On April 13, 2020, ENGlobal Corporation (“ENGlobal”) was granted an unsecured loan (the “Loan”) from Origin Bank in the aggregate principal amount of $4,915,800 to the Paycheck Protection Program (the “PPP”) under Division A, Title I of Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which was enacted on March 27, 2020. The Loan is evidenced by a promissory note, dated as of April 13, 2020 (the “Note”), by ENGlobal in favor of Origin Bank, as lender.

Interest Rate

The interest rate on the Loan is 1% per year.

Maturity

The term of the Loan is two years. ENGlobal will be required to pay any unforgiven principle and interest in eighteen equal monthly installments, with the first payment being due on November 13, 2020 and continuing on the same day of each subsequent month until the date of maturity.

Potential Loan Forgiveness

Under the PPP, ENGlobal may apply for forgiveness of the amount due on the Loan in an amount equal to the sum of the following costs incurred during the 8-week period beginning on the date of the first disbursement of the Loan: (a) payroll costs, (b) any payment of interest on a covered obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation), (c) any payment on a covered rent obligation, and (d) any covered utility payment, calculated in accordance with the terms of the CARES Act.

Events of Default

The Loan provides for customary events of default including, among other things, cross-defaults on any other loan with the lender. The Loan may be accelerated upon the occurrence of an event of default.

The foregoing description of the Loan is included to provide you with information regarding its terms. It does not purport to be a complete description and is qualified in its entirety by reference to the full text of the Note, which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

The following exhibit is included with this Current Report on Form 8-K:

ENGLOBAL CORP Exhibit
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About ENGlobal Corporation (NASDAQ:ENG)

ENGlobal Corporation is engaged in providing engineering and professional services to the energy industry. The Company operates through two segments: Engineering, Procurement and Construction Management (EPCM), and Automation. The EPCM segment provides services relating to the development, management and execution of projects requiring professional engineering and related project services to the energy industry throughout the United States. The EPCM segment includes the government services group, which provides engineering, design, installation and operation and maintenance of various government, public sector and international facilities. The Automation segment provides services related to the design, fabrication and implementation of process distributed control and analyzer systems, advanced automation, information technology and electrical projects to the upstream and downstream sectors throughout the United States, as well as a specific project in Central Asia.