<SEC-DOCUMENT>0001021408-01-508738.txt : 20011030
<SEC-HEADER>0001021408-01-508738.hdr.sgml : 20011030
ACCESSION NUMBER:		0001021408-01-508738
CONFORMED SUBMISSION TYPE:	10-K405
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20000930
FILED AS OF DATE:		20011025

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GENCOR INDUSTRIES INC
		CENTRAL INDEX KEY:			0000064472
		STANDARD INDUSTRIAL CLASSIFICATION:	CONSTRUCTION MACHINERY & EQUIP [3531]
		IRS NUMBER:				590933147
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		10-K405
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-11703
		FILM NUMBER:		1766125

	BUSINESS ADDRESS:	
		STREET 1:		5201 N ORANGE BLOSSOM TRAIL
		CITY:			ORLANDO
		STATE:			FL
		ZIP:			32810
		BUSINESS PHONE:		4072906000

	MAIL ADDRESS:	
		STREET 1:		5201 N ORANGE BLOSSOM
		CITY:			ORANLANDO
		STATE:			FL
		ZIP:			32810

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MECHTRON CORP
		DATE OF NAME CHANGE:	19690909

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MECHTRON GENCO CORP
		DATE OF NAME CHANGE:	19720411

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MECHTRON INTERNATIONAL CORP
		DATE OF NAME CHANGE:	19880128
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K405
<SEQUENCE>1
<FILENAME>d10k405.txt
<DESCRIPTION>FORM 10-K FOR SEPTEMBER 30, 2000
<TEXT>
<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                  FORM 10 - K

           [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15[d] OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                 For the Fiscal Year Ended September 30, 2000

         [_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15[d] OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                          Commission File No. 0-3821

                            GENCOR INDUSTRIES, INC.

Incorporated in the                               I.R.S. Employer Identification
State of Delaware                                                 No. 59-0933147

                        5201 North Orange Blossom Trail
                            Orlando, Florida 32810

              Registrant's Telephone Number, Including Area Code:
                                (407) 290-6000

          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                     None

          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                         Common Stock ($.10 Par Value)
                         -----------------------------

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to filing requirements
for the past 90 days.
                                                        [_]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
                                                        [X]

State the aggregate market value of the voting stock, $.10 per share value
Common Stock held by nonaffiliates of the Registrant as of July  31, 2001:
$13,983,122

Indicate the number of shares outstanding of each of the Registrant's classes of
Common Stock, as of the latest practicable date: 6,884,070 shares of Common
Stock ($.10 par value) and 1,798,398 shares of Class B Stock ($.10 par value) as
of July 31, 2001.

List hereunder the following documents if incorporated by reference and the part
of the Form 10-K into which the document is incorporated.

Part III - 2001 Proxy Statement

                                       1
<PAGE>

PART I

Restatement
-----------

Subsequent to the issuance of the Company's consolidated financial statements as
of and for the year ended September 30, 1998, Company management determined that
certain accounting irregularities and other improprieties had occurred at one of
its subsidiaries, Gencor ACP, Ltd. ("ACP"). The Chairman and Chief Financial
Officer of ACP were determined to be responsible for the accounting
irregularities and other improprieties and were therefore terminated in January
1999. The accounting irregularities primarily related to an overstatement of
ACP's net assets in the opening balance sheet as of October 1, 1997 of
approximately $7 million as well as misstatement of fiscal 1998 revenues and
costs resulting in an overstatement of fiscal 1998 income.  As a result of the
findings of the investigation, the 1998 consolidated financial statements have
been re-audited and restated from the amounts previously reported. (See Note 4
to the Consolidated Financial Statements).

Due to a prolonged and extensive re-audit effort, including the disqualification
of its then auditors of record, Deloitte & Touche, by the SEC, the Company was
unable to file a Form 10-K/A to restate the 1998 Annual Report previously filed
as part of the Form 10-K on December 16, 1998. The quarterly Form 10-Q reports
previously filed with the SEC were also not revised for the restatement.
Therefore, the Company's originally filed financial statements and announced
quarterly earnings reports for those periods should not be relied upon.  This
Form 10-K includes the re-audited and restated results for 1998 and the audited
results for 1999 and 2000.


ITEM 1.  BUSINESS
-------

Overview
--------

Gencor Industries, Inc. and its subsidiaries (the "Company") is a leading
manufacturer of process machinery for a wide variety of end-markets. Fiscal 2000
products included machinery used in the production of highway construction
materials such as hot-mix asphalt and machinery used to produce food products
such as pelletized animal feeds, edible oils, sugar and citrus juices.  The
Company's products are manufactured in 11 plants in the United States, Asia,
Europe and South America and sold through a combination of Company sales
representatives and independent dealers and agents located throughout the world.
The Company operated in two business groups: the Construction Equipment Group
("CEG") and the Consolidated Process Machinery Group ("CPM"). In May 2001, the
domestic and foreign operations of CPM were sold.

CEG designs and manufactures machinery and related equipment used primarily for
the production of asphalt and highway construction materials. CEG's principal
core products include asphalt plants, combustion systems and fluid heat transfer
systems. CEG's technical and design capabilities, environmentally friendly
process technology and wide range of products have enabled it to become a
leading producer of asphalt production equipment worldwide. The Company believes
CEG has the largest installed base of asphalt production plants in the United
States.

CEG's products are sold primarily to the highway construction industry and as a
result are seasonal in nature.  The majority of orders for the Company's
products are received between November and February, with a significant volume
of shipments occurring prior to May.  The principal factors driving demand for
CEG's products are the level of government funding for domestic highway
construction and repair, infrastructure development in emerging economies, the
need for spare parts and a trend towards larger plants (e.g. drum mix asphalt
production) resulting from asphalt production plant consolidation. On June 9,
1998, the Transportation Equity Act for the 21st Century ("TEA-21") was signed
into law.  TEA-21 significantly increases authorized funding levels for highway
construction and rehabilitation to $167 billion over the five-

                                       2
<PAGE>

year period, beginning October 1, 1998 through September 30, 2003. A significant
provision to the current program sets mandatory funding levels. The Company has
assessed the positive impact of TEA-21 on its future business outlook, and
strongly believes it will result in increase demand for its products and
services.

CPM designs and manufactures process machinery used in the production of
scientifically compounded animal feeds, edible oils, sugar and fruit juice
concentrates. CPM's products include pellet mills, crushers, flakers, grinders,
crystallizers, centrifuges and equipment used to concentrate juices, including
presses, evaporators, heat exchangers and dryers. The Company believes CPM has
the largest installed base of pelleting and grinding equipment in the world and
that CPM's customers recognize its products for their reliability and
technology.

CPM's products are sold primarily to commercial agribusiness companies,
integrated food producers, feed mills and food processing companies. CPM
believes its machinery enables its customers to manufacture food products more
efficiently and with higher quality and lower cost.  Its pelleting machinery is
a widely accepted method of scientifically processing animal feed. Over the past
several years, the domestic food processing machinery industry has experienced
strong growth, partly as a result of rising demand from overseas markets which
are increasingly adopting U.S. food production technologies.

In September 2000, the Company announced its intent to dispose of the CPM's
foreign and domestic operations. Accordingly, the results of the operations for
CPM have been reported as discontinued operations in the accompanying financial
statements and selected financial data.

Chapter 11 Bankruptcy Reorganization
------------------------------------

As of September 1999, the Company was in default of the terms and conditions of
its Senior Secured Credit Facility and Industrial Revenue Bond Indenture. In
November 1999, the Senior Secured Lenders accelerated their demand for payment
in full. During April 2000, certain of the Company's lenders filed an
Involuntary Petition under Chapter 11 of U.S. Bankruptcy Code. On September 13,
2000 (the "petition date"), the Company and certain of its subsidiaries ("the
Debtors") filed voluntary petitions commencing cases under Chapter 11 of the
U.S. Bankruptcy Code. The Company and certain of its subsidiaries began
operating its businesses as debtors-in-possession under Chapter 11 of the U.S.
Bankruptcy Code.

On April 13, 2001, the Debtors filed the Amended Plan of Reorganization of
Gencor Industries, Inc. (the "Amended Plan"), dated April 9, 2001 with the
Bankruptcy Court providing essentially for 100% payment of all secured and
unsecured creditors and no dilution or diminution to the equity holders. The
Amended Plan was confirmed on July 11, 2001.

The Plan will become effective on or before October 30, 2001, unless extended
(the "Effective Date"). Pursuant to the Amended Plan, as of the Effective Date,
the sale of CPM's domestic and foreign operations was to be consummated (see
Discontinued Operations). The sale was in fact consummated on May 29, 2001 for
$52 million. The net proceeds from the sale were used to reduce the outstanding
balance of the Senior Secured Lenders. Under the Amended Plan, all of the
Company's debts will be satisfied in full. Also by the Effective Date, the
Senior Secured Lenders and the Debtor are to have closed an Amended and Restated
Senior Secured Credit Agreement, which would specify that the remaining claims
of the Senior Secured Lenders are to be paid over a four-year period. The
Company intends to emerge from bankruptcy on the Effective Date.

                                       3
<PAGE>

Acquisition History
-------------------

In 1968, the foundation of the Company was formed by the merger of Mechtron
Corporation with General Combustion, Inc. and Genco Manufacturing, Inc. The new
entity reincorporated in Delaware in 1969 and adopted the name Mechtron
International Corporation in 1970. In 1985, the Company began a series of
acquisitions into related fields starting with the Beverley Group Ltd. in the
United Kingdom. Hy-Way Heat Company, Inc. and the Bituma Group were acquired in
1986. In 1987, the Company changed its name to Gencor Industries, Inc. and
acquired the Davis Line and its subsidiaries in 1988.

In 1996, the Company sought to diversify and expand its "process machinery"
product lines to broaden its core base and to facilitate more opportunities for
growth and reduce seasonality.  At the end of fiscal 1996, the Company acquired
the Process Equipment Division of Ingersoll-Rand (now CPM). Included in the CPM
group were a number of foreign subsidiaries, including a Swedish subsidiary,
Silver-Weibull A.B..

In 1997, the Company furthered its expansion with the acquisition of Gumaco
Industria E. Commercio Limitada ("Gumaco") in Brazil and ACP Holdings P.L.C.,
located in the United Kingdom.  Following the acquisition ACP Holdings P.L.C.
was renamed Gencor ACP, Ltd. ("ACP").

In January 1999, the Company announced that an internal investigation into the
affairs of ACP revealed certain accounting irregularities and improprieties,
which necessitated the termination of both ACP's Chairman and Chief Financial
Officer, as well as the re-audit and restatement of the Company's consolidated
financial statements for the year ended September 30, 1998. (See Note 4 in the
accompanying consolidated financial statements included in this Form 10-K for
further discussion regarding the adjustments resulting from these accounting
irregularities and improprieties.)  In June 2001, ACP was reorganized under the
direction of a receiver. The assets and business were sold to Gencor Industries
Limited, another wholly-owned subsidiary of the Company. The name of the
subsidiary was changed to Gencor International Limited ("Gencor International").


Acquisitions

Building on the base of its combustion and asphalt machinery business, the
Company made the following acquisitions in process machinery:

 .  Process Equipment Division of Ingersoll-Rand Company (PED). Effective
   September 30, 1996, the PED acquisition (which subsequently became the basis
   of the Company's CPM business), initiated the Company's strategy of acquiring
   complementary process machinery businesses. The acquisitions provided the
   Company with significant market share positions in new niche markets, which
   manufacture equipment to process food products such as pelletized animal
   feeds, sugar and edible oils. Furthermore, the expansion into the food
   machinery industry reduced the seasonality in the Company's quarterly
   earnings since the slower quarters for construction equipment are typically
   the strongest quarters for food processing machinery.

 .  Gumaco lndustria E Comercio Limitada. Effective July 1, 1997, the Company
   acquired Gumaco and certain other South American companies with substantial
   manufacturing capacity in Brazil. These companies produce heavy machinery for
   the production and processing of fruit juices. Gumaco is the world leader in
   the industry of manufacturing plants which extract, concentrate and freeze
   juices. The Gumaco acquisition furthered the Company's expansion into the
   food process machinery industry and provided the Company with access to Latin
   American markets.

   In September 2000, the Company announced its intent to dispose of its
   Brazilian and Swedish sugar operations. Accordingly, in September 2001, CPM's
   subsidiary Silver-Weibull A.B. was placed in

                                       4
<PAGE>

  receivership, and the Company reported the operating results of Gumaco and
  Silver-Weibull as discontinued operations.

 . ACP Holdings PLC. Effective October 1, 1997, the ACP acquisition expanded
  Gencor's construction equipment product line as ACP is a leading manufacturer
  of portable batch asphalt plants. This product line is more suitable for
  international markets since capacity and production needs are different in
  foreign markets from the United States. ACP is one of the largest exporters in
  the United Kingdom for its type of construction equipment and products. ACP
  sells to numerous international markets including China, Thailand, Malaysia,
  Southern Europe, Africa, the Middle East and the Mediterranean.

The following table summarizes the Company's history of principal acquisitions:

<TABLE>
<CAPTION>
  Year                        Acquisition                                     Principal Products
  <C>               <S>                                          <C>
  1985              Beverley Group Ltd.                          Thermal fluid heaters and industrial
                                                                 incinerators
  1986              Hy-Way Heat Company, Inc.                    Fluid heat transfer systems and specialty tanks
  1986              Bituma-Stor, Inc. and its wholly owned       Asphalt plants and hot mix asphalt storage
                    subsidiary, Bituma Corporation               silos
  1988              The Davis Line and its wholly owned          H&B batch mix asphalt plants, specialty tanks
                    subsidiary, Midwest Tank and Construction    and other products
                    Holding Corporation
  1996              Process Equipment Division of                Pelleting, grinding, flaking, sugar processing
                    Ingersoll-Rand Company ("PED")               and filtration equipment
  1997              Gumaco Industria E Comercio Limitada and     Citrus processing machinery and equipment
                    other South American companies
  1997              ACP Holdings PLC and subsidiaries            Road construction and crushing machinery
</TABLE>

Interest in Carbontronics, LLC
------------------------------

In January 1998, the Company finalized agreements with Carbontronics, LLC
("CLLC") pursuant to which the Company manufactured and installed four synthetic
fuel production plants. These plants were sold by CLLC to a limited partnership
("LP"), Carbontronics Synfuel Investors, LLC, who is now the owner of the
plants. The Company was paid in full for these plants in 1998. In addition to
payment for the plants, the Company received an equity interest of 45% in CLLC.
Also, the Company subsequently received a 25% equity position in the General
Partner ("GP") of the LP and in Carbontronics II, LLC ("C2LLC"). The remaining
interests in the GP, CLLC, and C2LLC are owned by other, unrelated entities. An
administrative member of the GP, not the Company, is responsible for
administration of the day-to-day affairs of the GP and LP. The Company is
entitled to appoint only one of the three members of the GP Management Committee
and has 1/3 of the voting rights thereof. As a part of the equity position in
CLLC, C2LLC, and the GP, the Company has the potential for income subject to the
performance of the partnership. Future benefits realizable by the Company on the
synthetic fuel production plants depend on whether the production from these
plants will continue to qualify for tax credits under Section 29 of the Internal
Revenue Code and the ability to economically produce and successfully market
synthetic fuel produced by the plants.

                                       5
<PAGE>

Products
--------

Construction Equipment Group (CEG)

Asphalt Plants. The Company and certain subsidiaries, Bituma, and Gencor
International Limited (UK), manufacture and produce hot-mix asphalt plants used
in the production of asphalt paving materials used in the construction of
highways and commercial pavements. The Company also manufactures related asphalt
plant equipment including hot mix storage silos, fabric filtration systems, cold
feed bins and all other plant components. H&B (Hetherington and Berner) built
the first asphalt batch plant in 1894 and is the world's oldest asphalt plant
line. Bituma, formerly known as Boeing Construction Company, developed the
continuous process for asphalt production, which has been adopted as the United
States industry's standard technology, as well as developed the counterflow
technology, the new standard, which recaptures and burns emissions and vapors,
resulting in a cleaner and more efficient process. Gencor International Limited
(UK) manufactures a very comprehensive range of fully mobile batch plants, as
well as mobile shredders and trommel screens, and is a significant United
Kingdom exporter of its type of construction machinery.

Combustion Systems and Industrial Incinerators. The Company manufactures
combustion systems, which are large burners that can transform most solid,
liquid or gaseous fuels into usable energy, or burn multiple fuels, alternately
or simultaneously. Through its subsidiary General Combustion, the Company has
been a significant source of combustion systems for the asphalt and aggregate
drying industries since the 1950's. The Company also manufactures soil
decontamination machinery, as well as combustion systems for rotary dryers,
kilns, fume and liquid incinerators, boilers and tank heaters. The Company
believes maintenance and fuel costs are lower for its burners because of their
superior design.

Fluid Heat Transfer Systems. The Company's General Combustion subsidiaries in
the USA and U.K. manufacture the Hy-Way heat and Beverley lines of thermal fluid
heat transfer systems and specialty storage tanks for a wide array of industry
uses. Thermal fluid heat transfer systems are similar to boilers, but use a high
temperature oil instead of water. Thermal fluid heaters have been replacing
steam pressure boilers as the best method of heat transfer for storage, heating
and pumping viscous materials (i.e., asphalt, chemicals, heavy oils, etc.) in
many industrial and petrochemical applications worldwide. The Company believes
the high efficiency design of its thermal fluid heaters can outperform
competitive units in many types of process applications. Heaters are available
for vertical, horizontal and underground tanks in steel, stainless steel, and
other materials designed to meet large or small specific job requirements.

Consolidated Process Machinery Group (CPM)

Pelleting Equipment. Consolidated Process Machinery, Inc., a wholly owned
subsidiary of the Company until May 29, 2001, manufactures pelleting equipment
which is primarily used in the production of scientifically compounded animal,
poultry, and aquaculture feed. The equipment is also used for biomass and
synthetic fuel production. Pellet mills are the only widely accepted processes
which can scientifically process grain, and compound mineral additives and
nutrient concentrations to achieve a highly efficient grain-to-meat conversion
ratio, as well as improve palatability to animals, lower production costs and
increase efficiency. The pelleting process compresses grain and feed materials
ranging from fine powders to small granules into pellets of increased bulk
density. Pellets are durable, stable and highly resistant to disintegration and
breakage.

Grinding and Flaking Equipment. Under the names Roskamp and Champion, the
Company manufactures grinding and flaking equipment designed to grind and
process various grains, including wheat, soybeans and corn, which are used for
the production of pelletized animal feeds, the grinding of mash feed and the
processing of seeds for edible oil production. The equipment is also used in the
pharmaceutical and dry chemical industries.

                                       6
<PAGE>

Sugar Production Equipment. Under the name Silver-Weibull, the Company designed
and manufactured some of the largest continuous and batch centrifuges and
crystallization towers used in the production of sugar from beets and sugar
cane. The batch centrifuge produces the highest quality of sugar crystals and is
used in the final stage of the sugar refinement process. The lower cost
continuous centrifuge is used in the preliminary stages of the crystallization
process and provides more output as it processes in a continuous mode.

Citrus Processing Machinery. Gumaco manufactured equipment including presses,
evaporators, distillation columns, heat exchangers and dryers, which concentrate
fruit juices. Gumaco produced the "T.A.S.T.E." evaporator (Thermally Accelerated
Short-Term Evaporator) which revolutionized the process of concentrating citrus
juices.

Product Engineering and Development
-----------------------------------

The Company is engaged in continuing worldwide product engineering and
development efforts to expand its product lines and to further develop more
energy efficient and environmentally compatible systems.

Significant developments include the use of cost effective, non-fossil fuels,
biomass (bagasse, municipal solid waste, sludge and wood waste), refuse-derived
fuel, coal and coal mixtures, the economical recycling of old asphalt and new
designs of environmentally compatible asphalt plants. Product engineering and
development activities are directed toward more efficient methods of producing
asphalt and lower cost fluid heat transfer systems. In addition, efforts are
also focused on developing combustion systems that operate at higher
temperatures and offer a higher level of environmental compatibility. Product
engineering and development efforts in the pelleting, grinding and flaking
product lines have been directed toward the new mill design features and product
testing facilities for pharmaceutical and scientific applications. Product
engineering and development expenses were approximately $2.8 million,  $4.4
million, and $3.0 million in the fiscal years ended September 30, 2000, 1999 and
1998, respectively.

Sources of Supply and Manufacturing
-----------------------------------

Substantially all products sold by the Company and its subsidiaries are
manufactured or assembled by the Company, except for procured raw materials and
hardware. The Company purchases a large quantity of steel,  raw materials and
hardware used to manufacture its products from hundreds of suppliers and is not
dependent on any single supplier. Periodically, the Company reviews the cost
effectiveness of internal manufacturing versus outsourcing its product lines to
independent third parties and currently believes it has the internal capability
to produce the highest quality product at the lowest cost.

Seasonality
-----------

Subsequent to the sale of its food equipment processing operations of CPM in May
2001, the Company will be concentrated in the asphalt-related business of CEG
and thereby subject to a seasonal slow-down during the third and fourth quarters
of the calendar year. Traditionally, CEG's customers do not purchase new
equipment for shipment during the summer and fall months to avoid disrupting
their peak season for highway construction and repair work. This slow-down often
results in lower reported sales and earnings and or losses   during the first
and fourth quarters of the Company's fiscal year ended September 30.

Competition
-----------

The markets for the Company's products are highly competitive. Within a given
product line, the industry remains fairly concentrated, with typically a small
number of companies competing for the majority of a product line's industry
sales. The principal competitive factors include technology and overall product
design, dependability and reliability of performance, brand recognition, pricing
and after-sale customer support.

                                       7
<PAGE>

Management believes its ability to compete depends upon its continual efforts to
improve product performance and dependability, competitively price its products,
and offer the best customer support in the industry.

Sales and Marketing
-------------------

The Company's products and services have been marketed internationally through a
combination of Company-employed sales representatives and independent dealers
and agents. Each of the Company's business groups has been responsible for
marketing its products and services with support from the corporate sales and
marketing department.

Sales Backlog
-------------

The nature of the Company's business is such as to require a relatively short
turnaround from order to shipment, usually less than ninety (90) days.
Therefore, the size of the Company's backlog should not be viewed as an
indicator of the Company's annualized revenues, nor future financial results.
The Company's backlog was approximately $14 million on June 30, 2001.

Licenses, Patents and Trademarks
--------------------------------

The Company holds numerous patents covering technology and applications related
to various products, equipment and systems, and numerous trademarks and trade
names registered with the U.S. Patent and Trademark Office and in various
foreign countries. In general, the Company depends upon technological
capabilities, manufacturing quality control and application know-how, rather
than patents or other proprietary rights in the conduct of its business. The
Company believes the expiration of any one of these patents, or a group of
related patents, would not have a material adverse effect on the overall
operations of the Company.

Government Regulations
----------------------

The Company believes its design and manufacturing processes meet all industry
and governmental agency standards that may apply to its entire line of products,
including all domestic and foreign environmental, structural, electrical and
safety codes. The Company's products are designed and manufactured to comply
with Environmental Protection Agency regulations. Certain state and local
regulatory authorities have strong environmental impact regulations. While the
Company believes that such regulations have helped, rather than restricted its
marketing efforts and sales results, there is no assurance that changes to
federal, state, local, or foreign laws and regulations will not have a material
adverse effect on the Company's products and earnings in the future.

Environmental Matters
---------------------

The Company is subject to various federal, state, local and foreign laws and
regulations relating to the protection of the environment.  The Company believes
it is in material compliance with all applicable environmental laws and
regulations. The Company does not expect any material impact on future operating
costs as a result of compliance with currently enacted environmental
regulations.

The Company also regularly conducts an environmental assessment consistent with
recognized standards of due diligence on properties and businesses which it
acquires. To date, these assessments have not identified contamination resulting
from acquired properties that would be reasonably likely to result in a material
adverse effect on the Company's business, results of operations, or financial
condition.

                                       8
<PAGE>

Employees
---------

As of September 30, 2000, the Company employed a total of 757 employees; of that
594 employees are in the domestic U.S. operations and 163 employees in the
foreign operations. The Company has collective bargaining agreements covering
production and maintenance employees at its Marquette, Iowa and Crawfordsville,
Indiana facilities. The remaining domestic employees are not represented by a
labor union or collective bargaining agreement. Several of the Company's foreign
plants are represented by labor unions or quasi-governmental sponsored
collective bargaining units. The Company believes that its relationship with its
employees is good. After the sale of the CPM in May 2001, the Company employed a
total of 504 employees; 408 employees in the U.S and 96 employees in the U.K. as
of June 30, 2001.

Executive Officers of the Registrant
------------------------------------

The executive officers of the Registrant at September 30, 2000 were:

<TABLE>
<CAPTION>
     NAME                                           POSITION
<S>                                                 <C>
     E.J. Elliott                                   Chairman of the Board and President
     John E. Elliott                                Executive Vice President
     Marc G. Elliott                                President, Construction Equipment Group
     Scott W. Runkel                                Chief Financial Officer and Treasurer
     David F. Brashears                             Senior Vice President, Technology
     D. William Garrett                             Vice President, Sales
     Jeanne Lyons                                   Secretary
</TABLE>


Mr. E.J. Elliott has served as Chairman of the Board since 1973 and President
since 1969. Mr. Elliott has over 45 years experience in the design, manufacture
and operation of construction machinery and asphalt manufacturing plants.  Since
the early 1960's, Mr. Elliott owned and served as Chairman  and President of
General Combustion, Inc. and Genco Manufacturing Corporation which became the
foundation for Gencor.

Mr. John Elliott was elected Assistant Vice President and a Director of the
Company in 1985. In 1986, he was elected a Vice President and promoted to
Executive Vice president in 1989.  He has been with the Company since 1982.

Mr. Marc Elliott was promoted to President of the Construction Equipment Group
(CEG) in August 1999. He had previously been Vice President, Marketing, since
July 1993. He has served in various marketing positions since joining the
Company in 1988.

Mr. Scott Runkel was named Chief Financial Officer and Treasurer, in August
2000. He was a partner with the accounting firm of Ernst & Young and then a
financial advisor prior to joining the Company.

Mr. David Brashears was named Senior Vice President, Technology, in July 1993.
He had previously been Vice President, Engineering, since he joined the Company
in 1978.

Mr. William Garrett was elected Vice President, Sales, in 1991. He had
previously held numerous management positions in sales and marketing for a
number of subsidiaries of the Company.

Ms. Jeanne Lyons joined the Company in 1995 as Administrative Assistant to the
Chairman, and was elected Secretary of the Company in 1996.

                                       9
<PAGE>

ITEM 2.    PROPERTIES
-------

The following table lists the properties owned or leased by the Company as of
September 30, 2000:

<TABLE>
<CAPTION>
                                              Owned       Square                                     Business
Location                                     Acreage     Footage     Principal Function              Segment
<S>                                       <C>         <C>         <C>                                <C>
Amsterdam, Netherlands (1 )                      1.2      64,000  Offices and manufacturing          CPM
Araraquara, Brazil (1 )                         29.2     295,000  Offices and manufacturing          CPM
Aurora, Colorado (1)                            16.8     117,000  Offices and manufacturing          CPM
Billingshurst, West Sussex England (1 )          1.2       5,000  Offices                            CEG
Wuxi, Jiangsu, China (2)                         N/A      11,000  Offices and warehouse              CPM
Crawfordsville, Indiana (1 )                     2.7      62,000  Offices and manufacturing          CPM
Daventry, England(2) .                           N/A       3,000  Office and warehouse               CPM
Hasselholm, Sweden (2)                           N/A      10,000  Offices and manufacturing          CPM
Leicester, England (1 )                          6.0      97,000  Offices and manufacturing          CEG
Malmaison, France (l)                            0.2       4,000  Offices                            CPM
Marquette, Iowa (1 )                            72.0     137,000  Offices and manufacturing          CEG
Merrimack, New Hampshire (2)                     N/A      37,000  Offices and manufacturing          CPM
Orlando, Florida (1 )                           27.0     171,000  Corporate offices and
                                                                  manufacturing                      CEG
Sao Paulo, Brazil (1)                            0.4      38,000  Offices                            CPM
Singapore, Republic of Singapore (2)             N/A      40,000  Offices and manufacturing          CPM
Waterloo, Iowa (l)                              11.5      55,000  Offices and manufacturing          CPM
Wexford, Ireland (1 )                            5.6      60,000  Offices and manufacturing          CPM
(1)  Owned
(2)  Leased
</TABLE>

During 1999, the Company sold an office and manufacturing facility located in
Youngstown, Ohio (5.5 acres; 45,000 square feet), and a warehouse facility in
North Kansas City, Missouri (0.7 acres; 6,000 square feet).

During 2000, the Company sold an office and manufacturing facility located in
Indianapolis, Indiana (11.3 acres; 79,000 square feet).

During 2001, the Company sold an office and manufacturing facility located in
Aurora, Colorado and the Sao Paulo, Brazil office. Also in May 2001, the Company
sold the following properties related to CPM, which were either owned or leased:
Amsterdam, Netherlands office and manufacturing facility; Wuxi, China office and
warehouse; Crawfordsville, Indiana office and manufacturing facility; Daventry,
England office and warehouse; Malmaison, France office; Merrimack, New Hampshire
office and manufacturing facility; Singapore, Republic of Singapore office and
manufacturing facility; Waterloo, Iowa office and manufacturing facility; and
the Wexford, Ireland office and manufacturing facility.

                                      10
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS
-------

The Company has various litigations and claims pending as of the date of this
Form 10-K. Those claims which have occurred in the ordinary course of business,
and which are being vigorously defended, may be covered in whole or in part by
insurance, and if found against the Company, are not expected to have a material
effect on the Company's financial position or results of operations. Management
has reviewed all litigation matters arising in the ordinary course of business
and, upon advice of counsel, has made provisions, not deemed material, for any
estimable losses and expenses of litigation.

Since January 1999, a class action lawsuit had been pending in the United States
District Court for the Middle District of Florida against the Company.  The
lawsuit alleged that certain officers and directors of the Company violated
Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934, as well as
rule 10b-5 promulgated thereunder. The lawsuit sought to recover damages on
behalf of all investors who purchased the Company's Common Stock between
February 5, 1998 and January 28, 1999. The claim was settled with no material
adverse impact to the Company.

                                      11
<PAGE>

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-------

None.

                                      12
<PAGE>

PART II

ITEM 5.    MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
-------    MATTERS

Stock price information is as follows:
                                              SALES PRICES
                                              ------------
                                    HIGH                       LOW
                                    -----                      ---
          1998
          ----
          First Quarter             10-13/16                   5-13/16
          Second Quarter            15-15/16                   9-3/4
          Third Quarter             27-1/2                     13-9/16
          Fourth Quarter            26-1/4                     9-1/8

          1999 (1)
          --------
          First Quarter             15-1/4                     10
          Second Quarter (2)        10                         6
          Third Quarter             not available
          Fourth Quarter            not available

          2000
          ----
          First Quarter             not available
          Second Quarter            not available
          Third Quarter             2-1/4                      1/4
          Fourth Quarter            2-1/4                      13/16

          (1) High/low prices from 1999 forward are estimates due to paucity of
              information from stock price charts and pink sheets.

          (2) The American Stock Exchange suspended trading on February 22,
              1999.


As of July 31, 2001, there were 473 holders of Common Stock of record and 9
holders of Class B Stock of record.

As result of the on-going re-audit and restatement and subsequent
disqualification of Deloitte & Touche as auditors by SEC, the Company could not
complete its required filings. On February 22, 1999, the American Stock Exchange
suspended trading of the Company's stock pending the filing reports with the
Securities and Exchange Commission (SEC). Effective June 1, 2000, the Company's
stock was de-listed from the American Stock Exchange for failure to file these
reports within the prescribed time period. Following February 22, 1999 the
Company's securities began trading on the "pink sheets". Quotations on the pink
sheets reflect inter-dealer prices without retail mark-up, markdown, or
commissions and may not represent actual transactions. This Form 10-K includes
the re-audited and restated results for 1998 and the audited results for 1999
and 2000.

On April 9, 1998, the Board of Directors authorized 2-for-1 stock split to
shareholders of record as of April 22, 1998, effective May 4, 1998.  As a result
of the stock split, 3,272,870 additional common shares and 883,094 additional
Class B shares were issued and paid-in capital was reduced by $415.
Shareholders' equity

                                      13
<PAGE>

has been restated for all periods presented to give retroactive recognition to
the stock split. In addition, for all periods presented, all references in the
consolidated financial statements and footnotes thereto to number of shares, per
share amounts, weighted average shares outstanding, as well as stock option and
related price information, have been restated to give retroactive effect to the
split.

On December 22, 1997, the Board of Directors declared cash dividends of $.025
payable January 14, 1998 to shareholders of record as of December 31, 1997.

On December 3, 1998, the Board of Directors declared a cash dividend of $.03 per
share payable on January 22, 1999 to Common Stock shareholders of record on
December 31, 1998.

Pursuant to the terms of its current credit agreements, the Company will not be
paying dividends for the foreseeable future.

                                      14
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA
-------

<TABLE>
<CAPTION>
                                                                       Years Ended September 30
                                                           ------------------------------------------------------------
                                                             2000         1999      1998 (1)(5)      1997        1996
                                                                      (in thousands, except per share data)
<S>                                                        <C>          <C>         <C>            <C>         <C>
Net revenue from continuing operations                      $ 96,808    $101,399    $125,283       $ 63,719    $ 60,208
Operating income (loss) from
  continuing operations                                     $  3,848    $(15,113)   $  7,887       $  1,024    $  5,240
Income (loss) from continuing operations                    $  1,268    $(12,544)   $ (1,236)      $   (122)   $  2,756
Discontinued operations (2)                                 $   (476)   $(11,322)   $  2,891       $  7,017    $      -
Net income (loss)                                           $    792    $(23,866)   $  1,655       $  6,895    $  2,756

Per share data:
Basic:  (3)
Income (loss) from continuing operations                    $   0.14    $  (1.45)   $  (0.15)      $  (0.02)   $   0.39
Discontinued operations (2)                                    (0.05)      (1.30)       0.35           0.87           -
                                                            --------    --------    --------       --------    --------
Net income (loss)                                           $   0.09    $  (2.75)   $   0.20       $   0.85    $   0.39
                                                            ========    ========    ========       ========    ========

Diluted:  (3)
Income (loss) from continuing operations                    $   0.14    $  (1.45)   $  (0.15)      $  (0.01)   $   0.38
Discontinued operations (2)                                    (0.05)      (1.30)       0.35           0.75           -
                                                            --------    --------    --------       --------    --------
Net income (loss)                                           $   0.09    $  (2.75)   $   0.20       $   0.74    $   0.38
                                                            ========    ========    ========       ========    ========

Cash dividends declared per common share                    $      -    $  0.030    $  0.025       $ 0.0125    $ 0.0125

Selected balance sheet data:
</TABLE>

<TABLE>
<CAPTION>
                                                                                September 30,
                                                            -----------------------------------------------------------

                                                              2000        1999       1998 (1)        1997        1996
<S>                                                         <C>         <C>         <C>            <C>         <C>
Current assets                                              $ 85,869    $ 93,424    $100,151       $ 95,393    $ 69,813
Current liabilities                                         $140,672    $149,737    $142,312       $136,155    $103,698
Total assets                                                $139,946    $151,947    $173,157       $163,152    $119,061
Long-term debt, less current maturities (4)                 $      -    $      -    $      -       $      -    $      -
Shareholders' equity (deficit)                              $ (7,423)   $ (4,275)   $ 22,257       $ 21,212    $ 12,399
</TABLE>

1)  Amounts have been restated to reflect the adjustments resulting from certain
    accounting irregularities and improprieties in the financial statements of
    the Company's wholly-owned U.K. subsidiary, Gencor ACP, Ltd. See Note 4 to
    the accompanying financial statements for further discussion regarding the
    restatement.

(2) The operating results of the food processing equipment manufacturing
    businesses (CPM) are reflected as discontinued operations on the
    Consolidated Statements of Operations.

(3) Applicable amounts have been restated to give retroactive effect to the
    adoption of SFAS 128, Earnings per Share.

(4) See Note 13 - Long-Term Debt to the accompanying financial statements
    regarding the reclassification of long-term debt to current maturities due
    to the accelerated demand for payment in full by the Senior Secured Lenders.

(5) Net revenues from continuing operations for 1998 includes approximately $50
    million from sales of synthetic fuel production machinery.

                                      15
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
-------
        OF OPERATIONS

"Forward-Looking" Information

This Form 10-K contains certain "forward-looking statements" within the meaning
of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), which represent the Company's expectations and beliefs, including, but
not limited to, statements concerning gross margins, sales of the Company's
products and future financing plans. These statements by their nature involve
substantial risks and uncertainties, certain of which are beyond the Company's
control. Actual results may differ materially depending on a variety of
important factors, including the financial condition of the Company's customers,
changes in the economic and competitive environments, demand for the Company's
products, and outcome of pending litigation.

Restatement
-----------

Subsequent to the issuance of the Company's 1998 Annual Report, the Company
publicly announced on January 28, 1999, that certain accounting irregularities
and other improprieties were discovered at its wholly-owned U.K. subsidiary,
Gencor ACP Limited ("ACP"). An investigation into the affairs of ACP was
conducted by the Company and included assistance by both legal counsel and
forensic auditors. This investigation resulted in the termination of both the
Chairman and Chief Financial Officer of ACP. The accounting irregularities
primarily related to receivables, inventories, diversion of assets and the
resulting overstatement of income. As a result of these findings, the 1998
consolidated financial statements have been re-audited and restated from the
amounts previously reported to account for the errors (See Note 4 to the
consolidated financial statements).

Changes in Financial Condition, Liquidity, and Capital Resources
----------------------------------------------------------------

Chapter 11 Bankruptcy Reorganization

As of September 1999, the Company was in default of the terms and conditions of
its Senior Secured Credit Facility and Industrial Revenue Bond Indenture. In
November 1999, the Senior Secured Lenders accelerated their demand for payment
in full. During April 2000, certain of the Company's lenders filed an
Involuntary Petition under Chapter 11 of U.S. Bankruptcy Code. On September 13,
2000 (the "petition date"), the Company and certain of its subsidiaries ("the
Debtors") filed voluntary petitions commencing cases under Chapter 11 of the
U.S. Bankruptcy Code. The Company and certain of its subsidiaries began
operating its businesses as debtors-in-possession under Chapter 11 of the U.S.
Bankruptcy Code

On April 13, 2001, the Debtors filed the Amended Plan of Reorganization of
Gencor Industries, Inc. (the "Amended Plan"), dated April 9, 2001 with the
Bankruptcy Court providing essentially for 100% payment of all secured and
unsecured creditors and no dilution or diminution to the equity holders. The
Amended Plan was confirmed on July 11, 2001.

The Amended Plan will become effective on or before October 30, 2001, unless
extended (the "Effective Date"). Pursuant to the Amended Plan, as of the
Effective Date, the sale of CPM's domestic and foreign operations was to be
consummated (see Discontinued Operations). The sale was in fact consummated on
May 29, 2001 for $52 million. The net proceeds from the sale were used to reduce
the outstanding balance of the Senior Secured Lenders. Under the Amended Plan,
all of the Company's debts will be satisfied in full. Also by the Effective
Date, the Senior Secured Lenders and the Debtor are to have closed an Amended
and Restated Senior Secured Credit Agreement, which would specify that the
remaining claims of the Senior Secured Lenders of approximately $33 million are
to be paid over a four-year period with the balance due in 2005.

                                      16
<PAGE>

Any remaining debt balance at the end of the four-year period is expected to be
refinanced. The Company intends to emerge from bankruptcy on the Effective Date.

Discontinued Operations - Consolidated Process Machinery (CPM)

As part of the Company's Plan of Reorganization, the Company sold its food
processing machinery group (CPM). This involved selling CPM's three domestic
operations located in Indiana, Iowa and New Hampshire, and the six foreign
operations in France, Netherlands, United Kingdom, Ireland, Singapore and China.
The net proceeds of the sale were applied against the outstanding balance of the
Senior Secured Lenders. The Company also intends to sell the food processing
machinery operations located in Colorado, Sweden and Brazil. The operating
results of the food processing machinery group were classified as discontinued
operations for all periods presented in the Consolidated Statements of
Operations within this report.

Other Changes in Financial Condition, Liquidity, and Capital Resources
----------------------------------------------------------------------

Due to the default on its indebtedness, the entire outstanding debt balance of
$104.7 million in 2000 and $96.8 million in 1999 was reclassified as current
liabilities, this resulted in low current ratios and negative working capital
for both years. The Company's current ratio at September 30, 2000 was 0.61:1
compared to 0.62:1 at September 30, 1999. Working capital was a negative $54.8
million at September 30, 2000 and a negative $56.3 million at September 30,
1999. As of the Effective Date, the new credit agreement referenced above will
go into effect. The new credit agreement will provide for full payment of the
outstanding balance over a four-year period and will contain certain financial
and other restrictive covenants.

Cash provided by operating activities was $15.3 million for the year ended
September 30, 2000, compared to  $3.1 million for the year ended September 30,
1999.

During fiscal 2000, the Company adjusted certain accruals to increase its debt
obligation to the Senior Secured Lenders by approximately $10.3 million in order
to comply with an amount stipulated by the Bankruptcy Court. For cash flow
purposes, this transaction was treated as a non-cash transaction and disclosed
separately from the Statements of Cash Flows for the year ended September 30,
2000 (See Note 13 Long-Term Debt).

Pursuant to the terms of its current credit agreements, the Company will not be
paying dividends for the foreseeable future.

Results of Operations
---------------------

Year ended September 30, 2000 compared with the year ended September 30, 1999
-----------------------------------------------------------------------------

Continuing Operations - Construction Equipment Group (CEG)
---------------------   ----------------------------------

Net sales for the construction equipment group (CEG) were $96.8 million for the
year ended September 30, 2000, reflecting a decline of $4.6 million from $101.4
million during 1999. Net sales at the Company's wholly-owned U.K. subsidiary,
ACP, declined by approximately $7 million or 22.6%, from $31 million in 1999 to
$24 million in 2000. On January 28, 1999, the Company had announced the
discovery of accounting irregularities and improprieties at ACP and that an
investigation into the financial affairs of ACP had been initiated. Management
attributes the decline in sales at ACP to uncertainties surrounding this
investigation. Net sales for the domestic operations of CEG were approximately
$70.4 million for 2000, as compared to $69.8 million in 1999. Domestic sales
volume remained fairly stable throughout 2000, even during the period of turmoil
leading up to the Chapter 11 filing in September 2000. This stability reflects
favorably on the Company's product line, customer loyalty and reputation within
the industry.

                                      17
<PAGE>

Production costs were $69.5 million or 71.8% of net sales in fiscal 2000
compared to $85.9 million or 84.7% of net sales in 1999. The improvement
reflects significantly lower production costs experienced by the Company's
domestic operations of CEG during 2000. Production costs for the domestic
operations of CEG declined 19.9% as a percent of net sales, from 87.1% in 1999
to 67.2% during 2000. Improvement in performance can be attributed to the
positive impact of cost reductions, price increases and numerous operational
efficiencies. In addition, the negative performance in 1999 occurred because of
high production and engineering costs relating to the design and manufacture of
a new product, which proved to be extremely labor intensive and costly to
produce. The Company discontinued its production at the end of 1999. Also
included in the production costs for 1999 were significant inventory write-offs
and warranty reserves adjustments. Management believes the improvement in 2000
reflects a more normal production environment, a return to historical profit
margins and the elimination of the problems that existed in 1999.

Engineering and design problems relating to the production and performance of
the discontinued product which required extensive involvement by engineering
personnel and higher R&D costs to be incurred during 1999. During 2000, warranty
costs, engineering personnel costs and R&D costs were much lower than in 1999.

Selling, general, and administrative expenses declined by $5.5 million or 21%,
from $26.2 million in 1999 to $20.7 million in 2000. During 2000, significant
reductions in payroll-related costs of approximately $1.0 million, legal and
accounting fees of  $2.1 million and bad debt expense of $2.0 million account
for the improvement over 1999.

Operating income was $3.8 million for fiscal 2000 improving significantly over
1999's operating loss of $15.1 million.

Discontinued Operations - Consolidated Process Machinery (CPM)
-----------------------   ------------------------------------

Total foreign and domestic net sales for CPM declined by approximately $18.9
million or 18.9% from $99.9 million in 1999 to $81million during 2000.

Total production costs reflected a favorable decline of 2.2% as a percent of net
sales during 2000, dropping from 74% in 1999 to 71.8% in 2000.

The loss from discontinued operations was approximately $.5 million during 2000,
which compares favorably to the loss from discontinued operations of  $11.3
million reported for 1999. Included in the loss from discontinued operations for
1999, is a $4.9 million charge for impairment of assets and a $3.9 million
write-off on a deposit.

Results of Operations
---------------------

Year ended September 30, 1999 compared with the year ended September 30, 1998,
------------------------------------------------------------------------------
(as restated)
-------------

Continuing Operations - Construction Equipment Group (CEG)
---------------------   ----------------------------------

Net sales for the construction equipment group (CEG) were approximately $101.4
million for the year ended September 30, 1999, reflecting a decline of $23.9
million from approximately $125.3 million during 1998. Net sales from domestic
operations of CEG declined approximately $33.5 million or 32.4%, from
approximately $103.3 million in 1998 to approximately $69.8 million in 1999. The
decline in net sales is attributed to special one-time orders for synthetic fuel
production machinery received in 1998. These orders contributed approximately
$50 million in additional sales during 1998. Gross margins on the synthetic fuel
production machinery were generally higher than typical asphalt plant projects.
The decline in domestic sales was partially offset by CEG's foreign operations,
principally its wholly-owned U.K. subsidiary, ACP, where net sales increased by
approximately $12.3 million or 65.8%, from $18.7 million in 1998 to $31 million
in

                                      18
<PAGE>

1999. This improvement is attributed to changes in senior management and a
renewed emphasis on restoring customer confidence and increasing market share.
During 1999, ACP was successful in outsourcing several of its manufacturing
processes in Europe and increasing market share through competitive pricing.

Production costs increased approximately 16.7%, as a percent of net sales, to
$85.9 million or 84.7% of net sales in fiscal 1999 from $85.4 million or 68% of
net sales in 1998. The large increase in production costs as a percent of sales
was due to significant differences between the types of plants sold,
exploitation of the Company's difficulties by competitors in the marketplace,
and deeper discounting in order to preserve sales. Production costs for the
domestic operations of CEG increased 23.5% as a percent of net sales, from 63.6%
in 1998 to 87.1% in 1999.

Product engineering and development costs increased by approximately $1.4
million from $3 million in 1998 to $4.4 million in 1999. The increases in
warranty claims and engineering personnel costs associated with the discontinued
new product account for the increases during 1999.

Selling, general, and administrative expenses increased by $4.2 million from $22
million in 1998 to $26.2 million in 1999 due to increases in legal and
accounting fees of  $2.1 million, and a $.5 million write-off of deferred
acquisition costs in 1999.

Discontinued Operations - Consolidated Process Machinery (CPM)
-----------------------   ------------------------------------

Domestic and foreign net sales for CPM declined by approximately $20.8 million
or 17.2% from $120.7 million in 1998 to $99.9 million during 1999.

Total production costs for CPM reflected a 2.4% increase, as a percent of net
sales during 1999, rising from 71.6% in 1998 to 74% in 1999.

The reported $11.3 million loss from discontinued operations during 1999
includes a $4.9 million charge for impairment of assets and a $3.9 million
write-off of a deposit.

New Accounting Pronouncements
-----------------------------

During 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 141 (SAFS 141), "Business Combinations", and
No.142 (SFAS 142), "Goodwill and Other Intangible Assets." SFAS 141 addresses
financial accounting and reporting for goodwill and other intangible assets
acquired in a business combination at acquisition. SFAS 141 requires the
purchase method of accounting to be used for all business combinations initiated
after June 30, 2001; establishes specific criteria for the recognition of
intangible assets separately from goodwill; and requires unallocated negative
goodwill to be written off immediately as an extraordinary gain (instead of
being deferred and amortized). SFAS 142 addresses financial accounting and
reporting for intangible assets acquired individually or with a group of other
assets (but not those acquired in a business combination) at acquisition. SFAS
142 also addresses financial accounting and reporting for goodwill and other
intangible assets subsequent to their acquisition. SFAS 142 provides that
goodwill and intangible assets which have indefinite useful lives will not be
amortized but rather will be tested at least annually for impairment. It also
provides that intangible assets that have finite useful lives will continue to
be amortized over their useful lives, but those lives will no longer be limited
to forty years. SFAS 141 is effective for all business combinations initiated
after June 30, 2001 and for all business combinations accounted for by the
purchase method for which the date of acquisition is after June 30, 2001. The
provisions of SFAS 142 are effective for reporting periods beginning after
December 15, 2001. The Company is considering the provisions of SFAS No. 141 and
No. 142 and at present has not determined the impact of adopting SFAS 141 and
SFAS 142.

In June 1998, SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, was issued. This standard requires derivative instruments to be
recognized as assets or liabilities in the statement of financial position and
measure those instruments at fair value. The accounting for changes in fair
value of a derivative

                                      19
<PAGE>

depends on the intended use of the derivative and the resulting designation of
the hedge exposure. The adoption of the standard, which is effective for fiscal
years beginning after June 15, 2000, will not significantly impact the Company's
financial statements.

In June 1997, SFAS No. 130, Reporting Comprehensive Income, was issued.
Comprehensive income is defined as all changes in equity except for those
resulting from investments by or distributions to owners.  This statement, which
is effective in the first quarter of the Company's fiscal year ending September
30, 1999, establishes standards for reporting and display of comprehensive
income and its components in a full set of financial statements.  The
implementation of the statement is not expected to have any effect on the
results of operations.

The Company adopted SFAS No. 131, Disclosures About Segments of an Enterprise
and Related Information, on October 1, 1997.  This standard requires public
business enterprises to report certain information about operating segments in
its financial statements.


Year 2000 Compliance
--------------------

The year 2000 issue is the result of computer programs being written using two
digits rather than four digits to define the applicable year.  Any of the
Company's software programs that are date sensitive, may recognize a date using
"00" as the year 1900 rather than 2000.  This could result in a systems failure
and a disruption to the Company's operations.

The Company did not experience any significant malfunctions related to year 2000
issue. The total cost to review and modify the software programs was not
material.

                                      20
<PAGE>

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
--------

The Company operates manufacturing facilities and sales offices principally
located in the United States, the United Kingdom and Brazil. The Company is
subject to business risks inherent in non-U.S. activities, including political
and economic uncertainty, import and export limitations, and market risk related
to changes in interest rates and foreign currency exchange rates. The Company's
principal currency exposures against the U.S. dollar are the British pound and
Brazilian real. The Company has used foreign currency forward exchange contracts
to mitigate fluctuations in currency. The Company does not hold derivatives for
trading purposes. Periodically, the Company will use derivative financial
instruments consisting primarily of interest rate hedge agreements to manage
exposures to interest rate changes. The Company's objective in managing its
exposure to changes in interest rates (on its variable rate debt) is to limit
the impact of such changes on earnings and cash flow and to reduce its overall
borrowing costs.

At September 30, 2000, the Company had approximately $105.9 million of debt
outstanding. Substantially all of the Company's borrowings bear interest at
variable rates based upon a factor applied to the prime rate or LIBOR. The
weighted average interest rate for these borrowings was approximately 9.6%
during 2000, reflecting an increase of 130 basis points (1.30%) over the
weighted average cost of funds during 1999 of 8.3%. The Company performed a
sensitivity analysis assuming a hypothetical 10% adverse movement in the
weighted average interest rates on the debt outstanding at the end of 2000. Such
a movement in interest rates would cause the Company to recognize additional
interest expense of approximately $1 million along with a corresponding decrease
in cash flows.

The above sensitivity analysis for interest rate risk excludes accounts
receivable, accounts payable and accrued liabilities because of the short-term
maturity of such instruments. The analysis does not consider the effect on other
variables such as changes in sales volumes or management's actions with respect
to levels of capital expenditures, future acquisitions or planned divestures.
All of which could be significantly influenced by changes in interest rates and
cause the results to differ significantly from those indicated by the
sensitivity analysis.

                                      21
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------

An index to the consolidated financial statements of the Company and its
subsidiaries is set forth following Part IV hereof.

                                      22
<PAGE>

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
-------
          AND FINANCIAL DISCLOSURE

On May 8, 2001, the Registrant filed a Form 8-K disclosing the change in
independent accountants from PricewaterhouseCoopers LLP to Moore Stephens
Lovelace, P.A.  Pursuant to Item 304(b) of Regulation S-K, there has been no
disagreement or any reportable event that would require additional disclosure in
this Form 10-K.

On December 27, 1999, the Registrant filed a Form 8-K disclosing the change in
independent accountants from Deloitte & Touche LLP to PricewaterhouseCoopers
LLP. Pursuant to Item 304(b) of Regulation S-K, there has been no disagreement
or any reportable event that would require additional disclosure in this Form
10-K.

                                      23
<PAGE>

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS
--------

The information regarding the Company's Directors required by this Item 10 is
incorporated herein by reference to the Company's definitive 2001 Proxy
Statement.

ITEM 11.  EXECUTIVE COMPENSATION
--------

The information required by this Item 11 is incorporated herein by reference to
the Company's definitive 2001 Proxy Statement.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------

The information required by this Item 12 is incorporated herein by reference to
the Company's definitive 2001 Proxy Statement.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------

During 2000, 1999 and 1998 Marcar Leasing Corporation ("Marcar") was engaged in
leasing machinery and vehicles to the public and to the Company. Marcar is owned
by family members of the Company's Chairman. The terms of the leases are
established based on the rates charged by independent leasing companies and are
believed to be more favorable than those generally available from independent
third parties. Leases between the Company and Marcar generally provide for equal
monthly payments over either thirty-six months or forty-eight months. During
fiscal 2000, 1999 and 1998, the Company made lease payments to Marcar totaling
$269,726, $246,168 and $217,805, respectively.

                                      24
<PAGE>

PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
--------

(a)  A listing of financial statements and financial statement schedules filed
     as part of this report is set forth in the "Index to Financial Statements"
     following Part IV hereof.

(b)  Reports on Form 8-K:

     On September 25, 2000, the Company filed a Form 8-K pursuant to Item 5.
     announcing that a consensual agreement had been reached between the Company
     and its lenders which resolved their outstanding disputes and will allow
     the Company to focus on its growing markets and serve its customers.

(c)  Exhibit Index - 2000 Annual Report on Form 10-K.

(d)  Audit Opinion Fiscal Years 1999 and 1998

     The fiscal years ended September 30, 1999 and 1998 have been audited by
     PricewaterhouseCoopers LLP whose report on those statements is dated March
     16, 2001. The consent and opinion of PricewaterhouseCoopers LLP are not
     included in this Form 10-K.

<TABLE>
<CAPTION>
  EXHIBIT
  NUMBER                                  DESCRIPTION                                   FILED HEREWITH
  ------                                  -----------                                   --------------
<S>               <C>                                                                   <C>
        2.1       Second Amended Plan of Reorganization of Gencor                              X
                  Industries, Inc., As Modified    Dated: July 8, 2001

        2.2       Asset Purchase Agreement Re: CPM                                             X

        2.3       First Amendment to Asset Purchase Agreement                                  X

        3.1       Restated Certificate of Incorporation of Company,
                  incorporated by reference to Exhibit 3.1 to Registration
                  No. 33-627

        3.2       Composite of Bylaws of Company, incorporated by reference
                  to Exhibit 3.2 to Registration No. 33-627

        3.3       Certificate of Amendment, changing name of Mechtron
                  International Corporation to Gencor Industries, Inc. and
                  adding a "twelfth" article regarding director liability
                  limitation, incorporated by reference to the Company's
                  annual report on Form 10-K for the year ended December 31,
                  1987.

        4.1       Form of Common Stock certificate, incorporated by
                  reference to Exhibit 4.1 to Registration No. 33-627.

        4.2       Loan Agreement between the Orange County Industrial
                  Development Authority and the Company dated as of December
                  1, 1984, incorporated by reference to Exhibit 4.2 to
                  Registration No. 33-627.

        4.3       Specimen copy of Promissory Note dated December 1, 1984,
                  from the Company to the Orange County Industrial
                  Development Authority in the principal sum of $5 million,
                  incorporated by reference to Exhibit 4.3 to Registration
                  No. 33-627
</TABLE>

                                      25
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                  DESCRIPTION                                 FILED HEREWITH
------                                  -----------                                 --------------
<S>               <C>                                                               <C>
  4.4             Mortgage Deed and Security Agreement dated as of December
                  1, 1984, from the Company to the Orange County Industrial
                  Development Authority, incorporated by reference to
                  Exhibit 4.4 to Registration No. 33-627.

  4.5             Trust Indenture between Orange County Industrial
                  Development Authority and Barnett Banks Trust Company
                  dated as of December 1, 1984, incorporated by reference to
                  Exhibit 4.5 to Registration No. 33-627.

  4.6             Guaranty Agreement between General Combustion Corporation,
                  Mechtron International DISC Corporation, Control Delta
                  Corporation, Thermotech Systems Corporation of Florida,
                  General Combustion Limited, and the Orange County
                  Industrial Development Authority dated as of December 1,
                  1984, incorporated by reference to Exhibit 4.6 to
                  Registration No. 33-627.

 4.27             $95 million Senior Secured Credit Agreement, by and among
                  Gencor, the Lenders and Credit Lyonnais, New York Bank as
                  Agent to the Lenders and the Issuing Bank with respect to
                  the Letters of Credit, incorporated by reference to
                  Exhibit 10.4 to the Company's Report on Form 8-K filed on
                  December 26, 1996.

 4.28             Borrower Security Agreement, dated as of December 10,
                  1996, made by Registrant in favor of Credit Lyonnais New
                  York Branch, as Agent, incorporated by reference to
                  Exhibit 10.5 to the Company's Report on Form 8-K filed on
                  December 26, 1996.

 4.29             Borrower Copyright Security Agreement, dated as of
                  December 10, 1996, made by Registrant in favor of Credit
                  Lyonnais New York Branch, as Agent, incorporated by
                  reference to Exhibit 10.6 to the Company's Report on Form
                  8-K filed on December 26, 1996.

 4.30             Borrower Pledge Agreement, dated as of December 10, 1996,
                  made by Registrant in favor of Credit Lyonnais New York
                  Branch, as Agent, incorporated by reference to Exhibit
                  10.7 to the Company's Report on Form 8-K filed on December
                  26, 1996.
</TABLE>

                                      26
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                  DESCRIPTION                             FILED HEREWITH
------                                  -----------                             --------------
<S>              <C>                                                            <C>
 4.31            California Pellet Mill Company Security Agreement, dated
                 as of December 10, 1996, made by California Pellet Mill
                 Company in favor of Credit Lyonnais New York Branch, as
                 Agent, incorporated by reference to Exhibit 10.8 to the
                 Company's Report on Form 8-K filed on December 26, 1996.

 4.32            California Pellet Mill Company Pledge Agreement, dated as
                 of December 10, 1996, made by California Pellet Mill
                 Company in favor of Credit Lyonnais New York Branch, as
                 Agent, incorporated by reference to Exhibit 10.9 to the
                 Company's Report on Form 8-K filed on December 26, 1996.

 4.33            General Combustion Corporation Security Agreement, dated
                 as of December 10, 1996, made by General Combustion
                 Corporation in favor of Credit Lyonnais New York Branch,
                 as Agent, incorporated by reference to Exhibit 10.10 to
                 the Company's Report on Form 8-K filed on December 26,
                 1996.

 4.34            Equipment Services Group, Inc. Security Agreement, dated
                 as of December 10, 1996, made by Equipment Services Group,
                 Inc. in favor of Credit Lyonnais New York Branch, as
                 Agent, incorporated by reference to Exhibit 10.11 to the
                 Company's Report on Form 8-K filed on December 26, 1996.

 4.35            Thermotech Systems Corporation Security Agreement, dated
                 as of December 10, 1996, made by Thermotech Systems
                 Corporation in favor of Credit Lyonnais New York Branch,
                 as Agent, incorporated by reference to Exhibit 10.12 to
                 the Company's Report on Form 8-K filed on December 26,
                 1996.

 4.36            Bituma-Stor, Inc. Security Agreement, dated as of December
                 10, 1996, made by Bituma-Stor, Inc. in favor of Credit
                 Lyonnais New York Branch, as Agent, incorporated by
                 reference to Exhibit 10.13 to the Company's Report on Form
                 8-K filed on December 26, 1996.

 4.37            Bituma Corporation Security Agreement, dated as of
                 December 10, 1996, made by Bituma Corporation in favor of
                 Credit Lyonnais New York Branch, as Agent, incorporated by
                 reference to Exhibit 10.13 to the Company's Report on Form
                 8-K filed on December 26, 1996.
</TABLE>

                                      27
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                      DESCRIPTION                                FILED HEREWITH
------                                      -----------                                --------------
<S>                  <C>                                                               <C>
 4.38                Mortgage made by Gencor, Industries, Inc. in favor of
                     Credit Lyonnais New York Branch, as Agent, for certain
                     real property located in Orlando, Florida, incorporated by
                     reference to Exhibit 10.15 to the Company's Report on Form
                     8-K filed on December 26, 1996.

 4.39                Mortgage made by General Combustion Corporation in favor
                     of Credit Lyonnais New York Branch, as Agent, for certain
                     real property located in Youngstown, Ohio, incorporated by
                     reference to Exhibit 10.16 to the Company's Report on Form
                     8-K filed on December 26, 1996.

 4.40                Mortgage made by Gencor Industries, Inc. in favor of
                     Credit Lyonnais New York Branch, as Agent, for certain
                     real property located in Marquette, Iowa, incorporated by
                     reference to Exhibit 10.17 to the Company's Report on Form
                     8-K filed on December 26, 1996.

 4.41                Mortgage made by California Pellet Mill Company in favor
                     of Credit Lyonnais New York Branch, as Agent, for certain
                     real property located in Waterloo, Iowa, incorporated by
                     reference to Exhibit 10.18 to the Company's Report on Form
                     8-K filed on December 26, 1996.

 4.42                Mortgage made by California Pellet Mill Company in favor
                     of Credit Lyonnais New York Branch, as Agent, for certain
                     real property located in Crawfordsville, Indiana,
                     incorporated by reference to Exhibit 10.19 to the
                     Company's Report on Form 8-K filed on December 26, 1996.

 4.43                Tranche A Term Note, incorporated by reference to Exhibit
                     10.20 to the Company's Report on Form 8-K filed on
                     December 26, 1996.

 4.44                Tranche B Term Note, incorporated by reference to Exhibit
                     10.21 to the Company's Report on Form 8-K filed on
                     December 26, 1996.

 4.45                Revolving Credit Notes, incorporated by reference to
                     Exhibit 10.22 to the Company's Report on Form 8-K filed on
                     December 26, 1996.

 4.46                Tranche C Term Notes, incorporated by reference to Exhibit
                     10.23 to the Company's Report on Form 8-K, filed on
                     October 27, 1997.
</TABLE>

                                      28
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                  DESCRIPTION                              FILED HEREWITH
------                                  -----------                             --------------
<S>              <C>                                                            <C>
 10.5            Form of Agreement for Nonqualified Stock Options granted
                 in 1986, incorporated by reference to the Annual Report on
                 Form 10-K for the year ended December 31, 1986.

 10.6            1992 Stock Option Plan and Form of Agreement, incorporated
                 by reference to Exhibit 10.6 to the Company's Quarterly
                 Report on Form 10-Q for the quarter ended June 30, 1992.

 10.7            Purchase Agreement between Ingersoll-Rand Company and
                 Registrant, dated August 12, 1996 incorporated by
                 reference to Exhibit 10.1 to the Company's Report on Form
                 8-K filed on August 19, 1996.

 10.8            First Amendment, dated as of November 22, 1996, to the
                 Purchase Agreement between Ingersoll-Rand Company and
                 Registrant, dated August 12, 1996 incorporated by
                 reference to Exhibit 10.2 to the Company's Report on Form
                 8-K filed on December 26, 1996.

 10.9            Second Amendment, dated as of December 10, 1996, to the
                 Purchase Agreement between Ingersoll-Rand Company and
                 Registrant, dated August 12, 1996 incorporated by
                 reference to Exhibit 10.3 to the Company's Report on Form
                 8-K filed on December 26, 1996.

 10.11           1997 Stock Option Plan incorporated by reference to
                 Exhibit A to the Company's Proxy Statement on 14A, filed
                 March 3, 1997.

 10.12           Form of Construction Subcontract dated April 3, 1998 (1)

 16.0            Letter re: change in certifying accountants dated May 8,
                 2001.

 16.1            Letter re: change in certifying accountants dated December
                 22, 1999.

 21.0            Subsidiaries of the Registrant.                                    X
</TABLE>

___________
(1) Portions of this exhibit have been omitted pursuant to a request for
confidential treatment.

                                      29
<PAGE>

SIGNATURES


Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.

Dated: October 25th 2001               GENCOR INDUSTRIES, INC.
                                         (Registrant)


                                         /s/ E.J. Elliott
                                         ---------------------------------------
                                         E.J. Elliott
                                         President and Chairman
                                         of the Board

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated. The signatures of Directors
constitute a majority of Directors.


/s/ E.J. Elliott                        /s/ Scott W. Runkel
-------------------------------------    ---------------------------------------
E.J. Elliott                             Scott W. Runkel

President and Chairman of the Board      Chief Financial Officer


/s/ John E. Elliott
-------------------------------------
John E. Elliott
Director

                                      30
<PAGE>

                            GENCOR INDUSTRIES, INC.
                            -----------------------

        INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
        ---------------------------------------------------------------

                                                                         Page
                                                                         ----

Reports of Independent Certified Public Accountants....................  34

Consolidated Balance Sheets as of September 30, 2000, 1999 and 1998....  35

Consolidated Statements of Operations for the years ended
 September 30, 2000, 1999 and 1998 (As Restated).......................  36

Consolidated Statements of Shareholders' Equity (Deficit) for the years
 ended September 30, 2000, 1999 and 1998 (As Restated).................  37

Consolidated Statements of Cash Flows for the years ended
 September 30, 2000, 1999 and 1998 (As Restated).......................  38

Notes to Consolidated Financial Statements.............................  39

Financial Statement Schedule:

Schedule II. Valuation and Qualifying Accounts.........................  58

All other schedules are omitted because they are not applicable or the required
information is shown in the consolidated financial statements or notes thereto.


Audit Opinion Fiscal Years 1999 and 1998

The fiscal years ended September 30, 1999 and 1998 have been audited by
PricewaterhouseCoopers LLP whose report on those statements is dated March 16,
2001. The consent and opinion of PricewaterhouseCoopers LLP are not included in
this Form 10-K.

<PAGE>

              REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
              --------------------------------------------------



Board of Directors
Gencor Industries, Inc.
Orlando, Florida


We have audited the accompanying consolidated balance sheet of Gencor
Industries, Inc. and subsidiaries as of September 30, 2000, and the related
consolidated statements of operations, shareholders' equity (deficit) and cash
flows for the year then ended.  Our audit also included the financial statement
schedule listed in the accompanying index.  These financial statements and
financial statement schedule are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audit. We did not audit the financial
statements of CPM/Europe Limited, California Pellet Mill Europe Limited, Silver
Weibull Aktiebolag and General Combustion Limited, wholly owned subsidiaries,
whose statements reflect total assets constituting 6% of consolidated assets as
of September 30, 2000, and total revenues constituting 4% of consolidated
revenues for the year then ended.  Those statements were audited by other
auditors whose reports have been furnished to us, and our opinion, insofar as it
relates to the amounts included for CPM/Europe Limited, California Pellet Mill
Europe Limited, Silver Weibull Aktiebolag and General Combustion Limited, is
based solely on the reports of the other auditors.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America.  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audit and the reports of
the other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audit and the audit reports of the other auditors,
the consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Gencor Industries, Inc. and
subsidiaries as of September 30, 2000, and the results of their operations and
their cash flows for the year then ended, in conformity with accounting
principles generally accepted in the United States of America.  Also, in our
opinion, the financial statement schedule referred to above, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.


Moore Stephens Lovelace, P.A.
Certified Public Accountants

Orlando, Florida
July 11, 2001, except for Notes 2 and 3,
 as to which the date is September 14, 2001.

                                      F-1
<PAGE>

                            GENCOR INDUSTRIES, INC.
                          Consolidated Balance Sheets
              All amounts in thousands, except per share amounts

<TABLE>
<CAPTION>
                                                                                                  September 30,
                                                                            -----------------------------------------------------
ASSETS                                                                           2000            1999           1998
                                                                                                           (As Restated,
Current assets:                                                                                             See Note 4)
<S>                                                                          <C>             <C>             <C>
  Cash and cash equivalents                                                  $ 17,971        $  9,581        $  8,539
  Accounts receivable, less allowance for doubtful accounts
     of $3,146 ($2,870 in 1999 and $5,573 in 1998)                             22,469          29,665          32,394
  Income tax receivable                                                             -           9,664           3,189
  Other receivables                                                             1,661           2,813           3,832
  Inventories                                                                  41,394          39,780          47,276
  Prepaid expenses, including deferred income taxes of $3,597 in 1998           2,374           1,921           4,921
                                                                             --------        --------        --------
           Total current assets                                                85,869          93,424         100,151

Property and equipment, net                                                    33,567          35,777          43,621
Goodwill, net of accumulated amortization of $2,498 ($1,746 in 1999
  and $1,261 in 1998)                                                          12,018          13,107          16,849
Other assets, including deferred income taxes of $1,019 in 1998                 8,492           9,639          12,536
                                                                             --------        --------        --------
           Total assets                                                      $139,946        $151,947        $173,157
                                                                             ========        ========        ========

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
  Notes payable                                                              $  1,124        $  5,359        $  5,468
  Current portion of long-term debt                                           104,743          96,756          97,079
  Accounts payable                                                             17,079          21,457          18,509
  Customer deposits                                                             1,735           5,445           3,359
  Income and other taxes payable                                                1,362           2,358           1,335
  Accrued expenses                                                             14,629          18,362          16,562
                                                                             --------        --------        --------
           Total current liabilities                                          140,672         149,737         142,312

Post-retirement benefits                                                        2,950           2,630           2,246
Deferred income taxes                                                               -               -           1,872
Other liabilities                                                               3,747           3,855           4,470
                                                                             --------        --------        --------

           Total liabilities                                                  147,369         156,222         150,900
                                                                             --------        --------        --------
Commitments and contingencies

Shareholders' equity (deficit):
  Preferred stock, par value $.10 per share; authorized
   300,000 shares; none issued                                                      -               -               -
  Common stock, par value $.10 per share; 15,000,000 shares authorized;
   6,971,470 shares issued in 2000 and 1999 (6,914,718 in 1998)                   697             697             691
  Class B stock, par value $.10 per share; 6,000,000 shares authorized:
    1,890,398 shares issued in 2000 and 1999 (1,917,150 shares in 1998)           189             189             192
  Capital in excess of par value                                               11,343          11,343          11,288
  Accumulated deficit                                                         (10,110)        (10,902)         13,239
  Accumulated other comprehensive loss                                         (7,743)         (3,803)         (1,354)
  Subscription receivable                                                         (95)            (95)            (95)
  Common stock in treasury, 179,400 shares at cost                             (1,704)         (1,704)         (1,704)
                                                                             --------        --------        --------
                                                                               (7,423)         (4,275)         22,257
                                                                             --------        --------        --------
                                                                             $139,946        $151,947        $173,157
                                                                             ========        ========        ========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                      F-2
<PAGE>

                            GENCOR INDUSTRIES, INC.
                     Consolidated Statements of Operations
                    In thousands, except per share amounts

<TABLE>
<CAPTION>
                                                                               For the Years Ended September 30,
                                                                            --------------------------------------------
                                                                               2000          1999              1998
                                                                                                          (As Restated,
                                                                                                           See Note 4)
<S>                                                                         <C>          <C>               <C>
Net revenue                                                                 $96,808      $101,399          $125,283
                                                                            -------      --------          --------

Costs and expenses:
     Production costs                                                        69,509        85,915            85,368
     Product engineering and development                                      2,783         4,404             2,971
     Selling, general and administrative                                     20,668        26,193            22,056
     ACP opening balance sheet adjustment                                         -             -             7,001
                                                                            -------      --------          --------
                                                                             92,960       116,512           117,396
                                                                            -------      --------          --------
Operating income (loss)                                                       3,848       (15,113)            7,887
                                                                            -------      --------          --------

Other income (expense):
     Interest income                                                            355            96               160
     Interest expense                                                        (3,194)       (3,220)           (3,260)
     Miscellaneous                                                              111          (883)              (36)
                                                                            -------      --------          --------
                                                                             (2,728)       (4,007)           (3,136)
                                                                            -------      --------          --------
Income (loss) from continuing operations
   before income taxes                                                        1,120       (19,120)            4,751

Income taxes                                                                   (148)       (6,576)            5,987
                                                                            -------      --------          --------
Income (loss) from continuing operations                                      1,268       (12,544)           (1,236)
Discontinued operations
   Operating income (loss) (net of income tax expense of $698 in
    2000, $2,908 in 1999 and $2,299 in 1998)                                   (476)      (11,322)            2,891
                                                                            -------      --------          --------
Net income (loss)                                                           $   792      $(23,866)         $  1,655
                                                                            =======      ========          ========

Basic and diluted earnings (loss) per common share:
Income (loss) from continuing operations                                    $  0.14      $  (1.45)         $  (0.15)
Discontinued operations                                                       (0.05)        (1.30)             0.35
                                                                            -------      --------          --------
Net income (loss)                                                           $  0.09      $  (2.75)         $   0.20
                                                                            =======      ========          ========
</TABLE>

         See accompanying notes to consolidated financial statements.

                                      F-3
<PAGE>

                            GENCOR INDUSTRIES, INC.
           Consolidated Statements of Shareholders' Equity (Deficit)
                           All amounts in thousands

             For the Years Ended September 30, 2000, 1999 and 1998

<TABLE>
<CAPTION>
                                                                                       Retained                     Accumulated
                                                                        Capital in     Earnings                        Other
                                      Common Stock     Class B Stock    Excess of    (Accumulated  Comprehensive   Comprehensive
                                     Shares  Amount   Shares   Amount   Par Value      Deficit)    Income (Loss)   Income (Loss)
<S>                                  <C>     <C>      <C>      <C>      <C>         <C>            <C>             <C>
 September 30, 1997                   6,546   $ 654   1,766    $ 177     $ 9,356     $   11,804                     $      (684)
  Exchange of shares                     49       5     (49)      (5)          -              -                               -
  Stock options exercised               320      32     200       20       1,127              -                               -
  Purchase of treasury stock              -       -       -        -           -              -                               -
  Cash dividend ($0.025 per share)        -       -       -        -           -           (220)                              -
  Tax benefit on options exercised        -       -       -        -         805              -                               -
  Net income, as restated                 -       -       -        -           -          1,655       $     1,655             -
  Translation adjustment                  -       -       -        -           -              -              (670)         (670)
                                      -----   -----   -----    -----     -------     ----------       -----------   -----------
  Comprehensive income                                                                                $       985
                                                                                                      ===========

 September 30, 1998  - as
   restated                           6,915     691   1,917      192      11,288         13,239                          (1,354)
  Exchange of shares                     27       3     (27)      (3)          -              -                               -
  Stock options exercised                30       3                           55              -                               -
  Cash dividend ($0.030 per share)        -       -       -        -           -           (275)                              -
  Net loss                                -       -       -        -           -        (23,866)      $   (23,866)            -
  Translation adjustment                  -       -       -        -           -              -            (2,449)       (2,449)
                                      -----   -----   -----    -----     -------     ----------       -----------   -----------
  Comprehensive loss                                                                                  $   (26,315)
                                                                                                      ===========

 September 30, 1999                   6,972     697   1,890      189      11,343        (10,902)                         (3,803)
  Net income                              -       -       -        -           -            792       $       792             -
  Translation adjustment                  -       -       -        -           -              -            (3,940)       (3,940)
                                      -----   -----   -----    -----     -------     ----------       -----------   -----------
  Comprehensive loss                                                                                  $    (3,148)
                                                                                                      ===========

 September 30, 2000                   6,972   $ 697   1,890    $ 189     $11,343     $  (10,110)                    $    (7,743)
                                      =====   =====   =====    =====     =======     ==========                     ===========
<CAPTION>
                                                                             Total
                                     Subscription     Treasury Stock     Shareholders'
                                      Receivable       Shares Cost      Equity (Deficit)
<S>                                  <C>              <C>               <C>
 September 30, 1997                  $        (95)                      $       21,212
  Exchange of shares                            -                                    -
  Stock options exercised                       -                                1,179
  Purchase of treasury stock                    -      179  $ (1,704)           (1,704)
  Cash dividend ($0.025 per share)              -        -         -              (220)
  Tax benefit on options exercised              -        -         -               805
  Net income, as restated                       -        -         -             1,655
  Translation adjustment                        -        -         -              (670)
                                     ------------   ------  --------    --------------
  Comprehensive income


 September 30, 1998  - as
   restated                                   (95)     179    (1,704)           22,257
  Exchange of shares                            -        -         -                 -
  Stock options exercised                       -        -         -                58
  Cash dividend ($0.030 per share)              -        -         -              (275)
  Net loss                                      -        -         -           (23,866)
  Translation adjustment                        -        -         -            (2,449)
                                     ------------   ------  --------    --------------
  Comprehensive loss


 September 30, 1999                           (95)     179    (1,704)           (4,275)
  Net income                                    -        -         -               792
  Translation adjustment                        -        -         -            (3,940)
                                     ------------   ------  --------    --------------
  Comprehensive loss


 September 30, 2000                  $        (95)     179  $ (1,704)   $       (7,423)
                                     ============   ======  ========    ==============
</TABLE>

         See accompanying notes to consolidated financial statements.

                                      F-4
<PAGE>

                            GENCOR INDUSTRIES, INC.
                     Consolidated Statements of Cash Flows
                           All amounts in thousands

<TABLE>
<CAPTION>
                                                                                    For the Years Ended September 30,
                                                                                    --------------------------------
                                                                             2000                    1999               1998
                                                                                                                     (As Restated,
                                                                                                                      See Note 4)
<S>                                                                        <C>                    <C>                <C>
Cash flows from operations:
  Net income (loss)                                                        $     792              $  (23,866)          $  1,655
  Adjustments to reconcile net income (loss)
  to cash provided by (used for) operations:
     Gain on sale of division                                                      -                       -               (712)
     Depreciation and amortization                                             5,240                   4,731              5,296
     Gain on sale of assets                                                     (247)                      -                  -
     Postretirement benefits                                                     320                     384                288
     Bad debt expense                                                            262                   2,270              2,264
     Impairment of long-lived assets and goodwill                                  -                   4,846                  -
     Unrecoverable deposits                                                        -                   3,923                  -
     ACP opening balance sheet adjustments                                         -                       -              7,001
     Change in assets and liabilities - net of businesses acquired:
          Income tax receivable                                                9,664                  (6,475)            (3,189)
          Accounts receivable                                                  5,894                   1,769              2,624
          Other receivables                                                    1,152                   1,019             (1,751)
          Inventories                                                         (1,614)                  7,496              1,627
          Prepaid expenses                                                      (453)                  1,981              1,020
          Other assets                                                           635                  (5,393)             2,292
          Deferred income taxes                                                    -                   2,744             (2,107)
          Accounts payable                                                    (4,378)                  2,948             (7,139)
          Customer deposits                                                   (3,710)                  2,086             (8,859)
          Income and other taxes payable                                        (996)                  1,023                793
          Accrued expenses                                                     6,556                   1,800             (3,307)
          Other liabilities                                                   (3,785)                   (169)               575
                                                                           ---------              ----------           --------
                 Total adjustments                                            14,540                  26,983             (3,284)
                                                                           ---------              ----------           --------
Cash provided by (used for) operations                                        15,332                   3,117             (1,629)
                                                                           ---------              ----------           --------
Cash flows from investing activities:
     Cash paid for business acquired                                               -                       -             (3,240)
     Proceeds received for division sold                                           -                       -              1,270
     Capital expenditures, net                                                (1,624)                 (1,613)            (5,386)
     Proceeds from sale of property and equipment                                442                     633                  -
     Acquisition costs                                                             -                       -             (1,304)
                                                                           ---------              ----------           --------
Cash used for investing activities                                            (1,182)                   (980)            (8,660)
                                                                           ---------              ----------           --------
Cash flows from financing activities:
     Net (reduction) increase in notes payable                                (2,928)                   (109)             5,424
     Repayment of debt                                                        (7,802)                 (4,823)           (50,449)
     Borrowings                                                                5,500                   4,500             53,696
     Cash dividends paid                                                           -                    (275)              (220)
     Issuance of common stock                                                      -                      58                252
                                                                           ---------              ----------           --------
Cash (used for) provided by financing activities                              (5,230)                   (649)             8,703
                                                                           ---------              ----------           --------
Effect of exchange rate changes on cash                                         (530)                   (446)              (162)
                                                                           ---------              ----------           --------
Net increase (decrease) in cash                                                8,390                   1,042             (1,748)
Cash and cash equivalents at:
     Beginning of year                                                         9,581                   8,539             10,287
                                                                           ---------              ----------           --------
     End of year                                                           $  17,971              $    9,581           $  8,539
                                                                           =========              ==========           ========
</TABLE>

         See accompanying notes to consolidated financial statements.

                                      F-5
<PAGE>

                            GENCOR INDUSTRIES, INC.
                            -----------------------

                  Notes to Consolidated Financial Statements
                  ------------------------------------------
              All amounts in thousands, except per share amounts

NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Gencor Industries, Inc. and its subsidiaries (collectively the "Company") design
and manufacture process equipment primarily utilized in the asphalt,
agricultural, and food industries (See Note 3).

On April 9, 1998, the Board of Directors authorized a 2-for-1 stock split to
shareholders of record as of April 22, 1998, effective May 4, 1998. As a result
of the split, 3,272,870 additional common shares and 883,094 additional Class B
shares were issued and paid-in capital was reduced by $415. All references in
the consolidated financial statements and footnotes thereto reflect the effect
of the stock split.

These consolidated financial statements include the accounts of the Company and
its subsidiaries.  All significant intercompany accounts and transactions have
been eliminated in consolidation.

Use of Estimates
----------------

The preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Net Income (Loss) Per Share
---------------------------

The financial statements include "basic" and "diluted" per share information.
Basic and diluted per share information is calculated by dividing income (loss)
from continuing operations, income (loss) from discontinued operations and net
income (loss) by the weighted average number of shares outstanding. Diluted per
share information is the same as basic in 1999 and 1998 because the impact of
potential common stock equivalents on the basic income (loss) from continuing
operations per share is antidilutive.

The following presents the calculation of the basic and diluted income (loss)
per share from continuing operations for the years ended September 30, 2000,
1999 and 1998:

<TABLE>
<CAPTION>
                                       2000                              1999                             1998
                          --------------------------------  ----------------------------------  --------------------------------
                                               Per Share                          Per Share                           Per Share
                          Income    Shares       Amount       Loss      Shares      Amount        Loss     Shares       Amount
<S>                       <C>      <C>           <C>        <C>        <C>          <C>         <C>       <C>          <C>
Basic and diluted EPS     $1,268   8,682,468      $0.14     $(12,544)  8,681,400    $(1.45)     $(1,236)  8,346,273    $(0.15)
                          ======   =========      =====     ========   =========    ======      =======   =========    ======
</TABLE>

Approximately 1,500,000 options to purchase common stock have not been included
as common stock equivalents in the fiscal 2000, 1999 and 1998 per share
calculations since the effect would not be dilutive or would be antidilutive.

                                      F-6
<PAGE>

Cash Equivalents
----------------

Cash equivalents, which consist of short-term certificates of deposit and
deposits in money market accounts with original maturities of three months or
less, are carried at cost, which approximates their market value.

Fair Value of Financial Instruments
-----------------------------------

The carrying amounts of cash, accounts receivable, accounts payable, and notes
payable to banks approximate fair value because of the short-term nature of
these items. The carrying amount of substantially all of the Company's long-term
debt approximates fair value due to the variable nature of the interest rates on
the debt.

Foreign Currency Translation
----------------------------

Assets and liabilities of the Company's foreign subsidiaries are translated into
U.S. dollars at the applicable rate of exchange in effect at the end of the
fiscal year. Revenue and expense accounts are translated at the average rate of
exchange during the period and equity accounts are translated at the rate in
effect when the transactions giving rise to the balances took place. Gains and
losses resulting from translation are included in "Accumulated Other
Comprehensive Income (Loss)." Gains and losses resulting from foreign currency
transactions are included in income.

Risk Management
---------------

Financial instruments that potentially subject the Company to concentrations of
credit risk consist primarily of cash and cash equivalents, accounts receivable
and interest rate swap agreements. The Company maintains its cash accounts in
various domestic and foreign financial institutions. Domestic funds are swept
daily into interest-bearing overnight repurchase agreements invested in U.S.
government securities. The Company's customers are not concentrated in any
specific geographic region, but are concentrated in the highway construction and
animal feed industries. The Company extends limited credit to its customers
based upon their creditworthiness and generally requires a significant up-front
deposit before beginning construction and full payment subject to hold-back
provisions, prior to shipment on asphalt plant orders. The Company establishes
an allowance for doubtful accounts based upon the credit risk of specific
customers, historical trends and other pertinent information.

Periodically, the Company will enter into foreign currency forward exchange
contracts with major financial institutions to hedge certain loans and trade
accounts receivables against adverse fluctuations in exchange rates. Gains or
losses on such contracts, which are designated as a hedge, are deferred and
included in determining the basis of the related assets. Gains and losses on
forward exchange contracts, which do not qualify as hedges, are reported in
other income (expense). At September 30, 2000 and 1999, the Company had no
forward exchange contracts. However, the Company expects to continue to utilize
foreign currency exchange contracts to manage its exposure, although there can
be no assurance that Company's efforts in this regard will be successful.

The Company will utilize derivative financial instruments in order to hedge its
exposure to interest rate and foreign currency fluctuations. The Company enters
into hedging relationships such that changes in the cash flows of items and
transactions being hedged are expected to be offset by corresponding changes in
the value of the derivatives. Any differential is accrued as interest rates
change and is recorded in interest expense. Gains and losses on any derivative
financial instruments which do not qualify for hedge accounting are recognized
currently in the statement of operations. At September 30, 2000 and 1999, the
Company had no derivative financial instruments.

The Company does not believe there is a significant risk of non-performance by
the counterparties to these foreign currency exchange contracts or derivative
financial instruments.

In 1999, the Financial Accounting Standards Board (FASB) amended the effective
date for Statement of Financial Accounting Standards (SFAS) 133, "Accounting for
Derivative Instruments and Hedging Activities" to fiscal years beginning after
June 15, 2000. This statement establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. It requires that an entity
recognize all derivatives as either assets or liabilities in the statement of
financial position and measure those instruments at fair value. If certain
conditions are met, a derivative may be specifically designated as a

                                      F-7
<PAGE>

hedge. The accounting for changes in the fair value of a derivative depends on
the intended use of the derivative and the resulting designation of the hedge
exposure. Depending on how the hedge is used and the designation, the gain or
loss due to changes in the fair value is reported either in earnings or in other
comprehensive income. Adoption of the statement, which is required for the
Company's year 2001 financial statements, will have no significant impact on the
Company.

Inventories
-----------

Inventories are stated at the lower of cost or market. The Company uses the
last-in, first-out (LIFO) method of determining cost for substantially all
inventories in the United States. All other inventories are accounted for using
the first-in, first-out (FIFO) method.

Used equipment, acquired by the Company by trade in from customers acquiring new
equipment, is valued at estimated realizable value at the time of trade in.

Property and Equipment
----------------------

Property and equipment are stated at cost. Depreciation of property and
equipment, including depreciation on assets acquired under capital leases, is
computed using straight-line and accelerated methods over the estimated useful
lives of the related assets.

Assets held for resale, which are comprised of property, machinery and equipment
primarily within the food segment, approximated $2,980, $2,991 and $5,805 as of
September 30, 2000, 1999 and 1998, respectively. The assets are stated at lower
of depreciated cost or fair value less cost to sell and are no longer
depreciated.

Depreciation of property and equipment, including depreciation on assets
acquired under capital leases, is computed using straight-line and accelerated
methods over the estimated useful lives of the related assets as follows:

                                                   Years

                 Land improvements                    5
                 Buildings and improvements        6-40
                 Machinery and equipment           2-10
                 Furniture and equipment           3-10
                 Vehicles                           5-7

Goodwill
--------

Goodwill, the excess of the purchase price over the fair value of net assets of
businesses acquired, is being amortized over 25 years using the straight-line
method.

Impairments
-----------

If the carrying value of an asset, including associated intangibles and
goodwill, exceeds the sum of estimated undiscounted future cash flows, an
impairment loss is recognized for the difference between estimated fair value
and carrying value.

Equity Investments
------------------

Investments in unconsolidated investees, in which the Company has a 20% to 50%
interest, are accounted for using the equity method whereby the initial
investment is recorded at cost and is adjusted for the Company's proportionate
share of the undistributed earnings or losses.

As of September 30, 2000, 1999 and 1998, the Company owns a 45% interest in
Carbontronics LLC and a 25% interest in Carbontronics Fuels LLC.  These equity
interests were obtained as part of contracts to build four synthetic

                                      F-8
<PAGE>

fuel production plants during 1998. The Company has no basis in these equity
investments or requirement to provide future funding. Any income arising from
these investments is dependent upon tax credits (adjusted for operating losses
at the fuel plants) being generated as a result of synthetic fuel production,
which will be recorded as received. No significant income was derived from these
equity investments in fiscal 2000, 1999 and 1998.

Revenues
--------

Revenues from contracts for the design and manufacture of certain custom
equipment are recognized under the percentage-of-completion method. Revenue from
all other sales are recorded as the products are shipped.

The percentage-of-completion method of accounting for long term contracts
recognizes revenue in proportion to actual labor costs incurred as compared with
total estimated labor costs expected to be incurred during the entire contract.
All selling, general and administrative expenses are charged to income as
incurred. Provision is made for any anticipated contract losses in the period
that the loss becomes evident.

The estimated costs of product warranties are charged to production costs as
revenue is recognized.

Income Taxes
------------

The Company recognizes deferred tax liabilities and assets for the expected
future tax consequences of events that have been included in the financial
statements or tax returns using current tax rates. The Company and its domestic
subsidiaries file a consolidated federal income tax return. The foreign
subsidiaries provide income taxes based on the tax regulations of the countries
in which they operate. Undistributed earnings of the Company's foreign
subsidiaries are intended to be indefinitely reinvested. No deferred taxes have
been provided on these earnings.

Deferred tax assets and liabilities are measured using the rates expected to
apply to taxable income in the years in which the temporary differences are
expected to reverse and the credits are expected to be used. The effect on
deferred tax assets and liabilities of the change in tax rates is recognized in
income in the period that includes the enactment date. An assessment is made as
to whether or not a valuation allowance is required to offset deferred tax
assets.

Accounting for Stock-Based Compensation
---------------------------------------

The Company measures compensation expense for employee and director stock
options as the aggregate difference between the market and exercise prices of
the options on the date that both the number of shares the grantee is entitled
to receive and the purchase price are known.

Comprehensive Income (Loss)
---------------------------

Other Comprehensive Income (Loss) consists of net income (loss) and includes all
other changes in shareholders' equity (deficit) except those resulting from
investments by owners and distributions to them. For all years presented, the
Company's comprehensive income (loss), which encompasses net income (loss) and
foreign currency translation adjustments, is separately displayed in the
consolidated statement of shareholders' equity (deficit).

                                      F-9
<PAGE>

Reporting Segments
------------------

Information concerning principal geographic areas for the continuing operations
is as follows:

<TABLE>
<CAPTION>
                                  2000                            1999                             1998
                        -------------------------       --------------------------        -------------------------
                                       Long-Term                        Long-Term                        Long-Term
                         Revenues        Assets           Revenues        Assets           Revenues        Assets
<S>                     <C>            <C>              <C>             <C>               <C>            <C>
United States             $70,391       $11,126           $ 68,195       $13,514           $103,321       $14,138
United Kingdom             26,417         5,405             33,204         6,559             21,962         6,991
                          -------       -------           --------       -------           --------       -------

Total                     $96,808       $16,531           $101,399       $20,073           $125,283       $21,129
                          =======       =======           ========       =======           ========       =======
</TABLE>

Revenues are attributed to geographic areas based on the location of the assets
producing the revenues. For 2000 and 1999, sales to any particular customer were
not significant. During 1998, revenues generated from one customer, included in
the continuing operations, accounted for more than 10% of total consolidated
revenues at approximately $26,000.

New Accounting Pronouncements
-----------------------------

During 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 141 (SFAS 141), "Business Combinations", and
No.142 (SFAS 142), "Goodwill and Other Intangible Assets." SFAS 141 addresses
financial accounting and reporting for goodwill and other intangible assets
acquired in a business combination at acquisition. SFAS 141 requires the
purchase method of accounting to be used for all business combinations initiated
after June 30, 2001; establishes specific criteria for the recognition of
intangible assets separately from goodwill; and requires unallocated negative
goodwill to be written off immediately as an extraordinary gain (instead of
being deferred and amortized). SFAS 142 addresses financial accounting and
reporting for intangible assets acquired individually or with a group of other
assets (but not those acquired in a business combination) at acquisition. SFAS
142 also addresses financial accounting and reporting for goodwill and other
intangible assets subsequent to their acquisition. SFAS 142 provides that
goodwill and intangible assets which have indefinite useful lives will not be
amortized but rather will be tested at least annually for impairment. It also
provides that intangible assets that have finite useful lives will continue to
be amortized over their useful lives, but those lives will no longer be limited
to forty years. SFAS 141 is effective for all business combinations initiated
after June 30, 2001 and for all business combinations accounted for by the
purchase method for which the date of acquisition is after June 30, 2001. The
provisions of SFAS 142 are effective for reporting periods beginning after
December 15, 2001. The Company is considering the provisions of SFAS No. 141 and
No. 142 and at present has not determined the impact of adopting SFAS 141 and
SFAS 142.

Reclassification
----------------

Certain prior year amounts in the consolidated financial statements have been
reclassified to conform to the current year presentation.

NOTE 2 - BANKRUPTCY PROCEEDINGS

As of September 1999, the Company was in default of the terms and conditions of
its Senior Secured Credit Facility and Industrial Revenue Bond Indenture. In
November 1999, the Senior Secured Lenders accelerated their demand for payment
in full. During April 2000, certain of the Company's lenders filed an
Involuntary Petition under Chapter 11 of the U.S. Bankruptcy Code. On September
13, 2000 (the "Petition Date"), the Company and certain of its subsidiaries
("the Debtors") filed voluntary petitions commencing cases under Chapter 11 of
the U. S. Bankruptcy Code. The Company and certain of its subsidiaries began
operating its businesses as debtors-in-possession under Chapter 11 of the U. S.
Bankruptcy Code. Substantially all liabilities as of the petition date are
subject to compromise or other treatment under a plan of reorganization, and
actions to enforce or otherwise effect payment of all pre-petition

                                     F-10
<PAGE>

liabilities are stayed. As a debtor-in-possession, the Company and its
subsidiaries continue to operate its businesses and reorganize its financial
affairs for its own benefit and that of its creditors.

On April 13, 2001, the Debtors filed the Amended Plan of Reorganization of
Gencor Industries, Inc. (the "Amended Plan"), dated April 9, 2001 with the
Bankruptcy Court providing essentially for 100% payment of all secured and
unsecured creditors and no dilution or diminution to the equity holders. The
Amended Plan was confirmed on July 11, 2001.


The Amended Plan will become effective on or before October 30, 2001, unless
extended (the "Effective Date"). Pursuant to the Amended Plan, as of the
Effective Date, the approved sale of Consolidated Process Machinery's (CPM)
domestic and foreign pellet operations was to be consummated (see Note 3 -
Discontinued Operations). The sale was in fact consummated on May 29, 2001 for
$52 million. The net proceeds from the sale were used to reduce the outstanding
balance of the Senior Secured Lenders. Under the Amended Plan, all of the
Company's debts will be satisfied in full. Also by the Effective Date, the
Senior Secured Lenders and the Debtor are to have closed an Amended and Restated
Senior Secured Credit Agreement, which would specify that the remaining claims
of the Senior Secured Lenders of approximately $33 million are to be paid over a
four-year period. The remaining debt balance is due in 2005. It is management's
intention to refinance any remaining outstanding balance. This agreement will
contain certain financial and other restrictive covenants. The Company intends
to emerge from bankruptcy on the Effective Date.


These consolidated financial statements do not include any adjustments, which
may arise as a result of the Company's bankruptcy proceedings.

NOTE 3 - DISCONTINUED OPERATIONS

As part of its planned reorganization, in September 2000, the Company announced
its intent to dispose of its food segment. Accordingly, the Company reported the
results of the operations of the food processing equipment manufacturing
business as discontinued operations.

Certain information with respect to discontinued operations is summarized as
follows:

<TABLE>
<CAPTION>
                                                                    2000                 1999                      1998
<S>                                                                <C>                 <C>                       <C>
Net revenue                                                        $81,044             $ 99,888                  $120,675
Costs and expenses                                                  80,822              108,302                   115,485
                                                                   -------             --------                  --------
Income (loss) from discontinued operations
   before income taxes                                                 222               (8,414)                    5,190
Income taxes                                                           698                2,908                     2,299
                                                                   -------             --------                  --------
Income (loss) from discontinued operations,
   net of income taxes                                             $  (476)            $(11,322)                 $  2,891
                                                                   =======             ========                  ========
</TABLE>

                                     F-11
<PAGE>

Assets and liabilities of the discontinued operations were as follows:

<TABLE>
<CAPTION>
                                                                    2000                 1999                1998
<S>                                                               <C>                  <C>                 <C>
Current assets                                                    $ 43,947             $ 47,307            $ 52,029
Property, plant and equipment, net                                  19,001               19,082              26,577
Other assets                                                        18,390               19,626              25,555
Current liabilities                                                (34,581)             (42,543)            (36,222)
Long-term liabilities                                               (8,435)              (7,901)             (8,191)
                                                                  --------             --------            --------
Net assets of discontinued operations                             $ 38,322             $ 35,571            $ 59,748
                                                                  ========             ========            ========
</TABLE>

On May 29, 2001, the Company sold the stock of CPM's foreign pellet subsidiaries
and the assets and certain liabilities of the domestic pellet subsidiaries for
approximately $52 million in cash. The net sale proceeds were used to pay-down
the outstanding loan balance of the senior secured lenders. The Company's
domestic and foreign food processing machinery operations located in Colorado,
Sweden and Brazil were not included in the aforementioned sale. The Company
intends to dispose of these operations. In September 2001, the Swedish operation
was placed into receivership. The Company anticipates that it will realize a net
gain on the disposal of its discontinued operations.

NOTE 4 - RESTATEMENT

Subsequent to the issuance of the Company's consolidated financial statements as
of and for the year ended September 30, 1998, Company management determined that
certain accounting irregularities and other improprieties had occurred at one of
its subsidiaries, Gencor ACP, Ltd. ("ACP"). The Chairman and Chief Financial
Officer of ACP were determined to be responsible for the accounting
irregularities and other improprieties and were therefore terminated in January
1999. The accounting irregularities primarily related to an overstatement of
ACP's net assets in the opening balance sheet as of October 1, 1997 of
approximately $7,000 as well as misstatement of fiscal 1998 revenues and costs
resulting in an overstatement of fiscal 1998 income.

As a result of its investigation into matters involving its subsidiary, ACP, the
Company determined that ACP had entered into various transactions in fiscal 1998
for engineering services, inventory and contract services with companies
affiliated with the ACP's former Chairman and former Chief Financial Officer.
The following companies affiliated with the former Chairman and former Chief
Financial Officer received the following amounts: Recycling Equipment
International, Ltd. - $302; Roadmec International Ltd. - $765; R.J. Driscoll
Sons, Ltd. - $348; Intermek, Ltd. - $118; Lewis Electric (NI) Ltd. - $807. Such
transactions are included in the financial statements as of and for the year
ended September 30, 1998. The Company believes that some of these transactions
may have reflected upon the subsidiary a less favorable treatment than generally
available from independent third parties. During 1999, the Company initiated
recovery efforts against the responsible parties.

As a result of the findings of the investigation in the irregularities at ACP,
the 1998 consolidated financial statements have been restated from the amounts
previously reported. The Company's 1998 reported revenues were reduced by
approximately $3,200 and net income by approximately $10,900 or $1.30 per share.

In June 2001, ACP was reorganized under the direction of a receiver. The assets
and business were sold to Gencor Industries, Limited, another wholly-owned
subsidiary of the Company. The name of the subsidiary was changed to Gencor
International, Limited.

In addition to the restatement for the irregularities at ACP, certain other
accounts were restated from those previously reported.

                                     F-12
<PAGE>

The following presents the effects on the 1998 consolidated balance sheet and
statement of operations of the restatement:

                          CONSOLIDATED BALANCE SHEET

                              September 30, 1998



<TABLE>
<CAPTION>
                                                                   ACP               Other
                                              As Previously     Restatement       Restatement           As
Assets                                           Reported       Adjustments       Adjustments        Restated
<S>                                           <C>               <C>               <C>                <C>
Current assets:
  Cash and cash equivalents                    $  8,848          $   (309)                 -         $  8,539
  Accounts receivable, net                       41,561            (5,346)          $     11           36,226
  Income tax receivable                           1,419                 -              1,770            3,189
  Inventories                                    50,332            (1,416)            (1,640)          47,276
  Prepaid expenses                                3,535               (75)             1,461            4,921
                                               --------          --------           --------         --------
           Total current assets                 105,695            (7,146)             1,602          100,151
Property and equipment, net                      43,782              (161)                 -           43,621
Goodwill, net                                    18,058            (1,137)               (72)          16,849
Other assets                                     14,524                 -             (1,988)          12,536
                                               --------          --------           --------         --------
                                               $182,059          $ (8,444)          $   (458)        $173,157
                                               ========          ========           ========         ========
Liabilities and Shareholders' Equity

Current liabilities:
  Notes payable                                $  5,102          $    231           $    135         $  5,468
  Current portion of long-term debt               7,569               148             89,362           97,079
  Accounts payable                               15,715             2,801                 (7)          18,509
  Customer deposits                               4,888                 -             (1,529)           3,359
  Net other and income taxes payable                 81                 -              1,254            1,335
  Accrued expenses                               14,927               685                950           16,562
                                               --------          --------           --------         --------
           Total current liabilities             48,282             3,864             90,166          142,312
Postretirement benefits                           2,246                 -                  -            2,246
Deferred income taxes                             1,884            (1,062)             1,050            1,872
Other liabilities                                 3,495              (421)             1,396            4,470
Long-term debt                                   89,510                 -            (89,510)               -
                                               --------          --------           --------         --------
Total liabilities                               145,417             2,381              3,102          150,900
                                               --------          --------           --------         --------
Contingencies and commitments
Shareholders' equity:
  Common stock                                      691               622               (622)             691
  Class B stock                                     192                 -                  -              192
  Capital in excess of par                       11,287                 -                  1           11,288
  Retained earnings                              26,667           (10,881)            (2,547)          13,239
  Cumulative translation adjustment                (396)             (567)              (391)          (1,354)
  Subscription receivable                           (95)                -                  -              (95)
  Common stock in treasury                       (1,704)                -                  -           (1,704)
                                               --------          --------           --------         --------
                                                 36,642           (10,825)            (3,560)          22,257
                                               --------          --------           --------         --------
                                               $182,059          $ (8,444)          $   (458)        $173,157
                                               ========          ========           ========         ========
</TABLE>

                                     F-13
<PAGE>

                       CONSOLIDATED STATEMENT OF INCOME

                     For the Year Ended September 30, 1998

<TABLE>
<CAPTION>
                                                                        ACP             Other
                                                 As Previously      Restatement      Restatement          As
                                                    Reported        Adjustments      Adjustments       Restated
<S>                                              <C>                <C>              <C>               <C>
Net revenue                                         $128,527        $ (3,244)         $     -          $125,283

Costs and expenses:
  Production costs                                    81,915             259            3,194            85,368
  Product engineering and development                  2,971               -                -             2,971
  Selling, general and administrative
   expenses                                           20,001             907            1,148            22,056
  ACP opening balance sheet adjustment                     -           7,001                -             7,001
                                                    --------        --------          -------          --------
                                                     104,887           8,167            4,342           117,396
                                                    --------        --------          -------          --------
Operating income                                      23,640         (11,411)          (4,342)            7,887

Other income (expense):
  Interest income                                        155               5                -               160
  Interest expense                                    (3,170)            525             (615)           (3,260)
  Miscellaneous                                         (195)              -              159               (36)
                                                    --------        --------          -------          --------
                                                      (3,210)            530             (456)           (3,136)
Income from continuing operations
  before income taxes                                 20,430         (10,881)          (4,798)            4,751

Income taxes                                           8,342               -           (2,355)            5,987
                                                    --------        --------          -------          --------
Income (loss) from continuing operations              12,088         (10,881)          (2,443)           (1,236)
Discontinued operations:
Income (loss) from discontinued
    operations (net of tax)                            2,994               -             (103)            2,891
                                                    --------        --------          -------          --------
Net income (loss)                                   $ 15,082        $(10,881)         $(2,546)         $  1,655
                                                    ========        ========          =======          ========

Basic earnings (loss) per common share:
  Income (loss) from continuing
   operations                                       $   1.95                                           $  (0.15)
  Discontinued operations                              (0.14)                                              0.35
  Net income (loss)                                 $   1.81                                           $   0.20
                                                    ========                                           ========

Dilute earnings (loss) per common share:
  Income (loss) from continuing
   operations                                       $   1.64                                           $  (0.15)
  Discontinued operations                              (0.12)                                              0.35
  Net income (loss)                                 $   1.52                                           $   0.20
                                                    ========                                           ========
</TABLE>

                                     F-14
<PAGE>

NOTE 5 - ACQUISITIONS

In connection with a proposed acquisition during fiscal 1999, the Company signed
a letter of intent and deposited approximately $3,500 in escrow relating to an
acquisition. As a result of concerns raised during the Company's due diligence,
the acquisition was terminated. However, the sellers took the position that the
deposit was non-refundable and refused to return the amount deposited. The
Company commenced litigation against the seller to recover the deposit. Counsel
for the Company did not express an opinion on the probability of the Company
recovering the deposit. The Company charged the deposit and approximately $400
of acquisition related expenses to operations in fiscal 1999. In fiscal 2001,
the Company recovered approximately $2,500 of this deposit.

Effective October 1, 1997, the Company acquired ACP Holdings P.L.C., a United
Kingdom-based designer and manufacturer of heavy machinery for the road
construction and quarrying industries for approximately $3.2 million in cash.
Following the acquisition, ACP Holdings P.L.C. was renamed Gencor ACP Holdings,
Ltd. Under the terms of the agreement, the Company could be required to issue up
to 480,000 shares of the Company's common stock as additional purchase price,
contingent upon ACP achieving specified earnings levels through September 30,
2000.  Based upon the discovery of accounting irregularities, other
improprieties and operating losses at ACP, the agreement providing for the
issuance of the 480,000 shares of stock was cancelled in fiscal year 2001.

The transaction was accounted for as a purchase and the assets acquired and
liabilities assumed have been included in the accompanying balance sheet at
their fair value as of the acquisition date after adjustment for the
improprieties discussed above. Total assets acquired approximated $13,800,
liabilities assumed approximated $17,800, and the excess of the amount paid over
the fair value of the assets acquired, after the opening balance sheet
adjustment totaling $7,000, was approximately $500.


NOTE 6 - INVENTORIES

Inventories at September 30 consist of the following:

                                         2000              1999           1998

Raw materials                         $17,532           $13,602        $14,572
Work in process                         7,705            11,047         14,470
Finished goods                         15,034            13,548         17,846
Used equipment                          1,123             1,583            388
                                      -------           -------        -------
                                      $41,394           $39,780        $47,276
                                      =======           =======        =======

At September 30, 2000, accumulated costs of approximately $924 on major
contracts, net of progress payments of approximately $150 and estimated earnings
of approximately $700, amount to approximately $1,474 and are included in work-
in-process inventory.  At September 30, 1999, accumulated costs of approximately
$3,551 on major contracts, net of progress payments of approximately $2,754, and
estimated earnings of approximately $1,683 amount to approximately $2,480 and
are included in work-in-process inventory. At September 30, 1998, accumulated
costs of approximately $4,800 on major contracts, net of progress payments of
approximately $1,468, and estimated earnings of approximately $2,102 amount to
approximately $5,434 and are included in work-in-process inventory.

At September 30, 2000, 1999 and 1998, cost is determined by the last-in, first-
out (LIFO) method for 67%, 66% and 70%, respectively, of total inventories,
exclusive of progress payments, and the first-in, first-out (FIFO) method for
all other inventories. At September 30, 2000, 1999 and 1998, the estimated
current cost of inventories exceeded their LIFO basis by approximately $50,
$1,633 and $2,376, respectively.

                                     F-15
<PAGE>

NOTE 7 - PROPERTY AND EQUIPMENT

Property and equipment at September 30 consist of the following:

                                                   2000       1999       1998

Land and improvements                          $  5,215   $  5,329   $  6,608
Building and improvements                        26,939     27,217     23,057
Machinery and equipment                          22,189     23,123     34,930
Tools, jigs and dies                                127        120        120
Furniture and equipment                           7,928      7,812      6,507
Vehicles                                          1,040      1,003      1,555
Construction in progress                            497        474      1,694
                                               --------   --------   --------
                                                 63,935     65,078     74,471
Less:  Accumulated depreciation                 (30,368)   (29,301)   (30,850)
                                               --------   --------   --------
                                               $ 33,567   $ 35,777   $ 43,621
                                               ========   ========   ========

Property and equipment as presented above includes approximately $15,500 of
fully depreciated assets which remain in service during fiscal 2000.

During fiscal 1998, management committed to the closing of an excess domestic
manufacturing facility. The carrying value of the equipment, approximately
$2,800, was written down to estimated fair value during fiscal 1998 and an
impairment loss of $1,500 was recorded. The equipment was sold to a third party
for $1,300 in fiscal 1999. Management believes that no impairment reserve is
required for the real estate related to this facility as the estimated market
value exceeds its carrying value of $2.9 million at September 30, 2000.

Substantially all of the Company's property and equipment is pledged as
collateral for the Company's debt.

Depreciation expense for the years ended September 30, 2000, 1999 and 1998 was
approximately $3,639, $3,578 and $4,113, respectively. There was no interest
capitalized during 2000, 1999 or 1998.

NOTE 8 - OTHER ASSETS

Other assets at September 30 consist of the following:

                                                2000         1999        1998

Deposits                                      $3,202       $3,323     $ 4,459
Deferred acquisition costs, net                2,236        2,342       3,151
Deferred loan costs, net                         660        1,145       1,631
Deferred income tax assets                         -            -       1,019
Other                                          2,394        2,829       2,276
                                              ------       ------     -------
                                              $8,492       $9,639     $12,536
                                              ======       ======     =======

As a result of a reevaluation of the carrying amount of deferred acquisition
costs related to the Company's Gumaco subsidiary in fiscal 1999, the Company
wrote off the balance of such costs relating to Gumaco totaling $685.

As a result of finalization of certain acquisition costs, the Company reduced
other assets by $1,309 and increased goodwill by a corresponding amount in 1998.
Additionally, the Company recorded certain deferred tax assets in the amount of
$1,019 in connection with the finalization of the Gumaco acquisition.

                                     F-16
<PAGE>

NOTE 9 - GOODWILL

Goodwill at September 30 is as follows:

                                                   2000      1999       1998

Goodwill                                         $14,477   $14,853    $18,110
Accumulated amortization                          (2,459)   (1,746)    (1,261)
                                                 -------   -------    -------
Net                                              $12,018   $13,107    $16,849
                                                 =======   =======    =======


As a result of a reevaluation of the carrying value of the goodwill relating to
the Company's Gumaco subsidiary in fiscal 1999, the Company wrote off the
balance of goodwill relating to Gumaco totaling $ 3,374.

NOTE 10 - ACCRUED EXPENSES

Accrued expenses consist of the following at September 30:

                                                     2000      1999      1998

Payroll and related accruals                      $ 5,690   $ 5,792   $ 5,621
Warranty and related accruals                       1,985     5,020     2,862
Acquisition costs                                     314       314     1,129
Professional fees                                   1,930     2,622       350
Interest                                                -     1,409     1,828
Sales and property taxes                              103        74       393
Other                                               4,607     3,131     4,379
                                                  -------   -------   -------
Total                                             $14,629   $18,362   $16,562
                                                  =======   =======   =======

NOTE 11 - INCOME TAXES

The provision for income taxes for continuing operations consists of:

                                                   2000       1999       1998

Current:
  Federal                                         $   -    $(7,852)   $ 7,231
  State                                               -          -        685
  Foreign                                          (148)        13          -
                                                  -----    -------    -------
     Total current expense (benefit)               (148)    (7,839)     7,916
Deferred:
  Federal                                             -      1,186     (1,901)
  State                                               -         77        (28)
  Foreign                                             -          -          -
                                                  -----    -------    -------
     Total deferred tax expense (benefit)             -      1,263     (1,929)
                                                  -----    -------    -------
Provision for (benefit from) income taxes         $(148)   $(6,576)   $ 5,987
                                                  =====    =======    =======

                                     F-17

<PAGE>

The difference between the U.S. federal income tax rate and the Company's
effective income tax rate for the continuing operations is as follows:

<TABLE>
<CAPTION>
                                                                      2000            1999          1998
<S>                                                                <C>             <C>           <C>
Federal income tax rate                                              35.0 %          35.0 %        35.0 %
State income taxes, net of federal income tax benefit                    -            (0.1)          9.0
Difference arising from transactions with, and profit
  and loss of, foreign subsidiaries not deductible or
  includable for U.S. federal income tax purposes                    (48.2)           (0.1)         78.4
Other, net                                                               -            (0.4)          3.6
                                                                    ------           -----        ------
                                                                    (13.2)%          34.4 %       126.0 %
                                                                    ======           =====        ======
</TABLE>

Deferred taxes are recorded as follows:

<TABLE>
<CAPTION>
                                                                        2000              1999          1998
<S>                                                          <C>               <C>               <C>
Deferred tax assets (liabilities):
    Depreciation and amortization                                   $ (2,792)         $ (2,140)      $(1,714)
    Other                                                               (151)             (151)         (159)
                                                                    --------          --------       -------
         Gross deferred tax liabilities                               (2,943)           (2,291)       (1,873)
                                                                    --------          --------       -------
  Allowance for doubtful accounts                                      1,154               888         1,376
  Accrued expenses and other                                           2,893             2,196         1,282
  Inventory cost adjustments                                           1,734               342             -
  Foreign net operating losses (NOLs)                                  5,592             7,675         5,553
  Domestic tax credits and NOLs                                        2,326             3,512             -
                                                                    --------          --------       -------
         Gross deferred tax assets                                    13,699            14,613         8,211
                                                                    --------          --------       -------
                                                                      10,756            12,322         6,338
  Less:  Valuation allowance                                         (10,756)          (12,322)       (3,595)
                                                                    --------          --------       -------
             Net deferred tax asset                                 $      -          $      -       $ 2,743
                                                                    ========          ========       =======
</TABLE>


A valuation allowance has been recorded for all net deferred tax assets at
September 30, 2000 and 1999. A valuation allowance was established as of
September 30, 1998 for the deferred tax assets relating to the foreign net
operating losses generated from the United Kingdom and Swedish operations.
Management determined based on evaluation of current factors, that it was more
likely than not that such amounts will not be realized.

At September 30, 2000, domestic net operating losses approximated $1.7 million,
which were available to offset future taxable income. These net operating losses
expire in the year 2020.

At September 30, 2000, Brazilian and Swedish net operating losses approximated
$14,400 and $1,000, respectively, which are available to offset future taxable
income. These net operating losses may be carried forward indefinitely.

Accumulated deficits of non-U.S. subsidiaries, included in consolidated retained
earnings (deficit), amounted to ($28,326), ($23,034) and ($11,577) as of
September 30, 2000, 1999 and 1998, respectively. The Company follows the policy
of indefinitely reinvesting foreign earnings, if any, to expand its
international operations. Accordingly, the Company will not provide U.S. income
taxes on any future earnings.  In the event any earnings of non-U.S.
subsidiaries are repatriated, the Company will provide U.S. income taxes upon
repatriation of such earnings which will be offset by applicable foreign tax
credits, subject to certain limitations.

Total income taxes paid during fiscal 2000, 1999 and 1998 were $100, $212 and
$12,285, respectively.

                                     F-18

<PAGE>

NOTE 12 - RETIREMENT BENEFITS

Retirement Benefits Other than Pensions
---------------------------------------

The Company sponsored a post-retirement plan (the "Plan") that covered certain
domestic employees. The Plan provides for healthcare benefits and, in some
instances, life insurance benefits and is contributory with amounts adjusted
annually. When covered full-time employees retire between age 55 and age 65 with
15 years of service, they would have been eligible to receive, at a cost to the
retiree, certain healthcare benefits identical to those available to active
employees. After attaining age 65, an eligible retiree's healthcare benefit
coverage will become coordinated with Medicare.

The recorded liabilities for these post-retirement benefits, none of which have
been funded, at September 30 are listed below:

<TABLE>
<CAPTION>
                                                                        2000            1999            1998
<S>                                                                   <C>             <C>             <C>
Accumulated post-retirement benefit obligation:
  Retirees                                                            $    -          $    -          $    -
  Active employees                                                     2,950           2,380           2,060
                                                                      ------          ------          ------
Unfunded accumulated post-retirement benefit obligation                2,950           2,380           2,060
Unrecognized net gain                                                      -             250             186
                                                                      ------          ------          ------
Accrued post-retirement benefit cost                                  $2,950          $2,630          $2,246
                                                                      ======          ======          ======
</TABLE>

The components of net periodic post-retirement benefits cost including service
costs and interest costs were $320, $320 and $288 for the years ended September
30, 2000, 1999 and 1998, respectively.

The discount rate used in determining the accumulated post-retirement benefit
obligation was 7.25% at September 30, 2000 and 1999. The assumed healthcare cost
trend rates used in measuring the accumulated post-retirement benefit obligation
was 7.85% in 2000 and 1999, declining each year to an ultimate rate by 2004 of
4.75%. An increase of one percentage point in the assumed healthcare cost trend
rates for each future year would have increased the aggregate of the service and
interest cost components of the 2000 and 1999 net periodic post-retirement
benefit cost by $87 and would have increased the accumulated post-retirement
benefit obligation as of September 30, 2000 by $445.

401(k) Plan
-----------

The Company has voluntary 401(k) employee benefit plans ("401(k) Plans") which
covers all eligible domestic employees. The Company makes discretionary matching
contributions subject to a maximum level, in accordance with the terms of the
respective 401(k) Plans. The Company charged approximately $445, $391 and $488
to operating expense under the provisions of the 401(k) Plans in the years ended
September 30, 2000, 1999 and 1998, respectively.

Pension Plan
------------

The Company provides pension benefits covering certain domestic employees.
Benefits under the plan are based upon an employee's compensation and years of
service. It is the Company's policy to make contributions to the plan sufficient
to meet the minimum funding requirements of applicable laws and regulations plus
such additional amounts, if any, as the Company's actuarial consultants advise
to be appropriate.

The Company has amended the plan to freeze all future benefit accruals and
participation as of August 20, 2000.  In addition, the Company is in the process
of terminating the plan. For fiscal 2000, the plan assets were $512 and periodic
pension expense was $309. The net liability to terminate the plan is estimated
to be approximately $300 and has been accrued as of September 30, 2000.

                                     F-19
<PAGE>

The following table sets forth the plan's funded status and amounts recognized
in the Company's balance sheet at September 30, 1999 and 1998:

<TABLE>
<CAPTION>
                                                                        1999              1998
<S>                                                                  <C>               <C>
Actuarial present value of accumulated benefit obligations:
    Vested                                                              $ 474             $ 378
    Nonvested                                                              67               114
                                                                        -----             -----
           Accumulated benefit obligation                               $ 541             $ 492
                                                                        =====             =====

Projected benefit obligation                                            $ 643             $ 619
Plan assets at fair value                                                  17                 -
                                                                        -----             -----
           Projected benefit obligation in excess of plan                 626               619
            assets
Unrecognized prior service cost                                           (60)              (65)
Unrecognized net gain                                                    (283)                -
Adjustment required to recognize minimum liability                          9               (11)
                                                                        -----             -----
           Accrued pension costs                                        $ 292             $ 543
                                                                        =====             =====
</TABLE>

Net periodic pension cost for 1999 and 1998 includes the following components:

<TABLE>
<CAPTION>
                                                                         1999              1998
<S>                                                                    <C>               <C>
Service cost - benefits earned during the year                          $ 304             $ 266
Interest cost on projected benefit obligation                              21                24
Return on plan assets                                                     (19)              (10)
Net amortization and deferral                                             (12)                5
                                                                        -----             -----
                                                                        $ 294             $ 285
                                                                        =====             =====
</TABLE>


To determine the actuarial present value of the projected benefit obligation for
1999 and 1998, the following rates were used:

<TABLE>
<CAPTION>
                                                                      1999           1998

<S>                                                                  <C>            <C>
Discount rate                                                        6.75%           7.5%
Rate of increase in future compensation levels                        5.0%           5.0%
Expected long-term rate of return                                     8.0%           8.0%
</TABLE>



NOTE 13 - LONG-TERM DEBT

<TABLE>

                                                                       2000          1999           1998
<S>                                                                <C>            <C>            <C>
Senior secured credit agreement:
  Line of credit facility                                           $ 46,284        $38,000        $33,500
  Term notes                                                          56,726         56,726         61,199
  Industrial revenue bonds payable to bank                             1,733          2,030          2,380
                                                                    --------        -------        -------
                                                                    $104,743        $96,756        $97,079
                                                                    ========        =======        =======
</TABLE>

                                     F-20
<PAGE>

In conjunction with the acquisition of the Process Equipment Division of
Ingersoll-Rand, the Company entered into a senior secured credit agreement with
a bank whereby the Company retired its existing line of credit facilities,
including its foreign line of credit and term loan payable to another bank.
Under the terms of the agreement, the Company borrowed $60 million under two
term loans and, in connection therewith, was granted a $35 million revolving
credit facility to facilitate the acquisition. The revolving credit facility was
increased to $48 million in connection with the ACP acquisition.  Interest rates
on these loans vary, at the Company's option, based upon a factor applied to the
prime rate or LIBOR.  The weighted average interest rate for these borrowings
was 9.6%, 8.3% and 8.0% for fiscal 2000, 1999 and 1998, respectively. Under the
terms of the senior secured credit agreement, the Company was required to
maintain compliance with certain financial and other covenants.

The Company entered into both an interest rate swap and an interest rate collar
with a major financial institution to reduce exposures to interest rate
fluctuations. Under the rate swap, the Company agreed with other parties to
exchange, at specified intervals, the difference between fixed-rate and
floating-rate interest amounts calculated by reference to an agreed notional
principal amount. Under the interest rate collar, the Company effectively
limited its interest rate to a maximum of 7.0%. The notional amounts of each of
the interest rate swap and the interest rate collar outstanding at September 30,
1999 and 1998 was $40 expiring in February 1999 and 2000, respectively.

The Company is in default under the terms of its senior secured credit
agreement.  In November 1999, the senior secured lenders accelerated their
demand for payment in full.  Accordingly, all secured debt has been classified
as current in the consolidated financial statements as of September 30, 2000,
1999 and 1998 (See Note 2).

The industrial revenue bonds are payable in monthly installments of principal
and interest (7.66% at September 30, 2000) at a varying percentage (81% at
September 30, 2000) of the bank's prime rate through December 2004. Under the
terms of the industrial revenue bond indenture, the Company is required to
maintain compliance with certain financial and other covenants.  The Company is
currently in default under the terms of the bond indenture. Accordingly, the
bonds payable are classified as a current liability.

During fiscal 1998, the Company entered into a note payable for $5 million,
bearing interest at 8.81%, maturing on March 15, 2000 and collateralized by a
letter of credit.  In May 2000, the letter of credit was called and the loan was
repaid by the Senior Secured Lenders. The Company has other notes payable
through its foreign subsidiaries with various repayment terms and interest
rates.

During fiscal 2000, the Company adjusted certain accruals to increase its debt
obligation to the Senior Secured Lenders by approximately $10.3 million in order
to comply with an amount stipulated by the Bankruptcy Court. For cash flow
purposes, this transaction was treated as a non-cash transaction.

Substantially all of the Company's assets are pledged as security under the
various credit agreements.

The Company paid interest of  $766, $10,355 and $9,158 on borrowings during the
fiscal years ended 2000, 1999 and 1998, respectively.

                                     F-21
<PAGE>

NOTE 14 - COMMITMENTS AND CONTINGENCIES

Leases
------

The Company leases certain equipment under noncancelable operating leases.
Future minimum rental commitments under noncancelable leases in effect at
September 30, 2000 are as follows:

2001                                                           $450
2002                                                            110
2003                                                             39
2004                                                             28
2005                                                              3
Thereafter                                                        -
                                                               ----
                                                               $630
                                                               ====


Total rental expense for the years ended September 30, 2000, 1999 and 1998 was
$779, $738 and $887, respectively.

Litigation
----------


The Company has various pending litigation and other claims.  Those claims which
are made in the ordinary course of business may be covered in whole or in part
by insurance, and if found against the Company, management does not believe
these matters will have a material effect on the Company's financial position,
results of operations or cash flows.

Since January 1999, a class action lawsuit has been pending in the United States
District Court for the Middle District of Florida against the Company. The
lawsuit alleged that certain officers and directors of the Company violated
Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934, as well as
rule 10b-5 promulgated thereunder. The lawsuit sought to recover damages on
behalf of all investors who purchased Gencor Industries, Inc. Common Stock
between February 5, 1998 and January 28, 1999. The claim was settled through the
Company's bankruptcy proceedings with no material adverse impact to the Company.


NOTE 15 - SHAREHOLDERS' EQUITY

Under the Company's amended Certificate of Incorporation, certain rights of the
holders of the Company's Common Stock are modified by shares of Class B Stock
for as long as such shall remain outstanding. During that period holders of
Common Stock will have the right to elect approximately 25% of the Company's
Board of Directors, and conversely, Class B Stock will be entitled to elect
approximately 75%. During the period when Common Stock and Class B Stock are
outstanding, certain matters submitted to a vote of shareholders will also
require approval of the holders of Common Stock and Class B Stock, each voting
separately as a class. Common stock and Class B shareholders have equal rights
with respect to dividends, preferences, and rights, including rights in
liquidation. Pursuant to its credit agreements, the Company will not be paying
dividends in the foreseeable future.


NOTE 16 - STOCK OPTIONS

The Company maintains stock option plans, which provide for the issuance of
nonqualified or incentive stock options to certain directors, officers and key
employees.

The 1992 Stock Option Plan (the "1992 Plan") authorizes the granting of options
to purchase up to 400,000 shares of the Company's Common Stock, 400,000 shares
of the Company's Class B Stock and fifteen percent (15%) of the authorized
Common Stock of any Company subsidiary. Shares are no longer available for grant
under the 1992 Plan since all options authorized under the Plan have been
granted.

                                     F-22
<PAGE>

The 1997 Stock Option Plan (the "1997 Plan") provides for the issuance of
incentive stock options and nonqualified stock options to purchase up to
1,200,000 shares of the Company's Common Stock, 1,200,000 shares of the
Company's Class B Stock and up to fifteen percent (15%) of the authorized Common
Stock of any subsidiary.

Under the terms of the Plans, option holders may tender previously owned shares
with a market value equal to the exercise price of the options at exercise date,
subject to Compensation Committee approval.  Additionally, option holders may,
upon Compensation Committee approval, surrender shares of stock to satisfy
federal withholding tax requirements.

Options become exercisable in a manner and on such dates and times as determined
by a committee of the Board of Directors. Options expire not more than ten years
from the date of grant. The option holders have no shareholder rights until the
date of issuance of a stock certificate for such shares. All outstanding options
in 1999 and 1998 were exercisable. All outstanding options at the end of 2000
are exercisable, except for the 100,000 shares granted during 2000, which are
limited to 20% per year over the next 5 years.  As of September 30, 2000, the
Company had issued approximately 2.18 million stock options. Options available
for future grants under the plans as of September 30, 2000 were 1.376 million.
The following table summarizes option activity under the plans:

<TABLE>
<CAPTION>
                                                                                               Weighted
                                                                          Number of          Option Price
                                                                           Shares              Per Share

<S>                                                                      <C>                 <C>
Outstanding at September 30, 1997                                         1,986,000                2.11
Options granted (at an exercise price of $8.44 in 1998)                      70,000                8.44
Exercised                                                                  (520,000)               2.27
                                                                          ---------              ------
Outstanding at September 30, 1998                                         1,536,000                2.77
Options granted (at an exercise price of $20.72 in 1999)                     24,000               20.72
Cancelled                                                                   (70,000)               8.44
Exercised                                                                   (30,000)               1.94
                                                                          ---------              ------
Outstanding at September 30, 1999                                         1,460,000                2.81
Options granted (at an exercise price of $.87 in 2000)                      100,000                0.87
Cancelled                                                                  (110,000)               6.04
Exercised                                                                         -                   -
                                                                          ---------              ------
Outstanding at September 30, 2000                                         1,450,000              $ 1.99
                                                                          =========              ======
</TABLE>

During fiscal 1998, three officers of the Company exercised options to purchase
190,000 shares of Common Stock and 200,000 shares of Class B Stock.  The option
holders elected to tender previously owned shares to fund the exercise price.
Federal withholding taxes totaling $778 on the gain to the three option holders
from the option exercise was funded by the Company through the repurchase of
39,900 shares of Common Stock and 42,000 shares of Class B Stock from the shares
issued upon option exercise. The transaction resulted in tax deductible expenses
of approximately $2.1 million and income tax savings in excess of $800 to the
Company.

                                     F-23
<PAGE>

The following table summarizes information about stock options outstanding at
September 30, 2000:

<TABLE>
<CAPTION>
                                                                                 Weighted
                                                                                  Average
                                                                 Number of       Remaining       Weighted
                                                                  Options       Contractual      Average
Range of Exercise Price                                         Outstanding        Life       Exercise Price

<S>                                                            <C>             <C>            <C>
$ 0.00 - $ 1.00                                                       100,000           4.92           $0.87
$ 1.01 - $ 2.00                                                       940,000           0.81           $1.94
$ 2.01 - $ 3.00                                                       410,000           4.21           $2.38
                                                                    ---------           ----           -----
                                                                    1,450,000           2.09           $1.99
                                                                    =========           ====           =====
</TABLE>

The pro forma impact on fiscal 2000, 1999 and 1998 net loss and loss per share
for the options granted in fiscal 2000, 1999 and 1998 is not material. The fair
value of options at date of grant was estimated using the Black-Scholes option-
pricing model with the following assumptions:

<TABLE>
<S>                                                                  <C>
Expected dividend yield                                                            0 %
Expected stock price volatility                                                   55 %
Risk-free interest rate                                                         6.65 %
Expected life of options                                                       3 years
</TABLE>


NOTE 17 - RELATED PARTY TRANSACTIONS

During fiscal 2000, 1999 and 1998, Marcar Leasing Corporation ("Marcar") was
engaged in  leasing machinery and vehicles to the public and the Company.
Marcar is owned by family members of the Company's Chairman. The terms of the
leases are established based on the rates charged by independent leasing
organizations and are believed by the Board of Directors to be more favorable
than those generally available from independent third parties. Leases between
the Company and Marcar generally provide for equal monthly payments over either
thirty-six months or forty-eight months. During fiscal 2000, 1999 and 1998, the
Company made lease payments to Marcar totaling $270, $246 and $218,
respectively.

                                     F-24
<PAGE>

                                  SCHEDULE II

                            GENCOR INDUSTRIES, INC.

                       Valuation and Qualifying Accounts

<TABLE>
<CAPTION>
                                                 Balance at           Charges/Credits                                    Balance at
                                                  Beginning             to Cost and               Additions/               End of
Description                                       of Period              Expenses               (Deductions) (1)           Period
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>                  <C>                       <C>                      <C>
Valuation accounts deducted
  from assets to which they apply:

For doubtful accounts receivable:

  September 30, 2000                                $2,870                  $   262                 $    14                 $3,146

  September 30, 1999                                $5,573                  $ 2,270                 $(4,973)                $2,870

  September 30, 1998                                $3,412                  $ 2,264                 $  (103)                $5,573
      (As restated) (2)



For inventory obsolescence:

  September 30, 2000                                $4,639                  $  (732)                $     -                 $3,907

  September 30, 1999                                $3,578                  $ 1,061                 $     -                 $4,639

  September 30, 1998                                $2,888                  $   690                 $     -                 $3,578
    (As restated) (2)
</TABLE>


(1)  Represents accounts written off during the year and collections of accounts
     previously written off.
(2)  For a more detailed description, see Note 4 to the consolidated financial
     statements included in the Form 10-K for the year ended September 30, 2000.

                                     F-25
<PAGE>

                                 EXHIBIT INDEX
                                 -------------

EXHIBIT
NUMBER                              DESCRIPTION
------                              -----------

  2.1        Second Amended Plan of Reorganization of Gencor Industries, Inc.,
             As Modified  Dated: July 8, 2001

  2.2        Asset Purchase Agreement Re: CPM

  2.3        First Amendment to Asset Purchase Agreement

  21.0       Subsidiaries of the Registrant.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.1
<SEQUENCE>3
<FILENAME>dex21.txt
<DESCRIPTION>SECOND AMENDED PLAN OF REORGANIZATION OF GENCOR
<TEXT>
<PAGE>

                         UNITED STATES BANKRUPTCY COURT

                           MIDDLE DISTRICT OF FLORIDA

                                ORLANDO DIVISION


In re:                                         Chapter 11
                                               Case No.: 00-3597-6J1
                                               Joint Administered with
GENCOR INDUSTRIES, INC., et al.                Case No.: 00-03598-6J1
                                               Case No.: 00-03599-6J1
               Debtor.                         Case No.: 00-03600-6J1
                                               Case No.: 00-03601-6J1
                                               Case No.: 00-03602-6J1
                                               Case No.: 00-03603-6J1
                                               Case No.: 00-03604-6J1
----------------------------------------

                     SECOND AMENDED PLAN OF REORGANIZATION
                    OF GENCOR INDUSTRIES, INC., AS MODIFIED

--------------------------------------------------------------------------------
                 Brad R. Godshall (California Bar No. 105438)
                    Rachel S. Lowy (Delaware Bar No. 3753)
                  Pachulski, Stang, Ziehl, Young & Jones P.C.
                   10100 Santa Monica Boulevard, Suite 1100
                         Los Angeles, California 90067
                           Telephone: (310) 277-6910
                           Facsimile: (310) 201-0760

                Paul Steven Singerman (Florida Bar No. 378850)
                  James H. Fierberg (Florida Bar No. 0050970)
                            Berger Singerman, P.A.
                   200 South Biscayne Boulevard, Suite 2950
                                Miami, FL 33131
                           Telephone: (305) 755-9500
                           Facsimile: (305) 714-4340

                 Counsel to Debtors and Debtors in Possession
--------------------------------------------------------------------------------

          Dated:  July 8, 2001
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                         Page
<S>                                                                                                      <C>
I.     DEFINED TERMS, RULES OF INTERPRETATION, COMPUTATION OF TIME AND GOVERNING LAW...................     1

       A.    Rules of Interpretation, Computation of Time and Governing Law............................     1

       B.    Defined Terms.............................................................................     2

II.    ADMINISTRATIVE CLAIMS, PROFESSIONAL FEES AND PRIORITY TAX CLAIMS................................    15

       A.    Introduction..............................................................................    15

       B.    Administrative Claims.....................................................................    15

       C.    Professional Fees.........................................................................    16

       D.    Priority Tax Claims.......................................................................    17

       E.    Pension Benefit Guaranty Corp. ("PBGC")...................................................    18

       F.    Class 3 GAP Claims........................................................................    18

III.   CLASSIFICATION AND TREATMENT OF CLASSIFIED CLAIMS AND EQUITY INTERESTS..........................    19

       A.    Summary...................................................................................    19

       B.    Classification and Treatment of Claims against Debtors....................................    19

             1.   Class 1 - Other Priority Claims......................................................    20

             2.   Class 2 - Lender Group Claims........................................................    20

             3.   Class 3 - GAP Claims.................................................................    22

             4.   Class 4 - Unsecured Convenience Claims...............................................    23

             5.   Class 5 - General Unsecured Claims...................................................    24

             6.   Class 6 - The Bank of New York Secured Claim.........................................    24

             7.   Class 7 - Class A Equity Interests in Gencor.........................................    25

             8.   Class 8 -  Class B Equity Interests in Gencor........................................    25

             9.   Class 9 -- Gencor's Equity Interests In Other Debtors................................    26

             10.  Class 10 - Securities Class Action Claim.............................................    26

             11.  Class 11 - Insured Tort Claims.......................................................    27

IV.    ACCEPTANCE OR REJECTION OF THE PLAN.............................................................    28

       A.    Voting Classes............................................................................    28

       B.    Acceptance by Impaired Classes............................................................    28

V.     EFFECT OF CONFIRMATION..........................................................................    29
</TABLE>

                                      -i-
<PAGE>

                              TABLE OF CONTENTS
                                 (continued)

<TABLE>
<CAPTION>
                                                                                                          Page
<S>                                                                                                      <C>
       A.   Substantive Consolidation/Vesting of Cash and Assets in Gencor as the Remaining Debtor.....     29

       B.   Post-Confirmation Directors and Officers...................................................     29

       C.   Authority to Effectuate Plan...............................................................     30

       D.   Post-Confirmation Status Report............................................................     30

       E.   Escrows....................................................................................     31

       F.   Binding Effect.............................................................................     31

VI.    COMMITTEE.......................................................................................     31

VII.   IMPLEMENTATION OF THE PLAN......................................................................     31

       A.   Funding of Plan............................................................................     31

       B.   Rights of the Debtors......................................................................     31

       C.   Surrender of Existing Securities...........................................................     32

VIII.  TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES...........................................     32

       A.   Rejection of Executory Contracts and Unexpired Leases......................................     32

       B.   Claims Based on Rejection of Executory Contracts or Unexpired Leases.......................     33

IX.    PROVISIONS GOVERNING DISTRIBUTIONS..............................................................     33

       A.   Distributions for Claims Allowed as of the Effective Date..................................     33

       B.   Manner of Payment..........................................................................     34

       C.   Transmittal of Distributions to Parties Entitled Thereto...................................     35

       D.   Disputed Claims and Unclaimed Property.....................................................     36

       E.   Setoffs....................................................................................     37

       F.   Saturday, Sunday or Legal Holiday..........................................................     37

       G.   Fractional Cents...........................................................................     37

       H.   Revesting Of Assets........................................................................     38

       I.   Corporate Action...........................................................................     38

       J.   Corporate Charter..........................................................................     38

       K.   No Release.................................................................................     38

X.     PROCEDURES FOR RESOLVING DISPUTED CLAIMS........................................................     39

       A.   Prosecution of Objections to Claims........................................................     39

       B.   Estimation of Claims.......................................................................     40
</TABLE>

                                     -ii-
<PAGE>

                              TABLE OF CONTENTS
                                 (continued)

<TABLE>
<CAPTION>
                                                                                                          Page
<S>                                                                                                      <C>
       C.   Cumulative Remedies........................................................................     40

       D.   Payments and Distributions on Disputed Claims..............................................     40

       E.   Allowance of Claims and Interests..........................................................     41

            1.   Disallowance of Claims................................................................     41

            2.   Allowance of Claims...................................................................     41

            3.   Allowance of Claims...................................................................     41

       F.   Controversy Concerning Impairment..........................................................     42

       G.   Stock Options..............................................................................     42

XI.    DEBTORS' CAUSES OF ACTION.......................................................................     42

       A.   Maintenance of Causes of Action............................................................     42

       B.   No Res Judicata Effect.....................................................................     43

XII.   CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN...............................     44

       A.   Condition Precedent to Confirmation/Effective Date.........................................     44

       B.   Conditions Precedent to Consummation.......................................................     44

       C.   Waiver of Conditions.......................................................................     44

       D.   Effect of Non-Occurrence of Conditions to Consummation.....................................     45

XIII.  RETENTION OF JURISDICTION.......................................................................     45

XIV.   MISCELLANEOUS PROVISIONS........................................................................     49

       A.   Payment of Statutory Fees..................................................................     49

       B.   Discharge of Debtors.......................................................................     49

       C.   Modification of Plan.......................................................................     49

       D.   Revocation of Plan.........................................................................     50

       E.   Successors and Assigns.....................................................................     50

       F.   Reservation of Rights......................................................................     50

       G.   Post-Confirmation Effectiveness of Proofs of Claims........................................     51

       H.   Term of Injunctions or Stays...............................................................     51

       I.   Indemnification and Reimbursement Obligations..............................................     52

       J.   Further Assurances.........................................................................     52

       K.   Entire Agreement...........................................................................     52
</TABLE>

                                     -iii-
<PAGE>

                              TABLE OF CONTENTS
                                 (continued)

<TABLE>
<CAPTION>
                                                                                                          Page
<S>                                                                                                      <C>
       L.   Retiree Benefits...........................................................................     53

       M.   Failure of Bankruptcy Court to Exercise Jurisdiction.......................................     53

       N.   Confirmation of the Plan Without Necessary Acceptances.....................................     53

       O.   Governing Law..............................................................................     54

       P.   Headings...................................................................................     54

       Q.   Notices....................................................................................     54

       R.   Filing of Additional Documents.............................................................     54

       S.   Enforceability.............................................................................     55

       T.   Severability...............................................................................     55

       U.   Notice of Default under the Plan...........................................................     55

       V.   Investments................................................................................     55

       W.   Reliance...................................................................................     56
</TABLE>

                                     -iv-
<PAGE>

     Pursuant to chapter 11, title 11 of the United States Code, 11 U.S.C.
(S)(S) 101-1330 (the "Bankruptcy Code"), Gencor Industries, Inc. ("Gencor"),
debtor and debtor-in-possession in the above-captioned and numbered chapter 11
case,/1/ hereby respectfully propose the following Second Amended Plan of
Reorganization, as modified, dated July 9, 2001:


                                      I.
                    DEFINED TERMS, RULES OF INTERPRETATION,
                    ---------------------------------------
                     COMPUTATION OF TIME AND GOVERNING LAW
                     -------------------------------------

     A.   Rules of Interpretation, Computation of Time and Governing Law
          --------------------------------------------------------------

     1.   For purposes of the Plan: (a) whenever from the context it is
appropriate, each term, whether stated in the singular or the plural, shall
include both the singular and the plural, and each pronoun, whether stated in
the masculine, feminine or neuter gender, shall include the masculine, feminine
and the neuter gender; (b) any reference in the Plan to a contract, instrument,
release, indenture or other agreement or document being in a particular form or
on particular terms and conditions means that such document shall be
substantially in such form or substantially on such terms and conditions; (c)
any reference in the Plan to an existing document or exhibit Filed, or to be
Filed, shall mean such document or exhibit, as it may have been or may be
amended, modified or supplemented; (d) unless otherwise specified, all
references in the Plan to Sections, Articles and Exhibits are references to
Sections, Articles and Exhibits of or to the Plan; (e) the words herein and
hereto refer to the Plan in its entirety rather than to a particular portion of
the Plan; (f) captions and headings to Articles and Sections are inserted for
convenience of reference only and are not intended to be a part of or to affect
the interpretation of the Plan; (g) the rules of construction set forth in
Section 102 of the Bankruptcy Code shall apply; and (h) any term used in
capitalized form in the Plan that is not defined herein but that is used in

___________
/1/   Gencor's estate has been substantively consolidated with the estates of
General Combustion Corp. ("GCC"), Thermotech Systems Corp. ("Thermotech"),
Equipment Services Group, Inc. ("Equipment Services"), Bituma Corp. ("Bituma")
and Bituma-Stor, Inc. ("BSI") (collectively, the "Debtors").  Consolidated
Process Machinery Inc. ("CPM") and CPM Brazil, Inc. have not been substantively
consolidated into Gencor and this Plan does not address claims against the
estates of CPM or CPM Brazil, Inc.
<PAGE>

the Bankruptcy Code or the Bankruptcy Rules shall have the meaning assigned to
such term in the Bankruptcy Code or the Bankruptcy Rules, as the case may be.

     2.   In computing any period of time prescribed or allowed by the Plan, the
provisions of Bankruptcy Rule 9006(a) shall apply.

     3.   Except to the extent that the Bankruptcy Code or Bankruptcy Rules are
applicable, and subject to the provisions of any contract, instrument, release,
indenture or other agreement or document entered into in connection with the
Plan, the rights and obligations arising under the Plan shall be governed by,
and construed and enforced in accordance with, the laws of the State of Florida,
without giving effect to the principles of conflict of laws thereof.

     B.   Defined Terms
          -------------

     Unless the context otherwise requires, the following terms shall have the
following meanings when used in capitalized form in the Plan:

     1.   "Administrative Claim" means a Claim for costs and expenses of
           --------------------
administration under Section 503(b), 507(b) or 1114(e)(2) of the Bankruptcy
Code, including: (a) the actual and necessary costs and expenses incurred after
the Petition Date of preserving the Estates and operating the businesses of
Gencor (such as wages, salaries or commissions for services and payments for
goods and other services and leased premises); (b) compensation for legal,
financial advisory, accounting and other services and reimbursement of expenses
awarded or allowed under Section 330(a) or 331 of the Bankruptcy Code; and (c)
all fees and charges assessed against the Estates under 28 U.S.C. (S)(S) 1911-
1930.

     2.  "Administrative Claims Reserve Fund" means such amount of Cash as
          ----------------------------------
Gencor shall determine to be necessary to retain on the Initial Distribution
Date and on all Subsequent

                                       2
<PAGE>

Distribution Dates through the Final Distribution Date, for the purpose of
paying Disputed Administrative Claims as they become (if at all) Allowed
Administrative Claims and the Professional Fees.

     3.   "Agent" means Credit Lyonnais New York Branch.
           -----

     4.   "Allowed" means, with respect to any Claim, except as otherwise
           -------
provided herein: (a) a Claim that has been scheduled by Debtors in their
Schedules as other than disputed, contingent or unliquidated and as to which
Debtors or other party in interest have not Filed an objection by the Effective
Date; (b) a Claim that has been allowed by a Final Order; (c) a Claim that is
allowed: (i) in any stipulation with Debtors of amount and nature of Claim
executed prior to the Confirmation Date and approved by the Bankruptcy Court;
(ii) in any stipulation with Debtors of amount and nature of Claim executed on
or after the Confirmation Date and, to the extent necessary, approved by the
Bankruptcy Court; or (iii) in any contract, instrument, indenture or other
agreement entered into or assumed by Debtors in connection with the Plan; (d) a
Claim relating to a rejected executory contract or unexpired lease that either
(i) is not a Disputed Claim or (ii) has been allowed by a Final Order, in either
case only if a proof of Claim has been Filed by the Bar Date or has otherwise
been deemed timely Filed under applicable law; or (e) a Claim that is allowed
pursuant to the terms of this Plan.

     5.   "Allowed Claim" means a Claim that has been Allowed.
           -------------

                                       3
<PAGE>

     6.   "Amended and Restated Senior Secured Credit Agreement" means the Loan
           ----------------------------------------------------
Agreement in favor of Agent, substantially in the form attached hereto as
Exhibit A, to be executed and delivered by Gencor.

     7.   "Assets" means any and all real or personal property of any nature,
           ------
including, without limitation, any real estate, buildings, structures,
improvements, privileges, rights, easements, leases, subleases, licenses, goods,
materials, supplies, furniture, fixtures, equipment, work in process, accounts,
intellectual property rights, claims, causes of action and any other general
intangibles of Debtors, as the case may be, of any nature whatsoever, including,
without limitation, the property of the estate pursuant to Section 541 of the
Bankruptcy Code.

     8.   "Assumed Contracts" mean those executory contracts or unexpired leases
           -----------------
assumed and assigned by Debtors pursuant to Section 365 of the Bankruptcy Code.

     9.   "Ballot Date" means the date stated in the Voting Instructions by
           -----------
which all Ballots must be received, which date shall be June 29, 2001.

     10.  "Ballots" mean the ballots accompanying the Disclosure Statement upon
           -------
which Holders of Impaired Claims shall indicate their acceptance or rejection of
the Plan in accordance with the Plan and the Voting Instructions.

     11.  "Bankruptcy Code" means title I of the Bankruptcy Reform Act of 1978,
           ---------------
as amended from time to time, as set forth in Sections 101 et seq. of title 11
of the United States Code, and applicable portions of titles 18 and 28 of the
United States Code.

                                       4
<PAGE>

     12.  "Bankruptcy Court" means the bankruptcy division of the United States
           ----------------
District Court for the Middle District of Florida having jurisdiction over the
Chapter 11 Cases.

     13.  "Bankruptcy Rules" means the Federal Rules of Bankruptcy Procedure, as
           ----------------
amended from time to time, as applicable to the Chapter 11 Cases, promulgated
under 28 U.S.C. (S) 2075 and the General, and Local Rules of the Bankruptcy
Court.

     14.  "Bar Date" means such date(s) fixed by order(s) of the Bankruptcy
           --------
Court by which proofs of Claim, proofs of Equity Interest, or requests for
allowance of Administrative Claim must be filed.

     15.  "Bituma" means Bituma Corp.
           ------

     16.  "BNY" means The Bank of New York.
           ---

     17.  "BSI" means Bituma-Stor, Inc.
           ---

     18.  "Business Day" means any day, other than a Saturday, Sunday or legal
           ------------
holiday (as defined in Bankruptcy Rule 9006(a)).

     19.  "Cash" means cash and cash equivalents, including, but not limited to,
           ----
bank deposits, wire transfers, checks, and readily marketable securities,
instruments and obligations of the United States of America or instrumentalities
thereof.

     20.  "Causes of Action" means all actions, causes of action, suits, debts,
           ----------------
dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants,
contracts, controversies, agreements, promises, variances, trespasses, damages
or judgments.

                                       5
<PAGE>

     21.  "Chapter 11 Cases" means the cases under chapter 11 of the Bankruptcy
           ----------------
Code, involuntarily commenced against the Debtors in the Bankruptcy Court for
the District of Delaware and thereafter transferred to the Bankruptcy Court on
or about May 10, 2000.

     22.  "Citrosuco" means Citrosuco North America, Inc.
           ---------

     23.  "Claim" means a claim (as defined in Section 101(5) of the Bankruptcy
           -----
Code) against any Debtor, including, but not limited to: (a) any right to
payment from a Debtor whether or not such right is reduced to judgment,
liquidated, unliquidated, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured; or (b) any right to an equitable remedy
for breach of performance if such performance gives rise to a right of payment
from a Debtor, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.

     24.  "Class" means a category of Holders of Claims or Equity Interests as
           -----
set forth in Article III of the Plan.

     25.  "Committee" means the Official Committee of Unsecured Creditors
           ---------
appointed by the United States Trustee in these Chapter 11 Cases on or about
September 20, 2000.

     26.  "Confirmation" means the entry of the Confirmation Order, subject to
           ------------
all conditions specified in Article XII of the Plan having been (a) satisfied or
(b) waived pursuant to Article XII(c).

                                       6
<PAGE>

     27.  "Confirmation Date" means the date upon which the Confirmation Order
           -----------------
is entered by the Bankruptcy Court in its docket, within the meaning of
Bankruptcy Rules 5003 and 9021.

     28.  "Confirmation Order" means the order of the Bankruptcy Court
           ------------------
confirming the Plan pursuant to Section 1129 of the Bankruptcy Code.

     29.  "Consummation" means the occurrence of the Effective Date.
           ------------

     30.  "Contingent Claim" means a Claim that has accrued but nonetheless
           ----------------
remains dependent on the occurrence of a future event that may never occur.

     31.  "Convenience Claim" means any Allowed General Unsecured Claim in the
           -----------------
amount of $2000 or less.

     32.  "Creditor" means any Holder of a Claim.
           --------

     33.  "Debtor" means Gencor Industries, Inc. and former debtors GCC,
           ------
Thermotech, Equipment Services, Bituma, and BSI, the estate of each of which has
been substantively consolidated into Gencor.

     34.  "Debtor in Possession" means Gencor Industries, Inc.
           --------------------

     35.  "Deliotte Proceeds" means the net proceeds of any action by the Debtor
           -----------------
against Deloitte & Touche, LLP.

                                       7
<PAGE>

     36.  "Disclosure Statement" means Debtors' Disclosure Statement dated April
           --------------------
4, 2001, as amended, supplemented, or modified from time to time, describing the
Plan, that is prepared and distributed in accordance with the Bankruptcy Code
and Bankruptcy Rules and other applicable law.

     37.  "Disputed" means, with respect to any Claim or Equity Interest, any
           --------
Claim or Equity Interest: (a) listed on the Schedules as unliquidated, disputed
or contingent; (b) as to which Debtors or any other party in interest have
interposed a timely objection or request for estimation in accordance with the
Bankruptcy Code and the Bankruptcy Rules or is otherwise disputed by Debtors in
accordance with applicable law, which objection, request for estimation or
dispute has not been withdrawn or determined by a Final Order, or (c) unless
otherwise indicated in the Plan, a Claim as to which the period within which to
object to such Claim has not yet expired.

     38.  "Distribution" means the Cash or Assets to be distributed to Holders
           ------------
of Allowed Claims or Equity Interests under Article III of the Plan.

     39.  "Distribution Dates" means each date on which a Distribution is to
           ------------------
be made under the Plan.

     40.  "Distribution Record Date" means April 9, 2001.
           ------------------------

     41.  "Effective Date" means the earlier of (a) September 4, 2001 or (b) the
           --------------
first Business Day of the first month after the Confirmation Date on which: (i)
no stay of the Confirmation Order is in effect, and (ii) all conditions
specified in both Article XII of the Plan have been (x) satisfied or (y) waived.

                                       8
<PAGE>

     42.  "Entity" means an entity as defined in Section 101(15) of the
           ------
Bankruptcy Code.

     43.  "Equipment Services" means Equipment Services Group, Inc.
           ------------------

     44.  "Equity Interest" means any equity interest in any Debtor, including,
           ---------------
but not limited to, all issued, unissued, authorized or outstanding shares or
stock, together with any warrants, options or contract rights to purchase or
acquire such interests at any time.

     45.  "Estate Assets" means all of each Debtor's Assets on the Effective
           -------------
Date, all of which have been substantively consolidated into the estate of
Gencor.

     46.  "Estates" means the substantively consolidated estates of Debtors
           -------
created by Section 541 of the Bankruptcy Code upon the commencement of the
Chapter 11 Cases.

     47.  "File" or "Filed" means file or filed with the Bankruptcy Court in the
           ----      -----
Chapter 11 Cases.

     48.  "Final Decree" means the decree contemplated under Bankruptcy Rule
           ------------
3022.

     49.  "Final Distribution Date" means the date of the last payment to
           -----------------------
Holders of Allowed Claims and Equity Interests in accordance with the provisions
of the Plan.

     50.  "Final Order" means an order or judgment of the Bankruptcy Court, or
           -----------
other court of competent jurisdiction with respect to the subject matter, which
has not been reversed, stayed, modified or amended, and as to which the time to
appeal or seek certiorari has expired and no appeal or petition for certiorari
has been timely taken, or as to which any appeal that has been

                                       9
<PAGE>

taken or any petition for certiorari that has been or may be filed has been
resolved by the highest court to which the order or judgment was appealed or
from which certiorari was sought.

     51.  "GAP Claim" means any Unsecured Claim arising after the Petition Date
           ---------
and prior to the Order for Relief Date that is entitled to priority pursuant to
Section 507(a)(2) of the Bankruptcy Code.

     52.  "GCC" means General Combustion Corp.
           ---

     53.  "Gencor" means Gencor Industries, Inc., whether as reorganized
           ------
following the Effective Date, or otherwise.

     54.  "General Unsecured Claim" means any Unsecured Claim that is not
           -----------------------
entitled to priority under Section 507(a) of the Bankruptcy Code.

     55.  "Holder" means a Person or Entity holding an Equity Interest or Claim.
           ------

     56.  "Impaired" means with respect to a Claim or Class of Claims, a Claim
           --------
or Class of Claims that is impaired within the meaning of Section 1124 of the
Bankruptcy Code.

     57.  "Initial Distribution Date" means the Effective Date, or as soon as
           -------------------------
practicable thereafter as determined by Gencor or such other date as the initial
payment of Allowed Claims in a given Class is required to be made under this
Plan.

     58.  "Insider" means an insider of Gencor, as defined in Section 101(31) of
           -------
the Bankruptcy Code.

                                      10
<PAGE>

     59.  "Lender Group" means the group of lenders represented by the Agent and
           ------------
holding the Lender Group Claims.  To Gencor's knowledge, the Lender Group
consists of Credit Lyonnais New York Branch, BHF USA Capital Corporation,
Balanced High-Yield  Fund I, Ltd., Bank Austria Creditanstalt Corporate Finance,
Inc., The ING Capital Senior Secured High Income Fund, L.P., ING Capital
Advisors, LLC, MC CBO IV (Cayman) Ltd., Pamco Cayman Ltd., Skandinaviska
Enskildabanken Corporation, ABN Amro Bank, N.V., and Suntrust Bank.

     60.  "Lender Group Claims" means the Claims of members of the Lender Group
           -------------------
in existence on the Petition Date.

     61.  "Lien" or "Liens" means any charge against or interest in property to
           ----      -----
secure payment or performance of a claim, debt, or obligation.

     62.  "Net Recovery" means the amounts received through assertion or
           ------------
prosecution by Gencor of any Rights of Action, including amounts received by
settlement.

     63.  "Order for Relief Date" means September 13, 2000, the date the order
           ---------------------
for relief was entered commencing these Chapter 11 cases.

     64.  "Other Priority Claim" means any Claim accorded priority in right of
           --------------------
payment under Section 507(a) of the Bankruptcy Code, other than a Priority Tax
Claim, a Gap Claim, or an Administrative Claim.

     65.  "Person" means a person as defined in Section 101(41) of the
           ------
Bankruptcy Code.

                                      11
<PAGE>

     66.  "Personal Injury Claim" means personal injury Claims against Debtors
           ---------------------
based on personal injury or product liability theories which are covered totally
or partially by insurance.

     67.  "Petition Date" means April 5, 2000 and April 7, 2000, the dates on
           -------------
which the involuntarily petitions against Debtors were filed.

     68.  "Plan" means this Second Amended Plan of Reorganization, as modified,
           ----
either in its present form or as it may be altered, amended, modified or
supplemented from time to time in accordance with the Plan, the Bankruptcy Code
and the Bankruptcy Rules.

     69.  "Priority Tax Claim" means a Claim of a governmental unit of the kind
           ------------------
specified in Section 507(a)(8) of the Bankruptcy Code.

     70.  "Pro Rata" means proportionately so that with respect to an Claim, the
           --------
ratio of (a) (i) the amount of property distributed on account of a particular
Claim to (ii) the amount of the Claim, is the same as the ratio of (b) (i) the
amount of property distributed on account of all Claims of the Class in which
the particular Claim is included to (ii) the amount of all Claims in that Class.

     71.  "Professional" means a Person or Entity (a) employed pursuant to a
           ------------
Final Order in accordance with Sections 327 and 1103 of the Bankruptcy Code and
to be compensated for services rendered prior to the Effective Date, pursuant to
Sections 327, 328, 329, 330 and 331 of the Bankruptcy Code, or (b) for which
compensation and reimbursement has been allowed by the Bankruptcy Court pursuant
to Section 503(b)(4) of the Bankruptcy Code.

                                      12
<PAGE>

     72.  "Professional Fee Claim" means those fees and expenses claimed by
           ----------------------
Professionals retained through a Bankruptcy Court order by Debtors, pursuant to
Sections 330, 331 and/or 503 of the Bankruptcy Code, and unpaid as of the
Confirmation Date.

     73.  "Professional Fees" means all Allowed Claims for compensation and for
           -----------------
reimbursement of expenses under Sections 328 and 330 of the Bankruptcy Code.

     74.  "Proof of Claim" means a proof of claim pursuant to Section 501 of the
           --------------
Bankruptcy Code and/or any order of the Bankruptcy Court, together with
supporting documents.

     75.  [Intentionally omitted.]

     76.  "Responsible Agent" means the individual or person with the
           -----------------
responsibility for making Distributions on behalf of Gencor under the Plan.

     77.  "Rights of Action" means, with respect to each Debtor individually (as
           ----------------
consolidated into the estate of Gencor), all claims, demands, rights, actions,
causes of action and suits of such Debtor's Estate, of any kind or character
whatsoever, known or unknown, suspected or unsuspected, whether arising prior
to, on or after the Petition Date, in contract or in tort, at law or in equity
or under any other theory of law, including but not limited to (a) rights of
setoff, counterclaim or recoupment, and claims on contracts or for breaches of
duties imposed by law, (b) the right to object to Claims or Interests, (c)
claims pursuant to Section 362 of the Bankruptcy Code, (d) claims and defenses
such as fraud, mistake, duress, usury and (e) all avoiding powers, rights to
seek subordination and all rights and remedies under Sections 502(d), 506, 510,
542,

                                      13
<PAGE>

543, 544, 545, 547, 548, 549, 550, 551, 552 or 553 or any fraudulent conveyance,
fraudulent transfer, or preference action.

     78.  "Schedules" means the schedules of assets and liabilities which Gencor
           ---------
is required to file pursuant to Section 521 of the Bankruptcy Code, the Official
Bankruptcy Forms and the Bankruptcy Rules, as they may be amended and
supplemented from time to time, and Gencor's statements of financial affairs
filed with the Bankruptcy Court, Gencor is required to file pursuant to Section
521 of the Bankruptcy Code, the Official Bankruptcy Forms and the Bankruptcy
Rules, as they may be amended and supplemented from time to time.

     79.  "Secured Claim" means (a) a Claim that is secured by a lien on
           -------------
property in which the Estates have an interest, which lien is valid, perfected
and enforceable under applicable law or by reason of a Final Order, or that is
subject to setoff under Section 553 of the Bankruptcy Code, to the extent of the
value of the Creditor's interest in the Estates' interest in such property or to
the extent of the amount subject to setoff, as applicable, as determined
pursuant to Section 506(a) of the Bankruptcy Code, or (b) a Claim Allowed under
this Plan as a Secured Claim.

     80.  "Securities Class Action Claim" means the Claim of Creditors who
           -----------------------------
commenced a class action suit against the Gencor, E.J. Elliot, John Elliot, and
Russell Lee, III (as officers and directors of the Companies) on October 18,
1999 and after dismissal, filed a subsequent action in October, 2000, in the
United States District Court for the Middle District of Florida, Orlando
Division, C.A. No. 99-106-CIV-ORL-19B seeking money damages for losses from the
alleged violations of Section 20 and 10(b) of the Securities Exchange Act of
1934 and Rule 10b-5.

                                      14
<PAGE>

     81.  "Subsequent Distribution Date" means any date after the Initial
           ----------------------------
Distribution Date (a) that is (i) set by Debtors after consultation with Gencor
the Responsible Agent to Gencor or (ii) otherwise ordered by the Bankruptcy
Court, and (b) upon which the Responsible Agent makes a Distribution to any
Holders of Allowed Claims.

     82.  "Thermotech" means Thermotech Systems Corp.
           ----------

     83.  "Unimpaired Class" means a Class in which is included any unimpaired
           ----------------
Claims within the meaning of Section 1124 of the Bankruptcy Code.

     84.  "Unsecured Claim" means any Claim against Gencor that is not a Secured
           ---------------
Claim or Administrative Claim.

     85.  "Voluntary Deferral" is as defined in Section III.B.3.
           ------------------

     86.  "U. S. Trustee" means the Office of the United States Trustee for the
           -------------
Middle District of Florida.

     87.  "Voting Instructions" means the instructions for voting on the Plan
           -------------------
contained in the Disclosure Statement and in the Ballots.

     88.  "Voting Record Date" means the date of Court approval of the
           ------------------
Disclosure Statement.

                                      II.
       ADMINISTRATIVE CLAIMS, PROFESSIONAL FEES AND PRIORITY TAX CLAIMS
       ----------------------------------------------------------------

     A.   Introduction
          ------------

                                      15
<PAGE>

     Certain types of Claims are not placed into voting Classes; instead they
are unclassified.  They are not considered Impaired and they do not vote on the
Plan because they are automatically entitled to specific treatment provided for
them in the Bankruptcy Code.  As such, Gencor has not placed the following
Claims in a Class:

     B.   Administrative Claims
          ---------------------

          With respect to all Administrative Claims, after funding the
Administrative Claims Reserve Fund, Gencor shall pay each Holder of an Allowed
Administrative Claim (except for Professional Fees to the extent that their
treatment, which is set forth below, differs) in full in the amount of the
Allowed Claim, without interest, in Cash, on the later of (a) the Initial
Distribution Date (or as soon thereafter as is practicable) or (b) within sixty
(60) days after the Claim becomes an Allowed Claim or (c) the date such Claim is
payable in the ordinary course of a Debtor's business.  Under the Plan, the
Holder of an Allowed Administrative Claim may be paid on such other date and
upon such other terms as may be agreed upon by that Holder of an Allowed
Administrative Claim and Gencor.

          Notwithstanding any provision in the Plan regarding payment of
Administrative Claims, all holders of Administrative Claims and Administrative
Tax Claims, which have not been paid as of the Effective Date, must file a
request for payment of Administrative Claims with the Bankruptcy Court and serve
the same on Debtors' counsel and the U.S. Trustee such that the request is
actually received no later than thirty (30) days after the conclusion of the
Confirmation Hearing, or such Claim shall be forever barred and shall not be
enforceable against Debtors, their successors, their assigns or their property.
An objection to an Administrative Claim or Administrative Tax Claim must be
filed within 120 days from the date such Claim is Filed.

                                      16
<PAGE>

Without limiting the foregoing, all fees payable under 28 U.S.C. (S) 1930 that
have not been paid, shall be paid on or before the Effective Date.

     C.   Professional Fees
          -----------------

     Gencor shall pay Professionals who are entitled to allowance of fees and
reimbursement of expenses from the Estates, in Cash, the amount awarded to such
Professionals by Final Order of the Bankruptcy Court, less the amount of fees
previously paid to the Professionals pursuant to the an Order of the Bankruptcy
Court providing for payment of interim compensation to Professionals, on the
later of the Effective Date or the date upon which any order awarding fees
and/or expenses becomes a Final Order.  The Holder of an Allowed Claim for
Professional Fees may be paid on such other date and upon such other terms as
may be agreed upon by that Holder of an Allowed Administrative Claim and Gencor.

     Each Professional in question must File and serve a properly noticed fee
application and the Court must rule on the application.  Only the amount of fees
allowed by the Court will be owed and required to be paid under the Plan.

     Professionals or other entities requesting compensation or reimbursement of
expenses pursuant to Sections 327, 328, 330, 331, 503(b) and 1103 of the
Bankruptcy Code for services rendered prior to the Effective Date must File and
serve pursuant to the notice provisions of the Interim Fee Order, an application
for final allowance of compensation and reimbursement of expenses no later than
sixty (60) days after the Effective Date.  All such applications for final
allowance of compensation and reimbursement of expenses will be subject to the
authorization and approval of the Bankruptcy Court.  Holders of Administrative
Claims (including, without limitation, Professionals) requesting compensation or
reimbursement of expenses that do not File such requests by the applicable bar
date shall be forever barred from asserting such claims against

                                      17
<PAGE>

Debtors or their successors, their assigns or their property. Any objection to
Professional Fee Claims shall be Filed on or before the date specified in the
application for final compensation.

     All reasonable fees for services rendered in connection with the Chapter 11
Cases and the Plan after the Effective Date, including those relating to the
resolution of pending Claims, shall be paid by Gencor without further Bankruptcy
Court authorization.

     D.   Priority Tax Claims
          -------------------

     A Priority Tax Claim is a Claim of a governmental entity of a kind
specified in Section 507(a)(8) of the Bankruptcy Code, including but not limited
to income taxes, real property taxes, sales taxes and use taxes.  Each Holder of
such an Allowed Priority Tax Claim will be paid in full, in Cash, without
interest on the later of the Initial Distribution Date (or as soon thereafter as
is practicable) or within sixty (60) days after the Claim becomes an Allowed
Claim and the date on which that Claim becomes due and payable, except for the
extent that the Holder of an Allowed Priority Tax Claim agreed or has agreed to
different terms.

     E.   Pension Benefit Guaranty Corp. ("PBGC")
          ---------------------------------------

     PBGC's Claim results from any unfunded or underfunded portion of CPM's plan
sponsorship of a certain Title IV of the Employee Retirement Income Security Act
of 1974 ("ERISA"), 20 U.S.C. (S) 1301, et seq., qualified pension plan ("Pension
                      ------           -------
Plan") for its Employees.  To the extent of Gencor's liability to PBGC, a
portion of the under-funded obligation in respect of the Pension Plan is
entitled to a fourth-priority of distribution.  The Debtors shall pay PBGC the
priority portion of its Allowed under-funded obligation in the full amount of
the Allowed Claim, without interest, in Cash, on the later of (a) the Initial
Distribution Date (or as soon thereafter as is practicable) or (b) within sixty
(60) days after the Claim becomes an Allowed Claim or (c) the date such Claim is
payable in the ordinary course of the Debtors' businesses.  The non-priority

                                      18
<PAGE>

portion of any Allowed under-funded obligation under the Pension Plan will be
treated as a Class 5 General Unsecured Claim.

     F.   Class 3 GAP Claims.
          -------------------

     Class 3 GAP Claims are technically unclassified and placed in "Class 3" for
administrative convenience only.  Class 3 GAP Claims are entitled to payment in
full of their Allowed Claims under the Code on the Effective Date of the Plan.
Gencor is requesting the Holders of GAP Claims to voluntarily defer payment of
35% of their Claims in order to provide Gencor with sufficient cash as of the
Effective Date to operate its business and perform under the Plan.  Unless
virtually all Holders of GAP Claims consent to this Voluntary Deferral, the Plan
may be infeasible.  Holders of Class 3 GAP Claims will receive a ballot for the
purpose of electing to make the Voluntary Deferral (as defined below).

                                     III.
                         CLASSIFICATION AND TREATMENT
                         ----------------------------
                   OF CLASSIFIED CLAIMS AND EQUITY INTERESTS
                   -----------------------------------------

     A.   Summary
          -------

          The categories of Claims and Equity Interests listed below classify
Claims and Equity Interests for all purposes, including voting, Confirmation and
Distribution pursuant to the Plan and pursuant to Sections 1122 and 1123(a)(1)
of the Bankruptcy Code.  A Claim or Equity Interest shall be deemed classified
in a particular Class only to the extent that the Claim or Equity Interest
qualifies within the description of that Class and shall be deemed classified in
a different Class to the extent that any remainder of such Claim or Equity
Interest qualifies within the description of such different Class.  A Claim or
Equity Interest is in a particular Class only to the extent that such Claim or
Equity Interest is Allowed in that Class and has not been paid or otherwise
settled prior to the Effective Date.

                                      19
<PAGE>

          THE ESTATES OF DEBTORS HAVE BEEN SUBSTANTIVELY CONSOLIDATED.  ALL
ESTATE ASSETS HAVE VESTED IN GENCOR.  ANY CLAIMS HELD AGAINST ONE DEBTOR WILL BE
SATISFIED FROM THE CONSOLIDATED ASSETS OF ALL DEBTORS HELD BY GENCOR FOLLOWING
THE EFFECTIVE DATE.

     B.   Classification and Treatment of Claims against Debtors
          ------------------------------------------------------

          The classification of Claims and Equity Interests against Debtors
pursuant to the Plan is as follows:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
Class                                           Status             Voting Rights
-----------------------------------------------------------------------------------------------
<S>                                             <C>                <C>
 Class 1--Other Priority Claims                 Unimpaired         Not entitled to Vote
-----------------------------------------------------------------------------------------------
 Class 2--Lender Group Claims                   Impaired           Entitled to Vote
-----------------------------------------------------------------------------------------------
 Class 3--GAP Claims                            Technically        Not entitled to Vote; Being
                                                Unclassified       Requested to make Voluntary
                                                                   Deferral
-----------------------------------------------------------------------------------------------
 Class 4 - Unsecured Convenience Claims         Impaired           Entitled to Vote
-----------------------------------------------------------------------------------------------
 Class 5--General Unsecured Claims              Impaired           Entitled to Vote
-----------------------------------------------------------------------------------------------
 Class 6--Bank of New York Secured Claim        Unimpaired         Not Entitled to Vote
-----------------------------------------------------------------------------------------------
 Class 7--Class A Equity Interests in Gencor    Unimpaired         Not Entitled to Vote
-----------------------------------------------------------------------------------------------
 Class 8-- Class B Equity Interests in Gencor   Unimpaired         Not Entitled to Vote
-----------------------------------------------------------------------------------------------
 Class 9 - Equity Interests in Debtors Other     Unimpaired         Not Entitled to Vote
 than Gencor
-----------------------------------------------------------------------------------------------
 Class 10 - Securities Class Action Claim        Impaired           Entitled to Vote
-----------------------------------------------------------------------------------------------
 Class 11 - Insured Personal Injury Claims       Impaired           Entitled to Vote
-----------------------------------------------------------------------------------------------
</TABLE>

     1.   Class 1 - Other Priority Claims

          a.   Classification: Class 1 consists of all Other Priority Claims
against Debtors.

          b.   Treatment: After paying Allowed Administrative Claims and funding
the Administrative Claims Reserve Fund, Debtors shall pay Allowed Class 1 Claims
in full, in Cash,

                                      20
<PAGE>

without interest, on the later of the Initial Distribution Date (or as soon
thereafter as is practicable), within sixty (60) days after the Claim becomes an
Allowed Claim, and the date on which such Claim becomes due and payable, except
to the extent that the Holder of the Allowed Claim in Class 1 agrees or has
agreed to a different treatment.

          c. Voting: Class 1 is an Unimpaired Class and Holders of Class 1
Claims are not entitled to vote.

     2.   Class 2 - Lender Group Claims

          a. Classification: Class 2 consists of the Lender Group Claims against
Debtors.

          b. Treatment:

             (1)  The aggregate Lender Claims will be reduced through cash
payments to not more than $40,000,000 as of the Effective Date./2/ Each Holder
of a Lender Group Claim will receive a note reflecting the amount of its Claim.
This Claim will be paid in full under the Plan. Gencor will pay Allowed Class 2
Claims in full over a four year period. Monthly principal payments will commence
on the Effective Date. Principal Payments will be $320,000 per month for the
first twelve months, and $400,000 per month for the succeeding thirty-five
months, with the remaining unpaid principal balance of the Allowed Amount of
such Claim, together with accrued interest thereon, being payable in full on the
fourth anniversary of
___________________________
/2/ A dispute currently exists as to the precise amount of the Lender Group
Claims, solely as to a portion of the Claims which appears to relate to expired
and undrawn letters of credit.  Gencor and the Lender Group hope to resolve this
issue consensually prior to Confirmation.

                                      21
<PAGE>

the Effective Date. Interest shall accrue on the Allowed Class 2 Claim as set
forth in the Amended and Restated Senior Secured Credit Agreement. Additional
material terms in respect of the treatment of Class 2 Claim are set forth in the
Amended and Restated Senior Secured Credit Agreement. The liens and security
interests of the Agent will be retained following the Effective Date; and
instruments creating such liens and security interests (collectively, "Lien
Instruments") shall be supplemented as required and deemed modified as set forth
below. A mandatory principal prepayment shall be made on the Class 2 Claim from
any Deloitte Proceeds.

          (2)  The prepetition loan and security agreement in favor of the
Lender Group (and any note relating thereto or guarantee by any of the Debtors
of the "Obligations" thereunder) shall be amended and restated pursuant to the
Amended and Restated Senior Secured Credit Agreement. Additionally, Lien
Instruments granted by Gencor for any "Active Subsidiary" (as defined in the
Amended and Restated Senior Secured Credit Agreement) shall be deemed modified
to provide:

               (i)   That payment obligations secured thereby are the payment
obligations established by the Plan and the Amended and Restated Senior Secured
Credit Agreement rather than the prior credit agreement;

               (ii)  That existing Events of Default under the prior credit
agreement are deemed waived; and

               (iii) That transactions contemplated by the Plan do not
constitute an Event of Default.

                                      22
<PAGE>

                    (b)  Any violation of Debtors' obligations to the Lender
Group under this Plan shall constitute an Event of Default under such Lien
Instrument.

          c.  Voting: Class 2 is an Impaired Class and holders of Class 2 Claims
are entitled to vote to accept or reject the Plan. Under the terms of the Second
Stipulation Regarding Use of cash Collateral, Adequate Protection and Other
Relief approved by the Bankruptcy Court on or about April 5, 2001, Holders of
more than 2/3 of the dollar amount and more than one half in number of Class 2
Claims have contractually agreed to vote in favor of the Plan.

     3.   Class 3 - GAP Claims

          a.  Classification: Class 3 consists of the claims of Holders of Gap
Claims against Debtors.

          b.  Treatment: Class 3 "GAP" Claims are classified for convenience
purposes only. Class 3 GAP Claims are entitled to payment in full of their
Allowed Claims under the Code on the Effective Date. Gencor is requesting the
Holders of GAP Claims agree to the "Voluntary Deferral". The specific terms of
the Voluntary Deferral are as follows: 65% of the Allowed Class 3 Claim will be
paid on the Effective Date. The remaining 35% balance of the Class 3 Allowed
Claims will be paid over a six year period, in quarterly payments of principal,
together with accrued interest thereon from the Effective Date. Interest shall
accrue on the unpaid principal amount of Allowed Class 3 Claims at the rate of
nine percent (9%) per annum after the Effective Date.

                                      23
<PAGE>

          c. Voting: Class 3 is not required to accept or reject the Plan but
Holders of Class 3 Claims are requested to execute the Voluntary Deferral.

     4.  Class 4 - Unsecured Convenience Claims

         a.  Classification: Class 4 consists of the Claims Holders of Unsecured
Convenience Claims in the amount of $2000 or less. In addition, Class 4 Claims
may also consist of Holders Class 5 General Unsecured Claims who elect to
participate in Class 4 by voluntarily reclassifying their Claims.

         b.  Treatment: Holder of an Allowed Class 4 Claims shall receive a
single Cash payment equal to 80% of their Allowed Claim in full and final
settlement of their Allowed Claim, on the later of the Initial Distribution Date
(or as soon thereafter as is practicable), within sixty (60) days after the
Claim becomes an Allowed Claim, and the date on which such Claim becomes due and
payable, except to the extent that the Holder of the Allowed Claim in Class 4
agrees or has agreed to a different treatment.

         c. Opt-Out: Class 4 Claimants may opt-out of the Convenience Class and
elect to accept the treatment of Class 5 General Unsecured Claimants as provided
in the Plan.

         d. Voting: Class 4 is an Impaired Class. The Holders of Class 4 Claims
are entitled to vote to accept or reject the Plan.

     5.  Class 5 - General Unsecured Claims

                                      24
<PAGE>

          a.  Classification: Class 5 consists of the Claims of Holders of
General Unsecured Claims against Debtors.

          b.  Treatment: Class 5 Claims will be paid in full over a six year
period by equal quarterly payments of principal together with accrued interest
thereon. Interest will accrue on the unpaid principal amount of Allowed Class 5
Claims at the rate of nine percent (9%) per annum from the later of the
Effective Date or the date a claim is allowed; provided, however, that Debtor
shall make a mandatory prepayment on Class 5 Claims from any Deloitte Proceeds
remaining after payment in full of all Class 2 Claims.

          c.  Voting: Class 5 is an Impaired Class. Class 5 Claims are entitled
to vote to accept or reject the Plan.

     6.   Class 6 - The Bank of New York Secured Claim

          a.  Classification: Class 6 shall consist of the Secured Claim of The
Bank of New York ("BNY"), which Claim is secured by the first priority mortgage
of Gencor's headquarters building in Orlando, Florida.

          b.  Treatment: On the Effective Date, BNY shall be paid an amount of
cash (at the non-default interest rate payable under the note in favor of BNY),
as ordered by the Bankruptcy Court, sufficient to cure any default existing in
respect thereto to render the Class 6 Claim unimpaired. Thereafter, the Class 6
Claim shall be paid in accordance with the pre-existing instrument between
Gencor and BNY relating to such Claim.

                                      25
<PAGE>

          c.  Voting: Class 6 is an unimpaired Class. Accordingly, the Class 6
Creditor is not entitled to vote to accept or reject the Plan.

     7.   Class 7 - Class A Equity Interests in Gencor

          a.  Classification: Class 7 consists of all Class A Equity Interests
in Gencor.

          b.  Treatment: Class 7 Equity Interests are unimpaired under the Plan.
Holders of Class 7 Equity Interests will retain their contractual rights under
the Plan.

          c.  Voting: Class 7 Interest Holders in Gencor shall retain all of
their rights under the Plan and are, therefore, unimpaired. Accordingly, Class 7
Creditors are not entitled to vote.

     8.   Class 8 -  Class B Equity Interests in Gencor

          a.  Classification: Class 8 consists of all Class B Equity Interests
in Gencor.

          b.  Treatment: Class 8 Equity Interests are unimpaired under the Plan.
Holders of Class 8 Equity Interests will retain their contractual rights under
the Plan.

          c.  Voting: Class 8 Interest Holders in Gencor shall retain all of
their rights under the Plan and are, therefore, unimpaired. Accordingly, Class 8
Creditors are not entitled to vote.

     9.  Class 9 -- Gencor's Equity Interests In Other Debtors

                                      26
<PAGE>

          a.  Classification: Class 9 consists of all Gencor's Equity Interests
in other Debtors.

          b.  Treatment: Class 9 Equity Interests are unimpaired pursuant to the
Plan.

          c.  Voting: Class 9 is an Unimpaired Class and the Holder of Class 9
Equity Interests therefore is not entitled to vote to accept or reject the Plan.

     10.  Class 10 - Securities Class Action Claim

          a.  Classification:  Class 10 consists of the Securities Class Claim.

              (1)  Treatment: The Class 10 Claims are not being liquidated,
adjudicated, or otherwise determined under this Plan or in the Chapter 11 Case.
On and after the Confirmation Date, the Holders of Class 10 Claims will be
permitted to proceed (in a forum other than the Bankruptcy Court) against the
Debtor to liquidate their rights and Claims against the Debtor and to seek
collection from insurance policies of the Debtor ("Insurance Policies"). In
connection with any such litigation, the Debtor (a) shall respond to subpoenas
and discovery requests properly served in accordance with the applicable rules
and procedures of the forum where the litigation is pending, and (b) in no event
shall the Debtor be liable or responsible for any liability in respect of such
Claims in an amount in excess of available coverage under the Insurance
Policies. As such, no Distribution shall be made from assets of the Debtor's
Estate (other than proceeds of the Insurance Policies) in respect of Class 10
Claims. Furthermore, except as provided with respect to Class 10 Claims, as
otherwise expressly provided in this Plan,

                                      27
<PAGE>

and expressly excluding any rights of reimbursement or indemnification by
directors or officers of Gencor, the Insurance Policies shall not be used with
respect to any Claims against the Debtor.

     Nothing in this Plan or the Confirmation Order shall be construed or
otherwise interpreted (i) as litigation on the merits of the Class 10 Claims or
an adjudication with respect to, or litigation of, any issue relating to the
Class 10 Claims, (ii) having any res judicata or collateral estoppel effect with
respect to any Class 10 Claims against the Debtor or any other individual or
entity, (iii) to release or otherwise impact any rights or Claims held by the
Holders of Class 10 Claims against individuals or entities other than the
Debtor, including, without limitation, present or former officers or directors
of the Debtor; or (iv) to release or otherwise impact the rights held by the
Holders of Class 10 Claims to seek payment, collection, and satisfaction of any
settlement or judgment against individuals or entities other than the Debtor,
including, without limitation, present or former officers or directors of the
Debtor, from property of those individuals or entities and the Insurance
Policies.  The treatment of the Class 10 Claims shall not in any way impact the
rights of such Holders to retain their Equity Interest in the Debtor in
accordance with the treatment of Class 7 and Class 8 Equity Interests under this
Plan.

          b.  Voting: Class 10 is an impaired Class and the Holder of a Class 10
Interest is entitled to vote to accept or reject the Plan.

     11.  Class 11 - Insured Tort Claims

          a.  Classification: Class 11 consists of all Insured Tort Claims.

                                      28
<PAGE>

          b.  Treatment: Allowed Class 11 Claims will be satisfied by recourse
of the Holders to insurance proceeds to the extent of policy limits. If the
aggregate Allowed Class 11 Claims exceed the amount of the available insurance
proceeds, the excess of such Allowed Class 11 Claims paid in full over the
balance of a six year period, in semi-annual payments of principal, together
with accrued interests thereon from the Effective Date. Interest will accrue on
the unpaid principal amount of Allowed Class 11 Claims at the rate of nine
percent (9%) per annum after the earlier of liquidation of the Claim amount or
the Effective Date. The Amount of each Allowed Class 11 Claim may be prepaid, in
whole or in part, at any time without penalty of any kind. The Debtors reserve
the right to request the Bankruptcy Court to estimate any deficiency in the
amount of insurance proceeds, if any.

          c.  Voting: Class 11 is an Impaired Class and the Holders of Class 11
Claims are entitled to vote to accept or reject the Plan.

                                      IV.
                      ACCEPTANCE OR REJECTION OF THE PLAN
                      -----------------------------------

     A.   Voting Classes
          --------------

     Each Holder of an Allowed Claim or Interest in Classes 2, 4, 5, 10 and 11
is entitled to vote either to accept or to reject the Plan.  Only those votes
cast by Holders of Allowed Claims and Equity Interests shall be counted in
determining whether acceptances have been received sufficient in number and
amount to obtain confirmation.

     B.   Acceptance by Impaired Classes
          ------------------------------

                                      29
<PAGE>

     An Impaired Class of Claims shall have accepted the Plan if (a) the Holders
(other than any Holder designated under Section 1126(e) of the Bankruptcy Code)
of at least two-thirds in dollar amount of the Allowed Claims actually voting in
such Class have voted to accept the Plan and (b) the Holders (other than any
Holder designated under Section 1126(e) of the Bankruptcy Code) of more than
one-half in number of the Allowed Claims actually voting in such Class have
voted to accept the Plan.

                                      V.
                            EFFECT OF CONFIRMATION
                            ----------------------

A.   Substantive Consolidation/Vesting of Cash and Assets in Gencor as the
     ---------------------------------------------------------------------
     Remaining Debtor
     ----------------

     All Estate Assets have vested in Gencor, and Gencor shall assume any and
all responsibility for the payment of any and all Claims against each Debtor.
Except to the extent otherwise provided in the Plan or restricted by prior order
of the Bankruptcy Court, on the Effective Date, all Cash and Estate Assets shall
be transferred to and vest in Gencor free of any Claims, Liens and Equity
Interests.

     B.   Post-Confirmation Directors and Officers
          ----------------------------------------

          On the Confirmation Date, the officers and directors of Gencor shall
be as follows:

Directors:
Mr.E.J. Elliot                        Chairman of the Board
Mr.John Elliot                        Director/3/

Officers:
Mr.E.J. Elliot                        Chief Executive Officer, President
Mr.John Elliot                        Executive Vice President and Secretary
Mr.Scott W. Runkel                    Chief Financial Officer, Treasurer
Mr.David F. Bradshears                Senior Vice President, Technology
Mr.Marc G. Elliot                     Vice President, Marketing
Mr.D. William Garrett                 Vice President Sales

_________________________
/3/ Gencor shall seek to appoint a third director prior to the Effective Date to
be subsequently identified.

                                      30
<PAGE>

          Compensation of each Officer and Director shall initially be as was in
effect prior to the Effective Date.  Gencor reserves the right to adjust such
compensation at a date which is one year following the Effective Date, subject
to the rights of the Lender Group under the Restated Senior Secured Credit
Agreement.

          C.  Authority to Effectuate Plan
              ----------------------------

          Upon the entry of the Confirmation Order by the Bankruptcy Court, all
matters provided under the Plan shall be deemed to be authorized and approved
without further approval from the Bankruptcy Court.  The Confirmation Order
shall act as an order modifying Gencor's by-laws such that the provisions of
this Plan can be effectuated.  Gencor shall be authorized, without further
application to or order of the Bankruptcy Court, to take whatever action is
necessary to achieve Consummation and carry out the Plan and to effectuate the
Distributions provided for thereunder.

          D.  Post-Confirmation Status Report
              -------------------------------

          Within 120 days of the entry of the Confirmation Order, Gencor shall
file a status report with the Court explaining what progress has been made
toward consummation of the confirmed Plan. The status report shall be served on
the United States Trustee, and those parties who have requested special notice
post-confirmation. The Bankruptcy Court may schedule status conferences at its
discretion.

                                      31
<PAGE>

     E.   Escrows
          -------

     All escrows previously established in the chapter 11 Cases and still in
existence on the Plan Effective Date shall continue to be administered, and the
escrowed funds shall be released, according to their terms and any orders of the
Bankruptcy Court previously entered.  Escrowed funds that are released to Gencor
after the Plan Effective Date shall be used to achieve Consummation and carry
out the Plan.

     F.   Binding Effect
          --------------

     Except as otherwise expressly provided in the Plan, on and after the
Effective Date, the Plan and all exhibits thereto shall bind the Committee, and
all Holders of Claims and Equity Interests.

                                      VI.
                                   COMMITTEE
                                   ---------

          Upon the Effective Date, the Committee shall be dissolved and its
members shall be deemed released of all their duties, responsibilities and
obligations.  The retention or employment of the Committee's Professionals and
agents shall terminate with the dissolution of the Committee.

                                     VII.
                          IMPLEMENTATION OF THE PLAN
                          --------------------------

     A.   Funding of Plan
          ---------------

     The source of funds to achieve Consummation and to carry out the Plan shall
be (i) Gencor's post-Confirmation operations; and (ii) the post-Effective Date
liquidation of Estate Assets.

     B.   Rights of the Debtors

          In addition to their other rights under the Plan, Gencor shall have
the right, but not the obligation, (a) to retain and compensate professionals
(including, but not limited to the

                                      32
<PAGE>

Professionals retained by Gencor prior to the Effective Date) and other Persons
to assist Gencor in performing its duties under the Plan.

     C.   Surrender of Existing Securities
          --------------------------------

          Except as provided with respect to the Lender Group, a holder or
lienholder of any equity instrument in Gencor must surrender such instrument as
a condition to receiving a Distribution under the Plan on account of such note
or instrument.  Any Holder of a Claim that fails to (a) surrender such note or
instrument or (b) execute and deliver an affidavit of loss and/or indemnity
satisfactory to Gencor and furnish a bond in form, substance, duration and
amount satisfactory to Gencor before the Confirmation Hearing, shall be deemed
to have forfeited all rights and Claims on such note or instrument and shall not
receive any Distribution on account of being a Holder of such note or
instrument.

                                     VIII.
                            TREATMENT OF EXECUTORY
                            ----------------------
                        CONTRACTS AND UNEXPIRED LEASES
                        ------------------------------

     A.   Rejection of Executory Contracts and Unexpired Leases
          -----------------------------------------------------

     On the Effective Date, except for an executory contract or unexpired lease
that was previously assumed or rejected by an order of the Bankruptcy Court
pursuant to Section 365 of the Bankruptcy Code, is assumed pursuant to a
separate motion filed in conjunction with or conditional upon Confirmation, or
is listed on Exhibit B attached hereto, any executory contract and unexpired
lease entered into by Debtors prior to the Order for Relief Date that has not
previously expired or terminated pursuant to its own terms shall be deemed
rejected pursuant to Section 365 of the Bankruptcy Code.  Exhibit B is a list of
executory contracts and unexpired leases that Debtors wish to assume, the
Debtors reserve their rights to add or remove any executory contract or
unexpired lease from this list prior to Confirmation of the Plan. However, as to
those executory contracts or unexpired leases that are not on the list as of
Confirmation of

                                      33
<PAGE>

the Plan, the Confirmation Order will constitute an Order of the Bankruptcy
Court approving such rejections pursuant to Section 365 of the Bankruptcy Code,
as of the Effective Date. The non-Debtor parties to any rejected personal
property leases shall be responsible for taking all steps necessary to retrieve
the personal property that is the subject of such executory contracts and
leases.

     B.   Claims Based on Rejection of Executory Contracts or Unexpired Leases
          --------------------------------------------------------------------

     All proofs of claim with respect to Claims arising from the rejection of
executory contracts or unexpired leases, if any, must be Filed with the
Bankruptcy Court within thirty (30) days after the later of the date of entry of
either the Confirmation Order or an order of the Bankruptcy Court approving such
rejection.  Any Claims arising from the rejection of an executory contract or
unexpired lease not Filed within such times will be forever barred from
assertion against Debtors, any other entity, their estates and property unless
otherwise ordered by the Bankruptcy Court or provided in the Plan; all such
Claims for which proofs of claim are required to be Filed will be, and will be
treated as, General Unsecured Claims subject to the provisions of Article III
hereof.

                                      IX.
                      PROVISIONS GOVERNING DISTRIBUTIONS
                      ----------------------------------

     A.   Distributions for Claims Allowed as of the Effective Date
          ---------------------------------------------------------

     Gencor or the Responsible Agent  will make all Distributions provided for
under the Plan.  Except as otherwise provided in the Plan, or as may be ordered
by the Bankruptcy Court, Distributions on account of those Claims that are
Allowed as of the Effective Date and are entitled to receive Distributions under
the Plan, shall be made on the Effective Date (or as soon thereafter as is
practicable).  Distributions on account of Claims that become Allowed after the
Effective Date shall be made pursuant to Article III of the Plan.

                                      34
<PAGE>

          Except as otherwise set forth in the Plan, Gencor may, but shall not
be required to, set-off against any Claim and the Distributions to be made
pursuant to the Plan in respect of such Claim, any Rights of Action the Estates
may have against the holder of the Claim, but neither the failure to do so nor
the allowance of any Claim hereunder shall constitute a waiver or release by
Gencor of any such Rights of Action, set-off or recoupment which Gencor may have
against such Holder.

     B.   Manner of Payment
          -----------------

          Any payment of Cash made under the Plan may be made either by check
drawn on a domestic bank, by wire transfer, or by automated clearing house
transfer from a domestic bank, at the option of Gencor.

          Under Section 1146(c) of the Bankruptcy Code, the making or delivery
of an instrument of transfer under a plan may not be taxed under any law
imposing a stamp tax or similar tax.  Pursuant thereto, entry of the
Confirmation Order shall be a determination that no stamp tax, transfer tax or
similar tax may be imposed on any sale of property by Gencor.

          Gencor, in making Distributions under the Plan, shall comply with all
tax withholding and reporting requirements imposed on it by any governmental
unit, and all Distributions pursuant to the Plan shall be subject to such
withholding and reporting requirements.  Gencor may withhold the entire
Distribution due to any Holder of an Allowed Claim until such time as such
Holder provides Gencor with the necessary information to comply with any
withholding requirements of any governmental unit.  Any funds so withheld will
then be paid by Gencor to the appropriate authority.  If the Holder of an
Allowed Claim fails to provide to Gencor the information necessary to comply
with any withholding requirements of any

                                      35
<PAGE>

governmental unit within thirty (30) days from the date of first notification by
Gencor to the Holder of such Allowed Claim the need for such information or for
the Cash necessary to comply with any applicable withholding requirements, then
the Holder's Distribution shall be treated as an undeliverable Distribution
accordance with Article IX(D) of the Plan.

     C.   Transmittal of Distributions to Parties Entitled Thereto
          --------------------------------------------------------

          All Distributions by check shall be deemed made at the time such check
is duly deposited in the United States mail, postage prepaid.  All Distributions
by wire transfer shall be deemed made as of the date the Federal Reserve or
other wire transfer is made.  Except as otherwise agreed with the Holder of an
Allowed Claim in respect thereof or as provided in the Plan, any property to be
distributed on account of an Allowed Claim shall be distributed by mail, upon
compliance by the Holder with the provisions of the Plan, to (a) the latest
mailing address Filed for the Holder of an Allowed Claim entitled to a
Distribution, (b) the latest mailing address Filed for a Holder of a Filed power
of attorney designated by the Holder of such Claim to receive Distributions, (c)
the latest mailing address Filed for the Holder's transferee as identified in a
Filed notice served on Gencor pursuant to Bankruptcy Rule 3001(e), or (d) if no
such mailing address has been Filed, the mailing address reflected on the
Schedules or in Debtors' books and records.

     D.   Disputed Claims and Unclaimed Property
          --------------------------------------

          Notwithstanding all references in the Plan to Claims that are Allowed,
in undertaking the calculations concerning Allowed Claims under the Plan,
including the determination of the amount of Distributions due to the Holders of
Allowed Claims, each Disputed Claim shall be treated as if it were an Allowed
Claim, as appropriate, except that if the

                                      36
<PAGE>

Court estimates the likely portion of a Disputed Claim to be Allowed or
otherwise determines the amount which would constitute a sufficient reserve for
a Disputed Claim (which estimations and determinations may be requested by
Gencor), such amount as determined by the Court shall be used as to such Claim.

          After an objection to a Disputed Claim is withdrawn or determined by
final order, the Distributions due on account of any resulting Allowed Claim
shall be paid by Gencor, together with the interest, if any, payable on such
Claim.  Such payment shall be made on the earlier of (a) the next payment date
for Claims of the Class or type of the Claim of such Holder and, (b) within
forty-five (45) days of the date the Disputed Claim becomes an Allowed Claim or
authorized Administrative Claim.  No interest shall be due to a Disputed Claim
holder based on the delay attendant to determining the allowance of such Claim
except as set forth in this subsection.

          At Gencor's election, any property, which is unclaimed for ninety (90)
days after Distribution thereof by mail to the last known mailing address of the
party entitled thereto, shall revest in Gencor as available funds for ongoing
costs and fees or for distribution to other Creditors.  Notwithstanding the
foregoing, if any mail sent to a Creditor at the last known mailing address by
Gencor is returned without a forwarding address and the Creditor does not Claim
its Distribution within ninety (90) days after it is mailed to the Creditor,
Gencor may strike the Creditor's Claim from the Creditor list, issue no more
checks to such Creditor and, for the purposes of future Distributions, treat the
Creditor's Claim as if it were disallowed.

     E.   Setoffs
          -------

                                      37
<PAGE>

          Gencor may, but shall not be required to, setoff against any Claim (a)
the payments and/or Distribution of other property to be made under the Plan in
respect of such Claim and (b) any Claims of any nature whatsoever Gencor may
have against the Holder of a Claim whether asserted or otherwise, but neither
the failure to do so nor the allowance of any Claim under the Plan shall
constitute a waiver by Gencor of any such claim Gencor may have against such
Holder.

     F.   Saturday, Sunday or Legal Holiday
          ---------------------------------

          If any payment, Distribution, or act under the Plan is required to be
made or performed on a date that is not a Business Day, then the making of such
payment or Distribution or the performance of such act may be completed on the
next succeeding Business Day, but shall be deemed to have been completed as of
the required date.

     G.   Fractional Cents
          ----------------

          Notwithstanding any other provisions of the Plan to the contrary, no
payment of fractional cents will be made under the Plan.  Cash will be issued to
Holders entitled to receive a Distribution of Cash in whole cents (rounded-down
to the nearest whole cent when and as necessary).

     H.   Revesting Of Assets
          -------------------

          The property of the Estates has vested in Gencor.  Gencor may use,
acquire, transfer and dispose of all of its property, including, without
limitation, all property formerly part of the Estate of another Debtor, free of
any restrictions of the Bankruptcy Code and without further order of the Court
as Gencor in its business judgment determines proper.  As of the Effective Date,
all property of Gencor shall be free and clear of all Claims except as provided
in

                                      38
<PAGE>

this Plan. If the Confirmation Order is ever reversed or revoked, this provision
of the Plan shall become null and void, and all Liens existing before the
Confirmation Date shall be revived.

     I.   Corporate Action
          ----------------

          Upon the entry of the Confirmation Order by the Bankruptcy Court, all
matters provided under the Plan involving the corporate structure of Gencor
shall be deemed to be authorized and approved without any requirement of further
action by Gencor, Gencor's shareholders, or Gencor's board of directors.

     J.   Corporate Charter.
          -----------------

          Upon the Effective Date, Gencor will amend its corporate charter to
provide for the issuance of non-voting securities.

     K.   No Release
          ----------

     Except as otherwise provided in the Plan, no Entity and/or any such
Entity's parents, subsidiaries, affiliates, related Entities, officers,
directors, agents and/or employees shall be released and/or discharged of any
liabilities under the Plan except as specifically provided in the Plan.
Consequently, except as specifically provided in the Plan, all Entities shall
remain liable to the extent presently provided under any applicable law with
respect to any claims against any such Entities.

                                      X.
                   PROCEDURES FOR RESOLVING DISPUTED CLAIMS
                   ----------------------------------------

     A.   Prosecution of Objections to Claims
          -----------------------------------

          Unless otherwise ordered by the Bankruptcy Court after notice and a
hearing, and except as set forth in the Plan, Gencor shall have the exclusive
right to make and File objections to Administrative Claims, Claims, and Equity
Interests.

                                      39
<PAGE>

     Unless another time is set by order of the Bankruptcy Court, all objections
to Claims and Equity Interests shall be Filed with the Court and served upon the
Holders of each of the Claims and Equity Interests to which objections are made
by the later of (a) 150 days after the Effective Date, or (b) ninety (90) days
after a Proof of Claim or request for payment with respect to such Claim or
Equity Interest is Filed.

     Except as set forth in the Plan, nothing in the Plan, the Disclosure
Statement, the Confirmation Order or any order in aid of Confirmation, shall
constitute, or be deemed to constitute, a waiver or release of any claim, cause
of action, right of setoff, or other legal or equitable defense that Debtors had
immediately prior to the commencement of the Chapter 11 Cases, against or with
respect to any Claim or Equity Interest.  Except as set forth in the Plan, upon
Confirmation, Gencor shall have, retain, reserve and be entitled to assert all
such claims, causes of action, rights of setoff and other legal or equitable
defenses that Debtors had immediately prior to the commencement of the Chapter
11 Cases as if the Chapter 11 Cases had not been commenced.

     B.   Estimation of Claims
          --------------------

     Gencor may, at any time, request that the Bankruptcy Court estimate any
contingent or unliquidated Claim pursuant to Section 502(c) of the Bankruptcy
Code regardless of whether Gencor has previously objected to such Claim or
whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy
Court will retain jurisdiction to estimate any Claim at any time during
litigation concerning any objection to any Claim, including during the pendency
of any appeal relating to any such objection.  In the event that the Bankruptcy
Court estimates any contingent or unliquidated Claim, that estimated amount will
constitute either the allowed amount of such Claim or a maximum limitation on
such Claim, as determined by the Bankruptcy Court.

                                      40
<PAGE>

If the estimated amount constitutes a maximum limitation on such Claim, Gencor
may elect to pursue any supplemental proceedings to object to any ultimate
payment on such Claim.

     C.   Cumulative Remedies
          -------------------

     All of the aforementioned Claims objection, estimation and resolution
procedures are cumulative and not necessarily exclusive of one another.  Claims
may be estimated and subsequently compromised, settled, withdrawn or resolved by
any mechanism approved by the Bankruptcy Court.  Until such time as such
Administrative Claim, Claim or Equity Interest becomes an Allowed Claim, such
Claim shall be treated as a Disputed Administrative Claim, Disputed Claim or
Disputed Equity Interest for purposes related to allocations, Distributions, and
voting under the Plan.

     D.   Payments and Distributions on Disputed Claims
          ---------------------------------------------

     As and when authorized by a Final Order, Disputed Claims that become
Allowed Claims shall be paid from Gencor's Cash and Assets, such that the Holder
of such Allowed Claim receives all payments and Distributions to which such
Holder is entitled under the Plan.  Notwithstanding any provision in the Plan to
the contrary, no partial payments and no partial Distributions will be made with
respect to a Disputed Claim until the resolution of such disputes by settlement
or Final Order.  Unless otherwise agreed by Gencor, a Creditor who holds both
(an) Allowed Claim(s) and (a) Disputed Claim(s) will not receive a Distribution
until such dispute is resolved by settlement or Final Order.

     E.   Allowance of Claims and Interests
          ---------------------------------

     1.   Disallowance of Claims

                                      41
<PAGE>

          All Claims held by Entities against whom Gencor has asserted or may
assert a cause of action under Sections 542, 543, 522(f), 522(h), 544, 545, 547,
548, 549, or 550 of the Bankruptcy Code shall be deemed disallowed pursuant to
Section 502(d) of the Bankruptcy Code, and Holders of such Claims may not vote
to accept or reject the Plan, both consequences to be in effect until such time
as such causes of action against that Entity have been settled or resolved by a
Final Order and all sums due Gencor by that Entity are turned over to Gencor or
to the Responsible Agent.

     2.   Allowance of Claims

          Except as expressly provided in the Plan, no Claim or Equity Interest
shall be deemed Allowed by virtue of the Plan, Confirmation, or any order of the
Bankruptcy Court in the Chapter 11 Cases, unless and until such Claim or Equity
Interest is deemed Allowed under the Bankruptcy Code or the Bankruptcy Court
enters a Final Order in the Chapter 11 Cases allowing such Claim or Equity
Interest.

     3.   Allowance of Claims

          Except as expressly provided in the Plan, no Claim or Equity Interest
shall be deemed Allowed by virtue of the Plan, Confirmation Order, or any order
of the Bankruptcy Court in the Chapter 11 Cases, unless and until such Claim or
Equity Interest is deemed Allowed under the Bankruptcy Code or the Bankruptcy
Court enters a Final Order in the Chapter 11 Cases allowing such Claim or Equity
Interest.

     F.   Controversy Concerning Impairment
          ---------------------------------

     If a controversy arises as to whether any Claims or Equity Interests or any
Class of Claims or Equity Interests are Impaired under the Plan, the Bankruptcy
Court, after notice and a hearing,

                                      42
<PAGE>

shall determine such controversy before the Confirmation Date. If such
controversy is not resolved prior to the Effective Date, Gencor's interpretation
of the Plan shall govern.

     G.   Stock Options
          -------------

     In conjunction with the Plan, stock options previously granted to E.J.,
John and Marc Elliott and approved by independent members of Gencor's Board (as
well as Gencor's compensation committee) are being extended from July 24, 2001
to July 24, 2006.  Attached as Exhibit D is a list of other incentive stock
option grants to officers, managers, and key employees who hold previously
granted options, which either expired or are about to expire, and which were
granted pursuant to existing 1996 an d 1997 Plans with the unanimous action of
Gencor's full Board.  Certain non-executive officers and managers had their
expiring grants augmented, while others including key employees, were granted
new incentive stock options in fulfillment of "stay incentive" commitments by
Gencor during the trying period of the last 2 years, and/or in recognition of
their superior performance in restructuring Gencor.

                                      XI.
                           DEBTORS' CAUSES OF ACTION
                           -------------------------

     A.   Maintenance of Causes of Action
          -------------------------------

     Except as otherwise provided in the Plan, any rights or causes of action
under any theory of law, including without limitation under the Bankruptcy Code,
accruing to Debtors shall remain Assets of the Estates pursuant to Section
1123(b)(3)(B) of the Bankruptcy Code and vests in Gencor.

     Unless a Right of Action against a Creditor or other Person is expressly
waived, relinquished, released, compromised or settled in the Plan or in a Final
Order, all rights with respect to such Right of Action are reserved to Gencor
who may pursue such Right of Action.  Without limiting the generality of the
foregoing, Rights of Action identified on the Attached Exhibit "C" are expressly
preserved.

                                      43
<PAGE>

          Gencor may pursue or decline to pursue the Rights of Action assigned
to it for prosecution, as appropriate, in Gencor's business judgment, subject to
the provisions of the Plan.  Gencor may settle, release, sell, assign, otherwise
transfer or compromise such Rights of Action, in Gencor's business judgment upon
order of the Court, subject to the provisions of the Plan.

     From and after the Effective Date, Gencor may also litigate any avoidance,
recovery or subordination actions under Sections 510, 544, 545, 547, 548, 549,
550, 551 and 553 of the Bankruptcy Code, or any other causes of action or rights
to payments or claims that belong to Debtors that may be instituted by Gencor
after the Effective Date.

     B.   No Res Judicata Effect
          ----------------------

     Notwithstanding anything to the contrary in this Plan or in the Disclosure
Statement, the provisions of this Disclosure Statement and the Plan which
permits Gencor to enter into settlements and compromises of any potential
litigation shall not have and are not intended to have any res judicata effect
with respect to any pre-petition claims and causes of action that are not
otherwise treated under the Plan and shall not be deemed a bar to asserting such
claims and causes of action. Gencor shall have the authority to settle claims
and litigation as provided in the Plan, provided that all such settlements shall
nevertheless be subject of the settlement standards imposed by Bankruptcy Rule.
9010 and the standards set forth in In re Justice Oaks II, Ltd., 898 F. 2d 1544,
1549 (11/th/ Cir. 1990), cert den. 498 U.S. 959, 1126 L. Ed. 2d 398,111 S. Ct.
389 (1990).

                                     XII.
                     CONDITIONS PRECEDENT TO CONFIRMATION
                     ------------------------------------
                         AND CONSUMMATION OF THE PLAN
                         ----------------------------

     A.   Condition Precedent to Confirmation/Effective Date
          --------------------------------------------------

     It is a condition to the Effective Date (unless waived by Gencor) that (a)
the Confirmation Order shall approve in all respects all of the provisions,
terms and conditions of the Plan, (b) the

                                      44
<PAGE>

Confirmation Order is satisfactory to Debtors in form and substance, (c) the
Lenders' Prepetition Claim shall have been reduced to a principal amount less
than Forty Million Dollars ($40,000,000), (d) Citrosuco's and the IRS's filed
Class 4 Claims are entirely disallowed by the Bankruptcy Court or estimated for
all purposed at $0; and (e) sufficient Holders of Class 3 GAP Claims shall have
made the Voluntary Deferral that Gencor's Effective Date payments on Class 3 GAP
Claims do not exceed $2,000,000.

     B.   Conditions Precedent to Consummation
          ------------------------------------

     It is a condition of Consummation that (a) the Confirmation Order shall
have been signed by the Bankruptcy Court and duly entered on the docket for the
chapter 11 Cases by the Clerk of the Bankruptcy Court in form and substance
acceptable to Debtors; and (b) the Confirmation Order shall be a Final Order.

     C.   Waiver of Conditions
          --------------------

     Gencor may waive any of the conditions of the Confirmation and/or
Consummation of the Plan, in whole or in part, set forth in Article XII of the
Plan at any time, without notice, without leave or order of the Bankruptcy
Court, and without any formal action other than proceeding to obtain
Confirmation and/or achieve Consummation of the Plan; provided, however, that
Gencor may not waive any conditions of the Plan or the Confirmation Order which
would adversely affect the Lender Group's rights and interests under the Plan.

                                      45
<PAGE>

     D.   Effect of Non-Occurrence of Conditions to Consummation
          ------------------------------------------------------

     If the Confirmation Order is vacated, the Plan shall be null and void in
all respects and nothing contained in the Plan or the Disclosure Statement
shall: (a) constitute a waiver or release of any Claims by or against, or any
Equity Interests in, Gencor; (b) prejudice in any manner the rights of Gencor,
or (c) constitute an admission, acknowledgment, offer or undertaking by Gencor
in any respects; provided, however, that the Professional Fees allowed by a
Final Order shall not be subject to disgorgement.

                                     XIII.
                           RETENTION OF JURISDICTION
                           -------------------------

          Notwithstanding entry of the Confirmation Order or the Plan Effective
Date having occurred, the Chapter 11 Cases having been closed, or Final Decrees
having been entered, the Bankruptcy Court shall have jurisdiction of matters
arising out of, and related to the Chapter 11 Cases and the Plan under, and for
the purposes of, Sections 105(a), 1127, 1142 and 1144 of the Bankruptcy Code and
for, among other things, the following purposes:

          A.  allow, disallow, determine, liquidate, classify, estimate or
establish the priority or status of any Claim, including the resolution of any
request for payment of any Administrative Claim and the resolution of any and
all objections to the allowance or priority of Claims;

          B.  grant or deny any applications for allowance of compensation or
reimbursement of expenses authorized pursuant to the Bankruptcy Code or the
Plan, for periods ending on or before the Effective Date;

          C.  resolve any matters related to the assumption, assumption and
assignment, or rejection of any executory contract or unexpired lease to which
Debtors are parties or with

                                      46
<PAGE>

respect to which Debtors may be liable and to hear, determine and, if necessary,
liquidate, any Claims arising therefrom, including those matters related to the
amendment after the Effective Date to the list of executory contracts and
unexpired leases to be rejected;

          D.  ensure that Distributions to Holders of Allowed Claims are
accomplished pursuant to the provisions of the Plan, including ruling on any
motion Filed pursuant to Article X;

          E.  decide or resolve any motions, adversary proceedings, contested or
litigated matters and any other matters and grant or deny any applications
involving Debtors or their affiliates, directors, employees, agents or
professionals that may be pending on the Effective Date;

          F.  enter such orders as may be necessary or appropriate to implement
or consummate the provisions of the Plan and all contracts, instruments,
releases, indentures and other agreements or documents created in connection
with the Plan or the Disclosure Statement;

          G.  resolve any cases, controversies, suits or disputes that may arise
in connection with the Consummation, interpretation or enforcement of the Plan
or any Person's or Entity's obligations incurred in connection with the Plan,
including, among other things, any avoidance actions or subordination actions
under Sections 510, 544, 545, 547, 548, 549, 550, 551, and 553 of the Bankruptcy
Code;

          H.  issue injunctions, enter and implement other orders or take such
other actions as may be necessary or appropriate to restrain interference by any
Person or Entity with Consummation or enforcement of the Plan, except as
otherwise provided herein;

                                      47
<PAGE>

          I.  resolve any cases, controversies, suits or disputes with respect
to the releases, injunction and other Plan provisions and enter such orders as
may be necessary or appropriate to implement such releases, injunction and other
provisions;

          J.  enter and implement such orders as are necessary or appropriate if
the Confirmation Order is for any reason modified, stayed, reversed, revoked or
vacated;

          K.  determine any other matters that may arise in connection with or
relate to the Plan, the Disclosure Statement, the Confirmation Order or any
contract, instrument, release, indenture or other agreement or document created
in connection with the Plan or the Disclosure Statement;

          L.  enter an order and/or final decree concluding the Chapter 11
Cases;

          M.  to consider any modification of the Plan under Section 1127 of the
Bankruptcy Code and/or modification of the Plan before "substantial
consummation" as defined in Section 1101(2) of the Bankruptcy Code;

          N.  to protect the property of the Estates from adverse Claims or
interference inconsistent with the Plan, including to hear actions to quiet or
otherwise clear title to such property based upon the terms and provisions of
the Plan, or to determine a Debtor's exclusive ownership of claims and causes of
action retained under the Plan;

          O.  to hear and determine matters pertaining to abandonment of
property of the Estates;

          P.  to consider any modifications of the Plan, to cure any defect or
omission, or reconcile any inconsistency in any order of the Bankruptcy Court,
including, without limitation, the Confirmation Order;

                                      48
<PAGE>

          Q.  to interpret and enforce any Orders previously entered in the
Chapter 11 Cases to the extent such Orders are not superseded or inconsistent
with the Plan;

          R.  to recover all Assets of Debtors and property of the Estates,
wherever located;

          S.  to hear and determine matters concerning state, local, and federal
taxes in accordance with Sections 345, 505, and 1146 of the Bankruptcy Code.

          T.  to hear and act on any other matter not inconsistent with the
Bankruptcy Code;

          U.  to consider and act on the compromise and settlement of any
litigation, Claim against or cause of action on behalf of the Estates; and

          V.  to interpret and enforce the injunctions contained in the
Confirmation Order.

                                     XIV.
                           MISCELLANEOUS PROVISIONS
                           ------------------------

     A.   Payment of Statutory Fees
          -------------------------

     All fees payable pursuant to 28 U.S.C (S) 1930 as determined by the
Bankruptcy Court at the hearing pursuant to Section 1128 of the Bankruptcy Code,
shall be paid on or before the Effective Date.  Gencor shall pay fees that
accrue under 28 U.S.C (S) 1930 until a Final Decree is entered in their
respective cases, or the Bankruptcy Court otherwise orders.  Debtors shall
submit U.S. Trustee quarterly fee status reports with each quarterly fee paid
after Confirmation.

     B.   Discharge of Debtors
          --------------------

     Except as otherwise provided herein: (a) the rights afforded in the Plan
and the treatment of all Claims and Equity Interests therein, shall be in
exchange for and in complete satisfaction, discharge and release of Claims and
Equity Interests of any nature whatsoever, including any

                                      49
<PAGE>

interest accrued on such Claims from and after the Petition Date, against
Debtors and Debtors in Possession, or any of their assets or properties; (b) on
the Effective Date, all such Claims against, and Equity Interests in Debtors
shall be satisfied, discharged and released in full; and (c) all Persons and
Entities shall be precluded from asserting against the Debtors, their successors
or their assets or properties any other or further Claims or Equity Interests
based upon any act or omission, transaction or other activity of any kind or
nature that occurred prior to the Confirmation Date.

     C.   Modification of Plan
          --------------------

          Gencor reserves to itself, in accordance with the Bankruptcy Code, the
right to amend or modify the Plan prior to the entry of the Confirmation Order.
However, in certain instances, the Court may require a new disclosure statement
and/or an Order revoking the Plan.

     Prior to entry of the Confirmation Order, the Plan may only be modified
with the consent of Gencor.  After the entry of the Confirmation Order, Gencor
may, upon order of the Bankruptcy Court, amend or modify the Plan, in accordance
with Section 1127(b) of the Bankruptcy Code, or remedy any defect or omission or
reconcile any inconsistency in the Plan in such manner as may be necessary to
carry out the purpose and intent of the Plan, if (a) the Plan has not been
substantially consummated and (b) the Court authorizes the proposed
                          ---
modifications after notice and a hearing.

     D.   Revocation of Plan
          ------------------

     Gencor reserves the right to withdraw the Plan at any time before the entry
of the Confirmation Order.  If any of the following events occur: (a) Debtors
revoke or withdraw the Plan; (b) the Confirmation Order is not entered; (c) the
Effective Date does not occur; (d) Consummation of the Plan is not substantially
achieved; or (e) the Confirmation Order is reversed or revoked, then, at the
option of Gencor, the Plan shall be deemed null and void.  In any of those

                                      50
<PAGE>

events, nothing contained in the Plan shall be deemed to constitute a waiver of
any claim by Gencor, or to prejudice in any manner the rights of Gencor in any
further proceedings involving Gencor.

     E.   Successors and Assigns
          ----------------------

     The rights, benefits and obligations of any Person or Entity named or
referred to in the Plan shall be binding on, and shall inure to the benefit of
any heir, executor, administrator, successor or assign of such Person or Entity.

     F.   Reservation of Rights
          ---------------------

     Except as expressly set forth herein, the Plan shall have no force or
effect unless the Bankruptcy Court shall enter the Confirmation Order.  The
filing of the Plan, the statements or provisions contained therein, or the
taking of any action by Gencor with respect to the Plan shall not be, or shall
not be deemed to be, an admission or waiver of any rights of Gencor with respect
to the Holders of Claims or Equity Interests prior to the Effective Date.

     G.   Post-Confirmation Effectiveness of Proofs of Claims
          ---------------------------------------------------

          Proofs of Claims shall, upon the Plan Effective Date, represent only
the right to participate in the Distributions contemplated by the Plan and
otherwise shall have no further force or effect.

     H.   Term of Injunctions or Stays
          ----------------------------

          Unless otherwise provided, all injunctions or stays provided for in
the Chapter 11 Cases under Sections 105 and 362 of the Bankruptcy Code or
otherwise in effect on the Confirmation Date shall remain in full force and
effect until the Effective Date.  From and after the Effective Date, all Persons
are permanently enjoined from and restrained against, commencing or continuing
in any court any suit, action or other proceeding, or otherwise

                                      51
<PAGE>

asserting any claim or interest, seeking to hold (a) any Gencor entity, (b) the
property of any Gencor entity, (c) the Committee or any of its members, or (d)
any of the Agent or the Lender Group (or their respective officers, directors,
employees, and other agents, advisors, attorneys and accountants, successors or
assigns) liable for any claim, obligation, right, interests, debt or liability
that has been discharged or released pursuant to the Plan.

          As of the Effective Date, Gencor and the Estates and Gencor's Non-
Debtor Subsidiaries shall release each attorney, accountant or other
professional employed by the Debtors, Agent and Lender Group in the Cases and
Agent, Lender Group and all officers, directors, representatives, or employees
of Gencor, Agent and Lender Group from any and all causes of action, claim,
liabilities, counterclaims and damages relating in any manner to such
professional's or other released individuals' or entities' participation in the
Cases.

          The releases and injunctions set forth herein: (i) only apply to post-
petition transactions or occurrences; and (2) do not release any party who may
be liable with Gencor to any party on account of any debt for which Gencor
receives a discharge.

     I.   Indemnification and Reimbursement Obligations
          ---------------------------------------------

          Notwithstanding any other provision of the Plan to the contrary, the
obligations of Gencor to indemnify and reimburse, pursuant to Gencor's articles
of incorporation, codes of regulations, bylaws, applicable law, specific
agreement, or any combination of the foregoing, the shareholders, acting in a
capacity as a director or officer of Debtors, against and for any obligations in
respect of those Claims relating to actions or omissions, prior to the Petition
Date, shall, to the extent permitted under applicable law, be deemed assumed by
Gencor on the Effective Date without any further action by any Entity.

     J.   Further Assurances
          ------------------

                                      52
<PAGE>

     Gencor and all Holders of Claims receiving Distributions under the Plan and
all other parties in interest shall, from time to time, prepare, execute and
deliver any agreements or documents and take any other actions as may be
necessary or advisable to effectuate the provisions and intent of the Plan.

     K.   Entire Agreement
          ----------------

     The Plan supersedes all prior discussions, understandings, agreements, and
documents pertaining or relating to any subject matter of the Plan.

     L.   Retiree Benefits
          ----------------

     On and after the Effective Date, Debtors will honor all retiree benefits.

     M.   Failure of Bankruptcy Court to Exercise Jurisdiction
          ----------------------------------------------------

     If the Bankruptcy Court abstains from exercising or declines to exercise
jurisdiction, or is otherwise without jurisdiction over any matter arising out
of the Bankruptcy Case, including any of the matters set forth in the Plan, the
Plan shall not prohibit or limit the exercise of jurisdiction by any other court
of competent jurisdiction with respect to such matter.

     N.   Confirmation of the Plan Without Necessary Acceptances
          ------------------------------------------------------

     A COURT MAY CONFIRM A PLAN, EVEN IF IT IS NOT ACCEPTED BY ALL IMPAIRED
CLASSES, IF THE PLAN HAS BEEN ACCEPTED BY AT LEASE ONE IMPAIRED CLASS OF CLAIMS
AND THE PLAN MEETS THE "CRAMDOWN" REQUIREMENTS SET FORTH IN SECTION 1129(b) OF
THE BANKRUPTCY CODE.  SECTION 1129(b) OF THE BANKRUPTCY CODE REQUIRES THAT THE
COURT FIND THAT A PLAN IS "FAIR AND EQUITABLE" AND DOES NOT "DISCRIMINATE
UNFAIRLY" WITH RESPECT TO EACH NON-ACCEPTING IMPAIRED CLASS OF CLAIMS OR
INTERESTS.  IN THE EVENT THAT ANY IMPAIRED CLASS (OTHER THAN CLASS 3) SHALL
REJECT THE PLAN IN ACCORDANCE WITH SECTION 1129(a)(8) OF THE BANKRUPTCY CODE,
GENCOR INTENDS TO REQUEST THAT

                                      53
<PAGE>

THE BANKRUPTCY COURT CONFIRM THE PLAN IN ACCORDANCE WITH SECTION 1129(b) OF THE
BANKRUPTCY CODE OR MODIFY THE PLAN IN ACCORDANCE WITH THE TERMS THEREOF.

     O.   Governing Law
          -------------

     Unless a rule of law or procedure is supplied by federal law (including the
Bankruptcy Code and Bankruptcy Rules), the internal laws of the State of Florida
shall govern the construction and implementation of the Plan and any agreements,
documents, and instruments executed in connection with the Plan, without regard
to the conflict of laws provisions of the State of Florida.

     P.   Headings
          --------

     The headings used in the Plan are inserted for convenience only and neither
constitute a portion of the Plan nor in any manner shall affect the provisions
or interpretation(s) of the Plan.

     Q.   Notices
          -------

          Any pleading, notice or other document required by the Plan to be
served on or delivered to Gencor shall be sent by first class U.S. mail, postage
prepaid to:

                    Gencor Industries, Inc.
                    5201 N. Orange Blossom Trail
                    Orlando, FL 32810
                    Attn:  John Elliott
With copies to:
--------------
                    Brad R. Godshall, Esquire
                    PACHULSKI, STANG, ZIEHL, YOUNG & JONES P.C.
                    10100 Santa Monica Blvd., 11/th/ Floor
                    Los Angeles, California 90067

                    Paul Steven Singerman, Esquire
                    James H. Fierberg, Esquire
                    BERGER SINGERMAN, P.A.
                    200 South Biscayne Boulevard Suite 2950
                    Miami, Florida 33131


     R.   Filing of Additional Documents
          ------------------------------

                                      54
<PAGE>

     On or before the Effective Date, Gencor may File such agreements and other
documents as may be necessary or appropriate to effectuate and further evidence
the terms and conditions of the Plan.

     S.   Enforceability
          --------------

     Should any provision in the Plan be determined to be unenforceable, such
determination shall in no way limit or affect the enforceability and operative
effect of any and all other provisions of the Plan.

     T.   Severability
          ------------

          The provisions of the Plan shall not be severable unless such
severance is agreed to by Gencor, and such severance would constitute a
permissible modification of the Plan pursuant to Section 1127 of the Bankruptcy
Code.

     U.   Notice of Default under the Plan
          --------------------------------

     Any notice of default as provided for in the Plan or in any exhibit to the
Disclosure Statement shall (a) conspicuously state that it is a notice of
default; (b) describe with particularity the nature of the default, including a
reference to the specific provisions of the Plan as to which a default or
defaults have allegedly occurred; and (c) describe any action required to cure
the default, including the exact amount of any payment required to cure such
default, if applicable.

     V.   Investments
          -----------

     Gencor shall be permitted from time to time to invest all or a portion of
the Cash contained in any of the Reserve Funds in securities issued or directly
guaranteed by the United States government or any agency thereof, commercial
paper of corporations rated at least "A-1" by Standard & Poor's Corporation or
rated at least "P-1" by Moody's Investor Services, Inc., interest bearing
certificates of deposit, time deposits, bankers' acceptances and overnight bank
deposits, and repurchase agreements.  All interest and proceeds from such
investments shall

                                      55
<PAGE>

become part of the Post-Confirmation Reserve Fund, to be transferred to the
Post-Confirmation Reserve Fund from time to time as Gencor, after consultation
with the Responsible Agent, determine appropriate.

     W.   Reliance
          --------

     Gencor, its agents, employees and professionals, while acting in their
capacity as such, including but not limited to, objecting to Claims, making
Distributions to Creditors holding Allowed Claims and approving settlement of
actions, as the case may be, shall be permitted to reasonably rely on any
certificates, sworn statements, instruments, reports, claim dockets, schedules,
or other documents reasonably believed by it to be genuine and to have been
prepared or presented by the Bankruptcy Court Clerk's Office, Gencor and
Gencor's professionals.

                     [SIGNATURES APPEAR ON THE NEXT PAGE]

                                      56
<PAGE>

Dated: April 9, 2001
       Orlando, Florida                 Respectfully submitted,

                                             Gencor Industries, Inc.


                                             By:  /s/ E.J. Elliott
                                                ------------------
                                             Its: Chairman of the Board and
                                                  -------------------------
                                                  President
                                                  ---------

Dated: Miami, Florida
       April 9, 2001               PACHULSKI, STANG, ZIEHL, YOUNG & JONES P.C.
                                   10100 Santa Monica Boulevard
                                   11th Floor
                                   Los Angeles, California 90067-4100
                                   Telephone: (310) 277-6910
                                   Facsimile: (310) 201-0760


                                   By:  /s/ Brad R. Godshall
                                      -------------------------------------
                                       Brad R. Godshall
                                       California State Bar No. 105438
                                       Email: bgodshall@pszyj.com
                                              -------------------

                                   and

                                   BERGER SINGERMAN, P.A.
                                   200 South Biscayne Boulevard
                                   Suite 2950
                                   Miami, Florida 33131
                                   Telephone: (305) 755-9500
                                   Facsimile: (305) 714-4340


                                   By:  /s/ Paul Steven Singerman
                                      ---------------------------
                                      Paul Steven Singerman
                                      Florida Bar No.: 378850
                                      email: psingerman@bdslaw.com
                                      James H. Fierberg
                                      Florida Bar No.: 0050970
                                      email: jfierberg@bdslaw.com

                                   Counsel to Gencor Industries, Inc.

                                      57

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.2
<SEQUENCE>4
<FILENAME>dex22.txt
<DESCRIPTION>ASSET PURCHASE AGREEMENT RE: CPM
<TEXT>
<PAGE>

                                                                     Exhibit 2.2

                           ASSET PURCHASE AGREEMENT

     This Asset Purchase Agreement (the "Agreement") is made and entered into as
of this ___ day of March, 2001, by and between CPM Acquisition Corp., a Delaware
corporation ("Buyer") and Consolidated Process Machinery, Inc., a California
corporation and Debtor and Debtor in Possession ("Seller") under a case (the
"Case") in the United States Bankruptcy Court for the Middle District of Florida
(the "Bankruptcy Court").

                                   RECITALS

A.   Seller is engaged in the manufacture of process machinery and other
     equipment utilized primarily in the agricultural and food producing /
     processing industries (the "Business").

B.   Seller wishes to sell to Buyer substantially all the assets it uses in
     connection with the Business at the price and on the other terms and
     conditions specified in detail below and Buyer wishes to so purchase and
     acquire such assets from Seller.

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

1.   Transfer of Assets
     ------------------

     1.1  Purchase and Sale of Assets. On the Closing Date, as hereinafter
          ---------------------------
defined, in consideration of the covenants, representations and obligations of
Buyer hereunder, and subject to the conditions hereinafter set forth, Seller
shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall
purchase from Seller all of Seller's right, title and interest as of the Closing
Date in and to the following assets, wherever located (collectively, the
"Property"):

          1.1.1  Leases and Contracts. Seller's right, title and interest (i) as
                 --------------------
lessee under the real property lease or leases described on Exhibit "A-1 " to
this Agreement (collectively, the "Real Property Leases"), (ii) as lessee under
those equipment, personal property and intangible property leases, rental
agreements, licenses, contracts, agreements and similar arrangements described
on Exhibit "A-2" to this Agreement (collectively, the "Other Leases"), and (iii)
as a party to those other contracts, leases, orders, purchase orders, licenses,
contracts, agreements and similar arrangements described on Exhibit "A-3"
(collectively, the "Other Contracts" and together with the Other Leases, the
"Other Leases and Contracts").

          1.1.2  Real Property and Improvements. Seller's fee simple ownership
                 ------------------------------
interest in that certain real property described in Exhibit "A-4" and all
improvements located thereon (collectively, the "Real Property"), but in all
events only to the extent, if any, of Seller's interest in the same
(collectively, the "Improvements"). Specifically excluded herein is real
property of Seller located at Aurora, Colorado and Hasselholm, Sweden, none of
which is utilized in the operation of the Business.

          1.1.3  Personal Property. All of those items of equipment and tangible
                 -----------------
personal property owned or leased by Seller and used in the Business, including,
without limitation, those
<PAGE>

items of equipment and other personal property listed in Exhibit "B" attached to
this Agreement and any other tangible personal property acquired or leased by
Seller after the date hereof but prior to the Closing Date exclusively in
connection with the Business (collectively, the "Personal Property"). As used in
this Agreement, the Personal Property shall not include the Inventory.

          1.1.4  Intangible Property. All intangible personal property owned or
                 -------------------
held by Seller and used exclusively in connection with the Business, but in all
cases only to the extent of Seller's interest therein and only to the extent
transferable, together with a copy of all books, records and like items
pertaining exclusively to the Business (collectively, the "Intangible
Property"), including, without limitation, the names "California Pellet Mill,"
"Roskamp Champion" and such other names and items identified on Exhibit "C"
hereto. As used in this Agreement, Intangible Property shall in all events
exclude, (i) any materials containing privileged communications or information
about employees, disclosure of which would violate an employee's reasonable
expectation of privacy and any other materials which are subject to attorney-
client or any other privilege, (ii) Seller's corporate books and records
relating to its organization and existence, and (iii) Seller's books and records
relating to indebtedness owing by Seller.

          1.1.5  Receivables. All accounts receivable arising out of the
                 -----------
operation of the Business and, subject to Section 1.2, all causes of action
relating or pertaining to the foregoing (collectively, the "Receivables").

          1.1.6  Inventory. All supplies, goods, materials, work in process,
                 ---------
inventory and stock in trade owned by Seller exclusively for use or sale in the
ordinary course of the Business (collectively, the "Inventory").

          1.1.7  Stock. All stock in the following subsidiaries: CPM Europe
                 -----
S.A., CPM Europe B.V., CPM Europe Ltd., CPM Pacific (Private) Ltd., and
California Pellet Mill Europe Ltd. (the "Purchased Subsidiaries").

     1.2  Excluded Assets. Notwithstanding anything to the contrary in this
          ---------------
Agreement, the Property shall not include (i) those items excluded pursuant to
the provisions of Section 1.1 above; (ii) all cash, cash equivalents and
marketable securities (including cash, cash equivalents and marketable
securities owned by the Purchased Subsidiaries); (iii) Inventory transferred,
used or sold by Seller in the ordinary course of the Business prior to the
Closing Date; (iv) any lease, rental agreement, contract, agreement, license or
similar arrangement ("Contracts") terminated or expired prior to the Closing
Date in accordance with its terms or in the ordinary course of the Business; (v)
any right, property or asset listed on Exhibit "D" hereto; (vi) all preference
or avoidance claims and actions of Seller, including, without limitation, any
such claims and actions arising under Sections 544, 547, 548, 549, and 550 of
the United States Bankruptcy Code; (vii) Seller's rights under this Agreement
and all cash and non-cash consideration payable or deliverable to Seller
pursuant to the terms and provisions hereof; or (viii) insurance proceeds,
claims and causes of action with respect to or arising in connection with (A)
any Contract which is not assigned to Buyer at the Closing, or (B) any item of
tangible or intangible property not acquired by Buyer at the Closing; and (ix)
the business, equity interest, and all of the assets of the Seller and its
subsidiaries not directly utilized in the operations of the Business, which

                                       2
<PAGE>

include, but is not limited to, General Combustion Corporation, Thermotech
Systems, Equipment Services Group, Inc., Bituma Corporation, Bituma Stor Inc.,
CPM Brazil, Inc., Silver Weibull A.B. and Gumaco, Inc.

     1.3  Instruments of Transfer. The sale, assignment, transfer, conveyance
          -----------------------
and delivery of the Property to Buyer and the assumption of liabilities provided
herein by Buyer shall be made by assignments, bill of sale, and other
instruments of assignment, transfer and conveyance provided for in Section 3
below and such other instruments as may reasonably be requested by Buyer or
Seller. None of the foregoing documents shall increase in any material way the
burdens imposed by this Agreement upon Seller or Buyer.

2.   Consideration; Deposit Escrow; Working Capital Escrow.
     -----------------------------------------------------

     2.1  Purchase Price.
          --------------

          2.1.1  The cash consideration to be paid by Buyer to Seller for the
Property (the "Purchase Price") shall be $52,000,000.

          2.1.2  Concurrently with the mutual execution and delivery of this
Agreement (the date of such mutual execution and delivery is sometimes referred
to herein as the "Execution Date"), Buyer shall deposit into escrow (the
"Deposit Escrow") with the law firm of Berger Davis and Singerman P.A. (the
"Deposit Escrow Holder") $5,000,000 (the "Deposit") in immediately available,
good funds (funds delivered in this manner are referred to herein as "Good
Funds"), pursuant to joint escrow instructions to be delivered to and
acknowledged by the Deposit Escrow Holder on or before the Execution Date. Such
escrow instructions shall include the provisions set forth in this Section
2.1.2. Upon receipt of the Deposit, the Deposit Escrow Holder shall immediately
deposit the Deposit into an interest-bearing account. The Deposit shall become
nonrefundable upon the earlier of (x) the entry of the Approval Order following
the hearing on the Sale Motion (as such terms are defined in Section 8.4.2
below), or (y) the termination of the transaction contemplated by this Agreement
by reason of Buyer's material default (a "Buyer Default Termination"). At the
Closing, the Deposit (and any interest accrued thereon) shall be delivered to
Seller and credited toward payment of the Purchase Price in the manner specified
in Section 2.1.3 below. In the event the Deposit becomes non-refundable by
reason of a Buyer Default Termination, Deposit Escrow Holder shall immediately
disburse the Deposit and all interest accrued thereon to Seller to be retained
by Seller for its own account. If the transactions contemplated herein terminate
by reason of (A) Seller's material default hereunder, (B) the failure of a
condition to Buyer's obligations, or (C) the consummation of a sale to a third
party as described in Section 8.4.1 below, the Deposit Escrow Holder shall
return to Buyer the Deposit (together with all interest thereon). The Deposit
Escrow Holder's escrow fees and charges shall be paid one-half by Seller and
one-half by Buyer.

          2.1.3  On the Closing Date, Buyer shall (i) pay and deliver to Seller,
by wire transfer in Good Funds, the Purchase Price less the Deposit (and
interest accrued thereon) and less the Working Capital Escrow Amount (as defined
in Section 2.1.4, below), and (ii) instruct the Deposit Escrow Holder to deliver
the Deposit (and any interest accrued thereon) to Seller, by wire transfer of
Good Funds.

                                       3
<PAGE>

          2.1.4  Notwithstanding anything to the contrary in this Agreement,
Buyer and Seller agree that at the Closing, Seller shall deposit (via diversion
of a portion of the Purchase Price otherwise due at Closing) into escrow (the
"Working Capital Escrow") with Fleet Bank, N.A. or any other escrow agent or
company reasonably acceptable to both parties (the "Working Capital Escrow
Holder") $l,000,000 (the "Working Capital Escrow Amount") in Good Funds,
pursuant to a Working Capital Escrow Agreement (the "Working Capital Escrow
Agreement") by and among Buyer, Seller and the Working Capital Escrow Agent, and
substantially in the form attached hereto as Exhibit "E." Upon receipt of the
Working Capital Escrow Amount, the Working Capital Escrow Holder shall
immediately deposit the Working Capital Escrow Amount into an interest-bearing
account. The Working Capital Escrow Amount shall be held until such time as the
Modified Working Capital Statement (as defined in Section 2.3.1 hereof) is final
and binding (the "Working Capital Escrow Period"), and shall be used solely as a
source of payment to satisfy Seller's obligation, if any, to pay the Buyer
Closing Adjustment (as defined in Section 2.3.2) to Buyer. Such Working Capital
Escrow Amount shall otherwise be administered and released during the Working
Capital Escrow Period as specifically provided for herein and in the Working
Capital Escrow Agreement.

     2.2  Assumed Liabilities. Buyer shall, effective as of the Closing Date,
          -------------------
assume and perform all liabilities accruing under the Real Property Leases and
under the Other Leases and Contracts on and after the Closing Date and or
otherwise required to be performed with respect to the property on or after the
Closing Date ("Assumed Liabilities"); provided that Buyer shall pay all cure
amounts owing under any of the Real Property Leases and Other Leases and
Contracts as of the Closing which the Bankruptcy Court may order to be paid as a
condition to Seller's assumption and assignment of any Real Property Lease or
Other Leases or Contracts ("Cure Amounts"); provided, however, that all such
Cure Amounts shall reduce the purchase price on a dollar for dollar basis; and
provided, further, that Buyer shall indemnify, defend (with counsel reasonably
satisfactory to Seller), protect, and save and hold Seller harmless from and
against any and all claims or demands asserted by any person or entity in
connection with the Assumed Liabilities relating to or arising out of post-sale
conduct by Buyer. Other than the liabilities and obligations of Seller expressly
assumed by Buyer hereunder, Buyer is not assuming and shall not be liable for
any liabilities or obligations of Seller other than trade payables arising in
the ordinary incurred after September 13, 2000 and outstanding on the Closing
Date.

     2.3  Post-Closing Purchase Price Adjustment. The Purchase Price shall be
          --------------------------------------
subject to adjustment as provided in this Section 2.3:

          2.3.1  Buyer shall, within forty-five (45) days of the Closing Date,
prepare and deliver to Seller a statement of Modified Working Capital as of the
Closing Date (the "Modified Working Capital Statement"). For purposes of this
Section 2.3, "Modified Working Capital" shall mean: (i) all current assets of
the Business in the United States as of the Closing Date, determined in
accordance with generally accepted accounting principles in effect in the United
States (except the Excluded Assets), plus (ii) the aggregate of all current
                                     ----
assets of the Purchased Subsidiaries (except the Excluded Assets) as of the
Closing Date, determined in each case in accordance with generally accepted
accounting principles in effect in the jurisdictions of

                                       4
<PAGE>

organization of the Purchased Subsidiaries, minus (iii) all Assumed Liabilities
                                            -----
(except the Excluded Assets), minus (iv) the aggregate of all current
                              -----
liabilities of the Purchased Subsidiaries as of the Closing Date, determined in
accordance with generally accepted accounting principles in effect in the
jurisdictions of organization of the Purchased Subsidiaries, including, without
limitation, income or similar taxes in respect of any period prior to the
Closing, minus (v) any prorations called for by Section 3.5 hereof, minus (vi)
         -----                                                      -----
any long-term debt of the Purchased Subsidiaries (taken in the aggregate) on the
Closing Date, determined in accordance with generally accepted accounting
principles in effect in the jurisdictions of organization of the Purchased
Subsidiaries. The parties acknowledge that the Modified Working Capital as of
December 31, 2000 is $18,900,000.

          2.3.2  If the Modified Working Capital Statement reflects Modified
Working Capital on the Closing Date of less than $18,900,000, then Buyer shall
be entitled to payment from Seller in the amount of such short fall (the "Buyer
Closing Adjustment") in immediately available funds. Any Buyer Closing
Adjustment shall be made first by the Escrow Agent from the Working Capital
Escrow. If and to the extent the Buyer Closing Adjustment is greater than, and
therefore entirely depletes the Working Capital Escrow, any excess unpaid
portion of the Buyer Closing Adjustment shall be paid by Seller and, until so
paid, shall constitute an administrative expense claim in the Case with priority
over all other administrative expense claims in the Case.

          2.3.3  If the Modified Working Capital Statement reflects Modified
Working Capital of greater than $18,900,000, then Seller shall be entitled to
payment in the amount of such excess (the "Seller Closing Adjustment") in
immediately available funds, provided, however, that under no circumstances
shall Buyer be obligated to make payment in respect of the Seller Closing
Adjustment in excess of $500,000.

          2.3.4  Seller may object to Buyer's determination of the Modified
Working Capital as contained in the Modified Working Capital Statement,
provided, however, that any such objection must be based upon a claim that the
Closing Statement (i) contains mathematical errors, (ii) was not prepared in
accordance with Section 2.3.1 or (iii) in Seller's good faith determination,
there is a substantive discrepancy in the Modified Working Capital Statement.
Any such objection must be made by delivery of a written statement of objections
(stating the basis of the objections with reasonable specificity) to Buyer
within fifteen (15) days following delivery of the Modified Working Capital
Statement. If Seller makes such objection, Buyer and Seller shall seek in good
faith to resolve such differences within twenty (20) days following the delivery
of such objections. During such time, if Buyer disagrees with Seller's
objections, it shall state the basis of such disagreement with reasonable
specificity. If Seller does not so object to the Modified Working Capital
Statement within such 15-day period, the Modified Working Capital Statement
shall be considered final and binding upon the parties.

          2.3.5  In the event Buyer and Seller are unable to resolve a dispute
or disagreement set forth in a written objection pursuant to Section 2.3.4, then
either party may elect, by written notice to the other party, to have all such
disputes or disagreements resolved by an accounting firm of recognized national
standing acceptable to Buyer and Seller and not then employed by either Seller
or Buyer (the "Selected Accounting Firm"). If Buyer and Seller

                                       5
<PAGE>

cannot agree upon the accounting firm to serve as the Selected Accounting Firm,
then the New York office of KPMG (the "Default Accounting Firm") shall serve as
the Selected Accounting Firm. The Selected Accounting Firm shall make a final
and binding resolution of the disputes or disagreements, and the Closing
Adjustment as finally determined by the Selected Accounting Firm shall be deemed
acceptable to Buyer and Seller for all purposes of this Agreement. The Selected
Accounting Firm shall be instructed that, in making its final and binding
resolution, it must select either the position of the Buyer in its entirety or
the position of the Seller in its entirety. No appeal from such determination
shall be permitted. The Selected Accounting Firm shall be instructed to use
every reasonable effort to perform its services within thirty (30) days after
submission of the Closing Statement to it, and in any case, as soon as
practicable after such submission. The costs and expenses for the services of
the Selected Accounting Firm shall be borne by the non-prevailing party.

3.   Closing Transactions.
     --------------------

     3.1  Closing. The Closing of the transactions provided for herein (the
          -------
"Closing") shall take place at the offices of Berger Davis and Singerman, 200
South Biscayne Boulevard, Suite 2950, Miami, Florida 33131.

     3.2  Closing Date. The Closing shall be held within five days after
          ------------
satisfaction or waiver of the conditions to closing in Section 4 (the "Closing
Date") but in no event later than June 15, 2001 (the "Outside Date").
Alternatively, the parties may mutually agree to an extended Closing Date. Until
this Agreement is either terminated or the parties have agreed upon an extended
Closing Date, the parties shall diligently continue to work to satisfy all
conditions to Closing.

     3.3  Seller's Deliveries to Buyer at Closing. On the Closing Date, subject
          ---------------------------------------
to satisfaction of the conditions precedent set forth in Section 4.1, Seller
shall make the following deliveries to Buyer:

          3.3.1  An Assignment and Assumption Agreement in form to be negotiated
by the parties, duly executed by Seller, pursuant to which Seller assigns the
Real Property Leases and the Other Leases and Contracts (the "Assignment
Agreement"); provided, however, that the Assignment Agreement need not be
delivered by Seller if the Bankruptcy Court has issued an order, in form and
substance satisfactory to Buyer, prior to the Closing Date authorizing the
assumption and assignment of the Real Property Leases and the Other Leases and
Contracts.

          3.3.2  A bill of sale, duly executed by Seller, in the form and on the
terms of the bill of sale attached hereto as Exhibit "F," pursuant to which
Seller transfers the Property other than the Real Property Leases and the Other
Leases and Contracts to Buyer (the "Bill of Sale").

          3.3.3  A bill of sale, duly executed by Seller, in a form reasonably
requested by Buyer, pursuant to which Seller specifically transfers the
Intangible Property (the "Intangible Property Bill of Sale").

                                       6
<PAGE>

          3.3.4  A deed of trust, reasonably satisfactory in form and substance
to Buyer ("Deed of Trust"), duly executed by Seller, in respect of the Real
Property.

          3.3.5  The Working Capital Escrow Agreement, duly executed by Seller
and Working Capital Escrow Holder.

     3.4  Buyer's Deliveries to Seller at Closing. On the Closing Date, subject
          ---------------------------------------
to satisfaction of the conditions precedent set forth in Section 4.2, Buyer
shall make or cause the following deliveries to Seller:

          3.4.1  That portion of the Purchase Price to be delivered by Buyer
directly to Seller at the Closing under Section 2.1 (and Buyer shall cause
Deposit Escrow Holder to deliver the Deposit and accrued interest to Seller).

          3.4.2  The Assignment Agreement, duly executed by Buyer; provided,
however, that the Assignment Agreement need not be delivered by Buyer if the
Bankruptcy Court has issued an order, in form and substance satisfactory to
Buyer, prior to the Closing Date authorizing the assumption and assignment of
the Real Property Leases and the Other Leases and Contracts.

          3.4.3  The Working Capital Escrow Agreement, duly executed by Buyer
and Working Capital Escrow Holder.

     3.5  Prorations. Rent, current taxes and other items of expense (including,
          ----------
without limitation, any prepaid insurance under the Real Property Leases or
Other Leases and Contracts, or any of them) and income relating to or
attributable to the Property and/or the Real Property Leases or the Other Leases
and Contracts shall be prorated between Seller and Buyer as of the Closing Date.
All obligations due in respect of periods prior to Closing shall be paid in full
or otherwise satisfied by Seller and all obligations due in respect of periods
after Closing shall be paid in full or otherwise satisfied by Buyer. Rent shall
be prorated on the basis of a thirty (30) day month. Buyer shall pay to Seller
in cash on the Closing Date the amount of any security or similar deposits with
the landlords or other contracting parties under the Real Property Leases and
the Other Leases and Contracts and the amount of any other deposits made by
Seller relating to the Real Property or the property to which the Other Leases
and Contracts relate.

     3.6  Sales, Use and Other Taxes. Any sales, purchases, transfer, fixed
          --------------------------
asset, stamp, documentary stamp, use or similar taxes which may be payable by
reason of the sale of the Property under this Agreement or the transactions
contemplated herein shall be borne and timely paid by Buyer, and Buyer shall
indemnify, defend (with counsel reasonably satisfactory to Seller), protect, and
save and hold Seller harmless from and against any and all claims, charges,
interest or penalties assessed, imposed or asserted in relation to any such
taxes.

     3.7  Possession. Right to possession of the Property shall transfer to
          ----------
Buyer on the Closing Date. Seller shall transfer and deliver to Buyer on the
Closing Date such keys, lock and safe combinations and other similar items as
Buyer shall require to obtain immediate and full occupation and control of the
Property, and shall also make available to Buyer at their then

                                       7
<PAGE>

existing locations the originals of all documents in Seller's possession that
are required to be transferred to Buyer by this Agreement.

4.   Conditions Precedent to Closing.
     -------------------------------

     4.1  Conditions to Seller's Obligations. Seller's obligation to make the
          ----------------------------------
deliveries required of Seller at the Closing Date shall be subject to the
satisfaction or waiver by Seller of each of the following conditions.

          4.1.1  All of the representations and warranties of Buyer contained
herein shall continue to be true and correct at the Closing in all material
respects, all covenants and obligations to be performed by Buyer prior to the
Closing shall have been performed in all material respects and Buyer shall have
certified the foregoing to Seller in writing.

          4.1.2  Buyer shall have executed and delivered to Seller the Working
Capital Escrow Agreement, the Assignment Agreement and each other document
reasonably requested by Seller pursuant to Section 1.3.

          4.1.3  Seller shall have received the total Purchase Price (less the
Working Capital Escrow Amount) in immediately available funds.

          4.1.4  Buyer shall have delivered to Seller appropriate evidence of
all necessary corporate action by Buyer in connection with the transactions
contemplated hereby, including, without limitation: (i) certified copies of
resolutions duly adopted by Buyer's directors approving the transactions
contemplated by this Agreement and authorizing the execution, delivery, and
performance by Buyer of this Agreement; and (ii) a certificate as to the
incumbency of officers of Buyer executing this Agreement and any instrument or
other document delivered in connection with the transactions contemplated by
this Agreement.

          4.1.5  Seller shall have determined that it will not incur any
liability under the Worker Adjustment and Retraining Notification Act in
connection with the consummation of this transaction.

          4.1.6  All applicable waiting periods relating to the Hart-Scott-
Rodino Antitrust Improvements Act of 1976 shall have expired or been terminated
and any proceedings that may have been filed or instituted thereunder shall have
been satisfactorily concluded.

          4.1.7  No action, suit or other proceedings shall be pending before
any court, tribunal or governmental authority seeking or threatening to restrain
or prohibit the consummation of the transactions contemplated by this Agreement,
or seeking to obtain substantial damages in respect thereof, or involving a
claim that consummation thereof would result in the violation of any law, decree
or regulation of any governmental authority having appropriate jurisdiction.

          4.1.8  The Bankruptcy Court shall have entered the Procedure Order in
accordance with Section 8.4.1 below and the Approval Order as contemplated by
and defined in

                                       8
<PAGE>

Section 8.4.2 below and the Approval Order shall not have been stayed, modified,
terminated or rescinded as of the Closing Date.

     4.2  Conditions to Buyer's Obligations. Buyer's obligation to make the
          ---------------------------------
deliveries required of Buyer at the Closing shall be subject to the satisfaction
or waiver by Buyer of each of the following conditions:

          4.2.1  All representations and warranties of Seller contained herein
shall continue to be true and correct at the Closing in all material respects,
all covenants and obligations to be performed by Seller prior to the Closing
shall have been performed in all material respects and Seller shall have
certified the foregoing to Buyer in writing.

          4.2.2  Seller shall have executed and delivered to Buyer the Working
Capital Escrow Agreement, the Assignment Agreement, the Bill of Sale, the
Intangible Property Bill of Sale and each other document reasonably requested by
Buyer pursuant to Section 1.3.

          4.2.3  All applicable waiting periods relating to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 shall have expired or been
terminated and any proceedings that may have been filed or instituted thereunder
shall have been satisfactorily concluded.

          4.2.4  No action, suit or other proceedings shall be pending before
any court, tribunal or governmental authority seeking or threatening to restrain
or prohibit the consummation of the transactions contemplated by this Agreement,
or seeking to obtain substantial damages in respect thereof, or involving a
claim that consummation thereof would result in the violation of any law, decree
or regulation of any governmental authority having appropriate jurisdiction.

          4.2.5  The Bankruptcy Court shall have entered the Procedure Order in
accordance with Section 8.4.1 below and the Approval Order in accordance with
Section 8.4.2 below and the Approval Order shall not have been stayed, modified,
terminated or rescinded as of the Closing Date.

          4.2.6  The transactions contemplated by this Agreement shall have been
consummated by the Outside Date.

     4.3  Termination. If any of the above conditions is neither satisfied nor
          -----------
waived on or before the date by which the condition is required to be satisfied,
the party who is not then in default hereunder may terminate this Agreement by
delivering to the other written notice of termination. Any waiver of a condition
shall be effective only if such waiver is stated in writing and signed by the
waiving party; provided, however, that the consent of a party to the Closing
shall constitute a waiver by such party of any conditions to Closing not
satisfied as of the Closing Date.

5.   Seller's Representations and Warranties. Seller hereby makes the following
     ---------------------------------------
representations and warranties to Buyer:

                                       9
<PAGE>

     5.1  Validity of Agreement. Upon obtaining the Approval Order, this
          ---------------------
Agreement, and each other document ancillary to this Agreement to which Seller
is a party shall constitute the valid and binding obligation of Seller
enforceable in accordance with its terms.

     5.2  Organization, Standing, Power and Authority. Seller is a corporation
          -------------------------------------------
duly organized, validly existing and in good standing under the laws of the
State of Florida, and each of the Purchased Subsidiaries is an entity duly
organized and validly existing an in good standing under the laws of the country
of its organization. Seller and each of the Purchased Subsidiaries has all
requisite corporate or company power and authority to own, lease and operate its
properties, to carry on its business as now being conducted, and Seller has,
subject to the applicable provisions of bankruptcy law and to Seller's obtaining
the Approval Order, all corporate power and authority to execute, deliver and
perform this Agreement and all writings relating hereto. Seller has delivered,
or has caused to be delivered, to Buyer complete and correct copies of each of
the Seller's and each Purchased Subsidiaries' organizational documents,
including all amendments thereto, as in effect as of the date of this Agreement.

     5.3  Financial Statements. Seller has heretofore delivered to Buyer true
          --------------------
and correct copies of its financial statements (balance sheet and income
statement) for the Business, including Purchased Subsidiaries, as of December
31, 2000 (collectively, the "Financial Statements"). Except as set forth in
Schedule 5.3, the Financial Statements (a) fairly present in all material
------------
respects, the financial condition and the results of operations of Seller as of
the dates and for the periods indicated, and (b) have been prepared in
accordance with generally accepted accounting principles consistently applied
over the periods referenced. Seller has made available to Buyer all books and
records which relate to the business of Seller, and such books and ledgers are
true and complete in all material respects. The Financial Statements have been
derived from and are consistent with the books and records.

     5.4  Absence of Certain Changes or Events. Except as set forth in Schedule
          ------------------------------------                         --------
5.4 or as otherwise contemplated by this Agreement, to Seller's knowledge, since
---
December 31, 2000, (i) Seller has operated the Business, including, without
limitation, with respect to the management of Inventory and Receivables, in the
ordinary course, (ii) each of the Purchased Subsidiaries has operated its
business (the "Purchased Subsidiaries' Business"), in the ordinary course, and
(iii) there have occurred no changes or events which, individually or in the
aggregate, would have a material adverse effect on the business, future
prospects, properties, financial condition or results of operations of Seller or
of any of the Purchased Subsidiaries or the ability of Seller to consummate the
transactions contemplated hereby ("Material Adverse Effect").

     5.5  No Conflicts or Violations. Upon obtaining the Approval Order, the
          --------------------------
execution and delivery of this Agreement, the consummation of the transactions
herein contemplated, and the performance of, fulfillment of and compliance with
the terms and conditions hereof by Seller do not and will not: (i) conflict with
or result in a breach of the organizational documents of any of the Seller or
the Purchased Subsidiaries, (ii) violate any statute, law, rule or regulation,
or any order, writ, injunction or decree of any court or governmental authority;
or (iii) violate or conflict with or constitute a default under any agreement,
instrument or writing of any nature to which either the Seller or any of the
Purchased Subsidiaries is a party or by which and of them or the Property may be
bound.

                                       10
<PAGE>

     5.6  Title to Personal Property. Except for the liens set forth in Schedule
          --------------------------                                    --------
5.6 ("Permitted Liens"), Seller has good and valid title to all the Personal
---
Property owned by it, and a valid and enforceable right to use all Personal
Property leased by or licensed to it, which is used or held for use in the
conduct of the Business as conducted prior to the date hereof, in each case,
free and clear of all liens, imperfections of title or encumbrances of any
nature whatsoever. Seller has delivered to Buyer true and complete copies of all
Other Leases and Contracts.

     5.7  Title to Real Property Leases; Real Property.
          --------------------------------------------

          5.7.1  Seller has a good and valid leasehold interest in all Real
Property Leases, and each of the Purchased Subsidiaries, as applicable, has a
good and valid leasehold interest in all the real property leases listed on
Schedule 5.7.1 hereto (the "Purchased Subsidiaries' Real Property Leases").
--------------
Exhibit A-1 contains a complete and accurate list and description of all Real
-----------
Property Leases, and Schedule 5.7.1 contains a complete and accurate list and
                     --------------
description of all Purchased Subsidiaries' Real Property Leases. Each of the
Real Property Leases and the Purchased Subsidiaries' Real Property Leases is in
full force and effect and is valid, binding and enforceable in accordance with
its terms. Seller and each of the Purchased Subsidiaries, as applicable, enjoys
quiet possession of all real property subject to the Real Property Leases or the
Purchased Subsidiaries' Real Property Leases, as the case may be, and Seller has
delivered, or has caused to be delivered, to Buyer true and complete copies
thereof.

          5.7.2  Exhibit A-4 hereto contains a complete and accurate list and
                 -----------
description of all Real Property. Schedule 5.7.2 hereto contains a complete and
                                  --------------
accurate list and description of all real property the fee simple ownership of
which, and of all improvements located thereon, resides in one of the Purchased
Subsidiaries (the "Purchased Subsidiaries' Real Property") (the Real Property
and the Purchased Subsidiaries' Real Property herein together referred to as the
"Owned Real Property").

          5.7.3  Seller and each of the Purchased Subsidiaries, as applicable,
has good, marketable and insurable fee simple title to its Owned Real Property
free and clear of any liens, except Permitted Liens. Seller has previously
delivered, or has caused to be delivered, to Buyer: (a) a complete and correct
copy of each deed or other instrument or evidence of title relating to the Owned
Real Property; (b) a complete and correct copy of each title insurance policy in
Seller's or any Purchased Subsidiaries' possession insuring title to the Owned
Real Property; and (c) a true and correct copy of each survey in Seller's or any
Purchased Subsidiaries' possession of the Owned Real Property.

          5.7.4  Seller and each of the Purchased Subsidiaries, as applicable,
has full legal and practical access to all of its Owned Real Property, and all
easements, rights of way, and real property licenses relating thereto have been
properly recorded in the appropriate public recording offices. To Seller's
knowledge, the Owned Real Property includes all the Real Property, easements,
rights of way, and other Real Property interests necessary to conduct the
Business and operations of Seller as now conducted or, as applicable, all the
Purchased Subsidiaries' Real Property, easements, rights of way, and other
Purchased Subsidiaries' Real Property interests necessary to conduct the
Purchased Subsidiaries' Business as now conducted. To Seller's

                                       11
<PAGE>

knowledge, none of the Improvements, or any improvements to Purchased
Subsidiaries' Real Property ("Purchased Subsidiaries' Improvements"), encroach
upon adjoining real property, and all such Improvements and Purchased
Subsidiaries' Improvements, together with all fixtures, are constructed and are
operated and used in conformance with all "set back" lines, easements,
covenants, restrictions and all applicable building, fire, zoning, health and
safety laws and codes. To Seller's knowledge, all Improvements and Purchased
Subsidiaries' Improvements are in good and technically sound operating
condition, have no latent structural mechanical or other defects of material
significance, are reasonably suitable for the purposes for which they are being
used and each has adequate rights of ingress and egress, utility service for
water and sewer, telephone, electric and/or gas, and sanitary service for the
conduct of the Business or Purchased Subsidiaries' Business, as the case may be,
as presently conducted. Other than the Case, there is no pending or, to the best
knowledge of Seller, threatened condemnation or other proceeding or action of
any kind relating to the Real Property.

     5.8  Inventory. All Inventory will, on the Closing Date, consist of items
          ---------
that are good and merchantable and of a quantity and quality that are usable or
saleable in the ordinary course of the Business consistent with past practices
at prices at least equal to their value on Seller's books and records. All work
in process and finished goods in the inventory and stock in trade owned by any
of the Purchased Subsidiaries (the "Purchased Subsidiaries' Inventory")
exclusively for use or sale in the ordinary course of such Purchased
Subsidiaries' Business have been produced in compliance with Seller's and such
of the Purchased Subsidiaries' quality control procedures applicable to the
Foreign Subsidiaries' Business. Seller has good and marketable title to all
Inventory, and each of the Purchased Subsidiaries had good and marketable title
to all of its Purchased Subsidiaries' Inventory, free and clear of all liens,
except Permitted Liens.

     5.9  Intellectual Property. All Intangible Property, together with all
          ---------------------
intangible personal property owned or held by any of the Purchased Subsidiaries
and used exclusively in connection with such Purchased Subsidiaries' Business
(collectively, the "Intellectual Property"), is set forth on Exhibit C. Except
                                                             ---------
as set forth on Exhibit C, to Seller's knowledge: (a) Seller and each of the
                ---------
Purchased Subsidiaries, and each predecessor in title to any of them, has taken
all necessary actions and has not taken any improper actions such that its
right, title, and interest in its Intellectual Property as owner or, subject to
the terms of any applicable license, as licensee, as applicable, is valid,
enforceable, and uncontested, and is free and clear of all liens, of any third
party, except for Permitted Liens, and, except to the extent any of the
Intellectual Property is licensed to Seller or any of the Purchased
Subsidiaries, as the case may be, of licenser; (b) all computer software and
databases located at any of Seller's or the Purchased Subsidiaries' premises or
used in the Business or the Purchased Subsidiaries' Business, as the case may
be, are owned by or properly licensed to Seller or such of the Purchased
Subsidiaries, and all of Seller's or such of the Purchased Subsidiaries' uses of
such computer software and databases are authorized under such licenses, as
applicable; (c) all of Seller's right, title and interest in and to its
Intellectual Property, including computer software and databases and any
warranties therein, shall be assignable to Buyer at Closing, and upon such
assignment, Buyer shall receive complete and exclusive right, title, and
interest in and to all tangible and intangible property rights existing in such
Intellectual Property; and (d) there are no infringements, unlawful uses,
improper assignments, or defaults of any license or other agreement with respect
to the Intellectual Property in connection with the Business or the Purchased
Subsidiaries'

                                       12
<PAGE>

Business, neither Seller nor any of the Purchased Subsidiaries has received any
notice or demand alleging that it is in default of any license or other
agreement or that it is infringing upon any rights of any third party in its use
of the Intellectual Property, and no circumstances exist which reasonably could
be expected to adversely affect the validity, subsistence, or existence of the
Intellectual Property or Seller's or such of the Purchased Subsidiaries', as the
case may be, continued right to use the Intellectual Property.

     5.10  Compliance with Laws. To Seller's knowledge, neither Seller nor any
           --------------------
of the Purchased Subsidiaries is in violation of any applicable law, rule or
regulation ("Applicable Laws"), the violation of which could adversely affect
the Property, the Business, the Purchased Subsidiaries' Business, results of
operations, or conditions (financial or otherwise), and has received no
notification or communication from any governmental authority (i) asserting that
it is not in compliance with any of the statutes, regulations or ordinances that
such governmental authority enforces, or (ii) threatening to revoke any license,
franchise, permit or authorization of any governmental authority.

     5.11  Capitalization.
           --------------

           5.11.1  The authorized capital stock of each of the Purchased
Subsidiaries is set forth on Schedule 5.11, and such capital stock is referred
                             -------------
to herein, collectively, as the "Capital Stock". All of issued and outstanding
shares of Capital Stock are duly and validly issued and outstanding and are
fully paid and nonassessable. A listing of all holders of outstanding and issued
Common Stock (the "Stockholders") and the amount of shares owned by each
Stockholder is set forth on Schedule 5.11. All options, the recipient of any
                            -------------
options, the grant date, exercise price, vesting and other material terms of any
such options are also described on Schedule 5.11.
                                   -------------

           5.11.2  Except as set forth in subsection (a) above, there are no
shares of capital stock or other equity securities of Purchased Subsidiaries
outstanding, and except as set forth in Schedule 5.11, there are no outstanding
                                        -------------
options, warrants or rights to subscribe for, securities or rights convertible
into or exchangeable for, or contracts, commitments or arrangements by which
Seller or any of the Purchased Subsidiaries is or may be required to issue or
sell additional shares of any of the Purchased Subsidiaries.

     5.12  Permits. To Seller's knowledge, each of Seller and the Purchased
           -------
Subsidiaries has duly obtained and holds in full force and effect all consents,
authorizations, permits, licenses, orders or approvals of, and has made all
declarations and filings with, all federal, state, local or other governmental
or regulatory bodies that are material or necessary in or to the conduct of its
business (collectively, the "Permits"); all of the Permits have been duly
obtained and are in full force and effect; no violations are or have been
recorded in respect of any such Permit and no Proceeding (as defined herein) is
pending or, to the best knowledge of Seller, threatened to revoke, deny or
limit any such Permit.

     5.13  Outstanding Commitments. To the best knowledge of Seller, neither
           -----------------------
Seller nor any of the Purchased Subsidiaries is bound by any commitments for the
performance of services or delivery of products in excess of its ability to
provide such services or deliver such products

                                       13
<PAGE>

during the time available to satisfy such commitments and all outstanding
commitments for the performance of services or delivery of products were made on
a basis calculated to produce a profit under the circumstances prevailing when
such commitments were made.

     5.14  Labor Matters: Employees.
           ------------------------

           5.14.1  To Seller's knowledge, each of Seller and the Purchased
Subsidiaries is in compliance, in all material respects, with all federal,
state, local or other laws respecting employment and employment practices
(including, in the case of Seller, the Americans with Disabilities Act and the
Family and Medical Leave Act) employee benefits, terms and conditions of
employment, wages and hours, and nondiscrimination in employment, and has not
and is not engaged in any unfair labor practice.

           5.14.2  In connection with the operations of the Business or the
Purchased Subsidiaries' Business, as applicable, to Seller's knowledge, neither
Seller nor any of the Purchased Subsidiaries is a party to, or subject to any
obligation, liability or commitment with respect to any written or oral
employment, compensation, consulting, severance pay or similar agreement other
than the agreements previously disclosed to Buyer.

           5.14.3  Seller knows of no employee who intends to terminate his or
her employment with Seller prior to or following the Closing Date.

     5.15  Environmental Matters.
           ---------------------

           5.15.1  Except as set forth in Schedule 5.15, to Seller's knowledge:
                                          -------------

                   (i)     Each of Seller and the Purchased Subsidiaries is and
     has been in material compliance with all applicable Environmental Laws (as
     hereinafter defined), which compliance includes, but is not limited to, the
     possession by it of all Permits required under applicable Environmental
     Laws, and compliance with the terms and conditions thereof;

                   (ii)    There are no Environmental Claims pending or, to the
     knowledge of Seller, threatened against either Seller or any of the
     Purchased Subsidiaries, or any person with respect to which any of them has
     or may have retained or assumed partial or total liability for, either
     contractually or by operation of law for which adequate reserves have not
     been established in the Financial Statements; and

                   (iii)   There are no past or present actions, activities,
     circumstances, conditions, events or incidents, including, without
     limitation, the release, threatened release or presence of any Hazardous
     Substance, that could form the basis of any Environmental Claim against
     either Seller or any of the Purchased Subsidiaries or for which any of them
     could be liable, except where such actions, activities, circumstances,
     conditions, events or incidents will not have a Material Adverse Effect.

                                       14
<PAGE>

           5.15.2  As used in this Agreement:

                   (i)     "Environmental Claim" means any proceeding by any
     person which may impose any environmental liability.

                   (ii)    "Environmental Law" means any law or order of any
     governmental authority relating to (A) the generation, treatment, storage,
     disposal, use, handling, manufacturing, transportation or shipment of, or
     (B) the environment or to emissions, discharges, releases or threatened
     releases of, Hazardous Substances, into the environment, and includes,
     without limitation, in the case of Seller, the Clean Air Act, 42 U.S.C. (S)
     7401 et seq.; Comprehensive Environmental Response, Compensation and
     Liability Act, 42 U.S.C. (S) 9601 et seq.; Emergency Planning and Community
     Right to Know Act, 42 U.S.C. (S) 11000 et seq.; Federal Insecticide,
     Fungicide and Rodenticide Act, 7 U.S.C. (S) 136 et seq.; Clean Water Act,
     33 U.S.C. (S) 1251 et seq.; Oil Pollution Act, 33 U.S.C. (S) 2701 et seq.;
     Resource Conservation and Recover Act, 42 U.S.C. (S) 6901 et seq.; Safe
     Water Drinking Act, 42 U.S.C. (S) 300f et seq.; Toxic Substance Control
     Act, 15 U.S.C. (S) 2601 et seq.; and Occupational Safety and Health Act 29
     U.S.C. (S) 651 et seq.

                   (iii)   "Environmental Liability" means any proceeding or
     liability (whether known or unknown, whether asserted or unasserted,
     whether absolute or contingent, whether accrued or unaccrued, whether
     liquidated or unliquidated, and whether due or to become due), arising out
     of or based on any violation of or obligation under any Environmental Law,
     (including, without limitation, liability for investigatory costs, clean up
     costs, governmental response costs, natural resources damages, property
     damages, personal injuries, death or penalties).

                   (iv)    "Hazardous Substances" means (A) any petroleum or
     petroleum products, radioactive materials or friable asbestos; (B) any
     chemicals or other materials or substances which are now defined as or
     included in the definition of "hazardous substances," "hazardous wastes,"
     "hazardous materials," "extremely hazardous wastes," "restricted hazardous
     wastes," "toxic substances," or "toxic pollutants" under any Environmental
     Law; and (C) pesticides.

     5.16  Assets Sufficient to Operate Business. The Property constitutes all
           -------------------------------------
of the assets necessary and sufficient to operate the Business as currently
operated by Seller.

     5.17  Absence of Intercompany Debt. None of the Purchased Subsidiaries owe
           ----------------------------
any amounts to Seller or any affiliate of Seller other than Purchased
Subsidiaries.

6.   Buyer's Representations and Warranties. Buyer hereby makes the following
     --------------------------------------
representations and warranties to Seller:

                                       15
<PAGE>

     6.1  Validity of Agreement. All action on the part of Buyer necessary for
          ---------------------
the authorization, execution, delivery and performance of this Agreement by
Buyer, including, but not limited to, the performance of Buyer's obligations
hereunder, has been duly taken. This Agreement, when executed and delivered by
Buyer, shall constitute the valid and binding obligation of Buyer enforceable in
accordance with its terms.

     6.2  Organization. Standing and Power. Buyer is a corporation duly
          --------------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer has all requisite corporate power and authority to own, lease
and operate its properties, to carry on its business as now being conducted and
to execute, deliver and perform this Agreement and all writings relating hereto.

     6.3  No Conflicts or Violations. The execution and delivery of this
          --------------------------
Agreement, the consummation of the transactions herein contemplated, and the
performance of, fulfillment of and compliance with the terms and conditions
hereof by Buyer do not and will not: (i) conflict with or result in a breach of
the articles of incorporation or by-laws of Buyer; (ii) violate any statute,
law, rule or regulation, or any order, writ, injunction or decree of any court
or governmental authority; or (iii) violate or conflict with or constitute a
default under any agreement, instrument or writing of any nature to which Buyer
is a party or by which Buyer or its assets or properties may be bound.

     6.4  Financing. Buyer has sufficient funds available to consummate the
          ---------
transactions contemplated hereby - THERE IS NO FINANCING CONTINGENCY WITH
RESPECT TO THIS TRANSACTION.


7.  "AS IS" Transaction. BUYER HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT AS
     ------------------
OTHERWISE EXPRESSLY PROVIDED IN SECTION 5 ABOVE, SELLER MAKES NO REPRESENTATIONS
OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY MATTER
RELATING TO THE PROPERTY INCLUDING, WITHOUT LIMITATION, INCOME TO BE DERIVED OR
EXPENSES TO BE INCURRED IN CONNECTION WITH THE PROPERTY, THE PHYSICAL CONDITION
OF ANY PERSONAL PROPERTY COMPRISING A PART OF THE PROPERTY OR WHICH IS THE
SUBJECT OF ANY OTHER LEASE OR CONTRACT TO BE ASSUMED BY BUYER AT THE CLOSING,
THE ENVIRONMENTAL CONDITION OR OTHER MATTER RELATING TO THE PHYSICAL CONDITION
OF ANY REAL PROPERTY OR IMPROVEMENTS WHICH ARE THE SUBJECT OF ANY REAL PROPERTY
LEASE TO BE ASSUMED BY BUYER AT THE CLOSING, THE ZONING OF ANY SUCH REAL
PROPERTY OR IMPROVEMENTS, THE VALUE OF THE PROPERTY (OR ANY PORTION THEREOF),
THE TRANSFERABILITY OF PROPERTY, THE TERMS, AMOUNT, VALIDITY OR ENFORCEABILITY
OF ANY ASSUMED LIABILITIES, THE TITLE OF THE PROPERTY (OR ANY PORTION THEREOF)
THE MERCHANTABILITY OR FITNESS OF THE PERSONAL PROPERTY OR ANY OTHER PORTION OF
THE PROPERTY FOR ANY PARTICULAR PURPOSE, OR ANY OTHER MATTER OR THING RELATING
TO THE PROPERTY OR ANY PORTION THEREOF. WITHOUT IN ANY WAY LIMITING THE
FOREGOING, SELLER HEREBY DISCLAIMS ANY WARRANTY, EXPRESS OR IMPLIED, OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR

                                       16
<PAGE>

PURPOSE AS TO ANY PORTION OF THE PROPERTY. BUYER FURTHER ACKNOWLEDGES THAT BUYER
HAS CONDUCTED AN INDEPENDENT INSPECTION AND INVESTIGATION OF THE PHYSICAL
CONDITION OF THE PROPERTY AND ALL SUCH OTHER MATTERS RELATING TO OR AFFECTING
THE PROPERTY AS BUYER DEEMED NECESSARY OR APPROPRIATE AND THAT IN PROCEEDING
WITH ITS ACQUISITION OF THE PROPERTY, EXCEPT FOR ANY REPRESENTATIONS AND
WARRANTIES EXPRESSLY SET FORTH IN SECTION 5, BUYER IS DOING SO BASED SOLELY UPON
SUCH INDEPENDENT INSPECTIONS AND INVESTIGATIONS. ACCORDINGLY, BUYER WILL ACCEPT
THE PROPERTY AT THE CLOSING "AS IS," "WHERE IS," AND "WITH ALL FAULTS."

8.   Conduct and Transaction Prior to Closing.
     ----------------------------------------

     8.1  Access to Records and Properties of Seller. From and after the date of
          ------------------------------------------
this Agreement until the Closing Date, Seller shall, upon reasonable advance
notice, afford to Buyer's officers, independent public accountants, counsel,
lenders, consultants and other representatives who shall be bound as
"Representatives" under the confidentiality agreements heretofore signed by
Buyer, reasonable access during normal business hours to the Property and all
records pertaining to the Property or the Business. Buyer, however, shall not be
entitled to access to any materials containing privileged communications or
information about employees, disclosure of which might violate an employee's
reasonable expectation of privacy. Buyer expressly acknowledges that nothing in
this Section 8.1 is intended to give rise to any contingency to Buyer's
obligations to proceed with the transactions contemplated herein.

     8.2  Operation of Seller's Business Pending Closing. Unless Buyer otherwise
          ----------------------------------------------
consents, during the period prior to the Closing Date, Seller shall operate the
Business, subject to the orders and direction of the Bankruptcy Court, as
currently operated and only in the ordinary course and, consistent with such
operation, shall use commercially reasonable efforts to preserve intact the
Business and its relationships with employees and persons having dealings with
it. Notwithstanding the foregoing, Seller may take such action as is reasonably
necessary prior to the Closing to withdraw excess cash balances from the
Purchased Subsidiaries to the extent that such withdrawals do not prevent the
Purchased Subsidiaries from continuing the conduct of business in the ordinary
course.

     8.3  Hart-Scott-Rodino Cooperation. Buyer and Seller shall cooperate with
          -----------------------------
each other (at their respective sole cost and expense) to comply with, and
provide the information required by, the pre-merger notification and waiting
period rules of the Hart-Scott-Rodino Antitrust Improvements Act of 1976
(codified in Section 18(a) of Title 15, U.S. Code) (the "Act"), in any Federal
Trade Commission regulations, and in any provisions or regulations of or
relating to the Clayton Act. In that connection, Buyer and Seller shall use
diligent efforts to make their joint pre-merger notification filing with the
Federal Trade Commission no later than ten (10) days following the Execution
Date. Buyer and Seller also mutually agree to request early termination of all
applicable waiting periods under the Act.

                                       17
<PAGE>

     8.4  Bankruptcy Court Approvals.
          --------------------------

          8.4.1.  Bankruptcy Court Approval of Sale Procedures. Promptly
                  --------------------------------------------
following the Execution Date (and in no event later than ten (10) business days
thereafter), Seller will file a motion (the "Sale Procedure Motion") with the
Bankruptcy Court requesting the entry of an order in form and substance
acceptable to Buyer (the "Procedure Order") (i) fixing the time, date, and
location of a hearing (the "Approval Hearing") to approve Seller's consummation
of this Agreement, (ii) fixing the time and date of an auction (the "Auction")
to be held at the offices of Houlihan Lokey Howard & Zukin, Atlanta, Georgia, at
which higher and better offers to purchase the Property may be presented to
Seller, (iii) providing that if Seller receives from a third party a higher and
better offer to purchase the Property at the Auction, and such third party offer
is subsequently approved by the Bankruptcy Court and closes as provided by its
terms, then Buyer will be entitled to receive from Seller a flat fee payment
(not dependent on amounts actually expended or incurred by Buyer) in cash or
other immediately available good funds in the amount of 3% of Purchase Price
(the "Break-Up Fee") which payment shall be made to Buyer concurrently with the
consummation of such third party sale, (iv) no prospective purchaser will be
permitted to bid at the Auction unless such party has been deemed "financially
qualified" by Houlihan Lokey Howard & Zukin Capital ("HLHZ"), Seller's
investment banker, (v) no prospective purchaser who bids for the Property at
Auction shall be entitled to purchase the Property unless such prospective
purchaser offers to purchase the Property for consideration which is at least
$2,000,000 greater than the consideration set forth in this Agreement (including
all cash, non-cash consideration and assumed liabilities) and otherwise on terms
at least as favorable to Seller as those set forth in this Agreement, and (vi)
after any initial overbid, all further overbids must be in increments of at
least $500,000. Should overbidding take place, Buyer shall have the right, but
not the obligation, to participate in the overbidding and to be approved as the
overbidder at the Approval Hearing based upon any such overbid. Should an
overbidder be approved at the hearing on the Sale Motion, Buyer shall deliver to
such approved overbidder all third party reports, studies and the like resulting
from Buyer's Due Diligence investigations. Following the filing of the Sale
Procedure Motion, Seller shall use reasonable efforts to obtain the Procedure
Order (the date on which the Procedure Order is entered and becomes final is
referred to herein as the "Sale Procedure Date").

          8.4.2   Bankruptcy Court's Approval of Sale. Promptly following the
                  -----------------------------------
Execution Date, and contemporaneously with the filing of the Sale Procedure
Motion, Seller shall file a motion with the Bankruptcy Court (the "Sale Motion")
requesting entry of an order in form and substance satisfactory to Buyer (the
"Approval Order") which (i) approves the sale of the Property to Buyer on the
terms and conditions set forth in this Agreement and authorizes Seller to
proceed with this transaction, (ii) includes a specific finding and conclusion
of law that Buyer is a good faith purchaser of the Property within the meaning
of Section 363(m) of the Bankruptcy Code, (iii) states that the sale of the
Property to Buyer shall be free and clear of all liens, claims, interests and
encumbrances whatsoever (except as expressly provided in this Agreement), and
(iv) approves Seller's assumption and assignment of the Real Property Leases and
Other Leases and Contracts (collectively, the "Section 365 Contracts") pursuant
to Section 365 of the United States Bankruptcy Code and orders Buyer to pay any
cure amounts payable to the other parties to the Section 365 Contracts as a
condition to such assumption and assignment. Following the filing of the Sale
Motion, Seller shall use reasonable efforts to obtain entry of the

                                       18
<PAGE>

Approval Order. Both Buyer's and Seller's obligations to consummate the
transactions contemplated in this Agreement which Buyer and Seller may hereafter
enter into shall be conditioned upon the Bankruptcy Court's entry of the
Approval Order.

9.   Indemnity
     ---------

     9.1.  Survival of Representations. The representations and warranties of
           ---------------------------
Seller contained in Section 5 hereof shall terminate upon the Closing, except
for the representations and warranties contained in Section 5.15 (Environmental
Matters) and Section 5.16 (Assets Sufficient to Operate Business), each of which
shall survive until such time as Seller's plan of reorganization in the Case
shall have been approved and confirmed by the Bankruptcy Court (the "Survival
Period"). The representations and warranties of Buyer contained in Section 6
hereof shall terminate upon the Closing.

     9.2  Indemnity by Seller. Subject to the terms and conditions of this
          -------------------
Section 9, Seller hereby agrees to indemnify, defend and hold harmless Buyer and
its affiliates and each of their respective members, officers, directors,
employees, stockholders, agents and representatives at any time after the
Closing, from and against all demands, claims, actions or causes of action,
assessments, losses, damages, liabilities, obligations, penalties, fines, costs
and expenses (including without limitation reasonable fees and expenses of
counsel) ("Damages") asserted against, resulting from, imposed upon or incurred
by Buyer, directly or indirectly, by reason of or resulting from: (a) any
liabilities or obligations of Seller which are not Assumed Liabilities; (b) a
breach of any representation or warranty of Seller contained in or made pursuant
to Section 5.15 (Environmental Matters) and Section 5.16 (Assets Sufficient to
Operate Business); (c) the breach by Seller of any covenant or agreement of
Seller contained in or made pursuant to this Agreement or in any agreement
delivered in connection herewith; (d) any liability for brokerage, financial
advisory or finders' fees or other commissions based on agreements, arrangements
or understandings made by Seller for services rendered for or on behalf of
Seller in connection with the transactions contemplated hereby; (e) the failure
to comply with statutory provisions relating to bulk sales and transfers, if
applicable; and (f) the failure of Seller to comply with the reasonable requests
of Buyer necessary to satisfy any applicable statutory or other governmental
provisions relating to transfers of stock of foreign entities. Any claim or
claims for Damages made by Buyer that are based upon a breach of any of the
representations or warranties in Section 5.15 or Section 5.16 during the
Survival Period shall be treated, until paid in full by Seller, as claims for
administrative expenses in the Case with priority over all other claims for
administrative expenses other than any claim asserted under Section 2.3.2
hereof.

     9.3  Indemnity by Buyer. Subject to the terms and conditions of this
          ------------------
Section 9, Buyer hereby agrees to indemnify, defend and hold harmless Seller at
any time after the Closing, from and against all Damages asserted against,
resulting to, imposed upon or incurred by Seller, directly or indirectly, by
reason of or resulting from: (a) any obligations or liabilities of Buyer; (b)
any Assumed Liabilities; (c) any liabilities, obligations or claims which arise
out of the operations of the business or ownership of the Property by Buyer
after the Closing Date; (d) the breach by Buyer of any covenant or agreement of
Buyer contained in or made pursuant to this Agreement; or (e) any liability for
brokerage or finders' fees or other commissions based on agreements,
arrangements or

                                       19
<PAGE>

understandings made by Buyer for services rendered for or on behalf of Buyer in
connection with the transactions contemplated hereby.

     9.4  Limitations: Calculation. Notwithstanding anything contained in this
          ------------------------
Agreement to the contrary, the amount of any Damages for which indemnification
is provided under this Section 9 shall be net of any amounts actually recovered
by the indemnified party under insurance policies with respect to such Damages
and shall be (i) increased to take account of any net tax cost incurred by the
indemnified party arising from the receipt of indemnity payments hereunder
(grossed up for such increase) and (ii) reduced to take account of any net tax
benefit realized by the indemnified party arising from the incurrence or payment
of any such Damages. In computing the amount of any such tax cost or tax
benefit, the indemnified party shall be deemed to recognize all other items of
income, gain, loss deduction or credit before recognizing any item arising from
the receipt of any indemnity payment hereunder or the incurrence or payment of
any indemnified Damages. Any offset made against any accounts or notes
receivable based upon or arising from any liability of Seller that Buyer has not
expressly agreed to assume pursuant to this Agreement shall be Damages for which
indemnification is provided hereunder.

10.  Miscellaneous.
     -------------

     10.1 Attorneys' Fees. In the event that either party hereto brings an
          ---------------
action or other proceeding to enforce or interpret the terms and provisions of
this Agreement, the prevailing party in that action or proceeding shall be
entitled to have and recover from the non-prevailing party all such fees, costs
and expenses (including ??? and reasonable attorneys' fees) as the prevailing
party may ??? or incur in the pursuit of defense of such action or proceeding.

     10.2 Reasonable Access to Records and Certain Personnel. So long as the
          -------------------------------------------------
Case is pending, (i) Buyer shall permit Seller's counsel and other professionals
employed in the Case reasonable access to the financial and other books and
records relating to the Property or the Business (whether in documentary or data
form) for the purpose of the continuing administration of the Case (including,
without limitation, the pursuit of any avoidance, preference or similar action),
which access shall include (a) the right of such professionals to copy, at
Seller's expense, such documents and records as they may request in furtherance
of the purposes described above, and (b) Buyer's copying and delivering to
Seller or its professionals such documents or records as they may request, but
only to the extent Seller or its professionals furnishes Buyer with reasonably
detailed written descriptions of the materials to be so copied and Seller
reimburses Buyer for the reasonable costs and expenses thereof), and (ii) Buyer
shall provide Seller and such professionals (at no cost to Seller) with
reasonable access to Ted Waitman during regular business hours to assist Seller
in the continuing administration of the Case, provided that such access does not
unreasonably interfere with Buyer's business operations.

     10.3 Notices. Unless otherwise provided herein, any notice, tender, or
          -------
delivery to be given hereunder by either party to the other may be effected by
personal delivery in writing, or by registered or certified mail, postage
prepaid, return receipt requested, and shall be deemed

                                       20
<PAGE>

communicated as of the date of mailing. Mailed notices shall be addressed as set
forth below, but each party may change his address by written notice in
accordance with this paragraph.

           To Seller:        Gencor Industries, Inc.
                             5201 North Orange Blossom Trail
                             Orlando, FL 32810
                             Attn: E. J. Elliott
                             Fax: 407-299-8241

           With copies to:   Pachulski, Stang, Ziehl, Young & Jones P.C.
                             10100 Santa Monica Boulevard, Suite 1100
                             Los Angeles, CA 90067
                             Attn: Brad R. Godshall
                             Fax: 310-201-0760

                             and

                             Berger, Davis and Singerman P.A.
                             200 South Biscayne Blvd., Suite 2950
                             Miami, FL 33131
                             Attn: Paul Singerman
                             Fax: 305-714-4340


                             and

                             Houlihan Lokey Howard & Zukin
                             3475 Piedmont Road, Suite 950
                             Atlanta, Georgia 30305
                             Attn: James Decker
                             Fax: 404-495-9545


           To Buyer:         CPM Acquisition Corp.
                             Sixty One Wilton Road, 2/nd/ Floor
                             Westport, Connecticut 06880
                             Attn: I. Joseph Massoud
                             Fax: 203-221-8253

                             and

                             The Compass Group International, LLC
                             Sixty One Wilton Road, 2/nd/ Floor
                             Westport, Connecticut 06880
                             Attn: Alan B. Offenberg, Principal
                             Fax: 203-221-8253

                                       21
<PAGE>

                             With a copy to: Squire, Sanders & Dempsey LLP
                             312 Walnut Street, Suite 3500
                             Cincinnati, Ohio 45202
                             Attn: Stephen C. Mahon, Esq.
                             Fax: 513-361-1201

     10.4  Entire Agreement. This instrument and the documents to be executed
           -----------------
pursuant hereto contain the entire agreement between the parties relating to the
sale of the Property. Any oral representations or modifications concerning this
Agreement or any such other document shall be of no force and effect excepting a
subsequent modification in writing, signed by the party to be charged.

     10.5  Modification. This Agreement may be modified, amended or supplemented
           ------------
only by a written instrument duly executed by all the parties hereto.

     10.6  Closing Date. All actions to be taken on the Closing Date pursuant to
           ------------
this Agreement shall be deemed to have occurred simultaneously, and no act,
document or transaction shall be deemed to have been taken, delivered or
effected until all such actions, documents and transactions have been taken,
delivered or effected.

     10.7  Severability. Should any term, provision or paragraph of this
           ------------
Agreement be determined to be illegal or void or of no force and effect, the
balance of the Agreement shall survive except that, if Buyer cannot acquire and
Seller cannot sell substantially all of the Property, either party may terminate
this Agreement, and it shall be of no further force and effect, unless both
parties agree in writing to the contrary.

     10.8  Captions. All captions and headings contained in this Agreement
           --------
are for convenience of reference only and shall not be construed to limit or
extend the terms or conditions of this Agreement.

     10.9  Further Assurances. Each party hereto will execute, acknowledge and
           ------------------
deliver any further assurance, documents and instruments reasonably requested by
any other party hereto for the purpose of giving effect to the transactions
contemplated herein or the intentions of the parties with respect thereto.

     10.10 Waiver. No waiver of any of the provisions of this Agreement shall be
           ------
deemed, or shall constitute, a waiver of other provisions, whether or not
similar, nor shall any waiver constitute a continuing waiver. No waiver shall be
binding unless executed in writing by the party making the waiver.

     10.11 Brokerage Obligations. Seller is represented by HLHZ as its exclusive
           ---------------------
sale agent with respect to the transactions contemplated herein pursuant to that
certain order entered by the Bankruptcy Court on November 6, 2000 and HLHZ's
fees and expenses are to be paid by Seller immediately and in accordance with
the terms and provisions of such order. Seller and Buyer each represent and
warrant to the other that, except for HLHZ, such party has incurred no liability
to any broker or agent with respect to the payment of any commission regarding

                                       22
<PAGE>

the consummation of the transaction contemplated hereby. Except for any claims
of HLHZ (which are to be handled and satisfied by Seller in accordance with the
above referenced order), it is agreed that if any claims for commissions, fees
or other compensation, including, without limitation, brokerage fees, finder's
fees, or commissions are ever asserted against Buyer or Seller in connection
with this transaction, all such claims shall be handled and paid by the party
whose actions form the basis of such claim and such party shall indemnify,
defend (with counsel reasonably satisfactory to the party entitled to
indemnification), protect, and save and hold the other harmless from and against
any and all such claims or demands asserted by any person, firm or corporation
in connection with the transaction contemplated hereby.

     10.12  Payment of Fees and Expenses. Except as provided in Sections 10.1
            ----------------------------
and 10.11 above, each party to this Agreement shall be responsible for, and
shall pay, all of its own fees and expenses, including those of its counsel,
incurred in the negotiation, preparation and consummation of the Agreement and
the transaction described herein.

     10.13  Survival. The representations and warranties made in this Agreement
            --------
shall survive the Closing only to the extent provided for in Section 9 hereof.
Except for the covenants and agreements to be performed after the Closing Date,
none of the respective covenants and agreements of Seller and Buyer herein, or
in any certificates or other documents delivered prior to or at the Closing,
shall survive the Closing.

     10.14  Assignments. This Agreement shall not be assigned by either party
            -----------
hereto without the prior written consent of the other party hereto.

     10.15  Binding Effect, Subject to the provisions of Section 10.14 above,
            --------------
this Agreement shall bind and inure to the benefit of the respective heirs,
personal representatives, successors, and assigns of the parties hereto.

     10.16  Applicable Law. This Agreement shall be governed by and construed in
            --------------
accordance with the laws of California.

     10.17  Good Faith. All parties hereto agree to do all acts and execute
            ----------
documents required to carry out the terms of this Agreement and to act in good
faith with respect to the terms and conditions contained herein before and after
Closing.

     10.18  Construction. In the interpretation and construction of this
            ------------
Agreement, the parties acknowledge that the terms hereof reflect extensive
negotiations between the parties and that this Agreement shall not be deemed,
for the purpose of construction and interpretation, drafted by either party
hereto.

     10.19  Counterparts. This Agreement may be signed in counterparts. The
            ------------
parties further agree that this Agreement may be executed by the exchange of
facsimile signature pages.

     10.20  Time is of the Essence. Time is of the essence in this Agreement,
            ----------------------
and all of the terms, covenants and conditions hereof.

                                       23
<PAGE>

     10.21  Bankruptcy Court Jurisdiction. BUYER AND SELLER AGREE THAT THE
            -----------------------------
BANKRUPTCY COURT SHALL HAVE EXCLUSIVE JURISDICTION OVER ALL DISPUTES AND OTHER
MATTERS RELATING; TO (i) THE INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT OR
ANY ANCILLARY DOCUMENT EXECUTED PURSUANT HERETO; AND/OR (ii) THE PROPERTY AND/OR
ASSUMED LIABILITIES, AND BUYER EXPRESSLY CONSENTS TO AND AGREES NOT TO CONTEST
SUCH EXCLUSIVE JURISDICTION.

                                       24
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase
Agreement as of the day and year first above written.


                                   CPM Acquisition Corp.


                                   By:   _______________________
                                   Name: _______________________
                                   Its:  _______________________


                                   Consolidated Process Machinery, Inc.
                                   Debtor and Debtor In Possession


                                   By:   _______________________
                                   Name: _______________________
                                   Its:  _______________________
                                 Exhibits "A-1" through "E"
                                 --------------------------

                     [EXHIBITS TO BE DELIVERED BY SELLER]

                                       25
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed this Asset
Purchase Agreement as of the day and year first above written.

                                        CPM Acquisition Corp.

                                        By: ____________________________
                                        Name: __________________________
                                        Its: ___________________________

                                        Consolidated Process Machinery, Inc.
                                        Debtor and Debtor In Possession


                                        By: /s/ John E. Elliott
                                            ----------------------------
                                        Name: JOHN E. ELLIOTT
                                             ---------------------------
                                        Its: VICE PRESIDENT
                                             ---------------------------

                                      25

<PAGE>


     10.21  Bankruptcy Court Jurisdiction.  BUYER AND SELLER AGREE THAT THE
            -----------------------------
BANKRUPTCY COURT SHALL HAVE EXCLUSIVE JURISDICTION OVER ALL DISPUTES AND OTHER
MATTERS RELATING; TO (i) THE INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT OR
ANY ANCILLARY DOCUMENT EXECUTED PURSUANT HERETO; AND/OR (ii) THE PROPERTY AND/OR
ASSUMED LIABILITIES, AND BUYER EXPRESSLY CONSENTS TO AND AGREES NOT TO CONTEST
SUCH EXCLUSIVE JURISDICTION.

            IN WITNESS WHEREOF, the parties hereto have executed this Asset
Purchase Agreement as of the day and year first above written.


                                        CPM Acquisition Corp.

                                        By:
                                           ----------------------
                                        Name:
                                             --------------------
                                        Its: President
                                            ---------------------

                                        Consolidated Process Machinery, Inc.
                                        Debtor and Debtor In Possession

                                        By: _________________________
                                        Name:________________________
                                        Its: ________________________
                           Exhibit "A-1 through "E"
                           ------------------------

                     [EXHIBITS TO BE DELIVERED BY SELLER]

                                      25

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.3
<SEQUENCE>5
<FILENAME>dex23.txt
<DESCRIPTION>FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT
<TEXT>
<PAGE>

                                                                     Exhibit 2.3

                               FIRST AMENDMENT

                                      TO

                           ASSET PURCHASE AGREEMENT

     This First Amendment to Asset Purchase Agreement (this "First Amendment")
is made and entered into as of this 29th day of May, 2001, by and between CPM
Acquisition Corp., a Delaware corporation ("Buyer"), and Consolidated Process
Machinery, Inc., a California corporation ("Seller") and Debtor and Debtor in
Possession under a case (the "Case") in the United States Bankruptcy Court for
the Middle District of Florida (the "Bankruptcy Court"), and amends that certain
Asset Purchase Agreement, dated as of March 21, 200l (the "Purchase Agreement"),
by and between Seller and Buyer.

     WHEREAS, Buyer and Seller have previously entered into the Purchase
Agreement; and

     WHEREAS, Buyer and Seller desire to amend the Purchase Agreement as set
forth herein; and

     WHEREAS, capitalized terms not defined herein shall have the meanings
ascribed to such terms in the Purchase Agreement.

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Buyer and Seller hereby agree as
follows:

1.  The following new Section 1.1.8 is hereby added to the Purchase Agreement:

          1.1.8  Purchased Subsidiary Cash. Cash owned by the Purchased
                 -------------------------
     Subsidiaries as follows: (i) cash owned by CPM Pacific (Private) Ltd in an
     amount equal to the domestic currency equivalent of US$100,000; (ii) cash
     owned by CPM Europe S.A. in an amount equal to the domestic currency
     equivalent of US$40,000; (iii) cash owned by CPM Europe B.V. in an amount
     equal to the domestic currency equivalent of US$280,000; (iv) cash owned by
     CPM Europe Ltd in an amount equal to the domestic currency equivalent of
     US$50,000; (v) cash owned by California Pellet Mill Europe Ltd. in
     an, amount equal to the domestic currency equivalent of US$10,000, and (vi)
     any amount greater than the sums enumerated above shall be deemed Purchased
     Subsidiary Cash only to the extent of the value of such amount after
     deduction of any applicable taxes, fees or other charges assessed on the
     repatriation of such amount. (collectively, the actual amounts on the
     date hereof, "Purchased Subsidiary Cash"),

2.   Section 1.2, subparagraph (ii) of the Purchase Agreement is hereby amended
to read as follows: "(ii) all cash (other than Purchased Subsidiary Cash), cash
equivalents and marketable securities (including cash, cash equivalents and
marketable securities, other than Purchased Subsidiary Cash, owned by the
Purchased Subsidiaries);"
<PAGE>

3.  Section 1.2 of the Purchase Agreement is hereby amended by adding, at the
end thereof, the following new sentence:

    "Buyer shall use all reasonable efforts to cause the payment to Seller of
    any amount previously declared as a dividend by CPM Pacific (Private) Ltd.
    ("CPM Pacific") in respect of cash on hand on the Closing Date at CPM
    Machinery (Wuxi) Pte. Ltd. ("Wuxi"), to the extent such cash can be lawfully
    removed from the Peoples Republic of China, and in respect of cash payments
    in at least the amount of $460,227 for purchases made by Wuxi from CPM
    Pacific (which amount Seller certifies to Buyer as being in transit from
    Wuxi to CPM Pacific at the time of Closing); provided, however, that any
                                                 --------  -------
    such payment shall be made to Seller after deduction of any and all
    applicable taxes, fees or charges of any kind whatsoever, including any
    applicable taxes in respect of dividends declared prior to the Closing.

5.  Section 2.3.3 of the Purchase Agreement is hereby deleted in its entirety
and the following new Section 2.3.3 substituted in is place:

               2.3.3  If the Modified Working Capital Statement reflects
     Modified Working Capital of greater than $18,900,000, then Seller shall be
     entitled to payment in the amount of such excess (the "Seller Closing
     Adjustment") in immediately available funds, provided, however, that under
     no circumstances shall Buyer be obligated to make payment in respect of the
     Seller Closing Adjustment in excess of $500,000 plus the Purchased
     Subsidiary Cash.

6.   The following new Section 3.3.6 is hereby added to the Purchase Agreement:

               3.3.6  A certificate signed on behalf of Seller and acceptable to
     Buyer certifying that all intercompany accounts by and among the Purchased
     Subsidiaries and Seller and/or any affiliate of Seller have been
     extinguished at or prior to the Closing, preserving only a payable in the
     amount of $180,000 owing from CPM Europe B.V. to Seller, Seller and Buyer
     agree that, notwithstanding anything herein to the contrary, the parties
     hereto agree that such payable shall not be paid directly but shall be
     netted against amounts owed by Seller to Buyer under Section 2.3.2 of the
     Purchase Agreement.

7.   All references to the Purchase Agreement in each document annexed as an
exhibit or schedule thereto shall be references to the Purchase Agreement as
amended by this First Amendment.

8.   The parties have, for purposes of prorations required under Section 3.5,
credited Buyer in the amount of $500,000 for liabilities associated with income
taxes payable by the Purchased Subsidiaries (the "Tax Amount"). The parties
agree that such amount, together with all other prorations, shall be used as a
basis for preparing the Modified Working Capital Statement. The parties further
agree that if the Tax Amount, or any portion thereof, has been paid, such amount
shall be treated as a prepayment and such amount shall be credited to the Seller
in the Modified Working Capital Statement.

                                       2
<PAGE>

9.   Seller covenants to deliver to Buyer any technical drawings located at CPM
Brazil, Inc. relating to processing machinery (whether or not such drawings
constitute Property) as soon as it gains control thereof and when such delivery
is possible under applicable law, if ever.

10.  Buyer and Seller have agreed to eliminate the Working Capital Escrow and in
connection therewith, the deposit of Working Capital Escrow Amount shall not be
made by Buyer at Closing. In lieu thereof, Seller shall receive a credit in the
amount of One Million Ten Thousand Three Hundred Seventeen and 00/xx Dollars
($1,010,317.00) against any sums due to Buyer under Section 2.3.2 of the
Purchase Agreement.

11.  Except as expressly provided in this First Amendment, all of the terms and
conditions of the Purchase Agreement and the exhibits and schedules thereto
remain unchanged and in full force and effect.

12.  This First Amendment may be executed in separate counterparts, each of
which shall be deemed an original, and all of which together shall be deemed a
fully executed agreement.

             [The remainder of this page intentionally left blank]

                                       3
<PAGE>

     IN WITNESS WHEREOF, this First Amendment has been duly executed and
delivered as of the date first above written.

                                            CPM Acquisition Corp.

                                            By:   /s/ I. Joseph Massoud
                                                  -------------------------
                                            Name: I. JOSEPH MASSOUD
                                                  -------------------------
                                            Its:  PRESIDENT
                                                  -------------------------

                                            Consolidated Process Machinery, Inc.
                                            Debtor and Debtor In Possession

                                            By:   /s/ John Elliott
                                                  -------------------------
                                            Name: John Elliott
                                                  -------------------------
                                            Its:  Vice President
                                                  -------------------------

                                       4
<PAGE>

                              CLOSING PRORATIONS

     As of the Closing on May 30, 2001, under the Asset Purchase Agreement by
and between CPM Acquisition Corp., a Delaware corporation and Consolidated
Process Machinery, Inc., a California corporation.

Purchase Price:                                             $52,000,000.00

            Prorations:

            (a)  Per Attached Schedule A   $   9,836.97
            (2)  Income Taxes on Foreign
                  Subsidiary (Estimated)    (500,000.00)
                                             ----------

                                           $ 490,163.03        (490,163.03)
                                             ==========         ----------

Net Purchase Price:                                          51,509,836.97
                                                             -------------

Less:   Elimination of Working Capital
        Escrow and credit towards
        Buyer Closing Adjustment                             (1,000,000.00)
                                                              ------------


Less:   Aggregate "stay" bonus obligation
        to be paid by Buyer                                    (460,000.00)

Total to Credit Lyonnaise /1/:                              $50,049,836.97
                                                             =============

Less: Deposit Escrow                                         (5,029,324.03)

Total Due from Buyer at Closing:                            $45,020,512.94
                                                             =============

                       [SIGNATURES APPEAR ON NEXT PAGE]

___________________
/1/ Includes Deposit Escrow plus Total Due from Buyer at Closing. Due not
    include $950, 163.03 that Buyer will pay Credit Lyonnaise to bring the total
    payment to Credit Lyonnaise to $51,000,000.00.
<PAGE>

                                          ACKNOWLEDGED AND AGREED AS OF THE DATE
                                          WRITTEN ABOVE:

                                          CONSOLIDATED PROCESS MACHINERY, INC.


                                          By:  /s/ John E. Elliott
                                               ---------------------
                                          Its: _____________________

                                          CPM ACQUISITlON CORP.

                                          By:
                                               ----------------------
                                          Its: President
                                               ----------------------

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>6
<FILENAME>dex211.txt
<DESCRIPTION>SUBSIDIARIES OF THE REGISTRANT.
<TEXT>
<PAGE>

                                                                      EXHIBIT 21

                   GENCOR INDUSTRIES, INC. AND SUBSIDIARIES

                        SUBSIDIARIES OF THE REGISTRANT


All of the operating subsidiaries of Gencor Industries, Inc., a Delaware
Corporation, listed below are included in the Consolidated Financial Statements:

<TABLE>
<CAPTION>
                                                                    State in Which     Country in Which
                                                                     Incorporated        Incorporated
                                                                     ------------        ------------
<S>                                                                <C>               <C>
General Combustion Corporation                                         Florida

Thermotech Systems Corporation                                         Florida

General Combustion Limited                                                                  England

Bituma-Stor, Inc.                                                        Iowa

Bituma Corporation                                                    Washington

The Davis Line, Inc.                                                   Indiana

Equipment Services Group, Inc.                                         Florida

Consolidated Process Machinery, Inc.                                  California

CPM/Europe Limited                                                                          Ireland

CPM/Europe S.A.                                                                             France

CPM/Europe B.V.                                                                           Netherlands

CPM/Pacific (Private) Limited                                                              Singapore

Silver Weibull AB                                                                           Sweden

California Pellet Mill Europe Limited                                                   United Kingdom

CPM Brazil, Inc.                                                       Florida

CPM do Brasil Ltda.                                                                         Brazil

Gumaco Industria E Comercio Ltda.                                                           Brazil

Gumaco Projectos E. Montagens Ltda.                                                         Brazil

CPM Industria E Comercio Ltda.                                                              Brazil

Gencor ACP, Ltd.                                                                            England
</TABLE>

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
