Employee Agreement

February 13, 2013
Mr. David Unger
Chairman of the Board of Directors
MFRI, Inc.

Re: Continuing Employment with MFRI, Inc.

Dear David:

I am pleased to set forth the terms of your continuing employment as an employee
with MFRI, Inc.
(the "Company"), effective February 1, 2013:

•
Title: Chairman of the Board of Directors and Executive Advisor to the Chief
Executive Officer

•
Term: February 1,2013 until January 31, 2015

•
Reports to: The President and Chief Executive Officer of the Company

•
Base Salary: $160,650 per year, payable from February 1,2013 through the fiscal
year ending January 31, 2015 (the "Base Compensation Period").

•
Incentive Compensation: You will be participating in the incentive program
described at the bottom of page 17 of the proxy filing for the fiscal year
ending January 31, 2012. Your incentive earnings for the fiscal years ending
January 31, 2014 and January 31, 2015 will be payable each year at the same time
the other executive officer incentives are paid. When the Company performance
results for the fiscal year ending January 31 , 2016 are complete, it is the
intention of the Board of Directors to discuss the advisability of an incentive
award to you based on the employee incentive system in place for FY2016 and for
your contribution toward the Company's performance leading up to and including
FY2016. These amounts will be paid on or prior to March 15 of the calendar year
that begins immediately following the close of the applicable fiscal year.

•
Health Insurance: You and Mrs. Unger will continue to be enrolled in the MFRI
Premium BCSS health insurance program, and you will continue to pay $4,020 per
year of this premium through the Company's section 125 plan.

•
Other Insurance Payments: We anticipate that the grants by the Board of
Directors, through a non-qualified plan, to its senior staff will continue to be
requested and approved unless conditions indicate otherwise. In lieu of a
non-qualified plan grant, you may continue to receive an equivalent amount to
use to pay insurance premiums for an existing Pacific Life second to die life
insurance policy and for John Hancock long term care policies for you and Mrs.
Unger.

•
401-K Match: As an employee, you will continue to be eligible for the 401-K
match of 3%, up to a maximum of $360,000, or $4,820.

•
Stock Options: During the Base Compensation Period, you shall receive option
and/or stock awards as a participant of the MFRI, Inc. 2004 Stock Incentive Plan
(the "Plan") at the block I level, as do other senior staff. Your outstanding
employee stock options will all immediately vest on January 31, 2013. The terms
of each option will be amended to provide that instead of expiring upon your
death or termination of service with the Company, such options will continue to
be exercisable for their entire original ten (10) year term. In the event of
your death within the ten (10) year term, the options will be exercisable during
their ten (10) year term by your personal representative at any time prior to
their expiration. With respect to employee options granted to you after January
31, 2013, your options will be at the same price and term granted to Tier One
officers. However, the options will vest in two annual installments for the 2013
grant and one annual installment for the 2014 grant. In the event of your death,
options granted in years 2013 and 2014 will vest upon your death and be
exercisable for the entire ten (l0) year term by your personal representative at
any time prior to their expiration.

•
Benefits: All other company benefits available to MFRI, Inc. employees will also
be extended to you during the Base Compensation Period.

•
Other Provisions: The Company will also transfer to you its rights to a portion
of the cash value

--------------------------------------------------------------------------------

under the Pacific Life insurance policy on your life, which amounted to $119,645
as of January 30, 2013. In the event of your death during the term of this
agreement, any amounts due or to become due to you in the future under this
Agreement shall be paid to your estate or to your designated beneficiary.

Sincerely,

s/s Bradley Mautner
Bradley Mautner
President and CEO
MFRI, Inc.

ACKNOWLEDGEMENT AND ACCEPTANCE

I, David Unger, hereby acknowledge the terms of employment as outlined in this
letter dated as of February 13, 2013 and agree to continued employment under the
terms and conditions set therein.

s/s David Unger                     2/15/2013
David Unger                         Date