Document:

Exhibit 10.41

 

RETIREMENT AND CONSULTING AGREEMENT

THIS RETIREMENT AND CONSULTING AGREEMENT (the “Agreement”) is made and entered into as of June 28, 2016 and effective as of December 31, 2016 (the “Effective Date”), by and between DIME COMMUNITY BANCSHARES, INC., a Delaware corporation (the “Company”), and VINCENT F. PALAGIANO (the “Executive”).

WHEREAS, the Executive intends to retire from the Company and its affiliates, and the parties mutually desire to arrange for his retirement from the Company and its affiliates, including without limitation, The Dime Savings Bank of Williamsburgh (the “Bank”), under certain terms,

WHEREAS, the Company wishes to take advantage of, and Executive wishes to provide, the Executive’s extensive knowledge of the operations of the Company and the Bank and the banking industry;

NOW, THEREFORE, in consideration of the premises, the terms and provisions set forth herein, the mutual benefits to be gained by the performance thereof and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

	 	
1.

	
Retirement; Employment Until Effective Date.

A.        As of the Effective Date, the Executive shall retire from all his officer and employee positions with the Company, the Bank, and their affiliates.  The Executive’s retirement shall not affect his status as a director of the Company and the Bank or as Chairman of the Company and the Bank, except that, after the Effective Date, the Executive will serve as non-executive Chairman in accordance with the applicable provisions of the governing documents of the Company and the Bank.  Executive acknowledges and agrees that, following the Effective Date, he will remain subject to all policies of general applicability to Company and Bank board members or to retired senior executives of the Company and the Bank.

B.         Pending the Effective Date, the Executive will continue in his current roles as executive Chairman and Chief Executive Officer and (i) receive his regular base salary, (ii) be eligible to participate in the Company benefits plans in which he is currently participating on the terms stated in such plans and (iii) be eligible to receive a 2016 cash-based, short-term incentive compensation award payable on such terms as are applicable to senior executives and at such times as are applicable to Company’s 2016 short-term incentive compensation program.

C.         As of the Effective Date , except as provided herein, the Executive’s employment agreements with the Company (dated as of March 31, 2011) and the Bank (dated as of December 31, 2008) (together, the “Employment Agreements”) shall terminate and shall thereafter be without force or effect.

 

D.        The execution of this Agreement and the attached Waiver and Release (Exhibit A) shall not affect the Executive’s rights and entitlements (including the timing, form and amount of payments) under the Company and Bank plans and programs in which he participates prior to the Effective Date and, in each case, such rights and entitlements shall be determined solely by reference to the terms of such plans and programs and any individual award agreement provided to the Executive thereunder.

E.         The Executive acknowledges that, after the Effective Date, he will not accrue any additional benefit with respect to awards previously made to him under the Company’s cash-based long-term incentive plan (the “LTIP”).   With respect to LTIP awards outstanding as of the date of this Agreement, the following shall apply to the determination of the Executive’s actual benefit:  (i) with respect to the 2014 LTIP award, for the performance period ending December 31, 2016, the Executive’s award will be based on “Actual Performance” (as defined in the LTIP) for the three (3) year period ending December 31, 2016, (ii) with respect to the 2015 LTIP award for the performance period ending December 31, 2017, the Executive’s award will be two-thirds (2/3) of the Target Amount (as defined in the LTIP), reflecting the Executive’s vested interest in the 2015 award as of the Effective Date and (iii) with respect to the 2016 award for the performance period ending December 31, 2018, the Executive’s award will be one-third (1/3) of the Target Amount (as defined in the LTIP), reflecting the Executive’s vested interest in the 2016 award as of the Effective Date.   All amounts due the Executive with respect to the LTIP under items (i)-(iii) will be paid to the Executive immediately following the determination of the 2014 LTIP award amount in the first quarter of 2017, and such payment shall be in full satisfaction of the Executive’s outstanding awards under the LTIP.

2.         Engagement as Consultant.  Commencing on the day following the Effective Date, the Company agrees to retain the Executive as an independent consultant, and the Executive agrees to render consulting services to the Company, for a period of three (3) years (the “Consulting Period”), unless such consulting arrangement is terminated earlier pursuant to Section 2C hereof.

A.        The Company hereby engages the Executive to provide during the Consulting Period such services of a consulting or advisory nature as the Company may reasonably request with respect to its business and matters within the Executive’s area of responsibility while employed by the Company and other matters within his expertise.  The Company will provide the Executive with advance notice in writing regarding the nature and scope of specific consulting assignments.  The parties expect that the Executive will devote less than twenty (20) percent of the average amount of time performed by Executive during the last three (3) years of his employment with the Company and its affiliates to performing services for the Company hereunder each month. The Executive shall act solely in a consulting capacity hereunder and, other than while acting in his capacity as non-executive Chairman, shall not have authority to act for the Company or to give instructions or orders on behalf of the Company or otherwise to make commitments for or on behalf of the Company. The Executive shall not be an employee of the Company during the Consulting Period, but shall act in the capacity of an independent contractor and the Company will provide the Executive with a Form 1099 for compensation related to the consulting services.  The Company shall not exercise control over the detail, manner or methods of the performance of the services by the Executive during the Consulting Period or have control over the location at which the Executive performs services.

 

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B.         As full and complete compensation for any and all services which the Executive may render during the Consulting Period:

i.         The Company shall pay the Executive a quarterly consulting fee at the rate of $125,000 per quarter, payable in arrears on the last business day of each quarter.

ii.        Except as is expressly provided in this Agreement, the Executive shall not receive nor be entitled to participate in any Company or Bank benefits or benefit plans with respect to the work done during the Consulting Period.

iii.       During the Consulting Period, the Executive shall be provided reasonable access to office space and secretarial services at the Company’s headquarters, and shall be reimbursed for reasonable pre-approved expenses directly related to his consulting assignments, subject to applicable Bank policies on expense reimbursement.

iv.      The Executive acknowledges that he is, and shall be, solely responsible for the payment of all federal, state and local taxes that are required by applicable laws or regulations to be paid with respect to all compensation and benefits payable or provided hereunder.

C.         Either the Company or the Executive may terminate the Consulting Period at any time and for any reason (or no reason) by providing the other party with thirty (30) days advance written notice of such termination, except in the case of a termination of the Consulting Period by the Company for “Cause” (as defined below), which shall be effective immediately. In addition, the Consulting Period shall terminate upon the occurrence of a “change in control” of the Company (as defined for purposes of Section 409A(a)(2)(A)(v) of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations thereunder).  For purposes of this Agreement, “Cause” shall mean (i) the Executive’s willful failure to perform his consulting assignments (other than any such failure resulting from incapacity due to physical or mental illness); (ii) the Executive’s willful engagement in dishonesty, illegal conduct, or gross misconduct, which is, in each case, materially injurious to the Company or its affiliates; (iii) the Executive’s embezzlement, misappropriation, or fraud, whether or not related to the Executive’s employment with the Company; (iv) the Executive’s conviction of or plea of guilty or nolo contendere to a crime that constitutes a felony (or state law equivalent) (v) the Executive’s willful unauthorized disclosure of Confidential Information (as defined below); or (vi) any material breach of this Agreement by the Executive (including, without limitation, the restrictive covenants set forth in Section 3). No act or failure to act on the part of the Executive shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. Except for a failure, breach, or refusal which, by its nature, cannot reasonably be expected to be cured, the Executive shall have ten (10) business days from the delivery of written notice by the Company within which to cure any acts constituting Cause.

 

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D.        Upon termination of the Consulting Period for any reason, the Company shall pay to the Executive any earned but unpaid Consulting Fees for services rendered prior to such termination and shall reimburse the Executive for any pre-approved business expense incurred prior to such termination and for which the Executive would be entitled to reimbursement. In addition, upon an early termination of the Consulting Period (i) by the Company without Cause or (ii) as a result of the Executive’s death or disability (as defined below) or the occurrence of a change in control (as defined above), the Executive shall be entitled to a lump sum cash payment equal to the Consulting Fees otherwise payable through the expiration of the Consulting Period but for its early termination. Any amounts payable upon termination shall be paid within ten (10) business days of the date of termination. Except as provided in the immediately preceding two sentences, upon any termination of the Consulting Period, the Company shall have no further obligation to the Executive under this Agreement.  In addition, upon early termination of the Consulting Period for any reason, the obligations of Sections 3, 4, 5, 8, 18, 19, Exhibit A and, if applicable, Exhibit B, shall survive such termination.  For purposes of this Agreement, “disability” shall have the same meaning as under Section 409A(a)(2)(C) of the Code.

3.         Restrictive Covenants.

A.        During the Consulting Period, the Executive will not, within twenty five (25) miles of any office or branch location in which the Company or the Bank was conducting business as of the Effective Date, engage in “Competition” with the Company. For purposes of this Agreement, “Competition” by the Executive shall mean the Executive’s:

(i)  engaging in, including without limitation, consulting or start-up activities for Executive’s own account or any third party, the business of banking; or

(ii)  acquiring an economic ownership interest in, or otherwise directly or indirectly being employed by or acting as a consultant, or render any services to, or being a director, officer, employee, principal, agent, stockholder, manager, member, owner or partner of, employer of, or permitting his name to be used in connection with the activities of any other business or organization (a “Competing Business”) which engages in, or is preparing to engage in, the business of banking or the provision of financial services; provided, however, that, notwithstanding the foregoing, (i) it shall not be a violation of this paragraph for the Executive to become the registered or beneficial owner of up to two (2%) percent of any class of the capital stock of a Competing Business registered under the Securities Exchange Act of 1934, as amended, provided that Executive does not otherwise participate in the business of such corporation and (ii) this paragraph shall not affect the Executive’s service on the board of directors of the Federal Home Loan Bank of New York or of any other entity if such service is not prohibited by any Company or Bank policies applicable to board members generally and does not otherwise constitute “Competition” by the Executive.

 

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B.         During the Consulting Period, the Executive will not in any manner, directly or indirectly:

(i)  solicit (or cause, or authorize, to be solicited), divert or otherwise attempt to obtain the business of any person or entity who or which is, or has at any time within three (3) years prior to the date of such action been, a customer, supplier, licensee or business relation of the Company or the Bank for any purpose which is competitive with the Company’s or an affiliate’s business;

(ii)  intentionally disturb or attempt to disturb in any adverse respect any business relationship between any person or entity and the Company or any affiliate;

(iii)  seek or attempt to persuade, induce or encourage any director, officer, employee, consultant, advisor or other agent of the Company or the Bank to discontinue their employment therewith or to become employed or otherwise engaged in a Competing Business; and

(iv)  solicit or employ, or otherwise hire or engage as an employee, independent contractor, consultant, advisor or otherwise, any person at any time within six (6) months following the date of cessation of employment of such person or the termination of such person’s other status, as the case may be, with the Company or the Bank.

C.        During the Consulting Period and at all times thereafter, the Executive shall keep secret and retain in strictest confidence, any and all Confidential Information (as defined below) relating to the Company and its affiliates, and shall use such Confidential Information only in furtherance of the performance by him of his duties as a consultant or a director and not for personal benefit or the benefit of any interest adverse to the interests of the Company.   For purposes of this Agreement, “Confidential Information” shall mean any confidential or proprietary information including, without limitation, plans, specifications, models, samples, data, customer lists and customer information, computer programs and documentation, and other technical and/or business information, in whatever form, tangible or intangible, printed, electronic or magnetic, that can be communicated by whatever means available at such time, that relates to the Company’s and its affiliates current business or future business contemplated during the period the Executive serves as a consultant, products, services and/or developments, or information received from others that the Company or its affiliate’s treats as confidential or proprietary, and the Executive shall not disclose such Confidential Information to any person other than the Company or its employees, directors or agents, except as may be required by law or court or administrative order (in which event the Executive shall so notify the Company as promptly as practicable).  For the avoidance of doubt, Confidential Information shall also include Confidential Information made available to the Executive prior to the Effective Date.

D.        The Executive hereby acknowledges that the business of the Company is highly competitive. Executive further acknowledges that his service to the Company will be of a special and unique character, and that he will continue to be identified personally with the Company. Executive also acknowledges that service as a consultant of the Company may require that he have access to the Company’s confidential business information, trade secrets and proprietary information. The parties therefore acknowledge that the restrictions contained in this Section 3 are a reasonable and necessary protection of the immediate interests of the Company, and any violation of these restrictions would cause substantial injury to the Company and that the Company would not have entered into this Agreement without receiving the additional consideration offered by Executive in binding himself to these restrictions.

 

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E.         In accordance with the Defend Trade Secrets Act of 2016, Executive will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made: (a) in confidence to a federal, state or local government official or an attorney, solely for the purpose of reporting or investigating a suspected violation of law; or (b) in a complaint or other document that is filed under seal in a lawsuit or other proceeding.

In addition, if Executive files a lawsuit alleging retaliation for reporting a suspected violation of law, Executive may disclose trade secrets to his attorney and use the trade secret information in the court proceeding if he: (a) files any document containing the trade secret under seal, and (b) does not disclose the trade secret except pursuant to court order.

4.         Mutual Nondisparagement.  The Executive agrees that at all times he shall refrain from publicly making, and shall not cause any other person or entity to publicly make, any disparaging statements about the Company or its affiliate’s or any of its or their directors, shareholders, advisors, representatives, officers, partners, agents or current or former employees. The Company agrees to cause its officers and directors (as such terms are used for purposes of Section 16 of the Securities Exchange Act of 1934) to refrain from publicly making, and shall not cause any other person to publicly make, any disparaging statements about the Executive.  Nothing in this provision shall be construed as preventing any party from testifying truthfully under oath in a deposition or other legal proceeding or filing or governmental investigation. For purposes of this Section 4, internal communications to and among current management employees, directors or legal counsel or accountants of the Company are not considered communications to third parties.

5.         Confidentiality of Agreement.  The Executive and the Company recognize that the Company will file this Agreement as an exhibit to public securities filings, and may also disclose this Agreement and the exhibits hereto as may be required by law or legal proceedings. The parties mutually agree that they, and each of them, will keep the circumstances underlying the negotiation and/or drafting of this Agreement, including Exhibit A, strictly confidential, will not disclose any such information in any way other than as provided herein, and will not make any representation or other communication (orally or in writing) regarding any such information to anyone, for any reason whatsoever, without the express written consent of the other, unless the disclosure, representation or communication: (A) is to counsel or financial or other professional advisors of the Executive or the Company, as applicable, and is necessary for the rendition of professional advice to the Executive or the Company, as applicable (the restrictions stated in this Section 5 shall automatically apply to the applicable counsel, financial and/or professional advisor, and the Executive or the Company, as applicable, shall so advise such attorney, financial and/or professional advisor); (B) if by the Executive, is to a member of his immediate family (the restrictions stated in this Section 5 shall automatically apply to such immediate family member and the Executive shall so advise such immediate family member); (C) if by the Company, is to its employees who have a business need to know such information, to any insurer or, consistent with business necessity, to any other individual or entity (the restrictions stated in this Section 5 shall automatically apply to such employees, insurer or any other such individual or entity and the Company shall so advise such individuals or entities); or (D) is for the purpose of enforcing this Agreement or any other agreement between the Executive and the Company or any of its affiliates.

 

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6.         Waiver and Release. In consideration for the Executive’s execution of, and compliance with, this Agreement, including but not limited to the provisions of Section 3, and the execution of the Waiver and Release attached hereto as Exhibit A, the Company has agreed to enter into the consulting relationship with the Executive following the Effective Date. This consideration is provided subject to the binding execution, without revocation prior to the 8th day following execution by the Executive of the Waiver and Release agreement.  The Company’s obligation to enter into the consulting relationship shall cease in the event the Executive fails to execute the Waiver and Release, and no payment shall be made until the expiration of the seven-day revocation period following execution of the Waiver and Release agreement, provided that such payments shall accrue from the Effective Date. If the Executive signs the Waiver and Release on a date prior to the Effective Date, then, notwithstanding anything in this Agreement to the contrary, the following shall apply: (i) following the Effective Date, the Executive must execute the certificate included as Exhibit B to this Agreement and return it to the Company and (ii) the revocation period referenced above will begin again on the date Employee executes the certificate.  If the Executive fails to execute the certificate within twenty one (21) days after the Effective Date, or executes the certificate but revokes within the 7 day revocation period, the Company will have no obligation with respect the consulting relationship and the consideration to be provided therefor.

7.         Indemnification.  The Executive shall be entitled to the protection of the Company's By-Laws and Certificate of Incorporation and any insurance and corporate indemnification policies the Company shall elect to maintain generally for the benefit of its directors and officers against or with respect to all costs, charges and expenses incurred or sustained by the Executive in connection with any action, suit or proceeding to which the Executive may be made a party by reason of having been a director or officer of the Company or any of its affiliates. With respect to the Executive’s actions during the Consulting Period, the Company shall indemnify the Executive to the same extent as it indemnifies other directors(other than in connection with the Executive’s gross negligence or willful misconduct) and shall pay, or reimburse the Executive for, reasonable attorneys' fees and expenses incurred by the Executive in connection with his defense in any related proceedings as such fees and expenses are incurred, subject to the provision of documentation thereof (subject to the undertaking from the Executive to repay such advances if it shall be finally determined by a judicial decision that is not subject to further appeal that the Executive was not entitled to the reimbursement of such fees and expenses); provided that this sentence shall not apply with respect to any action, claim or controversy in which the Executive and the Company are adverse parties or as prohibited by applicable law, rule or regulation.

8.         Nonassignability. Except for those rights that may accrue to the Executive’s family or estate in the event of his death or disability, neither this Agreement nor any right or interest hereunder shall be subject, in any manner, to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, whether voluntary or involuntary, by operation of law or otherwise, and any attempt at such shall be void; provided, that any such benefit shall not in any way be subject to the debts, contract, liabilities, engagements or torts of the Executive, nor shall it be subject to attachment or legal process for or against the Executive.

 

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9.         Entire Agreement; Modification. Except as provided herein, this Agreement sets forth the entire agreement and understanding of the parties concerning the subject matter hereof, and supersedes all prior agreements, arrangements and understandings relative to that subject matter including, without limitation, the Employment Agreements. No term or provision hereof may be modified or extinguished, in whole or in part, except by a writing which is dated and signed by the parties to this Agreement. No representation, promise or inducement has been made to or relied upon by or on behalf of either party concerning the subject matter hereof which is not set forth in this Agreement.

10.       Waiver. No term or condition of this Agreement shall be deemed to have been waived, nor shall there be an estoppel against the enforcement of any provision of this Agreement, except by written instrument of the party charged with such waiver or estoppel.

11.       Notices. All notices or communications hereunder shall be in writing, addressed as follows or to such other address as either party may designate from time to time by written notice so given:

To the Company:

Dime Community Bancshares, Inc.

One Pierrepont Plaza

8th Floor

Brooklyn, NY 11201

Attn: Chairman, Compensation Committee of the Board of Directors

To the General Counsel: at the address of record of the Company

To the Executive: at the address of record in the Company’s personnel files.

All such notices shall be conclusively deemed to be received and shall be effective; (i) if sent by hand delivery, upon receipt, (ii) if sent by telecopy or facsimile transmission, upon confirmation of receipt by the sender of such transmission, or (iii) if sent by registered or certified mail, on the fifth day after the day on which such notice is mailed.

12.       Source of Payments. All cash payments provided in this Agreement will be paid from the general funds of the Company. The Executive’s status with respect to amounts owed under this Agreement will be that of a general unsecured creditor of the Company.

13.       Income Tax Withholding. The Executive acknowledges that payments made to him by the Company or the Bank after the Effective Date, other than in his capacity as a consultant, may be subject to withholding of federal, state, or local taxes to the extent required by applicable law.

 

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14.       Severability. If any provision of this Agreement is held to be invalid, illegal or unenforceable, in whole or part, the provision will be automatically amended to the minimum extent necessary to cure the invalidity, illegality or unenforceability and permit enforcement, and  such invalidity will not affect any otherwise valid provision, and all other valid provisions will remain in full force and effect.

15.       Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, and all of which together will constitute one document.

16.       Titles. The titles and headings preceding the text of the paragraphs and subparagraphs of this Agreement have been inserted solely for convenience of reference and do not constitute a part of this Agreement or affect its meaning, interpretation or effect.

17.       Section 409A. It is intended that this Agreement shall comply with the provisions of Section 409A of the Code and the Treasury Regulations relating thereto, or an exemption to Section 409A of the Code. Any payments that qualify for the “short-term deferral” exception shall be paid under such exception. For purposes of Section 409A of the Code, each payment under this Agreement shall be treated as a separate payment for purposes of the exclusion for certain short-term deferral amounts. In no event may the Executive, directly or indirectly, designate the calendar year of any payment under this Agreement. Within the time period permitted by the applicable Treasury Regulations (or such later time as may be permitted under Section 409A of the Code or any Internal Revenue Service or Department of Treasury rules or other guidance issued thereunder), the Company may, in consultation with the Executive, modify this Agreement in order to cause the provisions of this Agreement to comply with the requirements of Section 409A of the Code. Notwithstanding anything to the contrary in this Agreement, all reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (A) any reimbursement is for expenses incurred during the Executive’s lifetime (or during a shorter period of time specified in this Agreement); (B) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year; (C) the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the year in which the expense is incurred; and (D) the right to reimbursement is not subject to liquidation or exchange for another benefit.  The Company acknowledges and agrees that a “separation from service” within the meaning of Section 409A will occur upon the Executive’s retirement and that such retirement will also constitute a “termination of employment” for purposes of the Benefits Maintenance Plan of Dime Community Bancshares, Inc.

18.       Arbitration.  Any dispute or controversy based on, arising under or relating to this Agreement shall be settled exclusively by final and binding arbitration, conducted before a single neutral arbitrator in Brooklyn, New York in accordance with the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association (the “AAA”) then in effect. Arbitration may be compelled, and judgment may be entered on the arbitration award in any court having jurisdiction.  Notwithstanding the foregoing, the Company shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction to prevent any violation of or continuation of any violation of the provisions of Section 3, and the Executive hereby consents that such restraining order or injunction may be granted without requiring the Company to post a bond or prove that money damages for violations of the non-competition provision would be difficult to calculate and that remedies at law would be inadequate. Only individuals who are (i) lawyers engaged full-time in the practice of law and (ii) on the AAA roster of arbitrators shall be selected as an arbitrator. Within twenty (20) days following the conclusion of the arbitration hearing, the arbitrator shall prepare written findings of fact and conclusions of law. Each party shall bear its own costs and attorneys' fees in connection with an arbitration, and the costs of the arbitrator and the AAA's administrative fees shall be split evenly between the parties.

 

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19.       Governing Law. This Agreement will be construed and enforced in accordance with the laws of the State of New York without regard to conflict of law principles.

20.       Terms. For purposes of this Agreement, the term “affiliate” means any subsidiary of the Company, including the Bank, or any subsidiary of the Bank and all references to “Company” herein shall be deemed to include all affiliates.

21.       Successor Obligations. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company and any successor to its business and/or assets which assumes and agrees to perform this Agreement by operation of law, or otherwise.  Executive’s obligations hereunder shall be binding upon his successors, heirs, administrators and executors.

22.       Tax Indemnification.  The Company and the Executive agree that the provisions of Section 18 of the Employment Agreement with the Company relating to Excise Tax Indemnification shall continue to apply during the Consulting Period.

23.       Coordination with Employment Agreements.  Notwithstanding any provision of this Agreement to the contrary, if, prior to the  Effective Date, the Company and/or the Bank (or any successor thereto) pays, or becomes obligated to pay, a severance benefit to the Executive under the Employment Agreements, this Agreement shall terminate as of such date without further action of the parties and neither the Company, the Bank nor the Executive shall have any obligation hereunder.

[SIGNATURE PAGE FOLLOWS]

 

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

 

	
 

	
DIME COMMUNITY BANCSHARES, INC.

	
 

	
 

	
 

	
 

	
By:

	
/s/ Omer S.J. Williams

	
 

	
 

	
 

	
 

	
Its:

	
Chairman of the Compensation Committee of the Board

	
 

	
 

	
 

		
/s/ Vincent F. Palagiano

 

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Exhibit A

	
 

	
Dated: June 28, 2016

WAIVER AND RELEASE

In exchange for the consideration (the “Benefits”) offered under the Retirement and Consulting Agreement between me and Dime Community Bancshares, Inc., (the “Company”) executed on June 28, 2016 (the “Agreement”), which was offered to me in exchange for my agreement, among other things, to waive all of my claims against and release Dime Community Bancshares, Inc. and its predecessors, successors and assigns (collectively referred to as the “Company”), all of the affiliates (including parents and subsidiaries) of the Company (collectively referred to as the “Affiliates”) and the Company’s and Affiliates’ directors and officers, employees, agents and the employee benefit plans and programs (“Employee Benefit Plans”), administrators and fiduciaries of Employer and each of the entities affiliated with Employer, (collectively, with the Company and Affiliates, referred to herein as the “Corporate Group”) from any and all claims, demands, actions, liabilities and damages arising out of or relating in any way to my employment with or separation from the Company or the Affiliates; provided, however, that this Waiver and Release shall not apply to (1) any existing right I have to indemnification, contribution and a defense, (2) any directors and officers and general liability insurance coverage, (3) any rights I may have as a shareholder of the Company, (4) any rights under any equity plans of the Company, (5) any rights to payments under any Employee Benefit Plans, (6) rights under the Agreement  and (7) any rights which cannot be waived or released as a matter of law.

I understand that signing this Waiver and Release is an important legal act. I acknowledge that the Company has advised me in writing to consult an attorney before signing this Waiver and Release and has given me at least 21 days from the day I received a copy of this Waiver and Release to sign it.

In exchange for the Benefits, I, among other things, (1) agree not to sue in any local, state and/or federal court regarding or relating in any way to my employment with or separation from the Company or the Affiliates and (2) knowingly and voluntarily waive all claims and release the Corporate Group from any and all claims, demands, actions, liabilities, and damages, whether known or unknown, arising out of or relating in any way to my employment with or separation from the Company or the Affiliates. This Waiver and Release includes, but is not limited to, claims and causes of action under: Title VII of the Civil Rights Act of 1964, as amended (“Title VII”); the Age Discrimination in Employment Act of 1967, as amended, including the Older Workers Benefit Protection Act of 1990 (“ADEA”); the Civil Rights Act of 1866, as amended; the Civil Rights Act of 1991; the Americans with Disabilities Act of 1990 (“ADA”); the Energy Reorganization Act, as amended, 42 U.S.C. §§ 5851; the Workers Adjustment and Retraining Notification Act of 1988; the Sarbanes-Oxley Act of 2002; the Employee Retirement Income Security Act of 1974, as amended; the Family and Medical Leave Act of 1993; the Fair Labor Standards Act; the Occupational Safety and Health Act; The New York Human Rights Law; The New York Executive Law; The New York Labor Law; The New York Civil Rights Law; The New York City Human Rights Law; The New York City Charter and Administrative Code; claims in connection with workers’ compensation or “whistle blower” statutes; and/or contract, tort, defamation, slander, wrongful termination or any other state or federal regulatory, statutory or common law. Further, I expressly represent that no promise or agreement which is not expressed in the Agreement has been made to me in executing this Waiver and Release, and that I am relying on my own judgment in executing this Waiver and Release, and that I am not relying on any statement or representation of the Company, any of the Affiliates or any other member of the Corporate Group or any of their agents. I agree that this Waiver and Release is valid, fair, adequate and reasonable, is entered into with my full knowledge and consent, was not procured through fraud, duress or mistake and has not had the effect of misleading, misinforming or failing to inform me.

 

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Employee understands and agrees that Employee would not receive the Benefits specified above, except for Employee’s signing and non-revocation of this Waiver and Release.

Notwithstanding the foregoing, nothing contained in this Waiver and Release is intended to prohibit or restrict me in any way from (1) bringing a lawsuit against the Company to enforce the Company’s obligations under the Agreement; (2) making any disclosure of information required by law; (3) providing information to, or testifying or otherwise assisting in any investigation or proceeding brought by, any federal, state or local regulatory or law enforcement agency or legislative body, any self-regulatory organization, or the Company’s legal, compliance or human resources officers; (4) testifying or participating in or otherwise assisting in a proceeding relating to an alleged violation of any federal, state or municipal law relating to fraud or any rule or regulation of the Securities and Exchange Commission or any self-regulatory organization; or (5) filing any claims that are not permitted to be waived or released under applicable law (although my ability to recover damages or other relief is still waived and released to the extent permitted by law).

Should any of the provisions set forth in this Waiver and Release be determined to be invalid by a court, agency or other tribunal of competent jurisdiction, it is agreed that such determination shall not affect the enforceability of other provisions of this Waiver and Release.   If the general release language is found to be illegal or unenforceable, Employee agrees to execute a binding replacement release.

I acknowledge that this Waiver and Release and the Agreement set forth the entire understanding and agreement between me and the Company or any other member of the Corporate Group concerning the subject matter of this Waiver and Release and supersede any prior or contemporaneous oral and/or written agreements or representations, if any, between me and the Company or any other member of the Corporate Group.

I understand that for a period of 7 calendar days following the date that I sign this Waiver and Release, I may revoke my acceptance of the offer, provided that my written statement of revocation is received on or before that seventh day by the Chairman of the Compensation Committee of the Company Board of Directors (or, in the event of mailing, postmarked on or before the seventh day), in which case the Waiver and Release will not become effective. In the event I revoke my acceptance of this offer, the Company shall have no obligation to provide me with the Benefits. I understand that failure to revoke my acceptance of the offer within 7 calendar days from the date I sign this Waiver and Release will result in this Waiver and Release being permanent and irrevocable.

 

A-2

I acknowledge that I have read this Waiver and Release, have had an opportunity to ask questions and have it explained to me and that I understand that this Waiver and Release will have the effect of knowingly and voluntarily waiving any action I might pursue, including breach of contract, personal injury, retaliation, discrimination on the basis of race, age, sex, national origin, or disability and any other claims arising prior to the date of this Waiver and Release. By execution of this document, I do not waive or release or otherwise relinquish any legal rights I may have which are attributable to or arise out of acts, omissions, or events of the Company or any other member of the Corporate Group which occur after the date of the execution of this Waiver and Release.

	
Vincent F. Palagiano

		
	 	 	 
	
Executive’s Printed Name

		
/s/ Michael Pucella

			 
			
June 28, 2016

	 	 	 
	
/s/ Vincent F. Palagiano

		
Execution Date

			 
	
June 28, 2016

		 
	
Date

		 

 

A-3

Exhibit B

Termination Certificate

I, Vincent F. Palagiano, previously executed a Waiver and Release dated as of _______________ pursuant to my Retirement and Consulting Agreement with Dime Community Bancshares, Inc. (the “Company”) executed on ______________, 2016 (the “Agreement”).  The terms and conditions set forth in the Waiver and Release are incorporated by reference in this Termination Certificate.

I hereby acknowledge and agree to the following:

(1)      I retired as an officer of the Company and its affiliates on December 31, 2016, which was after the date I executed the Waiver and Release.

(2)      A blank copy of this Termination Certificate was attached to the Agreement as Exhibit B and its purpose was described in Section 6 of the Agreement.  I was advised to discuss the Agreement, the Waiver and Release and this Termination Certificate, with an attorney before executing either document.

(3)      I understand that I have twenty one (21) days to consider my decision to sign this Termination Certificate.  I understand that the Benefits (as such term is defined in the Waiver and Release) will only be provided if I sign this Termination Certificate before the 21-day period expires and do not revoke it within seven (7) days after I sign it by providing written notice of such revocation to the Chairman of the Compensation Committee of the Company Board of Directors.

(4)      By my signature below, I acknowledge and agree that the Waiver and Release (i) is to be applied as if I signed it on the day I signed this Termination Certificate and (ii) that this Termination Certificate extends my waiver and release of claims under the Waiver and Release to any claims that arose during the period beginning on the date I signed the Waiver and Release through my last day of employment on December 31, 2016.

	 		 
	 	
Vincent F. Palagiano

	 
	 	 	 
	 	
Date:

		 

 

 

A-4Exhibit
4.1

 

COMMON
STOCK PURCHASE WARRANT

 

BIO-PATH
HOLDINGS, INC.

 

	Warrant Shares: ______ 	Initial Exercise Date: January __, 2017

 

THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on
or after the date that is six (6) months after the date hereof (the “Initial Exercise Date”) and on or prior
to the close of business on the five (5) year anniversary of the Initial Exercise Date (the “Termination Date”)
but not thereafter, to subscribe for and purchase from Bio-Path Holdings, Inc., a Delaware corporation (the “Company”),
up to ______ shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase
price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section
1.          Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase
Agreement (the “Purchase Agreement”), dated June 29, 2016, among the Company and the purchasers signatory thereto.

 

Section
2.          Exercise.

 

a)        Exercise
of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial
Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or agency of the Company
as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company)
of a duly executed facsimile copy (or e-mail attachment) of the Notice of Exercise in the form annexed hereto. Within three (3)
Trading Days following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares
specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless
the cashless exercise procedure specified in Section 2(c) below is available and is specified in the applicable Notice of Exercise.
No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization)
of any Notice of Exercise form be required. Notwithstanding anything herein to the contrary, the Holder shall not be required
to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder
and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation
within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this
Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of
lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant
Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the
date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt
of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions
of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available
for purchase hereunder at any given time may be less than the amount stated on the face hereof.

 

     

     

    

  

b)        Exercise
Price. The exercise price per share of the Common Stock under this Warrant shall be $2.30, subject to adjustment hereunder
(the “Exercise Price”).

 

c)        Cashless
Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained
therein is not available for the issuance of, the Warrant Shares to the Holder, then this Warrant may be exercised, in whole or
in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number
of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

(A)      =
the last VWAP immediately preceding the time of delivery of the Notice of Exercise giving rise to the applicable “cashless
exercise”, as set forth in the applicable Notice of Exercise (to clarify, the “last VWAP” will be the last VWAP
as calculated over an entire Trading Day such that, in the event that this Warrant is exercised at a time that the Trading Market
is open, the prior Trading Day’s VWAP shall be used in this calculation);

 

(B)      =
the Exercise Price of this Warrant, as adjusted hereunder; and

 

(X)
= the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant
if such exercise were by means of a cash exercise rather than a cashless exercise.

 

If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9)
of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company
agrees not to take any position contrary to this Section 2(c).

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the OTCQB or OTCQX is not a Trading
Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTCQB or OTCQX,
as applicable, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the
Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization
or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported,
or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected
in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the
Company, the fees and expenses of which shall be paid by the Company.

 

    	 	2	 

     

    

 

d)        Mechanics
of Exercise.

 

i.            Delivery
of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer
Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository
Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant
in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or
resale of the Warrant Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical
delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the
number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the
Notice of Exercise by the date that is one (1) Trading Day after the delivery to the Company of the Notice of Exercise (such date,
the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise the Holder shall be deemed for
all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised,
irrespective of the date of delivery of the Warrant Shares; provided payment of the aggregate Exercise Price (other than in the
case of a Cashless Exercise) is received within three Trading Days of delivery of the Notice of Exercise. If the Company fails
for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date,
the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject
to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day
(increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day
following such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company
agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and
exercisable.

 

ii.         Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder
and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.

 

iii.         Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section
2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

    	 	3	 

     

    

  

iv.         Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder,
if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions
of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder
is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise
purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated
receiving upon such exercise pursuant to the terms hereof (a “Buy-In”), then the Company shall (A) pay in cash
to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any)
for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that
the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell
order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion
of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall
be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company
timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having
a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate
sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company
shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall
limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares
of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

 

v.           No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the
Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole share.

 

vi.         Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the
Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the
Holder; provided, however, that, in the event Warrant Shares are to be issued in a name other than the name of the Holder, this
Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder
and the Company may require, as a condition thereto, the prior or contemporaneous payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any
Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar
functions) required for same-day electronic delivery of the Warrant Shares.

 

vii.         Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of
this Warrant, pursuant to the terms hereof.

 

    	 	4	 

     

    

  

e)         Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to
exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and
any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution
Parties”), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the
foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties
shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination
is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining,
nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii)
exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation,
any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein
beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence,
for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13 (d) of the Exchange
Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing
to the Holder that such calculation is in compliance with Section 13 (d) of the Exchange Act and the Holder is solely responsible
for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e)
applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together
with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable
shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s
determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates
and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership
Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination and shall have no
liability for exercises of the Warrant that are not in compliance with the Beneficial Ownership Limitation, except to the extent
the Holder relies on the number of outstanding shares of Common Stock that was provided by the Company. In addition, a determination
as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder, and the Company shall have no obligation to verify or confirm the accuracy of such
determination and shall have no liability for exercises of the Warrant that are not in compliance with the Beneficial Ownership
Limitation, except to the extent the Holder relies on the number of outstanding shares of Common Stock that was provided by the
Company. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely
on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report
filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written
notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written request
of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common
Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect
to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution
Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership
Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to
the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase
or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation
in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance
of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue
to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice
is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in
strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary
or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor
holder of this Warrant.

 

    	 	5	 

     

    

  

Section
3.          Certain
Adjustments.

 

a)        Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable
in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon
exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including
by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification
of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately
after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that
the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become
effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

b)        [RESERVED]

 

    	 	6	 

     

    

  

c)        Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues
or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard
to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the
date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date
as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights
(provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the
Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right
to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and
such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would
not result in the Holder exceeding the Beneficial Ownership Limitation).

 

d)        Pro
Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of
a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock
acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation,
the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such
record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation
in such Distribution (provided, however, to the extent that the Holder's right to participate in any such Distribution
would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate
in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution
to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time,
if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

    	 	7	 

     

    

 

 

e)       Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets
in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether
by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common
Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization
or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions
consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group
acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person
or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share
purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent
exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon
such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard
to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant
is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise
of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to
apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in
a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder
shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction other than one in
which a Successor Entity (as defined below) that is a publicly traded corporation whose stock is quoted or listed on a Trading
Market assumes this Warrant such that the Warrant shall be exercisable for the publicly traded Common Stock of such Successor
Entity, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently
with, or within 30 days after, the consummation of the Fundamental Transaction, purchase this Warrant from the Holder by paying
to the Holder an amount of cash equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date
of the consummation of such Fundamental Transaction. The payment of the Black Scholes Value will be made by wire transfer of immediately
available funds within five Business Days of the Holder’s election (or, if later, on the effective date of the Fundamental
Transaction). “Black Scholes Value” means the value of this Warrant based on the Black and Scholes Option Pricing
Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as of the day
of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding
to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable Fundamental
Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained
from the HVT function on Bloomberg as of the Trading Day immediately following the public announcement of the applicable Fundamental
Transaction, (C) the underlying price per share used in such calculation shall be the sum of the price per share being offered
in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (D) a
remaining option time equal to the time between the date of the public announcement of the applicable Fundamental Transaction
and the Termination Date. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not
the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this
Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant to written agreements
in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such
Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security
of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is
exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to
the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise
of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder
to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being
for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction),
and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for, the Company (so that from and after the date of such Fundamental
Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer
instead to the Successor Entity), and the Successor Entity may exercise every right and power of the Company and shall assume
all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor
Entity had been named as the Company herein.

 

    	 	8	 

     

    

  

f)         Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall
be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

g)
       Notice to Holder.

 

i.            Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall
promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the
number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

    	 	9	 

     

    

  

ii.         Notice
to Allow Exercise by Holder. If while the Warrant is outstanding (A) the Company shall declare a dividend (or any other distribution
in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of
the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe
for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company
shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company
is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby
the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered
by facsimile or email to the Holder at its last by facsimile number or email address as it shall appear upon the Warrant Register
of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating
(x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants,
or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend,
distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that
holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure
to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action
required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material,
non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with
the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the
period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise
be expressly set forth herein.

 

Section
4.          Transfer
of Warrant.

 

a)        Transferability.
This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in
part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment
of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient
to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company
shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination
or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion
of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant
in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date the Holder
delivers an assignment form to the Company assigning this Warrant full. The Warrant, if properly assigned in accordance herewith,
may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

b)        New
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of
the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed
by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants
to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial
issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant
thereto.

 

    	 	10	 

     

    

  

c)        Warrant
Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.

 

Section
5.          Miscellaneous.

 

a)      No
Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights
as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in
Section 3.

 

b)      Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case
of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate,
if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation,
in lieu of such Warrant or stock certificate.

 

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

 

d)      Authorized
Shares.

 

The
Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights
under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers
who are charged with the duty of executing stock certificates to execute and issue the necessary Warrant Shares upon the exercise
of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that
such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements
of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued
upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by
this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable
and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect
of any transfer occurring contemporaneously with such issue).

 

    	 	11	 

     

    

  

Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment.
Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above
the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may
be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares
upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions
or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform
its obligations under this Warrant.

 

Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or
in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be
necessary from any public regulatory body or bodies having jurisdiction thereof.

 

e)         Jurisdiction.
All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance
with the provisions of the Purchase Agreement.

 

f)         Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder
does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

 

g)         Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision
of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant,
which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to
cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings,
incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.

 

h)         Notices.
Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered
in accordance with the notice provisions of the Purchase Agreement.

 

i)         Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase
Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder
for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.

 

    	 	12	 

     

    

  

j)         Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled
to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert
the defense in any action for specific performance that a remedy at law would be adequate.

 

k)         Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure
to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns
of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and
shall be enforceable by the Holder or holder of Warrant Shares.

 

l)         Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

 

m)        Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions
of this Warrant.

 

n)        Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of
this Warrant.

 

********************

 

(Signature
Page Follows)

 

    	 	13	 

     

    

  

IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first
above indicated.

 

	 	BIO-PATH HOLDINGS,
    INC.  
	 	 	 
	 	By:  	 
	 	 	Name:
	 	 	Title:

 

    	 	14	 

     

    

  

NOTICE
OF EXERCISE

 

TO:
       BIO-PATH HOLDINGS, INC.

 

(1)         The
undersigned hereby elects to purchase ____ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if
exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if
any.

 

(2)          Payment
shall take the form of (check applicable box):

 

[  ]
in lawful money of the United States; or

 

[  ]
if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise
procedure set forth in subsection 2(c).

 

(3)          Please
issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

                                                    

 

The
Warrant Shares shall be delivered to the following DWAC Account Number:

 

                                                   

 

                                                   

 

                                                   

 

[SIGNATURE
OF HOLDER]

 

	Name of Investing Entity:	 
	Signature of Authorized Signatory
    of Investing Entity:	 
	Name of Authorized Signatory:	 
	Title of Authorized Signatory:	 
	Date:	 

 

    	 	15	 

     

    

 

EXHIBIT
B

 

ASSIGNMENT
FORM

 

(To
assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

 

FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

	Name:	 	 
		 	(Please Print)
	 	 	 
	Address:	 	 
		 	(Please Print)

 

Date:
___________ ___, _____

 

Holder’s
Signature:                          

 

Holder’s
Address:                          

 

    	 	16

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