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                                                                    EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT

         This Employment Agreement (the "Agreement") is entered into effective
March 15, 2004, by and between IndyMac Bank, F.S.B. ("Employer") and John
DelPonti ("Officer").

         1.       TERM. Employer agrees to employ Officer and Officer agrees to
serve Employer and its affiliates, in accordance with the terms and conditions
of this Agreement, for a period of three (3) years, commencing on the date first
set forth above, unless Officer's employment is earlier terminated as herein
provided.

         2.       POSITION, DUTIES AND RESPONSIBILITIES. Officer shall serve as
an Executive Vice President of Employer, or of one of Employer's affiliated
companies, as determined by Employer. Officer agrees to devote Officer's
full-time best efforts to the business and affairs of Employer and its
affiliates, to perform such executive and managerial duties as may be assigned
to Officer, and to diligently promote the business, affairs and interests of
Employer and its affiliates. If so requested by Employer, Officer agrees to
serve concurrently, and without additional compensation, as an officer of both
Employer and of one or more of Employer's affiliates, including its
subsidiaries.

         3.       OUTSIDE AFFILIATIONS. During the term of this Agreement,
Officer shall not compete, either directly or indirectly, with the business of
Employer or its affiliates. Except as otherwise provided in this Agreement,
Officer may make and manage personal business investments of Officer's choice
and may serve in any capacity with any civic, educational or charitable
organization, or with any governmental entity or trade association, provided
that such activities do not interfere with or conflict with Officer's duties
under this Agreement. Officer may not sit on the board of directors of any
civic, educational or charitable, or business organization without first
obtaining Employer's written consent.

         4.       COMPENSATION AND BENEFITS. In consideration of the performance
of Officer's duties under this Agreement, Employer or its affiliates shall
provide to Officer the compensation set forth below. All compensation paid to
Officer by Employer or by any of its affiliates shall be aggregated in
determining whether Officer has received the benefits described herein, but
without prejudice to the allocation of costs among the entities to which Officer
renders services under this Agreement.

                  4.1      BASE SALARY. Employer shall pay to Officer a base
salary at the annual rate set forth in Appendix A. Officer's base salary shall
be payable in equal installments no less frequently than every month. Employer
may, in its sole discretion, increase Officer's base salary during the term of
this Agreement, but Employer will not decrease Officer's base salary below the
amount set forth in Appendix A.

                  4.2      INCENTIVE COMPENSATION. For each calendar year during
the term of this Agreement, Employer shall pay to Officer an incentive
compensation award in an amount to be determined pursuant to the then-applicable
Annual Incentive Plan set forth in Appendix A. The terms of the Annual Incentive
Plan shall be agreed upon by Employer and Officer during the first quarter of
each new calendar year during the term of this Agreement. Any incentive
compensation award payable to Officer pursuant to the Annual Incentive Plan
shall be paid no later than thirty (30) days after completion and publication of
the applicable audited financial statements for the relevant calendar year.
Except as otherwise provided herein, any incentive compensation award described
in the Annual Incentive Plan, and Officer's base salary to the

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extent that the incentive compensation award is a percentage of Officer's base
salary, shall be prorated to the extent that Officer is employed for less than
twelve (12) full months during the relevant calendar year.

                  4.3      STOCK OPTIONS AND RESTRICTED STOCK. During the term
of this Agreement, Employer's public company affiliate, IndyMac Bancorp, Inc.,
or any successor public company ("Public Company"), may grant to Officer stock
options and/or restricted stock for such number of shares of the Public
Company's common stock as the Compensation Committee of the Board of Directors
of the Public Company ("Compensation Committee") in its sole discretion
determines, taking into account Officer's and the Public Company's performance
and the competitive practices then prevailing regarding the granting of stock
options. Subject to the foregoing, it is anticipated that the number of shares
in respect of each annual stock option and/or restricted stock grant, if any,
shall be comparable to the number of shares granted to officers of Employer at a
level similar to Officer's level. The stock options and/or restricted stock
herein described shall be granted at the same time as the Public Company grants
stock options and/or restricted stock to its other officers.

                  All stock options and restricted stock granted herein: (i)
shall be granted pursuant to the Public Company's current stock option plan, or
such other stock option plan or plans as may come into effect during the term of
this Agreement, (ii) shall be priced and shall vest in accordance with the terms
set by the Compensation Committee or as otherwise set forth in this Agreement,
and (iii) shall be subject to such other reasonable terms and conditions as may
be determined by the Compensation Committee and set forth in the agreement or
other document evidencing the award.

                  The effect of Officer's termination on the vesting of any
stock options or restricted stock granted under this Agreement is described in
Section 5.2. In the event that vested options held by Officer immediately after
such termination represent shares of common stock in an amount equal to or
greater than 500,000, then the maximum period for the exercise of any options
shall be twelve (12) months. In the event that vested options held by Officer
immediately after such termination represent shares of common stock in an amount
equal to or greater than 100,000 but less than 500,000, then the maximum period
for the exercise of any options shall be six (6) months. In the event that
vested options held by Officer immediately after such termination represent
shares of common stock in an amount less than 100,000, then the maximum period
for their exercise shall be three (3) months.

                  4.4      ADDITIONAL BENEFITS. Officer shall be entitled to
paid vacation, subject to Employer's vacation policies in effect from time to
time. Officer shall also be entitled to participate in Employer's life and
medical insurance plans, and in any stock purchase, executive compensation,
pension, profit-sharing, deferred compensation, or other benefit or bonus plans
that are offered to Employer's employees generally, or to officers of Employer
at a level similar to Officer's level, subject to the terms and conditions,
including any applicable eligibility requirements, of any such plan. This
Agreement shall not affect or otherwise modify the provisions of any other
compensation, retirement or other benefit program or plan of Employer.

                  4.5      RELOCATION EXPENSES. Employer shall, within 30 days
following execution of this Agreement by all parties, make a one-time payment to
Officer of $210,000 in respect of Officer's expenses, including forfeited
compensation from Officer's prior employer, to be incurred in moving to
California in order to accept employment with Employer.

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                  4.6      HOUSING ALLOWANCE. During the term of this Agreement,
Employer will pay to Officer the monthly sum of $8,333.33 in order to defray
Officer's housing expenses, including those described in Section 4.7.

                  4.7      RESIDENTIAL LEASE PURCHASE. Employer agrees that
IndyMac Bancorp, Inc. will purchase a residence to be selected by Officer
located within 20 miles of Employer's Pasadena home office, at a total cost not
to exceed $2.75 million, and will lease the said residence to Officer on a
monthly basis at fair rental value (anticipated to be approximately the same
amount as the $8,333 housing allowance) for a period of five years. Prior to
completion of the said purchase, Employer and Officer will enter into a standard
form California Association of Realtors' Residential Lease, pursuant to which
Officer will be responsible for paying all utilities and all repair and
maintenance expenses associated with occupation of the residence and its
grounds. The monthly fair rental value to be charged by Employer will include
and reflect Employer's liability for all property taxes associated with the
residence and Employer's cost of obtaining a dwelling fire policy or comparable
policy of property hazard insurance for the full replacement value of the
residence, including earthquake coverage, and including liability coverage with
limits of not less than $500,000. Officer may elect at any time during the lease
term to purchase the residence at the lower of its purchase price to Employer or
its fair market value minus improvements you have made, as determined by neutral
appraisal. The lease payments made by Officer during the term of the lease
arrangement will not be applied to or credited against the purchase price. At
the end of the five-year term, if Officer has not elected to purchase the
residence, Employer may sell the residence and retain for itself the sale
proceeds.

                  4.8      COUNTRY CLUB MEMBERSHIP. Employer will purchase for
Officer a membership interest in a country club of Officer's choice, and/or
membership in a luncheon club, the total cost of which shall not exceed
$100,000.00, and shall maintain the said membership and pay all business related
expenses, including monthly membership dues during the term of this Agreement.
Officer shall be responsible for all non-business costs associated with the said
membership including, without limitation, greens fees, guest fees and food and
beverage charges, and for all taxes associated with this Section 4.8.

         5.       TERMINATION OF EMPLOYMENT. This Agreement, the compensation
and benefits provided under this Agreement, and Officer's employment with
Employer, are terminable as herein provided.

                  5.1      GROUNDS FOR TERMINATION. Employer may, in its sole
and absolute discretion, terminate this Agreement and Officer's employment on
the following grounds:

                           5.1.1    DISABILITY. In the event of Officer's
inability to perform his or her duties (with or without reasonable
accommodation) because of illness, injury or similar incapacity for four (4)
consecutive calendar months, or for shorter periods aggregating eighty (80) or
more business days in any twelve (12)-month period ("Disability"), this
Agreement and Officer's employment may be terminated by Employer by giving
Notice of Termination as provided in Section 9.1.

                           5.1.2    DEATH. In the event of Officer's death
during the term of this Agreement ("Death"), this Agreement and Officer's
employment shall immediately and automatically terminate.

                           5.1.3    CAUSE. Employer may terminate this Agreement
and Officer's employment by giving Notice of Termination at any time for cause.
"Cause" means any act or

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omission to act by Officer which constitutes (i) a material breach of this
Agreement that is committed in bad faith or without reasonable belief that such
act or omission is in the best interests of Employer, (ii) negligence or
misconduct resulting in a material loss to Employer, (iii) gross negligence,
(iv) an intentional and material failure to perform Officer's assigned duties,
(v) fraud, theft or dishonesty, (vi) willful violation of any law, rule or
regulation of a governmental authority, other than traffic violations, (vii)
regular alcohol or drug abuse, (viii) such other conduct as is reasonably likely
to cause Employer public disgrace or disrepute, or (ix) entry of an order by any
state or federal regulatory agency either removing Officer from Officer's
position with Employer or its affiliates or prohibiting Officer from
participating in the conduct of the affairs of Employer or any of its
affiliates.

                           5.1.4    NO CAUSE. Employer may, in its sole and
absolute discretion, terminate this Agreement and Officer's employment by giving
Notice of Termination at any time for no reason, or for any reason whatsoever
other than Death, Disability or Cause ("No Cause"). Termination for No Cause
shall also be deemed to have occurred (i) if Officer resigns from employment
following, and as a result of, an involuntary reduction in his base salary or
his target incentive compensation award, an involuntary relocation of Officer's
place of employment by more than 25 miles or a material diminution in Officer's
employment duties and responsibilities, or (ii) if, prior to the expiration of
this Agreement, Officer is not offered a written employment agreement with
Employer to be effective upon expiration of this agreement that is comparable in
its terms to the written employment agreements then in effect between Employer
and its other Executive Vice Presidents (eg. standard termination language and
payments).

                           5.1.5    RESIGNATION. Should Officer voluntarily
resign Officer's employment, either by giving Notice of Termination during the
term of this Agreement or otherwise ("Resignation"), Officer's employment shall
terminate immediately, unless Officer and Employer mutually agree on a later
effective date of termination.

                  5.2      BENEFITS UPON TERMINATION.

                           5.2.1    DISABILITY. In the event that Officer's
employment terminates by reason of Disability, as defined in Section 5.1.1,
Officer shall be entitled to receive (i) all accrued but unpaid vacation
benefits as of the Termination Date, as defined in Section 9.1, (ii) any other
benefits already vested as of the Termination Date under any of Employer's
applicable stock option, pension, bonus or other similar plans in which Officer
participated immediately prior to termination ("Vested Benefits"), (iii) the
immediate vesting, to the extent not otherwise vested, of all outstanding stock
options or similar awards previously granted to Officer under Section 4.3, and
(iv) Officer's incentive compensation award for the year in which Officer became
disabled, prorated to the Termination Date. Officer shall also be entitled,
subject to Section 5.2.7, to receive the following benefits for a period of time
commencing from the Termination Date and continuing for the number of months
remaining in the term of this Agreement, or until Officer's death, whichever
first occurs: (v) continuation of Officer's base salary, reduced by 50%, minus
the amount of any cash payments due to Officer under the terms of Employer's
disability insurance or other disability benefit plan funded by Employer or
Employer's tax-qualified Defined Benefit Pension Plan, and (vi) continuation of
benefits substantially equivalent to the life, disability and medical insurance
policies maintained by Employer on behalf of Officer and Officer's spouse and
dependents, if any, immediately prior to the Notice of Termination, but then
only to the extent that Officer is not entitled to comparable benefits from
other employment.

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                           5.2.2    DEATH. In the event of Officer's Death, as
defined in Section 5.1.2, Employer shall pay to such person or persons as
Officer shall have designated in writing or, in the absence of such a
designation, to Officer's estate, (i) all accrued but unpaid vacation benefits
as of the date of Death, (ii) any Vested Benefits, (iii) to the extent not
otherwise vested, all outstanding stock options or similar awards previously
granted to Officer, which will vest immediately upon Officer's Death, and (iv)
Officer's incentive compensation award for the year in which Death occurs,
prorated to date of Death. Employer shall also, within forty-five (45) days
following Officer's Death, pay to Officer's designee or to Officer's estate an
amount equal to two times Officer's last annual base salary. Employer shall
also, for a period of twelve (12) months following the date of Officer's Death,
pay the cost of any continued coverage under Employer's group medical insurance
plan for the benefit of Officer's spouse and dependents, if any, should they
elect continued coverage under COBRA, provided they were covered under the plan
immediately prior to Officer's Death.

                           5.2.3    CAUSE. In the event of Officer's termination
for Cause, as defined in Section 5.1.3, Officer shall be entitled to payment of
Officer's base salary through the Termination Date, to any accrued but unpaid
vacation benefits, and to any other Vested Benefits, but to no other payments or
benefits whatsoever.

                           5.2.4    NO CAUSE. In the event of Officer's
termination for No Cause, as defined in Section 5.1.4, Officer shall be entitled
to receive (i) payment of Officer's base salary through the Termination Date,
(ii) any accrued but unpaid vacation benefits, (iii) any other Vested Benefits,
(iv) Officer's incentive compensation award for the year in which Officer was
terminated, prorated to the Termination Date, and (v) the immediate vesting, to
the extent not otherwise vested, of all outstanding stock options or similar
awards previously granted to Officer under Section 4.3. Officer shall also be
entitled, subject to Section 5.2.7, to receive continuation, for a period of
three (3) years following the Termination Date, of (vi) Officer's base salary as
of the Termination Date, plus a monthly sum equal to Officer's target incentive
compensation award for the year in which termination occurred divided by 12,
(vii) both the housing allowance described in Section 4.6 and the country club
membership described in Section 4.8, and (viii) benefits substantially
equivalent to the life, disability and medical insurance policies maintained by
Employer on behalf of the remaining members of Officer's executive committee,
but with respect to the benefits described in this clause (viii) only to the
extent that Officer is not entitled to comparable benefits from other
employment.

                           5.2.5    RESIGNATION. In the event of Officer's
Resignation, as defined in Section 5.1.5, Officer shall be entitled to payment
of Officer's base salary through the Termination Date, to any accrued but unpaid
vacation benefits, and to any other Vested Benefits, but to no other payments or
benefits whatsoever.

                           5.2.6    EXCISE TAX. In the event it should be
determined that any payment or distribution by Employer as the result of
Officer's termination due to No Cause would be subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code, the affected payments or
distributions shall include gross-up for any excise taxes due under Section 280G
of the Code or similar "golden parachute" provisions, plus any excise, income,
or payroll taxes owed on the excise payment amount. In order to be eligible for
this benefit, Officer must have had more than five (5) years of continuous
service to Employer or its affiliates as of the Termination Date, or must be a
Section 16 Employee. If the law prohibits any form of the foregoing benefit,
then Employer and Officer understand and agree that this Section 5.2.6 is of no
effect.

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                           5.2.7    RELEASE OF CLAIMS. Employer's obligation to
pay any salary continuation, benefits continuation or other non-vested benefits
in the event of the termination of Officer's employment due to Disability or No
Cause, as defined in Sections 5.1.1 and 5.1.4, is expressly conditional upon
Officer first executing a general release of all claims or causes of action,
whether known or unknown, that Officer may have or hold against Employer
including, but not limited to, any claims for breach of contract, for employment
discrimination or harassment, for wrongful termination or for other tortious
conduct in connection with Officer's employment or its termination. Such release
agreement shall be prepared by Employer, and shall include an express waiver by
Officer of California Civil Code section 1542.

         6.       NO SOLICITATION AND CONFIDENTIALITY. In order to protect the
Employer's Confidential Information as defined in Section 6.2 hereof, and as a
condition to Officer's receipt and retention of the salary continuation,
benefits continuation, or other non-vested benefits payable to Officer in the
event of termination by reason of Disability or No Cause, as defined in Sections
5.1.1 and 5.1.4, Officer agrees to the following:

                  6.1      NO SOLICITATION. During employment and for a period
of one (1) year after termination of employment, or until IndyMac payments and
benefits cease (whichever is longer), Officer shall not:

                           6.1.1    Solicit, or cause to be solicited, any
customers of Employer or its affiliates for purposes of promoting or selling any
products or services competitive with those of Employer or its affiliates;

                           6.1.2    Solicit business from, or perform services
for, any company or other business entity which at any time during the two (2)
year period immediately preceding Officer's termination of employment with
Employer was a client of Employer or its affiliates; or

                           6.1.3    Solicit for employment, offer, or cause to
be offered employment, either on a full time, part-time or consulting basis, to
any person who was employed by Employer or its affiliates on the date Officer's
employment terminated, unless Officer shall have received the prior written
consent of Employer.

                  6.2      CONFIDENTIALITY. Officer hereby acknowledges and
agrees that Employer and its affiliates have developed and own valuable
information related to their business, personnel and customers including, but
not limited to, concepts, ideas, customer lists, business lists, business and
strategic plans, financial data, accounting procedures, secondary marketing and
hedging models, trade secrets, computer programs and plans, and information
related to officers, directors, employees and agents. Officer hereby agrees that
all such information, and all codes, concepts, copies and forms relating to such
information, Employer's plans and intentions with respect thereto, and any
information provided by Employer or its affiliates to Officer with respect to
any of the foregoing, shall be considered "Confidential Information" for the
purpose of this Agreement. Officer acknowledges and agrees that all such
Confidential Information is a valuable asset of Employer, and if developed by
Officer, is developed by Officer in the course of Officer's employment with
Employer, and is the sole property of Employer. Officer agrees that Officer will
not, for a period of three (3) years following the termination of his employment
with Employer, divulge or otherwise disclose, directly or indirectly, any
Confidential Information concerning the business or policies of Employer or any
of its affiliates which Officer may have learned as a result of Officer's
employment during the term of this Agreement or prior thereto as an employee,
officer or director of or consultant to Employer or any of its affiliates,
except to the

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extent such use or disclosure is (i) necessary or appropriate to the performance
of this Agreement and in furtherance of Employer's best interests, (ii) required
by applicable law or in response to a lawful inquiry from a governmental or
regulatory authority, (iii) lawfully obtainable from other sources, or (iv)
authorized by Employer. This prohibition against disclosure of Confidential
Information does not include knowledge or expertise possessed by Officer wholly
independent of his employment with Employer.

                  6.3      REIMBURSEMENT. If any part of this Section 6 is
challenged by Officer and is determined to be invalid or unenforceable for any
reason by a court of competent jurisdiction, then Officer and Employer agree
that these covenants shall be of no effect, that Officer shall immediately
return to Employer the salary continuation, benefits continuation or other
non-vested compensation described in Section 5.2 that has been paid to Officer
after termination of Officer's employment, and that Officer shall not be
entitled to any further sums from Employer.

         7.       REIMBURSEMENT OF BUSINESS EXPENSES. During the term of this
Agreement, Employer shall promptly reimburse to Officer all business expenses
reasonably incurred by Officer in the performance of Officer's duties under this
Agreement to the extent that such expenditures meet Internal Revenue Code
requirements for deductibility by Employer for federal income tax purposes, or
are otherwise in compliance with the rules and policies of Employer and are
substantiated by Officer in accordance with applicable requirements of the Code
and Treasury Regulations, and the applicable rules and policies of Employer.

         8.       INDEMNITY. To the extent permitted by applicable law and by
Employer's articles, bylaws or other governing instruments, and subject to the
restrictions imposed therein, Employer shall defend and indemnify Officer and
hold Officer harmless for any acts or decisions made by Officer in good faith
and while performing approved services for Employer or its affiliates, and shall
advance to Officer any costs of defense, including attorneys' fees, incurred by
Officer in defense of any third-party claims asserted against Officer in direct
consequence of the discharge of Officer's duties under this Agreement. Employer
shall use reasonable efforts to obtain coverage for Officer under liability
insurance policies then in effect which cover the other officers or directors of
Employer.

         9.       MISCELLANEOUS.

                  9.1      NOTICE OF TERMINATION AND TERMINATION DATE. Any
termination of this Agreement by Employer or by Officer (including any
Resignation) shall be communicated by a written Notice of Termination to the
other party, stating the specific termination provision in this Agreement relied
upon, if any, and setting forth in reasonable detail the facts and
circumstances, if applicable, claimed to provide a basis for termination. The
effective date of termination ("Termination Date") shall be (i) the date
specified in the Notice of Termination, or (ii) in the event of Officer's Death,
the date of Death, or (iii) in the event of Officer's resignation without
providing Notice of Termination, Officer's last day of employment.

                  9.2      SUCCESSORSHIP. This Agreement shall inure to the
benefit of and shall be binding upon Employer, its successors and assigns. This
Agreement may not be assigned without the prior written consent of the parties,
other than in connection with a merger or sale of Employer or the sale of
substantially all the assets of Employer, or similar transaction.
Notwithstanding the foregoing, Employer may, without Officer's consent, assign,
whether by assignment agreement, merger, operation of law or otherwise, this
Agreement to the Public

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Company or to any successor or affiliate of Employer or the Public Company,
subject to such assignee's express assumption of all obligations of Employer
hereunder. The failure of any successor to or assignee of the Employer's
business and/or assets in such transaction to expressly assume all obligations
of Employer hereunder shall be deemed a termination for No Cause, pursuant to
Section 5.1.5.

                  9.3      NOTICES. Any notices provided for in this Agreement
shall be sent to Employer at its corporate headquarters, Attention: General
Counsel, with a copy to the Human Resources department at the same address, or
to such other address as Employer may from time to time in writing designate,
and to Officer at such address as Officer may from time to time in writing
designate (or Officer's business address of record in the absence of such
designation). All notices shall be deemed to have been given two (2) business
days after they have been deposited as certified mail, return receipt requested,
postage paid and properly addressed to the designated address of the party to
receive the notices.

                  9.4      ENTIRE AGREEMENT. This instrument contains the entire
agreement of the parties relating to the subject matter hereof, and it replaces
and supersedes any prior agreements between the parties relating to said subject
matter; provided, however, that all provisions of Employer's Employee Handbook
and any other written personnel policies of Employer shall be incorporated
herein by this reference, and Officer hereby expressly acknowledges that all
provisions of the Employee Handbook and other written policies are applicable to
Officer's employment relationship with Employer, except to the extent that any
such provisions directly conflict with any term contained in this Agreement;
PROVIDED, FURTHER, THAT OFFICER HEREBY EXPRESSLY ACKNOWLEDGES THAT OFFICER HAS
EXECUTED EMPLOYER'S STANDARD MUTUAL AGREEMENT TO ARBITRATE CLAIMS CONCURRENTLY
HEREWITH, WHICH REQUIRES THAT ANY DISPUTE UNDER THIS AGREEMENT WILL BE
ARBITRATED. No modifications or amendments of this Agreement shall be valid
unless made in writing and signed by the parties hereto.

                  9.5      WAIVER. The waiver of the breach of any term or of
any condition of this Agreement shall not be deemed to constitute the waiver of
any other breach of the same or any other term or condition.

                  9.6      CALIFORNIA LAW. This Agreement shall be construed and
interpreted in accordance with the laws of California, without reference to its
conflict of laws principles.

                  9.7      INJUNCTIVE RELIEF. Employer and Officer acknowledge
that the services Officer is obligated to render under the provisions of this
Agreement are of a special, unique, unusual, extraordinary and intellectual
character, which gives this Agreement peculiar value to Employer. The loss of
these services cannot be reasonably or adequately compensated in damages in an
action at law and it would be difficult (if not impossible) to replace these
services. By reason thereof, if either party violates any of the material
provisions of this Agreement, the parties shall, in addition to any other rights
and remedies available under this Agreement, or under applicable law or the
Mutual Agreement to Arbitrate Claims, be entitled to seek injunctive relief, as
permitted by law, from a court or tribunal of competent jurisdiction,
restraining the other from committing or continuing any violation of this
Agreement. The provisions hereof shall survive the expiration, suspension or
termination, for any reason, of this Agreement.

                  9.8      SEVERABILITY. If any provision of this Agreement is
held invalid or unenforceable, the remainder of this Agreement shall
nevertheless remain in full force and effect,

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and if any provision is held invalid or unenforceable with respect to particular
circumstances, it shall nevertheless remain in full force and effect in all
other circumstances.

                  9.9      REGULATORY INTERVENTION. Notwithstanding anything in
this Agreement to the contrary, this Agreement is subject to the following terms
and conditions:

                           9.9.1    If Officer is suspended and/or temporarily
prohibited from participating in the conduct of Employer's affairs by a notice
served under Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act (12
U.S.C. 1818 (e)(3) and (g)(1)), Employer's obligations hereunder shall be
suspended as of the date of service unless stayed by appropriate proceedings. If
the charges in the notice are dismissed, Employer shall (i) pay Officer all or
part of the compensation withheld while Employer's contract obligations were
suspended, and (ii) reinstate any of Employer's obligations which were
suspended.

                           9.9.2    If Officer is removed and/or permanently
prohibited from participating in the conduct of Employer's affairs by an order
issued under Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12
U.S.C. 1818 (e)(4) and (g)(1)), all obligations of Employer under this Agreement
shall terminate as of the effective date of the order, but Officer's vested
rights shall not be affected.

                           9.9.3    If Employer is in default (as defined in
Section 3(x)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1813 (x)(1)),
all obligations under this Agreement shall terminate as of the date of default,
but Officer's vested rights shall not be affected.

                           9.9.4    All obligations under this Agreement shall
be terminated, except to the extent determined that continuation of the contract
is necessary for the continued operation of Employer, (i) by the Office of
Thrift Supervision ("OTS") at the time the Federal Deposit Insurance Corporation
("FDIC") enters into an agreement to provide assistance to or on behalf of
Employer under the authority contained in Section 13(c) of the Federal Deposit
Insurance Act (12 U.S.C. 1823 (c)); or (ii) by the OTS at the time the OTS
approves a supervisory merger to resolve problems related to operation of
Employer or when Employer is determined by the OTS to be in an unsafe or unsound
condition. Any rights of Officer that shall have vested under this Agreement
shall not be affected by such action.

                           9.9.5    With regard to the provisions of this
Section 9.9:

                                    (i)      Employer agrees to use its best
efforts to oppose any such notice of charges as to which there are reasonable
defenses;

                                    (ii)     In the event the notice of charges
is dismissed or otherwise resolved in a manner that will permit Employer to
resume its obligations to pay compensation hereunder, Employer will promptly
make such payment hereunder; and

                                    (iii)    During the period of suspension,
the vested rights of the contracting parties shall not be affected except to the
extent precluded by such notice.

                           9.9.6    Any payments made to Officer by Employer
pursuant to this Agreement, or otherwise, are subject to and conditioned upon
their compliance with 12 U.S.C. Section 1828(k) and any regulations promulgated
thereunder.

                                       9
<PAGE>

EMPLOYER:

By:___________________________________          Dated: _________________________
         Michael W. Perry
         Chairman and Chief Executive Officer

OFFICER:

_____________________________________           Dated: _________________________
Name: John DelPonti

                                       10
<PAGE>

                                   APPENDIX A
                                  PROFIT CENTER
                              ANNUAL INCENTIVE PLAN

Officer Name:                               John DelPonti
Annual Base Rate for 2004:                  $325,000
Target Annual Bonus for 2004:               $200,000
Target Quarterly Bonus for 2004:            $0

Annual or Quarterly Incentive Awards:

         Officer shall be eligible for an Annual or Quarterly Incentive Awards
         (as applicable), which shall be comprised of the following components:

                  1.       Business Metrics

                  2.       Subjective Assessment (Wrap)

These components shall be measured as follows: Measurement of Components
Intentionally Omitted.Exhibit 4.1

 

Exhibit 4.1

INVESTOR RIGHTS AGREEMENT

     INVESTOR RIGHTS AGREEMENT, dated as of March    , 2004, by and among (i)
Trans-Industries, Inc., a Delaware Corporation (the “Company”), and (ii) the
investors who are purchasing shares of Series B Convertible Preferred Stock,
par value $1.00 per share (the “Series B Preferred Stock”), of the Company
pursuant to a Series B Preferred Stock and Warrant Purchase Agreement, dated as
of the date hereof (the “Purchase Agreement”).

     WHEREAS, it is a condition to the consummation of the transactions
contemplated by the Purchase Agreement that the parties enter into this
Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and the investment by the Investors under the Purchase
Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

ARTICLE 1

DEFINED TERMS

Section 1.1. Defined Terms.

          Capitalized terms used herein, and not otherwise defined herein, will have
the following meanings.

          Section 1.1.1 An “Affiliate” of a specified Person means any other Person
which, directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with such specified Person. For
purposes of this definition, (a) “control” of any Person means possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract, or otherwise and (b) an individual will be deemed to
“control” (i) such individual’s spouse, natural or adopted children or
grandchildren or (ii) a trust for the benefit of any one or more of such
individual, such individual’s spouse, natural or adopted children or
grandchildren.

          Section 1.1.2 “Agreement” means this Investor Rights Agreement, as the
same may be amended, restated, supplemented or otherwise modified from time to
time.

          Section 1.1.3 “Common Stock” means the Company’s common stock, par value
$.10 per share.

          Section 1.1.4 “Company” means Trans-Industries, Inc., a Delaware
corporation, and its successors.

          Section 1.1.5 “Convertible Security” means any warrant, stock option,
subscription agreement, convertible debt security or other agreement or
commitment, other than

 

 

a share of capital stock of the Company, pursuant to which the Company is or
may become obligated to issue or sell any shares of capital stock to any
Person.

          Section 1.1.6 “Investors” means Harry E. Figgie, Jr., trustee under the
Trust Agreement dated July 15, 1976, as modified, and his Affiliates and
successors.

          Section 1.1.7 “Person” or “person” means an individual, a corporation, a
limited liability company, an association, a joint-stock company, a business
trust or other similar organization, a partnership, a joint venture, a trust,
an unincorporated organization, a government or any agency, instrumentality or
political subdivision of a government.

          Section 1.1.8 “Security” or “Securities” means either a share (or shares)
of capital stock of the Company or a Convertible Security.

ARTICLE 2

RIGHT OF FIRST OFFER

Section 2.1 Right of First Offer.

          The Company shall, prior to any issuance by the Company of any Security,
offer to each Investor by written notice the right, for a period of 30 days, to
purchase all of such Securities for cash at an amount equal to the price or
other consideration for which such Securities are to be issued; provided,
however, that the first offer rights of the Investors pursuant to this Section
2.1 shall not apply to Securities issued or issuable (A) as a stock dividend or
upon any subdivision of shares of Common Stock, provided that the Securities
issued pursuant to such stock dividend or subdivision are limited to additional
shares of Common Stock, (B) pursuant to Convertible Securities, or other rights
which are listed in Schedule I hereto as being outstanding on the date of this
Agreement, (C) solely in consideration for the acquisition (whether by merger
or otherwise) by the Company of all or substantially all of the stock or assets
of any other entity, (D) pursuant to a firm commitment underwritten public
offering, or (E) pursuant to the exercise of options to purchase Common Stock
granted to directors, officers, employees or consultants of the Company in
connection with their service to the Company, under any stock option, employee
benefits or similar type plan that has been approved and adopted by the Board
of Directors of the Company, and if required by the terms of such plan, the
stockholders of the Company. The Company’s written notice to the Investors
shall describe the Securities proposed to be issued by the Company and specify
the number, price and payment terms.

Section 2.2 Acceptance by Investors.

          Each Investor may accept the Company’s offer as to the full number of
Securities offered to it or any lesser number, by written notice thereof given
by it to the Company prior to the expiration of the 30 day period referred to
in Section 2.1, in which event the Company shall sell and such Investor(s)
shall buy, upon the terms specified, the number of Securities agreed to be
purchased by such Investor(s). Notwithstanding the foregoing, if the Investors
agree, in the aggregate, to purchase more than the full number of Securities
offered by the Company, then, unless otherwise agreed to by all of the
Investors accepting the Company’s offer, each such Investor shall first be
allocated the lesser of (i) the number of Securities which such Investor

2

 

agreed to purchase and (ii) the number of Securities as is equal to the
full number of Securities offered by the Company multiplied by a fraction, the
numerator of which shall be the number of shares of Common Stock held by such
Investor as of the date of the Company’s notice of offer (treating such
Investor, for the purpose of such calculation, as the holder of the number of
shares of Common Stock which would be issuable to such Investor upon
conversion, exercise or exchange of all Securities (including but not limited
to the Series B Preferred Stock) held by such Investor on the date such offer
is made that are then convertible, exercisable or exchangeable into or for
(whether directly or indirectly) shares of Common Stock) and the denominator of
which shall be the aggregate number of shares of Common Stock (calculated as
aforesaid) held on such date by all Investors who accepted the Company’s offer,
and the balance of the Securities (if any) offered by the Company shall be
allocated among the Investors accepting the Company’s offer in proportion to
their relative equity ownership interests in the Company (calculated as
aforesaid), provided that no Investor shall be allocated more than the number
of Securities which such Investor agreed to purchase and provided further that
in cases covered by this sentence all Investors shall be allocated among them
the full number of Securities offered by the Company.

Section 2.3 Consummation of Issuance to Investors.

          All issuances of any Securities to any Investor pursuant to this Article 2
shall be consummated at the principal executive office of the Company (or such
other place as is mutually agreed upon by the parties) on the later of (i) a
business day not more than 45 days after the end of the 30 day period referred
to in Section 2.1, and (ii) the fifth business day following the receipt of all
regulatory or third party consents and approvals, if any, applicable to such
issuances, or at such other time or place as the parties to such issuances may
agree.

Section 2.4 Reoffer to Investors.

          The Company shall be free at any time prior to 90 days after the date of
its notice of offer to the Investors pursuant to Section 2.1, to offer and sell
to any third party or parties the number of such Securities not agreed by the
Investors to be purchased by them, at a price and on payment terms no less
favorable to the Company than those specified in such notice of offer to the
Investors. However, if such third party sale or sales are not consummated
within such 90 day period, the Company shall not sell such Securities as shall
not have been purchased within such period without again complying with this
Article 2.

ARTICLE 3

COVENANTS

Section 3.1 Company Covenants.

          At any time prior to the earlier of (i) five years from the date hereof
and (ii) the date upon which the Investors cease to hold at least 10% of the
Company’s outstanding Common Stock (treating the Investors, for the purpose of
such calculation, as the holders of the number of shares of Common Stock which
would be issuable to them upon conversion, exercise or exchange of all
Securities (including but not limited to the Series B Preferred Stock) held by
the Investors that are then convertible, exercisable or exchangeable into or
for (whether directly or

3

 

indirectly) shares of Common Stock), except where the vote or written
consent of the holders of a greater number of shares of the Company is required
by law or by the Company’s Certificate of Incorporation, and in addition to any
other vote required by law or the Company’s Certificate of Incorporation,
without the approval of the holders of at least a majority of the then
outstanding shares of Series B Preferred Stock, given in writing or by vote at
a meeting, consenting or voting (as the case may be) separately as a series,
the Company will not:

          Section 3.1.1 Create or authorize the creation of any additional class or
series of shares of stock unless the same ranks junior to the Series B
Preferred Stock as to the distribution of assets on the liquidation,
dissolution or winding up of the Company, or increase the authorized amount of
the Series B Preferred Stock or increase the authorized amount of any
additional class or series of shares of stock unless the same ranks junior to
the Series B Preferred Stock as to the distribution of assets on the
liquidation, dissolution or winding up of the Company, or create or authorize
any obligation or security convertible into shares of Series B Preferred Stock
or into shares of any other class or series of stock unless the same ranks
junior to the Series B Preferred Stock as to the distribution of assets on the
liquidation, dissolution or winding up of the Company, whether any such
creation, authorization or increase shall be by means of amendment to the
Company’s Certificate of Incorporation or by merger, consolidation or
otherwise;

          Section 3.1.2 Consent to any liquidation, dissolution or winding up of the
Company or consolidate or merge into or with any other entity or entities or
sell, lease, abandon, transfer or otherwise dispose of all or substantially all
its assets;

          Section 3.1.3 Amend, alter or repeal the Company’s Certificate of
Incorporation if the effect would be detrimental or adverse in any manner with
respect to the rights of the holders of the Series B Preferred Stock;

          Section 3.1.4 Purchase or set aside any sums for the purchase of any
shares of stock other than the Series B Preferred Stock, except for the
purchase of shares of Common Stock from former employees of the Company who
acquired such shares directly from the Company, if each such purchase is made
pursuant to contractual rights held by the Company relating to the termination
of employment of such former employee, and except for the purchase or
redemption of any shares of the Company’s Series A Preferred Stock pursuant to
the terms of such shares; or

          Section 3.1.5 Approve any annual budget for the Company or any deviation
of more than 10% from any budget previously approved.

          Section 3.2 Additional Covenants.

          At any time prior to the earlier of (i) ten years from the date hereof and
(ii) the date upon which the Investors cease to hold at least 10% of the
Company’s outstanding Common Stock (treating the Investors, for the purpose of
such calculation, as the holders of the number of shares of Common Stock which
would be issuable to them upon conversion, exercise or exchange of all
Securities (including but not limited to the Series B Preferred Stock) held by
the Investors that are then convertible, exercisable or exchangeable into or
for (whether directly or indirectly) shares of Common Stock), except where the
vote or written consent of the holders of

4

 

a greater number of shares of the Company is required by law or by the
Company’s Certificate of Incorporation, and in addition to any other vote
required by law or the Company’s Certificate of Incorporation, without the
approval of the holders of at least a majority of the then outstanding shares
of Series B Preferred Stock, given in writing or by vote at a meeting,
consenting or voting (as the case may be) separately as a series, the Company
will not:

          Section 3.2.1 Terminate, or appoint a new, Chief Executive Officer, Chief
Operating Officer or Chief Financial Officer of the Company, provided, however,
that the Investors agree that the Company’s Chief Executive Officer for the
three (3) year period following the date of this Agreement shall be Dale
Coenen, subject to his earlier death, disability, resignation or removal for
cause by a majority of the Board of Directors of the Company; or

          Section 3.2.2 Increase the maximum number of directors constituting the
Board of Directors to a number in excess of six.

     Section 3.3 Board Meetings. The Board of Directors of the Company shall
meet bi-monthly at such times and places as the Board may from time to time
determine. No notice of any such regular meeting need be given.

     Section 3.4 Management Committee. Promptly following the date of this
Agreement, the Company will constitute a management committee of the Board of
Directors (the “Management Committee”). The Management Committee shall have
three (3) members. The Investors shall have the right to appoint two (2)
members of the Management Committee. The Management Committee shall meet
bi-monthly during months the full Board of Directors does not meet. Company
management shall consult with, and report to, the Management Committee as
requested by the Management Committee.

ARTICLE 4

MISCELLANEOUS

Section 4.1 Company Covenant Prior to Shareholder Approval.

          Notwithstanding anything herein to the contrary, Article 2, Section 3.1
and Section 3.2.1 shall be of no force or effect unless and until the
shareholders of the Company approve the Purchase Agreement and the other
Transaction Documents (as defined in the Purchase Agreement, including this
Agreement) for purposes of complying with NASD listing standards (“Shareholder
Approval”). Notwithstanding anything herein to the contrary, the Company will
not (i) issue any Securities as contemplated by Section 2.1, (ii) take any of
the actions set forth in Sections 3.1, or (iii) terminate, or appoint a new,
Chief Executive Officer, Chief Operating Officer or Chief Financial Officer of
the Company, in each case until the earlier of (i) August    , 2004, and (ii)
the date on which the Company receives Shareholder Approval (and only then, in
compliance with the terms and conditions of this Agreement).

Section 4.2 Duration of Agreement.

          The rights and obligations of the Company and each other party or third
party beneficiary under this Agreement shall terminate immediately prior to a
transaction constituting

5

 

a deemed liquidation or dissolution under Section 4 of the terms of the
Series B Preferred Stock as set forth in the Company’s Certificate of
Incorporation.

Section 4.3 Notices.

          All notices, consents and other communications required or permitted to be
given or delivered under this Agreement shall be in writing and shall be given
or delivered as follows, or to such other address for a party as such party may
specify in a written notice given to each other party in accordance with this
Section:

     If to the Company, to:

	 	 	Trans-Industries, Inc.

2637 South Adams Road

Rochester Hills, MI 48309

Attention: Chief Executive Officer

Facsimile No.: (248) 852-1211

If to an Investor or any other stockholder of the Company, to the address
specified for such Investor or stockholder in the Purchase Agreement or in the
Company’s record of stockholders.

Notices so addressed and sent by registered or certified mail with first-class
postage prepaid and return receipt requested, or by a national overnight air
courier service, shall be deemed to have been given three business days and one
business day, respectively, after the date of registration or documented
acceptance by the national overnight air courier service, as the case may be,
and in the case of facsimile transmission, upon confirmation of receipt of such
transmission. Otherwise, notices shall be deemed to have been given when
actually received.

Section 4.4 Successors and Assigns.

This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors, assigns, heirs and personal
representatives. Specifically, an Investor may assign any and all of its
rights and obligations hereunder to any Persons to whom such Investor transfers
any of its Securities.

Section 4.5 Equitable Relief.

          The parties agree that it is impossible to determine the monetary damages
that would accrue to the Company or any party or its personal representative by
reason of the failure of any party or the Company to perform any of its
obligations under this Agreement requiring the performance of an act other than
the payment of money only. The Company and each party shall be entitled to
enforce its rights under this Agreement specifically and to exercise all other
rights existing in its favor. The parties hereto agree and acknowledge that
money damages may not be an adequate remedy for any breach of the provisions of
this Agreement and that each party may in its sole discretion apply to any
court of law or equity of competent jurisdiction for specific performance
and/or injunctive relief (without posting a bond or other security) in order to
enforce or prevent any violation of the provisions of this Agreement.

6

 

Section 4.6 Entire Agreement.

          This Agreement, the Transaction Documents (as defined in the Purchase
Agreement) and the other writings referenced herein constitute the exclusive
statement of the agreement of the Company and the other parties hereto
concerning the subject matter hereof and supersede all other agreements, oral
or written, among or between any of them concerning such subject matter. All
negotiations among or between any of the Company and the other parties hereto
concerning the subject matter of this Agreement are superseded by this
Agreement and the Transaction Documents, including any that may have been
expressed in any term sheet, letter of intent or other similar document, and
there are no representations, promises, understandings or agreements, oral or
written, in relation thereto among or between any of them other than those
incorporated herein.

Section 4.7 Waiver and Amendment.

          No waiver of any provision of this Agreement shall be effective unless
made in a written instrument which specifically references this Agreement and
which is duly signed by or on behalf of the party against whom such waiver is
sought to be enforced. Except as expressly provided herein, the failure of the
Company or any other party hereto to enforce at any time, or for any period of
time, any provision of this Agreement shall not be construed as a waiver of any
provision or of the right of any such Person to enforce each and every
provision of this Agreement. Neither this Agreement nor any provision hereof
can be modified, amended, changed, discharged or terminated except by an
instrument in writing, signed by the Company and the Investors holding at least
a majority of the outstanding shares of Common Stock on an as if converted
basis then held by all Investors; provided, however, that any amendment that
would adversely affect the rights of any party hereto, in its capacity as a
stockholder of the Company, without similarly affecting the rights hereunder of
all other similarly situated parties hereto, shall only be effective against
such stockholder with such stockholder’s written agreement.

Section 4.8 Governing Law; Consent to Jurisdiction and Venue; Waiver of Jury
Trial.

          This Agreement shall be governed by and construed in accordance with the
laws of the State of Ohio, without giving effect to principles of conflicts of
law. Each party hereto irrevocably and unconditionally agrees that any action,
suit or proceeding at law or in equity which in any way arises out of or
relates to this Agreement (a “Litigation”) may be brought in any federal or
state court of competent jurisdiction located in the State of Ohio, and all
objections to personal jurisdiction and venue in any action, suit or proceeding
so commenced are hereby expressly waived by all parties hereto. Each of the
parties irrevocably and unconditionally waives, to the fullest extent permitted
by applicable law, any and all rights to trial by jury in connection with any
Litigation arising out of or relating to this Agreement or the transactions
contemplated hereby.

Section 4.9 Severability.

          Whenever possible, each provision of this Agreement shall be interpreted
in such manner as to be effective, valid and enforceable as against all parties
hereto, but if any provision of this Agreement is held to be invalid or
unenforceable in any respect or as to any Person, such

7

 

invalidity or unenforceability shall not render invalid or unenforceable
any other provision of this Agreement as to any Person. In the event that
pursuant to any regulatory authority or regulation, the Company is required to
make any revisions or modifications to any provision of this Agreement or any
of the other related documents, the parties agree to enter into good faith
negotiations and make revisions or modifications, to the extent possible, that
are in compliance with such regulation or the rules of such regulatory
authority, and which are designed to accomplish the purposes of such provision
to be revised or modified.

Section 4.10 Headings.

          The Article and Section headings contained in this Agreement are intended
solely for convenience of reference and shall not be considered in interpreting
this Agreement.

Section 4.11 Gender; Inclusion.

          Whenever the context requires in this Agreement, the masculine gender
includes the feminine or neuter and the neuter gender includes the masculine or
feminine. In every place where they are used in this Agreement, the words
“include” and “including” are intended and shall be construed to mean “include,
without limitation” and “including, without limitation”, respectively, unless a
different intent is expressly stated in the context.

Section 4.12 Counterparts.

          This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original, and all of which together shall constitute one and
the same instrument. This Agreement may be executed and delivered by
facsimile, and may be executed and delivered with separate signature pages as
though all parties had executed and delivered the same signature page. Any
Person who subsequently becomes an Investor hereunder may execute a counterpart
of this Agreement and become a party hereto and any such person shall be deemed
an Investor hereunder.

Section 4.13 Time Periods.

          Unless otherwise expressly stated in the context, any action required
hereunder to be taken within a certain number of days shall be taken within
that number of calendar days; provided, however, that if the last day for
taking such action falls on a Saturday, Sunday, or a holiday observed by the
Company at its principal executive office, the period during which such action
may be taken shall be automatically extended to the next business day.

Section 4.14 No Inconsistent Agreements; Further Assurances.

          Neither the Company nor any other party hereto shall take any action or
enter into any agreement that is inconsistent with the rights of any party
hereunder or otherwise conflicts with the provisions hereof. At any time or
from time to time after the date hereof, the parties agree to cooperate with
each other, and at the request of any other party, to execute and deliver any
further instruments or documents and to take all such further action as the
other party may reasonably request in order to evidence or effectuate the
consummation of the transactions contemplated hereby and to otherwise carry out
the intent of the parties hereunder.

8

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

[SIGNATURE PAGE IMMEDIATELY FOLLOWING]

9

 

          IN WITNESS WHEREOF, the parties hereto have caused this Investor Rights
Agreement to be executed as of the date first above written.

	 	 	 	 	 
	 	 	TRANS-INDUSTRIES, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	

	

	 	 	 	
President

10

 

          IN WITNESS WHEREOF, the parties hereto have caused this Investor Rights
Agreement to be executed as of the date first above written.

	 	 	 
	

	 	INVESTORS:
	 
	 	 
	

	 	

Harry E. Figgie, Jr., trustee under the Trust
Agreement dated July 15, 1976, as modified

11

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