Form of Intercreditor Agreement


     

    Exhibit
      10(e)

     

    INTERCREDITOR
      AGREEMENT

     

    INTERCREDITOR
      AGREEMENT dated as of __________________, 2006 among:

     

    Jersey
      Central Power & Light Company, a New Jersey corporation (in its individual
      capacity, the “Company”),

     

    JCP&L
      Transition Funding LLC, a Delaware limited liability company (the “Initial
      Transition Bond Issuer”),

     

    JCP&L
      Transition Funding II LLC, a Delaware limited liability company (the
“Additional
      Transition Bond Issuer”),
      

     

    The
      Bank
      of New York, a New York banking corporation, in its capacity as trustee under
      the Indenture dated as of June 11, 2002 by and between the Initial Transition
      Bond Issuer and The Bank of New York, as Trustee, (the “Initial
      Transition Bond Trustee”),

     

    Jersey
      Central Power & Light Company, a New Jersey corporation, in its capacity as
      the initial servicer of the Initial Transition Property referred to below
      (including any successor in such capacity, the “Initial
      TC Servicer”),

     

    The
      Bank
      of New York, a New York banking corporation, in its capacity as trustee under
      the Indenture dated as of ___________, 2006 by and between the Additional
      Transition Bond Issuer and The Bank of New York, as Trustee, (the “Additional
      Transition Bond Trustee”),

     

    Jersey
      Central Power & Light Company, a New Jersey corporation, in its capacity as
      the initial servicer of the Additional Transition Property referred to below
      (including any successor in such capacity, the “Additional
      TC Servicer”),
      and

     

    Jersey
      Central Power & Light Company, a New Jersey corporation, in its capacity as
      collection agent for the benefit of the Initial TC Servicer and the Additional
      TC Servicer (the “Utility”).

     

    WHEREAS,
      pursuant to the terms of the Sale Agreement dated as of June 11, 2002 by and
      between the Initial Transition Bond Issuer and Jersey Central Power & Light
      Company, in its capacity as Seller (as it may hereafter from time to time be
      amended, restated or modified, the “Initial
      Sale Agreement”),
      the
      Company has sold to the Initial Transition Bond Issuer certain assets known
      as
“Transition Property” which includes the “Transition Charges” (hereinafter, the
“Initial
      Transition Property”
and
      the
“Initial
      Transition Charges”);
      and

     

    WHEREAS,
      pursuant to the terms of the Indenture dated as of June 11, 2002 by and between
      the Initial Transition Bond Issuer and the Initial Transition Bond Trustee
      (as
      it may hereafter from time to time be amended, restated or modified and as
      supplemented from time to time by one or more Series Supplements, such Series
      Supplements and Indenture being collectively referred to herein as the
“Initial
      Indenture”),
      the
      Initial Transition Bond Issuer, among other things, has granted to the Initial
      Transition Bond Trustee a security interest in certain of its assets, including
      the Initial Transition Property, to secure, among other things, the Transition
      Bonds issued pursuant to the Initial Indenture (the “Initial
      Transition Bonds”);
      and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    WHEREAS,
      pursuant to the terms of the Servicing Agreement dated as of June 11, 2002
      by
      and between the Initial Transition Bond Issuer and the Initial TC Servicer
      (as
      it may hereafter from time to time be amended, restated or modified, the
“Initial
      Servicing Agreement”),
      the
      Initial TC Servicer has agreed to provide for the benefit of the Initial
      Transition Bond Issuer servicing functions with respect to the Initial
      Transition Charges; and

     

    WHEREAS,
      pursuant to the terms of the Sale Agreement dated as of ___________, 2006 by
      and
      between the Additional Transition Bond Issuer and Jersey Central Power &
Light Company, in its capacity as Seller (as it may hereafter from time to
      time
      be amended, restated or modified, the “Additional
      Sale Agreement”),
      the
      Company has sold to the Additional Transition Bond Issuer certain additional
      Transition Property which includes additional related Transition Charges
      (hereinafter, the “Additional
      Transition Property”
and
      the
“Additional
      Transition Charges”);
      and

     

    WHEREAS,
      pursuant to the terms of the Indenture dated as of ___________, 2006 by and
      between the Additional Transition Bond Issuer and the Additional Transition
      Bond
      Trustee (as it may hereafter from time to time be amended, restated or modified
      and as supplemented from time to time by one or more Series Supplements, such
      Series Supplements and Indenture being collectively referred to herein as the
      “Additional
      Indenture”,
      and
      together with the Initial Indenture, the “Indentures”),
      the
      Additional Transition Bond Issuer, among other things, has granted to the
      Additional Transition Bond Trustee a security interest in certain of its assets,
      including the Additional Transition Property, to secure, among other things,
      the
      Transition Bonds issued pursuant to the Additional Indenture (the “Additional
      Transition Bonds”);
      and

     

    WHEREAS,
      pursuant to the terms of the Servicing Agreement dated as of ______________,
      2006 by and between the Additional Transition Bond Issuer and the Additional
      TC
      Servicer (as it may hereafter from time to time be amended, restated or
      modified, the “Additional
      Servicing Agreement”,
      and
      together with the Initial Servicing Agreement, the “Servicing
      Agreements”),
      the
      Additional TC Servicer has agreed to provide for the benefit of the
      Additional Transition Bond Issuer servicing functions with respect to the
      Additional Transition Charges; and

     

    WHEREAS,
      the Initial Transition Charges, Additional Transition Charges, related MTC-Tax
      charges (“MTC-Taxes”),
      applicable New Jersey sales and use taxes (the “Sales
      and Use Taxes”)
      will
      be combined as a single line item (i) with the non-utility generation charge
      on
      each non-residential customer’s bill and (ii) with the electric distribution
      charge on each residential customer’s bill (such combined amounts, the
“Collections”);
      and


     

    WHEREAS,
      the parties hereto wish to agree upon their respective rights relating to such
      Collections and any bank accounts into which the same may be deposited, as
      well
      as other matters of common interest to them which arise under or result from
      the
      coexistence of the Initial Sale Agreement, the Initial Indenture, the Initial
      Servicing Agreement, the Additional Sale Agreement, the Additional Indenture
      and
      the Additional Servicing Agreement;

     

    NOW,
      THEREFORE, in consideration of the premises and the mutual covenants herein
      contained, the parties hereto agree as follows:

     

    
      
        
        

      

      
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    SECTION
      1. Acknowledgment
      of Ownership Interests and Security Interests.
      The
      Initial Transition Bond Trustee, the Initial Transition Bond Issuer and the
      Initial TC Servicer hereby acknowledge the ownership interest of the Additional
      Transition Bond Issuer in the Additional Transition Property, including the
      Additional Transition Charges and the revenues, collections, claims, rights,
      payments, money and proceeds arising therefrom, and the security interest in
      favor of the Additional Transition Bond Trustee for the benefit of itself,
      the
      holders of the Additional Transition Bonds and any credit enhancement provider
      in the Additional Transition Property. 

     

    The
      Additional Transition Bond Trustee, the Additional Transition Bond Issuer and
      the Additional TC Servicer hereby acknowledge the ownership interest of the
      Initial Transition Bond Issuer in the Initial Transition Property, including
      the
      Initial Transition Charges and the revenues, collections, claims, rights,
      payments, money and proceeds arising therefrom, and the security interest in
      favor of the Initial Transition Bond Trustee for the benefit of itself, the
      holders of the Initial Transition Bonds and any credit enhancement provider
      in
      the Initial Transition Property. 

     

    The
      Initial Transition Bond Trustee, the Initial Transition Bond Issuer, the Initial
      TC Servicer, the Additional Transition Bond Trustee, the Additional Transition
      Bond Issuer and the Additional TC Servicer hereby acknowledge the ownership
      interest of the State of New Jersey with respect to the Sales and Use Taxes
      and
      acknowledge that the Initial TC Servicer and the Additional TC Servicer will
      collect the same for remittance to the State of New Jersey and not for its
      own
      account or that of the Initial Transition Bond Issuer or the Additional
      Transition Bond Issuer. 

     

    SECTION
      2. Deposit
      Accounts.
      Each of
      the Initial Transition Bond Issuer, the Initial Transition Bond Trustee, the
      Initial TC Servicer, the Additional Transition Bond Issuer, the Additional
      Transition Bond Trustee and the Additional TC Servicer acknowledges that
      Collections with respect to the Initial Transition Property and the Additional
      Transition Property may from time to time be deposited into one or more
      designated accounts of the Utility (the “Deposit
      Accounts”).
      Subject to Section 4 below, the Utility agrees to:

     

    (a)    maintain
      the collections held in the Deposit Accounts for the benefit of the Initial
      TC
      Servicer, the Initial Transition Bond Trustee, the Initial Transition Bond
      Issuer, the Additional TC Servicer, the Additional Transition Bond Trustee
      and
      the Additional Transition Bond Issuer, in accordance with their respective
      interests as described in this Agreement and the other Basic Documents (as
      defined in the Initial Indenture and the Additional Indenture, respectively),
      to
      the extent applicable; 

     

    (b)    allocate
      and remit funds from the Deposit Accounts at the times specified in the
      respective Indentures and Servicing Agreements to the Initial Transition Bond
      Trustee in the case of Collections relating to the Initial Transition Property
      and to the Additional Transition Bond Trustee in the case of Collections
      relating to the Additional Transition Property; provided
      that:
      (i) Collections from customers will be first applied to the payment of the
      Sales
      and Use Tax (which are not “charges” for purposes of the following allocations),
      then to charges in arrears, if any, and then to current charges; (ii) to the
      extent the combined amounts of remittance by customers are insufficient to
      satisfy amounts owed in respect of the Initial Transition Charges,

     

    
      
        
        

      

      
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    the
      Additional Transition Charges, the MTC-Taxes and the transmission and
      distribution charges (other than late-payment penalties), such allocation and
      remittances shall be made on a pro rata basis as between the Initial Transition
      Charges, the Additional Transition Charges, the MTC-Taxes and the applicable
      transmission and distribution charges based on the relative amounts owed in
      respect of such charges; and (iii) all Collections constituting late payment
      charges shall be payable to and retained by the Initial TC Servicer or
      Additional TC Servicer (or any successor(s) thereof), as applicable, as a
      component of its compensation under the applicable Servicing Agreement;
      and

     

    (c)    maintain
      records as to the amounts deposited into the Deposit Accounts and the allocation
      and remittances therefrom as provided in Section 2(b) above. 

     

    The
      Utility shall allocate and pay all interest accrued on amounts in each Deposit
      Account to the Initial TC Servicer or the Additional TC Servicer, as applicable.
      The Initial Transition Bond Trustee, the Initial Transition Bond Issuer, the
      Additional Transition Bond Trustee and the Additional Transition Bond Issuer,
      shall each have the right to require an accounting from time to time of
      collections, allocations and remittances by the Utility relating to the Deposit
      Accounts.

     

    Each
      of
      the parties hereto acknowledges the respective interests of the other parties
      hereto in amounts on deposit in the Deposit Accounts to the extent of their
      respective interests as described in this Agreement and the other Basic
      Documents, to the extent applicable.

     

    SECTION
      3. Time
      or Order of Attachment.
      The
      acknowledgments contained in Sections 1 and 2 of this Agreement are applicable
      irrespective of the time or order of attachment or perfection of security or
      ownership interests or the time or order of filing or recording of financing
      statements or mortgages or filings under the Electric Discount and Energy
      Competition Act, N.J.S.A.
      48:3-48
et
      seq..

     

    SECTION
      4. Servicing.

     

    (a)    Pursuant
      to Section 2 above, the Company, in its role as Initial TC Servicer and
      Additional TC Servicer, shall allocate and remit funds received from customers
      for the Initial Transition Bonds and the Additional Transition Bonds,
      respectively, and shall control the movement of such funds out of the Deposit
      Accounts (such allocation, remittance and deposits hereafter called the
“Allocation
      Services”).
      Each
      of the parties hereto acknowledges that the Initial TC Servicer or the
      Additional TC Servicer may be replaced in accordance with the applicable Basic
      Documents. Any such replacement, if such entity is retained in accordance with
      such applicable Basic Documents, is referred to herein as a “Replacement
      Servicer”.
      Each
      of the parties hereto agree that the Replacement Servicer for the Initial TC
      Servicer and the Additional TC Servicer shall be the same entity.

     

    (b)    In
      the
      event that the Initial Transition Bond Trustee or the Additional Transition
      Bond
      Trustee is entitled to and desires to exercise its rights under the Initial
      Indenture or the Additional Indenture, as applicable, to redirect Collections
      relating to the Initial Transition Property or the Additional Transition
      Property (as the case may be), any redirection of funds shall be either to
      (A)
      the Replacement Servicer or (B) if there is no Replacement Servicer, to a
      Designated Account (as defined below) with an Eligible Institution chosen in
      accordance with

     

    
      
        
        

      

      
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    the
      provisions of the Initial Indenture or the Additional Indenture, as applicable.
      The “Designated
      Account”
shall
      be an “Eligible
      Account”
(as
      defined in the Initial Indenture and the Additional Indenture, as applicable)
      and shall be held for the benefit of the Initial Transition Bond Trustee and
      the
      Additional Transition Bond Trustee as their interests may appear. Each of the
      parties hereto agree that the Eligible Institution acting as the Designated
      Account holder in accordance with the Initial Indenture and the Additional
      Indenture shall be the same entity.

     

    (c)    Upon
      exercise by the Initial Transition Bond Trustee or the Additional Transition
      Bond Trustee of its rights to redirect Collections relating to the Initial
      Transition Property or the Additional Transition Property, and in the absence
      of
      a Replacement Servicer, the parties agree that all Collections relating to
      the
      Initial Transition Property and the Additional Transition Property shall be
      deposited into the Designated Account and that the Eligible Institution acting
      as the Designated Account holder shall be instructed by the Utility to (i)
      allocate and remit funds from such Designated Account, in amounts calculated
      by
      the Utility, with such calculations provided to the Eligible Institution acting
      as Designated Account holder on a daily basis, to the Persons entitled thereto,
      being the Initial Transition Bond Trustee in the case of all Collections
      relating to the Initial Transition Property and the Additional Transition Bond
      Trustee in the case of all Collections relating to the Additional Transition
      Property (other than, in each case, late payment charges, which shall be
      allocated and remitted as described in Section 2(b) above); and (ii) maintain
      records as to the amounts deposited into such account and the amounts allocated
      and remitted therefrom as provided in clause (i). The fees and expenses of
      the
      Eligible Institution acting as Designated Account holder shall be payable from
      amounts deposited into the Designated Account on a pro rata basis as between
      Collections relating to the Initial Transition Property and the Additional
      Transition Property, provided that the portion of those fees and expenses
      allocable to Collections relating to the Initial Transition Property shall
      be
      payable by the Initial TC Servicer or its successor, as the case may be, from,
      and only to the extent of, the servicer fees provided for in the Initial
      Servicing Agreement, and the portion of those fees and expenses allocable to
      Collections relating to the Additional Transition Property shall be payable
      by
      the Additional TC Servicer or its successor, as the case may be, from, and
      only
      to the extent of, the servicer fees provided for in the Additional Servicing
      Agreement. The Initial Transition Bond Trustee, the Initial Transition Bond
      Issuer, the Additional Transition Bond Trustee and the Additional Transition
      Bond Issuer shall each have the right to require an accounting from time to
      time
      of collections, allocations and remittances by the Eligible Institution acting
      as Designated Account holder.

     

    (d)    Anything
      in this Agreement to the contrary notwithstanding, any action taken by either
      the Initial Transition Bond Trustee or the Additional Transition Bond Trustee
      to
      appoint a Replacement Servicer or designate an Eligible Institution acting
      as a
      Designated Account holder shall be subject to the Rating Agency Condition and
      the consent, if required by law or the Financing Order (as defined in the
      Initial Indenture or the Additional Indenture), of the New Jersey Board of
      Public Utilities. For the purposes of this Agreement, the “Rating
      Agency Condition”
means,
      with respect to any such action, notification to each rating agency then rating
      any class or series of the Initial Transition Bonds or the Additional Transition
      Bonds of such action, and the receipt of written notification from each such
      rating agency, other than Moody’s and Fitch (as such terms are defined in the
      Initial Indenture and the Additional Indenture, as applicable), that such action
      will not result in a reduction or withdrawal of its respective then current
      rating on the Initial Transition Bonds or the Additional Transition Bonds;
      provided that

     

    
      
        
        

      

      
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    the
      Rating Agency Condition shall not be satisfied if Moody’s or Fitch provides
      notice that such action will result in a reduction or withdrawal of its
      respective then current rating on the Initial Transition Bonds or the Additional
      Transition Bonds. The parties hereto acknowledge and agree that the approval
      or
      the consent of the rating agencies which is required in order to satisfy the
      Rating Agency Condition is not subject to any standard of commercial
      reasonableness, and the parties are bound to satisfy this condition whether
      or
      not the rating agencies are unreasonable or arbitrary.

     

    SECTION
      5. Sharing
      of Information.
      The
      parties hereto agree to cooperate with each other and make available to each
      other or any Replacement Servicer any and all records and other data relevant
      to
      the Initial Transition Property and the Additional Transition Property which
      it
      may have in its possession or may from time to time receive from the Company,
      the Initial TC Servicer, the Additional TC Servicer or any successors to any
      of
      the foregoing, including, without limitation, any and all computer programs,
      data files, documents, instruments, files and records and any receptacles and
      cabinets containing the same. The Company hereby consents to the release of
      information regarding the Company pursuant to this Section 5.

     

    SECTION
      6. No
      Joint Venture.
      Nothing
      herein contained shall be deemed as effecting a joint venture among any of
      the
      Initial Transition Bond Issuer, the Initial Transition Bond Trustee, the
      Additional Transition Bond Issuer, the Additional Transition Bond Trustee and
      the Company.

     

    SECTION
      7. Method
      of Adjustment and Allocation.
      Notwithstanding any provision herein to the contrary, for the purpose of this
      Agreement only, the Additional Transition Bond Issuer hereby
      acknowledges (a) the method of adjustment of the Initial Transition Charge
      in
      accordance with
      Section 5 of Annex I to the Initial Servicing Agreement, and (b) the method
      of
      calculation and allocation of payments in accordance with Sections 3.02 and
      3.03
      of the Initial Servicing Agreement. Notwithstanding any provision herein to
      the
      contrary, for the purpose of this Agreement only, the Initial Transition Bond
      Issuer hereby acknowledges (a) the method of adjustment of the Additional
      Transition Charge in accordance with
      Section 5 of Annex I to the Additional Servicing Agreement, and (b) the method
      of calculation and allocation of payments in accordance with Sections 3.02
      and
      3.03 of the Additional Servicing Agreement. Each of the parties referenced
      above
      in this Section 7 irrevocably waives any right to object to or enjoin any
      adjustment, calculation, payment or allocation consented and agreed to in this
      Section 7.

     

    SECTION
      8. Termination.
      This
      Agreement shall terminate upon the payment in full of the Initial Transition
      Bonds and the Additional Transition Bonds, except that the understandings and
      acknowledgments contained in paragraphs 1, 2 and 3 shall survive the termination
      of this Agreement.

     

    SECTION
      9. Governing
      Law.
      This
      Agreement shall be governed by 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
      10. Further
      Assurances.
      Each of
      the parties hereto agrees to execute any and all agreements, instruments and
      any
      and all other documents reasonably requested by any of the other parties hereto
      in order to effectuate the intent of this Agreement. Notwithstanding
      any

     

    
      
        
        

      

      
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    provision
      hereof to the contrary, the Initial Transition Bond Trustee and the Additional
      Transition Bond Trustee shall not be required to take any action pursuant to
      this Section 10 unless directed to do so in writing by the Initial Transition
      Bond Issuer or the Additional Transition Bond Issuer, respectively.

     

    SECTION
      11. Limitation
      on Rights of Others.
      This
      Agreement is solely for the benefit of the Initial Transition Bond Issuer,
      the
      Initial Transition Bond Trustee for the benefit of itself, the Additional
      Transition Bond Issuer, the Additional Transition Bond Trustee for the benefit
      of itself, the holders of the Initial Transition Bonds and the holders of the
      Additional Transition Bonds, the Company and any credit enhancement provider
      in
      the Initial Transition Property or the Additional Transition Property, as
      applicable, and no other person or entity shall have any rights, benefits,
      priority or interest under or because of the existence of this
      Agreement.

     

    SECTION
      12. Counterparts.
      This
      Agreement may be executed in any number of counterparts and by different parties
      hereto in separate counterparts, each of which when so executed and delivered
      shall be deemed to be an original and all of which taken together shall
      constitute but one and the same instrument. Delivery of an executed counterpart
      of a signature page to this Agreement by telecopier shall be effective as
      delivery of a manually executed counterpart of this Agreement.

     

    SECTION
      13. Nonpetition
      Covenant.
      Notwithstanding any prior termination of this Agreement, the Initial Indenture
      or the Additional Indenture, each of the parties covenants that it shall not,
      prior to the date which is one year and one day after payment in full of the
      Initial Transition Bonds and the Additional Transition Bonds, acquiesce,
      petition or otherwise invoke or cause either the Initial Transition Bond Issuer
      or the Additional Transition Bond Issuer to invoke the process of any court
      or
      government authority for the purpose of commencing or sustaining a case against
      the Initial Transition Bond Issuer or the Additional Transition Bond 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 Initial Transition Bond Issuer or the Additional
      Transition Bond Issuer or any substantial part of its property, or ordering
      the
      winding up or liquidation of the affairs of the Initial Transition Bond Issuer
      or the Additional Transition Bond Issuer.

     

    SECTION
      14. Trustees.
      The
      Bank of New York, as Initial Transition Bond Trustee, in acting hereunder is
      entitled to all rights, benefits, protections, immunities and indemnities
      accorded to it under the Initial Indenture. The Bank of New York, as Additional
      Transition Bond Trustee, in acting hereunder is entitled to all rights,
      benefits, protections, immunities and indemnities accorded to it under the
      Additional Indenture. 

     

    
      
        
        

      

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

     

    
      
        	 	
                JERSEY
                  CENTRAL POWER & LIGHT COMPANY

                as
                  Company

                 

              
	 	
                By:

              	 
	 	 	
                Name:
                  

                Title:
                  

                 

              
	 	
                JERSEY
                  CENTRAL POWER & LIGHT COMPANY
as
                  Initial TC Servicer

                 

              
	 	
                By:

              	 
	 	 	
                Name:
                  

                Title:
                  

                 

              
	 	
                JERSEY
                  CENTRAL POWER & LIGHT COMPANY
as
                  Additional TC Servicer

                 

              
	 	
                By:

              	 
	 	 	
                Name:
                  

                Title:
                  

                 

              
	 	
                JERSEY
                  CENTRAL POWER & LIGHT COMPANY
as
                  Utility

                 

              
	 	
                By:

              	 
	 	 	
                Name:
                  

                Title:
                  

                 

              
	 	
                JCP&L
                  TRANSITION FUNDING LLC

                 

              
	 	
                By:

              	 
	 	 	
                Name:
                  

                Title:
                  

                 

              


      

       

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

      

       

      
        	 	
                JCP&L
                  TRANSITION FUNDING II LLC

                 

              
	 	
                By:

              	 
	 	 	
                Name:
                  

                Title:
                  

                 

              
	 	
                THE
                  BANK OF NEW YORK,
as
                  Initial Transition Bond Trustee

                 

              
	 	
                By:

              	 
	 	 	
                Name:
                  

                Title:
                  

                 

              
	 	
                THE
                  BANK OF NEW YORK,
as
                  Additional Transition Bond Trustee

                 

              
	 	
                By:

              	 
	 	 	
                Name:
                  

                Title:
                  

                 

              


      

    

     

    
      
        
        

      

      
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