Third Amendment to the Second Amended and Restated Loan and Security Agreement

FOR VALUE RECEIVED, the undersigned (hereinafter "Borrowers"), hereby, jointly and severally, hereby PROMISE TO PAY to the order of Bank of America, N.A., a national banking association (hereinafter "Lender"), or its registered assigns at the office of Bank of America, N.A., a national banking association, as agent for such Lender, or at such other place in the United States of America as the holder of this Note may designate from time to time in writing, in lawful money of the United States of America, in immediately available funds, at the time of payment, the principal sum of ($ ), together with interest from and after the date hereof on the unpaid principal balance outstanding from time to time.

This Note (the "Note") is one of the Term Notes referred to in, and is issued pursuant to, that certain Second Amended and Restated Loan and Security Agreement dated as of April 30, 2012, by and among Borrowers, the lender signatories thereto (including Lender) and Bank of America, a national banking association ("Bank of America") as Agent for said lenders (Bank of America in such capacity "Agent") (hereinafter, as amended from time to time, the "Loan Agreement"), and is entitled to all of the benefits and security of the Loan Agreement. All of the terms, covenants and conditions of the Loan Agreement and the Security Documents are hereby made a part of this Note and are deemed incorporated herein in full. All capitalized terms used herein, unless otherwise specifically defined in this Note, shall have the meanings ascribed to them in the Loan Agreement.

The principal amount and accrued interest of this Note shall be due and payable on the dates and in the manner hereinafter set forth:

(a) Interest on the unpaid principal balance outstanding from time to time shall be paid at such interest rates and at such times as are specified in the Loan Agreement;

(b) Principal shall be due and payable in monthly commencing the first day of the month after the month in which the Third Amended Term Loan is advanced and continuing on the first day of each month thereafter to and including November 1, 2016, in equal installments of $ each; and

(c) The entire remaining principal amount then outstanding, together with any and all other amounts due hereunder, shall be due and payable on November 30,2016.

Notwithstanding the foregoing, the entire unpaid principal balance and accrued interest on this Note shall be due and payable immediately upon any termination of the Loan Agreement pursuant to Section 4 thereof.

This Note shall be subject to mandatory prepayment in accordance with the provisions of Section 3.3 of the Loan Agreement Borrowers may also prepay this Note in the manner provided in Section 4 o the Loan Agreement.

Upon the occurrence, and during the continuation, of an Event of Default, this Note shall or may, as provided in the Loan Agreement, become or be declared immediately due and payable.

The right to receive principal of, and stated interest on, this Note may only be transferred in accordance with the provisions of the Loan Agreement.

Except as otherwise provided in the Loan Agreement, demand, presentment, protest and notice of nonpayment and protest are hereby waived by Borrowers.

This Note shall be governed by, and construed and enforced in accordance with, the laws of the State of Illinois.

Consolidated Net Income (Loss) - with respect to any fiscal period, the net income (or loss) of MFRI determined in accordance with GAAP on a Consolidated basis with its domestic Subsidiaries; provided, however, Consolidated Net Income shall not include: (a) the income (or loss) of any Person (other than a Subsidiary of any Borrower) in which a Borrower or any of its wholly-owned subsidiaries has an ownership interest unless received in a cash distribution or requiring the payment of cash; (l:» the income (or loss) of any Person accrued prior to the date it became a domestic Subsidiary of a Borrower or is merged into or consolidated with a Borrower; (c) all amounts included in determining net income (or loss) in respect of the write-up of assets on or after the Closing Date, including the subsequent amortization or' expensing of the written-up portion of the assets; (d) extraordinary gains as defined under GAAP; and (e) gains from asset dispositions (other than sales of inventory); and any increase or decrease in expenses resulting from the implementation of FASB 146.

EBITDA - with respect to any fiscal period, the sum of Consolidated Net Income (Loss) before Interest Expense, income taxes, depreciation and amortization for such period (but excluding any extraordinary gains for such period); plus the amount of any expenses or charges deducted from Consolidated Net Income for the applicable period in connection with the closure and write down of TDC's facility at 1331 South 55th Court, Cicero, Illinois; provided that the aggregate amount of add backs to EBITDA as a result of any such charges or expenses shall not exceed $2,500,000; plus the cash amount of any Distribution or repayment of intercompany Money Borrowed received by a Borrower from Canadian Joint Venture or a Foreign Subsidiary; plus the amount of any non cash expenses or charges deducted from Consolidated Net Income related to management, director or employee equity incentive plans; provided that, to the extent any Borrower incurs any cash expense, charge or expenditure related to such equity incentive plans or repurchases any Security issued under any such equity incentive plan, the amount of such expense, charge, expenditure or repurchase price, to the extent not already deducted from Consolidated Net Income, shall be subtracted from the applicable period's EBITDA; plus any extraordinary, unusual or nonrecurring items (including fees, expenses, and charge associated with the consolidation or closings of domestic plants or offices, workforce reductions and similar restructuring activities) in an amount not to exceed $2,000,000 within the applicable fiscal period; plus the unrealized losses (and minus the unrealized gains) on any foreign currency transaction or transaction in respect of Indebtedness of any foreign subsidiary to Borrower or any of Borrower's domestic subsidiaries in an amount not to exceed $2,000,000 within the applicable fiscal period; plus, to the extent included in the determination of Consolidated Net Income (Loss), any excise taxes paid in or to India (or any political subdivision thereof) resulting from the repatriation of cash to the United States), all as determined for Borrowers and their domestic Subsidiaries on a Consolidated basis and in accordance with GAAP (except to the extent that the financial operations of MFRI's Foreign Subsidiaries are omitted).

Fixed Charge Coverage Ratio - with respect to any fiscal period, the ratio of (i) EBITDA for such period minus Capital Expenditures incurred by Borrowers or their domestic Subsidiaries (excluding, however, Capital Expenditures financed by third party financing) minus income taxes paid in cash by Borrowers and their domestic Subsidiaries in such period to (ii) the sum of Interest Expense paid in cash within such period plus principal payments of Money Borrowed (other than Revolving Credit Loans) made by Borrowers and their domestic Subsidiaries within such period.

Interest Expense - with respect to any fiscal period, interest expense paid or accrued for such period, including without limitation the interest portion of Capitalized Lease Obligations, plus the Letter of Credit and LC Guaranty fees owing for such period, all as determined for MFRI and its domestic Subsidiaries on a Consolidated basis and in accordance with GAAP.

Minimum Fixed Charge Coverage Ratio. if at any time Availability is less than the Availability Threshold, then Borrowers shall not permit Fixed Charge Coverage Ratio for the most recently ended Measurement Period to be less than 1.00 to 1.