On October 31, 2007, CECO Environmental Corp. (the "Company"), GMD Acquisition Corp. ("Acquisition"), an indirectly owned subsidiary of the Company, and GMD Environmental Technologies, Inc., GMD Properties, Inc. and GMD Services, Inc. (collectively, "GMD") entered into an Asset Purchase Agreement ("APA"), pursuant to which Acquisition acquired, for a purchase price of $1,400,000, substantially all of the assets of GMD (the "Asset Purchase"), which relate to the business currently conducted by GMD, including the design, manufacture, and sale of its air pollution control systems and the furnishing of installation services to customers. The Asset Purchase was completed on October 31, 2007.   

Goodwill Purchase Agreement

    On October 31, 2007, the Company and Acquisition also entered into a Goodwill Purchase Agreement ("GPA") with Gerald J. Reier and Lynda Reier (the "Sellers"), pursuant to which Acquisition acquired, for a purchase price of $1,600,000, all of the Sellers' goodwill in the business of GMD (the "Goodwill Purchase"). The Sellers are also entitled to an earn-out payment up to $1,000,000, payable approximately 39 months following closing, subject to the Company meeting certain financial thresholds. The closing for the Goodwill Purchase was completed on October 31, 2007.

    The parties to the APA and GPA have made customary representations, warranties and covenants therein. The representations, warranties and covenants made by and to the parties thereto as of specific dates. The assertions embodied in those representations and warranties were made for purposes of the APA and GPA are subject to qualifications and limitations agreed by the respective parties in connection with negotiating the terms of the APA and GPA. In addition, certain representations and warranties were made as of a specified date, may be subject to a contractual standard of materiality different from what might be viewed as material to stockholders, or may have been used for the purpose of allocating risk between the respective parties rather than establishing matters as facts. For the foregoing reasons, no person should rely on the representations and warranties as statements of factual information at the time they were made or otherwise.

    The foregoing descriptions of the Asset Purchase and Goodwill Purchase is included to provide information regarding their respective terms. It does not purport to be a complete description and is qualified in its entirety by reference to the full text of the APA, and the GPA which are filed as Exhibits 2.1 and 2.2 hereto, respectively, and are incorporated herein by reference.

Agreement of Sale

    The Agreement of Sale requires K&B to make an initial deposit of $100,000 and provides for a 60 day due diligence period within which K&B may elect to terminate the Agreement of Sale for any reason and reclaim the deposit. In addition, if the sale of the Forrer Property does not occur within 30 days after the expiration of the due diligence period, K&B can either terminate the Agreement of Sale and receive back its deposit or request a 30 day extension. If IPC elects to extend the closing date by 30 days, the deposit will become non-refundable. If IPC does not agree to an extension, K&B will receive back its deposit. The Agreement of Sale also contains customary representations, warranties and covenants of the parties.

This Current Report on Form 8-K may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. There are numerous risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements and include, but are not limited to, the effects of future events on financial performance, changes in general economic conditions, and adverse changes in real estate markets. For a more complete discussion of these risks and uncertainties, please see our Annual and Quarterly Reports filed with the Securities and Exchange Commission. CECO disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.