Document:

Exhibit

Exhibit 10.1

SECOND MODIFICATION AGREEMENT

THIS SECOND MODIFICATION AGREEMENT (this “Agreement”) is made as of June 27, 2018, by and among RIF I - DON JULIAN, LLC, a California limited liability company (“RIF I - Don Julian, LLC”), RIF I - LEWIS ROAD, LLC, a California limited liability company (“RIF I - Lewis Road, LLC”), RIF I - OXNARD, LLC, a California limited liability company (“RIF I - Oxnard, LLC”), RIF I - WALNUT, LLC, a California limited liability company (“RIF I - Walnut, LLC”), REXFORD BUSINESS CENTER - FULLERTON, LLC, a California limited liability company (“Rexford Business Center - Fullerton, LLC”), RIF III - IRWINDALE, LLC, a California limited liability company (“RIF III - Irwindale, LLC”), and REXFORD INDUSTRIAL - MADERA INDUSTRIAL, LLC, a Delaware limited liability company (“Rexford Industrial - Madera Industrial, LLC” and, together with RIF I - Don Julian, LLC, RIF I - Lewis Road, LLC, RIF I - Oxnard, LLC, RIF I - Walnut, LLC, Rexford Business Center - Fullerton, LLC,  and RIF III - Irwindale, LLC, hereinafter individually and collectively, jointly and severally, called the “Borrower”) and REXFORD INDUSTRIAL REALTY, INC., a Maryland corporation (hereinafter called the “Guarantor”), and BANK OF AMERICA, N.A., a national banking association (hereinafter called the “Lender”).

RECITALS:

WHEREAS, the Lender is the owner and holder of a Promissory Note dated as of July 24, 2013, executed and delivered by the Borrower and payable to the Lender in the original principal amount of $60,000,000 (as renewed, extended, modified, amended or restated from time to time, the “Note”), which Note evidences the Borrower’s obligations to the Lender in connection with a loan in the original principal amount of the Note (the “Loan”);

WHEREAS, the Note was issued pursuant to a Term Loan Agreement dated as of July 24, 2013, by and between the Lender, the Borrower and others (as amended, modified, supplemented or restated from time to time, the “Loan Agreement”);

WHEREAS, the Borrower’s obligations under the Note are secured by, among other things, the following Deeds of Trust, Assignments, Security Agreements and Fixture Filings (individually, as amended, supplemented, modified, restated, renewed or extended from time to time, each a “Mortgage”, and collectively,  as amended, supplemented, modified, restated, renewed or extended from time to time, the “Mortgages”):

(1)    Deed of Trust, Assignment, Security Agreement and Fixture Filing dated July 24, 2013, from RIF I - Don Julian, LLC in favor of Lender, and recorded on July 25, 2013 as Instrument No. 2013-1093952 of the Official Records of Los Angeles County, California covering certain real property and improvements thereon, more particularly described therein; 

(2)    Deed of Trust, Assignment, Security Agreement and Fixture Filing dated July 24, 2013, from RIF I - Lewis Road, LLC in favor of Lender, and recorded on July 25, 2013 as Instrument No. 2013-725-00131339-0 of the Official Records of Ventura County, California covering certain real property and improvements thereof, more particularly described therein;

(3)    Deed of Trust, Assignment, Security Agreement and Fixture Filing dated July 24, 2013, from RIF I - Oxnard, LLC in favor of Lender, and recorded on July 25, 2013 as Instrument No. 2013-725-00131340-0 of the Official Records of Ventura County, California covering certain real property and improvements thereof, more particularly described therein;

(4)    Deed of Trust, Assignment, Security Agreement and Fixture Filing dated July 24, 2013, from RIF I - Walnut, LLC in favor of Lender, and recorded on July 25, 2013 as Instrument No. 2013-44012 of the Official Records of Orange County, California covering certain real property and improvements thereof, more particularly described therein;

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(5)    Deed of Trust, Assignment, Security Agreement and Fixture Filing dated July 24, 2013, from RIF III - Irwindale, LLC in favor of Lender, and recorded on July 25, 2013 as Instrument No. 2013-1093958 of the Official Records of Los Angeles County, California covering certain real property and improvements thereof, more particularly described therein; and

(6)    Deed of Trust, Assignment, Security Agreement and Fixture Filing dated January 24, 2014, from Rexford Industrial - Madera Industrial, LLC in favor of Lender, and recorded January 29, 2014 as Instrument No. 20140129-0011123-0 of the Official Records of Ventura County, California covering certain real property and improvements thereof, more particularly described therein.

WHEREAS, the Borrower’s obligations under the Note are guaranteed by the Guarantor pursuant to a Guaranty Agreement dated as of July 24, 2013 (whether one or more, and as amended, supplemented, modified, restated or renewed from time to time, the “Guaranty”);

WHEREAS, the Borrower’s obligations under the Note and the other Loan Documents (hereinafter defined) are hereinafter collectively called the “Obligations;” the Note, the Mortgage, the Loan Agreement, the Guaranty, and all other documents previously, now or hereafter executed and delivered to evidence, secure, guarantee, or in connection with, the Obligations, as the same may from time to time be renewed, extended, amended, supplemented or restated, are hereinafter collectively called the “Loan Documents;” and all liens, security interests, assignments, superior titles, rights, remedies, powers, equities and priorities securing the Note or providing recourse to Lender with respect thereto are hereinafter collectively called the “Liens;” 

WHEREAS, all of the Obligations, including (without limitation) all outstanding principal, accrued and unpaid interest, outstanding late charges, unpaid fees, and all other amounts outstanding under the Note and the other Loan Documents, are due and payable in full on August 1, 2019 (the “Maturity Date”), subject to the Borrower’s right to extend the Maturity Date to August 1, 2020 in accordance with the terms and conditions of Section 1A of the Note; and

WHEREAS, the Borrower and the Guarantor have requested Lender to extend the Maturity Date of the Note and to modify the terms and conditions of the Borrower’s right to extend such Maturity Date and to modify the Loan Documents in various other respects.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower and the Lender now agree to extend the Maturity Date, and to make certain other modifications to the Loan Documents, all as more specifically set forth below.

1.Recitals.  The parties hereto acknowledge and agree that the recitals set forth above are true and correct and are incorporated herein by this reference; provided, however, that such recitals shall not be deemed to modify the express provisions hereinafter set forth.  Capitalized terms used herein but not defined shall have the meanings given to them in the Loan Agreement.

2.Reaffirmation of Loan.  Each Borrower reaffirms all of its obligations under the Loan Documents, hereby renews all of such obligations and promises to pay and perform the same as modified by this Agreement.  Borrower acknowledges that it has no claims, offsets or defenses with respect to the payment of sums due under the Note or any other Loan Document.  The execution and delivery of this Agreement shall not constitute a novation of the debt evidenced and secured by the Loan Documents.

3.Modifications to Loan Agreement.   Effective as of the Effective Date, the Loan Agreement is amended as follows:

(a)    A new Section 4.29, reading in its entirety as follows, is added to the Loan Agreement:

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“4.29    Patriot Act Documentation.  Promptly following any request therefor, Borrower shall provide information and documentation reasonably requested by Lender for purposes of compliance with applicable “know your customer” and anti-money-laundering rules and regulations, including, without limitation, the PATRIOT Act and the Beneficial Ownership Regulation.”

(b)    Section 8.19 of the Loan Agreement is deleted in its entirety and replaced with the following:

“Section 8.19    USA Patriot Act; KYC Notice.

Lender hereby notifies Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “PATRIOT Act”), it is required to obtain, verify and record information that identifies  Borrower, which information includes the name and address of  Borrower and other information that will allow Lender to identify Borrower in accordance with the PATRIOT Act.  Borrower shall, promptly following a request by Lender, provide all documentation and other information that Lender requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act.”

(c)    The following definitions are added to Schedule 1 of the Loan Agreement in the correct alphabetical order:

“Beneficial Ownership Certification” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

(d)    The definition of “Allocated Loan Amount” set forth in Schedule 1 of the Loan Agreement is deleted in its entirety and replaced with the following:

“Allocated Loan Amount” means, 

(a)    with respect to the RIF I - Don Julian Property, Seventeen Million Four Hundred Eight Thousand Fifty Dollars ($17,408,050),

(b)     with respect to the RIF I - Lewis Road Property, Thirteen Million Four Hundred Twenty Thousand Dollars ($13,420,000), 

(c)     with respect to the RIF I - Oxnard Property, Four Million Two Hundred Ninety Thousand Dollars ($4,290,000),

(d)     with respect to the RIF I - Walnut Property, Twelve Million Four Hundred Fifty- Two Thousand Dollars ($12,452,000),

(e)     with respect to the Rexford Industrial - Madera Property, Eight Million One Hundred Five Thousand Nine Hundred Dollars ($8,105,900), and

(f)     with respect to the RIF III - Irwindale Property, Eight Million Seven Hundred Forty-Five Thousand Dollars ($8,745,000).

4.Modifications to Note.  Effective as of the Effective Date, the Note is amended as follows:

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(a)    Section 1 of the Note is deleted in its entirety and replaced with the following:

“Section 1.    Payment Schedule and Maturity Date.  The principal of this Note shall be due and payable in equal monthly installments of Sixty-Five Thousand Two Hundred Fifty and No/100 Dollars ($65,250.00) commencing on July 15, 2021 and continuing on the fifteenth (15th) calendar day of each succeeding month thereafter until maturity.  Prior to maturity, accrued and unpaid interest shall be calculated from and including the fifteenth (15th) calendar day of each month through and including the fourteenth calendar day of the succeeding calendar month, and shall be due and payable, in addition to foregoing payment of principal, in arrears on the fifteenth (15th) calendar day of each calendar month commencing on July 15, 2018.  The entire principal balance of this Note then unpaid, together with all accrued and unpaid interest and all other amounts payable hereunder and under the other Loan Documents (as hereinafter defined), shall be due and payable in full on August 1, 2023 (the “Initial Maturity Date”), the final maturity of this Note, subject to Section 1A.”

(b)    The first sentence of Section 1A of the Note is deleted in its entirety and replaced with the following:

“Borrower shall have the right to extend the Initial Maturity Date of this Note to August 1, 2025 (the “Extended Maturity Date”), upon and subject to the following terms and conditions:”

(c)    Subsection 1A(a)(vi) of the Note is deleted in its entirety and replaced with the following:

“(vi)    Not later than the Initial Maturity Date, (A) Lender shall have been provided with updated title reports and appropriate title insurance endorsements shall have been issued as required by Lender, and (B) Borrower shall have paid to Lender a non-refundable extension fee in an amount equal to one hundred twenty-five one-thousandths of one percent (0.125%) of the current Net Commitment Amount of the Loan (defined below).”

(d)    Sections 3 and 3A of the Note are deleted in their entirety and replaced with the following:

“Section 3.    Interest Rate.  The Principal Debt from day to day outstanding which is not past due shall bear interest at a rate per annum equal to the applicable rate specified in Section 3.1 or Section 3.2 hereof.  As used in this Section 3, the term “Principal Debt” means the aggregate unpaid principal balance of this Note at the time in question.

Section 3.1.    Interest Rate On Principal Debt Not Subject to Applicable Swap Contract.  The provisions of this Section 3.1 apply to so much of the Principal Debt as to which the interest rate provisions of Section 3.2 do not, as of the date of calculation, apply.  

(a)    LIBOR Daily Floating Rate; Computations.  So much of the Principal Debt as to which the interest rate provisions of Section 3.2 do not apply and which is from day to day outstanding and which is not past due, shall bear interest at a fluctuating rate of interest per annum equal to the LIBOR Daily Floating Rate for that day plus one hundred seventy (170) basis points (the “Floating Rate”).  For any day, the “LIBOR Daily Floating Rate” means, for any day, a fluctuating rate of interest per annum equal to LIBOR, or a comparable or successor rate which rate is approved by Lender, as published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by Lender from time to time), at or about 11:00 a.m., London time, two (2) LIBOR Business Days prior to such day, for U.S. Dollar deposits with a term of one (1) month commencing that day; provided that (i) to the extent a comparable or successor rate is approved by Lender in connection herewith, the approved rate will be applied in a manner consistent with market practice, provided, further that to the extent such market practice is not administratively feasible for Lender, such approved rate will be applied in a 

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manner as otherwise reasonably determined by Lender; and (ii) if the LIBOR Daily Floating Rate shall be less than zero, such rate will be deemed zero for purposes of this Section 3.1.  “LIBOR” means the London Interbank Offered Rate.  “LIBOR Business Day” means a Business Day which is also a London Banking Day.  “London Banking Day” means any day on which dealings in U.S. Dollar deposits are conducted by and between banks in the London interbank eurodollar market.  All computations of interest for the Alternative Rate (as hereinafter defined) shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.  All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year).  To the extent that any calculation of interest or any fee required to be paid hereunder shall be less than zero, such rate shall be deemed zero for purposes of this Section 3.1.

(b)    Illegality.  If Lender determines that for any reason, any Law has made it unlawful, or that any Governmental Authority (as defined in Section 7) has asserted that it is unlawful, for Lender to make, maintain or fund loans whose interest is determined by reference to the LIBOR Daily Floating Rate, or to determine or charge interest rates based upon the LIBOR Daily Floating Rate, or any Governmental Authority has imposed material restrictions on the authority of Lender to purchase or sell, or to take deposits of, U.S. Dollars in the London interbank eurodollar market, then, on notice thereof by Lender to Borrower, any obligation of Lender to provide the Floating Rate shall be suspended, until Lender notifies Borrower that the circumstances giving rise to such determination no longer exist.  During the period of any such suspension, the unpaid principal balance of this Note from day to day outstanding which is not past due, shall bear interest at a fluctuating rate of interest per annum equal to the Alternative Rate for that day plus seventy (70) basis points per annum.  

(c)    Inability to Determine Rate.  If Lender determines that for any reason, (i) U.S. Dollar deposits are not being offered to banks in the London interbank eurodollar market in the outstanding amount of the Loan for terms equal to one (1) month (in each case with respect to this clause (i), “Impacted Principal”), (ii) adequate and reasonable means do not exist for determining the LIBOR Daily Floating Rate with respect to the Loan, or (iii) the Floating Rate does not adequately and fairly reflect the cost to Lender of funding the Loan, Lender will promptly so notify Borrower.  Thereafter, the obligation of Lender to provide the Floating Rate shall be suspended until Lender revokes such notice.  During the period of any such suspension, the unpaid principal balance of this Note from day to day outstanding which is not past due, shall bear interest at a fluctuating rate of interest per annum equal to the Alternative Rate for that day plus seventy (70) basis points per annum.  Notwithstanding the foregoing, if Lender has made the determination described in clause (i) of this Section 3.1(c) and Borrower shall so request, Lender and Borrower shall negotiate in good faith to amend the definition of “LIBOR Daily Floating Rate” and other applicable provisions to preserve the original intent thereof in light of such change; provided that until so amended, such Impacted Principal will be handled as otherwise provided pursuant to this Section 3.1(c).

(d)    LIBOR Successor Rate.  Notwithstanding anything to the contrary in this Note or any other Loan Documents, if Lender determines (which determination shall be conclusive absent manifest error), or if Borrower notifies Lender that Borrower has determined, that:

(i)    adequate and reasonable means do not exist for ascertaining LIBOR with respect to the Loan, including, without limitation, because the LIBOR Screen Rate is not available or published on a current basis, and such circumstances are unlikely to be temporary; or

(ii)    the administrator of the LIBOR Screen Rate or a Governmental Authority having jurisdiction over Lender has made a public statement identifying a specific date after which LIBOR or the LIBOR Screen Rate shall no longer be made available, or used for 

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determining the interest rate of loans (such specific date, as used in this Section 3.1 only, the “Scheduled Unavailability Date”); or

(iii)    bilateral portfolio commercial real property loans currently being executed, or that include language similar to that contained in this Subsection, are being executed or amended (as applicable) to incorporate or adopt a new benchmark interest rate to replace LIBOR,

then, reasonably promptly after such determination by Lender, or receipt by Lender of such notice from Borrower, as applicable, Lender and Borrower may amend this Note to replace LIBOR with an alternative benchmark rate (including any mathematical or other adjustments to the benchmark (if any) incorporated therein, giving due consideration to any evolving or then existing convention for similar U.S. Dollar denominated bilateral portfolio commercial real property loans for such alternative benchmarks (any such proposed rate, as used in this Section 3.1 only, a “LIBOR Successor Rate”), together with any proposed LIBOR Successor Rate Conforming Changes.

If no LIBOR Successor Rate has been determined and the circumstances under subsection (i) of this Section 3.1(d) exist or the Scheduled Unavailability Date has occurred (as applicable), Lender will promptly so notify Borrower.  Thereafter, Lender’s obligation to provide the Floating Rate shall be suspended, and the Loan shall bear interest at the Alternative Rate for that day plus seventy (70) basis points.  

Notwithstanding anything else herein, any definition of LIBOR Successor Rate shall provide that in no event shall such LIBOR Successor Rate be less than zero for purposes of this Note, provided, however, that at any time while a Swap Contract or a Third Party Swap Contract (whether one or more) is in effect in conformity with the terms of the Loan Agreement and has been pledged to the Lender pursuant to Section 2 of Schedule 7 of the Loan Agreement as collateral for the Obligations (as defined in the Loan Agreement), the provisions of this sentence shall not apply to that portion of the Loan in an aggregate outstanding amount equal to the aggregate notational amount of all such pledged Swap Contracts or Third Party Swap Contracts.

(e)    Additional Defined Terms.  In addition to other terms defined herein, as used in this Section 3.1 only, the following terms shall have the meanings indicated, unless the context otherwise requires: 

“Alternative Rate” means, for any day, a fluctuating rate per annum equal to the higher of (i) the Federal Funds Rate plus fifty (50) basis points, and (ii) the rate of interest in effect for such day as publicly announced from time to time by Lender as its “Prime Rate.”
    
“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (i) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (ii) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America, N.A. on such day on such transactions as determined by Lender.

“LIBOR Screen Rate” means the LIBOR quote on the applicable screen page Lender designates to determine LIBOR (or such other commercially available source providing such quotations as may be designated by Lender from time to time).

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“LIBOR Successor Rate Conforming Changes” means, with respect to any proposed LIBOR Successor Rate, any conforming changes to the definition of Alternative Rate, timing and frequency of determining rates and making payments of interest and other administrative matters as may be appropriate, in the discretion of Lender in consultation with Borrower, to reflect the adoption of such LIBOR Successor Rate and to permit the administration thereof by Lender in a manner substantially consistent with market practice (or, if Lender determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such LIBOR Successor Rate exists, in such other manner of administration as Lender determines in consultation with Borrower).

“Prime Rate” is a rate set by Lender based upon various factors including Lender’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in such Prime Rate announced by Lender shall take effect at the opening of business on the day specified in the public announcement of such change.

Section 3.2.    Interest Rate On Principal Debt Subject to Applicable Swap Contract.  The provisions of this Section 3.2 apply to that portion of the Principal Debt (i) in an aggregate outstanding amount equal to the aggregate notational amount of all Swap Contracts and Third Party Swap Contracts (as such terms are defined in the Loan Agreement) which are then in effect in conformity with the terms of the Loan Agreement and have been pledged to the Lender pursuant to Section 2 of Schedule 7 of the Loan Agreement as collateral for the Obligations (as defined in the Loan Agreement), and (ii) as to which Borrower has given Lender written notice that it elects to have interest on such amount bear interest in accordance with this Section 3.2 (Swap Contracts and Third Party Swap Contracts meeting the requirements of the foregoing clauses (i) and (ii) are referred to herein as “Applicable Swap Contracts”).   Such election shall become effective three (3) LIBOR Business Days (as hereinafter defined) after the conditions specified in the immediately preceding sentence have been satisfied and shall terminate with respect to the amount of the Principal Debt which was subject to an Applicable Swap Contract at such time as such Applicable Swap Contract is no longer in effect.

(a)    LIBOR Monthly Floating Rate.  Subject to the terms and conditions hereof, the Principal Debt from day to day outstanding for which an Applicable Swap Contract is then in place and which is not past due shall bear interest at a rate per annum equal to the LIBOR Rate (as hereinafter defined).  The LIBOR Rate shall be adjusted on each Interest Rate Change Date.  The LIBOR Rate shall remain fixed until the next Interest Rate Change Date.  As used in this Section 3.2 only, the following terms have the meanings indicated.

“Adjusted LIBOR Rate” means the rate equal to the quotient obtained by dividing (i) the applicable LIBOR Monthly Floating Rate by (ii) 1.00 minus the LIBOR Reserve Percentage.

“Interest Rate Change Date” means the first Business London Banking Day of each month.

“LIBOR” means the London Interbank Offered Rate.

“LIBOR Margin” means one hundred seventy (170) basis points.

“LIBOR Monthly Floating Rate” means, for any day, a fluctuating rate of interest per annum equal to LIBOR, or a comparable or successor rate which rate is approved by Lender, as published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by Lender from time to time), at or about 11:00 a.m., London time, two (2) London Banking Days prior to the most recent Interest Rate Change Date, for U.S. 

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Dollar deposits with a term of one (1) month commencing on such Interest Rate Change Date; provided that to the extent a comparable or successor rate is approved by Lender in connection herewith, the approved rate will be applied in a manner consistent with market practice; provided, further that to the extent such market practice is not administratively feasible for Lender, such approved rate will be applied in a manner as otherwise reasonably determined by Lender.

“LIBOR Rate” means a simple rate per annum equal to the sum of the LIBOR Margin plus the Adjusted LIBOR Rate.

“London Banking Day” means any day on which dealings in U.S. Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

(b)    Computations and Determinations.  All computations of interest for the Base Rate (as hereinafter defined) shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.  All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year). Lender shall determine each interest rate in accordance with this Note and its determination thereof shall be conclusive in the absence of manifest error.  The books and records of Lender shall be conclusive evidence, in the absence of manifest error, of all sums owing to Lender from time to time under this Note, but the failure to record any such information shall not limit or affect the obligations of Borrower under the Loan Documents. Lender neither warrants, nor accepts responsibility, nor shall Lender have any liability with respect to the administration, submission or any other matter related to the rates in the definitions of “LIBOR Rate” or “LIBOR Monthly Floating Rate” or with respect to any comparable or successor rate thereto.

(c)    Illegality.  If Lender determines that for any reason, any Law has made it unlawful, or that any Governmental Authority (as defined in Section 7) has asserted that it is unlawful, for Lender to make, maintain or fund loans whose interest is determined by reference to the LIBOR Monthly Floating Rate, or to determine or charge interest rates based upon the LIBOR Monthly Floating Rate, or any Governmental Authority has imposed material restrictions on the authority of Lender to purchase or sell, or to take deposits of, U.S. Dollars in the London interbank eurodollar market, then, on notice thereof by Lender to Borrower, any obligation of Lender to provide the Floating Rate shall be suspended, until Lender notifies Borrower that the circumstances giving rise to such determination no longer exist.  During the period of any such suspension, the unpaid principal balance of this Note from day to day outstanding which is not past due, shall bear interest at a fluctuating rate of interest per annum equal to the Base Rate for that day.  

(d)    Inability to Determine Rate.  If Lender determines that for any reason, (i) U.S. Dollar deposits are not being offered to banks in the London interbank eurodollar market in the outstanding amount of the Loan for terms equal to one (1) month (in each case with respect to this clause (i), “Impacted Principal”), (ii) adequate and reasonable means do not exist for determining the LIBOR Monthly Floating Rate with respect to the Loan, or (iii) the LIBOR Rate does not adequately and fairly reflect the cost to Lender of funding the Loan, Lender will promptly so notify Borrower.  Thereafter, the obligation of Lender to provide the Floating Rate shall be suspended until Lender revokes such notice.  During the period of any such suspension, the unpaid principal balance of this Note from day to day outstanding which is not past due, shall bear interest at a fluctuating rate of interest per annum equal to the Base Rate for that day.  Notwithstanding the foregoing, if Lender has made the determination described in clause (i) of this Section 3.2(d) and Borrower shall so request, Lender and Borrower shall negotiate in good faith to amend the definition of “LIBOR Monthly Floating Rate” and other applicable provisions to preserve the original intent thereof in light of such change; provided that until so amended, such Impacted Principal will be handled as otherwise provided pursuant to this Section 3.2(d).  

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(e)    LIBOR Successor Rate.  Notwithstanding anything to the contrary in this Note or any other Loan Documents, if Lender determines (which determination shall be conclusive absent manifest error), or if Borrower notifies Lender that Borrower has determined, that:

(i)    adequate and reasonable means do not exist for ascertaining LIBOR with respect to the Loan, including, without limitation, because the LIBOR Screen Rate is not available or published on a current basis, and such circumstances are unlikely to be temporary; or

(ii)    the administrator of the LIBOR Screen Rate or a Governmental Authority having jurisdiction over Lender has made a public statement identifying a specific date after which LIBOR or the LIBOR Screen Rate shall no longer be made available, or used for determining the interest rate of loans (such specific date, as used in this Section 3.2 only, the “Scheduled Unavailability Date”); or

(iii)    bilateral portfolio commercial real property loans currently being executed, or that include language similar to that contained in this Subsection, are being executed or amended (as applicable) to incorporate or adopt a new benchmark interest rate to replace LIBOR,

then, reasonably promptly after such determination by Lender, or receipt by Lender of such notice from Borrower, as applicable, Lender and Borrower may amend this Note to replace LIBOR with an alternative benchmark rate (including any mathematical or other adjustments to the benchmark (if any) incorporated therein, giving due consideration to any evolving or then existing convention for similar U.S. Dollar denominated bilateral portfolio commercial real property loans for such alternative benchmarks (any such proposed rate, as used in this Section 3.2 only, a “LIBOR Successor Rate”), together with any proposed LIBOR Successor Rate Conforming Changes.

If no LIBOR Successor Rate has been determined and the circumstances under subsection (i) of this Section 3.2(e) exist or the Scheduled Unavailability Date has occurred (as applicable), Lender will promptly so notify Borrower.  Thereafter, Lender’s obligation to provide the LIBOR Rate shall be suspended, and the Loan shall bear interest at the Base Rate for that day.  

(f)    Additional Defined Terms.  In addition to other terms defined herein, as used in this Section 3.2 the following terms shall have the meanings indicated, unless the context otherwise requires: 

“Base Rate” means, on any day, a fluctuating rate per annum equal to the Base Rate Margin plus the highest of:  (i) the rate of interest in effect for such day as publicly announced from time to time by Lender as its “Prime Rate,” (ii) the LIBOR Daily Floating Rate for that day plus one hundred (100) basis points, or (iii) the Federal Funds Rate for that day plus fifty (50) basis points.    

“Base Rate Margin” means seventy (70) basis points per annum.  

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (i) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (ii) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America, N.A. on such day on such transactions as determined by Lender.

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“LIBOR Daily Floating Rate” means, for any day, a fluctuating rate of interest per annum equal to LIBOR, or a comparable or successor rate which rate is approved by Lender, as published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by Lender from time to time), at or about 11:00 a.m., London time, two (2) London Banking Days prior to such day, for U.S. Dollar deposits with a term of one (1) month commencing that day; provided that (i) to the extent a comparable or successor rate is approved by Lender in connection herewith, the approved rate will be applied in a manner consistent with market practice; provided, further that to the extent such market practice is not administratively feasible for Lender, such approved rate will be applied in a manner as otherwise reasonably determined by Lender.

“LIBOR Reserve Percentage” means, for any day that percentage (expressed as a decimal, carried out to five decimal places) which is in effect on such day, under regulations issued from time to time by the Board of Governors of the Federal Reserve System for determining the maximum reserve requirement (including marginal, emergency, supplemental, special and other reserves) applicable to member banks of the Federal Reserve System, in respect of “Eurocurrency liabilities” (or in respect of any other category of liabilities which includes deposits by reference to which the LIBOR Rate is determined), whether or not Lender has any Eurocurrency liabilities or such requirement otherwise in fact applies to Lender.  The LIBOR Rate shall be adjusted automatically as of the effective date of each change in the LIBOR Reserve Percentage.

“LIBOR Screen Rate” means the LIBOR quote on the applicable screen page Lender designates to determine LIBOR (or such other commercially available source providing such quotations as may be designated by Lender from time to time).

“LIBOR Successor Rate Conforming Changes” means, with respect to any proposed LIBOR Successor Rate, any conforming changes to the definitions of Base Rate and Interest Rate Change Date, timing and frequency of determining rates and making payments of interest and other administrative matters as may be appropriate, in the discretion of Lender in consultation with Borrower, to reflect the adoption of such LIBOR Successor Rate and to permit the administration thereof by Lender in a manner substantially consistent with market practice (or, if Lender determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such LIBOR Successor Rate exists, in such other manner of administration as Lender determines in consultation with Borrower).

“Prime Rate” is a rate set by Lender based upon various factors including Lender’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in such Prime Rate announced by Lender shall take effect at the opening of business on the day specified in the public announcement of such change.”

5.Conditions Precedent to Closing.  Before this Agreement and the other Modification Documents become effective and any party becomes obligated hereunder or thereunder, all of the following conditions shall have been satisfied at Borrower’s sole cost and expense in a manner acceptable to Lender in the exercise of Lender’s sole judgment:

(a)    Lender’s receipt of this Agreement and all other additional documents reasonably required by Lender in connection with the modification of the Loan duly executed by Borrower and Guarantor as applicable;

(b)    Lender’s receipt of a standard flood hazard determination form for the Property, and if applicable, evidence of flood insurance coverage (including contents coverage, as applicable) satisfactory to Lender; 

Page 10

(c)    The Title Company shall have issued, or shall have irrevocably committed to Lender’s reasonable satisfaction to issue, such endorsements to Lender’s existing policies of title insurance on the Property as Lender shall require;

(d)    Borrower shall have paid the Lender a non-refundable extension fee of One Hundred Thirty-One Thousand Six Hundred Twenty-Three and 31/100 Dollars ($131,623.31);

(e)    Borrower shall have paid the Lender all documented fees, commissions, costs, charges, taxes and other expenses incurred by the Lender and its counsel in connection with this Agreement, including, but not limited to, reasonable fees and expenses of the Lender’s outside counsel and all recording fees, taxes and charges;

(f)    No Event of Default or Default under any of the Loan Documents shall exist and be continuing as of the date hereof;

(g)    All of the representations and warranties set forth in the Loan Documents shall be true and correct in all material respects as of the effective date hereof except to the extent such representations and warranties expressly relate to an earlier date (in which case they shall be true and correct in all material respects on and as of such earlier date); 

(h)    At least five (5) days prior to the Effective Date: (i) Borrower shall have provided to Lender, and Lender shall be reasonably satisfied with, the documentation and other information requested by Lender in connection with applicable “know your customer” and anti-money-laundering rules and regulations, including the PATRIOT Act; and (ii) any Borrower that qualifies as a “legal entity customer” under the Beneficial Ownership Regulation shall deliver to Lender a Beneficial Ownership Certification in relation to such Borrower, and the information included in such Beneficial Ownership Certification shall be true and correct in all respects; and

(i)    No material adverse change shall have occurred in the financial condition or operation of Borrower or Guarantor since the most recent financial statements were delivered to Lender.

Notwithstanding the date of this Agreement, the Effective Date of this Agreement is June 29, 2018, the date when the foregoing Conditions Precedent were either satisfied or waived by Lender.

6.Balance.  As of June 22, 2018, the outstanding principal balance of the Note is Fifty-Eight Million Four Hundred Ninety-Nine Thousand Two Hundred Fifty and No/100 Dollars ($58,499,250.00).

7.Borrower’s Representations and Warranties.  The Borrower hereby reaffirms all of the representations and warranties set forth in the Loan Documents, and further represents and warrants that (a) each Borrower, either individually or together with another Borrower, is the sole legal and beneficial owner of its Property; (b) the execution and delivery of this Agreement do not contravene, result in a breach of, or constitute a default under, any Borrower’s certificate of formation, articles of organization or operating agreement (as applicable), and to Borrower’s knowledge, any contract, agreement or other instrument to which the Borrower is a party or by which the  Borrower or any of its properties may be bound (nor would such execution and delivery constitute such a default with the passage of time or the giving of notice or both), and, to the Borrower’s knowledge, do not violate or contravene any law, order, decree, rule, regulation or restriction to which the Borrower or the Property is subject; (c) this Agreement constitutes the legal, valid and binding obligations of the Borrower enforceable in accordance with its terms; (d) the execution and delivery of, and performance under, this Agreement are within the Borrower’s power and authority, have been duly authorized by all requisite action (including the consent of any other party whose consent is required); (e) there exists no default under the Note or any other Loan Document; and (f) to the Borrower’s knowledge there are no offsets, claims, counterclaims, cross-claims or defenses with respect to the Obligations.  The Borrower further represents and warrants that, to the Borrower’s knowledge  and except as disclosed in writing to the Lender, there are no suits, judicial or administrative actions, claims, investigations, inquiries, proceedings or demands pending or threatened in writing against (i) the Borrower, or against any other person liable directly or 

Page 11

indirectly for the Obligations, or (ii) which affects the Property or the Borrower’s title to its Property, or (iii) which affects the validity, enforceability or priority of any of the Loan Documents.  The Borrower agrees to indemnify and hold the Lender harmless against any loss, claim, damage, liability or expense (including, without limitation, attorneys’ fees) incurred as a result of any representation or warranty made by the Borrower herein which proves to be untrue or inaccurate in any material respect, and any such occurrence shall constitute a default under the Loan Documents.

8.Release.  

(a)    The Borrower and the Guarantor, for themselves and for each of their respective heirs, personal representatives, successors and assigns, hereby release and waive all claims and/or defenses they now may have against the Lender and its successors and assigns (collectively, the “Released Parties”) on account of any occurrence relating to the Loan, the Loan Documents and/or the property encumbered by the Mortgage which accrued prior to the date hereof, including, but not limited to, any claim that the Lender (a) breached any obligation to the Borrower and/or the Guarantor in connection with the Loan, (b) was or is in any way involved with the Borrower and/or the Guarantor as a partner, joint venturer, or in any other capacity whatsoever other than as a lender, (c) failed to fund any portion of the Loan or any other sums as required under any document or agreement in reference thereto, or (d) failed to timely respond to any offers to cure any defaults under any document or agreement executed by the Borrower, the Guarantor or any third party or parties in favor of the Lender (collectively, the “Released Claims”).  This release and waiver shall be effective as of the date of this Agreement and shall be binding upon the Borrower and the Guarantor and each of their respective heirs, personal representatives, successors and assigns, and shall inure to the benefit of the Lender and its successors and assigns.  The term “Released Parties” as used herein shall include, but shall not be limited to, its present and former officers, directors, employees, agents and attorneys of Lender.

(b)    Borrower and Guarantor each agrees and acknowledges that it may hereafter discover facts different from or in addition to those now known or believed to be true regarding the Released Claims and agrees that the foregoing releases shall remain in full force and effect, notwithstanding the existence or nature of any such different or additional facts.

(c)    Borrower and Guarantor, each having consulted with counsel, is aware of the contents of Section 1542 of the Civil Code of the State of California.  Section 1542 reads as follows:

Section 1542.  (General Release - Claims Extinguished.)  A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

Borrower and Guarantor each expressly waives and relinquishes all rights and benefits under that section and any law or legal principle of similar effect in any jurisdiction, with respect to the Released Claims.  Each of Borrower and Guarantor has executed this Agreement voluntarily, with full knowledge of its significance, and with the express intention of effecting the legal consequences provided by a waiver of California Civil Code Section 1542.  

(d)    Notwithstanding anything to the contrary in this Section 8, Released Claims shall not include any Claims which, as of the date hereof, neither Borrower nor Guarantor knows to exist in its or their favor and which result from the gross negligence, fraud, illegal acts, intentional misrepresentation or willful misconduct on the part of Lender.

9.Course of Dealing.  The Lender and Borrower hereby acknowledge and agree that at no time shall any prior or subsequent course of conduct by Borrower or Lender directly or indirectly limit, impair or otherwise adversely affect any of Lender’s rights, interests or remedies in connection with the Loan and the Loan Documents or obligate Lender to agree to, or to negotiate or consider an agreement to, any waiver of any obligation or default by Borrower under any Loan Document or any amendment to any term or condition of any Loan Document.

Page 12

10.Renewal; Lien Continuation; No Novation.  The Borrower hereby renews the Obligations and promises to pay and perform all Obligations as modified by this Agreement.  The Liens are hereby ratified and confirmed as valid, subsisting and continuing to secure the Obligations, as modified hereby.  Nothing herein shall in any manner diminish, impair, waive or extinguish the Note, the Obligations or the Liens.  The execution and delivery of this Agreement shall not constitute a novation of the debt evidenced and secured by the Loan Documents.

11.Default.  A default under this Agreement shall constitute a default under the Note and other Loan Documents.

12.Miscellaneous.  To the extent of any conflict between the Loan Documents and this Agreement, this Agreement shall control.  Unless specifically modified hereby, all terms of the Loan Documents shall remain in full force and effect.  This Agreement (a) shall bind and benefit the parties hereto and their respective heirs, beneficiaries, administrators, executors, receivers, trustees, successors and assigns; (b) shall be governed by the laws of the State of California and United States federal law; and (c) may be executed in several counterparts, and by the parties hereto on separate counterparts, and each counterpart, when executed and delivered, shall constitute an original agreement enforceable against all who signed it without production of or accounting for any other counterpart, and all separate counterparts shall constitute the same agreement.

13.Reaffirmation of Guaranty.  Guarantor, by signature below as such, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, hereby consents to and joins in this Agreement and hereby declares to and agrees with the Lender that the Guaranty is and shall continue in full force and effect for the benefit of Lender with respect to the Obligations, as amended by this Agreement, that there are no offsets, claims, counterclaims, cross-claims or defenses of the Guarantor with respect to the Guaranty nor, to Guarantor’s knowledge, with respect to the Obligations, that the Guaranty is not released, diminished or impaired in any way by this Agreement or the transactions contemplated hereby, and that the Guaranty is hereby ratified and confirmed in all respects.  Each Guarantor hereby reaffirms all of the representations and warranties set forth in the Guaranty.  Each Guarantor acknowledges that without this consent and reaffirmation, the Lender would not execute this Agreement or otherwise consent to its terms.

[Signatures Begin On Next Page]

Page 13

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have executed this Agreement under seal as of the day and year first hereinabove written.

	
					
	LENDER:
	 
	 
	 

	 
	 
	 
	 
	 

	BANK OF AMERICA, N.A.,
	 
	 
	 

	a national banking association
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	By:
	/s/ Faina Birger
	 
	 
	 

	Name:
	Faina Birger
	 
	 
	 

	Title:
	SVP
	 
	 
	 

	 
	 
	 
	 
	 

[Signatures Continue on Next Page]

Page S-1

	
						
	BORROWER:
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	RIF I - DON JULIAN, LLC,
	 

	a California limited liability company
	 

	 
	 
	 
	 
	 
	 

	By:
	Rexford Industrial Realty, L.P.,
	 
	 

	 
	a Maryland limited partnership,
	 
	 

	 
	Its Managing Member
	 
	 

	 
	 
	 
	 
	 
	 

	 
	By:
	Rexford Industrial Realty, Inc.,
	 

	 
	 
	a Maryland corporation
	 

	 
	 
	Its General Partner
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Adeel Khan
	 

	 
	 
	Name:
	Adeel Khan
	 

	 
	 
	Title:
	CFO
	 

	
						
	RIF I - LEWIS ROAD, LLC,
	 

	a California limited liability company
	 

	 
	 
	 
	 
	 
	 

	By:
	Rexford Industrial Realty, L.P.,
	 
	 

	 
	a Maryland limited partnership,
	 
	 

	 
	Its Managing Member
	 
	 

	 
	 
	 
	 
	 
	 

	 
	By:
	Rexford Industrial Realty, Inc.,
	 

	 
	 
	a Maryland corporation
	 

	 
	 
	Its General Partner
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Adeel Khan
	 

	 
	 
	Name:
	Adeel Khan
	 

	 
	 
	Title:
	CFO
	 

	
						
	RIF I - OXNARD, LLC,
	 

	a California limited liability company
	 

	 
	 
	 
	 
	 
	 

	By:
	Rexford Industrial Realty, L.P.,
	 
	 

	 
	a Maryland limited partnership,
	 
	 

	 
	Its Managing Member
	 
	 

	 
	 
	 
	 
	 
	 

	 
	By:
	Rexford Industrial Realty, Inc.,
	 

	 
	 
	a Maryland corporation
	 

	 
	 
	Its General Partner
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Adeel Khan
	 

	 
	 
	Name:
	Adeel Khan
	 

	 
	 
	Title:
	CFO
	 

[Signatures Continue on Next Page]

Page S-2

	
						
	RIF I - WALNUT, LLC,
	 

	a California limited liability company
	 

	 
	 
	 
	 
	 
	 

	By:
	Rexford Industrial Realty, L.P.,
	 
	 

	 
	a Maryland limited partnership,
	 
	 

	 
	Its Managing Member
	 
	 

	 
	 
	 
	 
	 
	 

	 
	By:
	Rexford Industrial Realty, Inc.,
	 

	 
	 
	a Maryland corporation
	 

	 
	 
	Its General Partner
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Adeel Khan
	 

	 
	 
	Name:
	Adeel Khan
	 

	 
	 
	Title:
	CFO
	 

	
						
	REXFORD BUSINESS CENTER - FULLERTON, LLC,

	a California limited liability company
	 

	 
	 
	 
	 
	 
	 

	By:
	Rexford Industrial Realty, L.P.,
	 
	 

	 
	a Maryland limited partnership,
	 
	 

	 
	Its Managing Member
	 
	 

	 
	 
	 
	 
	 
	 

	 
	By:
	Rexford Industrial Realty, Inc.,
	 

	 
	 
	a Maryland corporation
	 

	 
	 
	Its General Partner
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Adeel Khan
	 

	 
	 
	Name:
	Adeel Khan
	 

	 
	 
	Title:
	CFO
	 

	
						
	RIF III - IRWINDALE, LLC,
	 

	a California limited liability company
	 

	 
	 
	 
	 
	 
	 

	By:
	Rexford Industrial Realty, L.P.,
	 
	 

	 
	a Maryland limited partnership,
	 
	 

	 
	Its Managing Member
	 
	 

	 
	 
	 
	 
	 
	 

	 
	By:
	Rexford Industrial Realty, Inc.,
	 

	 
	 
	a Maryland corporation
	 

	 
	 
	Its General Partner
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Adeel Khan
	 

	 
	 
	Name:
	Adeel Khan
	 

	 
	 
	Title:
	CFO
	 

[Signatures Continue on Next Page]

Page S-3

	
						
	REXFORD INDUSTRIAL - MADERA
	 

	INDUSTRIAL, LLC,
	 

	a Delaware limited liability company
	 

	 
	 
	 
	 
	 
	 

	By:
	Rexford Industrial Realty, L.P.,
	 
	 

	 
	a Maryland limited partnership,
	 
	 

	 
	Its Managing Member
	 
	 

	 
	 
	 
	 
	 
	 

	 
	By:
	Rexford Industrial Realty, Inc.,
	 

	 
	 
	a Maryland corporation
	 

	 
	 
	Its General Partner
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Adeel Khan
	 

	 
	 
	Name:
	Adeel Khan
	 

	 
	 
	Title:
	CFO
	 

	
					
	GUARANTOR:
	 
	 
	 

	 
	 
	 
	 
	 

	REXFORD INDUSTRIAL REALTY, INC.,
	 
	 

	a Maryland corporation
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	By:
	/s/ Adeel Khan
	 
	 
	 

	Name:
	Adeel Khan
	 
	 
	 

	Title:
	CFO
	 
	 
	 

	 
	 
	 
	 
	 

Page S-4Exhibit

Exhibit 10.1

	
	
	TRANSITION, SEVERANCE, AND RELEASE AGREEMENT WITH REAFFIRMATION OBLIGATIONS
(with Agreement of Non-Solicitation and Non-Competition and Special Vesting Agreement)
Between
Team, Inc. and Arthur F. Victorson

A.     INTRODUCTION
Arthur F. Victorson is a resident of Indiana and has been an employee working for Team, Inc. In this Agreement, “Employee” means Arthur F. Victorson, and “Team” means Team, Inc. and its affiliated entities and predecessor and successor entities. Employee has received this Severance Agreement and Release (the “Agreement”) on July 2, 2018, and the last day of Employee’s employment will be September 30, 2018 (the “Last Day of Employment”). The purpose of this Agreement is to state the conditions of Employee’s termination without cause and to resolve any employment-related issues that exist or might exist between Employee and Team. This Agreement is presented to Employee for Employee to sign as a condition to Employee’s receipt of certain benefits as set forth in the Retention Benefits Agreement between Employee and Team (the “Retention Agreement”) and the Team, Inc. Corporate Executive Officer Compensation and Benefits Continuation Policy (as amended, August 17, 2016) (the “Severance Policy”).
B.     TEAM’S PROMISES TO EMPLOYEE
In exchange for the promises of Employee set forth below and Employee’s continued compliance with these promises, Team agrees to do the following:
(1)    Continued Pay Through Last Day of Employment.  Employee will continue at-will employment with Team in the position of Special Advisor to the Chief Executive Officer to provide transition services to Team through the Last Day of Employment, and Team agrees to continue paying Employee his current base salary, less applicable withholdings as required by law or currently in place (“Base Salary”), on the regular Team pay dates through the Last Day of Employment, so long as neither Team nor Employee has terminated the employment relationship as set forth in Section D(5) below. 
(2)    Severance Pay.  
(a)    Continuation of Base Monthly Salary. Team agrees to provide severance pay to Employee in the form of a continuation of the Employee’s base monthly salary at the Employee’s base monthly salary level immediately prior to the Last Day of Employment for fifteen (15) months. If such base salary continuation payments do not exceed the Employee’s Compensation Limit, as defined in the Severance Policy, such payments shall be made in thirty (30) equal installments payable on the 15th and again on the last day of each month, beginning on the last day of the second month following the month in which the Employee’s Last Day of Employment occurs (and after the expiration of the seven-day revocation period stated in the Reaffirmation referenced below). If such base salary continuation payments exceed the Employee’s Compensation Limit, as defined in the Severance Policy, (a) a separate payment equal to the difference between the Employee’s base salary 

1

continuation payments and the Employee’s Compensation Limit shall be paid to the Employee on or before the later of the 15th day of the third month following the end of the Employee’s taxable year in which the Employee’s Last Day of Employment occurs or the 15th day of the third month following the end of the Company’s taxable year in which the Employee’s Last Day of Employment occurs (and after the expiration of the seven-day revocation period stated in the Reaffirmation referenced below), and (b) those salary continuation payments that do not exceed the Employee’s Compensation Limit shall be made in thirty (30) equal installments payable on the 15th and again on the last day of each month, beginning on the last day of the second month following the month in which the Employee’s Last Day of Employment occurs (and after the expiration of the seven-day revocation period stated in the Reaffirmation referenced below).  For purposes of Section 409A (defined below), the Employee’s right to a series of installment payments shall be treated as a right to a series of separate payments.  
(b)    Lump Sum Payment. Team also agrees to provide additional severance pay in the form of a single sum payment in the amount of Fifteen Thousand Five Hundred Dollars ($15,500.00) to be payable on the 60th day following the Last Day of Employment (and after the expiration of the seven-day revocation period stated in the Reaffirmation referenced below). 
(c)    The Severance Pay may be eligible for reduction in accordance with Section II of the Severance Policy. From the Severance Pay, Team also will withhold, as required, for state and federal taxes, FICA, and other required payroll deductions, but will not withhold for the Team, Inc. Salary Deferral Plan and Trust (“401(k) Plan”), health and welfare plans or other benefit plans. The Severance Payment will not be eligible for employer matching under the 401(k) Plan. 
(3)    Special Vesting Agreement.  Team’s CEO will recommend to the Board of Directors Compensation Committee that, following the Last Day of Employment and after the expiration of the seven-day revocation period stated in the Reaffirmation referenced below, Team will vest Employee’s unvested time-based restricted stock units previously awarded pursuant to the Team, Inc. 2006 Stock Incentive Plan (as amended, the “2006 Plan”) or the Team, Inc. 2016 Equity Incentive Plan (as amended, collectively with the 2006 Plan, the “Plan Documents”), as applicable, and the associated Restricted Stock Unit Agreements as listed on Exhibit “A” (the “RSU Agreements”), except as otherwise provided in this Agreement, and deliver the underlying shares to Employee in accordance with the original vesting schedule as set forth on Exhibit “A” to this Agreement under the “Future Delivery Dates” column (the “Special Vesting”). From the Special Vesting, Team will withhold, as required, for any local, state and federal taxes, FICA, and other required payroll deductions (“Deductions”), but will not withhold for the 401(k) Plan, health and welfare plans or other benefit plans. The Special Vesting will not be eligible for employer matching under the 401(k) Plan. To the extent that any of the Deductions are required at or prior to the delivery date of the underlying shares, Team, at its option, may withhold the required amount of the Deductions from any other compensation due Employee or require Employee to remit such required Deductions to Team in cash prior to delivery of the shares. If Employee violates any of the provisions of this Agreement, then any shares of Team’s stock that would have been delivered to Employee on a “Future Delivery Date” shall be forfeited on the date such violation occurs. All other terms and conditions of the RSU Agreements and the Plan Documents remain in full force and effect. The parties agree that this Section shall be deemed to be a “Special Vesting Agreement” for purposes of the time-based Restricted Stock Unit Awards listed on Exhibit “A”.

2

(4)    Non-disparagement.  Team agrees that it will instruct its corporate executive officers not publish or make in any manner any oral or written statements about Employee that are untrue, defamatory, disparaging, malicious, obscene, threatening, harassing, intimidating or discriminatory and which are designed to harm.
(5)    Acknowledgement and Agreement.  Employee acknowledges that all of the consideration provided in this Agreement by Team is not owed to Employee without his agreement to and compliance with all terms of this Agreement. Any breach by Employee of this Agreement will relinquish Employee’s rights to the consideration from Team under this Agreement, including all of the payments made under Sections B(2), any future vesting of unvested shares under Section B(3), and forfeiture of any Returnable Share Value as stated in the RSU Agreements under Section 3(B). Employee acknowledges and agrees that, except as provided in this Agreement and the Reaffirmation Agreement, Employee shall have no entitlement to any additional compensation from Team in respect of Employee’s employment or termination of employment.  
C.     EMPLOYEE’S PROMISES TO TEAM
In exchange for the promises of Team set forth above, Employee promises to do the following:
(1)    Resignation as an Officer or Director. Employee hereby resigns, effective as of July 15, 2018, as (i) President, Inspection and Heat Treating of Team, Inc., and (ii) as an officer or director of any subsidiary or affiliate of Team, Inc. and Employee agrees to take any further action reasonably requested by Team, Inc. to effectuate the foregoing. 
(2)    Transition Services Agreement. Employee agrees to continue at-will employment with Team in the position of Special Advisor to the Chief Executive Officer to provide transition services to Team through the Last Day of Employment. Employee agrees that during the remaining period of Employee’s employment, Employee shall continue to abide by all of Team’s policies and codes of conduct, any agreements Employee has with Team or legal obligations owed by Employee to Team, and to assist with the transition of Employee’s duties or other duties as requested by Team.  
(3)    Reaffirmation and Ratification of Agreement on or after Last Day of Employment. Employee has been given at least twenty-one (21) days to review this Agreement, and if he does not accept this Agreement by returning an executed copy to Team on or before July 23, 2018, this offer will expire. Because it is expected that Employee will sign this Agreement prior to the Last Day of Employment and will continue Employee’s employment with Team to provide transition services after signing this Agreement, as a condition of this Agreement and part of the consideration stated in this Agreement, Employee agrees to sign an acknowledgement on or immediately after the Last Day of Employment (“Reaffirmation”), acknowledging current compliance with this Agreement and ratifying and re-affirming each promise made in this Agreement, including the release and covenant not to sue, as of the date Employee signs that Reaffirmation. No payments or consideration will be provided under this Agreement unless and until this Agreement and the Reaffirmation are signed and not revoked by Employee and after the signing and expiration without revocation by Employee of the seven-day revocation period provided under the Reaffirmation.
(4)    General Release and Covenant Not to Sue. Employee hereby releases and discharges Team, its subsidiaries (past and present), business units, divisions, affiliates, successors, assigns, lessees, underwriters, insurers, stockholders, trustees, directors, officers, officials, managers, representatives, employees and agents from all legal, equitable, or administrative claims or any claims for wrongful discharge, discrimination, retaliation, harassment, breach of contract, intentional or negligent 

3

infliction of emotional distress, defamation, interference with employment related contract, or any other employment related cause of action based on federal, state, or local law or the common law, whether in tort or in contract that Employee may have against any of them from the beginning of time to the effective date of this Agreement. Employee agrees that this release includes, but is not limited to, any claims arising from Employee’s employment with and termination from Team, as well as all employment-related claims for any form of compensation, severance, contract claims or privacy rights, or any other claims arising before the date this Agreement is signed. Employee represents that Employee has been paid in full all compensation of any form which was owed to Employee through the date this Agreement was signed. Employee agrees that this release includes any employment-related claim Employee may have, including employment-related claims of which Employee may not presently be aware. Subject to the Protected Rights, Employee promises not to sue, file any sort of claim, or seek or receive monetary or other damages or relief regarding any of the claims released in this Agreement, whether the claim is filed by Employee or others.
(5)    Release of Employment Claims including Age Discrimination Claims. This release specifically includes, but is not limited to, age discrimination claims arising under the Age Discrimination in Employment Act of 1967 and the Older Workers Benefit Protection Act (“ADEA”), all claims and causes of action arising under Title VII of the Civil Rights Act, the Americans with Disabilities Act (“ADA”), the Family and Medical Leave Act (“FMLA”), common law torts, any causes of action or claims arising under or based on the Texas Labor Code including but not limited to Chapters 21, 61, 451, the Indiana Civil Rights Act, the Indiana Age Discrimination Act, the Indiana Discrimination Against Disabled Persons Act, the Indiana Equal Pay Law, the Indiana Occupational Safety and Health Act, or any other state or local law, statute, public policy, order, or regulation regarding employment; any claim regarding the enforceability or scope of any obligations regarding fiduciary duties, non-disclosure, non-competition and non-solicitation; and any and all suits in tort or contract, Employee Retirement Income Security Act (“ERISA”), and all other claims arising under federal, state, or local statutes, common law, ordinances, or equity, and any applicable severance policy or plan, stock incentive plan or policy, or compensation and benefits policy or plan, and all other incentive compensation plans, claims for wages, benefits, bonuses, vacation pay, severance pay or other compensation, except as otherwise provided above. Employee acknowledges that the consideration provided for in this waiver and release is in addition to anything of value to which Employee was already entitled.  
(6)    Non-disparagement.  Excluding the Protected Rights referenced below, Employee agrees to not publish or make in any manner any oral or written statements about Team or any of the people or entities released that are untrue, defamatory, disparaging, malicious, obscene, threatening, harassing, intimidating or discriminatory and which are designed to harm. 
(7)    Protected Rights.
(a)    Nothing in this Agreement shall be construed as an attempt to waive any right or claim which: is not waivable as a matter of law, is provided under this Agreement or arises after the signing of this Agreement and Reaffirmation, involves any vested benefits pursuant to an ERISA employee benefits plan, unemployment compensation benefits if Employee is otherwise qualified for such benefits under applicable law, or involves any pending workers’ compensation claim (however Employee represents there are no unfiled workers’ compensation claims or unreported injuries). To the extent that any such claim cannot be waived as a matter of law, it is understood that Employee reserves the right to file such claim, but Employee expressly waives Employee’s right to any relief of any kind should Employee or any other person or entity pursue any claim on Employee’s behalf except as stated below.

4

(b)    Nothing in this Agreement limits Employee’s ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission (“SEC”), or any other federal, state or local governmental agency or commission (“Government Agencies”). Employee further understands that this Agreement does not limit Employee’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agencies, including providing documents or other information, without notice to the Company. Employee understands and recognizes, however, that even if a report or disclosure is made or a charge is filed by Employee or on Employee’s behalf with a governmental agency, Employee will not be entitled to any damages or payment of any money or other relief personal to Employee relating to any event which occurred prior to Employee’s execution of this Agreement; however, excluded from this is any non-waivable recovery rights with the SEC or as otherwise applicable. 
(c)    Neither this Agreement nor any other agreement or policy of Team shall prohibit Employee from making, or submit Employee to civil or criminal liability under a trade secret law, for the following disclosures: (a) disclosures of trade secrets made in confidence to a federal, state, or local government official, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law, or (b) disclosures of trade secrets made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal or per court order, or (c) disclosures of trade secrets by a plaintiff to his or her attorney in a lawsuit for retaliation for reporting a suspected violation of law and use of the trade secret information in the court proceeding, if any document containing the trade secrets is filed under seal and does not disclose the trade secrets, except pursuant to court order, or (d) other actions protected as whistleblower activity under applicable law. Employee is not required to notify Team of these allowed reports or disclosures.
(8)    Confidentiality and Covenant of Non-Disclosure.
(a)    Employee understands and acknowledges that during the course of Employee’s employment with Team, Employee has had access to and learned about confidential, secret and proprietary documents, materials and other information, in tangible and intangible form, of and relating to Team, its affiliated companies, and their businesses and existing and prospective customers, suppliers, investors and other associated third parties (“Confidential Information”). Further, this access to Confidential Information will continue through Employee’s Last Day of Employment.
(b)    For purposes of this Agreement, “Confidential Information” includes, but is not limited to, all information not generally known to the public, in spoken, printed, electronic, or any other form or medium, relating directly or indirectly to: business processes, practices, methods, policies, plans, publications, documents, research, operations, services, strategies, techniques, agreements, contracts, terms of agreements, transactions, potential transactions, negotiations, pending negotiations, know-how, trade secrets, computer programs, computer software, applications, work-in-process, databases, manuals, records, articles, systems, material, sources of material, supplier information, vendor information, financial information, results, accounting information, accounting records, legal information, marketing information, advertising information, pricing information, credit information, design information, payroll information, staffing information, personnel information, employee lists, supplier lists, vendor lists, developments, reports, internal controls, security procedures, graphics, drawings, sketches, sales information, revenue, costs, formulae, notes, communications, product plans, ideas, audiovisual programs, inventions, unpublished patent applications, discoveries, experimental processes, experimental results, 

5

specifications, customer information, customer lists, client information, client lists, manufacturing information, distributor lists, and buyer lists of Team, its affiliated companies or their businesses or any of its existing or prospective customers, suppliers, investors or other associated third parties, or of any other person or entity that has entrusted confidential information to Team and which Team is obligated to keep confidential.
(c)    Employee understands that the above list is not exhaustive, and that Confidential Information also includes other information that is marked or otherwise identified as confidential or proprietary, or that would otherwise appear to a reasonable person to be confidential or proprietary in the context and circumstances in which the information is known or used.
(d)    Employee understands and agrees that Confidential Information developed by Employee in the course of Employee’s employment by Team shall be subject to the terms and conditions of this Agreement as if Team furnished the same Confidential Information to Employee in the first instance. Confidential Information and trade secrets shall not include information that (i) is generally available to and known by the public at the time of disclosure by Employee, provided that such general availability and knowledge of the public is through no direct or indirect fault of Employee or person(s) acting on Employee’s behalf; (ii) becomes generally known within the industry through no fault, act or failure to act, error, effort or breach of this Section by Employee; or (iii) is obtained from a third party with a legal right to possess and disclose it.
(e)    Acknowledgment. Employee understands that the nature of Employee’s position has provided Employee with access to and knowledge of Confidential Information and placed Employee in a position of trust and confidence with Team. Employee further understands and acknowledges that Team’s ability to reserve the Confidential Information for the exclusive knowledge and use of Team is of great competitive importance and commercial value to Team, and that improper use or disclosure by Employee is likely to result in unfair or unlawful competitive activity or might cause Team to incur financial costs, loss of business advantage, liability under confidentiality agreements with third parties, civil damages or criminal penalties.
(f)    Disclosure and Use Restrictions. Employee ratifies all prior agreements concerning this subject matter and re-states here that Employee agrees and covenants: (i) to treat all Confidential Information as strictly confidential; (ii) not to directly or indirectly disclose, publish, communicate or make available Confidential Information, or allow it to be disclosed, published, communicated or made available, in whole or part, to any entity or person whatsoever (including other employees of Team not having a need to know and authority to know and use the Confidential Information in connection with the business of Team and, in any event, not to anyone outside of the direct employ of Team) except as required in the performance of any of Employee’s remaining authorized employment duties to Team, if any, and only with the prior consent of an authorized officer acting on behalf of Team in each instance (and then, such disclosure shall be made only within the limits and to the extent of such duties or consent); and (iii) not to access or use any Confidential Information, and not to copy any documents, records, files, media or other resources containing any Confidential Information, or remove any such documents, records, files, media or other resources from the premises or control of Team, except as required in the performance of any of Employee’s remaining authorized employment duties to Team or with the prior consent of an authorized officer acting on behalf of Team in each instance (and then, such disclosure shall be made only within the limits and to the extent of such duties or consent). This Agreement does not, in any way, restrict or impede Employee from exercising protected rights to the extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does 

6

not exceed that required by the law, regulation or order. Employee shall promptly provide written notice of any such order or non-waivable legal right to the senior legal officer of Team. Further, this Agreement does not prevent Employee from exercising the Protected Rights addressed above, including making a good faith report or related disclosures to any governmental agency or entity regarding potential violations of applicable federal, state or local law or to take other actions protected as whistleblower activity under applicable law. Employee is not required to notify the Company of any actions or disclosures pursuant to these Protected Rights.
(g)    Duration of Confidentiality Obligations. Employee understands and acknowledges that Employee’s obligations under this Agreement with regard to any particular Confidential Information shall commence immediately and shall continue so long as the information protected remains confidential in nature.
(9)    Non-Solicitation and Non-Interference.  Employee acknowledges that the highly competitive nature of Team’s business, Employee’s position with Team, and the Confidential Information, company relationships, training, and goodwill provided to Employee during his employment with Team, support Employee’s promises not to solicit or interfere with the Company’s relationships with its customers and employees as stated below, during his employment with the Company and for a period of two years after Employee’s employment ends (“the Restricted Period”) regardless of the reason for the separation, within the United States and Canada (the “Restricted Territory”).
(a)    Non-Solicitation of Employees. During the Restricted Period and in the Restricted Territory, Employee agrees and covenants not to directly or indirectly solicit, hire, recruit, attempt to hire or recruit, or induce the resignation or termination of employment of any employee of Team with whom Employee worked or about whom Employee had access to Confidential Information during Employee’s employment with Team. This restriction shall not include any former, current, or potential employee of Team for whom Employee had no responsibility, no involvement, and about whom he had no access to Confidential Information during his employment with Team.  This restriction does not apply to postings and advertisements regarding job opportunities which are made available to the public and are not directed specifically toward Team employees.
(b)    Non-Solicitation of Customers. Employee understands and acknowledges that because of Employee’s experience with and relationship to Team, Employee has had access to and learned about much or all of Team’s customer information. “Customer Information” includes, but is not limited to, names, phone numbers, addresses, e-mail addresses, order history, order preferences, chain of command, pricing information and other confidential information identifying facts and circumstances specific to the customer and relevant to sales and/or services.
(i)    Employee understands and acknowledges that loss of this customer relationship and/or goodwill will cause significant and irreparable harm to Team.
(ii)    During the Restricted Period and in the Restricted Territory, Employee agrees and covenants, not to directly or indirectly conduct business with, solicit, contact (including but not limited to e-mail, regular mail, express mail, telephone, fax, text and instant message), attempt to contact or meet with Team’s current or prospective customers (defined as potential customers towards whom Team has, within the last two years of Employee’s employment, taken significant steps towards establishing a customer relationship) for purposes of conducting business which is competitive to that of Team.

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(iii)    This restriction shall only apply to: (a) Customers or prospective customers of Team that Employee had direct or indirect contact with in any way during the last two years of Employee’s employment with Team; or (b) Customers or prospective customers about whom Employee has had access to trade secret or Confidential Information or Customer Information during Employee’s last two years of employment with Team. 
(10)    Non-Compete. Because of Team’s legitimate business interest in protecting its Confidential Information, confidential training, and goodwill to which Employee has had access during Employee’s employment with Team, and in return for all of the good and valuable consideration offered to Employee, Employee agrees and covenants not to engage in the Prohibited Activity during the Restricted Period and in the Restricted Territory.
(a)    For purposes of this non-compete clause, “Prohibited Activity” is carrying on or engaging in any activity as an employee, employer, owner, operator, manager, advisor, consultant, contractor, agent, partner, director, stockholder, officer, investor, lender, or any other similar capacity engaged in by Employee on Employee’s own behalf or on behalf of any person or entity carrying on or engaged in a business similar to and competitive with the business of Team and that provides any of the services or product sales as Team provides as listed on the websites of Team (including affiliate or subsidiary companies), including such entities engaged in the business of: specialty maintenance and construction services required in maintaining high temperature and high pressure piping systems and vessels utilized in heavy industry, which service includes, but is not limited to, inspection and assessment, field heat treating, leak repair, composite repair, fugitive emissions control, hot tapping, isolation test plugs, line stops or line plugs, wet tapping, line freezes or line thaws, field machining, welding, technical bolting or torquing, concrete repair and restoration, field and shop valve repair and sales, installation, distribution, maintenance and warranty work for valves and valve products and service of waterworks valves, clamps and enclosures and any other services or products Team currently provides, including designing, developing, manufacturing, distributing or assembling equipment or products to support such services. Employee expressly acknowledges and agrees that, due to the nature of Employee’s employment with Team, any activities falling within the definition of Prohibited Activity would necessarily and inevitably involve the use and/or disclosure by Employee of Team’s trade secrets and Confidential Information. Restricted Territory and Prohibited Activity do not include any territory or geographic area or other portion of the business of Team in which Employee did not participate in the business of Team or take active steps to engage in the business of Team or about which Employee had no access to Confidential Information, training, business relationships, or goodwill of Team during the last two years of Employee’s employment with Team.
(b)    Any business, company, partnership, entity, or other form of organization that offers any of the products and/or services of the type offered by Team (including, its affiliated or subsidiary companies), in the Restricted Territory shall be considered to be carrying on or engaged in a business similar to and competitive with the business of Team.
(c)    Nothing in this Agreement shall prohibit Employee from purchasing or owning less than five percent (5%) of the publicly traded securities of any corporation, provided that such ownership represents a passive investment and that Employee is not a controlling person of, or a member of a group that controls, such corporation.

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(11)    Trade Secrets. Employee agrees that Employee will not, without prior written approval of Team, disclose to anyone outside Team or use, for Employee’s own private benefit or the benefit of any third party, any trade secrets or Confidential Information proprietary to Team (including its affiliated or subsidiary companies), or which Team is obligated to protect, including, but not limited to, all processes, designs, formulas, inventions, computer programs, know how, technical information, marketing strategies and plans, pricing information, and customer lists or other compilations of information belonging to Team or its affiliated or subsidiary companies or their customers.
(12)    Return of Team Property. Employee warrants and agrees that, as of the Last Day of Employment, Employee has returned (or will return) to Team, without undertaking any unauthorized modification or deletion, all of Team’s property in Employee’s possession or control relating to Employee’s employment with Team, including but not limited to, Company issued vehicles, computers, computer equipment, other equipment, Confidential Information, files, records, manuals, memoranda, documents, keys, access cards, credit cards, phone cards and all of the tangible and intangible property belonging to Team, or its affiliates, (hard copy or electronic) or its or their vendors, contractors, subcontractors, customers or prospective customers. Employee will not retain any copies or summaries, electronic or otherwise, of such property, unless agreed to in writing by an authorized senior level officer of Team, Inc. Notwithstanding the foregoing, to the extent such Company property is not in Employee’s possession on the Last Day of Employment, Employee covenants and agrees to use Employee’s best efforts to retrieve such Company property and return to the Company as soon after Employee’s Last Day of Employment as reasonably possible.
(13)    Remedies.  Employee agrees to fully comply with each of the terms of this Agreement in return for the opportunity to receive the consideration promised by Team, which Employee acknowledges and agrees is good, valuable, and sufficient consideration to support the agreements contained herein. Team will provide the consideration specified above only in return for Employee’s promises made and continued compliance with all terms of this Agreement, including Employee’s promises to continue to abide by any other obligations owed by Employee to Team under applicable law or other agreements, to the extent such obligations involve duties of a fiduciary, non-disclosure, non-competition, or non-solicitation of customers or employees. Strict compliance with and satisfaction of this Agreement is a specific condition for the consideration provided by Team under this Agreement, with such compliance and satisfaction determined by Team in its sole discretion.
Employee understands that the promises and restrictions set forth in this Agreement may limit Employee’s ability to engage in certain actions but acknowledges that Employee has been provided sufficient consideration or benefits under this Agreement to justify such restrictions. Employee acknowledges that money damages would not be sufficient remedy for any breach of this Agreement by Employee, and Team shall be entitled to enforce such provisions by specific performance and injunctive or other equitable relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for such breach, but shall be in addition to all remedies available at law or in equity to Team, including the recovery of damages involved in such breach, attorneys’ fees and costs, forfeiture of the opportunity to receive the consideration under this Agreement including any payments or any vesting of restricted stock units, and forfeiture of any amounts paid or prior vesting provided under this Agreement, and all remedies available to Team pursuant to other agreements with Employee or under any applicable law. It is expressly understood and agreed that Team and Employee consider each of the restrictions and obligations contained or referenced in this Agreement to be reasonable and necessary to protect the business of Team.

9

(14)    Notification to Subsequent Employers.  Employee further acknowledges that in order to enforce his obligations under this Agreement, Team may need to notify subsequent actual or potential employers or others of Employee’s obligations under this Agreement.  Employee agrees to notify Team of the identity of his employers for the Restricted Period before accepting a position with such employers, and Employee consents to Team providing notification to these employers or others involved, of Employee’s ongoing obligations to Team under this Agreement or under other applicable law.
(15)    Tolling of Restricted Period.  The duration of the Restricted Period shall be tolled and suspended for any period that Employee is in violation of these covenants up to a period of one year, unless such tolling is disallowed under applicable law.
(16)    Intellectual Property. Employee hereby irrevocably assigns to Team, for no additional consideration, Employee’s entire right, title and interest in and to all discoveries, writings, works of authorship, technologies, software developments, inventions, improvements, ideas and other works or intellectual property arising from Employee’s employment with Team, including the right to sue, counterclaim and recover for all past, present and future infringement, misappropriation or dilution thereof, and all rights corresponding thereto throughout the world.
(17)    Internal Revenue Code Section 409A. Employee and Team acknowledge and agree that: the form and timing of any payments and benefits to be provided pursuant to this Agreement are either (i) intended to be exempt from or to comply with one or more exceptions to the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and applicable Treasury Regulations thereunder (“Section 409A”), including the requirement for a six-month suspension on payments or benefits to “specified employees” as defined in Section 409A that are not otherwise permitted to be paid within the six-month suspension period, or (ii) for the payments subject to the Special Vesting Agreement, comply with the payment timing rules under Section 409A. The parties further acknowledge and agree that for purposes of Section 409A, Employee does not have discretion with respect to the timing of the payment of any amounts provided under this Agreement. Notwithstanding any provision of this Agreement to the contrary, Team, its affiliates, subsidiaries, successors, and each of their respective officers, directors, employees and representatives, neither represent nor warrant the tax treatment under any federal, state, local, or foreign laws or regulations thereunder (individually and collectively referred to as the “Tax Laws”) of any payment or benefits contemplated by this Agreement including, but not limited to, when and to what extent such payments or benefits may be subject to tax, penalties and interest under the Tax Laws.
(18)    No Knowledge of Wrongdoing or Fraud.  Other than that which has been previously disclosed by Employee to the audit services department or senior officers of Team in writing prior to the Effective Date, Employee warrants that, to Employee’s knowledge, (i) Employee is not aware of any improper financial reporting, posting, or accounting irregularities at Team, including, but not limited to, fraud, embezzlement, malfeasance, or financial misrepresentations; and (ii) Employee fairly represented in all material respects the financial condition, results of operations, cash flows, and safety status of the operations under Employee’s control.

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(19)    Further Assurances and Cooperation. During Employee’s employment with Team and thereafter, Employee agrees to provide truthful testimony and information and to otherwise reasonably cooperate with Team or any of its affiliates, representatives, officers, directors, or agents in connection with the defense, prosecution, or evaluation of any pending or potential claims or proceedings involving or effecting Team that relate to any decisions in which Employee participated or any matter of which Employee has or had knowledge.
(20)    Venue; Applicable Law. The venue for any dispute between the parties arising from or relating to this Agreement or Employee’s obligations hereunder shall be exclusively in the federal and state courts of Harris County, Texas, unless another forum is required by applicable law. This Agreement shall be construed in accordance with the laws of the State of Texas, without regard to the conflict of law provisions of any jurisdiction.  
(21)    No Admission of Liability.  The parties understand and acknowledge that this Agreement constitutes a compromise and settlement of any current or potential claims. No action taken by the parties hereto, either previously or in connection with this Agreement shall be deemed or construed to be (a) an admission of the truth or falsity of any current or potential claims theretofore made, or (b) an acknowledgement or admission by either party of any fault or liability whatsoever to the other party or to any third party.
(22)    Representations; Modifications; Severability; Assignment.  Employee acknowledges that Employee has not relied upon any representations or statements, written or oral, not set forth in this Agreement. This Agreement cannot be modified except in writing and signed by both parties. If any part of this Agreement is found to be unenforceable by a court of competent jurisdiction, then such unenforceable portion shall be modified by the court to be enforceable. If modification is not possible, then such unenforceable provision will be severed from and shall have no effect upon the remaining portions of the Agreement. Team may assign its rights and obligations under this Agreement, and this Agreement inures to the benefit of any successor of Team.
(23)    No Waiver.  No failure by either party at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall (i) be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time or (ii) preclude insistence upon strict compliance in the future.
(24)    Notices.  Any notices regarding acceptance, rejection, revocation or any other matters arising under this Agreement shall be sent by a method of delivery which provides a receipt of delivery and shall be addressed as provided below. Any change of contact information listed below shall be promptly reported to the other party at the address below. Notices to Employee should be addressed to Employee’s home address on file with Team. Notices to Team should be addressed to the EVP, Chief Legal Officer for Team, Inc. located at 13131 Dairy Ashford, Suite 600, Sugar Land, Texas 77478. Such notice may be delivered by fax to 281.388.5583 or electronic mail (with confirmed receipt) to Butch.Bouchard@Teaminc.com. 
D.     MISCELLANEOUS TERMS AGREED TO BY THE PARTIES
In exchange for the promises made by and to Employee and Team, they mutually agree to the following terms:
(1)    Either party may enforce the Agreement in court if the other party breaches it.

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(2)    If a court or governmental agency finds any part illegal or refuses to enforce any part of the Agreement, the remainder of this Agreement will not be affected and will remain in force, with the specific exception that if the waiver and release of claims are found to be invalid or unenforceable, Employee agrees to return all amounts paid pursuant to this Agreement.
(3)    Team does not admit violating any state, federal, or local laws by entering into this Agreement.
(4)    This Agreement and the Reaffirmation to be signed on or after the Last Day of Employment contain the entire and only Agreement between Team and Employee regarding Employee’s transition duties and termination of employment. All oral or written promises or assurances that are not contained in the Agreement are waived, invalid, and unenforceable, other than any otherwise existing obligations of Employee under contract or under the law regarding duties of confidentiality, non-solicitation, or non-competition which shall remain in full force and effect. This Agreement may not be modified except in a writing signed by Employee and an authorized officer of Team.
(5)    Early Termination of Employment.  Team shall have the right to terminate Employee’s employment at any time for any reason. If Employee’s termination occurs after this Agreement has been presented to Employee and is determined by the CEO of the Company to have been for “Cause,” Employee shall not be entitled to any further payments or benefits under this Agreement and Team shall have the right to recover any benefits already provided under this Agreement. For purposes of this Agreement, “Cause” shall mean (i) the commission of a crime involving dishonesty, breach of trust, or physical harm to any person; (ii) employee willfully engages in conduct that is in bad faith and materially injurious to Team, including but not limited to, misappropriation of trade secrets, fraud, or embezzlement; (iii) a material breach of this Agreement or (iv) Employee’s willful refusal to implement or follow a lawful policy or directive of Team.  
Either party may terminate Employee’s employment at any time for any reason. In the event of such early termination for any reason other than for “Cause”, as described above, Employee shall be entitled to all payments and benefits due pursuant to Section B of this Agreement, except for the continuation of Base Salary beyond the actual termination date, as set forth in Sections B(1) and C(2) above. 
E.     EMPLOYEE’S ASSURANCES TO TEAM
The Agreement is a legal document with legal consequences. Team wants to be certain that Employee fully understands the legal effect of signing this Agreement. Employee, therefore, makes the following assurances:
(1)    Employee has carefully read the complete Agreement.
(2)    The Agreement is written in language that is understandable to Employee.
(3)    Employee understands all of the provisions of this Agreement.
(4)    Employee understands that this Agreement is a waiver of any and all rights Employee may  have against Team and all the other parties listed in Section C(4), including any and all rights under the Age Discrimination in Employment Act for claims of age discrimination.
(5)    Employee wants to enter this Agreement. Employee recognizes that the Agreement is financially beneficial to him and that Employee willingly waives any and all rights in exchange for the promises of Team in this Agreement.

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(6)    Employee enters this Agreement freely and voluntarily. Employee is not under coercion or duress whatsoever in considering or agreeing to the provisions of this Agreement.
(7)    Employee understands that this Agreement is a contract and that either party may enforce it.
(8)    Employee has been given a period of twenty-one (21) calendar days to consider the terms of the offer contained in this Agreement. This twenty-one (21) day period has provided Employee with sufficient time to consider his options and to seek the advice of legal counsel, tax or financial advisors, family members, and anyone else whose advice Employee values. Employee understands that Employee does not need to take twenty-one (21) calendar days to consider this Agreement if Employee does not wish to do so, but Employee understands that any decision to sign before that time has expired has been made voluntarily and not because of any fraud or coercion or improper conduct by Team. 
(9)    After signing this Agreement, Employee has a period of seven (7) calendar days to revoke. Employee can revoke this Agreement by notifying Team in writing of his wish to do so within the seven (7) day period. The notice of revocation must be sent as designated in the Notices Section. In fact, this Agreement is not effective until the eighth (8th) calendar day after it is signed by Employee, provided the Agreement is not revoked by that day (the “Effective Date”). No payments under this Agreement (other than continued regular compensation during employment) shall be made until after the Effective Date of this Agreement and under the Reaffirmation Agreement.
(10)    Employee agrees and acknowledges that, without all of his promises in this Agreement, Employee is not otherwise entitled to any consideration or amount(s) that may be paid under this Agreement.
(11)    Team has urged Employee, in writing, to review this document with Employee’s lawyer prior to signing.

PLEASE READ AND CONSIDER THIS AGREEMENT CAREFULLY BEFORE SIGNING IT. THIS AGREEMENT CONTAINS A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS EMPLOYEE MAY HAVE AGAINST TEAM.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth below with their signatures.
Employee:
	
			
	/s/ Arthur F. Victorson
	 
	July 2, 2018

	 
	 
	 

	ARTHUR F. VICTORSON
	 
	(Date Signed)

	
					
	TEAM, INC.
	 
	 

	 
	 
	 
	 
	 

	By:
	/s/ Amerino Gatti
	 
	July 2, 2018

	 
	 
	 
	 
	(Date Signed)

	 
	 
	 
	 
	 

	Name:
	Amerino Gatti
	 
	 

	 
	 
	 
	 
	 

	Its:
	Chief Executive Officer
	 
	 

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Exhibit “A”
Team, Inc. Unvested Restricted Stock Units 

Vesting and Delivery Schedule

	
									
	Original
	 
	Original
	

	 
	Current
	

	 
	Future

	Grant Date
	 
	# Granted
	

	 
	# Unvested1
	

	 
	Delivery Dates

	 
	 
	 
	 
	 
	 
	 

	November 4, 2014
	 
	6,527
	

	 
	1,632
	

	 
	October 15, 2018

	October 15, 2015
	 
	7,876
	

	 
	1,969
	

	 
	October 15, 2018

	 
	 
	 
	 
	1,969
	

	 
	October 15, 2019

	November 15, 2016
	 
	8,407
	

	 
	2,102
	

	 
	November 15, 2018

	 
	 
	 
	 
	2,102
	

	 
	November 15, 2019

	 
	 
	 
	 
	2,102
	

	 
	November 15, 2020

	September 18, 2017
	 
	35,186
	

	 
	35,186
	

	 
	September 18, 2019

	November 15, 2017
	 
	15,805
	

	 
	3,951
	

	 
	November 15, 2018

	 
	 
	 
	 
	3,951
	

	 
	November 15, 2019

	 
	 
	 
	 
	3,951
	

	 
	November 15, 2020

	 
	 
	 
	 
	3,952
	

	 
	November 15, 2021

	 
	 
	 
	 
	62,867
	

	 
	 

__________________________________
1 Estimated delivery amounts, prior to withholding for taxes.

14

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