Document:

Service Agreement

 Exhibit 10.11 
  
 SERVICE AGREEMENT 
  
 This service agreement (“Agreement”) is effective as of July 1, 2003 by and among the PRUDENTIAL-BACHE DIVERSIFIED FUTURES FUND L.P. (the
“Fund”), SEAPORT FUTURES MANAGEMENT INC., as the general partner of the Fund (the “General Partner”) and WACHOVIA SECURITIES, LLC (the “Service Provider”). 
  
 WHEREAS, the Fund is a Delaware limited partnership organized to trade futures
contracts and other investments; 
  
 WHEREAS, the General Partner is
a Delaware corporation registered with the Commodity Futures Trading Commission (“CFTC”) as a Commodity Pool Operator (“CPO”) and Commodity Trading Advisor (“CTA”); 
  
 WHEREAS, Service Provider is registered with the CFTC and the National Futures
Association (“NFA”) as a futures commission merchant (“FCM”) and is also registered as a broker-dealer with the Securities and Exchange Commission (“SEC”) and is a member of the National Association
of Securities Dealers, Inc. (“NASD”); 
  
 WHEREAS,
the Fund has sold interests to the public (the “Interests”) pursuant to the terms of a prospectus (the “Prospectus”); and 
  
 WHEREAS, the General Partner wishes to engage the Service Provider as a service provider for the Fund and the Service Provider wishes to act as a service
provider for the Fund. 
  
 NOW, THEREFORE, in consideration of their
mutual covenants and undertakings and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows: 
  

	  1.	Services to be Provided 

  
 The Service Provider agrees to perform the following services for limited partners of the Fund that have accounts with the Service Provider (“Limited
Partners”): (a) inquiring of the General Partner from time to time, at the request of a Limited Partner, as to the Net Asset Value per Interest; (b) inquiring of the General Partner from time to time, at the request of a Limited Partner,
regarding the commodity interest markets or the Fund; (c) assisting, at the request of the General Partner, in the redemption, exchange and transfer of Interests; and (d) providing such other services to the Limited Partners as the General Partner
may, from time to time, reasonably request. To the extent that the Service Provider utilizes the services of its employees to assist it in performing the services described above, each such employee will be registered with the CFTC and will have
passed either the Series 3 National Commodity Futures Examination or the Series 31 Futures Managed Funds Examination. 
  
 In connection with the foregoing services, the Service Provider shall not give any written material other than such written material as has been approved in advance
by the Fund or the General Partner. The Service Provider shall make no oral representation to any Limited Partner unless such representation is specifically set forth in the applicable Prospectus or properly approved written material. 

	  2.	Undertakings 

  
 The General Partner and the Fund agree to cooperate with the Service Provider in the performance of the Service Provider’s services hereunder, and to provide the Service Provider with any and all information and
documentation that the Service Provider reasonably requires in order to perform the services contemplated by this Agreement. Without limiting the generality of the foregoing, the General Partner agrees to provide the Service Provider with copies of
(i) the Prospectus and any amendments or supplements thereto; (ii) any and all monthly and annual reports of the Fund; and (iii) all correspondence sent by the Fund and/or the General Partner to the Limited Partners. 
  

	  3.	Representations and Warranties of the General Partner 

  
 The General Partner represents and warrants to the Service Provider that: 
  

	 	A.	The General Partner and the Fund have obtained and possesses all required governmental, regulatory and commodity exchange approvals and licenses and that each has effected all filings and
registrations required in order to enter into and perform this Agreement, to conduct its business generally and to perform its obligations described hereunder and as described in the Prospectus. 

  

	 	B.	The General Partner and the Fund will maintain such approvals, licenses, filings and registrations throughout the term of this Agreement and shall notify the Service Provider immediately of
any material change in such approvals, licenses, filings or registrations. 

  

	 	C.	The General Partner and the Fund have complied with all laws, rules and regulations applicable to its business, including rules and regulations promulgated by the CFTC and NFA, the violation
of which would materially and adversely affect their respective business, financial condition or earnings. 

  

	 	D.	There are no actions, suits or proceedings pending or, to the best of the General Partner’s knowledge, threatened against the General Partner or the Fund at law or in equity or before or
by any Federal, state, municipal or other governmental or regulatory department, commission, board, bureau, agency or instrumentality, or by any commodity or security exchange worldwide in which an adverse decision would materially and adversely
affect the ability of the General Partner or the Fund to comply with and perform their respective obligations under this Agreement or any Prospectus. 

  

	 	E.	This Agreement has been duly and validly authorized, executed and delivered and is a valid and binding agreement, enforceable against the General Partner and the Fund in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy, moratorium, insolvency or other laws now or hereafter enacted affecting the enforcement of creditors’ rights generally and by legal and equitable restrictions on the
availability of equitable remedies, including specific performance. 

  

	 	F.	Neither the General Partner nor the Fund will use the Service Provider’s name in any documents or correspondence in connection with the Fund without the express written consent of the
Service Provider, which consent shall not be unreasonably withheld. 

  
 The representations and warranties contained in this Section 3 shall continue during the term of this Agreement, and, if at any time any event has occurred which would make or tend to make any of the foregoing not true, the General Partner
will promptly notify the Service Provider in writing of such event. 
  

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	  4.	Representations and Warranties of the Service Provider 

  
 The Service Provider hereby represents and warrants to the Fund and to the General Partner that: 
  

	 	A.	It is duly registered Futures Commission Merchant as that term is defined under Section 4d of the Commodity Exchange Act as amended and the regulations thereunder and is a registered member
of NFA. 

  

	 	B.	It is registered with the SEC as a broker-dealer and is a registered member of the NASD. 

  

	 	C.	It will maintain the foregoing registration status throughout the time it performs any services under this Agreement. 

  

	 	D.	It has complied with all laws, rules and regulations having application to its business, including rules and regulations promulgated by the CFTC and NFA, the violation of which would
materially and adversely affect the business, financial condition or earnings of the Service Provider. 

  

	 	E.	There are no actions, suits or proceedings pending or, to the best knowledge of the Service Provider, threatened at law or in equity or before or by any Federal, state, municipal or other
governmental or regulatory department, commission, board, bureau, agency or instrumentality, or by any commodity or security exchange worldwide in which an adverse decision would materially and adversely affect the ability of the Service Provider to
comply with and perform it obligations under this Agreement, except as set forth in Exhibit A attached hereto. 

  

	 	F.	This Agreement has been duly and validly authorized, executed and delivered and is a valid and binding agreement, enforceable against it, in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, moratorium, insolvency or other laws now or hereafter enacted affecting the enforcement of creditors’ rights generally and by legal and equitable restrictions on the availability of
equitable remedies, including specific performance. 

  

	 	G.	The Service Provider will not use the name of the General Partner or the Fund in any documents or correspondence, other than those necessary for the Service Provider to perform the services
enumerated in Section 1 hereof, without the express written consent of such Fund and the General Partner, which consent shall not be unreasonably withheld. 

  
 The representations and warranties contained in this Section 4 shall continue during the term of this Agreement, and, if at any time
any event has occurred which would make or tend to make any of the foregoing not true, the Service Provider will notify the General Partner and the Fund in writing of such event. 
  

	  5.	Indemnification 

  

	 	A.	 The General Partner and the Fund shall indemnify and hold harmless the Service Provider, and its officers, directors, employees and affiliates, from any claims, suits,
controversies, judgments, losses, awards or settlements (including, without limitation, reasonable attorneys’ fees and expenses) caused by, or related to, (i) the General Partner’s or the Fund’s material breach of any applicable
provision of this Agreement; or (ii) the General Partner’s or the Fund’s negligence, intentional misconduct or violation of applicable law in performing any of the activities contemplated under this Agreement. Notwithstanding the preceding
sentence, the General Partner and the Fund shall be entitled to an appropriate offset for any indemnification obligations that are 

  

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caused, in part or in whole, by Service Provider’s breach of any provision of this Agreement or Service Provider’s negligence, intentional misconduct or
violation of applicable law in performing any of the activities contemplated under this Agreement. 

  

	 	B.	The Service Provider shall indemnify and hold harmless the General Partner and the Fund, and their respective officers, directors, employees and affiliates, from any claims, suits,
controversies, judgments, losses, awards or settlements (including, without limitation, reasonable attorneys’ fees and expenses) caused by, or related to, (i) the Service Provider’s material breach of any applicable provision of this
Agreement; or (ii) the Service Provider’s negligence, intentional misconduct or violation of applicable law in performing any of the activities contemplated under this Agreement. Notwithstanding the preceding sentence, the Service Provider
shall be entitled to an appropriate offset for any indemnification obligations that are caused, in part or in whole, by the General Partner’s or the Fund’s breach of any provision of this Agreement or Service Provider’s negligence,
intentional misconduct or violation of applicable law in performing any of the activities contemplated under this Agreement. 

  

	  6.	Limitation of the Service Provider’s Liability 

  
 The Service Provider shall incur no liability to the Fund, the General Partner, any Limited Partner or any other party except to the extent caused by the Service
Provider’s negligence or willful misconduct in performing its obligations under this Agreement, or its material breach of any representation, warranty, covenant or term of this Agreement. 
  

	  7.	Compensation 

  
 In consideration of the Service Provider’s services provided as specified herein, the General Partner will pay or cause to be paid to the Service Provider a monthly service fee, which on an annual basis will equal 4% of
the Net Asset Value of such Interests beneficially owned by Limited Partners of the Fund as of the applicable date of determination who hold such Interests through accounts maintained with the Service Provider, provided that, as set out in Section
1, the Service Provider remains registered with the CFTC as a FCM and remains a member in good standing of the NFA in such capacity, and the registered representatives of the Service Provider responsible for the servicing of each Interest which is
the subject of the compensation paid to the Service Provider hereunder are registered with the CFTC and have passed either the Series 3 National Commodity Futures Examination or the Series 31 Futures Managed Funds Examination. These payments should
be made within a reasonable time following each month, but in no event later than 15 days following the end of each month. From the date of this Agreement, and until further written notice from the General Partner, the Service Provider shall be paid
such fees out of the brokerage and services fee that Prudential Equity Group, Inc., f/k/a Prudential Securities Incorporated (“PEG”) receives from the Fund. 
  

	  8.	Miscellaneous 

  

	 	A.	This Agreement shall be binding upon and inure to the benefit of the parties’ respective successors and permitted assigns; provided that such successors and assigns shall be deemed to
make the same representations and warranties contained in this Agreement as their predecessors. 

  

	 	B.	This Agreement shall be governed by and construed in accordance with the laws of the State of New York without giving effect to conflict of law principles. 

  

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	 	C.	This Agreement constitutes the entire agreement among the parties hereto with respect to the matters referred to herein and supersedes any prior agreements, whether verbal or written, among
them. 

  

	 	D.	This Agreement may not be amended except by the express written consent of the parties hereto. No waiver of any provision of this Agreement may be implied from any course of dealing among the
parties or from any failure by any party to assert its rights under this Agreement on any occasion or series of occasions. 

  

	 	E.	If any provision of this Agreement, or the application of any such provision to any person or circumstance, shall be held to be inconsistent with any present or future law, ruling, or
regulation of any court or regulatory body, exchange, or board of trade having jurisdiction over the subject matter of this Agreement, such provision shall be deemed to be rescinded or modified in accordance with such law, ruling, rule or
regulation, and the remainder of this Agreement, or the application of such provisions to persons or circumstances other than those as to which it is held inconsistent, shall not be effected thereby. 

  

	 	F.	Any and all disputes arising out of or relating to this Agreement shall be settled by arbitration pursuant to the rules of the NFA in force at the time arbitration is demanded. Any award
rendered thereon by the arbitrators shall be final and binding on each and all the parties thereto and judgment may be entered in any court having jurisdiction thereof. 

  

	 	G.	This Agreement may not be assigned by any party without the prior written consent of the other parties; provided, however, the Fund and the Service Provider agree that the General Partner may
assign this Agreement in connection with the sale of, and to the acquiror of, all or substantially all of the business or assets of the General Partner, provided such acquiror expressly assumes and agrees in writing to perform this Agreement in the
same manner and to the same extent that the General Partner would be required to perform if no such transaction had taken place. For the avoidance of doubt, it shall not be considered an assignment of this Agreement by the General Partner if the
ownership of the General Partner is transferred to an affiliate of PEG, including, but not limited to, Prudential Financial Derivatives, LLC. 

  

	 	H.	This Agreement may be executed and delivered in counterparts, each of which will be deemed an original. 

  

	 	I.	Headings used in this Agreement are for convenience of reference only and are not to affect the construction of or to be taken into consideration in interpreting this Agreement.

  

	  9.	Termination 

  
 This Agreement may be terminated by any party hereto upon 30 days’ prior written notice to the other parties. Such notice shall have no effect on any outstanding rights, obligations or liabilities of the parties prior to
the receipt of such notice and the effective date of termination of this Agreement. 
  

	10.	Notices 

  
 Any notice required to be delivered pursuant to this Agreement shall be in writing and shall be delivered by courier service, telex, facsimile transmission, or other similar means and shall be effective upon receipt by the
party to whom such notice shall be directed. 
  

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 IN WITNESS WHEREOF, this Agreement has been executed for and on behalf of the undersigned with effect as of
the date written above. 
  

					
	PRUDENTIAL-BACHE DIVERSIFIED FUTURES FUND L.P.
	By:	 	SEAPORT FUTURES MANAGEMENT INC.
		
	By:	 	 /s/ Brian Martin

	 	 	Name:	 	Brian Martin
	 	 	Title:	 	President
	
	SEAPORT FUTURES MANAGEMENT INC.
		
	By:	 	 /s/ Brian Martin

	 	 	Name:	 	Brian Martin
	 	 	Title:	 	President
	
	WACHOVIA SECURITIES, LLC
		
	By:	 	 /s/ Leah Wehinger

	 	 	Name:	 	Leah Wehinger
	 	 	Title:	 	Managing Director

  

 6Second Amended and Restated Replacement Promissory Note

 Exhibit 10.31 
  
 NEITHER THIS NOTE NOR ANY SECURITIES WHICH MAY BE ISSUED UPON THE EXERCISE OF THE WARRANTS HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR REGISTERED OR OTHERWISE QUALIFIED UNDER ANY STATE SECURITIES LAW. NEITHER THIS NOTE NOR ANY SUCH SECURITIES MAY BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND
REGISTRATION OR OTHER QUALIFICATION UNDER ANY APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION OR OTHER QUALIFICATION IS NOT REQUIRED. 
  
 THIS NOTE IS SUBJECT TO THE TERMS OF THE SUBORDINATION AGREEMENT (AS DEFINED HEREIN IN
SECTION 8) IN FAVOR OF PNC BANK, NATIONAL ASSOCIATION, AS AGENT FOR CERTAIN BANKS. NOTWITHSTANDING ANY CONTRARY STATEMENT CONTAINED IN THE WITHIN INSTRUMENT, NO PAYMENT ON ACCOUNT OF ANY OBLIGATION ARISING FROM OR IN CONNECTION WITH THE WITHIN
INSTRUMENT OR ANY RELATED AGREEMENT (WHETHER OF PRINCIPAL, INTEREST OR OTHERWISE) SHALL BE MADE, PAID, RECEIVED OR ACCEPTED EXCEPT IN ACCORDANCE WITH THE TERMS OF THE SUBORDINATION AGREEMENT. 
  
 CECO Environmental Corp. 
 SECOND AMENDED AND RESTATED REPLACEMENT 
 PROMISSORY NOTE 
  

	 $4,000,000 
	 May 28, 2002 

  
 WHEREAS, Green Diamond Oil Corp., an Ontario corporation (“Green Diamond”) has prior to this date advanced $4,000,000 (the “Advance”)
to CECO Environmental Corp. 
  
 WHEREAS, the terms of the Advance
are set forth in an Amended and Restated Replacement Promissory Note dated May 1, 2001 (the “Prior Note”), which Prior Note shall be cancelled and replaced by this Amended and Restated Replacement Promissory Note. 
  
 WHEREAS, Green Diamond had the Prior Note held in the name of Taurus Capital
Markets Ltd. and now desires to hold this Note in its own name; 
  
 FOR VALUE RECEIVED, the undersigned, CECO Environmental Corp. (the “Company”), a Delaware corporation, hereby promises to pay to the order of Green Diamond Oil Corp. or registered assigns (“Holder”), the principal sum of
FOUR MILLION DOLLARS ($4,000,000) on the Maturity Date, as defined in Section 1 below. This Note is part of a series of Notes of like tenor and effect to this Note in the aggregate principal amount of $5,000,000 to be issued in connection with a
mezzanine financing by the Company (the “1999 Subordinated Notes”). 

 1. Maturity. This Note shall be due and payable upon the earlier to occur of the following events
(the “Maturity Date”): (i) six and one-half (6 1/2) years from December 7, 1999; (ii) six (6) months
after repayment of the Superior Debt (as defined in Section 8 below); or (iii) the closing (any such closing referred to as the “Closing”) of a Sale Transaction. For purposes of this Note, a Sale Transaction shall mean (i) a merger,
consolidation, corporate reorganization, or sale of shares of stock of the Company as a result of which there is a change in control and/or the shareholders of the Company on the date hereof (“Current Shareholders”) own 50% or less of the
outstanding shares of the Company on a fully-diluted basis immediately after the transaction and, including as outstanding for purposes of such calculation, any warrants, options or other instruments convertible or exchangeable into equity
securities of the Company issued to persons other than the Current Shareholders in connection with the transaction or (ii) the sale of (A) fifty percent or more of the assets of the Company or (B) any subsidiary, division or line of business of the
Company for total consideration in excess of $5 million. 
  
 2. Interest. Interest shall accrue on the unpaid principal balance hereof and on any interest payment that is not made when due at the simple compounded rate of twelve percent (12%) per annum from the date hereof. Accrued Interest
shall be due and payable on June 30 and December 31 of each year commencing June 30, 2000 and on the Maturity Date. Notwithstanding the foregoing, interest due under this note on June 30, 2000 and December 31, 2000, will be paid in accordance with
the terms of the Subordination Agreement. It shall not be a default hereunder and interest will not accrue on any portion of such interest payments deferred pursuant to the Subordination Agreement (“Deferred Interest”) so long as the
Deferred Interest is paid at the time and in the manner allowed by the Subordination Agreement. In the Event of Default (as defined herein), interest shall accrue on all unpaid amounts due hereunder including without limitation, interest, at the
rate of fifteen percent (15%) per annum. If a judgment is entered against the Company on this Note, the amount of the judgment so entered shall bear interest at the highest rate authorized by law as of the date of the entry of the judgment.

  
 3. Payments. Payments of both principal and interest
shall be made at the principal executive office of the Company, or such other place as the holder hereof shall designate to the Company in writing, in lawful money of the United States of America. 
  
 So long as no Event of Default has occurred in this Note, all payments
hereunder shall first be applied to interest, then to principal. Upon the occurrence of an Event of Default in this Note, all payments hereunder shall first be applied to costs pursuant to Section 13.5, then to interest and the remainder to
principal. 
  
 4. Registration, Transfer and Exchange of
Notes. The Company will keep at its principal office a register in which it will provide for the registration of and transfer of this Note, at its own expense (excluding transfer taxes). If any Note is surrendered at said office or at the place
of payment named in the Note for registration of transfer or exchange (accompanied in the case of registration of transfer or exchange by a written instrument of transfer in form satisfactory to the Company duly executed by or on behalf of the
holder), the Company, at its expense, will deliver in exchange one or more new Notes in denominations of $10,000 or larger multiples of $1,000, as requested by the holder for the aggregate unpaid principal amount. Any Note or Notes issued in a

  

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 transfer or exchange shall carry the same rights to increase Notes surrendered. The Holder agrees that prior to making
any sale, transfer, pledge, assignment, hypothecation, or other disposition (each, a “Transfer”) of the Note, the Holder shall give written notice to the Company describing the manner in which any such proposed Transfer is to be made and
providing such additional information and documentation regarding the Transfer as the Company reasonably requests. If the Company so requests, the Holder shall at his expense provide the Company with an opinion of counsel (which counsel must be
reasonably satisfactory to the Company, to the holder, in form and substance satisfactory to the Company) that the proposed Transfer complies with applicable federal and state securities laws. The Company shall have no obligation to Transfer any
Notes unless the holder thereof has complied with the foregoing provisions, and any such attempted Transfer shall be null and void. 
  
 5. Registered Owner. Prior to due presentation for registration of transfer, the Company may treat the person in whose name any Note is registered
as the owner and holder of such Note for the purpose of receiving payment of principal of, and interest on, such Note and for all other purposes. 
  
 6. Prepayment. 
  
 6.1 Optional Prepayment. The Company, at its option and without any premium, may prepay in whole or in part the principal amount of
this Note at 100% of the face value of the Note at any time; provided, however, that if the Company intends to prepay any one or more of the 1999 Subordinated Notes in part, it shall prepay the same percentage of each outstanding 1999 Subordinated
Note. The Company shall, at the time of any such prepayment, pay to the holder of this Note all interest accrued and unpaid to the Prepayment Date (defined below). Notwithstanding the foregoing, once a notice of the Closing of a Sale Transaction
pursuant to Section 13.4 has been sent to the Holder, the Company may not prepay this Note prior to the Closing of a Sale Transaction, or until the Sale Transaction has been formally abandoned. 
  
 6.2 Notice of Prepayment. At least five (5) but not
more than fifteen (15) days prior to the date fixed for any prepayment, written notice shall be given to the holder of the Notes of the election of the Company to prepay all or a specified portion of the principal amount of the Note (the
“Prepayment Notice”). The Prepayment Notice shall specify the date upon (“Prepayment Date”) and the place at which, payment may be obtained and shall call upon the Holder to surrender the Note to the Company in the manner and at
the place designated. On the Prepayment Date, the Holder shall surrender this Note to the Company in the manner and at the place designated in the Prepayment Notice, and thereupon prepayment shall be made to Holder and this Note shall be cancelled.
In the event that less than all of the principal amount of this Note is prepaid, upon surrender of this Note to the Company, the Company shall execute and deliver to Holder a new Note or Notes in principal amount equal to the unpaid principal amount
of this Note. 
  
 6.3 Cessation of Rights.
From and after the Prepayment Date, unless there has been a default under the Prepayment Notice, all interest on the redeemed principal amount 
  

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 shall cease to accrue and all rights of Holder as a Holder of this Note shall cease with respect to the
principal amount prepaid and, with respect to such amount, this Note thereafter shall not be deemed to be outstanding for any purpose whatsoever. By acceptance of this Note, Holder agrees to execute and deliver such documents as may be reasonably
requested from time to time by the Company in order to implement the foregoing provisions of this Section. 
  
 7. Warrant Coverage. Holder shall receive, on the date hereof, ten-year warrants (the “Warrants”) to purchase 800,000 shares of common
stock of the Company (“Common Stock”). The exercise price of the Warrants shall be $2.25 per share of Common Stock of the Company (“Exercise Price”) and shall become exercisable six months after the date hereof. The Warrants
shall contain the terms and shall be in the form attached hereto, as Exhibit A. 
  
 The holders of the Warrant shall have registration rights in accordance with the terms as set forth in the a Warrant Agreement in the form attached as Exhibit B. 
  
 8. Subordination. The indebtedness evidenced by this Note shall at all
times be wholly subordinate and junior in right of payment to all obligations of the Company under or in connection with the Credit Agreement dated December 7, 1999 (“Superior Debt”) among the Company as guarantor, the borrowers CECO Group
Inc., CECO Filters, Inc., Air Purator Corporation, New Bush Co., Inc., U.S. Facilities Management, Inc., The Kirk & Blum Manufacturing Company, and kbd/Technic, Inc., and the lenders PNC Bank, National Association and various other financial
institutions, upon the terms and conditions contained in the Subordination Agreement between Green Diamond Oil Corp., Harvey Sandler, ICS Trustee Services Ltd., and PNC Bank, National Association and various other financial institutions dated
December 7, 1999 (the “Subordination Agreement”). 
  
 9.
Repayment of Notes. In the event the Company completes an equity financing or offering or a series of equity financing or offerings for a total consideration in excess of $10,000,000, then twenty-five percent (25%) of all such consideration
in excess of $10,000,000 shall be used immediately, upon receipt by the Company, to pre-pay the 1999 Subordinated Notes, provided such prepayment shall be made proportionately among the 1999 Subordinated Notes until the 1999 Subordinated Notes are
paid in full. 
  
 10. Covenants of the Company. The Company
covenants and agrees that it shall not, without the prior written approval of the Holders of a majority of the aggregate principal amount outstanding of the 1999 Subordinated Notes (“Majority Holders”): 
  
 10.1 Obtain or incur any indebtedness or other monetary
obligations that are senior to or on parity with the Notes, other than the Superior Debt. 
  
 10.2 Allow, suffer or cause to exist any lien, claim, security interest or encumbrance on the Company’s property or assets, other
than with respect to the Superior Debt and purchase money indebtedness incurred in the ordinary course of business. 
  

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 10.3 Enter into any arrangement or agreement involving the merger or consolidation of the
Company. 
  
 10.4 Use the proceeds from the sale
of the 1999 Subordinated Notes other than in the ordinary course of its business for general corporate purposes including lending monies to any of its subsidiaries. The Company also covenants and agrees that it shall operate its business in the
ordinary course. 
  
 11. Events of Default. 
  
 11.1 Occurrences of Events of Default. Each of the
following events shall constitute an “Event of Default” for purposes of this Note: 
  
 (a) if the Company fails to pay any amount payable, under this Note when due; 
  
 (b) if the Company breaches any of its representations,
warranties or covenants set forth in this Note or the Warrant Agreement; 
  
 (c) the commencement of an involuntary case against the Company or its subsidiary or any of its subsidiaries under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or the
appointing of a receiver, liquidator, assignee, custodian, trustee or similar official of the Company or for any substantial part of the Company or one of its subsidiary’s property, or ordering the winding-up or liquidation of the Company or
one of its subsidiary’s affairs; 
  
 (d) if
the Company or any of its subsidiaries shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case under any
such law, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian or similar official of the Company or its subsidiary or for any substantial part of the Company or one of its
subsidiary’s property, or shall make any general assignment for the benefit of creditors, or shall take any corporate action in furtherance of any of the foregoing; or 
  
 (e) if the Company’s business shall fail, as determined in good faith by the Majority Holders and
evidenced by the Company’s inability to pay its ongoing debts as such debts become due. 
  
 11.2 Acceleration Upon Event of Default. If any Event of Default shall have occurred and be continuing, for any reason whatsoever
(and whether such occurrence shall be voluntary or involuntary or come about or be effected by operation of law or otherwise), the unpaid principal amount of, and the accrued interest on, the Notes shall automatically become immediately due and
payable, without presentment, demand, protest or other requirements of any kind, all of which are hereby expressly waived by the Company. 
  

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 12. Investment Representations of the Holder. With respect to the purchase of this Note, the
Common Stock issuable upon the exercise of the Warrants (collectively, the “Securities”), the Holder hereby represents and warrants to the Company as follows: 
  
 12.1 Experience. The Holder has substantial experience in evaluating and investing in private
placement transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests. 
  
 12.2 Investment. The Holder is acquiring the
Securities for investment for its own account, not as a nominee or agent, and not with the view to, or for resale in connection with, any distribution thereof. The Holder understands that the Securities have not been, and will not be, registered
under the Securities Act of 1933, as amended (“Securities Act”), by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of the Holder’s representations as expressed herein. The holder is an “accredited investor” within the meaning of Regulation D, Section 501(a), promulgated by the Securities and Exchange
Commission. 
  
 12.3 Rule 144. The Holder
acknowledges that the Securities must be held indefinitely unless subsequently registered under the Securities Act, or unless an exemption from such registration is available. The Holder understands that at this time the Company is not under any
obligation to register any of the Securities. The Holder is aware of the provisions of Rule 144 promulgated under the Securities Act that permit limited resale of securities purchased in a private placement subject to satisfaction of certain
conditions. 
  
 12.4 No Public Market. The
Holder understands that no public market now exists for any of the Securities issued by the Company and that the Company has made no assurances that a public market will ever exist for the Securities. 
  
 12.5 Access to Data. The Holder has had an
opportunity to discuss the Company’s business, management and financial affairs with the Company’s management and has also had an opportunity to ask questions of the Company’s officers, which questions were answered to its
satisfaction. 
  
 13. Miscellaneous. 
  
 13.1 Invalidity of Any Provision. If any provision or
part of any provision of this Note shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Note and this Note shall be construed as
if such invalid, illegal or unenforceable provisions or part hereof had never been contained herein, but only to the extent of its invalidity, illegality or unenforceability. 
  

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 13.2 Governing Law. The Note shall be governed in all respects by the laws of the
State of Delaware, excluding its conflict of laws. 
  
 13.3 Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given (i) on the date of delivery if delivered personally, (ii) one (1) business day after
transmission by facsimile transmission with a written confirmation copy sent by first class mail, or (iii) five (5) days after mailing if mailed by first class mail, to the following addresses: 
  

			
	 If to the Company:
	 	 CECO Environmental Corp.

	 	 	 505 University Avenue, Suite 1400

	 	 	 Toronto, Ontario M5G 1X3

	 	 	 CANADA

	 	 	 Attention: Phillip DeZwirek

  
 And if
to the Holder, to the address or facsimile number of Holder as set forth on the Company’s records, or such other address as the Holder has provided to the Company by notice duly given. 
  
 13.4 Notice of a Sale Transaction. The Company shall
give all Holders of Notes notice of the Closing of a Sale Transaction at least thirty (30) days prior to such Closing. 
  
 13.5 Collection. If the indebtedness represented by the Note or any part thereof is collected at law or in equity or in bankruptcy,
receivership or other judicial proceedings or if the Note is placed in the hands of attorneys for collection after the occurrence of an Event of Default, the Company agrees to pay, in addition to the outstanding principal and accrued interest
payable hereon, reasonable attorneys’ fees and costs incurred by the Holder, or on behalf of the Holder by a representative of the Holder. 
  
 13.6 Successors and Assigns. The rights and obligations of the Company and the Holder shall be binding upon and benefit the
successors, assigns, heirs, administrators and transferees of the parties. 
  
 13.7 Waivers. The Company and any endorsers, sureties, guarantors, and all others who are, or may become liable for the payment hereof severally: (a) waive presentment for payment, demand, notice of demand,
notice of nonpayment or dishonor, protest and notice of protest of this Note, and all other notices in connection with the delivery, acceptance, performance, default, or enforcement of the payment of this Note, (b) consent to all extensions of time,
renewals, postponements of time of payment of this Note or other modifications hereof from time to time prior to or after the maturity date hereof, whether by acceleration or in due course, without notice, consent or consideration to any of the
foregoing, (c) agree to any substitution, exchange, addition, or release of any of the security for the indebtedness evidenced by this Note or the addition or release of any party or person primarily or secondarily liable hereon, (d) agree that
Holder shall not be required first to institute any suit, or to exhaust its remedies against the Company or any other person or party 
  

 7 

 to become liable hereunder or against the security in order to enforce the payment of this Note and (e)
agree that, notwithstanding the occurrence of any of the foregoing (except by the express written release by Holder of any such person), the Company shall be and remain, directly and primarily liable for all sums due under this Note. 
  
 13.8 Time. Time is of the essence in this Note.

  
 13.9 Captions. The captions of
sections of this Note are for convenient reference only, and shall not affect the construction or interpretation of any of the terms and provisions set forth in this Note. 
  
 13.10 Number and Gender. Whenever used in this Note, the singular number shall include the plural,
and the masculine shall include the feminine and the neuter, and vice versa. 
  
 13.11 Remedies. All remedies of the Holder shall be cumulative and concurrent and may be pursued singly, successively, or together
at the sole discretion of the Holder and may be exercised as often as occasion therefor shall arise. No act of omission or commission of the Holder, including specifically any failure to exercise any right, remedy or recourse shall be effective
unless it is set forth in a written document executed by the Holder and then only to the extent specifically recited therein. A waiver or release with reference to one event shall not be construed as continuing as a bar to or as a waiver or release
of any subsequent right, remedy, or recourse as to any subsequent event. 
  
 13.12 No Waiver by Holder. The acceptance by Holder of any payment under this Note which is less than the amount then due or the acceptance of any amount after the due date thereof, shall not be deemed a waiver
of any right or remedy available to Holder nor nullify the prior exercise of any such right or remedy by Holder. None of the terms or provisions of this Promissory Note may be waived, altered, modified or amended except by a written document
executed by Holder and then only to the extent specifically recited therein. No course of dealing or conduct shall be effective waive, alter, modify or amend any of the terms or provisions hereof. The failure or delay to exercise any right or remedy
available to Holder shall not constitute a waiver of the right of the Holder to exercise the same or any other right or remedy available to Holder at that time or at any subsequent time. 
  
 13.13 Submission to Jurisdiction. BORROWER, AND ANY ENDORSERS, SURETIES, GUARANTORS AND ALL OTHERS
WHO ARE, OR WHO MAY BECOME, LIABLE FOR THE PAYMENT HEREOF SEVERALLY, IRREVOCABLY AND UNCONDITIONALLY (A) AGREE THAT ANY SUIT, ACTION, OR OTHER LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE OR ANY OTHER AGREEMENT, DOCUMENT OR INSTRUMENT
DELIVERED PURSUANT TO, OR IN CONNECTION WITH THIS NOTE SHALL BE BROUGHT AND MAINTAINED IN THE COURTS IN AND FOR HAMILTON COUNTY, OHIO, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF OHIO; (B) CONSENT TO THE JURISDICTION OF EACH
SUCH COURT IN ANY SUCH SUIT, ACTION OR 
  

 8 

 PROCEEDING; AND (C) WAIVE ANY OBJECTION WHICH IT OR THEY MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH
SUIT, ACTION, OR PROCEEDING IN ANY OF SUCH COURTS. 
  
 13.14 Waiver of Trial by Jury. HOLDER AND BORROWER HEREBY KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ON THIS
NOTE, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION THEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO. THIS PROVISION
IS A MATERIAL INDUCEMENT FOR HOLDER TO MAKE THE LOAN EVIDENCED BY THIS NOTE. 
  
 3.15 This Note is issued, in part, in replacement of the Prior Note. The indebtedness evidenced by the Prior Note has not been paid; instead this Note is issued in substitution for the Prior Note and the unpaid
indebtedness evidenced thereby continues to be outstanding and is intended to be evidenced hereby. 
  

			
	 CECO ENVIRONMENTAL CORP.

		
	 By:
	 	 /s/ Phillip DeZwirek

	 	 	 Phillip DeZwirek

	 	 	 Chief Executive Officer

  

 9

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