Rights Agreement”) governing BNPP’s ability to require BWC to register shares of its common stock that BNPP will beneficially own as of the IPO Date.  The Registration Rights Agreement shall be effective no later than the IPO Date.

 

Section 4.                                           Representations and Warranties.

 

4.1                               Representations and Warranties of BWHI.  BWHI represents and warrants to the other Parties hereto that the statements contained in this Section 4.1 are true and correct as of the date hereof:

 

(a)                                 Organization and Authority of BWHI; Enforceability.  BWHI is a corporation duly incorporated, validly existing and in good standing under the laws of the state of Delaware.  BWHI has full corporate power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby.  The execution, delivery and performance by BWHI of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of BWHI.  This Agreement has been duly executed and delivered by BWHI and (assuming due authorization, execution and delivery by the other Parties) this Agreement constitutes the legal, valid and binding obligation of BWHI enforceable against BWHI in accordance with its terms.

 

(b)                                 Organization and Authority of BWC; Enforceability.  BWC is a corporation duly incorporated, validly existing and in good standing under the laws of the state of Delaware.  BWC has full corporate power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby.  The execution, delivery and performance by BWC of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of BWC.  This Agreement has been duly executed and delivered by BWC and (assuming due authorization, execution and delivery by the other Parties) this Agreement constitutes the legal, valid and binding obligation of BWC enforceable against BWC in accordance with its terms.

 

(c)                                  No Conflict; Consents.  The execution, delivery and performance by BWHI and BWC of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not: (i) violate or conflict with the organizational documents of BWHI or

 

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BWC, respectively; (ii) violate any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to BWHI or BWC, respectively; or (iii) conflict with, or result in (with or without notice or lapse of time or both) any violation of, or default under, or give rise to a right of termination, acceleration or modification of any obligation or loss of any benefit under any contract or other instrument to which BWC is a party or to which any of the assets of BWC (other than the Contributed Assets) are subject, in each case except for those which would not have a material adverse effect on the transactions contemplated hereby or on the business, financial condition or results of operation of BWC on or following the Separation Time.  No consent, approval, waiver or authorization is required to be obtained by BWHI or BWC from any Person or entity (including any Governmental Authority) in connection with the execution, delivery and performance by BWHI and BWC of this Agreement and the consummation of the transactions contemplated hereby and thereby that has not already been obtained or that would not have a material adverse effect on the transactions contemplated hereby or on the business, financial condition or results of operation of BWC on or following the Separation Time.

 

(d)                                 Title to Assets; Assumption of Obligations.  Prior to the Effective Date, BWC owned and had good title to its assets (other than the Contributed Assets), free and clear of any and all Encumbrances, in each case except for those which would not have a material adverse effect on the transactions contemplated hereby or on the business, financial condition or results of operation of BWC prior to, on or following the Separation Time.  Immediately prior to the Separation Time, to BWHI’s knowledge, there were no material Liabilities of BWC other than the Liabilities set forth on Schedule 2.1(b).

 

(e)                                  Legal Proceedings.  In each case except for those which would not have a material adverse effect on the transactions contemplated hereby or on the business, financial condition or results of operation of BWC prior to, on or following the Separation Time, there is no Action of any nature pending or, to BWHI’s knowledge, threatened against or by BWHI or BWC (i) relating to or affecting the Contributed Assets or the Assumed Obligations; or (ii) that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement.  To BWHI’s knowledge, no event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.

 

4.2                               Representations and Warranties of BNPP.  BNPP represents and warrants to the other Parties hereto that the statements contained in this Section 4.2 are true and correct as of the date hereof:

 

(a)                                 Organization and Authority of BNPP; Enforceability.  BNPP is a corporation duly organized and domiciled in France, validly existing and in good standing under the laws of France.  BNPP has full corporate power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby.  The execution, delivery and performance by BNPP of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of BNPP.  This Agreement has been duly executed and delivered by BNPP and (assuming due authorization, execution and delivery by the other Parties) this Agreement constitutes the legal, valid and binding obligation of BNPP enforceable against BNPP in accordance with its terms.

 

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(b)                                 No Conflict; Consents.  The execution, delivery and performance by BNPP of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not: (i) violate or conflict with the organizational documents of BNPP or (ii) any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to BNPP, in each case except for those which would not have a material adverse effect on the transactions contemplated hereby or on the business, financial condition or results of operation of BWC on or following the Separation Time.  No consent, approval, waiver or authorization is required to be obtained by BNPP from any Person or entity (including any Governmental Authority) in connection with the execution, delivery and performance by BNPP of this Agreement and the consummation of the transactions contemplated hereby that has not already been obtained or that would not have a material adverse effect on the transactions contemplated hereby or on the business, financial condition or results of operation of BWC on or following the Separation Time.

 

(c)                                  Legal Proceedings.  In each case except for those which would not have a material adverse effect on the transactions contemplated hereby or on the business, financial condition or results of operation of BWC prior to, on or following the Separation Time, there is no Action of any nature pending or, to BNPP’s knowledge, threatened against or by BNPP that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement.  To BNPP’s knowledge, no event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.

 

4.3                               Representations and Warranties of BWC Holding.  BWC Holding represents and warrants to the other Parties hereto that the statements contained in this Section 4.3 are true and correct as of the date hereof:

 

(a)                                 Organization and Authority of BWC Holding; Enforceability.  BWC Holding is a corporation duly incorporated, validly existing and in good standing under the laws of the state of Delaware.  BWC Holding has full corporate power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby.  The execution, delivery and performance by BWC Holding of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of BWC Holding.  This Agreement has been duly executed and delivered by BWC Holding and (assuming due authorization, execution and delivery by the other Parties) this Agreement constitutes the legal, valid and binding obligation of BWC Holding enforceable against BWC Holding in accordance with its terms.

 

(b)                                 No Conflict; Consents.  The execution, delivery and performance by BWC Holding of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not violate or conflict with the organizational documents of BWC Holding or any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to BWC Holding.  No consent, approval, waiver or authorization is required to be obtained by BWC Holding from any Person or entity (including any Governmental Authority) in connection with the execution, delivery and performance by BWC Holding of this Agreement and the consummation of the transactions contemplated hereby that has not already been obtained or that would not have a material adverse effect on the transactions contemplated hereby or on the

 

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business, financial condition or results of operation of BWC on or following the Separation Time.

 

(c)                                  Legal Proceedings.  In each case except for those which would not have a material adverse effect on the transactions contemplated hereby or on the business, financial condition or results of operation of BWC prior to, on or following the Separation Time, there is no Action of any nature pending or, to BWC Holding’s knowledge, threatened against or by BWC Holding that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement.  To BWC Holding’s knowledge, no event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.

 

Section 5.                                           Releases and Indemnification.

 

5.1                               Release of Claims.

 

(a)                                 BWHI and BNPP Release of BWC.  Except as provided in Section 5.1(c), effective as of the Separation Time, each of BWHI and BNPP does hereby, for itself and each other member of the BWHI Group, their respective successors and assigns, and, to the extent permitted by law, all Persons who at any time prior to the Separation Time have been stockholders, directors, officers, agents or employees of any member of the BWHI Group (in each case, in their respective capacities as such), release and forever discharge the members of the FHI Group, the respective successors and assigns of members of the FHI Group, and all Persons who at any time prior to the Separation Time have been stockholders, directors, officers, agents or employees of any member of the FHI Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, from any and all Liabilities related to the BWHI Business whatsoever, whether at law or in equity (including any right of contribution), whether arising under any contract or agreement, by operation of law or otherwise, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed on or prior to the Effective Date (including in connection with the Reorganization Transactions and all other activities to implement the Reorganization Transactions and any of the other transactions contemplated hereunder).

 

(b)                                 BWC Release of BWHI and BNPP.  Except as provided in Section 5.1(c), effective as of the Separation Time, BWC does hereby, for itself and each other member of the FHI Group, their respective successors and assigns, and, to the extent permitted by law, all Persons who at any time prior to the Separation Time have been stockholders, directors, officers, agents or employees of any member of the FHI Group (in each case, in their respective capacities as such), release and forever discharge the members of the BWHI Group and of BNPP, the respective successors and assigns of members of the BWHI Group and of BNPP, and all Persons who at any time prior to the Separation Time have been stockholders, directors, officers, agents or employees of any member of the BWHI Group or of BNPP (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, from any and all Liabilities related to the FHI Business whatsoever, whether at law or in equity (including any right to contribution), whether arising under any contract or agreement, by operation of law or otherwise, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any

 

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conditions existing or alleged to have existed on or prior to the Effective Date (including in connection with the Reorganization Transactions and all other activities to implement the Reorganization Transactions and any of the other transactions contemplated hereunder).

 

(c)                                  Obligations Not Affected.  Nothing contained in Section 5.1(a) or Section 5.1(b) shall impair any right of any Person to enforce this Agreement or any Ancillary Agreement.  In addition, nothing contained in Section 5.1(a) shall release BWC from honoring its existing obligations to indemnify (or advance expenses to) any director, officer or employee of BWHI or any of its Subsidiaries on or prior to the Effective Date who was a director, officer or employee of BWC or any of its Subsidiaries on or prior to the Effective Date, to the extent such director, officer or employee becomes the subject of any Action involving BWC or any of its Subsidiaries (but not including any indemnity obligations arising out of litigation commenced by BNPP, BWHI or BoW or any of their Subsidiaries other than the FHI Group) and was entitled to such indemnification (or advancement of expenses) pursuant to then-existing obligations; it being understood that, if the underlying obligation giving rise to such Action is a Liability related to the BWHI Business under this Agreement, BWHI shall indemnify BWC for such Liability (including BWC’s costs to indemnify the director, trustee, officer or employee) in accordance with the provisions set forth in this Section 5.

 

(d)                                 No Claims.  BWHI and BNPP shall not make, and shall not permit any member of the BWHI Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against BWC or any other member of the FHI Group, or any other Person released pursuant to Section 5.1(a), with respect to any Liabilities released pursuant to Section 5.1(a).  BWC shall not make, and shall not permit any other member of the FHI Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against BWHI, any other member of the BWHI Group or BNPP, or any other Person released pursuant to Section 5.1(b), with respect to any Liabilities released pursuant to Section 5.1(b).

 

(e)                                  Execution of Further Releases.  It is the intent of each of BWC and BWHI, by virtue of the provisions of this Section 5.1, to provide for a full and complete release and discharge of all Liabilities existing or arising from all acts and events occurring or failing to occur or alleged to have occurred or to have failed to occur and all conditions existing or alleged to have existed on or before the Separation Time, between or among BWHI or any other member of the BWHI Group, on the one hand, and BWC or any other member of the FHI Group, on the other hand (including any contractual agreements or arrangements existing or alleged to exist between or among any such members on or before the Separation Time), except as expressly set forth in Section 5.1(c). At any time, at the reasonable request of the other Party, each Party shall cause each member of its respective Group to execute and deliver such other and further releases reflecting the provisions hereof that the Parties deem to be necessary or desirable to carry out the purposes of this Section 5.1.

 

5.2                               Indemnification by BWHI. Except as provided in Section 5.3 and Section 5.5 or to the extent provided in any Ancillary Agreement (including, for the avoidance of doubt, the Transitional Services Agreement), to the fullest extent permitted by law, BWHI shall indemnify, defend and hold harmless BWC and each of the respective former and current

 

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directors, officers and employees of the members of the FHI Group, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “FHI Indemnitees”), from and against any and all Liabilities relating to, arising out of or resulting from, directly or indirectly, any of the following items (without duplication):

 

(a)                                 the BWHI Business, including the failure of BWHI or any other member of the BWHI Group or any other Person to pay, perform or otherwise promptly discharge any Liability relating to, arising out of or resulting from the BWHI Business in accordance with its terms, whether arising prior to or after the Separation Time; and

 

(b)                                 any breach by BWHI or any other member of the BWHI Group of this Agreement or any of the Ancillary Agreements; and

 

(c)                                  any contract to which BWC or any of its Subsidiaries was a party, and from which both the BWHI Business and the FHI Business derived a benefit, that terminated prior to the Separation Time except that this indemnity obligation shall not apply to the extent (but only to the extent) that the Liabilities arise out of or result from the negligence, recklessness, violation of law, fraud or misrepresentation by or of FHB or any of its Subsidiaries.

 

The Parties agree that the Transitional Services Agreement will provide that FHI and BWHI, respectively, will indemnify, defend and hold harmless the other for any liabilities owed to third parties under the shared services contracts included in the Transitional Services Agreement that arise out of FHI’s and BWHI’s respective bad acts.

 

5.3                               Indemnification by BNPP. Notwithstanding Section 5.2, BNPP (not BWHI) shall indemnify, defend and hold harmless the FHI Indemnitees from and against all Liabilities directly resulting from the execution and implementation of the Reorganization Transactions and the separation of BWC into two independent bank holding companies; provided, that to the extent any such Liability or results from the negligence of BWHI or any other member of the BWHI Group or any former and current director, officer or employee of the members of the BWHI Group prior to or as of the Separation Time, the indemnification obligations related to, arising out of or resulting from such negligence shall be the obligations of BWHI as provided in and in accordance with Section 5.2 herein.

 

5.4                               Indemnification by BWC. Except as provided in Section 5.5 hereof or to the extent provided in any Ancillary Agreement (including, for the avoidance of doubt, the Transitional Services Agreement), to the fullest extent permitted by law, BWC shall indemnify, defend and hold harmless BWHI and each of the respective former and current directors, officers and employees of the members of the BWHI Group, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “BWHI Indemnitees”), from and against any and all Liabilities relating to, arising out of or resulting from, directly or indirectly, any of the following items (without duplication):

 

(a)                                 the FHI Business, including the failure of BWC or any other member of the FHI Group or any other Person to pay, perform or otherwise promptly discharge any Liability relating to, arising out of or resulting from the FHI Business in accordance with its terms, whether arising prior to or after the Separation Time; and

 

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(b)                                 any breach by BWC or any other member of the FHI Group of this Agreement or any of the Ancillary Agreements; and

 

(c)                                  any contract to which BWC or any of its Subsidiaries was a party, and from which both the BWHI Business and the FHI Business derived a benefit, that terminated prior to the Separation Time to the extent (but only to the extent) that the Liabilities arise out of or result from the negligence, recklessness, violation of law, fraud or misrepresentation by or of FHB’s or any of its Subsidiaries.

 

The Parties agree that the Transitional Services Agreement will provide that FHI and BWHI, respectively, will indemnify, defend and hold harmless the other for any liabilities owed to third parties under the shared services contracts included in the Transitional Services Agreement that arise out of FHI’s and BWHI’s respective bad acts.

 

5.5                               Indemnification Obligations Net of Insurance Proceeds and Other Amounts.

 

(a)                                 The Parties intend that any Liability subject to indemnification, contribution or reimbursement pursuant to this Section 5 will be net of Insurance Proceeds that actually reduce the amount of, or are paid to the applicable Indemnitee in respect of, such Liability and net of reasonably expected tax benefits and tax costs to the Indemnitee (and members of the Indemnitee’s Group).  Accordingly, the amount that either Party (an “Indemnifying Party”) is required to pay to any Person entitled to indemnification or contribution hereunder (an “Indemnitee”) will be (i) reduced by any Insurance Proceeds theretofore actually recovered by or on behalf of the Indemnitee in respect of the related Liability, (ii) reduced by the net present value (calculated using a discount rate equal to the Annual Mid-term Applicable Federal Rate as provided in the Internal Revenue Service Revenue Rulings) of any net tax benefits to the Indemnitee (and members of the Indemnitee’s Group) reasonably expected to be actually utilized by the Indemnitee (or any member of the Indemnitee’s Group) within the taxable year in which such Liability is incurred and the following four years and (iii) increased by the net present value (calculated using a discount rate equal to the Annual Mid-term Applicable Federal Rate as provided in the Internal Revenue Service Revenue Rulings) of any net tax costs to the Indemnitee (and members of the Indemnitee’s Group) reasonably expected to arise from the receipt of any Indemnity Payment hereunder.  In applying the preceding sentence, the Indemnitee will determine the amounts of reasonably expected net tax benefits and net tax costs in its good faith discretion.  If an Indemnitee receives a payment (an “Indemnity Payment”) required by this Agreement from an Indemnifying Party in respect of any Liability and subsequently receives Insurance Proceeds in respect of such Liability, then the Indemnitee will pay to the Indemnifying Party an amount equal to the excess of the Indemnity Payment received over the amount of the Indemnity Payment that would have been due if such Insurance Proceeds had been received, realized or recovered before the Indemnity Payment was made.

 

(b)                                 Each Party shall, and shall cause the members of its Group to, use commercially reasonable efforts (taking into account the probability of success on the merits and the cost of expending such efforts, including attorneys’ fees and expenses) to collect and recover any Insurance Proceeds that may be collectible or recoverable respecting the Liabilities for

 

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which indemnification or contribution may be available under this Section 5; provided, that the Indemnitee’s inability to collect or recover any such Insurance Proceeds shall not limit the Indemnifying Party’s obligations hereunder.

 

5.6                               Procedures for Indemnification of Third-Party Claims.

 

(a)                                 Notice of Claims.  If, at or following the date of this Agreement, an Indemnitee shall receive notice or otherwise learn of a Third-Party Claim with respect to which an Indemnifying Party may be obligated to provide indemnification to such Indemnitee pursuant to Section 5.2, Section 5.3 or Section 5.4 or any other Section of this Agreement or any Ancillary Agreement, such Indemnitee shall give such Indemnifying Party written notice thereof as soon as practicable but in any event within twenty (20) days (or sooner if the nature of the Third-Party Claim so requires) after becoming aware of such Third-Party Claim. Any such notice shall describe the Third-Party Claim in reasonable detail, including the facts and circumstances giving rise to such claim for indemnification, and include copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. Notwithstanding the foregoing, the failure of any Indemnitee or other Person to give notice as provided in this Section 5.6(a) shall not relieve the related Indemnifying Party of its obligations under this Section 5, except to the extent that such Indemnifying Party is actually prejudiced by such failure to give notice and then only to the extent of such prejudice.

 

(b)                                 Control of Defense.  An Indemnifying Party may elect to defend, at such Indemnifying Party’s own expense and by such Indemnifying Party’s own counsel, any Third-Party Claim.  Within twenty (20) days after the receipt of notice from an Indemnitee in accordance with Section 5.6(a) (or sooner, if the nature of such Third-Party Claim so requires), the Indemnifying Party shall notify the Indemnitee of its election as to whether the Indemnifying Party will assume responsibility for defending such Third-Party Claim.  After notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to monitor and participate in (but not control) the defense, compromise, or settlement thereof, but the fees and expenses of such counsel shall be the expense of such Indemnitee, except that the Indemnifying Party shall be liable for the fees and expenses of counsel employed by the Indemnitee (i) for any period during which the Indemnifying Party has not assumed the defense of such Third-Party Claim (other than during any period in which the Indemnitee shall have failed to give notice of the Third-Party Claim in accordance with Section 5.6(a)), and (ii) if a conflict exists between the positions of the Indemnifying Party and the Indemnitee, as reasonably determined in good faith by the Indemnitee, and the Indemnitee believes it is in the Indemnitee’s best interest to obtain independent counsel.

 

(c)                                  If an Indemnifying Party elects not to assume responsibility for defending a Third-Party Claim, or fails to notify an Indemnitee of its election as provided in Section 5.6(b), such Indemnitee may defend such Third-Party Claim at the cost and expense of the Indemnifying Party.

 

(d)                                 If an Indemnifying Party elects to assume the defense of a Third-Party Claim in accordance with the terms of this Agreement, the Indemnitee shall agree to any settlement, compromise or discharge of such Third-Party Claim that the Indemnifying Party may

 

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recommend and that by its terms obligates the Indemnifying Party to pay the full amount of the liability in connection with such Third-Party Claim and that releases the Indemnitee completely in connection with such Third-Party Claim, provided, that Indemnitee shall not be required to admit any fault.

 

(e)                                  No Indemnifying Party shall consent to entry of any judgment or enter into any settlement of any Third-Party Claim without the consent of the applicable Indemnitee or Indemnitees if the effect thereof is to permit any injunction, declaratory judgment, other order or other nonmonetary relief to be entered, directly or indirectly, against any Indemnitee.

 

(f)                                   Whether or not the Indemnifying Party assumes the defense of a Third-Party Claim, no Indemnitee shall admit any liability with respect to, or settle, compromise or discharge, such Third-Party Claim without the Indemnifying Party’s prior written consent which shall not be unreasonably withheld.

 

5.7                               Additional Matters.

 

(a)                                 Notice of Direct Claims. Any claim on account of a Liability that does not result from a Third-Party Claim shall be asserted by written notice given by the Indemnitee to the related Indemnifying Party as soon as practicable but in any event within twenty (20) days after becoming aware of such claim; provided, that the failure of any Indemnitee to give notice as provided in this Section 5.7(a) shall not prejudice the ability of the Indemnitee to do so at a later time except to the extent that such Indemnifying Party is actually prejudiced by such failure to give notice and then only to the extent of such prejudice.  Such Indemnifying Party shall have a period of (thirty) 30 days after the receipt of such notice within which to respond thereto.  If such Indemnifying Party does not respond within such 30-day period, such Indemnifying Party shall be deemed to have refused to accept responsibility to make payment.  If such Indemnifying Party does not respond within such 30-day period or rejects such claim in whole or in part, such Indemnitee shall be free to pursue such remedies as may be available to such Party as contemplated by this Agreement and the Ancillary Agreements.

 

(b)                                 Subrogation.  In the event of payment by or on behalf of any Indemnifying Party to any Indemnitee in connection with any Third-Party Claim, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee as to any events or circumstances in respect of which such Indemnitee may have any right, defense or claim relating to such Third-Party Claim against any claimant or plaintiff asserting such Third-Party Claim or against any other Person. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right, defense or claim.

 

(c)                                  Substitution.  In the event of an Action in which the Indemnifying Party is not a named defendant, if either the Indemnitee or Indemnifying Party shall so request, the Parties shall endeavor to substitute the Indemnifying Party for the, or add the Indemnifying Party as an additional, named defendant.  If such substitution or addition cannot be achieved for any reason or is not requested, the named defendant shall allow the Indemnifying Party to manage the Action as set forth in Section 5.6 and this Section 5.7, and the Indemnifying Party

 

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shall fully indemnify the named defendant against all costs of defending the Action (including court costs, sanctions imposed by a court, attorneys’ fees, experts’ fees and all other external expenses), the costs of any judgment or settlement and the cost of any interest or penalties relating to any judgment or settlement other than costs arising as a result of the negligence of the defendant.

 

(d)                                 Right of Contribution.  If any right of indemnification contained in Section 5.2 or Section 5.4 is held unenforceable or is unavailable for any reason, or is insufficient to hold harmless an Indemnitee in respect of any Liability for which such Indemnitee is entitled to indemnification hereunder, then the Indemnifying Party shall contribute to the amounts paid or payable by the Indemnitees as a result of such Liability (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and the members of its Group, on the one hand, and the Indemnitees entitled to contribution, on the other hand, as well as any other relevant equitable considerations.

 

5.8                               Remedies Cumulative. The remedies provided in this Section 5 shall be cumulative and shall not preclude assertion by any Indemnitee of any other rights or the seeking of any and all other remedies against any Indemnifying Party.

 

5.9                               Survival of Indemnities. The rights and obligations of each of BWC and BWHI and their respective Indemnitees under this Section 5 shall survive (a) the sale or other transfer by any Party or any member of its Group of any assets or businesses or the assignment by it of any liabilities; or (b) any merger, consolidation, business combination, sale of all or substantially all of its assets, restructuring, recapitalization, reorganization or similar transaction involving any Party or any of the members of its Group.

 

Section 6.                                           Dispute Resolution.

 

6.1                               Disputes.  Except as otherwise specifically provided in each Ancillary Agreement, the procedures for discussion, negotiation and mediation set forth in this Section 6 shall apply to all disputes, controversies or claims (whether arising in contract, tort or otherwise) that may arise out of or relate to, or arise under or in connection with, this Agreement or any Ancillary Agreement or the transactions contemplated hereby or thereby (including all actions taken in furtherance of the transactions contemplated hereby or thereby on or prior to the date hereof).

 

6.2                               Escalation; Mediation.

 

(a)                                 It is the intent of the Parties to use reasonable efforts to resolve expeditiously any dispute, controversy or claim between or among them with respect to the matters covered hereby that may arise from time to time on a mutually acceptable negotiated basis.  In furtherance of the foregoing, a Party involved in a dispute, controversy or claim may deliver a notice to the other Party or Parties involved in the dispute, controversy or claim (an “Escalation Notice”) demanding an in-person meeting involving representatives of the parties at a senior level of management.  A copy of any such Escalation Notice shall be given to the Party involved in the dispute, controversy or claim (which copy shall state that it is an Escalation Notice pursuant to this Agreement) in accordance with the notice provisions of Section 8.8.  Any

 

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agenda, location or procedures for such discussions or negotiations between the Parties involved may be established by the Parties from time to time; provided, however, that the Parties involved shall use reasonable efforts to meet within 30 days of the Escalation Notice.

 

(b)                                 If the Parties involved are not able to resolve the dispute, controversy or claim through the escalation process referred to above, then the matter shall be referred to mediation.  The Parties involved shall retain a mediator, reasonably acceptable to both Parties, to aid the Parties in their discussions and negotiations by informally providing advice to the Parties.  Any opinion expressed by the mediator shall be strictly advisory and shall not be binding on the Parties involved or be admissible in any other proceeding. The mediator may be chosen from a list of mediators previously selected by the Parties involved in the dispute or by other agreement of the Parties.  Costs of the mediation shall be borne equally by the Parties involved in the matter, except that each Party shall be responsible for its own expenses, including legal fees.  Mediation shall be a prerequisite to the commencement of any Action by any Party against another Party.

 

(c)                                  In the event that any resolution of any dispute, controversy or claim pursuant to the procedures set forth in Section 6.2(a) or Section 6.2(b) in any way affects an agreement or arrangement between either of the Parties and a third-party insurance carrier, the consent of such third-party insurance carrier to such resolution, to the extent such consent is required, shall be obtained before such resolution can take effect.

 

6.3                               Court Actions.  In the event that any Party, after complying with the provisions set forth in Section 6.2, desires to commence an Action, such Party may submit the dispute, controversy or claim (or such series of related disputes, controversies or claims) to the court of competent jurisdiction specified in Section 8.14.  Unless otherwise agreed in writing, the Parties will continue to honor all other commitments under this Agreement during the course of dispute resolution pursuant to the provisions of this Section 6 with respect to all matters not subject to such dispute, controversy or claim.

 

Section 7.                                           Further Assurances.  In addition to the actions specifically provided for elsewhere in this Agreement, each Party hereto shall execute and deliver such additional documents, instruments, conveyances and assurances and take, or cause to be taken, all actions, and to do, or cause to be done, all things reasonably necessary, proper or advisable to carry out the provisions of this Agreement and the Ancillary Agreements and give effect to the transactions contemplated by this Agreement and the Ancillary Agreements and the documents to be delivered hereunder and thereunder.

 

Section 8.                                           Miscellaneous.

 

8.1                               Counterparts.  This Agreement may be executed in one or more counterparts, including by facsimile or by e-mail delivery of a “.pdf” format data file, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the Parties and delivered to the other Parties.

 

20

 

8.2                               Access to Corporate and Other Books and Records.  Following the Separation Time, FHI will permit representatives of BWHI (including legal counsel and accountants) to have full access at all reasonable times, and in a manner so as not to interfere with the normal business operations of FHI or FHB, to all of the BWC corporate and other books and records for periods prior to the Separation Time.  BWHI may make and keep copies of any such BWC corporate and other books and records.

 

8.3                               Complete Agreement; Construction.  This Agreement, including the Schedules hereto, and the Ancillary Agreements shall constitute the entire agreement between the parties with respect to the subject matter hereof and shall supersede all previous agreements, negotiations, discussion, understandings, conversations, commitments and writings with respect to such subject matter.

 

8.4                               Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed in the State of New York and without regard to its choice of law principles.

 

8.5                               Assignment.  This Agreement shall not be assignable, in whole or in part, directly or indirectly, by any Party without the prior written consent of the other Parties, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be void; provided, that any Party may assign this Agreement to a purchaser of all or substantially all of the properties and assets of such Party (whether by sale, merger or otherwise) so long as such purchaser expressly assumes, in a written instrument in form reasonably satisfactory to the non-assigning Parties, the due and punctual performance or observance of every agreement and covenant of this Agreement on the part of the assigning Party to be performed or observed.

 

8.6                               Successors and Assigns.  The provisions to this Agreement shall be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and permitted assigns.

 

8.7                               Third-Party Beneficiaries.  Except for the indemnification rights under this Agreement of any FHI Indemnitee or BWHI Indemnitee in their respective capacities as such, as to which rights such Indemnitees are third-party beneficiaries hereof, this Agreement is solely for the benefit of the Parties and should not be deemed to confer upon any other Person any right or remedy hereunder and there are no third-party beneficiaries of this Agreement and this Agreement shall not provide any third-person with any remedy claim, liability, reimbursement, claim of action or other right in excess of those existing without reference to this Agreement.

 

8.8                               Notices.  All notices and other communications hereunder shall be in writing, shall reference this Agreement and shall be deemed to have been duly given when (a) delivered in person, (b) sent by facsimile or electronic mail, or (c) deposited in the United States mail or private express mail, postage prepaid.  Such communications must be sent to the respective Parties at the following addresses (or at such other addresses for a party as shall be specified by like notice):

 

21

 

If to BWC:

 

First Hawaiian, Inc.
 999 Bishop Street, 29th Floor
 Honolulu, Hawaii 96813

Attention:  Robert S. Harrison, Chairman and CEO

 

with a copy to:

 

First Hawaiian, Inc.
 999 Bishop Street, 29th Floor
 Honolulu, Hawaii 96813

Attention:  Michael Ching, Executive Vice President, CFO and Treasurer

 

If to BWHI:

 

BancWest Holding Inc.
 c/o Bank of the West
 180 Montgomery Street
 San Francisco, California 94104
 Attention:  General Counsel

 

with a copy to:

 

BancWest Holding Inc.
 c/o Bank of the West
 180 Montgomery Street
 San Francisco, California 94104
 Attention:  Chief Financial Officer

 

If to BNPP:

 

BNP Paribas
 3 rue d’Antin
 75002 Paris, France
 Attention:  Pierre Bouchara — Head of Group Financial Management

 

If to BWC Holding:

 

BWC Holding Inc.
 c/o Bank of the West
 180 Montgomery Street
 San Francisco, California 94104
 Attention:  General Counsel

 

22

 

with a copy to:

 

BWC Holding Inc.
 c/o Bank of the West
 180 Montgomery Street
 San Francisco, California 94104
 Attention:  Chief Financial Officer

 

8.9                               Severability.  In the event any one or more of the provisions contained in this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, illegal, void or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein, or the application of such provisions to Persons or circumstances or in jurisdictions other than those as to which have been held invalid, illegal, void or unenforceable, shall remain in full force and effect and not in any way be affected, impaired or invalidated thereby.  The Parties shall endeavor in good faith negotiations to replace the invalid, illegal, void or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of invalid, illegal, void or unenforceable provisions.

 

8.10                        Title and Headings.  Titles and headings to Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

 

8.11                        Survival of Agreements.  Except as otherwise contemplated by this Agreement, all covenants, representations, warranties and agreements of the Parties contained in this Agreement, and liability for any breach of any obligations contained herein, shall survive the Effective Date.

 

8.12                        Waivers.  The failure of any Party to require strict performance by any other Party of any provision in this Agreement will not waive or diminish that Party’s right to demand strict performance thereafter of that or any other provision hereof.

 

8.13                        Amendments.  No provisions of this Agreement shall be deemed waived, amended, supplemented or modified by any Party hereto, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of the Party against whom it is sought to enforce such waiver, amendment, supplement or modification.

 

8.14                        Jurisdiction; Service of Process. Any action or proceeding arising out of or relating to this Agreement shall be brought in the courts of the State of New York located in the County of New York or in the United States District Court for the Southern District of New York (if any Party to such action or proceeding has or can acquire jurisdiction), and each of the Parties hereto or thereto irrevocably submits to the exclusive jurisdiction of each such court in any such action or proceeding, waives any objection it may now or hereafter have to venue or to convenience of forum, agrees that all claims in respect of the action or proceeding shall be heard and determined only in any such court and agrees not to bring any action or proceeding arising out of or relating to this Agreement in any other court.  The Parties to this Agreement agree that any of them may file a copy of this paragraph with any court as written evidence of the knowing,

 

23

 

voluntary and bargained agreement between the Parties hereto and thereto irrevocably to waive any objections to venue or to convenience of forum.  Process in any action or proceeding referred to in the first sentence of this Section 8.14 may be served on any Party to this Agreement anywhere in the world.

 

8.15                        Waiver of Jury Trial.  EACH PARTY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.

 

[Signature page follows]

 

24

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

	
 
    	
BANCWEST CORPORATION 
    
	
 
    	
(To be renamed First   Hawaiian, Inc.)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Robert S. Harrison
    
	
 
    	
Name: 
    	
Robert S. Harrison
    
	
 
    	
Title: 
    	
Vice Chair
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BANCWEST HOLDING INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Thibault Fulconis
    
	
 
    	
Name: 
    	
Thibault Fulconis
    
	
 
    	
Title:  
    	
Vice Chairman, Chief   Financial Officer & Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BWC HOLDING INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Thibault Fulconis
    
	
 
    	
Name: 
    	
Thibault Fulconis
    
	
 
    	
Title: 
    	
Vice Chairman, Chief   Financial Officer & Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BNP PARIBAS
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Stefaan Dacraene
    
	
 
    	
Name: 
    	
Stefaan Dacraene
    
	
 
    	
Title: 
    	
Head of International   Retail Banking
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Pierre Bouchara
    
	
 
    	
Name: 
    	
Pierre Bouchara
    
	
 
    	
Title: 
    	
Head of Group Financial   Management
    

 

[Signature Page to Master Reorganization Agreement]

 

 

Schedule 2.1(a)

 

Assets to be Transferred

 

All of BWC’s assets, properties, claims and rights (including goodwill) not solely related to FHB as measured immediately prior to the Effective Date, wherever located, of every kind, character and description, whether real, personal or mixed, tangible, intangible or contingent, in each case whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of BWC, including rights and benefits pursuant to any contract, agreement, instrument, understanding or other arrangement, and including, for the avoidance of doubt, all of BWC’s rights, title and interest in and to all of the shares of stock of BoW outstanding immediately prior to the Effective Date, but excluding (1) for the avoidance of doubt, all of BWC’s rights, title and interest in and to all of the shares of stock of FHB outstanding immediately prior to the Effective Date, (2) an amount of cash equal to $71,991,742.80, (3) any rights arising under the contracts that are addressed in the Transitional Services Agreement to the extent so addressed and (4) the corporate and other books and records of BWC.

 

 

Schedule 2.1(b)

 

Assumed Obligations

 

1.              Loan Agreement and Fixed Rate Note, each dated as of September 26, 2011, between BWC and BNP Paribas Fortis

 

2.              Loan Agreement, dated as of June 29, 2010, between BWC and Societe Anonyme de Gestion, d’Investissements et de Participations “SAGIP” S.A.

 

3.              Subordinated Term Loan Agreement, dated as of July 1, 2015, between BWC and BNP Paribas CC, Inc.

 

4.              Subordinated Term Loan Agreement, dated as of December 21, 2015, between BWC and BNP Paribas CC, Inc.

 

5.              All Liabilities of BWC not solely related to FHB, whether at law or in equity (including any right of contribution), whether arising under any contract or agreement, by operation of law or otherwise, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed on or prior to the Effective Date, other than with respect to contracts that are addressed in the Transitional Services Agreement to the extent so addressed.Exhibit 10.9

 

EXECUTION VERSION

 

	
 
    

 

TAX SHARING AGREEMENT

 

BY AND AMONG

 

BNP PARIBAS S.A.,

 

BANCWEST CORPORATION

(TO BE RENAMED FIRST HAWAIIAN, INC.)

 

AND

 

BANCWEST HOLDING INC.

 

dated as of April 1, 2016

 

	
 
    

 

 

TABLE OF CONTENTS

 

	
TAX   SHARING AGREEMENT
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
RECITALS
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 1.
    	
 
    	
Definition of Terms
    	
2
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 2.
    	
 
    	
Tax Allocation   Agreements; Allocation of Income Taxes
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
2.1
    	
Tax Allocation Agreements
    	
6
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
2.2
    	
United States Federal Income   Taxes
    	
7
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
2.3
    	
Local Taxes
    	
7
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 3.
    	
 
    	
Expected Taxes, Return   Taxes, Unexpected Taxes and Transfer Taxes
    	
7
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
3.1
    	
Expected Taxes
    	
7
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
3.2
    	
Return Taxes
    	
7
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
3.3
    	
Unexpected Taxes
    	
8
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
3.4
    	
Unexpected Tax Reductions
    	
8
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
3.5
    	
Transfer Taxes
    	
8
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
3.6
    	
De Minimis Amount
    	
8
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 4.
    	
 
    	
Tax Returns, Refunds,   Credits, Offsets and Benefits
    	
9
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
4.1
    	
Tax Returns
    	
9
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
4.2
    	
Refunds, Credits, Offsets, Tax Benefits
    	
10
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
4.3
    	
Carrybacks
    	
10
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
4.4
    	
Amended Returns
    	
10
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 5.
    	
 
    	
Interest Rate;   Characterization of Payments
    	
11
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
5.1
    	
Interest on Late Payments
    	
11
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
5.2
    	
Tax Consequences of Payments
    	
11
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 6.
    	
 
    	
Cooperation and Tax   Contests
    	
11
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
6.1
    	
Cooperation
    	
11
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
6.2
    	
Notices of Tax Contests
    	
11
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
6.3
    	
Control of Tax Contests
    	
12
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
6.4
    	
Cooperation Regarding Tax   Contests
    	
12
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 7.
    	
 
    	
Tax Records
    	
13
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
7.1
    	
Retention of Tax Records
    	
13
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
7.2
    	
Access to Tax Records
    	
13
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
7.3
    	
Confidentiality
    	
13
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 8.
    	
 
    	
Representations and   Covenants
    	
13
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 9.
    	
 
    	
General Provisions
    	
13
    

 

i

 

	
 
    	
 
    	
9.1
    	
Construction
    	
13
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
9.2
    	
Other Agreements
    	
13
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
9.3
    	
Counterparts
    	
14
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
9.4
    	
Notices
    	
14
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
9.5
    	
Amendments
    	
15
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
9.6
    	
Assignment
    	
15
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
9.7
    	
Successors and Assigns
    	
15
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
9.8
    	
Change in Law
    	
15
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
9.9
    	
Authorization, Etc.
    	
15
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
9.10
    	
Termination
    	
15
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
9.11
    	
Subsidiaries
    	
15
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
9.12
    	
Third-Party Beneficiaries
    	
15
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
9.13
    	
Double Recovery
    	
15
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
9.14
    	
Titles and Headings
    	
16
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
9.15
    	
Governing Law
    	
16
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
9.16
    	
Waiver of Jury Trial
    	
16
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
9.17
    	
Survival
    	
16
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
9.18
    	
Severability
    	
16
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
9.19
    	
No Strict Construction;   Interpretation
    	
16
    
	
 
    	
 
    	
 
    	
 
    
	
SCHEDULE A
    	
 
    	
 
    	
 
    

 

ii

 

TAX SHARING AGREEMENT

 

THIS TAX SHARING AGREEMENT (the “Agreement”) is dated as of April 1, 2016 (the “Effective Date”), by and among BNP Paribas S.A., a corporation organized and domiciled in the French Republic (“BNPP SA”), BancWest Corporation (to be renamed First Hawaiian, Inc. on the Effective Date), a Delaware corporation and, immediately prior to and as of the Effective Date, a wholly-owned subsidiary of BNPP SA (“FHI”), and BancWest Holding Inc., a Delaware corporation and a direct subsidiary of FHI immediately prior to the Distribution (as defined below) (“BWHI” and, together with BNPP SA and FHI, the “Parties”, and each, a “Party”).  Unless otherwise indicated, all “Section” references in this Agreement are to sections of the Agreement.

 

RECITALS

 

WHEREAS, Bank of the West, a California state-chartered bank (“BOW”), was, immediately prior to the Effective Date, a direct wholly-owned bank subsidiary of FHI;

 

WHEREAS, FHI, BOW and First Hawaiian Bank, a Hawaii state-chartered bank and a direct wholly-owned bank subsidiary of FHI (“FHB”), are each a member of the Pre-Distribution Group (as defined below);

 

WHEREAS, (i) BNPP SA and FHI entered into that certain Agreement for Allocation and Settlement of Unitary State Income Tax Liabilities effective December 22, 2001, as amended on October 31, 2014; (ii) FHI, BOW and FHB, entered into that certain Comprehensive Agreement for Allocation and Settlement of Income Tax Liabilities effective November 1, 1998, as amended on October 31, 2014; and (iii) FHI, BOW and FHB entered into that certain Agreement for Allocation and Settlement of Unitary State Tax Benefits and Detriments Resulting from Unitary Relationships with BNPP SA effective for taxable periods ending on or after December 31, 2009, as amended on October 31, 2014 (clauses (i) through (iii), collectively, the “Tax Allocation Agreements”);

 

WHEREAS, BNPP SA, FHI and BWHI determined that it is in the best interests of each named company and its stockholders to separate BOW and FHB under independent bank holding companies and entered into the Master Reorganization Agreement, dated as of the date hereof (the “Master Reorganization Agreement”);

 

WHEREAS, on March 22, 2016, FHI formed BWHI as a new subsidiary of FHI;

 

WHEREAS, pursuant to the Master Reorganization Agreement, FHI will contribute to BWHI (i) a certain amount of cash, (ii) all of the then-outstanding shares of stock of BOW, and (iii) other assets as specified in the Master Reorganization Agreement, in exchange for (i) the issuance of shares of (x) Class A common stock, par value $0.01 per share, of BWHI and (y) Class B common stock, par value $0.01 per share, of BWHI (clauses (x) and (y), collectively “BWHI Shares”), and (ii) the assumption of certain liabilities as specified in the Master Reorganization Agreement  (the “Contribution”);

 

WHEREAS, in accordance with the Master Reorganization Agreement, immediately following the Contribution, FHI will pay as an in-kind dividend all the BWHI Shares to FHI’s

 

 

stockholders, BNPP SA and French American Banking Corporation, a wholly-owned subsidiary of BNPP SA (the “Distribution”);

 

WHEREAS, subsequent to the Distribution, BNPP SA plans to pursue an initial public offering of FHI (the “IPO”) of its common stock, par value $0.01, and the board of directors of FHI has determined that it is in the best interests of FHI to do so;

 

WHEREAS, if the IPO is not effected prior to July 1, 2016, FHI will, in compliance with the Federal Reserve’s Regulation YY, become a direct subsidiary of BWC Holding Inc. (to be renamed BancWest Corporation on the Effective Date), an indirect United States subsidiary of BNPP SA and a direct subsidiary of BNP Paribas USA, a direct United States subsidiary of BNPP SA;

 

WHEREAS, the Parties intend the Contribution to qualify, with respect to FHI, as a tax-free transaction under section 351(a) of the United States Internal Revenue Code of 1986, as amended (the “Code”), and under applicable Local Tax (as defined below) laws;

 

WHEREAS, the Parties intend the Distribution to (i) be a distribution to which section 311(a) of the Code applies and (ii) result, with respect to FHI, in tax liabilities under applicable Local Tax (as defined below) laws in an amount not in excess of the amount of Expected Taxes (as defined below);

 

WHEREAS, the Parties desire to provide for and agree upon the allocation between the Parties of liabilities for Taxes (as defined below) arising prior to and as a result of the Contribution and the Distribution, and to provide for and agree upon other matters relating to Taxes; and

 

WHEREAS, in order to further the objective of the IPO, BNPP SA has agreed to cause the FHI Group to not bear the effects of unexpected adjustments to those Taxes (as defined below) for which the FHI Group is liable in respect of the Contribution and the Distribution.

 

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, the Parties hereby agree as follows:

 

SECTION 1.                         Definition of Terms.  For purposes of this Agreement (including the recitals hereof), the following terms have the following meanings:

 

“After-Tax Basis” means (i) reducing the amount of a payment to which such term applies by any Tax Benefit derived, as a result of the event giving rise to such payment, by the Payee or the Group to which such Payee is a member, and (ii) increasing the amount of a payment to which such term applies by any Tax cost incurred, as a result of the receipt or accrual of the payment, by the Payee or the Group to which such Payee is a member.

 

2

 

“Agreed Treatment” means the agreement among the Parties to treat for all purposes, unless a Final Determination provides otherwise, (i) the Contribution, with respect to FHI and all members of the FHI Group, as a tax-free transaction under United States federal and Local Tax laws, (ii) the Distribution, with respect to FHI and all members of the FHI Group, as a transaction to which section 311(a) of the Code applies, and (iii) the Distribution as resulting, with respect to FHI and all members of the FHI Group, in Local Tax liabilities in amounts not in excess of the amount of Expected Taxes or Return Taxes.

 

“Agreement” has the meaning set forth in the preamble hereof.

 

“BNPP SA” has the meaning set forth in the preamble hereof.

 

“BNPP Group” means BNPP SA and its subsidiaries, other than those included in the Pre-Distribution Group; provided, however, BNPP SA and its subsidiaries comprise the BNPP Group only to the extent included in a Unitary Group that includes the members of the Pre-Distribution Group.

 

“BOW” has the meaning set forth in the recitals hereof.

 

“Business Day” means any day other than a Saturday, a Sunday or a statutory holiday on which banks in the State of New York are closed.

 

“BWHI Group” means BWHI and its subsidiaries after the Distribution but only to the extent they were members of the Pre-Distribution Group.  For the avoidance of doubt, the BWHI Group does not include FHI or FHB.

 

“BWHI Shares” has the meaning set forth in the recitals hereof.

 

“Code” has the meaning set forth in the recitals hereof.

 

“Contribution” has the meaning set forth in the recitals hereof.

 

“Controlling Party” has the meaning set forth in Section 6.3.

 

“Distribution” has the meaning set forth in the recitals hereof.

 

“Distribution Straddle Period” means any taxable period beginning on or before and ending after, April 1, 2016.

 

“Effective Date” has the meaning set forth in the preamble hereof.

 

“Expected Taxes” means any Local Taxes expected to be allocated to the FHI Group in accordance with the Tax Allocation Agreements as a result of or in connection with the Distribution, each such amount by relevant jurisdiction calculated and set forth in Schedule A.  For the avoidance of doubt, Expected Taxes are not calculated on an After-Tax Basis and do not include Transfer Taxes.

 

“FHB” has the meaning set forth in the recitals hereof.

 

3

 

“FHI” has the meaning set forth in the preamble hereof.

 

“FHI Group” means FHI and its subsidiaries after the Distribution but only to the extent they were members of the Pre-Distribution Group.  For the avoidance of doubt, the FHI Group does not include BWHI or BOW.

 

“Filer” means the Party that is responsible for filing the applicable Tax Return pursuant to Section 4.1.

 

“Final Determination” means a determination as a result of an examination by a Tax Authority, any final action by a Tax Authority on an amended return or claim for refund, the execution of a closing agreement with a Tax Authority or a judicial decision which has become final.

 

“Group” means the BNPP Group, the FHI Group, the BWHI Group or the Pre-Distribution Group, as the context requires.

 

“IPO” has the meaning set forth in the recitals hereof.

 

“IRS” means the Internal Revenue Service.

 

“Local” means pertaining to a jurisdiction within the United States of America, other than the Federal Government of the United States of America, which for the avoidance of doubt includes any applicable state, municipalities and localities.

 

“Master Reorganization Agreement” has the meaning set forth in the recitals hereof.

 

“Non-Controlling Party” has the meaning set forth in Section 6.3.

 

“Non-Filer” means any Party that is not responsible for filing the applicable Tax Return pursuant to Sections 4.1.

 

“Party” has the meaning set forth in the preamble hereof.

 

“Parties” has the meaning set forth in the preamble hereof.

 

“Payee” has the meaning set forth in Section 6.2.

 

“Payor” has the meaning set forth in Section 6.2.

 

“Person” means any individual, corporation, company, limited liability company, partnership, trust, incorporated or unincorporated association, joint venture or other entity of any kind.

 

“Post-Distribution Period” means any taxable period beginning after April 1, 2016 and, in the case of any Straddle Period, the portion of such Straddle Period beginning after April 1, 2016.

 

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“Pre-Distribution Group” means FHI and its subsidiaries immediately before the Distribution.  For the avoidance of doubt, the Pre-Distribution Group includes BWHI and BOW.

 

“Pre-Distribution Period” means any taxable period that ends on or before April 1, 2016 and, in the case of any Straddle Period, the portion of such Straddle Period ending on April 1, 2016.

 

“Return Difference” has the meaning set forth in Section 3.2.

 

“Return Taxes” means any Local Taxes shown on Tax Returns to be filed in accordance with Section 4.1 allocated to the FHI Group in accordance with the Tax Allocation Agreements as a result of or in connection with the Distribution.  For the avoidance of doubt, Return Taxes are not calculated on an After-Tax Basis and do not include Transfer Taxes.

 

“Tax” or “Taxes” means any income, gross income, gross receipts, profits, capital stock, franchise, withholding, payroll, social security, workers’ compensation, employment, unemployment, disability, property, ad valorem, stamp, excise, severance, occupation, service, sales, use, license, lease, transfer, import, export, value added, alternative minimum, estimated, business privilege or other similar tax (including any fee, assessment, or other charge in the nature of or in lieu of any tax) imposed by any Tax Authority, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.

 

“Tax Allocation Agreements” has the meaning set forth in the recitals hereof.

 

“Tax Authority” means, with respect to any Tax, the governmental entity or political subdivision, agency, commission or authority thereof that imposes such Tax, and the agency, commission or authority (if any) charged with the assessment, determination or collection of such Tax for such entity or subdivision.

 

“Tax Benefit” means a reduction in the Tax liability of a member of a Group (or of the Group of which it is a member) for any taxable period.  Except as otherwise provided in this Agreement, a Tax Benefit shall be deemed to have been realized or received from a Tax Item in a taxable period only if and to the extent that the Tax liability of the member (or of the Group of which it is a member) for such period, after taking into account the effect of the Tax Item on the Tax liability of such member in the current period and all prior periods, is less than it would have been if such Tax liability were determined without regard to such Tax Item.

 

“Tax Contest” means an audit, review, examination, or any other administrative or judicial proceeding, appeal, or similar administrative or judicial action with respect to Taxes, Tax refunds, or Tax Returns of any member of the BNPP Group, the FHI Group and the BWHI Group.

 

“Tax Item” means any item of income, gain, loss, deduction, or credit.

 

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“Tax Return” means any return, filing, or other document (including an information return) filed or required to be filed, including any request for extension of time, filing made with an estimated Tax payment, claim for refund, or amended return that may be filed for any Taxable Year with any Tax Authority in connection with any Tax (whether or not payment is required to be made with respect to such filing).

 

“Tax Year” means, with respect to any Tax, the year, or shorter period, if applicable, for which the Tax is reported as provided under applicable Tax law.

 

“Transfer Taxes” means all United States federal, state or local sales, use, privilege, transfer, documentary, gains, stamp, duties, recording, and similar Taxes and fees (including any penalties, interest or additions thereto).  For the avoidance of doubt, Transfer Taxes do not include any Hawaii General Excise Tax.

 

“Treasury Regulations” means the regulations promulgated from time to time under the Code as in effect for the relevant Tax Year.

 

“Unexpected Taxes” has the meaning set forth in Section 3.3.

 

“Unexpected Tax Reduction” has the meaning set forth in Section 3.4.

 

“Unitary Group” means a unitary group of corporations under a respective state’s tax laws and regulations, but only to the extent such unitary group includes (i) at least one member of the FHI Group and (ii) at least one member of the BNPP Group or the BWHI Group and provided that any members included in or excluded from such state’s unitary Tax Return by reason of any water’s-edge or other elections that are in effect for any taxable period that is subject to this Agreement shall similarly be included in or excluded from the definition of “Unitary Group”.

 

“Unitary Group Straddle Period” means any taxable period of a Unitary Group beginning when the FHI Group is part of the Unitary Group and ending on the date on which the FHI Group is no longer part of the Unitary Group.

 

SECTION 2.                         Tax Allocation Agreements; Allocation of Income Taxes.

 

2.1                               Tax Allocation Agreements.  Notwithstanding anything to the contrary in the Tax Allocation Agreements:

 

(a)                                 BWHI, rather than FHI, shall be responsible for ensuring the timely payment of all United States federal income Taxes of the Pre-Distribution Group and Local income Taxes of the Unitary Group.

 

(b)                                 All members of the Pre-Distribution Group and the Unitary Group shall make payments to BWHI, and BWHI shall make payments to the members, in accordance with the Tax Allocation Agreements but with BWHI in the role of collection and payment agent that was previously assigned to FHI.

 

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2.2                               United States Federal Income Taxes.  United States federal income Taxes of the Pre-Distribution Group shall be allocated in accordance with the relevant Tax Allocation Agreements.  Any United States federal income Taxes in respect of a Distribution Straddle Period shall be allocated between the Pre-Distribution Period and the Post-Distribution Period on a “closing of the books” basis by assuming that the books of the members of the Pre-Distribution Group were closed at the end of the Effective Date in accordance with Treasury Regulations Section 1.1502-76.

 

2.3                               Local Taxes.  For the avoidance of doubt, Local Taxes shall continue to be allocated among the members of the Groups in accordance with the relevant Tax Allocation Agreements.  In the event that the FHI Group ceases to be included in a Unitary Group, any Local income Taxes in respect of the Unitary Group Straddle Period shall be allocated on a “closing of the books” basis by assuming that the books of the members of the Unitary Group were closed at the end of the date on which the FHI Group ceased to be part of the Unitary Group, applying concepts similar to those of Treasury Regulations Section 1.1502-76.

 

SECTION 3.                         Expected Taxes, Return Taxes, Unexpected Taxes and Transfer Taxes.

 

3.1                               Expected Taxes.  Notwithstanding any other provision of this Agreement or the Tax Allocation Agreements, the FHI Group shall be liable for any and all Expected Taxes.  For the avoidance of doubt, the Expected Taxes do not include any Taxes allocated to the BWHI Group under the Tax Allocation Agreements.

 

3.2                               Return Taxes.  Notwithstanding any other provision of this Agreement and the Tax Allocation Agreements, if any amount of Return Taxes is different from the amount of Expected Taxes in a relevant jurisdiction (each such difference, a “Return Difference”):

 

(a)                                 BWHI shall notify FHI of this fact at least thirty (30) Business Days prior to the due date for the relevant Tax Return, and FHI will have the right to review and approve the items directly related to such Return Difference, such approval not to be unreasonably delayed, conditioned or withheld by FHI.

 

(b)                                 BWHI and FHI shall discuss and negotiate in good faith to resolve any disagreements between them regarding any Return Difference.  In the event that BWHI and FHI are unable to resolve any such disagreement within fifteen (15) Business Days, such disagreement shall be resolved by Ernst & Young.  BWHI shall file the relevant Tax Returns in accordance with Section 4.1 based on such resolutions. BWHI and FHI shall bear evenly all costs and expenses associated with obtaining such resolution.

 

(c)                                  If the Return Taxes, after giving effect to the prior clauses of this Section 3.2 are greater than the amount of Expected Taxes for any jurisdiction, BWHI shall make a payment, on an After-Tax Basis, to FHI in an amount equal to such excess within five (5) Business Days after the filing by BWHI of the Local Tax Return for that jurisdiction for the Tax Year including the Effective Date in the manner prescribed in Section 4.1.

 

(d)                                 If the Return Taxes are less than the amount of Expected Taxes for any jurisdiction, FHI shall make a payment to BWHI in an amount equal to such difference (minus

 

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the United States federal income Tax costs to the FHI Group that results from such difference) within five (5) Business Days after the final filing by BWHI of the Local Tax Return for that jurisdiction for the Tax Year including the Effective Date in the manner prescribed in Section 4.1.

 

3.3                               Unexpected Taxes.  Notwithstanding any other provision of this Agreement, in the event of a Final Determination that FHI or any member of the FHI Group is liable for any Taxes in respect of the Contribution or Distribution (including any interest and penalties, but not including any Transfer Taxes) in an amount in excess of the Return Taxes (such amount in excess, the “Unexpected Taxes”), BWHI shall make a payment to FHI, on an After-Tax Basis, for such Unexpected Taxes at least five (5) Business Days prior to the date such payment is required to be made to the relevant Tax Authority.

 

3.4                               Unexpected Tax Reductions.  Notwithstanding any other provision of this Agreement, in the event of a Final Determination that results in a reduction of the aggregate Tax liability of FHI and the members of the FHI Group in respect of the Contribution and Distribution (including any interest and penalties, but not including any Transfer Taxes) to an amount less than the Return Taxes (such reduction, an “Unexpected Tax Reduction”), FHI shall make a payment to BWHI, for such Unexpected Tax Reduction (minus the United States federal income Tax costs to the FHI Group that results from such difference) within fifteen (15) Business Days after the date of the relevant Final Determination.

 

3.5                               Transfer Taxes.  The Parties shall cooperate with each other and use their commercially reasonable efforts to reduce and/or eliminate any Transfer Taxes.  If any Transfer Tax remains payable after application of the first sentence of this Section 3.5 and notwithstanding any other provision in this Agreement, Transfer Taxes shall be allocated in the following manner:

 

(a)                                 Transfer Taxes for the sale or transfer of real property shall be allocated to the Group that includes the entity that owns the real property after the relevant sale or transfer and the Party that is a member of such Group shall pay, on an After-Tax Basis, the amount of such Transfer Taxes to the person (if not a member of such Party’s Group) that is required to pay such Tax at least 5 Business Days prior to the date a payment for such Tax is required to be made to the relevant Tax Authority.

 

(b)                                 All other Transfer Taxes shall be allocated evenly between the Parties, and each Party shall pay its share of any such Taxes, on an After-Tax Basis, to the person (if not a member of such Party’s Group) that is required to pay such Tax at least 5 Business Days prior to the date a payment for such Tax is required to be made to the relevant Tax Authority.

 

(c)                                  Each Group shall be responsible for making any Transfer Tax filings that its members are required by law to make.  Out of pocket expenses for such filings shall be allocated and paid in accordance with Section 3.5(a) with respect to real property Transfer Tax filings and Section 3.5(b) with respect to all other Transfer Tax filings.

 

3.6                               De Minimis Amount.  Notwithstanding the foregoing, no payment pursuant to this Section SECTION 3 shall be made unless the aggregate amount of payments required under this Section SECTION 3 exceeds $10,000.

 

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SECTION 4.                         Tax Returns, Refunds, Credits, Offsets and Benefits.

 

4.1                               Tax Returns.

 

(a)                                 Notwithstanding anything to the contrary in the Tax Allocation Agreements and without limiting their rights and obligations and subject to the provisions of Section SECTION 3, (i) BNPP SA and FHI shall authorize BWHI to prepare and file all unitary Local income Tax Returns of the Unitary Group and any other returns, documents or statements required to be filed as part of such Unitary Group Tax Returns, and (ii) each of BNPP SA and FHI hereby irrevocably appoints BWHI as its agent and attorney-in fact to prepare and file all Local income Tax Returns of the Unitary Group as BWHI may deem appropriate but in accordance with applicable law to effect the foregoing. Notwithstanding any other provision of this Agreement or the Tax Allocation Agreements, BWHI shall bear all costs and expenses associated with filing Tax Returns pursuant to this Section 4.1(a).

 

(b)                                 Notwithstanding anything to the contrary in the Tax Allocation Agreements and without limiting its rights and obligations hereunder, (i) FHI shall authorize BWHI to prepare and file all consolidated United States federal income Tax Returns of the Pre-Distribution Group and any other returns, documents or statements required to be filed as part of such consolidated group Tax Returns, and (ii) FHI hereby irrevocably appoints BWHI as its agent and attorney-in fact to prepare and file all United States federal income Tax Returns of the Pre-Distribution Group as BWHI may deem appropriate but in accordance with applicable law to effect the foregoing.  Notwithstanding any other provision of this Agreement or the Tax Allocation Agreements, BWHI shall bear all costs and expenses associated with filing Tax Returns pursuant to this Section 4.1(b).

 

(c)                                  In applying the provisions of Section 4.1(a) and Section 4.1(b), each Party shall furnish any relevant information, including pro forma returns, disclosures, apportionment data and supporting schedules, relating to members of the Group of which such Party is a member, necessary for completing any Tax Return pursuant to Section 4.1(a) and Section 4.1(b) in a format suitable for inclusion in such return. Each Party shall have the right to review and approve items on such returns if and to the extent such items directly relate to Taxes for which such Party would be liable under any of the Tax Allocation Agreements or this Agreement, such approval not to be unreasonably delayed, conditioned or withheld by such Party.  Each Party signing a Tax Return in respect of which another Party is the Filer shall have the right to comment on all aspects of such Tax Return, and the Filer shall review and consider all such comments in good faith.

 

(d)                                 Manner of Tax Return Preparation.  Unless otherwise required by a Tax Authority, BWHI shall prepare and file all Tax Returns required to be filed pursuant to Section 4.1(a) and Section 4.1(b) on a timely basis (taking into account applicable extensions), and take all other actions, in a manner consistent with the relevant provisions of the Tax Allocation Agreements and this Agreement.

 

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4.2                               Refunds, Credits, Offsets, Tax Benefits.

 

(a)                                 Subject to applicable United States banking laws and regulations (including, for the avoidance of doubt, safety and soundness standards and any necessary bank regulatory approvals) and notwithstanding any provision of the Tax Allocation Agreements, FHI shall make a payment to BWHI in an amount equal to any refunds, credits or offsets (if any) with respect to Pre-Distribution Period Taxes that had been allocated to FHI or any member of the FHI Group pursuant to the Tax Allocation Agreements or this Agreement. The amount of payment required to be made by FHI to BWHI under Section 4.2(a) shall be the amount of the relevant refund, credit or offset, reduced by any Tax costs, including any Taxes imposed on such refund, credit, or offset, incurred by FHI or any member of the FHI Group.  All payments made under this Section 4.2(a) shall be made not later than fifteen (15) Business Days following the latest of (i) the receipt of the applicable refund, credit or offset with respect to Pre-Distribution Period Taxes by FHI or the relevant member of the FHI Group, (ii) a determination that such payments are permitted under applicable United States banking laws and regulations and (iii) the receipt of any necessary bank regulatory approvals.

 

(b)                                 Subject to applicable United States banking laws and regulations (including, for the avoidance of doubt, safety and soundness standards and any necessary bank regulatory approvals) and notwithstanding any provision of the Tax Allocation Agreements, FHI shall make a payment to BWHI for any refunds, credits, or offsets with respect to Return Taxes that it (or any member of the FHI Group) receives in accordance with the Tax Allocation Agreements.  The amount of payment required to be made by FHI to BWHI under Section 4.2(b) shall be the amount of the relevant refund, credit or offset, reduced by any Tax costs, including any Taxes imposed on such refund, credit, or offset, incurred by FHI or any member of the FHI Group.  All payments made under this Section 4.2(b) shall be made not later than fifteen (15) Business Days following the latest of (i) the receipt of the applicable refund, credit or offset with respect to Return Taxes by FHI or the relevant member of the FHI Group, (ii) a determination that such payments are permitted under applicable United States banking laws and regulations and (iii) the receipt of any necessary bank regulatory approvals.

 

(c)                                  If, subsequent to a Tax Authority’s allowance of a refund, credit or offset, such Tax Authority reduces or eliminates such allowance, any refund, credit or offset, forwarded under this Section 4.2(a) and Section 4.2(b) shall be returned to FHI in an amount equal to the applicable reduction.  All payments required to be made under this Section 4.2(c) shall be made by BWHI, within fifteen (15) Business Days after receiving notification by FHI requesting such payments.

 

4.3                               Carrybacks.  To the extent permitted under applicable Tax laws, the BWHI Group shall make the appropriate elections in respect of any Tax Returns to waive any option to carry back any net operating loss, any credits or any similar item to all taxable periods through the Distribution.  Any refund of or credit for Taxes resulting from any such carryback by a member of the BWHI Group that cannot be waived shall be payable to BWHI net of any Taxes incurred with respect to the receipt or accrual thereof and any expenses incurred in connection therewith.

 

4.4                               Amended Returns.  Any amended Tax Return or claim for Tax refund, credit or offset with respect to any member of the BNPP Group, the FHI Group or the BWHI Group may

 

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be made only by the member responsible for filing the original Tax Return with respect to such amendment or claim pursuant to the Tax Allocation Agreements and/or Section 4.1.  Such member shall not, without the prior written consent of the other Parties (which consent shall not be unreasonably withheld or delayed), file, or cause to be filed, any such amended Tax Return or claim for Tax refund, credit or offset to the extent that such filing, if accepted, is likely to increase the Taxes allocated to, or the Tax payment obligations of, another Party for any Tax Year (or portion thereof); provided, however, that such consent need not be obtained if the member filing the amended Tax Return or claim by written notice to the other Party agrees to indemnify the other Party for the incremental Taxes allocated to, or the incremental Tax payment obligations of, such other Party as a result of the filing of such amended Tax Return or claim.

 

SECTION 5.                         Interest Rate; Characterization of Payments

 

5.1                               Interest on Late Payments.  In the event that any payment required to be made under this Agreement is made after the date on which such payment is due, interest will accrue on the amount of such payment from (but not including) the due date of such payment to (and including) the date such payment is actually made at the applicable federal rate in effect at the time such payment is due (based on the federal mid-term rate), compounded on a daily basis.  Such interest will be payable at the same time as the payment to which it relates.

 

5.2                               Tax Consequences of Payments.  For all Tax purposes and to the extent permitted by applicable Tax law, the Parties hereto shall treat any payment made pursuant to this Agreement as a capital contribution by the relevant member or a distribution by the relevant member (or as adjustments to such contribution or distribution) (or as a distribution followed by a contribution) occurring immediately before the Effective Date.  Consistent with the foregoing, payments made between BWHI and FHI shall be treated, to the extent permitted by applicable Tax law, as adjustments to the amount of the Contribution.

 

SECTION 6.                         Cooperation and Tax Contests.

 

6.1                               Cooperation.  In addition to the obligations enumerated in Section 6.4, BNPP SA, FHI and BWHI will cooperate (and cause their respective subsidiaries to cooperate) with each other and with each other’s agents, including accounting firms and legal counsel, in connection with Tax matters, including provision of relevant documents and information in their possession and making available to each other, as reasonably requested and available, personnel (including officers, directors, employees and agents of the Parties or their respective subsidiaries) responsible for preparing, maintaining, and interpreting information and documents relevant to Taxes, and personnel reasonably required as witnesses or for purposes of providing information or documents in connection with any administrative or judicial proceedings relating to Taxes.

 

6.2                               Notices of Tax Contests.  Each Party shall provide prompt notice to any other Party of any pending or threatened Tax audit, assessment or proceeding or other Tax Contest of which it becomes aware relating to (i) Taxes which may be paid by such other Party hereunder or (ii) Tax items that may affect the amount or treatment of Tax items of such other Party (and any member of such other Party’s Group).  Such notice shall contain factual information (to the extent known) describing any asserted Tax liability in reasonable detail and shall be accompanied by copies of any notice and other documents received from any Tax Authority in

 

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respect of any such matters; provided, however, that failure to give such notification shall not affect the payment or indemnification provided hereunder except, and only to the extent that a Party hereto (a “Payor”) that is required to make a payment to another Party (a “Payee”) shall have been actually prejudiced as a result of such failure.  Thereafter, the Payee shall deliver to the Payor such additional information with respect to such Tax Contest in its possession that the Payor may reasonably request.

 

6.3                               Control of Tax Contests.

 

(a)                                 Controlling Party.  Subject to the limitations set forth in Section 6.3(c), a Filer shall, at its own cost and expense, be the Controlling Party with respect to any Tax Contest involving a Tax reported (or that, it is asserted, should have been reported) on a Tax Return for which such Party is responsible for filing (or causing to be filed) pursuant to Section 4.1 of this Agreement, in which case any Non-Filer that could have liability under this Agreement for a Tax to which such Tax Contest relates shall be treated as the “Non-Controlling Party.” Notwithstanding the immediately preceding sentence but subject to Section 6.3(b), if a Non-Filer (x) acknowledges to the Filer in writing its full liability under this Agreement to make a payment or indemnify for any Tax, and (y) provides to the Filer evidence (that is satisfactory to the Filer as determined in the Filer’s reasonable discretion) of the Non-Filer’s financial readiness and capacity to make such payment, as applicable, then thereafter with respect to the Tax Contest relating solely to such Tax the Non-Filer shall be the Controlling Party (subject to Section 6.3(c)) and the Filer shall be treated as the Non-Controlling Party.

 

(b)                                 Notwithstanding Section 6.3(a) but subject to Section 6.3(c), BWHI shall be the Controlling Party with respect to any Tax Contest involving Return Taxes and Unexpected Taxes.

 

(c)                                  Non-Controlling Party Participation Rights.  With respect to a Tax Contest of any Tax Return that could result in a Tax liability that is allocated under this Agreement, (i) the Non-Controlling Party shall, at its own cost and expense, be entitled to participate in such Tax Contest and to provide comments and suggestions to the Controlling Party, such comments and suggestions not to be unreasonably rejected, (ii) the Controlling Party shall keep the Non-Controlling Party updated and informed, and shall consult with the Non-Controlling Party, (iii) the Controlling Party shall act in good faith with a view to the merits in connection with the Tax Contest, and (iv) the Controlling Party shall not settle or compromise such Tax Contest without the prior written consent of the Non-Controlling Party (which consent shall not be unreasonably withheld).

 

6.4                               Cooperation Regarding Tax Contests.  The Parties shall provide each other with all information relating to a Tax Contest which is needed by the other Party or Parties to handle, participate in, defend, settle or contest the Tax Contest.  At the request of any Party, the other Parties shall take any action (e.g., executing a power of attorney) that is reasonably necessary in order for the requesting Party to exercise its rights under this Agreement in respect of a Tax Contest.  Each Party shall assist the other Party or Parties, as the case may be, in taking any remedial actions that are necessary or desirable to minimize the effects of any adjustment made by a Tax Authority.  The Payor or Parties shall reimburse the Payee or Payees for any reasonable out-of-pocket costs and expenses incurred in complying with this Section 6.4.

 

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SECTION 7.                         Tax Records.

 

7.1                               Retention of Tax Records.  Each of BNPP SA, FHI and BWHI shall preserve, and shall cause the members of the BNPP Group, the FHI Group and the BWHI Group to preserve, all Tax Records that are in their possession, and that could affect the liability of any other Party, any of its subsidiaries or any member of another Group for Taxes, for as long as the contents thereof may become material in the administration of any matter under applicable Tax Law, but in any event until the later of (x) the expiration of any applicable statute of limitations, as extended, and (y) seven (7) years after the Effective Date.

 

7.2                               Access to Tax Records.  Each Party shall make available, and cause the members of its Group to make available, to another Party for inspection and copying all Tax Records in their possession that relate to the Pre-Distribution Period or Post-Distribution Period and which is reasonably necessary for the preparation, review, approval or filing of a Tax Return by applicable Filers under Section 4.1 or with respect to any Tax Contest with respect to such Return.

 

7.3                               Confidentiality.  Each Party hereby agrees that it will hold, and shall use its reasonable best efforts to cause its officers, directors, employees, accountants, counsel, consultants, advisors, and agents to hold, in confidence all records and information prepared and shared by and among the Parties in carrying out the intent of this Agreement, except as may otherwise be necessary in connection with the filing of Tax Returns or any administrative or judicial proceedings relating to Taxes or unless disclosure is compelled by a governmental authority. Information and documents of one Party shall not be deemed to be confidential for purposes of this Section 7.3 to the extent that such information or document (i) is previously known to or in the possession of another Party and is not otherwise subject to a requirement to be kept confidential, (ii) becomes publicly available by means other than unauthorized disclosure under this Agreement by the second Party, or (iii) is received from a third party without, to the knowledge of the second Party after reasonable diligence, a duty of confidentiality owed to the first Party.

 

SECTION 8.                         Representations and Covenants.

 

Each Party hereby covenants that, to the fullest extent permissible under United States federal and Local Tax laws, it will, and will cause each of the respective members of its Group to, treat the Contribution and the Distribution in accordance with the Agreed Treatment.

 

SECTION 9.                         General Provisions.

 

9.1                               Construction.  This Agreement shall constitute the entire agreement (except insofar and to the extent that it specifically and expressly references the Master Reorganization Agreement and the Tax Allocation Agreements) between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter.

 

9.2                               Other Agreements.  This Agreement is not intended to address, and should not be interpreted to address, the matters specifically and expressly covered by the Master Reorganization Agreement.  Except as otherwise specifically provided in this Agreement

 

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(including with respect to the Return Taxes and Unexpected Taxes), in the event there is a conflict between the provisions of the Tax Allocation Agreements and this Agreement, the provisions of the Tax Allocation Agreements shall control and govern.

 

9.3                               Counterparts.  This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the Parties and delivered to the other Parties.

 

9.4                               Notices.  All notices and other communications hereunder shall be in writing, shall reference this Agreement and shall be delivered by hand delivery or certified or registered mail (return receipt requested), by email or by facsimile to the Parties at the following addresses (or at such other addresses for a Party as shall be specified by like notice) and will be deemed given on the date on which such notice is received:

 

To BNPP SA:

 

BNP Paribas
 3 rue d’Antin
 75002 Paris, France
 Attention:  Pierre Bouchara — Head of Group Financial Management

E-mail: pierre.bouchara@bnpparibas.com

 

To FHI:

 

BancWest Corporation (or, after the applicable name change, First Hawaiian,

Inc.)
 999 Bishop Street, 29th Floor
 Honolulu, Hawaii 96813
 Attention:  Michael Ching — Executive Vice President, CFO and Treasurer

E-mail: mching@fhb.com

 

To BWHI:

 

BancWest Holding Inc. 
 c/o Bank of the West
 180 Montgomery Street

San Francisco, California 94104
 Attention:  Vanessa Washington — General Counsel

E-mail: Vanessa.washington@bankofthewest.com

 

with copy to:

 

BancWest Holding Inc.

c/o Bank of the West

180 Montgomery Street

San Francisco, California 94104

Attention:  Thibault Fulconis — Chief Financial Officer

 

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E-mail: Thibault.fulconis@bankofthewest.com

 

9.5                               Amendments.  This Agreement may not be modified or amended except by an agreement in writing signed by each of the Parties.

 

9.6                               Assignment.  This Agreement shall not be assignable, in whole or in part, directly or indirectly, by any Party without the prior written consent of each of the other Parties, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be void; provided that, subject to compliance with Section SECTION 7, if applicable, any Party may assign this Agreement to a purchaser of all or substantially all of the properties and assets of such Party so long as such purchaser expressly assumes, in a written instrument in form reasonably satisfactory to the non-assigning Parties, the due and punctual performance or observance of every agreement and covenant of this Agreement on the part of the assigning Party to be performed or observed.

 

9.7                               Successors and Assigns.  The provisions to this Agreement shall be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and permitted assigns.

 

9.8                               Change in Law.  Any reference to a provision of the Code or any other Tax law shall include a reference to any applicable successor provision or law.

 

9.9                               Authorization, Etc.  Each of the Parties hereto hereby represents and warrants that it has the power and authority to execute, deliver and perform this Agreement, that this Agreement has been duly authorized by all necessary corporate action on the part of such Party, that this Agreement constitutes a legal, valid and binding obligation of such Party and that the execution, delivery and performance of this Agreement by such Party does not contravene or conflict with any provision of law or the Party’s charter or bylaws or any agreement, instrument or order binding such Party.

 

9.10                        Termination.  After the Effective Date, this Agreement may not be terminated except by an agreement in writing signed by the Parties.

 

9.11                        Subsidiaries.  Each of the Parties shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any entity that is contemplated to be a member of such Party’s Group after the Effective Date.

 

9.12                        Third-Party Beneficiaries.  This Agreement is solely for the benefit of the Parties and their respective subsidiaries and should not be deemed to confer upon any other Person any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement.

 

9.13                        Double Recovery.  Nothing in this Agreement is intended to confer to or impose upon any Party a duplicative right, entitlement, obligation or recovery with respect to any matter arising out of the same facts and circumstances.

 

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9.14                        Titles and Headings.  Titles and headings to Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

 

9.15                        Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed in the State of New York.

 

9.16                        Waiver of Jury Trial.  The Parties hereby irrevocably waive any and all right to trial by jury in any legal proceeding arising out of or related to this Agreement or the transactions contemplated hereby.

 

9.17                        Survival.

 

(a)                                 The obligations set forth in this Agreement shall survive until one (1) Business Day following the expiration of the applicable statute of limitations.

 

(b)                                 Notwithstanding the foregoing, payment with respect to claims of which notice was given prior to the expiration of the applicable survival period shall survive such expiration until such claim is finally resolved and any obligations with respect thereto are fully satisfied.

 

9.18                        Severability.  In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby.  The Parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

9.19                        No Strict Construction; Interpretation.

 

(a)                                 Each of BNPP SA, FHI and BWHI acknowledges that this Agreement has been prepared jointly by the Parties hereto and shall not be strictly construed against any Party hereto.

 

(b)                                 The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”.  The words “hereof”, “herein”, “hereto” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.  The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term.  Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or

 

16

 

instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein.

 

[Signature page follows]

 

17

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by the respective officers as of the date set forth above.

 

 

	
 
    	
BNP Paribas S.A.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Pierre Bouchara
    
	
 
    	
 
    	
Name:
    	
Pierre   Bouchara
    
	
 
    	
 
    	
Title:
    	
Head   of Group Financial 

Management
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Wendy Gould
    
	
 
    	
 
    	
Name:
    	
Wendy   Gould
    
	
 
    	
 
    	
Title:
    	
Deputy   Head of Tax — North 

America
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
BancWest Corporation
    
	
 
    	
(To   be renamed First Hawaiian, Inc.)
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robert S. Harrison
    
	
 
    	
 
    	
Name:
    	
Robert   S. Harrison
    
	
 
    	
 
    	
Title:
    	
Vice   Chair
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
BancWest Holding Inc.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Thibault Fulconis
    
	
 
    	
 
    	
Name:
    	
Thibault   Fulconis
    
	
 
    	
 
    	
Title:
    	
Vice   Chairman, Chief Financial 

Officer &   Treasurer
    

 

[Signature Page to Tax Sharing Agreement]

 

 

SCHEDULE A

 

Expected Taxes

 

	
JURISDICTION
    	
 
    	
AMOUNT ($)
    	
 
    
	
California
    	
 
    	
86,491,665
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Hawaii
    	
 
    	
7,174,113
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Minnesota
    	
 
    	
1,324,839
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Texas
    	
 
    	
144,392
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Utah
    	
 
    	
428,226
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Apportionment   Impact
    	
 
    	
(191,323
    	
)
    
	
 
    	
 
    	
 
    	
 
    
	
Total
    	
 
    	
95,371,912
    	
 
    

 

2

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