Unassociated Document


    Exhibit
      10(a)

     

    

      SALE
        AGREEMENT

       

      BONDABLE
        TRANSITION PROPERTY SALE AGREEMENT

       

      between

       

      JCP&L
        TRANSITION FUNDING II LLC

      Issuer

       

      and

       

      JERSEY
        CENTRAL POWER & LIGHT COMPANY

      Seller

       

      Dated
        as
        of ___________, 2006

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      TABLE
        OF CONTENTS

       

      Page

       

      
        	
                ARTICLE
                  I

                 

                DEFINITIONS

                 

              
	
                Section
                  1.01 

              	
                Definitions

              	
                1

              
	
                Section
                  1.02 

              	
                Other
                  Definitional Provisions

              	
                1

              
	
                 

                ARTICLE
                  II

                 

                CONVEYANCE
                  OF TRANSFERRED BONDABLE TRANSITION PROPERTY

                 

              
	
                Section
                  2.01 

              	
                Conveyance
                  of Initial Transferred Bondable Transition Property

              	
                2

              
	
                Section
                  2.02 

              	
                Conditions
                  to Conveyance of Bondable Transition Property

              	
                3

              
	
                 

                ARTICLE
                  III

                 

                REPRESENTATIONS
                  AND WARRANTIES OF THE SELLER

                 

              
	
                Section
                  3.01 

              	
                Organization
                  and Good Standing

              	
                5

              
	
                Section
                  3.02 

              	
                Due
                  Qualification

              	
                5

              
	
                Section
                  3.03 

              	
                Power
                  and Authority

              	
                5

              
	
                Section
                  3.04 

              	
                Binding
                  Obligation

              	
                5

              
	
                Section
                  3.05 

              	
                No
                  Violation

              	
                6

              
	
                Section
                  3.06 

              	
                No
                  Proceedings

              	
                6

              
	
                Section
                  3.07 

              	
                Approvals

              	
                6

              
	
                Section
                  3.08 

              	
                The
                  Transferred Bondable Transition Property

              	
                7

              
	
                Section
                  3.09 

              	
                Solvency

              	
                9

              
	
                 

                ARTICLE
                  IV

                 

                COVENANTS
                  OF THE SELLER

                 

              
	
                Section
                  4.01 

              	
                Seller’s
                  Existence

              	
                10

              
	
                Section
                  4.02 

              	
                No
                  Liens or Conveyances

              	
                10

              
	
                Section
                  4.03 

              	
                Use
                  of Proceeds

              	
                10

              
	
                Section
                  4.04 

              	
                Delivery
                  of Collections

              	
                10

              
	
                Section
                  4.05 

              	
                Notice
                  of Liens

              	
                10

              
	
                Section
                  4.06 

              	
                Compliance
                  with Law

              	
                10

              
	
                Section
                  4.07 

              	
                Covenants
                  Related to Transferred Bondable Transition Property

              	
                11

              
	
                Section
                  4.08 

              	
                Indemnification
                  Notice

              	
                12

              
	
                Section
                  4.09 

              	
                Protection
                  of Title

              	
                12

              
	
                Section
                  4.10 

              	
                Taxes

              	
                13

              


      

       

      
        
          
          

        

        
          (i)

          
            

          

        

        
          
          

        

      

       

      
        	
                ARTICLE
                  V

                 

                ADDITIONAL
                  UNDERTAKINGS OF THE SELLER

                 

              
	
                Section
                  5.01 

              	
                Liability
                  of the Seller; Indemnities

              	
                13

              
	
                Section
                  5.02 

              	
                Merger
                  or Consolidation of, or Assumption of the Obligations of, the
                  Seller

              	
                14

              
	
                Section
                  5.03 

              	
                Limitation
                  on Liability of the Seller and Others

              	
                15

              
	
                ARTICLE
                  VI

                 

                MISCELLANEOUS
                  PROVISIONS

                 

              
	
                Section
                  6.01 

              	
                Amendment

              	
                16

              
	
                Section
                  6.02 

              	
                Notices

              	
                16

              
	
                Section
                  6.03 

              	
                Assignment
                  by Seller

              	
                17

              
	
                Section
                  6.04 

              	
                Assignment
                  to Trustee

              	
                17

              
	
                Section
                  6.05 

              	
                Limitations
                  on Rights of Others

              	
                17

              
	
                Section
                  6.06 

              	
                Severability

              	
                17

              
	
                Section
                  6.07 

              	
                Separate
                  Counterparts

              	
                17

              
	
                Section
                  6.08 

              	
                Headings

              	
                17

              
	
                Section
                  6.09 

              	
                Governing
                  Law

              	
                17

              
	
                Section
                  6.10

              	
                Nonpetition
                  Covenant

              	
                17

              
	 	
                 

                 

              	 
	
                EXHIBIT
                  A   -

              	
                Bill
                  of Sale

              	
                A-1

              
	
                EXHIBIT
                  B    -

              	
                Officers’
                  Certificate

              	
                B-1

              


      

      


      APPENDIX
        A - Master Definitions

      


      
        
          
          

        

        
          (ii)

          
            

          

        

        
          
          

        

      

       

      BONDABLE
        TRANSITION PROPERTY SALE AGREEMENT,
        dated
        as of __________, 2006, by and between JCP&L
        TRANSITION FUNDING II LLC,
        a
        Delaware limited liability company, as Issuer (the “Issuer”), and JERSEY
        CENTRAL POWER & LIGHT COMPANY,
        a New
        Jersey corporation, in its capacity as Seller (the “Seller”) hereunder.


       

      W
        I T N E
        S S E T H:

       

      WHEREAS
        the Issuer desires to purchase from time to time Bondable Transition Property
        created pursuant to the Competition Act and the Financing Order; 

       

      WHEREAS
        the Seller is willing to sell Bondable Transition Property to the
        Issuer;

       

      WHEREAS
        the Issuer, in order to finance the purchase of the Transferred Bondable
        Transition Property, will from time to time issue Transition Bonds under
        the
        Indenture; and

       

      WHEREAS
        the Issuer, to secure its obligations under the Transition Bonds and the
        Indenture, will pledge its right, title and interest in, to and under the
        Transferred Bondable Transition Property to the Trustee for the benefit of
        the
        owners of the Transition Bonds.

       

      NOW,
        THEREFORE, in consideration of the premises and the mutual covenants herein
        contained and other good and valuable consideration, the receipt and sufficiency
        of which are hereby acknowledged, and intending to be legally bound hereby,
        the
        parties hereto agree as follows:

       

      ARTICLE
        I


       

      DEFINITIONS

       

      Section
        1.01 Definitions. 
        Capitalized terms used and not otherwise defined herein shall have the meanings
        assigned to such terms in Appendix A of the Indenture dated as of ________,
        2006
        between the Issuer and The Bank of New York, as Trustee.

       

      Section
        1.02 Other
        Definitional Provisions.

       

      (a)    Non-capitalized
        terms used herein that are defined in the Competition Act, as the context
        requires, have the meanings assigned to such terms in the Competition Act,
        but
        without giving effect to amendments to the Competition Act after the date
        hereof
        which have a material adverse effect on the Issuer or the owners of the
        Transition Bonds.

       

      (b)    All
        terms
        defined in this Sale Agreement have the defined meanings when used in any
        certificate or other document made or delivered pursuant hereto unless otherwise
        defined therein.

       

      (c)    The
        words
“hereof”, “herein”, “hereunder” and words of similar import when used in this
        Sale Agreement refer to this Sale Agreement as a whole and not to
        any

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      particular
        provision of this Sale Agreement; Article, Section, Schedule and Exhibit
        references contained in this Sale Agreement are references to Articles,
        Sections, Schedules and Exhibits in or to this Sale Agreement unless otherwise
        specified; and the term “including” means “including without
        limitation”.

       

      (d)    The
        definitions contained in this Sale Agreement are applicable to the singular
        as
        well as the plural forms of such terms. 

       

      ARTICLE
        II


       

      CONVEYANCE
        OF TRANSFERRED BONDABLE TRANSITION PROPERTY

       

      Section
        2.01 Conveyance
        of Initial Transferred Bondable Transition Property.

       

      (a)    In
        consideration of the Issuer’s payment to or upon the order of the Seller of
        $__________, less the underwriting discount and original issue discount for
        the
        Transition Bonds in the aggregate amount of $__________, or $__________ (the
        “Initial Purchase Price”) by wire transfer of funds immediately available on the
        date hereof to Seller’s account no. [3878-1543 at Citibank Delaware, New Castle,
        Delaware, routing transit ABA# 05300219], subject to the conditions specified
        in
        Section 2.02, the Seller does hereby irrevocably sell, transfer, assign and
        otherwise convey to the Issuer, without recourse (subject to the obligations
        of
        the Seller herein), all right, title and interest of the Seller in, to and
        under
        the Initial Transferred Bondable Transition Property identified in the Bill
        of
        Sale delivered pursuant to Section 2.02(a) on or prior to the Initial Transfer
        Date (such sale, transfer, assignment and conveyance of the Initial Transferred
        Bondable Transition Property to include, to the fullest extent permitted
        by the
        Competition Act, the New Jersey UCC and the Delaware UCC, and to the extent
        the
        Seller has any interest in any thereof, the assignment of all revenues,
        collections, claims, rights, payments, money or proceeds of or arising from
        the
        Transition Bond Charges related to the Initial Transferred Bondable Transition
        Property, as the same may be adjusted from time to time). Such sale, transfer,
        assignment and conveyance of the Initial Transferred Bondable Transition
        Property is hereby expressly stated to be a sale or other absolute transfer
        from
        the Seller to the Issuer and, pursuant to Section 23(a) of the Competition
        Act
        (N.J.S.A. 48:3-72(a)), shall constitute a sale or other absolute transfer
        of all
        of the Seller’s right, title and interest in, to and under, and not a borrowing
        secured by, the Initial Transferred Bondable Transition Property. The preceding
        sentence is the statement referred to in Section 23(a) of the Competition
        Act
        (N.J.S.A. 48:3-72(a)). The Seller agrees and confirms that upon payment of
        the
        Initial Purchase Price and the execution and delivery of this Sale Agreement
        and
        the related Bill of Sale, the Seller shall have no right, title or interest
        in,
        to or under the Initial Transferred Bondable Transition Property. The Issuer
        accepts the transfer and assignment of the Initial Transferred Bondable
        Transition Property from the Seller and expressly assumes all of the duties,
        obligations and liabilities incident to ownership of the Initial Transferred
        Bondable Transition Property, and the Seller hereby relinquishes all dominion
        and control over the Initial Transferred Bondable Transition Property to
        the
        Issuer. The relationship of the Issuer and the Seller shall be of buyer and
        seller, respectively.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      (b)    Subject
        to the conditions specified in Section 2.02, the Issuer does hereby purchase
        the
        Initial Transferred Bondable Transition Property from the Seller for the
        consideration set forth in clause (a) above.

       

      (c)    The
        Seller and the Issuer each acknowledge and agree that the Initial Purchase
        Price
        for the Initial Transferred Bondable Transition Property sold pursuant to
        this
        Sale Agreement is equal to its fair market value at the time of
        sale.

       

      (d)    The
        Seller and the Issuer further agree that from time to time the Seller may
        offer
        to sell, transfer, assign and convey, and the Issuer may purchase, Subsequent
        Transferred Bondable Transition Property as of Subsequent Transfer Dates,
        subject to the conditions specified in Section 2.02, in exchange for
        consideration to be agreed upon (the “Subsequent Purchase Price”). The Seller
        and the Issuer hereby agree that each such sale, transfer, assignment and
        conveyance of any Subsequent Transferred Bondable Transition Property shall
        include, to the fullest extent permitted by the Competition Act, the New
        Jersey
        UCC and the Delaware UCC, the assignment of all revenues, collections, claims,
        rights, payments, money or proceeds of or arising from the Transition Bond
        Charges related to the Subsequent Transferred Bondable Transition Property,
        as
        the same may be adjusted from time to time. Such sale, transfer, assignment
        and
        conveyance of the Subsequent Transferred Bondable Transition Property is
        hereby
        expressly stated to be a sale and absolute transfer and, pursuant to Section
        23(a) (N.J.S.A. 48:3 72(a)), of the Competition Act, shall constitute a sale
        and
        absolute transfer of all of the Seller’s right, title and interest in, to and
        under, and not a borrowing secured by, the Subsequent Transferred Bondable
        Transition Property. The preceding sentence is the statement referred to
        in
        Section 23(a) (N.J.S.A. 48:3 72(a)), of the Competition Act. The Seller agrees
        and confirms that after giving effect to any sale contemplated by this clause
        (d) and the execution and delivery of the related Bill of Sale, the Seller
        shall
        have no right, title or interest in, to or under the Subsequent Transferred
        Bondable Transition Property. 

       

      (e)    Notwithstanding
        the foregoing, in the event that any sale, transfer, assignment and conveyance
        of any Transferred Bondable Transition Property is determined by a court
        of
        competent jurisdiction not to be a true and absolute sale as contemplated
        by the
        parties hereto and by the Competition Act, then such sale, transfer, assignment
        and conveyance shall be treated as a pledge of such Transferred Bondable
        Transition Property and the Seller shall be deemed to have granted, and does
        hereby grant, as of the date hereof, a security interest in all of Seller’s
        right, title and interest in such Transferred Bondable Transition Property
        to
        the Issuer to secure the payment obligation incurred by the Seller in the
        amount
        paid by the Issuer for the Transferred Bondable Transition
        Property.

       

      Section
        2.02 Conditions
        to Conveyance of Bondable Transition Property. 
        The obligation of the Seller to sell, and the obligation of the Issuer to
        purchase, Bondable Transition Property upon any Transfer Date shall be subject
        to and conditioned upon the satisfaction or waiver of each of the following
        conditions:

       

      (a)    on
        or
        prior to the Transfer Date, the Seller shall deliver to the Issuer a duly
        executed Bill of Sale identifying the Bondable Transition Property to be
        conveyed as of that date, substantially in the form of Exhibit A;

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      (b)    as
        of the
        Transfer Date, no breach by the Seller of its representations, warranties
        or
        covenants in this Sale Agreement shall exist and the Seller shall have delivered
        to the Issuer and the Trustee an Officers’ Certificate to such effect in
        substantially the form and substance as set forth in Exhibit B and no Servicer
        Default shall have occurred and be continuing;

       

      (c)    as
        of the
        Transfer Date:

       

      (i)    the
        Issuer shall have sufficient funds available to pay the purchase price for
        the
        Transferred Bondable Transition Property to be conveyed on such date;
        and

       

      (ii)    all
        conditions precedent to the issuance of one or more Series of Transition
        Bonds
        set forth in the Indenture intended to provide such funds shall have been
        satisfied or waived by the parties thereto; 

       

      (d)    on
        or
        prior to the Transfer Date, the Seller shall have taken all actions required
        under the Competition Act, the Financing Order, the New Jersey UCC and the
        Delaware UCC, including, without limitation, filings under the New Jersey
        UCC
        and the Delaware UCC, to transfer to the Issuer ownership of the Transferred
        Bondable Transition Property to be conveyed on such date, free and clear
        of all
        Liens other than Liens created by the Issuer pursuant to the Indenture and
        to
        perfect such transfer, and the Issuer shall have taken all actions required
        for
        the Issuer to grant to the Trustee a valid perfected security interest, which
        once perfected, will be first priority in the Collateral and maintain such
        security interest as of such date, including any filings under the New Jersey
        UCC and the Delaware UCC;

       

      (e)    in
        the
        case of any sale of Subsequent Transferred Bondable Transition Property only,
        the Seller shall have provided the Issuer and each Rating Agency with a notice
        specifying the Subsequent Transfer Date for the Subsequent Transferred Bondable
        Transition Property not later than ten days prior to such Subsequent Transfer
        Date; 

       

      (f)    the
        Seller shall have delivered to each Rating Agency any Opinions of Counsel
        requested by the Rating Agencies;

       

      (g)    the
        Seller shall have delivered to the Trustee and the Issuer an Officers’
Certificate in substantially the form and substance as set forth in Exhibit
        B
        confirming the satisfaction of each condition precedent specified in this
        Section 2.02; and

       

      (h)    the
        Seller shall have received the Initial Purchase Price or the Subsequent Purchase
        Price, as applicable, in funds immediately available on the applicable Transfer
        Date.

       

      ARTICLE
        III


       

      REPRESENTATIONS
        AND WARRANTIES OF The SELLER

       

      As
        of
        each Transfer Date, the Seller makes the following representations and
        warranties on which the Issuer has relied and will rely in acquiring Transferred
        Bondable Transition Property. The following representations and warranties
        are
        made under existing law as in effect as of such Transfer Date. The Seller
        shall
        not be in breach of any representation or

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      warranty
        herein as a result of a change in law occurring after such Transfer Date.
        The
        representations and warranties shall survive the sale of Transferred Bondable
        Transition Property to the Issuer and the pledge thereof to the Trustee pursuant
        to the Indenture. The Seller agrees that the Issuer will have the right to
        assign the right to enforce the following representations and warranties
        to the
        Trustee for the benefit of the Transition Bondholders. The Seller agrees
        that
        the representations and warranties inure to the benefit of the Issuer and
        the
        Trustee for the benefit of the Transition Bondholders.

       

      Section
        3.01 Organization
        and Good Standing. 
        The Seller is a corporation duly organized and in good standing under the
        laws
        of the State of New Jersey, with the full corporate power and authority to
        own
        its properties and conduct its business as currently owned and
        conducted.

       

      Section
        3.02 Due
        Qualification. 
        The Seller is duly qualified to do business as a foreign corporation in good
        standing, and has obtained all necessary licenses and approvals, in all
        jurisdictions in which the ownership or lease of its property or the conduct
        of
        its business requires such qualifications, licenses or approvals (except
        where
        the failure to so qualify and to obtain such licenses and approvals would
        not be
        reasonably likely to have a material adverse effect on the Seller’s business,
        operations, assets, revenues, properties or prospects).

       

      Section
        3.03 Power
        and Authority. 
        The Seller has the full corporate power and authority to execute and deliver
        this Sale Agreement and to carry out its terms; the Seller has the full
        corporate power and authority to own the Bondable Transition Property and
        to
        sell, transfer, assign and otherwise convey the Transferred Bondable Transition
        Property to the Issuer, and the Seller has duly authorized such sale, transfer,
        assignment and conveyance to the Issuer by all necessary corporate action;
        and
        the execution, delivery and performance of this Sale Agreement have been
        duly
        authorized by the Seller by all necessary corporate action.

       

      Section
        3.04 Binding
        Obligation. 
        Each of this Sale Agreement and the Bill of Sale constitutes a legal, valid
        and
        binding obligation enforceable against the Seller in accordance with its
        terms,
        subject to bankruptcy, receivership, insolvency, fraudulent transfer,
        reorganization, moratorium or other laws affecting creditors’ rights generally
        from time to time in effect and to general principles of equity (regardless
        of
        whether considered in a proceeding in equity or at law).

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      Section
        3.05 No
        Violation. 
        The execution and delivery by the Seller of each of this Sale Agreement and
        the
        Bill of Sale, the performance by the Seller of the transactions contemplated
        by
        each of this Sale Agreement and the Bill of Sale and the fulfillment by the
        Seller of the terms of this Sale Agreement and the Bill of Sale do not and
        will
        not conflict with, result in any breach of any of the terms and provisions
        of,
        or constitute (with or without notice or lapse of time) a default under,
        the
        Seller’s organizational documents or any indenture, agreement or other
        instrument to which the Seller is a party or by which the Seller is bound,
        or
        result in the creation or imposition of any lien upon any of the Seller’s
        properties pursuant to the terms of any such indenture, agreement or other
        instrument, except as contemplated by each of the Basic Documents, or violate
        any law or any order, rule or regulation applicable to the Seller of any
        court
        or of any federal or State regulatory body, administrative agency or other
        governmental instrumentality having jurisdiction over the Seller or its
        properties. 

       

      Section
        3.06 No
        Proceedings. 
        Except as disclosed in the prospectus dated ___________, 2006 and the related
        prospectus supplement dated ___________, 2006, of the Issuer, relating to
        the
        Transition Bonds (together, the “Prospectus”), there are no proceedings or
        investigations pending or, to the Seller’s best knowledge, threatened, before
        any court, federal or State regulatory body, administrative agency or other
        governmental instrumentality having jurisdiction over the Seller or its
        properties:

       

      (a)    asserting
        the invalidity of any of the Basic Documents or the Transition
        Bonds;

       

      (b)    seeking
        to prevent the issuance of the Transition Bonds or the consummation of any
        of
        the transactions contemplated by the Basic Documents or the Transition
        Bonds;

       

      (c)    seeking
        any determination or ruling that could reasonably be expected to materially
        and
        adversely affect the performance by the Seller or the Issuer of their respective
        obligations under, or the validity or enforceability of, the Basic Documents
        or
        the Transition Bonds;

       

      (d)    challenging
        the Seller’s treatment of the Transition Bonds as debt of the Seller for federal
        and State income tax purposes; or

       

      (e)    challenging
        the Competition Act, the Financing Order or the Restructuring Order (insofar
        as
        it relates to the sale, assignment or transfer of the Transferred Bondable
        Transition Property and the sale of the Transition Bonds).

       

      Section
        3.07 Approvals. 
        Except for the filing of financing statements and continuation statements
        under
        the New Jersey UCC and the Delaware UCC, no approval, authorization, consent,
        order or other action of, or filing with, any court, federal or State regulatory
        body, administrative agency or other governmental instrumentality is required
        in
        connection with the execution and delivery by the Seller and the Issuer of
        this
        Sale Agreement, the performance by the Seller and the Issuer of the transactions
        contemplated hereby or the fulfillment by the Seller and the Issuer of the
        terms
        hereof, except those that have been obtained or made.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      Section
        3.08 The
        Transferred Bondable Transition Property.
        

       

      (a)    Information.
        All
        information provided by the Seller to the Issuer with respect to the Transferred
        Bondable Transition Property is correct in all material respects.

       

      (b)    Effect
        of Transfer.
        Each
        sale, transfer, assignment and conveyance herein contemplated constitutes
        a sale
        or other absolute transfer of all right, title and interest of the Seller
        in, to
        and under the Transferred Bondable Transition Property from the Seller to
        the
        Issuer; upon execution and delivery of this Sale Agreement and the related
        Bill
        of Sale, the Seller will have no right, title or interest in, to or under
        the
        Transferred Bondable Transition Property; and the Transferred Bondable
        Transition Property would not be part of the estate of the Seller as debtor
        in
        the event of the filing of a bankruptcy petition by or against the Seller
        under
        any bankruptcy law.

       

      (c)    Transfer
        Filings.
        The
        Seller is the sole owner of the Transferred Bondable Transition Property
        sold to
        the Issuer on the Transfer Date; and upon the execution and delivery of this
        Sale Agreement and the related Bill of Sale, the Transferred Bondable Transition
        Property will have been validly sold, assigned, transferred and conveyed
        to the
        Issuer free and clear of all Liens other than Liens created by the Issuer
        pursuant to the Indenture. All actions or filings, including filings with
        the
        New Jersey Secretary of State and the Delaware Secretary of State under the
        New
        Jersey UCC and the Delaware UCC, respectively, necessary in any jurisdiction
        to
        give the Issuer a valid perfected ownership interest (and a valid perfected
        security interest, that when perfected will be first priority, pursuant to
        Section 2.01(e) hereof) in the Transferred Bondable Transition Property and
        to
        grant to the Trustee a valid perfected security interest that when perfected
        will be first priority in the Transferred Bondable Transition Property, free
        and
        clear of all Liens of the Seller or anyone else, other than the Issuer or
        the
        Trustee, have been taken or made. 

       

      (d)    Financing
        Order Irrevocable; Designee Certification; Process Valid; No Litigation;
        Etc.

       

      (i)    (A)    The
        Financing Order, as issued on June 8, 2006, has been issued by the BPU in
        accordance with the Competition Act, and such order and the process by which
        it
        was issued comply with all applicable laws, rules and regulations, including
        but
        not limited to the due process requirements of the United States Constitution
        and the New Jersey Constitution. The Financing Order has become effective
        pursuant to the Competition Act and is and as of the date of issuance of
        any
        Transition Bonds will be in full force and effect, final and
        non-appealable.

       

      (B)    The
        Designee Certification has been filed with the BPU in accordance with the
        Competition Act and the Financing Order.

       

      (ii)    As
        of the
        Series Issuance Date, the Transition Bonds of the related Series will be
        entitled to the protections provided by the Competition Act and, in accordance
        with the Competition Act, the Financing Order and the Transition Bond Charge
        authorized therein, subject to the periodic Transition Bond Charge
        Adjustments

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      authorized
        in the Financing Order, have become irrevocable and, upon issuance, each
        Advice
        Letter will be irrevocable, final and uncontestable.

       

      (iii) 

      (A)    Under
        the
        Competition Act, the State of New Jersey may not limit, alter or impair the
        Transferred Bondable Transition Property or other rights vested in the Seller,
        the Issuer and the Trustee (for the benefit of the Transition Bondholders)
        pursuant to the Financing Order until the Transition Bonds are fully paid
        and
        discharged, or in any way limit, alter, impair or reduce the value or amount
        of
        the Transferred Bondable Transition Property as approved by the BPU pursuant
        to
        the Financing Order; and 

       

      (B)    Under
        the
        Contract Clauses of the United States Constitution and the New Jersey
        Constitution, the State of New Jersey, including the BPU, could not, absent
        a
        demonstration that such action was necessary to serve a significant and
        legitimate public purpose, constitutionally take any action of a legislative
        character, including the repeal or amendment of the Competition Act, which
        would
        substantially limit, alter or impair the Bondable Transition Property or
        other
        rights vested in the Transition Bondholders pursuant to the Financing Order,
        or
        substantially limit, alter, impair or reduce the value or amount of the Bondable
        Transition Property, unless such action is a reasonable exercise of the State
        of
        New Jersey’s sovereign powers and of a character reasonable and appropriate to
        the public purpose justifying such action, and under the Takings Clauses
        of the
        United States and New Jersey Constitutions, the State of New Jersey could
        not
        repeal or amend the Competition Act or take any other action in contravention
        of
        its pledge and agreement quoted above without paying just compensation to
        the
        Transition Bondholders, as determined by a court of competent jurisdiction,
        if
        doing so would constitute a permanent appropriation of a substantial property
        interest of the Transition Bondholders in the Bondable Transition Property
        and
        deprive the Transition Bondholders of their reasonable expectations arising
        from
        their investments in the Transition Bonds. The Seller, however, does not
        represent or warrant that, even if a court were to award just compensation,
        it
        would be sufficient to pay the full amount of principal of and interest on
        the
        Transition Bonds.

       

      (iv)    There
        is
        no order by any court providing for the revocation, alteration, limitation
        or
        other impairment of the Competition Act, the Financing Order, the Restructuring
        Order (insofar as it relates to the sale of the Transferred Bondable Transition
        Property), any Advice Letter, the Transferred Bondable Transition Property
        or
        the Transition Bond Charge or any rights arising under any of the foregoing
        or
        to enjoin the performance of any obligations under the Financing
        Order.

       

      (v)    No
        other
        approval, authorization, consent, order or other action of, or filing with,
        any
        court, federal or State regulatory body, administrative agency or other
        governmental instrumentality is required in connection with the creation,
        sale,
        transfer, assignment or conveyance of the Transferred Bondable Transition
        Property, except those that have been obtained or made.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      (e)    Assumptions.
        The
        assumptions used in calculating the Transition Bond Charge in any Advice
        Letter
        delivered by the Seller to the BPU pursuant to the Financing Order are
        reasonable and made in good faith. Notwithstanding the foregoing, the Seller
        makes no representation or warranty, express or implied, that the assumptions
        used in calculating the Transition Bond Charge will in fact be
        realized.

       

      (f)    Creation
        of Transferred Bondable Transition Property. 

       

      (i)    For
        purposes of the Competition Act, the New Jersey UCC and the Delaware UCC,
        the
        Transferred Bondable Transition Property, upon transfer thereof to the Issuer,
        will constitute a presently existing property right;

       

      (ii)    the
        Bondable Transition Property includes, without limitation, (A) the
        irrevocable right of the Seller to charge, collect and receive, and be paid
        from
        collections of, the Transition Bond Charge in the amounts necessary to provide
        for the full recovery of the Bondable Stranded Costs which have been determined
        to be recoverable in the Financing Order and (B) all rights of the Seller
        under
        the Financing Order, including all rights to obtain periodic adjustments
        of the
        Transition Bond Charge pursuant to the Competition Act, and all revenues,
        collections, payments, money and proceeds arising under, or with respect
        to, all
        of the foregoing; 

       

      (iii)    the
        Bondable Transition Property is not subject to any Lien created by a previous
        indenture; and

       

      (iv)    the
        Financing Order, including the right to collect the Transition Bond Charge,
        has
        become irrevocable. 

       

      Section
        3.09 Solvency. 
        After giving effect to the sale, transfer, assignment and conveyance of any
        Transferred Bondable Transition Property hereunder, the Seller: 

       

      (a)    is
        solvent and expects to remain solvent; 

       

      (b)    is
        adequately capitalized to conduct its business and affairs considering its
        size
        and the nature of its business and intended purposes;

       

      (c)    is
        not
        engaged in, nor does it expect to engage in, a business for which its remaining
        property represents an unreasonably small portion of its capital;

       

      (d)    reasonably
        believes that it will be able to pay its debts as they come due;
        and

       

      (e)    is
        able
        to pay its debts as they mature and does not intend to incur, or does not
        believe that it will incur, indebtedness that it will not be able to repay
        at
        its maturity.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        IV


       

      COVENANTS
        OF THE SELLER

       

      The
        Seller makes the following covenants and agrees that these covenants inure
        to
        the benefit of the Issuer and the Trustee for the benefit of the Transition
        Bondholders.

       

      Section
        4.01 Seller’s
        Existence. 
        Except as provided in Section 5.02 hereof, and for so long as any of the
        Transition Bonds are outstanding, the Seller shall keep in full force and
        effect
        its existence as a corporation and remain in good standing under the laws
        of the
        jurisdiction of its organization, and shall obtain and preserve its
        qualification to do business in each jurisdiction in which such qualification
        is
        or will be necessary to protect the validity and enforceability of this Sale
        Agreement and each other instrument or agreement to which the Seller is a
        party
        necessary to the proper administration of this Sale Agreement and the
        transactions contemplated hereby.

       

      Section
        4.02 No
        Liens or Conveyances. 
        Except for the sales, transfers, assignments and conveyances hereunder, the
        Seller shall not sell, pledge, assign, transfer or otherwise convey to any
        other
        Person, or grant, create, incur, assume or suffer to exist any Lien on, any
        of
        the Transferred Bondable Transition Property, whether now existing or hereafter
        created, or any interest therein. The Seller shall not at any time assert
        any
        Lien against or with respect to any Transferred Bondable Transition Property,
        and shall defend the right, title and interest of the Issuer, and upon the
        pledge of the Issuer to the Trustee, the Trustee’s right, title and interest in,
        to and under the Transferred Bondable Transition Property, whether now existing
        or hereafter created, against all claims of third parties claiming through
        or
        under the Seller. The costs of any such defense shall be reimbursed by the
        Issuer to the Seller from amounts on deposit in the Collection Account as
        an
        Operating Expense.

       

      Section
        4.03 Use
        of Proceeds. 
        The Seller shall use the proceeds from the sale of the Bondable Transition
        Property in accordance with the Financing Order and the Competition
        Act.

       

      Section
        4.04 Delivery
        of Collections. 
In
        the event that the Seller is no longer acting as the Servicer under the
        Servicing Agreement, if the Seller receives collections of the Transition
        Bond
        Charge with respect to the Transferred Bondable Transition Property or the
        proceeds thereof, the Seller shall pay the Servicer, on behalf of the Issuer,
        all payments received by the Seller in respect thereof as soon as practicable
        after receipt thereof by the Seller, but in no event later than two Business
        Days after such receipt.

       

      Section
        4.05 Notice
        of Liens. 
        The Seller shall notify the Issuer and the Trustee promptly after becoming
        aware
        of any Lien on any Transferred Bondable Transition Property other than the
        conveyances hereunder or under the Indenture.

       

      Section
        4.06 Compliance
        with Law. 
        The Seller shall comply with its organizational or governing documents and
        all
        laws, treaties, rules, regulations and determinations of any governmental
        instrumentality applicable to the Seller, except to the extent that failure
        to
        so comply would not adversely affect the Issuer’s or the Trustee’s interests in
        the

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      Transferred
        Bondable Transition Property or under any of the Basic Documents or the Seller’s
        performance of its obligations hereunder or under any other Basic Document
        to
        which Seller is a party. 

       

      Section
        4.07 Covenants
        Related to Transferred Bondable Transition Property.

       

      (a)    So
        long
        as any of the Transition Bonds are Outstanding, the Seller shall:

       

      (i)    treat
        the
        Transition Bonds as debt of the Issuer and not of the Seller, except for
        financial accounting, State or federal regulatory or tax reporting
        purposes;

       

      (ii)    clearly
        disclose in its financial statements that it is not the owner of the Transferred
        Bondable Transition Property and that the assets of the Issuer are not available
        to pay creditors of the Seller or any of its Affiliates (other than the Issuer);
        

       

      (iii)    clearly
        disclose all transactions between the Seller and the Issuer and the effects
        thereof in accordance with generally accepted accounting principles;
        and

       

      (iv)    not
        own
        or purchase any Transition Bonds. 

       

      (b)    The
        Seller agrees that upon the sale, transfer, assignment and conveyance by
        the
        Seller of the Transferred Bondable Transition Property to the Issuer pursuant
        to
        this Sale Agreement:

       

      (i)    to
        the
        fullest extent permitted by law, including the Competition Act and applicable
        BPU Regulations, the Issuer shall have all of the rights originally held
        by the
        Seller with respect to the Transferred Bondable Transition Property (other
        than
        the rights exclusively conferred upon an electric public utility as set forth
        in
        the Competition Act), including the right to collect any amounts payable
        by any
        Customer or Third Party in respect of such Transferred Bondable Transition
        Property, notwithstanding any objection or direction to the contrary by the
        Seller; and

       

      (ii)    any
        payment by any Customer or Third Party to the Issuer shall discharge such
        Customer’s or such Third Party’s obligations in respect of such Transferred
        Bondable Transition Property to the extent of such payment, notwithstanding
        any
        objection or direction to the contrary by the Seller. 

       

      (c)    So
        long
        as any of the Transition Bonds are Outstanding: 

       

      (i)    in
        all
        proceedings relating directly or indirectly to the Transferred Bondable
        Transition Property, the Seller shall (A) affirmatively certify and confirm
        that
        it has sold the Transferred Bondable Transition Property to the Issuer (other
        than for financial accounting, State or federal regulatory or tax purposes)
        and
        (B) not make any statement or reference in respect of the Transferred Bondable
        Transition Property that is inconsistent with the ownership thereof by the
        Issuer (other than for financial accounting, State or federal regulatory
        or tax
        reporting purposes); and

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      (ii)    the
        Seller shall not take any action in respect of the Transferred Bondable
        Transition Property except as contemplated by the Basic Documents.

       

      Section
        4.08 Indemnification
        Notice. 
        The Seller shall deliver an Officers’ Certificate to the Issuer and Trustee
        promptly after having obtained knowledge of the occurrence of any event which
        requires or which, with the giving or notice or the passage of time or both,
        would require the Seller to make any indemnification payment pursuant to
        this
        Sale Agreement.

       

      Section
        4.09 Protection
        of Title. 
        The
        Seller shall execute and file such filings, and cause to be executed and
        filed
        such filings, and take all such actions, all in such manner and in such places
        as may be required by law fully to preserve, maintain, protect and perfect
        the
        interests of the Issuer and the Trustee in the Transferred Bondable Transition
        Property, including all filings required under the New Jersey UCC and the
        Delaware UCC relating to the transfer of the ownership of the Transferred
        Bondable Transition Property by the Seller to the Issuer and the pledge of
        the
        Transferred Bondable Transition Property by the Issuer to the Trustee. The
        Seller shall deliver (or cause to be delivered) to the Issuer and the Trustee
        file-stamped copies of, or filing receipts for, any document filed as provided
        above, as soon as available following such filing. The Seller shall institute
        any action or proceeding necessary to compel the performance by the BPU or
        the
        State of New Jersey of any of their obligations or duties under the Competition
        Act or the Financing Order, and the Seller agrees to take such legal or
        administrative actions, including defending against or instituting and pursuing
        legal actions and appearing or testifying at hearings or similar proceedings,
        in
        each case as may be reasonably necessary: 

       

      
        	 	
                (a)

              	
                to
                  protect the Issuer and the Trustee for the benefit of the Transition
                  Bondholders from claims, State actions or other actions or proceedings
                  of
                  third parties which, if successfully pursued, would result in a
                  breach of
                  any representation or warranty set forth in Article III of this
                  Sale
                  Agreement or of any covenant set forth in this Article IV;
                  or

              


      

       

      
        	 	
                (b)

              	
                to
                  block or overturn any attempts to cause a repeal of, modification
                  of or
                  supplement to the Competition Act, the Financing Order, any Advice
                  Letter,
                  the Restructuring Order (to the extent it affects the rights of
                  Transition
                  Bondholders or the validity or value of the Bondable Transition
                  Property),
                  the Bondable Transition Property or the rights of the Transition
                  Bondholders by legislative enactment or constitutional amendment
                  that
                  would be adverse to the Issuer, the Trustee or the Transition
                  Bondholders.

              


      

       

      The
        costs
        of any such actions or proceedings shall be reimbursed by the Issuer to the
        Seller from amounts on deposit in the Collection Account as an Operating
        Expense. The Seller’s obligations pursuant to this Section 4.09 shall survive
        and continue notwithstanding that the payment of Operating Expenses pursuant
        to
        the Indenture may be delayed (it being understood that the Seller may be
        required to advance its own funds to satisfy its obligation hereunder). The
        Seller designates the Issuer as its agent and attorney-in-fact to execute
        and
        file any of financing statements, continuation statements or other instruments
        required by the Issuer pursuant to this Section 4.09, it being understood
        that
        the Issuer shall have no obligation to execute any such instruments. It is
        also
        understood that, subject to the provisions of this Section 4.09, the Seller
        is
        not under any obligation to appear in, prosecute or defend any legal action
        that
        is not incidental

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      to
        its
        obligations hereunder, and that in the Seller’s opinion may involve the Seller
        in any expense or liability.

       

      Section
        4.10 Taxes. 
So
        long as any of the Transition Bonds are Outstanding, the Seller shall, and
        shall
        cause each of its subsidiaries to, pay all material taxes, assessments and
        governmental charges imposed upon it or any of its properties or assets
        (including any Bondable Transition Property which the Seller is deemed to
        own
        for tax purposes) or with respect to any of its franchises, business, income
        or
        property before any penalty accrues thereon if the failure to pay any such
        material taxes, assessments and governmental charges would, after any applicable
        grace periods, notices or other similar requirements, result in a Lien on
        the
        Transferred Bondable Transition Property; provided, that no such tax need
        be
        paid if the Seller or any of its subsidiaries is contesting the same in good
        faith by appropriate proceedings promptly instituted and diligently conducted
        and if the Seller or such subsidiary has established appropriate reserves
        as
        shall be required in conformity with generally accepted accounting principles.
        

       

      ARTICLE
        V


       

      ADDITIONAL
        UNDERTAKINGS OF THE SELLER

       

      The
        Seller hereby undertakes the obligations contained in this Article V and
        agrees
        that the Issuer shall have the right to assign its rights with respect to
        such
        obligations to the Trustee for the benefit of the Transition
        Bondholders.

       

      Section
        5.01 Liability
        of the Seller; Indemnities.
        

       

      (a)    The
        Seller shall be liable in accordance herewith only to the extent of the
        obligations specifically undertaken by the Seller under this Sale
        Agreement.

       

      (b)    The
        Seller shall indemnify the Issuer, each Swap Counterparty, if any, and the
        Trustee, for itself and on behalf of the Transition Bondholders, and each
        of
        their respective officers, directors, managers, employees and agents, for,
        and
        defend and hold harmless each such person from and against, any and all taxes
        (other than any taxes imposed on the Transition Bondholders solely as a result
        of their ownership of the Transition Bonds) that may at any time be imposed
        on
        or asserted against any such person under existing law as of any Transfer
        Date
        as a result of the sale, transfer, assignment and conveyance of the Transferred
        Bondable Transition Property by the Seller to the Issuer, the acquisition
        or
        holding of the Transferred Bondable Transition Property by the Issuer or
        the
        issuance and sale by the Issuer of the Transition Bonds, including any sales,
        general corporation, personal property, privilege, franchise or license taxes
        not recovered by the Issuer through the Transition Bond Charge or through
        the
        Market Transition Charge, but excluding any taxes imposed as a result of
        a
        failure of such person to properly withhold or remit taxes imposed with respect
        to payments on any Transition Bond, it being understood that the Transition
        Bondholders shall be entitled to enforce their rights against the Seller
        under
        this Section 5.01(b) solely through a cause of action brought for their benefit
        by the Trustee in accordance with the terms of the Indenture.

       

      (c)    The
        Seller shall indemnify the Issuer, each Swap Counterparty, if any, and the
        Trustee, for itself and on behalf of the Transition Bondholders, and each
        of
        their respective

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      officers,
        directors, managers, employees and agents, for, and defend and hold harmless
        each such person from and against, (i) any and all amounts of principal of
        and interest on the Transition Bonds (including amounts owed to Holders of
        any
        floating rate Transition Bonds) not paid when due or when scheduled to be
        paid
        in accordance with their terms and the amount of any deposits to the Issuer
        required to have been made in accordance with the terms of the Basic Documents
        or the Financing Order which are not made when so required, in each case
        as a
        result of the Seller’s breach of any of its representations, warranties or
        covenants contained in this Sale Agreement, and (ii) any and all liabilities,
        obligations, claims, actions, suits or payments of any kind whatsoever that
        may
        be imposed on or asserted against any such person, other than any liabilities,
        obligations or claims for, or payments of, principal of, or interest on,
        the
        Transition Bonds, together with any reasonable costs and expenses incurred
        by
        such person, as a result of the Seller’s breach of any of its representations,
        warranties or covenants contained in this Sale Agreement.

       

      (d)    Indemnification
        under this Section 5.01 shall survive any repeal, modification, or judicial
        invalidation of, or supplement to the Competition Act or any Financing Order
        and
        shall survive the resignation or removal of the Trustee and the termination
        of
        this Sale Agreement and shall include reasonable fees and expenses of
        investigation and litigation (including reasonable attorneys’ fees and
        expenses). The Seller shall not indemnify any party under this Section 5.01
        for
        any changes in law after the Transfer Date.

       

      (e)    The
        indemnification obligation of the Seller under this Section 5.01 shall be
        pari
        passu with all other general unsecured obligations of the Seller.

       

      Section
        5.02 Merger
        or Consolidation of, or Assumption of the Obligations of, the
        Seller. 
        Any
        Person:

       

      
        	 	
                (a)

              	
                into
                  which the Seller may be merged, converted or consolidated and which
                  succeeds to all or substantially all of the electric distribution
                  business
                  of the Seller,

              


      

       

      
        	 	
                (b)

              	
                which
                  results from the division of the Seller into two or more Persons
                  and which
                  succeeds to all or substantially all of the electric distribution
                  business
                  of the Seller, 

              


      

       

      
        	 	
                (c)

              	
                which
                  may result from any merger or consolidation to which the Seller
                  shall be a
                  party and which succeeds to all or substantially all of the electric
                  distribution business of the
                  Seller,

              


      

       

      
        	 	
                (d)

              	
                which
                  may succeed to the properties and assets of the Seller substantially
                  as a
                  whole and which succeeds to all or substantially all of the electric
                  distribution business of the Seller,
                  or

              


      

       

      
        	 	
                (e)

              	
                which
                  may otherwise succeed to all or substantially all of the electric
                  distribution business of the
                  Seller,

              


      

       

      which
        Person in any of the foregoing cases executes an agreement of assumption
        to
        perform every obligation of the Seller under this Sale Agreement, shall be
        the
        successor to the Seller

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      hereunder
        without the execution or filing of any other document or any further act
        by any
        of the parties to this Sale Agreement; provided, however, that

       

      
        	 	
                (i)

              	
                immediately
                  after giving effect to such transaction, no representation, warranty
                  or
                  covenant made pursuant to Article III or Article IV of this Sale
                  Agreement, as the case may be, shall have been
                  breached,

              


      

       

      
        	 	
                (ii)

              	
                the
                  Seller shall have delivered to the Issuer and the Trustee an Officers’
                  Certificate and an Opinion of Counsel each stating that such
                  consolidation, merger or succession and such agreement of assumption
                  comply with this Section 5.02 and that all conditions precedent,
                  if any,
                  provided for in this Sale Agreement relating to such transaction
                  have been
                  complied with,

              


      

       

      
        	 	
                (iii)

              	
                the
                  Seller shall have delivered to the Issuer and the Trustee an Opinion
                  of
                  Counsel either

              


      

       

      
        	 	
                (A)

              	
                stating
                  that, in the opinion of such counsel, all filings to be made by
                  the Seller
                  and the Issuer, including New Jersey UCC filings and the Delaware
                  UCC
                  filings, that are necessary fully to preserve and protect fully
                  the
                  respective interests of the Issuer and the Trustee in the Transferred
                  Bondable Transition Property have been executed and filed, and
                  reciting
                  the details of such filings, or

              


      

       

      
        	 	
                (B)

              	
                stating
                  that, in the opinion of such counsel, no such action is necessary
                  to
                  preserve and protect such
                  interests,

              


      

       

      
        	 	
                (iv)

              	
                the
                  Rating Agencies shall have received prior written notice of such
                  transaction and

              


      

       

      
        	 	
                (v)

              	
                the
                  Seller shall have delivered to the Issuer and the Trustee an opinion
                  of
                  independent tax counsel (as selected by, and in form and substance
                  reasonably satisfactory to, the Seller, and which may be based
                  on a ruling
                  from the Internal Revenue Service) to the effect that, for federal
                  income
                  tax purposes, such consolidation or merger will not result in a
                  material
                  adverse federal income tax consequence to the Seller, the Issuer,
                  the
                  Trustee or the Holders of the Outstanding Transition
                  Bonds.

              


      

       

      The
        Seller shall not consummate any transaction referred to in clauses (a), (b),
        (c), (d) or (e) above except upon execution of the above described agreement
        of
        assumption and compliance with clauses (i), (ii), (iii), (iv) and (v) above.
        When any Person acquires the properties and assets of the Seller substantially
        as a whole and becomes the successor to the Seller in accordance with the
        terms
        of this Section 5.02, then upon the satisfaction of all of the other conditions
        of this Section 5.02, the Seller shall automatically and without further
        notice
        be released from its obligations hereunder.

       

      Section
        5.03 Limitation
        on Liability of the Seller and Others. 
        The
        Seller and any director, officer, employee or agent of the Seller may rely
        in
        good faith on the advice of counsel or on any document of any kind, prima
        facie
        properly executed and submitted by any

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      Person,
        respecting any matters arising hereunder. Subject to Section 4.09, the Seller
        shall not be under any obligation to appear in, prosecute or defend any legal
        action that is not incidental to its obligations under this Sale Agreement,
        and
        that in its opinion may involve it in any expense or liability.

       

      ARTICLE
        VI


       

      MISCELLANEOUS
        PROVISIONS

       

      Section
        6.01 Amendment. 

       

      (a)    This
        Sale
        Agreement may be amended by the Seller and the Issuer, with the consent of
        the
        Trustee, provided written notice of the substance of the amendment is provided
        by the Issuer to each Rating Agency. 

       

      (b)    Prior
        to
        the execution of any amendment to this Sale Agreement, the Issuer and the
        Trustee shall be entitled to receive and rely upon an Opinion of Counsel
        stating
        that the execution of such amendment is authorized or permitted by this Sale
        Agreement. The Issuer and the Trustee may, but shall not be obligated to,
        enter
        into any such amendment which affects their own rights, duties or immunities
        under this Sale Agreement or otherwise. 

       

      Section
        6.02 Notices. 
        Unless
        otherwise specifically provided herein, all notices, directions, consents
        and
        waivers required under the terms and provisions of this Sale Agreement shall
        be
        in English and in writing, and any such notice, direction, consent or waiver
        may
        be given by United States first-class mail, reputable overnight courier service,
        facsimile transmission or electronic mail (confirmed by telephone, United
        States
        first-class mail or reputable overnight courier service in the case of notice
        by
        facsimile transmission or electronic mail) or any other customary means of
        communication, and any such notice, direction, consent or waiver shall be
        effective when delivered or transmitted, or if mailed, five days after deposit
        in the United States first-class mail with proper postage for first-class
        mail
        prepaid:

       

      
        	 	
                (a)

              	
                in
                  the case of the Seller, at Jersey Central Power & Light Company, 76
                  South Main Street, Akron, Ohio 44308, Attention:
                  Treasurer;

              


      

       

      
        	 	
                (b)

              	
                in
                  the case of the Issuer, at JCP&L Transition Funding II LLC, 103 Foulk
                  Road, Suite 202, Wilmington, Delaware 19803, with a copy to JCP&L
                  Transition Funding II LLC, c/o FirstEnergy Service Company, 76
                  South Main
                  Street, Akron, Ohio 44308, Attention:
                  Managers;

              


      

       

      
        	 	
                (c)

              	
                in
                  the case of Moody’s, at Moody’s Investors Service, Inc., ABS Monitoring
                  Department, 99 Church Street, New York, New York
                  10007;

              


      

       

      
        	 	
                (d)

              	
                in
                  the case of Standard & Poor’s, at Standard & Poor’s, Structured
                  Finance, ABS Surveillance Group, 55 Water Street, 41st
                  Floor, New York, New York 10041-0003, Fax: 212-438-2664;
                  

              


      

       

      
        	 	
                (e)

              	
                in
                  the case of Fitch, at Fitch, Inc., One State Street Plaza, New
                  York, New
                  York 10004, Attention: ABS Surveillance;
                  and

              


      

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (f)

              	
                in
                  the case of the Trustee, at the address provided for notices or
                  communications to the Trustee in Section 11.04(a) of the Indenture;
                  

              


      

       

      or,
        as to
        each of the foregoing, at such other address as shall be designated by written
        notice to the other parties.

       

      Section
        6.03 Assignment
        by Seller. 
        Subject
        to Section 5.02, this Sale Agreement may not be assigned by the
        Seller.

       

      Section
        6.04 Assignment
        to Trustee. 
        The Seller hereby acknowledges and consents to any pledge, assignment and
        grant
        of a security interest by the Issuer to the Trustee pursuant to the Indenture
        of
        all right, title and interest of the Issuer in, to and under the Transferred
        Bondable Transition Property and the proceeds thereof and the assignment
        of any
        or all of the Issuer’s rights hereunder to the Trustee.

       

      Section
        6.05 Limitations
        on Rights of Others. 
        The provisions of this Sale Agreement are solely for the benefit of the Seller,
        the Issuer and the Trustee, on behalf of itself and the Transition Bondholders,
        and nothing in this Sale Agreement, whether express or implied, shall be
        construed to give to any other Person any legal or equitable right, remedy
        or
        claim in the Collateral or under or in respect of this Sale Agreement or
        any
        covenants, conditions or provisions contained herein.

       

      Section
        6.06 Severability. 
        Any provision of this Sale Agreement that is prohibited or unenforceable
        in any
        jurisdiction shall, as to such jurisdiction, be ineffective to the extent
        of
        such prohibition or unenforceability without invalidating the remaining
        provisions hereof, and any such prohibition or unenforceability in any
        jurisdiction shall not invalidate or render unenforceable such provision
        in any
        other jurisdiction.

       

      Section
        6.07 Separate
        Counterparts. 
        This Sale Agreement may be executed by the parties hereto in separate
        counterparts, each of which when so executed and delivered shall be an original,
        but all such counterparts shall together constitute but one and the same
        instrument.

       

      Section
        6.08 Headings. 
        The headings of the various Articles and Sections herein are for convenience
        of
        reference only and shall not define or limit any of the terms or provisions
        hereof.

       

      Section
        6.09 Governing. 
        THIS SALE AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
        STATE
        OF NEW JERSEY, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
        OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
        IN
        ACCORDANCE WITH SUCH LAWS.

       

      Section
        6.10 Nonpetition
        Covenant. 
        Notwithstanding any prior termination of this Sale Agreement or the Indenture,
        the Seller hereby covenants and agrees that it shall not, prior to the date
        which is one year and one day after the termination of the Indenture and
        the
        payment in full of the Transition Bonds, any other amounts owed under the
        Indenture, including, without limitation any amounts owed to third-party
        credit
        enhancers, and any amounts owed

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      under
        Interest Rate Swap Agreements, acquiesce, petition or otherwise invoke or,
        cause
        the Issuer to invoke, the process of any court or government authority for
        the
        purpose of commencing or sustaining a case against the Issuer under any federal
        or State bankruptcy, insolvency or similar law or appointing a receiver,
        liquidator, assignee, trustee, custodian, sequestrator or other similar official
        of the Issuer or any substantial part of the property of the Issuer, or ordering
        the winding up or liquidation of the affairs of the Issuer.

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

         

      

      IN
        WITNESS WHEREOF, the parties hereto have caused this Sale Agreement to be
        duly
        executed and delivered by their respective duly authorized officers as of
        the
        date and year first above written.

       

      
        	
                JCP&L
                  TRANSITION FUNDING II LLC,
                  

                as
                  Issuer

              
	 
	 
	
                By:______________________________________ 

              
	
                Name: 

              
	
                Title:

              
	 
	 
	
                JERSEY
                  CENTRAL POWER & LIGHT COMPANY,
                  

                as
                  Seller

              
	 
	 
	
                By:______________________________________ 

              
	
                Name:  

              
	
                Title:  

              


      

      


      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        A


       

      BILL
        OF SALE

       

      For
        good
        and valuable consideration, the receipt of which is hereby acknowledged,
        JERSEY
        CENTRAL POWER & LIGHT COMPANY,
        a New
        Jersey corporation (the “Seller”), does hereby sell, assign, transfer and convey
        to JCP&L
        TRANSITION FUNDING II LLC,
        a
        Delaware limited liability company (the “Issuer”), without recourse except as
        provided in the Bondable Transition Property Sale Agreement dated as of
        _________, 2006 (the “Sale Agreement”) between the Issuer and the Seller, all of
        the Seller’s right, title and interest in, to and under all of its Bondable
        Transition Property, which sale, assignment, transfer and conveyance of such
        Bondable Transition Property shall include, as provided in the Competition
        Act,
        the sale, assignment, transfer and conveyance of all of the Seller’s right,
        title and interest in, to and under all revenues, collections, payments,
        money
        or proceeds arising under or with respect to the Transition Bond Charge related
        to such Bondable Transition Property, as the same may be adjusted from time
        to
        time in accordance with the Competition Act and the Financing Order, to have
        and
        to hold the same unto the Issuer and to the successors and assigns of the
        Issuer, forever.

       

      Capitalized
        terms used and not otherwise defined herein shall have the meanings assigned
        to
        such terms in Appendix A of the Indenture dated as of __________, 2006 between
        the Issuer and The Bank of New York, as Trustee.

       

      This
        Bill
        of Sale is governed by the laws of the State of New Jersey.

       

      IN
        WITNESS WHEREOF, the Seller has duly executed and delivered this Bill of
        Sale
        this ___ day of __________, 2006.

       

      
        	
                JERSEY
                  CENTRAL POWER & LIGHT COMPANY,
                  

                as
                  Seller 

              
	 
	 
	
                By:______________________________________
                   

              
	
                Name: 

              
	
                Title: 

              


      

      


      
        	
                Accepted
                  this ___ day of ________, 2006.

              
	 
	
                JCP&L
                  TRANSITION FUNDING II LLC, 

                as
                  Issuer

              
	 
	 
	
                By:______________________________ 

              
	
                Name: 

              
	
                Title: 

              


      

       

      
        
          
          

        

        
          A-1

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        B

       

      OFFICERS’
        CERTIFICATE

      


      We,
        __________, __________ and___________, _________________ of Jersey Central
        Power
& Light Company (the "Company"), pursuant to Sections 2.02(b) and 2.02(g) of
        the Bondable Transition Property Sale Agreement, dated as of _______, 2006
        (the
“Sale Agreement”), by and between JCP&L Transition Funding II LLC and the
        Company, hereby certify as follows (capitalized terms used herein and not
        otherwise defined have the meanings set forth in the Sale
        Agreement):

       

      
        	
                (i)

              	
                No
                  breach by the Company of its representations, warranties or covenants
                  in
                  the Sale Agreement exists; and 

              


      

       

      
        	
                (ii)

              	
                Each
                  condition precedent that must be satisfied by the Company under
                  Section
                  2.02 of the Sale Agreement has been
                  satisfied.

              


      

       

       

      


      


      IN
        WITNESS WHEREOF, we have hereunto set our hands this ___ day of _____,
        2006.


      


       

      _______________________________________

      Name:

      Title:


      


       

      _______________________________________

      Name:

      Title:

       

      
        
          
          

        

        
          B-1