Exhibit 10.3


Recording Requested By,

And After Recording, Return To:

WELLS FARGO BANK,

 NATIONAL ASSOCIATION

1740 Broadway

Denver, Colorado 80203

Attn: Loan Documentation









AGREEMENT AND ACKNOWLEDGMENT OF SECURITY INTEREST



THIS AGREEMENT AND ACKNOWLEDGMENT OF SECURITY INTEREST (this "Agreement") is
entered into as of December 29, 2009, by and among WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Bank"), ENGlobal Corporation ("Debtor") and CLAY REAL ESTATE
DEVELOPMENT, L.P. ("Landlord").



WHEREAS, Bank has extended, or has agreed to extend, credit to Debtor on the
condition, among others, that such credit be secured by a security interest in
certain assets of Debtor (the "Collateral") described in the Security Agreement
attached hereto as Exhibit A and incorporated herein by this reference (the
"Security Agreement"), and all or a portion of the Collateral is now or may
hereafter be located on that certain real property owned by Landlord in
Jefferson County, Texas, as more particularly described on Exhibit B attached
hereto and incorporated herein by this reference (the "Property"); and



WHEREAS, in extending or continuing to extend such credit to Debtor, Bank is
relying on the acknowledgments, representations and agreements relating to the
Collateral set forth herein.



NOW, THEREFORE, Landlord, Debtor and Bank hereby acknowledge, represent and
agree as follows:



1. Landlord's Acknowledgment. Landlord acknowledges that the security interest
of Bank in the Collateral is senior and superior to any claim or right in all or
any portion thereof which Landlord now has or may at any time hereafter acquire.
Landlord confirms that Landlord has not received notice from any person or
entity other than Bank of any claim of right, title or interest in or to any of
the Collateral.



2. Notice and License. Landlord agrees to deliver to Bank, at the same time as
delivery to Debtor, a copy of any notice given by Landlord to Debtor regarding
any breach of, or limitation or termination of, any lease or other agreement
between Debtor and Landlord relating to Debtor's use and possession of the
Property. Subject to the terms and conditions of this Agreement, Landlord and,
where applicable, Debtor agree that notwithstanding any failure by Debtor to
perform under, or the termination of, any lease or other agreement between
Debtor and Landlord relating to Debtor's use and possession of the Property: (a)
Landlord will not dispose of the Collateral nor assert any right or interest
therein unless it has first notified Bank in writing and has given Bank a
reasonable opportunity to exercise Bank's rights in and to the Collateral; and
(b) Bank is hereby granted the right and license to enter upon the Property and
to possess and use the Property to take possession of the Collateral and to
exercise Bank's rights, powers and remedies with respect to the Collateral,
including without limitation completing any work in process, removing any or all
of the Collateral from the Property, and sorting, assembling, selling (including
by auction sale held on the Property) and otherwise disposing of the Collateral
in accordance with the terms and conditions of the Security Agreement, this
Agreement and applicable law.



3. Conditions. The rights and licenses granted to Bank herein are conditioned
upon Bank's agreement to, and Bank hereby agrees to: (a) pay rent to Landlord at
the times and at the daily rate paid

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by Debtor for the period commencing on the day Bank enters into possession of
the Property and ending on the day Bank relinquishes possession thereof; and (b)
reimburse Landlord for any damage to the Property, other than diminution in
value thereof, actually caused by Bank's activities on the Property during its
possession thereof.



4. Indemnity. Debtor agrees to indemnify and hold Landlord and Bank, and their
respective partners, officers, directors, successors and assigns, harmless from
and against any and all claims, actions, damages, costs, expenses (including
reasonable attorneys' fees, to include Bank's outside counsel fees and all
allocated costs of Bank's in-house counsel to the extent permissible) and/or
liability arising from or in any manner relating to Landlord's compliance with
this Agreement and/or Bank's exercise of any of its rights hereunder. Debtor
hereby irrevocably authorizes Landlord to comply with any instructions or
directions which Bank may give to Landlord pursuant hereto and/or in connection
with Bank's exercise of its rights, powers and remedies with respect to the
Collateral.



5. No Waiver; Amendments. No delay, failure or discontinuance of Bank in
exercising any right, power or remedy hereunder or under the Security Agreement
shall affect such right, power or remedy; nor shall any single or partial
exercise of any such right, power or remedy preclude, waive or otherwise affect
the further exercise thereof or the exercise of any other right, power or
remedy. The rights, powers and remedies of Bank hereunder are cumulative and not
exclusive. Any waiver, permit, consent or approval of any kind by Bank of any
breach of or default under this Agreement, or any such waiver of any provisions
or conditions hereof, must be in writing and shall be effective only to the
extent set forth in such writing. This Agreement may be amended or modified only
in writing signed by all parties hereto.



6. Notices. All notices, requests and demands required hereunder must be in
writing, addressed to each party at the address specified below or to such other
address as any party may designate by written notice to each other party, and
shall be deemed to have been given or made as follows: (a) if personally
delivered, upon delivery; (b) if sent by mail, upon the earlier of the date of
receipt or three (3) days after deposit in the U.S. mail, first class and
postage prepaid; and (c) if sent by telecopy, upon receipt.



7. Governing Law; Successors, Assigns. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, and shall be
binding upon and inure to the benefit of the heirs, executors, administrators,
legal representatives, successors and assigns of the parties.

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



BANK: LANDLORD:



CLAY REAL ESTATE DEVELOPMENT, L.P.



By:

Name:

Title:

Address:



WELLS FARGO BANK,
NATIONAL ASSOCIATION



By: /s/ David Jones

Name: David Jones

Title: Relationship Manager

Address: 21 Waterway Avenue, Suite 600
         The Woodlands, TX 77380-2629



DEBTOR:



ENGlobal Corporation



By: /s/ Robert Raiford

Name: R. W. Raiford

Title: Chief Financial Officer

Address: 654 N Sam Houston Parkway, Suite 400
         Houston, TX 77060-5914



OBTAIN NOTARY ACKNOWLEDGMENTS



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EXHIBIT B

TO

AGREEMENT AND ACKNOWLEDGMENT OF SECURITY INTEREST





Legal Description of Property:




















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