Form of Series Supplement including Form of Transition Bonds


                                                                         


    Exhibit
      4(e)


     

    SERIES
      SUPPLEMENT

     

     

    JCP&L
      TRANSITION FUNDING II LLC,

     

    as
      Issuer

     

    and

     

    THE
      BANK OF NEW YORK

     

    as
      Trustee

     

    ---------------------------------------------

     

    2006-A
      SERIES SUPPLEMENT

     

    Dated
      as of August _, 2006

     

    ----------------------------------------------

     

    2006-A
      SERIES SUPPLEMENT, dated as of August __, 2006 (this “Supplement”), by and
      between JCP&L TRANSITION FUNDING II LLC, a Delaware limited liability
      company (the “Issuer”), and The Bank of New York, a New York banking
      corporation, as Trustee under the Indenture dated as of August __, 2006, between
      the Issuer and the Trustee (the “Indenture”).

     

    PRELIMINARY
      STATEMENT

     

    Section
      9.01 of the Indenture provides, among other things, that the Issuer and the
      Trustee may at any time and from time to time enter into one or more indentures
      supplemental to the Indenture for the purposes of authorizing the issuance
      by
      the Issuer of a Series of Transition Bonds and specifying the terms thereof.
      The
      Issuer has duly authorized the execution and delivery of this Supplement and
      the
      creation of a Series of Transition Bonds with an initial aggregate principal
      amount of $182,400,000 to be known as the Issuer’s Transition Bonds, Series
      2006-A (the “Series 2006-A Transition Bonds”). All acts and all things necessary
      to make the Series 2006-A Transition Bonds, when duly executed by the Issuer
      and
      authenticated by the Trustee as provided in the Indenture and this Supplement
      and issued by the Issuer, the valid, legal and binding obligations of the Issuer
      and to make this Supplement a valid and enforceable supplement to the Indenture
      have been done, performed and fulfilled and the execution and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    delivery
      hereof have been in all respects duly and lawfully authorized. The Issuer and
      the Trustee are executing and delivering this Supplement in order to provide
      for
      the issuance of the Series 2006-A Transition Bonds.

     

    In
      order
      to secure the payment of the Secured Obligations, the Issuer hereby confirms
      the
      Grant to the Trustee, for the benefit of (i) the Holders of the Series 2006-A
      Transition Bonds from time to time issued and Outstanding and (ii) the Trustee,
      of all of the Issuer’s right, title and interest in, to and under the
      Collateral, including, without limitation, the Bondable Transition Property
      transferred by the Seller to the Issuer as of the Initial Transfer Date pursuant
      to the Sale Agreement and all proceeds thereof.

     

    The
      Trustee acknowledges the confirmation of such Grant, accepts the trusts
      hereunder in accordance with the provisions hereof and agrees to perform its
      duties required in the Indenture and this Supplement.

     

    SECTION
      1. DEFINITIONS.

     

    All
      terms
      used in this Supplement that are defined in the Indenture, either directly
      or by
      reference therein, have the meanings assigned to them therein, except to the
      extent such terms are defined or modified in this Supplement or the context
      clearly requires otherwise.

     

    SECTION
      2. OTHER
      DEFINITIONAL PROVISIONS.

     

    Authorized
      Denominations
      shall
      mean $1,000 and integral multiples of $1,000 above that amount, provided,
      however, that one Transition Bond of each Class may have a denomination of
      less
      than $1,000. 

     

    Expected
      Amortization Schedule
      means
      Schedule A to this Supplement. 

     

    Expected
      Final Payment Date
      means,
      with respect to any Class of the Series 2006-A Transition Bonds, the expected
      final Payment Date therefor, as specified in Section 4 of this
      Supplement.

     

    Final
      Maturity Date
      means,
      with respect to any Class of the Series 2006-A Transition Bonds, the final
      Payment Date thereof, as specified in Section 4 of this Supplement.

     

    Interest
      Rate
      has the
      meaning set forth in Section 4 of this Supplement.

     

    Overcollateralization
      Amount
      has the
      meaning set forth in Section 5(d) of this Supplement.

     

    Payment
      Dates
      has the
      meaning set forth in Section 5(a) of this Supplement.

     

    Record
      Date
      shall
      mean, with respect to any Payment Date, the Business Day prior to such Payment
      Date or, with respect to any Definitive Transition Bonds, the last Business
      Day
      of the month preceding such Payment Date.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    Required
      Capital Amount
      has the
      meaning set forth in Section 5(e) of this Supplement.

     

    Series
      Issuance Date
      has the
      meaning set forth in Section 3(b) of this Supplement.

     

    Series
      2006-A Transition Bonds has
      the
      meaning set forth in the Preliminary Statement of this Supplement.

     

    Trustee
      Policies
      has the
      meaning set forth in Section 9 of this Supplement.

     

    SECTION
      3. DESIGNATION;
      SERIES ISSUANCE DATES.

     

    (a) Designation.
      The
      Series 2006-A Transition Bonds shall be designated generally as the Issuer’s
      Transition Bonds, Series 2006-A, and further denominated as [Class A-1, Class
      A-2, Class A-3 and Class A-4].

     

    (b) Series
      Issuance Date.
      The
      Series 2006-A Transition Bonds that are authenticated and delivered by the
      Trustee to or upon the order of the Issuer on August __, 2006 (the “Series
      Issuance Date”) shall have as their date of authentication August __,
      2006.

     

    SECTION
      4. INITIAL
      PRINCIPAL AMOUNT; INTEREST RATE; EXPECTED FINAL PAYMENT DATE; FINAL MATURITY
      DATES.

     

    The
      Transition Bonds of each Class of the Series 2006-A Transition Bonds shall
      have
      the aggregate initial principal amounts, bear interest at the Interest Rates
      and
      have Expected Final Payment Dates and Final Maturity Dates as set forth
      below:

     

    
      	
               

              Class

            	
               

              Initial
                Principal Amount

            	
               

              Interest
                Rate

            	
              Expected
                Final

              Payment
                Date

            	
              Final

              Maturity
                Date

            
	
               

              [A-1

            	
               

              $
                ___________

            	
               

              ____%

            	 	 
	
               

              A-2

            	
               

              $
                ___________

            	
               

              ____%

            	 	 
	
               

              A-3

            	
               

              $
                ___________

            	
               

              ____%

            	 	 
	
               

              A-4]

            	
               

              $
                ___________

            	
               

              ____%

            	 	 


    

    


     

    SECTION
      5. PAYMENT
      DATES; EXPECTED AMORTIZATION SCHEDULE FOR PRINCIPAL; INTEREST;
      OVERCOLLATERALIZATION AMOUNT; REQUIRED CAPITAL AMOUNT; SERIES 2006-A CAPITAL
      SUBACCOUNT; NO PREMIUM. 

     

    (a) Payment
      Dates.
      The
      Payment Dates for each Class of the Series 2006-A Transition Bonds (“Payment
      Dates”) are March 5, June 5, September 5 and December 5 of each year or, if any
      such date is not a Business Day, the next succeeding Business Day, commencing
      on
      _____________ and continuing until the earlier of repayment of such Class in
      full and the applicable Final Maturity Date.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (b) Expected
      Amortization Schedule for Principal.
      Except
      in the case of an optional redemption pursuant to Section 10.01 of the
      Indenture, unless an Event of Default has occurred and is continuing and the
      unpaid principal amount of all Series of Transition Bonds has been declared
      to
      be due and payable together with accrued and unpaid interest thereon, on each
      Payment Date the Trustee shall distribute to the Holders of the Series 2006-A
      Transition Bonds of record as of the related Record Date amounts payable in
      respect of the Series 2006-A Transition Bonds pursuant to Section 8.02(g) of
      the
      Indenture as principal, in accordance with the Expected Amortization Schedule.
      Notwithstanding the foregoing, if one or more Classes did not receive principal
      on any prior Payment Date in accordance with the Expected Amortization Schedule,
      such shortfalls of principal shall be paid prior to the payment of principal
      scheduled to be paid on the current Payment Date and shall be paid in the order
      in which such amounts were scheduled to be paid previously pursuant to the
      Expected Amortization Schedule; provided, however, that in no event shall a
      principal payment pursuant to this Section 5(b) on any Class on a Payment Date
      be greater than the amount that reduces the Outstanding Amount of such Class
      of
      Series 2006-A Transition Bonds to the amount specified in the Expected
      Amortization Schedule for such Class and Payment Date.

     

    (c) Interest.
      On each
      Payment Date after the initial Payment Date, interest will be payable on the
      Series 2006-A Transition Bonds in an amount equal to the number of days
      (determined on the basis of a 360-day year of twelve 30-day months) from and
      including the preceding Payment Date to, but excluding, the current Payment
      Date, divided by 360, times in each case the product of

     

    (i) the
      applicable Interest Rate times

     

    (ii) the
      Outstanding Amount of the related Class of Transition Bonds as of the close
      of
      business on the preceding Payment Date after giving effect to all payments
      of
      principal made to the Holders of the related Class of Series 2006-A Transition
      Bonds on such preceding Payment Date.

     

    With
      respect to the initial Payment Date, interest will be payable in an amount
      equal
      to the number of days (determined on the basis of a 360-day year of twelve
      30-day months) from and including the Series Issuance Date to, but excluding,
      the initial Payment Date, divided by 360, times the product of:

     

    (1) the
      applicable Interest Rate for such Class times 

     

    (2) the
      original principal amount of such Class of Transition Bonds as of the Series
      Issuance Date.

     

    (d) Overcollateralization
      Amount.
      The
      Overcollateralization Amount for the Series 2006-A Transition Bonds (the
“Overcollateralization Amount”) shall be zero.

     

    (e) Required
      Capital Amount; Series 2006-A Capital Subaccount. The
      Required Capital Amount for the Series 2006-A Transition Bonds (the “Required
      Capital Amount”) shall be $________.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (f) No
      Premium.
      No
      premium will be payable in connection with the early redemption of the Series
      2006-A Transition Bonds.

     

    SECTION
      6. AUTHORIZED
      DENOMINATIONS. The Series 2006-A Transition Bonds shall be issuable in the
      Authorized Denominations.

     

    SECTION
      7. REDEMPTION.

     

    (a) Mandatory
      Redemption.
      The
      Series 2006-A Transition Bonds shall not be subject to mandatory
      redemption.

     

    (b) Optional
      Redemption.
      The
      Issuer may redeem the Transition Bonds of Series 2006-A, at its option, on
      any
      Payment Date in accordance with Section 10.01 of the Indenture if after giving
      effect to payments that would otherwise be made on such Payment Date, the
      Outstanding Amount of such Series has been reduced to less than five percent
      of
      the initial principal balance of such Series.

     

    SECTION
      8. CREDIT
      ENHANCEMENT. No credit enhancement (other than the Required Capital Amount
      and
      any adjustments to the Transition Bond Charge approved by the BPU as
      contemplated in the Servicing Agreement) is provided for the Series 2006-A
      Transition Bonds.

     

    SECTION
      9. TRUSTEE
      POLICIES. If at any time withdrawals from the Series 2006-A Capital Subaccount
      exceed in the aggregate [$460,000], the Issuer shall within thirty days, deliver
      to the Trustee and keep in force until the Indenture ceases to be of any further
      effect, one or more policies of insurance, surety bonds and/or letters of credit
      in the aggregate face amount of $5,000,000, which policies, surety bonds and/or
      letters of credit are sufficient to provide coverage for, and to ensure to
      the
      Trustee the payment of, all amounts due and owing to the Trustee under the
      Indenture (collectively, the “Trustee Policies”), subject to reasonable
      commercial availability and provided that the premiums or fees for the Trustee
      Policies shall not exceed $50,000 during any calendar year. The terms and
      conditions of the Trustee Policies shall be in form and substance reasonably
      acceptable to the Trustee and shall be issued by one or more carriers or issuers
      reasonably acceptable to the Trustee.

     

    SECTION
      10. DELIVERY
      OF THE SERIES 2006-A TRANSITION BONDS; FORM OF THE SERIES 2006-A TRANSITION
      BONDS. The Trustee shall deliver the Series 2006-A Transition Bonds to the
      Issuer when authenticated in accordance with Section 2.02 of the Indenture.
      The
      Series 2006-A Transition Bonds of [Class A-1, Class A-2, Class A-3, and Class
      A-4] shall be in the form of Exhibit A hereto.

     

    SECTION
      11. ADMINISTRATION
      FEE. The Administrator shall be paid in accordance with Section 8.02(g)(i)
      of
      the Indenture by the Issuer a fee as determined in accordance with the
      Administration Agreement on each Payment Date with respect to the Series 2006-A
      Transition Bonds.

     

    SECTION
      12. SECURITY
      INTERESTS. The Issuer hereby makes the following representations and
      warranties:

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (a) the
      Indenture creates a valid and continuing security interest (as defined in the
      New Jersey UCC) in, to and under that portion of the Collateral subject to
      Article 9 of the New Jersey UCC, including the Transferred Bondable Transition
      Property (the “Article 9 Collateral”), in favor of the Trustee, which security
      interest is perfected and is prior to all other Liens, and is enforceable as
      such;

     

    (b) the
      Transferred Bondable Transition Property constitutes an “account” within the
      meaning of the New Jersey UCC;

     

    (c) the
      Issuer owns and has good and marketable title to the Article 9 Collateral free
      and clear of any Lien;

     

    (d) the
      Issuer has caused or will have caused, within ten days of the date hereof,
      the
      filing of all appropriate financing statements in the proper filing offices
      in
      the appropriate jurisdictions under applicable law in order to perfect the
      security interest granted to the Trustee under the Indenture; and

     

    (e) other
      than the security interest granted to the Trustee pursuant to the Indenture,
      the
      Issuer has not pledged, assigned, sold, granted a security interest in or
      otherwise conveyed any of the Article 9 Collateral; the Issuer has not
      authorized the filing of and is not aware of any financing statements against
      the Issuer that include a description of the Article 9 Collateral other than
      any
      financing statement relating to the security interest granted to the Trustee
      under the Indenture or that has been terminated; and the Issuer is not aware
      of
      any judgment or tax lien filing against the Issuer.

     

    SECTION
      13. CONFIRMATION
      OF INDENTURE. As supplemented by this Supplement, the Indenture is in all
      respects ratified and confirmed and the Indenture, as so supplemented by this
      Supplement, shall be read, taken and construed as one and the same instrument.
      

     

    SECTION
      14. COUNTERPARTS.
      This Supplement may be executed in any number of counterparts, each of which
      so
      executed shall be deemed to be an original, but all of such counterparts shall
      together constitute but one and the same instrument.

     

    SECTION
      15. GOVERNING
      LAW. THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
      STATE
      OF NEW JERSEY, WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS, AND THE
      OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
      IN
      ACCORDANCE WITH SUCH LAWS. 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the Issuer and the Trustee have caused this Supplement to
      be
      duly executed and delivered by their respective officers thereunto duly
      authorized as of the date first above written. 

     

    
      
        	 	
                JCP&L
                  TRANSITION FUNDING II LLC,
as Issuer

                 

              
	 	By: 	
                 

              
	 	 	
                Name:
                  Richard H. Marsh

              
	 	 	
                Title:  
                  Manager, Senior Vice President and Chief Financial Officer

                 

              
	 	
                THE
                  BANK OF NEW YORK,
as Trustee 

                 

              
	 	By: 	
                 

              
	 	 	
                Name:
                  

              
	 	 	
                Title:
                  

              


      

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    


    SCHEDULE
      A

     

    Expected
      Amortization Schedule

    Scheduled
      Amortization Requirement

     

    (All
      amounts are in United States Dollars)

     

    
      	
               

              Payment
                Date

            	 	
              [Class
                A-1

              Balance

            	 	
              Class
                A-2

              Balance

            	 	
              Class
                A-3

              Balance

            	 	
              Class
                A-4]

              Balance

            	 
	
              Closing
                Date

            	 	$	 	 	
              $

            	
               

            	 	 $	 	 	
              $

            	
               

            	 


    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

EXHIBIT
        A TO 2006-A SERIES SUPPLEMENT

    

     

    Form
      of
      Transition Bond

     

    
      	
              REGISTERED

            	
              $_____________

            
	
               

              No.
                R-1

            	
               

              CUSIP
                NO. ____

            


    

    


    SEE
      REVERSE FOR CERTAIN DEFINITIONS AND OTHER PROVISIONS

     

    THE
      PRINCIPAL OF THIS CLASS A-[ ] TRANSITION BOND WILL BE PAID IN INSTALLMENTS
      AS
      SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS
      A-[ ] TRANSITION BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE
      FACE
      HEREOF. THE HOLDER OF THIS CLASS A-[ ] TRANSITION BOND HEREBY COVENANTS AND
      AGREES THAT PRIOR TO THE DATE WHICH IS ONE (1) YEAR AND ONE (1) DAY AFTER THE
      PAYMENT IN FULL OF THE CLASS A-[ ] TRANSITION BONDS, IT WILL NOT INSTITUTE
      AGAINST, OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST, THE ISSUER ANY
      BANKRUPTCY, REORGANIZATION, MORATORIUM, ARRANGEMENT, INSOLVENCY OR LIQUIDATION
      PROCEEDINGS OR OTHER SIMILAR PROCEEDING UNDER THE LAWS OF THE UNITED STATES
      OR
      ANY STATE OF THE UNITED STATES. TRANSFERS OF THIS GLOBAL TRANSITION BOND SHALL
      BE LIMITED TO TRANSFERS IN THE CLEARING AGENCY OR TO A SUCCESSOR THEREOF OR
      SUCH
      SUCCESSOR’S NOMINEE, AND TRANSFERS OF PORTIONS OF THIS GLOBAL TRANSITION BOND
      SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
      FORTH
      IN THE INDENTURE.

     

    JCP&L
      TRANSITION FUNDING LLC

     

    TRANSITION
      BONDS, SERIES 2006-A, CLASS A-[ ].

     

    
      	
              Interest
                Rate

            	
              Original
                Principal Amount

            	
              Expected
                Final Payment Date

            	
              Final
                Maturity Date

            
	 	 	 	 


    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    JCP&L
      Transition Funding LLC, a limited liability company formed and existing under
      the laws of the State of Delaware (herein referred to as the “Issuer”), for
      value received, hereby promises to pay to the Registered Holder hereof, or
      registered assigns, the Original Principal Amount shown above in quarterly
      installments on the Payment Dates (as defined below) and in the amounts
      determined as specified on the reverse hereof or, if there are insufficient
      funds available, the amounts determined pursuant to Section 8.02(g) of the
      Indenture, in each year, commencing on _______and ending on or before the Final
      Maturity Date, to pay the entire unpaid principal hereof on the Final Maturity
      Date and to pay interest, at the Interest Rate shown above at a fixed rate,
      on
      each March 5, June 5, September 5 and December 5, and if any such day is not
      a
      Business Day, the next succeeding Business Day, commencing on ____________,
      20__
      and continuing until the earlier of the payment of the principal hereof and
      the
      Final Maturity Date (each a “Payment Date”), on the principal amount of this
      Class A-[ ] Transition Bond outstanding from time to time. Interest will be
      computed (i) for the first Payment Date, on the basis of the number of days
      (determined on the basis of a 360-day year of twelve 30-day months) from and
      including the Series Issuance Date, to but excluding the initial Payment Date,
      divided by 360, multiplied by the product of the Interest Rate shown above
      times
      the Original Principal Amount of the Class A-[ ] Transition Bonds, and (ii)
      for
      each succeeding Payment Date, the number of days (determined on the basis of
      a
      360-day year of twelve 30-day months) from and including the preceding Payment
      Date to, but excluding, the current Payment Date, divided by 360, multiplied
      by
      the product of the Interest Rate shown above times the Outstanding Amount of
      the
      Class A-[ ] Transition Bonds as of the close of business on the preceding
      Payment Date after giving effect to all payments of principal made to the
      Holders of the Class A-[ ] Transition Bonds on such preceding Payment Date.
      Such
      principal of and interest on this Class A-[ ] Transition Bond shall be paid
      in
      the manner specified on the reverse hereof.

     

    The
      principal of and interest on this Class A-[ ] Transition Bond are payable in
      such coin or currency of the United States of America as at the time of payment
      is legal tender for payment of public and private debts. All payments made
      by
      the Issuer with respect to this Class A-[ ] Transition Bond shall be applied
      first to interest due and payable on this Class A-[ ] Transition Bond as
      provided above and then to the unpaid principal of this Class A-[ ] Transition
      Bond, all in the manner set forth in Section 8.02(g) of the
      Indenture.

     

    Reference
      is made to the further provisions of this Class A-[ ] Transition Bond set forth
      on the reverse hereof, which shall have the same effect as though fully set
      forth on the face of this Class A-[ ] Transition Bond.

     

    Unless
      the certificate of authentication hereon has been executed by the Trustee whose
      name appears below by manual signature, this Class A-[ ] Transition Bond shall
      not be entitled to any benefit under the Indenture referred to on the reverse
      hereof, or be valid or obligatory for any purpose.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually
      or
      in facsimile, by an authorized Manager of the Issuer. 

     

    Dated:
      [           ],
      2006

     

    
      
        	 	
                 JCP&L
                  TRANSITION FUNDING II LLC 

                 

              
	 	By:	
                 

              
	 	 	
                Name:

              
	 	 	
                Title:  
                  Manager

              


      

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    TRUSTEE’S
      CERTIFICATE OF AUTHENTICATION

     

    Dated:
      [            
 ], 2006

    


    


    


    This
      is
      one of the Class A-[ ] Transition Bonds of the Series 2006-A Transition Bonds,
      designated above and referred to in the within-mentioned Indenture.

     

    
      
        	 	
                THE
                  BANK OF NEW YORK,
as Trustee 

                 

              
	 	By:	
                 

              
	 	 	
                Name:

              
	 	 	
                Title:

              


      

    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    REVERSE
      OF TRANSITION BOND

     

    This
      Class A-[ ] Transition Bond is one of a duly authorized issue of Transition
      Bonds of the Issuer, designated as its Transition Bonds (herein called the
      “Transition Bonds”), issued and to be issued in one or more Series, which Series
      are issuable in one or more Classes. The Series 2006-A Transition Bonds consist
      of four Classes, including the Class A-[ ] Transition Bonds (herein called
      the
“Class A-[ ] Transition Bonds”). The Class A-[ ] Transition Bonds have been
      issued under an indenture dated as of August __, 2006, and a series supplement
      thereto dated as of August __, 2006 (such series supplement, as supplemented
      or
      amended, the “Series Supplement” and, collectively with such indenture, as
      supplemented or amended, the “Indenture”), each between the Issuer and The Bank
      of New York, as Trustee (the “Trustee”, which term includes any successor
      trustee under the Indenture), to which Indenture and all indentures supplemental
      thereto reference is hereby made for a statement of the Collateral pledged,
      the
      nature and extent of the security, the respective rights, obligations and
      immunities thereunder of the Issuer, the Trustee and the Holders of the
      Transition Bonds and the terms and conditions under which additional Transition
      Bonds may be issued. All capitalized terms used in this Class A-[ ] Transition
      Bond that are defined in the Indenture, as supplemented or amended, shall have
      the meanings assigned to them in the Indenture. 

     

    The
      Class
      A-[ ] Transition Bonds, the other Classes of Series 2006-A Transition Bonds
      and
      any other Series of Transition Bonds issued by the Issuer are and will be
      equally and ratably secured by the Collateral pledged as security therefor
      as
      provided in the Indenture.

     

    The
      principal of this Class A-[ ] Transition Bond shall be payable on each Payment
      Date only to the extent that amounts in the Collection Account are available
      therefor, and only until the outstanding principal balance of the Class A-[
      ]
      Transition Bonds on such Payment Date (after giving effect to all payments
      of
      principal, if any, made on such Payment Date) has been reduced to the principal
      balance specified in the Expected Amortization Schedule which is attached to
      the
      Series Supplement as Schedule A, unless payable earlier either
      because

     

    (i) an
      Event
      of Default has occurred and is continuing and the Trustee or the Holders of
      Transition Bonds representing not less than a majority of the Outstanding Amount
      of the Transition Bonds of all Series have declared the Transition Bonds to
      be
      immediately due and payable in accordance with Section 5.02 of the Indenture
      or

     

    (ii) the
      Issuer, at its option, has called for the redemption of the Series 2006-A
      Transition Bonds in whole pursuant to Section 7(b) of the Series Supplement
      and
      Section 10.01 of the Indenture. 

     

    If
      there
      are insufficient funds available in the Collection Account, actual principal
      payments may be made in lesser than expected amounts and at later than expected
      times as determined pursuant to Section 8.02(g) of the Indenture. The entire
      unpaid principal amount of this Class A-[ ] Transition Bond shall be due and
      payable on the earlier of the Final Maturity Date hereof and the Redemption
      Date, if any. Notwithstanding the foregoing, the entire unpaid principal amount
      of the Transition Bonds shall be due and payable, if not then previously paid,
      on the date on which an Event of Default shall have occurred and be continuing
      and the Trustee or the Holders of the Transition Bonds of all Series
      representing not less than a majority of the

     

    
      
        
        

      

      
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    Outstanding
      Amount of the Transition Bonds have declared the Transition Bonds to be
      immediately due and payable in the manner provided in Section 5.02 of the
      Indenture. All principal payments on the Class A-[ ] Transition Bonds shall
      be
      made pro rata to the Holders of the Class A-[ ] Transition Bonds entitled
      thereto based on the respective principal amounts of the Class A-[ ] Transition
      Bonds held by them.

     

    Payments
      of interest on this Class A-[ ] Transition Bond due and payable on each Payment
      Date, together with the installment of principal payable on this Class A-[
      ]
      Transition Bond on such Payment Date, shall be made by check mailed first-class,
      postage prepaid, to the Person whose name appears as the Registered Holder
      of
      this Class A-[ ] Transition Bond (or one or more predecessors of such Transition
      Bond) in the Transition Bond Register as of the close of business on the Record
      Date or in such other manner as may be provided in the Series Supplement, except
      that with respect to Class A-[ ] Transition Bonds registered on the Record
      Date
      in the name of a Clearing Agency, payments will be made by wire transfer in
      immediately available funds to the account designated by such Clearing Agency
      and except for the final installment of principal payable with respect to this
      Class A-[ ] Transition Bond on a Payment Date which shall be payable as provided
      below. Such checks shall be mailed to the Person entitled thereto at the address
      of such Person as it appears in the Transition Bond Register as of the
      applicable Record Date without requiring that this Class A-[ ] Transition Bond
      be submitted for notation of payment. Any reduction in the principal amount
      of
      this Class A-[ ] Transition Bond (or any one or more predecessors to such
      Transition Bond) effected by any payments made on any Payment Date shall be
      binding upon all future Holders of this Class A-[ ] Transition Bond and of
      any
      Class A-[ ] Transition Bond issued upon the registration of transfer hereof
      or
      in exchange hereof or in lieu hereof, whether or not noted hereon. If funds
      are
      expected to be available, as provided in the Indenture, for payment in full
      of
      the then remaining unpaid principal amount of this Class A-[ ] Transition Bond
      on a Payment Date, then the Trustee, in the name of and on behalf of the Issuer,
      will notify the Person who was the Registered Holder hereof as of the second
      preceding Record Date to such Payment Date by notice mailed no later than five
      days prior to such final Payment Date and shall specify that such final
      installment will be payable to the Registered Holder hereof as of the Record
      Date immediately preceding such final Payment Date and only upon presentation
      and surrender of this Class A-[ ] Transition Bond and shall specify the place
      where this Class A-[ ] Transition Bond may be presented and surrendered for
      payment of such installment.

     

    The
      Issuer shall pay interest on overdue installments of interest on this Class
      A-[
      ] Transition Bond at the Interest Rate for Class A-[ ] Transition Bonds to
      the
      extent lawful.

     

    As
      provided in the Indenture, the Class A-[ ] Transition Bonds may be redeemed,
      in
      whole, but not in part, in certain circumstances as provided in Section 7(b)
      of
      the Series Supplement and Section 10.01 of the Indenture.

     

    This
      Class A-[ ] Transition Bond is a Transition Bond as such term is defined in
      the
      Competition Act. Principal and interest due and payable on this Transition
      Bond
      are payable from and secured primarily by bondable transition property
      authorized by a bondable stranded cost rate order issued by the BPU pursuant
      to
      the Competition Act. Bondable transition property includes the irrevocable
      right
      to impose and collect certain non-bypassable charges (defined in the Competition
      Act as “transition bond charges”) to be included in electric utility bills of
      all

     

    
      
        
        

      

      
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    electric
      service retail customers of Jersey Central Power & Light Company, a New
      Jersey electric utility.

     

    The
      Competition Act provides that:

     

    “The
      State of New Jersey does hereby pledge and agree with the holders of any
      transition bonds issued under the authority of this act, with the pledgee,
      owner
      or assignee of bondable transition property, with any financing entity which
      has
      issued transition bonds with respect to which a bondable stranded costs rate
      order has been issued and with any person who may enter into agreements with
      an
      electric public utility or an assignee or pledgee thereof or a financing entity
      pursuant to this act, that the State will not limit, alter or impair any
      bondable transition property or other rights vested in an electric public
      utility or an assignee or pledgee thereof or a financing entity or vested in
      the
      holders of any transition bonds pursuant to a bondable stranded costs rate
      order
      until such transition bonds, together with the interest and acquisition or
      redemption premium, if any, thereon, are fully paid and discharged or until
      such
      agreements are fully performed on the part of the electric public utility,
      any
      assignee or pledgee thereof or the financing entity or in any way limit, alter,
      impair or reduce the value or amount of the bondable transition property
      approved by a bondable stranded costs rate order . . . .”

     

    The
      issuance of this Class A-[ ]Transition Bond under the Competition Act does
      not,
      directly, indirectly or contingently, obligate the State of New Jersey or any
      political subdivision thereof to levy or pledge any form of taxation therefor
      or
      to make an appropriation for its payment. This Class A-[ ] Transition Bond
      will
      be payable solely from Bondable Transition Property and such other proceeds
      or
      property as may be pledged therefor.

     

    As
      provided in the Indenture and subject to certain limitations set forth therein,
      the transfer of this Class A-[ ] Transition Bond may be registered in the
      Transition Bond Register upon surrender of this Class A-[ ] Transition Bond
      for
      registration of transfer at the office or agency designated by the Issuer
      pursuant to the Indenture, duly endorsed by, or accompanied by a written
      instrument of transfer in form satisfactory to the Trustee duly executed by,
      the
      Holder hereof or his attorney duly authorized in writing, with such signature
      guaranteed by an Eligible Guarantor Institution, and thereupon one or more
      new
      Class A-[ ] Transition Bonds of any Authorized Denominations and in the same
      aggregate initial principal amount will be issued to the designated transferee
      or transferees. No service charge will be charged for any registration of
      transfer or exchange of this Class A-[ ] Transition Bond, but the transferor
      may
      be required to pay a sum sufficient to cover any tax or other governmental
      charge that may be imposed in connection with any registration of transfer
      or
      exchange. 

     

    Prior
      to
      the due presentment for registration of transfer of this Class A-[ ] Transition
      Bond, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
      treat the Person in whose name this Class A-[ ] Transition Bond is registered
      (as of the day of determination) as the owner hereof for the purpose of
      receiving payments of principal of and interest on this Class A-[ ] Transition
      Bond and for all other purposes whatsoever, whether or not this Class A-[ ]
      Transition Bond may be overdue, and neither the Issuer, the Trustee nor any
      such
      agent shall be affected by notice to the contrary.

     

    
      
        
        

      

      
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    The
      Indenture permits, with certain exceptions as therein provided, the amendment
      thereof and the modification of the rights and obligations of the Issuer and
      the
      rights of the Holders of the Transition Bonds under the Indenture at any time
      by
      the Issuer with the consent of the Holders of Transition Bonds representing
      a
      majority of the Outstanding Amount of all Transition Bonds at the time
      Outstanding of each Series or Class to be affected. The Indenture also contains
      provisions permitting the Holders of Transition Bonds representing specified
      percentages of the Outstanding Amount of the Transition Bonds of all Series,
      on
      behalf of the Holders of all the Transition Bonds, to waive compliance by the
      Issuer with certain provisions of the Indenture and certain past defaults under
      the Indenture and their consequences. Any such consent or waiver by the Holder
      of this Class A-[ ] Transition Bond (or any one of more predecessors of such
      transition bonds) shall be conclusive and binding upon such Holder and upon
      all
      future Holders of this Class A-[ ] Transition Bond and of any Class A-[ ]
      Transition Bond issued upon the registration of transfer hereof or in exchange
      hereof or in lieu hereof whether or not notation of such consent or waiver
      is
      made upon this Class A-[ ] Transition Bond. The Indenture also permits the
      Trustee to amend or waive certain terms and conditions set forth in the
      Indenture without the consent of Holders of the Transition Bonds issued
      thereunder.

     

    The
      term
“Issuer” as used in this Class A-[ ] Transition Bond includes any successor to
      the Issuer under the Indenture.

     

    The
      Issuer is permitted by the Indenture, under certain circumstances, to merge
      or
      consolidate, subject to the rights of the Trustee and the Holders of Transition
      Bonds under the Indenture. 

     

    The
      Class
      A-[ ] Transition Bonds are issuable only in registered form in Authorized
      Denominations as provided in the Indenture and the Series Supplement, subject
      to
      certain limitations therein set forth. 

     

    This
      Class A-[ ] Transition Bond and the Indenture 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 and thereunder shall be determined in accordance with such
      laws.

     

    No
      reference herein to the Indenture and no provision of this Class A-[ ]
      Transition Bond or of the Indenture shall alter or impair the obligation of
      the
      Issuer, which is absolute and unconditional, to pay the principal of and
      interest on this Class A-[ ] Transition Bond at the times and rate and in the
      currency herein prescribed.

     

    
      
        
        

      

      
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    ASSIGNMENT

     

    Social
      Security or taxpayer I.D. or other identifying number of assignee:
      ____________________________________________________

     

    FOR
      VALUE
      RECEIVED, the undersigned hereby sells, assigns and transfers unto

    _____________________________________________________________________________________________

    (Name
      and
      Address of Assignee)

     

    the
      within Class A-[ ] Transition Bond and all rights thereunder, and hereby
      irrevocably constitutes and appoints

    _____________________________________________________________________________________________

    (Name
      and
      Address of Appointee)

     

    attorney,
      to transfer said Class A-[ ] Transition Bond on the books kept for registration
      thereof, with full power of substitution in the premises. 

     

    Dated:

     

    
      
        	*By: 	 	 	 *By:	 
	 	 Name	 	 	Name 


      

    

     

    *NOTE:
      The
      signature to this assignment must correspond with the name of the registered
      owner as it appears on the face of the within Class A-[ ] Transition Bond in
      every particular, without alteration, enlargement or any change
      whatsoever.