Document:

exv10w4

 

Exhibit 10.4

AMENDMENT NUMBER THIRTEEN TO LOAN AND SECURITY AGREEMENT

          THIS AMENDMENT NUMBER THIRTEEN TO LOAN AND SECURITY AGREEMENT (this
“Amendment”), dated as of October 31, 2003, is entered into between and among,
on the one hand, the lenders identified on the signature pages hereof (such
lenders, together with their respective successors and assigns, are referred to
hereinafter each individually as a “Lender” and collectively as the “Lenders”),
WELLS FARGO FOOTHILL, INC., a California corporation, formerly known as
Foothill Capital Corporation, as the arranger and administrative agent for the
Lenders (“Agent”), and, on the other hand, HYPERCOM CORPORATION, a Delaware
corporation (“Parent”), and each of Parent’s Subsidiaries identified on the
signature pages hereof (such Subsidiaries are referred to hereinafter each
individually as a “Borrower”, and individually and collectively, jointly and
severally, as the “Borrowers”), with reference to the following:

W I T N E S S E T H

          WHEREAS, Borrowers and Parent previously entered into that certain Loan
and Security Agreement, dated as of July 31, 2001, as amended by Amendment
Number One to Loan and Security Agreement dated as of October 3, 2001, by
Amendment Number Two to Loan and Security Agreement dated as of November 13,
2001, by Amendment Number Three to Loan and Security Agreement dated as of
February 13, 2002, by Amendment Number Four to Loan and Security Agreement
dated as of June 24, 2002, by Amendment Number Five to Loan and Security
Agreement dated as of December 23, 2002, by Amendment Number Six to Loan and
Security Agreement dated as of March 5, 2003, by Amendment Number Seven to
Loan and Security Agreement dated as of March 28, 2003, by Amendment Number
Eight to Loan and Security Agreement dated as of May 12, 2003, by Amendment
Number Nine to Loan and Security Agreement and other Loan Documents dated as of
June 30, 2003, by Amendment Number Ten to Loan and Security Agreement dated as
of August 14, 2003, by Amendment Number Eleven to Loan and Security Agreement
dated as of August 28, 2003, and by Amendment Number Twelve to Loan and
Security Agreement dated as of October 1, 2003 (as the same may be further
amended, restated, supplemented, or otherwise modified from time to time, the
“Loan Agreement”), with Agent and Lenders pursuant to which Lenders have made
certain loans and financial accommodations available to Borrowers and Parent;

          WHEREAS, Borrowers have requested that the Lender Group agree to amend the
Loan Agreement as set forth herein; and

          WHEREAS, subject to the satisfaction of the conditions set forth herein,
the Lender Group is willing to so agree to amend the Loan Agreement.

          NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree to amend the
Loan Agreement as follows:

1

 

1.     DEFINITIONS.
Capitalized terms used herein and not otherwise defined herein shall have
the meanings ascribed to them in the Loan Agreement, as amended hereby.

2.     AMENDMENT TO LOAN AGREEMENT.

     (a)  Section 1.1 of the Loan Agreement is hereby amended by amending and
restating the following definition in its entirety as follows:

          “Permitted Restricted Payments” means (a) dividends, loans, or advances to
Parent to enable Parent to make payment of its general operating expenses and
federal, state, local and foreign tax obligations then due and owing and
incurred in the ordinary course of business if and so long as Parent (i)
immediately uses the proceeds of such dividends, loans, or advances solely to
satisfy such obligations and (ii) does not use such to satisfy the obligations
of any other Person through the satisfaction of a guaranty or otherwise, and
(b) any purchase, acquisition, redemption, or retirement by Parent of any class
of its outstanding Stock on or before November 30, 2003, in an aggregate amount
not in excess of $10,000,000.

3.     CONDITIONS PRECEDENT TO THIS AMENDMENT. The satisfaction of each of
the following shall constitute conditions precedent to the effectiveness of
this Amendment and each and every provision hereof:

     (a)  The representations and warranties in the Loan Agreement and the other
Loan Documents shall be true and correct in all respects on and as of the date
hereof, as though made on such date (except to the extent that such
representations and warranties relate solely to an earlier date);

     (b)  Agent shall have received the reaffirmation and consent of each
Guarantor, attached hereto as Exhibit A, duly executed and delivered by an
authorized official of Guarantor;

     (c)  No Default or Event of Default shall have occurred and be continuing
on the date hereof or as of the date of the effectiveness of this Amendment;
and

     (d)  No injunction, writ, restraining order, or other order of any nature
prohibiting, directly or indirectly, the consummation of the transactions
contemplated herein shall have been issued and remain in force by any
Governmental Authority against Borrower, Guarantors, or the Lender Group.

4.     CONSTRUCTION. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA APPLICABLE
TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF CALIFORNIA.

2

 

5.     ENTIRE AMENDMENT; EFFECT OF AMENDMENT. This Amendment, and terms and
provisions hereof, constitute the entire agreement among the parties pertaining
to the subject matter hereof and supersedes any and all prior or
contemporaneous amendments relating to the subject matter hereof. Except for
the amendments to the Loan Agreement expressly set forth in Section 2 hereof,
the Loan Agreement and other Loan Documents shall remain unchanged and in full
force and effect. Except as expressly set forth herein, the execution,
delivery, and performance of this Amendment shall not operate as a waiver of
any right, power, or remedy of the Lender Group as in effect prior to the date
hereof. To the extent any terms or provisions of this Amendment conflict with
those of the Loan Agreement or other Loan Documents, the terms and provisions
of this Amendment shall control. This Amendment is a Loan Document.

6.     COUNTERPARTS; TELEFACSIMILE EXECUTION. This Amendment may be executed
in any number of counterparts, all of which taken together shall constitute one
and the same instrument and any of the parties hereto may execute this
Amendment by signing any such counterpart. Delivery of an executed counterpart
of this Amendment by telefacsimile shall be equally as effective as delivery of
an original executed counterpart of this Amendment. Any party delivering an
executed counterpart of this Amendment by telefacsimile also shall deliver an
original executed counterpart of this Amendment, but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability,
and binding effect of this Amendment.

7.     MISCELLANEOUS.

     (a)  Upon the effectiveness of this Amendment, each reference in the Loan
Agreement to “this Agreement”, “hereunder”, “herein”, “hereof” or words of like
import referring to the Loan Agreement shall mean and refer to the Loan
Agreement as amended by this Amendment.

     (b)  Upon the effectiveness of this Amendment, each reference in the Loan
Documents to the “Loan Agreement”, “thereunder”, “therein”, “thereof” or words
of like import referring to the Loan Agreement shall mean and refer to the Loan
Agreement as amended by this Amendment.

3

 

\
     IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
and delivered as of the date first written above.

	 	 
	HYPERCOM CORPORATION,

a Delaware corporation	HYPERCOM EMEA, INC.,

fka Hypercom Europe Limited, Inc.,

an Arizona corporation
	 
	By: /s/ John W. Smolak

Name: John W. Smolak

Title: Executive Vice President and

Chief Financial and Administrative Officer	By: /s/ John W. Smolak

Name: John W. Smolak

Title: Executive Vice President
	 
	HYPERCOM U.S.A., INC.,

a Delaware corporation	HYPERCOM MANUFACTURING RESOURCES, INC.,

an Arizona corporation
	 
	By: /s/ John W. Smolak

Name: John W. Smolak

Title: Executive Vice President	By: /s/ John W. Smolak

Name: John W. Smolak

Title: Executive Vice President
	 
	HYPERCOM LATINO AMERICA, INC.,

an Arizona corporation	EPICNETZ, INC.,

a Nevada corporation
	 
	By: /s/ John W. Smolak

Name: John W. Smolak

Title: Executive Vice President	By: /s/ John W. Smolak

Name: John W. Smolak

Title: Executive Vice President
	 
	WELLS FARGO FOOTHILL, INC.,

a California corporation, formerly known as

Foothill Capital Corporation, as Agent and as

a Lender	 
	 
	By: /s/ John Nocita

Name: John Nocita

Title: Vice President	 

 

 

Exhibit A

REAFFIRMATION AND CONSENT

          All capitalized terms used herein but not otherwise defined herein shall
have the meanings ascribed to them in that certain Loan and Security Agreement
by and among the lenders identified on the signature pages thereof (such
lenders, together with their respective successors and assigns, are referred to
hereinafter each individually as a “Lender” and collectively as the “Lenders”),
WELLS FARGO FOOTHILL, INC., a California corporation, formerly known as
Foothill Capital Corporation, as the arranger and administrative agent for the
Lenders (“Agent”), and, on the other hand, HYPERCOM CORPORATION, a Delaware
corporation (“Parent”), and each of Parent’s Subsidiaries identified on the
signature pages thereof (such Subsidiaries are referred to hereinafter each
individually as a “Borrower”, and individually and collectively, jointly and
severally, as the “Borrowers”), dated as of July 31, 2001, as amended by
Amendment Number One to Loan and Security Agreement dated as of October 3,
2001, by Amendment Number Two to Loan and Security Agreement dated as of
November 13, 2001, by Amendment Number Three to Loan and Security Agreement
dated as of February 13, 2002, by Amendment Number Four to Loan and Security
Agreement dated as of June 24, 2002, by Amendment Number Five to Loan and
Security Agreement dated as of December 23, 2002, by Amendment Number Six to
Loan and Security Agreement dated as of March 5, 2003, by Amendment Number
Seven to Loan and Security Agreement dated as of March 28, 2003, by Amendment
Number Eight to the Loan and Security Agreement dated as of May 12, 2003, by
Amendment Number Nine to Loan and Security Agreement and other Loan Documents
dated as of June 30, 2003, by Amendment Number Ten to Loan and Security
Agreement dated as of August 14, 2003, by Amendment Number Eleven to Loan and
Security Agreement dated as of August 28, 2003, and by Amendment Number Twelve
to Loan and Security Agreement dated as of October 1, 2003 (as the same may be
further amended, restated, supplemented, or otherwise modified from time to
time, the “Loan Agreement”), or in Amendment Number Thirteen to Loan and
Security Agreement dated as of October 31, 2003 (the “Amendment”), among
Parent, the Borrowers and the Lender Group. The undersigned hereby (a)
represent and warrant to the Lender Group that the execution, delivery, and
performance of this Reaffirmation and Consent are within its powers, have been
duly authorized by all necessary action, and are not in contravention of any
law, rule, or regulation, or any order, judgment, decree, writ, injunction, or
award of any arbitrator, court, or governmental authority, or of the terms of
its charter or bylaws, or of any contract or undertaking to which it is a party
or by which any of its properties may be bound or affected; (b) consents to the
transactions contemplated by the Amendment and the execution and delivery
thereof; (c) acknowledges and reaffirms its obligations owing to the Lender
Group under the Guaranty and any other Loan Documents to which it is a party;
and (d) agrees that each of the Loan Documents to which it is a party is and
shall remain in full force and effect. Although the undersigned has been
informed of the matters set forth herein and has acknowledged and agreed to
same, it understands that the Lender Group has no obligations to inform it of
such matters in the future or to seek its acknowledgment or agreement to future
amendments, and nothing herein shall create such a duty. Delivery of an
executed counterpart of this Reaffirmation and Consent by
telefacsimile

 

 

shall be equally as effective as delivery of an original executed
counterpart of this Reaffirmation and Consent. Any party delivering an
executed counterpart of this Reaffirmation and Consent by telefacsimile also
shall deliver an original executed counterpart of this Reaffirmation and
Consent but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Reaffirmation
and Consent. This Reaffirmation and Consent shall be governed by the laws of
the State of California.

 

 

     IN WITNESS WHEREOF, the undersigned have each caused this Reaffirmation
and Consent to be executed as of the date of the Amendment.

HYPERCOM CORPORATION,

a Delaware corporation

By: /s/ John W. Smolak

Name: John W. Smolak

Title: Executive Vice President and

Chief Financial and Administrative Officer

HYPERCOM DO BRASIL INDUSTRIA E

COMERCIO LIMITADA (BRAZIL), an

organization organized under the laws of

Brazil

	 	 	 
	 	 	
By: Hypercom U.S.A., Inc., 
       its shareholder
	 	 	 
	 	 	
By: /s/ John W. Smolak
	 	 	
Name: John W. Smolak
	 	 	
Title: Executive Vice President
	 	 	 
	 	 	
By: Hypercom Latino America, Inc., 
       its shareholder
	 	 	 
	 	 	
By: /s/ John W. Smolak
	 	 	
Name: John W. Smolak
	 	 	
Title: Executive Vice PresidentExhibit 10.1

                                                                  EXECUTION COPY

================================================================================

                             CONTRIBUTION AGREEMENT

                           dated as of October 3, 2003

                                 by and between

                         CENTRAL ILLINOIS LIGHT COMPANY

                               d.b.a. AMERENCILCO

                                       and

                    AMERENENERGY RESOURCES GENERATING COMPANY

================================================================================

<PAGE>

<TABLE>
<CAPTION>

                                                TABLE OF CONTENTS

<S>     <C>                                                                                                     <C>
Article I DEFINITIONS.............................................................................................1
   1.1   Certain Definitions......................................................................................1
   1.2   Other Terms..............................................................................................5
   1.3   Other Definitional Provisions............................................................................5

ARTICLE II  CONTRIBUTION OF ASSETS................................................................................5
   2.1   Contribution of Assets...................................................................................5
   2.2   Retained Assets..........................................................................................7
   2.3   Assumption of Liabilities................................................................................7
   2.4   Retained Liabilities.....................................................................................8

Article III  THE CLOSING..........................................................................................9
   3.1   Closing Time and Location................................................................................9
   3.2   Documents to be Delivered by CILCO.......................................................................9
   3.3   Documents to be Delivered by AERG.......................................................................10
   3.4   Conditions to AERG's Obligations........................................................................10
   3.5   Conditions to CILCO's Obligations.......................................................................11

Article IV  REPRESENTATIONS AND WARRANTIES OF CILCO..............................................................11
   4.1   Organization and Qualification..........................................................................11
   4.2   Corporate Authorization.................................................................................11
   4.3   Consents and Approvals..................................................................................12
   4.4   Non-Contravention.......................................................................................12
   4.5   Binding Effect..........................................................................................12

Article V  REPRESENTATIONS AND WARRANTIES OF AERG................................................................12
   5.1   Organization and Qualification..........................................................................12
   5.2   Corporate Authorization.................................................................................12
   5.3   Consents and Approvals..................................................................................13
   5.4   Non-Contravention.......................................................................................13
   5.5   Binding Effect..........................................................................................13

Article VI   COVENANTS AND OTHER MATTERS.........................................................................13
   6.1   Best Efforts............................................................................................13
   6.2   Employee Matters........................................................................................13
   6.3   Further Assurances......................................................................................14
   6.4   Tax Matters.............................................................................................14
   6.5   Books and Records.......................................................................................14
   6.6   Nontransferable Permits.................................................................................15
   6.7   Nonassignable Contracts.................................................................................15
   6.8   Assets Subject to Mortgage Indenture....................................................................15

Article VII   INDEMNIFICATION....................................................................................15
   7.1   Indemnification by AERG.................................................................................15

</TABLE>
<PAGE>

<TABLE>
<S>     <C>                                                                                                    <C>
   7.2   Indemnification by CILCO................................................................................15
   7.3   Indemnification Procedures for Third-Party Claims.......................................................16
   7.4   Indemnification Procedures for Other Claims.............................................................17
   7.5   Mitigation..............................................................................................17
   7.6   Computation of Losses Subject to Indemnification........................................................17
   7.7   Obligations Absolute....................................................................................17
   7.8   Survival of Indemnities.................................................................................17
   7.9 Remedies Cumulative.......................................................................................17

Article VIII   TERMINATION.......................................................................................18
   8.1   Termination.............................................................................................18
   8.2   Effect of Termination...................................................................................18

Article IX   MISCELLANEOUS.......................................................................................18
   9.1   Notices.................................................................................................18
   9.2   Entire Agreement; Amendment.............................................................................19
   9.3   Parties in Interest; Assignment.........................................................................19
   9.4   Schedules...............................................................................................19
   9.5   Governing Law; Submission to Jurisdiction; Section of Forum.............................................19
   9.6   Counterparts............................................................................................20
   9.7   Severability............................................................................................20
   9.8   Headings................................................................................................20

</TABLE>

                                                                ii

<PAGE>

                             EXHIBITS AND SCHEDULES
                             ----------------------

Exhibit                            Description
-------                            -----------

A                                  Duck Creek Easement Agreement
B                                  Edwards Easement Agreement
C                                  Power Supply Agreement
D                                  Services and Facilities Agreement
E                                  Sterling Avenue Easement Agreement

Schedule                           Description
--------                           -----------

2.1(a)                             Owned Real Property
2.1(b)                             Leased Real Property
2.1(d)                             Specific Account Assets
2.1(e)                             Intellectual Property
2.1(f)                             Contracts
2.1(g)                             Permits
2.2(a)                             Retained Transmission and Distribution Assets
2.2(b)                             Retained Contracts
2.3(b)                             Assumed Environmental Liabilities
2.3(c)                             Assumed Claim Liabilities
2.3(d)                             Certain Assumed Liabilities
2.4(d)                             Retained Claim Liabilities
2.4(e)                             Retained Environmental Liabilities
4.3                                Consents
6.2                                Employees

                                      iii
<PAGE>

                             CONTRIBUTION AGREEMENT
                             ----------------------

     THIS CONTRIBUTION AGREEMENT dated as of October 3, 2003, is entered into by
and between  CENTRAL  ILLINOIS LIGHT  COMPANY,  an Illinois  corporation  d.b.a.
AmerenCILCO  ("CILCO"),  and AMERENENERGY  RESOURCES  GENERATING  COMPANY (f/k/a
Central Illinois Generation Inc.), an Illinois corporation ("AERG").

                              W I T N E S S E T H:
                              --------------------

     WHEREAS,  CILCO is a public utility  company as defined in Section 3-105 of
the Illinois Public Utilities Act (220 ILCS 5/3-105) and presently operates as a
vertically  integrated  electricity  generation,  transmission  and distribution
company and as a natural gas distribution company in the State of Illinois;

     WHEREAS,  pursuant to the  provisions of Section  16-111(g) of the Illinois
Public  Utilities  Act (220  ILCS  5/16-111(g))  CILCO  has been  authorized  to
contribute  its  electric   generation   facilities  and  assets  to  AERG,  its
wholly-owned subsidiary;

     WHEREAS, CILCO desires to contribute to AERG all of the assets, properties,
rights, interests and liabilities of its electric generation operations;

     WHEREAS,  AERG  desires  to receive  such  assets,  properties,  rights and
interests,  to assume the  related  liabilities,  and to conduct an  electricity
generation business therewith; and

     WHEREAS, the parties intend the transaction to qualify under Section 351(a)
of the Internal Revenue Code of 1986, as amended.

     NOW,  THEREFORE,  upon the terms and  subject to the  conditions  contained
herein, CILCO and AERG hereby agree as follows: Article I DEFINITIONS

     1.1  Certain  Definitions.  As used herein,  the following terms shall have
the meanings set forth or as referenced below.

     "Account" shall mean an account on CILCO's books and records  maintained in
accordance  with the Federal Energy  Regulatory  Commission's  Uniform System of
Accounts.

     "Agreement"  shall  mean this  Contribution  Agreement,  together  with all
Exhibits and Schedules hereto.

<PAGE>

     "Ancillary Documents" shall mean all agreements, certificates,  instruments
and other  documents  executed or delivered in accordance  with or in connection
with the  transactions  contemplated  by this  Agreement,  including the Edwards
Easement Agreement,  the Duck Creek Easement Agreement,  and the Sterling Avenue
Easement  Agreement,  but excluding the Power Supply  Agreement and Services and
Facilities Agreement.

     "Assumed Liabilities" shall have the meaning set forth in Section 2.3.

     "Books and Records" shall have the meaning set forth in Section 2.1.

     "Business Day" shall mean any day other than a Saturday, Sunday or a day on
which banks in Chicago, Illinois are authorized or obligated by Law or executive
order to close.

     "Claim"  shall  mean  any  claim,  action,  suit,  proceeding,  dispute  or
investigation made or brought by any Person, whether formal or informal,  before
any Governmental Authority or in arbitration, mediation or otherwise.

     "Closing"  shall mean the event at which CILCO  consummates the assignment,
transfer and delivery of the  Contributed  Assets to AERG,  and AERG assumes and
agrees to perform or discharge the Assumed Liabilities.

     "Closing Date" shall have the meaning set forth in Section 3.1.

     "Code" shall mean the Internal Revenue Code of 1986, as amended.

     "Consents" shall mean any consent, approval, authorization, waiver, permit,
grant,  franchise,  concession,  agreement,  license,  exemption  or  order  of,
registration,  certificate,  declaration  or filing with, or report or notice to
any Person, including without limitation any Governmental Authority.

     "Contracts" shall have the meaning set forth in Section 2.1.

     "Contributed Assets" shall have the meaning set forth in Section 2.1.

     "Duck  Creek  Easement  Agreement"  shall  mean  the  Duck  Creek  Easement
Agreement  to be  entered  into on the  Closing  Date  between  CILCO  and  AERG
substantially in the form of Exhibit A.

     "Duck Creek Facility" shall mean the electric  generation  facility located
at 17751 North CILCO Road, in the City of Canton,  County of Fulton and State of
Illinois.

     "Edwards Easement  Agreement" shall mean the Edwards Easement  Agreement to
be entered into on the Closing Date between CILCO and AERG  substantially in the
form of Exhibit B.

     "Edwards Facility" shall mean the electric  generation  facility located at
7800 South CILCO Lane, in the City of Bartonville, County of Peoria and State of
Illinois.

                                       2

<PAGE>

     "Employees" shall have the meaning set forth in Section 6.2.

     "Encumbrances"  shall  mean  any and all  encumbrances,  including  without
limitation all claims, liens, charges,  mortgages,  pledges, security interests,
options,  restrictions  (including,  in the  case of real  property,  easements,
rights of way, covenants,  restrictions,  lease,  licenses,  zoning and set back
requirements and other variances) or third party rights.

     "Energy  Control  Center" shall mean CILCO's energy control center facility
located in the City of Peoria, County of Peoria and State of Illinois, including
all  buildings,  structures,  and  tangible  personal  property  located at such
facility.

     "Environmental  Law" shall mean any Law with respect to the preservation of
the environment or the promotion of worker health and safety,  including any Law
relating to Hazardous  Substances,  drinking water, surface water,  groundwater,
wetlands, landfills, open dumps, storage tanks, underground storage tanks, solid
waste, waste water,  storm water run-off,  noises,  odors, air emissions,  waste
emissions or wells.  Without limiting the generality of the foregoing,  the term
encompasses  each of the  following  statutes  and the  regulations  promulgated
thereunder,  and any similar applicable state or local Law, each as amended: (a)
the Comprehensive  Environmental  Response,  Compensation,  and Liability Act of
1980;   (b)  the  Solid  Waste   Disposal  Act;  (c)  the  Hazardous   Materials
Transportation  Act;  (d) the Toxic  Substance  Control Act; (e) the Clean Water
Act;  (f) the Clean Air Act; (g) the Safe  Drinking  Water Act; (h) the National
Environmental   Policy  Act  of  1969;   (i)  the   Superfund   Amendments   and
Reauthorization  Act of 1986;  (j) Title  III of the  Superfund  Amendments  and
Reauthorization Act; (k) the Federal Insecticide,  Fungicide and Rodenticide Act
and (l)  the  provisions  of the  Occupational  Safety  and  Health  Act of 1970
relating to the  handling of and exposure to  Hazardous  Substances  and similar
substances.

     "ERISA" shall mean the Employee  Retirement Income Security Act of 1974, as
amended.

     "Facilities"  shall mean the premises that collectively  comprise the Owned
Real Property, the Leased Real Property, and the Sterling Avenue Facility.

                  "Generation Operations" shall mean, collectively, each and
every task, function and operation that is necessary to, or performed for the
purpose of supporting, either directly or indirectly, the generation of
electricity by CILCO at the Facilities, as such tasks, functions, and operations
are performed at the Facilities as of the date of this Agreement.

     "Governmental  Authority" shall mean the United States,  any state or other
political subdivision thereof and any entity exercising executive,  legislative,
judicial, regulatory or administrative functions of or pertaining to government,
including  without  limitation any  government  authority,  agency,  department,
board,  commission or  instrumentality  of the United  States,  any state of the
United States, or any political subdivision of any of the foregoing.

     "Hazardous  Substance"  shall  mean:  (i)  petroleum,  byproducts  and  any
petroleum  fractions;  (ii) materials  which contain any substance  defined as a
hazardous or toxic substance under any United States federal  statutes and their
state  counterparts,   as  well  as  such  statutes'  implementing   regulations
including,  but not limited to, the Hazardous Materials

                                       3

<PAGE>

Transportation   Act,  the   Resource   Conservation   and  Recovery   Act,  the
Comprehensive Environmental Response,  Compensation and Liability Act, the Clean
Water Act,  the Safe  Drinking  Water  Act,  the Atomic  Energy  Act,  the Toxic
Substances Control Act, the Federal Insecticide, Fungicide, and Rodenticide Act,
and the  Clean  Air Act;  and  (iii)  any  other  materials,  including  without
limitation  asbestos,  which a federal,  state or local  Governmental  Authority
requires be  remediated  pursuant to any Law relating to the  protection  of the
environment.

     "Indian Trails  Facility" shall mean the  cogeneration  facility located at
1301 South Front Street in Pekin, Illinois.

     "Intellectual Property" shall have the meaning set forth in Section 2.1.

     "Laws" shall mean any federal,  state,  foreign,  provincial  or local law,
constitutional provisions,  code, statute,  ordinance, rule, regulation,  order,
judgment or decree of any Governmental Authority.

     "Leased Real Property" shall have the meaning set forth in Section 2.1.

     "Liabilities" mean all Claims,  demands,  assessments,  judgments,  losses,
liabilities,   damages,  costs  and  expenses  (including,  without  limitation,
interest,  penalties,  attorneys'  fees to the  extent  permitted  by  law,  and
accounting fees and investigation costs).

     "Material  Adverse Effect" shall mean an effect that is materially  adverse
to the value of the Contributed  Assets or the Generation  Operations taken as a
whole or materially adverse to the business,  financial  condition or results of
operations or business prospects of the Generation Operations taken as a whole.

     "Owned Real Property" shall have the meaning set forth in Section 2.1.

     "Permitted Encumbrances" shall mean (a) all Encumbrances on the Contributed
Assets as of the date hereof as well as (b) all  Encumbrances on the Contributed
Assets  that shall have (i) become  effective  between  the date  hereof and the
Closing Date and (ii) arisen or been  incurred in good faith and in the ordinary
course of business consistent with past practices.

     "Permits" shall have the meaning set forth in Section 2.1.

     "Person" shall mean an individual, a corporation,  a partnership, a limited
liability  company,  an  association,  a trust or other entity or  organization,
including any Governmental Authority.

     "Personal Property" shall have the meaning set forth in Section 2.1.

     "Power  Supply  Agreement"  shall  mean the Power  Supply  Agreement  to be
entered  into on the Closing Date between  CILCO and AERG  substantially  in the
form of Exhibit C.

     "Retained Assets" shall have the meaning set forth in Section 2.2.

                                       4

<PAGE>

     "Retained Liabilities" shall have the meaning set forth in Section 2.4.

     "Retained  Transmission and Distribution Assets" shall have the meaning set
forth in Section 2.2.

     "Services and Facilities Agreement" shall mean the Services
and Facilities Agreement to be entered into on the Closing Date by and among
CILCO, AERG and the other parties thereto substantially in the form of Exhibit
D.

     "Sterling  Avenue  Easement  Agreement"  shall  mean  the  Sterling  Avenue
Easement Agreement to be entered into on the Closing Date between CILCO and AERG
substantially in the form of Exhibit E.

     "Sterling Avenue Facility" shall mean CILCO's electric  generating facility
located on Sterling Avenue in the City of Peoria, Illinois.

     "Transferred  Employee" shall have the meaning set forth in Section 6.2(a).

     1.2  Other Terms.  Other terms may be defined elsewhere in the text of this
Agreement and, unless otherwise  indicated,  shall have such meaning  throughout
this Agreement.

     1.3  Other Definitional Provisions.

     (a)  The words "hereof",  "herein",  and "hereunder",  and words of similar
import,  when used in this  Agreement,  shall refer to this Agreement as a whole
and not to any particular provision of this Agreement.

     (b)  The terms defined in the singular shall have a comparable meaning when
used in the plural, and vice versa.

     (c)  The terms "dollars" and "$" shall mean United States dollars.

     (d)  The  term  "including"  shall be  deemed  to mean  "including  without
limitation."

                                   Article II
                             CONTRIBUTION OF ASSETS

     2.1  Contribution of Assets. On the terms and subject to the conditions set
forth herein, CILCO shall transfer,  convey,  assign,  contribute and deliver to
AERG all  direct or  indirect  right,  title and  interest  in and to all of the
assets, properties and rights of every type and description, whether tangible or
intangible,  that are related primarily to the Generation Operations in exchange
for all of the  outstanding  stock  of AERG and  AERG's  assumption  of  certain
liabilities  pursuant to Section 2.3  hereof.  Such assets  shall be free of all
Encumbrances except Permitted Encumbrances,  and with such changes, deletions or
additions  thereto as may occur from the date hereof to the Closing  Date in the
ordinary course of business (the "Contributed Assets"), including the following:

                                       5

<PAGE>

     (a)  the real property  owned by CILCO and  identified on Schedule  2.1(a),
          including all buildings,  structures, and improvements thereon and all
          appurtenances relating thereto (the "Owned Real Property");

     (b)  the leases  under which CILCO  leases,  as lessee,  the real  property
          identified on Schedule 2.1(b), including all buildings, structures and
          improvements  thereon,  to the  extent  included  in such  lease  (the
          "Leased Real Property");

     (c)  all  tangible  personal  property,   including  all  fixtures,   plant
          materials and operating  supplies  recorded in Account 154,  machinery
          and equipment, fuel supplies (including fuel stock recorded in Account
          151),  spare parts,  vehicles,  rolling  stock,  office  furniture and
          equipment,      furnishings,      leasehold      improvements      and
          construction-in-process, which is located at the Facilities or used or
          held for use in  connection  with  the  Generation  Operations  at the
          Facilities (the "Personal Property");

     (d)  the assets listed on Schedule 2.1(d);

     (e)  the  following   intellectual  property  (and  the  rights  associated
therewith): (i) the patents, copyrighted works and registrations or applications
for  registration  of  copyrights  in  any  jurisdiction,   trademarks  (whether
registered or unregistered),  service marks, brand names,  certification  marks,
trade names and other indications of origin  identified on Schedule 2.1(e),  the
goodwill  associated with the foregoing and  registrations  and  applications to
register the foregoing, including any extension,  modification or renewal of any
of such  registrations  or  applications;  (ii)  non-public  information,  trade
secrets and  confidential  information  to the extent  related  primarily to the
Generation  Operations  and  rights  in any  jurisdiction  to  limit  the use or
disclosure  thereof  by any  Person;  and (iii)  any  claims or causes of action
arising out of or related to any infringement or  misappropriation of any of the
foregoing (the "Intellectual Property");

     (f)  to the extent assignable, all agreements, licenses, leases, contracts,
subcontracts,   purchase  orders,   sales  orders,   notes,  bonds,   mortgages,
indentures, guarantees, refunds, commitments, undertakings and any other form of
agreement  related  primarily to the Generation  Operations  (the  "Contracts"),
including the Contracts identified on Schedule 2.1(f);

     (g)  to the extent assignable, all licenses, permits, approvals, variances,
waivers,  registrations,  certificates  or consents to the extent  transferable,
issued or required by any  Governmental  Authorities and used in or necessary to
the Generation  Operations (the "Permits"),  including the Permits identified on
Schedule 2.1(g);

     (h)  all Claims  against Third Persons in  connection  with the  Generation
Operations  or any of the  Contributed  Assets,  whether  arising  out of events
before,  on, or after the Closing Date, except with respect to Claims related to
Retained Liabilities; and

     (i)  all  books  and  records  that  relate  primarily  to  the  Generation
Operations,  including all files, ledgers,  lists, models, plans, designs, data,
data bases,  invoices,  forms,  account  registers,  correspondence,  production
records, technical, accounting, manufacturing and procedural manuals, employment
records, studies, reports or summaries, and any other books and records relating
primarily  to the  operation  or use of any of the  Contributed  Assets  and any

                                       6

<PAGE>

confidential  information  that has been  reduced to  writing or other  tangible
medium (the "Books and Records").

     2.2  Retained Assets. Notwithstanding anything to the contrary herein, from
and after the Closing,  CILCO shall retain all of its direct and indirect right,
title  and  interest  in  and  to  all  of  the  following   assets  and  rights
(collectively, the "Retained Assets"):

     (a)  the   overhead   and   underground   communications   and   electrical
transmission and distribution  lines (whether  consisting of one circuit or more
than one circuit) and other overhead and underground transmission, distribution,
communication  and related  facilities and structures,  including  towers,  pole
structures,  poles, wires,  cables,  conduits,  pipes (including the natural gas
pipelines  and  connections  located at the Sterling  Avenue  Facility),  ducts,
pumps, controls,  switches, relays, circuit breakers,  monitoring devices, fiber
optic  cable  and  facilities,  counterpoise,  anchors,  ground  grid,  cathodic
protection equipment, manholes, transformers, pedestals, and necessary fixtures,
conductors and appurtenances  attached thereto (including the metering and relay
buildings  located  at  the  substation  of  the  Edwards  Facility  and  at the
switchyard of the Duck Creek Facility),  which are located at the Facilities and
identified on Schedule  2.2(a),  (the "Retained  Transmission  and  Distribution
Assets"),  and easements with respect to the Edwards Facility and the Duck Creek
Facility;

     (b)  the contracts,  leases, licenses, purchase orders and other agreements
identified on Schedule 2.2(b);

     (c)  all  Books  and  Records  that  CILCO is  required  by law to  retain,
provided that CILCO shall  furnish AERG with  complete  copies of such Books and
Records;

     (d)  all tax returns of CILCO;

     (e)  the Energy Control Center;

     (f)  all assets and rights used or held for use  exclusively  in connection
with the operations at the Indian Trails  Facility,  including all such tangible
personal property,  intellectual property,  contracts,  permits,  claims against
Third Persons, and book and records;

     (g)  the real  property at which the Sterling  Avenue  Facility is located;
and

     (h)  all other rights and assets not  identified as a Contributed  Asset in
Section 2.1.

     2.3  Assumption of Liabilities.  On the terms and subject to the conditions
set forth in this  Agreement,  at the  Closing and  effective  as of the Closing
Date,  AERG shall assume and agree to pay, honor,  defend against,  discharge or
perform when due all debts, liabilities and obligations, other than the Retained
Liabilities,  including  unknown and contingent  liabilities,  that arise out of
each and every task,  function and operation  that is necessary to, or performed
for the purpose of supporting,  either directly or indirectly, the generation of
electricity by CILCO at the Facilities or the Contributed  Assets, to the extent
arising  from events or  conditions  existing  after the Closing  (the  "Assumed
Liabilities"), including, but not limited to, the following:

                                       7

<PAGE>

     (a)  all liabilities and obligations under the Contracts and Permits,  when
and to the  extent  such  Contracts  or  Permits  shall  have been  assigned  or
transferred to AERG;

     (b)  all liabilities and obligations  (including all unknown and contingent
liabilities  and  obligations)  under the  Environmental  Laws arising after the
Closing out of each and every task, function and operation that is necessary to,
or performed for the purpose of supporting,  either directly or indirectly,  the
Contributed  Assets or the Generation  Operations,  (all of the  foregoing,  the
"Assumed Environmental Liabilities");

     (c)  all  liabilities  and  obligations  arising out of the  employment  or
termination of any  Transferred  Employee and all  liabilities  and  obligations
arising out of the Claims identified on Schedule 2.3(c); and

     (d)  the  liabilities  and  obligations  listed  on  Schedule  2.3(d).

     2.4  Retained Liabilities. Notwithstanding anything to the contrary herein,
CILCO shall  retain all, and AERG shall not assume or be  responsible  or liable
for any, of the following  liabilities and obligations,  whether incurred before
or after the Closing (the "Retained Liabilities"):

     (a)  all  liabilities  and  obligations  arising  out of or  related to the
Retained Assets;

     (b)  all liabilities  and  obligations  under the Contracts and Permits not
assigned or transferred to AERG;

     (c)  all  liabilities  and  obligations  arising out of or relating to this
Agreement or the  transactions  contemplated  hereby for which CILCO has assumed
responsibility pursuant to this Agreement or any Ancillary Document;

     (d)  all  liabilities  and  obligations  arising  out of or  related to the
Claims identified on Schedule 2.4(d);

     (e)  all liabilities and obligations  under the  Environmental  Laws (other
than the  Assumed  Environmental  Liabilities),  and all other  liabilities  and
obligations relating to Hazardous  Substance,  the Contributed Assets and/or the
Generation  Operations to the extent arising from events or conditions  existing
prior to the Closing,  including,  but not limited to, the known liabilities set
forth on Schedule 2.4(e);

     (f)  all  liabilities  and  obligations in connection  with any Claims by a
Person  (other  than  AERG)  based  in  whole  or in  part  on  the  transaction
contemplated by this Agreement;

     (g)  all  liabilities  and  obligations   arising  out  of  or  related  to
operations at the Indian Trails Facility; and

     (h)  any and all other  liabilities not identified as an Assumed  Liability
in Section 2.3.

                                       8

<PAGE>

                                  Article III
                                  THE CLOSING

     3.1  Closing Time and Location. The Closing shall take place at the offices
of McGuireWoods LLP, 77 West Wacker Drive, Suite 4400,  Chicago,  Illinois 60601
at 8:00 a.m.  (local time), on October 3, 2003,  subject to the  satisfaction or
waiver (by the party  entitled to waive the  condition) of all conditions to the
Closing set forth below,  or at such other time and place as the parties  hereto
may mutually agree.  The date on which the Closing occurs is called the "Closing
Date".  The  consummation  of the transfer of the Contributed  Assets  hereunder
shall for all  purposes  under this  Agreement  and the  Ancillary  Documents be
deemed effective as of 12:00 a.m. Central Standard Time on the Closing Date.

     3.2  Documents to be Delivered by CILCO. At the Closing,  unless  otherwise
agreed to by the parties, CILCO shall deliver to AERG:

     (a)  a copy of (i) the  resolutions  of the  Board  of  Directors  of CILCO
authorizing execution,  delivery and performance of this Agreement and all other
transactions  and  agreements  contemplated  hereby,  (ii)  CILCO's  Articles of
Incorporation,  and (iii)  CILCO's  Bylaws,  all  certified by the  Secretary or
Assistant  Secretary of CILCO to be true, correct,  complete,  unmodified and in
full force and effect as of the Closing Date;

     (b)  instruments  transferring,  assigning or  subleasing  the  Contributed
Assets  to  AERG,  free and  clear  of all  Encumbrances  except  for  Permitted
Encumbrances;

     (c)  copies of all Consents to the transfer, assignment or sublease to AERG
of each Contributed Asset that requires such Consent;

     (d)  Special  Warranty Deeds (the "Deeds") in recordable  form, and in form
and substance  satisfactory to AERG,  conveying the Owned Real Property to AERG,
free and clear of all Encumbrances except for Permitted Encumbrances;

     (e)  releases,  including without limitation  termination  statements under
the  Uniform  Commercial  Code (the  "UCC") of any  financing  statements  filed
against any Contributed Assets, evidencing discharge, removal and termination of
all  Encumbrances  to which the  Contributed  Assets  are  subject  (other  than
Permitted  Encumbrances),  which  releases shall be effective at or prior to the
Closing;

     (f)  a Non-Foreign Person Affidavit as required by Section 1445 of the Code
(a "FIRPTA Affidavit");

     (g)  the certificates required by Sections 3.4(a) and (b) below;

     (h)  such other deeds, endorsements, assignments, affidavits and other good
and sufficient  instruments  of assignment,  conveyance and transfer in form and
substance satisfactory to AERG as may be necessary to effect the Closing; and

     (i)  a duly executed copy of each of the Ancillary Documents.

                                       9

<PAGE>

     3.3  Documents to be Delivered by AERG.  At the Closing,  unless  otherwise
agreed to by the parties, AERG shall deliver to CILCO:

     (a)  a copy  of (i) the  resolutions  of the  Board  of  Directors  of AERG
authorizing execution,  delivery and performance of this Agreement and all other
transactions  and  agreements  contemplated  hereby,  (ii)  AERG's  Articles  of
Incorporation,  and (iii) AERG's  Bylaws,  all  certified by the Secretary or an
Assistant  Secretary of AERG to be true,  correct,  complete,  unmodified and in
full force and effect as of the Closing Date;

     (b)  the certificates required by Sections 3.5(a) and (b) below;

     (c)  such instruments of assumption,  in form and substance satisfactory to
CILCO,  as  may  be  necessary  to  effect  AERG's  assumption  of  the  Assumed
Liabilities;

     (d)  such  other   instruments   and  documents,   in  form  and  substance
satisfactory to CILCO, as may be necessary to effect the Closing; and

     (e)  a duly executed copy of each of the other Ancillary Documents.

     3.4  Conditions to AERG's Obligations. The obligation of AERG to consummate
the transactions  provided for by this Agreement is subject to the satisfaction,
on or prior to the Closing  Date, of each of the  following  conditions,  any of
which may be waived by AERG, except for the conditions (as to Permits) set forth
in subsection (c) of this Section 3.4.

     (a)  Representations and Warranties.  The representations and warranties of
CILCO contained herein shall have been true and correct in all material respects
when made and  shall be true and  correct  in all  material  respects  as of the
Closing Date (except that  representations  and warranties that are made as of a
specific date must be true in all material  respects only as of such date),  and
AERG shall have received a certificate to such effect dated the Closing Date and
executed by a duly authorized officer of CILCO.

     (b)  Covenants. The covenants and agreements of CILCO to be performed on or
prior to the Closing  shall have been duly  performed in all material  respects,
and AERG shall have received a certificate to such effect dated the Closing Date
and executed by a duly authorized officer of CILCO.

     (c)  Consents.  All  Permits  and  Consents  shall have been  obtained  and
satisfied.

     (d)  No  Proceeding   or   Litigation.   No   litigation,   action,   suit,
investigation,  Claim or proceeding  challenging  the legality of, or seeking to
restrain,  prohibit or materially modify, the transactions  provided for in this
Agreement  shall  have been made or  instituted  by any  Person or  Governmental
Authority and not settled or otherwise finally terminated.

     (e)  Closing   Deliveries.   CILCO  shall  have   delivered   to  AERG  the
certificates  and  other  documents   required  by  Section  3.2.

                                       10

<PAGE>

     3.5  Conditions  to  CILCO's  Obligations.  The  obligations  of  CILCO  to
consummate  the  transactions  provided for by this Agreement are subject to the
satisfaction,  on or  prior  to the  Closing  Date,  of  each  of the  following
conditions,  any of which may be waived by CILCO,  except for the conditions (as
to Permits) set forth in subsection (c) of this Section 3.5.

     (a)  Representations and Warranties.  The representations and warranties of
AERG contained herein shall have been true and correct in all material  respects
when made and  shall be true and  correct  in all  material  respects  as of the
Closing Date (except that  representations  and warranties that are made as of a
specific date need be true in all material  respects only as of such date),  and
AERG shall have received a certificate to such effect dated the Closing Date and
executed by a duly authorized officer of AERG.

     (b)  Covenants.  The covenants and agreements of AERG to be performed on or
prior to the Closing  shall have been duly  performed in all material  respects,
and AERG shall have received a certificate to such effect dated the Closing Date
and executed by a duly authorized officer of AERG.

     (c)  Consents.  All Permits and Consents  that are  necessary to consummate
the transactions contemplated hereunder shall have been obtained and satisfied.

     (d)  No  Proceeding   or   Litigation.   No   litigation,   action,   suit,
investigation,  Claim or proceeding  challenging  the legality of, or seeking to
restrain,  prohibit or materially modify, the transactions  provided for in this
Agreement  shall  have been made or  instituted  by any  Person or  Governmental
Authority and not settled or otherwise finally terminated.

     (e)  Closing  Deliveries.  AERG shall have delivered the  certificates  and
other documents  required by Section 3.3.

                                   Article IV
                     REPRESENTATIONS AND WARRANTIES OF CILCO

                CILCO represents and warrants to AERG as follows:

     4.1  Organization and Qualification. CILCO is a corporation duly organized,
validly  existing and in good  standing  under the laws of the state of Illinois
and has all  requisite  corporate  power and  authority  to own and  operate the
Contributed  Assets  and to  carry on the  Generation  Operations  as  currently
conducted.  CILCO is duly  qualified to do business and is in good standing as a
foreign corporation in each jurisdiction where the ownership or operation of the
Contributed  Assets or the conduct of the  Generation  Operations  requires such
qualification.

     4.2  Corporate Authorization.  CILCO has full corporate power and authority
to execute and deliver this Agreement and each of the Ancillary  Documents,  and
to perform its obligations hereunder and thereunder. The execution, delivery and
performance by CILCO of this Agreement and each of the Ancillary  Documents have
been duly and validly  authorized and

                                       11

<PAGE>

no additional corporate  authorization or consent is required in connection with
the execution,  delivery and  performance by CILCO of this Agreement and each of
the Ancillary Documents.

     4.3  Consents and Approvals.  Except as specifically  set forth in Schedule
4.3, no Consent is  required  to be  obtained  by CILCO  from,  and no notice or
filing is required to be given by CILCO to, any Governmental  Authority or other
Person in connection  with the execution,  delivery and  performance by CILCO of
this Agreement and each of the Ancillary Documents.

     4.4  Non-Contravention. The execution, delivery and performance by CILCO of
this Agreement and each of the Ancillary Documents,  and the consummation of the
transactions  contemplated hereby and thereby, does not and will not (i) violate
any provision of the Articles of Incorporation or Bylaws of CILCO,  (ii) subject
to obtaining the Consents  identified on Schedule 4.3,  conflict with, or result
in the breach of, or constitute a default under,  or result in the  termination,
cancellation,  modification or acceleration  (whether after the filing of notice
or the lapse of time or both) of any right or obligation of CILCO under, or to a
loss of any benefit to which CILCO is entitled under,  any Contract or result in
the creation of any  Encumbrance  upon any of the Contributed  Assets;  or (iii)
violate, or result in a breach of or constitute a default under any Law to which
CILCO is subject.

     4.5  Binding Effect. This Agreement constitutes,  and each of the Ancillary
Documents when executed and delivered by the parties thereto will constitute,  a
valid and legally binding obligation of CILCO enforceable in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors,  rights and to
general equity principles.

                                   Article V
                     REPRESENTATIONS AND WARRANTIES OF AERG

                AERG represents and warrants to CILCO as follows:

     5.1  Organization and Qualification.  AERG is a corporation duly organized,
validly  existing and in good  standing  under the laws of the state of Illinois
and has all  requisite  corporate  power and  authority  to own and  operate the
Contributed  Assets  and to  carry on the  Generation  Operations  as  currently
conducted.  AERG is duly  qualified to do business and is in good  standing as a
foreign corporation in each jurisdiction where the ownership or operation of the
Contributed  Assets or the conduct of the  Generation  Operations  requires such
qualification.

     5.2  Corporate  Authorization.  AERG has full corporate power and authority
to execute and deliver this Agreement and each of the Ancillary  Documents,  and
to perform its obligations hereunder and thereunder. The execution, delivery and
performance by AERG of this  Agreement and each of the Ancillary  Documents have
been duly and validly  authorized and no additional  corporate  authorization or
consent is required in connection  with the execution,  delivery and performance
by AERG of this Agreement and each of the Ancillary Documents.

                                       12

<PAGE>

     5.3  Consents and Approvals.  No Consent is required to be obtained by AERG
from, and no notice or filing is required to be given by AERG to or made by AERG
with,  any  Governmental  Authority  or  other  Person  in  connection  with the
execution,  delivery and  performance  by AERG of this Agreement and each of the
Ancillary Documents.

     5.4  Non-Contravention.  The execution, delivery and performance by AERG of
this Agreement and each of the Ancillary Documents,  and the consummation of the
transactions  contemplated hereby and thereby, does not and will not (i) violate
any  provision of the  certificate  of  incorporation  or bylaws of AERG or (ii)
violate, or result in a breach of or constitute a default under any Law to which
AERG is subject.

     5.5  Binding Effect. This Agreement constitutes,  and each of the Ancillary
Documents when executed and delivered by the parties thereto will constitute,  a
valid and legally binding  obligation of AERG enforceable in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors,  rights and to
general equity principles.

                                   Article VI
                           COVENANTS AND OTHER MATTERS

     6.1  Best Efforts.  CILCO and AERG will cooperate and use their  respective
reasonable best efforts to fulfill the conditions precedent to the other party's
obligations  hereunder,  including  but not limited to,  securing as promptly as
practicable  all Permits and all Consents  required for the  consummation of the
transactions  contemplated  by this Agreement and the Ancillary  Documents,  and
agree to any reasonable requests in connection therewith.

     6.2  Employee Matters.

     (a)  Employment  and Benefits.  On and after the Closing  Date,  AERG shall
offer to continue the  employment of all Persons who are employed by CILCO as of
the Closing Date and are either (i)  identified on Schedule 6.2 or (ii) hired by
CILCO in the  ordinary  course of  business  between the date  Schedule  6.2 was
prepared  and the  Closing  Date  for  employment  primarily  in the  Generation
Operations (the "Employees").  Each offer of employment to an Employee shall, at
a minimum,  be at the same terms and  conditions  and  enjoyed by such  Employee
immediately  prior to the Closing  Date.  Each Employee  hired by AERG (each,  a
"Transferred  Employee")  will be provided with benefits under employee  benefit
plans,  programs and  arrangements  which are the same as those  offered to such
Employee by CILCO prior to the Closing Date.

     (b)  Labor  Unions.  AERG shall,  at the  Closing  Date and  thereafter  in
accordance  with the  requirements of applicable  federal labor laws,  recognize
Local No. 8 as the exclusive  representative of those  Transferred  Employees at
the  Facilities who are  represented  by the National  Conference of Firemen and
Oilers  (NCF&O) for  purposes of  collective  bargaining.  AERG shall assume the
collective bargaining agreement that is in effect on the Closing Date.

                                       13

<PAGE>

     (c)  No Third Party  Beneficiaries.  Nothing  contained  in this  Agreement
shall (i) create any rights in any third party, including without limitation any
right to employment or right to any  particular  benefit or (ii) be construed as
prohibiting or restricting in any way the right of AERG,  CILCO or any successor
or other entity to modify, amend or terminate any employee benefit plan, program
or  arrangement,  or any other term or  condition  of  employment  of any of its
employees, in whole or in part at any time after the Closing Date.

     6.3  Further Assurances.  At any time after the Closing Date, CILCO, on the
one hand, and AERG, on the other hand, shall promptly  execute,  acknowledge and
deliver any other  assurances  or  documents  reasonably  requested by the other
party and necessary for it to satisfy its  respective  obligations  hereunder or
for CILCO or AERG to obtain the benefits contemplated hereby.

     6.4  Tax Matters.

     (a)  Asset Transfer  Taxes.  In the event any tax on the transfer of assets
are assessed in connection with the transactions contemplated by this Agreement,
the payment of such taxes shall be the sole responsibility of CILCO.

     (b)  Property Taxes.  Personal and real property taxes for any period after
the  Closing  Date on  property  of AERG  (including,  but not  limited  to, the
prorated  portion of personal and real property taxes on such property which are
based on the value of such  property)  shall be the liability of AERG. All other
personal and real property  taxes for any period prior to the Closing Date shall
be the liability of CILCO.

     (c)  Record  Retention.  The  parties  agree to retain all books,  records,
returns,  schedules,  documents and all material  papers or items of information
relating  to such taxes for periods  prior to the Closing  Date for the later of
(i)  seven  (7)  years or (ii) the full  period  of the  applicable  statute  of
limitations, including any extensions thereof.

     6.5  Books and Records.

     (a)  Notwithstanding  anything  to  the  contrary  contained  herein,  AERG
acknowledges  and agrees that the Books and Records  included in the Contributed
Assets shall be delivered to AERG by CILCO within 90 days  following the Closing
Date and that  CILCO  shall have the right to redact  such Books and  Records so
that they do not reflect or include any  information  regarding  any business or
assets of CILCO other than the Generation Operations and the Contributed Assets.

     (b)  AERG will  retain all Books and Records  included  in the  Contributed
Assets  and  make the same  reasonably  available  after  the  Closing  Date for
inspection and copying by CILCO, at CILCO's expense,  during the normal business
hours  of  AERG,  upon  reasonable   request  and  upon  reasonable  notice.  In
furtherance  and not in  limitation  of the  foregoing and subject to any longer
periods  required  under Section 6.4 hereof,  no such Books and Records shall be
destroyed  by AERG for a period of seven years after the Closing  Date (or until
all pending  Claims  hereunder are resolved,  if any such Claim is pending as of
the end of such  seven-year  period) without first advising CILCO in writing and
giving CILCO a reasonable opportunity to obtain possession thereof.

                                       14

<PAGE>

     (c)  CILCO will retain all books and records and other documents pertaining
in any way to the  Generation  Operations  (to the  extent not  included  in the
Contributed  Assets)  in  existence  on the  Closing  Date  and to make the same
reasonably  available after the Closing Date for inspection and copying by AERG,
at AERG's expense,  during the normal  business hours of CILCO,  upon reasonable
request and upon reasonable  notice. In furtherance and not in limitation of the
foregoing and subject to any longer  periods  required under Section 6.4 hereof,
no such books,  records or documents shall be destroyed by CILCO for a period of
seven years after the Closing Date (or until all pending  Claims  hereunder  are
resolved,  if any such Claim is pending as of the end of such seven-year period)
without first advising AERG in writing and giving AERG a reasonable  opportunity
to obtain possession thereof.

     6.6  Nontransferable  Permits.  Notwithstanding  the foregoing and anything
else to the contrary herein,  AERG  acknowledges and agrees (i) that all Permits
that are not  transferable  will be retained by CILCO from and after the Closing
and (ii) that AERG shall be responsible for obtaining any such  non-transferable
Permit  necessary  to engage  in the  Generation  Operations  from and after the
Closing.

     6.7  Nonassignable  Contracts.  Notwithstanding  the foregoing and anything
else to the contrary herein, unless the parties mutually agree otherwise, in the
event  CILCO is unable to obtain the consent  necessary  to assign or transfer a
Contract to AERG without adversely  affecting AERG's rights or obligations under
such Contract, such Contract will be retained by CILCO.

     6.8  Assets  Subject  to  Mortgage  Indenture.  For so long as,  and to the
extent that, the Contributed  Assets are subject to a lien or other restrictions
pursuant to that certain  Indenture of Mortgage and Deed of Trust  between CILCO
and Bankers Trust Company (the "Mortgage Indenture"), (a) AERG shall not use any
such Contributed  Assets in a manner  inconsistent  with the requirements of the
Mortgage  Indenture;  and (b) CILCO  shall  comply  with all of its  obligations
under,  and shall not breach or permit to exist a default  under,  the  Mortgage
Indenture.

                                  Article VII
                                 INDEMNIFICATION

     7.1  Indemnification  by AERG.  From and  after  the  Closing,  AERG  shall
indemnify,  defend  and  hold  harmless  CILCO  and  its  respective  directors,
officers,  representatives,   shareholders,  partners,  attorneys,  accountants,
employees  (other  than  Employees)  and  agents,  and their  respective  heirs,
successors  and  assigns,  (collectively,  all  of  the  foregoing,  the  "CILCO
Indemnified  Parties"),  from and  against any and all  Liabilities  that may be
incurred by the CILCO Indemnified  Parties, or any of them, resulting or arising
from,  related to or incurred  in  connection  with:  (a) the failure of AERG to
assume, pay, perform and discharge any of the Assumed  Liabilities,  and (b) any
breach of any  representation,  warranty,  covenant,  obligation or agreement of
AERG contained herein.

     7.2  Indemnification  by CILCO.  From and after the  Closing,  CILCO  shall
indemnify, defend and hold harmless AERG and its respective directors, officers,

                                       15

<PAGE>
representatives,  shareholders,  partners, attorneys, accountants, employees and
agents, and their respective heirs, successors and assigns,  (collectively,  all
of the foregoing,  the "AERG  Indemnified  Parties" and, together with the CILCO
Indemnified  Parties,  the  "Indemnified  Parties") from and against any and all
Liabilities  that may be incurred  by the AERG  Indemnified  Parties,  or any of
them,  resulting or arising from, related to or incurred in connection with: (a)
the failure of CILCO to assume,  pay,  perform and discharge any of the Retained
Liabilities;  and (b) any  breach  of any  representation,  warranty,  covenant,
obligation  or  agreement  of  CILCO  contained  herein.   1.2   Indemnification
Procedures  for  Third-Party  Claims.  With respect to third-party  claims,  all
claims for  indemnification by any Indemnified Party hereunder shall be asserted
and  resolved  as set forth in this  Section

     7.3. In the event that any written claim or demand for which AERG or CILCO,
as the case may be (an "Indemnifying Party"), would be liable to any Indemnified
Party  hereunder  is  asserted  against  or  sought  to be  collected  from  any
Indemnified Party by a third party,  such Indemnified Party shall promptly,  but
in no event  more than  thirty  (30) days  following  such  Indemnified  Party's
receipt of such claim or demand,  notify the Indemnifying Party of such claim or
demand and the  amount or the  estimated  amount  thereof,  to the  extent  such
estimate is then feasible  (which  estimate shall not be conclusive of the final
amount of such claim or demand) (the "Claim  Notice").  The  Indemnifying  Party
shall have sixty (60) days from the  receipt of the Claim  Notice  (the  "Notice
Period") to notify the  Indemnified  Party (a) whether  the  Indemnifying  Party
disputes  the  liability  of the  Indemnifying  Party to the  Indemnified  Party
hereunder  with  respect to such  claim or demand and (b)  whether it desires to
defend  the  Indemnified  Party  against  such  claim or  demand.  All costs and
expenses  incurred by the  Indemnifying  Party in defending such claim or demand
shall be a liability of, and shall be paid by, the Indemnifying Party. Except as
hereinafter  provided,  in the event that the  Indemnifying  Party  notifies the
Indemnified  Party  within  the  Notice  Period  that it  desires  to defend the
Indemnified  Party against such claim or demand,  the  Indemnifying  Party shall
have the right to defend the  Indemnified  Party by appropriate  proceedings and
shall have the sole power to direct and control such defense. If any Indemnified
Party desires to participate in any such defense,  it may do so at its sole cost
and  expense.  The  Indemnified  Party shall not settle any such claim or demand
without the consent of the Indemnifying Party. The Indemnifying Party shall not,
without the prior written consent of the Indemnified Party,  settle,  compromise
or offer to settle or compromise any such claim or demand on a basis which would
result in the  imposition of a consent  order,  injunction or decree which would
restrict  the  future  activity  or  conduct of the  Indemnified  Party.  If the
Indemnifying Party elects not to defend the Indemnified Party against such claim
or demand, whether by not giving the Indemnified Party timely notice as provided
above or otherwise,  then the amount of any such claim or demand or, if the same
be contested by the  Indemnified  Party,  then that portion  thereof as to which
such defense is unsuccessful  (and the reasonable costs and expenses  pertaining
to such defense), shall be the liability of the Indemnifying Party hereunder. To
the extent the  Indemnifying  Party shall direct,  control or participate in the
defense or settlement of any third-party claim or demand,  the Indemnified Party
will give the Indemnifying Party and its counsel access,  during normal business
hours, to the relevant  business records and other  documents,  and shall permit
them to consult with the employees  and counsel of the  Indemnified  Party.  The
Indemnified  Party shall use its best efforts in the defense of all such claims.

                                       16

<PAGE>

     7.4  Indemnification  Procedures  for Other  Claims.  In the event that any
Indemnified  Party  has a  claim  against  an  Indemnifying  Party  under  or in
connection  with this Agreement that does not involve a third-party  claim,  the
Indemnified Party must notify the Indemnifying Party of such claim within thirty
(30) days following the date on which the Indemnified Party becomes aware of any
such claim; provided, however, that failure to give such notice shall not affect
the Indemnified  Party's right to  indemnification  or the Indemnifying  Party's
obligation  to  indemnify  under  this  Article  VII,  except to the  extent the
Indemnifying Party is actually prejudiced thereby.

     7.5  Mitigation.  Each Indemnified Party shall take all reasonable steps to
mitigate its respective  Liabilities  upon and after becoming aware of any event
that could reasonably be expected to give rise to any Liabilities for which such
Indemnified Party may be entitled to indemnification hereunder.

     7.6  Computation  of Losses Subject to  Indemnification.  The amount of any
Liability for which indemnification is provided under this Article VII shall (i)
be computed net of any insurance proceeds or other third-party recovery received
by the  Indemnified  Party  in  connection  with  such  Liability  (and any such
proceeds or  recovery  received by an  Indemnified  Party after  receipt by such
Indemnified  Party  of  an  indemnification  payment  in  connection  with  such
Liability  pursuant  to this  Article  VII  shall be  promptly  remitted  to the
Indemnifying  Party,  to the extent of such  indemnification  payment)  and (ii)
exclude consequential damages, lost profits and exemplary or punitive damages.

     7.7  Obligations  Absolute.   The  foregoing  contractual   obligations  of
indemnification set forth in this Article VII shall:

     (a)  also  apply to any and all third  party  claims  that  allege  that an
Indemnified  Party  is  independently,  directly,  vicariously  or  jointly  and
severally liable to such third party; and

     (b)  to  the  extent  permitted  by  applicable  law,  apply  even  if  the
Indemnified Party is partially  negligent or otherwise  partially culpable or at
fault,  whether  or not such  liability  arises  under  any  doctrine  of strict
liability.

     7.8  Survival of Indemnities.  The obligations of CILCO and AERG under this
Article  VII  shall  survive  the sale or other  transfer  by any of them of any
assets or businesses or the assignment by any of them of any  Liabilities,  with
respect to any indemnifiable  liability of any Indemnified Party related to such
assets, businesses or Liabilities.

     7.9  Remedies Exclusive. The remedies provided in this Article VII shall be
the  exclusive  remedies of the parties  hereto with  respect to the matters for
which the parties may be entitled to  indemnification  under this  Article  VII;
provided, however, that this Article VII shall not be deemed to apply to matters
covered by remedies  specifically  provided under any of the Ancillary Documents
or under the Power Supply Agreement or Services and Facilities Agreement,  which
remedies shall be the exclusive remedies with respect to such matters.

                                       17

<PAGE>

                                  Article VIII
                                   TERMINATION

     8.1  Termination.  This Agreement and the transactions  contemplated hereby
may be  terminated  at any time prior to the  Closing  (any such date upon which
this  Agreement is terminated  pursuant to this Section 8.1 shall be referred to
herein as the "Termination Date"):

     (a)  by mutual written consent of CILCO and AERG;

     (b)  by CILCO or AERG,  if there shall be in effect any law that  prohibits
the  consummation of the Closing or if consummation of the Closing would violate
any  non-appealable  final  order,  decree  or  judgment  of any  court or other
Governmental Authority having competent jurisdiction;

     (c)  by AERG, if any condition precedent to AERG's obligation to effect the
Closing  as set forth in Section  3.4 is not  satisfied,  or shall  have  become
incapable of fulfillment, and such condition is not waived, if waivable, by AERG
on or prior to the Termination Date; and

     (d)  by CILCO, if any condition  precedent to CILCO's  obligation to effect
the Closing as set forth in Section 3.5 is not  satisfied,  or shall have become
incapable of  fulfillment,  and such  condition is not waived,  if waivable,  by
CILCO on or prior to the Termination Date.

     8.2  Effect of  Termination.  If this  Agreement is terminated  pursuant to
Section 8.1,  written  notice thereof shall be given to the other party and this
Agreement shall thereafter  become void and have no further force and effect and
all further  obligations of CILCO and AERG under this Agreement  shall terminate
without further liability of CILCO or AERG.

                                   Article IX
                                 MISCELLANEOUS

     9.1  Notices.  All notices and other  communications  hereunder shall be in
writing  and shall be deemed to have been given if (i)  delivered  in person (to
the individual  whose attention is specified  below) or via facsimile  (followed
immediately  with a copy in the manner  specified in clause (ii)  hereof),  (ii)
sent by  prepaid  first-class  registered  or  certified  mail,  return  receipt
requested, or (iii) sent by recognized overnight courier service, as follows:

                                       18

<PAGE>

                  to CILCO:         Central Illinois Light Company
                                    300 Liberty Street
                                    Peoria, Illinois 61602-1404
                                    Attention: General Counsel

                  to AERG:          AmerenEnergy Resources Generating Company
                                    One Ameren Plaza
                                    1901 Chouteau Avenue
                                    St. Louis, Missouri 63103
                                    Attention: General Counsel

or to such other address as any party hereto may,  from time to time,  designate
in a written notice given in like manner.  All notices and other  communications
hereunder  shall be  effective:  (i) the day of receipt when  delivered by hand,
facsimile  or  overnight  courier;  and (ii) three  Business  Days from the date
deposited in the mail in the manner specified above.

     9.2  Entire Agreement;  Amendment.  This Agreement (including all Ancillary
Documents,  Schedules and Exhibits hereto) contains the entire agreement between
the parties  hereto with respect to the subject matter hereof and supersedes all
prior and contemporaneous  agreements and understandings,  oral or written, with
respect to such matters.  Any amendment or modification  hereto and thereto,  in
order to become  effective,  shall be made in writing and executed by each party
hereto and  thereto.  No other Person shall have the right or ability to modify,
amend or terminate this Agreement or any Ancillary  Document in any respect,  by
conduct or otherwise.

     9.3  Parties in Interest;  Assignment.  This  Agreement  shall inure to the
benefit  of  and be  binding  upon  the  parties  hereto  and  their  respective
successors  and  permitted  assigns.  Except  as set forth in  Article  VII with
respect to Indemnified Parties,  nothing in this Agreement,  express or implied,
is intended to confer upon any Person other than AERG, CILCO or their respective
successors or permitted  assigns,  any rights or remedies  under or by reason of
this  Agreement.  No party to this  Agreement  may  assign  any of its rights or
obligations  under this Agreement without the prior written consent of the other
party hereto.

     9.4  Schedules.  The  disclosure  of any  matter  in any  schedule  to this
Agreement  shall be deemed to be a disclosure for all purposes of this Agreement
to which such matter could  reasonably  be expected to be  pertinent,  but shall
expressly  not be  deemed  to  constitute  an  admission  by AERG or CILCO or to
otherwise  imply  that any such  matter is  material  for the  purposes  of this
Agreement.

     9.5  Governing Law;  Submission to Jurisdiction;  Selection of Forum.  This
Agreement  shall be governed by, and construed in accordance  with,  the laws of
the state of Illinois,  without  regard to its  principles of conflicts of laws.
Each party hereto agrees that it shall bring any action or proceeding in respect
of any claim  arising  out of or  related  to this  Agreement  or any  Ancillary
Document or the  transactions  contained in or  contemplated  hereby or thereby,
whether in tort or  contract or at law or in equity,  exclusively  in a court of
the State of Illinois (the "Chosen  Courts") and (i) irrevocably  submits to the
exclusive jurisdiction of the Chosen Courts, (ii) waives any objection to laying
venue in any such action or proceeding in the Chosen Courts,

                                       19

<PAGE>

(iii) waives any objection that the Chosen Courts are an  inconvenient  forum or
do not have  jurisdiction over any party and (iv) agrees that service of process
upon a party in any such action or  proceeding  shall be  effective if notice is
given in accordance with Section 9.1 of this Agreement.

     9.6  Counterparts.   This   Agreement  may  be  executed  in  one  or  more
counterparts,  each of which shall be deemed an original, and all of which shall
constitute one and the same Agreement.

     9.7  Severability.  The  provisions  of  this  Agreement  shall  be  deemed
severable and the  invalidity  or  unenforceability  of any provision  shall not
affect the validity or enforceability of the other provisions hereof or thereof.
If any provision of this Agreement or any Ancillary Document, or the application
thereof to any Person or any circumstance,  is invalid or  unenforceable,  (a) a
suitable and equitable provision shall be substituted therefor in order to carry
out,  so far as may be valid and  enforceable,  the intent  and  purpose of such
invalid or  unenforceable  provision and (b) the remainder of this  Agreement or
the  Ancillary  Document,  as the  case  may  be,  and the  application  of such
provision  to other  Persons  or  circumstances  shall not be  affected  by such
invalidity or  unenforceability,  nor shall such invalidity or  unenforceability
affect the validity or  enforceability  of such  provision,  or the  application
thereof, in any other jurisdiction.

     9.8  Headings.  The heading references and the table of contents herein and
in any Ancillary Document are for convenience purposes only, do not constitute a
part of this  Agreement  or any  Ancillary  Document  and shall not be deemed to
limit or affect any of the provisions hereof.

                            [SIGNATURE PAGE FOLLOWS]

                                       20

<PAGE>

     IN  WITNESS  WHEREOF,   the  parties  have  caused  their  duly  authorized
representatives  to execute  this  Contribution  Agreement  as of the date first
above written.

                                         CENTRAL ILLINOIS LIGHT COMPANY, an
                                         Illinois corporation d.b.a. AMERENCILCO

                                         By:    /s/ G.L. Rainwater
                                            ------------------------------------
                                         Name:      G.L. Rainwater
                                         Title:     President

                                         AMERENENERGY RESOURCES
                                         GENERATING COMPANY, an Illinois
                                         corporation

                                         By:    /s/ Daniel F. Cole
                                            ------------------------------------
                                         Name:      Daniel F. Cole
                                         Title:     President

                                       21

<PAGE>

                             Contribution Agreement
                             ----------------------

                                    Exhibit A
                                    ---------

                          Duck Creek Easement Agreement

<PAGE>

                             Contribution Agreement
                             ----------------------

                                    Exhibit B
                                    ---------

                           Edwards Easement Agreement

                                       2

<PAGE>

                             Contribution Agreement
                             ----------------------

                                    Exhibit C
                                    ---------

                             Power Supply Agreement

<PAGE>

                             Contribution Agreement
                             ----------------------

                                    Exhibit D
                                    ---------

                        Services and Facilities Agreement

                                       2

<PAGE>

                             Contribution Agreement
                             ----------------------

                                    Exhibit E
                                    ---------

                       Sterling Avenue Easement Agreement

<PAGE>

                                             SCHEDULES TO CONTRIBUTION AGREEMENT

                                 SCHEDULE 2.1(a)

                               OWNED REAL PROPERTY

1.   The real property located at 17751 North CILCO Road, in the City of Canton,
     County of Fulton,  and State of  Illinois  (the Duck Creek  Property).  The
     description of the Duck Creek Property is attached hereto as Annex A.

2.   The  real  property  located  at 7800  South  CILCO  Lane,  in the  City of
     Bartonville,   County  of  Peoria,  and  State  of  Illinois  (the  Edwards
     Property).  The  description of the Edwards  Property is attached hereto as
     Annex B.

<PAGE>

                                     ANNEX A

                       DESCRIPTION OF DUCK CREEK PROPERTY

                               [legal description]

<PAGE>

                                     ANNEX B

                         DESCRIPTION OF EDWARDS PROPERTY

                               [legal description]

<PAGE>

                                 SCHEDULE 2.1(b)

                              LEASED REAL PROPERTY

1.   The  facility  and  parcel of real  property  leased by CILCO as lessee and
     located at 4498 Entec Drive, in the City of Bartonville,  County of Peoria,
     and State of Illinois (the Entec  Property).  The  description of the Entec
     Property is attached hereto as Annex A.
                                    -------

2.   The generation facility easement to CILCO is located at 4316 North Sterling
     Avenue  in the City of  Peoria,  County of  Peoria  and  State of  Illinois
     ("Sterling  Avenue  Easement").  The  description  of the  Sterling  Avenue
     Easement is attached hereto as Annex B.
                                    -------

<PAGE>

                                     ANNEX A

                        DESCRIPTION OF THE ENTEC PROPERTY

                               [legal description]

<PAGE>

                                     ANNEX B

                   DESCRIPTION OF THE STERLING AVENUE EASEMENT

                               [legal description]

<PAGE>

                                 SCHEDULE 2.1(d)

                        SPECIFIC ACCOUNT AND OTHER ASSETS

1.   Sulfur dioxide emission allowance inventory recorded in Account 158.1.

2.   Undistributed stores recorded in Account 163.

3.   Miscellaneous deferred debits recorded in Account 186.

4.   The assets identified on Annex A attached hereto.

5.   The assets identified on Annex B attached hereto.

<PAGE>

                                 SCHEDULE 2.1(e)

                              INTELLECTUAL PROPERTY

1.   AERG (formerly CIGI) Logo and all rights and benefits connected therewith.

<PAGE>

                                 SCHEDULE 2.1(f)

                                    CONTRACTS

1.   Finance  Lease  dated  11/4/99  between  CILCO  and  Caterpillar  Financial
     Services Corporation.

2.   Finance  Lease  dated  1/21/99  between  CILCO  and  Caterpillar  Financial
     Services Corporation.

3.   Marketing and  Management  Agreement  dated  12/6/00  between CILCO and ISG
     Resources, Inc.

4.   Contractual  Inventory  Agreement  dated  9/20/00  between CILCO and Alstom
     Power Integrated Services, Inc.

5.   Maintenance and Connectivity  Support  Agreement dated 2/1/01 between CILCO
     and IKON Office Solutions, Inc.

6.   Maintenance  Agreement  between  CILCO  and  IKON  Office  Solutions,  Inc.
     (undated).

7.   Hardware  and  Software   Agreement   dated   2/11/98   between  CILCO  and
     Environmental Systems Corporation.

8.   Software License and Non-Disclosure  Agreement dated 12/29/99 between CILCO
     and Environmental Systems Corporation.

9.   Software  License  Agreement  dated  3/17/00  between  Project  Software  &
     Development, Inc.

10.  General Ledger Software Agreements for Duck Creek and Edwards dated 2/29/00
     between CILCO and Software Essentials, Inc.

11.  Guaranteed   Term   Agreement   dated  6/21/00   between  CILCO  and  Qwest
     Communications Corporation.

12.  Collective  Bargaining  Agreement  dated 2/23/01 - 7/1/06 between CILCO and
     National Conference of Firemen and Oilers, Local # 8.

13.  Coal Supply Agreement dated 1/17/00 between CILCO and Exxon Coal USA, Inc.

14.  Coal Supply  Agreement  dated 1/1/00 between CILCO and  Consolidation  Coal
     Company.

<PAGE>

15.  Rail  Transportation  Agreement dated 8/29/01 between CILCO, The Burlington
     Northern and Santa Fe Railway  Company,  Norfolk  Southern  Railway and The
     Toledo Peoria & Western Railway Corporation.

16.  Confidential  Rail  Transportation  Contract dated 1/1/00 between CILCO and
     Union Pacific Railroad Company.

17.  Rail  Transportation  Agreement dated 1/21/02 between CILCO, The Burlington
     Northern  and Santa Fe Railway  Company,  and The  Toledo  Peoria & Western
     Railway Corporation.

18.  Limestone  Purchase Letter Agreement dated 1/3/00 between CILCO and Central
     Stone Company.

19.  Contract  entered into on August 17, 2001,  between CILCO and Lurgi Lentjes
     North America for  installation  of Selective  Catalytic  Reactor System at
     Edwards facility.

20.  Contract  entered into on May 2002,  between  CILCO and Lurgi Lentjes North
     America for  installation  of Selective  Catalytic  Reactor  System at Duck
     Creek facility.

21.  Project Service Agreement dated 1/4/02, between CILCO and Harding ESE.

22.  Coal Supply  Agreement dated 12/20/01,  between CILCO and RAG Coal Sales of
     America, Inc.

23.  Coal Supply and Transportation Agreement dated 11/21/01,  between CILCO and
     Prairie Energy Sales Corporation.

24.  Coal Supply  Agreement  dated  1/1/02 - 12/31/04,  between  CILCO and Oxbow
     Carbon & Minerals, Inc.

25.  License  Agreement  covering license # 98604, file 28-387 dated October 10,
     1983 between CILCO and Chicago and Northwestern Transportation Company.

26.  License  Agreement dated August 15, 1983 between CILCO and Peoria and Pekin
     Union Railway Company.

27.  License  Agreement # 6393 dated September 1, 1983 between CILCO and Toledo,
     Peoria & Western Railroad.

28.  See Appendix B of the Power Supply Agreement for supply contracts  assigned
     to AERG.

<PAGE>

                                 SCHEDULE 2.1(g)

                                     PERMITS

1.   NPDES  Permit No.  IL0001970,  dated  3/1/00,  between  CILCO and  Illinois
     Environmental Protection Agency.

2.   Dept.  of the Army Permit  #CEMVR-RD-365340-1,  between CILCO and U.S. Army
     Corps of Engineers, Rock Island District (undated).

3.   Application  for CAAPP  Permit,  dated  7/7/95,  between CILCO and Illinois
     Environmental Protection Agency.

4.   Operating Permit #73010724 I.D. No. 143805AAG,  dated 6/20/95, with Title V
     Permit   Application   95070026   pending   between   CILCO  and   Illinois
     Environmental Protection Agency.

5.   Joint  Construction and Operating  Permit  #98090079,  I.D. No.  143805AAG,
     dated 12/8/98, between CILCO and Illinois Environmental Protection Agency.

6.   Acid Rain Program Phase II Permit,  Oris No. 6016,  Illinois  Environmental
     Protection Agency I.D. No. 057801AAA, effective 1/1/2000, between CILCO and
     Illinois  Environmental  Protection  Agency,  Phase II Nox Compliance  Plan
     dated 12/18/97, and revision submitted June 27, 2003.

7.   NPDES  Permit No.  IL0055620,  dated  5/1/98,  between  CILCO and  Illinois
     Environmental  Protection Agency, and pending renewal application submitted
     9/26/02.

8.   Operating Permit Grant #78020006 - NSPS Source Revised,  dated 11/13/95 and
     expired 3/6/1998,  with Permit  Application  95070025 pending between CILCO
     and Illinois Environmental Protection Agency.

9.   Water Pollution Control Permit #2000-EO-1116,  dated 8/28/00, between CILCO
     and Illinois Environmental Protection Agency.

10.  Radioactive  Material  License  #IL-01572-01  Amendment #9, dated 10/18/00,
     between CILCO and Illinois Department of Nuclear Safety.

11.  Radioactive Material License #IL-01572-02,  dated 2/20/2001,  between CILCO
     and Illinois Department of Nuclear Safety.

12.  Draft Acid Rain Phase II Permit No.  143805AAG and Phase II NOx  Compliance
     Plan, dated 12/18/97,  between CILCO and Illinois Environmental  Protection
     Agency, and revision submitted June 27, 2003.

<PAGE>

13.  Federally  Enforceable  State Operating Permit  #73010481,  I.D. No. 143065
     AMW - Revised, dated  7/25/2002,  between CILCO and Illinois  Environmental
     Protection Agency.

14.  Boron  Variance  obtained in CILCO (Duck Creek Station) v. IEPA, PCB 99-21,
     granted 12/17/98, Illinois Pollution Control Board and CILCO.

15.  Sulphur  Dioxide  Variance and  site-specific  relief  obtained in CILCO v.
     IEPA,  PCB 99-80,  granted  6/5/03,  Illinois  Pollution  Control Board and
     CILCO.

16.  Final Alternative Emission Limitation Petition,  AES Edwards Station,  Unit
     3,  Oris Code  856,  dated  3/26/2002,  filed  with the U.S.  Environmental
     Protection Agency.

17.  Construction  Permit  #02020038,  I.D. No. 057801AAA for Duck Creek Low NOx
     Burners,  dated  3/15/02,  between AES - Duck Creek c/o CILCO and  Illinois
     Environmental Protection Agency.

18.  Construction Permit #0204006 for Duck Creek SCR, dated 5/3/02,  between AES
     - Duck Creek and Illinois Environmental Protection Agency.

19.  Construction  Permit  #01070072 for Edwards SCR,  dated  10/22/01,  between
     Edwards  Station c/o AES E.D.  Edwards  Station and Illinois  Environmental
     Protection Agency.

20.  Peoria County  Zoning,  Building and Use Permit #48235 - Edwards SCR, dated
     4/12/02, between AES Edwards Power Plant and County of Peoria, Illinois.

21.  Peoria County Construction Permit - Pollution Control Structure & Equipment
     #7356 - Duck Creek SCR, dated 3/27/02, between AES Duck Creek c/o CILCO and
     Fulton County, Illinois.

22.  Peoria  County  Edwards  Entrance  Road  Erosion  Permit  #2001-156,  dated
     9/28/01, between AES Edwards and County of Peoria, Illinois.

23.  Erosion  Control  Escrow  Agreement,  dated  8/30/02,  between  AES Edwards
     Station and the Peoria County Erosion Control  Administrator and the Peoria
     County Control  Treasurer  regarding  Peoria County  Erosion,  Sediment and
     Storm Water Control Permit #2001-156.

24.  Peoria County Flood Permit #2001-019F,  dated 10/5/01,  between AES Edwards
     and County of Peoria, Illinois.

25.  Illinois  Pesticide ID Card  License No. CAN 05763379  issued to Tim L. Van
     Middlesworth  by  the  Illinois   Department  of  Agriculture,   Bureau  of
     Environmental Programs.

<PAGE>

26.  Illinois Pesticide ID Card License No. CAN 05763380 issued to Marcus George
     Boyer by the Illinois  Department of Agriculture,  Bureau of  Environmental
     Programs.

27.  U.S. Environmental Protection Agency NOx Allowance Tracking System Accounts
     for the benefit of CILCO - Account Numbers:
     000856000001
     000856000002
     000856000003
     000856OVERDF
     000601600001
     999900000195

28.  U.S. Environmental Protection Agency SO2 Allowance Tracking System Accounts
     for the benefit of CILCO - Account Numbers:
     000856000001
     000856000002
     000856000003
     000601600001

29.  Construction   Permit  #03050051  for  Edwards  Units  1  and  2  Flue  Gas
     Conditioning System, dated 5/21/03, between AmerenEnergy Generating Company
     (CILCO) and Illinois Environmental Protection Agency.

30.  NPDES Permit No. ILR108958,  dated 9/4/03, between AmerenCILCO and Illinois
     Environmental Protection Agency.

31.  Peoria  County  Erosion  Permit  No.  2003-126,   dated  8/13/03,   between
     AmerenCILCO Edwards Pwr. Plant and County of Peoria, Illinois.

<PAGE>

                                 SCHEDULE 2.2(a)

                            RETAINED TRANSMISSION AND
                               DISTRIBUTION ASSETS

1.   The overhead and underground communications and electrical transmission and
     distribution  lines  (whether  consisting  of one  circuit or more than one
     circuit) and other  overhead and  underground  transmission,  distribution,
     communication and related facilities and structures, including towers, pole
     structures,  poles, wires, cables,  conduits,  pipes (including natural gas
     pipelines and  connections),  ducts,  pumps,  controls,  switches,  relays,
     circuit  breakers,  monitoring  devices,  fiber optic cable and facilities,
     counterpoise,   anchors,   ground  grid,  cathodic  protection   equipment,
     manholes,  transformers,  pedestals, and necessary fixtures, conductors and
     appurtenances  attached  thereto,  that are located at the Sterling  Avenue
     Facility and an easement is being granted with respect to those such assets
     used or held for use in connection with Generation Operations.

2.   The assets identified on Annex A attached hereto.

<PAGE>

                                 SCHEDULE 2.2(b)

                               RETAINED CONTRACTS

1.   Tolling Agreement between CILCO and AES Medina Valley Cogen LLC (undated).

2.   Caterpillar  Receivables  Assignment and Consent  Agreement  dated 12/19/00
     between  CILCO,  AES  Medina  Valley  Cogen  LLC,  Caterpillar,   Inc.  and
     Landesbank Hessen-Thuringen Girozentrale, New York Branch.

3.   Interconnection  Agreement  dated  12/29/00  between  CILCO and AES  Medina
     Valley Cogen LLC.

4.   Services  Agreement  (Medina) dated 12/29/00 between CILCO and Caterpillar,
     Inc. (with Lease  Agreement,  Environmental  Agreement and  Confidentiality
     Agreement attached).

5.   Ground Lease,  dated as of December 16, 1993, by and between  Midwest Grain
     Products,  Inc.,  as lessor,  and CILCORP  Development  Services,  Inc., as
     lessee.

6.   Cogeneration  Agreement dated 12/16/93 between CILCO,  CILCORP, and Midwest
     Grain Products, Inc.

7.   Steam Heat Service  Agreement  dated 12/16/93  between  CILCORP and Midwest
     Grain Products, Inc.

8.   Gas Service Agreement dated 9/1/96 between CILCO and Midwest Grain Products
     of Illinois.

9.   Postage Meter Rental  Agreement dated 7/6/99 between CILCO and Ascom Hasler
     Mailing Systems, Inc.

10.  Equipment  Rental  Agreement dated 7/15/99 between CILCO and Walz Equipment
     Co.

11.  Microsoft Business Agreement dated 6/28/00.

12.  Software License and Maintenance  Agreement dated 12/9/98 between CILCO and
     Lodestar Corporation.

13.  License  Agreement for Proprietary  Software Products and Maintenance dated
     6/30/94 between CILCO and Compuware Corporation.

<PAGE>

14.  SCADA System  Agreement dated 9/15/97  between CILCO and Valmet  Automation
     (USA), Inc.

15.  OASyS Software  License  Agreement  dated 9/15/97  between CILCO and Valmet
     Automation (USA), Inc.

16.  Payroll  Services   Agreement  dated  6/7/00  between  CILCO  and  Ceridian
     Corporation.

17.  Software License between CILCO and Ceridian Corporation (undated).

18.  Personal  Services   Agreement  between  CILCO  and  Ceridian   Corporation
     (undated).

19.  Letter  Agreement  dated 9/1/99 between CILCO,  Trunkline Gas Company,  and
     Panhandle Eastern Pipe Line Company.

20.  Services  Agreement  (#104819) dated 10/1/00 between CILCO and ANR Pipeline
     Company.

21.  Services  Agreement  (#104820) dated 11/1/00 between CILCO and ANR Pipeline
     Company.

22.  Firm  Transportation  Negotiated  Rate Agreement for  Prearranged  Capacity
     Contract  (#117452) dated 11/1/00 between CILCO and Natural Gas Pipeline of
     America.

23.  Firm  Transportation  Negotiated  Rate Agreement for  Prearranged  Capacity
     Contract  (#116657)  dated 4/1/00 between CILCO and Natural Gas Pipeline of
     America.

24.  Firm  Transportation  Negotiated  Rate Agreement for  Prearranged  Capacity
     Contract  (#117318)  dated 5/1/00 between CILCO and Natural Gas Pipeline of
     America.

25.  Professional  Services  Agreement  dated 6/18/98 between CILCO and Computer
     Associates International, Inc.

26.  Master Product  License  Agreement dated 5/31/94 between CILCO and Platinum
     Technology, Inc.

27.  FCC Radio Station  License  (Duck Creek  Locomotive)  dated 9/8/99  between
     CILCO and the Federal Commerce Commission.

<PAGE>

28.  FCC Radio Station License (Emergency Communications -- Duck Creek, Edwards,
     and Energy  Control  Center)  dated  3/26/00  between CILCO and the Federal
     Commerce Commission.

29.  FCC Radio Station License (Edwards  Locomotive)  dated 9/8/99 between CILCO
     and the Federal Commerce Commission.

30.  FCC Radio Station  License  (Duck Creek Paging) dated 9/8/99  between CILCO
     and the Federal Commerce Commission.

31.  FCC Radio Station License (Duck Creek Voice) dated 9/8/99 between CILCO and
     the Federal Commerce Commission.

32.  Equipment Lease dated 6/1/93 between CILCO and Ameritech Credit Corporation
     (as supplemented).

33.  Ameritech  Priority Service Solutions  Maintenance  Service Agreement dated
     11/14/96 between CILCO and Ameritech Enhanced Business Services.

<PAGE>

                            SCHEDULE 2.3(b) - Omitted

<PAGE>

                                 SCHEDULE 2.3(c)

                            ASSUMED CLAIM LIABILITIES

1.   All  Liabilities  arising out of the Coal  Supply  Agreement  dated  1/1/00
     between CILCO and Consolidation Coal Company.

2.   All  Liabilities  arising out of the Coal Supply  Agreement (as amended and
     restated)  dated  1/1/87  between  CILCO and  Freeman  United  Coal  Mining
     Company.

<PAGE>

                                 SCHEDULE 2.3(d)

                           CERTAIN ASSUMED LIABILITIES

1.   Accumulated  deferred  income taxes  recorded in Account 190,  281, 282 and
     283.

2.   Accounts payable recorded in Account 232 (consisting  primarily of payments
     due from fuel suppliers and transporters).

3.   Accrued real estate taxes recorded in Account 236.

4.   Pension and OPEB liability recorded in Account 253.

<PAGE>

                                 SCHEDULE 2.4(d)

                           RETAINED CLAIM LIABILITIES

1.   All Liabilities  arising out of or relating to CILCO's  Affirmative  Action
     Plan.

2.   All  Liabilities  arising  out of or  relating  to the  September  6,  2000
     Conciliation Agreement.

3.   All Liabilities arising out of or relating to the employment or termination
     of employment of Marian Head.

4.   All Liabilities arising out of or relating to the employment or termination
     of employment of Ruth Gibbs.

5.   All Liabilities  arising out of or relating to the bonus programs for CILCO
     personnel  in the Energy  Delivery  Unit (EDU) and Sales & Marketing  (S&M)
     departments of CILCO.

6.   All  Liabilities  arising out of or relating to Donald Kolzow v. USX Corp.,
     CILCO, et al., Case No. 01 L 002448 (Cook County, IL).

7.   All  Liabilities  arising out of or  relating  to Huey v. A.W.  Chesterton,
     Inc., et al, case number 02-L-530 (Madison County).

8.   All Liabilities arising out of or relating to Klingler v. A.W.  Chesterton,
     Inc., et al, case number 02-L-1066 (Madison County).

9.   All  Liabilities  arising out of or  relating  to Graves v. Rapid  American
     Corporation, et al, case number 00-L-14281 (Cook County).

10.  All  Liabilities  arising  out of or  relating  to King v.  Rapid  American
     Corporation, et al, case number 00-L-4256 (Cook County).

11.  All Liabilities  arising out of or relating to Johnson v. ACandS,  Inc., et
     al, case number 02-L-178 (Madison County).

12.  All Liabilities  arising out of or relating to Abegg V. John Crane Inc., et
     al, case number 02-L-1429 (Madison County).

13.  All  liabilities  arising out of or relating to Clark v. ABB, Inc., et al.,
     Case No. 49-D-02-9601-MI-001-798 (Marion County, Indiana).

14.  All  liabilities  arising  out of or  relating to Jackie A. Feicke v. A. W.
     Chesterton,  Inc.,  et al.,  Case No.  02-L-480  (Peoria  County).

<PAGE>

15.  All liabilities arising out of or relating to Richard Lingenfelter v. A. W.
     Chesterton, Inc., et al., Case No. 02-L-489 (Peoria County).

16.  All  liabilities  arising out of or  relating  to Cox v. A. W.  Chesterton,
     Inc., et al., Case No. 02-L-125 (Peoria County).

17.  All  liabilities  arising out of or relating to Frith v. A. W.  Chesterton,
     Inc., et al., Case No. 02-L-1120 (Madison County).

18.  All liabilities arising out of or relating to the death of employee Marrice
     Sayles.

<PAGE>

                                 SCHEDULE 2.4(e)

                       RETAINED ENVIRONMENTAL LIABILITIES

1.   Potential  Liabilities  associated with four identified former manufactured
     gas plant sites located at (a) 825 N. McArthur Blvd., Springfield,  IL; (b)
     Persimmon  St.,  Peoria,  IL;  (c) 531  Court  St.,  Pekin,  IL and (d) the
     Vector-Springfield site, Springfield, IL.

2.   Potential Liabilities associated with the former power station site located
     at 100 Harrison St., Peoria, IL.

3.   Potential  Liabilities  associated  with the Pierce Oil & Refining  Company
     site  in  Springfield,  Illinois  and  not  arising  out of the  Generation
     Operations at the Facilities.

4.   Liabilities  associated  with the June 15,  2000 Notice of Intent to Pursue
     Legal  Action  ("NOI") from the Illinois  Environmental  Protection  Agency
     regarding alleged permit violations  pertaining to the continuous emissions
     monitoring system at the Indian Trails Facility.

5.   The  potential  Liabilities  associated  with the past,  present and future
     compliance with all federal,  state and local  requirements  related to the
     off-site  disposal of materials from any of the Retained Assets or Retained
     Contracts.

6.   The potential  Liabilities and closure obligations  associated with closure
     of an ash pond at the R.S. Wallace Power Station.

7.   The potential  Liabilities  associated with groundwater  exceedances at the
     R.S. Wallace Power Station.

8.   The potential Liabilities  associated with an alleged discharge of asbestos
     into the Illinois  River during the  demolition  of the R.S.  Wallace Power
     Station.

9.   The potential  Liabilities  associated with asbestos  abatement relating to
     the December  1995  implosion of one of the  buildings at the R.S.  Wallace
     Power Station.

10.  Potential  Liabilities  associated  with the April 23,  2001  Noncompliance
     Advisories from the Illinois  Environmental  Protection Agency ("IEPA") for
     the Hallock  Diesel  Generators  Facility  (Lifetime  Operating  Permit No.
     00010058) and the Kickapoo Diesel Generators  Facility (Lifetime  Operating
     Permit No. 00010059).

11.  Potential Liabilities  associated with a March 10, 1998 Notice of Violation
     issued by the IEPA to CILCO with respect to its operation of a cogeneration
     facility located in Pekin, Illinois (i.e., the Indian Trails Facility) that
     is associated with Midwest Grain Products Co.

<PAGE>

12.  Potential  Liabilities  associated with past, present and future compliance
     with federal, state and local statutory, regulatory and permit requirements
     for the Lincoln Gas Storage Field,  the  Springfield  Service  Center,  the
     Indian  Trails  Facility  and the R.S.  Wallace  Power  Station,  including
     without limitation, the requirements in the following permits:

     (a)  Indian Trails Facility  Operating Permit No.  94010076,  issued by the
          IEPA on September 22, 1999, expiring March 17, 2002;

     (b)  Lifetime  Operating Permit #00010058 for Diesel  Generators  issued by
          the IEPA on April 19,  2000,  expiring 180 days after the IEPA sends a
          written request for renewal;

     (c)  7/20/99 IEPA  Termination  of NPDES permit for the R.S.  Wallace Power
          Station;

     (d)  8/24/00  IEPA  Certification  of Closure  for the R.S.  Wallace  Power
          Station;

     (e)  Permit No.  1992-004-DE/OP;  Supplemental  Permit No.  1999-151-SP for
          modification of existing  landfill for the R.S. Wallace Power Station;
          and

     (f)  Lifetime  Operating Permit #00010059 for Diesel  Generators  issued by
          the IEPA on April 19,  2000,  expiring 180 days after the IEPA sends a
          written request for renewal.

<PAGE>

                                  SCHEDULE 4.3

                                    CONSENTS

1.   Consent of ISG  Resources,  Inc. for assignment of Marketing and Management
     Agreement dated 12/6/00.

2.   Consent of IKON Office  Solutions,  Inc. for assignment of Maintenance  and
     Connectivity Support Agreement dated 2/1/01.

3.   Consent of IKON  Office  Solutions,  Inc.  for  assignment  of  Maintenance
     Agreement (undated).

4.   Consent of  Environmental  Systems  Corporation  for assignment of Software
     License and Non-Disclosure Agreement dated 12/29/99.

5.   Consent of Project Software & Development,  Inc. for assignment of Software
     License Agreement dated 3/17/00.

6.   Consent of Qwest  Communications  Corporation  for assignment of Guaranteed
     Term Agreement dated 6/21/00.

7.   Consent of Union Pacific  Railroad  Company for assignment of  Confidential
     Rail Transportation Contract dated 1/1/00.

8.   Consent of Lurgi Lentjes North America for assignment of Catalytic  Reactor
     System at Edwards facility dated July 2001.

9.   Consent of Lurgi Lentjes North America for assignment of Catalytic  Reactor
     System at Duck Creek facility dated May 2002.

10.  Consent of Harding ESE for assignment of  Professional  Services  Agreement
     and Environmental Compliance Services Work Order dated 1/4/02.

11.  Consent of Chicago and Northwestern  Transportation  Company for assignment
     of license  agreement  covering license # 98604,  file 28-387 dated October
     10, 1983.

12.  Consent of Peoria and Pekin Union Railway Company for assignment of license
     agreement dated August 15, 1983.

13.  Consent of Toledo,  Peoria & Western  Railroad  for  assignment  of license
     agreement # 6393 dated September 1, 1983.

14.  Approval of the Federal  Energy  Regulatory  Commission  for the  following
     items:

<PAGE>

     a.   Authorization  to implement  corporate  restructuring  and to transfer
          jurisdictional assets.

     b.   Approval of market based rate authority for AERG.

     c.   Waiver of Commission's interaffiliate power sales transmission pricing
          rules and code of conduct rules.

     d.   Acceptance of AERG's revised market based rate tariff.

     e.   Approval of form Power Supply Agreement.

     f.   Approval of interconnection agreement between CILCO and AERG.

     g.   Waiver of requirements under FERC Orders 888 and 889.

     h.   Determination of exempt wholesale generator status.

<PAGE>

                                  SCHEDULE 6.2

                                    EMPLOYEES

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