EXHIBIT 10.19

DATED THIS 8th DAY OF SEPTEMBER, 2006

BETWEEN

YONG CHOY LIN @ YONG CHAI LIN

AND

ENGlobal Engineering, Inc

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OPTION TO PURCHASE SHARE AGREEMENT

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This Option To Purchase Share Agreement

is made on between the following parties:

1. Yong Choy Lin @ Yong Chai Lin NRIC No. 460330-04-5154 of 10, Jalan USJ 14/1J, 47630 Subang Jaya, Selangor Darul Ehsan.
(Vendor)

2. Englobal Engineering Inc.
(Company No: 0106962700) Texas, USA chartered
(Purchaser)

Recitals:

A. SchmArt Technologies Sdn Bhd (Company No.655264-W) (Company) is a company incorporated in Malaysia under the Companies Act 1965, the corporate particulars of which are set out in Schedule 1.

B. The Vendor is the registered and beneficial owner of 210,000 ordinary shares of RM 1.00 each in the Company, representing 100% of the entire issued and paid-up share capital of the Company (Sale Shares). Among the 210,000 ordinary shares, 63,000 of the ordinary shares are registered in the name of the Vendor, 126,000 of the ordinary shares were registered in the name of the shareholder named Mohamed Ghazali Bin Ismail (NRIC No.490302-11-5041) who holds the said 126,000 of the ordinary shares on trust for the Vendor and 21,000 of the ordinary shares were registered in the name of the shareholder named Edwin Pang Loo Chee (NRIC No.660224-04-5173) who holds the said 21,000 of the ordinary shares on trust for the Vendor (both, Other Shareholders).

C. The Vendor has agreed to grant/sell and the Purchaser has agreed to purchase the option, to purchase the Sale Shares (Option To Purchase) on the terms and subject to the conditions set out in this option to purchase share agreement.

1.1 Grant/sale

The Vendor grants/sells to Purchaser and the Purchaser agrees to purchase the Option to Purchase from the Vendor on the terms and subject to the conditions set out in this option to purchase share agreement.

1.2 Basis of sale

The Option to Purchase is granted/ sold -

(a) On the basis that the Purchaser can exercise this Option to Purchase, for all or any lesser portion of the Sale Shares as Purchaser shall determine in its sole discretion, at any time up to ninety (90) days immediately after the 3rd year from the date of this option to purchase share agreement, or such extended period as may be agreed between the parties (Option Period) for the payment to the Vendor of additional price of USD$1.00 (Share Consideration) and the Purchaser shall, subject to the Purchaser obtaining the approval from and conditions to be imposed by the Malaysia Foreign Investment Committee for such acquisition of the Vendor's shares, become the registered and/or beneficial owner of the Sale Shares;

(b) In the event that the Purchaser exercises this Option to Purchase after paying the additional price of $1.00, both Vendor and Purchaser further agree to execute Share Sales Agreement to effect and complete the sales of the said Sale Shares.

(c) On the basis that the Purchaser and Company will enter into a Management Agreement on an even date herewith;

(d) On the basis that the Vendor is to procure that the Company and SchmArt Engineering, Inc. will enter into a licensing agreement for use of the relief ++ system and software for all work in Malaysia;

(e) On the basis that the Vendor will be retained as a paid Director of the Company for a minimum of three (3) years from the date of this option to purchase share agreement regardless of whether the Purchaser exercises the Option to Purchase or not; and

(f) On the basis of the Warranties given by the Vendor as referred to in clause 4.1.

1.3 Waiver of pre-emption rights

(a) The Vendor [and each of the Other Shareholders] waives all rights of pre-emption, rights of first refusal or options over any of the Sale Shares conferred by the Articles of Association of the Company or in any other way.

(b) The Vendor must procure and undertakes and warrants to the Purchaser that the Other Shareholders waive all rights of pre-emption, rights of first refusal or options over any of the Sale Shares conferred by the Articles of Association of the Company or in any other way.

2.1 Amount

The consideration for the Option to Purchase is USD$150,000.00 (Option Consideration).

2.2 Satisfaction

The Option Consideration will be paid in the following manner:

(a) A sum of USD$50,000.00 non-refundable deposit has been paid by the Purchaser to the Vendor upon the execution of this option to purchase share agreement.

(b) The balance of the Option Consideration will be paid by the Purchaser in the following manner :

(1) USD$25,000.00 will be paid to the Vendor on 15th day of September 2006;

(2) USD$25,000.00 will be paid to the Vendor on 15th day of October 2006;

(3) USD$25,000.00 will be paid to the Vendor on 15th day of November 2006; and

(4) USD$25,000.00 will be paid to the Vendor on 15th day of December 2006.

2.3 The Option Consideration is non-refundable in the event that the Purchaser decides not to exercise the Option to Purchase.

3.1 Time for Exercise

The Option to Purchase may be exercised at any time during the Option Period.

3.2 Effect of Exercise and Completion

Except to the extent already performed, all the provisions of this option to purchase share agreement will, so far as they are capable of being performed or observed, continue in full force and effect notwithstanding completion of the purchase and transfer of the Sale Shares (Completion).

4.1 Warranties

The Vendor warrants to the Purchaser that during the Option Period -

(a) the warranties given by the Vendor as set out in Schedule 2 (Warranties) are as at the date of this option to purchase share agreement and will immediately before Completion in respect of the facts then existing be, true and accurate in all respects;

(b) the contents of any disclosure in writing, and of all accompanying documents, are true and accurate in all respects and fully, clearly and accurately disclose every matter to which they relate;

(c) the Vendor will not permit the Company to introduce any new management for which negotiations for hire were not previously underway, or to adjust or introduce new operating or accounting methods without the written approval of Purchaser;

(d) the Vendor will not permit the Company to sell, transfer, lease, or encumber any material asset (if any);

(e) the Vendor will not permit the Company to make any expenditures outside the ordinary course of business, to declare or pay any dividends, to redeem any stock, to prepay any debt, to enter into non-standard agreements with its officers, directors or shareholders, to increase unreasonably the compensation to be paid to employees, to substantially modify any existing personnel or employee benefit policy or program or to create or modify any bonus plan, except as previously planned, or as approved in advance and in writing by the Purchaser;

(f) the Vendor will cause the Company to perform all its material obligations under the debt and lease instruments and other arrangements relating to or affecting the assets;

(g) the Vendor will not permit the Company to enter into any new, or to amend any existing, lease agreement other than renewals of existing leases in the ordinary course of business and on the terms not materially less favourable to the Company than the terms of its existing leases and equipment leases entered into the ordinary course of business, except as previously planned and made known to Purchaser, or as approved in advance and in writing by the Purchaser;

(h) the Vendor will cause the Company to keep in effect its present insurance policies or comparable insurance coverage; and

(i) the Vendor will cause the Company to use its best efforts to maintain and preserve its business organisation, retain its present employees, and to maintain its relationships with suppliers, customers, and others having business relations with the Vendor.

4.2 Basis of warranties

(a) Each of the Warranties is without prejudice to any other warranty or undertaking and, except where expressly stated, no Warranty contained in this option to purchase share agreement governs or limits the extent or application of any other Warranty.

(b) Each of the Warranties is deemed to be given as at the date of this option to purchase share agreement and to be repeated immediately before Completion in relation to the facts then existing.

4.3 Rights & remedies

The rights and remedies of the Purchaser in respect of any breach of the Warranties will not be affected by -

(a) Completion;

(b) any investigation made by or on behalf of the Purchaser into the affairs of the Company;

(c) any failure to exercise or delay in exercising any right or remedy or by any other event or matter whatsoever, except a specific and duly authorised written waiver or release; or

(d) any information the Purchaser may have received or been given or have actual implied or constructive notice of prior to the date of this option to purchase share agreement.

4.4 Due inquiry

Vendor undertakes that in relation to any Warranty which refers to the knowledge, information or belief of the Vendor, that the Vendor has made full inquiry into the subject matter of that Warranty.

4.5 Disclosure prior to completion

The Vendor must promptly disclose in writing to the Purchaser any event or circumstance, which arises or becomes known to the Vendor after the date of this option to purchase share agreement and prior to Completion, which is inconsistent with any of the Warranties, or which might be material to be known by a purchaser for value of the Sale Shares.

5.1 Undertakings

Upon execution of this option to purchase share agreement, the Vendor must not do and must ensure none of the Connected Persons does, directly or indirectly, any of the following without first obtaining the written consent of the Purchaser: carry on (whether alone or in partnership or joint venture with anyone else) or otherwise be concerned with or interested in (whether as trustee, principal, agent, shareholder, unit holder or in any other capacity) any business which uses or includes as any part of its corporate or business name, the words 'SchmArt Technologies', other than in respect of or through the Company itself.

5.2 Injunction

The Vendor acknowledges that monetary damages would not be adequate compensation to the Purchaser for the Vendor's breach of either clauses 5.1 or 6.1 and that the Purchaser is entitled to seek an injunction from a court of competent jurisdiction.

6.1 Confidentiality

(a) Each party must treat as strictly confidential all information received or obtained as a result of entering into or performing this option to purchase share agreement which relates to the provisions or subject matter of this option to purchase share agreement, to any other party to this option to purchase sale agreement or the negotiations relating to this option to purchase share agreement.

(b) Each party must use its reasonable endeavours to cause all of its directors, officers, employees and agents who have or are likely to have access to all such information as referred to in clause 6.1(a), to observe all the obligations of confidentiality under this clause 6.

7.1 Costs

Each party will bear its own costs and expenses incurred in the preparation, execution and implementation of this option to purchase share agreement.

7.2 Stamp duty

The Purchaser will pay all stamp and other transfer duties and registration fees applicable to any document to which it is a party and which arise as a result of or in consequence of this option to purchase share agreement.

8.1 How notices may be given

A notice, request, demand, consent or approval (each a notice) under this option to purchase share agreement:

(a) must be in writing;

(b) may be signed for the party giving it by the party's authorized officer, attorney or solicitor;

(c) may be delivered personally to the person to whom it is addressed, or left at or sent by prepaid post to the person's address stated on page 1 of this option to purchase share agreement or by facsimile.

8.2 When notice taken as given

A notice is taken as given by the sender and received by the intended recipient:

(a) if delivered by hand or courier prior to 5.00 p.m. on a business day (which expression means a business day in Texas, U.S.), at the time of delivery to the addressee or, if delivered by hand or courier at any other time, at 9.00 a.m. on the next business day following the date of delivery to the addressee;

(b) if sent by mail on the 3rd business day falling after the date of posting; or

(c) if transmitted by way of facsimile transmission prior to 5.00
p.m. on a business day, at the time of transmission, or if transmitted by way of facsimile transmission at any other time, at 9.00 a.m. on the next business day following the date of such transmission.

References to time are to time in Texas, U.S.

8.3 Proof

In providing the giving of a notice or any other document under or in respect of this option to purchase share agreement it shall be sufficient to show -

(a) in the case of mail that the notice or other document was duly addressed and posted; or

(b) in the case of facsimile transmission, that the notice or other document was duly transmitted from the despatching terminal as evidenced by a transmission report generated by the despatching terminal.

8.4 Change of address or fax number

A party may change its address or fax number for notices by giving notice to the other party.

9.1 Vendors' right to terminate

The Vendor may, at any time while such default subsists, give a Notice of Termination to the Purchaser in the event that the Purchaser defaults in the satisfaction of the Consideration in accordance with the provisions of this option to purchase share agreement.

9.2 Purchaser's right to terminate

The Purchaser may, at any time while such default subsists, give a Notice of Termination to the Vendor in the event that there has been any material event, matter or circumstance which is inconsistent with, contrary to or otherwise a material breach of the Warranties or the provisions of this option to purchase share agreement.

9.3 Termination in event of bankruptcy

The Purchaser may, at any time, give a Notice of Termination to the Vendor if -

(a) the Vendor or any of the Other Shareholders is or becomes, or is adjudicated or found to be, bankrupt; or

(b) a distress, attachment or execution is levied or enforced upon, any part of the assets or undertaking of the Vendor or any of the Other Shareholders.

9.4 Consequences of termination

(a) In the event of a Notice of Termination being duly given under the provisions of clause 9.1, clause 9.2, or clause 9.3 -

(1) the Purchaser must, within seven days from the Notice of Termination, return all documents, if any, delivered to them by or on behalf of the Vendor to the Vendor;

(2) the Vendor must, within seven days from the Notice of Termination, return all documents, if any, delivered to them by or on behalf of the Purchaser and return any part of the Option Consideration received by or on behalf of the Vendor to the Purchaser.

9.5 Post-termination

Following the giving of a Notice of Termination under any of the provisions of this option to purchase share agreement, and complete performance of the obligations under clause 9.4 and subject to clause 10, neither party will have any further obligation under this option to purchase share agreement to the other party.

a. For a period of two years from and after Completion, Vendor hereby agrees to indemnify, defend, and hold harmless Purchaser and its partners, officers, employees, advisors, affiliates, agents, representatives and assigns (the "Purchaser Indemnitees") from and against any and all liabilities, penalties, damages, losses, claims, costs, and expenses (including reasonable attorneys fees and expenses for the defense of any claim which, if proved, would give rise to an obligation of indemnity hereunder, notwithstanding that such claim may be settled prior to final judgment) arising out of or resulting directly or indirectly from (a) breach, falsity, inaccuracy, incompleteness or misleading nature of any warranty, representation or covenant by Vendor contained in this option to purchase share agreement; or (b) nonperformance of any obligations or covenants on the part of Vendor under this option to purchase share agreement (each hereafter a "Claim").

b. Notwithstanding anything herein to the contrary, the maximum amount that the Vendor shall be obligated to pay in respect of any and all obligations of indemnity under this clause 10 shall be equal to the sum of USD$150,000. In addition, a Claim shall not be brought by Purchaser under or pursuant to this clause 10, unless either (i) the amount of that Claim exceeds USD$10,000, or (ii) the aggregate amount of all Claims (whether reimbursed or unreimbursed, and including both theretofore made and any Claims then being made) exceeds USD$10,000.

11.1 Entire Agreement

This option to purchase share agreement -

(a) constitutes the entire agreement and understanding between the parties with respect to the matters dealt with in this option to purchase share agreement;

(b) supersedes any other agreement, letters, correspondence (oral or written or expressed or implied) entered into prior to this option to purchase share agreement in respect of the matters dealt with in this option to purchase share agreement; and

(c) was not entered into by the parties in reliance of any agreement, understanding, warranty or representation of any party not expressly contained or referred to in this option to purchase share agreement.

11.2 Execution

The execution of this option to purchase share agreement by or on behalf of a party shall constitute an authority to the solicitors acting for that party in connection with this option to purchase share agreement to deliver and date it on behalf of that party.

11.3 Effective date

This option to purchase share agreement will take effect on the date entered on the first page of this option to purchase share agreement irrespective of the diverse dates upon which the respective parties may have executed this option to purchase share agreement.

11.4 Amendments & additions

No amendment, variation, revocation, cancellation, substitution or waiver of, or addition or supplement to, any of the provisions of this option to purchase share agreement shall be effective unless it is in writing and signed by both of the parties.

11.5 Successors & assigns

This option to purchase share agreement will be binding upon and inure for the benefit of the respective heirs, personal representatives, successors-in-title or permitted assigns, as the case may be, of the parties.

11.6 No Partnership or agency

The provisions of this option to purchase share agreement will not be construed or taken to constitute -

(a) a partnership between the parties;

(b) either party to be the agent of the other party; or

(c) an authority to either party to represent or bind or pledge the credit of the other party in any way.

11.7 Invalidity & severability

If any provision of this option to purchase share agreement is or may become under any written law, or is found by any court or administrative body or competent jurisdiction to be, illegal, void, invalid, prohibited or unenforceable then -

(a) such provision will be ineffective to the extent of such illegality, voidness, invalidity, prohibition or unenforceability;

(b) the remaining provisions of this option to purchase share agreement will remain in full force and effect; and

(c) the parties must use their respective best endeavours to negotiate and agree a substitute provision which is valid and enforceable and achieves to the greatest extent possible the economic, legal and commercial objectives of such illegal, void, invalid, prohibited or unenforceable term, condition, stipulation, provision, covenant or undertaking.

11.8 Time of the essence

Time wherever mentioned is of the essence of this option to purchase share agreement, both as regards the dates and periods specifically mentioned and as to any dates and periods which may be agreed in writing between the parties be substituted for them.

11.9 Knowledge & acquiescence

Knowledge or acquiescence by any party of, or in, any breach of any of the provisions of this option to purchase share agreement will not operate as, or be deemed to be, a waiver of such provisions and, notwithstanding such knowledge or acquiescence, such party will remain entitled to exercise its rights and remedies under this option to purchase share agreement, and at law, and to require strict performance of all of the provisions of this option to purchase share agreement.

11.10 Rights & remedies

The rights and remedies provided in this option to purchase share agreement are cumulative, and are not exclusive of any rights or remedies of the parties provided at law or in equity, and no failure or delay in the exercise or the partial exercise of any such right or remedy or the exercise of any other right or remedy will affect or impair any such right or remedy.

11.11 Governing Law; Arbitration.

This option to purchase share agreement shall be governed in all respects in conformity with the intent of the parties as expressed in the provisions of this option to purchase share agreement. To the

extent any issue between the parties is not controlled by this Agreement, then any dispute between the parties shall be governed and construed in accordance with the laws of the State of Texas, U.S. without regard to its choice of law principles. UNLESS THIS AGREEMENT SPECIFICALLY PROVIDES FOR ANOTHER TYPE OF DISPUTE RESOLUTION WITH RESPECT TO A PARTICULAR KIND OF DISPUTE, ANY AND ALL CONTROVERSIES AND CLAIMS ARISING OUT OF OR RELATING TO THIS OPTION TO PURCHASE SHARE AGREEMENT, OR THE BREACH THEREOF, SHALL BE SETTLED BY FINAL AND BINDING ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION THEN IN EFFECT. Any such arbitration proceedings shall be and remain confidential. The panel of arbitrators for any such arbitration shall consist of three members of the American Arbitration Association, one of whom shall be selected by the Purchaser, one of whom shall be selected by the Vendor, and the third who will be selected by the other two. Judgment upon the decision rendered by the arbitrators may be entered in any court having jurisdiction thereof. The place of arbitration shall be Houston, Texas.

Schedule 1 - Corporate particulars

1. Registered number 655264-W

2. Date of Incorporation 8th June 2004

3. Address of registered office Unit 920, 9th Floor, Block A, Damansara Intan, No.1, Jalan SS 20/27, 47400 Petaling Jaya, Selangor Darul Ehsan

4. Authorized share capital RM500,000.00 divided into 500,000 ordinary shares of RM1.00 each

5. Issued share capital RM210,000.00 divided into 210,000 ordinary shares of RM1.00 each

6. Directors Yong Choy Lin @ Yong Chai Lin (F); Mohamed Ghazali Bin Ismail; and Zuriati Binti Mohamed Yusoff

7. Shareholders Yong Choy Lin @ Yong Chai Lin 30%

Mohamed Ghazali Bin Ismail 60%
(held on trust for Yong Choy Lin)

Edwin Pang Loo Chee 10% (held on
trust for Yong Choy Lin)

8. Secretary Rebecca Yu (MAICSA 0829744)

9. Accounting reference date 31st December

I. The Vendor

A. Capacity

(1) The Vendor has the requisite power and authority to enter into and perform this option to purchase share agreement.

(2) This option to purchase share agreement constitutes and imposes valid legal and binding obligations on the Vendor and is fully enforceable in accordance with its terms.

(3) The Vendor has not entered into any prior option to purchase share agreement with any party to dispose of the Sale Shares of which the said agreement is still valid and subsisting.

II. Shares and Capital

A. Title

The Vendor is the beneficial owner of all the Sale Shares. The registered owners of the Sale Shares are as follows :

Registered Owners                                       Sale Shares
-----------------                                       -----------

Mohamed Ghazali Bin Ismail (NRIC : 490302-11-5041)          126,000
holding on trust for the Vendor

Vendor                                                       63,000

Edwin Pang Loo Chee (NRIC : 660224-04-5173)                  21,000
holding on trust for the Vendor

The Sale Shares are free of all Security Interests other than described above.

B. Issued capital

The Sale Shares constitute 100% of the total issued and paid up capital of the Company.

C. Capital

The authorised capital of the Company is RM500,000.00 divided into 500,000 ordinary shares of RM1.00 each. The amount of issued and paid up capital is RM210,000.00 divided into 210,000 ordinary shares of RM1.00 each.

D. Fully paid

The Sale Shares are fully paid and no money is owing to the Company in respect of them.

III. Company

A. Corporate existence

The Company -

(1) is a private limited company; and

(2) has the power to own its assets and carry on its business.

B. Compliance with constituent documents

The business affairs of the Company have been conducted in accordance with the constitution of the Company.

IV. Corporate matters

A. Insolvency of the Company

(1) No order has been made, no resolution has been passed, no petition presented, no meeting convened for the winding up of the Company or for a provisional liquidator to be appointed in respect of the Company and the Company has not been a party to any transaction which could be avoided in a winding up.

(2) No administration order has been made and no petition for one has been presented in respect of the Company.

(3) No receiver or administrative receiver has been appointed in respect of the Company or any of its assets.

(4) The Company :

(a) is not insolvent,

(b) has not failed and is able to pay, and has a reasonable prospect of being able to pay, any of its debts as they fall due,

as those expressions are defined in section 218 of the Companies Act 1965.

(5) The Company has not made or proposed any arrangement or composition with its creditors or any class of them.

(6) No distress, execution or other process has been levied on any of the Company's assets or action taken to repossess goods in the possession of the Company.

(7) No unsatisfied judgment is outstanding against the Company and no demand has been served on the Company under section 218 of the Companies Act.

V. Information

B. Accuracy and adequacy of information

(1) The information contained in schedules to this option to purchase share agreement is accurate and complete.

(2) All written information supplied to the Purchaser or its advisers by or on behalf of the Vendor or any of their advisers or by the Company is complete and accurate and is not misleading because of any omission or ambiguity or for any other reason and where information is expressed as an opinion, it is truly and honestly held and not given casually, recklessly or without due regard for its accuracy.

(3) So far as the Vendor is aware, there is no fact or circumstance relating to the business and affairs of any of the Company which, if disclosed to the Purchaser or any of its advisers, might reasonably be expected to influence the decision of the Purchaser to purchase the Sale Shares on the terms contained in this option to purchase share agreement and which has not been so disclosed.

VI. Accounts

A. Basis of preparation

The Accounts -

(1) have been prepared in accordance with current standard accountancy practices applicable to a Malaysian company;

(2) show a true and fair view of the financial position and the assets and liabilities of the Company at the Accounts Date;

(3) are not affected by any unusual or non-recurring item;

(4) take account of all gains and losses, whether realised or unrealised arising from any transaction; and

(5) include all reserves and provisions for taxation that are necessary to cover all Tax liabilities of the Company in respect of any period up to the Accounts Date.

B. Management Accounts

The management accounts fairly reflect the trading position of the Company as at the date and for the period to which they relate and are not affected by any extraordinary, exceptional, unusual or non-recurring income, capital gain or expenditure or by any other factor known by the Vendor rendering Profits or losses for the period covered exceptionally high or low.

C. Position since Accounts Date

Since the Accounts Date -

(1) the Company's business has been conducted in the ordinary course of business and in a proper and efficient manner;

(2) the Company has not incurred any liabilities other than in the ordinary course of business; and

(3) there has been no material adverse change affecting the business, the assets of the Company, or the financial or trading position or prospects of the Company.

VII. Properties

The Company has no interest in land.

VIII. Financial

A. Financial commitments and borrowings

(1) The Company is not a party to, nor has it agreed to enter into, any lending, or purported lending, agreement or arrangement (other than agreements to give credit in the ordinary course of its business).

(2) The Company is not exceeding any borrowing limit imposed upon it by its bankers, other lenders, its articles of association or otherwise nor has the Company entered into any commitment or arrangement which might lead it so to do.

(3) No event has occurred or been alleged which is or, with the passing of any time or the giving of any notice, certificate, declaration or demand, would become an event of default under, or breach of, any of the terms of any loan capital, borrowing or financial facility of the Company or which would entitle any person to call for repayment prior to normal maturity.

(4) The Company is not, nor has it agreed to become, bound by any guarantee, indemnity, surety or similar commitment.

IX. Trading and contracts

A. Contracts and commitments

(1) The Company is not a party to any agreement, arrangement or commitment which -

(a) has or is expected to have material consequences in terms of expenditure or revenue;

(b) relates to matters outside its ordinary business or was not entered into on arms' length terms;

(c) constitutes a commercial transaction or arrangement which deviates from the usual pattern for it;

(d) can be terminated in the event of any change in the underlying ownership or control of it or would be materially affected by such change;

(e) cannot readily be fulfilled or performed by it on time; or

(f) cannot be terminated, without giving rise to any liabilities on it, by it giving three months' notice or less.

however, the Purchaser and Company will enter into a Management Agreement on or about the date of this option to purchase share agreement.

B. Litigation and disputes

(1) Except for actions to recover any debt incurred in the ordinary course of the business owed to the Company -

(a) neither the Company nor any person for whose acts the Company may be liable is engaged in any litigation, arbitration, administrative or criminal proceedings, whether as plaintiff, defendant or otherwise;

(b) no litigation, arbitration, administrative or criminal proceedings by or against the Company or any person for whose acts it may be liable are threatened or expected and, as far as the Vendor are aware, none are pending; and

(c) there are no facts or circumstances likely to give rise to any litigation, arbitration, administrative or criminal proceedings against the Company or any person for whose acts it may be liable.

(2) The Company is not subject to any order or judgment given by any court or governmental or other authority, department, board, body or agency or has not been a party to any undertaking or assurance given to any court or governmental or other authority, department, board, body or agency which is still in force.

X. Assets

A. Charges and encumbrances over assets

(1) Save as described in paragraph II(A) above, no option, right to acquire, mortgage, charge, pledge, lien (other than a lien arising by operation of law in the ordinary course of trading) or other form of security or encumbrance or equity (Security Interest) on, over or affecting the shares or the whole or any part of the undertaking or assets of the Company, including any investment in any other company, is outstanding and, apart from this option to purchase share agreement, there is no agreement or commitment to give or create any of them and no claim has been made by any person to be entitled to any of them.

(2) The Company has not received notice from any person intimating that it will enforce any security which it may hold over the asset of the Company, and there are no circumstances likely to give rise to such a notice.

XI. Intellectual Property

(1) No licences, registered user or other rights have been granted or agreed to be granted by the Company to any person in respect of any Intellectual Property.

(2) Except in the ordinary course of business and on a confidential basis, no disclosure has been made of any of the confidential information, know-how, technical processes, financial or trade secrets or customer or supplier lists or information of the Company (Proprietary Rights).

(3) The Company's use of the Proprietary Rights is not infringing upon or otherwise violating the rights of any third party in or to such Proprietary Rights, and no proceedings have been instituted against or notices received by the Company that are presently outstanding alleging that the Company's use of its Proprietary Rights infringes upon or otherwise violates any rights of a third party in or to such Proprietary Rights.

XII. Employment

A. Industrial relations

(1) The Company is not a party to any contract, agreement or arrangement with any trade union or other body or organisation representing any of its employees.

(2) The Company has in relation to its employees and former employees complied with all conditions of service, customs and practices and, where relevant, all collective agreements and recognition agreements for the time being.

(3) No dispute has arisen between the Company and a material number or category of its employees nor are there any present circumstances known to the Vendors which are likely to give rise to any such dispute.

XIII. Taxation

(1) The Company has at all times been resident for Tax purposes in Malaysia, which is the only country whose Tax Authorities seek to charge tax on the Profits of the Company.

(2) Any Tax arising under any Taxation payable in respect of any transaction, income or asset of the Company will be paid.

IN WITNESS WHEREOF the parties hereto have hereunto set their hands the day and year first above written.

Signed by                        )
                                 )
YONG CHOY LIN @ YONG CHAI LIN    )
                                 )
presence of :-                   )           -----------------------------------
                                             YONG CHOY LIN @ YONG CHAI LIN

Signed by                        )
                                 )
MOHAMED GHAZALI BIN ISMAIL       )
                                 )
presence of :-                   )           -----------------------------------
                                             MOHAMED GHAZALI BIN ISMAIL




Signed by                        )
                                 )
EDWIN PANG LOO CHEE              )
                                 )
presence of :-                   )           -----------------------------------
                                             EDWIN PANG LOO CHEE



Signed by : Michael L. Burrow    )           ENGlobal Engineering, Inc.
                                 )
ENGLOBAL Engineering Inc         )
                                 )
in the presence of :-            )           -----------------------------------
                                             By: Michael L. Burrow, Chairman of
                                             the Board

EXHIBIT 10.20

MANAGEMENT AGREEMENT

THIS AGREEMENT made on the 8th day of September, 2006

Between

ENGlobal Engineering Inc. a Texas Corporation, having its principal offices at 654 N. Sam Houston Parkway E., Suite 400, Houston, Texas 77060 (hereinafter referred to as "the Managing Company") .

and

SchmArt Technologies Sdn Bhd, a company incorporated in Malaysia and having its principal office at 15th Floor, Menara Kemayan, Jalan Ampang 50450 Kuala Lumpur (hereinafter referred to as "Owner").

WITNESSETH

WHEREAS:-

A. The Owner is engaged in the business of providing "low cost, high value" engineering and drafting services to customers in Malaysia and throughout the world (the "Business");

B. The Managing Company is experienced in providing engineering and drafting services to customers in the United States and throughout the world;

C. The Owner is desirous of retaining the services of the Managing Company as its technical operation manager of the Business and the Managing Company is desirous of performing such services in the manner and upon the terms and provisions hereinafter set forth;

D. Owner's Representative is herein defined as Jenny Schmieder.

1. COMMENCEMENT DATE AND VALIDITY

Subject to the terms and conditions herein, the Managing Company shall assume the responsibility as the technical operations manager of the Business for a period of three (3) years commencing from the effective date, renewable for subsequent periods of one (1) year each, unless specifically cancelled by either Owner or Managing Company in writing 60 days prior to the renewal date. The date of execution of this Agreement shall be the effective date. This Agreement shall be automatically terminated in the event of the sale or transfer of the entire issued and paid up share capital of the Owner.

2. SERVICES OF THE MANAGING COMPANY

2.1 The Managing Company is given discretionary power to:-

i. Supervise the technical performance of the Business;

ii. Hiring of engineers and drafters for the technical performance of the Business;

iii. Establishing work processes and procedures including quality control and assurance methods for executing all engineering and design work.

2.2 Save and except for the above, the Managing Company shall, subject to the supervision and approval of the board of directors of the Owner, use its reasonable efforts to operate and manage the technical operation of the Owner in accordance with the scope as herein stated.

i. In exercise of its function and performing its duty under this clause 2.2, the Managing Company shall comply with directions, guidelines and policies provided by the Owner at all material times.

ii. Managing Company shall take all reasonable steps to prevent and shall not cause any third party to cause to commit an act of breach of the terms and conditions herein or any act which is contrary to the directions, guidelines and/or policies issued by the Owner.

2.3 The board of directors of the Owner shall not unreasonably intervene in the actions of the Managing Company in managing the technical operation of the Owner as stated in clause 2.1 above.

2.4 The Managing Company shall at all times perform the services to be provided hereunder diligently and in a first class manner designed to protect and to promote the interests of the Owner in the profitable operation of the Business.

2.5 The scope of services provided in clause 2.1 above shall be further determined by mutual agreement by both Managing Company and Owner, including any future additions, deletions or modifications.

2.6 The Managing Company agrees that it shall at all time conduct the Business in a lawful manner and in full compliance with all applicable governmental laws, ordinances, rules and regulations. The Owner warrants that it is and it will at all times remain in compliance with all laws and ordinances relevant to this Agreement.

2.7 The parties will perform their respective obligations under this Agreement in good faith towards one another.

3. EMPLOYEE

3.1 The Managing Company is hereby authorized to employ, through the Owner, and supervise employees and/or independent contractors as may be reasonably required in performing its services in clause 2.1 above.

3.2 The Managing Company shall not be allowed to dismiss such employees and/or independent contractors without consultations and approval of the Owner's Representative (which approval shall not be unreasonably withheld) to ensure that such dismissal is/are fully in compliance with the Malaysia industrial relation practice and laws.

3.3 The employee/s and/or independent contractor/s so employed shall be deemed to be the employee/s and/or independent contractor/s of the Owner.

3.4 MANAGING COMPANY SHALL INDEMNIFY, DEFEND, AND HOLD OWNER, ITS EMPLOYEES, AGENTS, OFFICERS, DIRECTORS, SHAREHOLDERS, SUBSIDIARIES AND AFFILIATES HARMLESS FROM AND AGAINST ANY AND ALL LOSSES, COSTS, EXPENSES, LIABILITIES, CLAIMS AND/OR DEMANDS WHATSOEVER TO WHICH SUCH PARTIES MAY BE SUBJECTED TO BY REASON OF ANY INJURY TO ANY PERSON OR DAMAGE TO ANY PROPERTY OR CONTRACTUAL CLAIM BY ANY THIRD PARTY RESULTING FROM ANY AND ALL ACTIONS (OR FAILURES TO ACT) OF MANAGING COMPANY UNDER THIS AGREEMENT, EXCEPT TO THE EXTENT CAUSED BY OWNER'S NEGLIGENCE AND/OR WILLFUL MISCONDUCT. THE PARTIES AGREE AND ACKNOWLEDGE THAT THIS INDEMNIFICATION CLAUSE COMPLIES WITH THE EXPRESS NEGLIGENCE RULE, IF APPLICABLE, AND IS CONSPICUOUS.

OWNER SHALL INDEMNIFY, DEFEND AND HOLD MANAGING COMPANY, ITS EMPLOYEES, AGENTS, OFFICERS, DIRECTORS, SHAREHOLDERS, SUBSIDIARIES AND AFFILIATES HARMLESS FROM AND AGAINST ANY AND ALL LOSSES, COSTS, EXPENSES, LIABILITIES, CLAIMS AND/OR DEMANDS WHATSOEVER TO WHICH SUCH PARTIES MAY BE SUBJECTED TO BY REASON OF ANY INJURY TO ANY PERSON OR DAMAGE TO ANY PROPERTY OR CONTRACTUAL CLAIM BY ANY THIRD PARTY RESULTING FROM ANY AND ALL ACTIONS (OR FAILURES TO ACT) OF OWNER UNDER THIS AGREEMENT, EXCEPT TO THE EXTENT CAUSED BY MANAGING COMPANY'S NEGLIGENCE AND/OR WILLFUL MISCONDUCT. THE PARTIES AGREE AND ACKNOWLEDGE THAT THIS INDEMNIFICATION CLAUSE COMPLIES WITH THE EXPRESS NEGLIGENCE RULE, IF APPLICABLE, AND IS CONSPICUOUS.

4. PURCHASE OF SUPPLIES & CONTRACTS FOR LABOR & MATERIAL

All purchases of the necessary supplies and contracts for labor and material for providing the services shall be made upon a competitive basis and charged to the Owner, although Managing Company shall be under no obligation to seek or accept the lowest bid. All invoices shall be paid by the Owner and all discounts shall accrue to the benefit of the Owner.

5. FEE COLLECTION

5.1 The Managing Company shall be obligated to account to the Owner for all fees or other income derived from the Business.

5.2 Should it become necessary to seek legal action to collect any account owed to Owner, the Owner shall be responsible for taking such actions as may be necessary to recover such fees due. All expenses in connection with such legal recovery of debt proceedings shall be borne by the Owner. In the event the amount to be collected exceeds USD$50,000.00, no form of legal action shall be instituted and no settlement, compromise or adjustment of any matters involved herein shall be made without the prior written consent of Managing Company.

5.3 All monies collected by the Managing Company for the account of the Owner shall be promptly deposited with a bank or banks designated by the Owner.

6. PAYMENT TO MANAGING COMPANY

6.1 During the term of this Agreement, the Managing Company shall receive as its payment fifty percent (50%) of all pre-taxed profits from the Business for both Owner's local Malaysian clients and Managing Company's clients whose work is performed in Owner's Malaysian office.

6.2 Pre-Tax profits are defined as net profit after deduction of all interest expense but before income taxes or payment to the Managing Company required under clause 6.1 above, as calculated using generally accepted accounting principles and the accrual method of accounting.

6.3 The Owner will present the calculation, along with all supporting detail, to the Managing Company on or before March 1st of each year for Owner's preceding accounting year ending December 31st. The Owner shall provide Managing Company with full and complete sets of Owner's books and records to verify the Owner's calculation. Should the Managing Company agree with the calculation, the Owner shall pay Managing Company its payment within ten (10) days of receiving notice that Managing Company agrees with the calculation. In the event that the Managing Company does not agree with the calculation, Managing Company shall notify the owner in writing before March 15th of Managing Company's disagreement.

6.4 In the event of disagreement concerning the calculation, the matter shall be submitted to mediation to be held within thirty days. In the event that the payment calculation can not be resolved through mediation, the matter shall be submitted to arbitration after thirty days and the payment shall either be increased or decreased in accordance with Arbitration decision.

6.5 In the event that Managing Company exercises its Option to Purchase under the Option to Purchase Share Agreement with the shareholders of the Owner, the Managing Company and the vendor, Yong Choy Lin shall share the Pre-Tax Profits for the Business for a period of three (3) years from the date of the execution of this Agreement under the terms stated hereinabove. The parties shall each bear their pro-rata share of the total combined United States and Malaysian tax burden associated with their portion of the pre-tax profits.

7. MANAGEMENT OF RECORDS AND ACCOUNTS

7.1 The parties shall maintain an accounting system which is agreed upon by the parties including accurate books of account, records and reports of all matters pertaining to the Business in accordance with generally accepted accounting principles, which books and records shall be compiled employing standards and procedures in conformity with mandatory requirements of Malaysian law.

7.2 The parties shall be kept in close touch with the Business and shall be promptly furnished to such extent and in such form and detail as they may from time to time reasonably require with particulars of any matters concerned with and arising out of the Business.

8. INSURANCE

8.1 The parties agree that the Owner shall procure and keep in force, at the Owner's expense, during the existence of this Agreement, comprehensive general liability insurance, to provide the following minimum coverage:-

     Bodily injury liability                        equivalent to $1,000,000 USD
     Professional liability insurance               equivalent to $5,000,000 USD
     Property Damage Liability                      equivalent to $1,000,000 USD
     Contractual liability:
                     Bodily Injury                  equivalent to $1,000,000 USD
                     Property Damage                equivalent to $1,000,000 USD

                                        5

9.   TERMINATION

9.1 In this Agreement, termination 'with cause' shall mean any termination by either party, which is effected due to either:-

i) the other party's failure to perform, breach, default, or non-compliance of any obligation after the date of its agreed execution and after reasonable notice of that failure, breach, default, or non-compliance has been given to the other party, and such failure, breach, default or non-compliance has not been rectified or remedied; or

ii) the happening of a frustrating event that was not contemplated by the parties.

9.2 In this Agreement, termination `without cause' shall mean any termination by either party, which is effected after pre-requisite 30 day notice in writing is given, where the other party has done nothing to warrant such a termination.

9.3 In essence, if the Managing Company wants to terminate this Agreement 'without cause', then the Managing Company will have to pay the Owner compensation of $50,000.00 and vice versa.

9.4 Upon reasonable notice in writing, this Agreement may be terminated immediately `with cause' by either party, upon the occurrence of any one of the following events:-

i) the filing by such other party of a voluntary petition in bankruptcy or insolvency, or a petition for reorganization or protection under any bankruptcy or insolvency law;

ii) the consent by such other party to any involuntary petition in bankruptcy or insolvency; or

iii) the making of an order or judgment by any competent court, on the application of a creditor, adjudicating such other party bankrupt or insolvent, or approving a petition seeking reorganization, or appointing a receiver, for all or a substantial part of such party's assets which order or judgment shall continue non-stayed and in effect for sixty (60) days.

9.5 In addition to clause 9.4, the Owner shall have the right to terminate this Agreement 'with cause' by reason of failure, breach, default, or non-compliance by the Managing Company with regard to any obligations contained in this Agreement, upon the failure by the Managing Company to remedy such a failure, breach, default or non-compliance within thirty (30) days of receipt of notice thereof from the Owner, unless the Managing Company has given a reasonable explanation as to its delay, after which the Owner shall extend the time period for an additional thirty (30) days or such longer period as may be agreed to by both parties. The Owner will be allowed to receive compensation of USD$50,000.00 for such failure, breach, default or non-compliance by the Managing Company.

9.6 In addition to clause 9.4, the Managing Company shall have the right to terminate this Agreement 'with cause' by reason of failure, breach, default, or non-compliance by the Owner with regard to any obligations contained in this Agreement, upon the failure by the Owner to remedy such a failure, breach, default or non-compliance within thirty (30) days of receipt of notice thereof from the Managing Company, unless the Owner has given a reasonable explanation as to its delay, after which the Managing Company shall extend the time period for an additional thirty (30) days or such longer period as may be agreed to by both parties. The Managing Company will be allowed to receive compensation of USD$50,000.00 for such failure, breach, default or non-compliance by the Owner.

9.7 In the event that the Managing Company fails to perform any obligation under this Agreement prior to termination, the Owner may fulfill the relevant obligation on behalf of the Managing Company and the Managing Company shall be liable to reimburse the Owner forthwith all sums expended by the Owner in relation to such failure.

9.8 In the event that the Owner fails to perform any obligation under the Agreement prior to termination, the Managing Company may fulfill the relevant obligation on behalf of the Owner, and the Owner shall be liable to reimburse the Managing Company forthwith all sums expended by the Managing Company in relation to such failure.

10. NO PROPERTY INTEREST CREATED

Nothing contained in this Agreement shall be deemed to create or shall be construed as creating in Managing Company any property interest in the Business. The Managing Company shall have no authority to convey or otherwise transfer, pledge or encumber any property or asset of the Business of the Owner, except in the ordinary course of business.

11. MANAGING COMPANY AS INDEPENDENT CONTRACTOR

Managing Company is an independent contractor and is not an employee of the Owner for any purpose. This Agreement is not intended to create, and shall not be construed as creating a partnership or joint venture between the parties. The duties and obligations of the Owner and Managing Company hereunder shall be several, and not joint or collective.

12. NOTICE

All notices required or permitted to be given under this Agreement shall be in writing and may be delivered by personal delivery, by facsimile, by nationally recognized private courier, by PDF/email, or by postal mail. Notice delivered by mail shall be deemed given five business days after deposit in the postal States mail, postage prepared, registered or certified mail, return receipt requested. Notices delivered by personal delivery, by facsimile, or by nationally recognized private courier shall be deemed given on the first business day following receipt. However, a notice delivered by facsimile or PDF/email shall only be effective upon electronic confirmation of receipt. All notices shall be addressed as follows:-

If to Owner:

SchmArt Technologies Sdn Bhd
15th Floor, Menara Kemayan Jalan Ampang Kuala Lumpur, Malaysia
Fax Number:
Email Address: richard@schmarttech.com

And if to the Managing Company at:

ENGlobal Engineering, Inc.
Attn: Michael L. Burrow
654 N. Sam Houston Parkway E., Suite 400 Houston, Texas 77060
Fax Number: 00 1 409-840-2338
Email Address: mike.burrow@englobal.com

13. ASSIGNMENT

This Agreement shall be binding on and inure to the benefit of the successors and assigns of the parties hereto; provided, however, that this Agreement may not be assigned by Managing Company without the prior written consent of Owner or by Owner without prior written consent of Managing Company.

14. MODIFICATION

This Agreement may not be modified unless such modification is in writing and signed by the parties to this Agreement.

15. MISCELLANEOUS

(a) CONFIDENTIALITY

Owner and Managing Company will each hold all confidential and proprietary information related to the performance of the services or this Agreement in strictest confidence and neither will use such information nor other information concerning either Owner or Managing Company for any purpose intended to result in economic gain, whether or not such undertaking might be competitively disadvantageous to Owner or Managing Company.

(b) SEVERABILITY

If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Agreement or the application of such term or provision to persons or circumstances other than those as to which it is invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the extent permitted by law.

(c) COUNTERPART AND FAXES

This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one counterpart. A signature transmitted by facsimile shall have the same force and effect as an original signature.

(d) INTERPRETATION

The headings in this Agreement are for convenience of reference only and shall not define or limit any of the terms or provisions hereof. All pronouns shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the person or persons referred to may require. Each defined term identified herein with initial capital letters shall have the meaning ascribed to such term herein. Each party agrees that the language and all parts of this Agreement shall be construed as a whole according to its fair meaning, and irrespective of any party or its counsel's role in drafting this Agreement shall not be strictly construed for or against any party. The parties acknowledge that each has reviewed this Agreement and have had the opportunity to have it reviewed by its attorney and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in the interpretation of this Agreement or any part thereof or attachment thereto.

(e) GOVERNING LAW; ARBITRATION.

This Agreement shall be governed in all respects in conformity with the intent of the parties as expressed in the provisions of this Agreement. If in the process of interpreting or carrying out this Agreement, there should arise any disputes between the parties, the parties shall make good-faith efforts to resolve them through mutual friendly consultation. To the extent any issue between the parties is not controlled by this Agreement, then any dispute between the parties shall be governed and construed in accordance with the laws of the State of Texas, United States of America, without regard to its choice of law principles. UNLESS THIS AGREEMENT SPECIFICALLY PROVIDES FOR ANOTHER TYPE OF DISPUTE RESOLUTION WITH RESPECT TO A PARTICULAR KIND OF DISPUTE, ANY AND ALL CONTROVERSIES AND CLAIMS ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH THEREOF, SHALL BE SETTLED BY FINAL AND BINDING ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION THEN IN EFFECT. Any such arbitration proceedings shall be and remain confidential. The panel of arbitrators for any such arbitration shall consist of three members of the American Arbitration Association.

The Common Seal of                          )
SchmArt Technologies Sdn Bhd                )
(Company No 655264-W) was affixed here      )
in the presence of:                         )

MANAGING COMPANY
ENGLOBAL ENGINEERING, INC.

Exhibit 10.21

AMENDMENT OF THE PLAN FOR EGTRRA,
REVENUE RULING 2002-27 AND
REVENUE PROCEDURE 2002-29

AMENDMENT NUMBER ONE TO

ENGLOBAL 401 (K) PLAN

AMENDMENT OF THE PLAN FOR EGTRRA, REVENUE RULING 2002-27 AND
REVENUE PROCEDURE 2002-29

AMENDMENT NUMBER ONE TO ENGLOBAL 401(K) PLAN

BY THIS AGREEMENT, ENGlobal 40I (k) Plan (herein referred to as the Plan) is hereby amended as follows:

ARTICLE I
PREAMBLE

1.1 Adoption and effective date of amendment. This amendment of the Plan is adopted to reflect certain provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), the model amendment of Revenue Ruling 2002-27 and the model amendment of Revenue Procedure 2002-29. This amendment is intended as good faith compliance with the requirements of EGTRRA, the model amendment of Revenue Ruling 2002-27 and the model amendment of Revenue Procedure 2002-29 and is to be construed in accordance with EGTRRA, the model amendment of Revenue Ruling 2002-27 and the model amendment of Revenue Procedure 2002-29 and guidance issued thereunder. Except as otherwise provided, this amendment shall be effective as of the first day of the first Plan Year beginning after December 31, 2001.

1.2 Supersession of inconsistent provisions. This amendment shall supersede the provisions of the Plan to the extent those provisions are inconsistent with the provisions of this amendment.

ARTICLE II
LIMITATIONS ON CONTRIBUTIONS

2.1 Effective date. This Article shall be effective for "limitation years" beginning after December 31, 2001.

2.2 Maximum annual addition. Except to the extent permitted under Article VIII of this amendment and Code Section 414(v), the "annual addition" that may be contributed or allocated to a Participant's account under the Plan for any "limitation year" shall not exceed the lesser of:

(a) $40,000, as adjusted for increases in the cost-of-living under Code
Section 415(d),or

(b) one-hundred percent (100%) of the Participant's "415 Compensation" for the "limitation year."

The "415 Compensation" limit referred to in (b) shall not apply to any contribution for medical benefits after separation from service (within the meaning of Code Section 401(h) or Code Section 419A(f)(2)) which is otherwise treated as an "annual addition.(1)'

ARTICLE III
INCREASE IN COMPENSATION LIMIT

The annual Compensation of each Participant taken into account in determining allocations for any Plan Year beginning after December 31, 2001, shall not exceed $200,000, as adjusted for cost-of-living increases in accordance with Code Section 401(a)(17)(B).

ARTICLE IV
MODIFICATION OF TOP-HEAVY RULES

4.1 Effective date. This Article shall apply for purposes of determining whether the Plan is a top-heavy plan under Code Section 416(g) for Plan Years beginning after December 31, 2001, and whether the Plan satisfies the minimum benefits requirements of Code Section 416(c) for such years. This Article amends Article VIII of the Plan.

4.2 Determination of top-heavy status.

(a) Key employee. Key employee means any Employee or former Employee (including any deceased Employee) who at any time during the Plan Year that includes the determination date was an officer of the Employer having "415 Compensation" greater than $130,000 (as adjusted under Code Section 416(i)(l) for Plan Years beginning after December 31, 2002), a 5-percent owner of the Employer, or a 1-percent owner of the Employer having "415 Compensation" of more than $150,000. The determination of who is a key employee will be made in accordance with Code Section 416(i)(l) and the applicable regulations and other guidance of general applicability issued thereunder.

(b) Determination of present values and amounts. This section (b) shall apply for purposes of determining the present values of accrued benefits and the amounts of account balances of Employees as of the determination date.

(1) Distributions during year ending on the determination date. The present values of accrued benefits and the amounts of account balances of an Employee as of the determination date shall be increased by the distributions made with respect to the Employee under the Plan and any plan aggregated with the Plan under Code Section 416(g)(2) during the 1-year period ending on the determination date. The preceding sentence shall also apply to distributions under a terminated plan which, had it not been terminated, would have been aggregated with the Plan under Code Section 416(g)(2)(A)(i). In the case of a distribution made for a reason other than separation from service, death, or disability, this provision shall be applied by substituting "5-year period" for " 1-year period."

(2) Employees not performing services during year ending on the determination date. The accrued benefits and accounts of any individual who has not performed services for the Employer during the 1-year period ending on the determination date shall not be taken into account,

4.3 Minimum benefits. Employer matching contributions shall be taken into account for purposes of satisfying the minimum contribution requirements of Code Section 416(c)(2) and the Plan. The preceding sentence shall apply with respect to matching contributions under the Plan

or, if the Plan provides that the minimum contribution requirement shall be met in another plan, such other plan. Employer matching contributions that are used to satisfy the minimum contribution requirements shall be treated as matching contributions for purposes of the actual contribution percentage test and other requirements of Code Section 401(m).

ARTICLE V
DIRECT ROLLOVERS OF PLAN DISTRIBUTIONS

5.1 Effective date. This Article shall apply to distributions made after December 31, 2001.

5.2 Modification of definition of eligible retirement plan. For purposes of the direct rollover provisions in Section 6.13 p,63 of the Plan, an eligible retirement plan shall also mean an annuity contract described in Code Section 403(b) and an eligible plan under Code Section 457(b) which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this Plan. The definition of eligible retirement plan shall also apply in the case of a distribution to a surviving spouse, or to a spouse or former spouse who is the alternate payee under a qualified domestic relation order, as defined in Code Section 414(p).

5.3 Modification of definition of eligible rollover distribution to exclude hardship distributions. For purposes of the direct rollover provisions in
Section 6.13 p. 63 of the Plan, any amount that is distributed on account of hardship shall not be an eligible rollover distribution and the distributee may not elect to have any portion of such a distribution paid directly to an eligible retirement plan.

ARTICLE VI
ROLLOVERS FROM OTHER PLANS

The Administrator, operationally and on a nondiscriminatory basis, may limit the source of rollover contributions that may be accepted by this Plan.

ARTICLE VII
REPEAL OF MULTIPLE USE TEST

The multiple use test described in Treasury Regulation Section 1.401(m)-2 and Section 4.7(a)(2) p.36 of the Plan shall not apply for Plan Years beginning after December 31, 2001.

ARTICLE VIII
CATCH-UP CONTRIBUTIONS

8.1 Effective date. This Article shall apply to catch-up contributions made on and after January 1, 2006.

8.2 Applicability. All Employees who are eligible to make salary reductions under this Plan and who are projected to attain age 50 before the end of a calendar year shall be eligible to make catch-up contributions as of the January 1st of that calendar year in accordance with, and subject to the limitations of, Code Section 414(v). Such catch-up contributions shall not be taken into account for purposes of the provisions of the Plan implementing the required limitations of Code Sections 402(g) and 415. The Plan shall not be treated as failing to satisfy the provisions of the 8.1

Plan implementing the requirements of Code Section 401(k)(3), 401(k)(l 1),
401(k)(12), 410(b), or 416, as applicable, by reason of the making of such catch-up contributions.

8.3 Matching contributions. Notwithstanding anything in the Plan to the contrary, catch-up contributions shall not be matched.

ARTICLE IX
SUSPENSION PERIOD FOLLOWING HARDSHIP DISTRIBUTION

A Participant who, after December 31, 2001, receives a hardship distribution pursuant to Regulation 1.401(k)-l(d)(2)(iv) of elective deferrals, shall be prohibited from making elective deferrals and after-tax Employee contributions under this Plan and all other plans maintained by the Employer for six (6) months after receipt of the hardship distribution. A Participant who receives such a hardship distribution in calendar year 2001 shall be prohibited from making elective deferrals and after-tax Employee contributions under this Plan and all other plans maintained by the Employer for six (6) months after receipt of the hardship distribution or until January 1, 2002, if later.

The provisions of paragraph (4) of Section 6.1 l(b) of the Plan with respect to limitations on the amount of deferrals in the year following a hardship distribution shall not apply for years beginning on or after January 1, 2002.

ARTICLE X
DISTRIBUTION UPON SEVERANCE FROM EMPLOYMENT

10.1. Effective date. This Article shall apply for distributions occurring on and after January 1, 2006 regardless of when severance from employment occurred.

10.2. New distributable event. A Participant's Elective Contributions and earnings attributable to these contributions shall be distributed on account of the Participant's severance from employment. However, such a distribution shall be subject to the other provisions of the Plan regarding distributions, other than provisions that require a separation from service before such amounts may be distributed.

ARTICLE XI
MODEL AMENDMENT UNDER REVENUE PROCEDURE 2002-29
MINIMUM DISTRIBUTION REQUIREMENTS

11.1 General Rules.

(a) Effective Date. The provisions of this Article will apply for purposes of determining required minimum distributions for calendar years beginning with the 2003 calendar year, as well as required minimum distributions for the 2002 distribution calendar year that are made on or after December 31, 2002.

(b) Coordination with Minimum Distribution Requirements Previously in Effect. If the total amount of 2002 required minimum distributions under the Plan made to the distributee prior to the effective date of this Article equals or exceeds the required minimum distributions determined under this Article, then no additional distributions will be required to be made for 2002 on or after such date to the distributee. If the total

          amount of 2002 required minimum distributions under the Plan made to
          the distributee prior to the effective date of this Article is less
          than the amount determined under this Article, then required minimum
          distributions for 2002 on and after such date will be determined so
          that the total amount of required minimum distributions for 2002 made
          to the distributee will be the amount determined under this Article.

     (c)  Precedence. The requirements of this Article will take precedence over
          any inconsistent provisions of the Plan.

     (d)  Requirements of Treasury Regulations Incorporated. All distributions
          required under this Article will be determined and made in accordance
          with the Treasury regulations under Code Section 40I(a)(9).

11.2    Time and Manner of Distribution.

     (a)  Required Beginning Date, The Participant's entire interest will be
          distributed, or begin to be distributed, to the Participant no later
          than the Participant's required beginning date.

     (b)  Death of Participant Before Distributions Begin. If the Participant
          dies before distributions begin, the Participant's entire interest
          will be distributed, or begin to be distributed, no later than as
          follows:

          (1) If the Participant's surviving spouse is the Participant's sole
          designated Beneficiary, then, except as provided in Section
          11.2(b)(3), distributions to the surviving spouse will begin by
          December 31st of the calendar year immediately following the calendar
          year in which the Participant died, or by December 31st of the
          calendar year in which the Participant would have attained age 70 1/2,
          if later.

          (2) If the Participant's surviving spouse is not the Participant's
          sole designated Beneficiary, then, except as provided in Section
          11.2(b)(3), distributions to the designated Beneficiary will begin by
          December 31st of the calendar year immediately following the calendar
          year in which the Participant died.

          (3) Participants or Beneficiaries may elect on an individual basis
          whether the 5-year rule or the life expectancy rule in Sections 1
          l,2(b) and 11.4(b) applies to distributions after the death of a
          Participant who has a designated Beneficiary. The election must be
          made no later than the earlier of September 30th of the calendar year
          in which distribution would be required to begin under Section
          11.2(b), or by September 30th of the calendar year which contains the
          fifth anniversary of the Participant's (or, if applicable, surviving
          spouse's) death. If neither the Participant nor Beneficiary makes an
          election under this paragraph, distributions will be made in
          accordance with Sections 11.2(b) and 11,4(b).

          (4) If there is no designated Beneficiary as of September 30th of the
          year following the year of the Participant's death, the Participant's
          entire interest will be distributed by December 31st of the calendar
          year containing the fifth anniversary of the Participant's death.

(5) If the Participant's surviving spouse is the Participant's sole designated Beneficiary and the surviving spouse dies after the Participant but before distributions to the surviving spouse begin, this Section 11,2(b), other than Section 11.2(b)(l), will apply as if the surviving spouse were the Participant.

For purposes of this Section 11.2(b) and Section 11.4, unless Section ll,2(b)(5) applies, distributions are considered to begin on the Participant's required beginning date. If Section 11.2(b)(5) applies, distributions are considered to begin on the date distributions are required to begin to the surviving spouse under Section 11.2(b)(l). If distributions under an annuity purchased from an insurance company irrevocably commence to the Participant before the Participant's required beginning date (or to the Participant's surviving spouse before the date distributions are required to begin to the surviving spouse under Section 11.2(b)(l)), the date distributions are considered to begin is the date distributions actually commence.

(c) Form of Distribution. Unless the Participant's interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the required beginning date, as of the first distribution calendar year distributions will be made in accordance with Sections 11.3 and 11.4 of this Article. If the Participant's interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of Code Section 401(a)(9) and the Treasury regulations.

11.3    Required Minimum Distributions During Participant's Lifetime.

     (a)  Amount of Required Minimum Distribution For Each Distribution Calendar
          Year. During the Participant's lifetime, the minimum amount that will
          be distributed for each distribution calendar year is the lesser of:

          (1) the quotient obtained by dividing the Participant's account
          balance by the distribution period in the Uniform Lifetime Table set
          forth in Section 1.401(a)(9)-9 of the Treasury regulations, using the
          Participant's age as of the Participant's birthday in the distribution
          calendar year; or

          (2) if the Participant's sole designated Beneficiary for the
          distribution calendar year is the Participant's spouse, the quotient
          obtained by dividing the Participant's account balance by the number
          in the Joint and Last Survivor Table set forth in Section
          1.401(a)(9)-9 of the Treasury regulations, using the Participant's and
          spouse's attained ages as of the Participant's and spouse's birthdays
          in the distribution calendar year.

     (b)  Lifetime Required Minimum Distributions Continue Through Year of
          Participant's Death. Required minimum distributions will be determined
          under this Section 11.3 beginning with the first distribution calendar
          year and up to and including the distribution calendar year that
          includes the Participant's date of death,

11.4    Required Minimum Distributions After Participant's Death.

     (a)  Death On or After Date Distributions Begin.

(1) Participant Survived by Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is a designated Beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's account balance by the longer of the remaining life expectancy of the Participant or the remaining life expectancy of the Participant's designated Beneficiary, determined as follows:

(i) The Participant's remaining life expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year.

(ii) If the Participant's surviving spouse is the Participant's sole designated Beneficiary, the remaining life expectancy of the surviving spouse is calculated for each distribution calendar year after the year of the Participant's death using the surviving spouse's age as of the spouse's birthday in that year. For distribution calendar years after the year of the surviving spouse's death, the remaining life expectancy of the surviving spouse is calculated using the age of the surviving spouse as of the spouse's birthday in the calendar year of the spouse's death, reduced by one for each subsequent calendar year.

(iii) If the Participant's surviving spouse is not the Participant's sole designated Beneficiary, the designated Beneficiary's remaining life expectancy is calculated using the age of the beneficiary in the year following the year of the Participant's death, reduced by one for each subsequent year.

(2) No Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is no designated Beneficiary as of September 30th of the year after the year of the Participant's death, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's account balance by the Participant's remaining life expectancy calculated using the age of the Participant in the year of death, reduced by one for each subsequent year.

(b) Death Before Date Distributions Begin.

(1) Participant Survived by Designated Beneficiary. Except as provided in Section 11.4(b)(2), if the Participant dies before the date distributions begin and there is a designated Beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's account balance by the remaining life expectancy of the Participant's designated Beneficiary, determined as provided in Section 11.4(a).

(2) Participants or Beneficiaries may elect on an individual basis whether the 5-year rule or the life expectancy rule in Sections 11.2(b) and 11.4(b) applies to distributions after the death of a Participant who has a designated Beneficiary. The election must be made no later than the earlier of September 30th of the (1)

          calendar year in which distribution would be required to begin under
          Section 11.2(b), or by September 30th of the calendar year which
          contains the fifth anniversary of the Participant's (or, if
          applicable, surviving spouse's) death. If neither the Participant nor
          Beneficiary makes an election under this paragraph, distributions will
          be made in accordance with Sections 11.2(b) and 11.4(b).

          (3) No Designated Beneficiary. If the Participant dies before the date
          distributions begin and there is no designated Beneficiary as of
          September 30th of the year following the year of the Participant's
          death, distribution of the Participant's entire interest will be
          completed by December 31st of the calendar year containing the fifth
          anniversary of the Participant's death.

          (4) Death of Surviving Spouse Before Distributions to Surviving Spouse
          Are Required to Begin. If the Participant dies before the date
          distributions begin, the Participant's surviving spouse is the
          Participant's sole designated Beneficiary, and the surviving spouse
          dies before distributions are required to begin to the surviving
          spouse under Section 11.2(b)(l), this Section 11.4(b) will apply as if
          the surviving spouse were the Participant.

11.5     Definitions.

     (a)  Designated Beneficiary. The individual who is designated as the
          Beneficiary under Section 1.7 p.2 of the Plan and is the designated
          Beneficiary under Code Section 401(a)(9) and section 1.401(a)(9)-l,
          Q&A-4, of the Treasury regulations.

     (b)  Distribution calendar year. A calendar year for which a minimum
          distribution is required. For distributions beginning before the
          Participant's death, the first distribution calendar year is the
          calendar year immediately preceding the calendar year which contains
          the Participant's required beginning date. For distributions beginning
          after the Participant's death, the first distribution calendar year is
          the calendar year in which distributions are required to begin under
          Section 11.2(b). The required minimum distribution for the
          Participant's first distribution calendar year will be made on or
          before the Participant's required beginning date. The required minimum
          distribution for other distribution calendar years, including the
          required minimum distribution for the distribution calendar year in
          which the Participant's required beginning date occurs, will be made
          on or before December 31st of that distribution calendar year.

     (c)  Life expectancy. Life expectancy as computed by use of the Single Life
          Table in section 1.401(a)(9)-9 of the Treasury regulations.

     (d)  Participant's account balance. The account balance as of the last
          valuation date in the calendar year immediately preceding the
          distribution calendar year (valuation calendar year) increased by the
          amount of any contributions made and allocated or forfeitures
          allocated to the account balance as of dates in the valuation calendar
          year after the valuation date and decreased by distributions made in
          the valuation calendar year after the valuation date. The account
          balance for the valuation calendar year includes any amounts rolled
          over or transferred to the plan either in the valuation calendar year
          or in the distribution calendar year if distributed or transferred in
          the valuation calendar year.

(e) Required beginning date. The date specified in Sections 6.5(e) p.55 and 66(g) p 59 of the Plan.

ARTICLE XII
MODEL AMENDMENT UNDER REVENUE RULING 2002-27
COMPENSATION

12.1 Effective date. This Article shall apply to Plan Years and "limitation years" beginning on and after January 1, 2006.

12.2 For purposes of the definition of compensation under the Plan that includes a reference to amounts under Code Section 125, amounts under Code Section 125 include any amounts not available to a Participant in cash in lieu of group health coverage because the Participant is unable to certify that he or she has other health coverage. An amount will be treated as an amount under Code Section 125 only if the Employer does not request or collect information regarding the Participant's other health coverage as part of the enrollment process for the health plan. 12.1

IN WITNESS WHEREOF, this Amendment has been executed this 24th day of October, 2005.

ENGlobal Engineering, Inc.

October 24, 2005

//s// William A. Coskey, CEO

      EMPLOYER

EXHIBIT 10.22

ENGLOBAL 401(K) PLAN

AND ALL SUPPORTING FORMS HAVE BEEN PRODUCED FOR

SCHWAB

Copyright 2005 SunGard Corbel
All Rights Reserved

ENGLOBAL 401 (K) PLAN

TABLE OF CONTENTS

                                    ARTICLE I
                                   DEFINITIONS


                                   ARTICLE II
                                 ADMINISTRATION

2.1      POWERS AND RESPONSIBILITIES OF THE EMPLOYER..........................14
2.2      DESIGNATION OF ADMINISTRATIVE AUTHORITY..............................15
2.3      ALLOCATION AND DELEGATION OF RESPONSIBILITIES........................15
2.4      POWERS AND DUTIES OF THE ADMINISTRATOR...............................15
2.5      RECORDS AND REPORTS..................................................17
2.6      APPOINTMENT OF ADVISERS..............................................17
2.7      INFORMATION FROM EMPLOYER............................................17
2.8      PAYMENT OF EXPENSES..................................................17
2.9      MAJORITY ACTIONS.....................................................17
2.10     CLAIMS PROCEDURE.....................................................18
2.11     CLAIMS REVIEW PROCEDURE..............................................19


                                   ARTICLE III
                                   ELIGIBILITY

3.1      CONDITIONS OF ELIGIBILITY............................................20
3.2      EFFECTIVE DATE OF PARTICIPATION......................................20
3.3      DETERMINATION OF ELIGIBILITY.........................................21
3.4      TERMINATION OF ELIGIBILITY...........................................21
3.5      OMISSION OF ELIGIBLE EMPLOYEE........................................21
3.6      INCLUSION OF INELIGIBLE EMPLOYEE.....................................21
3.7      REHIRED EMPLOYEES AND BREAKS IN SERVICE..............................21


                                   ARTICLE IV
                           CONTRIBUTION AND ALLOCATION

4.1      FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION........................23
4.2      PARTICIPANT'S SALARY REDUCTION ELECTION..............................23
4.3      TIME OF PAYMENT OF EMPLOYER CONTRIBUTION.............................27
4.4      ALLOCATION OF CONTRIBUTION AND EARNINGS..............................27
4.5      ACTUAL DEFERRAL PERCENTAGE TESTS.....................................30

4.6      ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS.......................32
4.7      ACTUAL CONTRIBUTION PERCENTAGE TESTS.................................35
4.8      ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS...................37
4.9      MAXIMUM ANNUAL ADDITIONS.............................................40
4.10     ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS............................42
4.11     ROLLOVERS AND PLAN-TO-PLAN TRANSFERS FROM QUALIFIED
          PLANS...............................................................43
4.12     DIRECTED INVESTMENT ACCOUNT..........................................45
4.13     QUALIFIED MILITARY SERVICE...........................................47
4.14     2005 VOLUNTARY COMPLIANCE............................................47

                                    ARTICLE V
                                   VALUATIONS

5.1      VALUATION OF THE TRUST FUND..........................................47
5.2      METHOD OF VALUATION..................................................48


                                   ARTICLE VI
                   DETERMINATION AND DISTRIBUTION OF BENEFITS

6.1      DETERMINATION OF BENEFITS UPON RETIREMENT............................48
6.2      DETERMINATION OF BENEFITS UPON DEATH.................................48
6.3      DETERMINATION OF BENEFITS IN EVENT OF DISABILITY.....................50
6.4      DETERMINATION OF BENEFITS UPON TERMINATION...........................50
6.5      DISTRIBUTION OF BENEFITS.............................................51
6.6      DISTRIBUTION OF BENEFITS UPON DEATH..................................57
6.7      TIME OF SEGREGATION OR DISTRIBUTION..................................59
6.8      DISTRIBUTION FOR MINOR OR INCOMPETENT BENEFICIARY....................60
6.9      LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN.......................60
6.10     PRE-RETIREMENT DISTRIBUTION..........................................60
6.11     ADVANCE DISTRIBUTION FOR HARDSHIP....................................61
6.12     QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION......................62
6.13     DIRECT ROLLOVER......................................................62

                                   ARTICLE VII
                    AMENDMENT, TERMINATION, MERGERS AND LOANS

 7.1        AMENDMENT.........................................................63

7.2      TERMINATION..........................................................64
7.3      MERGER, CONSOLIDATION OR TRANSFER OF ASSETS..........................65
7.4      LOANS TO PARTICIPANTS................................................65

                                  ARTICLE VIII
                                    TOP HEAVY

8.1      TOP HEAVY PLAN REQUIREMENTS..........................................66
8.2      DETERMINATION OF TOP HEAVY STATUS....................................66

                                   ARTICLE IX
                                  MISCELLANEOUS

9.1      PARTICIPANT'S RIGHTS.................................................69
9.2      ALIENATION...........................................................70
9.3      CONSTRUCTION OF PLAN.................................................71
9.4      GENDER AND NUMBER....................................................71
9.5      LEGAL ACTION.........................................................71
9.6      PROHIBITION AGAINST DIVERSION OF FUNDS...............................71
9.7      EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE...........................72
9.8      INSURER'S PROTECTIVE CLAUSE..........................................72
9.9      Receipt and RELEASE FOR PAYMENTS.....................................72
9.10     ACTION BY THE EMPLOYER...............................................73
9.11     NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY...................73
9.12     HEADINGS.............................................................73
9.13     APPROVAL BY INTERNAL REVENUE SERVICE.................................73
9.14     UNIFORMITY...........................................................74

                                    ARTICLE X
                             PARTICIPATING EMPLOYERS

10.1     ADOPTION BY OTHER EMPLOYERS..........................................74
10.2     REQUIREMENTS OF PARTICIPATING EMPLOYERS..............................74
10.3     DESIGNATION OF AGENT.................................................74
10.4     EMPLOYEE TRANSFERS...................................................75
10.5     PARTICIPATING EMPLOYER CONTRIBUTION AND FORFEITURES..................75
10.6     AMENDMENT............................................................75
10.7     DISCONTINUANCE OF PARTICIPATION......................................75
10.8     ADMINISTRATOR'S AUTHORITY............................................76

ENGLOBAL 401(K) PLAN

THIS PLAN is hereby adopted by ENGlobal Engineering, Inc. (herein referred to as the "Employer").

WITNESSETH:

WHEREAS, the Employer heretofore established a Profit Sharing Plan effective January 1, 1990, (hereinafter called the "Effective Date") known as ENGlobal 401(k) Plan (herein referred to as the "Plan") in recognition of the contribution made to its successful operation by its employees and for the exclusive benefit of its eligible employees; and

WHEREAS, under the terms of the Plan, the Employer has the ability to amend the Plan, provided the Trustee joins in such amendment if the provisions of the Plan affecting the Trustee are amended;

NOW, THEREFORE, effective October 1, 2005, except as otherwise provided, the Employer in accordance with the provisions of the Plan pertaining to amendments thereof, hereby amends the Plan in its entirety and restates the Plan to provide as follows:

ARTICLE I
DEFINITIONS

1.1 "Act" means the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.

1.2 "Administrator" means the person or entity designated by the Employer pursuant to Section 2.2 to administer the Plan on behalf of the Employer.

1.3 "Affiliated Employer" means any corporation which is a member of a controlled group of corporations (as defined in Code Section 414(b)) which includes the Employer; any trade or business (whether or not incorporated) which is under common control (as defined in Code Section 414(c)) with the Employer; any organization (whether or not incorporated) which is a member of an affiliated service group (as defined in Code Section 414(m)) which includes the Employer; and any other entity required to be aggregated with the Employer pursuant to Regulations under Code Section 414(o).

1.4 "Aggregate Account" means, with respect to each Participant, the value of all accounts maintained on behalf of a Participant, whether attributable to Employer or Employee contributions, subject to the provisions of Section 8.2.

1.5 "Anniversary Date" means the last day of the Plan Year.

1.6 "Annuity Starting Date" means, with respect to any Participant, the first day of the first period for which an amount is paid as an annuity, or, in the case of a benefit not payable in the form of an annuity, the first day on which all events have occurred which entitles the Participant to such benefit.

1.7 "Beneficiary" means the person (or entity) to whom the share of a deceased Participant's total account is payable, subject to the restrictions of Sections 6.2 and 6.6.

1.8 "Code" means the Internal Revenue Code of 1986, as amended or replaced from time to time.

1.9 "Compensation" with respect to any Participant means such Participant's wages as defined in Code Section 3401 (a) and all other payments of compensation by the Employer (in the course of the Employer's trade or business) for a Plan Year for which the Employer is required to furnish the Participant a written statement under Code Sections 604l(d), 6051(a)(3) and 6052. Compensation must be determined without regard to any rules under Code Section 3401 (a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code Section 3401(a)(2)).

For purposes of this Section, the determination of Compensation shall be made by:

(a) excluding (even if includible in gross income) reimbursements or other expense allowances, fringe benefits (cash or noncash), moving expenses, deferred compensation, and welfare benefits.

(b) including amounts which are contributed by the Employer pursuant to a salary reduction agreement and which are not includible in the gross income of the Participant under Code Sections 125,132(f)(4), 402(e)(3),
402(h)(l)(B), 403(b) or 457(b), and Employee contributions described in Code Section 414(h)(2) that are treated as Employer contributions.

For a Participant's initial year of participation, Compensation shall be recognized as of such Employee's effective date of participation pursuant to
Section 3.2.

Compensation in excess of $150,000 (or such other amount provided in the Code) shall be disregarded for all purposes other than for purposes of salary deferral elections pursuant to Section 4,2. Such amount shall be adjusted for increases in the cost of living in accordance with Code Section 401(a)(17)(B), except that the dollar increase in effect on January 1 of any calendar year shall be effective for the Plan Year beginning with or within such calendar year. For any short Plan Year the Compensation limit shall be an amount equal to the Compensation limit for the calendar year in which the Plan Year begins multiplied by the ratio obtained by dividing the number of full months in the short Plan Year by twelve (12).

If any class of Employees is excluded from the Plan, then Compensation for any Employee who becomes eligible or ceases to be eligible to participate during a Plan Year shall only include Compensation while the Employee is an Eligible Employee.

For purposes of this Section, if the Plan is a plan described in Code
Section 413(c) or 414(f) (a plan maintained by more than one Employer), the limitation applies separately with respect to the Compensation of any Participant from each Employer maintaining the Plan.

1.10 "Contract" or "Policy" means any life insurance policy, retirement income policy or annuity contract (group or individual) issued pursuant to the terms of the Plan. In the event of any conflict between the terms of this Plan and the terms of any contract purchased hereunder, the Plan provisions shall control.

1.11 "Deferred Compensation" with respect to any Participant means the amount of the Participant's total Compensation which has been contributed to the Plan in accordance with the Participant's deferral election pursuant to Section 4.2 excluding any such amounts distributed as excess "annual additions" pursuant to Section 4.10(a).

1.12 "Designated Investment Alternative" means a specific investment identified by name by the Employer (or such other Fiduciary who has been given the authority to select investment options) as an available investment under the Plan to which Plan assets may be invested by the Trustee pursuant to the investment direction of a Participant.

1.13 "Directed Investment Option" means one or more of the following:

(a) a Designated Investment Alternative.

(b) any other investment permitted by the Plan and the Participant Direction Procedures to which Plan assets may be invested by the Trustee pursuant to the investment direction of a Participant.

1.14 "Early Retirement Date" means the date on which a Participant or Former Participant attains age 55, and has completed at least 3 whole year Periods of Service with the Employer (Early Retirement Age). A Participant shall become fully Vested upon satisfying this requirement if still employed at Early Retirement Age.

A Former Participant who separates from service after satisfying the service requirement for Early Retirement and who thereafter reaches the age requirement contained herein shall be entitled to receive benefits under this Plan.

1.15 "Elective Contribution" means the Employer contributions to the Plan of Deferred Compensation excluding any such amounts distributed as excess "annual additions" pursuant to Section 4.10(a). In addition, any Employer Qualified Non-Elective Contribution made pursuant to Section 4.6(b) which is used to satisfy the "Actual Deferral Percentage" tests shall be considered an Elective Contribution for purposes of the Plan. Any contributions deemed to be Elective Contributions (whether or not used to satisfy the "Actual Deferral Percentage" tests or the "Actual Contribution Percentage" tests) shall be subject to the requirements of Sections 4.2(b) and 4.2(c) and shall further be required to satisfy the nondiscrimination requirements of Regulation 1.401(k)-l(b)(5) and Regulation 1.401(m)-l(b)(5), the provisions of which are specifically incorporated herein by reference.

1.16 "Eligible Employee" means any Employee, subject to the following:

Employees who are Leased Employees within the meaning of Code Sections 414(n)(2) and 414(o)(2) shall not be eligible to participate in this Plan.

Employees whose employment is governed by the terms of a collective bargaining agreement between Employee representatives (within the meaning of Code Section 7701(a)(46)) and the Employer under which retirement benefits were the subject of good faith bargaining between the parties will not be eligible to participate in this Plan unless such agreement expressly provides for coverage in this Plan.

Employees who are nonresident aliens (within the meaning of Code Section 7701(b)(l)(B)) and who receive no earned income (within the meaning of Code
Section 91 l(d)(2)) from the Employer which constitutes income from sources within the United States (within the meaning of Code Section 861(a)(3)) shall not be eligible to participate in this Plan.

Employees of Affiliated Employers shall not be eligible to participate in this Plan unless such Affiliated Employers have specifically adopted this Plan in writing.

Employees classified by the Employer as independent contractors who are subsequently determined by the Internal Revenue Service to be Employees shall not be Eligible Employees for the period during which they were classified as independent contractors.

1.17 "Employee" means any person who is employed by the Employer or Affiliated Employer, and excludes any person who is employed as an independent contractor. Employee shall include Leased Employees within the meaning of Code Sections 414(n)(2) and 414(o)(2) unless such Leased Employees are covered by a plan described in Code Section 414(n)(5) and such Leased Employees do not constitute more than 20% of the recipient's non-highly compensated work force.

1.18 "Employer" means ENGlobal Engineering, Inc. and any successor which shall maintain this Plan; and any predecessor which has maintained this Plan. The Employer is a corporation, with principal offices in the State of Texas. In addition, where appropriate, the term Employer shall include any Participating Employer (as defined in Section 10.1) which shall adopt this Plan.

1.19 "Excess Aggregate Contributions" means, with respect to any Plan Year, the excess of the aggregate amount of the Employer matching contributions made pursuant to Section 4.1 (b) and any qualified non-elective contributions or elective deferrals taken into account pursuant to Section 4.7(c) on behalf of Highly Compensated Participants for such Plan Year, over the maximum amount of such contributions permitted under the limitations of Section 4.7(a) (determined by hypothetically reducing contributions made on behalf of Highly Compensated Participants in order of the actual contribution ratios beginning with the highest of such ratios). Such determination shall be made after first taking into account corrections of any Excess Deferred Compensation pursuant to Section 4.2 and taking into account any adjustments of any Excess Contributions pursuant to Section 4.6.

1.20 "Excess Contributions" means, with respect to a Plan Year, the excess of Elective Contributions used to satisfy the "Actual Deferral Percentage" tests made on behalf of Highly Compensated Participants for the Plan Year over the maximum amount of such contributions permitted under Section 4.5(a) (determined by hypothetically reducing contributions made on behalf of Highly Compensated Participants in order of the actual deferral ratios beginning with the highest of such ratios). Excess Contributions shall be treated as an "annual addition" pursuant to Section 4.9(b).

1.21 "Excess Deferred Compensation" means, with respect to any taxable year of a Participant, the excess of the aggregate amount of such Participant's Deferred Compensation and the elective deferrals pursuant to Section 4.2(f) actually made on behalf of such Participant for such taxable year, over the dollar limitation provided for in Code Section 402(g), which is incorporated herein by reference. Excess Deferred Compensation shall be treated as an "annual addition" pursuant to Section 4.9(b) when contributed to the Plan unless distributed to the affected Participant not later than the first April 15th following the close of the Participant's taxable year. Additionally, for purposes of Sections 8.2 and 4.4(g), Excess Deferred Compensation shall continue to be treated as Employer contributions even if distributed pursuant to Section
4.2(f). However, Excess Deferred Compensation of Non-Highly Compensated Participants is not taken into account for purposes of Section 4.5(a) to the extent such Excess Deferred Compensation occurs pursuant to Section 4.2(d).

1.22 "Fiduciary" means any person who (a) exercises any discretionary authority or discretionary control respecting management of the Plan or exercises any authority or control respecting management or disposition of its assets, (b) renders investment advice for a fee or other compensation, direct or indirect, with respect to any monies or other property of the Plan or has any authority or responsibility to do so, or (c) has any discretionary authority or discretionary responsibility in the administration of the Plan.

1.23 "Fiscal Year" means the Employer's accounting year of 12 months commencing on January 1 of each year and ending the following December 31.

1.24 "Forfeiture" means that portion of a Participant's Account that is not Vested, and occurs on the earlier of:

(a) the distribution of the entire Vested portion of the Participant's Account of a Former Participant who has severed employment with the Employer, or

(b) the last day of the Plan Year in which a Former Participant who has severed employment with the Employer incurs five (5) consecutive 1-Year Breaks in Service.

Regardless of the preceding provisions, if a Former Participant is eligible to share in the allocation of Employer contributions or Forfeitures in the year in which the Forfeiture would otherwise occur, then the Forfeiture will not occur until the end of the first Plan Year for which the Former Participant is not eligible to share in the allocation of Employer contributions or Forfeitures. Furthermore, the term "Forfeiture" shall also include amounts deemed to be Forfeitures pursuant to any other provision of this Plan.

1.25 "Former Participant" means a person who has been a Participant, but who has ceased to be a Participant for any reason.

1.26 "415 Compensation" with respect to any Participant means such Participant's wages as defined in Code Section 3401 (a) and all other payments of compensation by the Employer (in the course of the Employer's trade or business) for a Plan Year for which the Employer is required to furnish the Participant a written statement under Code Sections 604 l(d), 6051(a)(3) and 6052. "415 Compensation" must be determined without regard to any rules under

Code Section 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code Section 3401(a)(2)).

For purposes of this Section, the determination of "415 Compensation" shall include any elective deferral (as defined in Code Section 402(g)(3))f and any amount which is contributed or deferred by the Employer at the election of the Participant and which is not includible in the gross income of the Participant by reason of Code Sections 125, 132(f}(4) or 457.

1.27 "414(s) Compensation" means any definition of compensation that satisfies the nondiscrimination requirements of Code Section 414(s) and the Regulations thereunder. The period for determining 414(s) Compensation must be either the Plan Year or the calendar year ending with or within the Plan Year. An Employer may further limit the period taken into account to that part of the Plan Year or calendar year in which an Employee was a Participant in the component of the Plan being tested. The period used to determine 414(s) Compensation must be applied uniformly to all Participants for the Plan Year.

1.28 "Highly Compensated Employee" means an Employee described in Code
Section 414(q) and the Regulations thereunder, and generally means any Employee who:

(a) was a "five percent owner" as defined in Section 1,34(c) at any time during the "determination year" or the "look-back year"; or

(b) for the "look-back year" had "415 Compensation" from the Employer in excess of $80,000. The $80,000 amount is adjusted at the same time and in the same manner as under Code Section 415(d), except that the base period is the calendar quarter ending September 30, 1996.

The "determination year" means the Plan Year for which testing is being performed, and the "look-back year" means the immediately preceding twelve (12) month period.

A highly compensated former Employee is based on the rules applicable to determining Highly Compensated Employee status as in effect for the "determination year," in accordance with Regulation 1.414(q)-lT, A-4 and IRS Notice 97-45 (or any superseding guidance).

In determining who is a Highly Compensated Employee, Employees who are non-resident aliens and who received no earned income (within the meaning of Code Section 911 (d)(2) from the Employer constituting United States source income within the meaning of Code Section 861(a)(3) shall not be treated as Employees. Additionally, all Affiliated Employers shall be taken into account as a single employer and Leased Employees within the meaning of Code Sections 414(n)(2) and 414(o)(2) shall be considered Employees unless such Leased Employees are covered by a plan described in Code Section 414(n)(5) and are not covered in any qualified plan maintained by the Employer. The exclusion of Leased Employees for this purpose shall be applied on a uniform and consistent basis for all of the Employer's retirement plans. Highly Compensated Former Employees shall be treated as Highly Compensated Employees without regard to whether they performed services during the "determination year."

1.29 "Highly Compensated Participant" means any Highly Compensated Employee who is eligible to participate in the component of the Plan being tested.

1.30 "Hour of Service" means, for purposes of eligibility for participation and vesting, each hour for which an Employee is paid or entitled to payment for the performance of duties for the Employer.

1.31 "Hour of Service" means, for purposes of benefit accrual, (1) each hour for which an Employee is directly or indirectly compensated or entitled to compensation by the Employer for the performance of duties (these hours will be credited to the Employee for the computation period in which the duties are performed); (2) each hour for which an Employee is directly or indirectly compensated or entitled to compensation by the Employer (irrespective of whether the employment relationship has terminated) for reasons other than performance of duties (such as vacation, holidays, sickness, jury duty, disability, lay-off, military duty or leave of absence) during the applicable computation period (these hours will be calculated and credited pursuant to Department of Labor regulation 2530.200b~2 which is incorporated herein by reference); (3) each hour for which back pay is awarded or agreed to by the Employer without regard to mitigation of damages (these hours will be credited to the Employee for the computation period or periods to which the award or agreement pertains rather than the computation period in which the award, agreement or payment is made). The same Hours of Service shall not be credited both under (1) or (2), as the case may be, and under (3).

Notwithstanding (2) above, (i) no more than 501 Hours of Service are required to be credited to an Employee on account of any single continuous period during which the Employee performs no duties (whether or not such period occurs in a single computation period); (ii) an hour for which an Employee is directly or indirectly paid, or entitled to payment, on account of a period during which no duties are performed is not required to be credited to the Employee if such payment is made or due under a plan maintained solely for the purpose of complying with applicable worker's compensation, or unemployment compensation or disability insurance laws; and (iii) Hours of Service are not required to be credited for a payment which solely reimburses an Employee for medical or medically related expenses incurred by the Employee.

For purposes of (2) above, a payment shall be deemed to be made by or due from the Employer regardless of whether such payment is made by or due from the Employer directly, or indirectly through, among others, a trust fund, or insurer, to which the Employer contributes or pays premiums and regardless of whether contributions made or due to the trust fund, insurer, or other entity are for the benefit of particular Employees or are on behalf of a group of Employees in the aggregate.

For purposes of this Section, Hours of Service will be credited for employment with other Affiliated Employers. The provisions of Department of Labor regulations 2530.200b-2(b) and (c) are incorporated herein by reference.

1.32 "Income" means the income or losses allocable to "excess amounts" which shall equal the allocable gain or loss for the "applicable computation period". The income allocable to "excess amounts" for the "applicable computation period" is determined by multiplying the income for the "applicable

computation period" by a fraction. The numerator of the fraction is the "excess amount" for the "applicable computation period." The denominator of the fraction is the total "account balance" attributable to "Employer contributions" as of the end of the "applicable computation period", reduced by the gain allocable to such total amount for the "applicable computation period" and increased by the loss allocable to such total amount for the "applicable computation period". The provisions of this Section shall be applied;

(a) For purposes of Section 4.2(f), by substituting:

(1) "Excess Deferred Compensation" for "excess amounts";

(2) "taxable year of the Participant" for "applicable computation period";

(3) "Deferred Compensation" for "Employer contributions"; and

(4) "Participant's Elective Account" for "account balance."

(b) For purposes of Section 4.6(a), by substituting:

(1) "Excess Contributions" for "excess amounts";

(2) "Plan Year" for "applicable computation period";

(3) "Elective Contributions" for "Employer contributions"; and

(4) "Participant's Elective Account" for "account balance."

(c) For purposes of Section 4.8(a), by substituting:

(1) "Excess Aggregate Contributions" for "excess amounts";

(2) "Plan Year" for "applicable computation period";

(3) "Employer matching contributions made pursuant to Section 4.1 (b) and any qualified non-elective contributions or elective deferrals taken into account pursuant to Section 4.7(c)" for "Employer contributions"; and

(4) "Participant's Account" for "account balance."

Income allocable to any distribution of Excess Deferred Compensation on or before the last day of the taxable year of the Participant shall be calculated from the first day of the taxable year of the Participant to the date on which the distribution is made pursuant to either the "fractional method" or the "safe harbor method." Under such "safe harbor method," allocable Income for such period shall be deemed to equal ten percent (10%) of the Income allocable to such Excess Deferred Compensation multiplied by the number of calendar months in such period. For purposes of determining the number of calendar months in such period, a distribution occurring on or before the fifteenth day of the month shall be treated as having been made on the last day of the preceding month and a distribution occurring after such fifteenth day shall be treated as having been made on the first day of the next subsequent month.

1.33 "Investment Manager" means an entity that (a) has the power to manage, acquire, or dispose of Plan assets and (b) acknowledges fiduciary responsibility to the Plan in writing. Such entity must be a person, firm, or corporation registered as an investment adviser under the Investment Advisers Act of 1940, a bank, or an insurance company.

1.34 "Key Employee" means an Employee as defined in Code Section 416(i) and the Regulations thereunder. Generally, any Employee or former Employee (as well as each of the Employee's or former Employee's Beneficiaries) is considered a Key Employee if the Employee, at any time during the Plan Year that contains the "Determination Date" or any of the preceding four (4) Plan Years, has been included in one of the following categories:

(a) an officer of the Employer (as that term is defined within the meaning of the Regulations under Code Section 416) having annual "415 Compensation" greater than 50 percent of the amount in effect under Code
Section 415(b)(l)(A) for any such Plan Year.

(b) one of the ten employees having annual "415 Compensation" from the Employer for a Plan Year greater than the dollar limitation in effect under Code Section 415(c)(l)(A) for the calendar year in which such Plan Year ends and owning (or considered as owning within the meaning of Code Section 318) both more than one-half percent interest and the largest interests in the Employer.

(c) a "five percent owner" of the Employer. "Five percent owner" means any person who owns (or is considered as owning within the meaning of Code
Section 318) more than five percent (5%) of the outstanding stock of the Employer or stock possessing more than five percent (5%) of the total combined voting power of all stock of the Employer or, in the case of an unincorporated business, any person who owns more than five percent (5%) of the capital or profits interest in the Employer. In determining percentage ownership hereunder, employers that would otherwise be aggregated under Code Sections 414(b), (c), (m) and (o) shall be treated as separate employers.

(d) a "one percent owner" of the Employer having an annual "415 Compensation" from the Employer of more than $150,000. "One percent owner" means any person who owns (or is considered as owning within the meaning of Code Section 318) more than one percent (1%) of the outstanding stock of the Employer or stock possessing more than one percent (1%) of the total combined voting power of all stock of the Employer or, in the case of an unincorporated business, any person who owns more than one percent (1%) of the capital or profits interest in the Employer. In determining percentage ownership hereunder, employers that would otherwise be aggregated under Code Sections 414(b), (c), (m) and (o) shall be treated as separate employers. However, in determining whether an individual has "415 Compensation" of more than $150,000, "415 Compensation" from each employer required to be aggregated under Code Sections 414(b), (c), (m) and (o) shall be taken into account.

For purposes of this Section, the determination of "415 Compensation" shall be made by including amounts which are contributed by the Employer pursuant to a salary reduction agreement and which are not includible in the gross income of the Participant under Code Sections 125, 132(f)(4), 402(e)(3), 402(h)(l)(B), 403(b) or 457(b), and Employee contributions described in Code Section 414(h)(2) that are treated as Employer contributions.

1.35 "Late Retirement Date" means a Participant's actual Retirement Date after having reached Normal Retirement Date.

1.36 "Leased Employee" means any person (other than an Employee of the recipient Employer) who pursuant to an agreement between the recipient Employer and any other person or entity ("leasing organization") has performed services for the recipient (or for the recipient and related persons determined in accordance with Code Section 414(n)(6)) on a substantially foil time basis for a period of at least one year, and such services are performed under primary direction or control by the recipient Employer, Contributions or benefits provided a Leased Employee by the leasing organization which are attributable to services performed for the recipient Employer shall be treated as provided by the recipient Employer. Furthermore, Compensation for a Leased Employee shall only include Compensation from the leasing organization that is attributable to services performed for the recipient Employer. A Leased Employee shall not be considered an Employee of the recipient Employer:

(a) if such employee is covered by a money purchase pension plan providing:

(1) a nonintegrated employer contribution rate of at least 10% of compensation, as defined in Code Section 415(c)(3);

(2) immediate participation;

(3) full and immediate vesting; and

(b) if Leased Employees do not constitute more than 20% of the recipient Employer's nonhighly compensated work force.

1.37 "Non-Elective Contribution" means the Employer contributions to the Plan excluding, however, contributions made pursuant to the Participant's deferral election provided for in Section 4.2 and any Qualified Non-Elective Contribution used in the "Actual Deferral Percentage" tests,

1.38 "Non-Highly Compensated Participant" means any Participant who is not a Highly Compensated Employee. However, for purposes of Section 4.5(a) and
Section 4.6, if the prior year testing method is used, a Non-Highly Compensated Participant shall be determined using the definition of Highly Compensated Employee in effect for the preceding Plan Year.

1.39 "Non-Key Employee" means any Employee or former Employee (and such Employee's or former Employee's Beneficiaries) who is not, and has never been a Key Employee.

1.40 "Normal Retirement Age" means the Participant's 65th birthday, or the Participant's 3rd anniversary of joining the Plan, if later. A Participant shall become fully Vested in the Participant's Account upon attaining Normal Retirement Age.

1.41 "Normal Retirement Date" means the Participant's Normal Retirement Age.

1.42 " 1 -Year Break in Service" means, for purposes of eligibility for participation and vesting, a Period of Severance of at least 12 consecutive months.

1.43 "Participant" means any Eligible Employee who participates in the Plan and has not for any reason become ineligible to participate further in the Plan.

1.44 "Participant Direction Procedures" means such instructions, guidelines or policies, the terms of which are incorporated herein, as shall be established pursuant to Section 4.12 and observed by the Administrator and applied and provided to Participants who have Participant Directed Accounts.

1.45 "Participant's Account" means the account established and maintained by the Administrator for each Participant with respect to such Participant's total interest in the Plan and Trust resulting from the Employer Non-Elective Contributions.

1.46 "Participant's Combined Account" means the total aggregate amount of each Participant's Elective Account and Participant's Account.

1.47 "Participant's Directed Account" means that portion of a Participant's interest in the Plan with respect to which the Participant has directed the investment in accordance with the Participant Direction Procedure.

1.48 "Participant's Elective Account" means the account established and maintained by the Administrator for each Participant with respect to the Participant's total interest in the Plan and Trust resulting from the Employer Elective Contributions used to satisfy the "Actual Deferral Percentage" tests. A separate accounting shall be maintained with respect to that portion of the Participant's Elective Account attributable to such Elective Contributions pursuant to Section 4,2 and any Employer Qualified Non-Elective Contributions.

1.49 "Participant's Transfer/Rollover Account" means the account established and maintained by the Administrator for each Participant with respect to the Participant's total interest in the Plan resulting from amounts transferred to this Plan from a direct plan-to-plan transfer and/or with respect to such Participant's interest in the Plan resulting from amounts transferred from another qualified plan or "conduit" Individual Retirement Account in accordance with Section 4.11,

A separate accounting shall be maintained with respect to that portion of the Participant's Transfer/Rollover Account attributable to transfers (within the meaning of Code Section 414(1)) and "rollovers."

1.50 "Period of Service" means the aggregate of all periods commencing with the Employee's first day of employment or reemployment with the Employer or Affiliated Employer and ending on the date a 1-Year Break in Service begins. The first day of employment or reemployment is the first day the Employee performs

an Hour of Service. An Employee will also receive partial credit for any Period of Severance of less than twelve (12) consecutive months. Fractional periods of a year will be expressed in terms of days.

Periods of Service with the following employers shall be recognized:
Triangle Engineers & Constructors, Inc.; RPM Engineering, Inc.; Petrocon of Louisiana, Inc.; Constant Power Manufacturing, Inc.; IDS Engineering, Inc.; ENGlobal Engineering, Inc.; ENGlobal Construction Resources, Inc. (formerly known as Petrocon Construction Resources, Inc.); ENGlobal Systems, Inc. (formerly known as Petrocon Systems, Inc.); ENGlobal Automation Group, Inc. (formerly known as Petrocon Technologies, Inc.); ENGlobal Corporate Services, Inc. (formerly known as Industrial Data Systems, Inc.); ENGlobal Design Group, Inc. (formerly known as Engineering Design Group, Inc.)

1.51 "Period of Severance" means a continuous period of time during which the Employee is not employed by the Employer. Such period begins on the date the Employee retires, quits or is discharged, or if earlier, the twelve (12) month anniversary of the date on which the Employee was otherwise first absent from service.

In the case of an individual who is absent from work for maternity or paternity reasons, the twelve (12) consecutive month period beginning on the first anniversary of the first day of such absence shall not constitute a 1-Year Break in Service. For purposes of this paragraph, an absence from work for maternity or paternity reasons means an absence (a) by reason of the pregnancy of the individual, (b) by reason of the birth of a child of the individual, (c) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or (d) for purposes of caring for such child for a period beginning immediately following such birth or placement.

1.52 "Plan" means this instrument, including all amendments thereto.

1.53 "Plan Year" means the Plan's accounting year of twelve (12) months commencing on January 1 of each year and ending the following December 31.

1.54 "Qualified Non-Elective Contribution" means any Employer contributions made pursuant to Section 4.6(b) and Section 4.8(f). Such contributions shall be considered an Elective Contribution for the purposes of the Plan and used to satisfy the "Actual Deferral Percentage" tests or the "Actual Contribution Percentage" tests.

1.55 "Regulation" means the Income Tax Regulations as promulgated by the Secretary of the Treasury or a delegate of the Secretary of the Treasury, and as amended from time to time.

1.56 "Retired Participant" means a person who has been a Participant, but who has become entitled to retirement benefits under the Plan.

1.57 "Retirement Date" means the date as of which a Participant retires for reasons other than Total and Permanent Disability, whether such retirement occurs on a Participant's Normal Retirement Date, Early or Late Retirement Date (see Section 6.1).

1.58 "Terminated Participant" means a person who has been a Participant, but whose employment has been terminated other than by death, Total and Permanent Disability or retirement.

1.59 "Top Heavy Plan" means a plan described in Section 8.2(a).

1.60 "Top Heavy Plan Year" means a Plan Year during which the Plan is a Top Heavy Plan.

1.61 "Total and Permanent Disability" means a condition, certified by a physician selected by the Employer, in which a person is unable to engage in any substantial gainful activity due to physical or mental impairment. The physician must certify that the condition:

(a) has lasted (or is expected to last) at least 12 consecutive months; or

(b) is expected to result in death.

1.62 "Trustee" means the person or entity named as trustee herein or in any separate trust forming a part of this Plan, and any successors.

1.63 "Trust Agreement" means any trust agreement between the Employer and the Trustee with respect to the Plan, as such may be in effect from time to time, the provisions of which are incorporated herein by reference.

1.64 "Trust Fund" means the assets of the Plan and Trust as the same shall exist from time to time.

1.65 "Valuation Date" means the Anniversary Date and may include any other date or dates deemed necessary or appropriate by the Administrator for the valuation of the Participants' accounts during the Plan Year, which may include any day that the Trustee, any transfer agent appointed by the Trustee or the Employer or any stock exchange used by such agent, are open for business.

1.66 "Vested" means the nonforfeitable portion of any account maintained on behalf of a Participant.

1.67 "Year of Service" means the computation period of twelve (12) consecutive months, herein set forth, during which an Employee has at least 1000 Hours of Service.

The computation period shall be the Plan Year if not otherwise set forth herein.

Notwithstanding the foregoing, for any short Plan Year, the determination of whether an Employee has completed a Year of Service shall be made in accordance with Department of Labor regulation 2530.203-2(c).

Years of Service with the following employers shall be recognized; Triangle Engineers & Constructors, Inc.; RPM Engineering, Inc.; Petrocon of Louisiana, Inc.; Constant Power Manufacturing, Inc.; IDS Engineering, Inc.; ENGlobal Engineering, Inc.; ENGlobal Construction Resources, Inc. (formerly known as

Petrocon Construction Resources, Inc.); ENGlobal Systems, Inc. (formerly known as Petrocon Systems, Inc.); ENGlobal Automation Group, Inc. (formerly known as Petrocon Technologies, Inc.); ENGlobal Corporate Services, Inc. (formerly known as Industrial Data Systems, Inc.); ENGlobal Design Group, Inc. (formerly known as Engineering Design Group, Inc.)

Years of Service with any Affiliated Employer shall be recognized,

ARTICLE II
ADMINISTRATION

2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER

(a) In addition to the general powers and responsibilities otherwise provided for in this Plan, the Employer shall be empowered to appoint and remove the Trustee and the Administrator from time to time as it deems necessary for the proper administration of the Plan to ensure that the Plan is being operated for the exclusive benefit of the Participants and their Beneficiaries in accordance with the terms of the Plan, the Code, and the Act. The Employer may appoint counsel, specialists, advisers, agents (including any nonfiduciary agent) and other persons as the Employer deems necessary or desirable in connection with the exercise of its fiduciary duties under this Plan. The Employer may compensate such agents or advisers from the assets of the Plan as fiduciary expenses (but not including any business (settlor) expenses of the Employer), to the extent not paid by the Employer.

(b) The Employer may, by written agreement or designation, appoint at its option an Investment Manager (qualified under the Investment Company Act of 1940 as amended), investment adviser, or other agent to provide direction to the Trustee with respect to any or all of the Plan assets. Such appointment shall be given by the Employer in writing in a form acceptable to the Trustee and shall specifically identify the Plan assets with respect to which the Investment Manager or other agent shall have authority to direct the investment.

(c) The Employer shall establish a "funding policy and method," i.e., it shall determine whether the Plan has a short run need for liquidity (e.g., to pay benefits) or whether liquidity is a long run goal and investment growth (and stability of same) is a more current need, or shall appoint a qualified person to do so. The Employer or its delegate shall communicate such needs and goals to the Trustee, who shall coordinate such Plan needs with its investment policy. The communication of such a "funding policy and method" shall not, however, constitute a directive to the Trustee as to the investment of the Trust Funds. Such "funding policy and method" shall be consistent with the objectives of this Plan and with the requirements of Title I of the Act.

(d) The Employer shall periodically review the performance of any Fiduciary or other person to whom duties have been delegated or allocated by it under the provisions of this Plan or pursuant to procedures

established hereunder. This requirement may be satisfied by formal periodic review by the Employer or by a qualified person specifically designated by the Employer, through day-to-day conduct and evaluation, or through other appropriate ways.

2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY

The Employer shall appoint one or more Administrators. Any person, including, but not limited to, the Employees of the Employer, shall be eligible to serve as an Administrator. Any person so appointed shall signify acceptance by filing written acceptance with the Employer. An Administrator may resign by delivering a written resignation to the Employer or be removed by the Employer by delivery of written notice of removal, to take effect at a date specified therein, or upon delivery to the Administrator if no date is specified.

The Employer, upon the resignation or removal of an Administrator, shall promptly designate a successor to this position. If the Employer does not appoint an Administrator, the Employer will function as the Administrator.

2.3 ALLOCATION AND DELEGATION OF RESPONSIBILITIES

If more than one person is appointed as Administrator, the responsibilities of each Administrator may be specified by the Employer and accepted in writing by each Administrator. In the event that no such delegation is made by the Employer, the Administrators may allocate the responsibilities among themselves, in which event the Administrators shall notify the Employer and the Trustee in writing of such action and specify the responsibilities of each Administrator. The Trustee thereafter shall accept and rely upon any documents executed by the appropriate Administrator until such time as the Employer or the Administrators file with the Trustee a written revocation of such designation.

2.4 POWERS AND DUTIES OF THE ADMINISTRATOR

The primary responsibility of the Administrator is to administer the Plan for the exclusive benefit of the Participants and their Beneficiaries, subject to the specific terms of the Plan. The Administrator shall administer the Plan in accordance with its terms and shall have the power and discretion to construe the terms of the Plan and to determine all questions arising in connection with the administration, interpretation, and application of the Plan. Any such determination by the Administrator shall be conclusive and binding upon all persons. The Administrator may establish procedures, correct any defect, supply any information, or reconcile any inconsistency in such manner and to such extent as shall be deemed necessary or advisable to carry out the purpose of the Plan; provided, however, that any procedure, discretionary act, interpretation or construction shall be done in a nondiscriminatory manner based upon uniform principles consistently applied and shall be consistent with the intent that the Plan shall continue to be deemed a qualified plan under the terms of Code
Section 401(a), and shall comply with the terms of the Act and all regulations issued pursuant thereto. The Administrator shall have all powers necessary or appropriate to accomplish the Administrator's duties under the Plan.

The Administrator shall be charged with the duties of the general administration of the Plan as set forth under the terms of the Plan, including, but not limited to, the following:

(a) the discretion to determine all questions relating to the eligibility of Employees to participate or remain a Participant hereunder and to receive benefits under the Plan;

(b) to compute, certify, and direct the Trustee with respect to the amount and the kind of benefits to which any Participant shall be entitled hereunder;

(c) to authorize and direct the Trustee with respect to all discretionary or otherwise directed disbursements from the Trust;

(d) to maintain all necessary records for the administration of the Plan;

(e) to interpret the provisions of the Plan and to make and publish such rules for regulation of the Plan as are consistent with the terms hereof;

(f) to determine the size and type of any Contract to be purchased from any insurer, and to designate the insurer from which such Contract shall be purchased;

(g) to compute and certify to the Employer and to the Trustee from time to time the sums of money necessary or desirable to be contributed to the Plan;

(h) to prepare and implement a procedure for notifying Participants and Beneficiaries of their rights to elect joint and survivor annuities as required by the Act and regulations thereunder;

(i) to prepare and implement a procedure to notify Eligible Employees that they may elect to have a portion of their Compensation deferred or paid to them in cash;

(j) to act as the named Fiduciary responsible for communications with Participants as needed to maintain Plan compliance with Act Section 404(c), including, but not limited to, the receipt and transmitting of Participant's directions as to the investment of their account(s) under the Plan and the formulation of policies, rules, and procedures pursuant to which Participants may give investment instructions with respect to the investment of their accounts;

(k) to determine the validity of, and take appropriate action with respect to, any qualified domestic relations order received by it; and

(1) to assist any Participant regarding the Participant's rights, benefits, or elections available under the Plan,

2.5 RECORDS AND REPORTS

The Administrator shall keep a record of all actions taken and shall keep all other books of account, records, policies, and other data that may be necessary for proper administration of the Plan and shall be responsible for supplying all information and reports to the Internal Revenue Service, Department of Labor, Participants, Beneficiaries and others as required by law.

2.6 APPOINTMENT OF ADVISERS

The Administrator, or the Trustee with the consent of the Administrator, may appoint counsel, specialists, advisers, agents (including nonfiduciary agents) and other persons as the Administrator or the Trustee deems necessary or desirable in connection with the administration of this Plan, including but not limited to agents and advisers to assist with the administration and management of the Plan, and thereby to provide, among such other duties as the Administrator may appoint, assistance with maintaining Plan records and the providing of investment information to the Plan's investment fiduciaries and to Plan Participants.

2.7 INFORMATION FROM EMPLOYER

The Employer shall supply full and timely information to the Administrator on all pertinent facts as the Administrator may require in order to perform its function hereunder and the Administrator shall advise the Trustee of such of the foregoing facts as may be pertinent to the Trustee's duties under the Plan. The Administrator may rely upon such information as is supplied by the Employer and shall have no duty or responsibility to verify such information.

2.8 PAYMENT OF EXPENSES

All expenses of administration may be paid out of the Trust Fund unless paid by the Employer. Such expenses shall include any expenses incident to the functioning of the Administrator, or any person or persons retained or appointed by any named Fiduciary incident to the exercise of their duties under the Plan, including, but not limited to, fees of accountants, counsel, Investment Managers, agents (including nonfiduciary agents) appointed for the purpose of assisting the Administrator or the Trustee in carrying out the instructions of Participants as to the directed investment of their accounts and other specialists and their agents, the costs of any bonds required pursuant to Act
Section 412, and other costs of administering the Plan. Until paid, the expenses shall constitute a liability of the Trust Fund. Notwithstanding the foregoing, the Employer, on a uniform and nondiscriminatory basis, may direct that expenses and fees that are allocable to the accounts of a specific Participant shall be paid from that Participant's accounts.

2.9 MAJORITY ACTIONS

Except where there has been an allocation and delegation of administrative authority pursuant to Section 2.3, if there is more than one Administrator, then they shall act by a majority of their number, but may authorize one or more of them to sign all papers on their behalf.

2.10 CLAIMS PROCEDURE

Claims for benefits under the Plan may be filed in writing with the Administrator. Notice of the disposition of a claim shall be furnished to the claimant within ninety (90) days after the application is filed, or such period as is required by applicable law or Department of Labor regulation, unless the Administrator determines that special circumstances require an extension of time for processing the claim. If it is determined that an extension is needed, written notice of the extension shall be furnished to the claimant prior to the termination of the initial 90-day period specifying the special circumstances requiring the extension and the date by which the plan expects to render a decision. In no event shall such extension exceed a period of 90 days from the end of such initial period.

In the case of a claim for disability benefits, notice of the disposition of a claim shall be furnished to the claimant within forty-five (45) days after the application is filed, or such period as is required by applicable law or Department of Labor regulation, unless the Administrator determines that circumstances beyond the Plan's control require an extension of time of up to thirty (30) days for processing the claim. If it is determined that an extension is needed, notice of the extension shall be furnished to the claimant prior to the termination of the initial 45-day period specifying the circumstances requiring the extension and the date by which the Plan expects to render a decision. If prior to the end of the first 30-day extension period, the Administrator determines that circumstances beyond the Plan's control require an additional extension of time of up to thirty (30) days, the period for deciding the claim may be extended. If an additional 30-day extension is needed, notice of the extension shall be furnished to the claimant prior to the termination of the first 30-day extension period specifying the circumstances requiring the further extension and the date by which the Plan expects to render a decision. For any extension, the notice must explain the standards on which entitlement to a benefit is based, the issues that prevent a decision on the claim, and the additional information needed to resolve those issues. The claimant will be given at least 45 days to respond to the request for additional information.

In the event the claim is denied, the reasons for the denial shall be specifically set forth in the notice in language calculated to be understood by the claimant, pertinent provisions of the Plan shall be cited, and, where appropriate, an explanation as to how the claimant can perfect the claim will be provided. In addition, the claimant shall be furnished with an explanation of the Plan's claims review procedure and the time limits applicable to such procedure. In the case of a claim for disability benefits, the claimant will be provided with a copy of any internal rule, guideline, protocol or other similar criterion that was relied upon in denying the claim, or the claimant will be provided with a statement that the rule, guideline, protocol or similar criterion was relied upon and that a copy of the rule, guideline, protocol or similar criterion will be provided to the claimant free of charge upon request. Also, in the case of a claim for disability benefits that was denied based on medical necessity or experimental treatment or similar exclusion or limit, the claimant will be provided with an explanation of the specific or clinical judgment (applying the terms of the Plan to the medical circumstances) that was relied upon to deny the claim, or a statement that such explanation will be provided to the claimant free of charge upon request.

2.11 CLAIMS REVIEW PROCEDURE

Any Employee, former Employee, or Beneficiary of either, who has been denied a benefit by a decision of the Administrator pursuant to Section 2.10 shall be entitled to request the Administrator to give further consideration to a claim by filing with the Administrator a written request for a full and fair review. Such request, together with a written statement of the reasons why the claimant believes the claim should be allowed and any written comments, documents, records and other information relating to the claim, shall be filed with the Administrator no later than sixty (60) days after receipt of the notification provided for in Section 2.10.

If the claim is for disability benefits, the request for review must be filed with the Administrator no later than one hundred-eighty (180) days after receipt of the notification provided for in Section 2.10.

A claimant shall be provided, upon request and free of charge, reasonable access to (and copies of) all documents, records and other information relevant to the claim. The Administrator shall then conduct a review of such claim that takes into account all comments, documents, records and other information submitted by the claimant relating to the claim, regardless of whether such information was submitted or considered in the initial benefit determination.

If the claim is for disability benefits, the review will be conducted without regard to the initial adverse benefit determination by an appropriate named fiduciary of the Plan who is neither the individual nor the subordinate of the individual who made the initial adverse benefit determination. If the initial adverse benefit determination is based in whole or in part on medical judgment, the appropriate named fiduciary will consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment and who was neither the individual nor a subordinate of the individual consulted in connection with the initial adverse benefit determination. Any medical or vocational experts whose advise was obtained on behalf of the Plan in connection with the initial adverse benefit determination will be identified, regardless of whether the advice was relied upon in making the adverse benefit determination.

A final decision as to the allowance of the claim shall be made by the Administrator within sixty (60) days of receipt of the appeal (unless there has been an extension of sixty (60) days due to special circumstances, provided the delay, the special circumstances occasioning it, and the expected decision date are communicated to the claimant within the sixty (60) day period). If the claim relates to disability benefits, then the previous sentence will apply but with the substitution of "forty-five (45)" for every instance in which the phrase "sixty (60)" appears in the sentence.

Such communication shall be written in a manner calculated to be understood by the claimant and shall include: specific reasons for the decision, specific references to the pertinent Plan provisions on which the decision is based, a statement that the claimant is entitled to receive reasonable access to (and copies of) all documents, records and other information relevant to the claim, a statement describing any voluntary appeal procedures offered by the Plan and the claimant's right to obtain information about such procedures, and a statement of the claimant's right to bring an action under Act Section 502(a).

In the case of a claim for disability benefits, the claimant will be provided with a copy of any internal rule, guideline, protocol or other similar criterion that was relied upon in denying the claim, or the claimant will be provided with a statement that the rule, guideline, protocol or similar criterion was relied upon and that a copy of the rule, guideline, protocol or similar criterion will be provided to the claimant free of charge upon request. Also, in the case of a claim for disability benefits that was denied based on medical necessity or experimental treatment or similar exclusion or limit, the claimant will be provided with an explanation of the specific or clinical judgment (applying the terms of the Plan to the medical circumstances) that was relied upon to deny the claim, or a statement that such explanation will be provided to the claimant free of charge upon request,

ARTICLE III
ELIGIBILITY

3.1 CONDITIONS OF ELIGIBILITY

Any Eligible Employee who has completed a 60 day Period of Service and has attained age 21 shall be eligible to participate hereunder as of the date such Employee has satisfied such requirements. However, any Employee who was a Participant in the Plan prior to the effective date of this amendment and restatement shall continue to participate in the Plan.

3.2 EFFECTIVE DATE OF PARTICIPATION

An Eligible Employee shall become a Participant effective as of the first day of the Plan Year quarter coinciding with or next following the date such Employee met the eligibility requirements of Section 3.1, provided said Employee was still employed as of such date (or if not employed on such date, as of the date of rehire if a 1-Year Break in Service has not occurred or, if later, the date that the Employee would have otherwise entered the Plan had the Employee not terminated employment).

If an Eligible Employee satisfies the Plan's eligibility requirement conditions by reason of recognition of service with a predecessor employer, such Employee will become a Participant as of the day the Plan credits service with a predecessor employer or, if later, the date the Employee would have otherwise entered the Plan had the service with the predecessor employer been service with the Employer.

If an Employee, who has satisfied the Plan's eligibility requirements and would otherwise have become a Participant, shall go from a classification of a noneligible Employee to an Eligible Employee, such Employee shall become a Participant on the date such Employee becomes an Eligible Employee or, if later, the date that the Employee would have otherwise entered the Plan had the Employee always been an Eligible Employee.

If an Employee, who has satisfied the Plan's eligibility requirements and would otherwise become a Participant, shall go from a classification of an Eligible Employee to a noneligible class of Employees, such Employee shall become a Participant in the Plan on the date such Employee again becomes an Eligible Employee, or, if later, the date that the Employee would have otherwise entered the Plan had the Employee always been an Eligible Employee. However, if such Employee incurs a 1-Year Break in Service, eligibility will be determined under the Break in Service rules set forth in Section 3.7.

3.3 DETERMINATION OF ELIGIBILITY

The Administrator shall determine the eligibility of each Employee for participation in the Plan based upon information furnished by the Employer. Such determination shall be conclusive and binding upon all persons, as long as the same is made pursuant to the Plan and the Act. Such determination shall be subject to review pursuant to Section 2.11.

3.4 TERMINATION OF ELIGIBILITY

In the event a Participant shall go from a classification of an Eligible Employee to an ineligible Employee, such Former Participant shall continue to vest in the Plan for each Period of Service completed while a noneligible Employee, until such time as the Participant's Account is forfeited or distributed pursuant to the terms of the Plan. Additionally, the Former Participant's interest in the Plan shall continue to share in the earnings of the Trust Fund.

3.5 OMISSION OF ELIGIBLE EMPLOYEE

If, in any Plan Year, any Employee who should be included as a Participant in the Plan is erroneously omitted and discovery of such omission is not made until after a contribution by the Employer for the year has been made and allocated, then the Employer shall make a subsequent contribution so that the omitted Employee receives a total amount which the Employee would have received (including both Employer contributions and earnings thereon) had the Employee not been omitted. Such contribution shall be made regardless of whether it is deductible in whole or in part in any taxable year under applicable provisions of the Code.

3.6 INCLUSION OF INELIGIBLE EMPLOYEE

If, in any Plan Year, any person who should not have been included as a Participant in the Plan is erroneously included and discovery of such inclusion is not made until after a contribution for the year has been made and allocated, the Employer shall be entitled to recover the contribution made with respect to the ineligible person provided the error is discovered within twelve (12) months of the date on which it was made. Otherwise, the amount contributed with respect to the ineligible person shall constitute a Forfeiture for the Plan Year in which the discovery is made. Notwithstanding the foregoing, any Deferred Compensation made by an ineligible person shall be distributed to the person (along with any earnings attributable to such Deferred Compensation).

3.7 REHIRED EMPLOYEES AND BREAKS IN SERVICE

(a) If any Participant becomes a Former Participant due to severance from employment with the Employer and is reemployed by the Employer before a 1-Year Break in Service occurs, the Former Participant shall become a Participant as of the reemployment date.

(b) If any Participant becomes a Former Participant due to severance from employment with the Employer and is reemployed after a 1 -Year Break in Service has occurred, Periods of Service shall include Periods of Service prior to the 1-Year Break in Service subject to the following rules:

(1) In the case of a Former Participant who under the Plan does not have a nonforfeitable right to any interest in the Plan resulting from Employer contributions, Periods of Service before a period of 1-Year Break in Service will not be taken into account if the number of consecutive 1-Year Breaks in Service equal or exceed the greater of (A) five (5) or (B) the aggregate number of pre-break Periods of Service. Such aggregate number of Periods of Service will not include any Periods of Service disregarded under the preceding sentence by reason of prior 1-Year Breaks in Service.

(2) A Former Participant shall participate in the Plan as of the date of reemployment.

(c) After a Former Participant who has severed employment with the Employer incurs five (5) consecutive 1-Year Breaks in Service, the Vested portion of said Former Participant's Account attributable to pre-break service shall not be increased as a result of post-break service. In such case, separate accounts will be maintained as follows:

(1) one account for nonforfeitable benefits attributable to pre-break service; and

(2) one account representing the Participant's Employer derived account balance in the Plan attributable to post-break service.

(d) If any Participant becomes a Former Participant due to severance of employment with the Employer and is reemployed by the Employer before five (5) consecutive 1-Year Breaks in Service, and such Former Participant had received a distribution of the entire Vested interest prior to reemployment, then the forfeited account shall be reinstated only if the Former Participant repays the full amount which had been distributed. Such repayment must be made before the earlier of five (5) years after the first date on which the Participant is subsequently reemployed by the Employer or the close of the first period of five (5) consecutive 1-Year Breaks in Service commencing after the distribution. If a distribution occurs for any reason other than a severance of employment, the time for repayment may not end earlier than five (5) years after the date of distribution. In the event the Former Participant does repay the full amount distributed, the undistributed forfeited portion of the Participant's Account must be restored in full, unadjusted by any gains or losses occurring subsequent to the Valuation Date preceding the distribution. The source for such reinstatement may be Forfeitures occurring during the Plan Year. If such source is insufficient, then the Employer will contribute an amount which is sufficient to restore any such forfeited Accounts.

ARTICLE IV
CONTRIBUTION AND ALLOCATION

4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION

For each Plan Year, the Employer shall contribute to the Plan:

(a) The amount of the total salary reduction elections of all Participants made pursuant to Section 4.2(a), which amount shall be deemed an Employer Elective Contribution.

(b)(i) For Participants who are classified on the payroll records of the Employer as "regular employees," 50% of elective deferrals up to the first 4% of Compensation; and (ii) for all other Participants, 25% of elective deferrals up to the first 4% of Compensation. In other words, we are no longer referring to contract or project employees, and the match for the first group would be a maximum of 2% of pay, and for the second group, a maximum of 1% of pay.

(c) Additionally, to the extent necessary, the Employer shall contribute to the Plan the amount necessary to provide the top heavy minimum contribution. All contributions by the Employer shall be made in cash or in such property as is acceptable to the Trustee.

4.2 PARTICIPANT'S SALARY REDUCTION ELECTION

(a) Each Participant may elect to defer a portion of Compensation which would have been received in the Plan Year (except for the deferral election) by up to the maximum amount which will not cause the Plan to violate the provisions of Sections 4,5(a) and 4.9. A deferral election (or modification of an earlier election) may not be made with respect to Compensation which is currently available on or before the date the Participant executed such election. For purposes of this Section, Compensation shall be determined prior to any reductions made pursuant to Code Sections 125, 132(f)(4), 402(e)(3), 402(h)(l)(B), 403(b) or 457(b), and Employee contributions described in Code Section 414(h)(2) that are treated as Employer contributions.

The amount by which Compensation is reduced shall be that Participant's Deferred Compensation and be treated as an Employer Elective Contribution and allocated to that Participant's Elective Account.

(b) The balance in each Participant's Elective Account shall be fully Vested at all times and, except as otherwise provided herein, shall not be subject to Forfeiture for any reason.

(c) Notwithstanding anything in the Plan to the contrary, amounts held in the Participant's Elective Account may not be distributable (including any offset of loans) earlier than:

(1) a Participant's separation from service, Total and Permanent Disability, or death;

(2) a Participant's attainment of age 59 1/2;

(3) the termination of the Plan without the existence at the time of Plan termination of another defined contribution plan or the establishment of a successor defined contribution plan by the Employer or an Affiliated Employer within the period ending twelve months after distribution of all assets from the Plan maintained by the Employer. For this purpose, a defined contribution plan does not include an employee stock ownership plan (as defined in Code Section 4975(e)(7) or 409), a simplified employee pension plan (as defined in Code
Section 408(k)), or a simple individual retirement account plan (as defined in Code Section 408(p));

(4) the date of disposition by the Employer to an entity that is not an Affiliated Employer of substantially all of the assets (within the meaning of Code Section 409(d)(2)) used in a trade or business of such corporation if such corporation continues to maintain this Plan after the disposition with respect to a Participant who continues employment with the corporation acquiring such assets;

(5) the date of disposition by the Employer or an Affiliated Employer who maintains the Plan of its interest in a subsidiary (within the meaning of Code Section 409(d)(3)) to an entity which is not an Affiliated Employer but only with respect to a Participant who continues employment with such subsidiary; or

(6) the proven financial hardship of a Participant, subject to the limitations of Section 6.11.

(d) For each Plan Year, a Participant's Deferred Compensation made under this Plan and all other plans, contracts or arrangements of the Employer maintaining this Plan shall not exceed, during any taxable year of the Participant, the limitation imposed by Code Section 402(g), as in effect at the beginning of such taxable year. If such dollar limitation is exceeded, a Participant will be deemed to have notified the Administrator of such excess amount which shall be distributed in a manner consistent with Section 4.2(f). The dollar limitation shall be adjusted annually pursuant to the method provided in Code Section 415(d) in accordance with Regulations.

(e) In the event a Participant has received a hardship distribution from the Participant's Elective Account pursuant to Section 6.1 l(b) or pursuant to Regulation 1.401(k)-l(d)(2)(iv)(B) from any other plan maintained by the Employer, then such Participant shall not be permitted to elect to have Deferred Compensation contributed to the Plan for a period of twelve (12) months following the receipt of the distribution. Furthermore, the dollar limitation under Code Section 402(g) shall be reduced, with respect to the Participant's taxable year following the taxable year in

which the hardship distribution was made, by the amount of such Participant's Deferred Compensation, if any, pursuant to this Plan (and any other plan maintained by the Employer) for the taxable year of the hardship distribution.

(f) If a Participant's Deferred Compensation under this Plan together with any elective deferrals (as defined in Regulation 1.402(g)-l(b)) under another qualified cash or deferred arrangement (as described in Code
Section 401(k)), a simplified employee pension (as described in Code
Section 408(k)(6)), a simple individual retirement account plan (as described in Code Section 408(p)), a salary reduction arrangement (within the meaning of Code Section 3121(a)(5)(D)), a deferred compensation plan under Code Section 457(b), or a trust described in Code Section 501(c)(18) cumulatively exceed the limitation imposed by Code Section 402(g) (as adjusted annually in accordance with the method provided in Code Section 415(d) pursuant to Regulations) for such Participant's taxable year, the Participant may, not later than March 1 following the close of the Participant's taxable year, notify the Administrator in writing of such excess and request that the Participant's Deferred Compensation under this Plan be reduced by an amount specified by the Participant. In such event, the Administrator may direct the Trustee to distribute such excess amount (and any Income allocable to such excess amount) to the Participant not later than the first April 15th following the close of the Participant's taxable year. Any distribution of less than the entire amount of Excess Deferred Compensation and Income shall be treated as a pro rata distribution of Excess Deferred Compensation and Income. The amount distributed shall not exceed the Participant's Deferred Compensation under the Plan for the taxable year (and any Income allocable to such excess amount). Any distribution on or before the last day of the Participant's taxable year must satisfy each of the following conditions:

(1) the distribution must be made after the date on which the Plan received the Excess Deferred Compensation;

(2) the Participant shall designate the distribution as Excess Deferred Compensation; and

(3) the Plan must designate the distribution as a distribution of Excess Deferred Compensation.

Matching contributions which relate to Excess Deferred Compensation which is distributed pursuant to this Section 4.2(f) shall be forfeited.

(g) Notwithstanding Section 4,2(f) above, a Participant's Excess Deferred Compensation shall be reduced, but not below zero, by any distribution of Excess Contributions pursuant to Section 4.6(a) for the Plan Year beginning with or within the taxable year of the Participant.

(h) At Normal Retirement Date, or such other date when the Participant shall be entitled to receive benefits, the fair market value of the Participant's Elective Account shall be used to provide additional benefits to the Participant or the Participant's Beneficiary.

(i) Employer Elective Contributions made pursuant to this Section may be segregated into a separate account for each Participant in a federally insured savings account, certificate of deposit in a bank or savings and loan association, money market certificate, or other short-term debt security acceptable to the Trustee until such time as the allocations pursuant to Section 4.4 have been made.

(j) The Employer and the Administrator shall implement the salary reduction elections provided for herein in accordance with the following:

(1) A Participant must make an initial salary deferral election within a reasonable time, not to exceed thirty (30) days, after entering the Plan pursuant to Section 3.2. If the Participant fails to make an initial salary deferral election within such time, then such Participant may thereafter make an election in accordance with the rules governing modifications. The Participant shall make such an election by entering into a written salary reduction agreement with the Employer and filing such agreement with the Administrator. Such election shall initially be effective beginning with the pay period following the acceptance of the salary reduction agreement by the Administrator, shall not have retroactive effect and shall remain in force until revoked.

(2) A Participant may modify a prior election at any time during the Plan Year and concurrently make a new election by filing a written notice with the Administrator within a reasonable time before the pay period for which such modification is to be effective. Any modification shall not have retroactive effect and shall remain in force until revoked.

(3) A Participant may elect to prospectively revoke the Participant's salary reduction agreement in its entirety at any time during the Plan Year by providing the Administrator with thirty (30) days written notice of such revocation (or upon such shorter notice period as may be acceptable to the Administrator), Such revocation shall become effective as of the beginning of the first pay period coincident with or next following the expiration of the notice period. Furthermore, the termination of the Participant's employment, or the cessation of participation for any reason, shall be deemed to revoke any salary reduction agreement then in effect, effective immediately following the close of the pay period within which such termination or cessation occurs.

4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION

The Employer may make its contribution to the Plan for a particular Plan Year at such time as the Employer, in its sole discretion, determines. If the Employer makes a contribution for a particular Plan Year after the close of that Plan Year, the Employer will designate to the Trustee the Plan Year for which the Employer is making its contribution.

Notwithstanding anything contained herein to the contrary, Deferred Compensation must be remitted to the Trust on the earliest day on which such Deferred Compensation can reasonably be segregated from the Employer's general assets, but in no event later than the 15th business day of the month following the month in which the Participant's Deferred Compensation would otherwise have been payable to such Participant in cash, as set forth in DOL Regulation ss.2510.3-102(b)(l).

4.4 ALLOCATION OF CONTRIBUTION AND EARNINGS

(a) The Administrator shall establish and maintain an account in the name of each Participant to which the Administrator shall credit as of each Anniversary Date, or other Valuation Date, all amounts allocated to each such Participant as set forth herein.

(b) The Employer shall provide the Administrator with all information required by the Administrator to make a proper allocation of the Employer contributions for each Plan Year. Within a reasonable period of time after the date of receipt by the Administrator of such information, the Administrator shall allocate such contribution as follows:

(1) With respect to the Employer Elective Contribution made pursuant to Section 4.1 (a), to each Participant's Elective Account in an amount equal to each such Participant's Deferred Compensation for the year.

(2) With respect to the Employer Non-Elective Contribution made pursuant to Section 4.1(b), to each Participant's Account in accordance with Section 4. l(b).

(c) On or before each Anniversary Date any amounts which became Forfeitures since the last Anniversary Date may be made available to reinstate previously forfeited account balances of Former Participants, if any, in accordance with Section 3.7(d), be used to satisfy any contribution that may be required pursuant to Section 3.5 and/or 6.9, or be used to pay any administrative expenses of the Plan. The remaining Forfeitures, if any, shall be used to reduce the contribution of the Employer hereunder for the Plan Year in which such Forfeitures occur.

(d) For any Top Heavy Plan Year, Non-Key Employees not otherwise eligible to share in the allocation of contributions as provided above, shall receive the minimum allocation provided for in Section 4.4(g) if eligible pursuant to the provisions of Section 4.4(i).

(e) Notwithstanding the foregoing, Participants who do not complete the allocation eligibility requirements specified above due to Retirement (Early, Normal or Late), Total and Permanent Disability or death shall share in the allocation of contributions for that Plan Year.

(f) As of each Valuation Date, before the current valuation period allocation of Employer contributions, any earnings or losses (net appreciation or net depreciation) of the Trust Fund shall be allocated in the same proportion that each Participant's and Former Participant's nonsegregated accounts bear to the total of all Participants' and Former Participants' nonsegregated accounts as of such date. Earnings or losses with respect to a Participant's Directed Account shall be allocated in accordance with Section 4,12.

Participants' transfers from other qualified plans deposited in the general Trust Fund shall share in any earnings and losses (net appreciation or net depreciation) of the Trust Fund in the same manner provided above. Each segregated account maintained on behalf of a Participant shall be credited or charged with its separate earnings and losses.

(g) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum of the Employer contributions allocated to the Participant's Combined Account of each Non-Key Employee shall be equal to at least three percent (3%) of such Non-Key Employee's "415 Compensation" (reduced by contributions and forfeitures, if any, allocated to each Non-Key Employee in any defined contribution plan included with this Plan in a Required Aggregation Group). However, if (1) the sum of the Employer contributions allocated to the Participant's Combined Account of each Key Employee for such Top Heavy Plan Year is less than three percent (3%) of each Key Employee's "415 Compensation" and (2) this Plan is not required to be included in an Aggregation Group to enable a defined benefit plan to meet the requirements of Code Section 401(a)(4) or 410, the sum of the Employer contributions allocated to the Participant's Combined Account of each Non-Key Employee shall be equal to the largest percentage allocated to the Participant's Combined Account of any Key Employee, However, in determining whether a Non-Key Employee has received the required minimum allocation, such Non-Key Employee's Deferred Compensation and matching contributions needed to satisfy the "Actual Contribution Percentage" tests pursuant to Section 4.7(a) shall not be taken into account.

However, no such minimum allocation shall be required in this Plan for any Non-Key Employee who participates in another defined contribution plan subject to Code Section 412 included with this Plan in a Required Aggregation Group.

(h) For purposes of the minimum allocations set forth above, the percentage allocated to the Participant's Combined Account of any Key Employee shall be equal to the ratio of the sum of the Employer contributions allocated on behalf of such Key Employee divided by the "415 Compensation" for such Key Employee.

(i) For any Top Heavy Plan Year, the minimum allocations set forth above shall be allocated to the Participant's Combined Account of all Non-Key Employees who are Participants and who are employed by the Employer on the last day of the Plan Year, including Non-Key Employees who have (1) failed to complete a Year of Service; and (2) declined to make mandatory contributions (if required) or, in the case of a cash or deferred arrangement, elective contributions to the Plan.

(j) For the purposes of this Section, "415 Compensation" in excess of $150,000 (or such other amount provided in the Code) shall be disregarded. Such amount shall be adjusted for increases in the cost of living in accordance with Code Section 401(a)(17)(B), except that the dollar increase in effect on January 1 of any calendar year shall be effective for the Plan Year beginning with or within such calendar year. If "415 Compensation" for any prior determination period is taken into account in determining a Participant's minimum benefit for the current Plan Year, the "415 Compensation" for such determination period is subject to the applicable annual "415 Compensation" limit in effect for that prior period. For this purpose, in determining the minimum benefit in Plan Years beginning on or after January 1, 1989, the annual "415 Compensation" limit in effect for determination periods beginning before that date is $200,000 (or such other amount as adjusted for increases in the cost of living in accordance with Code Section 415(d) for determination periods beginning on or after January 1, 1989, and in accordance with Code Section 401(a)(17)(B) for determination periods beginning on or after January 1, 1994). For determination periods beginning prior to January 1, 1989, the $200,000 limit shall apply only for Top Heavy Plan Years and shall not be adjusted. For any short Plan Year the "415 Compensation" limit shall be an amount equal to the "415 Compensation" limit for the calendar year in which the Plan Year begins multiplied by the ratio obtained by dividing the number of full months in the short Plan Year by twelve (12).

(k) Notwithstanding anything herein to the contrary, Participants who terminated employment for any reason during the Plan Year shall share in the salary reduction contributions made by the Employer for the year of termination without regard to the Hours of Service credited.

(1) Notwithstanding anything in this Section to the contrary, all information necessary to properly reflect a given transaction may not be available until after the date specified herein for processing such transaction, in which case the transaction will be reflected when such information is received and processed. Subject to express limits that may be imposed under the Code, the processing of any contribution, distribution or other transaction may be delayed for any legitimate business reason (including, but not limited to, failure of systems or computer programs, failure of the means of the transmission of data, force majeure, the failure of a service provider to timely receive values or prices, and the correction for errors or omissions or the errors or omissions of any service provider). The processing date of a transaction will be binding for all purposes of the Plan.

4.5 ACTUAL DEFERRAL PERCENTAGE TESTS

(a) Maximum Annual Allocation; For each Plan Year, the annual allocation derived from Employer Elective Contributions to a Highly Compensated Participant's Elective Account shall satisfy one of the following tests:

(1) The "Actual Deferral Percentage" for the Highly Compensated Participant group shall not be more than the "Actual Deferral Percentage" of the Non-Highly Compensated Participant group (for the preceding Plan Year if the prior year testing method is used to calculate the "Actual Deferral Percentage" for the Non-Highly Compensated Participant group) multiplied by 1.25, or

(2) The excess of the "Actual Deferral Percentage" for the Highly Compensated Participant group over the "Actual Deferral Percentage" for the Non-Highly Compensated Participant group (for the preceding Plan Year if the prior year testing method is used to calculate the "Actual Deferral Percentage" for the Non-Highly Compensated Participant group) shall not be more than two percentage points. Additionally, the "Actual Deferral Percentage" for the Highly Compensated Participant group shall not exceed the "Actual Deferral Percentage" for the Non-Highly Compensated Participant group (for the preceding Plan Year if the prior year testing method is used to calculate the "Actual Deferral Percentage" for the Non-Highly Compensated Participant group) multiplied by 2. The provisions of Code
Section 401(k)(3) and Regulation 1,401(k)-l(b) are incorporated herein by reference.

However, in order to prevent the multiple use of the alternative method described in (2) above and in Code Section 401(m)(9)(A), any Highly Compensated Participant eligible to make elective deferrals pursuant to Section 4.2 and to make Employee contributions or to receive matching contributions under this Plan or under any other plan maintained by the Employer or an Affiliated Employer shall have a combination of such Participant's Elective Contributions and Employer matching contributions reduced pursuant to Section 4.6(a) and Regulation 1.401(m)-2, the provisions of which are incorporated herein by reference.

(b) For the purposes of this Section "Actual Deferral Percentage" means, with respect to the Highly Compensated Participant group and Non-Highly Compensated Participant group for a Plan Year, the average of the ratios, calculated separately for each Participant in such group, of the amount of Employer Elective Contributions allocated to each Participant's Elective Account for such Plan Year, to such Participant's "414(s) Compensation" for such Plan Year. The actual deferral ratio for each Participant and the "Actual Deferral Percentage" for each group shall be calculated to the nearest one-hundredth of one percent. Employer Elective Contributions allocated to each Non-Highly Compensated

Participant's Elective Account shall be reduced by Excess Deferred Compensation to the extent such excess amounts are made under this Plan or any other plan maintained by the Employer.

Notwithstanding the above, if the prior year test method is used to calculate the "Actual Deferral Percentage" for the Non-Highly Compensated Participant group for the first Plan Year of this amendment and restatement, the "Actual Deferral Percentage" for the Non-Highly Compensated Participant group for the preceding Plan Year shall be calculated pursuant to the provisions of the Plan then in effect.

(c) For the purposes of Sections 4.5(a) and 4.6, a Highly Compensated Participant and a Non-Highly Compensated Participant shall include any Employee eligible to make a deferral election pursuant to Section 4.2, whether or not such deferral election was made or suspended pursuant to
Section 4.2.

Notwithstanding the above, if the prior year testing method is used to calculate the "Actual Deferral Percentage" for the Non-Highly Compensated Participant group for the first Plan Year of this amendment and restatement, for purposes of Section 4.5(a) and 4.6, a Non-Highly Compensated Participant shall include any such Employee eligible to make a deferral election, whether or not such deferral election was made or suspended, pursuant to the provisions of the Plan in effect for the preceding Plan Year.

(d) For the purposes of this Section and Code Sections 401 (a)(4), 410(b) and 401 (k), if two or more plans which include cash or deferred arrangements are considered one plan for the purposes of Code Section 401(a)(4) or 410(b) (other than Code Section 410(b)(2)(A)(ii)), the cash or deferred arrangements included in such plans shall be treated as one arrangement. In addition, two or more cash or deferred arrangements may be considered as a single arrangement for purposes of determining whether or not such arrangements satisfy Code Sections 401(a)(4), 410(b) and 401(k). In such a case, the cash or deferred arrangements included in such plans and the plans including such arrangements shall be treated as one arrangement and as one plan for purposes of this Section and Code Sections
401(a)(4), 410(b) and 401(k). Any adjustment to the Non-Highly Compensated Participant actual deferral ratio for the prior year shall be made in accordance with Internal Revenue Service Notice 98-1 and any superseding guidance. Plans may be aggregated under this paragraph (d) only if they have the same plan year. Notwithstanding the above, if two or more plans which include cash or deferred arrangements are permissively aggregated under Regulation 1.410(b)-7(d), all plans permissively aggregated must use either the current year testing method or the prior year testing method for the testing year.

Notwithstanding the above, an employee stock ownership plan described in Code Section 4975(e)(7) or 409 may not be combined with this Plan for purposes of determining whether the employee stock ownership plan or this Plan satisfies this Section and Code Sections 401(a)(4), 410(b) and 401 (k).

(e) For the purposes of this Section, if a Highly Compensated Participant is a Participant under two or more cash or deferred arrangements (other than a cash or deferred arrangement which is part of an

employee stock ownership plan as defined in Code Section 4975(e)(7) or 409) of the Employer or an Affiliated Employer, all such cash or deferred arrangements shall be treated as one cash or deferred arrangement for the purpose of determining the actual deferral ratio with respect to such Highly Compensated Participant. However, if the cash or deferred arrangements have different plan years, this paragraph shall be applied by treating all cash or deferred arrangements ending with or within the same calendar year as a single arrangement,

(f) For the purpose of this Section, when calculating the "Actual Deferral Percentage" for the Non-Highly Compensated Participant group, the current year testing method shall be used. Any change from the current year testing method to the prior year testing method shall be made pursuant to Internal Revenue Service Notice 98-1, Section VII (or superseding guidance), the provisions of which are incorporated herein by reference.

(g) Notwithstanding anything in this Section to the contrary, the provisions of this Section and Section 4.6 may be applied separately (or will be applied separately to the extent required by Regulations) to each plan within the meaning of Regulation 1.401(k)-l(g)(l 1). Furthermore, the provisions of Code Section 401(k)(3)(F) may be used to exclude from consideration all Non-Highly Compensated Employees who have not satisfied the minimum age and service requirements of Code Section 410(a)(l)(A).

4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS

In the event (or if it is anticipated) that the initial allocations of the Employer Elective Contributions made pursuant to Section 4.4 do (or might) not satisfy one of the tests set forth in Section 4.5(a), the Administrator shall adjust Excess Contributions pursuant to the options set forth below:

(a) On or before the fifteenth day of the third month following the end of each Plan Year, but in no event later than the close of the following Plan Year, the Highly Compensated Participant having the largest dollar amount of Elective Contributions shall have a portion of such Participant's Elective Contributions distributed until the total amount of Excess Contributions has been distributed, or until the amount of such Participant's Elective Contributions equals the Elective Contributions of the Highly Compensated Participant having the second largest dollar amount of Elective Contributions. This process shall continue until the total amount of Excess Contributions has been distributed. In determining the amount of Excess Contributions to be distributed with respect to an affected Highly Compensated Participant as determined herein, such amount shall be reduced pursuant to Section 4.2(f) by any Excess Deferred Compensation previously distributed to such affected Highly Compensated Participant for such Participant's taxable year ending with or within such Plan Year.

(1) With respect to the distribution of Excess Contributions pursuant to (a) above, such distribution:

(i) may be postponed but not later than the close of the Plan Year following the Plan Year to which they are allocable;

(ii) shall be adjusted for Income; and

(iii) shall be designated by the Employer as a distribution of Excess Contributions (and Income).

(2) Any distribution of less than the entire amount of Excess Contributions shall be treated as a pro rata distribution of Excess Contributions and Income.

(3) Matching contributions which relate to Excess Contributions shall be forfeited unless the related matching contribution is distributed as an Excess Aggregate Contribution pursuant to Section 4.8.

(b) Notwithstanding the above, within twelve (12) months after the end of the Plan Year, the Employer may make a special Qualified Non-Elective Contribution in accordance with one of the following provisions which contribution shall be allocated to the Participant's Elective Account of each Non-Highly Compensated Participant eligible to share in the allocation in accordance with such provision. The Employer shall provide the Administrator with written notification of the amount of the contribution being made and for which provision it is being made pursuant to:

(1) A special Qualified Non-Elective Contribution may be made on behalf of Non-Highly Compensated Participants in an amount sufficient to satisfy (or to prevent an anticipated failure of) one of the tests set forth in Section 4.5(a). Such contribution shall be allocated in the same proportion that each Non-Highly Compensated Participant's
414(s) Compensation for the year (or prior year if the prior year testing method is being used) bears to the total 414(s) Compensation of all Non-Highly Compensated Participants for such year.

(2) A special Qualified Non-Elective Contribution may be made on behalf of Non-Highly Compensated Participants in an amount sufficient to satisfy (or to prevent an anticipated failure of) one of the tests set forth in Section 4.5(a). Such contribution shall be allocated in the same proportion that each Non-Highly Compensated Participant electing salary reductions pursuant to Section 4.2 in the same proportion that each such Non-Highly Compensated Participant's Deferred Compensation for the year (or at the end of the prior Plan Year if the prior year testing method is being used) bears to the total Deferred Compensation of all such Non-Highly Compensated Participants for such year.

(3) A special Qualified Non-Elective Contribution may be made on behalf of Non-Highly Compensated Participants in an amount sufficient to satisfy (or to prevent an anticipated failure of) one of the tests set forth in Section 4.5(a). Such contribution shall be allocated in equal amounts (per capita).

(4) A special Qualified Non-Elective Contribution may be made on behalf of Non-Highly Compensated Participants electing salary reductions pursuant to Section 4.2 in an amount sufficient to satisfy (or to prevent an anticipated failure of) one of the tests set forth in Section 4.5(a). Such contribution shall be allocated for the year (or at the end of the prior Plan Year if the prior year testing method is used) to each Non-Highly Compensated Participant electing salary reductions pursuant to Section 4.2 in equal amounts (per capita).

(5) A special Qualified Non-Elective Contribution may be made on behalf of Non-Highly Compensated Participants in an amount sufficient to satisfy (or to prevent an anticipated failure of) one of the tests set forth in Section 4.5(a). Such contribution shall be allocated to the Non-Highly Compensated Participant having the lowest 414(s) Compensation, until one of the tests set forth in Section 4,5(a) is satisfied (or is anticipated to be satisfied), or until such Non-Highly Compensated Participant has received the maximum "annual addition" pursuant to Section 4.9. This process shall continue until one of the tests set forth in Section 4.5(a) is satisfied (or is anticipated to be satisfied).

Notwithstanding the above, at the Employer's discretion, Non-Highly Compensated Participants who are not employed at the end of the Plan Year (or at the end of the prior Plan Year if the prior year testing method is being used) shall not be eligible to receive a special Qualified Non-Elective Contribution and shall be disregarded.

Notwithstanding the above, if the testing method changes from the current year testing method to the prior year testing method, then for purposes of preventing the double counting of Qualified Non-Elective Contributions for the first testing year for which the change is effective, any special Qualified Non-Elective Contribution on behalf of Non-Highly Compensated Participants used to satisfy the "Actual Deferral Percentage" or "Actual Contribution Percentage" test under the current year testing method for the prior year testing year shall be disregarded.

(c) If during a Plan Year, it is projected that the aggregate amount of Elective Contributions to be allocated to all Highly Compensated Participants under this Plan would cause the Plan to fail the tests set forth in Section 4.5(a), then the Administrator may automatically reduce the deferral amount of affected Highly Compensated Participants, beginning with the Highly Compensated Participant who has the highest deferral ratio until it is anticipated the Plan will pass the tests or until the actual deferral ratio equals the actual deferral ratio of the Highly Compensated

Participant having the next highest actual deferral ratio. This process may continue until it is anticipated that the Plan will satisfy one of the tests set forth in Section 4.5(a). Alternatively, the Employer may specify a maximum percentage of Compensation that may be deferred.

(d) Any Excess Contributions (and Income) which are distributed on or after 2 1/2 months after the end of the Plan Year shall be subject to the ten percent (10%) Employer excise tax imposed by Code Section 4979.

4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS

(a) The "Actual Contribution Percentage" for the Highly Compensated Participant group shall not exceed the greater of:

(1) 125 percent of such percentage for the Non-Highly Compensated Participant group (for the preceding Plan Year if the prior year testing method is used to calculate the "Actual Contribution Percentage" for the Non-Highly Compensated Participant group); or

(2) the lesser of 200 percent of such percentage for the Non-Highly Compensated Participant group (for the preceding Plan Year if the prior year testing method is used to calculate the "Actual Contribution Percentage" for the Non-Highly Compensated Participant group), or such percentage for the Non-Highly Compensated Participant group (for the preceding Plan Year if the prior year testing method is used to calculate the "Actual Contribution Percentage" for the Non-Highly Compensated Participant group) plus 2 percentage points. However, to prevent the multiple use of the alternative method described in this paragraph and Code Section 401(m)(9)(A), any Highly Compensated Participant eligible to make elective deferrals pursuant to Section 4.2 or any other cash or deferred arrangement maintained by the Employer or an Affiliated Employer and to make Employee contributions or to receive matching contributions under this Plan or under any plan maintained by the Employer or an Affiliated Employer shall have a combination of Elective Contributions and Employer matching contributions reduced pursuant to Regulation 1.401(m)-2 and
Section 4.8(a). The provisions of Code Section 401(m) and Regulations 1.40 l(m)-l(b) and 1.401(m)-2 are incorporated herein by reference.

(b) For the purposes of this Section and Section 4.8, "Actual Contribution Percentage" for a Plan Year means, with respect to the Highly Compensated Participant group and Non-Highly Compensated Participant group (for the preceding Plan Year if the prior year testing method is used to calculate the "Actual Contribution Percentage" for the Non-Highly Compensated Participant group), the average of the ratios (calculated separately for each Participant in each group and rounded to the nearest one-hundredth of one percent) of:

(1) the sum of Employer matching contributions made pursuant to
Section 4.1(b)on behalf of each such Participant for such Plan Year;

(2) the Participant's "414(s) Compensation" for such Plan Year.

Notwithstanding the above, if the prior year testing method is used to calculate the "Actual Contribution Percentage" for the Non-Highly Compensated Participant group for the first Plan Year of this amendment and restatement, for purposes of Section 4.7(a), the "Actual Contribution Percentage" for the Non-Highly Compensated Participant group for the preceding Plan Year shall be determined pursuant to the provisions of the Plan then in effect.

(c) For purposes of determining the "Actual Contribution Percentage," only Employer matching contributions contributed to the Plan prior to the end of the succeeding Plan Year shall be considered. In addition, the Administrator may elect to take into account, with respect to Employees eligible to have Employer matching contributions pursuant to Section 4.1(b) allocated to their accounts, elective deferrals (as defined in Regulation 1.402(g)-l(b)) and qualified non-elective contributions (as defined in Code
Section 401(m)(4)(C)) contributed to any plan maintained by the Employer. Such elective deferrals and qualified non-elective contributions shall be treated as Employer matching contributions subject to Regulation 1.401(m)-l(b)(5) which is incorporated herein by reference. However, the Plan Year must be the same as the plan year of the plan to which the elective deferrals and the qualified non-elective contributions are made.

(d) For purposes of this Section and Code Sections 401 (a)(4), 410(b) and 401(m), if two or more plans of the Employer to which matching contributions, Employee contributions, or both, are made are treated as one plan for purposes of Code Sections 401(a)(4) or 410(b) (other than the average benefits test under Code Section 410(b)(2)(A)(ii)), such plans shall be treated as one plan. In addition, two or more plans of the Employer to which matching contributions, Employee contributions, or both, are made may be considered as a single plan for purposes of determining whether or not such plans satisfy Code Sections 401(a)(4), 410(b) and
401(m). In such a case, the aggregated plans must satisfy this Section and Code Sections 401(a)(4), 410(b) and 401 (m) as though such aggregated plans were a single plan. Any adjustment to the Non-Highly Compensated Participant actual contribution ratio for the prior year shall be made in accordance with Internal Revenue Service Notice 98-1 and any superseding guidance. Plans may be aggregated under this paragraph (d) only if they have the same plan year. Notwithstanding the above, if two or more plans which include cash or deferred arrangements are permissively aggregated under Regulation 1.410(b)-7(d), all plans permissively aggregated must use either the current year testing method or the prior year testing method for the testing year.

Notwithstanding the above, an employee stock ownership plan described in Code Section 4975(e)(7) or 409 may not be aggregated with this Plan for purposes of determining whether the employee stock ownership plan or this Plan satisfies this Section and Code Sections 401(a)(4), 410(b) and 401(m).

(e) If a Highly Compensated Participant is a Participant under two or more plans (other than an employee stock ownership plan as defined in Code
Section 4975(e)(7) or 409) which are maintained by the Employer or an

Affiliated Employer to which matching contributions, Employee contributions, or both, are made, all such contributions on behalf of such Highly Compensated Participant shall be aggregated for purposes of determining such Highly Compensated Participant's actual contribution ratio. However, if the plans have different plan years, this paragraph shall be applied by treating all plans ending with or within the same calendar year as a single plan.

(f) For purposes of Sections 4.7(a) and 4.8, a Highly Compensated Participant and Non-Highly Compensated Participant shall include any Employee eligible to have Employer matching contributions (whether or not a deferral election was made or suspended) allocated to the Participant's account for the Plan Year.

Notwithstanding the above, if the prior year testing method is used to calculate the "Actual Contribution Percentage" for the Non-Highly Compensated Participant group for the first Plan Year of this amendment and restatement, for the purposes of Section 4.7(a), a Non-Highly Compensated Participant shall include any such Employee eligible to have Employer matching contributions (whether or not a deferral election was made or suspended) allocated to the Participant's account for the preceding Plan Year pursuant to the provisions of the Plan then in effect.

(g) For the purpose of this Section, when calculating the "Actual Contribution Percentage" for the Non-Highly Compensated Participant group, the current year testing method shall be used. Any change from the current year testing method to the prior year testing method shall be made pursuant to Internal Revenue Service Notice 98-1, Section VII (or superseding guidance), the provisions of which are incorporated herein by reference.

(h) Notwithstanding anything in this Section to the contrary, the provisions of this Section and Section 4.8 may be applied separately (or will be applied separately to the extent required by Regulations) to each plan within the meaning of Regulation 1.401(k)-l(g)(l 1). Furthermore, the provisions of Code Section 401(k)(3)(F) may be used to exclude from consideration all Non-Highly Compensated Employees who have not satisfied the minimum age and service requirements of Code Section 410(a)(l)(A).

4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS

(a) In the event (or if it is anticipated) that the "Actual Contribution Percentage" for the Highly Compensated Participant group exceeds (or might exceed) the "Actual Contribution Percentage" for the Non-Highly Compensated Participant group pursuant to Section 4.7(a), the Administrator (on or before the fifteenth day of the third month following the end of the Plan Year, but in no event later than the close of the following Plan Year) shall direct the Trustee to distribute to the Highly Compensated Participant having the largest dollar amount of contributions determined pursuant to Section 4.7(b)(l), the Vested portion of such contributions (and Income allocable to such contributions) and, if

forfeitable, forfeit such non-Vested contributions attributable to Employer matching contributions (and Income allocable to such forfeitures) until the total amount of Excess Aggregate Contributions has been distributed, or until the Participant's remaining amount equals the amount of contributions determined pursuant to Section 4.7(b)(l) of the Highly Compensated Participant having the second largest dollar amount of contributions. This process shall continue until the total amount of Excess Aggregate Contributions has been distributed.

If the correction of Excess Aggregate Contributions attributable to Employer matching contributions is not in proportion to the Vested and non-Vested portion of such contributions, then the Vested portion of the Participant's Account attributable to Employer matching contributions after the correction shall be subject to Section 6,5(j).

(b) Any distribution and/or forfeiture of less than the entire amount of Excess Aggregate Contributions (and Income) shall be treated as a pro rata distribution and/or forfeiture of Excess Aggregate Contributions and Income. Distribution of Excess Aggregate Contributions shall be designated by the Employer as a distribution of Excess Aggregate Contributions (and Income). Forfeitures of Excess Aggregate Contributions shall be treated in accordance with Section 4.4.

(c) Excess Aggregate Contributions, including forfeited matching contributions, shall be treated as Employer contributions for purposes of Code Sections 404 and 415 even if distributed from the Plan.

Forfeited matching contributions that are reallocated to Participants' Accounts for the Plan Year in which the forfeiture occurs shall be treated as an "annual addition" pursuant to Section 4.9(b) for the Participants to whose Accounts they are reallocated and for the Participants from whose Accounts they are forfeited.

(d) The determination of the amount of Excess Aggregate Contributions with respect to any Plan Year shall be made after first determining the Excess Contributions, if any, to be treated as after-tax voluntary Employee contributions due to recharacterization for the plan year of any other qualified cash or deferred arrangement (as defined in Code Section 401(k)) maintained by the Employer that ends with or within the Plan Year or which are treated as after-tax voluntary Employee contributions due to recharacterization pursuant to Section 4.6(a).

(e) If during a Plan Year the projected aggregate amount of Employer matching contributions to be allocated to all Highly Compensated Participants under this Plan would, by virtue of the tests set forth in
Section 4.7(a), cause the Plan to fail such tests, then the Administrator may automatically reduce proportionately or in the order provided in
Section 4.8(a) each affected Highly Compensated Participant's projected share of such contributions by an amount necessary to satisfy one of the tests set forth in Section 4.7(a).

(f) Notwithstanding the above, within twelve (12) months after the end of the Plan Year, the Employer may make a special Qualified Non-Elective Contribution in accordance with one of the following provisions which contribution shall be allocated to the Participant's Account of each Non-Highly Compensated eligible to share in the allocation in accordance with such provision. The Employer shall provide the Administrator with written notification of the amount of the contribution being made and for which provision it is being made pursuant to:

(1) A special Qualified Non-Elective Contribution may be made on behalf of Non-Highly Compensated Participants in an amount sufficient to satisfy (or to prevent an anticipated failure of) one of the tests set forth in Section 4.7. Such contribution shall be allocated in the same proportion that each Non-Highly Compensated Participant's 414(s) Compensation for the year (or prior year if the prior year testing method is being used) bears to the total 414(s) Compensation of all Non-Highly Compensated Participants for such year.

(2) A special Qualified Non-Elective Contribution may be made on behalf of Non-Highly Compensated Participants in an amount sufficient to satisfy (or to prevent an anticipated failure of) one of the tests set forth in Section 4.7. Such contribution shall be allocated in the same proportion that each Non-Highly Compensated Participant electing salary reductions pursuant to
Section 4.2 in the same proportion that each such Non-Highly Compensated Participant's Deferred Compensation for the year (or at the end of the prior Plan Year if the prior year testing method is being used) bears to the total Deferred Compensation of all such Non-Highly Compensated Participants for such year.

(3) A special Qualified Non-Elective Contribution may be made on behalf of Non-Highly Compensated Participants in an amount sufficient to satisfy (or to prevent an anticipated failure of) one of the tests set forth in Section 4.7. Such contribution shall be allocated in equal amounts (per capita),

(4) A special Qualified Non-Elective Contribution may be made on behalf of Non-Highly Compensated Participants electing salary reductions pursuant to Section 4.2 in an amount sufficient to satisfy (or to prevent an anticipated failure of) one of the tests set forth in Section 4.7. Such contribution shall be allocated for the year (or at the end of the prior Plan Year if the prior year testing method is used) to each Non-Highly Compensated Participant electing salary reductions pursuant to
Section 4,2 in equal amounts (per capita).

(5) A special Qualified Non-Elective Contribution may be made on behalf of Non-Highly Compensated Participants in an amount sufficient to satisfy (or to prevent an anticipated failure of) one of the tests set forth in Section 4.7. Such contribution shall be allocated to the Non-Highly Compensated Participant

having the lowest 414(s) Compensation, until one of the tests set forth in Section 4.7 is satisfied (or is anticipated to be satisfied), or until such Non-Highly Compensated Participant has received the maximum "annual addition" pursuant to Section 4.9. This process shall continue until one of the tests set forth in
Section 4.7 is satisfied (or is anticipated to be satisfied).

Notwithstanding the above, at the Employer's discretion, Non-Highly Compensated Participants who are not employed at the end of the Plan Year (or at the end of the prior Plan Year if the prior year testing method is being used) shall not be eligible to receive a special Qualified Non-Elective Contribution and shall be disregarded.

Notwithstanding the above, if the testing method changes from the current year testing method to the prior year testing method, then for purposes of preventing the double counting of Qualified Non-Elective Contributions for the first testing year for which the change is effective, any special Qualified Non-Elective Contribution on behalf of Non-Highly Compensated Participants used to satisfy the "Actual Deferral Percentage" or "Actual Contribution Percentage" test under the current year testing method for the prior year testing year shall be disregarded.

(g) Any Excess Aggregate Contributions (and Income) which are distributed on or after 2 1/2 months after the end of the Plan Year shall be subject to the ten percent (10%) Employer excise tax imposed by Code
Section 4979.

4.9 MAXIMUM ANNUAL ADDITIONS

(a) Notwithstanding the foregoing, the maximum "annual additions" credited to a Participant's accounts for any "limitation year" shall equal the lesser of: (1) S30,000 adjusted annually as provided in Code Section 415(d) pursuant to the Regulations, or (2) twenty-five percent (25%) of the Participant's "415 Compensation" for such "limitation year." If the Employer contribution that would otherwise be contributed or allocated to the Participant's accounts would cause the "annual additions" for the "limitation year" to exceed the maximum "annual additions," the amount contributed or allocated will be reduced so that the "annual additions" for the "limitation year" will equal the maximum "annual additions," and any amount in excess of the maximum "annual additions," which would have been allocated to such Participant may be allocated to other Participants. For any short "limitation year," the dollar limitation in (1) above shall be reduced by a fraction, the numerator of which is the number of full months in the short "limitation year" and the denominator of which is twelve (12).

(b) For purposes of applying the limitations of Code Section 415, "annual additions" means the sum credited to a Participant's accounts for any "limitation year" of (1) Employer contributions, (2) Employee contributions, (3) forfeitures, (4) amounts allocated, after March 31, 1984, to an individual medical account, as defined in Code Section 415(1)(2) which is part of a pension or annuity plan maintained by the Employer and (5) amounts derived from contributions paid or accrued after

December 31, 1985, in taxable years ending after such date, which are attributable to post-retirement medical benefits allocated to the separate account of a key employee (as defined in Code Section 419A(d)(3)) under a welfare benefit plan (as defined in Code Section 419(e)) maintained by the Employer. Except, however, the "415 Compensation" percentage limitation referred to in paragraph (a)(2) above shall not apply to: (1) any contribution for medical benefits (within the meaning of Code Section 419A(f)(2)) after separation from service which is otherwise treated as an "annual addition," or (2) any amount otherwise treated as an "annual addition" under Code Section 415(1)(1).

(c) For purposes of applying the limitations of Code Section 415, the transfer of funds from one qualified plan to another is not an "annual addition." In addition, the following are not Employee contributions for the purposes of Section 4.9(b)(2): (1) rollover contributions (as defined in Code Sections 402(e)(6), 403(a)(4), 403(b)(8) and 408(d)(3)); (2) repayments of loans made to a Participant from the Plan; (3) repayments of distributions received by an Employee pursuant to Code Section 41 l(a)(7)(B) (cash-outs); (4) repayments of distributions received by an Employee pursuant to Code Section 41 l(a)(3)(D) (mandatory contributions); and (5) Employee contributions to a simplified employee pension excludable from gross income under Code Section 408(k)(6).

(d) For purposes of applying the limitations of Code Section 415, the "limitation year" shall be the Plan Year,

(e) For the purpose of this Section, all qualified defined contribution plans (whether terminated or not) ever maintained by the Employer shall be treated as one defined contribution plan.

(f) For the purpose of this Section, if the Employer is a member of a controlled group of corporations, trades or businesses under common control (as defined by Code Section 1563(a) or Code Section 414(b) and (c) as modified by Code Section 415(h)), is a member of an affiliated service group (as defined by Code Section 414(m)), or is a member of a group of entities required to be aggregated pursuant to Regulations under Code
Section 414(o), all Employees of such Employers shall be considered to be employed by a single Employer.

(g) If this is a plan described in Code Section 413(c) (other than a plan described in Code Section 413(f)), then all of the benefits or contributions attributable to a Participant from all of the Employers maintaining this Plan shall be taken into account in applying the limits of this Section with respect to such Participant. Furthermore, in applying the limitations of this Section with respect to such a Participant, the total "415 Compensation" received by the Participant from all of the Employers maintaining the Plan shall be taken into account.

(h)( 1) If a Participant participates in more than one defined contribution plan maintained by the Employer which have different Anniversary Dates, the maximum "annual additions" under this Plan shall equal the maximum "annual additions" for the "limitation year" minus any "annual additions" previously credited to such Participant's accounts during the "limitation year."

(2) If a Participant participates in both a defined contribution plan subject to Code Section 412 and a defined contribution plan not subject to Code Section 412 maintained by the Employer which have the same Anniversary Date, "annual additions" will be credited to the Participant's accounts under the defined contribution plan subject to Code Section 412 prior to crediting "annual additions" to the Participant's accounts under the defined contribution plan not subject to Code Section 412.

(3) If a Participant participates in more than one defined contribution plan not subject to Code Section 412 maintained by the Employer which have the same Anniversary Date, the maximum "annual additions" under this Plan shall equal the product of (A) the maximum "annual additions" for the "limitation year" minus any "annual additions" previously credited under subparagraphs (1) or (2) above, multiplied by (B) a fraction (i) the numerator of which is the "annual additions" which would be credited to such Participant's accounts under this Plan without regard to the limitations of Code Section 415 and (ii) the denominator of which is such "annual additions" for all plans described in this subparagraph.

(i) Notwithstanding anything contained in this Section to the contrary, the limitations, adjustments and other requirements prescribed in this Section shall at all times comply with the provisions of Code Section 415 and the Regulations thereunder.

4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS

(a) If, as a result of a reasonable error in estimating a Participant's Compensation, a reasonable error in determining the amount of elective deferrals (within the meaning of Code Section 402(g)(3)) that may be made with respect to any Participant under the limits of Section 4.9 or other facts and circumstances to which Regulation 1.415-6(b)(6) shall be applicable, the "annual additions" under this Plan would cause the maximum "annual additions" to be exceeded for any Participant, the "excess amount" will be disposed of in one of the following manners, as uniformly determined by the Administrator for all Participants similarly situated.

(1) Any matched Deferred Compensation and Employer matching contributions which relate to such Deferred Compensation will be proportionately reduced to the extent they would reduce the "excess amount." The Deferred Compensation (and any gains attributable to such Deferred Compensation) will be distributed to the Participant and the Employer matching contributions (and any gains attributable to such matching contributions) will be used to reduce the Employer contribution in the next "limitation year";

(2) If, after the application of subparagraph (1) above, an "excess amount" still exists, and the Participant is covered by the Plan at the end of the "limitation year," the "excess amount" will be used to reduce the Employer contribution for such Participant in the next "limitation year," and each succeeding "limitation year" if necessary;

(3) If, after the application of subparagraphs (1) and (2) above, an "excess amount" still exists, and the Participant is not covered by the Plan at the end of the "limitation year," the "excess amount" will be held unallocated in a "Section 415 suspense account." The "Section 415 suspense account" will be applied to reduce future Employer contributions for all remaining Participants in the next "limitation year," and each succeeding "limitation year" if necessary;

(4) If a "Section 415 suspense account" is in existence at any time during the "limitation year" pursuant to this Section, it will not participate in the allocation of investment gains and losses of the Trust Fund. If a "Section 415 suspense account" is in existence at any time during a particular "limitation year," all amounts in the "Section 415 suspense account" must be allocated and reallocated to Participants' accounts before any Employer contributions or any Employee contributions may be made to the Plan for that "limitation year," Except as provided in (1) above, "excess amounts" may not be distributed to Participants or Former Participants.

(b) For purposes of this Article, "excess amount" for any Participant for a "limitation year" shall mean the excess, if any, of (1) the "annual additions" which would be credited to the Participant's account under the terms of the Plan without regard to the limitations of Code Section 415 over (2) the maximum "annual additions" determined pursuant to Section 4.9.

(c) For purposes of this Section, "Section 415 suspense account" shall mean an unallocated account equal to the sum of "excess amounts" for all Participants in the Plan during the "limitation year."

4.11 ROLLOVERS AND PLAN-TO-PLAN TRANSFERS FROM QUALIFIED PLANS

(a) With the consent of the Administrator, amounts may be transferred (within the meaning of Code Section 414(1)) to this Plan from other tax qualified plans under Code Section 401 (a) by Eligible Employees, provided the trust from which such funds are transferred permits the transfer to be made and the transfer will not jeopardize the tax exempt status of the Plan or Trust or create adverse tax consequences for the Employer. Prior to accepting any transfers to which this Section applies, the Administrator may require an opinion of counsel that the amounts to be transferred meet the requirements of this Section. The amounts transferred shall be set up in a separate account herein referred to as a Participant's Transfer/Rollover Account. Furthermore, for vesting purposes, the Participant's portion of the Participant's Transfer/Rollover Account attributable to any transfer shall be subject to Section 6.4(b).

Except as permitted by Regulations (including Regulation 1.411 (d)-4), amounts attributable to elective contributions (as defined in Regulation 1.401(k)-l(g)(3)), including amounts treated as elective contributions, which are transferred from another qualified plan in a plan-to-plan transfer (other than a direct rollover) shall be subject to the distribution limitations provided for in Regulation 1.401(k)-l(d).

(b) With the consent of the Administrator, the Plan may accept a "rollover" by Eligible Employees, provided the "rollover" will not jeopardize the tax exempt status of the Plan or create adverse tax consequences for the Employer. Prior to accepting any "rollovers" to which this Section applies, the Administrator may require the Employee to establish (by providing opinion of counsel or otherwise) that the amounts to be rolled over to this Plan meet the requirements of this Section. The amounts rolled over shall be set up in a separate account herein referred to as a "Participant's Transfer/Rollover Account." Such account shall be fully Vested at all times and shall not be subject to Forfeiture for any reason.

For purposes of this Section, the term "qualified plan" shall mean any tax qualified plan under Code Section 401 (a), or, any other plans from which distributions are eligible to be rolled over into this Plan pursuant to the Code. The term "rollover" means: (i) amounts transferred to this Plan directly from another qualified plan; (ii) distributions received by an Employee from other "qualified plans" which are eligible for tax-free rollover to a "qualified plan" and which are transferred by the Employee to this Plan within sixty (60) days following receipt thereof; (iii) amounts transferred to this Plan from a conduit individual retirement account provided that the conduit individual retirement account has no assets other than assets which (A) were previously distributed to the Employee by another "qualified plan," (B) were eligible for tax-free rollover to a "qualified plan" and (C) were deposited in such conduit individual retirement account within sixty (60) days of receipt thereof; (iv) amounts distributed to the Employee from a conduit individual retirement account meeting the requirements of clause (iii) above, and transferred by the Employee to this Plan within sixty (60) days of receipt thereof from such conduit individual retirement account; and (v) any other amounts which are eligible to be rolled over to this Plan pursuant to the Code. (

c) Amounts in a Participant's Transfer/Rollover Account shall be held by the Trustee pursuant to the provisions of this Plan and may not be withdrawn by, or distributed to the Participant, in whole or in part, except as provided in paragraph (d) of this Section. The Trustee shall have no duty or responsibility to inquire as to the propriety of the amount, value or type of assets transferred, nor to conduct any due diligence with respect to such assets; provided, however, that such assets are otherwise eligible to be held by the Trustee under the terms of this Plan.

(d) The Administrator, at the election of the Participant, shall direct the Trustee to distribute all or a portion of the amount credited to the Participant's Transfer/Rollover Account. Any distributions of amounts held in a Participant's Transfer/Rollover Account shall be made in a manner which is consistent with and satisfies the provisions of Section 6.5, including, but not limited to, all notice and consent requirements of Code Sections 417 and 411(a)(11) and the

Regulations thereunder. Furthermore, such amounts shall be considered as part of a Participant's benefit in determining whether an involuntary cash-out of benefits may be made without Participant consent.

(e) The Administrator may direct that Employee transfers and rollovers made after a Valuation Date be segregated into a separate account for each Participant until such time as the allocations pursuant to this Plan have been made, at which time they may remain segregated or be invested as part of the general Trust Fund or be directed by the Participant pursuant to
Section 4.12.

(f) Notwithstanding anything herein to the contrary, a transfer directly to this Plan from another qualified plan (or a transaction having the effect of such a transfer) shall only be permitted if it will not result in the elimination or reduction of any "Section 41 l(d)(6) protected benefit" as described in Section 7.1.

4.12 DIRECTED INVESTMENT ACCOUNT

(a) Participants may, subject to a procedure established by the Administrator (the Participant Direction Procedures) and applied in a uniform nondiscriminatory manner, direct the Trustee, in writing (or in such other form which is acceptable to the Trustee), to invest all of their accounts in specific assets, specific funds or other investments permitted under the Plan and the Participant Direction Procedures. That portion of the interest of any Participant so directing will thereupon be considered a Participant's Directed Account.

(b) As of each Valuation Date, all Participant Directed Accounts shall be charged or credited with the net earnings, gains, losses and expenses as well as any appreciation or depreciation in the market value using publicly listed fair market values when available or appropriate as follows:

(1) to the extent that the assets in a Participant's Directed Account are accounted for as pooled assets or investments, the allocation of earnings, gains and losses of each Participant's Directed Account shall be based upon the total amount of funds so invested in a manner proportionate to the Participant's share of such pooled investment; and

(2) to the extent that the assets in the Participant's Directed Account are accounted for as segregated assets, the allocation of earnings, gains and losses from such assets shall be made on a separate and distinct basis.

(c) Investment directions will be processed as soon as administratively practicable after proper investment directions are received from the Participant. No guarantee is made by the Plan, Employer, Administrator or Trustee that investment directions will be processed on a daily basis, and no guarantee is made in any respect regarding the processing time of an investment direction. Notwithstanding any other provision of the Plan, the Employer, Administrator or Trustee reserves the right to not value an investment option on any given Valuation Date for any reason deemed appropriate by the Employer, Administrator or Trustee. Furthermore, the processing of any investment

transaction may be delayed for any legitimate business reason (including, but not limited to, failure of systems or computer programs, failure of the means of the transmission of data, force majeure, the failure of a service provider to timely receive values or prices, and correction for errors or omissions or the errors or omissions of any service provider). The processing date of a transaction will be binding for all purposes of the Plan and considered the applicable Valuation Date for an investment transaction.

(d) The Participant Direction Procedures shall provide an explanation of the circumstances under which Participants and their Beneficiaries may give investment instructions, including, but need not be limited to, the following:

(1) the conveyance of instructions by the Participants and their Beneficiaries to invest Participant Directed Accounts in Directed Investment Options;

(2) the name, address and phone number of the Fiduciary (and, if applicable, the person or persons designated by the Fiduciary to act on its behalf) responsible for providing information to the Participant or a Beneficiary upon request relating to the Directed Investment Options;

(3) applicable restrictions on transfers to and from any Designated Investment Alternative;

(4) any restrictions on the exercise of voting, tender and similar rights related to a Directed Investment Option by the Participants or their Beneficiaries;

(5) a description of any transaction fees and expenses which affect the balances in Participant Directed Accounts in connection with the purchase or sale of Directed Investment Options; and

(6) general procedures for the dissemination of investment and other information relating to the Designated Investment Alternatives as deemed necessary or appropriate, including but not limited to a description of the following:

(i) the investment vehicles available under the Plan, including specific information regarding any Designated Investment Alternative;

(ii) any designated Investment Managers; and

(iii) a description of the additional information which may be obtained upon request from the Fiduciary designated to provide such information.

(e) Any information regarding investments available under the Plan, to the extent not required to be described in the Participant Direction Procedures,

may be provided to the Participant in one or more written documents (or in any other form including, but not limited to, electronic media) which are separate from the Participant Direction Procedures and are not thereby incorporated by reference into this Plan.

(f) The Administrator may, in its discretion, include in or exclude by amendment or other action from the Participant Direction Procedures such instructions, guidelines or policies as it deems necessary or appropriate to ensure proper administration of the Plan, and may interpret the same accordingly,

4.13 QUALIFIED MILITARY SERVICE

Notwithstanding any provision of this Plan to the contrary, contributions, benefits and service will be provided in accordance with Code Section 414(u).

4.14 2005 VOLUNTARY COMPLIANCE

As to any person that received a distribution upon the termination of the Industrial Data Systems, Inc. 401(k) Profit Sharing Plan, is actively employed by the Employer or Affiliated Employer on the date that the Internal Revenue Service approves the voluntary compliance filing made pursuant to the terms of Revenue Procedure 2003-44 on June 3, 2005, and who elects to repay the distribution received upon such termination, an Account will be established for such repayment, reflecting the repayment in its appropriate source of funds. Such Account will be held pursuant to the terms of the Plan, until such time that payment of the Account can be made in accordance with the normal terms of the Plan.

As to any person that received a distribution upon the termination of the Industrial Data Systems, Inc. 401(k) Profit Sharing Plan, who rolled over such distribution to the Plan, and is actively employed by the Employer or Affiliated Employer on the date that the Internal Revenue Service approves the voluntary compliance filing made pursuant to the terms of Revenue Procedure 2003-44 on June 3, 2005, the amount in such Rollover Account will be reallocated under the Plan to reflect its appropriate source of funds. Such Account will be held pursuant to the terms of the Plan, until such time that payment of the Account can be made in accordance with the normal terms of the Plan.

ARTICLE V
VALUATIONS

5.1 VALUATION OF THE TRUST FUND

The Administrator shall direct the Trustee, as of each Valuation Date, to determine the net worth of the assets comprising the Trust Fund as it exists on the Valuation Date. In determining such net worth, the Trustee shall value the assets comprising the Trust Fund at their fair market value (or their contractual value in the case of a Contract or Policy) as of the Valuation Date and shall deduct all expenses for which the Trustee has not yet obtained reimbursement from the Employer or the Trust Fund. The Trustee may update the value of any

shares held in the Participant Directed Account by reference to the number of shares held by that Participant, priced at the market value as of the Valuation Date.

5.2 METHOD OF VALUATION

In determining the fair market value of securities held in the Trust Fund which are listed on a registered stock exchange, the Administrator shall direct the Trustee to value the same at the prices they were last traded on such exchange preceding the close of business on the Valuation Date, If such securities were not traded on the Valuation Date, or if the exchange on which they are traded was not open for business on the Valuation Date, then the securities shall be valued at the prices at which they were last traded prior to the Valuation Date. Any unlisted security held in the Trust Fund shall be valued at its bid price next preceding the close of business on the Valuation Date, which bid price shall be obtained from a registered broker or an investment banker. In determining the fair market value of assets other than securities for which trading or bid prices can be obtained, the Trustee may appraise such assets itself, or in its discretion, employ one or more appraisers for that purpose and rely on the values established by such appraiser or appraisers.

ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS

6.1 DETERMINATION OF BENEFITS UPON RETIREMENT

Every Participant may terminate employment with the Employer and retire for the purposes hereof on the Participant's Normal Retirement Date or Early Retirement Date. However, a Participant may postpone the termination of employment with the Employer to a later date, in which event the participation of such Participant in the Plan, including the right to receive allocations pursuant to Section 4.4, shall continue until such Participant's Late Retirement Date. Upon a Participant's Retirement Date, or as soon thereafter as is practicable, the Trustee shall distribute, at the election of the Participant, all amounts credited to such Participant's Combined Account in accordance with
Section 6.5.

6.2 DETERMINATION OF BENEFITS UPON DEATH

(a) Upon the death of a Participant before the Participant's Retirement Date or other termination of employment, all amounts credited to such Participant's Combined Account shall become fully Vested. The Administrator shall direct the Trustee, in accordance with the provisions of Sections 6.6 and 6.7, to distribute the value of the deceased Participant's accounts to the Participant's Beneficiary.

(b) Upon the death of a Former Participant, the Administrator shall direct the Trustee, in accordance with the provisions of Sections 6.6 and 6.7, to distribute any remaining Vested amounts credited to the accounts of a deceased Former Participant to such Former Participant's Beneficiary.

(c) Any security interest held by the Plan by reason of an outstanding loan to the Participant or Former Participant shall be taken into account in determining the amount of the death benefit.

(d) The Administrator may require such proper proof of death and such evidence of the right of any person to receive payment of the value of the account of a deceased Participant or Former Participant as the Administrator may deem desirable. The Administrator's determination of death and of the right of any person to receive payment shall be conclusive.

(e) The Beneficiary of the death benefit payable pursuant to this
Section shall be the Participant's spouse. Except, however, the Participant may designate a Beneficiary other than the spouse if:

(1) the spouse has waived the right to be the Participant's Beneficiary, or

(2) the Participant is legally separated or has been abandoned (within the meaning of local law) and the Participant has a court order to such effect (and there is no "qualified domestic relations order" as defined in Code Section 414(p) which provides otherwise), or

(3) the Participant has no spouse, or (4) the spouse cannot be located.

In such event, the designation of a Beneficiary shall be made on a form satisfactory to the Administrator. A Participant may at any time revoke a designation of a Beneficiary or change a Beneficiary by filing written (or in such other form as permitted by the Internal Revenue Service) notice of such revocation or change with the Administrator. However, the Participant's spouse must again consent in writing (or in such other form as permitted by the Internal Revenue Service) to any change in Beneficiary unless the original consent acknowledged that the spouse had the right to limit consent only to a specific Beneficiary and that the spouse voluntarily elected to relinquish such right.

(f) In the event no valid designation of Beneficiary exists, or if the Beneficiary is not alive at the time of the Participant's death, the death benefit will be paid to the Participant's estate. If the Beneficiary does not predecease the Participant, but dies prior to distribution of the death benefit, the death benefit will be paid to the Beneficiary's estate.

(g) Any consent by the Participant's spouse to waive any rights to the death benefit must be in writing (or in such other form as permitted by the Internal Revenue Service), must acknowledge the effect of such waiver, and be witnessed by a Plan representative or a notary public. Further, the spouse's consent must be irrevocable and must acknowledge the specific nonspouse Beneficiary.

6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY

In the event of a Participant's Total and Permanent Disability prior to the Participant's Retirement Date or other termination of employment, all amounts credited to such Participant's Combined Account shall become fully Vested. In the event of a Participant's Total and Permanent Disability, the Administrator, in accordance with the provisions of Sections 6.5 and 6.7, shall direct the distribution to such Participant of all Vested amounts credited to such Participant's Combined Account.

6.4 DETERMINATION OF BENEFITS UPON TERMINATION

(a) If a Participant's employment with the Employer is terminated for any reason other than death, Total and Permanent Disability or retirement, then such Participant shall be entitled to such benefits as are provided hereinafter pursuant to this Section 6.4.

Distribution of the funds due to a Terminated Participant shall be made on the occurrence of an event which would result in the distribution had the Terminated Participant remained in the employ of the Employer (upon the Participant's death, Total and Permanent Disability, Early or Normal Retirement). However, at the election of the Participant, the Administrator shall direct the Trustee that the entire Vested portion of the Terminated Participant's Combined Account be payable to such Terminated Participant. Any distribution under this paragraph shall be made in a manner which is consistent with and satisfies the provisions of Section 6.5, including, but not limited to, all notice and consent requirements of Code Sections 417 and 41 l(a)(l 1) and the Regulations thereunder.

If the value of a Terminated Participant's Vested benefit derived from Employer and Employee contributions does not exceed $5,000, then the Administrator shall direct the Trustee to cause the entire Vested benefit to be paid to such Participant in a single lump sum.

(b) The Vested portion of any Participant's Account shall be a percentage of the total amount credited to the Participant's Account determined on the basis of the Participant's number of whole year Periods of Service according to the following schedule:

                 Vesting Schedule
Periods of Service                  Percentage
        1                              25 %
        2                              50 %
        3                             100 %

(c) Notwithstanding the vesting schedule above, the Vested percentage of a Participant's Account shall not be less than the Vested percentage attained as of the later of the effective date or adoption date of this amendment and restatement.

(d) Notwithstanding the vesting schedule above, upon the complete discontinuance of the Employer contributions to the Plan or upon any full or partial termination of the Plan, all amounts then credited to the account of any affected Participant shall become 100% Vested and shall not thereafter be subject to Forfeiture.

(e) The computation of a Participant's nonforfeitable percentage of such Participant's interest in the Plan shall not be reduced as the result of any direct or indirect amendment to this Plan. In the event that the Plan is amended to change or modify any vesting schedule, or if the Plan is amended in any way that directly or indirectly affects the computation of the Participant's nonforfeitable percentage, or if the Plan is deemed amended by an automatic change to a top heavy vesting schedule, then each Participant with at least three (3) whole year Periods of Service as of the expiration date of the election period may elect to have such Participant's nonforfeitable percentage computed under the Plan without regard to such amendment or change. If a Participant fails to make such election, then such Participant shall be subject to the new vesting schedule. The Participant's election period shall commence on the adoption date of the amendment and shall end sixty (60) days after the latest of:

(1) the adoption date of the amendment,

(2) the effective date of the amendment, or

(3) the date the Participant receives written notice of the amendment from the Employer or Administrator.

6.5 DISTRIBUTION OF BENEFITS

(a) The Administrator, pursuant to the election of the Participant, shall direct the Trustee to distribute to a Participant or such Participant's Beneficiary any amount to which the Participant is entitled under the Plan in one of the following methods:

(1) One lump-sum payment in cash or in property allocated to the Participant's account. This shall be the normal form of payment, except as otherwise provided below.

(2) Payments over a period certain in monthly, quarterly, semiannual, or annual cash installments. In order to provide such installment payments, the Administrator may (A) segregate the aggregate amount thereof in a separate, federally insured savings account, certificate of deposit in a bank or savings and loan association, money market certificate or other liquid short-term security or (B) purchase a nontransferable annuity contract for a term certain (with no life contingencies) providing for such payment. The period over which such payment is to be made shall not extend beyond the Participant's life expectancy (or the life expectancy of the Participant and the Participant's designated Beneficiary).

(3) Purchase of or providing an annuity subject to the provisions of
Section 6.5(b).

(b) Special rules applicable to annuity payments:

(1) Unless otherwise elected as provided below, a Participant who is married on the Annuity Starting Date and who does not die before the Annuity Starting Date shall receive the value of all of such Participant's benefits in the form of a joint and survivor annuity. The joint and survivor annuity is an annuity that commences immediately and shall be equal in value to a single life annuity. Such joint and survivor benefits following the Participant's death shall continue to the spouse during the spouse's lifetime at a rate equal to fifty percent (50%) of the rate at which such benefits were payable to the Participant, This joint and survivor annuity shall be considered the designated qualified joint and survivor annuity and automatic form of payment for the purposes of this Plan. However, the Participant may, without spousal consent, elect to receive a smaller annuity benefit with continuation of payments to the spouse at a rate of seventy-five percent (75%) or one-hundred percent (100%) of the rate payable to a Participant during the Participant's lifetime, which alternative joint and survivor annuity shall be equal in value to the automatic joint and fifty percent (50%) survivor annuity. An unmarried Participant shall receive the value of such Participant's benefit in the form of a life annuity. Such unmarried Participant, however, may elect in writing to waive the life annuity. The election must comply with the provisions of this Section as if it were an election to waive the joint and survivor annuity by a married Participant, but without the spousal consent requirement. The Participant may elect to have any annuity provided for in this Section distributed upon the attainment of the "earliest retirement age" under the Plan. The "earliest retirement age" is the earliest date on which, under the Plan, the Participant could elect to receive retirement benefits.

(2) Any election to waive the joint and survivor annuity must be made by the Participant in writing (or in such other form as permitted by the Internal Revenue Service) during the election period and be consented to in writing (or in such other form as permitted by the Internal Revenue Service) by the Participant's spouse. If the spouse is legally incompetent to give consent, the spouse's legal guardian, even if such guardian is the Participant, may give consent. Such election shall designate a Beneficiary (or a form of benefits) that may not be changed without spousal consent (unless the consent of the spouse expressly permits designations by the Participant without the requirement of further consent by the spouse). Such spouse's consent shall be irrevocable and must acknowledge the effect of such election and be witnessed by a Plan representative or a notary public. Such consent shall not be required if it is established to the satisfaction of the Administrator that the required consent cannot be obtained

because there is no spouse, the spouse cannot be located, or other circumstances that may be prescribed by Regulations. The election made by the Participant and consented to by such Participant's spouse may be revoked by the Participant in writing (or in such other form as permitted by the Internal Revenue Service) without the consent of the spouse at any time during the election period. A revocation of a prior election shall cause the Participant's benefits to be distributed as a joint and survivor annuity. The number of revocations shall not be limited. Any new election must comply with the requirements of this paragraph. A former spouse's waiver shall not be binding on a new spouse.

(3) The election period to waive the joint and survivor annuity shall be the ninety (90) day period ending on the Annuity Starting Date.

(4) For purposes of this Section, spouse or surviving spouse means the spouse or surviving spouse of the Participant, provided that a former spouse will be treated as the spouse or surviving spouse and a current spouse will not be treated as the spouse or surviving spouse to the extent provided under a qualified domestic relations order as described in Code Section 414(p).

(5) With regard to the election, the Administrator shall provide to the Participant no less than thirty (30) days and no more than ninety
(90) days before the Annuity Starting Date a written (or in such other form as permitted by the Internal Revenue Service) explanation of:

(i) the terms and conditions of the joint and survivor annuity,

(ii) the Participant's right to make, and the effect of, an election to waive the joint and survivor annuity,

(iii) the right of the Participant's spouse to consent to any election to waive the joint and survivor annuity, and

(iv) the right of the Participant to revoke such election, and the effect of such revocation.

(6) Notwithstanding the above, if the Participant elects (with spousal consent, if applicable) to waive the requirement that the explanation be provided at least thirty (30) days before the Annuity Starting Date, the election period shall be extended to the thirtieth (30th) day after the date on which such explanation is provided to the Participant, unless the thirty (30) day period is waived pursuant to the following provisions.

Any distribution provided for in this Section 6.5(b) may commence less than thirty (30) days after the notice required by Code Section 417(a)(3) is given provided the following requirements are satisfied:

(i) the Administrator clearly informs the Participant that the Participant has a right to a period of thirty (30) days after receiving the notice to consider whether to waive the joint and survivor annuity and to elect (with spousal consent) to a form of distribution other than a joint and survivor annuity;

(ii) the Participant is permitted to revoke an affirmative distribution election at least until the Annuity Starting Date, or, if later, at any time prior to the expiration of the seven (7) day period that begins the day after the explanation of the joint and survivor annuity is provided to the Participant;

(iii) the Annuity Starting Date is after the date that the explanation of the joint and survivor annuity is provided to the Participant. However, the Annuity Starting Date may be before the date that any affirmative distribution election is made by the Participant and before the date that the distribution is permitted to commence under
(iv) below; and

(iv) distribution in accordance with the affirmative election does not commence before the expiration of the seven (7) day period that begins the day after the explanation of the joint and survivor annuity is provided to the Participant.

(c) In the event a married Participant duly elects pursuant to paragraph (b)(2) above not to receive benefits in the form of a joint and survivor annuity, or if such Participant is not married, in the form of a life annuity, the Administrator, pursuant to the election of the Participant, shall direct the Trustee to distribute to a Participant or Beneficiary any such amount to which the Participant or Beneficiary is entitled under the Plan in one or more of the following methods:

(1) One lump-sum payment in cash or in property allocated to the Participant's account.

(2) Payments over a period certain in monthly, quarterly, semiannual, or annual cash installments. In order to provide such installment payments, the Administrator may (A) segregate the aggregate amount thereof in a separate, federally insured savings account, certificate of deposit in a bank or savings and loan association, money market certificate or other liquid short-term security or (B) purchase a nontransferable annuity contract for a term certain (with no life contingencies) providing for such payment. The period over which such payment is to be made shall not extend beyond the Participant's life expectancy (or the life expectancy of the Participant and the Participant's designated Beneficiary).

(d) The present value of a Participant's joint and survivor annuity derived from Employer and Employee contributions may not be paid without the Participant's and the Participant's spouse's written (or in such form as permitted by the Internal Revenue Service) consent if the value exceeds $5,000 and the benefit

is "immediately distributable." However, spousal consent is not required if the distribution will be made in the form of a joint and survivor annuity and the benefit is "immediately distributable." A benefit is "immediately distributable" if any part of the benefit could be distributed to the Participant (or surviving spouse) before the Participant attains (or would have attained if not deceased) the later of the Participant's Normal Retirement Age or age 62. Any consent required by this Section 6.5(d) must be obtained not more than ninety (90) days before commencement of the distribution and shall be made in a manner consistent with Section 6.5(b)(2).

If the value of the Participant's benefit derived from Employer and Employee contributions does not exceed $5,000, then the Administrator shall direct the Trustee to immediately distribute such benefit in a lump sum without the Participant's and the Participant's spouse's written consent. No distribution may be made under the preceding sentence after the Annuity Starting Date unless the Participant and the Participant's spouse consent in writing (or in such form as permitted by the Internal Revenue Service) to such distribution.

(e) Any distribution to a Participant who has a benefit which exceeds $5,000, shall require such Participant's written (or in such other form as permitted by the Internal Revenue Service) consent if such distribution commences prior to the time the benefit is "immediately distributable." A benefit is "immediately distributable" if any part of the benefit could be distributed to the Participant (or surviving spouse) before the Participant attains (or would have attained if not deceased) the later of the Participant's Normal Retirement Age or age 62,

(f) The following rules will apply to the consent requirements set forth in subsections (d) and (e):

(1) No consent shall be valid unless the Participant has received a general description of the material features and an explanation of the relative values of the optional forms of benefit available under the Plan that would satisfy the notice requirements of Code Section 417.

(2) The Participant must be informed of the right to defer receipt of the distribution. If a Participant fails to consent, it shall be deemed an election to defer the commencement of payment of any benefit. However, any election to defer the receipt of benefits shall not apply with respect to distributions which are required under
Section 6.5(g).

(3) Notice of the rights specified under this paragraph shall be provided no less than thirty (30) days and no more than ninety (90) days before the Annuity Starting Date.

Notwithstanding the above, the Annuity Starting Date may be a date prior to the date the explanation is provided to the Participant if the distribution does not commence until at least thirty (30) days after such explanation is provided, subject to the waiver of the thirty (30) day period as provided for in Section 6.5(b)(6).

(4) Written (or such other form as permitted by the Internal Revenue Service) consent of the Participant to the distribution must not be made before the Participant receives the notice and must not be made more than ninety (90) days before the Annuity Starting Date.

(5) No consent shall be valid if a significant detriment is imposed under the Plan on any Participant who does not consent to the distribution.

Any such distribution may commence less than thirty (30) days, subject to Section 6.5(b)(6), after the notice required under Regulation 1.411(a)-l l(c) is given, provided that: (1) the Administrator clearly informs the Participant that the Participant has a right to a period of at least thirty
(30) days after receiving the notice to consider the decision of whether or not to elect a distribution (and, if applicable, a particular distribution option), and (2) the Participant, after receiving the notice, affirmatively elects a distribution.

(g) Notwithstanding any provision in the Plan to the contrary, the distribution of a Participant's benefits, whether under the Plan or through the purchase of an annuity contract, shall be made in accordance with the following requirements and shall otherwise comply with Code Section 401(a)(9) and the Regulations thereunder (including Regulation 1.401(a)(9)-2), the provisions of which are incorporated herein by reference:

(1) A Participant's benefits shall be distributed or must begin to be distributed not later than April 1st of the calendar year following the later of (1)the calendar year in which the Participant attains age 70 1/2 or (ii) the calendar year in which the Participant retires, provided, however, that this clause (ii) shall not apply in the case of a Participant who is a "five (5) percent owner" at any time during the Plan Year ending with or within the calendar year in which such owner attains age 70 1/2. Such distributions shall be equal to or greater than any required distribution.

Alternatively, distributions to a Participant must begin no later than the applicable April 1st as determined under the preceding paragraph and must be made over the life of the Participant (or the lives of the Participant and the Participant's designated Beneficiary) or the life expectancy of the Participant (or the life expectancies of the Participant and the Participant's designated Beneficiary) in accordance with Regulations.

(2) Distributions to a Participant and the Participant's Beneficiaries shall only be made in accordance with the incidental death benefit requirements of Code Section 401(a)(9)(G) and the Regulations thereunder.

With respect to distributions under the Plan made on or after October 19, 2001 for calendar years beginning on or after January 1,2001, the Plan will apply the minimum distribution requirements of Code Section 401(a)(9) in accordance with the regulations under Code Section 401(a)(9) that were proposed on January 17, 2001 (the 2001 proposed Regulations), notwithstanding any provision of

the Plan to the contrary. If the total amount of required minimum distributions made to a Participant for 2001 prior to October 19, 2001 are equal to or greater than the amount of required minimum distributions determined under the proposed 2001 Regulations, men no additional distributions are required for such Participant for 2001 on or after such date. If the total amount of required minimum distributions made to a Participant for 2001 prior to October 19,2001 are less than the amount determined under the 2001 proposed Regulations, then the amount of required minimum distributions for 2001 on or after such date will be determined so that the total amount of required minimum distributions for 2001 is the amount determined under the 2001 proposed Regulations. This amendment shall continue in effect until the last calendar year beginning before the effective date of the final regulations under Code Section 401(a)(9) or such other date as may be published by the Internal Revenue Service.

(h) For purposes of this Section, the life expectancy of a Participant and a Participant's spouse (other than in the case of a life annuity) shall not be redetermined in accordance with Code Section 401(a)(9)(D). Life expectancy and joint and last survivor expectancy shall be computed using the return multiples in Tables V and VI of Regulation 1.72-9.

(i) Ail annuity Contracts under this Plan shall be non-transferable when distributed. Furthermore, the terms of any annuity Contract purchased and distributed to a Participant or spouse shall comply with all of the requirements of the Plan.

(j) If a distribution is made to a Participant who has not severed employment and who is not fully Vested in the Participant's Account and the Participant may increase the Vested percentage in such account, then, at any relevant time the Participant's Vested portion of the account will be equal to an amount ("X") determined by the formula:

X equals P(AB plus D) - D

For purposes of applying the formula: P is the Vested percentage at the relevant time, AB is the account balance at the relevant time, and D is the amount of distribution.

(k) Effective November 1, 2005, no Participant may elect to receive their benefit in the form of an annuity. Any Participant who elects an annuity form of benefit prior to November 1, 2005, will receive, or continue to receive, his benefit in such form of an annuity.

6.6 DISTRIBUTION OF BENEFITS UPON DEATH

(a)(l) The death benefit payable pursuant to Section 6.2 shall be paid to the Participant's Beneficiary within a reasonable time after the Participant's death by either of the following methods, as elected by the Participant (or if no election has been made prior to the Participant's death, by the Participant's Beneficiary) subject, however, to the rules specified in Section 6.6(b):

(i) One lump-sum payment in cash or in property allocated to the Participant's account.

(ii) Payment in monthly, quarterly, semi-annual, or annual cash installments over a period to be determined by the Participant or the Participant's Beneficiary. After periodic installments commence, the Beneficiary shall have the right to direct the Trustee to reduce the period over which such periodic installments shall be made, and the Trustee shall adjust the cash amount of such periodic installments accordingly.

(2) In the event the death benefit payable pursuant to Section 6.2 is payable in installments, then, upon the death of the Participant, the Administrator may direct the Trustee to segregate the death benefit into a separate account, and the Trustee shall invest such segregated account separately, and the funds accumulated in such account shall be used for the payment of the installments.

(b) Notwithstanding any provision in the Plan to the contrary, distributions upon the death of a Participant shall be made in accordance with the following requirements and shall otherwise comply with Code
Section 40l(a)(9) and the Regulations thereunder. If it is determined, pursuant to Regulations, that the distribution of a Participant's interest has begun and the Participant dies before the entire interest has been distributed, the remaining portion of such interest shall be distributed at least as rapidly as under the method of distribution selected pursuant to
Section 6.5 as of the date of death. If a Participant dies before receiving any distributions of the interest in the Plan or before distributions are deemed to have begun pursuant to Regulations, then the death benefit shall be distributed to the Participant's Beneficiaries by December 31st of the calendar year in which the fifth anniversary of the Participant's date of death occurs.

However, the 5-year distribution requirement of the preceding paragraph shall not apply to any portion of the deceased Participant's interest which is payable to or for the benefit of a designated Beneficiary. In such event, such portion may, at the election of the Participant (or the Participant's designated Beneficiary) be distributed over a period not extending beyond the life expectancy of such designated Beneficiary provided such distribution begins not later than December 31st of the calendar year immediately following the calendar year in which the Participant died. However, in the event the Participant's spouse (determined as of the date of the Participant's death) is the designated Beneficiary, the requirement that distributions commence within one year of a Participant's death shall not apply. In lieu thereof, distributions must commence on or before the later of: (1) December 31st of the calendar year immediately following the calendar year in which the Participant died; or
(2) December 31st of the calendar year in which the Participant would have attained age 70 1/2. If the surviving spouse dies before distributions to such spouse begin, then the 5-year distribution requirement of this Section shall apply as if the spouse was the Participant.

(c) For purposes of Section 6.6(b), the election by a designated Beneficiary to be excepted from the 5-year distribution requirement must be made no later than December 31st of the calendar year following the calendar year of the Participant's death. Except, however, with respect to a designated Beneficiary who is the Participant's surviving spouse, the election must be made by the earlier of: (1) December 31st of the calendar year immediately following the calendar year in which the Participant died or, if later, December 31st of the calendar year in which the Participant would have attained age 70 1/2; or (2) December 31st of the calendar year which contains the fifth anniversary of the date of the Participant's death. An election by a designated Beneficiary must be in writing (or in such other form as permitted by the Internal Revenue Service) and shall be irrevocable as of the last day of the election period stated herein. In the absence of an election by the Participant or a designated Beneficiary, the 5-year distribution requirement shall apply.

(d) For purposes of this Section, the life expectancy of a Participant and a Participant's spouse shall not be redetermined in accordance with Code Section 401(a)(9)(D). Life expectancy and joint and last survivor expectancy shall be computed using the return multiples in Tables V and VI of Regulation 1.72-9.

(e) For purposes of this Section, any amount paid to a child of the Participant will be treated as if it had been paid to the surviving spouse if the amount becomes payable to the surviving spouse when the child reaches the age of majority.

(f) Effective November 1, 2005, no Participant or Beneficiary may elect to receive their benefit in the form of an annuity. Any Participant or Beneficiary who elects an annuity form of benefit prior to November 1, 2005, will receive, or continue to receive, his benefit in such form of an annuity.

6.7 TIME OF SEGREGATION OR DISTRIBUTION

Except as limited by Sections 6.5 and 6.6, whenever the Trustee is to make a distribution or to commence a series of payments the distribution or series of payments may be made or begun on such date or as soon thereafter as is practicable. However, unless a Former Participant elects in writing to defer the receipt of benefits (such election may not result in a death benefit that is more than incidental), the payment of benefits shall begin not later than the sixtieth (60th) day after the close of the Plan Year in which the latest of the following events occurs: (a) the date on which the Participant attains the earlier of age 65 or the Normal Retirement Age specified herein; (b) the tenth
(10th) anniversary of the year in which the Participant commenced participation in the Plan; or (c) the date the Participant terminates service with the Employer.

Notwithstanding the foregoing, the failure of a Participant and, if applicable, the Participant's spouse, to consent to a distribution that is "immediately distributable" (within the meaning of Section 6.5), shall be deemed to be an election to defer the commencement of payment of any benefit sufficient to satisfy this Section.

6.8 DISTRIBUTION FOR MINOR OR INCOMPETENT BENEFICIARY

In the event a distribution is to be made to a minor or incompetent Beneficiary, then the Administrator may direct that such distribution be paid to the legal guardian, or if none in the case of a minor Beneficiary, to a parent of such Beneficiary or a responsible adult with whom the Beneficiary maintains residence, or to the custodian for such Beneficiary under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted by the laws of the state in which said Beneficiary resides. Such a payment to the legal guardian, custodian or parent of a minor Beneficiary shall fully discharge the Trustee, Employer, and Plan from further liability on account thereof.

6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN

In the event that all, or any portion, of the distribution payable to a Participant or Beneficiary hereunder shall, at the later of the Participant's attainment of age 62 or Normal Retirement Age, remain unpaid solely by reason of the inability of the Administrator, after sending a registered letter, return receipt requested, to the last known address, and after further diligent effort, to ascertain the whereabouts of such Participant or Beneficiary, the amount so distributable shall be treated as a Forfeiture pursuant to the Plan. Notwithstanding the foregoing, if the value of a Participant's Vested benefit derived from Employer and Employee contributions does not exceed $5,000, then the amount distributable may, in the sole discretion of the Administrator, either be treated as a Forfeiture, or be paid directly to an individual retirement account described in Code Section 408(a) or an individual retirement annuity described in Code Section 408(b) at the time it is determined that the whereabouts of the Participant or the Participant's Beneficiary cannot be ascertained. In the event a Participant or Beneficiary is located subsequent to the Forfeiture, such benefit shall be restored, first from Forfeitures, if any, and then from an additional Employer contribution if necessary. However, regardless of the preceding, a benefit which is lost by reason of escheat under applicable state law is not treated as a Forfeiture for purposes of this Section nor as an impermissible forfeiture under the Code.

6.10 PRE-RETIREMENT DISTRIBUTION

Unless otherwise provided, at such time as a Participant shall have attained the age of 59 1/2 years, the Administrator, at the election of the Participant who has not severed employment with the Employer, shall direct the Trustee to distribute all or a portion of the elective deferral account maintained on behalf of the Participant. In addition, a Pre-retirement distribution may be taken from a Participant's Transfer/Rollover Account at any time (see also Section 4.1 l(d)). In the event that the Administrator makes such a distribution, the Participant shall continue to be eligible to participate in the Plan on the same basis as any other Employee. Any distribution made pursuant to this Section shall be made in a manner consistent with Section 6.5, including, but not limited to, all notice and consent requirements of Code Sections 417 and 41 l(a)(l 1) and the Regulations thereunder.

Any Participant who had accrued benefits in the RPM Engineering, Inc. Group
401(k) Profit Sharing Plan (The "RPM Plan") as of December 31, 1997, shall be entitled to receive an in-service withdrawal of all or apart of the vested account balance of employer nonelective (profit sharing) contribution or matching contribution credited on his behalf to the RPM Plan as of December 31, 1997, if the Participant has completed at least five (5) Years of Service as a Participant and subsequently merged with the Plan.

6.11 ADVANCE DISTRIBUTION FOR HARDSHIP

(a) The Administrator, at the election of the Participant, shall direct the Trustee to distribute to any Participant in any one Plan Year up to the lesser of 100% of the Participant's Elective Account (and earnings attributable thereto up to December 31,1988) valued as of the last Valuation Date or the amount necessary to satisfy the immediate and heavy financial need of the Participant. Any distribution made pursuant to this
Section shall be deemed to be made as of the first day of the Plan Year or, if later, the Valuation Date immediately preceding the date of distribution, and the Participant's Elective Account shall be reduced accordingly. Withdrawal under this Section is deemed to be on account of an immediate and heavy financial need of the Participant only if the withdrawal is for:

(1) Medical expenses described in Code Section 213(d) incurred by the Participant, the Participant's spouse, or any of the Participant's dependents (as defined in Code Section 152) or necessary for these persons to obtain medical care as described in Code Section 213(d);

(2) The costs directly related to the purchase (excluding mortgage payments) of a principal residence for the Participant;

(3) Payment of tuition, related educational fees, and room and board expenses for the next twelve (12) months of post-secondary education for the Participant and the Participant's spouse, children, or dependents; or

(4) Payments necessary to prevent the eviction of the Participant from the Participant's principal residence or foreclosure on the mortgage on that residence.

(b) No distribution shall be made pursuant to this Section unless the Administrator, based upon the Participant's representation and such other facts as are known to the Administrator, determines that all of the following conditions are satisfied:

(1) The distribution is not in excess of the amount of the immediate and heavy financial need of the Participant. The amount of the immediate and heavy financial need may include any amounts necessary to pay any federal, state, or local income taxes or penalties reasonably anticipated to result from the distribution;

(2) The Participant has obtained all distributions, other than hardship distributions, and all nontaxable (at the time of the loan) loans currently available under all plans maintained by the Employer;

(3) The Plan, and all other plans maintained by the Employer, provide that the Participant's elective deferrals and after-tax voluntary Employee contributions will be suspended for at least twelve (12) months after

receipt of the hardship distribution or, the Participant, pursuant to a legally enforceable agreement, will suspend elective deferrals and after-tax voluntary Employee contributions to the Plan and all other plans maintained by the Employer for at least twelve (12) months after receipt of the hardship distribution; and

(4) The Plan, and all other plans maintained by the Employer, provide that the Participant may not make elective deferrals for the Participant's taxable year immediately following the taxable year of the hardship distribution in excess of the applicable limit under Code
Section 402(g) for such next taxable year less the amount of such Participant's elective deferrals for the taxable year of the hardship distribution.

(c) Notwithstanding the above, distributions from the Participant's Elective Account pursuant to this Section shall be limited solely to the Participant's total Deferred Compensation as of the date of distribution, reduced by the amount of any previous distributions pursuant to this
Section and Section 6.10.

(d) Any distribution made pursuant to this Section shall be made in a manner which is consistent with and satisfies the provisions of Section 6.5, including, but not limited to, all notice and consent requirements of Code Sections 417 and 41 l(a)(l 1) and the Regulations thereunder.

6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION

All rights and benefits, including elections, provided to a Participant in this Plan shall be subject to the rights afforded to any "alternate payee" under a "qualified domestic relations order." Furthermore, a distribution to an "alternate payee" shall be permitted if such distribution is authorized by a "qualified domestic relations order," even if the affected Participant has not separated from service and has not reached the "earliest retirement age" under the Plan. For the purposes of this Section, "alternate payee," "qualified domestic relations order" and "earliest retirement age" shall have the meaning set forth under Code Section 414(p).

6.13 DIRECT ROLLOVER

(a) Notwithstanding any provision of the Plan to the contrary that would otherwise limit a "distributee's" election under this Section, a "distributee" may elect, at the time and in the manner prescribed by the Administrator, to have any portion of an "eligible rollover distribution" that is equal to at least $500 paid directly to an "eligible retirement plan" specified by the "distributee" in a "direct rollover."

(b) For purposes of this Section the following definitions shall apply:

(1) An "eligible rollover distribution" is any distribution of all or any portion of the balance to the credit of the "distributee," except that an "eligible rollover distribution" does not include: any distribution that is one of a series of substantially equal periodic payments (not less

frequently than annually) made for the life (or life expectancy) of the "distributee" or the joint lives (or joint life expectancies) of the "distributee" and the "distributee's" designated beneficiary, or for a specified period often years or more; any distribution to the extent such distribution is required under Code Section 401(a)(9); the portion of any other distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities); any hardship distribution described in Code Section 401(k)(2)(B)(i)(IV); and any other distribution that is reasonably expected to total less than $200 during a year.

(2) An "eligible retirement plan" is an individual retirement account described in Code Section 408(a), an individual retirement annuity described in Code Section 408 (b), an annuity plan described in Code
Section 403 (a), or a qualified trust described in Code Section 401
(a), that accepts the "distributee's" "eligible rollover distribution." However, in the case of an "eligible rollover distribution" to the surviving spouse, an "eligible retirement plan" is an individual retirement account or individual retirement annuity.

(3) A "distributee" includes an Employee or former Employee. In addition, the Employee's or former Employee's surviving spouse and the Employee's or former Employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code Section 414(p), are "distributees" with regard to the interest of the spouse or former spouse.

(4) A "direct rollover" is a payment by the Plan to the "eligible retirement plan" specified by the "distributee."

ARTICLE VII
AMENDMENT, TERMINATION, MERGERS AND LOANS

7.1 AMENDMENT

(a) The Employer shall have the right at any time to amend this Plan, subject to the limitations of this Section. However, any amendment which affects the rights, duties or responsibilities of the Trustee or Administrator may only be made with the Trustee's or Administrator's written consent. Any such amendment shall become effective as provided therein upon its execution. The Trustee shall not be required to execute any such amendment unless the amendment affects the duties of the Trustee hereunder.

(b) No amendment to the Plan shall be effective if it authorizes or permits any part of the Trust Fund (other than such part as is required to pay taxes and administration expenses) to be used for or diverted to any purpose other than for the exclusive benefit of the Participants or their Beneficiaries or estates; or causes any reduction in the amount credited to the account of any Participant; or

causes or permits any portion of the Trust Fund to revert to or become property of the Employer.

(c) Except as permitted by Regulations (including Regulation 1.411
(d)-4) or other IRS guidance, no Plan amendment or transaction having the effect of a Plan amendment (such as a merger, plan transfer or similar transaction) shall be effective if it eliminates or reduces any "Section
411 (d)(6) protected benefit" or adds or modifies conditions relating to "Section 41 l(d)(6) protected benefits" which results in a further restriction on such benefits unless such "Section 41 l(d)(6) protected benefits" are preserved with respect to benefits accrued as of the later of the adoption date or effective date of the amendment. "Section 411(d)(6) protected benefits" are benefits described in Code Section 41l(d)(6)(A)? early retirement benefits and retirement-type subsidies, and optional forms of benefit. A Plan amendment that eliminates or restricts the ability of a Participant to receive payment of the Participant's interest in the Plan under a particular optional form of benefit will be permissible if the amendment satisfies the conditions in (1) and (2) below:

(1) The amendment provides a single-sum distribution form that is otherwise identical to the optional form of benefit eliminated or restricted. For purposes of this condition (1), a single-sum distribution form is otherwise identical only if it is identical in all respects to the eliminated or restricted optional form of benefit (or would be identical except that it provides greater rights to the Participant) except with respect to the timing of payments after commencement.

(2) The amendment is not effective unless the amendment provides that the amendment shall not apply to any distribution with an Annuity Starting Date earlier than the earlier of: (i) the ninetieth (90th) day after the date the Participant receiving the distribution has been furnished a summary that reflects the amendment and that satisfies the Act requirements at 29 CFR 2520.104b-3 (relating to a summary of material modifications) or (ii) the first day of the second Plan Year following the Plan Year in which the amendment is adopted.

7.2 TERMINATION

(a) The Employer shall have the right at any time to terminate the Plan by delivering to the Trustee and Administrator written notice of such termination. Upon any full or partial termination, all amounts credited to the affected Participants' Combined Accounts shall become 100% Vested as provided in Section 6.4 and shall not thereafter be subject to forfeiture, and all unallocated amounts, including Forfeitures, shall be allocated to the accounts of all Participants in accordance with the provisions hereof.

(b) Upon the full termination of the Plan, the Employer shall direct the distribution of the assets of the Trust Fund to Participants in a manner which is consistent with and satisfies the provisions of Section
6.5. Distributions to a Participant shall be made in cash or in property allocated to the Participant's

account or through the purchase of irrevocable nontransferable deferred commitments from an insurer. Except as permitted by Regulations, the termination of the Plan shall not result in the reduction of "Section 41 l(d)(6) protected benefits" in accordance with Section 7.1(c).

7.3 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS

This Plan may be merged or consolidated with, or its assets and/or liabilities may be transferred to any other plan and trust only if the benefits which would be received by a Participant of this Plan, in the event of a termination of the Plan immediately after such transfer, merger or consolidation, are at least equal to the benefits the Participant would have received if the Plan had terminated immediately before the transfer, merger or consolidation, and such transfer, merger or consolidation does not otherwise result in the elimination or reduction of any "Section 41 l(d)(6) protected benefits" in accordance with Section 7.1(c).

7.4 LOANS TO PARTICIPANTS

(a) The Trustee may, in the Trustee's discretion, make loans to Participants and Beneficiaries under the following circumstances: (1) loans shall be made available to all Participants and Beneficiaries on a reasonably equivalent basis; (2) loans shall not be made available to Highly Compensated Employees in an amount greater than the amount made available to other Participants and Beneficiaries; (3) loans shall bear a reasonable rate of interest; (4) loans shall be adequately secured; and (5) loans shall provide for periodic repayment over a reasonable period of time.

(b) Loans made pursuant to this Section (when added to the outstanding balance of all other loans made by the Plan to the Participant) may, in accordance with a uniform and nondiscriminatory policy established by the Administrator, be limited to the lesser of:

(1) $50,000 reduced by the excess (if any) of the highest outstanding balance of loans from the Plan to the Participant during the one year period ending on the day before the date on which such loan is made, over the outstanding balance of loans from the Plan to the Participant on the date on which such loan was made, or

(2) one-half (112) of the present value of the non-forfeitable accrued benefit of the Participant under the Plan.

For purposes of this limit, all plans of the Employer shall be considered one plan.

(c) Loans shall provide for level amortization with payments to be made not less frequently than quarterly over a period not to exceed five
(5) years. However, loans used to acquire any dwelling unit which, within a reasonable time, is to be used (determined at the time the loan is made) as a "principal residence" of the Participant shall provide for periodic repayment over a reasonable period of time that may exceed five (5) years. For this purpose, a

"principal residence" has the same meaning as a "principal residence" under Code Section 1034. Loan repayments may be suspended under this Plan as permitted under Code Section 414(u)(4).

(d) Any loans granted or renewed shall be made pursuant to a Participant loan program. Such loan program shall be established in writing and must include, but need not be limited to, the following:

(1) the identity of the person or positions authorized to administer the Participant loan program;

(2) a procedure for applying for loans;

(3) the basis on which loans will be approved or denied;

(4) limitations, if any, on the types and amounts of loans offered; (

5) the procedure under the program for determining a reasonable rate of interest;

(6) the types of collateral which may secure a Participant loan; and

(7) the events constituting default and the steps that will be taken to preserve Plan assets.

Such Participant loan program shall be contained in a separate written document which, when properly executed, is hereby incorporated by reference and made a part of the Plan, Furthermore, such Participant loan program may be modified or amended in writing from time to time without the necessity of amending this Section.

(e) Notwithstanding anything in this Section to the contrary, any loans made prior to the date this amendment and restatement is adopted shall be subject to the terms of the plan in effect at the time such loan was made.

ARTICLE VIII
TOP HEAVY

8.1 TOP HEAVY PLAN REQUIREMENTS

For any Top Heavy Plan Year, the Plan shall provide the special vesting requirements of Code Section 416(b) pursuant to Section 6.4 of the Plan and the special minimum allocation requirements of Code Section 416(c) pursuant to
Section 4.4 of the Plan.

8.2 DETERMINATION OF TOP HEAVY STATUS

(a) This Plan shall be a Top Heavy Plan for any Plan Year in which, as of the Determination Date, (1) the Present Value of Accrued Benefits of Key Employees and (2) the sum of the Aggregate Accounts of Key Employees under

this Plan and all plans of an Aggregation Group, exceeds sixty percent (60%) of the Present Value of Accrued Benefits and the Aggregate Accounts of all Key and Non-Key Employees under this Plan and all plans of an Aggregation Group.

If any Participant is a Non-Key Employee for any Plan Year, but such Participant was a Key Employee for any prior Plan Year, such Participant's Present Value of Accrued Benefit and/or Aggregate Account balance shall not be taken into account for purposes of determining whether this Plan is a Top Heavy Plan (or whether any Aggregation Group which includes this Plan is a Top Heavy Group). In addition, if a Participant or Former Participant has not performed any services for any Employer maintaining the Plan at any time during the five year period ending on the Determination Date, any accrued benefit for such Participant or Former Participant shall not be taken into account for the purposes of determining whether this Plan is a Top Heavy Plan.

(b) Aggregate Account: A Participant's Aggregate Account as of the Determination Date is the sum of:

(1) the Participant's Combined Account balance as of the most recent valuation occurring within a twelve (12) month period ending on the Determination Date.

(2) an adjustment for any contributions due as of the Determination Date. Such adjustment shall be the amount of any contributions actually made after the Valuation Date but due on or before the Determination Date, except for the first Plan Year when such adjustment shall also reflect the amount of any contributions made after the Determination Date that are allocated as of a date in that first Plan Year.

(3) any Plan distributions made within the Plan Year that includes the Determination Date or within the four (4) preceding Plan Years. However, in the case of distributions made after the Valuation Date and prior to the Determination Date, such distributions are not included as distributions for top heavy purposes to the extent that such distributions are already included in the Participant's Aggregate Account balance as of the Valuation Date, Notwithstanding anything herein to the contrary, all distributions, including distributions under a terminated plan which if it had not been terminated would have been required to be included in an Aggregation Group, will be counted. Further, distributions from the Plan (including the cash value of life insurance policies) of a Participant's account balance because of death shall be treated as a distribution for the purposes of this paragraph.

(4) any Employee contributions, whether voluntary or mandatory. However, amounts attributable to tax deductible qualified voluntary employee contributions shall not be considered to be a part of the Participant's Aggregate Account balance.

(5) with respect to unrelated rollovers and plan-to-plan transfers (ones which are both initiated by the Employee and made from a plan maintained by one employer to a plan maintained by another employer), if this Plan provides the rollovers or plan-to-plan transfers, it shall always consider such rollovers or plan-to-plan transfers as a distribution for the purposes of this Section. If this Plan is the plan accepting such rollovers or plan-to-plan transfers, it shall not consider such rollovers or plan-to-plan transfers as part of the Participant's Aggregate Account balance,

(6) with respect to related rollovers and plan-to-plan transfers (ones either not initiated by the Employee or made to a plan maintained by the same employer), if this Plan provides the rollover or plan-to-plan transfer, it shall not be counted as a distribution for purposes of this Section. If this Plan is the plan accepting such rollover or plan-to-plan transfer, it shall consider such rollover or plan-to-plan transfer as part of the Participant's Aggregate Account balance, irrespective of the date on which such rollover or plan-to-plan transfer is accepted.

(7) For the purposes of determining whether two employers are to be treated as the same employer in (5) and (6) above, all employers aggregated under Code Section 414(b), (c), (m) and (o) are treated as the same employer.

(c) "Aggregation Group" means either a Required Aggregation Group or a Permissive Aggregation Group as hereinafter determined.

(1) Required Aggregation Group: In determining a Required Aggregation Group hereunder, each plan of the Employer in which a Key Employee is a participant in the Plan Year containing the Determination Date or any of the four preceding Plan Years, and each other plan of the Employer which enables any plan in which a Key Employee participates to meet the requirements of Code Sections 401(a)(4) or 410, will be required to be aggregated. Such group shall be known as a Required Aggregation Group.

In the case of a Required Aggregation Group, each plan in the group will be considered a Top Heavy Plan if the Required Aggregation Group is a Top Heavy Group. No plan in the Required Aggregation Group will be considered a Top Heavy Plan if the Required Aggregation Group is not a Top Heavy Group.

(2) Permissive Aggregation Group: The Employer may also include any other plan not required to be included in the Required Aggregation Group, provided the resulting group, taken as a whole, would continue to satisfy the provisions of Code Sections 401(a)(4) and 410. Such group shall be known as a Permissive Aggregation Group.

In the case of a Permissive Aggregation Group, only a plan that is part of the Required Aggregation Group will be considered a Top Heavy Plan if

the Permissive Aggregation Group is a Top Heavy Group. No plan in the Permissive Aggregation Group will be considered a Top Heavy Plan if the Permissive Aggregation Group is not a Top Heavy Group.

(3) Only those plans of the Employer in which the Determination Dates fall within the same calendar year shall be aggregated in order to determine whether such plans are Top Heavy Plans.

(4) An Aggregation Group shall include any terminated plan of the Employer if it was maintained within the last five (5) years ending on the Determination Date.

(d) "Determination Date" means (a) the last day of the preceding Plan Year, or (b) in the case of the first Plan Year, the last day of such Plan Year.

(e) Present Value of Accrued Benefit: In the case of a defined benefit plan, the Present Value of Accrued Benefit for a Participant other than a Key Employee, shall be as determined using the single accrual method used for all plans of the Employer and Affiliated Employers, or if no such single method exists, using a method which results in benefits accruing not more rapidly than the slowest accrual rate permitted under Code Section 41 l(b)(l)(C). The determination of the Present Value of Accrued Benefit shall be determined as of the most recent Valuation Date that falls within or ends with the 12-month period ending on the Determination Date except as provided in Code Section 416 and the Regulations thereunder for the first and second plan years of a defined benefit plan.

(f) "Top Heavy Group" means an Aggregation Group in which, as of the Determination Date, the sum of:

(1) the Present Value of Accrued Benefits of Key Employees under all defined benefit plans included in the group, and

(2) the Aggregate Accounts of Key Employees under all defined contribution plans included in the group, exceeds sixty percent (60%) of a similar sum determined for all Participants.

ARTICLE IX
MISCELLANEOUS

9.1 PARTICIPANT'S RIGHTS

This Plan shall not be deemed to constitute a contract between the Employer and any Participant or to be a consideration or an inducement for the employment of any Participant or Employee. Nothing contained in this Plan shall be deemed to give any Participant or Employee the right to be retained in the service of the Employer or to interfere with the right of

the Employer to discharge any Participant or Employee at any time regardless of the effect which such discharge shall have upon the Employee as a Participant of this Plan.

9.2 ALIENATION

(a) Subject to the exceptions provided below, and as otherwise permitted by the Code and the Act, no benefit which shall be payable out of the Trust Fund to any person (including a Participant or the Participant's Beneficiary) shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the same shall be void; and no such benefit shall in any manner be liable for, or subject to, the debts, contracts, liabilities, engagements, or torts of any such person, nor shall it be subject to attachment or legal process for or against such person, and the same shall not be recognized by the Trustee, except to such extent as may be required by law.

(b) Subsection (a) shall not apply to the extent a Participant or Beneficiary is indebted to the Plan, by reason of a loan made pursuant to
Section 7.4. At the time a distribution is to be made to or for a Participant's or Beneficiary's benefit, such proportion of the amount to be distributed as shall equal such indebtedness shall be paid to the Plan, to apply against or discharge such indebtedness. Prior to making a payment, however, the Participant or Beneficiary must be given written notice by the Administrator that such indebtedness is to be so paid in whole or part from the Participant's Combined Account. If the Participant or Beneficiary does not agree that the indebtedness is a valid claim against the Vested Participant's Combined Account, the Participant or Beneficiary shall be entitled to a review of the validity of the claim in accordance with procedures provided in Sections 2.10 and 2.11.

(c) Subsection (a) shall not apply to a "qualified domestic relations order" defined in Code Section 414(p), and those other domestic relations orders permitted to be so treated by the Administrator under the provisions of the Retirement Equity Act of 1984. The Administrator shall establish a written procedure to determine the qualified status of domestic relations orders and to administer distributions under such qualified orders. Further, to the extent provided under a "qualified domestic relations order," a former spouse of a Participant shall be treated as the spouse or surviving spouse for all purposes under the Plan.

(d) Subsection (a) shall not apply to an offset to a Participant's accrued benefit against an amount that the Participant is ordered or required to pay the Plan with respect to a judgment, order, or decree issued, or a settlement entered into, on or after August 5, 1997, in accordance with Code Sections 401(a)(13)(C) and (D). In a case in which the survivor annuity requirements of Code Section 401(a)(l 1) apply with respect to distributions from the Plan to the Participant, if the Participant has a spouse at the time at which the offset is to be made:

(1) either such spouse has consented in writing to such offset and such consent is witnessed by a notary public or representative of the Plan (or it is established to the satisfaction of a Plan representative that such consent may not be obtained by reason of circumstances described in Code Section 417(a)(2)(B)), or an election to waive the right of the spouse to either a qualified joint and survivor annuity or a qualified pre-retirement survivor annuity is in effect in accordance with the requirements of Code Section 417(a),

(2) such spouse is ordered or required in such judgment, order, decree or settlement to pay an amount to the Plan in connection with a violation of fiduciary duties, or

(3) in such judgment, order, decree or settlement, such spouse retains the right to receive the survivor annuity under a qualified joint and survivor annuity provided pursuant to Code Section 401(a)(ll)(A)(i) and under a qualified pre-retirement survivor annuity provided pursuant to Code Section 401(a)(11)(A)(ii).

9.3 CONSTRUCTION OF PLAN

This Plan shall be construed and enforced according to the Code, the Act and the laws of the State of Texas, other than its laws respecting choice of law, to the extent not pre-empted by the Act.

9.4 GENDER AND NUMBER

Wherever any words are used herein in the masculine, feminine or neuter gender, they shall be construed as though they were also used in another gender in all cases where they would so apply, and whenever any words are used herein in the singular or plural form, they shall be construed as though they were also used in the other form in all cases where they would so apply.

9.5 LEGAL ACTION

In the event any claim, suit, or proceeding is brought regarding the Trust and/or Plan established hereunder to which the Trustee, the Employer or the Administrator may be a party, and such claim, suit, or proceeding is resolved in favor of the Trustee, the Employer or the Administrator, they shall be entitled to be reimbursed from the Trust Fund for any and all costs, attorney's fees, and other expenses pertaining thereto incurred by them for which they shall have become liable.

9.6 PROHIBITION AGAINST DIVERSION OF FUNDS

(a) Except as provided below and otherwise specifically permitted by law, it shall be impossible by operation of the Plan or of the Trust, by termination of either, by power of revocation or amendment, by the happening of any contingency, by collateral arrangement or by any other means, for any part of the corpus or income of any Trust Fund maintained pursuant to the Plan or any funds

contributed thereto to be used for, or diverted to, purposes other than the exclusive benefit of Participants, Former Participants, or their Beneficiaries.

(b) In the event the Employer shall make an excessive contribution under a mistake of fact pursuant to Act Section 403(c)(2)(A), the Employer may demand repayment of such excessive contribution at any time within one
(1) year following the time of payment and the Trustees shall return such amount to the Employer within the one (1) year period. Earnings of the Plan attributable to the contributions may not be returned to the Employer but any losses attributable thereto must reduce the amount so returned.

(c) Except for Sections 3.5, 3.6, and 4.1(c), any contribution by the Employer to the Trust Fund is conditioned upon the deducibility of the contribution by the Employer under the Code and, to the extent any such deduction is disallowed, the Employer may, within one (1) year following the final determination of the disallowance, whether by agreement with the Internal Revenue Service or by final decision of a competent jurisdiction, demand repayment of such disallowed contribution and the Trustee shall return such contribution within one (1) year following the disallowance. Earnings of the Plan attributable to the contribution may not be returned to the Employer, but any losses attributable thereto must reduce the amount so returned.

9.7 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE

The Employer, Administrator and Trustee, and their successors, shall not be responsible for the validity of any Contract issued hereunder or for the failure on the part of the insurer to make payments provided by any such Contract, or for the action of any person which may delay payment or render a Contract null and void or unenforceable in whole or in part.

9.8 INSURER'S PROTECTIVE CLAUSE

Except as otherwise agreed upon in writing between the Employer and the insurer, an insurer which issues any Contracts hereunder shall not have any responsibility for the validity of this Plan or for the tax or legal aspects of this Plan. The insurer shall be protected and held harmless in acting in accordance with any written direction of the Trustee, and shall have no duty to see to the application of any funds paid to the Trustee, nor be required to question any actions directed by the Trustee. Regardless of any provision of this Plan, the insurer shall not be required to take or permit any action or allow any benefit or privilege contrary to the terms of any Contract which it issues hereunder, or the rules of the insurer.

9.9 RECEIPT AND RELEASE FOR PAYMENTS

Any payment to any Participant, the Participant's legal representative, Beneficiary, or to any guardian or committee appointed for such Participant or Beneficiary in accordance with the provisions of the Plan, shall, to the extent thereof, be in full satisfaction of all claims hereunder against the Trustee and the Employer, either of whom may require such Participant, legal representative, Beneficiary, guardian or committee, as a condition precedent to such payment, to execute a receipt and release thereof in such form as shall be determined by the Trustee or Employer.

9.10 ACTION BY THE EMPLOYER

Whenever the Employer under the terms of the Plan is permitted or required to do or perform any act or matter or thing, it shall be done and performed by a person duly authorized by its legally constituted authority,

9.11 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY

The "named Fiduciaries" of this Plan are (1) the Employer, (2) the Administrator, and (3) any Investment Manager appointed hereunder. The named Fiduciaries shall have only those specific powers, duties, responsibilities, and obligations as are specifically given them under the Plan including, but not limited to, any agreement allocating or delegating their responsibilities, the terms of which are incorporated herein by reference. In general, the Employer shall have the sole responsibility for making the contributions provided for under Section 4.1; and shall have the authority to appoint and remove the Trustee and the Administrator; to formulate the Plan's "funding policy and method"; and to amend or terminate, in whole or in part, the Plan. The Administrator shall have the sole responsibility for the administration of the Plan, including, but not limited to, the items specified in Article II of the Plan, as the same may be allocated or delegated thereunder. The Administrator shall act as the named Fiduciary responsible for communicating with the Participant according to the Participant Direction Procedures. The Administrator shall have the sole responsibility of management of the assets held under the Trust, except with respect to those assets, the management of which has been assigned to an Investment Manager, who shall be solely responsible for the management of the assets assigned to it, or as otherwise specifically provided in the Plan and Trust Agreement. Each named Fiduciary warrants that any directions given, information furnished, or action taken by it shall be in accordance with the provisions of the Plan, authorizing or providing for such direction, information or action, Furthermore, each named Fiduciary may rely upon any such direction, information or action of another named Fiduciary as being proper under the Plan, and is not required under the Plan to inquire into the propriety of any such direction, information or action. It is intended under the Plan that each named Fiduciary shall be responsible for the proper exercise of its own powers, duties, responsibilities and obligations under the Plan as specified or allocated herein. No named Fiduciary shall guarantee the Trust Fund in any manner against investment loss or depreciation in asset value. Any person or group may serve in more than one Fiduciary capacity.

9.12 HEADINGS

The headings and subheadings of this Plan have been inserted for convenience of reference and are to be ignored in any construction of the provisions hereof.

9.13 APPROVAL BY INTERNAL REVENUE SERVICE

Notwithstanding anything herein to the contrary, if, pursuant to an application for qualification filed by or on behalf of the Plan by the time prescribed by law for filing the Employer's return for the taxable year in which the Plan is adopted, or such later date that the Secretary of the Treasury may prescribe, the Commissioner of Internal Revenue Service or the Commissioner's delegate should determine that the Plan does not initially qualify as a tax-exempt plan under Code Sections 401 and 501, and such determination is not contested, or if contested,

is finally upheld, then if the Plan is a new plan, it shall be void ab initio and all amounts contributed to the Plan by the Employer, less expenses paid, shall be returned within one (1) year and the Plan shall terminate, and the Trustee shall be discharged from all further obligations. If the disqualification relates to an amended plan, then the Plan shall operate as if it had not been amended,

9.14 UNIFORMITY

All provisions of this Plan shall be interpreted and applied in a uniform, nondiscriminatory manner. In the event of any conflict between the terms of this Plan and any Contract purchased hereunder, the Plan provisions shall control.

ARTICLE X
PARTICIPATING EMPLOYERS

10.1 ADOPTION BY OTHER EMPLOYERS

Notwithstanding anything herein to the contrary, with the consent of the Employer and Trustee, any other corporation or entity, whether an affiliate or subsidiary or not, may adopt this Plan and all of the provisions hereof, and participate herein and be known as a Participating Employer, by a properly executed document evidencing said intent and will of such Participating Employer.

10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS

(a) Each such Participating Employer shall be required to use the same Trustee as provided in this Plan.

(b) The Trustee may, but shall not be required to, commingle, hold and invest as one Trust Fund all contributions made by Participating Employers, as well as all increments thereof.

c) Any expenses of the Plan which are to be paid by the Employer or borne by the Trust Fund shall be paid by each Participating Employer in the same proportion that the total amount standing to the credit of all Participants employed by such Employer bears to the total standing to the credit of all Participants.

10.3 DESIGNATION OF AGENT

Each Participating Employer shall be deemed to be a party to this Plan; provided, however, that with respect to all of its relations with the Trustee and Administrator for the purpose of this Plan, each Participating Employer shall be deemed to have designated irrevocably the Employer as its agent. Unless the context of the Plan clearly indicates the contrary, the word "Employer" shall be deemed to include each Participating Employer as related to its adoption of the Plan.

10.4 EMPLOYEE TRANSFERS

In the event an Employee is transferred between Participating Employers, accumulated service and eligibility shall be carried with the Employee involved. No such transfer shall effect a termination of employment hereunder, and the Participating Employer to which the Employee is transferred shall thereupon become obligated hereunder with respect to such Employee in the same manner as was the Participating Employer from whom the Employee was transferred.

10.5 PARTICIPATING EMPLOYER CONTRIBUTION AND FORFEITURES

Any contribution or Forfeiture subject to allocation during each Plan Year shall be allocated only among those Participants of the Employer or Participating Employers making the contribution or by which the forfeiting Participant was employed. However, if the contribution is made, or the forfeiting Participant was employed, by an Affiliated Employer, in which event such contribution or Forfeiture shall be allocated among all Participants of all Participating Employers who are Affiliated Employers in accordance with the provisions of this Plan. On the basis of the information furnished by the Administrator, the Trustee may keep separate books and records concerning the affairs of each Participating Employer hereunder and as to the accounts and credits of the Employees of each Participating Employer. The Trustee may, but need not, register Contracts so as to evidence that a particular Participating Employer is the interested Employer hereunder, but in the event of an Employee transfer from one Participating Employer to another, the employing Participating Employer shall immediately notify the Trustee thereof.

10.6 AMENDMENT

Amendment of this Plan by the Employer at any time when there shall be a Participating Employer hereunder shall only be by the written action of the Employer.

10.7 DISCONTINUANCE OF PARTICIPATION

Any Participating Employer shall be permitted to discontinue or revoke its participation in the Plan at any time. At the time of any such discontinuance or revocation, satisfactory evidence thereof and of any applicable conditions imposed shall be delivered to the Trustee. The Trustee shall thereafter transfer, deliver and assign Contracts and other Trust Fund assets allocable to the Participants of such Participating Employer to such new trustee as shall have been designated by such Participating Employer, in the event that it has established a separate qualified retirement plan for its employees provided, however, that no such transfer shall be made if the result is the elimination or reduction of any "Section 411 (d)(6) protected benefits" as described in Section
7.1(c). If no successor is designated, the Trustee shall retain such assets for the Employees of said Participating Employer pursuant to the provisions of the Trust. In no such event shall any part of the corpus or income of the Trust Fund as it relates to such Participating Employer be used for or diverted for purposes other than for the exclusive benefit of the Employees of such Participating Employer.

10.8 ADMINISTRATOR'S AUTHORITY

The Administrator shall have authority to make any and all necessary rules or regulations, binding upon all Participating Employers and all Participants, to effectuate the purpose of this Article.

IN WITNESS WHEREOF, this Plan has been executed on the day and year written below.

-------------------------------------             ENGlobal Engineering, Inc.
DATE

                                                  ------------------------------
                                                  EMPLOYER

SUPPLEMENTAL PARTICIPATION AGREEMENT

A Participation Agreement made and entered into this 24 day of October , 2005______________________, between EN Global Construction Resources, Inc. (hereinafter referred to as the "Participating Employer"), ENGlobal Engineering, Inc. (hereinafter referred to as the "Employer"), and The Charles Schwab Trust Company (hereinafter referred to as the "Trustees").

WHEREAS, the Participating Employer desires to reward its employees for faithful service, to establish a bond between employer and employee, to provide an incentive for efficient and conscientious work, to provide a fund for retirement, disability, or death, and to retain high-calibre fellow employees; and

WHEREAS, there exists a Profit Sharing Plan entered into on the 24 day of October, 2005 namely the ENGlobal 401(k) Plan, called the "Plan"; and

WHEREAS, Plan Section 10,1 provides that any other Participating Employer may, with the consent of the Employer, adopt the Plan and participate therein by a properly executed document evidencing said intent of said Participating Employer;

NOW, THEREFORE, the Participating Employer hereby becomes a party to the Plan, effective the 2*^ day of 0cf^6>f<! 2-o-osr_______________________, and the Employer and the Trustees hereby consent to such adoption and participation upon the following terms:

(1) Wherever a right or obligation is imposed upon the Employer by the terms of the Plan, the same shall extend to the Participating Employer as the "Employer" under the Plan and shall be separate and distinct from that imposed upon the Employer. It is the intention of the parties that the Participating Employer shall be a party to the Plan and treated in all respects as the Employer thereunder, with its employees to be considered as the Employees or Participants, as the case may be, thereunder. However, the participation of the Participating Employer in the Plan shall in no way diminish, augment, modify, or in any way affect the rights and duties of the Employer, its Employees, or Participants, under the Plan.

(2) The Trustees hereby agree to receive and allocate contributions made to the Plan by the Employer and by the Participating Employer, as well as to do and perform all acts that are necessary to keep records and accounts of all funds held for Participants who are Employees of the respective employers.

(3) The execution of this Agreement by this Participating Employer shall be construed as the adoption of the Plan in every respect as if said Plan had this date been executed between the Participating Employer and the Trustees, except as otherwise expressly provided herein or in any amendment that may subsequently be adopted hereto.

(4) All actions required by the Plan to be taken by the Employer shall be effective with respect to the Participating Employer if taken by the Employer and pursuant to Plan Section 10.3, the Participating Employer hereby irrevocably designates the Employer as its agent for such purposes. This shall include the (1) ability to amend the Plan or any other Plan document, in accordance with Plan Section 10.6.

IN WITNESS WHEREOF, the Participating Employer, the Employer and the Trustees have caused this Supplemental Participation Agreement to be executed in their respective names on the day and date first above written.

ENGlobal Construction Resources, Inc.

EMPEOYER ENGlobal Engineering, Inc.

The Charles Schwab Trust Company

ENGLOBAL 401(K) PLAN

FUNDING POLICY AND METHOD

A pension benefit plan (as defined in the Employee Retirement Income Security Act of 1974) has been adopted by the company for the purpose of rewarding long and loyal service to the company by providing to employees additional financial security at retirement. Incidental benefits are provided in the case of disability, death or other termination of employment.

Since the principal purpose of the plan is to provide benefits at normal retirement age, the principal goal of the investment of the funds in the plan should be both security and long-term stability with moderate growth commensurate with the anticipated retirement dates of participants. Investments, other than "fixed dollar" investments, should be included among the plan's investments to prevent erosion by inflation. However, investments should be sufficiently liquid to enable the plan, on short notice, to make some distributions in the event of the death or disability of a participant.

SUPPLEMENTAL PARTICIPATION AGREEMENT

A Participation Agreement made and entered into this 24 day of October, 2005 between ENGlobal Systems, Inc. (hereinafter referred to as the "Participating Employer"), ENGlobal Engineering, Inc. (hereinafter referred to as the "Employer") and The Charles Schwab Trust Company (hereinafter referred to as the "Trustees").

WHEREAS, the Participating Employer desires to reward its employees for faithful service, to establish a bond between employer and employee, to provide an incentive for efficient and conscientious work, to provide a fund for retirement, disability, or death, and to retain high-calibre fellow employees; and

WHEREAS, there exists a Profit Sharing Plan entered into on the 24 day of October, 2005____namely the ENGlobal 401 (k) Plan, called the "Plan"; and

WHEREAS, Plan Section 10.1 provides that any other Participating Employer may, with the consent of the Employer, adopt the Plan and participate therein by a properly executed document evidencing said intent of said Participating Employer;

NOW, THEREFORE, the Participating Employer hereby becomes a party to the Plan, effective the .24th day of October, 2005__________________________, and the Employer and the Trustees hereby consent to such adoption and participation upon the following terms:

(1) Wherever a right or obligation is imposed upon the Employer by the terms of the Plan, the same shall extend to the Participating Employer as the "Employer" under the Plan and shall be separate and distinct from that imposed upon the Employer. It is the intention of the parties that the Participating Employer shall be a party to the Plan and treated in all respects as the Employer thereunder, with its employees to be considered as the Employees or Participants, as the case may be, thereunder. However, the participation of the Participating Employer in the Plan shall in no way diminish, augment, modify, or in any way affect the rights and duties of the Employer, its Employees, or Participants, under the Plan.

(2) The Trustees hereby agree to receive and allocate contributions made to the Plan by the Employer and by the Participating Employer, as well as to do and perform all acts that are necessary to keep records and accounts of all funds held for Participants who are Employees of the respective employers.

(3) The execution of this Agreement by this Participating Employer shall be construed as the adoption of the Plan in every respect as if said Plan had this date been executed between the Participating Employer and the Trustees, except as otherwise expressly provided herein or in any amendment that may subsequently be adopted hereto.

(4) All actions required by the Plan to be taken by the Employer shall be effective with respect to the Participating Employer if taken by the Employer and pursuant to Plan Section 10.3, the Participating Employer hereby irrevocably designates the Employer as its agent for such purposes. This shall include the (1) ability to amend the Plan or any other P!an document, in accordance with Plan Section 10.6.

IN WITNESS WHEREOF, the Participating Employer, the Employer and the Trustees have caused this Supplemental Participation Agreement to be executed in their respective names on the day and date first above written,

ENGlobal Systems, Inc.

PARTICIPATING

EMPLOYER ENGlobal Engineering, Inc.
EMPLOYER

The Charles Schwab Trust Company

ENGLOBAL 401(K) PLAN

FUNDING POLICY AND METHOD

A pension benefit plan (as defined in the Employee Retirement Income Security Act of 1974) has been adopted by the company for the purpose of rewarding long and loyal service to the company by providing to employees additional financial security at retirement. Incidental benefits are provided in the case of disability, death or other termination of employment.

Since the principal purpose of the plan is to provide benefits at normal retirement age, the principal goal of the investment of the funds in the plan should be both security and long-term stability with moderate growth commensurate with the anticipated retirement dates of participants. Investments, other than "fixed dollar" investments, should be included among the plan's investments to prevent erosion by inflation. However, investments should be sufficiently liquid to enable the plan, on short notice, to make some distributions in the event of the death or disability of a participant.

Exhibit 10.23

SECOND AMENDMENT TO THE ENGLOBAL 401(K) PLAN

WHEREAS, ENGlobal Engineering, Inc. {the "Employer") adopted a restatement of the ENGlobal 40l(k) Plan (the "Plan"), effective as of October 1, 2005, and various subsequent amendments; and

WHEREAS, the employer has (he ability to amend the Plan pursuant to Section 7,1; and WHEREAS, the Employer now desires to amend the Plan to update the matching formulas,

NOW. THEREFORE. the Employer hereby amends the Plan in the following respects, effective as of April 1, 2006:

1. Article 4.1 (b) is amended to read as follows:

(b){i) For Participants who are classified on the payroll records of the Employer as "regular employees," 50% of elective deferrals up to the first 0% of Compensation; and (ii) for all other Participants, 33.3% of elective deferrals up to the first 6% of Compensation. In other words, we are no longer referring to contract or project employees, and the match for the first group would be a maximum of 3% of pay, and for the second group, a maximum of 2% of pay.

2. In all other respects, the terms of this Plan are hereby ratified and confirmed.

IN WITNESS WHEREOF, the Employer has caused this Second Amendment, to he executed I counterparts. each of which shall be considered as an original, as of the date indicated be

ENGL0BAL ENGINEERING, INC,

Witness: //s//  Natalie S. Hairston        Signature  //s//  William A. Coskey
                                           Title: CEO
                                           Date: March 29, 2006

Exhibit ???

THIRD AMENDMENT TO
THE ENGLOBAL 401 (K)
PLAN

WHEREAS, ENGlobal Engineering, Inc. (the "Employer") adopted a restatement of the ENGlobal 401(k) Plan (the "Plan"), effective as of October 1, 2005, and various subsequent amendments; WHEREAS, the Employer has the ability to amend the Plan pursuant to Section 7.1; and WHEREAS, the Employer now desires to amend the Plan to include service with WRC Corporation;

NOW, THEREFORE, the Employer hereby amends the Plan in the following respects, effective as of July 1, 2006

1. The following shall be added to Section 1.50: Periods of Service with WRC Corporation shall be recognized.

2. The following shall be added to Section 1.67: Years of Service with WRC Corporation shall be recognized. 3

In all other respects, the terms of this Plan are hereby ratified and confirmed.

IN WITNESS WHEREOF, the Employer has caused this Third Amendment to be executed in duplicate counterparts, each of which shall be considered as an original, as of the date indicated below.

ENGLOBAL ENGINEERING, INC.

//s// William A. Coskey, CEO


Date:  October 16, 2006


Witness: //s// Jean Whitaker

EXHIBIT 10.25

ENGLOBAL 401(K) PLAN

FINAL 401(k)/4Gl(m) REGULATIONS AMENDMENT

I.I  Adoption and effective date of amendment. The sponsor adopts this Amendment
     to the Plan to reflect certain provisions of the Final Regulations under
     Code Sections 401(k) and 401(m) that were published on December 29, 2004
     (hereinafter referred to as the "Final 401(k) Regulations"). The sponsor
     intends this Amendment as good faith compliance with the requirements of
     these provisions. This Amendment shall be effective with respect to Plan
     Years beginning after December 31, 2005.

1-2  Supersession of inconsistent provisions. This Amendment shall supersede the
     provisions of the Plan to the extent those provisions are inconsistent with
     the provisions of this Amendment.

1.3  Application of provisions. Certain provisions of this Amendment relate to
     elective deferrals of a 401(k) plan; if the Plan to which this Amendment
     relates is not a 401(k) plan, then those provisions of this Amendment do
     not apply. Certain provisions of this Amendment relate to matching
     contributions and /or after-tax employee contributions subject to Code
     Section 401 (m); if the Plan to which this Amendment relates is not subject
     to Code Section 401(m), then those provisions of this Amendment do not
     apply.

                                   ARTICLE II
                               EMPLOYER ELECTIONS

2.1  Effective Date. This Amendment is effective, and the Plan shall implement
     the provisions of the Final 401 (k) Regulations, with respect to Plan Years
     beginning after December 31, 2005.

2.2  ACP Test Safe Harbor. Unless otherwise selected below, if this Plan uses
     the ADP Test Safe Harbor provisions, then the provisions of Amendment
     Section 9.2(a) apply and all matching contributions under the Plan will be
     applied without regard to any allocation conditions except as provided in
     that Section.

     a.   [ ] The provisions of Amendment Section 9.2(b) apply. The allocation
          conditions applicable to matching contributions under the Plan
          continue to apply (if selected, the Plan is not an ACP Test Safe
          Harbor Plan).

     b.   [X ]The provisions of Amendment Section 9.2(c) apply. All matching
          contributions under the Plan will be applied without regard to any
          allocation conditions as of the effective date of this Amendment.

                                   ARTICLE III
                                  GENERAL RULES

3.1  Deferral elections. A cash or deferred arrangement ("CODA") is an
     arrangement under which eligible Employees may make elective deferral
     elections. Such elections cannot relate to compensation that is currently
     available prior to the adoption or effective date of the CODA. In addition,
     except for occasional, bona fide administrative considerations,
     contributions made pursuant to such an election cannot precede the earlier
     of (1) the performance of services relating to the contribution and (2)
     when the compensation that is subject to the election would be currently
     available to the Employee in the absence of an election to defer.

3.2  Vesting provisions. Elective Contributions are always fully vested and
     nonforfeitable. The Plan shall disregard Elective Contributions in applying
     the vesting provisions of the Plan to other contributions or benefits under
     Code Section 41 l(a)(2). However, the Plan shall otherwise take a
     participant's Elective Contributions into account in determining the
     Participant's vested benefits under the Plan. Thus, for example, the Plan
     shall take Elective Contributions into account in determining whether a
     Participant has a nonforfeitable right to contributions under the Plan for
     purposes of forfeitures, and for applying provisions permitting the
     repayment of distributions to have forfeited amounts restored, and the
     provisions of Code Sections 410(a)(5)(D)(iii) and 411(a)(6)(D)(iii)
     permitting a plan to disregard certain service completed prior to
     breaks-in- service (sometimes referred to as "the rule of parity").

                                   ARTICLE IV
                             HARDSHIP DISTRIBUTIONS

4.1  Applicability. The provisions of this Article IV apply if the Plan provides
     for hardship distributions upon satisfaction of the deemed immediate and
     heavy financial need standards set forth in Regulation Section
     1.401(k)-l(d)(2)(iv)(A) as in effect prior to the issuance of the Final
     40l(k) Regulations.

4.2  Hardship events. A distribution under the Plan is hereby deemed to be on
     account of an immediate and heavy financial need of an Employee if the
     distribution is for one of the following or any other item permitted under
     Regulation Section L401(k)-l{d)(3)(iii)(B):

     (a)  Expenses for (or necessary to obtain) medical care that would be
          deductible under Code Section 213(d) (determined without regard to
          whether the expenses exceed 7.5% of adjusted gross income);

     (b)  Costs directly related to the purchase of a principal residence for
          the Employee (excluding mortgage payments);

     (c)  Payment of tuition, related educational fees, and room and board
          expenses, for up to the ......... next twelve (12) months of
          post-secondary education for the Employee, the Employee's spouse,
          children, or dependents (as defined in Code Section 152, and, for
          taxable years beginning on or after January 1, 2005, without regard to
          Code Section 152(b)(l), (b)(2), and(d)(l)(B));

     (d)  Payments necessary to prevent the eviction of the Employee from the
          Employee's principal residence or foreclosure on the mortgage on that
          residence;

     (e)  Payments for burial or funeral expenses for the Employee's deceased
          parent, spouse, children or dependents (as defined in Code Section
          152, and, for taxable years beginning on or after January 1, 2005,
          without regard to Code Section 152(d)(l)(B)); or

     (f)  Expenses for the repair of damage to the Employee's principal
          residence that would qualify for the casualty deduction under Code
          Section 165 (determined without regard to whether the loss exceeds 10%
          of adjusted gross income).

4.3  Reduction of Code Section 402(g) limit following, hardship distribution. If
     the Plan provides for hardship distributions upon satisfaction of the safe
     harbor standards set forth in Regulation Sections 1.401(k)-l(d)(3)(iii)(B)
     (deemed immediate and heavy financial need) and 1.401(k)-l(d)(3)(iv)(E)
     (deemed necessary to satisfy immediate need), then there shall be no
     reduction in the maximum amount of elective deferrals that a Participant
     may make pursuant to Code Section 402(g) solely because of a hardship
     distribution made by this Plan or any other plan of the Employer.

ARTICLE V ACTUAL DEFERRAL PERCENTAGE (ADP) TEST

5.1 Targeted contribution limit. Qualified Nonelective Contributions (as defined in Regulation Section l, 401(k)-6) cannot be taken into account in determining the Actual Deferral Ratio (ADR) for a Plan Year for a Non-Highly Compensated Employee (NHCE) to the extent such contributions exceed the product of that NHCE's Code Section 414(s) compensation and the greater of five percent (5%) or two (2) times the Plan's "representative contribution rate." Any Qualified Nonelective Contribution taken into account under an Actual Contribution Percentage (ACP) test under Regulation
Section 1.401(m)-2(a)(6) (including the determination of the representative contribution rate for purposes of Regulation Section i .401(m)-2(a)(6)(v)(B)), is not permitted to be taken into account for purposes of this Section (including the determination of the "representative contribution rate" under this Section). For purposes of this Section:

(a) The Plan's "representative contribution rate" is the lowest "applicable contribution rate" of any eligible NHCE among a group of eligible NHCEs that consists of half of all eligible NHCEs for the Plan Year (or, if greater, the lowest "applicable contribution rate" of any eligible NHCE who is in the group of all eligible NHCEs for the Plan Year and who is employed by the Employer on the last day of the Plan Year), and

(b) The "applicable contribution rate" for an eligible NHCE is the sum of the Qualified Matching Contributions (as defined in Regulation Section 1.401(k)-6) taken into account in determining the ADR for the eligible NHCE for the Plan Year and the Qualified (a) Nonelective Contributions made for the eligible NHCE for the Plan Year, divided by the eligible NHCE's Code Section 414(s) compensation for the same period.

Notwithstanding the above, Qualified Nonelective Contributions that are made in connection with an Employer's obligation to pay prevailing wages under the Davis-Bacon Act (46 Stat. 1494), Public Law 71-798, Service Contract Act of 1965 (79 Stat. 1965), Public Law 89-286, or similar legislation can be taken into account for a Plan Year for an NHCE to the extent such contributions do not exceed 10 percent (10%) of that NHCE's Code Section 414(s) compensation.

Qualified Matching Contributions may only be used to calculate an ADR to the extent that such Qualified Matching Contributions are matching contributions that are not precluded from being taken into account under the ACP test for the Plan Year under the rules of Regulation Section 1.401(m)-2(a)(5)(ii) and as set forth in Section 7.1.

5.2 Limitation on QNECs and QMACs. Qualified Nonelective Contributions and Qualified Matching Contributions cannot be taken into account to determine an ADR to the extent such contributions are taken into account for purposes of satisfying any other ADP test, any ACP test, or the requirements of Regulation Section 1.401(k)-3, 1.401(m)-3, or 1.401(k)-4. Thus, for example, matching contributions that are made pursuant to Regulation
Section 1.401(k)-3(c) cannot be taken into account under the ADP test. Similarly, if a plan switches from the current year testing method to the prior year testing method pursuant to Regulation Section 1.401(k)-2(c), Qualified Nonelective Contributions that are taken into account under the current year testing method for a year may not be taken into account under the prior year testing method for the next year,

5.3 ADR of HCE if multiple plans. The Actual Deferral Ratio (ADR) of any Participant who is a Highly Compensated Employee (HCE) for the Plan Year and who is eligible to have Elective Contributions (as defined in Regulation Section 1.401(k)-6) (and Qualified Nonelective- Contributions and/or Qualified Matching Contributions, if treated as Elective Contributions for purposes of the ADP test) allocated to such Participant's accounts under two (2) or more cash or deferred arrangements described in Code Section 401 (k), that are maintained by the same Employer, shall be determined as if such Elective Contributions (and, if applicable, such Qualified Nonelective Contributions and/or Qualified Matching Contributions) were made under a single arrangement. If an HCE participates in two or more cash or deferred arrangements of the Employer that have different Plan Years, then alt Elective Contributions made during the Plan Year being tested under all such cash or deferred arrangements shall be aggregated, without regard to the plan years of the other plans. However, for Plan Years beginning before the effective date of this Amendment, if the plans have different Plan Years, then all such cash or deferred arrangements ending with or within the same calendar year shall be treated as a single cash or deferred arrangement. Notwithstanding the foregoing, certain plans shall be treated as separate if mandatorily disaggregated under the Regulations of Code Section 401(k).

5.4 Plans using different testing methods for the ADP and ACP test. Except as otherwise provided in this Section, the Plan may use the current year testing method or prior year testing method for the ADP test for a Plan Year without regard to whether the current year testing method or prior year testing method is used for the ACP test for that Plan Year. However, if different testing methods are used, then the Plan cannot use:

(a) The recharacterization method of Regulation Section l,401(k)-2(b)(3) to correct excess contributions for a Plan Year;

(b) The rules of Regulation Section 1.401(m)-2(a)(6)(ii) to take Elective Contributions into account under the ACP test (rather than the ADP test); or

(c) The rules of Regulation Section 1.401(k)-2(a)(6)(v) to take Qualified Matching Contributions into account under the ADP test (rather than the ACP test).

ARTICLE VI
ADJUSTMENT TO ADP TEST

6.1 Distribution of Income attributable to Excess Contributions. Distributions of Excess Contributions must be adjusted for income (gain or loss), including an adjustment for income for the period between the end of the Plan Year and the date of the distribution (the "gap period"). The Administrator has the discretion to determine and allocate income using any of the methods set forth below:

(a) Reasonable, method of allocating income. The Administrator may use any reasonable method for computing the income allocable to Excess Contributions, provided that the method does not violate Code Section
403(a)(4), is used consistently for all Participants and for all corrective distributions under the Plan for the Plan Year, and is used by the Plan for allocating income to Participant's accounts. A Plan will not fail to use a reasonable method for computing the income allocable to Excess Contributions merely because the income allocable to Excess Contributions is determined on a date that is no more than seven (7) days before the distribution.

(b) Alternative method of allocating income. The Administrator may allocate income to Excess Contributions for the Plan Year by multiplying the income for the Plan Year allocable to the Elective Contributions and other amounts taken into account under the ADP test (including contributions made for the Plan Year), by a fraction, the numerator of which is the Excess Contributions for the Employee for the Plan Year, and the denominator of which is the sum of the:

(1) Account balance attributable to Elective Contributions and other amounts taken into account under the ADP test as of the beginning of the Plan Year, and

(2) Any additional amount of such contributions made for the Plan Year.

(c) Safe harbor method of allocating gap period income. The Administrator may use the safe harbor method in this paragraph to determine income on Excess Contributions for the gap period. Under this safe harbor method, income on Excess Contributions for the gap period is equal to ten percent (10%) of the income allocable to Excess Contributions for the Plan Year that would be determined under paragraph (b) above, multiplied by the number of calendar months that have elapsed since the end of the Plan Year. For purposes of calculating the number of calendar months that have elapsed under the safe harbor method, a corrective distribution that is made on or before the fifteenth (15th) day of a month is treated as made on the last day of the preceding month and a distribution made after the fifteenth day of a month is treated as made on the last day of the month.

(d) Alternative method for allocating Plan, Year and gap period income. The Administrator may determine the income for the aggregate of the Plan Year and the gap period, by applying the alternative method provided by paragraph (b) above to this aggregate period. This is accomplished by (1) substituting the income for the Plan Year and the gap period, for the income for the Plan Year, and (2) substituting the amounts taken into account under the ADP test for the Plan Year and the gap period, for the amounts taken into account under the ADP test for the Plan Year in determining the fraction that is multiplied by that income.

6.2 Corrective contributions. If a failed ADP test is to be corrected by making an Employer contribution, then the provisions of the Plan for the corrective contributions shall be applied by limiting the contribution made on behalf of any NHCE pursuant to such provisions to an amount that does not exceed the targeted contribution limits of Section 5.1 of this Amendment, or in the case of a corrective contribution that is a Qualified Matching Contribution, the targeted contribution limit of Section 7.1 of this Amendment.

ARTICLE VII

ACTUAL CONTRIBUTION PERCENTAGE (ACP0 TEST

7.1 Targeted matching contribution limit. A matching contribution with respect to an Elective. Contribution for a Plan Year is not taken into account under the Actual Contribution Percentage

(ACP) test for an NHCE to the extent it exceeds the greatest of:

(a) five percent (5%) of the NHCE's Code Section 414(s) compensation for the Plan Year;

(b) the NHCE's Elective Contributions for the Plan Year; and

(c) the product of two (2) times the Plan's "representative matching rate" and the NHCE's Elective Contributions for the Plan Year.

For purposes of this Section, the Plan's "representative matching rate" is the lowest "matching rate" for any eligible NHCE among a group of NHCEs that consists of half of all eligible NHCEs in the Plan for the Plan Year who make Elective Contributions for the Plan Year (or, if greater, the lowest "matching rate" for all eligible NHCEs in the Plan who are employed by the Employer on the last day of the Plan Year and who make Elective Contributions for the Plan Year).

For purposes of this Section, the "matching rate" for an Employee generally is the matching contributions made for such Employee divided by the Employee's Elective Contributions for the Plan Year. If the matching rate is not the same for all levels of Elective Contributions for an Employee, then the Employee's "matching rate" is determined assuming that an Employee's Elective Contributions are equal to six percent (6%) of Code
Section 414(s) compensation.

If the Plan provides a match with respect to the sum of the Employee's after-tax Employee contributions and Elective Contributions, then for purposes of this Section, that sum is substituted for the amount of the Employee's Elective Contributions in subsections (b) & (c) above and in determining the "matching rate," and Employees who make either after-tax Employee contributions or Elective Contributions are taken into account in determining the Plan's "representative matching rate." Similarly, if the Plan provides a match with respect to the Employee's after-tax Employee contributions, but not Elective Contributions, then for purposes of this subsection, the Employee's after-tax Employee contributions are substituted for the amount of the Employee's Elective Contributions in subsections (b) & (c) above and in determining the "matching rate," and Employees who make after-tax Employee contributions are taken into account in determining the Plan's "representative matching rate."

7.2 Targeted QNEC limit. Qualified Nonelective Contributions (as defined in Regulation Section 1.401(k)-6) cannot be taken into account under the Actual Contribution Percentage (ACP) test for a Plan Year for an NHCE to the extent such contributions exceed the product of that NHCE's Code
Section 414(s) compensation and the greater of five percent (5%) or two (2) times the Plan's "representative contribution rate." Any Qualified Nonelective Contribution taken into account under an Actual Deferral Percentage (ADP) test under Regulation Section 1.401(k)-2(a)(6) (including the determination of the "representative contribution rate" for purposes of Regulation Section 1.401(k)-2(a)(6)(iv)(B)) is not permitted to be taken into account for purposes of this Section (including the determination of the "representative contribution rate" for purposes of subsection (a) below). For purposes of this Section:

(a) The Plan's "representative contribution rate" is the lowest "applicable contribution rate" of any eligible NHCE among a group of eligible NHCEs that consists of half of all eligible NHCEs for the Plan Year (or, if greater, the lowest "applicable contribution rate" of any eligible NHCE who is in the group of all eligible NHCEs for the Plan Year and who is employed by the Employer on the last day of the Plan Year), and

(b) The "applicable contribution rate" for an eligible NHCE is the sum of the matching contributions (as defined in Regulation Section 1.401(m)-l(a)(2)) taken into account in determining the ACR for the eligible NHCE for the Plan Year and the Qualified Nonelective Contributions made for that NHCE for the Plan Year, divided by that NHCE's Code Section 414(s) compensation for the Plan Year.

Notwithstanding the above, Qualified Nonelective Contributions that are made in connection with an Employer's obligation to pay prevailing wages under the David-Bacon Act (46 Stat. 1494). Public Law 71-798, Service Contract Act of 1965 (79 Stat. 1965), Public Law 89-286, or similar legislation can be taken into account for a Plan Year for an NHCE to the extent such contributions do not exceed 10 Percent (10%) of that NHCE's Code Section 414(s) Compensation.

7-3 ACR of HCE if multiple plans. The Actual Contribution Ratio (ACR) for any Participant who is a Highly Compensated Employee (HCE) and who is eligible to have matching contributions or after-tax Employee contributions allocated to his or her account under two (2) or more plans described in Code Section 401 (a), or arrangements described in Code Section 401(k) that are maintained by the same Employer, shall be determined as if the total of such contributions was made under each plan and arrangement. If an HCE participates in two (2) or more such plans or arrangements that have different plan years, then all matching contributions and after-tax Employee contributions made during the Plan Year being tested under all such plans and arrangements shall be aggregated, without regard to the plan years of the other plans. For plan years beginning before the effective date of this Amendment, all such plans and arrangements ending with or within the same calendar year shall be treated as a single plan or arrangement. Notwithstanding the foregoing, certain plans shall be treated as separate if mandatorily disaggregated under the Regulations of Code
Section 401(m).

7.4 Plans using different testing methods for the ACP and ADP test. Except as otherwise provided in this Section, the Plan may use the current year testing method or prior year testing method for the ACP test for a Plan Year without regard to whether the current year testing method or prior year testing method is used for the ADP test for that Plan Year. However, if different testing methods are used, then the Plan cannot use:

(a) The recharacterization method of Regulation Section 1.401 (k)-2(b)(3) to correct excess contributions for a Plan Year;

(b) The rules of Regulation Section 1.401(m)-2(a)(6)(ii) to take Elective Contributions into account under the ACP test (rather than the ADP test); or

(c) The rules of Regulation Section l,401(k)-2(a)(6) to take Qualified Matching Contributions into account under the ADP test (rather than the ACP test).

ARTICLE VIII ADJUSTMENT TO ACP TEST

8.1 Distribution of Income attributable to Excess Aggregate Contributions. Distributions of Excess Aggregate Contributions must be adjusted for income (gain or loss), including an adjustment for income for the period between the end of the Plan Year and the date of the distribution (the "gap period"). For the purpose of this Section, "income" shall be determined and allocated in accordance with the provisions of Section 6.1 of this Amendment, except that such Section shall be applied by substituting "Excess Contributions" with "Excess Aggregate Contributions" and by substituting amounts taken into account under the ACP test for amounts taken into account under the ADP test

8.2 Corrective contributions. If a failed ACP test is to be corrected by making an Employer contribution, then the provisions of the Plan for the corrective contributions shall be applied by limiting the contribution made on behalf of any NHCE pursuant to such provisions to an amount that does not exceed the targeted contribution limits of Sections 7.1 and 7.2 of this Amendment.

ARTICLE IX SAFE HARBOR PLAN PROVISIONS

9.1 Applicability. The provisions of this Article IX apply if the Plan uses the alternative method of satisfying the Actual Deferral Percentage (ADP) test set forth in Code Section 401(k)(12) (ADP Test Safe Harbor) and/or the Actual Contribution Percentage (ACP) test set forth in Code Section 401
(m)(l 1) (ACP Test Safe Harbor).

9.2 Elimination of conditions on matching contributions. Unless otherwise provided in Section 2.2 of this Amendment, the provisions of subsection (a) below shall apply. However, if the Employer so elects in Section 2.2 of this Amendment, then the provisions of subsection (b) or (c) below shall apply.

(a) Default provision. If, prior to the date this Amendment has been executed, an ADP Test Safe Harbor notice has been given for a Plan Year for which this Amendment is effective (see Amendment Section 1.1) and such notice provides that there are no allocation conditions imposed on any matching contributions under the Plan, then (1) the Plan will be an ACP Test Safe Harbor plan, provided the ACP Test Safe Harbor requirements are met and (2) the Plan will not impose any allocation conditions on matching contributions. However, if, prior to the date this Amendment has been executed, an ADP Test Safe Harbor notice has been given for a Plan Year for which this Amendment is effective and such notice provides that there are allocation conditions imposed on any matching contributions under the Plan, then the provisions of this Amendment do not modify any such allocation conditions or provisions for that Plan Year and the Plan must satisfy the ACP Test for such Plan Year using the current year testing method. With respect to any Plan Year beginning after the date this Amendment has been executed, if the Plan uses the ADP Test Safe Harbor and provides for matching contributions, then (1) the Plan will be an ACP Test Safe Harbor plan, provided the ACP Test Safe Harbor requirements are met and (2) the Plan will not impose any allocation conditions on matching contributions.

(b) Retention of allocation conditions. If the Employer so elects in
Section 2.2 of this Amendment, then the Plan will retain any allocation conditions contained in the Plan with regard to matching contributions for any Plan Year for which this Amendment is effective. In that case, the Plan must satisfy the ACP Test for each such Plan Year.

(c) Elimination of allocation conditions. If the Employer so elects in
Section 2.2 of this Amendment, then (1) the Plan will be an ACP Test Safe Harbor plan, provided the ACP Test Safe Harbor requirements are met, and (2) the Plan will not impose any allocation conditions on matching contributions.

9.3 Matching Catch-up contributions. If the Plan provides for ADP Test Safe Harbor matching contributions or ACP Test Safe Harbor matching contributions, then catch-up contributions (as defined in Code Section
414(v)) will be taken into account in applying such matching contributions under the Plan.

9.4 Plan Year requirement. Except as provided in Regulation Sections 1.401(k)-3(e) and 1.401 (k)- 3(f), and below, the Plan will fail to satisfy the requirements of Code Section 401(k)(12) and this Section for a Plan Year unless such provisions remain in effect for an entire twelve (12) month Plan Year.

9.5 Change of Plan Year. If a Plan has a short Plan Year as a result of changing its Plan Year, then the Plan will not fail to satisfy the requirements of Section 9.4 of this Amendment merely because the Plan Year has less than twelve (12) months, provided that:

(a) The Plan satisfied the ADP Test Safe Harbor and/or ACP Test Safe Harbor requirements for the immediately preceding Plan Year; and

(b) The Plan satisfies the ADP Test Safe Harbor and/or ACP Test Safe Harbor requirements (determined without regard to Regulation Section 1.40I(k)-3(g)) for the immediately following Plan Year (or for the immediately following twelve (12) months if the immediately following Plan Year is less than twelve (12) months).

9.6 Timing of matching contributions. If the ADP Test Safe Harbor contribution being made to the Plan is a matching contribution (or any ACP Test Safe Harbor matching contribution) that is made separately with respect to each payroll period (or with respect to all payroll periods ending with or within each month or quarter of a Plan Year) taken into account under the Plan for the Plan Year, then safe harbor matching contributions with respect to any elective deferrals and/or after-tax employee contributions made during a Plan Year quarter must be contributed to the Plan by the last day of the immediately following Plan Year quarter.

9.7 Exiting safe harbor matching. The Employer may amend the Plan during a Plan Year to reduce or eliminate prospectively any or all matching contributions under the Plan (including any ADP Test Safe Harbor matching contributions) provided: (a) the Plan Administrator provides a supplemental notice to the Participants which explains the consequences of the amendment, specifies the amendment's effective date, and informs Participants that they will have a reasonable opportunity to modify their cash or deferred elections and, if applicable, after-tax Employee contribution elections; (b) Participants have a reasonable opportunity (including a reasonable period after receipt of the supplemental notice) prior to the effective date of the amendment to modify their cash or deferred elections and, if applicable, after-tax Employee contribution elections; and (c) the amendment is not effective earlier than the later of: (i) thirty (30) days after the Plan Administrator gives supplemental notice; or (ii) the date the Employer adopts the amendment. An Employer which amends its Plan to eliminate or reduce any matching contribution under this Section, effective during the Plan Year, must continue to apply all of the ADP Test Safe Harbor and/or ACP Test Safe Harbor requirements of the Plan until the amendment becomes effective and also must apply for the entire Plan Year, using current year testing, the ADP test and the ACP test.

9.8 Plan termination. An Employer may terminate the Plan during a Plan Year in accordance with Plan termination provisions of the Plan and this Section.

(a) Acquisition/disposition or substantial business hardship. If the Employer terminates the Plan resulting in a short Plan Year, and the termination is on account of an acquisition or disposition transaction described in Code Section 410(b)(6)(C), or if the termination is on account of the Employer's substantial business hardship within the meaning of Code Section 412(d), then the Plan remains an ADP Test Safe Harbor and/or ACP Test Safe Harbor Plan provided that the Employer satisfies the ADP Test Safe Harbor and/or ACP Test Safe Harbor provisions through the effective date of the Plan termination.

(b) Other termination. If the Employer terminates the Plan for any reason other than as described in Section 9.7(a) above, and the termination results in a short Plan Year, the Employer must conduct the termination under the provisions of Section 9.7 above, except that the Employer need not provide Participants with the right to change their cash or deferred elections.

ENGLOBAL 401(K) PLAN

FINAL 401(k)/401(m) REGULATIONS

AMENDMENT

ENGLOBAL CORPORATION

                           By: //s// William A. Coskey
                           Title: Chairman
                           Date: December 27, 2006


Witness //s// Natalie Hairston

EXHIBIT 10.26

FIRST AMENDMENT TO LEASE

This agreement made as of the 7 day of April. 2005, between Oral Roberts University, an Oklahoma corporation ("Landlord") and ENGlobal Engineering, Inc., a Texas Corporation ("Tenant").

WHEREAS, Landlord and Tenant entered into that certain "Lease Agreement" dated January 27, 2005 with respect to premises consisting of approximately 50,631 square feet of Net Rentable Area (the "Leased Premises") in the building located at 2448 E. 81st Street, Suite 3300, Tulsa, Oklahoma 74137 and known as CityPlex Towers (the "Building"), said premises being more particularly described in the Lease; and

WHEREAS, Landlord and Tenant (the "parties") now desire to amend and modify said Lease Agreement in the following particulars;

NOW THEREFORE, in consideration of the mutual convenants contained herein, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant agree as follows:

1. The provisions of this Agreement shall supersede any inconsistent provisions contained in the Lease, whether such inconsistent provisions are contained in the printed portion of the Lease or any addendum, rider or exhibit annexed thereto. All capitalized items not otherwise defined herein shall have the same meanings ascribed to them in the Lease.

2. Effective September 1, 2005 the Premises shall be expanded by 5,319 Net Rentable Square Feet (as shown on Exhibit "A" attached hereto).

3. The monthly Base Rental for the above described space, subject to adjustments called for in the Lease, shall be as follows:

September 1, 2005 - January 31, 2008 $ 4,299.53

The monthly Base Rental amounts above shall be in addition to the monthly Base Rental amounts contained in Section 2d. of the Addendum to Lease.

4. This Agreement shall not constitute an agreement by Landlord or Tenant and shall not be binding upon Landlord or Tenant unless and until this Agreement shall be executed by Landlord and Tenant.

5. This Agreement may be changed only in writing, signed by both parties, and shall be binding upon and inure to the benefit of Landlord and Tenant, their respective heirs, successors and, as permitted, their assigns.

6. Except as herein expressly amended or modified the terms and conditions of the Lease are hereby ratified and confirmed and shall remain in full force and effect.

IN WITNESS WHEREOF, Landlord and Tenant have executed this First Amendment to Lease as of the date first written above.

                                            LANDLORD:

WITNESS:                                    ORAL ROBERTS UNIVERSITY,
                                            An Oklahoma corporation

                                            By: D. M. Bernard, Vice-President
---------------------------                 ------------------------------------
Print Name                                  Title


                                            TENANT:

WITNESS:                                    ENGLOBAL ENGINEERING, INC.
                                            A Texas corporation

                                            By:
---------------------------                 ------------------------------------

Jean Whitaker                               William A. Coskey - CEO
---------------------------                 ------------------------------------
Print Name                                  Title

EXHIBIT "A"

[GRAPHIC ON FILE]

60 Story Tower

3500 -

11,250 Sq. F

Floor Plan

EXHIBIT 10.27

SECOND AMENDMENT TO LEASE

This agreement made as of the 15 day of June ,2005, between Oral Roberts University, an Oklahoma corporation ("Landlord") and ENGlobal Engineering, Inc., a Texas Corporation ("Tenant").

WHEREAS, Landlord and Tenant entered into that certain "Lease Agreement" dated January 27, 2005 with respect to premises consisting of approximately 50,631 square feet of Net Rentable Area (the "Leased Premises") in the building located at 2448 E. 81st Street, Suite 3300, Tulsa, Oklahoma 74137 and known as CityPlex Towers (the "Building"), said premises being more particularly described in the Lease; and

WHEREAS, Landlord and Tenant (the "parties") have made and executed that certain First Amendment to Lease dated April 7, 2005, modifying and amending the Lease upon the terms and conditions therein contained and;

WHEREAS, Landlord and Tenant (the "parties") now desire to amend and modify said Lease Agreement in the following particulars;

NOW THEREFORE, in consideration of the mutual convenants contained herein, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant agree as follows:

1. The provisions of this Agreement shall supersede any inconsistent provisions contained in the Lease, whether such inconsistent provisions are contained in the printed portion of the Lease or any addendum, rider or exhibit annexed thereto. All capitalized items not otherwise defined herein shall have the same meanings ascribed to them in the Lease.

2. Effective September 1, 2005 the Premises shall be expanded by 11,250 Net Rentable Square Feet (as shown on Exhibit "A" attached hereto),

3. The monthly Base Rental for the above described space, subject to adjustments called for in the Lease, shall be as follows:

September 1, 2005 - January 31, 2008 $9,093.75

The monthly Base Rental amounts above shall be in addition to the monthly Base Rental amounts contained in Section 2d. of the Addendum to Lease and Section 3. of the First Amendment to Lease.

4. This Agreement shall not constitute an agreement by Landlord or Tenant and shall not be binding upon Landlord or Tenant unless and until this Agreement shall be executed by Landlord and Tenant.

5. This Agreement may be changed only in writing, signed by both parties, and shall be binding upon and inure to the benefit of Landlord and Tenant, their respective heirs, successors and, as permitted, their assigns.

6. Except as herein expressly amended or modified the terms and conditions of the Lease are hereby ratified and confirmed and shall remain in full force and effect.

IN WITNESS WHEREOF, Landlord and Tenant have executed this Second Amendment to Lease as of the date first written above.

                                              LANDLORD:

WITNESS:                                      ORAL ROBERTS UNIVERSITY,
                                              An Oklahoma Corporation

                                              By:
Pat Binder
                                              D. M. Bernard, Vice President
                                              Title


                                              TENANT:
WITNESS:
                                              ENGLOBAL ENGINEERING, INC.
                                              A Texas corporation

Jean Whitaker
                                              By: William A. Coskey, CEO

___________________________________        _____________________________________
Print Name                                 Title

EXHIBIT "A"

60 Story Tower

2800

[GRAPHIC ON FILE]

EXHIBIT 10.28

THIRD AMENDMENT TO LEASE

This agreement made as of the 28 day of December, 2005, between Oral Roberts University, an Oklahoma corporation ("Landlord") and ENGlobal Engineering, Inc., a Texas Corporation ("Tenant").

WHEREAS, Landlord and Tenant entered into that certain "Lease Agreement" dated January 27, 2005 with respect to premises consisting of approximately 50,631 square feet of Net Rentable Area (the "Leased Premises") in the building located st 2448 E. 81st Street, Suite 3300, Tulsa, Oklahoma 74137 and known as CityPlex Towers (the "Building"), said premises being more particularly described in the Lease; and

WHEREAS, Landlord and Tenant (the "parties") have made and executed that certain First Amendment to Lease dated April 7, 2005, modifying and amending the Lease upon the terms and conditions therein contained and;

WHEREAS, Landlord and Tenant (the "parties") have made and executed that certain Second Amendment to Lease dated June 13, 2005, modifying and amending the Lease upon the terms and conditions therein contained and;

WHEREAS, Landlord and Tenant (the "parties") now desire to amend and modify said Lease Agreement in the following particulars;

NOW THEREFORE, in consideration of the mutual convenants contained herein, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant agree as follows:

1. The provisions of this Agreement shall supersede any inconsistent provisions contained in the Lease, whether such inconsistent provisions are contained in the printed portion of the Lease or any addendum, rider or exhibit annexed thereto. All capitalized items not otherwise defined herein shall have the same meanings ascribed to them in the Lease.

2. Effective February 1, 2006 the Premises shall be expanded by 11,250 Net Rentable Square Feet (as shown on Exhibit "A" attached hereto),

3. The monthly Base Rental for the above described space, subject to adjustments called for in the Lease, shall be as follows:

February 1, 2006 - February 28, 2006 $ 0.00 March 1, 2006 - January 31, 2008 $9,093.75

The monthly Base Rental amounts above shall be in addition to the monthly Base Rental amounts contained in Section 2d. of the Addendum to Lease and Section 3. of the First Amendment to Lease and Section 3. of the Second Amendment to Lease.

4. This Agreement shall not constitute an agreement by Landlord or Tenant and shall not be binding upon Landlord or Tenant unless and until this Agreement shall be executed by Landlord and Tenant.

5. This Agreement may be changed only in writing, signed by both parties, and shall be binding upon and inure to the benefit of Landlord and Tenant, their respective heirs, successors and, as permitted, their assigns.

6. Except as herein expressly amended or modified the terms and conditions of the Lease are hereby ratified and confirmed and shall remain in full force and effect.

IN WITNESS WHEREOF, Landlord and Tenant have executed this Third Amendment to Lease as of the date first written above.

Pat Binder

________________________________              Title
Print Name


                                              TENANT:

WITNESS:                                      ENGLOBAL ENGINEERING, INC.
                                              A Texas corporation

Jean Whitaker

                                              By: William A. Coskey , CEO


________________________________
Print Name                                    Title

Exhibit 10.29

FOURTH AMENDMENT TO LEASE

This agreement made as of the 27th day of February 2006, between Oral Roberts University, an Oklahoma corporation ("Landlord") and ENGlobal Engineering, Inc., a Texas Corporation ("Tenant").

WHEREAS, Landlord and Tenant entered into that certain "Lease Agreement" dated January 27, 2005 with respect to premises consisting of approximately 50,631 square feet of Net Rentable Area (the "Leased Premises") in the building located st 2448 E. 81st Street, Suite 3300, Tulsa, Oklahoma 74137 and known as CityPlex Towers (the "Building"), said premises being more particularly described in the Lease; and

WHEREAS, Landlord and Tenant (the "parties") have made and executed that certain First Amendment to Lease dated April 7, 2005, modifying and amending the Lease upon the terms and conditions therein contained and;

WHEREAS, Landlord and Tenant (the "parties") have made and executed that certain Second Amendment to Lease dated June 13, 2005, modifying and amending the Lease upon the terms and conditions therein contained and;

WHEREAS, Landlord and Tenant (the "parties") have made and executed that certain Third Amendment to Lease dated December 28, 2005, modifying and amending the Lease upon the terms and conditions therein contained and;

WHEREAS, Landlord and Tenant (the "parties") now desire to amend and modify said Lease Agreement in the following particulars;

NOW THEREFORE, in consideration of the mutual convenants contained herein, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant agree as follows:

1. The provisions of this Agreement shall supersede any inconsistent provisions contained in the Lease, whether such inconsistent provisions are contained in the printed portion of the Lease or any addendum, rider or exhibit annexed thereto. All capitalized items not otherwise defined herein shall have the same meanings ascribed to them in the Lease.

2. Effective April 1, 2006 the Premises shall be expanded by 11,250 Net Rentable Square Feet (as shown on Exhibit "A" attached hereto).

3. The monthly Base Rental for the above described space, subject to adjustments called for in the Lease, shall be as follows:

April 1, 2006 - January 31, 2008 $9,093.75

The monthly Base Rental amounts above shall be in addition to the monthly Base Rental amounts contained in Section 2d. of the Addendum to Lease and Section 3. of the First Amendment to Lease and Section 3. of the Second Amendment to Lease and Section 3. of the Third Amendment to Lease.

4. This Agreement shall not constitute an agreement by Landlord or Tenant and shall not be binding upon Landlord or Tenant unless and until this Agreement shall be executed by Landlord and Tenant.

5. This Agreement may be changed only in writing, signed by both parties, and shall be binding upon and inure to the benefit of Landlord and Tenant, their respective heirs, successors and, as permitted, their assigns.

6. Except as herein expressly amended or modified the terms and conditions of the Lease are hereby ratified and confirmed and shall remain in full force and effect.

IN WITNESS WHEREOF, Landlord and Tenant have executed this Fourth Amendment to Lease as of the date first written above.

                                                     LANDLORD:

WITNESS:                                    ORAL ROBERTS UNIVERSITY,
                                            An Oklahoma corporation

                                            By:
                                                -------------------------------
Austin Neal                                 D. M. Bernard, Vice-President
-----------------------------               -----------------------------------
Print Name                                  Title


                                            TENANT:

WITNESS:                                    ENGLOBAL ENGINEERING, INC.
                                            A Texas corporation

                                            By:
-----------------------------                   -------------------------------

R. David Kelley                             William A. Coskey - CEO
-----------------------------               -----------------------------------
Print Name                                  Title

EXHIBIT "A"

[GRAPHIC OMITTED]

Exhibit 10.30

FIFTH AMENDMENT TO LEASE

This agreement made as of the 28th day of July, 2006, between Oral Roberts University, an Oklahoma corporation ("Landlord") and ENGlobal Engineering, Inc., a Texas Corporation ("Tenant").

WHEREAS, Landlord and Tenant entered into that certain "Lease Agreement" dated January 27, 2005 with respect to premises consisting of approximately 50,631 square feet of Net Rentable Area (the "Leased Premises") in the building located st 2448 E. 81st Street, Suite 3300, Tulsa, Oklahoma 74137 and known as CityPlex Towers (the "Building"), said premises being more particularly described in the Lease; and

WHEREAS, Landlord and Tenant (the "parties") have made and executed that certain First Amendment to Lease dated April 7, 2005, modifying and amending the Lease upon the terms and conditions contained therein, and;

WHEREAS, Landlord and Tenant (the "parties") have made and executed that certain Second Amendment to Lease dated June 13, 2005, modifying and amending the Lease upon the terms and conditions therein contained and;

WHEREAS, Landlord and Tenant (the "parties") have made and executed that certain Third Amendment to Lease dated December 28, 2005, modifying and amending the Lease upon the terms and conditions therein contained and;

WHEREAS, Landlord and Tenant (the "parties") have made and executed that certain Fourth Amendment to Lease dated February 27, 2006, modifying and amending the Lease upon the terms and conditions therein contained and;

WHEREAS, Landlord and Tenant (the "parties") now desire to amend and modify said Lease Agreement in the following particulars;

NOW THEREFORE, in consideration of the mutual convenants contained herein, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant agree as follows:

1. The provisions of this Agreement shall supersede any inconsistent provisions contained in the Lease, whether such inconsistent provisions are contained in the printed portion of the Lease or any addendum, rider or exhibit annexed thereto. All capitalized items not otherwise defined herein shall have the same meanings ascribed to them in the Lease.

2. Effective September 1, 2006, the Premises shall be expanded by 11,250 net rentable square feet (as shown on Exhibit "A" attached hereto).

3. The monthly Base Rental for the above described space, subject to adjustments called for in the Lease, shall be as follows:

September 1, 2006 - January 31, 2008 $9,093.75

The monthly Base Rental amounts above shall be in addition to the monthly Base Rental amounts contained in Section 2d. of the Addendum to Lease and
Section 3. of the First Amendment to Lease and Section 3. of the Second Amendment to Lease and Section 3. of the Third Amendment to Lease and Section 3. of the Fourth Amendment to Lease.

4. This Agreement shall not constitute an agreement by Landlord or Tenant and shall not be binding upon Landlord or Tenant unless and until this Agreement shall be executed by Landlord and Tenant.

5. This Agreement may be changed only in writing, signed by both parties, and shall be binding upon and inure to the benefit of Landlord and Tenant, their respective heirs, successors and, as permitted, their assigns.

6. Except as herein expressly amended or modified the terms and conditions of the Lease are hereby ratified and confirmed and shall remain in full force and effect.

IN WITNESS WHEREOF, Landlord and Tenant have executed this Fifth Amendment to Lease as of the date first written above.

                                            LANDLORD:

WITNESS:                                    ORAL ROBERTS UNIVERSITY,
                                            An Oklahoma corporation

                                            By:
----------------------------                   --------------------------------


Pat Binder                                  D. M. Bernard, Vice President
----------------------------                ------------------------------------
Print Name                                  Title


                                            TENANT:

WITNESS:                                    ENGLOBAL ENGINEERING, INC.
                                            A Texas corporation

                                            By:
----------------------------                    -------------------------------

Jean Whitaker                               William A. Coskey, CEO
----------------------------                ------------------------------------
Print Name                                  Title

EXHIBIT "A"

[GRAPHIC OMITTED]

EXHIBIT 10.31

FIRST AMENDMENT TO CREDIT AGREEMENT

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (herein called this "Amendment") is executed on the date set forth on the signature pages but is made effective as of September 30, 2004, by and among ENGLOBAL CORPORATION, a Nevada corporation; ENGLOBAL CORPORATE SERVICES, INC., a Texas corporation; THERMAIRE, INC., a Texas corporation; ENGLOBAL ENGINEERING, INC., a Texas corporation; ENGLOBAL CONSTRUCTION RESOURCES, INC., a Texas corporation; ENGLOBAL SYSTEMS, INC., a Texas corporation; RPM ENGINEERING, INC., a Louisiana corporation; ENGLOBAL TECHNOLOGIES, INC., a Texas corporation; ENGLOBAL CONSTANT POWER, INC., a Texas corporation; SENFTLEBER & ASSOCIATES, L.P., a Texas limited partnership; and ENGLOBAL DESIGN GROUP, INC., a Texas corporation (collectively, "Borrower"), and COMERICA BANK ("Bank").

THE RECITALS

WHEREAS, Borrower and Bank have entered into that certain Credit Agreement dated as of July 27, 2004 (as heretofore amended, the "Original Credit Agreement"), for the purposes and consideration therein expressed, pursuant to which Bank became obligated to make loans to Borrower as therein provided; and

WHEREAS, Borrower and Bank desire to amend the Original Credit Agreement as provided herein;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and in the Original Credit Agreement, in consideration of the loans which may hereafter be made by Bank to Borrower, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:

Section 1.1 Terms Defined in the Original Credit Agreement. Unless the context otherwise requires or unless otherwise expressly defined herein, the terms defined in the Original Credit Agreement shall have the same meanings whenever used in this Amendment.

Section 1.2 Other Defined Terms. Unless the context otherwise requires, the following terms when used in this Amendment shall have the meanings assigned to them in this Section 1.2.

"Amendment" means this First Amendment to Credit Agreement.

"Amendment Documents" means, collectively, this Amendment and any other document required to be delivered by Borrower pursuant to Article III hereof.

"Credit Agreement" means the Original Credit Agreement as amended hereby.

"Original Omnibus Certificate" means the Omnibus Certificate dated July 27, 2004 executed and delivered by officers of each Borrower pursuant to the Original Credit Agreement.

Section 2.1 Section 4.4(b) of the Original Credit Agreement is hereby amended by deleting the figure "18,175,000" set forth therein and substituting therefor the figure "$17,563,000".

Section 2.2 Section 5.1 of the Original Credit Agreement is hereby deleted in its entirety, and the following is substituted in place thereof:

"5.1 Capital Structure, Business Objects or Purpose. Except as permitted in Sections 5.6 and 5.7 hereof and in the proviso below, purchase, acquire or redeem any of its equity ownership interests, or enter into any reorganization or recapitalization or reclassify its equity ownership interests, or make any material change in its capital structure or general business objects or purpose; provided that (A) Borrower may repurchase up to 652,377 shares of its common stock for a purchase price of $0.96 per share, not to exceed $626,281.13 in the aggregate, such purchase price being payable in three annual installments of $208,760.71 each and being payable on or about the last day of December for the calendar years 2004, 2005 and 2006 and (B) Borrower may repurchase annually up to $100,000 of its common stock in connection with the Borrower's employee stock purchase plan."

Section 2.3 Section 5.4 of the Original Credit Agreement is hereby amended by deleting the word "and" at the end of Section 5.4(c), deleting the period at the end of Section 5.4(d) and substituting therefore a semi-colon and adding to
Section 5.4 a new subsection (e) to read in its entirety as follows:

"(e) additional unsecured Debt not otherwise described above not to exceed $2,000,000 at any one time outstanding."

Section 2.4 Section 5.17 of the Original Credit Agreement hereby amended by deleting the figure "$1,000,000" and substituting "1,300,000" in place thereof.

Section 2.5 The Defined Terms Addendum to the Original Credit Agreement is hereby amended by deleting the definitions of "Agreement" and "Funded Debt" and substituting therefor the following:

"'Agreement' shall mean this Credit Agreement, including the Defined Terms Addendum and the Loan Terms, Conditions and Procedures Addendum, together with all exhibits and schedules, as amended by the First Amendment and as it may be further amended from time to time.

"'Funded Debt' shall mean for the Borrower, as of any month-end determination date, the average total outstanding principal balance of Debt which should be classified in accordance with GAAP as "funded indebtedness" or "long term indebtedness" on the Borrower's balance sheet for the then-ended month including, without limitation, the outstanding amount of the Revolving Loans and the Letter of Credit Liabilities excluding any indebtedness incurred for the purpose of financing insurance premiums."

Section 2.6 The Defined Terms Addendum to the Original Credit Agreement is hereby amended by adding the following definitions thereto:

"'First Amendment' shall mean that certain First Amendment to Credit Agreement effective as of September 30, 2004 among Borrower and Bank."

Section 3.1 Effective Date. This Amendment shall become effective as of the date first above written when and only when Bank shall have received, at Bank's office,

(a) a duly executed counterpart of this Amendment;

(b) a duly executed counterpart of the No Oral Agreements of even date herewith;

(c) a duly executed certificate of the chief financial officer and secretary of Borrower certifying that (i) resolutions of its board of directors attached to the Original Omnibus Certificate authorizing the execution, delivery, and performance of this Amendment and identifying the officers authorized to sign such instrument are in full force and effect and (ii) the specimen signatures of the officers so authorized which were attached to the Original Omnibus Certificate are true and correct; and

(d) each other document to be executed and delivered by Borrower pursuant hereto or thereto.

Section 4.1 Representations and Warranties of Borrower. In order to induce Bank to enter into this Amendment, Borrower represents and warrants to Bank that:

(a) The representations and warranties contained in Section 3 of the Original Credit Agreement are true and correct at and as of the time of the effectiveness hereof;

(b) Borrower is duly authorized to execute and deliver this Amendment and the other Amendment Documents and is and will continue to be duly authorized to borrow and to perform its obligations under the Credit Agreement. Borrower has duly taken all corporate action necessary to authorize the execution and delivery of this Amendment and the other Amendment Documents and to authorize the performance of the obligations of Borrower hereunder and thereunder;

(c) The execution and delivery by Borrower of this Amendment and the other Amendment Documents, the performance by Borrower of its obligations hereunder and thereunder and the consummation of the transactions contemplated hereby do not and will not conflict with any provision of law, statute, rule or regulation or the bylaws or partnership agreement of Borrower, or of any material agreement, judgment, license, order or permit applicable to or binding upon Borrower, or result in the creation of any lien, charge or encumbrance upon any assets or properties of Borrower. Except for those which have been duly obtained, no consent, approval, authorization or order of any court or governmental authority or third party is required in connection with the execution and delivery by Borrower of this Amendment and the other Amendment Documents or to consummate the transactions contemplated hereby and thereby;

(d) When duly executed and delivered, each of this Amendment and the other Amendment Documents will be a legal and binding instrument and agreement of Borrower, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency and similar laws applying to creditors' rights generally and by principles of equity applying to creditors' rights generally; and

(e) No material adverse change has occurred in the financial condition or businesses or in the consolidated financial condition or businesses of Borrower since the date of the most recently delivered financial statements.

Section 5.1 Ratification of Agreement. The Original Credit Agreement as hereby amended is hereby ratified and confirmed in all respects. Any reference to the Credit Agreement in any Loan Document shall be deemed to refer to this Amendment also. The execution, delivery and effectiveness of this Amendment and the other Amendment Documents shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of Bank under the Credit Agreement or any other Loan Document nor constitute a waiver of any provision of the Credit Agreement or any other Loan Document.

Section 5.2 Survival of Agreements. All representations, warranties, covenants and agreements of Borrower herein shall survive the execution and delivery of this Amendment and the performance hereof, and shall further survive until all of the Indebtedness is paid in full. All statements and agreements contained in any certificate or instrument delivered by Borrower hereunder or under the Credit Agreement to Bank shall be deemed to constitute representations and warranties by, or agreements and covenants of, Borrower under this Amendment and under the Credit Agreement.

Section 5.3 Loan Documents. This Amendment and the other Amendment Documents are each a Loan Document, and all provisions in the Credit Agreement pertaining to Loan Documents apply hereto and thereto.

Section 5.4 Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of Texas and any applicable laws of the United States of America in all respects, including construction, validity and performance.

Section 5.5 Counterparts; Fax. This Amendment may be separately executed in counterparts and by the different parties hereto in separate counterparts, each of which when so executed shall be deemed to constitute one and the same Amendment. This Amendment may be duly executed by facsimile or other electronic transmission.

THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

IN WITNESS WHEREOF, this Amendment is executed as of January ___, 2005 to be effective as of the date first above written.

BORROWER:

ENGLOBAL CORPORATION,
a Nevada corporation

ENGLOBAL CORPORATE SERVICES, INC.,
a Texas corporation

THERMAIRE, INC., a Texas corporation

ENGLOBAL ENGINEERING, INC.,
a Texas corporation

ENGLOBAL CONSTRUCTION
RESOURCES, INC., a Texas corporation

ENGLOBAL SYSTEMS, INC.,
a Texas corporation

RPM ENGINEERING, INC.,
a Louisiana corporation

ENGLOBAL TECHNOLOGIES, INC.,
a Texas corporation

ENGLOBAL CONSTANT POWER, INC.,
a Texas corporation

SENFTLEBER & ASSOCIATES, L.P.,
a Texas limited partnership

By: ENGlobal Design Group, Inc.,
a Texas corporation, its general
partner

ENGLOBAL DESIGN GROUP, INC.,
a Texas corporation

BANK:

COMERICA BANK

EXHIBIT 10.32

SECOND AMENDMENT TO CREDIT AGREEMENT

THIS SECOND AMENDMENT TO CREDIT AGREEMENT (herein called this "Amendment") is executed on the date set forth on the signature pages but is made effective as of April 1, 2005, by and among ENGLOBAL CORPORATION, a Nevada corporation; ENGLOBAL CORPORATE SERVICES, INC., a Texas corporation; THERMAIRE, INC., a Texas corporation; ENGLOBAL ENGINEERING, INC., a Texas corporation; ENGLOBAL CONSTRUCTION RESOURCES, INC., a Texas corporation; ENGLOBAL SYSTEMS, INC., a Texas corporation; RPM ENGINEERING, INC., a Louisiana corporation; ENGLOBAL TECHNOLOGIES, INC., a Texas corporation; ENGLOBAL CONSTANT POWER, INC., a Texas corporation; SENFTLEBER & ASSOCIATES, L.P., a Texas limited partnership; and ENGLOBAL DESIGN GROUP, INC., a Texas corporation (collectively, "Borrower"); and COMERICA BANK ("Bank").

THE RECITALS

WHEREAS, Borrower and Bank have entered into that certain Credit Agreement dated as of July 27, 2004, as amended by that certain First Amendment to Credit Agreement dated as of September 30, 2004 (as amended, the "Original Credit Agreement"), for the purposes and consideration therein expressed, pursuant to which Bank became obligated to make loans to Borrower as therein provided; and

WHEREAS, Borrower and Bank desire to further amend the Original Credit Agreement as provided herein;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and in the Original Credit Agreement, in consideration of the loans which may hereafter be made by Bank to Borrower, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:

Section 1.1 Terms Defined in the Original Credit Agreement. Unless the context otherwise requires or unless otherwise expressly defined herein, the terms defined in the Original Credit Agreement shall have the same meanings whenever used in this Amendment.

Section 1.2 Other Defined Terms. Unless the context otherwise requires, the following terms when used in this Amendment shall have the meanings assigned to them in this Section 1.2.

"Amendment" means this Second Amendment to Credit Agreement.

"Amendment Documents" means, collectively, this Amendment and any other document required to be delivered by Borrower pursuant to Article III hereof.

"Credit Agreement" means the Original Credit Agreement as amended hereby.

"Original Omnibus Certificate" means the Omnibus Certificate dated July 27, 2004 executed and delivered by officers of each Borrower pursuant to the Original Credit Agreement.

Section 2.1 The Original Credit Agreement is hereby amended by deleting
Section 4.4(c) and substituting therefor the following:

"(c) Maximum Leverage Ratio. Maintain as of the last day of each calendar month during the term of this Agreement a ratio of Funded Debt to Adjusted EBITDA for the twelve (12) months ending on each date occurring during the term of this Agreement no greater than 3.00 to 1; provided that, for purposes of this covenant and subject to Bank approval, Adjusted EBITDA shall have added back the trailing 12-month EBITDA of new acquisitions exceeding a gross purchase price of $2,500,000; provided further that for any calculation hereunder that includes a calendar month prior to the date of Borrower's purchase of AmTech Inspection and Cleveland Inspection (hereinafter called, the "Acquisition" and each month occurring before the Acquisition, being a "Pre-Acquisition Month"), Adjusted EBITDA shall include, for each Pre-Acquisition Month, a number equal to (i) the Adjusted EBITDA of AmTech Inspection and Cleveland Inspection for each calendar month after the Acquisition divided by (ii) the number of calendar months since the Acquisition."

Section 2.2 The Defined Terms Addendum to the Original Credit Agreement is hereby amended by deleting the definition of "Agreement" and substituting therefor the following:

"'Agreement' shall mean this Credit Agreement, including the Defined Terms Addendum and the Loan Terms, Conditions and Procedures Addendum, together with all exhibits and schedules, as amended by the First Amendment and the Second Amendment, and as it may be further amended from time to time.

Section 2.3 The Defined Terms Addendum to the Original Credit Agreement is hereby amended by adding the following definition thereto:

"'Second Amendment' shall mean that certain Second Amendment to Credit Agreement effective as of April ___, 2005 among Borrower and Bank."

Section 2.4 The Loan Terms, Conditions and Procedures Addendum to the Original Credit Agreement is hereby amended by deleting Section 1.9(a) and substituting therefor the following:

"(a) Letters of Credit. Subject to the terms and conditions of this Agreement and the other Loan Documents, the Bank shall, upon request from Borrower from time to time prior to the Revolving Credit Maturity Date, issue one or more Letters of Credit. The Letter of Credit Liabilities shall not exceed $500,000, provided that, for Letters of Credit issued in connection with the Engineering and Procurement Services Agreement between Borrower and Coffeyville Resources Refining and Marketing LLC, Borrower may obtain Letters of Credit and incur Letter of Credit Liabilities up to an additional $4,500,000, provided further that the sum of (i) the outstanding principal balance of all Revolving Loans plus (ii) the Letter of Credit Liabilities shall not exceed the Revolving Credit Maximum Amount. Letters of Credit may be issued to finance working capital needs. Each Letter of Credit issued pursuant to this Agreement shall be in a minimum amount of $25,000. No Letter of Credit shall have a stated expiration date later than thirty (30) days prior to the Revolving Credit Maturity Date."

Section 3.1 Effective Date. This Amendment shall become effective as of the date first above written when and only when Bank shall have received, at Bank's office,

(a) a duly executed counterpart of this Amendment;

(b) a duly executed counterpart of the No Oral Agreements of even date herewith;

(c) each other document to be executed and delivered by Borrower pursuant hereto or thereto; and

(d) an amendment fee in the amount of $5000.

Section 4.1 Representations and Warranties of Borrower. In order to induce Bank to enter into this Amendment, Borrower represents and warrants to Bank that:

(a) The representations and warranties contained in Section 3 of the Original Credit Agreement are true and correct at and as of the time of the effectiveness hereof;

(b) Borrower is duly authorized to execute and deliver this Amendment and the other Amendment Documents and is and will continue to be duly authorized to borrow and to perform its obligations under the Credit Agreement. Borrower has duly taken all corporate action necessary to authorize the execution and delivery of this Amendment and the other Amendment Documents and to authorize the performance of the obligations of Borrower hereunder and thereunder. The Original Omnibus Certificate of each Borrower delivered to Lender on the date of the Original Credit Agreement remain in full force and effect, and the specimen signatures of the officers on the Original Omnibus Certificates are true and correct;

(c) The execution and delivery by Borrower of this Amendment and the other Amendment Documents, the performance by Borrower of its obligations hereunder and thereunder and the consummation of the transactions contemplated hereby do not and will not conflict with any provision of law, statute, rule or regulation or the bylaws or partnership agreement of Borrower, or of any material agreement, judgment, license, order or permit applicable to or binding upon Borrower, or result in the creation of any lien, charge or encumbrance upon any assets or properties of Borrower. Except for those which have been duly obtained, no consent, approval, authorization or order of any court or governmental authority or third party is required in connection with the execution and delivery by Borrower of this Amendment and the other Amendment Documents or to consummate the transactions contemplated hereby and thereby;

(d) When duly executed and delivered, each of this Amendment and the other Amendment Documents will be a legal and binding instrument and agreement of Borrower, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency and similar laws applying to creditors' rights generally and by principles of equity applying to creditors' rights generally; and

(e) No material adverse change has occurred in the financial condition or businesses or in the consolidated financial condition or businesses of Borrower since the date of the most recently delivered financial statements.

Section 5.1 Ratification of Agreement. The Original Credit Agreement as hereby amended is hereby ratified and confirmed in all respects. Any reference to the Credit Agreement in any Loan Document shall be deemed to refer to this Amendment also. The execution, delivery and effectiveness of this Amendment and the other Amendment Documents shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of Bank under the Credit Agreement or any other Loan Document nor constitute a waiver of any provision of the Credit Agreement or any other Loan Document.

Section 5.2 Survival of Agreements. All representations, warranties, covenants and agreements of Borrower herein shall survive the execution and delivery of this Amendment and the performance hereof, and shall further survive until all of the Indebtedness is paid in full. All statements and agreements contained in any certificate or instrument delivered by Borrower hereunder or under the Credit Agreement to Bank shall be deemed to constitute representations and warranties by, or agreements and covenants of, Borrower under this Amendment and under the Credit Agreement.

Section 5.3 Loan Documents. This Amendment and the other Amendment Documents are each a Loan Document, and all provisions in the Credit Agreement pertaining to Loan Documents apply hereto and thereto.

Section 5.4 Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of Texas and any applicable laws of the United States of America in all respects, including construction, validity and performance.

Section 5.5 Counterparts; Fax. This Amendment may be separately executed in counterparts and by the different parties hereto in separate counterparts, each of which when so executed shall be deemed to constitute one and the same Amendment. This Amendment may be duly executed by facsimile or other electronic transmission.

THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

IN WITNESS WHEREOF, this Amendment is executed as of the date first above written.

BORROWER:

ENGLOBAL CORPORATION,
a Nevada corporation

ENGLOBAL CORPORATE SERVICES, INC.,
a Texas corporation

THERMAIRE, INC., a Texas corporation

ENGLOBAL ENGINEERING, INC.,
a Texas corporation

ENGLOBAL CONSTRUCTION
RESOURCES, INC., a Texas corporation

ENGLOBAL SYSTEMS, INC.,
a Texas corporation

RPM ENGINEERING, INC.,
a Louisiana corporation

ENGLOBAL TECHNOLOGIES, INC.,
a Texas corporation

ENGLOBAL CONSTANT POWER, INC.,
a Texas corporation

SENFTLEBER & ASSOCIATES, L.P.,
a Texas limited partnership

By: ENGlobal Design Group, Inc.,
a Texas corporation, its general
partner

ENGLOBAL DESIGN GROUP, INC.,
a Texas corporation

BANK:

COMERICA BANK

EXHIBIT 10.33

THIRD AMENDMENT TO CREDIT AGREEMENT

THIS THIRD AMENDMENT TO CREDIT AGREEMENT (herein called this "Amendment") is executed on the date set forth on the signature pages but is made effective as of July 31, 2005, by and among ENGLOBAL CORPORATION, a Nevada corporation; ENGLOBAL CORPORATE SERVICES, INC., a Texas corporation; THERMAIRE, INC., a Texas corporation; ENGLOBAL ENGINEERING, INC., a Texas corporation; ENGLOBAL CONSTRUCTION RESOURCES, INC., a Texas corporation; ENGLOBAL SYSTEMS, INC., a Texas corporation; RPM ENGINEERING, INC., a Louisiana corporation; ENGLOBAL TECHNOLOGIES, INC., a Texas corporation; ENGLOBAL CONSTANT POWER, INC., a Texas corporation; SENFTLEBER & ASSOCIATES, L.P., a Texas limited partnership; and ENGLOBAL DESIGN GROUP, INC., a Texas corporation (collectively, "Borrower"), and COMERICA BANK ("Bank").

THE RECITALS

WHEREAS, Borrower and Bank have entered into that certain Credit Agreement dated as of July 27, 2004 (as heretofore amended by a First Amendment effective as of September 30, 2004 and a Second Amendment effective as of April 1, 2005 and as it may be hereafter amended, the "Original Credit Agreement"), for the purposes and consideration therein expressed, pursuant to which Bank became obligated to make loans to Borrower as therein provided; and

WHEREAS, Borrower and Bank desire to amend the Original Credit Agreement as provided herein;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and in the Original Credit Agreement, in consideration of the loans which may hereafter be made by Bank to Borrower, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:

Section 1.1 Terms Defined in the Original Credit Agreement. Unless the context otherwise requires or unless otherwise expressly defined herein, the terms defined in the Original Credit Agreement shall have the same meanings whenever used in this Amendment.

Section 1.2 Other Defined Terms. Unless the context otherwise requires, the following terms when used in this Amendment shall have the meanings assigned to them in this Section 1.2.

"Amendment" means this Third Amendment to Credit Agreement.

"Amendment Documents" means, collectively, this Amendment and any other document required to be delivered by Borrower pursuant to Article III hereof.

"Credit Agreement" means the Original Credit Agreement as amended hereby.

"Original Omnibus Certificate" means the Omnibus Certificate dated July 27, 2004 executed and delivered by officers of each Borrower pursuant to the Original Credit Agreement.

Section 2.1 Section 5.17 of the Original Credit Agreement is hereby amended by deleting the figure "$1,300,000" and substituting "2,500,000" in place thereof.

Section 2.2 The Defined Terms Addendum to the Original Credit Agreement is hereby amended by deleting the definition of "Agreement" and substituting therefor the following:

"'Agreement' shall mean this Credit Agreement, including the Defined Terms Addendum and the Loan Terms, Conditions and Procedures Addendum, together with all exhibits and schedules, as amended by the First Amendment, Second Amendment, Third Amendment and as it may be further amended from time to time.

Section 2.3 The Defined Terms Addendum to the Original Credit Agreement is hereby amended by adding the following definitions thereto:

"'Third Amendment' shall mean that certain Third Amendment to Credit Agreement executed on October __, 2005 but effective as of July 31, 2005 among Borrower and Bank."

Section 2.4 The Loan Terms, Conditions and Procedures Addendum to the Original Credit Agreement is hereby amended by deleting Section 1.9(a) and substituting therefor the following:

"(a) Letters of Credit. Subject to the terms and conditions of this Agreement and the other Loan Documents, the Bank shall, upon request from Borrower from time to time prior to the Revolving Credit Maturity Date, issue one or more Letters of Credit. The Letter of Credit Liabilities shall not exceed $8,000,000 from the date of the Third Amendment until February 28, 2006 and from February 28, 2006 to May 31, 2006 the Letter of Credit Liabilities shall not exceed $3,000,000 and from and after May 31, 2006 the Letter of Credit Liabilities shall not exceed $2,000,000, provided that, at all times the sum of (i) the outstanding principal balance of all Revolving Loans plus (ii) the Letter of Credit Liabilities shall not exceed the Revolving Credit Maximum Amount. Letters of Credit may be issued to finance working capital needs. Each Letter of Credit issued pursuant to this Agreement shall be in a minimum amount of $25,000. No Letter of Credit shall have a stated expiration date later than thirty (30) days prior to the Revolving Credit Maturity Date."

Section 3.1 Effective Date. This Amendment shall become effective as of the date first above written when and only when Bank shall have received, at Bank's office,

(a) a duly executed counterpart of this Amendment;

(b) a duly executed counterpart of the No Oral Agreements of even date herewith; and

(c) each other document to be executed and delivered by Borrower pursuant hereto or thereto.

Section 4.1 Representations and Warranties of Borrower. In order to induce Bank to enter into this Amendment, Borrower represents and warrants to Bank that:

(a) The representations and warranties contained in Section 3 of the Original Credit Agreement are true and correct at and as of the time of the effectiveness hereof;

(b) Borrower is duly authorized to execute and deliver this Amendment and the other Amendment Documents and is and will continue to be duly authorized to borrow and to perform its obligations under the Credit Agreement. Borrower has duly taken all corporate action necessary to authorize the execution and delivery of this Amendment and the other Amendment Documents and to authorize the performance of the obligations of Borrower hereunder and thereunder. The Omnibus Certificate of each Borrower delivered to Bank on the date of the Original Credit Agreement remains in full force and effect, and the specimen signatures of the officers contained in the Omnibus Certificate are true and correct;

(c) The execution and delivery by Borrower of this Amendment and the other Amendment Documents, the performance by Borrower of its obligations hereunder and thereunder and the consummation of the transactions contemplated hereby do not and will not conflict with any provision of law, statute, rule or regulation or the bylaws or partnership agreement of Borrower, or of any material agreement, judgment, license, order or permit applicable to or binding upon Borrower, or result in the creation of any lien, charge or encumbrance upon any assets or properties of Borrower. Except for those which have been duly obtained, no consent, approval, authorization or order of any court or governmental authority or third party is required in connection with the execution and delivery by Borrower of this Amendment and the other Amendment Documents or to consummate the transactions contemplated hereby and thereby;

(d) When duly executed and delivered, each of this Amendment and the other Amendment Documents will be a legal and binding instrument and agreement of Borrower, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency and similar laws applying to creditors' rights generally and by principles of equity applying to creditors' rights generally; and

(e) No material adverse change has occurred in the financial condition or businesses or in the consolidated financial condition or businesses of Borrower since the date of the most recently delivered financial statements.

Section 5.1 Ratification of Agreement. The Original Credit Agreement as hereby amended is hereby ratified and confirmed in all respects. Any reference to the Credit Agreement in any Loan Document shall be deemed to refer to this Amendment also. The execution, delivery and effectiveness of this Amendment and the other Amendment Documents shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of Bank under the Credit Agreement or any other Loan Document nor constitute a waiver of any provision of the Credit Agreement or any other Loan Document.

Section 5.2 Survival of Agreements. All representations, warranties, covenants and agreements of Borrower herein shall survive the execution and delivery of this Amendment and the performance hereof, and shall further survive until all of the Indebtedness is paid in full. All statements and agreements contained in any certificate or instrument delivered by Borrower hereunder or under the Credit Agreement to Bank shall be deemed to constitute representations and warranties by, or agreements and covenants of, Borrower under this Amendment and under the Credit Agreement.

Section 5.3 Loan Documents. This Amendment and the other Amendment Documents are each a Loan Document, and all provisions in the Credit Agreement pertaining to Loan Documents apply hereto and thereto.

Section 5.4 Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of Texas and any applicable laws of the United States of America in all respects, including construction, validity and performance.

Section 5.5 Counterparts; Fax. This Amendment may be separately executed in counterparts and by the different parties hereto in separate counterparts, each of which when so executed shall be deemed to constitute one and the same Amendment. This Amendment may be duly executed by facsimile or other electronic transmission.

THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

IN WITNESS WHEREOF, this Amendment is on October ___, 2005 but to be effective as of July 31, 2005.

BORROWER:

ENGLOBAL CORPORATION,
a Nevada corporation

ENGLOBAL CORPORATE SERVICES, INC.,
a Texas corporation

THERMAIRE, INC., a Texas corporation

ENGLOBAL ENGINEERING, INC.,
a Texas corporation

ENGLOBAL CONSTRUCTION
RESOURCES, INC., a Texas corporation

ENGLOBAL SYSTEMS, INC.,
a Texas corporation

RPM ENGINEERING, INC.,
a Louisiana corporation

ENGLOBAL TECHNOLOGIES, INC.,
a Texas corporation

ENGLOBAL CONSTANT POWER, INC.,
a Texas corporation

SENFTLEBER & ASSOCIATES, L.P.,
a Texas limited partnership

By: ENGlobal Design Group, Inc.,
a Texas corporation, its general
partner

ENGLOBAL DESIGN GROUP, INC.,
a Texas corporation

BANK:

COMERICA BANK

EXHIBIT 10.34

FOURTH AMENDMENT TO CREDIT AGREEMENT

THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (herein called this "Amendment") is executed on the date set forth on the signature pages but is made effective as of December 31, 2005, by and among ENGLOBAL CORPORATION, a Nevada Corporation ("ENGlobal Corporation"), ENGLOBAL CORPORATE SERVICES, INC., a Texas corporation ("ENGlobal Corporate"), ENGLOBAL ENGINEERING, INC., a Texas corporation ("ENGlobal Engineering"), ENGLOBAL CONSTRUCTION RESOURCES, INC., a Texas corporation ("ENGlobal Construction"), ENGLOBAL SYSTEMS, INC., a Texas corporation ("ENGlobal Systems"), RPM ENGINEERING, INC., a Louisiana corporation ("RPM Engineering"), ENGlobal Technical Services, Inc. ("ENGlobal Technical"), formerly known as ENGlobal Design Group, Inc., and ENGLOBAL AUTOMATION GROUP, INC., a Texas corporation, formerly known as ENGLOBAL TECHNOLOGIES, INC. ("ENGlobal Automation"; individually and collectively, jointly and severally, ENGlobal Corporation, ENGlobal Corporate, ENGlobal Engineering, ENGlobal Construction, ENGlobal Systems, RPM Engineering, ENGlobal Technical and ENGlobal Automation are hereinafter called "Borrower") and COMERICA BANK ("Bank").

THE RECITALS

WHEREAS, ENGlobal Corporation, ENGlobal Corporate, ENGlobal Engineering, ENGlobal Construction, ENGlobal Systems, RPM Engineering, ENGlobal Automation, ENGLOBAL TECHNICAL SERVICES, INC., a Texas corporation, formerly known as ENGLOBAL DESIGN GROUP, INC. ("ENGlobal Technical"), Thermaire, Inc., a Texas corporation ("Thermaire"), ENGlobal Constant Power, Inc., a Texas corporation ("ENGlobal Constant"), Senftleber & Associates, L.P., a Texas limited partnership ("Senftleber"), and Bank have entered into that certain Credit Agreement dated as of July 27, 2004 (as heretofore amended by a First Amendment effective as of September 30, 2004, a Second Amendment effective as of April 1, 2005 and a Third Amendment effective as of July 31, 2005, and as it may hereafter be amended, the "Original Credit Agreement"); and

WHEREAS, ENGlobal Technical, Thermaire, ENGlobal Constant and Senftleber have been dissolved; and

WHEREAS, Borrower and Bank desire to amend the Original Credit Agreement as provided herein;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and in the Original Credit Agreement, in consideration of the loans which may hereafter be made by Bank to Borrower, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:

Section 1.1 Terms Defined in the Original Credit Agreement. Unless the context otherwise requires or unless otherwise expressly defined herein, the terms defined in the Original Credit Agreement shall have the same meanings whenever used in this Amendment.

Section 1.2 Other Defined Terms. Unless the context otherwise requires, the following terms when used in this Amendment shall have the meanings assigned to them in this Section 1.2.

"Amendment" means this Fourth Amendment to Credit Agreement.

"Amendment Documents" means, collectively, this Amendment and any other document required to be delivered by Borrower pursuant to Article III hereof.

"Credit Agreement" means the Original Credit Agreement as amended hereby.

"Original Omnibus Certificate" means the Omnibus Certificate dated July 27, 2004 executed and delivered by officers of each Borrower pursuant to the Original Credit Agreement.

Section 2.1 Section 5.17 of the Original Credit Agreement is hereby amended by deleting the figure "$2,500,000" and substituting "3,250,000" in place thereof.

Section 2.2 The Defined Terms Addendum to the Original Credit Agreement is hereby amended by deleting the definition of "Agreement" and substituting therefor the following:

"'Agreement' shall mean this Credit Agreement, including the Defined Terms Addendum and the Loan Terms, Conditions and Procedures Addendum, together with all exhibits and schedules, as amended by the First Amendment, Second Amendment, Fourth Amendment and as it may be further amended from time to time."

Section 2.3 The Defined Terms Addendum to the Original Credit Agreement is hereby amended by adding the following definitions thereto:

"'Fourth Amendment' shall mean that certain Fourth Amendment to Credit Agreement executed on March 17, 2006 but effective as of December 31, 2005 among Borrower and Bank."

Section 2.4 The Loan Terms, Conditions and Procedures Addendum to the Original Credit Agreement is hereby amended by deleting Section 1.9(a) and substituting therefor the following:

"(a) Letters of Credit. Subject to the terms and conditions of this Agreement and the other Loan Documents, the Bank shall, upon request from Borrower from time to time prior to the Revolving Credit Maturity Date, issue one or more Letters of Credit. The Letter of Credit Liabilities shall not exceed $8,000,000 from the date of the Third Amendment until February 28, 2006 and from February 28, 2006 the Letter of Credit Liabilities shall not exceed $3,500,000, provided that, at all times the sum of (i) the outstanding principal balance of all Revolving Loans plus (ii) the Letter of Credit Liabilities shall not exceed the Revolving Credit Maximum Amount. Letters of Credit may be issued to finance working capital needs. Each Letter of Credit issued pursuant to this Agreement shall be in a minimum amount of $25,000. No Letter of Credit shall have a stated expiration date later than thirty (30) days prior to the Revolving Credit Maturity Date."

Section 2.5 Schedule 3.5 to the Original Credit Agreement is hereby amended and replaced in its entirety by Schedule 3.5 attached to this Amendment.

Section 3.1 Effective Date. This Amendment shall become effective as of the date first above written when and only when Bank shall have received, at Bank's office,

(a) a duly executed counterpart of this Amendment;

(b) a duly executed counterpart of the No Oral Agreements of even date herewith; and

(c) each other document to be executed and delivered by Borrower pursuant hereto or thereto.

Section 4.1 Representations and Warranties of Borrower. In order to induce Bank to enter into this Amendment, Borrower represents and warrants to Bank that:

(a) The representations and warranties contained in Section 3 of the Original Credit Agreement are true and correct at and as of the time of the effectiveness hereof;

(b) Borrower is duly authorized to execute and deliver this Amendment and the other Amendment Documents and is and will continue to be duly authorized to borrow and to perform its obligations under the Credit Agreement. Borrower has duly taken all corporate action necessary to authorize the execution and delivery of this Amendment and the other Amendment Documents and to authorize the performance of the obligations of Borrower hereunder and thereunder. The Omnibus Certificate of each Borrower delivered to Bank on the date of the Original Credit Agreement remains in full force and effect, and the specimen signatures of the officers contained in the Omnibus Certificate are true and correct;

(c) The execution and delivery by Borrower of this Amendment and the other Amendment Documents, the performance by Borrower of its obligations hereunder and thereunder and the consummation of the transactions contemplated hereby do not and will not conflict with any provision of law, statute, rule or regulation or the bylaws or partnership agreement of Borrower, or of any material agreement, judgment, license, order or permit applicable to or binding upon Borrower, or result in the creation of any lien, charge or encumbrance upon any assets or properties of Borrower. Except for those which have been duly obtained, no consent, approval, authorization or order of any court or governmental authority or third party is required in connection with the execution and delivery by Borrower of this Amendment and the other Amendment Documents or to consummate the transactions contemplated hereby and thereby;

(d) When duly executed and delivered, each of this Amendment and the other Amendment Documents will be a legal and binding instrument and agreement of Borrower, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency and similar laws applying to creditors' rights generally and by principles of equity applying to creditors' rights generally; and

(e) No material adverse change has occurred in the financial condition or businesses or in the consolidated financial condition or businesses of Borrower since the date of the most recently delivered financial statements.

Section 5.1 Ratification of Agreement. The Original Credit Agreement as hereby amended is hereby ratified and confirmed in all respects. Any reference to the Credit Agreement in any Loan Document shall be deemed to refer to this Amendment also. The execution, delivery and effectiveness of this Amendment and the other Amendment Documents shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of Bank under the Credit Agreement or any other Loan Document nor constitute a waiver of any provision of the Credit Agreement or any other Loan Document.

Section 5.2 Consent and Waiver.

(a) The Bank hereby consents to the dissolution of ENGlobal Technical, Thermaire, ENGlobal Constant and Senftleber and waives any non-compliance with Section 4.1 of the Original Credit Agreement due to the fact that ENGlobal Technical, Thermaire, ENGlobal Constant and Senftleber have been dissolved. The Bank agrees that the Borrower shall not be deemed in Default solely by reason of the dissolution of ENGlobal Technical, Thermaire, ENGlobal Constant and Senftleber.

(b) The foregoing waiver shall not be deemed to be a waiver by the Bank of any other covenant, condition or obligation on the part of the Borrower under the Credit Agreement or any other Loan Document. In addition, the foregoing waiver shall in no respect evidence any commitment by the Bank to grant any future consents or waivers of any covenant, condition or obligation on the part of the Borrower under the Credit Agreement or any other Loan Document. Any further waivers or consents must be specifically agreed to in writing in accordance with Section 7.10 of the Credit Agreement.

Section 5.3 Survival of Agreements. All representations, warranties, covenants and agreements of Borrower herein shall survive the execution and delivery of this Amendment and the performance hereof, and shall further survive until all of the Indebtedness is paid in full. All statements and agreements contained in any certificate or instrument delivered by Borrower hereunder or under the Credit Agreement to Bank shall be deemed to constitute representations and warranties by, or agreements and covenants of, Borrower under this Amendment and under the Credit Agreement.

Section 5.4 Loan Documents. This Amendment and the other Amendment Documents are each a Loan Document, and all provisions in the Credit Agreement pertaining to Loan Documents apply hereto and thereto.

Section 5.5 Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of Texas and any applicable laws of the United States of America in all respects, including construction, validity and performance.

Section 5.6 Counterparts; Fax. This Amendment may be separately executed in counterparts and by the different parties hereto in separate counterparts, each of which when so executed shall be deemed to constitute one and the same Amendment. This Amendment may be duly executed by facsimile or other electronic transmission.

THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

IN WITNESS WHEREOF, this Amendment is executed on March 17, 2006 but to be effective as of December 31, 2005.

BORROWER:

ENGLOBAL CORPORATION,
a Nevada corporation

ENGLOBAL CORPORATE SERVICES, INC.,
a Texas corporation

ENGLOBAL ENGINEERING, INC.,
a Texas corporation

ENGLOBAL CONSTRUCTION
RESOURCES, INC., a Texas corporation

ENGLOBAL SYSTEMS, INC.,
a Texas corporation

RPM ENGINEERING, INC.,
a Louisiana corporation

ENGLOBAL TECHNICAL SERVICES, INC.,
a Texas corporation, formerly known as
ENGlobal Design Group, Inc.

ENGLOBAL AUTOMATION GROUP, INC.,
a Texas corporation, formerly known as
ENGLOBAL TECHNOLOGIES, INC.

BANK:

COMERICA BANK

SCHEDULE 3.5

Subsidiaries of ENGlobal Corporation:

ENGlobal Corporate Services, Inc., a Texas corporation

ENGlobal Engineering, Inc., a Texas corporation

R.P.M. Engineering, Inc., a Louisiana corporation

ENGlobal Construction Resources, Inc., a Texas corporation

ENGlobal Systems, Inc., a Texas corporation

ENGlobal Automation Group, Inc., a Texas corporation, f/k/a ENGlobal Technologies, Inc.

ENGlobal Canada ULC, an Alberta corporation

ENGlobal Technical Services, Inc., a Texas corporation, f/k/a ENGlobal Design Group, Inc.

EXHIBIT 10.35

FIFTH AMENDMENT TO CREDIT AGREEMENT

THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (herein called this "Amendment") is executed on the date set forth on the signature pages but is made effective as of July 26, 2006, by and among ENGLOBAL CORPORATION, a Nevada corporation ("ENGlobal Corporation"), ENGLOBAL CORPORATE SERVICES, INC., a Texas corporation ("ENGlobal Corporate"), ENGLOBAL ENGINEERING, INC., a Texas corporation ("ENGlobal Engineering"), ENGLOBAL CONSTRUCTION RESOURCES, INC., a Texas corporation ("ENGlobal Construction"), ENGLOBAL SYSTEMS, INC., a Texas corporation ("ENGlobal Systems"), RPM ENGINEERING, INC., a Louisiana corporation ("RPM Engineering"), ENGLOBAL TECHNICAL SERVICES, INC., a Texas corporation, formerly known as ENGlobal Design Group, Inc. ("ENGlobal Technical"), ENGLOBAL AUTOMATION GROUP, INC., a Texas corporation, formerly known as ENGlobal Technologies, Inc. ("ENGlobal Automation"), PEI INVESTMENTS, A TEXAS JOINT VENTURE, a Texas general partnership ("PEI"), ENGLOBAL CANADA ULC, an Alberta corporation ("ENGlobal Canada"), WRC CORPORATION, a Colorado corporation ("WRC"), WRC CANADA LTD., an Alberta corporation ("WRC Canada"); individually and collectively, jointly and severally, ENGlobal Corporation, ENGlobal Corporate, ENGlobal Engineering, ENGlobal Construction, ENGlobal Systems, RPM Engineering, ENGlobal Technical, ENGlobal Automation, PEI, ENGlobal Canada, WRC and WRC Canada are hereinafter called "Borrower"), and COMERICA BANK ("Bank").

THE RECITALS

WHEREAS, Borrower and Bank have entered into that certain Credit Agreement dated as of July 27, 2004 (as heretofore amended by a First Amendment to Credit Agreement effective as of September 30, 2004, a Second Amendment to Credit Agreement effective as of April 1, 2005, a Third Amendment to Credit Agreement effective as of July 31, 2005, and a Fourth Amendment to Credit Agreement dated as of December 31, 2005, and as it may hereafter be amended, the "Original Credit Agreement"); and

WHEREAS, Borrower and Bank desire to amend the Original Credit Agreement as provided herein.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and in the Original Credit Agreement, in consideration of the loans which may hereafter be made by Bank to Borrower, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:

Section 1.1 Terms Defined in the Original Credit Agreement. Unless the context otherwise requires or unless otherwise expressly defined herein, the terms defined in the Original Credit Agreement shall have the same meanings whenever used in this Amendment.

Section 1.2 Other Defined Terms. Unless the context otherwise requires, the following terms when used in this Amendment shall have the meanings assigned to them in this Section 1.2.

"Amendment" means this Fifth Amendment to Credit Agreement.

"Amendment Documents" means, collectively, this Amendment and any other document required to be delivered by Borrower pursuant to Article III hereof.

"Credit Agreement" means the Original Credit Agreement, as amended hereby.

"Original Omnibus Certificate" means the Omnibus Certificate dated July 27, 2004 executed and delivered by officers of each Borrower pursuant to the Original Credit Agreement.

Section 2.1 Sections 4.3(c), (d) and (e) of the Original Credit Agreement are modified by deleting "thirty (30) days" in each instance and substituting "forty-five (45) days" therefor.

Section 2.2 The Original Credit Agreement is hereby amended by deleting
Section 4.4(c) and substituting therefor the following:

"(c) Maximum Leverage Ratio. Maintain as of the last day of each calendar month during the term of this Agreement a ratio of Funded Debt to Adjusted EBITDA for the twelve (12) months ending on each date occurring during the term of this Agreement no greater than 3.00 to 1; provided that, for purposes of this covenant and subject to Bank approval, Adjusted EBITDA shall have added back the trailing 12-month EBITDA of new acquisitions exceeding a gross purchase price of $2,500,000; provided further that for any calculation hereunder that includes a calendar month prior to the date of Borrower's purchase of AmTech Inspection, Cleveland Inspection or WRC (each hereinafter called, an "Acquisition" and each month occurring before an Acquisition, being a "Pre-Acquisition Month"), Adjusted EBITDA shall include, for each Pre-Acquisition Month, a number equal to (i) the Adjusted EBITDA of AmTech Inspection, Cleveland Inspection or WRC (as applicable) for each calendar month after the applicable Acquisition divided by (ii) the number of calendar months since the applicable Acquisition."

Section 2.3 The Defined Terms Addendum to the Original Credit Agreement is hereby amended by deleting the definition of "Agreement" and substituting therefor the following:

"'Agreement' shall mean this Credit Agreement, including the Defined Terms Addendum and the Loan Terms, Conditions and Procedures Addendum, together with all exhibits and schedules, as amended by the First Amendment, Second Amendment, Third Amendment, Fourth Amendment, and Fifth Amendment, and as it may be further amended from time to time."

Section 2.4 The Defined Terms Addendum to the Original Credit Agreement is hereby amended by adding the following definitions thereto:

"'Fifth Amendment' shall mean that certain Fifth Amendment to Credit Agreement as of July 26, 2006 among Borrower and Bank."

Section 2.5 The Defined Terms Addendum to the Original Credit Agreement is hereby amended by deleting "July 26, 2007" from the definition of "Revolving Credit Maturity Date" and substituting "July 26, 2009" in place thereof.

Section 2.6 The Defined Terms Addendum to the Original Credit Agreement is hereby amended by deleting the definition of "Revolving Credit Maximum Amount" and substituting therefore the following:

"'Revolving Credit Maximum Amount' shall mean THIRTY MILLION DOLLARS ($30,000,000)."

Section 2.7 The Defined Terms Addendum to the Original Credit Agreement is hereby amended by deleting the definition of "Revolving Credit Note" and substituting therefore the following:

"'Revolving Credit Note' shall mean the Master Revolving Note-Eurodollar Rate-Maturity Date-Committed dated July 27, 2004, in the original principal amount of $22,000,000 made by Borrower payable to the order of the Bank, as renewed, extended, modified, and enlarged on July 26, 2006, to the amount of $30,000,000 made by Borrower payable to the order of the Bank, in accordance with the terms of the Fifth Amendment of even date therewith, and as renewed, extended, modified, increased or restated from time to time."

Section 2.8 The Loan Terms, Conditions and Procedures Addendum to the Original Credit Agreement is hereby amended by deleting Section 1.9(a) and substituting therefor the following:

"(a) Letters of Credit. Subject to the terms and conditions of this Agreement and the other Loan Documents, the Bank shall, upon request from Borrower from time to time prior to the Revolving Credit Maturity Date, issue one or more Letters of Credit. The Letter of Credit Liabilities shall not exceed $1,000,000, provided that, at all times the sum of (i) the outstanding principal balance of all Revolving Loans plus (ii) the Letter of Credit Liabilities shall not exceed the Revolving Credit Maximum Amount. Letters of Credit may be issued to finance working capital needs. Each Letter of Credit issued pursuant to this Agreement shall be in a minimum amount of $25,000. No Letter of Credit shall have a stated expiration date later than thirty (30) days prior to the Revolving Credit Maturity Date."

Section 2.9 Schedule 3.5 to the Original Credit Agreement is hereby amended and replaced in its entirety by Schedule 3.5 attached to this Amendment.

Section 3.1 Effective Date. This Amendment shall become effective as of the date first above written when and only when Bank shall have received, at Bank's office,

(a) a duly executed counterpart of this Amendment to be executed by Borrower;

(b) a Master Revolving Note-Eurodollar Rate-Maturity Date-Committed of even date herewith to be executed by Borrower;

(c) an Act of Supplement and Amendment and Notice of Reinscription of Act of Mortgage and Security Agreement of even date herewith to be executed by RPM Engineering, Inc. and recorded in East Baton Rouge Parish, Louisiana;

(d) a Security Agreement (Accounts Receivable and Equipment) of even date herewith to be executed by PEI Investments, a Texas Joint Venture, ENGlobal Canada ULC, WRC Corporation, and WRC Canada Ltd.;

(e) a duly executed counterpart of the No Oral Agreements of even date herewith to be executed by Borrower

(f) a duly executed certificate of the partners, chief financial officer and secretary of each of PEI Investments, a Texas Joint Venture, ENGlobal Canada ULC, WRC Corporation, and WRC Canada Ltd. certifying that
(i) resolutions of its board of directors attached to the Original Omnibus Certificate authorizing the execution, delivery, and performance of this Amendment and identifying the officers authorized to sign such instrument are in full force and effect and (ii) the specimen signatures of the officers so authorized which were attached to the Original Omnibus Certificate are true and correct; and

(g) each other document to be executed and delivered by Borrower pursuant hereto or thereto.

Section 4.1 Representations and Warranties of Borrower. In order to induce Bank to enter into this Amendment, Borrower represents and warrants to Bank that:

(a) The representations and warranties contained in Section 3 of the Original Credit Agreement are true and correct at and as of the time of the effectiveness hereof;

(b) Borrower is duly authorized to execute and deliver this Amendment and the other Amendment Documents and is and will continue to be duly authorized to borrow and to perform its obligations under the Credit Agreement. Borrower has duly taken all corporate action necessary to authorize the execution and delivery of this Amendment and the other Amendment Documents and to authorize the performance of the obligations of Borrower hereunder and thereunder. The Omnibus Certificate of each Borrower delivered to Bank on the date of the Original Credit Agreement remains in full force and effect, and the specimen signatures of the officers contained in the Omnibus Certificate are true and correct;

(c) The execution and delivery by Borrower of this Amendment and the other Amendment Documents, the performance by Borrower of its obligations hereunder and thereunder and the consummation of the transactions contemplated hereby do not and will not conflict with any provision of law, statute, rule or regulation or the bylaws or partnership agreement of Borrower, or of any material agreement, judgment, license, order or permit applicable to or binding upon Borrower, or result in the creation of any lien, charge or encumbrance upon any assets or properties of Borrower. Except for those which have been duly obtained, no consent, approval, authorization or order of any court or governmental authority or third party is required in connection with the execution and delivery by Borrower of this Amendment and the other Amendment Documents or to consummate the transactions contemplated hereby and thereby;

(d) When duly executed and delivered, each of this Amendment and the other Amendment Documents will be a legal and binding instrument and agreement of Borrower, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency and similar laws applying to creditors' rights generally and by principles of equity applying to creditors' rights generally; and

(e) No material adverse change has occurred in the financial condition or businesses or in the consolidated financial condition or businesses of Borrower since the date of the most recently delivered financial statements.

Section 5.1 Ratification of Agreement. The Original Credit Agreement as hereby amended is hereby ratified and confirmed in all respects. Any reference to the Credit Agreement in any Loan Document shall be deemed to refer to this Amendment also. The execution, delivery and effectiveness of this Amendment and the other Amendment Documents shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of Bank under the Credit Agreement or any other Loan Document nor constitute a waiver of any provision of the Credit Agreement or any other Loan Document.

Section 5.2 Survival of Agreements. All representations, warranties, covenants and agreements of Borrower herein shall survive the execution and delivery of this Amendment and the performance hereof, and shall further survive until all of the Indebtedness is paid in full. All statements and agreements contained in any certificate or instrument delivered by Borrower hereunder or under the Credit Agreement to Bank shall be deemed to constitute representations and warranties by, or agreements and covenants of, Borrower under this Amendment and under the Credit Agreement.

Section 5.3 Loan Documents. This Amendment and the other Amendment Documents are each a Loan Document, and all provisions in the Credit Agreement pertaining to Loan Documents apply hereto and thereto.

Section 5.4 Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of Texas and any applicable laws of the United States of America in all respects, including construction, validity and performance.

Section 5.5 Counterparts; Fax. This Amendment may be separately executed in counterparts and by the different parties hereto in separate counterparts, each of which when so executed shall be deemed to constitute one and the same Amendment. This Amendment may be duly executed by facsimile or other electronic transmission.

THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

IN WITNESS WHEREOF, this Amendment is effective as of July 26, 2006.

BORROWER:

ENGLOBAL CORPORATION,
a Nevada corporation

ENGLOBAL CORPORATE SERVICES, INC.,
a Texas corporation
s

ENGLOBAL ENGINEERING, INC.,
a Texas corporation

ENGLOBAL CONSTRUCTION
RESOURCES, INC., a Texas corporation

ENGLOBAL SYSTEMS, INC.,
a Texas corporation

RPM ENGINEERING, INC.,
a Louisiana corporation

ENGLOBAL TECHNICAL SERVICES, INC.,
a Texas corporation, formerly known as
ENGlobal Design Group, Inc.

ENGLOBAL AUTOMATION GROUP, INC.,
a Texas corporation, formerly known as
ENGlobal Technologies, Inc.

PEI INVESTMENTS, A TEXAS JOINT
VENTURE, a Texas general partnership

ENGLOBAL CANADA ULC,
an Alberta corporation

WRC CORPORATION,
a Colorado corporation

WRC CANADA LTD.,
an Alberta corporation

BANK:

COMERICA BANK

SCHEDULE 3.5

Subsidiaries of ENGlobal Corporation:

ENGlobal Corporate Services, Inc., a Texas corporation

ENGlobal Engineering, Inc., a Texas corporation

RPM Engineering, Inc., a Louisiana corporation

ENGlobal Construction Resources, Inc., a Texas corporation

ENGlobal Systems, Inc., a Texas corporation

ENGlobal Automation Group, Inc., a Texas corporation, f/k/a ENGlobal Technologies, Inc.

ENGlobal Technical Services, Inc., a Texas corporation, f/k/a ENGlobal Design Group, Inc.

PEI Investments, a Texas Joint Venture, a Texas general partnership

ENGlobal Canada ULC, an Alberta corporation

WRC Corporation, a Colorado corporation

WRC Canada Ltd., an Alberta corporation

EXHIBIT 10.36

SIXTH AMENDMENT TO CREDIT AGREEMENT

THIS SIXTH AMENDMENT TO CREDIT AGREEMENT (herein called this "Amendment") is executed on March 3, 2007 but is effective as of December 31, 2006, by and among ENGLOBAL CORPORATION, a Nevada corporation ("ENGlobal Corporation"), ENGLOBAL CORPORATE SERVICES, INC., a Texas corporation ("ENGlobal Corporate"), ENGLOBAL ENGINEERING, INC., a Texas corporation ("ENGlobal Engineering"), ENGLOBAL CONSTRUCTION RESOURCES, INC., a Texas corporation ("ENGlobal Construction"), ENGLOBAL SYSTEMS, INC., a Texas corporation ("ENGlobal Systems"), RPM ENGINEERING, INC., a Louisiana corporation ("RPM Engineering"), ENGLOBAL TECHNICAL SERVICES, INC., a Texas corporation, formerly known as ENGlobal Design Group, Inc. ("ENGlobal Technical"), ENGLOBAL AUTOMATION GROUP, INC., a Texas corporation, formerly known as ENGlobal Technologies, Inc. ("ENGlobal Automation"), PEI INVESTMENTS, A TEXAS JOINT VENTURE, a Texas general partnership ("PEI"), ENGLOBAL CANADA ULC, an Alberta corporation ("ENGlobal Canada"), WRC CORPORATION, a Colorado corporation ("WRC"), and WRC CANADA LTD., an Alberta corporation ("WRC Canada"); individually and collectively, jointly and severally, ENGlobal Corporation, ENGlobal Corporate, ENGlobal Engineering, ENGlobal Construction, ENGlobal Systems, RPM Engineering, ENGlobal Technical, ENGlobal Automation, PEI, ENGlobal Canada, WRC and WRC Canada are hereinafter called "Borrower"), and COMERICA BANK ("Bank").

THE RECITALS

WHEREAS, Borrower and Bank have entered into that certain Credit Agreement dated as of July 27, 2004 (as heretofore amended by a First Amendment to Credit Agreement effective as of September 30, 2004, a Second Amendment to Credit Agreement effective as of April 1, 2005, a Third Amendment to Credit Agreement effective as of July 31, 2005, a Fourth Amendment to Credit Agreement dated as of December 31, 2005, and a Fifth Amendment to Credit Agreement effective as of July 26, 2006, and as it may hereafter be amended, the "Original Credit Agreement"); and

WHEREAS, Borrower and Bank desire to amend the Original Credit Agreement as provided herein.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and in the Original Credit Agreement, in consideration of the loans which may hereafter be made by Bank to Borrower, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:

Section 1.1 Terms Defined in the Original Credit Agreement. Unless the context otherwise requires or unless otherwise expressly defined herein, the terms defined in the Original Credit Agreement shall have the same meanings whenever used in this Amendment.

Section 1.2 Other Defined Terms. Unless the context otherwise requires, the following terms when used in this Amendment shall have the meanings assigned to them in this Section 1.2.

"Amendment" means this Sixth Amendment to Credit Agreement.

"Amendment Documents" means, collectively, this Amendment and any other document required to be delivered by Borrower pursuant to Article III hereof.

"Credit Agreement" means the Original Credit Agreement, as amended hereby.

"Original Omnibus Certificate" means the Omnibus Certificate dated July 27, 2004 executed and delivered by officers of each Borrower pursuant to the Original Credit Agreement.

Section 2.1 The Original Credit Agreement is hereby amended by deleting
Section 4.4(b) and substituting therefor the following:

"(b) Minimum Net Worth. Maintain as of the last day of each calendar quarter during the term of this Agreement a minimum Net Worth of not less than the sum of (i) $40,116,000 plus (ii) 75% of Net Income earned in each fiscal quarter beginning with the quarter ending March 31, 2007 (without deduction for losses) plus (iii) 100% of the net proceeds of any offering, sale or other transfer of any capital stock or equity securities of any kind of the Borrower after the date hereof; provided for purposes of this covenant adjustments may be made for any non-recurring transaction costs incurred by Borrower."

Section 2.2 The Original Credit Agreement is hereby amended by deleting
Section 4.4(c) and substituting therefor the following:

"(c) Maximum Leverage Ratio. Maintain as of the last day of each calendar month during the term of this Agreement a ratio of Funded Debt to Adjusted EBITDA for the twelve (12) months ending on each date occurring during the term of this Agreement no greater than 3.00 to 1; provided that, for purposes of this covenant and subject to Bank approval, Adjusted EBITDA shall have added back (A) the trailing 12-month EBITDA of new acquisitions exceeding a gross purchase price of $2,500,000; provided further that for any calculation hereunder that includes a calendar month prior to the date

of Borrower's purchase of AmTech Inspection, Cleveland Inspection or WRC (each hereinafter called, an "Acquisition" and each month occurring before an Acquisition, being a "Pre-Acquisition Month"), Adjusted EBITDA shall include, for each Pre-Acquisition Month, a number equal to (i) the Adjusted EBITDA of AmTech Inspection, Cleveland Inspection or WRC (as applicable) for each calendar month after the applicable Acquisition divided by (ii) the number of calendar months since the applicable Acquisition and (B) expenses associated with Borrower's issuance and/or granting of stock options to Borrower's directors and employees; provided further that for any calculation hereunder, Adjusted EBITDA shall exclude losses associated with the ConocoPhillips-Ferndale, Washington project which have occurred prior to January 1, 2007."

Section 2.3 Waiver.

(a) Bank hereby waives any non-compliance by the Borrower with Section 4.4(c) of the Original Credit Agreement for the month's ending November 31, 2006 and December 31, 2006 and Bank agrees that the Borrower shall not be deemed in Default, nor shall any Event of Default be deemed to have existed, solely by reason of any such non-compliance.

(b) Bank hereby waives any non-compliance by the Borrower with Section 5.17 of the Original Credit Agreement for the fiscal year ending December 31, 2006 and Bank agrees that the Borrower shall not be deemed in Default, nor shall any Event of Default be deemed to have existed, solely by reason of any such non-compliance during such fiscal year; provided Borrower's actual expenditures or commitments to acquire fixed assets by lease, purchase or otherwise for the fiscal year ending December 31, 2006 do not exceed in the aggregate $3,500,000.

(c) The foregoing waivers shall not be deemed to be a waiver by the Bank of any other covenant, condition or obligation on the part of the Borrower under the Original Credit Agreement or any other Loan Document, except as set forth in this Section 2.3. In addition, the foregoing waivers shall in no respect evidence any commitment by the Bank to grant any future consents or waivers of any covenant, condition or obligation on the part of the Borrower under the Original Credit Agreement or any other Loan Document. Any further waivers or consents must be specifically agreed to in writing in accordance with Section 7.10.

Section 2.4 The Defined Terms Addendum to the Original Credit Agreement is hereby amended by deleting the definition of "Agreement" and substituting therefor the following:

"'Agreement' shall mean this Credit Agreement, including the Defined Terms Addendum and the Loan Terms, Conditions and Procedures Addendum, together with all exhibits and schedules, as amended by the First Amendment, Second Amendment, Third Amendment, Fourth Amendment, Fifth Amendment, and Sixth Amendment, and as it may be further amended from time to time."

Section 2.5 The Defined Terms Addendum to the Original Credit Agreement is hereby amended by adding the following definitions thereto:

"'Sixth Amendment' shall mean that certain Sixth Amendment to Credit Agreement effective as of December 31, 2006 among Borrower and Bank."

Section 3.1 Effective Date. This Amendment shall become effective as of the date first above written when and only when Bank shall have received, at Bank's office,

(a) a duly executed counterpart of this Amendment to be executed by Borrower;

(b) a duly executed counterpart of the No Oral Agreements of even date herewith to be executed by Borrower; and

(c) each other document to be executed and delivered by Borrower pursuant hereto or thereto.

Section 4.1 Representations and Warranties of Borrower. In order to induce Bank to enter into this Amendment, Borrower represents and warrants to Bank that:

(a) The representations and warranties contained in Section 3 of the Original Credit Agreement are true and correct at and as of the time of the effectiveness hereof;

(b) Borrower is duly authorized to execute and deliver this Amendment and the other Amendment Documents and is and will continue to be duly authorized to borrow and to perform its obligations under the Credit Agreement. Borrower has duly taken all corporate action necessary to authorize the execution and delivery of this Amendment and the other Amendment Documents and to authorize the performance of the obligations of Borrower hereunder and thereunder. The Omnibus Certificate of each Borrower delivered to Bank on the date of the Original Credit Agreement remains in full force and effect, and the specimen signatures of the officers contained in the Omnibus Certificate are true and correct;

(c) The execution and delivery by Borrower of this Amendment and the other Amendment Documents, the performance by Borrower of its obligations hereunder and thereunder and the consummation of the transactions contemplated hereby do not and will not conflict with any provision of law, statute, rule or regulation or the bylaws or partnership agreement of Borrower, or of any material agreement, judgment, license, order or permit applicable to or binding upon Borrower, or result in the creation of any lien, charge or encumbrance upon any assets or properties of Borrower. Except for those which have been duly obtained, no consent, approval, authorization or order of any court or governmental authority or third party is required in connection with the execution and delivery by Borrower of this Amendment and the other Amendment Documents or to consummate the transactions contemplated hereby and thereby;

(d) When duly executed and delivered, each of this Amendment and the other Amendment Documents will be a legal and binding instrument and agreement of Borrower, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency and similar laws applying to creditors' rights generally and by principles of equity applying to creditors' rights generally; and

(e) No material adverse change has occurred in the financial condition or businesses or in the consolidated financial condition or businesses of Borrower since the date of the most recently delivered financial statements.

Section 5.1 Ratification of Agreement. The Original Credit Agreement as hereby amended is hereby ratified and confirmed in all respects. Any reference to the Credit Agreement in any Loan Document shall be deemed to refer to this Amendment also. The execution, delivery and effectiveness of this Amendment and the other Amendment Documents shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of Bank under the Credit Agreement or any other Loan Document nor constitute a waiver of any provision of the Credit Agreement or any other Loan Document.

Section 5.2 Survival of Agreements. All representations, warranties, covenants and agreements of Borrower herein shall survive the execution and delivery of this Amendment and the performance hereof, and shall further survive until all of the Indebtedness is paid in full. All statements and agreements contained in any certificate or instrument delivered by Borrower hereunder or under the Credit Agreement to Bank shall be deemed to constitute representations and warranties by, or agreements and covenants of, Borrower under this Amendment and under the Credit Agreement.

Section 5.3 Loan Documents. This Amendment and the other Amendment Documents are each a Loan Document, and all provisions in the Credit Agreement pertaining to Loan Documents apply hereto and thereto.

Section 5.4 Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of Texas and any applicable laws of the United States of America in all respects, including construction, validity and performance.

Section 5.5 Counterparts; Fax. This Amendment may be separately executed in counterparts and by the different parties hereto in separate counterparts, each of which when so executed shall be deemed to constitute one and the same Amendment. This Amendment may be duly executed by facsimile or other electronic transmission.

THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

IN WITNESS WHEREOF, this Amendment is effective as of December 31, 2006.

BORROWER:

ENGLOBAL CORPORATION,
a Nevada corporation

ENGLOBAL CORPORATE SERVICES, INC.,
a Texas corporation

ENGLOBAL ENGINEERING, INC.,
a Texas corporation

ENGLOBAL CONSTRUCTION
RESOURCES, INC., a Texas corporation

ENGLOBAL SYSTEMS, INC.,
a Texas corporation

RPM ENGINEERING, INC.,
a Louisiana corporation

ENGLOBAL TECHNICAL SERVICES, INC.,
a Texas corporation, formerly known as
ENGlobal Design Group, Inc.

ENGLOBAL AUTOMATION GROUP, INC.,
a Texas corporation, formerly known as
ENGlobal Technologies, Inc.

PEI INVESTMENTS, A TEXAS JOINT
VENTURE, a Texas general partnership

ENGLOBAL CANADA ULC,
an Alberta corporation

WRC CORPORATION,
a Colorado corporation

WRC CANADA LTD.,
an Alberta corporation

BANK:

COMERICA BANK

		Key Manager Incentive Plan

1.    PURPOSE

     1.1     The purpose of this Key Manager Incentive Plan (the “ Plan ”) is to incentivize certain key managers of ENGlobal Corporation (the “ Company ”) and its subsidiaries to promote the Company’s core values, which are described in Section 5. Employees may participate in only one ENGlobal Incentive Plan at a time. Eligible Participants in the Company’s Executive Level Incentive Plan, or any other plans, shall not be entitled to participate in this Plan.

     1.2    This Plan has been approved by the Board of Directors on December 16, 2004, to be effective as of January 1, 2005, and amended by the Board of Directors on March 28, 2006, to be effective as of January 1, 2006.

2.    ELIGIBLE PARTICIPANTS

     2.1    Participants shall include individuals who have been guaranteed participation in this Plan through specific provisions in their employment contracts and may also include subsidiary presidents (or equivalent), profit center (divisional) managers and officers, business development managers and officers, and key departmental and project management personnel, unless they are eligible to participate in a separate bonus plan (“ Eligible Participants ”). The Company will pay bonuses under this Plan only to those Eligible Participants who are employed on a regular, full-time basis on the last day (the “ Bonus Determination Date ”) of each calendar year (each, a “ Bonus Period ”) for which the bonus is paid. Unless otherwise prohibited by law, an employee whose employment with the Company or its subsidiaries is terminated for any reason prior to the Bonus Determination Date for a particular Bonus Period will not be eligible to receive any bonus under this Plan based on his performance in that Bonus Period.

     2.2    The Chief Executive Officer, with the approval of the Board of Directors, may change the positions that qualify as Eligible Participants as he determines appropriate from time to time.

     2.3    If the Chief Executive Officer, after consultation with the Company’s Chairman of the Board and Chief Financial Officer (the “ Management Bonus Committee ”), determines that an Eligible Participant has exhibited bad behavior, poor teamwork, or unsafe work practices, has failed to comply with Company policies and procedures or risk management practices, has used Company funds inappropriately, or has engaged in similar types of behavior, he shall not be entitled to receive a bonus until the Chief Executive Officer has determined that the behavior has been corrected. In making the determination to restore the Eligible Participant’s right to a bonus, the Chief Executive Officer shall consult with the members of the Management Bonus Committee and the person who supervises the Eligible Participant.

     2.4    The fact that an individual is an Eligible Participant does not guarantee that he will receive a bonus under this Plan. Rather, payment of a bonus under this Plan is entirely discretionary and will depend on the Company’s evaluation of the individual’s performance, as more particularly described in this Plan.

1

		Key Manager Incentive Plan

3.    BONUS DETERMINATIONS

     3.1    Following the end of each Bonus Period, the Chief Executive Officer will consult with each member of the Management Bonus Committee to discuss how the total bonus pool shall be divided among the Eligible Participants and if portions of the Bonus Pool shall be set aside for certain key managers (the “ Supervising Managers ”) to distribute to Eligible Participants under their supervision, as further described in Section 3.2. The substance and results of the consultations between the Chief Executive Officer and the other members of the Management Bonus Committee shall be documented. Following the consultations, the Chief Executive Officer will determine which Eligible Participants will receive a bonus for that Bonus Period and the amounts of funds to be allocated to Supervising Managers for further distribution to Eligible Participants who are their subordinates. The Chief Executive Officer and the members of the Management Bonus Committee will seek to reach a consensus decision on the payment of bonuses; however, lacking a consensus, the Chief Executive Officer will be entitled to make the final decision.

     3.2    Only individuals who report directly to the members of the Management Bonus Committee are eligible to be Supervising Managers. As an example, the presidents of the Company’s subsidiaries, and other key managerial positions who report to any member of the Management Bonus Committee are eligible to serve as Supervising Managers. The Supervising Managers shall evaluate Eligible Participants who are their subordinates using the criteria described in this Plan. Without the approval of the Chief Executive Officer, bonuses may not be awarded to any employees below the level of department head (for both billable and overhead positions) or to any project manager. The Company intends that this Plan be used to reward a smaller number of individuals with bonuses large enough to incentivize individuals to promote the goals and objectives described in this Plan. Based on studies reviewed by members of the Management Bonus Committee, it appears that this typically cannot be achieved with bonuses that are less than 7% of an individual’s annual salary. Supervising Managers should keep this in mind in awarding bonuses to their subordinates.

     3.3    Notwithstanding the other provisions herein, no bonus (other than the safety bonus, if earned) shall be paid to any profit center manager whose contribution to the Company’s net operating income for the Bonus Period is significantly below the budgeted contribution to net operating income for that profit center as set forth in the Annual Budget . Likewise, no bonus shall be paid to any profit center manager (other than the Safety Bonus, if earned) if the actual departmental costs for his profit center are significantly above (on a percentage of revenue basis) those provided for in the Annual Budget.

     3.4    The Chief Executive Officer shall also have the final authority to resolve all disputes that may arise related to this Plan. The Chief Executive Officer’s decisions will be without recourse by members of the Management Bonus Committee or the affected employees. This Plan is not intended to be, and does not constitute, a contract between the Company and any Eligible Participant or other employee. This Plan may be revised or terminated at any time by the Board of Directors without prior notice to, or the consent of, any of the Eligible Participants.

2

		Key Manager Incentive Plan

4.    BONUS POOL AND BONUS PAYMENTS

     4.1    As long as this Plan is in effect, at the end of each Bonus Period, the Company shall designate an amount of money (the “Bonus Pool ”) to be used for the payment of bonuses to Eligible Participants. The amount of the Bonus Pool shall be determined by reference to the Company’s Adjusted Earnings per Share (as herein defined) as compared to its prior year’s Adjusted Earnings per Share for the relevant period. “ Adjusted Earnings per Share ” shall mean the Company’s actual Earnings per Share for the Bonus Period as stated in the Company’s audited financial statements filed with its Annual Report on Form 10-K, but adjusted each year to exclude unusual or infrequent transactions. The amount of the “Bonus Pool” shall be determined as follows:

     4.2    If the Company’s adjusted earnings per share ( “EPS” ) for the year for which the bonus is being paid (the “ Current Year ”), after subtracting any and all incentive compensation, exceeds adjusted EPS in the immediately preceding calendar year (the “ Base Year”), then the Company shall contribute to the Bonus Pool in the amounts, and with the restrictions, as set below.

     4.3    Bonus payments, if due hereunder, will be made within 75 days following the end of each year.

     4.4    The manner in which the total Bonus Pool is determined may be modified from time to time by the Board of Directors, without prior notice to the Participants. Notwithstanding the percentages set forth herein, unless the Board of Directors authorizes additional funding, the total of all Bonus Pools, including the Executive Level Incentive Plan and any other bonuses, for any Bonus Period shall not exceed 13.10% of adjusted pre-tax, pre-bonus earnings.

     4.5    In the discretion of the Chief Executive Officer, after consultation with the Management Bonus Committee, an amount equal to 10% to 15% of the total Bonus Pool may be allocated for any employees exhibiting performance over and above requirements of their position, when their performance has resulted in the addition of new clients, an improvement in the Company’s financial performance, the award of new projects, or other significant activities that reflect the Company’s core values as defined in this Plan. If this amount is not awarded for any Bonus Period, it may, at the election of the Chief Executive Officer, be added to the Bonus Pool for the next Bonus Period.

     4.6    Bonus payments, if due hereunder, will be made no later than 75 days following the end of the Bonus Period or, if earlier, within 10 days after the Company files its Annual Report on Form 10-K for the Bonus Period.

3

		Key Manager Incentive Plan

5.    CORE VALUE SYSTEM

     This Plan is intended to reward performance that reinforces and supports the Company’s core values as applicable for each Eligible Participant. The evaluations for non-profit center managers (e.g. Accounting, HR, IR, Governance and IT) shall be adjusted for their “spheres of influence.” For example, “client satisfaction” would be measured based on “internal client satisfaction” for accounting managers as opposed to “external client satisfaction” for operations managers. In making bonus determinations, the Chief Executive Officer and the Management Bonus Committee will consider the following:

     5.1    Safety and Security

     5.2    Financial Results

     As a public corporation, the Company is in the business of creating value for its shareholders. Consequently, for Eligible Participants who are responsible for profits or for a budget, the Company will consider each Eligible Participant’s performance in accomplishing his budget. Just as project managers are accountable for project budgets even though they may not have personally prepared the project estimate, managers are accountable to meet the budgets approved by the Board of Directors even if the approved budget differs from the budget submitted by the manager. If a manager fails to meet his budget for any Bonus Period without valid reasons, he may not be eligible for a bonus for that Bonus Period. For operations (profit center) managers, the primary budget number to be considered will be the Net Operating Income from the profit center (without any allocation of corporate general and administrative expenses) as determined in the Company’s consolidated financial statements. The Company will also consider actual variable overhead costs, actual general and administrative expenses, and accounts receivable balances greater than 60 days outstanding and actual income earned.

     5.3     Marketing

     Since higher profits are critical to the Company’s success, the Company places a high value on successful sales and marketing efforts. The Company may develop a point system to measure individual marketing efforts and to be considered in awarding bonuses. Until then, the Company will consider monthly marketing reports as well as the growth in an Eligible Participant’s particular area of operations in determining each business development manager’s bonus.

4

		Key Manager Incentive Plan

     5.4    Work-Sharing and Cooperation

     The Company values high employee utilization rates and cross-marketing efforts. One of the Company’s key strategic goals is to encourage profit centers to work together. This Plan recognizes this in two ways: (1) the Bonus Pool is based on the consolidated profits of the Company, and (2) Eligible Participants will be evaluated on how well they cooperate with other divisions and departments through work-sharing, cross-marketing, and other types of assistance. The Company is able to serve its clients better through the strength of its combined operations rather than on a strictly local or individualized basis. During slow work periods, the Company’s goal is to keep the best people, no matter what office they are working in, by placing them on other work, if necessary, from other offices outside their local area. Under-utilization of employees is detrimental to the Company. Eligible Participants who encourage full utilization of all employees, work-sharing among Company locations and divisions, and cross-marketing will be favorably considered for a bonus under this Plan.

     5.5    Client Satisfaction

     The Company operates in a competitive environment in which clients require the Company to accept ever-increasing liability and accountability for its employees’ actions. Consequently, satisfying clients under these conditions can be difficult. Nevertheless, the Company reinforces the concept that it is in business to satisfy its clients and to obtain repeat business. The Company will give favorable consideration to Eligible Participants who succeed in this endeavor.

     5.6     Entrepreneurial Spirit

     The Company recognizes that it will be difficult to achieve significant growth internally without new business ventures and investments in new key personnel. Thus, the Company encourages its managers to make well thought out entrepreneurial decisions. Managers who have an entrepreneurial idea that they believe could help the Company achieve its goals should submit a business plan in Executive Summary format to the Chief Executive Officer for his consideration, and if appropriate, for his presentation to the Board of Directors.

     5.7     Growth Contribution

     Typically, the largest operations contribute the highest profits to the Company’s consolidated results, giving the managers of those operations the opportunity to earn a significant bonus under this Plan. However, managers of smaller operations can also qualify for a substantial bonus by achieving significant growth in the operations they manage. As a publicly traded company, the Company is seeking to be a high growth company. The Company anticipates that much of the Company’s growth will be derived from acquisitions; however, internal growth typically creates even more value for the Company’s stock. Consequently, the Company will award bonuses to managers of operations that grow significantly and in a manner that is sustainable. Because it is often easier for smaller operations to achieve a higher rate of growth, managers of small operations will also have an opportunity to receive a significant bonus. Criteria for measuring growth shall include the following weighted equally:

5

		Key Manager Incentive Plan

     5.8    Long-Term Stability and Risk Management

     The Company’s management expects each division to grow in a sustainable fashion and to create as much stability as the marketplace allows. It is relatively easy to show very fast growth rates by taking on high risk projects, such as lump sum and fixed price work. While the Company has no general objection to that type of work, it does expect the profitability of such work to be commensurate with the risks. Additionally, the Company expects the managers in charge to be diligent in managing risks so that the Company will not sustain significant losses even if a project does not go as planned. The Company may conduct audits of such projects to see if they were bid and performed in accordance with the Company’s procedures for risk management, safety, cost control, and scheduling. Fast growth will not be rewarded if the growth was obtained through undertaking unreasonable risks.

     5.9     Market Share

     Because many clients utilize alliances and partnerships with engineering firms like the Company, market share has become even more important than in the past. The Company’s goal is to be number one or two in its local, geographical area within the niche markets that it serves. These goals will be easier to obtain in markets outside of large oil and gas complexes like the Houston area. The Houston goal is to become one of the primary players in that marketplace. In the other geographical areas that the Company currently serves, the goal is to be number one or two in market share. The Company will view favorably all efforts that bring the Company closer to obtaining these goals.

     5.10    Leadership

     Employee morale is significantly influenced by the leadership qualities of the Company’s managers. The Company encourages management personnel to operate as a cohesive team and speak with integrity and truthfulness, and believes employees will emulate management’s actions. Thus, the Company values leadership, as opposed to dictatorial management styles, and will consider this in its evaluation of Eligible Participants.

     5.11    Credibility

     Part of leadership is to exhibit the highest degree of integrity and truthfulness in dealing with employees, suppliers, subcontractors, and clients. While this does not mean discussing Company business in an inappropriate manner or failing to speak tactfully, the Company values employees who are honest and accountable in their dealings. The Company’s goal is for its employees to have complete credibility with others. The Company will reward Eligible Participants whose actions support this goal.

6

		Key Manager Incentive Plan

     5.12    Accountability

     The Company recognizes that employee performance is often influenced by outside circumstances beyond its control. However, the Company values managers who are accountable for their areas of responsibility and for the performance of their subordinates even when the unexpected occurs. Managers should accept responsibility for their area rather than asking forgiveness or making excuses when business does not go as planned. The Company values accountability and will reward Eligible Participants accordingly.

     5.13     Empowerment

     The Company cannot grow at the pace it has established unless managers empower their subordinates to make decisions and hold their subordinates accountable for their actions. While employees are expected to participate and cooperate with each other to achieve the goals described in this Plan, the Company’s general operating philosophy should be one of empowering associates and providing them with coaching, mentoring, and training necessary to make good decisions.

6.    MISCELLANEOUS

     6.1    This Bonus Plan shall be governed by the laws of the State of Texas, excluding choice of law and conflict of law principles that direct the application of the laws of a different state. The Board of Directors is hereby authorized to resolve any ambiguities in this Plan.

     6.2    This Bonus Plan represents the sole Bonus Plan covering the Eligible Participants, and all rights to participate in any other bonus plans (other than any plan under which the Company may award options or other equity consideration) are hereby revoked in their entirety. This Bonus Plan may be modified or amended at any time by the Board of Directors of the Company, with or without prior notice to the Eligible Participants.

     6.3    There are no third party beneficiaries to this Bonus Plan.

     6.4    This Bonus Plan is an unfunded and unsecured compensation arrangement. It is not governed by the Employee’s Retirement and Income Security Act of 1974.

Adopted by Resolution of the Compensation Committee of the Board of Directors
April 17, 2006

/s/    William A. Coskey, P.E.
William A. Coskey, P.E.
Chairman of the Board

7

		Executive Level Incentive Plan

1.    PURPOSE AND EFFECTIVE DATE

     1.1 The purpose of this Executive Level Incentive Plan (this “ Plan ”) is to provide financial incentives to certain corporate officers (the “ Participants ”) of ENGlobal Corporation (“ ENGlobal ” or the “ Company ”) to use their best efforts on behalf of the Company and to provide bonuses commensurate with the industry peer group if the Company is successful in raising earnings per share.

     1.2 This Plan was approved by the Board of Directors on December 16, 2004 and shall be effective as of January 1, 2005, and amended by the Board of Directors on March 28, 2006, to be effective as of January 1, 2006.

2.    ELIGIBLE PARTICIPANTS

     The Participants in this Plan shall be the Chairman of the Board, President and Chief Executive Officer, Chief Financial Officer, Executive Vice President of Business Development, and such other participants as the Board of Directors may designate from time to time.

3.    BONUS POOL AND BONUS PAYMENTS

     The “ Bonus Pool ” (herein so called) from which bonuses shall be paid to Participants under this Plan shall be calculated and paid as follows:

     3.1 If the Company’s adjusted earnings per share (“ EPS ”) for the year for which the bonus is being paid (the “ Current Year ”), after subtracting any and all incentive compensation, exceeds adjusted EPS in the immediately preceding calendar year (the “ Base Year”), then the Company shall contribute to the Bonus Pool in the amounts, and with the restrictions, as set below. “ Adjusted Earnings per Share ” shall mean the Company’s actual Earnings per Share for the Bonus Period as stated in the Company’s audited financial statements filed with its Annual Report on Form 10-K, but adjusted each year to exclude unusual or infrequent transactions. The amount of the “ Bonus Pool ” shall be determined as follows:

     3.2 Bonus payments, if due hereunder, will be made within 75 days following the end of each year.

		Executive Level Incentive Plan

4.    BONUS DETERMINATIONS

     The amount of the Bonus shall be divided among the Eligible Participants in proportion to their salaries for the year in which the bonus is being paid.

5.    MISCELLANEOUS

     5.1 This Bonus Plan shall be governed by the laws of the State of Texas, excluding choice of law and conflict of law principles that direct the application of the laws of a different state. The Board of Directors is hereby authorized to resolve any ambiguities in this Plan.

     5.2 This Bonus Plan represents the sole Bonus Plan covering the Participants, and all rights to participate in any other Bonus Plans (other than any plan under which the Company may award options or other equity consideration) are hereby revoked in their entirety. This Bonus Plan may be modified or amended at any time by the Board of Directors of the Company, with or without prior notice to the Participants.

     5.3 There are no third-party beneficiaries to this Bonus Plan.

     5.4 This Bonus Plan is an unfunded and unsecured compensation arrangement. It is not governed by the Employee’s Retirement and Income Security Act of 1974.

Adopted by Resolution of the Compensation Committee of the Board of Directors
April 17, 2006

/s/    William A. Coskey, P.E.
William A. Coskey, P.E.
Chairman of the Board

2

KEY EXECUTIVE EMPLOYMENT AGREEMENT

     THIS AGREEMENT effective January 1, 2006, is between ENGlobal Corporate Services, Inc., a Texas corporation (the “Company” ) , and William A. Coskey, a resident of Montgomery, Texas (the “Executive” ).

     The Company and the Executive agree as follows:

     1. Employment, Duties and Acceptance.

          1.1 Employment by the Company . The Company agrees to employ the Executive as Chairman of the Board of the Company for the duration of the Employment Term (as defined in Section 2 below), to render such services and to perform such duties as are normally associated with and inherent in the executive capacity in which the Executive will be serving, as well as such other duties, which are not inconsistent with the Executive’s position with the Company, as shall from time to time reasonably be assigned to him by the Board of Directors of the Company (the “Board of Directors” ).

          1.2 Extent of Service . The Executive agrees to render the services required of him under Section 1.1. During the Employment Term, the Executive shall devote his full business time, attention and energy to the business of the Company and the performance of his duties under this Agreement. The foregoing shall not, however, prohibit the Executive from making and managing personal investments, or from engaging in civic or charitable activities, that do not materially impair the performance of his duties under this Agreement. If appointed or elected, as applicable, the Executive also shall serve during all or any part of the Employment Term as any other officer and/or as a director of the Company or any of its subsidiaries or affiliates, without any additional compensation other than that specified in this Agreement.

          1.3 Place of Performance . The Executive shall be based in the Houston Metropolitan Area, and nothing in this Agreement shall require the Executive to relocate his base of employment or principal place of residence from the Houston Metropolitan Area.

     2. Employment Term . The term of the Executive’s employment under this Agreement (the “Employment Term” ) shall commence on January 1, 2006 (the “Commencement Date” ), and shall expire on December 31, 2007 (the “Expiration Date” ) , unless extended by the Company or earlier terminated as herein provided. At the end of the Employment Term, this Agreement shall be automatically renewed year to year thereafter, unless (a) Employee’s employment has been terminated prior to such day, or (b) not later than 60 days prior to such day, either party to this Agreement shall have given written notice to the other party that he or it does not wish to extend further the Termination Date (and the Employment Term).

     3. Compensation and Other Benefits.

          3.1 Annual Salary . As compensation for services to be rendered under this Agreement, the Company shall pay the Executive a salary (the “Annual Salary” ), subject to such increases as the Board of Directors may, in its discretion, approve, at a rate of $245,000.00 per annum. The Executive shall also be eligible, during the Employment Term, to receive such other compensation, whether in the form of cash bonuses, incentive compensation, stock options, stock appreciation rights, restricted stock awards or otherwise (collectively, the “Additional Compensation” ), as the Board of Directors (or any committee of the Board) may, in its discretion, approve. The Annual Salary and the Additional Compensation shall be payable in accordance with the applicable payroll and/or other compensation policies and plans of the Company as in effect from time to time during the Employment Term, less such deductions as shall be required to be withheld by applicable law and regulations.

          3.2 Participation in Employee Benefit Plans . The Executive shall be permitted, during the Employment Term, if and to the extent he is and continues to meet all applicable eligibility requirements, to participate in any group life, hospitalization or disability insurance plan, health program, pension plan, similar benefit plan or other “fringe benefits” of the Company, which may be available to all other similarly situated members of the Company’s management on generally the same terms.

          3.3 Executive Support . The Company shall provide to the Executive office facilities, furniture, and equipment, secretarial and support personnel and other management level support services as the Executive shall reasonably require in connection with his performance of his duties under this Agreement.

          3.4 Reimbursement of Business Expenses . The Executive may incur reasonable, ordinary and necessary business expenses in the course of his performance of his duties under this Agreement, including expenses for travel, food and entertainment. The Company shall reimburse the Executive for all such business expenses if (i) the expenses are incurred by the Executive in accordance with the Company’s business expense reimbursement policy, if any, as may be established and modified by the Company from time to time, and (ii) the Executive provides to the Company a record of and appropriate receipts for (A) the amount of the expense, (B) the date, place and nature of the expense, (C) the business reason for the expense and (D) the names, occupations and other data concerning individuals entertained sufficient to establish their business relationship to the Company. The Company shall have no obligation to reimburse the Executive for expenses that are not incurred and substantiated as required by this Section 3.4.

     4. Non-Competition.

          4.1 Covenants Against Competition . During the Employment Term, the Company will provide confidential information to the Executive. The Executive acknowledges that (i) the Company, which for purposes of this Section 4 includes the Company, and all present and future subsidiaries and affiliates, and any subsidiaries and affiliates that may be formed or incorporated during the Restricted Period (as defined in Section 4.1.1), is engaged in the business of providing a broad range of engineering services, including planning, engineering, design, procurement, construction management, in-plant staffing, field inspection, land management, and control system services (the “Business” ); (ii) the Executive is one of a limited number of persons who has performed a significant role in developing the Business; (iii) the Business is conducted throughout the United States and internationally; (iv) the Company will give him possession of, and access to, trade secrets of, and confidential, proprietary information concerning, the Company; (v) the agreements and covenants contained in this Section 4 (collectively, the “Restrictive Covenants” ) are essential to protect the Business and the goodwill of the Company; and (vi) the Restrictive Covenants will not impair his ability to engage in a wide array of professional activities. Accordingly, the Executive agrees as follows:

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               4.1.1 Competitive Activities . During the Restricted Period, the Executive shall not (A) engage, anywhere within the Territory (as hereinafter defined), as an officer, director or in any other managerial capacity or as an owner, co-owner or other investor or creditor in or of, whether as an employee, independent contractor, consultant or advisor, in any business selling or providing any services which are sold or offered by the Company, within the territory surrounding each office or facility (each a “facility” ) at which the Executive was employed by the Company within the one-year period immediately preceding the date of the Executive’s termination of employment (for purposes of this Section 4.1, the territory surrounding a facility shall be: (1) the city, town or village in which the facility is located, (2) the county or parish in which the facility is located, (3) the counties or parishes contiguous to the county or parish in which the facility is located and (4) the area located within 100 miles of the facility, all of such locations being herein collectively called the “Territory”), or (B) call on any person or entity that at the time is, or at any time within one year prior to the date of termination of the Executive’s employment was, a customer of the Company, for the purpose of soliciting or selling any product or service which is then sold or offered within the Territory by the Company if the Executive has knowledge of that customer relationship; provided, however, that nothing in this Section 4.1.1 shall prohibit the Executive from owning, directly or indirectly, solely as an investment, securities of any entity traded on any national securities exchange or over-the-counter market if the Executive is not a controlling person of, or a member of a group which controls, such entity and does not, directly or indirectly, own one percent or more of any class of securities of such entity. As used in this Section 4, the term “Restricted Period” means the period beginning on the Commencement Date and ending on the expiration of the Total Severance Benefit Period (as defined in Section 5.5).

               4.1.2 Confidential Information; Personal Relationships . During the Restricted Period and thereafter, the Executive shall keep secret and retain in strict confidence, and shall not use for the benefit of himself or others, all confidential matters of the Company, including, without limitation, “know-how,” trade secrets, customer lists, details of client or consultant contracts, pricing policies, bidding practices and procedures, operational methods, marketing plans or strategies, project development techniques or plans, business acquisition plans, new personnel acquisition plans, methods of production, manufacture and installation, technical processes, designs and design projects, inventions and research projects of the Company learned by the Executive heretofore or during the Restricted Period.

               4.1.3 Property of the Company . All memoranda, notes, lists, records and other documents or papers (and all copies thereof, including such items stored in computer memories, on microfiche or by any other means, made or compiled by or on behalf of the Executive, or made available to the Executive relating to the Company, other than purely personal matters, are and shall be the Company’s property and shall be delivered to the Company promptly upon the termination of the Executive’s employment (whether such termination is for Cause, as hereinafter defined, or otherwise) or at any other time on request of the Company.

               4.1.4 Employees of the Company . During the Employment Term and the Restricted Period, the Executive shall not, directly or indirectly, recruit or solicit any employee of the Company away from the Company or encourage any such employee to leave such employment.

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               4.1.5 Consultants of the Company . During the Employment Term and the Restricted Period, the Executive shall not, directly or indirectly, recruit or solicit any consultant then under contract with the Company or encourage such consultant to terminate such relationship.

               4.1.6 Acquisition Candidates . During the Employment Term and the Restricted Period, the Executive shall not call on any Acquisition Candidate (as defined below in this Section 4.1.6), with the knowledge of such Acquisition Candidate’s status as such, for the purpose of acquiring, or arranging the acquisition of, that Acquisition Candidate by any person or entity other than the Company. In this Section 4.1.6 “Acquisition Candidate” means any person or entity engaged in any of the businesses of providing engineering services, including planning, design procurement, construction management, in-plant maintenance, field inspection and control system services, and (i) which was called on by the Company, in connection with the possible acquisition by the Company of that person or entity, or (ii) with respect to which the Company has made an acquisition analysis.

          4.2 Rights and Remedies upon Breach . If the Executive breaches or threatens to commit a breach of the Restrictive Covenants, the Company shall have the following rights and remedies, each of which shall be independent of the others and severally enforceable, and each of which is in addition to, and not in lieu of, any other rights and remedies available to the Company under law or in equity:

               4.2.1 Injunctive Relief . The right and remedy to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy to the Company.

               4.2.2 Accounting . The right and remedy to require the Executive to account for and pay over to the Company all compensation, profits, monies, accruals, increments or other benefits derived or received by the Executive as the result of any transaction constituting a breach of the Restrictive Covenants.

          4.3 Severability of Covenants . The Executive acknowledges and agrees that the Restrictive Covenants are reasonable and valid in geographical and temporal scope and in all other respects. If any court determines that any of the Restrictive Covenants, or any part thereof, is invalid or unenforceable, the remainder of the Restrictive Covenants shall not thereby be affected and shall be given full effect, without regard to the invalid portions.

          4.4 Reformation . If any court determines that any Restrictive Covenant, or any part thereof, is unenforceable because of the duration or geographic scope of such provision, such court shall have the power to reduce the duration or scope of such provision, as the case may be, and, in its reduced form, such provision shall then be enforceable.

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          4.5 Enforceability . The Company and the Executive intend to and hereby confer exclusive jurisdiction to enforce the Restrictive Covenants upon the federal and state courts of Harris County, Texas.

          4.6 Definitions. For the purposes of this Section 4 only, the term “Company” shall not only include ENGlobal Corporate Services, Inc., but its parents, subsidiaries, and affiliates.

     5. Termination.

          5.1 Termination upon Death . If the Executive dies during the Employment Term, this Agreement shall terminate, except that the Executive’s legal representatives, successors, heirs or assigns shall be entitled to receive the Annual Salary, the Additional Compensation and other accrued benefits, if any, earned up to the date of the Executive’s death; provided, however, if any Additional Compensation or other benefits are governed by the provisions of any written employee benefit plan or policy of the Company, any written agreement contemplated thereunder or any other separate written agreement entered into between the Executive and the Company, the terms and conditions of such plan, policy or agreement shall control in the event of any discrepancy or conflict with the provisions of this Agreement regarding such Additional Compensation or other benefit upon the death, termination or disability of the Executive.

          5.2 Termination for Cause . At any time during the Employment Term, the Company shall have the right to terminate the Executive’s employment under this Agreement and discharge the Executive for Cause, exercisable upon the affirmative vote of no less than three (3) members of the Board of Directors and the service of written notice upon the Executive. If such right is exercised, the Company’s obligation to the Executive shall be limited to the payment of any unpaid Annual Salary, Additional Compensation and other benefits, if any, accrued up to the effective date specified in the Company’s notice of termination (which date shall not be retroactive). As used in this Section 5.2 and elsewhere in this Agreement, the term “Cause” shall mean the determination that (i) after notice and a right to cure, there has been a material breach by the Executive of the terms of this Agreement, (ii) after receipt of a written warning, the Executive has failed or refused to follow the reasonable policies, performance objectives, or directives established by the Board of Directors or executive officers of the Company senior to the Executive, (iii) the Executive has misappropriated money or other assets or properties of the Company or any subsidiary or affiliate of the Company, (iv) the Executive has been convicted of any felony or other serious crime, (v) the Executive’s employment performance has been substantially impaired by chronic absenteeism, alcoholism or drug addiction, or (vi) the Executive has exhibited gross moral turpitude relevant to his office or employment with the Company or any subsidiary or affiliate of the Company.

          5.3 Termination Without Cause . At any time during the Employment Term, the Company shall have the right to terminate the Executive’s employment under this Agreement and discharge the Executive without Cause, exercisable upon the affirmative vote of no less than three (3) members of the Board of Directors and the service of written notice to the Executive. If such right is exercised, the Company’s obligation to the Executive shall be as set forth in Section 5.5 below.

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          5.4 Termination upon Disability . If during the Employment Term the Executive becomes physically or mentally disabled, whether totally or partially, as evidenced by the written statement of a competent physician licensed to practice medicine in the United States, so that the Executive is unable to substantially perform his services hereunder with reasonable accommodation for (i) a period of six consecutive months, or (ii) for shorter periods aggregating six months during any period of twelve consecutive months, the Company may at any time after the last day of the six consecutive months of disability, or the day on which the shorter periods of disability equal an aggregate of six months within a period of twelve consecutive months, terminate the Executive’s employment hereunder, exercisable upon the affirmative vote of no less than three (3) members of the Board of Directors and the service of written notice to the Executive. If such right is exercised, the Company’s obligation to the Executive shall be as set forth in Section 5.5 below.

          5.5 Severance Benefit . If at any time during or after the Employment Term, the Executive’s employment by the Company is terminated for any reason other than (i) a termination for Cause under Section 5.2, (ii) his voluntary resignation (including in breach of this Agreement), or (iii) his death, then for a period of six (6) months following the date of termination of the Executive’s employment (the “Initial Severance Benefit Period” ), the Company shall continue to (a) pay to the Executive, in payroll period installments in accordance with the Company’s normal payroll policies, the monthly amount of Executive’s Annual Salary in effect at the date of termination of his employment and (b) under the same cost sharing arrangements as were in place prior to termination, continue to include the Executive and his eligible dependents under the coverage of all group health, medical and dental insurance policies, plans and programs maintained by the Company during the Initial Severance Benefit Period for the Company’s employees, or management employees, generally.

     The Company, at its option, which shall be exercisable by a written notice sent to the Executive at least sixty (60) days prior to the expiration of the Initial Severance Benefit Period, may elect to extend the Initial Severance Benefit Period for a period of an additional six (6) months following the expiration of the Initial Severance Benefit Period. If the Company so elects to extend the Initial Severance Benefit Period, the Company, during the Second Severance Benefit Period shall (i) pay to the Executive, in payroll period installments in accordance with the Company’s normal payroll policies, an amount equal to 50% of the monthly amount of Executive’s Annual Salary in effect at the date of termination of his employment and (ii) under the same cost sharing arrangements as were in place prior to termination, continue to include the Executive and his eligible dependants under the coverage of all group health, medical and dental insurance policies, plans and programs maintained by the Company during the Second Severance Benefit Period, for the Company’s employees, or management employees, generally.

     For purposes of Section 4.1.1 of this Agreement, the term “Total Severance Benefit Period” means the total period (including the Initial Severance Benefit Period and, if applicable, the Second Severance Benefit Period) during which the Company is obligated to pay and provide, and performs its obligations to pay and provide, severance benefits to the Executive under this Section 5.5.

     6. Insurance . The Company may, from time to time, apply for and take out, in its own name and at its own expense, naming itself or others as the designated beneficiary (which it may change from time to time), policies for health, accident, disability or other insurance upon the Executive or his life, in any amount or amounts that it may deem necessary or appropriate to protect its interest. The Executive agrees to aid the Company in procuring such insurance by submitting to reasonable medical examinations and by filling out, executing and delivering such applications and other instruments in writing as may reasonably be required by an insurance company or companies to which any application or applications for insurance may be made by or for the Company.

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     7. Arbitration.

          7.1 Binding Effect . Except as provided in Section 7.2 below, any and all controversies, claims or disputes by the Executive or the Company relating to the provisions or obligations under this Agreement, or with respect to the employment or termination thereof of the Executive by the Company, shall be submitted to final and binding arbitration in accordance with the Employment Dispute Resolution Rules of the American Arbitration Association in effect at the time a demand for arbitration is made. It is the intention of the Executive and the Company that this Arbitration provision shall be enforceable under the Federal Arbitration Act.

          7.2 Excluded Matters . This Arbitration provision shall not apply to any claims for workers’ compensation benefits, unemployment compensation benefits, or claims by the Company for injunctive and/or other equitable relief for any violation of Section 4 of this Agreement.

     8. Other Provisions.

          8.1 Notices . Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage prepaid. Any such notice shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission or, if mailed, five days after the date of deposit in the United States mail, as follows:

     Either party may change its address for notice hereunder by notice to the other party.

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          8.2 Entire Agreement . This Agreement contains the entire agreement and understanding between the parties with respect to its subject matter and supersedes all prior agreements, written or oral, with respect thereto; provided, however, that nothing herein shall in any way limit the obligation, rights or liabilities of the parties under any written stock option agreement separately entered into by the parties.

          8.3 Waivers and Amendments . This Agreement may be amended, modified, superseded, canceled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by the parties or, in the case of a waiver, by the party waiving compliance. No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any right, power or privilege hereunder, nor any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

          8.4 Governing Law; Venue . This Agreement, except as set forth in Section 4.5 hereof, shall be governed by, and construed in accordance with, the laws of the State of Texas without reference to principles governing choice or conflicts of law. Venue shall exclusively lie in the state and federal courts of Harris County, Texas.

          8.5 Assignment . This Agreement, and any rights and obligations hereunder, may not be assigned by any party hereto without the prior written consent of the other party, except that the Company may assign this Agreement to any of its subsidiaries or affiliates without the Executive’s consent provided such assignment does not diminish any of the Executive’s benefits, rights or obligations hereunder.

          8.6 Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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

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

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KEY EXECUTIVE EMPLOYMENT AGREEMENT

     THIS AGREEMENT effective January 1, 2006, is between ENGlobal Corporate Services, Inc., a Texas corporation (the “Company” ) , and Michael L. Burrow, a resident of Beaumont, Texas (the “Executive” ).

     The Company and the Executive agree as follows:

     1. Employment, Duties and Acceptance.

          1.1 Employment by the Company . The Company agrees to employ the Executive as President and Chief Executive Officer of the Company for the duration of the Employment Term (as defined in Section 2 below), to render such services and to perform such duties as are normally associated with and inherent in the executive capacity in which the Executive will be serving, as well as such other duties, which are not inconsistent with the Executive’s position with the Company, as shall from time to time reasonably be assigned to him by the Board of Directors of the Company (the “Board of Directors” ).

          1.2 Extent of Service . The Executive agrees to render the services required of him under Section 1.1. During the Employment Term, the Executive shall devote his full business time, attention and energy to the business of the Company and the performance of his duties under this Agreement. The foregoing shall not, however, prohibit the Executive from making and managing personal investments, or from engaging in civic or charitable activities, that do not materially impair the performance of his duties under this Agreement. If appointed or elected, as applicable, the Executive also shall serve during all or any part of the Employment Term as any other officer and/or as a director of the Company or any of its subsidiaries or affiliates, without any additional compensation other than that specified in this Agreement.

          1.3 Place of Performance . The Executive shall be based in the Houston/Beaumont Metropolitan Area, and nothing in this Agreement shall require the Executive to relocate his base of employment or principal place of residence from the Houston/Beaumont Metropolitan Area.

     2. Employment Term . The term of the Executive’s employment under this Agreement (the “Employment Term” ) shall commence on January 1, 2006 (the “Commencement Date” ), and shall expire on December 31, 2007 (the “Expiration Date” ) , unless extended by the Company or earlier terminated as herein provided. At the end of the Employment Term, this Agreement shall be automatically renewed year to year thereafter, unless (a) Employee’s employment has been terminated prior to such day, or (b) not later than 60 days prior to such day, either party to this Agreement shall have given written notice to the other party that he or it does not wish to extend further the Termination Date (and the Employment Term).

     3. Compensation and Other Benefits.

          3.1 Annual Salary . As compensation for services to be rendered under this Agreement, the Company shall pay the Executive a salary (the “Annual Salary” ), subject to such increases as the Board of Directors may, in its discretion, approve, at a rate of $320,000.00 per annum. The Executive shall also be eligible, during the Employment Term, to receive such other compensation, whether in the form of cash bonuses, incentive compensation, stock options, stock appreciation rights, restricted stock awards or otherwise (collectively, the “Additional Compensation” ), as the Board of Directors (or any committee of the Board) may, in its discretion, approve. The Annual Salary and the Additional Compensation shall be payable in accordance with the applicable payroll and/or other compensation policies and plans of the Company as in effect from time to time during the Employment Term, less such deductions as shall be required to be withheld by applicable law and regulations.

          3.2 Participation in Employee Benefit Plans . The Executive shall be permitted, during the Employment Term, if and to the extent he is and continues to meet all applicable eligibility requirements, to participate in any group life, hospitalization or disability insurance plan, health program, pension plan, similar benefit plan or other “fringe benefits” of the Company, which may be available to all other similarly situated members of the Company’s management on generally the same terms.

          3.3 Executive Support . The Company shall provide to the Executive office facilities, furniture, and equipment, secretarial and support personnel and other management level support services as the Executive shall reasonably require in connection with his performance of his duties under this Agreement.

          3.4 Reimbursement of Business Expenses . The Executive may incur reasonable, ordinary and necessary business expenses in the course of his performance of his duties under this Agreement, including expenses for travel, food and entertainment. The Company shall reimburse the Executive for all such business expenses if (i) the expenses are incurred by the Executive in accordance with the Company’s business expense reimbursement policy, if any, as may be established and modified by the Company from time to time, and (ii) the Executive provides to the Company a record of and appropriate receipts for (A) the amount of the expense, (B) the date, place and nature of the expense, (C) the business reason for the expense and (D) the names, occupations and other data concerning individuals entertained sufficient to establish their business relationship to the Company. The Company shall have no obligation to reimburse the Executive for expenses that are not incurred and substantiated as required by this Section 3.4.

     4. Non-Competition.

          4.1 Covenants Against Competition . During the Employment Term, the Company will provide confidential information to the Executive. The Executive acknowledges that (i) the Company, which for purposes of this Section 4 includes the Company, and all present and future subsidiaries and affiliates, and any subsidiaries and affiliates that may be formed or incorporated during the Restricted Period (as defined in Section 4.1.1), is engaged in the business of providing a broad range of engineering services, including planning, design procurement, construction management, in-plant maintenance, field inspection and control system services (the “Business” ); (ii) the Executive is one of a limited number of persons who has performed a significant role in developing the Business; (iii) the Business is conducted throughout the United States and internationally; (iv) the Company will give him possession of, and access to, trade secrets of, and confidential, proprietary information concerning, the Company; (v) the agreements and covenants contained in this Section 4 (collectively, the “Restrictive Covenants” ) are essential to protect the Business and the goodwill of the Company; and (vi) the Restrictive Covenants will not impair his ability to engage in a wide array of professional activities. Accordingly, the Executive agrees as follows:

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               4.1.1 Competitive Activities . During the Restricted Period, the Executive shall not (A) engage, anywhere within the Territory (as hereinafter defined), as an officer, director or in any other managerial capacity or as an owner, co-owner or other investor or creditor in or of, whether as an employee, independent contractor, consultant or advisor, in any business selling or providing any services which are sold or offered by the Company, within the territory surrounding each office or facility (each a “facility” ) at which the Executive was employed by the Company within the one-year period immediately preceding the date of the Executive’s termination of employment (for purposes of this Section 4.1, the territory surrounding a facility shall be: (1) the city, town or village in which the facility is located, (2) the county or parish in which the facility is located, (3) the counties or parishes contiguous to the county or parish in which the facility is located and (4) the area located within 100 miles of the facility, all of such locations being herein collectively called the “Territory”), or (B) call on any person or entity that at the time is, or at any time within one year prior to the date of termination of the Executive’s employment was, a customer of the Company, for the purpose of soliciting or selling any product or service which is then sold or offered within the Territory by the Company if the Executive has knowledge of that customer relationship; provided, however, that nothing in this Section 4.1.1 shall prohibit the Executive from owning, directly or indirectly, solely as an investment, securities of any entity traded on any national securities exchange or over-the-counter market if the Executive is not a controlling person of, or a member of a group which controls, such entity and does not, directly or indirectly, own one percent or more of any class of securities of such entity. As used in this Section 4, the term “Restricted Period” means the period beginning on the Commencement Date and ending on the expiration of the Total Severance Benefit Period (as defined in Section 5.5).

               4.1.2 Confidential Information; Personal Relationships . During the Restricted Period and thereafter, the Executive shall keep secret and retain in strict confidence, and shall not use for the benefit of himself or others, all confidential matters of the Company, including, without limitation, “know-how,” trade secrets, customer lists, details of client or consultant contracts, pricing policies, bidding practices and procedures, operational methods, marketing plans or strategies, project development techniques or plans, business acquisition plans, new personnel acquisition plans, methods of production, manufacture and installation, technical processes, designs and design projects, inventions and research projects of the Company learned by the Executive heretofore or during the Restricted Period.

               4.1.3 Property of the Company . All memoranda, notes, lists, records and other documents or papers (and all copies thereof, including such items stored in computer memories, on microfiche or by any other means, made or compiled by or on behalf of the Executive, or made available to the Executive relating to the Company, other than purely personal matters, are and shall be the Company’s property and shall be delivered to the Company promptly upon the termination of the Executive’s employment (whether such termination is for Cause, as hereinafter defined, or otherwise) or at any other time on request of the Company.

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               4.1.4 Employees of the Company . During the Employment Term and the Restricted Period, the Executive shall not, directly or indirectly, recruit or solicit any employee or consultant engineer of the Company away from the Company or encourage any such employee or agent to leave such employment.

               4.1.5 Consultants of the Company . During the Employment Term and the Restricted Period, the Executive shall not, directly or indirectly, recruit or solicit any consultant then under contract with the Company or encourage such consultant to terminate such relationship.

               4.1.6 Acquisition Candidates . During the Employment Term and the Restricted Period, the Executive shall not call on any Acquisition Candidate (as defined below in this Section 4.1.6), with the knowledge of such Acquisition Candidate’s status as such, for the purpose of acquiring, or arranging the acquisition of, that Acquisition Candidate by any person or entity other than the Company. In this Section 4.1.6 “Acquisition Candidate” means any person or entity engaged in any of the businesses of providing engineering services, including planning, design procurement, construction management, in-plant maintenance, field inspection and control system services, and (i) which was called on by the Company, in connection with the possible acquisition by the Company of that person or entity, or (ii) with respect to which the Company has made an acquisition analysis.

          4.2 Rights and Remedies upon Breach . If the Executive breaches or threatens to commit a breach of the Restrictive Covenants, the Company shall have the following rights and remedies, each of which shall be independent of the others and severally enforceable, and each of which is in addition to, and not in lieu of, any other rights and remedies available to the Company under law or in equity:

               4.2.1 Injunctive Relief . The right and remedy to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy to the Company.

               4.2.2 Accounting . The right and remedy to require the Executive to account for and pay over to the Company all compensation, profits, monies, accruals, increments or other benefits derived or received by the Executive as the result of any transaction constituting a breach of the Restrictive Covenants.

          4.3 Severability of Covenants . The Executive acknowledges and agrees that the Restrictive Covenants are reasonable and valid in geographical and temporal scope and in all other respects. If any court determines that any of the Restrictive Covenants, or any part thereof, is invalid or unenforceable, the remainder of the Restrictive Covenants shall not thereby be affected and shall be given full effect, without regard to the invalid portions.

          4.4 Reformation . If any court determines that any Restrictive Covenant, or any part thereof, is unenforceable because of the duration or geographic scope of such provision, such court shall have the power to reduce the duration or scope of such provision, as the case may be, and, in its reduced form, such provision shall then be enforceable.

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          4.5 Enforceability . The Company and the Executive intend to and hereby confer exclusive jurisdiction to enforce the Restrictive Covenants upon the federal and state courts of Harris County, Texas.

          4.6 Definitions. For the purposes of this Section 4 only, the term “Company” shall not only include ENGlobal Corporate Services, Inc., but its parents, subsidiaries, and affiliates.

     5. Termination.

          5.1 Termination upon Death . If the Executive dies during the Employment Term, this Agreement shall terminate, except that the Executive’s legal representatives, successors, heirs or assigns shall be entitled to receive the Annual Salary, the Additional Compensation and other accrued benefits, if any, earned up to the date of the Executive’s death; provided, however, if any Additional Compensation or other benefits are governed by the provisions of any written employee benefit plan or policy of the Company, any written agreement contemplated thereunder or any other separate written agreement entered into between the Executive and the Company, the terms and conditions of such plan, policy or agreement shall control in the event of any discrepancy or conflict with the provisions of this Agreement regarding such Additional Compensation or other benefit upon the death, termination or disability of the Executive.

          5.2 Termination for Cause . At any time during the Employment Term, the Company shall have the right to terminate the Executive’s employment under this Agreement and discharge the Executive for Cause, exercisable upon the affirmative vote of no less than three (3) members of the Board of Directors and the service of written notice upon the Executive. If such right is exercised, the Company’s obligation to the Executive shall be limited to the payment of any unpaid Annual Salary, Additional Compensation and other benefits, if any, accrued up to the effective date specified in the Company’s notice of termination (which date shall not be retroactive). As used in this Section 5.2 and elsewhere in this Agreement, the term “Cause” shall mean the determination that (i) after notice and a right to cure, there has been a material breach by the Executive of the terms of this Agreement, (ii) after receipt of a written warning, the Executive has failed or refused to follow the reasonable policies, performance objectives, or directives established by the Board of Directors or executive officers of the Company senior to the Executive, (iii) the Executive has misappropriated money or other assets or properties of the Company or any subsidiary or affiliate of the Company, (iv) the Executive has been convicted of any felony or other serious crime, (v) the Executive’s employment performance has been substantially impaired by chronic absenteeism, alcoholism or drug addiction, or (vi) the Executive has exhibited gross moral turpitude relevant to his office or employment with the Company or any subsidiary or affiliate of the Company.

          5.3 Termination Without Cause . At any time during the Employment Term, the Company shall have the right to terminate the Executive’s employment under this Agreement and discharge the Executive without Cause, exercisable upon the affirmative vote of no less than three (3) members of the Board of Directors and the service of written notice to the Executive. If such right is exercised, the Company’s obligation to the Executive shall be as set forth in Section 5.5 below.

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          5.4 Termination upon Disability . If during the Employment Term the Executive becomes physically or mentally disabled, whether totally or partially, as evidenced by the written statement of a competent physician licensed to practice medicine in the United States, so that the Executive is unable to substantially perform his services hereunder with reasonable accommodation for (i) a period of six consecutive months, or (ii) for shorter periods aggregating six months during any period of twelve consecutive months, the Company may at any time after the last day of the six consecutive months of disability, or the day on which the shorter periods of disability equal an aggregate of six months within a period of twelve consecutive months, terminate the Executive’s employment hereunder, exercisable upon the affirmative vote of no less than three (3) members of the Board of Directors and the service of written notice to the Executive. If such right is exercised, the Company’s obligation to the Executive shall be as set forth in Section 5.5 below.

          5.5 Severance Benefit . If at any time during or after the Employment Term, the Executive’s employment by the Company is terminated for any reason other than (i) a termination for Cause under Section 5.2, (ii) his voluntary resignation (including in breach of this Agreement), or (iii) his death, then for a period of six (6) months following the date of termination of the Executive’s employment (the “Initial Severance Benefit Period” ), the Company shall continue to (a) pay to the Executive, in payroll period installments in accordance with the Company’s normal payroll policies, the monthly amount of Executive’s Annual Salary in effect at the date of termination of his employment and (b) under the same cost sharing arrangements as were in place prior to termination, continue to include the Executive and his eligible dependents under the coverage of all group health, medical and dental insurance policies, plans and programs maintained by the Company during the Initial Severance Benefit Period for the Company’s employees, or management employees, generally.

     The Company, at its option, which shall be exercisable by a written notice sent to the Executive at least sixty (60) days prior to the expiration of the Initial Severance Benefit Period, may elect to extend the Initial Severance Benefit Period for a period of an additional six (6) months following the expiration of the Initial Severance Benefit Period. If the Company so elects to extend the Initial Severance Benefit Period, the Company, during the Second Severance Benefit Period shall (i) pay to the Executive, in payroll period installments in accordance with the Company’s normal payroll policies, an amount equal to 50% of the monthly amount of Executive’s Annual Salary in effect at the date of termination of his employment and (ii) under the same cost sharing arrangements as were in place prior to termination, continue to include the Executive and his eligible dependants under the coverage of all group health, medical and dental insurance policies, plans and programs maintained by the Company during the Second Severance Benefit Period, for the Company’s employees, or management employees, generally.

     For purposes of Section 4.1.1 of this Agreement, the term “Total Severance Benefit Period” means the total period (including the Initial Severance Benefit Period and, if applicable, the Second Severance Benefit Period) during which the Company is obligated to pay and provide, and performs its obligations to pay and provide, severance benefits to the Executive under this Section 5.5.

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     6. Insurance . The Company may, from time to time, apply for and take out, in its own name and at its own expense, naming itself or others as the designated beneficiary (which it may change from time to time), policies for health, accident, disability or other insurance upon the Executive or his life, in any amount or amounts that it may deem necessary or appropriate to protect its interest. The Executive agrees to aid the Company in procuring such insurance by submitting to reasonable medical examinations and by filling out, executing and delivering such applications and other instruments in writing as may reasonably be required by an insurance company or companies to which any application or applications for insurance may be made by or for the Company.

     7. Arbitration.

          7.1 Binding Effect . Except as provided in Section 7.2 below, any and all controversies, claims or disputes by the Executive or the Company relating to the provisions or obligations under this Agreement, or with respect to the employment or termination thereof of the Executive by the Company, shall be submitted to final and binding arbitration in accordance with the Employment Dispute Resolution Rules of the American Arbitration Association in effect at the time a demand for arbitration is made. It is the intention of the Executive and the Company that this Arbitration provision shall be enforceable under the Federal Arbitration Act.

          7.2 Excluded Matters . This Arbitration provision shall not apply to any claims for workers’ compensation benefits, unemployment compensation benefits, or claims by the Company for injunctive and/or other equitable relief for any violation of Section 4 of this Agreement.

     8. Other Provisions.

          8.1 Notices . Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage prepaid. Any such notice shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission or, if mailed, five days after the date of deposit in the United States mail, as follows:

     Either party may change its address for notice hereunder by notice to the other party.

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          8.2 Entire Agreement . This Agreement contains the entire agreement and understanding between the parties with respect to its subject matter and supersedes all prior agreements, written or oral, with respect thereto; provided, however, that nothing herein shall in any way limit the obligation, rights or liabilities of the parties under any written stock option agreement separately entered into by the parties.

          8.3 Waivers and Amendments . This Agreement may be amended, modified, superseded, canceled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by the parties or, in the case of a waiver, by the party waiving compliance. No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any right, power or privilege hereunder, nor any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

          8.4 Governing Law; Venue . This Agreement, except as set forth in Section 4.5 hereof, shall be governed by, and construed in accordance with, the laws of the State of Texas without reference to principles governing choice or conflicts of law. Venue shall exclusively lie in the state and federal courts of Harris County, Texas.

          8.5 Assignment . This Agreement, and any rights and obligations hereunder, may not be assigned by any party hereto without the prior written consent of the other party, except that the Company may assign this Agreement to any of its subsidiaries or affiliates without the Executive’s consent provided such assignment does not diminish any of the Executive’s benefits, rights or obligations hereunder.

          8.6 Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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

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

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KEY EXECUTIVE EMPLOYMENT AGREEMENT

     THIS AGREEMENT effective January 1, 2006, is between ENGlobal Corporate Services, Inc., a Texas corporation (the “Company” ) , and Robert W. Raiford, a resident of Houston, Texas (the “Executive” ).

     The Company and the Executive agree as follows:

     1. Employment, Duties and Acceptance.

          1.1 Employment by the Company . The Company agrees to employ the Executive as Chief Financial Officer and Treasurer of the Company for the duration of the Employment Term (as defined in Section 2 below), to render such services and to perform such duties as are normally associated with and inherent in the executive capacity in which the Executive will be serving, as well as such other duties, which are not inconsistent with the Executive’s position with the Company, as shall from time to time reasonably be assigned to him by the Board of Directors of the Company (the “Board of Directors” ).

          1.2 Extent of Service . The Executive agrees to render the services required of him under Section 1.1. During the Employment Term, the Executive shall devote his full business time, attention and energy to the business of the Company and the performance of his duties under this Agreement. The foregoing shall not, however, prohibit the Executive from making and managing personal investments, or from engaging in civic or charitable activities, that do not materially impair the performance of his duties under this Agreement. If appointed or elected, as applicable, the Executive also shall serve during all or any part of the Employment Term as any other officer and/or as a director of the Company or any of its subsidiaries or affiliates, without any additional compensation other than that specified in this Agreement.

          1.3 Place of Performance . The Executive shall be based in the Houston/Beaumont Metropolitan Area, and nothing in this Agreement shall require the Executive to relocate his base of employment or principal place of residence from the Houston/Beaumont Metropolitan Area.

     2. Employment Term . The term of the Executive’s employment under this Agreement (the “Employment Term” ) shall commence on January 1, 2006 (the “Commencement Date” ), and shall expire on December 31, 2007 (the “Expiration Date” ) , unless extended by the Company or earlier terminated as herein provided. At the end of the Employment Term, this Agreement shall be automatically renewed year to year thereafter, unless (a) Employee’s employment has been terminated prior to such day, or (b) not later than 60 days prior to such day, either party to this Agreement shall have given written notice to the other party that he or it does not wish to extend further the Termination Date (and the Employment Term).

     3. Compensation and Other Benefits.

          3.1 Annual Salary . As compensation for services to be rendered under this Agreement, the Company shall pay the Executive a salary (the “Annual Salary” ), subject to such increases as the Board of Directors may, in its discretion, approve, at a rate of $245,000.00 per annum. The Executive shall also be eligible, during the Employment Term, to receive such other compensation, whether in the form of cash bonuses, incentive compensation, stock options, stock appreciation rights, restricted stock awards or otherwise (collectively, the “Additional Compensation” ), as the Board of Directors (or any committee of the Board) may, in its discretion, approve. The Annual Salary and the Additional Compensation shall be payable in accordance with the applicable payroll and/or other compensation policies and plans of the Company as in effect from time to time during the Employment Term, less such deductions as shall be required to be withheld by applicable law and regulations.

          3.2 Participation in Employee Benefit Plans . The Executive shall be permitted, during the Employment Term, if and to the extent he is and continues to meet all applicable eligibility requirements, to participate in any group life, hospitalization or disability insurance plan, health program, pension plan, similar benefit plan or other “fringe benefits” of the Company, which may be available to all other similarly situated members of the Company’s management on generally the same terms.

          3.3 Executive Support . The Company shall provide to the Executive office facilities, furniture, and equipment, secretarial and support personnel and other management level support services as the Executive shall reasonably require in connection with his performance of his duties under this Agreement.

          3.4 Reimbursement of Business Expenses . The Executive may incur reasonable, ordinary and necessary business expenses in the course of his performance of his duties under this Agreement, including expenses for travel, food and entertainment. The Company shall reimburse the Executive for all such business expenses if (i) the expenses are incurred by the Executive in accordance with the Company’s business expense reimbursement policy, if any, as may be established and modified by the Company from time to time, and (ii) the Executive provides to the Company a record of and appropriate receipts for (A) the amount of the expense, (B) the date, place and nature of the expense, (C) the business reason for the expense and (D) the names, occupations and other data concerning individuals entertained sufficient to establish their business relationship to the Company. The Company shall have no obligation to reimburse the Executive for expenses that are not incurred and substantiated as required by this Section 3.4.

     4. Non-Competition.

          4.1 Covenants Against Competition . During the Employment Term, the Company will provide confidential information to the Executive. The Executive acknowledges that (i) the Company, which for purposes of this Section 4 includes the Company, and all present and future subsidiaries and affiliates, and any subsidiaries and affiliates that may be formed or incorporated during the Restricted Period (as defined in Section 4.1.1), is engaged in the business of providing a broad range of engineering services, including planning, design procurement, construction management, in-plant maintenance, field inspection and control system services (the “Business” ); (ii) the Executive is one of a limited number of persons who has performed a significant role in developing the Business; (iii) the Business is conducted throughout the United States and internationally; (iv) the Company will give him possession of, and access to, trade secrets of, and confidential, proprietary information concerning, the Company; (v) the agreements and covenants contained in this Section 4 (collectively, the “Restrictive Covenants” ) are essential to protect the Business and the goodwill of the Company; and (vi) the Restrictive Covenants will not impair his ability to engage in a wide array of professional activities. Accordingly, the Executive agrees as follows:

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               4.1.1 Competitive Activities . During the Restricted Period, the Executive shall not (A) engage, anywhere within the Territory (as hereinafter defined), as an officer, director or in any other managerial capacity or as an owner, co-owner or other investor or creditor in or of, whether as an employee, independent contractor, consultant or advisor, in any business selling or providing any services which are sold or offered by the Company, within the territory surrounding each office or facility (each a “facility” ) at which the Executive was employed by the Company within the one-year period immediately preceding the date of the Executive’s termination of employment (for purposes of this Section 4.1, the territory surrounding a facility shall be: (1) the city, town or village in which the facility is located, (2) the county or parish in which the facility is located, (3) the counties or parishes contiguous to the county or parish in which the facility is located and (4) the area located within 100 miles of the facility, all of such locations being herein collectively called the “Territory”), or (B) call on any person or entity that at the time is, or at any time within one year prior to the date of termination of the Executive’s employment was, a customer of the Company, for the purpose of soliciting or selling any product or service which is then sold or offered within the Territory by the Company if the Executive has knowledge of that customer relationship; provided, however, that nothing in this Section 4.1.1 shall prohibit the Executive from owning, directly or indirectly, solely as an investment, securities of any entity traded on any national securities exchange or over-the-counter market if the Executive is not a controlling person of, or a member of a group which controls, such entity and does not, directly or indirectly, own one percent or more of any class of securities of such entity. As used in this Section 4, the term “Restricted Period” means the period beginning on the Commencement Date and ending on the expiration of the Total Severance Benefit Period (as defined in Section 5.5).

               4.1.2 Confidential Information; Personal Relationships . During the Restricted Period and thereafter, the Executive shall keep secret and retain in strict confidence, and shall not use for the benefit of himself or others, all confidential matters of the Company, including, without limitation, “know-how,” trade secrets, customer lists, details of client or consultant contracts, pricing policies, bidding practices and procedures, operational methods, marketing plans or strategies, project development techniques or plans, business acquisition plans, new personnel acquisition plans, methods of production, manufacture and installation, technical processes, designs and design projects, inventions and research projects of the Company learned by the Executive heretofore or during the Restricted Period.

               4.1.3 Property of the Company . All memoranda, notes, lists, records and other documents or papers (and all copies thereof, including such items stored in computer memories, on microfiche or by any other means, made or compiled by or on behalf of the Executive, or made available to the Executive relating to the Company, other than purely personal matters, are and shall be the Company’s property and shall be delivered to the Company promptly upon the termination of the Executive’s employment (whether such termination is for Cause, as hereinafter defined, or otherwise) or at any other time on request of the Company.

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               4.1.4 Employees of the Company . During the Employment Term and the Restricted Period, the Executive shall not, directly or indirectly, recruit or solicit any employee or consultant engineer of the Company away from the Company or encourage any such employee or agent to leave such employment.

               4.1.5 Consultants of the Company . During the Employment Term and the Restricted Period, the Executive shall not, directly or indirectly, recruit or solicit any consultant then under contract with the Company or encourage such consultant to terminate such relationship.

               4.1.6 Acquisition Candidates . During the Employment Term and the Restricted Period, the Executive shall not call on any Acquisition Candidate (as defined below in this Section 4.1.6), with the knowledge of such Acquisition Candidate’s status as such, for the purpose of acquiring, or arranging the acquisition of, that Acquisition Candidate by any person or entity other than the Company. In this Section 4.1.6 “Acquisition Candidate” means any person or entity engaged in any of the businesses of providing engineering services, including planning, design procurement, construction management, in-plant maintenance, field inspection and control system services, and (i) which was called on by the Company, in connection with the possible acquisition by the Company of that person or entity, or (ii) with respect to which the Company has made an acquisition analysis.

          4.2 Rights and Remedies upon Breach . If the Executive breaches or threatens to commit a breach of the Restrictive Covenants, the Company shall have the following rights and remedies, each of which shall be independent of the others and severally enforceable, and each of which is in addition to, and not in lieu of, any other rights and remedies available to the Company under law or in equity:

               4.2.1 Injunctive Relief . The right and remedy to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy to the Company.

               4.2.2 Accounting . The right and remedy to require the Executive to account for and pay over to the Company all compensation, profits, monies, accruals, increments or other benefits derived or received by the Executive as the result of any transaction constituting a breach of the Restrictive Covenants.

          4.3 Severability of Covenants . The Executive acknowledges and agrees that the Restrictive Covenants are reasonable and valid in geographical and temporal scope and in all other respects. If any court determines that any of the Restrictive Covenants, or any part thereof, is invalid or unenforceable, the remainder of the Restrictive Covenants shall not thereby be affected and shall be given full effect, without regard to the invalid portions.

          4.4 Reformation . If any court determines that any Restrictive Covenant, or any part thereof, is unenforceable because of the duration or geographic scope of such provision, such court shall have the power to reduce the duration or scope of such provision, as the case may be, and, in its reduced form, such provision shall then be enforceable.

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          4.5 Enforceability . The Company and the Executive intend to and hereby confer exclusive jurisdiction to enforce the Restrictive Covenants upon the federal and state courts of Harris County, Texas.

          4.6 Definitions. For the purposes of this Section 4 only, the term “Company” shall not only include ENGlobal Corporate Services, Inc., but its parents, subsidiaries, and affiliates.

     5. Termination.

          5.1 Termination upon Death . If the Executive dies during the Employment Term, this Agreement shall terminate, except that the Executive’s legal representatives, successors, heirs or assigns shall be entitled to receive the Annual Salary, the Additional Compensation and other accrued benefits, if any, earned up to the date of the Executive’s death; provided, however, if any Additional Compensation or other benefits are governed by the provisions of any written employee benefit plan or policy of the Company, any written agreement contemplated thereunder or any other separate written agreement entered into between the Executive and the Company, the terms and conditions of such plan, policy or agreement shall control in the event of any discrepancy or conflict with the provisions of this Agreement regarding such Additional Compensation or other benefit upon the death, termination or disability of the Executive.

          5.2 Termination for Cause . At any time during the Employment Term, the Company shall have the right to terminate the Executive’s employment under this Agreement and discharge the Executive for Cause, exercisable upon the affirmative vote of no less than three (3) members of the Board of Directors and the service of written notice upon the Executive. If such right is exercised, the Company’s obligation to the Executive shall be limited to the payment of any unpaid Annual Salary, Additional Compensation and other benefits, if any, accrued up to the effective date specified in the Company’s notice of termination (which date shall not be retroactive). As used in this Section 5.2 and elsewhere in this Agreement, the term “Cause” shall mean the determination that (i) after notice and a right to cure, there has been a material breach by the Executive of the terms of this Agreement, (ii) after receipt of a written warning, the Executive has failed or refused to follow the reasonable policies, performance objectives, or directives established by the Board of Directors or executive officers of the Company senior to the Executive, (iii) the Executive has misappropriated money or other assets or properties of the Company or any subsidiary or affiliate of the Company, (iv) the Executive has been convicted of any felony or other serious crime, (v) the Executive’s employment performance has been substantially impaired by chronic absenteeism, alcoholism or drug addiction, or (vi) the Executive has exhibited gross moral turpitude relevant to his office or employment with the Company or any subsidiary or affiliate of the Company.

          5.3 Termination Without Cause . At any time during the Employment Term, the Company shall have the right to terminate the Executive’s employment under this Agreement and discharge the Executive without Cause, exercisable upon the affirmative vote of no less than three (3) members of the Board of Directors and the service of written notice to the Executive. If such right is exercised, the Company’s obligation to the Executive shall be as set forth in Section 5.5 below.

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          5.4 Termination upon Disability . If during the Employment Term the Executive becomes physically or mentally disabled, whether totally or partially, as evidenced by the written statement of a competent physician licensed to practice medicine in the United States, so that the Executive is unable to substantially perform his services hereunder with reasonable accommodation for (i) a period of six consecutive months, or (ii) for shorter periods aggregating six months during any period of twelve consecutive months, the Company may at any time after the last day of the six consecutive months of disability, or the day on which the shorter periods of disability equal an aggregate of six months within a period of twelve consecutive months, terminate the Executive’s employment hereunder, exercisable upon the affirmative vote of no less than three (3) members of the Board of Directors and the service of written notice to the Executive. If such right is exercised, the Company’s obligation to the Executive shall be as set forth in Section 5.5 below.

          5.5 Severance Benefit . If at any time during or after the Employment Term, the Executive’s employment by the Company is terminated for any reason other than (i) a termination for Cause under Section 5.2, (ii) his voluntary resignation (including in breach of this Agreement), or (iii) his death, then for a period of six (6) months following the date of termination of the Executive’s employment (the “Initial Severance Benefit Period” ), the Company shall continue to (a) pay to the Executive, in payroll period installments in accordance with the Company’s normal payroll policies, the monthly amount of Executive’s Annual Salary in effect at the date of termination of his employment and (b) under the same cost sharing arrangements as were in place prior to termination, continue to include the Executive and his eligible dependents under the coverage of all group health, medical and dental insurance policies, plans and programs maintained by the Company during the Initial Severance Benefit Period for the Company’s employees, or management employees, generally.

     The Company, at its option, which shall be exercisable by a written notice sent to the Executive at least sixty (60) days prior to the expiration of the Initial Severance Benefit Period, may elect to extend the Initial Severance Benefit Period for a period of an additional six (6) months following the expiration of the Initial Severance Benefit Period. If the Company so elects to extend the Initial Severance Benefit Period, the Company, during the Second Severance Benefit Period shall (i) pay to the Executive, in payroll period installments in accordance with the Company’s normal payroll policies, an amount equal to 50% of the monthly amount of Executive’s Annual Salary in effect at the date of termination of his employment and (ii) under the same cost sharing arrangements as were in place prior to termination, continue to include the Executive and his eligible dependants under the coverage of all group health, medical and dental insurance policies, plans and programs maintained by the Company during the Second Severance Benefit Period, for the Company’s employees, or management employees, generally.

     For purposes of Section 4.1.1 of this Agreement, the term “Total Severance Benefit Period” means the total period (including the Initial Severance Benefit Period and, if applicable, the Second Severance Benefit Period) during which the Company is obligated to pay and provide, and performs its obligations to pay and provide, severance benefits to the Executive under this Section 5.5.

     6. Insurance . The Company may, from time to time, apply for and take out, in its own name and at its own expense, naming itself or others as the designated beneficiary (which it may change from time to time), policies for health, accident, disability or other insurance upon the Executive or his life, in any amount or amounts that it may deem necessary or appropriate to protect its interest. The Executive agrees to aid the Company in procuring such insurance by submitting to reasonable medical examinations and by filling out, executing and delivering such applications and other instruments in writing as may reasonably be required by an insurance company or companies to which any application or applications for insurance may be made by or for the Company.

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     7. Arbitration.

          7.1 Binding Effect . Except as provided in Section 7.2 below, any and all controversies, claims or disputes by the Executive or the Company relating to the provisions or obligations under this Agreement, or with respect to the employment or termination thereof of the Executive by the Company, shall be submitted to final and binding arbitration in accordance with the Employment Dispute Resolution Rules of the American Arbitration Association in effect at the time a demand for arbitration is made. It is the intention of the Executive and the Company that this Arbitration provision shall be enforceable under the Federal Arbitration Act.

          7.2 Excluded Matters . This Arbitration provision shall not apply to any claims for workers’ compensation benefits, unemployment compensation benefits, or claims by the Company for injunctive and/or other equitable relief for any violation of Section 4 of this Agreement.

     8. Other Provisions.

          8.1 Notices . Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage prepaid. Any such notice shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission or, if mailed, five days after the date of deposit in the United States mail, as follows:

     Either party may change its address for notice hereunder by notice to the other party.

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          8.2 Entire Agreement . This Agreement contains the entire agreement and understanding between the parties with respect to its subject matter and supersedes all prior agreements, written or oral, with respect thereto; provided, however, that nothing herein shall in any way limit the obligation, rights or liabilities of the parties under any written stock option agreement separately entered into by the parties.

          8.3 Waivers and Amendments . This Agreement may be amended, modified, superseded, canceled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by the parties or, in the case of a waiver, by the party waiving compliance. No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any right, power or privilege hereunder, nor any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

          8.4 Governing Law; Venue . This Agreement, except as set forth in Section 4.5 hereof, shall be governed by, and construed in accordance with, the laws of the State of Texas without reference to principles governing choice or conflicts of law. Venue shall exclusively lie in the state and federal courts of Harris County, Texas.

          8.5 Assignment . This Agreement, and any rights and obligations hereunder, may not be assigned by any party hereto without the prior written consent of the other party, except that the Company may assign this Agreement to any of its subsidiaries or affiliates without the Executive’s consent provided such assignment does not diminish any of the Executive’s benefits, rights or obligations hereunder.

          8.6 Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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

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

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EXECUTIVE EMPLOYMENT AGREEMENT

     THIS AGREEMENT dated as of December 22, 2005 , by and between ENGlobal Corporation , a Texas corporation (the “Company” ), and Michael M. Patton , a resident of Houston, Texas (the “Executive” ).

RECITALS

     WHEREAS, the Executive is willing to accept employment by the Company on the terms and conditions of this Agreement;

     NOW, THEREFORE, the Company and the Executive agree as follows:

     1. Employment Duties and Acceptance.

     1.1 Employment by the Company . The Company agrees to employ the Executive as Senior Vice President of Business Development for the duration of the Employment Term (as defined in Section 2 below), to render such services and to perform such duties as are normally associated with and inherent in the executive capacity in which the Executive will be serving, as well as such other duties, which are not inconsistent with the Executive’s position with the Company, as shall from time to time reasonably be assigned to him by the Chief Executive Officer of the Company (the “CEO” ), including, but not limited to, possible assignments to render services and perform duties with ENGlobal Corporation and/or its subsidiaries.

     1.2 Acceptance of Employment by the Executive . The Executive accepts such employment for the Employment Term and agrees to render the services required of him under Section 1.1. During the Employment Term, the Executive shall devote his full business time, attention and energy to the business of the Company and the performance of his duties under this Agreement. The foregoing shall not, however, prohibit the Executive from making and managing personal investments, or from engaging in civic or charitable activities, that do not materially impair the performance of his duties under this Agreement. If appointed or elected, as applicable, the Executive also shall serve during all or any part of the Employment Term as any other officer and/or as a director of the Company or any of its subsidiaries or affiliates, without any additional compensation other than that specified in this Agreement.

     1.3 Place of Performance . The Executive shall be based in the Houston Metropolitan Area, and nothing in this Agreement shall require the Executive to relocate his base of employment or principal place of residence from the Houston Metropolitan Area.

     1.4 Termination of Existing Contracts . The Executive agrees that all agreements and contracts, whether written or oral, relating to the employment of the Executive by the Company, or any of its subsidiaries or affiliates, shall be superceded effective as of the commencement of the Employment Term. However, nothing in this Section 1.4 shall (i) affect accrued vacation, holiday or sick pay accruals, (ii) require the Company to cease to make available to the Executive, and, subject to his meeting all applicable eligibility requirements, the Executive shall be entitled to continue to be covered under, all group health, medical and dental insurance policies, plans and programs maintained by the Company for its executive level employees generally, in each case until replacement coverage is provided by the Company, or (iii) impair or adversely affect any indemnification rights that the Executive may have under statutes empowering corporations in the Company’s or any of its subsidiaries’ states of incorporation to indemnify their officers and directors, or under the Company’s or any of its affiliates’ bylaws or any written indemnification agreement between the Executive and the Company or any of its affiliates implementing such statutory indemnification rights, but only with respect to third-party claims or proceedings that relate to actions taken by the Executive as an officer or director of the Company or any of its affiliates prior to the date hereof.

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     2. Employment Term . The term of the Executive’s employment under this Agreement (the “Employment Term” ) shall commence on the effective date of February 7, 2006 (the “Commencement Date” ), and shall continue through and expire on the 3rd anniversary of the Commencement Date (the “Expiration Date” ), unless extended by the Company or earlier terminated as herein provided. By written notice given by the Company to the Executive at any time at least 60 days before the Expiration Date, the Company may elect to extend the Employment Term for one additional one-year period beginning on the Expiration Date. In that case, and from that point forward, the “Employment Term” shall become the four-year period beginning on the Commencement Date, and the term “Expiration Date ” shall be deemed to refer to the fourth anniversary of the Commencement Date.

     3. Compensation and Other Benefits.

     3.1 Annual Salary . As compensation for services to be rendered under this Agreement, the Company shall pay the Executive a salary (the “Annual Salary” ), subject to such increases as the Board of Directors may, in its discretion, approve, at a rate of $210,000.00 per annum. The Executive shall also be eligible, during the Employment Term, to receive such other compensation, whether in the form of cash bonuses, incentive compensation, stock options, stock appreciation rights, restricted stock awards or otherwise (collectively, the “Additional Compensation” ), as the Board of Directors (or any committee of the Board) may, in its discretion, approve. The Annual Salary and the Additional Compensation shall be payable in accordance with the applicable payroll and/or other compensation policies and plans of the Company as in effect from time to time during the Employment Term, less such deductions as shall be required to be withheld by applicable law and regulations, or authorized by Executive.

     3.2 Participation in Employee Benefit Plans . The Executive shall be permitted, during the Employment Term, if and to the extent he is and continues to meet all applicable eligibility requirements, to participate in any group life, hospitalization or disability insurance plan, health program, pension plan, similar benefit plan or other “fringe benefits” of the Company, which may be available to all other similarly situated executives and officers of the Company on generally the same terms.

     3.3 Executive Support . The Company shall provide to the Executive office facilities, furniture, and equipment, secretarial and support personnel and other management level support services as the Executive shall reasonably require in connection with his performance of his duties under this Agreement.

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     3.4 Reimbursement of Business Expenses . The Executive may incur reasonable, ordinary and necessary business expenses in the course of his performance of his duties under this Agreement, including expenses for travel, food and entertainment. The Company shall reimburse the Executive for all such business expenses if (i) the expenses are incurred by the Executive in accordance with the Company’s business expense reimbursement policy, if any, as may be established and modified by the Company from time to time, and (ii) the Executive provides to the Company a record of and appropriate receipts for (A) the amount of the expense, (B) the date, place and nature of the expense, (C) the business reason for the expense and (D) the names, occupations and other data concerning individuals entertained sufficient to establish their business relationship to the Company. The Company shall have no obligation to reimburse the Executive for expenses that are not incurred and substantiated as required by this Section 3.4.

     4. Non-Competition.

     4.1 Covenants Against Competition . The Executive acknowledges that (i) the Company, which for purposes of this Section 4 includes the Company, and all of its present and future subsidiaries and affiliates, engaged in the business of providing a broad range of engineering services and engineered systems (instrumentation systems), including planning, design procurement, construction management, in-plant maintenance, field inspection and control system services (“the Business”); (ii) the Executive is one of a limited number of persons who has performed a significant role in developing the Business; (iii) the Business is conducted throughout the United States and internationally; (iv) his work for the Company will give him possession of, and access to, trade secrets of, and confidential, proprietary information concerning, the Company; (v) the agreements and covenants contained in this Section 4 (collectively, the “Restrictive Covenants” ) are essential to protect the Business and the goodwill of the Company. Accordingly, the Executive agrees as follows:

     4.1.1 Non-Compete . During the Restricted Period, the Executive shall not (A) engage, anywhere within the Territory (as hereinafter defined), as an owner, co-owner, investor, creditor, officer, director, employee, independent contractor, consultant, advisor, or in any other managerial capacity in any business selling or providing any services which are sold or offered by the Company, within the area surrounding each office or facility ( “Facility ”) at which the Executive was employed by the Company within the two-year period immediately preceding the date of the Executive’s termination of employment (for purposes of this Section 4.1, the area surrounding a Facility shall be: (1) the city, town or village in which the Facility is located, (2) the county or parish in which the Facility is located, (3) the counties or parishes contiguous to the county or parish in which the Facility is located and (4) the area located within 150 miles of the Facility, all of such locations being herein collectively called the “Territory” , or (B) call on any person or entity that at the time is, or at any time within one-year prior to the date of termination of the Executive’s employment was, a customer of the Company, for the purpose of soliciting or selling any product or service which is then sold or offered within the Territory by the Company if the Executive has knowledge of that customer relationship; provided, however, that nothing in this Section 4.1.1 shall prohibit the Executive from owning, directly or indirectly, solely as an investment, securities of any entity traded on any national securities exchange or over-the-counter market if the Executive is not a controlling person of, or a member of a group which controls, such entity and does not, directly or indirectly, own one percent or more of any class of securities of such entity. As used in this Section 4, the term “Restricted Period” means the period beginning on the Commencement Date and ending:

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     4.1.2 Confidential Information; Personal Relationships . During the Restricted Period and thereafter, the Executive shall keep secret and retain in strict confidence, and shall not use for the benefit of himself or others, all confidential matters of the Company, including, without limitation, “know-how,” trade secrets, customer lists, details of client or consultant contracts, pricing policies, bidding practices and procedures, operational methods, marketing plans or strategies, project development techniques or plans, business acquisition plans, new personnel acquisition plans, methods of production, manufacture and installation, technical processes, designs and design projects, inventions and research projects of the Company learned by the Executive heretofore or during the Restricted Period; nor shall the Executive exploit for his own benefit, or the benefit of others, personal relationships with customers, suppliers or agents of the Company in connection with or adversely affecting the Business formed previously during the course of his association with the Company or formed during the Restricted Period.

     4.1.3 Property of the Company . All memoranda, notes, lists, records and other documents or papers (and all copies thereof), including such items stored in computer memories, on microfiche or by any other means, made or compiled by or on behalf of the Executive, or made available to the Executive relating to the Company, other than purely personal matters, are and shall be the Company’s property. Upon the termination of the Executive’s employment (whether such termination is for Cause, as hereinafter defined, or otherwise) or at any other time on request of the Company, Executive shall promptly (i) return all Company property, (ii) download into useable format and provide to the Company all such information stored on computers or other electronic storage, and immediately thereafter destroy or permanently delete the information from Executive’s possession, and (iii) within five days of the Company’s written request, provide the Company with a sworn affidavit verifying that all such materials have been returned to the Company or destroyed.

     4.1.4 Employees of the Company . During the Restricted Period and thereafter for as long as the Executive shall remain an employee of or consultant to the Company, the Executive shall not, directly or indirectly, hire or solicit any employee or consultant engineer of the Company away from the Company or encourage any such employee or agent to leave such employment.

     4.1.5 Consultants of the Company . During the Restricted Period and thereafter for as long as the Executive shall remain an employee of or consultant to the Company, the Executive shall not, directly or indirectly, hire or solicit any consultant then under contract with the Company or encourage such consultant to terminate such relationship.

     4.1.6 Acquisition Candidates . During the Restricted Period and thereafter for as long as the Executive shall remain an employee of or consultant to the Company, the Executive shall not call on any Acquisition Candidate (as defined below in this Section 4.1.6), with the knowledge of such Acquisition Candidate’s status as such, for the purpose of acquiring, or arranging the acquisition of, that Acquisition Candidate by any person or entity other than the Company. In this Section 4.1.6 “Acquisition Candidate” means any person or entity engaged in any of the businesses of engineering services, including planning, design procurement, construction management, in-plant maintenance, field inspection and control system services, and (i) which was called on by the Company, in connection with the possible acquisition by the Company of that person or entity, or (ii) with respect to which the Company has made an acquisition analysis within two (2) years preceding the date of Executive’s termination of employment.

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     4.2 Rights and Remedies upon Breach . If the Executive breaches or threatens to commit a breach of the Restrictive Covenants, the Company shall have the following rights and remedies, each of which shall be independent of the others and severally enforceable, and each of which is in addition to, and not in lieu of, any other rights and remedies available to the Company under law or in equity.

     4.2.1 Specific Performance . The right and remedy to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy to the Company.

     4.2.2 Accounting . The right and remedy to require the Executive to account for and pay over to the Company all compensation, profits, monies, accruals, increments or other benefits derived or received by the Executive as the result of any transaction constituting a breach of the Restrictive Covenants.

     4.3 Severability of Covenants . The Executive acknowledges and agrees that the Restrictive Covenants are reasonable and valid in geographical and temporal scope and in all other respects. If any court determines that any of the Restrictive Covenants, or any part thereof, is invalid or unenforceable, the remainder of the Restrictive Covenants shall not thereby be affected and shall be given full effect, without regard to the invalid portions.

     4.4 Reformation . If any court determines that any Restrictive Covenant, or any part thereof, is unenforceable because of the duration or geographic scope of such provision, such court shall have the power to reduce the duration or scope of such provision, as the case may be, and, in its reduced form, such provision shall then be enforceable.

     4.5 Enforceability . The Company and the Executive intend to and hereby confer exclusive jurisdiction to enforce the Restrictive Covenants upon the state and federal courts of Harris County, Texas.

     5. Termination.

     5.1 Termination upon Death . If the Executive dies during the Employment Term, this Agreement shall terminate, except that the Executive’s legal representatives, successors, heirs or assigns shall be entitled to receive the Annual Salary, the Additional Compensation and other accrued benefits, if any, earned up to the date of the Executive’s death and for a period of three (3) months thereafter; provided, however, if any Additional Compensation or other benefits are governed by the provisions of any written employee benefit plan or policy of the Company, any written agreement contemplated thereunder or any other separate written agreement entered into between the Executive and the Company, the terms and conditions of such plan, policy or agreement shall control in the event of any discrepancy or conflict with the provisions of this Agreement regarding such Additional Compensation or other benefit upon the death, termination or disability of the Executive.

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     5.2 Termination for Cause . At any time during the Employment Term, the Company shall have the right to terminate the Executive’s employment under this Agreement and discharge the Executive for Cause, exercisable upon the service of written notice upon the Executive. If such right is exercised, the Company’s obligation to the Executive shall be limited to the payment of any unpaid Annual Salary, Additional Compensation and other benefits, if any, accrued up to the effective date specified in the Company’s notice of termination (which date shall not be retroactive). As used in this Section 5.2 and elsewhere in this Agreement, the term “Cause” shall mean the determination that (i) after notice and a right to cure, there has been a material breach by the Executive of the terms of this Agreement, (ii) after receipt of a written warning, the Executive has failed or refused to follow the reasonable policies, performance objectives, or directives established by the Board of Directors or executive officers of the Company senior to the Executive, (iii) the Executive has wrongfully misappropriated money or other assets or properties of the Company or any subsidiary or affiliate of the Company, (iv) the Executive has been convicted of any felony or other serious crime, (v) the Executive’s employment performance has been substantially impaired by chronic absenteeism, alcoholism or drug addiction, or (vi) the Executive has exhibited gross moral turpitude relevant to his office or employment with the Company or any subsidiary or affiliate of the Company.

     5.3 Termination Without Cause . At any time during the period beginning on the first anniversary of the Commencement Date and continuing through the end of the Employment Term, the Company shall have the right to terminate the Executive’s employment under this Agreement and discharge the Executive without Cause, exercisable upon the service of written notice to the Executive. If such right is exercised, the Company’s obligation to the Executive shall be as set forth in Section 5.5 below.

     5.4 Termination Upon Disability . If during the Employment Term the Executive becomes physically or mentally disabled, whether totally or partially, as evidenced by the written statement of a competent physician licensed to practice medicine in the United States, so that the Executive is unable to substantially perform his services hereunder with reasonable accommodation for (i) a period of six consecutive months, or (ii) for shorter periods aggregating six months during any period of twelve consecutive months, the Company may at any time after the last day of the six consecutive months of disability, or the day on which the shorter periods of disability equal an aggregate of six months within a period of twelve consecutive months, terminate the Executive’s employment hereunder, exercisable by written notice to the Executive. If such right is exercised, the Company’s obligation to the Executive shall be as set forth in Section 5.5 below.

     5.5 Severance Benefit . If at any time during or after the Employment Term, the Executive’s employment by the Company is terminated for any reason other than (i) a termination for Cause under Section 5.2, (ii) Executive’s voluntary resignation, or (iii) Executive’s death, then for a period of six (6) months following the date of termination of the Executive’s employment (the “Initial Severance Benefit Period” ), the Company shall continue to (a) pay to the Executive, in payroll period installments in accordance with the Company’s normal payroll policies, the monthly amount of Executive’s base monthly salary in effect at the date of termination of his employment, and (b) at the Company’s expense, provide coverage for the Executive and his eligible dependents under the coverage of all group health, medical and dental insurance policies, plans and programs maintained by the Company during the Initial Severance Benefit Period for the Company’s employees, or management employees, generally, as allowed by law.

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     The Company, at its option, which shall be exercisable by a written notice sent to the Executive at least sixty (60) days prior to the expiration of the Initial Severance Benefit Period, may elect to extend the Initial Severance Benefit Period for a period of an additional six (6) months following the expiration of the Initial Severance Benefit Period. If the Company so elects to extend the Initial Severance Benefit Period, the Company, during the Second Severance Benefit Period shall (i) pay to the Executive, in payroll period installments in accordance with the Company’s normal payroll policies, an amount equal to 100% of the monthly amount of Executive’s base monthly salary in effect at the date of termination of his employment, and (ii) at the Company’s expense, provide coverage for the Executive and his eligible dependents under the coverage of all group health, medical and dental insurance policies, plans and programs maintained by the Company during the Second Severance Benefit Period, for the Company’s employees, or management employees, generally, as allowed by law.

     For purposes of Section 4.1.1 of this Agreement, the term “Total Severance Benefit Period” means the total period (including the Initial Severance Benefit Period and, if applicable, the Second Severance Benefit Period) during which the Company is obligated to pay and provide, and performs its obligations to pay and provide, severance benefits to the Executive under this Section 5.5.

     6. Insurance . The Company may, from time to time, apply for and take out, in its own name and at its own expense, naming itself or others as the designated beneficiary (which it may change from time to time), policies for health, accident, disability or other insurance upon the Executive or his life, in any amount or amounts that it may deem necessary or appropriate to protect its interest. The Executive agrees to aid the Company in procuring such insurance by submitting to reasonable medical examinations and by filling out, executing and delivering such applications and other instruments in writing as may reasonably be required by an insurance company or companies to which any application or applications for insurance may be made by or for the Company.

     7. Arbitration.

     7.1 Binding Effect . Except as provided in Section 7.2 below, any and all controversies, claims or disputes by and between the Executive and the Company relating to the provisions or obligations under this Agreement, or with respect to the employment or termination thereof of the Executive by the Company, shall be submitted to final and binding arbitration in accordance with the Employment Dispute Resolution Rules of the American Arbitration Association in effect at the time a demand for arbitration is made. It is the intention of the Executive and the Company that this Arbitration provision shall be enforceable under the Federal Arbitration Act, the Texas General Arbitration Act, and at common law.

     7.2 Excluded Matters . This Arbitration provision shall not apply to any claims for workers’ compensation benefits, unemployment compensation benefits, or claims by the Company for injunctive and/or other equitable relief for any violation of Section 4 of this Agreement.

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     8. Other Provisions.

     8.1 Notices . Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage prepaid. Any such notice shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission or, if mailed, five days after the date of deposit in the United States mail, as follows:

     Either party may change its address for notice hereunder by notice to the other party.

     8.2 Entire Agreement . This Agreement contains the entire agreement and understanding between the parties with respect to its subject matter and supersedes all prior agreements, written or oral, with respect thereto; provided, however, that nothing herein shall in any way limit the obligation, rights or liabilities of the parties under any written stock option agreement separately entered into by the parties.

     8.3 Waivers and Amendments . This Agreement may be amended, modified, superseded, canceled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by the parties or, in the case of a waiver, by the party waiving compliance. No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any right, power or privilege hereunder, nor any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

     8.4 Governing Law; Venue . This Agreement, except as set forth in Section 4.5 hereof, shall be governed by, and construed in accordance with, the laws of the State of Texas without reference to principles governing choice or conflicts of law. Venue shall exclusively lie in the state and federal courts of Harris County, Texas.

     8.5 Assignment . This Agreement, and any rights and obligations hereunder, may not be assigned by any party hereto without the prior written consent of the other party, except that the Company may assign this Agreement to any of its subsidiaries or affiliates without the Executive’s consent provided such assignment does not diminish any of the Executive’s benefits, rights or obligations hereunder.

     8.6 Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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

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

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