Document:

EXHIBIT 4.2

 

	
  ST - 1

  	
   

  	
  36,000

  

 

Fixed Rate Cumulative Perpetual
Preferred Stock, Series T, no par value per share (“Shares”)

Of

	
   

  	
  YADKIN VALLEY FINANCIAL CORPORATION

  	
   

  
	
  A Corporation organized under the laws of the
  state of North Carolina

  

 

This certifies that The
United States Department of the Treasury is
the owner of Thirty-six thousand
(36,000) fully paid and non-assessable
Shares of the above Corporation transferable only on the books of the
Corporation by the holder hereof in person or by duly authorized Attorney upon
surrender of this certificate properly endorsed.

 

In
Witness Whereof, the said Corporation has
caused this Certificate to be signed by its duly authorized officers and to be
sealed with the seal of the Corporation.

 

 

	
  Dated
  January 16, 2009

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  William A. Long

  	
   

  	
  /s/
  Patricia H. Wooten

  
	
  William
  A. Long, President

  	
   

  	
  Patricia
  H. Wooten, Secretary

  

 

 

“THE
SECURITIES REPRESENTED BY THIS INSTRUMENT ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR
OTHER OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.

 

THE
SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), 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. EACH PURCHASER OF THE SECURITIES
REPRESENTED BY THIS INSTRUMENT IS NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.  ANY TRANSFEREE OF THE
SECURITIES REPRESENTED BY THIS INSTRUMENT BY ITS ACCEPTANCE HEREOF (1) REPRESENTS
THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), (2) AGREES THAT IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER
THE SECURITIES REPRESENTED BY THIS INSTRUMENT EXCEPT (A) PURSUANT TO A
REGISTRATION STATEMENT WHICH IS THEN EFFECTIVE UNDER THE SECURITIES ACT, (B) FOR
SO LONG AS THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED
INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (C) TO THE ISSUER OR (D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT
WILL GIVE TO EACH PERSON TO WHOM THE SECURITIES REPRESENTED BY THIS INSTRUMENT
ARE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.”

 

THE
CORPORATION IS AUTHORIZED TO ISSUE DIFFERENT CLASSES OF
SHARES AND DIFFERENT SERIES WITHIN A CLASS. ON REQUEST IN WRITING AND
WITHOUT CHARGE, THE CORPORATION WILL FURNISH THE SHAREHOLDER WITH A SUMMARY OF
THE THE DESIGNATIONS, RELATIVE RIGHTS, PREFERENCES, AND LIMITATIONS APPLICABLE
TO EACH CLASS AND THE VARIATIONS IN RIGHTS, PREFERENCES, AND LIMITATIONS
DETERMINED FOR EACH SERIES (AND THE AUTHORITY OF THE BOARD OF DIRECTORS TO
DETERMINE VARIATIONS FOR FUTURE SERIES).

 

The
following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations. Additional abbreviations may also
be used though not in the list.

 

	
  TEN COM

  	
   

  	
  —

  	
  as tenants in common

  	
   

  	
  UNIF GIFT MIN ACT —

  	
   

  	
  Custodian

  	
   

  	
  (Minor)

  
	
  TEN

  ENT

  	
   

  	
  —

  	
  as tenants by the entireties

  	
   

  	
  under Uniform Gifts to Minors
  Act

  	
   

  	
   

  	
   

  	
  (State)

  
	
  JT TEN

  	
   

  	
  —

  	
  as joint tenants with right of survivorship and not as tenants in
  common

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

For value received, the undersigned hereby sells,
assigns and transfers unto

 

PLEASE PRINT OR
TYPEWRITE NAME AND ADDRESS OF ASSIGNEE

 

Shares represented by the within Certificate, and
hereby irrevocably constitutes and appoints                                                    Attorney
to transfer the said shares on the books of the within-named Corporation with
full power of substitution in the premises.

 

	
  Dated:

  	
   

  	
   

  	
  In presence of:

  	
   

  

 

 

PLEASE INSERT
SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEEExhibit 10.1

 

January 16, 2009

 

[Executive]

Yadkin
Valley Financial Corporation

209
North Bridge Street

Elkin,
North Carolina 28621

 

Dear
[Executive],

 

Yadkin
Valley Financial Corporation (the “Company”) anticipates entering into a
Securities Purchase Agreement (the “Participation Agreement”) with the United
States Department of Treasury (the “Treasury”) that provides, among other
things, for the purchase by the Treasury of securities issued by the Company.
This purchase is anticipated to occur as part of the Company’s participation in
the Treasury’s Troubled Asset Relief Program - Capital Purchase Program (the “CPP”).

 

As
a condition to the closing of the investment contemplated by the Participation
Agreement, the Company is required to take certain actions with respect to
compensation arrangements of its senior executive officers. The Company has
determined that you are or may be a senior executive officer for purposes of
the CPP. To comply with the requirements of the CPP, and in consideration of
the benefits that you will receive as a result of the Company’s participation
in the CPP and for other good and valuable consideration, the sufficiency of
which you hereby acknowledge, you agree as follows:

 

(1)                                  No Golden Parachute
Payments. You will not be entitled to receive from the Company any golden
parachute payment (as defined below) during any period in which the Treasury
holds an equity or debt position acquired from the Company in the CPP (the “CPP
Covered Period”) (or during the year following any acquisition of the Company,
to the extent required by the CPP Limitations (as defined below)).

 

(2)                                  Recovery of Bonus and
Incentive Compensation. You will be required to and shall return to the Company
any bonus or incentive compensation paid to you by the Company during the CPP
Covered Period if such bonus or incentive compensation is paid to you based on
materially inaccurate financial statements or any other materially inaccurate
performance metric criteria.

 

(3)                                  Compensation Program
Amendments. Each of the Company’s compensation, bonus, incentive and other
benefit plans, arrangements and agreements , including your Employment Security
Agreement (all such plans, arrangements and agreements, the “Benefit Plans”)
are hereby amended to the extent necessary to give effect to provisions (1) and
(2) of this letter.

 

The
Company is also required as a condition to participation in the CPP to review
the Benefit Plans to ensure that the Benefit Plans do not encourage its senior
executive officers to take unnecessary and excessive risks that threaten the
value of the Company. To the extent that the Company determines that the
Benefit Plans must be revised as a result of such review, or determines that
the Benefit Plans must otherwise be revised to comply with Section 111(b) of
the EESA (as defined below) as implemented by any guidance or regulation
thereunder that has been issued and is in effect as of the closing date of the
Company’s issuance of preferred stock and warrants to acquire common stock to
the 

 

 

Treasury
pursuant to the CPP (the “CPP Limitations”), you and the Company agree to
negotiate and effect such changes promptly and in good faith.

 

(4)                                  Definitions and
Interpretation. This letter shall be interpreted as follows:

 

·                  “Senior
executive officer” means the Company’s “senior executive officers” as defined
in Q&A 2 of the Interim Final Rule issued by the Treasury at 31 CFR Part 30,
effective on October 20, 2008 (the “Interim Final Rule”).

 

·                  “Golden
parachute payment” shall have the meaning set forth in Q&A 9 of the Interim
Final Rule.

 

·                  The term “Company”
includes any entities treated as a single employer with the Company under
Q&A 1 and Q&A 11 of the Interim Final Rule.

 

·                  This letter is
intended to, and shall be interpreted, administered and construed to comply
with Section 111 of the Emergency Economic Stabilization Act of 2008 (the “EESA”)
and the regulations and guidance promulgated thereunder (and, to the maximum
extent consistent with the preceding, to permit operation of the Benefit Plans
in accordance with their terms before giving effect to this letter).

 

(5)                                  Miscellaneous. To the extent
not subject to federal law, this letter will be governed by and construed in
accordance with the laws of the State of North Carolina. This letter may be
executed in two or more counterparts, each of which will be deemed to be an
original. A signature transmitted by facsimile will be deemed an original
signature.

 

(6)                                  If the Treasury does not
purchase the securities contemplated by the Participation Agreement, then this
letter shall be of no force or effect. In addition, upon such time as the
Treasury no longer holds securities or debt of the Company acquired under the
CPP, this letter shall be of no further force or effect, except to the extent
required by the CPP Limitations. If you cease to be a senior executive officer
of the Company for purposes of the CPP, you shall be released from the
restrictions and obligations set forth in this letter to the extent permissible
under the CPP. If it is determined that you are not a senior executive officer
of the Company as of the date hereof, this letter shall be of no force or
effect.

 

The
Company appreciates the concessions you are making and looks forward to your
continued leadership during these financially turbulent times.

 

[Signature page follows]

 

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  YADKIN
  VALLEY FINANCIAL CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:
  

  	
  William
  A. Long

  
	
   

  	
  Title:   

  	
  President
  and Chief Executive Officer

  

 

 

Intending
to be legally bound, I agree with and accept the

foregoing
terms on the date set forth below.

 

	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  [Executive]

  	
   

  
	
  Title:

  	
  [Executive’s
  title]

  	
   

  
	
  Date:
  

  	
  January 16,
  2009

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