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Exhibit 10.6    
    

[ORANGE COUNTY BUSINESS BANK LOGO]  

  
 

    SECURITY AGREEMENT    
    

DATE AND PARTIES.    The date of this Security Agreement (Agreement) is June 24, 2005. The parties and their addresses are: 

SECURED PARTY:

        ORANGE COUNTY BUSINESS BANK N.A.

        4675 Mac Arthur Court Suite 100

        Newport Beach, California 92660 

DEBTOR:

        THE WILLDAN GROUP OF COMPANIES

        a CALIFORNIA Corporation

        2401 EAST KATELLA AVENUE #300

        ANAHEIM, California 92806 

The
pronouns "you" and "your" refer to the Secured Party. The pronouns "I," "me" and "my" refer to each person or entity signing this Agreement as Debtor and agreeing to give the Property described in
this Agreement as security for the Secured Debts. 

	1.
	SECURED DEBTS.    This Agreement will secure the following Secured Debts:

	A.
	Specific Debts.    The following debts and all extensions, renewals, refinancings, modifications and replacements. A
promissory note or other agreement, No. 010274428, dated June 24, 2005, from me to you, in the amount of $900,000.00.

	B.
	All Debts.    All present and future debts from me to you, even if this Agreement is not specifically referenced, the future
debts are also secured by other collateral, or if the future debt is unrelated to or of a different type than this debt. If more than one person signs this Agreement, each agrees that it will secure
debts incurred either individually or with others who may not sign this Agreement. Nothing in this Agreement constitutes a commitment to make additional or future loans or advances. Any such
commitment must be in writing. 

This
Agreement will not secure any debt for which you fail to give any required notice of the right of rescission. This Agreement will not secure any debt for which a non-possessory,
non-purchase money security interest is created in "household goods" in connection with a "consumer loan," as those terms are defined by federal law governing unfair and deceptive credit
practices. 

	C.
	Sums Advanced.    All sums advanced and expenses incurred by you under the terms of this Agreement. 

Loan
Documents refer to all the documents executed in connection with the Secured Debts. 

	2.
	SECURITY INTEREST.    To secure the payment and performance of the Secured Debts, I give you a security interest in all of the
Property described in this Agreement that I own or have sufficient rights in which to transfer an interest, now or in the future, wherever the Property is or will be located, and all proceeds and
products from the Property (including, but not limited to, all parts, accessories, repairs, replacements, improvements, and accessions to the Property). Property is all the collateral given as
security for the Secured Debts and described in this Agreement, and includes all obligations that support the payment or performance of the Property. "Proceeds" includes anything acquired upon the
sale, lease, license, exchange, or other disposition of the Property; any rights and claims arising from the Property; and any collections and distributions on account of the Property. 

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This
Agreement remains in effect until terminated in writing, even if the Secured Debts are paid and you are no longer obligated to advance funds to me under any loan or credit agreement. 

	3.
	PROPERTY DESCRIPTION.    The Property is described as follows:

	A.
	Inventory.    All inventory which I hold for ultimate sale or lease, or which has been or will be supplied under contracts of
service, or which are raw materials, work in process, or materials used or consumed in my business.

	B.
	Accounts and Other Rights to Payment.    All rights I have now or in the future to payments including, but not limited to,
payment for property or services sold, leased, rented, licensed, or assigned, whether or not I have earned such payment by performance. This includes any rights and interests (including all liens and
security interests) which I may have by law or agreement against any Account Debtor or obligor of mine.

	C.
	Instruments, Documents and Chattel Paper.    All instruments and rights I have now or in the future to payments including, but
not limited to, rights to payment arising out of all present and future documents, instruments, tangible and electronic chattel paper, and loans and obligations receivable. This includes any rights
and interests (including all liens and security interests) which I may have by law or agreement against any Account Debtor or obligor of mine.

	D.
	General Intangibles.    All general intangibles including, but not limited to, tax refunds, applications for patents, parents,
copyrights, trademarks, trade secrets, good will, trade names, customer lists, permits and franchises, payment intangibles, computer programs and all supporting information provided in connection with
a transaction relating to computer programs and the right to use my name.

	E.
	Equipment.    All equipment including, but not limited to, all machinery, vehicles, furniture, fixtures, manufacturing
equipment, farm machinery and equipment, shop equipment, office and recordkeeping equipment, and parts and tools. All equipment described in a list or schedule which I give to you will also be
included in the Property, but such a list is not necessary for a valid security interest in my equipment.

 

	4.
	WARRANTIES AND REPRESENTATIONS.    I make to you the following warranties and representations which will continue as long as
this Agreement is in effect:

	A.
	Power.    I am duly organized, and validly existing and in good standing in all jurisdictions in which I operate. I have the
power and authority to enter into this transaction and to carry on my business or activity as it is now being conducted and, as applicable, am qualified to do so in each jurisdiction in which I
operate.

	B.
	Authority.    The execution, delivery and performance of this Agreement and the obligation evidenced by this Agreement are
within my powers, have been duly authorized, have received all necessary governmental approval, will not violate any provision of law, or order of court or governmental agency, and will not violate
any agreement to which I am a party or to which I am or any of my property is subject.

	C.
	Name and Location.    My name indicated in the DATE AND PARTIES section is my exact legal name. I am an entity organized and
registered under the laws of California, I will provide verification of registration and location upon your request. I will provide you with at least 30 days notice prior to any change in my
name, address, or state of organization of registration.

	D.
	Business Name.    Other than previously disclosed in writing to you I have not changed my name or principal place of business
within the last 10 years and have not used any other trade 

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or
fictitious name. Without your prior written consent, I do not and will not use any other name and will preserve my existing name, trade names and franchises. 

	E.
	Ownership of Property.    I represent that I own all of the Property. Your claim to the Property is ahead of the claims of any
other creditor, except as disclosed in writing to you prior to any advance on the Secured Debts. The collateral that is the subject of the chattel paper is perfected and preserved. I represent that I
am the original owner of the Property and, if I am not, that I have provided you with a list of prior owners of the Property.

 

	5.
	DUTIES TOWARD PROPERTY.

 
	A.
	 Protection of Secured Party's Interest.    I will defend the Property against any other claim. I agree to do whatever you require to protect your
security interest and to keep your claim in the Property ahead of the claims of other creditors. I will not do anything to harm your position. 

I
will keep books, records and accounts about the Property and my business in general. I will let you examine these and make copies at any reasonable time. I will prepare any report or accounting you
request which deals with the Property. 

	B.
	Use, Location, and Protection of the Property.    I will keep the Property in my possession and in good repair. I will use it
only for commercial purposes. I will not change this specified use without your prior written consent. You have the right of reasonable access to inspect the Property and I will immediately inform you
of any loss or damage to the Property. I will not cause for permit waste to the Property. 

I
will keep the Property at my address listed in the DATE AND PARTIES section unless we agree I may keep it at another location. If the Property is to be used in other states, I will give you a list
of those states. The location of the Property is given to aid in the identification of the Property. It does not in any way limit the scope of the security interest granted to you. I will notify you
in writing and obtain your prior written consent to any change in location of any of the Property. I will not use the
Property in violation of any law. I will notify you in writing prior to any change in my address, name or, if an organization, any change in my identity or structure. 

Until
the Secured Debts are fully paid and this Agreement is terminated. I will not grant a security interest in any of the Property without your prior written consent. I will pay all taxes and
assessments levied or assessed against me or the Property and provide timely proof of payment of these taxes and assessments upon request. 

	C.
	Selling, Leasing or Encumbering the Property.    I will not sell, offer to sell, lease, or otherwise transfer or encumber the
Property without your prior written permission, except for inventory sold in the ordinary course of business at fair market value, or at a minimum price established between you and me. If I am in
default under this Agreement, I may not sell the inventory portion of the Property even in the ordinary course of business. Any disposition of the Property contrary to this Agreement will violate your
rights. Your permission to sell the Property may be reasonably withheld without regard to the creditworthiness of any buyer or transferee. I will not permit the Property to be the subject of any court
order affecting my rights to the Property in any action by anyone other than you. If the Property includes chattel paper of instruments, either as original collateral or as proceeds of the Property. I
will note your security interest on the face of the chattel paper or instruments.

	D.
	Additional Duties Specific to Accounts.    Until you tell me otherwise, I will collect all Accounts in the ordinary course of
business. I will not dispose of the Accounts by assignment without your prior written consent. I will keep the proceeds from all the Accounts and any goods which are returned to me or which I take
back. I will deliver the Accounts to you at 

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your
request. I will give you any statements, reports, certificates, lists of Account Debtors (showing names, addresses and amounts owing), invoices applicable to each Account, and other data in any
way pertaining to the Accounts as you may request. 

	6.
	INSURANCE.    I agree to keep the Property insured against the risks reasonably associated with the Property. I will maintain
this insurance in the amounts you require. This insurance will last until the Property is released from this Agreement. I may choose the insurance company, subject to your approval, which will not be
unreasonably withheld. I acknowledge that you have not conditioned the making of this loan upon the selection of a particular agent or broker. 

I
will have the insurance company name you as loss payee on any insurance policy. I will give you and the insurance company immediate notice of any loss. You may apply the insurance proceeds toward
what is owed on the Secured Debts. You may require added security as a condition of permitting any insurance proceeds to be used to repair or replace the Property. 

If
you acquire the Property in damaged condition, my right to any insurance policies and proceeds will pass to you to the extent of the Secured Debts. 

I
will immediately notify you of cancellation or termination of insurance. If I fail to keep the Property insured, you may obtain insurance to protect your interest in the Property. This insurance may
include coverages not originally required of me, may be written by a company other than one I would choose, and may be written at a higher rate than I could obtain if I purchased the insurance. 

	7.
	COLLECTION RIGHTS OF THE SECURED PARTY.    Account Debtor means the person who is obligated on an account, chattel paper, or
general intangible. I authorize you to notify my Account Debtors of your security interest and to deal with the Account Debtors' obligations at your discretion. You may enforce the obligations of an
Account Debtor, exercising any of my rights with respect to the Account Debtors' obligations to make payment or otherwise render performance to me, including the enforcement of any security interest
that secures such obligations. You may apply proceeds received from the Account Debtors to the Secured Debts or you may release such proceeds to me. 

I
specifically and irrevocably authorize you to exercise any of the following powers at my expense, without limitation, until the Secured Debts are paid in full: 

	A.
	demand payment and enforce collection from any Account Debtor or Obligor by suit or otherwise.

	B.
	enforce any security interest, lien or encumbrance given to secure the payment or performance of any Account Debtor or any obligation
constituting Property.

	C.
	file proofs of claim or similar documents in the event of bankruptcy, insolvency or death of any person obligated as an Account Debtor.

	D.
	compromise, release, extend, or exchange any indebtedness of an Account Debtor.

	E.
	take control of any proceeds of the Account Debtors' obligations and any returned or repossessed goods.

	F.
	endorse all payments by any Account Debtor which may come into your possession as payable to me.

	G.
	deal in all respects as the holder and owner of the Account Debtors' obligations.

 

	8.
	AUTHORITY TO PERFORM.    I authorize you to do anything you deem reasonably necessary to protect the Property, and perfect and
continue your security interest in the Property. If I fail to perform any of my duties under this Agreement or any other Loan Document, you are authorized, without notice to me, to perform the duties
or cause them to be performed. 

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These
authorizations include, but are not limited to, permission to: 

	A.
	pay and discharge taxes, liens, security interests or other encumbrances at any time levied or placed on the Property.

	B.
	pay any rents or other charges under any lease affecting the Property.

	C.
	order and pay for the repair, maintenance and preservation of the Property.

	D.
	sign, when permitted by law, and file any financing statements on my behalf and pay for filing and recording fees pertaining to the
Property.

	E.
	place a note on any chattel paper indicating your interest in the Property.

	F.
	take any action you feel necessary to realize on the Property, including performing any part of a contract or endorsing it in my name.

	G.
	handle any suits or other proceedings involving the Property in my name.

	H.
	prepare, file, and sign my name to any necessary reports or accountings.

	I.
	make an entry on my books and records showing the existence of this Agreement.

	J.
	notify any Account Debtor of your interest in the Property and tell the Account Debtor to make payments to you or someone else you name. 

If
you perform for me, you will use reasonable care. Reasonable care will not include: any steps necessary to preserve rights against prior parties; the duty to send notices, perform services or take
any other action in connection with the management of the Property; or the duty to protect, preserve or maintain any security interest given to others by me or other parties. Your authorization to
perform for me will not create an obligation to perform and your failure to perform will not preclude you from exercising any other rights under the law or this Agreement. 

If
you come into actual or constructive possession of the Property, you will preserve and protect the Property. For purposes of this paragraph, you will be in actual possession of the property only
when you have physical, immediate and exclusive control over the Property and you have affirmatively accepted that control. You will be in constructive possession of the Property only when you have
both the power and the intent to exercise control over the Property. 

	9.
	DEFAULT.    I will be in default if any of the following occur:

	A.
	Payments.    I fail to make a payment in full within ten (10) days of due date.

	B.
	Insolvency or Bankruptcy.    The death, dissolution or insolvency of appointment of a receiver by or on behalf of, application
of any debtor relief law, the assignment for the benefit of creditors by or on behalf of, the voluntary or involuntary termination of existence by, or the commencement of any proceeding under any
present of future federal or state insolvency, bankruptcy, reorganization, composition or debtor relief law by or against me, Obligor, or any co-signer, endorser, surety or guarantor of
this Agreement or any other obligations Obligor has with you.

	C.
	Business Termination.    I merge, dissolve, reorganize, end my business or existence, or a partner or majority owner dies or
is declared legally incompetent.

	D.
	Failure to Perform.    I fail to perform any condition or to keep any promise or covenant of this Agreement within twenty
(20) days of notice.

	E.
	Other Documents.    A default occurs under the terms of any other Loan Document.

	F.
	Other Agreements.    I am in default on any other debt or agreement I have with you. 

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	G.
	Misrepresentation.    I make any verbal or written statement or provide any financial information that is untrue, inaccurate,
or conceals a material fact at the time it is made or provided.

	H.
	Judgment.    I fail to satisfy or appeal any judgment against me.

	I.
	Forfeiture.    The Property is used in a manner or for a purpose that threatens confiscation by a legal authority.

	J.
	Name Change.    I change my name or assume an additional name without notifying you before making such a change.

	K.
	Property Transfer.    I transfer all or a substantial part of my money or property.

	L.
	Property Value.    The value of the Property materially declines or is impaired.

	M.
	Material Change.    Without first notifying you, there is a material change in my business, including ownership, management,
and financial conditions.

	N.
	Insecurity.    You reasonably believe that you are insecure.

 

	10.
	REMEDIES.    After I default, and after you give any legally required notice and opportunity to cure the default, you may at
your option do any one or more of the following.

	A.
	Acceleration.    You may make all or any part of the amount owing by the terms of the Secured Debts immediately due.

	B.
	Sources.    You may use any and all remedies you have under state or federal law or in any Loan Document.

	C.
	Insurance Benefits.    You may make a claim for any and all insurance benefits or refunds that may be available on my default.

	D.
	Payments Made On My Behalf.    Amounts advanced on my behalf will be immediately due and may be added to the Secured Debts.

	E.
	Assembly of Property.    You may require me to gather the Property and make it available to you in a reasonable fashion.

	F.
	Repossession.    You may repossess the Property so long as the repossession does not involve a breach of the peace. You may
sell the Property as provided by law. You may apply what you receive from the sale of the Property to your expenses, your attorney's fees and legal expenses (where not prohibited by law), and any debt
I owe you. If what you receive from the sale of the Property does not satisfy the debt, I will be liable for the deficiency (where permitted by law). In some cases, you may keep the Property to
satisfy the debt. 

Where
a notice is required, I agree that ten days prior written notice sent by first class mail to my address listed in this Agreement will be reasonable notice to me under the California Uniform
Commercial Code. If the Property is perishable or threatens to decline speedily in value, you may, without notice to me, dispose of any or all of the Property in a commercially reasonable manner at my
expense following any commercially reasonable preparation or processing. 

If
any items not otherwise subject to this Agreement are contained in the Property when you take possession, you may hold these items for me at my risk and you will not be liable for taking possession
of them. 

	G.
	Use and Operation.    You may enter upon my premises and take possession of all or any part of my property for the purpose of
preserving the Property or its value, so long as you do not 

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breach
the peace. You may use and operate my property for the length of time you feel is necessary to protect your interest, all without payment or compensation to me. 

	H.
	Waiver.    By choosing any one or more of these remedies you do not give up your right to use any other remedy. You do not
waive a default if you choose not to use a remedy, By electing not to use any remedy, you do not waive your right to later consider the event a default and to use any remedies if the default continues
or occurs again.

 

	11.
	WAIVER OF CLAIMS.    I waive all claims for loss or damage caused by your acts or omissions where you acted reasonably and in
good faith.

	12.
	PERFECTION OF SECURITY INTEREST AND COSTS.    I authorize you to file a financing statement covering the Property. I
will comply with, facilitate, and otherwise assist you in connection with obtaining perfection or control over the Property for purposes of perfecting your security interest under the Uniform
Commercial Code. I agree to pay all taxes, fees and costs you pay or incur in connection with preparing, filing or recording any financing statements or other security interest filings on the
Property. I agree to pay all actual costs of terminating your security interest.

	13.
	APPLICABLE LAW.    This Agreement is governed by the laws of California, the United States of America and to the extent
required, by the laws of the jurisdiction where the Property is located. In the event of a dispute, the exclusive forum, venue and place of jurisdiction will be in California, unless otherwise
required by law.

	14.
	JOINT AND INDIVIDUAL LIABILITY AND SUCCESSORS.    Each Debtor's obligations under this Agreement are independent of the
obligations of any other Debtor. You may sue each Debtor individually or together with any other Debtor. You may release any part of the Property and I will still be obligated under this Agreement for
the remaining Property. The duties and benefits of this Agreement will bind and benefit the successors and assigns of you and me.

	15.
	AMENDMENT INTEGRATION AND SEVERABILITY.    This Agreement may not be amended or modified by oral agreement. No amendment or
modification of this Agreement is effective unless made in writing and executed by you and me. This Agreement and the other Loan Documents are the complete and final expression of the understanding
between you and me. If any provision of this Agreement is unenforceable, then the unenforceable provision will be severed and the remaining provisions will still be enforceable.

	16.
	INTERPRETATION.    Whenever used, the singular includes the plural and the plural includes the singular. The section headings
are for convenience only and are not to be used to interpret or define the terms of this Agreement.

	17.
	NOTICE, FINANCIAL REPORTS AND ADDITIONAL DOCUMENTS.    Unless otherwise required by law, any notice will be given by
delivering it or mailing it by first class mail to the appropriate party's address listed in the DATE AND PARTIES section, or to any other address designated in writing. Notice to one Debtor will be
deemed to be notice to all Debtors. I will inform you in writing of any change in my name, address or other application information. I will provide you any financial statement or information you
request. All financial statements and information I give you will be correct and complete. I agree to sign, deliver, and file any additional documents or certifications that you may consider necessary
to perfect, continue, and preserve my obligations under this Agreement and to confirm your lien status on any Property. Time is of the essence.

	18.
	WAIVER OF JURY TRIAL.    All of the parties to this agreement agree to waive our respective right to trial by jury of any
cause of action, claim, counterclaim or cross-complaint in any action, proceeding, or hearing brought by either party on any matter arising out of or in any way related 

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to
this transaction, the parties' relationship or any claim of injury or damage, or the enforcement of any remedy under any law, statute, or regulation, in effect or as amended. 

SIGNATURES.    By signing, I agree to the terms contained in this Agreement. I also acknowledge receipt of a copy of this Agreement. 

	 	DEBTOR:	 	 
	

 	

 	

THE WILLDAN GROUP OF COMPANIES	
 	

 
	

 	

 	

 	

By:	

/s/ Dan W. Heil
	
 	

 
	 	 	 	DAN W. HEIL, CHAIRMAN OF THE BOARD	 	 

8

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Exhibit 10.6

SECURITY AGREEMENTQuickLinks
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Exhibit 10.7    
    

WILLDAN ASSOCIATES — HUMAN RESOURCES POLICY  

	Policy No. 130	 	Effective Date: 05/01/96	 	Page 1 of 3

 
 

INCENTIVE BONUS PLAN    
    

1.     PURPOSE  

To
establish guidelines within which the Company will reward certain employees for their individual contributions to the overall financial success of the Company. 

2.     SCOPE  

This
policy applies to all eligible employees in the classifications of Regional Manager, Division Manager and others as determined by the President. 

3.     POLICY  

The
Company will pay an incentive bonus to each eligible employee who meets the goals established by the Company, as long as the Company meets certain financial goals. 

4.0   PROVISIONS & CONDITIONS  

	4.1
	ELIGIBILITY

	4.1.1
	To
be eligible, an employee must be either a Division Manager, Regional Manager or any classification determined to be eligible by the President.

	4.1.2
	An
employee must have been employed for the last six months of the calendar year for which an incentive bonus is to be paid.

	4.1.3
	An
employee must also be employed with the Company at the time an incentive bonus is paid.

	4.2
	DETERMINATION
OF COMPANY GOALS

	4.2.1
	Prior
to the beginning of the calendar year, the Company will set certain minimum annual company goals such as pre-tax profit and revenue growth.

	4.2.2
	Regional
offices will also establish minimum revenue growth and pre-tax profit goals which must be approved by the President. These goals must be at least equal to the
overall Company goals. Together the revenue and profit goals will be a 100% goal, however they can be weighted differently.

	4.2.3
	Finance
and Administration Units will also establish minimum goals for their departments that are similar in design/concept to the Company goals. These must be approved by the
President.

	4.2.4
	Division
Managers and key individuals in responsible positions will also establish minimum revenue growth and pre-tax profit goals or other performance goals, which must
be consistent with their goals, as well as approved by the President. These goals must be at least equal to the overall Regional Office/Unit goals. Together the revenue and profit goals will be a 100%
goal, however they can be weighted differently. 

1

 

	4.2.5
	The
Company will also establish any priority company commitments prior to the start of the calendar year. These commitments are as follows:

	(1)
	To
fund a contribution to the 401(k) Profit Sharing Plan at least equal to 10% of taxable profit.

	(2)
	To
fund a return on equity, in the form of dividends, at least equal to 10% of beginning of year stockholder's equity.

	(3)
	To
fund a significant reduction of outside debt each year.

	4.3
	DETERMINATION
OF INCENTIVE BONUS

	4.3.1
	OVERALL COMPANY. In order for any bonus to be paid, the Company, as a whole, must meet the minimum goals that have been established.

	4.3.2
	REGIONAL MANAGER. The Regional Office must have met both revenue and profit goals AND the Company must have met both revenue and
profit goals, in order for a Regional Manager to receive a bonus. However, if the Regional Manager does not meet both of his/her goals but the dollar
profit contribution equals or exceeds the dollar amount of the original profit goal, a partial bonus may be paid.

	4.3.2
	DIVISION MANAGER. The Division must have met both revenue and profit goals AND the Company must have met both revenue and profit
goals, in order for a Division Manager to receive a bonus. However, if the Division Manager does not meet both of his/her goals but the dollar profit
contribution equals or exceeds the dollar amount of the original profit goal, a partial bonus may be paid.

	4.4
	COMPOSITION
OF INCENTIVE BONUS

	4.4.1
	The
incentive bonus for Regional Managers is 10% (minimum) to 25% (maximum) of annual salary.

	4.4.1
	The
incentive bonus for Division Managers is 5% (minimum) to 15% (maximum) of annual salary.

	4.5
	CALCULATION
OF INCENTIVE BONUS

	4.5.1
	Regional Managers. One-third of the total potential bonus is based on the Companys' overall performance to goal, and
two-thirds of the total potential bonus is based on the Regional Office performance to goal.

	4.5.2
	Division Managers. One-third of the total potential bonus is based on the Regional Offices' performance to goal, and
two-thirds of the total potential bonus is based on the Division's performance to goal. Division Managers who do not meet both of their
goals are not eligible for the one-third bonus otherwise available because the Company and Regional office met their goals.

	4.5.3
	Finance and Administration Units. One-third of the total potential bonus is based on the Companys' overall performance to
goal, and two-thirds of the total potential bonus is based on the Unit's performance to goal. 

2

QuickLinks

Exhibit 10.7

INCENTIVE BONUS PLAN

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