EXHIBIT 4.2


 


UST 93


 


WARRANT TO PURCHASE
COMMON STOCK


 


THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT
WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT OR SUCH LAWS. THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS
ON TRANSFER AND OTHER PROVISIONS OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE
ISSUER OF THESE SECURITIES AND THE INVESTOR REFERRED TO THEREIN, A COPY OF
WHICH IS ON FILE WITH THE ISSUER. THE SECURITIES REPRESENTED BY THIS INSTRUMENT
MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID
AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT
WILL BE VOID.


 


WARRANT


to purchase


 


3,035,109


 


Shares of
Common Stock

of East West Bancorp, Inc.


 


Issue Date: December 5, 2008


 


1.             Definitions.  Unless the context otherwise requires, when
used herein the following terms shall have the meanings indicated.


 


“Affiliate”
has the meaning ascribed to it in the Purchase Agreement.


 


“Appraisal
Procedure” means a procedure whereby two independent appraisers, one
chosen by the Company and one by the Original Warrantholder, shall mutually
agree upon the determinations then the subject of appraisal.  Each party shall deliver a notice to the
other appointing its appraiser within 15 days after the Appraisal Procedure is
invoked.  If within 30 days after
appointment of the two appraisers they are unable to agree upon the amount in
question, a third independent appraiser shall be chosen within 10 days thereafter
by the mutual consent of such first two appraisers.  The decision of the third appraiser so
appointed and chosen shall be given within 30 days after the selection of such
third appraiser.  If three appraisers shall



 


1

















 


be appointed
and the determination of one appraiser is disparate from the middle
determination by more than twice the amount by which the other determination is
disparate from the middle determination, then the determination of such
appraiser shall be excluded, the remaining two determinations shall be averaged
and such average shall be binding and conclusive upon the Company and the
Original Warrantholder; otherwise, the average of all three determinations
shall be binding upon the Company and the Original Warrantholder.  The costs of conducting any Appraisal
Procedure shall be borne by the Company.


 


“Board of
Directors” means the board of directors of the Company, including
any duly authorized committee thereof.


 


“Business
Combination” means a merger, consolidation, statutory share exchange
or similar transaction that requires the approval of the Company’s
stockholders.


 


“business
day” means any day except Saturday, Sunday and any day on which
banking institutions in the State of New York generally are authorized or
required by law or other governmental actions to close.


 


“Capital
Stock” means (A) with respect to any Person that is a
corporation or company, any and all shares, interests, participations or other
equivalents (however designated) of capital or capital stock of such Person and
(B) with respect to any Person that is not a corporation or company, any
and all partnership or other equity interests of such Person.


 


“Charter”
means, with respect to any Person, its certificate or articles of
incorporation, articles of association, or similar organizational document.


 


“Common
Stock” has the meaning ascribed to it in the Purchase Agreement.


 


“Company”
means the Person whose name, corporate or other organizational form and
jurisdiction of organization is set forth in Item 1 of Schedule A hereto.


 


“conversion”
has the meaning set forth in Section 13(B).


 


“convertible
securities” has the meaning set forth in Section 13(B).


 


“CPP”
has the meaning ascribed to it in the Purchase Agreement.


 


“Exchange
Act” means the Securities Exchange Act of 1934, as amended, or any
successor statute, and the rules and regulations promulgated thereunder.


 


“Exercise
Price” means the amount set forth in Item 2 of Schedule A
hereto.


 


“Expiration
Time” has the meaning set forth in Section 3.


 


“Fair Market
Value” means, with respect to any security or other property, the
fair market value of such security or other property as determined by the Board
of Directors, acting in good faith or, with respect to Section 14, as
determined by the Original Warrantholder acting in good faith.  For so long as the Original Warrantholder
holds this Warrant or any portion 


 


2

















 


thereof, it
may object in writing to the Board of Director’s calculation of fair market
value within 10 days of receipt of written notice thereof.  If the Original Warrantholder and the Company
are unable to agree on fair market value during the 10-day period following the
delivery of the Original Warrantholder’s objection, the Appraisal Procedure may
be invoked by either party to determine Fair Market Value by delivering
written notification thereof not later than the 30th day after delivery of the Original Warrantholder’s objection.


 


“Governmental
Entities” has the meaning ascribed to it in the Purchase Agreement.


 


“Initial
Number” has the meaning set forth in Section 13(B).


 


“Issue Date” means the date
set forth in Item 3 of Schedule A hereto.


 


“Market
Price” means, with respect to a particular security, on any given
day, the last reported sale price regular way or, in case no such reported sale
takes place on such day, the average of the last closing bid and ask prices
regular way, in either case on the principal national securities exchange on
which the applicable securities are listed or admitted to trading, or if not
listed or admitted to trading on any national securities exchange, the average
of the closing bid and ask prices as furnished by two members of the Financial
Industry Regulatory Authority, Inc. 
selected from time to time by the Company for that purpose.  “Market Price” shall be determined without
reference to after hours or extended hours trading.  If such security is not listed and traded in
a manner that the quotations referred to above are available for the period
required hereunder, the Market Price per share of Common Stock shall be deemed
to be (i) in the event that any portion of the Warrant is held by the
Original Warrantholder, the fair market value per share of such security as
determined in good faith by the Original Warrantholder or (ii) in all
other circumstances, the fair market value per share of such security as
determined in good faith by the Board of Directors in reliance on an opinion of
a nationally recognized independent investment banking corporation retained by
the Company for this purpose and certified in a resolution to the
Warrantholder.  For the purposes of
determining the Market Price of the Common Stock on the “trading day”
preceding, on or following the occurrence of an event, (i) that trading
day shall be deemed to commence immediately after the regular scheduled closing
time of trading on the New York Stock Exchange or, if trading is closed at an
earlier time, such earlier time and (ii) that trading day shall end at the
next regular scheduled closing time, or if trading is closed at an earlier
time, such earlier time (for the avoidance of doubt, and as an example, if the
Market Price is to be determined as of the last trading day preceding a
specified event and the closing time of trading on a particular day is 4:00 p.m.
and the specified event occurs at 5:00 p.m. on that day, the Market Price
would be determined by reference to such 4:00 p.m. closing price).


 


“Ordinary Cash
Dividends” means a regular quarterly cash dividend on shares of Common
Stock out of surplus or net profits legally available therefor (determined in accordance
with generally accepted accounting principles in effect from time to time), provided that Ordinary Cash Dividends
shall not include any cash dividends paid subsequent to the Issue Date to the
extent the aggregate per share dividends paid on the outstanding Common Stock
in any quarter exceed the amount set forth in Item 4 of Schedule A hereto,
as adjusted for any stock split, stock dividend, reverse stock split,
reclassification or similar transaction.


 


3

















 


“Original
Warrantholder” means the United States Department of the
Treasury.  Any actions specified to be
taken by the Original Warrantholder hereunder may only be taken by such Person
and not by any other Warrantholder.


 


“Permitted
Transactions” has the meaning set forth in Section 13(B).


 


“Person”
has the meaning given to it in Section 3(a)(9) of the Exchange Act
and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act.


 


“Per Share
Fair Market Value” has the meaning set forth in Section 13(C).


 


“Preferred Shares”
means the perpetual preferred stock issued to the Original Warrantholder on the
Issue Date pursuant to the Purchase Agreement.


 


“Pro Rata
Repurchases” means any purchase of shares of Common Stock by the
Company or any Affiliate thereof pursuant to (A) any tender offer or
exchange offer subject to Section 13(e) or 14(e) of the Exchange
Act or Regulation 14E promulgated thereunder or (B) any other offer
available to substantially all holders of Common Stock, in the case of both (A) or
(B), whether for cash, shares of Capital Stock of the Company, other securities
of the Company, evidences of indebtedness of the Company or any other Person or
any other property (including, without limitation, shares of Capital Stock,
other securities or evidences of indebtedness of a subsidiary), or any
combination thereof, effected while this Warrant is outstanding.  The “Effective
Date” of a Pro Rata Repurchase shall mean the date of acceptance of
shares for purchase or exchange by the Company under any tender or exchange
offer which is a Pro Rata Repurchase or the date of purchase with respect to
any Pro Rata Repurchase that is not a tender or exchange offer.


 


“Purchase
Agreement” means the Securities Purchase Agreement – Standard Terms
incorporated into the Letter Agreement, dated as of the date set forth in
Item 5 of Schedule A hereto, as amended from time to time, between the
Company and the United States Department of the Treasury (the “Letter Agreement”), including all annexes
and schedules thereto.


 


“Qualified
Equity Offering” has the meaning ascribed to it in the Purchase
Agreement.


 


“Regulatory
Approvals” with respect to the Warrantholder, means, to the extent
applicable and required to permit the Warrantholder to exercise this Warrant
for shares of Common Stock and to own such Common Stock without the
Warrantholder being in violation of applicable law, rule or regulation,
the receipt of any necessary approvals and authorizations of, filings and
registrations with, notifications to, or expiration or termination of any
applicable waiting period under, the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations thereunder.


 


“SEC”
means the U.S. Securities and Exchange Commission.


 


“Securities
Act” means the Securities Act of 1933, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.


 


“Shares”
has the meaning set forth in Section 2.


 


4

















 


“trading day”
means (A) if the shares of Common Stock are not traded on any national or
regional securities exchange or association or over-the-counter market, a
business day or (B) if the shares of Common Stock are traded on any
national or regional securities exchange or association or over-the-counter
market, a business day on which such relevant exchange or quotation system is
scheduled to be open for business and on which the shares of Common Stock (i) are
not suspended from trading on any national or regional securities exchange or
association or over-the-counter market for any period or periods aggregating
one half hour or longer; and (ii) have traded at least once on the
national or regional securities exchange or association or over-the-counter
market that is the primary market for the trading of the shares of Common
Stock.


 


“U.S. GAAP”
means United States generally accepted accounting principles.


 


“Warrantholder”
has the meaning set forth in Section 2.


 


“Warrant”
means this Warrant, issued pursuant to the Purchase Agreement.


 


2.             Number
of Shares; Exercise Price.  This
certifies that, for value received, the United States Department of the
Treasury or its permitted assigns (the “Warrantholder”)
is entitled, upon the terms and subject to the conditions hereinafter set
forth, to acquire from the Company, in whole or in part, after the receipt of
all applicable Regulatory Approvals, if any, up to an aggregate of the number
of fully paid and nonassessable shares of Common Stock set forth in Item 6
of Schedule A hereto, at a purchase price per share of Common Stock equal to
the Exercise Price.  The number of shares
of Common Stock (the “Shares”)
and the Exercise Price are subject to adjustment as provided herein, and all
references to “Common Stock,” “Shares” and “Exercise Price” herein shall be
deemed to include any such adjustment or series of adjustments.


 


3.             Exercise
of Warrant; Term.  Subject to Section 2,
to the extent permitted by applicable laws and regulations, the right to
purchase the Shares represented by this Warrant is exercisable, in whole or in
part by the Warrantholder, at any time or from time to time after the execution
and delivery of this Warrant by the Company on the date hereof, but in no event
later than 5:00 p.m., New York City time on the tenth anniversary of the
Issue Date (the “Expiration Time”),
by (A) the surrender of this Warrant and Notice of Exercise annexed
hereto, duly completed and executed on behalf of the Warrantholder, at the
principal executive office of the Company located at the address set forth in
Item 7 of Schedule A hereto (or such other office or agency of the Company
in the United States as it may designate by notice in writing to the
Warrantholder at the address of the Warrantholder appearing on the books of the
Company), and (B) payment of the Exercise Price for the Shares thereby
purchased:


 


(i)            by having the
Company withhold, from the shares of Common Stock that would otherwise be
delivered to the Warrantholder upon such exercise, shares of Common stock
issuable upon exercise of the Warrant equal in value to the aggregate Exercise
Price as to which this Warrant is so exercised based on the Market Price of the
Common Stock on the trading day on which this Warrant is exercised and the
Notice of Exercise is delivered to the Company pursuant to this Section 3,
or


 


5

















 


(ii)           with the consent of
both the Company and the Warrantholder, by tendering in cash, by certified or
cashier’s check payable to the order of the Company, or by wire transfer of
immediately available funds to an account designated by the Company.


 


If the Warrantholder does not exercise this Warrant in its entirety,
the Warrantholder will be entitled to receive from the Company within a reasonable
time, and in any event not exceeding three business days, a new warrant in
substantially identical form for the purchase of that number of Shares equal to
the difference between the number of Shares subject to this Warrant and the
number of Shares as to which this Warrant is so exercised.  Notwithstanding anything in this Warrant to
the contrary, the Warrantholder hereby acknowledges and agrees that its
exercise of this Warrant for Shares is subject to the condition that the
Warrantholder will have first received any applicable Regulatory Approvals.


 


4.                                       Issuance
of Shares; Authorization; Listing. 
Certificates for Shares issued upon exercise of this Warrant will be
issued in such name or names as the Warrantholder may designate and will be
delivered to such named Person or Persons within a reasonable time, not to
exceed three business days after the date on which this Warrant has been duly
exercised in accordance with the terms of this Warrant.  The Company hereby represents and warrants
that any Shares issued upon the exercise of this Warrant in accordance with the
provisions of Section 3 will be duly and validly authorized and issued,
fully paid and nonassessable and free from all taxes, liens and charges (other
than liens or charges created by the Warrantholder, income and franchise taxes
incurred in connection with the exercise of the Warrant or taxes in respect of
any transfer occurring contemporaneously therewith).  The Company agrees that the Shares so issued
will be deemed to have been issued to the Warrantholder as of the close of
business on the date on which this Warrant and payment of the Exercise Price
are delivered to the Company in accordance with the terms of this Warrant,
notwithstanding that the stock transfer books of the Company may then be closed
or certificates representing such Shares may not be actually delivered on such
date.  The Company will at all times
reserve and keep available, out of its authorized but unissued Common Stock,
solely for the purpose of providing for the exercise of this Warrant, the
aggregate number of shares of Common Stock then issuable upon exercise of this
Warrant at any time.  The Company will (A) procure,
at its sole expense, the listing of the Shares issuable upon exercise of this
Warrant at any time, subject to issuance or notice of issuance, on all
principal stock exchanges on which the Common Stock is then listed or traded
and (B) maintain such listings of such Shares at all times after
issuance.  The Company will use
reasonable best efforts to ensure that the Shares may be issued without
violation of any applicable law or regulation or of any requirement of any
securities exchange on which the Shares are listed or traded.


 


5.                                       No
Fractional Shares or Scrip.  No
fractional Shares or scrip representing fractional Shares shall be issued upon
any exercise of this Warrant.  In lieu of
any fractional Share to which the Warrantholder would otherwise be entitled,
the Warrantholder shall be entitled to receive a cash payment equal to the
Market Price of the Common Stock on the last trading day preceding the date of
exercise less the pro-rated Exercise Price for such fractional share.


 


6

















 


6.                                       No
Rights as Stockholders; Transfer Books. 
This Warrant does not entitle the Warrantholder to any voting rights or
other rights as a stockholder of the Company prior to the date of exercise
hereof.  The Company will at no time
close its transfer books against transfer of this Warrant in any manner which
interferes with the timely exercise of this Warrant.


 


7.                                       Charges,
Taxes and Expenses.  Issuance of
certificates for Shares to the Warrantholder upon the exercise of this Warrant
shall be made without charge to the Warrantholder for any issue or transfer tax
or other incidental expense in respect of the issuance of such certificates,
all of which taxes and expenses shall be paid by the Company.


 


8.                                       Transfer/Assignment.


 


(A)          Subject
to compliance with clause (B) of this Section 8, this Warrant and all
rights hereunder are transferable, in whole or in part, upon the books of the
Company by the registered holder hereof in person or by duly authorized
attorney, and a new warrant shall be made and delivered by the Company, of the
same tenor and date as this Warrant but registered in the name of one or more
transferees, upon surrender of this Warrant, duly endorsed, to the office or
agency of the Company described in Section 3.  All expenses (other than stock transfer
taxes) and other charges payable in connection with the preparation, execution
and delivery of the new warrants pursuant to this Section 8 shall be paid
by the Company.


 


(B)           The
transfer of the Warrant and the Shares issued upon exercise of the Warrant are
subject to the restrictions set forth in Section 4.4 of the Purchase Agreement.  If and for so long as required by the
Purchase Agreement, this Warrant shall contain the legends as set forth in
Sections 4.2(a) and 4.2(b) of the Purchase Agreement.


 


9.                                       Exchange
and Registry of Warrant.  This
Warrant is exchangeable, upon the surrender hereof by the Warrantholder to the
Company, for a new warrant or warrants of like tenor and representing the right
to purchase the same aggregate number of Shares.  The Company shall maintain a registry showing
the name and address of the Warrantholder as the registered holder of this
Warrant.  This Warrant may be surrendered
for exchange or exercise in accordance with its terms, at the office of the
Company, and the Company shall be entitled to rely in all respects, prior to
written notice to the contrary, upon such registry.


 


10.                                 Loss,
Theft, Destruction or Mutilation of Warrant.  Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and in the case of any such loss, theft or destruction, upon
receipt of a bond, indemnity or security reasonably satisfactory to the
Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company shall make and deliver, in lieu of
such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor
and representing the right to purchase the same aggregate number of Shares as
provided for in such lost, stolen, destroyed or mutilated Warrant.


 


11.                                 Saturdays,
Sundays, Holidays, etc.  If the last
or appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a business day, then such action may be
taken or such right may be exercised on the next succeeding day that is a
business day.


 


7

















 


12.                                 Rule 144
Information.  The Company covenants
that it will use its reasonable best efforts to timely file all reports and
other documents required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations promulgated by the SEC
thereunder (or, if the Company is not required to file such reports, it will,
upon the request of any Warrantholder, make publicly available such information
as necessary to permit sales pursuant to Rule 144 under the Securities
Act), and it will use reasonable best efforts to take such further action as
any Warrantholder may reasonably request, in each case to the extent required
from time to time to enable such holder to, if permitted by the terms of this
Warrant and the Purchase Agreement, sell this Warrant without registration
under the Securities Act within the limitation of the exemptions provided by (A) Rule 144
under the Securities Act, as such rule may be amended from time to time,
or (B) any successor rule or regulation hereafter adopted by the
SEC.  Upon the written request of any
Warrantholder, the Company will deliver to such Warrantholder a written
statement that it has complied with such requirements.


 


13.                                 Adjustments
and Other Rights.  The Exercise Price
and the number of Shares issuable upon exercise of this Warrant shall be
subject to adjustment from time to time as follows; provided, that if more than one subsection of this Section 13
is applicable to a single event, the subsection shall be applied that produces
the largest adjustment and no single event shall cause an adjustment under more
than one subsection of this Section 13 so as to result in duplication:


 


(A)          Stock
Splits, Subdivisions, Reclassifications or Combinations.  If the Company shall (i) declare and pay
a dividend or make a distribution on its Common Stock in shares of Common
Stock, (ii) subdivide or reclassify the outstanding shares of Common Stock
into a greater number of shares, or (iii) combine or reclassify the outstanding
shares of Common Stock into a smaller number of shares, the number of Shares
issuable upon exercise of this Warrant at the time of the record date for such
dividend or distribution or the effective date of such subdivision, combination
or reclassification shall be proportionately adjusted so that the Warrantholder
after such date shall be entitled to purchase the number of shares of Common
Stock which such holder would have owned or been entitled to receive in respect
of the shares of Common Stock subject to this Warrant after such date had this
Warrant been exercised immediately prior to such date.  In such event, the Exercise Price in effect
at the time of the record date for such dividend or distribution or the
effective date of such subdivision, combination or reclassification shall be
adjusted to the number obtained by dividing (x) the product of (1) the
number of Shares issuable upon the exercise of this Warrant before such
adjustment and (2) the Exercise Price in effect immediately prior to the record
or effective date, as the case may be, for the dividend, distribution,
subdivision, combination or reclassification giving rise to this adjustment by (y) the
new number of Shares issuable upon exercise of the Warrant determined pursuant
to the immediately preceding sentence.


 


(B)           Certain
Issuances of Common Shares or Convertible Securities.  Until the earlier of (i) the date on
which the Original Warrantholder no longer holds this Warrant or any portion
thereof and (ii) the third anniversary of the Issue Date, if the Company
shall issue shares of Common Stock (or rights or warrants or other securities
exercisable or convertible into or exchangeable (collectively, a “conversion”) for shares of Common Stock)
(collectively, “convertible securities”)
(other than in Permitted Transactions (as defined below) or a transaction to
which subsection (A) of this Section 13 is applicable) without
consideration or at a 


 


8

















 


consideration per share (or having a conversion price
per share) that is less than 90% of the Market Price on the last trading day
preceding the date of the agreement on pricing such shares (or such convertible
securities) then, in such event:


 


(A)          the number of Shares
issuable upon the exercise of this Warrant immediately prior to the date of the
agreement on pricing of such shares (or of such convertible securities) (the “Initial Number”) shall be increased to the
number obtained by multiplying the Initial Number by a fraction (A) the
numerator of which shall be the sum of (x) the number of shares of Common
Stock of the Company outstanding on such date and (y) the number of
additional shares of Common Stock issued (or into which convertible securities
may be exercised or convert) and (B) the denominator of which shall be the
sum of (I) the number of shares of Common Stock outstanding on such date
and (II) the number of shares of Common Stock which the aggregate
consideration receivable by the Company for the total number of shares of
Common Stock so issued (or into which convertible securities may be exercised
or convert) would purchase at the Market Price on the last trading day
preceding the date of the agreement on pricing such shares (or such convertible
securities); and


 


(B)           the Exercise Price
payable upon exercise of the Warrant shall be adjusted by multiplying such
Exercise Price in effect immediately prior to the date of the agreement on
pricing of such shares (or of such convertible securities) by a fraction, the
numerator of which shall be the number of shares of Common Stock issuable upon
exercise of this Warrant prior to such date and the denominator of which shall
be the number of shares of Common Stock issuable upon exercise of this Warrant
immediately after the adjustment described in clause (A) above.


 


For purposes
of the foregoing, the aggregate consideration receivable by the Company in
connection with the issuance of such shares of Common Stock or convertible
securities shall be deemed to be equal to the sum of the net offering price (including
the Fair Market Value of any non-cash consideration and after deduction of any
related expenses payable to third parties) of all such securities plus the
minimum aggregate amount, if any, payable upon exercise or conversion of any
such convertible securities into shares of Common Stock; and “Permitted Transactions” shall mean
issuances (i) as consideration for or to fund the acquisition of
businesses and/or related assets, (ii) in connection with employee benefit
plans and compensation related arrangements in the ordinary course and
consistent with past practice approved by the Board of Directors, (iii) in
connection with a public or broadly marketed offering and sale of Common Stock
or convertible securities for cash conducted by the Company or its affiliates
pursuant to registration under the Securities Act or Rule 144A thereunder
on a basis consistent with capital raising transactions by comparable financial
institutions and (iv) in connection with the exercise of preemptive rights
on terms existing as of the Issue Date. 
Any adjustment made pursuant to this Section 13(B) shall
become effective immediately upon the date of such issuance.


 


(C)           Other
Distributions.  In case the Company
shall fix a record date for the making of a distribution to all holders of
shares of its Common Stock of securities, evidences of indebtedness, assets,
cash, rights or warrants (excluding Ordinary Cash Dividends, dividends of its
Common Stock and other dividends or distributions referred to in Section 13(A)),
in each 


 


9

















 


such case, the Exercise Price in effect prior to such
record date shall be reduced immediately thereafter to the price determined by
multiplying the Exercise Price in effect immediately prior to the reduction by
the quotient of (x) the Market Price of the Common Stock on the last
trading day preceding the first date on which the Common Stock trades regular
way on the principal national securities exchange on which the Common Stock is
listed or admitted to trading without the right to receive such distribution,
minus the amount of cash and/or the Fair Market Value of the securities,
evidences of indebtedness, assets, rights or warrants to be so distributed in
respect of one share of Common Stock (such amount and/or Fair Market Value, the
“Per Share Fair Market Value”)
divided by (y) such Market Price on such date specified in clause (x);
such adjustment shall be made successively whenever such a record date is
fixed.  In such event, the number of
Shares issuable upon the exercise of this Warrant shall be increased to the
number obtained by dividing (x) the product of (1) the number of
Shares issuable upon the exercise of this Warrant before such adjustment, and (2) the
Exercise Price in effect immediately prior to the distribution giving rise to
this adjustment by (y) the new Exercise Price determined in accordance
with the immediately preceding sentence. 
In the case of adjustment for a cash dividend that is, or is coincident
with, a regular quarterly cash dividend, the Per Share Fair Market Value would
be reduced by the per share amount of the portion of the cash dividend that
would constitute an Ordinary Cash Dividend. 
In the event that such distribution is not so made, the Exercise Price
and the number of Shares issuable upon exercise of this Warrant then in effect
shall be readjusted, effective as of the date when the Board of Directors
determines not to distribute such shares, evidences of indebtedness, assets,
rights, cash or warrants, as the case may be, to the Exercise Price that would
then be in effect and the number of Shares that would then be issuable upon
exercise of this Warrant if such record date had not been fixed.


 


(D)          Certain
Repurchases of Common Stock.  In case
the Company effects a Pro Rata Repurchase of Common Stock, then the Exercise
Price shall be reduced to the price determined by multiplying the Exercise
Price in effect immediately prior to the Effective Date of such Pro Rata
Repurchase by a fraction of which the numerator shall be (i) the product
of (x) the number of shares of Common Stock outstanding immediately before
such Pro Rata Repurchase and (y) the Market Price of a share of Common
Stock on the trading day immediately preceding the first public announcement by
the Company or any of its Affiliates of the intent to effect such Pro Rata
Repurchase, minus (ii) the aggregate purchase price of the Pro Rata
Repurchase, and of which the denominator shall be the product of (i) the
number of shares of Common Stock outstanding immediately prior to such Pro Rata
Repurchase minus the number of shares of Common Stock so repurchased and (ii) the
Market Price per share of Common Stock on the trading day immediately preceding
the first public announcement by the Company or any of its Affiliates of the
intent to effect such Pro Rata Repurchase. 
In such event, the number of shares of Common Stock issuable upon the
exercise of this Warrant shall be increased to the number obtained by dividing (x) the
product of (1) the number of Shares issuable upon the exercise of this
Warrant before such adjustment, and (2) the Exercise Price in effect
immediately prior to the Pro Rata Repurchase giving rise to this adjustment by (y) the
new Exercise Price determined in accordance with the immediately preceding
sentence.  For the avoidance of doubt, no
increase to the Exercise Price or decrease in the number of Shares issuable
upon exercise of this Warrant shall be made pursuant to this Section 13(D).


 


(E)           Business
Combinations.  In case of any
Business Combination or reclassification of Common Stock (other than a
reclassification of Common Stock referred to in


 


10
















 


Section 13(A)), the Warrantholder’s right to
receive Shares upon exercise of this Warrant shall be converted into the right
to exercise this Warrant to acquire the number of shares of stock or other
securities or property (including cash) which the Common Stock issuable (at the
time of such Business Combination or reclassification) upon exercise of this
Warrant immediately prior to such Business Combination or reclassification
would have been entitled to receive upon consummation of such Business Combination
or reclassification; and in any such case, if necessary, the provisions set
forth herein with respect to the rights and interests thereafter of the
Warrantholder shall be appropriately adjusted so as to be applicable, as nearly
as may reasonably be, to the Warrantholder’s right to exercise this Warrant in
exchange for any shares of stock or other securities or property pursuant to
this paragraph.  In determining the kind
and amount of stock, securities or the property receivable upon exercise of
this Warrant following the consummation of such Business Combination, if the
holders of Common Stock have the right to elect the kind or amount of
consideration receivable upon consummation of such Business Combination, then
the consideration that the Warrantholder shall be entitled to receive upon
exercise shall be deemed to be the types and amounts of consideration received
by the majority of all holders of the shares of common stock that affirmatively
make an election (or of all such holders if none make an election).


 


(F)           Rounding
of Calculations; Minimum Adjustments. 
All calculations under this Section 13 shall be made to the nearest
one-tenth (1/10th) of a cent or to the nearest one-hundredth
(1/100th) of a share, as the case may be. 
Any provision of this Section 13 to the contrary notwithstanding,
no adjustment in the Exercise Price or the number of Shares into which this
Warrant is exercisable shall be made if the amount of such adjustment would be
less than $0.01 or one-tenth (1/10th) of a share of Common Stock, but any
such amount shall be carried forward and an adjustment with respect thereto
shall be made at the time of and together with any subsequent adjustment which,
together with such amount and any other amount or amounts so carried forward,
shall aggregate $0.01 or 1/10th of a share of Common Stock, or more.


 


(G)           Timing
of Issuance of Additional Common Stock Upon Certain Adjustments.  In any case in which the provisions of this Section 13
shall require that an adjustment shall become effective immediately after a
record date for an event, the Company may defer until the occurrence of such
event (i) issuing to the Warrantholder of this Warrant exercised after
such record date and before the occurrence of such event the additional shares
of Common Stock issuable upon such exercise by reason of the adjustment
required by such event over and above the shares of Common Stock issuable upon
such exercise before giving effect to such adjustment and (ii) paying to
such Warrantholder any amount of cash in lieu of a fractional share of Common
Stock; provided, however, that the Company upon request
shall deliver to such Warrantholder a due bill or other appropriate instrument
evidencing such Warrantholder’s right to receive such additional shares, and
such cash, upon the occurrence of the event requiring such adjustment.


 


(H)          Completion
of Qualified Equity Offering.  In the
event the Company (or any successor by Business Combination) completes one or
more Qualified Equity Offerings on or prior to December 31, 2009 that
result in the Company (or any such successor ) receiving aggregate gross
proceeds of not less than 100% of the aggregate liquidation preference of the
Preferred Shares (and any preferred stock issued by any such successor to
the Original 


 


11

















 


Warrantholder under the CPP), the number of shares of
Common Stock underlying the portion of this Warrant then held by the Original
Warrantholder shall be thereafter reduced by a number of shares of Common Stock
equal to the product of (i) 0.5 and (ii) the number of shares
underlying the Warrant on the Issue Date (adjusted to take into account all
other theretofore made adjustments pursuant to this Section 13).


 


(I)            Other
Events.  For so long as the Original
Warrantholder holds this Warrant or any portion thereof, if any event occurs as
to which the provisions of this Section 13 are not strictly applicable or,
if strictly applicable, would not, in the good faith judgment of the Board of
Directors of the Company, fairly and adequately protect the purchase rights of
the Warrants in accordance with the essential intent and principles of such
provisions, then the Board of Directors shall make such adjustments in the
application of such provisions, in accordance with such essential intent and
principles, as shall be reasonably necessary, in the good faith opinion of the
Board of Directors, to protect such purchase rights as aforesaid.  The Exercise Price or the number of Shares
into which this Warrant is exercisable shall not be adjusted in the event of a
change in the par value of the Common Stock or a change in the jurisdiction of
incorporation of the Company.


 


(J)            Statement
Regarding Adjustments.  Whenever the
Exercise Price or the number of Shares into which this Warrant is exercisable
shall be adjusted as provided in Section 13, the Company shall forthwith
file at the principal office of the Company a statement showing in reasonable
detail the facts requiring such adjustment and the Exercise Price that shall be
in effect and the number of Shares into which this Warrant shall be exercisable
after such adjustment, and the Company shall also cause a copy of such
statement to be sent by mail, first class postage prepaid, to each
Warrantholder at the address appearing in the Company’s records.


 


(K)          Notice
of Adjustment Event.  In the event
that the Company shall propose to take any action of the type described in this
Section 13 (but only if the action of the type described in this Section 13
would result in an adjustment in the Exercise Price or the number of Shares
into which this Warrant is exercisable or a change in the type of securities or
property to be delivered upon exercise of this Warrant), the Company shall give
notice to the Warrantholder, in the manner set forth in Section 13(J),
which notice shall specify the record date, if any, with respect to any such
action and the approximate date on which such action is to take place.  Such notice shall also set forth the facts
with respect thereto as shall be reasonably necessary to indicate the effect on
the Exercise Price and the number, kind or class of shares or other securities
or property which shall be deliverable upon exercise of this Warrant.  In the case of any action which would require
the fixing of a record date, such notice shall be given at least 10 days prior
to the date so fixed, and in case of all other action, such notice shall be
given at least 15 days prior to the taking of such proposed action.  Failure to give such notice, or any defect
therein, shall not affect the legality or validity of any such action.


 


(L)           Proceedings Prior to Any Action Requiring
Adjustment.  As a condition
precedent to the taking of any action which would require an adjustment
pursuant to this Section 13, the Company shall take any action which may
be necessary, including obtaining regulatory, New York Stock Exchange, NASDAQ
Stock Market or other applicable national securities exchange or stockholder
approvals or exemptions, in order that the Company may thereafter validly and legally
issue as fully paid and nonassessable all shares of Common Stock 


 


12

















 


that the Warrantholder is entitled to receive upon
exercise of this Warrant pursuant to this Section 13.


 


(M)         Adjustment
Rules.  Any adjustments pursuant to
this Section 13 shall be made successively whenever an event referred to
herein shall occur.  If an adjustment in
Exercise Price made hereunder would reduce the Exercise Price to an amount
below par value of the Common Stock, then such adjustment in Exercise Price
made hereunder shall reduce the Exercise Price to the par value of the Common
Stock.


 


14.                                 Exchange.  At any time following the date on which the
shares of Common Stock of the Company are no longer listed or admitted to trading
on a national securities exchange (other than in connection with any Business
Combination), the Original Warrantholder may cause the Company to exchange all
or a portion of this Warrant for an economic interest (to be determined by the
Original Warrantholder after consultation with the Company) of the Company
classified as permanent equity under U.S. GAAP having a value equal to the Fair
Market Value of the portion of the Warrant so exchanged.  The Original Warrantholder shall calculate
any Fair Market Value required to be calculated pursuant to this Section 14,
which shall not be subject to the Appraisal Procedure.


 


15.                                 No
Impairment.  The Company will not, by
amendment of its Charter or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms to be observed or performed hereunder by the Company, but will at
all times in good faith assist in the carrying out of all the provisions of
this Warrant and in taking of all such action as may be necessary or
appropriate in order to protect the rights of the Warrantholder.


 


16.                                 Governing
Law.  This Warrant
will be governed by and construed in accordance with the federal law of the
United States if and to the extent such law is applicable, and otherwise in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within such State. 
Each of the Company and the Warrantholder agrees (a) to submit to
the exclusive jurisdiction and venue of the United States District Court for
the District of Columbia for any civil action, suit or proceeding arising out
of or relating to this Warrant or the transactions contemplated hereby, and (b) that
notice may be served upon the Company at the address in Section 20 below
and upon the Warrantholder at the address for the Warrantholder set forth in
the registry maintained by the Company pursuant to Section 9 hereof.  To the extent permitted by applicable law,
each of the Company and the Warrantholder hereby unconditionally waives trial
by jury in any civil legal action or proceeding relating to the Warrant or the
transactions contemplated hereby or thereby.


 


17.                                 Binding
Effect.  This Warrant shall be
binding upon any successors or assigns of the Company.


 


18.                                 Amendments.  This Warrant may be amended and the
observance of any term of this Warrant may be waived only with the written
consent of the Company and the Warrantholder.


 


13

















 


19.                                 Prohibited
Actions.  The Company agrees that it
will not take any action which would entitle the Warrantholder to an adjustment
of the Exercise Price if the total number of shares of Common Stock issuable
after such action upon exercise of this Warrant, together with all shares of
Common Stock then outstanding and all shares of Common Stock then issuable upon
the exercise of all outstanding options, warrants, conversion and other rights,
would exceed the total number of shares of Common Stock then authorized by its
Charter.


 


20.                                 Notices.  Any notice, request, instruction or other
document to be given hereunder by any party to the other will be in writing and
will be deemed to have been duly given (a) on the date of delivery if
delivered personally, or by facsimile, upon confirmation of receipt, or (b) on
the second business day following the date of dispatch if delivered by a
recognized next day courier service.  All
notices hereunder shall be delivered as set forth in Item 8 of Schedule A
hereto, or pursuant to such other instructions as may be designated in writing
by the party to receive such notice.


 


21.                                 Entire
Agreement.  This Warrant, the forms
attached hereto and Schedule A hereto (the terms of which are incorporated by
reference herein), and the Letter Agreement (including all documents
incorporated therein), contain the entire agreement between the parties with
respect to the subject matter hereof and supersede all prior and
contemporaneous arrangements or undertakings with respect thereto.


 


[Remainder of page intentionally left blank]


 


14

















 


[Form of Notice of
Exercise]


 


	
   

  	
  Date:

  



 


TO:         East West Bancorp, Inc.


 


RE:          Election to Purchase
Common Stock


 


The undersigned, pursuant to the provisions
set forth in the attached Warrant, hereby agrees to subscribe for and purchase
the number of shares of the Common Stock set forth below covered by such
Warrant. The undersigned, in accordance with Section 3 of the Warrant,
hereby agrees to pay the aggregate Exercise Price for such shares of Common
Stock in the manner set forth below. A new warrant evidencing the remaining
shares of Common Stock covered by such Warrant, but not yet subscribed for and
purchased, if any, should be issued in the name set forth below.


 


Number of Shares of Common Stock


 


Method of Payment of Exercise Price (note if cashless exercise pursuant
to Section 3(i) of the Warrant or cash exercise pursuant to Section 3(ii) of
the Warrant, with consent of the Company and the Warrantholder)


 


	
  Aggregate Exercise Price:

  
	
   

  
	
   

  	
  Holder:

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
						



 


15

















 


IN WITNESS WHEREOF, the Company has caused
this Warrant to be duly executed by a duly authorized officer.


 


 


Dated:
December 5, 2008


 


 


	
   

  	
  EAST WEST BANCORP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas J. Tolda

  
	
   

  	
   

  	
  Name:

  	
  Thomas J. Tolda

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief

  Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Douglas P. Krause

  
	
   

  	
   

  	
  Name:

  	
  Douglas P. Krause

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President, General

  Counsel, and Corporate Secretary

  



 


[Signature Page to
Warrant]


 


16

















 


SCHEDULE A


 


Item 1


Name:  East West Bancorp, Inc.


Corporate or other organizational form: 
Corporation 

Jurisdiction of organization:  Delaware


 


Item 2


Exercise Price:(1)  $15.15


 


Item 3


Issue Date:  December 5,
2008


 


Item 4


Amount of last dividend declared prior to the Issue Date:  $.10


 


Item 5


Date of Letter Agreement between the Company and the United States
Department of the Treasury:  December 5,
2008


 


Item 6


Number of shares of Common Stock: 
3,035,109


 


Item 7


Company’s
address:  135 N. Los Robles
Avenue, 7th Floor


Pasadena, CA 91101


 


Item 8


Notice
information:


 


Primary
Contact


Thomas
J. Tolda


Executive Vice President and Chief Financial Officer


East
West Bancorp, Inc.


135
N. Los Robles Avenue, 7th Floor


Pasadena,
CA 91101


Phone:
(626) 768-6788


Fax:
(626) 243-1279


eMail:
tom.tolda@eastwestbank.com


 


Secondary
Contact


Douglas
P. Krause, Esq.


Executive Vice President, General Counsel and
Corporate Secretary


East
West Bancorp, Inc.


135
N. Los Robles Avenue, 7th Floor


Pasadena,
CA 91101


Phone:
(626) 768-6896


Fax:
(626) 817-8838


eMail:
dkrause@eastwestbank.com


 


Legal Contact


T.J. Mick Grasmick


Manatt, Phelps &
Phillips, LLP


11355 W. Olympic Blvd.


Los Angeles, California
90064


Phone: (310) 312-4369


Fax: (310) 312-4224


eMail: mgrasmick@manatt.com


 






(1) Initial
exercise price to be calculated based on the average of closing prices of the
Common Stock on the 20 trading days ending on the last trading day prior to the
date the Company’s application for participation in the Capital Purchase
Program was approved by the United States Department of the Treasury.


 


1