Exhibit 10.3

SUBSIDIARY GUARANTY AGREEMENT

THIS SUBSIDIARY GUARANTY AGREEMENT dated as of August 27, 2013 (this
“Agreement”), is being entered into among EACH OF THE UNDERSIGNED AND EACH OTHER
PERSON WHO SHALL BECOME A PARTY HERETO BY EXECUTION OF A SUBSIDIARY GUARANTY
JOINDER AGREEMENT (each a “Subsidiary Guarantor” and collectively the
“Subsidiary Guarantors”) and BANK OF AMERICA, N.A., as Administrative Agent (in
such capacity, the “Administrative Agent”) for each of the Secured Parties (as
defined in the Credit Agreement referenced below). All capitalized terms used
but not otherwise defined herein shall have the meanings ascribed to such terms
in the Credit Agreement.

RECITALS:

A. Pursuant to a Credit Agreement dated as of the date hereof (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among CECO Environmental Corp., a Delaware corporation (the
“Company”), certain Subsidiaries of the Company party thereto (each a
“Designated Borrower” and, together with the Company, the “Borrowers” and each a
“Borrower”), the Administrative Agent, Bank of America, N.A., as Swing Line
Lender and an L/C Issuer, the lenders now or hereafter party thereto (the
“Lenders”) and the other L/C Issuers now or hereafter party thereto, the Lenders
and the L/C Issuers have agreed to provide to the Borrowers a revolving credit
facility with a letter of credit subfacility and a swing line subfacility, a
multicurrency revolving credit facility and a term loan facility.

B. Certain additional extensions of credit may be made from time to time for the
benefit of the Subsidiary Guarantors pursuant to certain Secured Cash Management
Agreements and Secured Hedge Agreements.

C. It is a condition precedent to the Secured Parties’ obligations to make and
maintain the extensions of credit described in Recitals A and B that the
Subsidiary Guarantors shall have executed and delivered this Agreement to the
Administrative Agent.

D. Each Subsidiary Guarantor is, directly or indirectly, a Subsidiary of the
Company, engaged in interrelated business with the Loan Parties and will
materially benefit from the extensions of credit described in Recitals A and B.
The credit extended under the Credit Agreement, the Secured Cash Management
Agreements and the Secured Hedge Agreements will be used in part to enable the
Loan Parties to make valuable transfers to the Subsidiary Guarantors in
connection with the operation of their respective businesses. The credit
extended under the Credit Agreement, the Secured Cash Management Agreements and
the Secured Hedge Agreements will enhance the overall financial strength and
stability of the Company’s consolidated group of companies, including the
Subsidiary Guarantors.

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In order to induce the Secured Parties to from time to time make and maintain
extensions of credit under the Credit Agreement and under the Secured Cash
Management Agreements and Secured Hedge Agreements, the parties hereto agree as
follows:

1. Guaranty. Each Subsidiary Guarantor hereby jointly and severally,
unconditionally, absolutely, continually and irrevocably guarantees to the
Administrative Agent for the benefit of the Secured Parties the payment and
performance in full of the Guaranteed Liabilities (as defined below). For all
purposes of this Agreement, “Guaranteed Liabilities” means: (a) each Borrower’s
prompt payment in full, when due or declared due and at all such times, of all
Obligations and all other amounts pursuant to the terms of the Credit Agreement,
the Notes, and all other Loan Documents heretofore, now or at any time or times
hereafter owing, arising, due or payable from any Borrower to any one or more of
the Secured Parties, including principal, interest, premiums, fees and
documented and out-of-pocket expenses (including all documented and
out-of-pocket fees and expenses of counsel required to be paid or reimbursed
under any Loan Document (collectively, “Attorneys’ Costs”)); (b) each Loan
Party’s prompt, full and faithful performance, observance and discharge of each
and every agreement, undertaking, covenant and provision to be performed,
observed or discharged by such Loan Party under the Credit Agreement, the Notes
and all other Loan Documents; and (c) the prompt payment in full by each Loan
Party, when due or declared due and at all such times, of obligations and
liabilities now or hereafter arising under the Secured Cash Management
Agreements and Secured Hedge Agreements; provided that the Guaranteed
Liabilities of a Subsidiary Guarantor shall exclude any Excluded Swap
Obligations with respect to such Subsidiary Guarantor. The Subsidiary
Guarantors’ obligations to the Secured Parties under this Agreement are
hereinafter collectively referred to as the “Subsidiary Guarantors’ Obligations”
and, with respect to each Subsidiary Guarantor individually, the “Subsidiary
Guarantor’s Obligations”. Notwithstanding the foregoing, the liability of each
Subsidiary Guarantor individually with respect to its Subsidiary Guarantor’s
Obligations shall be limited to an aggregate amount equal to the largest amount
that would not render its obligations hereunder subject to avoidance under
Section 548 of the United States Bankruptcy Code or any comparable provisions of
any applicable state law.

Each Subsidiary Guarantor agrees that it is jointly and severally, directly and
primarily liable (subject to the limitation in the immediately preceding
sentence) for the Guaranteed Liabilities.

The Subsidiary Guarantors’ Obligations are secured by various Collateral
Documents referred to in the Credit Agreement, including without limitation the
Security Agreement, the Pledge Agreement and each Mortgage.

2. Payment. If any Borrower or any other Loan Party shall default in payment or
performance of any of the Guaranteed Liabilities, whether principal, interest,
premium, fees (including, but not limited to, Attorneys’ Costs), or otherwise,
when and as the same shall become due, and after expiration of any applicable
grace period, whether according to the terms of the Credit Agreement or any
other Loan Document, by acceleration, or otherwise, or upon the occurrence and
during the continuance of any Event of Default, then any or all of the
Subsidiary Guarantors will, upon demand thereof by the Administrative Agent,
(i) fully pay to the Administrative Agent, for the benefit of the Secured
Parties, subject to any restriction on each Subsidiary Guarantor’s Obligations
set forth in Section 1, an amount equal to all the Guaranteed Liabilities then
due and owing or declared or deemed to be due and owing, including for this
purpose, in the event of any Event of Default under Section 8.01(f) of the
Credit Agreement (and irrespective of the applicability of any restriction on
acceleration or other action as against any

 

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other Loan Party under any Debtor Relief Laws), the entire outstanding or
accrued amount of all Obligations or (ii) perform such Guaranteed Liabilities,
as applicable. For purposes of this Section 2, the Subsidiary Guarantors
acknowledge and agree that “Guaranteed Liabilities” shall be deemed to include
any amount (whether principal, interest, premium, fees) which would have been
accelerated in accordance with Section 8.02 of the Credit Agreement but for the
fact that such acceleration could be unenforceable or not allowable under any
Debtor Relief Law.

3. Absolute Rights and Obligations. This is a guaranty of payment and not of
collection. The Subsidiary Guarantors’ Obligations under this Agreement shall be
joint and several, absolute and unconditional irrespective of, and each
Subsidiary Guarantor hereby expressly waives, to the extent permitted by law,
any defense to its obligations under this Agreement and all Collateral Documents
to which it is a party by reason of:

(a) any lack of legality, validity or enforceability of the Credit Agreement, of
any of the Notes, of any other Loan Document, or of any other agreement or
instrument creating, providing security for, or otherwise relating to any of the
Subsidiary Guarantors’ Obligations, any of the Guaranteed Liabilities, or any
other guaranty of any of the Guaranteed Liabilities (the Loan Documents and all
such other agreements and instruments being collectively referred to as the
“Related Agreements”);

(b) any action taken under any of the Related Agreements, any exercise of any
right or power therein conferred, any failure or omission to enforce any right
conferred thereby, or any waiver of any covenant or condition therein provided;

(c) any acceleration of the maturity of any of the Guaranteed Liabilities, of
the Subsidiary Guarantor’s Obligations of any other Subsidiary Guarantor, or of
any other obligations or liabilities of any Person under any of the Related
Agreements;

(d) any release, exchange, non-perfection, lapse in perfection, disposal,
deterioration in value, or impairment of any security for any of the Guaranteed
Liabilities, for any of the Subsidiary Guarantor’s Obligations of any Subsidiary
Guarantor, or for any other obligations or liabilities of any Person under any
of the Related Agreements;

(e) any dissolution of any Borrower, any Subsidiary Guarantor, any other Loan
Party or any other party to a Related Agreement, or the combination or
consolidation of any Borrower, any Subsidiary Guarantor, any other Loan Party or
any other party to a Related Agreement into or with another entity or any
transfer or disposition of any assets of any Borrower, any Subsidiary Guarantor
or any other Loan Party or any other party to a Related Agreement;

(f) any extension (including without limitation extensions of time for payment),
renewal, amendment, restructuring or restatement of, any acceptance of late or
partial payments under, or any change in the amount of any borrowings or any
credit facilities available under, the Credit Agreement, any of the Notes or any
other Loan Document or any other Related Agreement, in whole or in part;

 

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(g) the existence, addition, modification, termination, reduction or impairment
of value, or release of any other guaranty (or security therefor) of the
Guaranteed Liabilities (including without limitation the Subsidiary Guarantor’s
Obligations of any other Subsidiary Guarantor and obligations arising under any
other Loan Document now or hereafter in effect);

(h) any waiver of, forbearance or indulgence under, or other consent to any
change in or departure from any term or provision contained in the Credit
Agreement, any other Loan Document or any other Related Agreement, including
without limitation any term pertaining to the payment or performance of any of
the Guaranteed Liabilities, any of the Subsidiary Guarantor’s Obligations of any
other Subsidiary Guarantor, or any of the obligations or liabilities of any
party to any other Related Agreement; or

(i) any other circumstance whatsoever (with or without notice to or knowledge of
any Subsidiary Guarantor or any other Loan Party) which might in any manner or
to any extent vary the risks of such Subsidiary Guarantor or Loan Party, or
might otherwise constitute a legal or equitable defense available to, or
discharge of, a surety or a guarantor, including without limitation any right to
require or claim that resort be had to any Borrower or any other Loan Party or
to any collateral in respect of the Guaranteed Liabilities or Subsidiary
Guarantors’ Obligations.

It is the express purpose and intent of the parties hereto that this Agreement
and the Subsidiary Guarantors’ Obligations hereunder and under each Subsidiary
Guaranty Joinder Agreement shall be absolute and unconditional under any and all
circumstances and shall not be discharged except by payment and performance as
herein provided.

4. Currency and Funds of Payment. All Subsidiary Guarantors’ Obligations for
payment will be paid in Dollars and in immediately available funds, regardless
of any law, regulation or decree now or hereafter in effect that might in any
manner affect the Guaranteed Liabilities, or the rights of any Secured Party
with respect thereto as against any Borrower or any other Loan Party, or cause
or permit to be invoked any alteration in the time, amount or manner of payment
by any Borrower or any other Loan Party of any or all of the Guaranteed
Liabilities. If, for the proposes of obtaining judgment in any court, it is
necessary to convert a sum due hereunder or any other Loan Document in one
currency into another currency, the rate of exchange used shall be that at which
in accordance with normal banking procedures the Administrative Agent could
purchase the first currency with such other currency on the Business Day
preceding that on which final judgment is given. The obligation of each
Subsidiary Guarantor in respect of any such sum due from it to the
Administrative Agent, any Lender or any L/C Issuer hereunder or under the other
Loan Documents shall, notwithstanding any judgment in a currency (the “Judgment
Currency”) other than that in which such sum is denominated in accordance with
the applicable provisions of this Agreement (the “Agreement Currency”), be
discharged only to the extent that on the Business Day following receipt by the
Administrative Agent, such Lender or such L/C Issuer, as the case may be, of any
sum adjudicated to be so due in the Judgment Currency, the Administrative Agent,
such Lender or such L/C Issuer, as the case may be, may in accordance with
normal banking procedures purchase the Agreement Currency

 

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with the Judgment Currency. If the amount of the Agreement Currency so purchased
is less than the sum originally due to the Administrative Agent, any Lender or
any L/C Issuer from any Subsidiary Guarantor in the Agreement Currency, such
Subsidiary Guarantor agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify the Administrative Agent, such Lender or such L/C
Issuer, as the case may be, against such loss. If the amount of the Agreement
Currency so purchased is greater than the sum originally due to the
Administrative Agent, any Lender or any L/C Issuer in such currency, the
Administrative Agent, such Lender or such L/C Issuer, as the case may be, agrees
to return the amount of any excess to such Subsidiary Guarantor (or to any other
Person who may be entitled thereto under applicable law).

5. Events of Default. Without limiting the provisions of Section 2, in the event
that there shall occur and be continuing an Event of Default, then
notwithstanding any collateral or other security or credit support for the
Guaranteed Liabilities, at the Administrative Agent’s election and without
notice thereof or demand therefor, each of the Guaranteed Liabilities and the
Subsidiary Guarantors’ Obligations shall immediately be and become due and
payable.

6. Subordination. Until this Agreement is terminated in accordance with
Section 22, each Subsidiary Guarantor hereby unconditionally subordinates all
present and future debts, liabilities or obligations now or hereafter owing to
such Subsidiary Guarantor (a) by each Borrower, to the payment in full of the
Guaranteed Liabilities, (b) by every other Subsidiary Guarantor (an “obligated
guarantor”), to the payment in full of the Subsidiary Guarantors’ Obligations of
such obligated guarantor, and (c) by each other Person now or hereafter
constituting a Loan Party, to the payment in full of the obligations of such
Loan Party owing to any Secured Party and arising under the Loan Documents or
any Secured Cash Management Agreement or Secured Hedge Agreement. All amounts
due under such subordinated debts, liabilities, or obligations shall, upon the
occurrence and during the continuance of an Event of Default, be collected and,
upon request by the Administrative Agent, paid over forthwith to the
Administrative Agent for the benefit of the Secured Parties on account of the
Guaranteed Liabilities, the Subsidiary Guarantors’ Obligations, or such other
obligations, as applicable, and, after such request and pending such payment,
shall be held by such Subsidiary Guarantor as agent and bailee of the Secured
Parties separate and apart from all other funds, property and accounts of such
Subsidiary Guarantor.

7. Suits. Each Subsidiary Guarantor from time to time shall pay to the
Administrative Agent for the benefit of the Secured Parties, on demand, at the
Administrative Agent’s Office or such other address as the Administrative Agent
shall give notice of to such Subsidiary Guarantor, the Subsidiary Guarantors’
Obligations as they become or are declared due, and in the event such payment is
not made forthwith, the Administrative Agent may proceed to suit against any one
or more or all of the Subsidiary Guarantors. At the Administrative Agent’s
election, one or more and successive or concurrent suits may be brought hereon
by the Administrative Agent against any one or more or all of the Subsidiary
Guarantors, whether or not suit has been commenced against any Borrower, any
other Subsidiary Guarantor, or any other Person and whether or not the Secured
Parties have taken or failed to take any other action to collect all or any
portion of the Guaranteed Liabilities or have taken or failed to take any
actions against any collateral securing payment or performance of all or any
portion of the Guaranteed Liabilities, and irrespective of any event,
occurrence, or condition described in Section 3.

 

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8. Set-Off and Waiver. Each Subsidiary Guarantor waives any right to assert any
reduction of such Subsidiary Guarantor’s Obligations as a result of any
counterclaim, set-off, recoupment or cross claim such Subsidiary Guarantor may
now or at any time hereafter have against any Borrower, any other Loan Party or
any or all of the Secured Parties without waiving any additional defenses,
set-offs, counterclaims or other claims otherwise available to such Subsidiary
Guarantor. Each Subsidiary Guarantor agrees that each Secured Party shall have a
lien for all the Subsidiary Guarantor’s Obligations upon all deposits or deposit
accounts, of any kind, or any interest in any deposits or deposit accounts, now
or hereafter pledged, mortgaged, transferred or assigned to such Secured Party
or otherwise in the possession or control of such Secured Party for any purpose
(other than solely for safekeeping) for the account or benefit of such
Subsidiary Guarantor, including any balance of any deposit account or of any
credit of such Subsidiary Guarantor with the Secured Party, whether now existing
or hereafter established, and hereby authorizes each Secured Party at any time
or times from and after the occurrence of an Event of Default and during the
continuance thereof with or without prior notice to apply such balances or any
part thereof to such of the Subsidiary Guarantor’s Obligations to the Secured
Parties then due and in such amounts as provided for in the Credit Agreement
(but subject to the limitation on each Subsidiary Guarantor’s Obligations set
forth in Section 1) as they may elect. For the purposes of this Section 8, all
remittances and property shall be deemed to be in the possession of a Secured
Party as soon as the same is put in transit to it by mail or courier or by other
bailee.

9. Waiver of Notice; Subrogation.

(a) Each Subsidiary Guarantor hereby waives to the extent permitted by law
notice of the following events or occurrences: (i) acceptance of this Agreement;
(ii) the Lenders’ heretofore, now or from time to time hereafter making Loans
and issuing Letters of Credit and otherwise loaning monies or giving or
extending credit to or for the benefit of any Borrower or any other Loan Party,
or otherwise entering into arrangements with any Loan Party giving rise to
Guaranteed Liabilities, whether pursuant to the Credit Agreement or the Notes or
any other Loan Document or Related Agreement or any amendments, modifications,
or supplements thereto, or replacements or extensions thereof;
(iii) presentment, demand, default, non-payment, partial payment and protest;
and (iv) any other event, condition, or occurrence described in Section 3. Each
Subsidiary Guarantor agrees that each Secured Party may heretofore, now or at
any time hereafter do any or all of the foregoing in such manner, upon such
terms and at such times as each Secured Party, in its sole and absolute
discretion, deems advisable, without in any way or respect impairing, affecting,
reducing or releasing such Subsidiary Guarantor from its Subsidiary Guarantor’s
Obligations, and each Subsidiary Guarantor hereby consents to each and all of
the foregoing events or occurrences.

 

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(b) Each Subsidiary Guarantor hereby agrees that payment or performance by such
Subsidiary Guarantor of its Subsidiary Guarantor’s Obligations under this
Agreement may be enforced by the Administrative Agent on behalf of the Secured
Parties upon demand by the Administrative Agent to such Subsidiary Guarantor
without the Administrative Agent being required, such Subsidiary Guarantor
expressly waiving to the extent permitted by law any right it may have to
require the Administrative Agent, to (i) prosecute collection or seek to enforce
or resort to any remedies against any Borrower or any other Subsidiary Guarantor
or any other guarantor of the Guaranteed Liabilities, or (ii) seek to enforce or
resort to any remedies with respect to any security interests, Liens or
encumbrances granted to the Administrative Agent or any Lender or other party to
a Related Agreement by any Borrower, any other Subsidiary Guarantor or any other
Person on account of the Guaranteed Liabilities or any guaranty thereof, IT
BEING EXPRESSLY UNDERSTOOD, ACKNOWLEDGED AND AGREED TO BY SUCH SUBSIDIARY
GUARANTOR THAT DEMAND UNDER THIS AGREEMENT MAY BE MADE BY THE ADMINISTRATIVE
AGENT, AND THE PROVISIONS HEREOF ENFORCED BY THE ADMINISTRATIVE AGENT, EFFECTIVE
AS OF THE FIRST DATE ANY EVENT OF DEFAULT OCCURS AND IS CONTINUING UNDER THE
CREDIT AGREEMENT.

(c) Each Subsidiary Guarantor further agrees that with respect to this
Agreement, such Subsidiary Guarantor shall not exercise any of its rights of
subrogation, reimbursement, contribution, indemnity or recourse to security for
the Guaranteed Liabilities until 93 days immediately following the Facility
Termination Date shall have elapsed without the filing or commencement, by or
against any Loan Party, of any state or federal action, suit, petition or
proceeding seeking any reorganization, liquidation or other relief or
arrangement in respect of creditors of, or the appointment of a receiver,
liquidator, trustee or conservator in respect to, such Loan Party or its assets.
If an amount shall be paid to any Subsidiary Guarantor on account of such rights
at any time prior to termination of this Agreement in accordance with the
provisions of Section 22, such amount shall be held in trust for the benefit of
the Secured Parties and shall forthwith be paid to the Administrative Agent, for
the benefit of the Secured Parties, to be credited and applied upon the
Subsidiary Guarantors’ Obligations, whether matured or unmatured, in accordance
with the terms of the Credit Agreement or otherwise as the Secured Parties may
elect. The agreements in this subsection shall survive repayment of all of the
Subsidiary Guarantors’ Obligations, the termination or expiration of this
Agreement in any manner, including but not limited to termination in accordance
with Section 22, and occurrence of the Facility Termination Date.

10. Effectiveness; Enforceability. This Agreement shall be effective as of the
date first above written and shall continue in full force and effect until
termination in accordance with Section 22. Any claim or claims that the Secured
Parties may at any time hereafter have against a Subsidiary Guarantor under this
Agreement may be asserted by the Administrative Agent on behalf of the Secured
Parties by written notice directed to such Subsidiary Guarantor in accordance
with Section 24.

11. Representations and Warranties. Each Subsidiary Guarantor warrants and
represents to the Administrative Agent, for the benefit of the Secured Parties,
that (a) it is duly authorized to execute and deliver this Agreement (or the
Subsidiary Guaranty Joinder Agreement to which it is a party, as applicable),
and to perform its obligations under this Agreement; (b) this

 

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Agreement (or the Subsidiary Guaranty Joinder Agreement to which it is a party,
as applicable) has been duly executed and delivered on behalf of such Subsidiary
Guarantor by its duly authorized representatives; (c) this Agreement (and any
Subsidiary Guaranty Joinder Agreement to which such Subsidiary Guarantor is a
party) is legal, valid, binding and enforceable against such Subsidiary
Guarantor in accordance with its terms except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors’ rights generally and by general equitable
principles; and (d) such Subsidiary Guarantor’s execution, delivery and
performance of this Agreement (and any Subsidiary Guaranty Joinder Agreement to
which such Subsidiary Guarantor is a party) do not violate or constitute a
breach of (i) any of its Organization Documents, (ii) any agreement or
instrument to which such Subsidiary Guarantor is a party, or (iii) any Law to
which it or its properties or operations is subject.

12. Expenses and Indemnity. Each Subsidiary Guarantor agrees to be jointly and
severally liable for the payment of all reasonable fees and expenses, including
Attorneys’ Costs, incurred by any Secured Party in connection with the
enforcement of this Agreement, whether or not suit be brought. Without
limitation of any other obligations of any Subsidiary Guarantor or remedies of
the Administrative Agent or any other Secured Party under this Agreement, each
Subsidiary Guarantor shall, to the fullest extent permitted by Law, indemnify,
defend and save and hold harmless the Administrative Agent and each other
Secured Party from and against, and shall pay on demand, any and all damages,
losses, liabilities and expenses (including Attorneys’ Costs) that may be
suffered or incurred by the Administrative Agent or such Secured Party in
connection with or as a result of any failure of any Guaranteed Liabilities to
be the legal, valid and binding obligations of any Borrower or any other
applicable Loan Party enforceable against such Borrower or such other applicable
Loan Party in accordance with their terms. The obligations of each Subsidiary
Guarantor under this paragraph shall survive the payment in full of the
Guaranteed Liabilities and termination of this Agreement.

13. Reinstatement. Each Subsidiary Guarantor agrees that this Agreement shall
continue to be effective or be reinstated, as the case may be, at any time
payment received by any Secured Party in respect of any Guaranteed Liabilities
is rescinded or must be restored for any reason, or is repaid by any Secured
Party in whole or in part in good faith settlement of any pending or threatened
avoidance claim.

14. Attorney-in-Fact. To the extent permitted by law, each Subsidiary Guarantor
hereby appoints the Administrative Agent, for the benefit of the Secured
Parties, as such Subsidiary Guarantor’s attorney-in-fact for the purposes of
carrying out the provisions of this Agreement and taking any action and
executing any instrument which the Administrative Agent may deem necessary or
advisable to accomplish the purposes hereof, which appointment is coupled with
an interest and is irrevocable; provided that the Administrative Agent shall
have and may exercise rights under this power of attorney only upon the
occurrence and during the continuance of an Event of Default.

 

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15. Reliance. Each Subsidiary Guarantor represents and warrants to the
Administrative Agent, for the benefit of the Secured Parties, that: (a) such
Subsidiary Guarantor has adequate means to obtain on a continuing basis (i) from
the Borrowers, information concerning the Loan Parties and the Loan Parties’
financial condition and affairs and (ii) from other reliable sources, such other
information as it deems material in deciding to provide this Agreement and any
Subsidiary Guaranty Joinder Agreement (“Other Information”), and has full and
complete access to the Loan Parties’ books and records and to such Other
Information; (b) such Subsidiary Guarantor is not relying on any Secured Party
or its or their employees, directors, agents or other representatives or
Affiliates, to provide any such information, now or in the future; (c) such
Subsidiary Guarantor has been furnished with and reviewed the terms of the
Credit Agreement and such other Loan Documents and Related Agreements as it has
requested, is executing this Agreement (or the Subsidiary Guaranty Joinder
Agreement to which it is a party, as applicable) freely and deliberately, and
understands the obligations and financial risk undertaken by providing this
Agreement (and any Subsidiary Guaranty Joinder Agreement); (d) such Subsidiary
Guarantor has relied solely on the Subsidiary Guarantor’s own independent
investigation, appraisal and analysis of the Borrowers and the other Loan
Parties, such Persons’ financial condition and affairs, the Other Information,
and such other matters as it deems material in deciding to provide this
Agreement (and any Subsidiary Guaranty Joinder Agreement) and is fully aware of
the same; and (e) such Subsidiary Guarantor has not depended or relied on any
Secured Party or its or their employees, directors, agents or other
representatives or Affiliates, for any information whatsoever concerning any
Borrower or any Borrower’s financial condition and affairs or any other matters
material to such Subsidiary Guarantor’s decision to provide this Agreement (and
any Subsidiary Guaranty Joinder Agreement), or for any counseling, guidance, or
special consideration or any promise therefor with respect to such decision.
Each Subsidiary Guarantor agrees that no Secured Party has any duty or
responsibility whatsoever, now or in the future, to provide to such Subsidiary
Guarantor any information concerning any Borrower or any other Loan Party or
such Persons’ financial condition and affairs, or any Other Information, other
than as expressly provided herein, and that, if such Subsidiary Guarantor
receives any such information from any Secured Party or its or their employees,
directors, agents or other representatives or Affiliates, such Subsidiary
Guarantor will independently verify the information and will not rely on any
Secured Party or its or their employees, directors, agents or other
representatives or Affiliates, with respect to such information.

16. Rules of Interpretation. The rules of interpretation contained in
Section 1.02 of the Credit Agreement shall be applicable to this Agreement and
each Subsidiary Guaranty Joinder Agreement and are hereby incorporated by
reference. All representations and warranties contained herein shall survive the
delivery of documents and any extension of credit referred to herein or
guaranteed hereby.

17. Entire Agreement. This Agreement and each Subsidiary Guaranty Joinder
Agreement, together with the Credit Agreement and other Loan Documents,
constitute and express the entire understanding between the parties hereto with
respect to the subject matter hereof, and supersede all prior negotiations,
agreements, understandings, inducements, commitments or conditions, express or
implied, oral or written, except as herein contained. The express terms hereof
control and supersede any course of performance or usage of the trade
inconsistent with any of the terms hereof. Except as provided in Section 22,
neither this Agreement nor any Subsidiary Guaranty Joinder Agreement nor any
portion or provision hereof or thereof may be changed, altered, modified,
supplemented, discharged, canceled, terminated, or amended orally or in any
manner other than as provided in the Credit Agreement.

 

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18. Binding Agreement; Assignment. This Agreement, each Subsidiary Guaranty
Joinder Agreement and the terms, covenants and conditions hereof and thereof,
shall be binding upon and inure to the benefit of the parties hereto and
thereto, and to their respective successors and assigns; provided, however, that
no Subsidiary Guarantor shall be permitted to assign any of its rights, powers,
duties or obligations under this Agreement, any Subsidiary Guaranty Joinder
Agreement or any other interest herein or therein except as expressly permitted
herein or in the Credit Agreement. Without limiting the generality of the
foregoing sentence of this Section 18, any Lender may assign to one or more
Persons, or grant to one or more Persons participations in or to, all or any
part of its rights and obligations under the Credit Agreement (to the extent
permitted by the Credit Agreement); and to the extent of any such assignment or
participation such other Person shall, to the fullest extent permitted by law,
thereupon become vested with all the benefits in respect thereof granted to such
Lender herein or otherwise, subject however, to the provisions of the Credit
Agreement, including Article IX thereof (concerning the Administrative Agent)
and Section 10.06 thereof concerning assignments and participations. All
references herein to the Administrative Agent shall include any successor
thereof.

19. Secured Cash Management Agreements and Secured Hedging Agreements. No
Secured Party (other than the Administrative Agent) that obtains the benefit of
this Agreement shall have any right to notice of any action or to consent to,
direct or object to any action hereunder (including the release, impairment or
modification of any Subsidiary Guarantors’ Obligations or security therefor)
other than in its capacity as a Lender or an L/C Issuer and, in each such case,
only to the extent expressly provided in the Loan Documents. Notwithstanding any
other provision of this Agreement to the contrary, the Administrative Agent
shall only be required to verify the payment of, or that other satisfactory
arrangement have been made with respect to, the Guaranteed Liabilities arising
under Secured Cash Management Agreements and Secured Hedge Agreements to the
extent the Administrative Agent has received written notice of such Obligations,
together with such supporting documentation as it may request, from the
applicable Cash Management Bank or Hedge Bank, as the case may be. Each Secured
Party not a party to the Credit Agreement that obtains the benefit of this
Agreement shall be deemed to have acknowledged and accepted the appointment of
the Administrative Agent pursuant to the terms of the Credit Agreement, and that
with respect to the actions and omissions of the Administrative Agent hereunder
or otherwise relating hereto that do or may affect such Secured Party, the
Administrative Agent and each of its Related Parties shall be entitled to all
the rights, benefits and immunities conferred under Article IX of the Credit
Agreement.

20. Severability. If any provision of this Agreement is held to be illegal,
invalid or unenforceable, (a) the legality, validity and enforceability of the
remaining provisions of this Agreement shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

10

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21. Counterparts. This Agreement may be executed in any number of counterparts
each of which when so executed and delivered shall be deemed an original, and it
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart executed by the Subsidiary Guarantors against
whom enforcement is sought. Without limiting the foregoing provisions of this
Section 21, the provisions of Section 10.10 of the Credit Agreement shall be
applicable to this Agreement.

22. Termination. Subject to reinstatement pursuant to Section 13, this Agreement
and each Subsidiary Guaranty Joinder Agreement, and all of the Subsidiary
Guarantors’ Obligations hereunder (excluding those Subsidiary Guarantors’
Obligations relating to Guaranteed Liabilities that expressly survive such
termination) shall terminate on the Facility Termination Date.

23. Remedies Cumulative; Late Payments. All remedies hereunder are cumulative
and are not exclusive of any other rights and remedies of the Administrative
Agent or any other Secured Party provided by law or under the Credit Agreement,
the other Loan Documents or other applicable agreements or instruments. The
making of the Loans and other credit extensions pursuant to the Credit Agreement
and other Related Agreements shall be conclusively presumed to have been made or
extended, respectively, in reliance upon each Subsidiary Guarantor’s guaranty of
the Guaranteed Liabilities pursuant to the terms hereof. Any amounts not paid
when due under this Agreement shall bear interest at the Default Rate.

24. Notices. Any notice required or permitted hereunder or under any Subsidiary
Guaranty Joinder Agreement shall be given, (a) with respect to each Subsidiary
Guarantor, at the address of the Company indicated in Schedule 10.02 of the
Credit Agreement and (b) with respect to the Administrative Agent or any other
Secured Party, at the Administrative Agent’s address indicated in Schedule 10.02
of the Credit Agreement. All such addresses may be modified, and all such
notices shall be given and shall be effective, as provided in Section 10.02 of
the Credit Agreement for the giving and effectiveness of notices and
modifications of addresses thereunder.

25. Joinder. Each Person that shall at any time execute and deliver to the
Administrative Agent a Subsidiary Guaranty Joinder Agreement substantially in
the form attached hereto as Exhibit A shall thereupon irrevocably, absolutely
and unconditionally become a party hereto and obligated hereunder as a
Subsidiary Guarantor, and all references herein and in the other Loan Documents
to the Subsidiary Guarantors or to the parties to this Agreement shall be deemed
to include such Person as a Subsidiary Guarantor hereunder.

26. Governing Law; Jurisdiction; Etc.

(a) GOVERNING LAW. THIS AGREEMENT AND EACH SUBSIDIARY GUARANTY JOINDER AGREEMENT
AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR
TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY SUBSIDIARY GUARANTY JOINDER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.

 

11

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(b) SUBMISSION TO JURISDICTION. EXCEPT TO THE EXTENT MANDATED BY APPLICABLE LAW
OR RULES OF PROCEDURE, EACH SUBSIDIARY GUARANTOR IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY
KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR
OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER, ANY L/C ISSUER, OR ANY
RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS AGREEMENT OR ANY
SUBSIDIARY GUARANTY JOINDER AGREEMENT OR THE TRANSACTIONS RELATING HERETO OR
THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF NEW YORK SITTING IN
NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT
OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE PARTIES
HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH
COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION, LITIGATION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
AGREEMENT OR IN ANY SUBSIDIARY GUARANTY JOINDER AGREEMENT SHALL AFFECT ANY RIGHT
THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY L/C ISSUER MAY OTHERWISE HAVE
TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY SUBSIDIARY
GUARANTY JOINDER AGREEMENT AGAINST ANY SUBSIDIARY GUARANTOR OR ITS PROPERTIES IN
THE COURTS OF ANY JURISDICTION.

(c) WAIVER OF VENUE. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY SUBSIDIARY GUARANTY JOINDER AGREEMENT IN
ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.

 

12

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(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 24. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.

27. Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY SUBSIDIARY GUARANTY JOINDER AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR
ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT OR ANY SUBSIDIARY GUARANTY JOINDER
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

28. Keepwell. Each Subsidiary Guarantor that is a Designated Borrower (a
“Designated Borrower Subsidiary Guarantor” and collectively, the “Designated
Borrower Subsidiary Guarantors”) hereby absolutely, unconditionally and
irrevocably undertake to provide such funds or other support to each other
Subsidiary Guarantor as may be needed by such other Subsidiary Guarantor from
time to time to honor all of its obligations under this Agreement and the other
Loan Documents to which it is a party in respect of Swap Obligations that would,
in absence of the agreement in this Section 28, otherwise constitute Excluded
Swap Obligations (but, in each case, only up to the maximum amount of such
liability that can be hereby incurred without rendering the Designated Borrower
Subsidiary Guarantors’ obligations and undertakings under this Section 28
voidable under applicable law relating to fraudulent conveyance or fraudulent
transfer, and not for any greater amount). The obligations and undertakings of
the Designated Borrower Subsidiary Guarantors under this Section 28 shall remain
in full force and effect until the Subsidiary Guarantors’ Obligations have been
indefeasibly paid and performed in full. Each Designated Borrower Subsidiary
Guarantor intends this Section 28 to constitute, and this Section 28 shall be
deemed to constitute, a guarantee of the obligations of, and a “keepwell,
support, or other agreement” for the benefit of, each other Subsidiary Guarantor
for all purposes of the Commodity Exchange Act.

[Signature pages follow.]

 

13

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

 

SUBSIDIARY GUARANTORS: AARDING THERMAL ACOUSTICS USA INC. ADWEST TECHNOLOGIES,
INC. AVC, INC. CECO ABATEMENT SYSTEMS, INC. CECO FILTERS, INC. CECO GROUP, INC.
CECO MEXICO HOLDINGS LLC CECOAIRE, INC. EFFOX INC. FISHER-KLOSTERMAN, INC.
GMD ENVIRONMENTAL TECHNOLOGIES, INC. MUSTANG ACQUISITION, INC. MUSTANG
ACQUISITION II LLC NEW BUSCH CO., INC.

THE KIRK & BLUM MANUFACTURING COMPANY

By:

  /s/ Benton L. Cook  

 

Name:

  Benton L. Cook

Title:

  Interim Chief Financial Officer

CECO GROUP GLOBAL HOLDINGS LLC

FKI, LLC

By:

  /s/ Benton L. Cook  

 

Name:

  Benton L. Cook

Title:

  Treasurer & Secretary

H.M. WHITE, INC.

By:

  /s/ Benton L. Cook  

 

Name:

  Benton L. Cook

Title:

  Chief Financial Officer

KBD/TECHNIC, INC.

By:

  /s/ Jeffrey Lang  

 

Name:

  Jeffrey Lang

Title:

  President

SUBSIDIARY GUARANTY AGREEMENT

Signature Page

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ADMINISTRATIVE AGENT:

 

BANK OF AMERICA, N.A., as Administrative Agent

By:

  /s/ Anthony W. Kell  

 

Name:

  Anthony W. Kell

Title:

  Vice President

SUBSIDIARY GUARANTY AGREEMENT

Signature Page

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EXHIBIT A

Form of Subsidiary Guaranty Joinder Agreement

SUBSIDIARY GUARANTY JOINDER AGREEMENT

THIS SUBSIDIARY GUARANTY JOINDER AGREEMENT dated as of             ,
20            (this “Subsidiary Guaranty Joinder Agreement”), is made by
            , a             (the “Joining Subsidiary Guarantor”), in favor of
BANK OF AMERICA, N.A., in its capacity as Administrative Agent (in such
capacity, the “Administrative Agent”) for the Secured Parties (as defined in the
Credit Agreement referenced below; except as otherwise provided herein, all
capitalized terms used but not defined herein shall have the meanings provided
therefor in the Credit Agreement).

RECITALS:

A. CECO Environmental Corp., a Delaware corporation (the “Company”), certain
Subsidiaries of the Company party thereto (each a “Designated Borrower” and,
together with the Company, the “Borrowers” and each a “Borrower”), the lenders
and the L/C Issuers party thereto and the Administrative Agent are party to a
Credit Agreement dated as of August 27, 2013 (as in effect on the date hereof
and as amended, restated, supplemented or otherwise modified from time to time
after the date hereof, the “Credit Agreement”).

B. Certain Subsidiaries of the Company are party to a Subsidiary Guaranty
Agreement dated as of August 27, 2013 (as in effect on the date hereof and as
amended, restated, supplemented or otherwise modified from time to time after
the date hereof, the “Subsidiary Guaranty Agreement”).

C. The Joining Subsidiary Guarantor is a Subsidiary of the Company and is
required by the terms of the Credit Agreement to be joined as a party to the
Subsidiary Guaranty Agreement as a Subsidiary Guarantor (as defined in the
Subsidiary Guaranty Agreement).

D. The Joining Subsidiary Guarantor will materially benefit directly and
indirectly from the making and maintenance of the extensions of credit made from
time to time under the Credit Agreement, Secured Cash Management Agreements and
Secured Hedge Agreements.

In order to induce the Secured Parties to from time to time make and maintain
extensions of credit under the Credit Agreement, Secured Cash Management
Agreements and Secured Hedge Agreements, the Joining Subsidiary Guarantor hereby
agrees as follows:

1. Joinder. The Joining Subsidiary Guarantor hereby irrevocably, absolutely and
unconditionally becomes a party to the Subsidiary Guaranty Agreement as a
Subsidiary Guarantor and bound by all the terms, conditions, obligations,
liabilities and undertakings of each Subsidiary Guarantor or to which each
Subsidiary Guarantor is subject thereunder, including without limitation the
joint and several, unconditional, absolute, continuing and

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irrevocable guarantee to the Administrative Agent for the benefit of the Secured
Parties of the payment and performance in full of the Guaranteed Liabilities (as
defined in the Subsidiary Guaranty Agreement) whether now existing or hereafter
arising, all with the same force and effect as if the Joining Subsidiary
Guarantor were a signatory to the Subsidiary Guaranty Agreement.

2. Affirmations. The Joining Subsidiary Guarantor hereby acknowledges and
affirms as of the date hereof with respect to itself, its properties and its
affairs each of the waivers, representations, warranties, acknowledgements and
certifications applicable to any Subsidiary Guarantor contained in the
Subsidiary Guaranty Agreement.

3. Severability. If any provision of this Subsidiary Guaranty Joinder Agreement
is held to be illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Subsidiary Guaranty Joinder
Agreement shall not be affected or impaired thereby and (b) the parties shall
endeavor in good faith negotiations to replace the illegal, invalid or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the illegal, invalid or unenforceable
provisions. The invalidity of a provision in a particular jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.

4. Counterparts. This Subsidiary Guaranty Joinder Agreement may be executed in
any number of counterparts each of which when so executed and delivered shall be
deemed an original, and it shall not be necessary in making proof of this
Subsidiary Guaranty Joinder Agreement to produce or account for more than one
such counterpart executed by the Joining Subsidiary Guarantor. Without limiting
the foregoing provisions of this Section 4, the provisions of Section 10.10 of
the Credit Agreement shall be applicable to this Subsidiary Guaranty Joinder
Agreement.

5. Delivery. The Joining Subsidiary Guarantor hereby irrevocably waives notice
of acceptance of this Subsidiary Guaranty Joinder Agreement and acknowledges
that the Guaranteed Liabilities are and shall be deemed to be incurred, and
credit extensions under the Loan Documents, Secured Cash Management Agreements
and Secured Hedge Agreements made and maintained, in reliance on this Subsidiary
Guaranty Joinder Agreement and the Joining Subsidiary Guarantor’s joinder as a
party to the Subsidiary Guaranty Agreement as herein provided.

6. Governing Law; Jurisdiction; Waiver of Jury Trial; Etc. The provisions of
Sections 26 and 27 of the Subsidiary Guaranty Agreement are hereby incorporated
by reference as if fully set forth herein.

[Signature page follows.]

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IN WITNESS WHEREOF, the Joining Subsidiary Guarantor has duly executed and
delivered this Subsidiary Guaranty Joinder Agreement as of the day and year
first written above.

 

JOINING SUBSIDIARY GUARANTOR:   By:     Name:      Title: