Document:

Salary Continuation Agreement between Carolina Bank and Robert T. Braswell

 Exhibit 10.2 
 CAROLINA BANK 
 SALARY CONTINUATION
AGREEMENT 
 This SALARY CONTINUATION AGREEMENT (this
“Agreement”) is entered into as of this 20th day of May, 2008, by and between Carolina Bank, a North Carolina-chartered bank (the “Bank”), and Robert T. Braswell, its President and Chief Executive Officer (the
“Executive”). 
 WHEREAS, recognizing the Executive’s substantial contribution to the
Bank’s success and intending to encourage the Executive to remain an employee, the Bank and the Executive entered into an Executive Agreement dated as of March 10, 2003 under the Bank’s Executive Supplemental Retirement Plan,
promising specified benefits to the Executive after retirement or death payable from the Bank’s general assets, 
 WHEREAS, the Bank and the Executive intend that this Agreement shall amend and restate in its entirety the March 10, 2003 Executive Agreement, 
 WHEREAS, none of the conditions or events included in the definition of the term “golden parachute
payment” that is set forth in section 18(k)(4)(A)(ii) of the Federal Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in Federal Deposit Insurance Corporation Rule 359.1(f)(1)(ii) [12 CFR 359.1(f)(1)(ii)] exists or, to the best knowledge
of the Bank, is contemplated insofar as the Bank is concerned, and 
 WHEREAS, the parties hereto intend
that this Agreement shall be considered an unfunded arrangement maintained primarily to provide supplemental retirement benefits for the Executive, and to be considered a non-qualified benefit plan for purposes of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”). The Executive is fully advised of the Bank’s financial status. 
 NOW THEREFORE, in consideration of these premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Executive and the Bank hereby
agree as follows. 
 ARTICLE 1 
 DEFINITIONS 
 1.1 “Accrual Balance” means the liability that
should be accrued by the Bank under generally accepted accounting principles (“GAAP”) for the Bank’s obligation to the Executive under this Agreement, applying Accounting Principles Board Opinion No. 12, as amended by Financial
Accounting Standard No. 106, and the calculation method and discount rate specified hereinafter. The Accrual Balance is determined such that when it is credited with interest each month the Accrual Balance at Normal Retirement Age equals the
present value of the normal retirement benefits. The discount rate means the rate used by the Plan Administrator for determining the Accrual Balance. In its sole discretion the Plan Administrator may adjust the discount rate to maintain the rate
within reasonable standards according to GAAP. 
 1.2 “Beneficiary” means each designated person, or the estate of
the deceased Executive, entitled to benefits, if any, upon the death of the Executive, determined according to Article 4. 

 1.3 “Beneficiary Designation Form” means the form established from time to time
by the Plan Administrator that the Executive completes, signs, and returns to the Plan Administrator to designate one or more Beneficiaries. 
 1.4 “Change in Control” shall mean a change in control as defined in Internal Revenue Code section 409A and rules, regulations, and guidance of general application thereunder issued by the Department of the Treasury,
including – 
 (a) Change in ownership: a change in ownership of Carolina Bank Holdings, Inc., a North Carolina corporation of
which the Bank is a wholly owned subsidiary, occurs on the date any one person or group accumulates ownership of Carolina Bank Holdings, Inc. stock constituting more than 50% of the total fair market value or total voting power of Carolina Bank
Holdings, Inc. stock, or 
 (b) Change in effective control: (x) any one person or more than one person acting as a group
acquires within a 12-month period ownership of Carolina Bank Holdings, Inc. stock possessing 30% or more of the total voting power of Carolina Bank Holdings, Inc. stock, or (y) a majority of Carolina Bank Holdings, Inc.’s board of
directors is replaced during any 12-month period by directors whose appointment or election is not endorsed in advance by a majority of Carolina Bank Holdings, Inc.’s board of directors, or 
 (c) Change in ownership of a substantial portion of assets: a change in ownership of a substantial portion of Carolina Bank Holdings, Inc.’s
assets occurs if in a 12-month period any one person or more than one person acting as a group acquires from Carolina Bank Holdings, Inc. assets having a total gross fair market value equal to or exceeding 40% of the total gross fair market value of
all of Carolina Bank Holdings, Inc.’s assets immediately before the acquisition or acquisitions. For this purpose, gross fair market value means the value of Carolina Bank Holdings, Inc.’s assets, or the value of the assets being disposed
of, determined without regard to any liabilities associated with the assets. 
 1.5 “Code” means the Internal Revenue
Code of 1986, as amended, and rules, regulations, and guidance of general application issued thereunder by the Department of the Treasury. 
 1.6 “Disability” means, because of a medically determinable physical or mental impairment that can be expected to result in death or that can be expected to last for a continuous period of at least 12 months,
(x) the Executive is unable to engage in any substantial gainful activity, or (y) the Executive is receiving income replacement benefits for a period of at least three months under an accident and health plan of the employer.
Medical determination of disability may be made either by the Social Security Administration or by the provider of an accident or health plan covering employees of the Bank. Upon request of the Plan Administrator, the Executive must submit proof to
the Plan Administrator of the Social Security Administration’s or provider’s determination. 
 1.7 “Early
Termination” means Separation from Service before Normal Retirement Age for reasons other than death, Disability, or Termination for Cause. 
 1.8 “Effective Date” means December 24, 2002. 
  

 25 

 1.9 “Normal Retirement Age” means the Executive’s 65th birthday. 

1.10 “Plan Administrator” or “Administrator” means the plan administrator described in Article 8. 

1.11 “Plan Year” means a twelve-month period commencing on January 1 and ending on December 31 of each year. The
initial Plan Year shall commence on the effective date of this Agreement. 
 1.12 “Separation from Service” means the
Executive’s service as an executive and independent contractor to the Bank and any member of a controlled group, as defined in Code section 414, terminates for any reason, other than because of a leave of absence approved by the Bank or the
Executive’s death. For purposes of this Agreement, if there is a dispute about the employment status of the Executive or the date of the Executive’s Separation from Service, the Bank shall have the sole and absolute right to decide the
dispute unless a Change in Control shall have occurred. 
 1.13 “Termination with Cause” and “Cause”
shall have the same meaning specified in any effective severance or employment agreement existing on the date hereof or hereafter entered into between the Executive and the Bank. If the Executive is not a party to a severance or employment agreement
containing a definition of termination with cause, Termination with Cause means the Bank terminates the Executive’s employment for any of the following reasons – 
 (a) the Executive’s gross negligence or gross neglect of duties or intentional and material failure to perform stated duties after written notice thereof, or 
 (b) disloyalty or dishonesty by the Executive in the performance of the Executive’s duties, or a breach of the Executive’s fiduciary duties for
personal profit, in any case whether in the Executive’s capacity as a director or officer, or 
 (c) intentional wrongful damage by the
Executive to the business or property of the Bank or its affiliates, including without limitation the reputation of the Bank, which in the judgement of the Bank causes material harm to the Bank or affiliates, or 
 (d) a willful violation by the Executive of any applicable law or significant policy of the Bank or an affiliate that, in the Bank’s judgement,
results in an adverse effect on the Bank or the affiliate, regardless of whether the violation leads to criminal prosecution or conviction. For purposes of this Agreement applicable laws include any statute, rule, regulatory order, statement of
policy, or final cease-and-desist order of any governmental agency or body having regulatory authority over the Bank, or 
 (e) an
intentional act of fraud, embezzlement, or theft by the Executive in the course of employment. For purposes of this Agreement no act or failure to act on the part of the Executive shall be deemed to have been intentional if it was due primarily to
an error in judgment or negligence. An act or failure to act on the Executive’s part shall be considered intentional if it is not in good faith and if it is without a reasonable belief that the action or failure to act is in the Bank’s
best interests, or 
  

 26 

 (f) the occurrence of any event that results in the Executive being excluded from coverage, or having
coverage limited for the Executive as compared to other executives of the Bank, under the Bank’s blanket bond or other fidelity or insurance policy covering its directors, officers, or employees, or 
 (g) the Executive is removed from office or permanently prohibited from participating in the Bank’s affairs by an order issued under section 8(e)(4)
or section 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1), or 
 (h) conviction of the Executive for or plea of
no contest to a felony or conviction of or plea of no contest to a misdemeanor involving moral turpitude, or the actual incarceration of the Executive for 45 consecutive days or more. 
 ARTICLE 2 
 LIFETIME BENEFITS 

 2.1 Normal Retirement. Unless Separation from Service or a Change in Control occurs before Normal Retirement Age, when the
Executive attains Normal Retirement Age the Bank shall pay to the Executive the benefit described in this section 2.1 instead of any other benefit under this Agreement. If the Executive’s Separation from Service thereafter is a Termination with
Cause or if this Agreement terminates under Article 5, no further benefits shall be paid. 
 2.1.1 Amount of benefit. The annual
benefit under this section 2.1 is $200,000. 
 2.1.2 Payment of benefit. Beginning with the month immediately after the month in which
the Executive attains Normal Retirement Age, the Bank shall pay the annual benefit to the Executive in equal monthly installments on the first day of each month. The annual benefit shall be paid to the Executive for 15 years. 
 2.2 Early Termination. Unless the Executive shall have received the benefit under section 2.4 after a Change in Control, after Early Termination
the Bank shall pay to the Executive the benefit described in this section 2.2 instead of any other benefit under this Agreement. 
 2.2.1
Amount of benefit. The annual benefit under this section 2.2 is calculated as the amount that fully amortizes the Accrual Balance existing at the end of the month immediately before the month in which Separation from Service occurs,
amortizing that Accrual Balance over the period beginning with the Executive’s Normal Retirement Age and taking into account interest at the discount rate or rates established by the Plan Administrator. 
 2.2.2 Payment of benefit. Beginning with the later of (x) the seventh month after the month in which the Executive’s Separation
from Service occurs, or (y) the month immediately after the month in which the Executive attains Normal Retirement Age, the Bank shall pay the annual benefit to the Executive in equal monthly installments on the first day of each month.
The annual benefit shall be paid to the Executive for 15 years. 
  

 27 

 2.3 Disability. Unless the Executive shall have received the benefit under section 2.4 after a
Change in Control, for Separation from Service because of Disability before Normal Retirement Age the Bank shall pay to the Executive the benefit described in this section 2.3 instead of any other benefit under this Agreement. 
 2.3.1 Amount of benefit. The annual benefit under this section 2.3 is calculated as the amount that fully amortizes the Accrual Balance existing at
the end of the month immediately before the month in which Separation from Service occurs, amortizing that Accrual Balance over the period beginning with the Executive’s Normal Retirement Age and taking into account interest at the discount
rate or rates established by the Plan Administrator. 
 2.3.2 Payment of benefit. Beginning with the later of (x) the
seventh month after the month in which the Executive’s Separation from Service occurs, or (y) the month immediately after the month in which the Executive attains Normal Retirement Age, the Bank shall pay the annual benefit to the
Executive in equal monthly installments on the first day of each month. The annual benefit shall be paid to the Executive for 15 years. 
 2.4 Change in Control. If a Change in Control occurs both before Normal Retirement Age and before Separation from Service, the Bank shall pay to the Executive the benefit described in this section 2.4 instead of any other benefit
under this Agreement. 
 2.4.1 Amount of benefit. The benefit under this section 2.4 is the Normal Retirement Age Accrual Balance
required by section 2.1, without discount for the time value of money. 
 2.4.2 Payment of benefit. The Bank shall pay the benefit
under this section 2.4 to the Executive in a single lump sum within three days after the Change in Control. If the Executive receives the benefit under this section 2.4 because of the occurrence of a Change in Control, the Executive shall not be
entitled to claim additional benefits under section 2.4 if an additional Change in Control occurs thereafter. 
 2.5 Lump-sum Payment of
Normal Retirement Benefit, Early Termination Benefit, or Disability Benefit Being Paid to the Executive when a Change in Control Occurs. If when a Change in Control occurs the Executive is receiving the Normal Retirement Age benefit under
section 2.1, the Bank shall pay the remaining salary continuation benefits to the Executive in a single lump sum within three days after the Change in Control. If when a Change in Control occurs the Executive is receiving or is entitled at Normal
Retirement Age to receive the benefit under sections 2.2 or 2.3, the Bank shall pay the remaining salary continuation benefits to the Executive in a single lump sum within three days after the later of (x) the date of the Change in
Control or (y) the first day of the seventh month after the month in which the Executive’s Separation from Service occurs. The lump-sum payment due to the Executive as a result of a Change in Control shall be an amount equal to the
Accrual Balance amount corresponding to the particular benefit when the Change in Control occurs. 
 2.6 Annual Benefit Statement.
Within 60 days after the end of each Plan Year the Plan Administrator shall provide or cause to be provided to the Executive and the Bank an annual benefit statement showing benefits payable or potentially payable to the Executive under this
Agreement. Each annual benefit statement shall supersede the previous year’s annual 

  

 28 

 
benefit statement. If there is a contradiction between this Agreement and the annual benefit statement concerning the amount of a particular benefit payable
or potentially payable to the Executive under sections 2.2, 2.3, or 2.4 hereof, the amount of the benefit determined under the Agreement shall control. 
 2.7 Savings Clause Relating to Compliance with Code Section 409A. Despite any contrary provision of this Agreement, if when the Executive’s employment terminates the Executive is a specified employee,
as defined in Code section 409A, and if any payments under Article 2 of this Agreement will result in additional tax or interest to the Executive because of section 409A, the Executive shall not be entitled to the payments under Article 2 until the
earliest of (x) the date that is at least six months after termination of the Executive’s employment for reasons other than the Executive’s death, (y) the date of the Executive’s death, or (z) any
earlier date that does not result in additional tax or interest to the Executive under section 409A. If any provision of this Agreement would subject the Executive to additional tax or interest under section 409A, the Bank shall reform the
provision. However, the Bank shall maintain to the maximum extent practicable the original intent of the applicable provision without subjecting the Executive to additional tax or interest, and the Bank shall not be required to incur any additional
compensation expense as a result of the reformed provision. 
 2.8 One Benefit Only. Despite anything to the contrary in this
Agreement, the Executive and Beneficiary are entitled to one benefit only under this Agreement, which shall be determined by the first event to occur that is dealt with by this Agreement. Except as provided in section 2.5 or Article 3, subsequent
occurrence of events dealt with by this Agreement shall not entitle the Executive or Beneficiary to other or additional benefits under this Agreement. 
 ARTICLE 3 
 DEATH BENEFITS 
 3.1 Death Before Separation from Service. Except as provided in section 5.2, if the Executive dies before Separation from Service, at the
Executive’s death the Beneficiary shall be entitled to an amount in cash equal to the Accrual Balance existing at the Executive’s death, unless the Change-in-Control benefit shall have been paid to the Executive under section 2.4 or unless
a Change-in-Control payout shall have occurred under section 2.5. No benefit shall be paid if the Change-in-Control benefit shall have been paid to the Executive under section 2.4 or if a Change-in-Control payout shall have occurred under section
2.5. If a benefit is payable to the Beneficiary, the benefit shall be paid in a single lump sum 90 days after the Executive’s death. However, no benefits under this Agreement shall be paid or payable to the Executive or the Beneficiary if this
Agreement is terminated under Article 5. 
 3.2 Death after Separation from Service. If the Executive dies after Separation from
Service and if Separation from Service was not a Termination with Cause, at the Executive’s death the Beneficiary shall be entitled to an amount in cash equal to the Accrual Balance remaining at the Executive’s death, unless the
Change-in-Control benefit shall have been paid to the Executive under section 2.4 or unless a Change-in-Control payout shall have occurred under section 2.5. No benefit shall be paid if the Change-in-Control benefit shall have been paid to the
Executive under section 2.4 or if a Change-in-Control payout shall have occurred under section 2.5. If a benefit is payable to the Beneficiary under this section 3.2, the benefit shall be paid in a single lump sum 90 days after the Executive’s
death. However, no benefits under this Agreement shall be paid or payable to the Executive or the Beneficiary if this Agreement is terminated under Article 5. 
  

 29 

 ARTICLE 4 
 BENEFICIARIES 
 4.1 Beneficiary Designations. The
Executive shall have the right to designate at any time a Beneficiary to receive any benefits payable under this Agreement at the Executive’s death. The Beneficiary designated under this Agreement may be the same as or different from the
beneficiary designation under any other benefit plan of the Bank in which the Executive participates. 
 4.2 Beneficiary Designation:
Change. The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form and delivering it to the Plan Administrator or its designated agent. The Executive’s Beneficiary designation shall be deemed
automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved. The Executive shall have the right to change a Beneficiary by completing, signing, and
otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures, as in effect from time to time. Upon acceptance by the Plan Administrator of a new Beneficiary Designation Form, all
Beneficiary designations previously filed shall be cancelled. The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Plan Administrator before the Executive’s death.

 4.3 Acknowledgment. No designation or change in designation of a Beneficiary shall be effective until received, accepted, and
acknowledged in writing by the Plan Administrator or its designated agent. 
 4.4 No Beneficiary Designation. If the Executive dies
without a valid beneficiary designation, or if all designated Beneficiaries predecease the Executive, the Executive’s spouse shall be the designated Beneficiary. If the Executive has no surviving spouse the benefits shall be paid to the
Executive’s estate. 
 4.5 Facility of Payment. If a benefit is payable to a minor, to a person declared incapacitated, or to a
person incapable of handling the disposition of his or her property, the Bank may pay the benefit to the guardian, legal representative, or person having the care or custody of the minor, incapacitated person, or incapable person. The Bank may
require proof of incapacity, minority, or guardianship as it may deem appropriate before distribution of the benefit. Distribution shall completely discharge the Bank from all liability for the benefit. 
 ARTICLE 5 
 GENERAL LIMITATIONS 
 5.1 Termination with Cause. Despite any contrary provision of
this Agreement, the Bank shall not pay any benefit under this Agreement and this Agreement shall terminate if Separation from Service is a Termination with Cause. 
 5.2 Suicide or Misstatement. The Bank shall not pay any benefit under this Agreement if the Executive commits suicide within two years after the date of this Agreement or if the Executive makes any material
misstatement of fact on any application or resume provided to the Bank or on any application for benefits provided by the Bank. 
  

 30 

 5.3 Removal. If the Executive is removed from office or permanently prohibited from participating
in the Bank’s affairs by an order issued under section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1), all obligations of the Bank under this Agreement shall terminate as of the effective date of the
order. 
 5.4 Default. Despite any contrary provision of this Agreement, if the Bank is in “default” or “in danger of
default,” as those terms are defined in section 3(x) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(x), all obligations under this Agreement shall terminate. 
 5.5 FDIC Open-Bank Assistance. All obligations under this Agreement shall terminate, except to the extent determined that continuation of the contract is necessary for the continued operation of the Bank, when
the Federal Deposit Insurance Corporation enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Federal Deposit Insurance Act section 13(c). 12 U.S.C. 1823(c). Rights of the parties that have
already vested shall not be affected by such action, however. 
 ARTICLE 6 
 CLAIMS AND REVIEW PROCEDURES 
 6.1 Claims Procedure. A person or beneficiary (“claimant”) who has not received benefits under this Agreement that he or she believes
should be paid shall make a claim for such benefits as follows – 
 6.1.1 Initiation – written claim. The claimant initiates
a claim by submitting to the Administrator a written claim for the benefits. If the claim relates to the contents of a notice received by the claimant, the claim must be made within 60 days after the notice was received by the claimant. All other
claims must be made within 180 days after the date of the event that caused the claim to arise. The claim must state with particularity the determination desired by the claimant. 
 6.1.2 Timing of Bank response. The Bank shall respond to the claimant within 90 days after receiving the claim. If the Bank determines that special
circumstances require additional time for processing the claim, the Bank may extend the response period by an additional 90 days by notifying the claimant in writing before the end of the initial 90-day period that an additional period is required.
The notice of extension must state the special circumstances and the date by which the Bank expects to render its decision. 
 6.1.3 Notice
of decision. If the Bank denies part or all of the claim, the Bank shall notify the claimant in writing of the denial. The Bank shall write the notification in a manner calculated to be understood by the claimant. The notification shall set
forth – 
  

			
	6.1.3.1	 	the specific reasons for the denial,
		
	6.1.3.2	 	a reference to the specific provisions of the Agreement on which the denial is based,

  

 31 

			
	6.1.3.3	 	a description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed,
		
	6.1.3.4	 	an explanation of the Agreement’s review procedures and the time limits applicable to such procedures, and
		
	6.1.3.5	 	a statement of the claimant’s right to bring a civil action under ERISA section 502(a) following an adverse benefit determination on review.

 6.2 Review Procedure. If the Bank denies part or all of the claim, the claimant shall have
the opportunity for a full and fair review by the Bank of the denial, as follows – 
 6.2.1 Initiation – written request. To
initiate the review, the claimant, within 60 days after receiving the Bank’s notice of denial, must file with the Bank a written request for review. 
 6.2.2 Additional submissions – information access. The claimant shall then have the opportunity to submit written comments, documents, records, and other information relating to the claim. The Bank shall
also provide the claimant, upon request and free of charge, reasonable access to and copies of all documents, records, and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits. 

6.2.3 Considerations on review. In considering the review, the Bank shall take into account all materials and information the claimant submits
relating to the claim, without regard to whether the information was submitted or considered in the initial benefit determination. 
 6.2.4
Timing of Bank response. The Bank shall respond in writing to the claimant within 60 days after receiving the request for review. If the Bank determines that special circumstances require additional time for processing the claim, the Bank may
extend the response period by an additional 60 days by notifying the claimant in writing before the end of the initial 60-day period that an additional period is required. The notice of extension must state the special circumstances and the date by
which the Bank expects to render its decision. 
 6.2.5 Notice of decision. The Bank shall notify the claimant in writing of its
decision on review. The Bank shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth – 
  

			
	6.2.5.1	 	the specific reason for the denial,
		
	6.2.5.2	 	a reference to the specific provisions of the Agreement on which the denial is based,
		
	6.2.5.3	 	a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records, and other information relevant (as defined in
applicable ERISA regulations) to the claimant’s claim for benefits, and
		
	6.2.5.4	 	a statement of the claimant’s right to bring a civil action under ERISA section 502(a).

  

 32 

 ARTICLE 7 
 MISCELLANEOUS 
 7.1 Amendments and Termination. Subject to
section 7.14, this Agreement may be amended solely by a written agreement signed by the Bank and by the Executive, and except for termination occurring under Article 5 this Agreement may be terminated solely by a written agreement signed by the Bank
and by the Executive. 
 7.2 Binding Effect. This Agreement shall bind the Executive, the Bank, and their beneficiaries, survivors,
executors, successors, administrators, and transferees. 
 7.3 No Guarantee of Employment. This Agreement is not an employment policy
or contract. It does not give the Executive the right to remain an employee of the Bank nor does it interfere with the Bank’s right to discharge the Executive. It also does not require the Executive to remain an employee or interfere with the
Executive’s right to terminate employment at any time. 
 7.4 Non-Transferability. Benefits under this Agreement may not be sold,
transferred, assigned, pledged, attached, or encumbered. 
 7.5 Successors; Binding Agreement. By an assumption agreement in form and
substance satisfactory to the Executive, the Bank shall require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business or assets of the Bank to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that the Bank would be required to perform this Agreement had no succession occurred. 
 7.6 Tax Withholding. The Bank shall withhold any taxes that are required to be withheld from the benefits provided under this Agreement. 
 7.7 Applicable Law. This Agreement and all rights hereunder shall be governed by the laws of the State of North Carolina, except to the extent
preempted by the laws of the United States of America. 
 7.8 Unfunded Arrangement. The Executive and Beneficiary are general
unsecured creditors of the Bank for the payment of benefits under this Agreement. The benefits represent the mere promise by the Bank to pay benefits. Rights to benefits are not subject to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment, or garnishment by creditors. Any insurance on the Executive’s life is a general asset of the Bank to which the Executive and Beneficiary have no preferred or secured claim. 
 7.9 Entire Agreement. This Agreement constitutes the entire agreement between the Bank and the Executive concerning the subject matter. No rights
are granted to the Executive under this Agreement other than those specifically set forth. This Agreement amends and restates in its entirety the Executive Agreement dated as of March 10, 2003 entered into by the Bank and the Executive under
the Bank’s Executive Supplemental Retirement Plan. 
  

 33 

 7.10 Severability. If any provision of this Agreement is held invalid, such invalidity shall not
affect any other provision of this Agreement not held invalid, and each such other provision shall continue in full force and effect to the full extent consistent with law. If any provision of this Agreement is held invalid in part, such invalidity
shall not affect the remainder of the provision not held invalid, and the remainder of such provision together with all other provisions of this Agreement shall continue in full force and effect to the full extent consistent with law. 
 7.11 Headings. Caption headings and subheadings herein are included solely for convenience of reference and shall not affect the meaning or
interpretation of any provision of this Agreement. 
 7.12 Notices. All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid, to the following addresses or to such other address as either party may
designate by like notice. If to the Bank, notice shall be given to the board of directors, Carolina Bank, 2604 Lawndale Drive, P.O. Box 10209, Greensboro, North Carolina 27408, or to such other or additional person or persons as the Bank shall have
designated to the Executive in writing. If to the Executive, notice shall be given to the Executive at the Executive’s address appearing on the Bank’s records, or to such other or additional person or persons as the Executive shall have
designated to the Bank in writing. 
 7.13 Payment of Legal Fees. The Bank is aware that after a Change in Control management of the
Bank could cause or attempt to cause the Bank to refuse to comply with its obligations under this Agreement, or could institute or cause or attempt to cause the Bank to institute litigation seeking to have this Agreement declared unenforceable, or
could take or attempt to take other action to deny Executive the benefits intended under this Agreement. In these circumstances the purpose of this Agreement would be frustrated. The Bank intends that the Executive not be required to incur expenses
associated with the enforcement of rights under this Agreement, whether by litigation or other legal action, because the cost and expense thereof would substantially detract from the benefits intended to be granted to the Executive hereunder. The
Bank intends that the Executive not be forced to negotiate settlement of rights under this Agreement under threat of incurring expenses. Accordingly, if after a Change in Control occurs it appears to the Executive that (x) the Bank has
failed to comply with any of its obligations under this Agreement, or (y) the Bank or any other person has taken any action to declare this Agreement void or unenforceable, or instituted any litigation or other legal action designed to
deny, diminish, or recover from the Executive the benefits intended to be provided to the Executive hereunder, the Bank irrevocably authorizes the Executive from time to time to retain counsel of the Executive’s choice, at the Bank’s
expense as provided in this section 7.13, to represent the Executive in the initiation or defense of any litigation or other legal action, whether by or against the Bank or any director, officer, stockholder, or other person affiliated with the
Bank, in any jurisdiction. Despite any existing or previous attorney-client relationship between the Bank and any counsel chosen by the Executive under this section 7.13, the Bank irrevocably consents to the Executive entering into an
attorney-client relationship with that counsel, and the Bank and the Executive agree that a confidential relationship shall exist between the Executive and that counsel. The fees and expenses of counsel selected from time to time by the Executive as
provided in this section shall be paid or reimbursed to the Executive by the Bank on a regular, periodic basis upon presentation by the Executive of a statement or statements prepared by counsel in accordance with counsel’s customary practices,
up to a maximum aggregate amount 

  

 34 

 
of $125,000, whether suit be brought or not and regardless of whether incurred in trial, bankruptcy, or appellate proceedings. The Bank’s obligation to
pay the Executive’s legal fees provided by this section 7.13 operates separately from and in addition to any legal fee reimbursement obligation the Bank may have with the Executive under any separate employment, severance, or other agreement
between the Executive and the Bank. Despite any contrary provision within this Agreement however, the Bank shall not be required to pay or reimburse the Executive’s legal expenses if doing so would violate section 18(k) of the Federal Deposit
Insurance Act [12 U.S.C. 1828(k)] and Rule 359.3 of the Federal Deposit Insurance Corporation [12 CFR 359.3]. 
 7.14 Termination or
Modification of Agreement Because of Changes in Law, Rules or Regulations. The Bank is entering into this Agreement on the assumption that certain existing tax laws, rules, and regulations will continue in effect in their current form. If that
assumption materially changes and the change has a material detrimental effect on this Agreement, the Bank reserves the right to terminate or modify this Agreement accordingly, subject to the written consent of the Executive, which shall not be
unreasonably withheld. This section 7.14 shall become null and void effective immediately upon a Change in Control. 
 ARTICLE 8 
 ADMINISTRATION OF AGREEMENT 
 8.1 Plan Administrator Duties. This Agreement shall be administered by a Plan Administrator consisting of the Bank’s board of directors or
such committee or person(s) as the board shall appoint. The Executive may not be a member of the Plan Administrator. The Plan Administrator shall have the discretion and authority to (x) make, amend, interpret, and enforce all
appropriate rules and regulations for the administration of this Agreement and (y) decide or resolve any and all questions that may arise, including interpretations of this Agreement. 
 8.2 Agents. In the administration of this Agreement, the Plan Administrator may employ agents and delegate to them such administrative duties as
it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel, who may be counsel to the Bank. 
 8.3 Binding Effect of Decisions. The decision or action of the Plan Administrator concerning any question arising out of the administration, interpretation, and application of the Agreement and the rules and
regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Agreement. No Executive or Beneficiary shall be deemed to have any right, vested or nonvested, regarding the continued use of any
previously adopted assumptions, including but not limited to the discount rate and calculation method described in section 1.1. 
 8.4
Indemnity of Plan Administrator. The Bank shall indemnify and hold harmless the members of the Plan Administrator against any and all claims, losses, damages, expenses, or liabilities arising from any action or failure to act with respect to
this Agreement, except in the case of willful misconduct by the Plan Administrator or any of its members. 
 8.5 Bank Information. To
enable the Plan Administrator to perform its functions, the Bank shall supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the retirement, Disability, death, or Separation from
Service of the Executive and such other pertinent information as the Plan Administrator may reasonably require. 
  

 35 

 IN WITNESS WHEREOF, the Executive and
a duly authorized officer of the Bank have executed this Salary Continuation Agreement as of the date first written above. 
  

							
	EXECUTIVE:	 		 	BANK:
			
		 		 	Carolina Bank
				
	 /s/ Robert T. Braswell
	 		 	By:	 	 /s/ T. Allen Liles

	Robert T. Braswell	 		 	Its:	 	Executive Vice President
				
		 		 	And By:	 	 /s/ T. Allen Liles

		 		 	Its:	 	Carolina Bank Holdings, Inc.
		 		 		 	Corporate Secretary

  

 36 

 BENEFICIARY DESIGNATION 
 CAROLINA BANK 
 SALARY CONTINUATION AGREEMENT 
  

					
	 I, Robert T. Braswell, designate the following as beneficiary of any death benefits under this Salary Continuation Agreement
–

		
	 Primary:
	 	 Barbara C. Braswell

  

					
	         (spouse)
	 	.	 	
	 	 	

			
		
	 Contingent:
	 	 Kristin B. Hill & Brooke E. Braswell

  

					
	               (daughters)
	 	.	 	
	 	 	

 Note: To name a trust as beneficiary, please provide the name of the trustee(s) and the exact
name and date of the trust agreement. 
 I understand that I may change these beneficiary designations by filing a new written
designation with the Bank. I further understand that the designations will be automatically revoked if the beneficiary predeceases me, or if I have named my spouse as beneficiary and our marriage is subsequently dissolved. 
  

			
	Signature:	 	 /s/ Robert T. Braswell

		 	Robert T. Braswell
	Date:	 	May 20, 2008
	
	Accepted by the Bank this 20th day of May, 2008
		
	By:	 	 /s/ T. Allen Liles

	Print Name:	 	T. Allen Liles
	Title:	 	Executive Vice President

  

 37exhibit_4-1.htm

    
      

    

    Exhibit
4.1

     

    

      FORM OF WARRANT

      

      WARRANT TO
PURCHASE

      SHARES OF COMMON
STOCK

      

      Date of
Warrant:  ______________, 2____

      

      

      THIS
CERTIFIES that, for value received, _______________________________ or
his/her/its registered assigns (“Warrantholder”), is entitled, subject to the
terms and conditions set forth in this Warrant, to purchase from Studio One
Media, Inc., a Delaware corporation (“Company”), ____________, fully paid, duly
authorized and nonassessable shares of common stock (“Shares”), $0.001 par value
per share, of the Company, at any time commencing on the date hereof and
continuing for two years thereafter (the “Exercise Period”) at an exercise price
of ______Dollars and _______ Cents ($_________) per share, subject to adjustment
pursuant to Section 8 hereof.

      

      This Warrant is subject to the
following provisions, terms and conditions:

      

      1.           
 Transferability.

      

      1.1           Registration.  The
Warrants shall be issued only in registered form.

      

      1.2           Transfer.  This
Warrant shall be transferable only on the books of the Company maintained at its
principal executive offices upon surrender thereof for registration of transfer
duly endorsed by the Warrantholder or by its duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment or
authority to transfer.  Upon any registration of transfer, the Company
shall execute and deliver a new Warrant or Warrants in appropriate denominations
to the person or persons entitled thereto.

      

      1.3           Common
Stock to be Issued. Upon the exercise of
any Warrants and upon receipt by the Company of a facsimile or original of
Warrantholder’s signed Election to Exercise Warrant (See Exhibit 1), Company
shall instruct its transfer agent to issue stock certificates, subject to the
restrictive legend set forth below, in the name of Warrantholder (or its
nominee) and in such denominations to be specified by Warrantholder representing
the number of shares of Common Stock issuable upon such exercise, as
applicable.  Company warrants that no instructions, other than these
instructions, have been given or will be given to the transfer agent and that
the Common Stock shall otherwise be freely transferable on the books and records
of the Company.

      

      1.4           It
shall be the Company’s responsibility to take all necessary actions and to bear
all such costs to issue the certificate of Common Stock as provided herein,
including the responsibility and cost for delivery of an opinion letter to the
transfer agent, if so required.  The person in whose name the
certificate of Common Stock is to be registered shall be treated as a
shareholder of record on and after the exercise date. Upon surrender of any
Warrant that is to be converted in part, the Company shall issue to the
Warrantholder a new Warrant equal to the unconverted amount, if so requested by
Purchaser:

      

      THE SECURITIES OFFERED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM
THE REGISTRATION REQUIREMENTS OF SUCH LAWS.  THE SECURITIES ARE
SUBJECT TO RESTRICTIONS OF TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED
OR RESOLD EXCEPT AS PERMITTED UNDER SUCH LAWS PURSUANT TO REGISTRATION OR AN
EXEMPTION THEREFROM.  THE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE
MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE OFFERING
MATERIALS.  ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        
FORM OF
WARRANT

       

      

      2.            Exchange
of Warrant Certificate.

      

      Any
Warrant certificate may be exchanged for another certificate or certificates of
like tenor entitling the Warrantholder to purchase a like aggregate number of
Shares as the certificate or certificates surrendered then entitle such
Warrantholder to purchase.  Any Warrantholder desiring to exchange a
warrant certificate shall make such request in writing delivered to the Company,
and shall surrender, properly endorsed, the certificate evidencing the Warrant
to be so exchanged.  Thereupon, the Company shall execute and deliver
to the person entitled thereto a new Warrant certificate as so
requested.

      

      3.            Terms
of Warrants: Exercise of Warrants.

      

      3.1           Warrant
Exercise.  Subject to the terms of this Warrant, the
Warrantholder shall have the right to purchase from the Company, such number of
fully paid, duly authorized and nonassessable shares of common stock (“Shares”),
$0.001 par value per share, of the Company as have been set forth in the first
paragraph of this Warrant, at any time commencing from the date hereof and
continuing for two years thereafter (the “Exercise Period”), upon surrender to
the Company at its principal executive office, of the certificate evidencing
this Warrant to be exercised, together with the attached Election to Exercise
Warrant form duly filled in and signed, and upon payment to the Company of the
Warrant Price (as defined in and determined in accordance with the provisions of
Section 7 and 8 hereof) or as provided in Section 3(a)(i) hereof, for the number
of Shares with respect to which such Warrant is then
exercised.  Payment of the aggregate Warrant Price shall be made in
cash, wire transfer or by cashier’s check or any combination
thereof.

      

      3.2           Common Stock
Certificates.  Subject to the terms of this Warrant, upon such
surrender of this Warrant and payment of such Warrant Price as aforesaid, the
Company shall promptly issue and cause to be delivered to the Warrantholder or
to such person or persons as the Warrantholder may designate in writing, a
certificate or certificates (in such name or names as the Warrantholder may
designate in writing) for the number of duly authorized, fully paid and
non-assessable whole Shares to be purchased upon the exercise of this Warrant,
and shall deliver to the Warrantholder Common Stock or cash, to the extent
provided in Section 9 hereof, with respect to any fractional Shares otherwise
issuable upon such surrender.  Such certificate or certificates shall
be deemed to have been issued and any person so designated to be named therein
shall be deemed to have become a holder of such Shares as of the close of
business on the date of the surrender of this Warrant and payment of the Warrant
Price, notwithstanding that the certificates representing such Shares shall not
actually have been delivered or that the Share and Warrant transfer books of the
Company shall then be closed.  This Warrant shall be exercisable, at
the sole election of the Warrantholder, either in full or from time to time in
part and, in the event that any certificate evidencing this Warrant (or any
portion thereof) is exercised prior to the Termination Date with respect to less
than all of the Shares specified therein at any time prior to the Termination
Date, a new certificate of like tenor evidencing the remaining portion of this
Warrant shall be issued by the Company, if so requested by the
Warrantholder.

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        
FORM OF
WARRANT

       

      

      3.3           Transfer
Agent.  Upon the Company’s receipt of a facsimile or original
of Warrantholder’s signed Election to Exercise Warrant, the Company shall
instruct its transfer agent to issue one or more stock Certificates representing
that number of shares of Common Stock which the Warrantholder is entitled to
purchase in accordance with the terms and conditions of this Warrant and the
Election to Exercise Warrant attached hereto.  The transfer agent for
the Company shall act as registrar and shall maintain an appropriate ledger
containing the necessary information with respect to each Warrant.

      

      3.4           Exercise.  This
Warrant is exercisable in whole or in part at the Exercise Price per share of
Common Stock (as defined hereafter) payable hereunder, payable in cash or by
certified or official bank check, by means of tendering this Warrant Certificate
to the Company.  Upon surrender of this Warrant Certificate with the
annexed Notice of Exercise duly executed, together with payment of the Exercise
Price for the shares of Common Stock purchased, the Holder shall be entitled to
receive a certificate or certificates for the shares of Common Stock so
purchased.

      

      3.5           Election to
Exercise.  Such exercise shall be effectuated by surrendering
to the Company, or its attorney, the Warrants to be converted together with a
facsimile or original of the signed Election to Exercise Warrant which evidences
Warrantholder’s intention to exercise those Warrants indicated.  The
date on which the Election to Exercise Warrant is effective (“Exercise Date”)
shall be deemed to be the date on which the Warrantholder has delivered to the
Company a facsimile or original of the signed Election to Exercise Warrant, as
long as the original Warrants to be exercised are received by the Company or its
designated attorney within five (5) business days thereafter.  As long
as the Warrants to be exercised are received by the Company within five (5)
business days after it receives a facsimile or original of the signed Election
to Exercise Warrant, the Company shall deliver to the Warrantholder, or per the
Warrantholder’s instructions, the shares of Common Stock within three (3)
business days of receipt of the Warrants to be converted.

      

      3.6           Payment of Interest. 
Nothing contained in this Warrant shall be deemed to establish or require the
payment of interest to the Warrantholder.

      

      3.7           Issuance of Common
Stock.  It shall be the Company’s responsibility to take all
necessary actions and to bear all such costs to issue the Certificate of Common
Stock as provided herein, including the responsibility and cost for delivery of
an opinion letter to the transfer agent, if so required.  The person
in whose name the certificate of Common Stock is to be registered shall be
treated as a shareholder of record on and after the exercise date. Upon
surrender of any Warrants that are to be converted in part, the Company shall
issue to the Warrantholder new Warrants equal to the unconverted amount, if so
requested by Warrantholder.

      

      3.8           Exercise
Default.  The Company shall at all times reserve and have
available all Common Stock necessary to meet exercise of the Warrants by all
Warrantholders of the entire amount of Warrants then outstanding.  If,
at any time Warrantholder submits an Election to Exercise Warrant and the
Company does not have sufficient authorized but unissued shares of Common Stock
available to effect, in full, a exercise of the Warrants (a “Exercise Default”,
the date of such default being referred to herein as the “Exercise Default
Date”), the Company shall issue to the Warrantholder all of the shares of Common
Stock which are available, and the Election to Exercise Warrant as to any
Warrants requested to be converted but not converted (the “Unconverted
Warrants”), upon Warrantholder’s sole option, may be deemed null and
void.  The Company shall provide notice of such Exercise Default
(“Notice of Exercise Default”) to all existing Warrantholders of outstanding
Warrants, by facsimile, within one (1) business day of such
default  (with the original delivered by overnight or two day
courier), and the Warrantholder shall give notice to the Company by facsimile
within five (5) business days of receipt of the original Notice of Exercise
Default (with the original delivered by overnight or two day courier) of its
election to either nullify or confirm the Election to Exercise
Warrant.

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        
FORM OF
WARRANT

       

      

      3.9           Furnishing of
Prospectus.  The Company shall furnish to Warrantholder such
number of prospectuses and other documents incidental to the registration of the
shares of Common Stock underlying the Warrants, including any amendment of or
supplements thereto.  Warrantholder shall acknowledge in writing the
receipt, the careful reading, and the understanding thereof, prior to any
exercise under this Section 3.

      

      3.10         Shareholder of
Record.  Each person in whose name any certificate for shares
of Common Stock shall be issued shall for all purposes be deemed to have become
the holder of record of the Common Stock represented thereby on the date on
which the Warrant was surrendered and payment of the purchase price and any
applicable taxes was made, irrespective of date of issue or delivery of such
certificate, except that if the date of such surrender and payment is a date
when the Shares transfer books of the Company are closed, such person shall be
deemed to have become the holder of such Shares on the next succeeding date on
which such Share transfer books are open.  The Company shall not close
such Share transfer books at any one time for a period longer than seven
(7)  days.

      

      4.            Payment of
Taxes.    The Company shall pay all documentary stamp
taxes, if any, attributable to the initial issuance of the Shares; provided,
however, that the Company shall not be required to pay any tax or taxes which
may be payable, (a) with respect to any secondary transfer of this Warrant or
the Shares or (b) as a result of the issuance of the Shares to any person other
than the Warrantholder, and the Company shall not be required to issue or
deliver any certificate for any Shares unless and until the person requesting
the issuance thereof shall have paid to the Company the amount of such tax or
shall have produced evidence that such tax has been paid to the appropriate
taxing authority.

      

      5.            Mutilated or Missing
Warrant.  In case the certificate or certificates evidencing
this Warrant shall be mutilated, lost, stolen or destroyed, the Company shall,
at the request of the Warrantholder, issue and deliver in exchange and
substitution for and upon cancellation of the mutilated certificate or
certificates, or in lieu of and substitution for the certificate or certificates
lost, stolen or destroyed, a new Warrant certificate or certificates of like
tenor and representing an equivalent right or interest, but only upon receipt of
evidence satisfactory to the Company of such loss, theft or destruction of such
Warrant and of a bond of indemnity, if requested, also satisfactory to the
Company in form and amount, and issued at the applicant’s
cost.  Applicants for such substitute Warrant certificate shall also
comply with such other reasonable regulations and pay such other reasonable
charges as the Company may prescribe.

      

      6.            Reservation of
Shares.  The issuance, sale and delivery of the Warrants have
been duly authorized by all required corporate action on the part of the Company
and when issued, sold and delivered in accordance with the terms hereof and
thereof for the consideration expressed herein and therein, will be duly and
validly issued, fully paid, and non-assessable and enforceable in accordance
with their terms, subject to the laws of bankruptcy and creditors’ rights
generally.  The Company shall pay all taxes in respect of the issue
thereof.  As a condition precedent to the taking of any action that
would result in the effective purchase price per share of Common Stock upon the
exercise of this Warrant being less than the par value per share (if such shares
of Common Stock then have a par value), the Company will take such corporate
action as may, in the opinion of its counsel, be necessary in order that the
Company may comply with all its obligations under this Agreement with regard to
the exercise of this Warrant.

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        
FORM OF
WARRANT

       

      7.            Warrant
Price.  During the Exercise Period, the price per Share
(“Warrant price”) at which Shares shall be purchasable upon the exercise of this
Warrant shall be Four Dollars and Fifty Cents ($4.50), subject to adjustment
pursuant to Section 8 hereof (“Exercise Price”).

      

       8.            Adjustment of Warrant Price and
Number of Shares.  The number and kind of securities
purchasable upon the exercise of this Warrant and the Warrant Price shall be
subject to adjustment from time to time after the date hereof upon the happening
of certain events, as follows:

      

      8.1            Adjustments.  The
number of Shares purchasable upon the exercise of this Warrant shall be subject
to adjustments as follows:

      

      (a)         In
case the Company shall (i) pay a dividend on Common Stock in Common Stock or
securities convertible into, exchangeable for or otherwise entitling a holder
thereof to receive Common Stock, (ii) declare a dividend payable in cash on its
Common Stock and at substantially the same time offer its shareholders a right
to purchase new Common Stock (or securities convertible into, exchangeable for
or other entitling a holder thereof to receive Common Stock) from the proceeds
of such dividend (all Common Stock so issued shall be deemed to have been issued
as a stock dividend), (iii) subdivide its outstanding shares of Common Stock
into a greater number of shares of Common Stock, (iv) combine its outstanding
shares of Common Stock into a smaller number of shares of Common Stock, or (v)
issue by reclassification of its Common Stock any shares of Common Stock of the
Company, the number of shares of Common Stock issuable upon exercise of the
Warrants immediately prior thereto shall be adjusted so that the holders of the
Warrants shall be entitled to receive after the happening of any of the events
described above that number and kind of shares as the holders would have
received had such Warrants been converted immediately prior to the happening of
such event or any record date with respect thereto.

      

      (b)         In
case the Company shall distribute, without receiving consideration therefor, to
all holders of its Common Stock evidences of its indebtedness or assets
(excluding cash dividends other than as described in Section (8)(a)(ii)), then
in such case, the number of shares of Common Stock thereafter issuable upon
exercise of the Warrants shall be determined by multiplying the number of shares
of Common Stock theretofore issuable upon exercise of the Warrants, by a
fraction, of which the numerator shall be the closing bid price per share of
Common Stock on the record date for such distribution, and of which the
denominator shall be the closing bid price of the Common Stock less the then
fair value (as determined by the Board of Directors of the Company, whose
determination shall be conclusive) of the portion of the assets or evidences of
indebtedness so distributed per share of Common Stock.  Such
adjustment shall be made whenever any such distribution is made and shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such distribution.

      

      (c)         Any
adjustment in the number of shares of Common Stock issuable hereunder otherwise
required to be made by this Section 8 will not have to be adjusted if such
adjustment would not require an increase or decrease in one percent (1%) or more
in the number of shares of Common Stock issuable upon exercise of the
Warrant.  No adjustment in the number of Shares purchasable upon
exercise of this Warrant will be made for the issuance of shares of capital
stock to directors, employees or independent Warrantors pursuant to the
Company’s or any of its subsidiaries’ stock option, stock ownership or other
benefit plans or arrangements or trusts related thereto or for issuance of any
shares of Common Stock pursuant to any plan providing for the reinvestment of
dividends or interest payable on securities of the Company and the investment of
additional optional amounts in shares of Common Stock under such
plan.

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        
FORM OF
WARRANT

       

      

      (d)         Whenever
the number of shares of Common Stock issuable upon the exercise of the Warrants
is adjusted, as herein provided the Warrant Price shall be adjusted (to the
nearest cent) by multiplying such Warrant Price immediately prior to such
adjustment by a fraction, of which the numerator shall be the number of shares
of Common Stock issuable upon the exercise of each share of the Warrants
immediately prior to such adjustment, and of which the denominator shall be the
number of shares of Common Stock issuable immediately thereafter.

      

      (e)         The
Company from time to time by action of its Board of Directors may decrease the
Warrant Price  by any amount for any period of time if the period is
at least twenty (20) days, the decrease is irrevocable during the period and the
Board of Directors of the Company in its sole discretion shall have made a
determination that such decrease would be in the best interest of the Company,
which determination shall be conclusive. Whenever the Warrant Price is decreased
pursuant to the preceding sentence, the Company shall mail to holders of record
of the Warrants a notice of the decrease at least fifteen (15) days prior to the
date the decreased Warrant Price takes effect, and such notice shall state the
decreased Warrant Price and the period it will be in effect.

      

      8.2            Mergers, Etc.  In
the case of any (i) consolidation or merger of the Company into any entity
(other than a consolidation or merger that does not result in any
reclassification, exercise, exchange or cancellation of outstanding shares of
Common Stock of the Company), (ii) sale, transfer, lease or conveyance of all or
substantially all of the assets of the Company as an entirety or substantially
as an entirety, or (iii) reclassification, capital reorganization or change of
the Common Stock (other than solely a change in par value, or from par value to
no par value), in each case as a result of which shares of Common Stock shall be
converted into the right to receive stock, securities or other property
(including cash or any combination thereof), each holder of Warrants then
outstanding shall have the right thereafter to exercise such Warrant only into
the kind and amount of securities, cash and other property receivable upon such
consolidation, merger, sale, transfer, capital reorganization or
reclassification by a holder of the number of shares of Common Stock of the
Company into which such Warrants would have been converted immediately prior to
such consolidation, merger, sale, transfer, capital reorganization or
reclassification, assuming such holder of Common Stock of the Company (A) is not
an entity with which the Company consolidated or into which the Company merged
or which merged into the Company or to which such sale or transfer was made, as
the case may be (“constituent entity”), or an affiliate of a constituent entity,
and (B) failed to exercise his or her rights of election, if any, as to the kind
or amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer (provided that if the kind or amount of
securities, cash and other property receivable upon such consolidation, merger,
sale or transfer is not the same for each share of Common Stock of the Company
held immediately prior to such consolidation, merger, sale or transfer by other
than a constituent entity or an affiliate thereof and in respect of which such
rights or election shall not have been exercised (“non-electing share”), then
for the purpose of this Section 8.2 the kind and amount of securities, cash and
other property receivable upon such consolidation, merger, sale or transfer by
each non-electing share shall be deemed to be the kind and amount so receivable
per share by a plurality of the non-electing shares).  If necessary,
appropriate adjustment shall be made in the application of the provision set
forth herein with respect to the rights and interests thereafter of the holder
of Warrants, to the end that the provisions set forth herein shall thereafter
correspondingly be made applicable, as nearly as may reasonably be, in relation
to any shares of stock or other securities or property thereafter deliverable on
the exercise of the Warrants.  The above provisions shall similarly
apply to successive consolidations, mergers, sales, transfers, capital
reorganizations and reclassifications.  The Company shall not effect
any such consolidation, merger, sale or transfer unless prior to or
simultaneously with the consummation thereof the successor company or entity (if
other than the Company) resulting from such consolidation, merger, sale or
transfer assumes, by written instrument, the obligation to deliver to the holder
of Warrants such shares of stock, securities or assets as, in accordance with
the foregoing provision, such holder may be entitled to receive under this
Section 8.2.

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        
FORM OF
WARRANT

       

      8.3            Statement of
Warrants.  Irrespective of any adjustments in the Warrant Price
of the number or kind of shares purchasable upon the exercise of this Warrant,
this Warrant certificate or certificates hereafter issued may continue to
express the same price and number and kind of shares as are stated in this
Warrant.

      

      9.             
Fractional
Shares.  Any fractional shares of Common Stock issuable upon
exercise of the Warrants shall be rounded to the nearest whole share or, at the
election of the Company, the Company shall pay the holder thereof an amount in
cash equal to the closing bid price thereof.  Whether or not
fractional shares are issuable upon exercise shall be determined on the basis of
the total number of Warrants the holder is at the time exercising and the number
of shares of Common Stock issuable upon such exercise.

      

      10.           No Rights as
Stockholders:  Notices to Warrantholders.  Nothing
contained in this Warrant shall be construed as conferring upon the
Warrantholder or its transferees any rights as a stockholder of the Company,
including the right to vote, receive dividends, consent or receive notices as a
stockholder with respect to any meeting of stockholders for the election of
directors of the Company or any other matter.  If, however, at any
time prior to the Expiration Time and prior to the exercise of this Warrant, any
of the following events shall occur:

      

      (a)         any
action which would require an adjustment pursuant to Section 8.1;
or

      

      (b)         a
dissolution, liquidation or winding up of the Company or any consolidation,
merger or sale of its property, assets and business as an entirety; then in any
one or more of said events, the Company shall give notice in writing of such
event to the Warrantholder at least ten (10) days prior to the date fixed as a
record date or the date of closing the transfer books for the determination of
the shareholders entitled to any relevant dividend, distribution, subscription
rights, or other rights or for the effective date of any dissolution,
liquidation of winding up or any merger, consolidation, or sale of substantially
all assets, but failure to mail or receive such notice or any defect therein or
in the mailing thereof shall not affect the validity of any such action
taken.  Such notice shall specify such record date or the effective
date, as the case may be.

      

      11.           Registration
Rights.

      

      11.1         Piggyback
Registration

      

      
        	
                 

              	
                (a)

              	
                Each
      time that the Company proposes to Register a public offering solely of its
      Common Stock (not including an offering of Common stock issuable upon
      conversion or exercise of other securities), other than pursuant to a
      Registration Statement on Form S-4 or Form S-8 or similar or successor
      forms (collectively,"Excluded Forms"), the Company shall promptly give
      written
      notice of such proposed Registration to all holders of Shares, which shall
      offer such holders the right to request inclusion of any Registrable
      Securities in the proposed
Registration.

              

      

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        
FORM OF
WARRANT

       

      

      
        	
                 

              	
                (b)

              	
                Each
      holder of Shares shall have ten (10) days or such longer period as shall
      be set forth in the notice from the receipt of such notice to deliver to
      the Company a written request specifying the number of shares of
      Registrable Securities such holder intends to sell and the holder's
      intended plan of disposition.

              

      

      

      
        	
                 

              	
                (c)

              	
                In
      the event that the proposed Registration by the Company is, in whole or in
      part, an underwritten public offering of securities of the Company, any
      request under Section 11.1 (b) may specify that the Registrable Securities
      be included in the underwriting on the same terms and conditions as the
      shares of Common Stock, if any, otherwise being sold through underwriters
      under such Registration.

              

      

      

      
        	
                 

              	
                (d)

              	
                Upon
      receipt of a written request pursuant to Section 11.1 (b), the Company
      shall promptly use its best efforts to cause all such Registrable
      Securities to be Registered, to the extent required to permit sale or
      disposition as set forth in the written
request.

              

      

      

      
        	
                 

              	
                (e)

              	
                Notwithstanding
      the foregoing, if the managing underwriter of an underwritten public
      offering, determines and advises in writing that the inclusion of all
      Registrable Securities proposed to be included in the underwritten public
      offering, together with any other issued and outstanding shares of Common
      Stock proposed to be included therein by holders other than the holders of
      Registrable Securities (such other shares hereinafter collectively
      referred to as the "Other Shares"), would interfere with the successful
      marketing of the securities proposed to be included in the underwritten
      public offering, then the number of such shares to be included in such
      underwritten public offering shall be reduced, and shares shall be
      excluded from such underwritten public offering in a number deemed
      necessary by such managing underwriter, first by excluding shares held by
      the directors, officers, employees and founders of the Company, and then,
      to the extent necessary, by excluding Registrable Securities participating
      in such underwritten public offering, pro rata based  on the
      number of shares of Registrable Securities each such holder proposed to
      include.

              

      

      

      
        	
                 

              	
                (f)

              	
                All
      Shares that are not included in the underwritten public offering shall be
      withheld from the market by the holders thereof for a period, not to
      exceed 12 months following a public offering, that the managing
      underwriter reasonably determines as necessary in order to effect the
      underwritten public offering.  The holders of such Shares shall
      execute such documentation as the managing underwriter reasonably requests
      to evidence this lock-up.

              

      

      

      12.           Miscellaneous.

      

      12.1         Benefits of this
Agreement.  Nothing in this Warrant shall be construed to give
to any person or corporation other than the Company and the Warrantholder any
legal or equitable right, remedy or claim under this Warrant, and this Warrant
shall be for the sole and exclusive benefit of the Company and the
Warrantholder.

      

      12.2          Rights Cumulative;
Waivers.  The rights of each of the parties under this Warrant
are cumulative.  The rights of each of the parties hereunder shall not
be capable of being waived or varied other than by an express waiver or
variation in writing.  Any failure to exercise or any delay in
exercising any of such rights shall not operate as a waiver or variation of that
or any other such right.  However, the holders of a majority in
principal amount of the Warrants may waive a default or rescind the declaration
of an Exercise Default and its consequences except for a default in the exercise
into Common Stock.  Any defective or partial exercise of any of such
rights shall not preclude any other or further exercise of that or any other
such right.  No act or course of conduct or negotiation on the part of
any party shall in any way preclude such party from exercising any such right or
constitute a suspension or any variation of any such right.

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        
FORM OF
WARRANT

       

      12.3          Benefit; Successors
Bound.  This Warrant and the terms, covenants, conditions,
provisions, obligations, undertakings, rights, and benefits hereof, shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
heirs, executors, administrators, representatives, successors, and permitted
assigns.

      

      12.4          Entire
Agreement.  This Warrant contains the entire agreement between
the parties with respect to the subject matter hereof.  There are no
promises, agreements, conditions, undertakings, understandings, warranties,
covenants or representations, oral or written, express or implied, between them
with respect to this Warrant or the matters described in this Warrant, except as
set forth in this Warrant.  Any such negotiations, promises, or
understandings shall not be used to interpret or constitute this
Warrant.

      

      12.5          Assignment.  This
Warrant may be assigned if the Assignment of Warrant, attached as Exhibit 2 to
this Warrant, is properly completed, executed and delivered to the
Company.

      

      12.6          Amendment.  This
Warrant may be amended only by an instrument in writing executed by the parties
hereto.

      

      12.7          Severability.  Each
part of this Warrant is intended to be severable.  In the event that
any provision of this Warrant is found by any court or other authority of
competent jurisdiction to be illegal or unenforceable, such provision shall be
severed or modified to the extent necessary to render it enforceable and as so
severed or modified, this Warrant shall continue in full force and
effect.

      

      12.8          Notices.  Notices
required or permitted to be given hereunder shall be in writing and shall be
deemed to be sufficiently given when personally delivered (by hand, by courier,
by telephone line facsimile transmission, receipt confirmed, or other means) or
sent by certified mail, return receipt requested, properly addressed and with
proper postage pre-paid (i) if to the Company, at its executive office (ii) if
to the Warrantholder, at the address set forth under its name in the
subscription agreement for this Warrant, with a copy to its designated attorney
and (iii) if to any other Warrantholder, at such address as such Warrantholder
shall have provided in writing to the Company, or at such other address as each
such party furnishes by notice given in accordance with this section, and shall
be effective, when personally delivered, upon receipt and, when so sent by
certified mail, four (4) business days after deposit with the United States
Postal Service.

      

      12.9          Governing Law.  This
Agreement shall be governed by the interpreted in accordance with the laws of
the State of Arizona without reference to its conflicts of laws rules or
principles.

      

      12.10        Forum Selection and Consent to
Jurisdiction.  Any litigation based thereon, or arising out of,
under, or in connection with, this agreement or any course of conduct, course of
dealing, statements (whether oral or written) or actions of the Company or
Warrantholder shall be brought and maintained exclusively in the federal courts
of the State of Arizona without reference to its conflicts of laws rules or
principles.  The Company hereby expressly and irrevocably submits to
jurisdiction exclusively with the federal Courts of the State of Arizona for the
purpose of any such litigation as set forth above and irrevocably agrees to be
bound by any final judgment rendered thereby in connection with such
litigation.  The Company further irrevocably consents to the service
of process by registered mail, postage prepaid, or by personal service within or
without the State of Arizona.  The Company hereby expressly and
irrevocably waives, to the fullest extent permitted by law, any objection which
it may have or hereafter may have to the laying of venue of any such litigation
brought in any such court referred to above and any claim that any such
litigation has been brought in any inconvenient forum.  To the extent
that the Company has or hereafter may acquire any immunity from jurisdiction of
any court or from any legal process (whether through service or notice,
attachment prior to judgment, attachment in aid of execution or otherwise) with
respect to itself or its property.  The Company hereby irrevocably
waives such immunity in respect of its obligations under this agreement and the
other loan documents.

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        
FORM OF
WARRANT

       

      

      12.11        Waiver of Jury
Trial.  The Warrantholder and the Company hereby knowingly,
voluntarily and intentionally waive any rights they may have to a trial by jury
in respect of any litigation based hereon, or arising out of, under, or in
connection with, this agreement, or any course of conduct, course of dealing,
statements (whether oral or written) or actions of the Warrantholder or the
Company.  The Company acknowledges and agrees that it has received
full and sufficient consideration for this provision and that this provision is
a material inducement for the Warrantholder entering into this
agreement.

      

      12.12        Consents.  The
person signing this Warrant on behalf of the Company hereby represents and
warrants that he has the necessary power, consent and authority to execute and
deliver this Warrant on behalf of the Company.

      

      12.13        Further
Assurances.  In addition to the instruments and documents to be
made, executed and delivered pursuant to this Warrant, the parties hereto agree
to make, execute and deliver or cause to be made, executed and delivered, to the
requesting party such other instruments and to take such other actions as the
requesting party may reasonably require to carry out the terms of this Warrant
and the transactions contemplated hereby.

      

      12.14        Section
Headings.  The Section headings in this Warrant are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Warrant.

      

      12.15        Construction.  Unless
the context otherwise requires, when used herein, the singular shall be deemed
to include the plural, the plural shall be deemed to include each of the
singular, and pronouns of one or no gender shall be deemed to include the
equivalent pronoun of the other or no gender.

      

      IN
WITNESS WHEREOF, the parties have caused this Warrant to be duly executed, all
as of the day and year first above written.

       

      
        	 	COMPANY:	 
	 	 	 
	 	Studio One Media,
      Inc.	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
                 

              	
                By:
    

              	/s/ Preston J.
Shea	 
	 	 	Preston J. Shea,
    President	 
	 	 	 	 
	 	 	 	 

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        
FORM OF
WARRANT

      EXHIBIT 1

      

      ELECTION TO EXERCISE
WARRANT

      

      The
undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant for, and to purchase thereunder, _______shares
of Common Stock of Studio One Media, Inc., a Delaware corporation (“Shares”)
provided for therein, and requests that certificates for the Shares be issued in
the name of:*

      

      Name:___________________________________________________________

      

      Address:_________________________________________________________

      

      Social
Security No.________________________________________________

      

      or Tax ID
Number:_________________________________________________

      

      and, if
such number of Shares shall not be all of the Shares purchasable under the
Warrant, that a new Warrant certificate for the balance of the Shares
purchasable under the within Warrant be registered in the name of the
undersigned Warrantholder or his Assignee* as indicated below and delivered to
the address stated below:

      

      Dated:
_________________, 20___

      

      Name of
Warrantholder of

      Assignee
(Please Print)_____________________________________________

      

      Address:_________________________________________________________

      

      

      Signature:________________________________________________________

      

      

      Signature
Guaranteed:______________________________________________

      Signature of Guarantor

      

      

      

      

      *            
The Warrant contains restrictions on sale, assignment or transfer.

      **           Note:  The
above signature must correspond with the name as written onthe face of this
Warrant certificate in every particular, without alteration or enlargement or
any change whatever, unless this warrant has been assigned.

      

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        
FORM OF
WARRANT

      EXHIBIT 2

      

      ASSIGNMENT OF
WARRANT

      (To be signed only upon
assignment of Warrant)*

      

      

      

      FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto

      

      ________________________________________________________________

      ________________________________________________________________

      (Name,
Address and S.S./E.I. No. of Assignee must be Printed or
Typewritten)

      

      the
within Warrant issued by Studio One Media, Inc., a Delaware corporation, hereby
irrevocably constituting and appointing _______________________________ Attorney
to transfer said Warrant on the books of the Company, with full power of
substitution in the premises.

      

      

      Dated:
___________________, 20____

      

      

      

      

      _______________________________________**

      Signature of Registered
Holder

      

      

      

      Signature
Guaranteed: ________________________________________

      Signature of Guarantor

      

      

      

      *           The
Warrant contains restrictions on sale, assignment or transfer.

      

      **         Note:  The signature of this
assignment must correspond with the name as it appears upon the face of the
Warrant certificate in every particular, without alteration or enlargement
or any change whatever.

       

       

       12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00143-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00143-of-00352.parquet"}]]