Form of Indenture


     

    
      Exhibit
        4(d)

       

      INDENTURE

       

       

       

      JCP&L
        TRANSITION FUNDING II LLC,

       

      as
        Issuer

       

      and

       

      THE
        BANK
        OF NEW YORK

       

      as
        Trustee

       

      
        

      

       

      INDENTURE

       

      Dated
        as
        of ________, 2006

       

      
        
          

        

      

       

      Securing
        Transition Bonds

       

      Issuable
        in Series

       

      
        
          
          

        

            

          
          

          
            

          

        

        
          
          

        

         

      

      TABLE
        OF
        CONTENTS

       

      
        	ARTICLE
                I     DEFINITIONS
                AND INCORPORATION BY
                REFERENCE	
                2

              
	
                  SECTION
                  1.01

              	
                DEFINITIONS

              	
                2

              
	
                  SECTION
                  1.02

              	
                INCORPORATION
                  BY REFERENCE OF THE TRUST INDENTURE ACT

              	
                2

              
	
                  SECTION
                  1.03

              	
                RULES
                  OF CONSTRUCTION

              	
                2

              
	
                 

                ARTICLE
                  II    THE TRANSITION
                  BONDS

              	
                3

              
	
                  SECTION
                  2.01

              	
                FORM.

              	
                3

              
	
                  SECTION
                  2.02

              	
                EXECUTION,
                  AUTHENTICATION AND DELIVERY.

              	
                4

              
	
                  SECTION
                  2.03

              	
                DENOMINATIONS;
                  TRANSITION BONDS ISSUABLE IN SERIES.

              	
                4

              
	
                  SECTION
                  2.04

              	
                TEMPORARY
                  TRANSITION BONDS.

              	
                5

              
	
                  SECTION
                  2.05

              	
                REGISTRATION;
                  REGISTRATION OF TRANSFER AND EXCHANGE.

              	
                6

              
	
                  SECTION
                  2.06

              	
                MUTILATED,
                  DESTROYED, LOST OR STOLEN TRANSITION BONDS.

              	
                7

              
	
                  SECTION
                  2.07

              	
                PERSONS
                  DEEMED OWNER

              	
                8

              
	
                  SECTION
                  2.08

              	
                PAYMENT
                  OF PRINCIPAL AND INTEREST; INTEREST ON OVERDUE PRINCIPAL;

                PRINCIPAL
                  AND INTEREST RIGHTS PRESERVED.

              	
                8

              
	
                  SECTION
                  2.09

              	
                CANCELLATION

              	
                10

              
	
                  SECTION
                  2.10

              	
                AMOUNT;
                  AUTHENTICATION AND DELIVERY OF TRANSITION BONDS.

              	
                10

              
	
                  SECTION
                  2.11

              	
                BOOK-ENTRY
                  TRANSITION BONDS

              	
                15

              
	
                  SECTION
                  2.12

              	
                NOTICES
                  TO CLEARING AGENCY

              	
                16

              
	
                  SECTION
                  2.13

              	
                DEFINITIVE
                  TRANSITION BONDS.

              	
                16

              
	
                 

                ARTICLE
                  III    COVENANTS

              	
                17

              
	
                  SECTION
                  3.01

              	
                PAYMENT
                  OF PRINCIPAL AND INTEREST

              	
                17

              
	
                  SECTION
                  3.02

              	
                MAINTENANCE
                  OF OFFICE OR AGENCY.

              	
                17

              
	
                  SECTION
                  3.03

              	
                MONEY
                  FOR PAYMENTS TO BE HELD IN TRUST.

              	
                18

              
	
                  SECTION
                  3.04

              	
                EXISTENCE

              	
                19

              
	
                  SECTION
                  3.05

              	
                PROTECTION
                  OF COLLATERAL

              	
                19

              
	
                  SECTION
                  3.06

              	
                OPINIONS
                  AS TO COLLATERAL.

              	
                20

              
	
                  SECTION
                  3.07

              	
                PERFORMANCE
                  OF OBLIGATIONS.

              	
                20

              
	
                  SECTION
                  3.08

              	
                NEGATIVE
                  COVENANTS

              	
                21

              
	
                  SECTION
                  3.09

              	
                ANNUAL
                  STATEMENT AS TO COMPLIANCE

              	
                21

              
	
                  SECTION
                  3.10

              	
                ISSUER
                  MAY CONSOLIDATE, ETC

              	
                21

              
	
                  SECTION
                  3.11

              	
                SUCCESSOR
                  OR TRANSFEREE.

              	
                22

              
	
                  SECTION
                  3.12

              	
                NO
                  OTHER BUSINESS

              	
                23

              
	
                  SECTION
                  3.13

              	
                NO
                  BORROWING

              	
                23

              
	
                  SECTION
                  3.14

              	
                GUARANTEES,
                  LOANS, ADVANCES AND OTHER LIABILITIES

              	
                23

              
	
                  SECTION
                  3.15

              	
                CAPITAL
                  EXPENDITURES

              	
                23

              


      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      
        	
                  SECTION
                  3.16

              	
                RESTRICTED
                  PAYMENTS

              	
                23

              
	
                  SECTION
                  3.17

              	
                NOTICE
                  OF EVENTS OF DEFAULT

              	
                24

              
	
                  SECTION
                  3.18

              	
                INSPECTION

              	
                24

              
	
                  SECTION
                  3.19

              	
                ADJUSTED
                  OVERCOLLATERALIZATION BALANCE SCHEDULES

              	
                24

              
	
                  SECTION
                  3.20

              	
                SALE
                  AGREEMENT, INTERCREDITOR AGREEMENT, SERVICING AGREEMENT AND

                INTEREST
                  RATE SWAP AGREEMENT COVENANTS.

              	
                24

              
	
                  SECTION
                  3.21

              	
                TAXES

              	
                28

              
	
                 

                ARTICLE
                  IV    SATISFACTION
                  AND DISCHARGE; DEFEASANCE

              	
                28

              
	
                  SECTION
                  4.01

              	
                SATISFACTION
                  AND DISCHARGE OF INDENTURE; DEFEASANCE.

              	
                28

              
	
                  SECTION
                  4.02

              	
                CONDITIONS
                  TO DEFEASANCE.

              	
                29

              
	
                  SECTION
                  4.03

              	
                APPLICATION
                  OF TRUST MONEY

              	
                31

              
	
                  SECTION
                  4.04

              	
                REPAYMENT
                  OF MONEYS HELD BY PAYING AGENT

              	
                31

              
	
                 

                ARTICLE
                  V    
                  REMEDIES

              	
                31

              
	
                  SECTION
                  5.01

              	
                EVENTS
                  OF DEFAULT

              	
                31

              
	
                  SECTION
                  5.02

              	
                ACCELERATION
                  OF MATURITY; RESCISSION AND ANNULMENT

              	
                32

              
	
                  SECTION
                  5.03

              	
                COLLECTION
                  OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.

              	
                33

              
	
                  SECTION
                  5.04

              	
                REMEDIES.

              	
                35

              
	
                  SECTION
                  5.05

              	
                OPTIONAL
                  PRESERVATION OF THE COLLATERAL

              	
                36

              
	
                  SECTION
                  5.06

              	
                LIMITATION
                  OF PROCEEDINGS.

              	
                37

              
	
                  SECTION
                  5.07

              	
                UNCONDITIONAL
                  RIGHTS OF TRANSITION BONDHOLDERS TO RECEIVE PRINCIPAL AND
                  INTEREST

              	
                38

              
	
                  SECTION
                  5.08

              	
                RESTORATION
                  OF RIGHTS AND REMEDIES

              	
                38

              
	
                  SECTION
                  5.09

              	
                RIGHTS
                  AND REMEDIES CUMULATIVE

              	
                38

              
	
                  SECTON
                  5.10

              	
                DELAY
                  OR OMISSION NOT A WAIVER

              	
                38

              
	
                  SECTION
                  5.11

              	
                CONTROL
                  BY TRANSITION BONDHOLDERS

              	
                38

              
	
                  SECTON
                  5.12

              	
                WAIVER
                  OF PAST DEFAULTS

              	
                39

              
	
                  SECTION
                  5.13

              	
                UNDERTAKING
                  FOR COSTS

              	
                39

              
	
                  SECTON
                  5.14

              	
                WAIVER
                  OF STAY OR EXTENSION LAWS

              	
                40

              
	
                  SECTION
                  5.15

              	
                ACTION
                  ON TRANSITION BONDS

              	
                40

              
	
                  SECTION
                  5.16

              	
                APPLICATION
                  OF TRUST MONEY

              	
                40

              
	
                 

                ARTICLE
                  VI    THE
                  TRUSTEE

              	
                40

              
	
                  SECTION
                  6.01

              	
                DUTIES
                  AND LIABILITIES OF TRUSTEE.

              	
                40

              
	
                  SECTION
                  6.02

              	
                RIGHTS
                  OF TRUSTEE.

              	
                42

              
	
                  SECTION
                  6.03

              	
                INDIVIDUAL
                  RIGHTS OF TRUSTEE

              	
                43

              
	
                  SECTION
                  6.04

              	
                TRUSTEE’S
                  DISCLAIMER

              	
                43

              
	
                  SECTION
                  6.05

              	
                NOTICE
                  OF DEFAULTS

              	
                43

              
	
                  SECTION
                  6.06

              	
                REPORTS
                  BY TRUSTEE TO HOLDERS.

              	
                43

              
	
                  SECTION
                  6.07

              	
                COMPENSATION
                  AND INDEMNITY.

              	
                44

              


      

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

       

      
        	
                  SECTION
                  6.08

              	
                REPLACEMENT
                  OF TRUSTEE.

              	
                45

              
	
                  SECTION
                  6.09

              	
                SUCCESSOR
                  TRUSTEE BY MERGER.

              	
                46

              
	
                  SECTION
                  6.10

              	
                APPOINTMENT
                  OF CO-TRUSTEE OR SEPARATE TRUSTEE.

              	
                46

              
	
                  SECTION
                  6.11

              	
                ELIGIBILITY;
                  DISQUALIFICATION

              	
                48

              
	
                  SECTION
                  6.12

              	
                PREFERENTIAL
                  COLLECTION OF CLAIMS AGAINST THE ISSUER

              	
                48

              
	
                  SECTION
                  6.13

              	
                REPRESENTATIONS
                  AND WARRANTIES OF THE TRUSTEE

              	
                48

              
	
                  SECTION
                  6.14

              	
                RIGHT
                  OF TRUSTEE IN CAPACITY OF REGISTRAR OR PAYING AGENT. .

              	
                48

              
	
                 

                ARTICLE
                  VII   TRANSITION
                  BONDHOLDERS’ LISTS AND REPORTS

              	
                48

              
	
                  SECTION
                  7.01

              	
                ISSUER
                  TO FURNISH TRUSTEE NAMES AND ADDRESSES OF TRANSITION
                  BONDHOLDERS

              	
                48

              
	
                  SECTION
                  7.02

              	
                PRESERVATION
                  OF INFORMATION; COMMUNICATIONS TO TRANSITION BONDHOLDERS.

              	
                49

              
	
                  SECTION
                  7.03

              	
                REPORTS
                  BY ISSUER.

              	
                49

              
	
                  SECTION
                  7.04

              	
                REPORTS
                  BY TRUSTEE.

              	
                49

              
	
                  SECTION
                  7.05

              	
                PROVISION
                  OF SERVICER REPORTS

              	
                50

              
	
                 

                ARTICLE
                  VIII   ACCOUNTS,
                  DISBURSEMENTS AND RELEASES

              	
                50

              
	
                  SECTION
                  8.01

              	
                COLLECTION
                  OF MONEY

              	
                50

              
	
                  SECTION
                  8.02

              	
                COLLECTION
                  ACCOUNT.

              	
                50

              
	
                  SECTION
                  8.03

              	
                RELEASE
                  OF COLLATERAL.

              	
                57

              
	
                  SECTION
                  8.04

              	
                ISSUER
                  OPINION OF COUNSEL

              	
                58

              
	
                  SECTION
                  8.05

              	
                REPORTS
                  BY INDEPENDENT ACCOUNTANTS

              	
                58

              
	
                 

                ARTICLE
                  IX    SUPPLEMENTAL
                  INDENTURES

              	
                59

              
	
                  SECTION
                  9.01

              	
                SUPPLEMENTAL
                  INDENTURES WITHOUT CONSENT OF TRANSITION BONDHOLDERS.

              	
                59

              
	
                  SECTION
                  9.02

              	
                SUPPLEMENTAL
                  INDENTURES WITH CONSENT OF TRANSITION BONDHOLDERS.

              	
                60

              
	
                  SECTION
                  9.03

              	
                EXECUTION
                  OF SUPPLEMENTAL INDENTURES

              	
                62

              
	
                  SECTION
                  9.04

              	
                EFFECT
                  OF SUPPLEMENTAL INDENTURE

              	
                62

              
	
                  SECTION
                  9.05

              	
                CONFORMITY
                  WITH TRUST INDENTURE ACT

              	
                63

              
	
                  SECTION
                  9.06

              	
                REFERENCE
                  IN TRANSITION BONDS TO SUPPLEMENTAL INDENTURES

              	
                63

              
	
                 

                ARTICLE
                  X    REDEMPTION
                  OF
                  TRANSITION BONDS

              	
                63

              
	
                  SECTION
                  10.01

              	
                OPTIONAL
                  REDEMPTION BY ISSUER

              	
                63

              
	
                  SECTION
                  10.02

              	
                MANDATORY
                  REDEMPTION BY ISSUER

              	
                63

              
	
                  SECTION
                  10.03

              	
                FORM
                  OF REDEMPTION NOTICE.

              	
                64

              
	
                  SECTION
                  10.04

              	
                PAYMENT
                  OF REDEMPTION PRICE

              	
                65

              
	
                 

                ARTICLE
                  XI    MISCELLANEOUS

              	
                65

              


      

       

      
        
          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

       

      
        	
                  SECTION
                  11.01

              	
                COMPLIANCE
                  CERTIFICATES AND OPINIONS, ETC.

              	
                65

              
	
                  SECTION
                  11.02

              	
                FORM
                  OF DOCUMENTS DELIVERED TO TRUSTEE.

              	
                66

              
	
                  SECTION
                  11.03

              	
                ACTS
                  OF TRANSITION BONDHOLDERS.

              	
                66

              
	
                  SECTION
                  11.04

              	
                NOTICES,
                  ETC

              	
                67

              
	
                  SECTION
                  11.05

              	
                NOTICES
                  TO TRANSITION BONDHOLDERS; WAIVER.

              	
                68

              
	
                  SECTION
                  11.06

              	
                ALTERNATE
                  PAYMENT AND NOTICE PROVISIONS

              	
                68

              
	
                  SECTION
                  11.07

              	
                CONFLICT
                  WITH TRUST INDENTURE ACT.

              	
                68

              
	
                  SECTION
                  11.08

              	
                EFFECT
                  OF HEADINGS AND TABLE OF CONTENTS

              	
                69

              
	
                  SECTION
                  11.09

              	
                SUCCESSORS
                  AND ASSIGNS.

              	
                69

              
	
                  SECTION
                  11.10

              	
                SEVERABILITY

              	
                69

              
	
                  SECTION
                  11.11

              	
                BENEFITS
                  OF INDENTURE

              	
                69

              
	
                  SECTION
                  11.12

              	
                LEGAL
                  HOLIDAYS

              	
                69

              
	
                  SECTION
                  11.13

              	
                GOVERNING
                  LAW

              	
                69

              
	
                  SECTION
                  11.14

              	
                COUNTERPARTS

              	
                70

              
	
                  SECTION
                  11.15

              	
                ISSUER
                  OBLIGATION

              	
                70

              
	
                  SECTION
                  11.16

              	
                NO
                  PETITION

              	
                70

              
	
                  SECTION
                  11.17

              	
                INTERCREDITOR
                  AGREEMENT

              	
                70

              


      

      


      APPENDIX
        A           
MASTER
        DEFINITIONS

       

      
        
          
          

        

        
          iv

          
            

          

        

        
          
          

        

      

       

      INDENTURE,
        dated as of _______ , 2006, by and between JCP&L TRANSITION FUNDING II LLC,
        a Delaware limited liability company, as Issuer, and The Bank of New York,
        a New
        York banking corporation, in its capacity as trustee for the benefit of the
        Holders of the Transition Bonds, itself and each Swap Counterparty, if any
        (in
        its collective capacities, the “Trustee”).

       

      The
        Issuer has duly authorized the execution and delivery of this Indenture to
        provide for one or more Series, issuable as provided in this Indenture. Each
        such Series will be issued only under a separate Series Supplement to this
        Indenture duly executed and delivered by the Issuer and the Trustee. The
        Issuer
        is entering into this Indenture, and the Trustee is accepting the trusts
        created
        hereby, each for good and valuable consideration, the receipt and sufficiency
        of
        which are hereby acknowledged and each intending to be legally bound
        hereby.

       

      GRANTING
        CLAUSE

       

      The
        Issuer hereby Grants to the Trustee for the benefit of (i) the Holders of
        the
        Transition Bonds from time to time issued and outstanding, (ii) the Trustee
        and
        (iii) each Swap Counterparty (but only to the extent specified in any
        Series Supplement), all of the Issuer’s right, title and interest whether now
        owned or hereafter acquired, in, to and under: (a) all Bondable Transition
        Property, including, without limitation, the Bondable Transition Property
        transferred by the Seller to the Issuer from time to time pursuant to the
        Sale
        Agreement and all proceeds thereof; (b) the Sale Agreement; (c) all Bills
        of
        Sale delivered by the Seller pursuant to the Sale Agreement; (d) the
        Intercreditor Agreement; (e) the Servicing Agreement; (f) the
        Administration Agreement; (g) each Interest Rate Swap Agreement, if any;
        (h) the Collection Account and all sub-accounts thereof (including, without
        limitation, the General Subaccount, each Series Overcollateralization
        Subaccount, each Series Capital Subaccount, the Reserve Subaccount, each
        Series
        Subaccount, any Class Subaccount and any Defeasance Subaccount) and all cash,
        securities, instruments, investment property or other assets deposited in
        or
        credited to the Collection Account or any subaccount thereof from time to
        time
        or purchased with funds therefrom; (i) all investment property and all
        other property of whatever kind owned from time to time by the Issuer other
        than
        (x) any cash released to any Swap Counterparty by the Trustee from the related
        Class Subaccount pursuant to Section 8.02(f) and the related Series
        Supplement, (y) any cash or other property released to the Issuer by the
        Trustee from any Series Capital Subaccount pursuant to Section 8.02(g)(x)
        and (z) the proceeds from the sale of the Transition Bonds used to pay (1)
        the costs of issuance of the Transition Bonds and the Upfront Transaction
        Costs
        and Capital Reduction Costs (as those terms are defined in the Financing
        Order)
        and (2) the purchase price of the Bondable Transition Property paid
        pursuant to the Sale Agreement; (j) all present and future claims, demands,
        causes and choses in action in respect of any or all of the foregoing; and
        (k)
        all payments on or under and all proceeds of every kind and nature whatsoever
        in
        respect of any or all of the foregoing, including all proceeds of the
        conversion, voluntary or involuntary, into cash or other liquid property,
        all
        cash proceeds, accounts, accounts receivable, general intangibles, notes,
        drafts, acceptances, chattel paper, checks, deposit accounts, insurance
        proceeds, condemnation awards, rights to payment of any and every kind and
        other
        forms of obligations and receivables, instruments and other property which
        at
        any time constitute all or part of or are included in the proceeds of any
        of the
        foregoing (collectively, the “Collateral”).

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Such
        Grants are made to the Trustee to have and to hold in trust to secure the
        payment of Principal of and premium, if any, and interest on, and any other
        amounts owing in respect of, the Transition Bonds and all fees, expenses,
        counsel fees and other amounts due and owing to the Trustee and, if and to
        the
        extent provided in any Series Supplement, any amounts due and owing to each
        Swap
        Counterparty, (collectively, the “Secured Obligations”) equally and ratably
        without prejudice, preference, priority or distinction, except as expressly
        provided in this Indenture, and to secure performance by the Issuer of all
        of
        the Issuer’s other obligations under this Indenture, all as provided in this
        Indenture.

       

      The
        Trustee, as trustee on behalf of the Holders of the Transition Bonds,
        acknowledges such Grant, accepts the trusts hereunder in accordance with
        the
        provisions hereof and agrees to perform its duties herein required.


       

      ARTICLE
        I


       

      DEFINITIONS
        AND INCORPORATION BY REFERENCE

       

      SECTION
        1.01  DEFINITIONS. 
        Capitalized terms used but not otherwise defined in this Indenture have the
        respective meanings set forth in Appendix A hereto unless the context otherwise
        requires.

       

      SECTION
        1.02  INCORPORATION
        BY REFERENCE OF THE TRUST INDENTURE ACT. 
        Whenever this Indenture refers to a provision of the TIA, the provision is
        incorporated by reference in and made a part of this Indenture. Each of the
        following TIA terms used in this Indenture has the following
        meaning:

       

      “Commission”
        means the U.S. Securities and Exchange Commission, and any successor thereof.
        

       

      “indenture
        securities” means the Transition Bonds.

       

      “indenture
        to be qualified” means this Indenture. 

       

      “indenture
        trustee” or “institutional trustee” means the Trustee. 

       

      All
        other
        TIA terms used in this Indenture that are defined by the TIA, defined by
        TIA
        reference to another statute or defined by Commission rule have the meanings
        assigned to them by such definitions.

       

      SECTION
        1.03  RULES
        OF
        CONSTRUCTION. 
        For purposes of this Indenture:

       

      (a)
          An
        accounting term not otherwise defined has the meaning assigned to it in
        accordance with generally accepted accounting principles of the United States
        of
        America as in effect from time to time;

       

      (b)
          “including”
        means including without limitation; 

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      (c)
          with
        respect to terms defined in Appendix A hereto, words in the singular include
        the
        plural and words in the plural include the singular; 

       

      (d)
          unless
        otherwise specified, references herein to Sections or Articles are to Sections
        or Articles of this Indenture; and 

       

      (e)
          the
        words
“herein”, “hereof”, “hereunder” and other words of similar import refer to this
        Indenture as a whole and not to any particular Article, Section or other
        subdivision.

       

      ARTICLE
        II


       

      THE
        TRANSITION BONDS

       

      SECTION
        2.01  FORM.

       

      (a)
          The
        Transition Bonds and the Trustee’s certificate of authentication shall be in
        substantially the forms set forth in the exhibits to the related Series
        Supplement, with such appropriate insertions, omissions, substitutions and
        other
        variations as are required or permitted by this Indenture or by the related
        Series Supplement and may have such letters, numbers or other marks of
        identification and such legends or endorsements placed thereon as may,
        consistently herewith, be determined by the Manager of the Issuer executing
        such
        Transition Bonds, as evidenced by his or her execution of such Transition
        Bonds.
        Any portion of the text of any Transition Bond may be set forth on the reverse
        thereof, with an appropriate reference thereto on the face of the Transition
        Bond. Each Transition Bond shall be dated the date of its
        authentication.

       

      (b)
          The
        Transition Bonds shall be typewritten, printed, lithographed or engraved
        or
        produced by any combination of these methods (with or without steel engraved
        borders), all as determined by the Manager of the Issuer executing such
        Transition Bonds, as evidenced by his or her execution of such Transition
        Bonds.

       

      (c)
          Each
        Transition Bond shall bear upon its face the designation so selected for
        the
        Series and Class, if any, to which it belongs. The terms of all Transition
        Bonds
        of the same Series shall be the same, unless such Series is comprised of
        one or
        more Classes, in which case the terms of all Transition Bonds of the same
        Class
        shall be the same.

       

      (d)
          Each
        Transition Bond shall state that the Competition Act provides that the State
        of
        New Jersey pledges and agrees with the Holders of the Transition Bonds 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”.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      SECTION
        2.02  EXECUTION,
        AUTHENTICATION AND DELIVERY.

       

      (a)
          The
        Transition Bonds shall be executed on behalf of the Issuer by a Manager.
        The
        signature of any such Manager on the Transition Bonds may be manual or
        facsimile.

       

      (b)
          Transition
        Bonds bearing the manual or facsimile signature of an individual who was
        at any
        time a Manager shall bind the Issuer, notwithstanding that such individuals
        or
        any of them have ceased to hold such offices prior to the authentication
        and
        delivery of such Transition Bonds.

       

      (c)
          At
        any
        time and from time to time after the execution and delivery of this Indenture,
        the Issuer may deliver Transition Bonds executed on behalf of the Issuer
        to the
        Trustee pursuant to an Issuer Order for authentication; and the Trustee shall
        authenticate and deliver such Transition Bonds as in this Indenture and in
        such
        Issuer Order provided and not otherwise.

       

      (d)
          No
        Transition Bond shall be entitled to any benefit under this Indenture or
        be
        valid or obligatory for any purpose, unless there appears on such Transition
        Bond a certificate of authentication substantially in the form provided for
        in
        the related Series Supplement executed by the Trustee by the manual signature
        of
        one of its authorized signatories, and such certificate upon any Transition
        Bond
        shall be conclusive evidence, and the only evidence, that such Transition
        Bond
        has been duly authenticated and delivered hereunder.

       

      (e)
          The
        Trustee may appoint an authenticating agent acceptable to the Issuer to
        authenticate Transition Bonds. An authenticating agent may authenticate
        Transition Bonds whenever the Trustee may do so. Each reference in this
        Indenture to authentication by the Trustee includes authentication by such
        agent. An authenticating agent has the same rights as the Paying Agent and
        the
        Transition Bond Registrar to deal with the Issuer or any Affiliate of the
        Issuer.

       

      SECTION
        2.03  DENOMINATIONS;
        TRANSITION BONDS ISSUABLE IN SERIES.

       

      (a)
          The
        Transition Bonds of each Series shall be issuable as registered Transition
        Bonds
        in the Authorized Denominations specified in the Series Supplement therefor.
        

       

      (b)
          The
        Transition Bonds may, at the election of and as authorized by a Manager and
        set
        forth in a Series Supplement, be issued in one or more Series (each of which
        may
        be comprised of one or more Classes), and shall be designated generally as
        the
“Transition Bonds” of the Issuer, with such further particular designations
        added or incorporated in such title for the Transition Bonds of any particular
        Series or Class as a Manager of the Issuer may determine and be set forth
        in the
        Series Supplement therefor.

       

      (c)
          Each
        Series shall be created by a Series Supplement authorized by a Manager and
        establishing the terms and provisions of such Series and, if applicable,
        any
        Classes thereof. The several Series and any Classes thereof may differ as
        between Series and Classes, in respect of any of the following
        matters:

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      
        (i)    designation
          of the Series and each Class thereof;

         

        (ii)    the
          aggregate initial principal amount of the Series and each Class
          thereof;

         

        (iii)    the
          Interest Rate or Interest Rates of the Series and each Class thereof or
          the
          formula, if any, used to calculate the applicable Interest Rate or Interest
          Rates for the Series and each Class thereof;

         

        (iv)    the
          Payment Dates of the Series and each Class thereof;

         

        (v)    the
          Expected Final Payment Date of the Series and each Class thereof;

         

        (vi)    the
          Final
          Maturity Date of the Series and each Class thereof;

         

        (vii)    the
          Series Issuance Date of the Series;

         

        (viii)    the
          place
          or places for payments with respect to the Series and each Class
          thereof;

         

        (ix)    the
          Authorized Denominations for the Series and each Class thereof;

         

        (x)    the
          provisions, if any, for redemption by the Issuer of the Series and each
          Class
          thereof;

         

        (xi)    the
          Expected Amortization Schedule for the Series and each Class
          thereof;

         

        (xii)    the
          Overcollateralization Amount with respect to the Series;

         

        (xiii)    the
          Required Capital Amount with respect to the Series;

         

        (xiv)    the
          Calculation Dates and Adjustment Dates for the Series;

         

        (xv)    the
          credit enhancement, if any, applicable to the Series and each Class thereof;
          and

         

        (xvi)    any
          other
          terms of the Series or each Class that are not inconsistent with the provisions
          of this Indenture.

      

       

      SECTION
        2.04  TEMPORARY
        TRANSITION BONDS.

       

      (a)
          Pending
        the preparation of definitive Transition Bonds pursuant to Section 2.13,
        or, in
        the case of Transition Bonds held in a book-entry only system by a Clearing
        Agency, any Manager on behalf of the Issuer may execute, and upon receipt
        of an
        Issuer Order the Trustee shall authenticate and deliver, temporary Transition
        Bonds which are printed, lithographed, typewritten, mimeographed or otherwise
        produced, of the tenor of the definitive

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      Transition
        Bonds in lieu of which they are issued and with such variations not inconsistent
        with the terms of this Indenture and the related Series Supplement as the
        Manager executing such Transition Bonds may determine, as evidenced by his
        or
        her execution of such Transition Bonds.

       

      (b)
          If
        temporary Transition Bonds are issued, the Issuer will cause definitive
        Transition Bonds to be prepared without unreasonable delay except where
        temporary Transition Bonds are held in a book-entry only system by a Clearing
        Agency in which case the Issuer shall not be required to prepare definitive
        Transition Bonds. After the preparation of definitive Transition Bonds, the
        temporary Transition Bonds shall be exchangeable for definitive Transition
        Bonds
        upon surrender of the temporary Transition Bonds at the office or agency
        of the
        Issuer to be maintained as provided in Section 3.02, without charge to any
        Holder. Upon surrender for cancellation of any one or more temporary Transition
        Bonds, a Manager on behalf of the Issuer shall execute and the Trustee shall
        authenticate and deliver in exchange therefor a like Series (and, if applicable,
        Class) and aggregate initial principal amount of definitive Transition Bonds
        in
        Authorized Denominations. Until so exchanged, the temporary Transition Bonds
        shall in all respects be entitled to the same benefits under this Indenture
        as
        definitive Transition Bonds. 

       

      SECTION
        2.05  REGISTRATION;
        REGISTRATION OF TRANSFER AND EXCHANGE.

       

      (a)
          The
        Issuer shall cause to be kept a register (the “Transition Bond Register”) in
        which, subject to such reasonable regulations as it may prescribe, the Issuer
        shall provide for the registration of Transition Bonds and the registration
        of
        transfers of Transition Bonds. The Trustee shall be the registrar (the Trustee
        or any successor thereof in such capacity, the “Transition Bond Registrar”) for
        the purpose of registering Transition Bonds and transfers of Transition Bonds
        as
        herein provided. Upon any resignation of any Transition Bond Registrar, the
        Issuer shall promptly appoint a successor or, if it elects not to make such
        an
        appointment, shall assume the duties of Transition Bond Registrar.

       

      (b)
          If
        a
        Person other than the Trustee is appointed by the Issuer as Transition Bond
        Registrar, the Issuer shall give the Trustee and any transfer, paying or
        listing
        agent of the Issuer appointed pursuant to Section 3.02(b) prompt written
        notice
        of the appointment of such Transition Bond Registrar and of the location,
        and
        any change in the location, of the Transition Bond Register; the Trustee
        and any
        such agent shall have the right to inspect the Transition Bond Register at
        all
        reasonable times and to obtain copies thereof; and the Trustee and any such
        agent shall have the right to conclusively rely upon a certificate executed
        on
        behalf of the Transition Bond Registrar by a duly authorized officer thereof
        as
        to the names and addresses of the Holders of the Transition Bonds and the
        original and Outstanding Amounts and number of such Transition Bonds (separately
        stated by Series and, if applicable, Class).

       

      (c)
          Upon
        surrender for registration of transfer of any Transition Bond at the office
        or
        agency of the Issuer to be maintained as provided in Section 3.02, a Manager
        on
        behalf of the Issuer shall execute, and the Trustee shall authenticate and
        the
        Transition Bondholder shall obtain from the Trustee, in the name of the
        designated transferee or transferees, one or more new Transition Bonds in
        any
        Authorized Denominations, of a like Series (and, if applicable, Class) and
        aggregate initial principal amount. 

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      (d)
          At
        the
        option of the Holder, Transition Bonds may be exchanged for other Transition
        Bonds of a like Series (and, if applicable, Class) and aggregate initial
        principal amount in Authorized Denominations, upon surrender of the Transition
        Bonds to be exchanged at such office or agency as provided in Section 3.02.
        Whenever any Transition Bonds are so surrendered for exchange, a Manager
        on
        behalf of the Issuer shall execute, and the Trustee shall authenticate and
        the
        Transition Bondholder shall obtain from the Trustee, the Transition Bonds
        which
        the Transition Bondholder making the exchange is entitled to receive.


       

      (e)
          All
        Transition Bonds issued upon any registration of transfer or exchange of
        Transition Bonds shall be the valid obligations of the Issuer, evidencing
        the
        same debt, and entitled to the same benefits under this Indenture, as the
        Transition Bonds surrendered upon such registration of transfer or
        exchange.

       

      (f)
          Every
        Transition Bond presented or surrendered for registration of transfer or
        exchange shall be duly endorsed by, or be accompanied by a written instrument
        of
        transfer in form satisfactory to the Trustee duly executed by, the Holder
        thereof or such Holder’s attorney duly authorized in writing, with such
        signature guaranteed by an Eligible Guarantor Institution in the form set
        forth
        in such Transition Bond.

       

      (g)
          No
        service charge shall be made to a Holder for any registration of transfer
        or
        exchange of Transition Bonds, but, other than in respect of exchanges made
        pursuant to Sections 2.04 or 9.06 not involving any transfer, the Issuer
        may
        require payment by such Holder of a sum sufficient to cover any tax or other
        governmental charge that may be imposed in connection with any registration
        of
        transfer or exchange of Transition Bonds, and the fees and expenses of the
        Trustee.

       

      (h)
          The
        preceding provisions of this Section 2.05 notwithstanding, the Issuer shall
        not
        be required to make, and the Transition Bond Registrar need not register,
        transfers or exchanges of Transition Bonds selected for redemption or transfers
        or exchanges of any Transition Bond for a period of fifteen days preceding
        the
        date on which final payment of Principal is to be made with respect to such
        Transition Bond.

       

      SECTION
        2.06  MUTILATED,
        DESTROYED, LOST OR STOLEN TRANSITION BONDS.

       

      (a)
          If
        (i)
        any mutilated Transition Bond is surrendered to the Trustee, or the Trustee
        receives evidence to its satisfaction of the destruction, loss or theft of
        any
        Transition Bond, and (ii) there is delivered to the Trustee such security
        or
        indemnity as may be required by it to hold the Issuer and the Trustee harmless,
        then, in the absence of notice to the Issuer, the Transition Bond Registrar
        or
        the Trustee that such Transition Bond has been acquired by a bona fide
        purchaser, a Manager on behalf of the Issuer shall execute, and upon a Manager’s
        written request the Trustee shall authenticate and deliver, in exchange for
        or
        in lieu of any such mutilated, destroyed, lost or stolen Transition Bond,
        a
        replacement Transition Bond of like Series (and, if applicable, Class), tenor
        and initial principal amount in Authorized Denominations, bearing a number
        not
        contemporaneously outstanding; provided, however, that if any such destroyed,
        lost or stolen Transition Bond, but not a mutilated Transition Bond, shall
        have
        become or within seven days shall be due and payable, or shall have been
        called
        for redemption,

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      instead
        of issuing a replacement Transition Bond, the Issuer may pay such destroyed,
        lost or stolen Transition Bond when so due or payable or upon the Redemption
        Date without surrender thereof. If, after the delivery of such replacement
        Transition Bond or payment of a destroyed, lost or stolen Transition Bond
        pursuant to the proviso to the preceding sentence, a protected purchaser
        of the
        original Transition Bond in lieu of which such replacement Transition Bond
        was
        issued presents for payment such original Transition Bond, the Issuer and
        the
        Trustee shall be entitled to recover such replacement Transition Bond (or
        such
        payment) from the Person to whom it was delivered or any Person taking such
        replacement Transition Bond from such Person to whom such replacement Transition
        Bond was delivered or any assignee of such Person, except a protected purchaser,
        and shall be entitled to recover upon the security or indemnity provided
        therefor to the extent of any loss, damage, cost or expense incurred by the
        Issuer or the Trustee in connection therewith.

       

      (b)
          Every
        replacement Transition Bond issued pursuant to this Section 2.06 in replacement
        of any mutilated, destroyed, lost or stolen Transition Bond shall constitute
        an
        original additional contractual obligation of the Issuer, whether or not
        the
        mutilated, destroyed, lost or stolen Transition Bond shall be at any time
        enforceable by anyone, and shall be entitled to all the benefits of this
        Indenture equally and proportionately with any and all other Transition Bonds
        duly issued hereunder. Upon the issuance of any new Transition Bond under
        this
        Section, the Issuer may require the payment of a sum sufficient to cover
        any tax
        or other governmental charge that may be imposed in relation thereto and
        any
        other reasonable expenses (including the fees and expenses of the Trustee
        and
        its counsel) connected therewith.

       

      (c)
          The
        provisions of this Section 2.06 are exclusive and shall preclude (to the
        extent
        lawful) all other rights and remedies with respect to the replacement or
        payment
        of mutilated, destroyed, lost or stolen Transition Bonds.

       

      SECTION
        2.07  PERSONS
        DEEMED OWNER. 
        Prior to due presentment for registration of transfer of any Transition Bond,
        the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat
        the
        Person in whose name any Transition Bond is registered (as of the day of
        determination) as the owner of such Transition Bond for the purpose of receiving
        payments of Principal of and interest on such Transition Bond and for all
        other
        purposes whatsoever, whether or not such Transition Bond be overdue, and
        neither
        the Issuer, the Trustee nor any agent of the Issuer or the Trustee shall
        be
        affected by notice to the contrary.

       

      SECTION
        2.08  PAYMENT
        OF PRINCIPAL AND INTEREST; INTEREST ON OVERDUE PRINCIPAL; PRINCIPAL AND INTEREST
        RIGHTS PRESERVED.

       

      (a)
          The
        Transition Bonds shall accrue interest as provided in the form of Transition
        Bond attached to the Series Supplement for such Transition Bonds, at the
        applicable Interest Rate or Interest Rates specified therein, and such interest
        shall be payable on each Payment Date as specified therein. Any installment
        of
        interest or Principal payable on any Transition Bond which is punctually
        paid or
        duly provided for by the Issuer on the applicable Payment Date shall be paid
        to
        the Person in whose name such Transition Bond is registered on the Record
        Date
        for such Payment Date, in the manner specified in the related Series Supplement,
        and if not specified therein, either (i) by check mailed first-class, postage
        prepaid to

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      such
        Person’s address as it appears on the Transition Bond Register on such Record
        Date or (ii) with respect to Transition Bonds registered on a Record Date
        in the
        name of the nominee of the Clearing Agency (initially, such nominee to be
        Cede
& Co.), by wire transfer in immediately available funds to the account
        designated by such nominee, except for the final installment of Principal
        payable with respect to such Transition Bond on a Payment Date, which shall
        be
        payable as provided in clause (b) below. The funds represented by any such
        checks or other amounts returned undelivered shall be held in accordance
        with
        Section 3.03. 

       

      (b)
          The
        Principal of each Transition Bond of each Series (and, if applicable, Class)
        shall be payable in installments on each Payment Date specified in the Expected
        Amortization Schedule included in the Series Supplement for such Transition
        Bonds, but only to the extent that moneys are available for such payment
        pursuant to Section 8.02; provided, that installments of Principal not paid
        when
        scheduled to be paid shall be paid upon receipt of moneys available for such
        purpose, in the sequential order set forth in the applicable Expected
        Amortization Schedule. Failure to pay in accordance with such Expected
        Amortization Schedule because moneys are not so available pursuant to Section
        8.02 to make such payments shall not constitute a Default or Event of Default
        under this Indenture. Notwithstanding the foregoing, the entire Outstanding
        Principal amount of the Transition Bonds of any Series or Class shall be
        due and
        payable, if not previously paid, either (i) on the Final Maturity Date therefor,
        (ii) on the date on which the Transition Bonds of all Series have been declared
        immediately due and payable in accordance with Section 5.02 or (iii) on the
        Redemption Date, if any, therefor. The Trustee shall notify the Person in
        whose
        name a Transition Bond is registered, and any other Person required under
        the
        relevant Series Supplement, at the close of business on the second Record
        Date
        preceding the Payment Date on which the Issuer expects that the final
        installment of Principal of and interest on such Transition Bond will be
        paid.
        Such notice shall be mailed no later than five days prior to such final Payment
        Date and, subject to the Issuer’s right to pay without surrender pursuant to
        Section 2.06(a), shall specify that such final installment of Principal will
        be
        payable only upon presentation and surrender of such Transition Bond and
        shall
        specify the place where such Transition Bond may be presented and surrendered
        for payment of such installment. Notices in connection with redemptions of
        Transition Bonds also shall be mailed to Transition Bondholders as provided
        in
        Section 10.03. 

       

      (c)
          If
        the
        Issuer defaults in a payment of interest on the Transition Bonds of any Series,
        or is in default with respect to any amount payable to any Swap Counterparty,
        the Issuer shall pay such defaulted interest or such other amount, as the
        case
        may be, plus interest on such defaulted interest or on such other amount
        at the
        applicable Interest Rate or Interest Rates in any lawful manner (subject
        to the
        availability of such amounts in the related Class Subaccount, in the case
        of
        interest owed with respect to any Transition Bonds which have floating rates
        of
        interest). The Issuer may pay such defaulted interest to the Persons who
        are
        Transition Bondholders and to any Swap Counterparty, as applicable, at the
        rate
        specified in the related Series Supplement or Interest Rate Swap Agreement,
        respectively, on a subsequent special record date, which date shall be at
        least
        five Business Days prior to the payment date. The Issuer shall fix or cause
        to
        be fixed any such special record date and payment date, and, at least fifteen
        days before any such special record date, the Issuer shall mail to each affected
        Transition Bondholder and the Trustee a notice that states the special record
        date, the payment date and the amount of defaulted interest to be paid.


       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      SECTION
        2.09  CANCELLATION.
        All
        Transition Bonds surrendered for payment, registration of transfer, exchange
        or
        redemption shall, if surrendered to any Person other than the Trustee, be
        delivered to the Trustee and shall be promptly canceled by the Trustee. The
        Issuer may at any time deliver to the Trustee for cancellation any Transition
        Bonds previously authenticated and delivered hereunder which the Issuer may
        have
        acquired in any manner whatsoever, and all Transition Bonds so delivered
        shall
        be promptly canceled by the Trustee. No Transition Bonds shall be authenticated
        in lieu of or in exchange for any Transition Bonds canceled as provided in
        this
        Section 2.09, except as expressly permitted by this Indenture. All canceled
        Transition Bonds may be held or disposed of by the Trustee in accordance
        with
        its standard retention or disposal policy as in effect at the time unless
        the
        Issuer shall direct by an Issuer Order that they be destroyed or returned
        to it;
        provided, that such Issuer Order is timely and the Transition Bonds have
        not
        been previously disposed of by the Trustee.

       

      SECTION
        2.10  AMOUNT;
        AUTHENTICATION AND DELIVERY OF TRANSITION BONDS.

       

      (a)
          The
        Issuer may issue Transition Bonds of a new Series as a Financing Issuance
        or a
        Refunding Issuance. 

       

      (b)
          Transition
        Bonds of a new Series may from time to time be executed by a Manager on behalf
        of the Issuer and delivered to the Trustee for authentication and thereupon
        the
        same shall be authenticated and delivered by the Trustee upon an Issuer Request
        and upon delivery by the Issuer, at the Issuer’s expense, to the Trustee of the
        following:

      

        (i)   Trust
          Action.
          An
          Issuer Order authorizing and directing the authentication and delivery
          of the
          Transition Bonds by the Trustee and specifying the principal amount of
          Transition Bonds to be authenticated.

         

        (ii)   Authorizing
          Certificate.
          A
          certified resolution of the Managers authorizing the execution and delivery
          of
          the Series Supplement for the Transition Bonds applied for and the execution,
          authentication and delivery of such Transition Bonds.

         

        (iii)   Series
          Supplement.
          A Series
          Supplement for the Series being issued, which shall set forth the provisions
          and
          form of the Transition Bonds of such Series (and, if applicable, each Class
          thereof).

         

        (iv)   Certificates
          of the Issuer and the Seller.

         

        (A)    An
          Issuer
          Officer’s Certificate dated as of the Series Issuance Date,
          stating:

         

        (1)    that
          no
          Default has occurred and is continuing under this Indenture and that the
          issuance of the Transition Bonds being issued on such Series Issuance Date
          will
          not result in any Default; 

         

        (2)    that
          the
          Issuer has not assigned any interest or participation in the Collateral
          except
          for the Grant contained in this Indenture; that the Issuer has the power
          and
          authority to Grant a perfected

         

        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

        

        
           

          security
            interest in the Collateral to the Trustee as security hereunder; and
            that the
            Issuer, subject to the terms of this Indenture, has Granted to the Trustee
            a
            perfected security interest that is first priority in all of the Issuer’s right,
            title and interest in, to and under the Collateral free and clear of
            any Lien,
            except the Lien of this Indenture;

           

        

        (3)    that
          the
          Issuer has appointed a firm of Independent registered public accountants
          as
          contemplated in Section 8.05; 

         

        (4)    that
          attached thereto are duly executed, true and complete copies of the Sale
          Agreement, the Intercreditor Agreement and the Servicing Agreement;


         

        (5)    that
          all
          financing statements with respect to the Collateral which are required
          to be
          filed under the New Jersey UCC, the Delaware UCC or the uniform commercial
          code
          of any other jurisdiction by the terms of the Sale Agreement, the Servicing
          Agreement or this Indenture have been or will be filed as required; and
          

         

        (6)    that
          all
          conditions precedent provided in this Indenture relating to the authentication
          and delivery of the Transition Bonds have been complied with.

         

        (B)    
A
          Seller
          Officers’ Certificate, dated as of the Series Issuance Date, to the effect that,
          in the case of the Bondable Transition Property to be transferred to the
          Issuer
          on such date, immediately prior to the conveyance thereof to the Issuer
          pursuant
          to the Sale Agreement:

         

        (1)    no
          entity, other than the Seller, had any ownership interest in such Bondable
          Transition Property at any time; to the extent of the Seller’s interest in the
          Bondable Transition Property, such interest in the Bondable Transition
          Property
          will be validly transferred and sold to the Issuer free and clear of all
          Liens
          (other than Liens created by the Issuer pursuant to this Indenture) and
          such
          transfer will be perfected; the Seller has the power and authority to sell
          and
          assign such interest in the Bondable Transition Property to the Issuer;
          the
          Seller has duly authorized such sale and assignment to the Issuer; and
          the
          Seller’s state of incorporation is the State of New Jersey;

         

        (2)    the
          attached copy of the Financing Order creating such Bondable Transition
          Property
          is true and correct and is in full force and effect; and

         

        (3)    if
          the
          Series Issuance Date is after the date hereof, the representations and
          warranties contained in Sections 3.08(b), (d)(iv), (d)(v) and (f)(i)-(iii)
          of
          the Sale Agreement are true as if made on the date of conveyance of the
          Bondable
          Transition Property.

         

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

         

        (v)   Issuer
          Opinion of Counsel.
          An
          Issuer Opinion of Counsel, or any other opinion or opinions on which the
          Trustee
          may conclusively rely, portions of which may be delivered by counsel for
          the
          Issuer and portions of which may be delivered by counsel for the Seller
          and/or
          the Servicer, as appropriate, dated as of the Series Issuance Date, subject
          to
          customary qualifications, substantially to the collective effect
          that:

         

        (A)   the
          Issuer has the power and authority to execute and deliver the related Series
          Supplement and this Indenture and to issue the Transition Bonds being issued,
          each of the related Series Supplement and this Indenture and such Transition
          Bonds has been duly authorized, executed and delivered, and the Issuer
          is duly
          organized, validly existing as a limited liability company and in good
          standing
          under the laws of the jurisdiction of its organization and is in good standing
          in any jurisdiction where it is required to be qualified; 

         

        (B)   no
          authorization, approval or consent of any governmental body is required
          for the
          valid issuance, authentication or delivery of such Transition Bonds, except
          for
          any such authorization, approval or consent as has already been obtained
          and
          such registrations as are required under the blue sky and securities laws
          of any
          State;

         

        (C)   the
          Transition Bonds being issued, when executed and authenticated in accordance
          with the provisions of this Indenture and delivered, will constitute valid
          and
          binding obligations of the Issuer entitled to the benefits of this Indenture
          and
          the related Series Supplement;

         

        (D)   the
          Financing Order with respect to the related Transition Bonds is final and
          non-appealable; 

         

        (E)   this
          Indenture, the Sale Agreement, the Intercreditor Agreement and the Servicing
          Agreement are valid and binding agreements of the Issuer, enforceable against
          the Issuer in accordance with their respective terms except as such
          enforceability may be subject to bankruptcy, insolvency, moratorium,
          reorganization, receivership and other similar laws affecting the rights
          and
          remedies of creditors generally and general principles of equity (regardless
          of
          whether such enforceability is considered in a proceeding in equity or
          at law);


         

        (F)   the
          Sale
          Agreement is a valid and binding agreement of the Seller, enforceable against
          the Seller in accordance with its terms except as such enforceability may
          be
          subject to bankruptcy, insolvency, moratorium, reorganization, receivership
          and
          other similar laws affecting the rights and remedies of creditors generally
          and
          general principles of equity (regardless of whether such enforcement is
          considered in a proceeding in equity or at law);

         

        (G)    the
          Servicing Agreement is a valid and binding agreement of the Servicer,
          enforceable against the Servicer in accordance with its terms

         

        
          
            
            

          

          
            12

            
              

            

          

          
            
            

          

        

         

        except
          as
          such enforceability may be subject to bankruptcy, insolvency, reorganization,
          receivership, moratorium and other laws affecting the rights and remedies
          of
          creditors generally and general principles of equity (regardless of whether
          such
          enforcement is considered in a proceeding in equity or at law);

         

        (H)
           

         

        (1)    the
          provisions of the Sale Agreement together with the related Bill of Sale
          are
          effective to create, in favor of the Issuer, a valid security interest
          (as such
          term is defined in Section 1-201 of the New Jersey UCC) in the Seller’s rights
          in the Bondable Transition Property described in the Bill of Sale (the
          “Transferred Bondable Transition Property”), which security interest if
          characterized as a transfer for security will secure the amount paid by
          the
          Issuer for such Transferred Bondable Transition Property; it being noted
          that
          the term “security interest” for the purposes of this paragraph includes both a
          sale and a transfer for security of an account and no opinion will be expressed
          as to the proper characterization of the transfer of the Transferred Bondable
          Transition Property by the Seller to the Issuer;

         

        (2)    the
          security interest in favor of the Issuer in the Transferred Bondable Transition
          Property has been perfected; and

         

        (3)    no
          other
          security interest of any other creditor of the Seller is equal or prior
          to the
          security interest of the Issuer in the Transferred Bondable Transition
          Property;

         

        (I)    upon
          the
          giving of value by the Trustee to the Issuer with respect to the
          Collateral,

         

        (1)    this
          Indenture creates in favor of the Trustee, to secure payment of the Secured
          Obligations, a valid security interest in the rights of the Issuer 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”),

         

        (2)    upon
          filing of the related financing statements in accordance with the New Jersey
          UCC
          and the Delaware UCC, such security interest will be perfected, and


         

        (3)    based
          solely on a review of the search reports under the New Jersey UCC and the
          Delaware UCC, no other security interest of any other creditor of the Issuer
          is
          equal or prior to the security interest of the Trustee in the Article 9
          Collateral;

         

        (J)    this
          Indenture has been duly qualified under the Trust Indenture Act and either
          the
          related Series Supplement for the Transition Bonds

         

        
          
            
            

          

          
            13

            
              

            

          

          
            
            

          

        

         

        applied
          for has been duly qualified under the Trust Indenture Act or no such
          qualification of such Series Supplement is necessary;

         

        (K)   all
          instruments furnished to the Trustee hereunder conform to the requirements
          of
          this Indenture and constitute all of the documents required to be delivered
          hereunder for the Trustee to authenticate and deliver the Transition Bonds
          applied for, and all conditions precedent provided for in this Indenture
          relating to the authentication and delivery of the Transition Bonds have
          been
          complied with; 

         

        (L)   either
          

         

        (1)    the
          registration statement covering the Transition Bonds is effective under
          the
          Securities Act of 1933, as amended, and, to the best of such counsel’s knowledge
          and information, no stop order suspending the effectiveness of such registration
          statement has been issued under the Securities Act of 1933, as amended,
          nor have
          proceedings therefor been instituted or threatened by the Commission
          or

         

        (2)    the
          Transition Bonds are exempt from the registration requirements under the
          Securities Act of 1933, as amended; 

         

        (M)   this
          Indenture has been duly authorized, executed and delivered by the
          Issuer;

         

        (N)   the
          Sale
          Agreement and the Servicing Agreement have been duly authorized, executed
          and
          delivered by each of the parties thereto; and

         

        (O)   the
          Issuer is not now and, following the issuance of the Transition Bonds,
          will not
          be, required to be registered under the Investment Company Act of 1940,
          as
          amended. 

         

        (vi)   Issuer
          Officer’s Certificate Regarding Accountant’s Certificate or
          Opinion.
          An
          Issuer Officer’s Certificate, dated as of the Series Issuance Date, to the
          effect that the Issuer has received a letter addressed to the Issuer complying
          with the requirements of Section 11.01, of a firm of Independent registered
          public accountants of recognized national reputation to the effect that
          (A) such
          accountants are Independent with respect to the Issuer within the meaning
          of
          this Indenture, and are independent public accountants within the meaning
          of the
          standards of The American Institute of Certified Public Accountants, and
          (B)
          with respect to the Collateral, they have made certain specified recalculations
          of calculations and information provided by the Issuer for the purpose
          of
          determining that, based on certain specified assumptions used in calculating
          the
          Transition Bond Charge with respect to the related Transferred Bondable
          Transition Property, as of the Series Issuance Date for such Series, after
          giving effect to the issuance of such Series and the application of the
          proceeds
          therefrom, and taking into account any amounts on deposit in the Reserve
          Subaccount, the Transition Bond Charge will be sufficient to pay (1) assumed
          Operating Expenses when incurred, plus (2) any amounts due under each
          Interest Rate Swap Agreement when due, plus (3) the

         

        
          
            
            

          

          
            14

            
              

            

          

          
            
            

          

        

         

        Overcollateralization
          Amount for such Series set forth in the Final Prospectus (as such term
          is
          defined in the Underwriting Agreement), plus (4) interest on the Transition
          Bonds at their respective Interest Rates when due as set forth in the Final
          Prospectus, plus (5) principal of the Transition Bonds in accordance with
          the Expected Amortization Schedule set forth in the Final Prospectus, as
          of each
          Payment Date and found such calculations to be mathematically
          correct.

         

        (vii)    Required
          Capital Amount.
          Evidence
          satisfactory to the Trustee that the Required Capital Amount for such Series
          has
          been credited to the Capital Subaccount for such Series.

         

        (viii)   Rating
          Agency Approval.
          If there
          are any Outstanding Series or Classes, or any outstanding transition bonds
          issued by JCP&L Transition Funding LLC, including the Series 2002-A
          Transition Bonds issued on June 11, 2002 (the “Series 2002-A Transition Bonds”),
          written notice from each Rating Agency that such action will not result
          in a
          reduction or withdrawal of the then current rating or ratings by such Rating
          Agency of any such Outstanding Series or Class or outstanding Series 2002-A
          Transition Bonds.

         

        (ix)    Bill
          of Sale.
          If the
          issuance of an additional Series is a Financing Issuance, the Bill of Sale
          delivered to the Issuer under the Sale Agreement with respect to the Bondable
          Transition Property being purchased with the proceeds of such Financing
          Issuance.

         

        (x)    Moneys
          for Refunding.
          If the
          issuance of a Series is a Refunding Issuance, the amount of money necessary
          to
          pay premiums, if any, and the outstanding Principal balance of and interest
          on
          the Transition Bonds being refunded to the Redemption Date for the Transition
          Bonds being refunded upon redemption, such money to be deposited into a
          separate
          account with the Trustee.

      

       

      SECTION
        2.11  BOOK-ENTRY
        TRANSITION BONDS. 
        Unless otherwise specified in the related Series Supplement, each Series,
        upon
        original issuance, will be issued in the form of a typewritten Transition
        Bond
        or Transition Bonds representing the Book-Entry Transition Bonds, to be
        delivered to the Trustee as custodian for The Depository Trust Company, the
        initial Clearing Agency, by, or on behalf of, the Issuer. Such Transition
        Bond
        shall initially be registered on the Transition Bond Register in the name
        of
        Cede & Co., the nominee of the initial Clearing Agency, and no Transition
        Bond Owner will receive a definitive Transition Bond representing such
        Transition Bond Owner’s interest in such Transition Bond, except as provided in
        Section 2.13. Unless and until definitive, fully registered Transition Bonds
        (the “Definitive Transition Bonds”) have been issued to Transition Bondholders
        pursuant to Section 2.13:

       

      (a)
          the
        provisions of this Section 2.11 shall be in full force and effect; 

       

      (b)
          the
        Transition Bond Registrar and the Trustee shall be entitled to deal with
        the
        then acting Clearing Agency for all purposes of this Indenture (including
        the
        payment of Principal of and interest on the Transition Bonds and the giving
        of
        instructions or directions

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      hereunder)
        as the sole Holder of the Transition Bonds, and shall have no obligation
        to the
        Transition Bond Owners; 

       

      (c)
          to
        the
        extent that the provisions of this Section 2.11 conflict with any other
        provisions of this Indenture, the provisions of this Section 2.11 shall
        control;

       

      (d)
          the
        rights of Transition Bond Owners shall be exercised only through the then
        acting
        Clearing Agency and shall be limited to those established by law and agreements
        between such Transition Bond Owners and the Clearing Agency or the Clearing
        Agency Participants. Pursuant to the DTC Agreement, unless and until Definitive
        Transition Bonds are issued pursuant to Section 2.13, the initial Clearing
        Agency will make book-entry transfers among the Clearing Agency Participants
        and
        receive and transmit payments of Principal of and interest on the Transition
        Bonds to such Clearing Agency Participants; and 

       

      (e)
          whenever
        this Indenture requires or permits actions to be taken based upon instructions
        or directions of Holders evidencing a specified percentage of the Outstanding
        Amount of the Transition Bonds or a Series or Class thereof, the Clearing
        Agency
        shall be deemed to represent such percentage only to the extent that it has
        received instructions to such effect from Transition Bond Owners or Clearing
        Agency Participants owning or representing, respectively, such required
        percentage of the beneficial interest in the Transition Bonds or such Series
        or
        Class and has delivered such instructions to the Trustee.

       

      SECTION
        2.12  NOTICES
        TO CLEARING AGENCY. 
        Whenever a notice or other communication to the Transition Bondholders is
        required under this Indenture, unless and until Definitive Transition Bonds
        shall have been issued to Transition Bond Owners pursuant to Section 2.13,
        the
        Trustee shall give all such notices and communications specified herein to
        be
        given to Transition Bondholders to the Clearing Agency, and shall have no
        obligation to the Transition Bond Owners.

       

      SECTION
        2.13  DEFINITIVE
        TRANSITION BONDS.

       

      (a)
          If
        (i)
        the Issuer advises the Trustee in writing that the then acting Clearing Agency
        is no longer willing or able to properly discharge its responsibilities as
        depository with respect to any Series or Class and the Issuer is unable to
        locate a qualified successor, (ii) the Issuer, at its option, advises the
        Trustee in writing that it elects to terminate the book-entry system through
        the
        Clearing Agency with respect to any Series or Class or (iii) after the
        occurrence of an Event of Default, Transition Bond Owners representing
        beneficial interests aggregating at least a majority of the Outstanding Amount
        of the Transition Bonds of all Series advise the Trustee through the Clearing
        Agency in writing that the continuation of a book-entry system through the
        Clearing Agency is no longer in the best interests of the Transition Bond
        Owners, then the Clearing Agency shall notify all affected Transition Bond
        Owners and the Trustee of the occurrence of any such event and of the
        availability of Definitive Transition Bonds to affected Transition Bond Owners
        requesting the same. Upon surrender to the Trustee of the typewritten Transition
        Bond or Transition Bonds representing the Book-Entry Transition Bonds by
        the
        Clearing Agency, accompanied by registration instructions, a Manager on behalf
        of the Issuer shall execute and the Trustee shall authenticate the Definitive
        Transition Bonds in accordance with the instructions of the Clearing Agency.
        None of the Issuer, the Transition

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      Bond
        Registrar or the Trustee shall be liable for any delay in delivery of such
        instructions and may conclusively rely on, and shall be protected in relying
        on,
        such instructions. Upon the issuance of Definitive Transition Bonds, the
        Trustee
        shall recognize the Holders of the Definitive Transition Bonds as Transition
        Bondholders.

       

      (b)
          Definitive
        Transition Bonds will be transferable and exchangeable at the offices of
        the
        Transition Bond Registrar. 

       

      ARTICLE
        III


       

      COVENANTS

       

      SECTION
        3.01  PAYMENT
        OF PRINCIPAL AND INTEREST. 
        The Issuer will duly and punctually pay, or will cause the Servicer to duly
        and
        punctually pay, the Principal of and interest on the Transition Bonds in
        accordance with the terms of the Transition Bonds and this Indenture; provided,
        however, that except on the Final Maturity Date or the Redemption Date for
        a
        Series or Class or upon the acceleration of the Transition Bonds pursuant
        to
        Section 5.02, the Issuer shall only be obligated to pay the Principal of
        such
        Transition Bonds on each Payment Date therefor to the extent moneys are
        available for such payment pursuant to Section 8.02. Amounts properly withheld
        under the Code by any Person from a payment to any Transition Bondholder
        of
        interest or Principal shall be considered as having been paid by the Issuer
        to
        such Transition Bondholder for all purposes of this Indenture.

       

      SECTION
        3.02  MAINTENANCE
        OF OFFICE OR AGENCY.

       

      (a)
          So
        long
        as any of the Transition Bonds remain Outstanding, the Issuer will maintain
        in
        the Borough of Manhattan, The City of New York, an office or agency where
        Transition Bonds may be surrendered for registration of transfer or exchange,
        and where notices and demands to or upon the Issuer in respect of the Transition
        Bonds and this Indenture may be served. The Issuer hereby initially appoints
        the
        Trustee to serve as its agent for the foregoing purposes. The Issuer will
        give
        prompt written notice to the Trustee and any agent appointed pursuant to
        clause
        (b) below of the location and identity, and of any change in the location
        or
        identity, of any such office or agency. If at any time the Issuer shall fail
        to
        maintain any such office or agency or shall fail to furnish the Trustee and
        each
        such agent with the address thereof, such surrenders, notices and demands
        may be
        made or served at the Corporate Trust Office, and the Issuer hereby appoints
        the
        Trustee as its agent to receive all such surrenders, notices and demands.
        

       

      (b)
          To
        the
        extent any of the Transition Bonds are listed on the Luxembourg Stock Exchange
        and the rules of such exchange so require, (i) the Issuer will maintain in
        Luxembourg (A) an office and a transfer agent where Transition Bonds may be
        surrendered for registration of transfer or exchange, (B) an office and a
        listing agent where notices and demands to or upon the Issuer in respect
        of the
        Transition Bonds and this Indenture may be served, and (C) an office and a
        paying agent where payments in respect of the Transition Bonds may be made
        and
        (ii) any reference in this Indenture to the office or agency of the Issuer
        referenced in Section 3.02(a) shall also refer to such offices, and the
        transfer, listing and paying agents, of the Issuer in Luxembourg, as applicable.
        The Issuer shall give the Trustee and any other agent

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      appointed
        under this Section 3.02(b) prompt written notice of the location and identity,
        and of any change in the location or identity, of any such office or
        agency.

       

      SECTION
        3.03  MONEY
        FOR
        PAYMENTS TO BE HELD IN TRUST.

       

      (a)
          As
        provided in Section 8.02(a), all payments of Principal of and interest on
        the
        Transition Bonds that are to be made from amounts withdrawn from the Collection
        Account pursuant to Section 8.02(g) or Section 4.03 shall be made on behalf
        of
        the Issuer by the Trustee or by another Paying Agent, and no amounts so
        withdrawn from the Collection Account for payments of Transition Bonds shall
        be
        paid over to the Issuer except as provided in this Section 3.03 and in Section
        8.02.

       

      (b)
          The
        Issuer shall cause each Paying Agent other than the Trustee to execute and
        deliver to the Trustee an instrument in which such Paying Agent shall agree
        with
        the Trustee (and if the Trustee acts as Paying Agent, it hereby so agrees),
        subject to the provisions of this Section 3.03, that such Paying Agent
        will:


      
        (i)   hold
          all
          sums held by it for the payment of Principal of or interest on the Transition
          Bonds in trust for the benefit of the Persons entitled thereto until such
          sums
          shall be paid to such Persons or otherwise disposed of as herein provided
          and
          pay such sums to such Persons as herein provided;

         

        (ii)   give
          the
          Trustee written notice of any Default by the Issuer (or any other obligor
          upon
          the Transition Bonds) of which the Paying Agent has actual knowledge in
          the
          making of any payment required to be made with respect to the Transition
          Bonds;

         

        (iii)   at
          any
          time during the continuance of any such Default, upon the written request
          of the
          Trustee, forthwith pay to the Trustee all sums so held in trust by such
          Paying
          Agent;

         

        (iv)   immediately
          resign as a Paying Agent and forthwith pay to the Trustee all sums held
          by the
          Paying Agent in trust for the payment of Transition Bonds if at any time
          the
          Paying Agent ceases to meet the standards required to be met by a Paying
          Agent
          at the time of its appointment; and

         

        (v)   comply
          with all requirements of the Code with respect to the withholding from
          any
          payments made by it on any Transition Bonds of any applicable withholding
          taxes
          imposed thereon and with respect to any applicable reporting requirements
          in
          connection therewith.

         

      

      (c)
          The
        Issuer may at any time, for the purpose of obtaining the satisfaction and
        discharge of this Indenture or for any other purpose, by Issuer Order direct
        any
        Paying Agent to pay to the Trustee all sums held in trust by such Paying
        Agent,
        such sums to be held by the Trustee upon the same trusts as those upon which
        the
        sums were held by such Paying Agent; and upon such payment by any Paying
        Agent
        to the Trustee, such Paying Agent shall be released from all further liability
        with respect to such money.

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      (d)
          Subject
        to applicable laws with respect to escheat of funds, any money held by the
        Trustee or any Paying Agent in trust for the payment of any amount of Principal
        of or interest on any Transition Bond and remaining unclaimed for two years
        after such amount has become due and payable shall be discharged from such
        trust
        and be paid to the Issuer upon Issuer Order; and the Holder of such Transition
        Bond shall thereafter, as an unsecured general creditor, look only to the
        Issuer
        for payment thereof (but only to the extent of the amounts so paid to the
        Issuer), and all liability of the Trustee or such Paying Agent with respect
        to
        such trust money shall thereupon cease; provided, however, that the Trustee
        or
        such Paying Agent, before being required to make any such repayment, may
        at the
        expense of the Issuer cause to be published once, in a newspaper published
        in
        the English language, customarily published on each Business Day and of general
        circulation in The City of New York, and in an Authorized Newspaper, notice
        that
        such money remains unclaimed and that, after a date specified therein, which
        shall not be less than thirty days from the date of such publication, any
        unclaimed balance of such money then remaining will be repaid to the Issuer.
        The
        Trustee may also adopt and employ, at the expense of the Issuer, any other
        reasonable means of notification of such repayment (including mailing notice
        of
        such repayment to Holders whose Transition Bonds have been called but have
        not
        been surrendered for redemption or whose right to or interest in moneys due
        and
        payable but not claimed is determinable from the records of the Trustee or
        of
        any Paying Agent, at the last address of record for each such Holder).


       

      SECTION
        3.04  EXISTENCE. 
        Subject to Section 3.10, the Issuer shall keep in full effect its existence,
        rights and franchises as a limited liability company under the laws of the
        State
        of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
        organized under the laws of any other State or of the United States of America,
        in which case the Issuer will keep in full effect its existence, rights and
        franchises under the laws of such other jurisdiction) and will obtain and
        preserve its qualification to do business in each jurisdiction in which such
        qualification is or shall be necessary to protect the validity and
        enforceability of this Indenture, the Transition Bonds, the other Basic
        Documents, the Collateral and each other instrument or agreement referenced
        herein or therein.

       

      SECTION
        3.05  PROTECTION
        OF COLLATERAL. 
        (a) The Issuer shall from time to time execute and deliver all such supplements
        and amendments hereto and all such filings, financing statements, continuation
        statements, instruments of further assurance and other instruments, and shall
        take such other action necessary or advisable to:

       

      (b)
          The
        Issuer hereby designates the Trustee as its agent and attorney-in-fact to
        execute any filing with the BPU, financing statement, continuation statement
        or
        other instrument required by the Trustee pursuant to this Section
        3.05.

       

      
        (i)   maintain
          and preserve the Lien and security interest (and the priority thereof)
          of this
          Indenture or carry out more effectively the purposes hereof;

         

        (ii)   perfect,
          publish notice of or protect the validity of any Grant made or to be made
          by
          this Indenture;

         

        (iii)   enforce
          any of the Collateral, including its rights under each Interest Rate Swap
          Agreement;

         

        (iv)   preserve
          and defend title to the Collateral and the rights of the Trustee and the
          Transition Bondholders in the Collateral against the claims of all Persons
          and
          parties; and

         

        
          
            
            

          

          
            19

            
              

            

          

          
            
            

          

        

         

        (v)    pay
          any
          and all taxes levied or assessed upon all or any part of the
          Collateral.

         

      

      SECTION
        3.06  OPINIONS
        AS TO COLLATERAL.

       

      (a)
          Promptly
        after the execution and delivery of this Indenture, promptly after each Series
        Issuance Date, if any, and on or before May 31 in each calendar year, while
        any
        Series is outstanding, commencing May 31, 2007, the Issuer shall furnish
        to the
        Trustee an Issuer Opinion of Counsel either stating that, in the opinion
        of such
        counsel, such action has been taken pursuant to the New Jersey UCC and Delaware
        UCC so as to maintain the effectiveness of the Lien and security interest
        created by this Indenture and reciting the details of such action or stating
        that in the opinion of such counsel no such action is necessary to maintain
        such
        Lien and security interest, and no other Lien or security interest is equal
        or
        prior to the Lien and security interest of the Trustee in the Collateral.
        Such
        Issuer Opinion of Counsel shall also describe the execution and filing of
        any
        filings pursuant to the New Jersey UCC and the Delaware UCC of financing
        statements, continuation statements and other instruments that will, in the
        opinion of such counsel, be required to maintain the Grant, Lien and security
        interest of this Indenture until May 31 in the following calendar
        year.

       

      (b)
          
        Prior to
        the effectiveness of any amendment to the Sale Agreement or the Servicing
        Agreement, the Issuer shall furnish to the Trustee an Issuer Opinion of Counsel
        either (i) stating that, in the opinion of such counsel, all actions, with
        respect to filings, including filings pursuant to the New Jersey UCC and
        the
        Delaware UCC, have been taken that are necessary fully to maintain the Lien
        and
        security interest of the Issuer in the Transferred Bondable Transition Property
        and the Lien and security interest of the Trustee in the Transferred Bondable
        Transitional Property and the other Collateral, respectively, and reciting
        the
        details of such filings or referring to prior Issuer Opinions of Counsel
        in
        which such details are given, or (ii) stating that, in the opinion of such
        counsel, no such action shall be necessary to maintain such Liens and security
        interests.

       

      SECTION
        3.07  PERFORMANCE
        OF OBLIGATIONS. 

       

      (a)
          The
        Issuer (i) shall diligently pursue any and all actions to enforce its rights
        under each instrument or agreement included in the Collateral and (ii) shall
        not
        take any action and will use its best efforts not to permit any action to
        be
        taken by others that would release any Person from any of such Person’s
        covenants or obligations under any such instrument or agreement or that would
        result in the amendment, hypothecation, subordination, termination or discharge
        of, or impair the validity or effectiveness of, any such instrument or
        agreement, except, in each case, as expressly provided in this Indenture,
        the
        Sale Agreement, the Servicing Agreement, any Interest Rate Swap Agreement
        or any
        other Basic Document.

       

      (b)
          The
        Issuer may contract with other Persons to assist it in performing its duties
        under this Indenture, and any performance of such duties by a Person identified
        to the

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

      Trustee
        in an Issuer Officer’s Certificate shall be deemed to be action taken by the
        Issuer. Initially, the Issuer has contracted with the Administrator to assist
        the Issuer in performing its duties under this Indenture. 

       

      (c)
          The
        Issuer shall punctually perform and observe all of its obligations and
        agreements contained in the Sale Agreement, this Indenture and any supplements
        hereto, the Servicing Agreement, each Interest Rate Swap Agreement and in
        all
        other instruments and agreements included in the Collateral.

       

      SECTION
        3.08  NEGATIVE
        COVENANTS. 
        The Issuer shall not:

       

      (a)
          except
        as
        expressly permitted by this Indenture, the Sale Agreement, the Servicing
        Agreement, any Interest Rate Swap Agreement or any other Basic Document,
        sell,
        transfer, exchange or otherwise dispose of any of the Collateral, unless
        directed to do so by the Trustee in accordance with Article V; 

       

      (b)
          claim
        any
        credit on, or make any deduction from the Principal or premium, if any, or
        interest payable in respect of, the Transition Bonds (other than amounts
        properly withheld from such payments under the Code or pursuant to any Interest
        Rate Swap Agreement) or assert any claim against any present or former
        Transition Bondholder by reason of the payment of taxes levied or assessed
        upon
        the Issuer or any part of the Collateral; or 

       

      (c)
          (i)
        permit the validity or effectiveness of this Indenture to be impaired, or
        permit
        the Lien of this Indenture to be amended, hypothecated, subordinated, terminated
        or discharged, or permit any Person to be released from any covenants or
        obligations with respect to the Transition Bonds under this Indenture except,
        as
        to each of the foregoing, as may be expressly permitted hereby, (ii) permit
        any
        Lien (other than the Lien created by this Indenture) to be created on or
        extend
        to or otherwise arise upon or burden the Collateral or any part thereof,
        any
        interest therein or the proceeds thereof or (iii) permit the Lien of this
        Indenture not to constitute a continuing valid first priority security interest
        in the Collateral.

       

      SECTION
        3.09  ANNUAL
        STATEMENT AS TO COMPLIANCE. 
        The Issuer will deliver to the Trustee, within 120 days after the end of
        each
        fiscal year of the Issuer (commencing with the fiscal year 2006), an Issuer
        Officer’s Certificate stating, as to the Manager signing such Issuer Officer’s
        Certificate, that:

       

      (a)
          a
        review
        of the activities of the Issuer during such year (or relevant portion thereof)
        and of performance under this Indenture has been made under such Manager’s
        supervision; and 

       

      (b)
          to
        the
        best of such Manager’s knowledge, based on such review, the Issuer has complied
        with all conditions and covenants under this Indenture throughout such calendar
        year (or relevant portion thereof), or, if there has been a default in complying
        with any such condition or covenant, describing each such default and the
        nature
        and status thereof.

       

      SECTION
        3.10  ISSUER
        MAY CONSOLIDATE, ETC.,
        ONLY
        ON CERTAIN TERMS.  The Issuer shall not consolidate or merge with or into
        any other Person or

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

       

      sell,
        in
        one or a series of related transactions, substantially all of its assets
        to any
        other Person or dissolve, unless:

       

      (a)
          the
        Person (if other than the Issuer) formed by or surviving such consolidation
        or
        merger or to whom substantially all of such assets are sold shall be a Person
        organized and existing under the laws of the United States of America or
        any
        State and shall expressly assume by an indenture supplemental hereto, executed
        and delivered to the Trustee, in form satisfactory to the Trustee, the due
        and
        punctual payment of the Principal of and premium, if any, and interest on
        all
        Transition Bonds and the performance of every agreement and covenant of this
        Indenture on the part of the Issuer to be performed or observed, all as provided
        herein and in the applicable Series Supplement or Series Supplements;


       

      (b)
          the
        Person (if other than the Issuer) formed by or surviving such consolidation
        or
        merger or to whom substantially all of such assets are sold shall expressly
        assume all obligations and succeed to all rights of the Issuer under the
        Sale
        Agreement, the Administration Agreement, the Servicing Agreement and each
        Interest Rate Swap Agreement pursuant to an assignment and assumption agreement
        executed and delivered to the Trustee, in form satisfactory to the Trustee;
        

       

      (c)
          immediately
        after giving effect to such consolidation, merger or sale, no Default or
        Event
        of Default shall have occurred and be continuing;

       

      (d)
          prior
        notice of such consolidation, merger or sale shall be given to the Rating
        Agencies and the then current ratings on any Outstanding Transition Bonds
        shall
        not be withdrawn or downgraded in connection with such consolidation, merger
        or
        sale; 

       

      (e)
          the
        Issuer shall have received an Issuer Opinion of Counsel (and shall have
        delivered copies thereof to the Trustee) to the effect that such consolidation,
        merger or sale (i) will not have any material adverse tax consequence to
        the
        Issuer or any Transition Bondholder, (ii) complies with this Indenture and
        all
        of the conditions precedent herein relating to such transaction and (iii)
        will
        result in the Trustee maintaining a continuing valid first priority perfected
        security interest in the Collateral;

       

      (f)
          neither
        the Bondable Transition Property nor the Financing Order nor the rights of
        the
        Seller, the Servicer or the Issuer under the Competition Act or the Financing
        Order shall be impaired thereby; and

       

      (g)
          any
        action as is necessary to maintain the Lien created by this Indenture shall
        have
        been taken. 

       

      SECTION
        3.11  SUCCESSOR
        OR TRANSFEREE.

       

      (a)
          Upon
        any
        consolidation or merger of the Issuer in accordance with Section 3.10, the
        Person formed by or surviving such consolidation or merger (if other than
        the
        Issuer) shall succeed to, and be substituted for, and may exercise every
        right
        and power of, the Issuer under this Indenture with the same effect as if
        such
        Person had been named as the Issuer herein.

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

       

      (b)
          Upon
        any
        sale by the Issuer of substantially all of its assets in accordance with
        Section
        3.10, JCP&L Transition Funding II LLC will be released from every covenant
        and agreement of this Indenture to be observed or performed on the part of
        the
        Issuer with respect to the Transition Bonds and from every covenant and
        agreement of the Sale Agreement, the Administration Agreement, the Servicing
        Agreement and each Interest Rate Swap Agreement to be observed or performed
        on
        the part of the Issuer.

       

      SECTION
        3.12  NO
        OTHER
        BUSINESS. 
        The Issuer shall not engage in any business other than purchasing and owning
        Bondable Transition Property, issuing Transition Bonds from time to time,
        pledging its interest in the Collateral to the Trustee under this Indenture
        in
        order to secure the Transition Bonds and other Secured Obligations, entering
        into the Basic Documents and all other agreements relating to the Transition
        Bonds and performing its obligations thereunder and performing activities
        that
        are necessary, suitable or convenient to accomplish these purposes or are
        incidental thereto.

       

      SECTION
        3.13  NO
        BORROWING. 
        The Issuer shall not issue, incur, assume, guarantee or otherwise become
        liable,
        directly or indirectly, for any indebtedness except for the Transition Bonds
        and
        except as contemplated by the Basic Documents and the Underwriting
        Agreement.

       

      SECTION
        3.14  GUARANTEES,
        LOANS, ADVANCES AND OTHER LIABILITIES. 
        Except as contemplated by the Basic Documents, the Issuer shall not make
        any
        loan or advance or credit to, or guarantee (directly or indirectly or by
        an
        instrument having the effect of assuring another’s payment or performance on any
        obligation or capability of so doing or otherwise), endorse or otherwise
        become
        contingently liable, directly or indirectly, in connection with the obligations,
        stock or dividends of, or own, purchase, repurchase or acquire (or agree
        contingently to do so) any stock, obligations, assets or securities of, or
        any
        other interest in, or make any capital contribution to, any other Person,
        other
        than any Eligible Investments.

       

      SECTION
        3.15  CAPITAL
        EXPENDITURES. 
        The Issuer shall not make any expenditure (by long-term or operating lease
        or
        otherwise) for capital assets (either realty or personalty) other than Bondable
        Transition Property purchased from the Seller pursuant to, and in accordance
        with, the Sale Agreement.

       

      SECTION
        3.16  RESTRICTED
        PAYMENTS. 
        The Issuer shall not, directly or indirectly, (a) pay any dividend or make
        any
        distribution (by reduction of capital or otherwise), whether in cash, property,
        securities or a combination thereof, to any owner of a beneficial interest
        in
        the Issuer or otherwise with respect to any ownership or equity interest
        in, or
        ownership security of, the Issuer, (b) redeem, purchase, retire or otherwise
        acquire for value any such ownership or equity interest or security or (c)
        set
        aside or otherwise segregate any amounts for any such purpose; provided,
        however, that if no Event of Default shall have occurred and be continuing
        or
        would otherwise result from such payment, the Issuer may make, or cause to
        be
        made, any such distributions to any owner of a limited liability company
        interest in the Issuer or otherwise with respect to any ownership or equity
        interest or security in or of the Issuer using funds either distributed to
        the
        Issuer pursuant to Section 8.02(g) or which are not otherwise subject to
        the
        Lien of this Indenture, to the extent that such distributions would
        not

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

       

      cause
        the
        book value of the remaining equity in the Issuer to decline below 0.5% of
        the
        initial principal amount of all Series which remain outstanding. The Issuer
        will
        not, directly or indirectly, make payments to or distributions from the
        Collection Account except in accordance with the Basic Documents. 

       

      SECTION
        3.17  NOTICE
        OF
        EVENTS OF DEFAULT. 
        The Issuer agrees to deliver to the Trustee and the Rating Agencies written
        notice in the form of an Issuer Officer’s Certificate of any Default or Event of
        Default hereunder or under any of the Basic Documents, its status and what
        action the Issuer is taking or proposes to take with respect thereto within
        five
        Business Days after the occurrence thereof.

       

      SECTION
        3.18  INSPECTION. 
        The Issuer agrees that, on reasonable prior notice, it will permit any
        representative of the Trustee, during the Issuer’s normal business hours, to
        examine all the books of account, records, reports and other papers of the
        Issuer, to make copies and extracts therefrom, to cause such books to be
        audited
        annually by Independent registered public accountants, and to discuss the
        Issuer’s affairs, finances and accounts with the Issuer’s officers, employees
        and Independent registered public accountants, all at such reasonable times
        and
        as often as may be reasonably requested. The Trustee shall and shall cause
        its
        representatives to hold in confidence all such information except to the
        extent
        disclosure may be required by law (and all reasonable applications for
        confidential treatment are unavailing) and except to the extent that the
        Trustee
        may reasonably determine that such disclosure is consistent with its obligations
        hereunder.

       

      SECTION
        3.19  ADJUSTED
        OVERCOLLATERALIZATION BALANCE SCHEDULES. 
        Not later than the date on which a new Series is issued or any outstanding
        Series is redeemed or defeased, the Issuer shall deliver to the Trustee a
        replacement Schedule A to the related Series Supplement, adjusted to reflect
        such issuance, redemption or defeasance and setting forth the Scheduled
        Overcollateralization Level for each Payment Date with respect to each
        Series.

       

      SECTION
        3.20  SALE
        AGREEMENT, INTERCREDITOR AGREEMENT, SERVICING AGREEMENT AND INTEREST RATE
        SWAP
        AGREEMENT COVENANTS.

       

      (a)
          The
        Issuer agrees to take all such lawful actions to enforce its rights under
        the
        Sale Agreement, the Intercreditor Agreement, the Servicing Agreement and
        each
        Interest Rate Swap Agreement and to compel or secure the performance and
        observance by the Seller, the Servicer and each Swap Counterparty, of each
        of
        their respective obligations to the Issuer under or in connection with the
        Sale
        Agreement, the Intercreditor Agreement, the Servicing Agreement and applicable
        Interest Rate Swap Agreement, respectively, in accordance with the terms
        thereof. So long as no Event of Default occurs and is continuing, but subject
        to
        Section 3.20(f), the Issuer may exercise any and all rights, remedies, powers
        and privileges lawfully available to the Issuer under or in connection with
        the
        Sale Agreement, the Intercreditor Agreement, the Servicing Agreement and
        each
        Interest Rate Swap Agreement.

       

      (b)
          If
        an
        Event of Default occurs and is continuing, the Trustee may, and, at the
        direction (which direction shall be in writing) of (i) with respect to the
        Sale Agreement, the

       

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

       

      Intercreditor
        Agreement or the Servicing Agreement, the Holders of a majority of the
        Outstanding Amount of the Transition Bonds of all Series, voting together
        as a
        single class, or (ii) with respect to any Interest Rate Swap Agreement, the
        Holders of that percentage of the Outstanding Amount of the Transition Bonds
        of
        the related Class specified in the related Series Supplement, shall exercise
        all
        rights, remedies, powers, privileges and claims of the Issuer against the
        Seller, the Servicer or Swap Counterparty under or in connection with the
        Sale
        Agreement, the Servicing Agreement and related Interest Rate Swap Agreement,
        respectively, including the right or power to take any action to compel or
        secure performance or observance by the Seller, the Servicer or Swap
        Counterparty of each of their respective obligations to the Issuer thereunder
        and to give any consent, request, notice, direction, approval, extension
        or
        waiver under the Sale Agreement, the Servicing Agreement and Interest Rate
        Swap
        Agreement, and any right of the Issuer to take such action shall be
        suspended.

       

      (c)
          With
        the
        consent of the Trustee, the Sale Agreement, the Intercreditor Agreement and
        the
        Servicing Agreement may be amended, provided notice of the substance of the
        amendment is given to each Rating Agency, at any time and from time to time,
        without the consent of the Transition Bondholders, or the counterparty under
        any
        Interest Rate Swap Agreement; provided, however, such amendment may not
        adversely affect in any material respect the interests of any Transition
        Bondholder or any counterparty under any Interest Rate Swap Agreement without
        the consent of the Holders of a majority of the Outstanding Amount of the
        Transition Bonds of each Series or Class and each such counterparty, in each
        case materially and adversely affected thereby. Further, with the written
        consent of the Trustee and the related counterparty under an Interest Rate
        Swap
        Agreement, such Interest Rate Swap Agreement may be amended, at any time
        and
        from time to time, so long as prior notice is provided to the Rating Agencies
        and the then current ratings on any Outstanding Transition Bonds are not
        withdrawn or downgraded by the Rating Agencies. However, such amendment may
        not
        adversely affect in any material respect the interest of any Transition
        Bondholder or counterparty under an Interest Rate Swap Agreement without
        the
        written consent of sixty-six and two thirds percent of the Holders of the
        Outstanding Amount of the Transition Bonds of each Series or Class and each
        such
        counterparty materially and adversely affected thereby.

       

      (d)
          If
        the
        Issuer, the Seller, the Servicer or any Swap Counterparty proposes to amend,
        modify, waive, supplement, terminate or surrender, or agree to any amendment,
        modification, waiver, supplement, termination, or surrender of, the terms
        of the
        Sale Agreement, the Intercreditor Agreement, the Servicing Agreement or any
        Interest Rate Swap Agreement, or waives timely performance or observance
        thereunder by the Seller, the Servicer or any Swap Counterparty, respectively,
        in each case in such a way as would materially and adversely affect the
        interests of any Class of any Series of Transition Bondholders or the
        counterparty under any Interest Rate Swap Agreement, the Issuer shall first
        notify the Rating Agencies of the proposed amendment, modification, supplement,
        waiver, termination or surrender. After sending such notification to the
        Rating
        Agencies, the Issuer shall notify the Trustee in writing and the Trustee
        shall
        notify the Transition Bondholders and each counterparty under an Interest
        Rate
        Swap Agreement, of the proposal. With respect to any such proposed action
        related to the Sale Agreement and the Servicing Agreement, the Trustee shall
        consent to such proposed action only (i) with the written consent of the
        Holders
        of a majority of the Outstanding Amount of the Transition Bonds of each Class
        of
        each Series and each counterparty under an Interest Rate Swap Agreement,
        in each
        case materially and adversely affected thereby and (ii) upon written notice
        of

       

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

       

      the
        substance of the proposed action to the Rating Agencies and the Rating Agencies’
subsequent confirmation that the then current ratings on any Outstanding
        Transition Bonds will not be withdrawn or downgraded by the Rating Agencies
        (except that with regard to Moody’s and Fitch it will be sufficient to provide
        ten days’ prior notice of any such action). With respect to any such proposed
        action related to any Interest Rate Swap Agreement, the Trustee shall consent
        to
        such proposed action only (y) with the written consent of the Holders
        representing sixty-six and two-thirds percent of the Outstanding Amount of
        the
        Transition Bonds of the related Series or Class, and each counterparty under
        an
        Interest Rate Swap Agreement, in each case materially and adversely affected
        thereby and (z) upon written notice of the substance of the proposed action
        to the Rating Agencies and the Rating Agencies’ subsequent confirmation that the
        then current ratings on any Outstanding Transition Bonds will not be withdrawn
        or downgraded by the Rating Agencies (except that with regard to Moody’s and
        Fitch it will be sufficient to provide ten days’ prior notice of any such
        action). If any such amendment, modification, supplement, waiver, termination
        or
        surrender shall be so consented to by the Trustee or such Holders, the Issuer
        agrees to execute and deliver, in its own name and at its own expense, such
        agreements, instruments, consents and other documents as shall be necessary
        or
        appropriate in the circumstances. For so long as any of the Transition Bonds
        are
        listed on the Luxembourg Stock Exchange and the rules of that exchange so
        require, notice of such proposed action will be published by an agent to
        be
        appointed by the Issuer in an Authorized Newspaper promptly following its
        effectiveness.

       

      (e)
          If
        the
        Issuer or the Servicer proposes to amend, modify, waive, supplement, terminate
        or surrender in any material respect, or to agree to any material amendment,
        modification, waiver, supplement, termination or surrender of, the Transition
        Bond Charge Adjustment Process, the Issuer shall notify the Trustee in writing
        and the Trustee shall notify the Transition Bondholders of such proposal
        and the
        Trustee shall consent thereto only with the written consent of the Holders
        of a
        majority of the Outstanding Amount of the Transition Bonds of each Series,
        voting together as a single class, materially and adversely affected thereby;
        provided, notice of the substance of such proposal is provided to the Rating
        Agencies and the Rating Agencies subsequently confirm that the then current
        ratings on any Outstanding Transition Bonds will not be withdrawn or downgraded
        by the Rating Agencies (except that with regard to Moody’s and Fitch it will be
        sufficient to provide ten days’ prior notice of any such action).

       

      (f)
          Promptly
        following a default by either the Seller, the Servicer or any Swap Counterparty
        under the Sale Agreement, the Intercreditor Agreement, the Servicing Agreement
        or related Interest Rate Swap Agreement, respectively, and at the Issuer’s
        expense, the Issuer agrees to take all such lawful actions as the Trustee
        may
        request to compel or secure the performance and observance by the Seller,
        the
        Servicer or Swap Counterparty, as applicable, of each of their respective
        obligations to the Issuer under or in connection with the Sale Agreement,
        the
        Intercreditor Agreement, the Servicing Agreement or related Interest Rate
        Swap
        Agreement in accordance with the terms thereof, and to exercise any and all
        rights, remedies, powers and privileges lawfully available to the Issuer
        under
        or in connection with the Sale Agreement, the Intercreditor Agreement, the
        Servicing Agreement or Interest Rate Swap Agreement, respectively, to the
        extent
        and in the manner directed by the Trustee, including the transmission of
        notices
        of default on the part of the Seller, the Servicer or Swap Counterparty
        thereunder and the institution of legal or administrative actions or proceedings
        to compel or secure performance

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

       

      by
        the
        Seller, the Servicer or Swap Counterparty of each of their respective
        obligations under the Sale Agreement, the Intercreditor Agreement, the Servicing
        Agreement and related Interest Rate Swap Agreement.

       

      (g)
          If
        the
        Issuer shall have knowledge of the occurrence of a Servicer Default under
        the
        Servicing Agreement or an event of default, termination event or downgrade
        event
        under any Interest Rate Swap Agreement, the Issuer shall promptly give written
        notice thereof to the Trustee and the Rating Agencies, and shall specify
        in such
        notice the action, if any, the Issuer is taking with respect to such default
        or
        event of default.

       

      (h)
          If
        a
        Servicer Default shall arise from the failure of the Servicer to perform
        any of
        its duties or obligations under the Servicing Agreement with respect to the
        Bondable Transition Property or the Transition Bond Charge, the Issuer shall
        take all reasonable steps available to it to remedy such failure. The Issuer
        shall not take any action to terminate the Servicer’s rights and powers under
        the Servicing Agreement following a Servicer Default without the prior written
        consent of the Trustee and of the Holders of a majority of the Outstanding
        Amount of the Transition Bonds of all Series.

       

      (i)
          As
        promptly as possible after the giving of notice of termination to the Servicer
        and the Rating Agencies of the Servicer’s rights and powers pursuant to Section
        6.01 of the Servicing Agreement, the Trustee, with the written consent of
        the
        Holders evidencing not less than a majority of the Outstanding Amount of
        the
        Transition Bonds of all Series, may appoint a successor Servicer (the “Successor
        Servicer”), and such Successor Servicer shall accept its appointment by a
        written assumption in a form acceptable to the Issuer and the Trustee. A
        Person
        shall qualify as a Successor Servicer only if such Person satisfies the
        requirements of Section 6.04 of the Servicing Agreement. In connection with
        any
        such appointment, the Issuer may make such arrangements for the compensation
        of
        such Successor Servicer as it and such Successor Servicer shall agree, subject
        to the limitations set forth below and in the Servicing Agreement, and, in
        accordance with Section 6.04 of the Servicing Agreement, the Issuer shall
        enter
        into an agreement with such Successor Servicer for the servicing of the Bondable
        Transition Property (such agreement to be in form and substance satisfactory
        to
        the Trustee).

       

      (j)
          Upon
        termination of the Servicer’s rights and powers pursuant to the Servicing
        Agreement, the Trustee shall promptly notify the Issuer, the Transition
        Bondholders and the Rating Agencies of such termination. As soon as a Successor
        Servicer is appointed, the Issuer shall notify the Trustee, the Transition
        Bondholders and the Rating Agencies in writing of such appointment, specifying
        in such notice the name and address of such Successor Servicer.

       

      (k)
          The
        Issuer shall not take any action to terminate or assign a Swap Counterparty’s
        rights and powers under any Interest Rate Swap Agreement or replace a Swap
        Counterparty following an event of default, termination event or downgrade
        event
        under an Interest Rate Swap Agreement without (i) the prior written consent
        of the Trustee and of the Holders of that percentage of the Outstanding Amount
        of the Transition Bonds, if any such consent is required under the related
        Series Supplement, of the related Series and Class, if any, specified in
        the
        related Series Supplement, and (ii) satisfying any other requirements set
        forth in the related Series Supplement and Interest Rate Swap
        Agreement.

       

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

       

      (l)
          Upon
        termination or assignment of a Swap Counterparty’s rights and powers, pursuant
        to an Interest Rate Swap Agreement, the Trustee shall promptly inform the
        Issuer, the Transition Bondholders of the related Class and the Rating Agencies
        of such termination or assignment. As soon as a replacement Swap Counterparty
        is
        appointed, the Issuer shall notify the Trustee, the Transition Bondholders
        of
        the related Class and the Rating Agencies in writing of such appointment,
        specifying in such notice the name and address of such replacement Swap
        Counterparty.

       

      SECTION
        3.21  TAXES. 
        So long as any of the Transition Bonds are outstanding, the Issuer shall
        pay or
        cause to be paid all material taxes, assessments and governmental charges
        imposed upon it or any of its properties or assets or with respect to any
        of its
        franchises, business, income or property before any penalty accrues thereon
        if
        the failure to pay any such taxes, assessments and governmental charges would,
        after any applicable grace periods, notices or other similar requirements,
        result in a Lien on the Collateral.

       

      ARTICLE
        IV


       

      SATISFACTION
        AND DISCHARGE; DEFEASANCE

       

      SECTION
        4.01  SATISFACTION
        AND DISCHARGE OF INDENTURE; DEFEASANCE.

       

      (a)
          The
        Transition Bonds of any Series, all moneys payable with respect thereto and
        this
        Indenture as it applies to such Series shall cease to be of further effect
        and
        the Lien hereunder shall be released with respect to such Series, interest
        shall
        cease to accrue on the Transition Bonds of such Series and the Trustee, on
        written demand of and at the expense of the Issuer, shall execute proper
        instruments acknowledging satisfaction and discharge of this Indenture with
        respect to the Transition Bonds of such Series, when


      
         

        (i)   either

         

        (A)    all
          Transition Bonds of such Series theretofore authenticated and delivered
          (other
          than (1) Transition Bonds that have been destroyed, lost or stolen and
          that have
          been replaced or paid as provided in Section 2.06 and (2) Transition Bonds
          for
          whose payment money has theretofore been deposited in trust or segregated
          and
          held in trust by the Issuer and thereafter repaid to the Issuer or discharged
          from such trust, as provided in Section 3.03(d)) have been delivered to
          the
          Trustee for cancellation; or

         

        (B)    the
          Expected Final Payment Date or Redemption Date has occurred with respect
          to all
          Transition Bonds of such Series not theretofore delivered to the Trustee
          for
          cancellation, and the Issuer has irrevocably deposited or caused to be
          irrevocably deposited with the Trustee cash, in trust for such purpose,
          in an
          amount sufficient to pay and discharge the entire indebtedness on such
          Transition Bonds not theretofore delivered to the Trustee on the Expected
          Final
          Payment Date or Redemption Date, as applicable, therefor;

         

        
          
            
            

          

          
            28

            
              

            

          

          
            
            

          

        

         

        (ii)   the
          Issuer has paid or caused to be paid all other sums payable hereunder by
          the
          Issuer with respect to such Series; and

         

        (iii)   the
          Issuer has delivered to the Trustee an Issuer Officer’s Certificate, an Issuer
          Opinion of Counsel and (if required by the TIA or the Trustee) an Independent
          Certificate from a firm of certified public accountants, each meeting the
          applicable requirements of Section 11.01 and each stating that all conditions
          precedent herein provided for relating to the satisfaction and discharge
          of this
          Indenture with respect to Transition Bonds of such Series have been complied
          with.

         

      

      (b)
          Subject
        to Sections 4.01(c) and 4.02, the Issuer at any time may terminate (i) all
        its
        obligations under this Indenture with respect to the Transition Bonds of
        any
        Series (“Legal Defeasance Option”) or (ii) its obligations under Sections 3.04,
        3.05, 3.06 (other than with respect to amounts in the Defeasance Subaccount),
        3.07, 3.08, 3.09, 3.10, 3.12, 3.13, 3.14, 3.15, 3.16, 3.17, 3.18, 3.19 and
        3.20
        and the operation of Section 5.01(d) (“Covenant Defeasance Option”) with respect
        to any Series. The Issuer may exercise the Legal Defeasance Option with respect
        to any Series notwithstanding its prior exercise of the Covenant Defeasance
        Option with respect to such Series.

       

      (c)
          If
        the
        Issuer exercises the Legal Defeasance Option with respect to any Series,
        the
        maturity of the Transition Bonds of such Series may not be (i) accelerated
        pursuant to Section 5.02 or (ii) except as provided in Section 4.02, redeemed.
        If the Issuer exercises the Covenant Defeasance Option with respect to any
        Series, the maturity of the Transition Bonds of such Series may not be
        accelerated because of an Event of Default specified in Section
        5.01(d).

       

      (d)
          Upon
        satisfaction of the conditions set forth herein to the exercise of the Legal
        Defeasance Option or the Covenant Defeasance Option with respect to any Series,
        the Trustee, on written demand of and at the expense of the Issuer, shall
        execute proper instruments acknowledging satisfaction and discharge of the
        obligations that are terminated pursuant to such exercise. 

       

      (e)
          Notwithstanding
        Sections 4.01(a) and 4.01(b), (i) the rights of registration of transfer
        and
        exchange, (ii) the rights of substitution of mutilated, destroyed, lost or
        stolen Transition Bonds, (iii) the rights of Transition Bondholders to receive
        payments of Principal and interest, but only from the amounts deposited with
        the
        Trustee for such payments, (iv) Sections 4.03 and 4.04, (v) the rights,
        obligations and immunities of the Trustee hereunder (including the rights
        of the
        Trustee under Section 6.07 and the obligations of the Trustee under Section
        4.03) and (vi) the rights of Transition Bondholders under this Indenture
        with
        respect to the property deposited with the Trustee payable to all or any
        of
        them, shall survive until the Transition Bonds of the Series as to which
        this
        Indenture or certain obligations hereunder have been satisfied and discharged
        pursuant to Section 4.01(a) or 4.01(b) and have been paid in full. Thereafter,
        the obligations in Sections 6.07 and 4.04 with respect to such Series shall
        survive. 

       

      SECTION
        4.02  CONDITIONS
        TO DEFEASANCE.

       

      (a)
          The
        Issuer may exercise the Legal Defeasance Option or the Covenant Defeasance
        Option with respect to any Series only if:

       

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

       

      
        (i)   the
          Issuer irrevocably deposits or causes to be deposited in trust with the
          Trustee
          cash or U.S. Government Obligations maturing as to Principal and interest
          in
          such amounts and at such times as will insure the availability of cash
          for the
          payment of Principal of and premium, if any, and interest on such Series
          to the
          Expected Final Payment Date or Redemption Date therefor, as applicable,
          such
          deposit to be made in the Defeasance Subaccount for such Series;

         

        (ii)   the
          Issuer delivers to the Trustee a certificate from a nationally recognized
          firm
          of Independent registered public accountants expressing its opinion that
          the
          payments of Principal and interest when due and without reinvestment of
          the
          deposited U.S. Government Obligations plus any deposited cash without investment
          will provide cash at such times and in such amounts (but, in the case of
          the
          Legal Defeasance Option only, not more than such amounts) as will be sufficient
          to pay in respect of the Transition Bonds of such Series (A) subject to
          clause
          (B), Principal in accordance with the Expected Amortization Schedule therefor,
          (B) if such Series is to be redeemed, the Redemption Price therefor on
          the
          Redemption Date therefor and (C) interest when due;

         

        (iii)   in
          the
          case of the Legal Defeasance Option, ninety-five days pass after the deposit
          is
          made and during such ninety-five day period no Default specified in Section
          5.01(e) or 5.01(f) occurs which is continuing at the end of the period;
          provided, however, that in determining whether a default under Section
          5.01(e)
          has occurred, the requirement that the decree or order shall remain unstayed
          and
          in effect for ninety days shall be disregarded;

         

        (iv)   no
          Default has occurred and is continuing on the day of such deposit and after
          giving effect thereto;

         

        (v)   in
          the
          case of the Legal Defeasance Option, the Issuer delivers to the Trustee
          an
          Issuer Opinion of Counsel stating that (A) the Issuer has received from,
          or
          there has been published by, the Internal Revenue Service a ruling, or
          (B) since
          the date of execution of this Indenture, there has been a change in the
          applicable Federal income tax law, in either case to the effect that, and
          based
          thereon such opinion shall confirm that, the Holders of the Transition
          Bonds of
          such Series will not recognize income, gain or loss for Federal income
          tax
          purposes as a result of the exercise of such Legal Defeasance Option and
          will be
          subject to Federal income tax on the same amounts, in the same manner and
          at the
          same times as would have been the case if such defeasance had not
          occurred;

         

        (vi)   in
          the
          case of the Covenant Defeasance Option, the Issuer delivers to the Trustee
          an
          Issuer Opinion of Counsel to the effect that the Holders of the Transition
          Bonds
          of such Series will not recognize income, gain or loss for Federal income
          tax
          purposes as a result of the exercise of such Covenant Defeasance Option
          and will
          be subject to Federal income tax on the same amounts, in the same manner
          and at
          the same times as would have been the case if such defeasance had not occurred;
          and 

         

        (vii)   the
          Issuer delivers to the Trustee an Issuer Officer’s Certificate and an Issuer
          Opinion of Counsel, each stating that all conditions precedent to the
          satisfaction

         

        
          
            
            

          

          
            30

            
              

            

          

          
            
            

          

        

         

        and
          discharge of the Transition Bonds of such Series to the extent contemplated
          by
          this Article IV have been complied with.

         

      

      (b)
          Notwithstanding
        any other provision of this Section 4.02 to the contrary, no delivery of
        cash or
        U.S. Government Obligations to the Trustee under this Section 4.02 shall
        terminate any obligations of the Issuer under this Indenture with respect
        to any
        Transition Bonds which are to be redeemed prior to the Expected Final Payment
        Date therefor until such Transition Bonds shall have been irrevocably called
        or
        designated for redemption on a date thereafter on which such Transition Bonds
        may be redeemed in accordance with the provisions of this Indenture and proper
        notice of such redemption shall have been given in accordance with the
        provisions of this Indenture or the Issuer shall have given the Trustee,
        in form
        satisfactory to the Trustee, irrevocable instructions to give, in the manner
        and
        at the times prescribed herein, notice of redemption of such
        Series.

       

      SECTION
        4.03  APPLICATION
        OF TRUST MONEY. 
        All moneys or U.S. Government Obligations deposited with the Trustee pursuant
        to
        Sections 4.01 or 4.02 with respect to any Series shall be held in trust in
        the
        Defeasance Subaccount for such Series and applied by the Trustee, in accordance
        with the provisions of the Transition Bonds and this Indenture, to the payment,
        either directly or through any Paying Agent, as the Trustee may determine,
        to
        the Holders of the particular Transition Bonds for the payment or redemption
        of
        which such moneys have been deposited with the Trustee, of all sums due and
        to
        become due thereon for Principal, premium, if any, and interest. Such moneys
        shall be segregated and held apart solely for paying such Transition Bonds
        and
        such Transition Bonds shall not be entitled to any amounts on deposit in
        the
        Collection Account other than amounts on deposit in the Defeasance Subaccount
        for such Transition Bonds.

       

      SECTION
        4.04  REPAYMENT
        OF MONEYS HELD BY PAYING AGENT. 
        In connection with the satisfaction and discharge of this Indenture, or the
        exercise of the Covenant Defeasance Option or the Legal Defeasance Option
        with
        respect to the Transition Bonds of any Series, all moneys then held by any
        Paying Agent other than the Trustee under the provisions of this Indenture
        or
        the Intercreditor Agreement with respect to such Transition Bonds shall,
        upon
        demand of the Issuer, be paid to the Trustee to be held and applied according
        to
        Section 3.03 and thereupon such Paying Agent shall be released from all further
        liability with respect to such moneys.

       

      ARTICLE
        V


       

      REMEDIES

       

      SECTION
        5.01  EVENTS
        OF
        DEFAULT. 
        “Event of Default,” wherever used herein, means any one or more of the following
        events (whatever the reason for such Event of Default and whether it shall
        be
        voluntary or involuntary or be effected by operation of law or pursuant to
        any
        judgment, decree or order of any court or any order, rule or regulation of
        any
        administrative or governmental body):

       

      (a)
          default
        in the payment of any interest on any Transition Bond when the same becomes
        due
        and payable and the continuation of such default for five Business
        Days;

       

      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

       

      (b)
          default
        in the payment of the then unpaid Principal of any Transition Bond of any
        Series
        or Class on the Final Maturity Date therefor;

       

      (c)
          default
        in the payment of the Redemption Price for any Transition Bond on the Redemption
        Date therefor;

       

      (d)
          default
        in the observance or performance of any covenant or agreement of the Issuer
        made
        in this Indenture (other than a covenant or agreement, a default in the
        observance or performance of which is specifically dealt with in clause (a),
        (b)
        or (c) above), or any material representation or warranty of the Issuer made
        in
        this Indenture or in any certificate or other writing delivered pursuant
        hereto
        or in connection herewith proving to have been incorrect in any material
        respect
        as of the time when made, and any such default shall continue or not be cured,
        for a period of thirty days after the earlier of (i) the date that there
        shall
        have been given, by registered or certified mail, to the Issuer by the Trustee
        or to the Issuer and the Trustee by the Holders of at least twenty-five percent
        of the Outstanding Amount of the Transition Bonds of any Series or Class,
        a
        written notice specifying such default or incorrect representation or warranty
        and requiring it to be remedied and stating that such notice is a “Notice of
        Default” hereunder or (ii) the date the Issuer has knowledge of the
        default;

       

      (e)
          the
        filing of a decree or order for relief by a court having jurisdiction in
        the
        premises in respect of the Issuer or any substantial part of the Collateral
        in
        an involuntary case or proceeding under any applicable Federal or state
        bankruptcy, insolvency or other similar law now or hereafter in effect, or
        appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
        or
        similar official for the Issuer or for any substantial part of the Collateral,
        or ordering the winding-up or liquidation of the Issuer’s affairs, and such
        decree or order shall remain unstayed and in effect for a period of ninety
        consecutive days;

       

      (f)
          the
        commencement by the Issuer of a voluntary case or proceeding under any
        applicable Federal or state bankruptcy, insolvency or other similar law now
        or
        hereafter in effect, or the consent by the Issuer to the entry of an order
        for
        relief in an involuntary case under any such law, or the consent by the Issuer
        to the appointment or taking possession by a receiver, liquidator, assignee,
        custodian, trustee, sequestrator or similar official for the Issuer or for
        any
        substantial part of the Collateral, or the making by the Issuer of any
        assignment for the benefit of creditors, or the failure by the Issuer generally
        to pay its debts as such debts become due, or the taking of action by the
        Issuer
        in furtherance of any of the foregoing; or

       

      (g)
          any
        act
        or failure to act by the State of New Jersey or any of its agencies (including
        the BPU), officers or employees that violates or is not in accordance with
        the
        pledge and agreement of the State of New Jersey in Section 17(a) of the
        Competition Act (N.J.S.A.
        48:3-66(a)).

       

      SECTION
        5.02  ACCELERATION
        OF MATURITY; RESCISSION AND ANNULMENT.

       

      (a)
          If
        an
        Event of Default (other than an Event of Default under Section 5.01(g)) occurs
        and is continuing, then and in every such case either the Trustee or the
        Holders
        of not less than a majority of the Outstanding Amount of the Transition Bonds
        of
        all Series,

       

      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

       

      voting
        together as a single class, may, but need not, declare all the Transition
        Bonds
        to be immediately due and payable, by a notice in writing to the Issuer (and
        to
        the Trustee if given by Transition Bondholders), and upon any such declaration
        the unpaid Principal amount of the Transition Bonds of all Series, together
        with
        accrued and unpaid interest thereon through the date of acceleration, shall
        become immediately due and payable. 

       

      (b)
          At
        any
        time after such declaration of acceleration of maturity has been made and
        before
        a judgment or decree for payment of the money due has been obtained by the
        Trustee as provided in this Article V, the Holders of not less than a majority
        of the Outstanding Amount of the Transition Bonds of all Series, voting together
        as a single class, by written notice to the Issuer and the Trustee, may rescind
        and annul such declaration and its consequences, provided that:

       

      
        (i)   the
          Issuer has paid or deposited with the Trustee, for deposit in the General
          Subaccount of the Collection Account, a sum sufficient to pay:

         

        (A)    all
          payments of Principal of and interest on all Transition Bonds of all Series
          and
          all other amounts that would then be due hereunder or upon such Transition
          Bonds
          if the Event of Default giving rise to such acceleration had not occurred;
          and

         

        (B)    all
          sums
          paid or advanced by the Trustee hereunder and the reasonable compensation,
          expenses, disbursements and advances of the Trustee and its agents and
          counsel;
          and

         

        (ii)   all
          Events of Default, other than the nonpayment of the principal of the Transition
          Bonds of all Series that has become due solely by such acceleration, have
          been
          cured or waived as provided in Section 5.12. 

         

      

      (c)
          No
        such
        rescission shall affect any subsequent Default or impair any right consequent
        thereto.

       

      SECTION
        5.03  COLLECTION
        OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.

       

      (a)
          The
        Issuer covenants that if (i) Default is made in the payment of any interest
        on
        any Transition Bond when such interest becomes due and payable and such Default
        continues for five Business Days, (ii) Default is made in the payment of
        the
        then unpaid Principal of any Transition Bond on the Final Maturity Date therefor
        or (iii) Default is made in the payment of the Redemption Price or for any
        Transition Bond on the Redemption Date therefor, the Issuer shall, upon demand
        of the Trustee, pay to it, for the benefit of the Holders of the Transition
        Bonds of such Series, such amount as shall be sufficient to cover the costs
        and
        expenses of collection, including the reasonable compensation, expenses,
        disbursements and advances of the Trustee and its agents and counsel and
        the
        whole amount then due and payable on such Transition Bonds for Principal
        and
        interest, with interest upon the overdue payment of principal and, to the
        extent
        payment at such rate of interest shall be legally enforceable, upon overdue
        installments of interest, at the respective Interest Rate of such Series
        or the
        applicable Class of such Series. 

       

      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

       

      (b)
          In
        case
        the Issuer shall fail forthwith to pay the amounts specified in clause (a)
        above
        upon such demand, the Trustee, in its own name and as trustee of an express
        trust, may institute a Proceeding for the collection of the sums so due and
        unpaid, and may prosecute such Proceeding to judgment or final decree, and
        may
        enforce the same against the Issuer or other obligor upon such Transition
        Bonds
        and collect in the manner provided by law out of the property of the Issuer
        or
        other obligor upon such Transition Bonds, wherever situated, the moneys adjudged
        or decreed to be payable. 

       

      (c)
          If
        an
        Event of Default occurs and is continuing, the Trustee may, as more particularly
        provided in Section 5.04, in its discretion, proceed to protect and enforce
        its
        rights and the rights of the Transition Bondholders, by such appropriate
        Proceedings as the Trustee shall deem most effective to protect and enforce
        any
        such rights, whether for the specific enforcement of any covenant or agreement
        in this Indenture or in aid of the exercise of any power granted herein,
        or to
        enforce any other proper remedy or legal or equitable right vested in the
        Trustee by this Indenture or by law including foreclosing or otherwise enforcing
        the Lien on the Bondable Transition Property securing the Transition Bonds.
        The
        Trustee shall request a court of competent jurisdiction to permit the BPU
        to
        issue and enforce any order for sequestration of revenues arising with respect
        to such Bondable Transition Property. 

       

      (d)
          In
        case
        there shall be pending, relative to the Issuer or any other obligor upon
        the
        Transition Bonds or any Person having or claiming an ownership interest in
        the
        Collateral, Proceedings under Title 11 of the United States Code or any other
        applicable Federal or state bankruptcy, insolvency or other similar law,
        or in
        case a receiver, assignee or trustee in bankruptcy or reorganization,
        liquidator, sequestrator or similar official shall have been appointed for
        or
        taken possession of the Issuer or its property or such other obligor or Person,
        or in case of any other comparable judicial Proceedings relative to the Issuer
        or other obligor upon the Transition Bonds, or to the creditors or property
        of
        the Issuer or such other obligor, the Trustee, irrespective of whether the
        Principal of any Transition Bonds shall then be due and payable as therein
        expressed or by declaration or otherwise and irrespective of whether the
        Trustee
        shall have made any demand pursuant to the provisions of this Section 5.03,
        shall be entitled and empowered, by intervention in such Proceedings or
        otherwise: 


      
         

        (i)   to
          file
          and prove a claim or claims for the whole amount of Principal and interest
          owing
          and unpaid in respect of the Transition Bonds and to file such other papers
          or
          documents as may be necessary or advisable in order to have the claims
          of the
          Trustee (including any claim for reasonable compensation to the Trustee
          and each
          predecessor Trustee, and their respective agents, attorneys and counsel,
          and for
          reimbursement of all expenses and liabilities incurred, and all advances
          made,
          by the Trustee and each predecessor Trustee, except as a result of negligence
          or
          bad faith) and of the Transition Bondholders allowed in such
          Proceedings;

         

        (ii)   unless
          prohibited by applicable law and regulations, to vote on behalf of the
          Holders
          in any election of a trustee, a standby trustee or Person performing similar
          functions in any such Proceedings;

         

        
          
            
            

          

          
            34

            
              

            

          

          
            
            

          

        

         

        (iii)   to
          collect and receive any moneys or other property payable or deliverable
          on any
          such claims and to distribute all amounts received with respect to the
          claims of
          the Transition Bondholders and of the Trustee on their behalf; and

         

        (iv)   to
          file
          such proofs of claim and other papers or documents as may be necessary
          or
          advisable in order to have the claims of the Trustee or the Holders allowed
          in
          any judicial proceedings relative to the Issuer, its creditors and its
          property;

      

       

      and
        any
        trustee, receiver, liquidator, custodian or other similar official in any
        such
        Proceeding is hereby authorized by each of such Transition Bondholders to
        make
        payments to the Trustee, and, in the event that the Trustee shall consent
        to the
        making of payments directly to such Transition Bondholders, to pay to the
        Trustee such amounts as shall be sufficient to cover reasonable compensation
        to
        the Trustee, each predecessor Trustee and their respective agents, attorneys
        and
        counsel, and all other expenses and liabilities incurred, and all advances
        made,
        by the Trustee and each predecessor Trustee except as a result of negligence
        or
        bad faith.

       

      (e)
          Nothing
        herein contained shall be deemed to authorize the Trustee to authorize or
        consent to or vote for or accept or adopt on behalf of any Transition Bondholder
        any plan of reorganization, arrangement, adjustment or composition affecting
        the
        Transition Bonds or the rights of any Holder thereof or to authorize the
        Trustee
        to vote in respect of the claim of any Transition Bondholder in any such
        proceeding except, as aforesaid, to vote for the election of a trustee in
        bankruptcy or similar Person.

       

      (f)
          All
        rights of action and of asserting claims under this Indenture, or under any
        of
        the Transition Bonds, may be enforced by the Trustee without the possession
        of
        any of the Transition Bonds or the production thereof in any trial or other
        Proceedings relative thereto, and any such action or Proceedings instituted
        by
        the Trustee shall be brought in its own name as trustee of an express trust,
        and
        any recovery of judgment, subject to the payment of the expenses, disbursements
        and compensation of the Trustee, each predecessor Trustee and their respective
        agents and attorneys, shall be for the ratable benefit of the Holders of
        the
        Transition Bonds.

       

      (g)
          In
        any
        Proceedings brought by the Trustee (and also any Proceedings involving the
        interpretation of any provision of this Indenture to which the Trustee shall
        be
        a party), the Trustee shall be held to represent all the Holders of the
        Transition Bonds, and it shall not be necessary to make any Transition
        Bondholder a party to any such Proceedings.

       

      SECTION
        5.04  REMEDIES.

       

      (a)
          If
        an
        Event of Default other than Section 5.01(g) occurs and is continuing, the
        Trustee may do one or more of the following (subject to Section
        5.05):


      
         

        (i)   institute
          Proceedings in its own name and as trustee of an express trust for the
          collection of all amounts then payable on the Transition Bonds or under
          this
          Indenture with respect thereto, whether by declaration or otherwise, enforce
          any
          judgment obtained, and collect from the Issuer and any other obligor upon
          such
          Transition Bonds moneys adjudged due;

         

        
          
            
            

          

          
            35

            
              

            

          

          
            
            

          

        

         

        (ii)   institute
          Proceedings from time to time for the complete or partial foreclosure of
          this
          Indenture with respect to the Collateral;

         

        (iii)   exercise
          any remedies of a secured party under the New Jersey UCC , the Delaware
          UCC or
          the Competition Act or any other applicable law and take any other appropriate
          action to protect and enforce the rights and remedies of the Trustee and
          the
          Holders of the Transition Bonds;

         

        (iv)   sell
          the
          Collateral or any portion thereof or rights or interest therein, at one
          or more
          public or private sales called and conducted in any manner permitted by
          law;
          and

         

        (v)   exercise
          all rights, remedies, powers, privileges and claims of the Issuer against
          the
          Seller, the Administrator, the Servicer or any Swap Counterparty under
          or in
          connection with the Sale Agreement, the Intercreditor Agreement, the
          Administration Agreement, the Servicing Agreement or the related Interest
          Rate
          Swap Agreement, respectively, as provided in Section 3.20(b);

      

       

      provided,
        however, that the Trustee may not sell or otherwise liquidate any portion
        of the
        Collateral following an Event of Default, other than an Event of Default
        described in Section 5.01(a), 5.01(b) or 5.01(c), with respect to any Series
        unless (A) the Holders of one hundred percent of the Outstanding Amount of
        the
        Transition Bonds of all Series consent in writing thereto, (B) the proceeds
        of
        such sale or liquidation distributable to the Transition Bondholders of all
        Series are sufficient to discharge in full all amounts then due and unpaid
        upon
        such Transition Bonds for Principal and premium, if any, and accrued and
        unpaid
        interest or (C) the Trustee determines, after having been advised in writing
        by
        the Servicer, that the Collateral will not continue to provide sufficient
        funds
        for all payments on the Transition Bonds of all Series as they would have
        become
        due if the Transition Bonds had not been declared due and payable and the
        Trustee obtains the written consent of Holders of at least sixty-six and
        two-thirds percent of the Outstanding Amount of the Transition Bonds of all
        Series. In determining such sufficiency or insufficiency with respect to
        clauses
        (B) and (C), the Trustee may, but need not, obtain and conclusively rely
        upon an
        opinion of an Independent investment banking or certified public accounting
        firm
        of national reputation as to the feasibility of such proposed action and
        as to
        the sufficiency of the Collateral for such purpose.

       

      (b)
          If
        an
        Event of Default under Section 5.01(g) occurs and is continuing, the Trustee,
        for the benefit of the Holders, shall be entitled and empowered to the extent
        permitted by applicable law to institute or participate in Proceedings
        reasonably necessary to compel performance of or to enforce the pledge and
        agreement of the State of New Jersey in Section 17(a) of the Competition
        Act
        (N.J.S.A.
        48:3-66(a)) and to collect any monetary damages incurred by the Holders or
        the
        Trustee as a result of any such Event of Default, and may prosecute any such
        Proceeding to final judgment or decree. Such remedy shall be the only remedy
        that the Trustee may exercise if the only Event of Default that has occurred
        and
        is continuing is an Event of Default under Section 5.01(g).

       

      SECTION
        5.05  OPTIONAL
        PRESERVATION OF THE COLLATERAL. 
        If the Transition Bonds have been declared to be due and payable under Section
        5.02 following

       

      
        
          
          

        

        
          36

          
            

          

        

        
          
          

        

      

       

      an
        Event
        of Default and such declaration and its consequences have not been rescinded
        and
        annulled, the Trustee may, but need not, elect, as provided in Section 5.11(c),
        to maintain possession of the Collateral and not sell or liquidate the same.
        It
        is the desire of the parties hereto and the Transition Bondholders that there
        be
        at all times sufficient funds for the payment of Principal of and interest
        on
        the Transition Bonds, and the Trustee shall take such desire into account
        when
        determining whether or not to maintain possession of the Collateral or sell
        or
        liquidate the same. In determining whether to maintain possession of the
        Collateral or sell or liquidate the same, the Trustee may, but need not,
        obtain
        and conclusively rely upon an opinion of an Independent investment banking
        or
        certified public accounting firm of national reputation as to the feasibility
        of
        such proposed action and as to the sufficiency of the Collateral for such
        purpose.

       

      SECTION
        5.06  LIMITATION
        OF PROCEEDINGS.

       

      (a)
          No
        Holder
        of any Transition Bond of any Series shall have any right to institute any
        Proceeding, judicial or otherwise, to avail itself of any remedies provided
        in
        the Competition Act or to avail itself of the right to foreclose on the Bondable
        Transition Property or otherwise enforce the Lien on the Bondable Transition
        Property, with respect to this Indenture, or for the appointment of a receiver
        or trustee, or for any other remedy hereunder, unless: 


      
         

        (i)   such
          Holder has previously given written notice to the Trustee of a continuing
          Event
          of Default;

         

        (ii)   the
          Holders of not less than twenty-five percent of the Outstanding Amount
          of the
          Transition Bonds of all Series have made written request of the Trustee
          to
          institute such Proceeding in respect of such Event of Default in its own
          name as
          Trustee hereunder;

         

        (iii)   such
          Holder or Holders have offered to the Trustee security or indemnity reasonably
          satisfactory to the Trustee against the costs, expenses and liabilities
          to be
          incurred in complying with such request;

         

        (iv)   the
          Trustee for sixty days after its receipt of such notice, request and offer
          of
          indemnity has failed to institute such Proceeding; and

         

        (v)   no
          direction inconsistent with such written request has been given to the
          Trustee
          during such sixty day period by the Holders of a majority of the Outstanding
          Amount of the Transition Bonds of all Series;

      

       

      it
        being
        understood and intended that no one or more Holders shall have any right
        in any
        manner whatever by virtue of, or by availing of, any provision of this Indenture
        to affect, disturb or prejudice the rights of any other Holders or to obtain
        or
        to seek to obtain priority or preference over any other Holders or to enforce
        any right under this Indenture, except in the manner herein
        provided.

       

      (b)
          In
        the
        event the Trustee shall receive conflicting or inconsistent requests and
        indemnity from two or more groups of Holders, each representing less than
        a
        majority of the Outstanding Amount of the Transition Bonds of all Series,
        the
        Trustee in its sole discretion may

       

      
        
          
          

        

        
          37

          
            

          

        

        
          
          

        

      

       

      determine
        what action, if any, shall be taken, notwithstanding any other provisions
        of
        this Indenture.

       

      SECTION
        5.07  UNCONDITIONAL
        RIGHTS OF TRANSITION BONDHOLDERS TO RECEIVE PRINCIPAL AND INTEREST. 
        Notwithstanding any other provisions in this Indenture, the Holder of any
        Transition Bond shall have the right, which is absolute and unconditional,
        and
        shall not be impaired without the consent of each such Holder, (a) to receive
        payment of (i) the interest, if any, on such Transition Bond on or after
        the due
        dates thereof expressed in such Transition Bond or in this Indenture, (ii)
        the
        unpaid Principal, if any, of such Transition Bonds on or after the Final
        Maturity Date therefor or (iii) in the case of redemption, the unpaid Principal,
        if any, and interest, if any, on such Transition Bond on or after the Redemption
        Date therefor and (b) to institute suit for the enforcement of any such payment,
        and such right shall not be impaired without the consent of such
        Holder.

       

      SECTION
        5.08  RESTORATION
        OF RIGHTS AND REMEDIES.
         If the Trustee or any Transition Bondholder has instituted any Proceeding
        to enforce any right or remedy under this Indenture and such Proceeding has
        been
        discontinued or abandoned for any reason or has been determined adversely
        to the
        Trustee or to such Transition Bondholder, then and in every such case the
        Issuer, the Trustee and the Transition Bondholders shall, subject to any
        determination in such Proceeding, be restored severally and respectively
        to
        their former positions hereunder, and thereafter all rights and remedies
        of the
        Trustee and the Transition Bondholders shall continue as though no such
        Proceeding had been instituted.

       

      SECTION
        5.09  RIGHTS
        AND REMEDIES CUMULATIVE. 
        No right or remedy herein conferred upon or reserved to the Trustee or to
        the
        Transition Bondholders is intended to be exclusive of any other right or
        remedy,
        and every right and remedy shall, to the extent permitted by law, be cumulative
        and in addition to every other right and remedy given hereunder or now or
        hereafter existing at law or in equity or otherwise. The assertion or employment
        of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
        assertion or employment of any other appropriate right or remedy.

       

      SECTION
        5.10  DELAY
        OR
        OMISSION NOT A WAIVER. 
        No delay or omission of the Trustee or any Transition Bondholder to exercise
        any
        right or remedy accruing upon any Default or Event of Default shall impair
        any
        such right or remedy or constitute a waiver of any such Default or Event
        of
        Default or an acquiescence therein. Every right and remedy given by this
        Article
        V or by law to the Trustee or to the Transition Bondholders may be exercised
        from time to time, and as often as may be deemed expedient, by the Trustee
        or by
        the Transition Bondholders, as the case may be.

       

      SECTION
        5.11  CONTROL
        BY A MAJORITY OF TRANSITION BONDHOLDERS. 
        The Holders of a majority of the Outstanding Amount of the Transition Bonds
        of
        all Series (or, if less than all Series or Classes are affected, the affected
        Series or Class or Classes), voting together as a single class, shall have
        the
        right to direct the time, method and place of conducting any Proceeding for
        any
        remedy available to the Trustee with respect to the Transition Bonds of such
        Series or Class or Classes or exercising any trust or power conferred on
        the
        Trustee with respect to such Series or Class or Classes; provided
        that

       

      
        
          
          

        

        
          38

          
            

          

        

        
          
          

        

      

       

      (a)
          such
        direction shall not be in conflict with any rule of law or with this
        Indenture;

       

      (b)
          subject
        to the express terms of Section 5.04, any direction to the Trustee to sell
        or
        liquidate the Collateral shall be by the Holders of not less than one hundred
        percent of the Outstanding Amount of the Transition Bonds of all
        Series;

       

      (c)
          if
        the
        conditions set forth in Section 5.05 have been satisfied and the Trustee
        elects
        to retain the Collateral pursuant to such Section 5.05 and elects not to
        sell or
        liquidate the same, then any direction to the Trustee by Holders of less
        than
        one hundred percent of the Outstanding Amount of the Transition Bonds of
        all
        Series to sell or liquidate the Collateral shall be of no force and effect;
        and

       

      (d)
          the
        Trustee may take any other action deemed proper by the Trustee that is not
        inconsistent with such direction;

       

      provided,
        however, that, subject to Section 6.01, the Trustee need not take any action
        that it determines might involve it in liability for which it reasonably
        believes it will not be indemnified to its reasonable satisfaction against
        the
        costs, expenses and liabilities which might be incurred by it in complying
        with
        such request. The Trustee also need not take any action that it determines
        might
        materially and adversely affect the rights of any Transition Bondholders
        not
        consenting to such action.

       

      SECTION
        5.12  WAIVER
        OF
        PAST DEFAULTS.

       

      (a)
          Prior
        to
        the declaration of the acceleration of the maturity of the Transition Bonds
        of
        all Series as provided in Section 5.02, the Holders of not less than a majority
        of the Outstanding Amount of the Transition Bonds of all Series, voting together
        as a single class, may waive any past Default or Event of Default and its
        consequences except a Default (i) in payment of Principal of and premium,
        if
        any, or interest on any of the Transition Bonds or (ii) in respect of a covenant
        or provision hereof which cannot be modified or amended without the waiver
        or
        consent of the Holder of each Transition Bond of all Series or Classes affected.
        In the case of any such waiver, the Issuer, the Trustee and the Holders of
        the
        Transition Bonds shall be restored to their former positions and rights
        hereunder, respectively, but no such waiver shall extend to any subsequent
        or
        other Default or impair any right consequent thereto.

       

      (b)
          Upon
        any
        such waiver, such Default shall cease to exist and be deemed to have been
        cured
        and not to have occurred, and any Event of Default arising therefrom shall
        be
        deemed to have been cured and not to have occurred, for every purpose of
        this
        Indenture, but no such waiver shall extend to any subsequent or other Default
        or
        Event of Default or impair any right consequent thereto. 

       

      SECTION
        5.13  UNDERTAKING
        FOR COSTS. 
        All parties to this Indenture agree, and each Holder of any Transition Bond
        by
        such Holder’s acceptance thereof shall be deemed to have agreed, that any court
        may in its discretion require, in any suit for the enforcement of any right
        or
        remedy under this Indenture, or in any suit against the Trustee for any action
        taken, suffered or omitted by it as Trustee, the filing by any party litigant
        in
        such suit of an undertaking to pay the costs of such suit, and that such
        court
        may in its discretion assess

       

      
        
          
          

        

        
          39

          
            

          

        

        
          
          

        

      

       

      reasonable
        costs, including reasonable attorneys’ fees, against any party litigant in such
        suit, having due regard to the merits and good faith of the claims or defenses
        made by such party litigant; provided, however, the provisions of this Section
        5.13 shall not apply to (a) any suit instituted by the Trustee, (b) any suit
        instituted by any Transition Bondholder, or group of Transition Bondholders,
        in
        each case holding in the aggregate more than ten percent of the Outstanding
        Amount of the Transition Bonds of a Series or (c) any suit instituted by
        any
        Transition Bondholder for the enforcement of the payment of (i) interest
        on any
        Transition Bond on or after the due dates expressed in such Transition Bond
        and
        in this Indenture, (ii) the unpaid Principal, if any, of any Transition Bond
        on
        or after the Final Maturity Date therefor or (iii) in the case of redemption,
        the unpaid Principal of and interest on any Transition Bond on or after the
        Redemption Date therefor. 

       

      SECTION
        5.14  WAIVER
        OF
        STAY OR EXTENSION LAWS. 
        The Issuer covenants (to the extent that it may lawfully do so) that it will
        not
        at any time insist upon, or plead, or in any manner whatsoever, claim or
        take
        the benefit or advantage of, any stay or extension law wherever enacted,
        now or
        at any time hereafter in force, that may affect the covenants or the performance
        of this Indenture. The Issuer (to the extent that it may lawfully do so)
        hereby
        expressly waives all benefit or advantage of any such law, and covenants
        that it
        will not hinder, delay or impede the execution of any power herein granted
        to
        the Trustee, but will suffer and permit the execution of every such power
        as
        though no such law had been enacted.

       

      SECTION
        5.15  ACTION
        ON
        TRANSITION BONDS. 
        The Trustee’s right to seek and recover judgment on the Transition Bonds or
        under this Indenture shall not be affected by the seeking, obtaining or
        application of any other relief under or with respect to this Indenture.
        Neither
        the Lien of this Indenture nor any rights or remedies of the Trustee or the
        Transition Bondholders shall be impaired by the recovery of any judgment
        by the
        Trustee against the Issuer or by the levy of any execution under such judgment
        upon any portion of the Collateral or upon any of the assets of the
        Issuer.

       

      SECTION
        5.16  APPLICATION
        OF TRUST MONEY. 
        Any money collected by the Trustee pursuant to this Article V shall be applied
        in accordance with Section 8.02 hereof.

       

      ARTICLE
        VI


       

      THE
        TRUSTEE

       

      SECTION
        6.01  DUTIES
        AND LIABILITIES OF TRUSTEE.

       

      (a)
          If
        an
        Event of Default has occurred and is continuing, the Trustee shall exercise
        the
        rights and powers vested in it by this Indenture and use the same degree
        of care
        and skill in their exercise as a prudent Person would exercise or use under
        the
        circumstances in the conduct of such Person’s own affairs.

       

      (b)
          Except
        during the continuance of an Event of Default: 

       

      
        
          
          

        

        
          40

          
            

          

        

        
          
          

        

      

       

      
        (i)   the
          Trustee undertakes to perform such duties and only such duties as are
          specifically set forth in this Indenture and no implied covenants or obligations
          shall be read into this Indenture against the Trustee; and

         

        (ii)   in
          the
          absence of bad faith on its part, the Trustee may conclusively rely, as
          to the
          truth of the statements and the correctness of the opinions expressed therein,
          upon certificates or opinions furnished to the Trustee and conforming to
          the
          requirements of this Indenture.

         

        (c)   The
          Trustee may not be relieved from liability for its own negligent action,
          its own
          negligent failure to act or its own willful misconduct, except
          that:

         

        (i)   this
          clause (c) does not limit the effect of clause (b) of this Section
          6.01;

         

        (ii)   the
          Trustee shall not be liable for any error of judgment made in good faith
          by a
          Responsible Officer unless it is proved that the Trustee was negligent
          in
          ascertaining the pertinent facts; and

         

        (iii)   the
          Trustee shall not be liable with respect to any action it takes or omits
          to take
          in good faith in accordance with a direction received by it
          hereunder.

         

      

      (d)
          Every
        provision of this Indenture that in any way relates to the Trustee is subject
        to
        clauses (a), (b) and (c) of this Section 6.01. 

       

      (e)
          The
        Trustee shall not be liable for interest on any money received by it except
        as
        provided in this Indenture.

       

      (f)
          Money
        held in trust by the Trustee need not be segregated from other funds held
        by the
        Trustee except to the extent required by law or the terms of this Indenture,
        the
        Sale Agreement, the Intercreditor Agreement or the Servicing Agreement or
        any
        Interest Rate Swap Agreement.

       

      (g)
          No
        provision of this Indenture shall require the Trustee to expend or risk its
        own
        funds or otherwise incur any liability, financial or otherwise, in the
        performance of any of its duties hereunder or in the exercise of any of its
        rights or powers, if it shall have reasonable grounds to believe that repayments
        of such funds or indemnity reasonably satisfactory to it against such risk
        or
        liability is not reasonably assured to it.

       

      (h)
          Every
        provision of this Indenture relating to the conduct or affecting the liability
        of or affording protection to the Trustee shall be subject to the provisions
        of
        this Section 6.01 and to the provisions of the TIA.

       

      (i)
          Under
        no
        circumstances shall the Trustee be liable for any indebtedness of the Issuer,
        the Servicer, the Seller or any Swap Counterparty evidenced by or arising
        under
        the Transition Bonds or any Basic Document.

       

      
        
          
          

        

        
          41

          
            

          

        

        
          
          

        

      

       

      (j)
          If
        so
        requested by the Issuer, or by the Servicer on behalf of the Issuer, for
        the
        purpose of satisfying the Issuer’s reporting obligations under the Exchange Act
        with respect to any class of Transition Bonds, the Trustee shall (i) notify
        the
        Issuer in writing of (A) any material litigation or governmental proceedings
        pending against the Trustee and (B) any affiliations or relationships that
        develop following the Closing Date between the Trustee and any party to any
        of
        the Basic Documents, and (ii) provide to the Issuer a written description
        of
        such proceedings, affiliations or relationships.

       

      (k)   On
        or
        before March 15 of each calendar year, if, during the prior year, the Issuer
        was
        obligated to file reports under the Exchange Act, the Trustee shall deliver
        to
        the Issuer a report (in form and substance reasonably satisfactory to the
        Issuer) regarding the Trustee’s assessment of compliance with the Servicing
        Criteria during the immediately preceding calendar year, as required under
        Rules
        13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB. Such
        report shall be addressed to the Issuer and signed by an authorized officer
        of
        the Trustee, and shall address each of the Servicing Criteria. The Trustee
        shall
        also deliver to the Issuer a report of a registered public accounting firm
        reasonably acceptable to the Issuer that attests to, and reports on, the
        assessment of compliance made by the Trustee and delivered pursuant to the
        first
        sentence of this Section 6.01(k). Such attestation shall be in accordance
        with
        Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and
        the
        Exchange Act..

       

      SECTION
        6.02  RIGHTS
        OF
        TRUSTEE.

       

      (a)
          The
        Trustee may conclusively rely on any document believed by it to be genuine
        and
        to have been signed or presented by the proper Person. The Trustee need not
        investigate any fact or matter stated in any such document. 

       

      (b)
          Before
        the Trustee acts or refrains from acting, it may require an Issuer Officer’s
        Certificate or an Issuer Opinion of Counsel. The Trustee shall not be liable
        for
        any action it takes or omits to take in good faith in reliance on an Issuer
        Officer’s Certificate or an Issuer Opinion of Counsel.

       

      (c)
          The
        Trustee may execute any of the trusts or powers hereunder or perform any
        duties
        hereunder either directly or by or through agents, attorneys, a custodian
        or
        nominee, and the Trustee shall not be responsible for any misconduct or
        negligence on the part of, or for the supervision of, any such agent, attorney,
        custodian or nominee appointed with due care by it hereunder.

       

      (d)
          The
        Trustee shall not be liable for any action it takes or omits to take in good
        faith which it believes to be authorized or within its rights or powers;
        provided, however, that the Trustee’s conduct does not constitute willful
        misconduct, negligence or bad faith.

       

      (e)
          The
        Trustee may consult with counsel, and the advice or opinion of such counsel
        with
        respect to legal matters relating to this Indenture and the Transition Bonds
        shall be full and complete authorization and protection from liability in
        respect to any action taken, omitted or suffered by it hereunder in good
        faith
        and in accordance with the advice or opinion of such counsel.

       

      
        
          
          

        

        
          42

          
            

          

        

        
          
          

        

      

       

      SECTION
        6.03  INDIVIDUAL
        RIGHTS OF TRUSTEE. 
        The Trustee in its individual or any other capacity may become the owner
        or
        pledgee of Transition Bonds and may otherwise deal with the Issuer or its
        Affiliates with the same rights it would have if it were not Trustee. Any
        Paying
        Agent, Transition Bond Registrar, co-registrar or co-paying agent, or agent
        appointed pursuant to Section 3.02(b) may do the same with like rights;
        provided, however, the Trustee must comply with Sections 6.11 and
        6.12.

       

      SECTION
        6.04  TRUSTEE’S
        DISCLAIMER. 
        The Trustee shall not be responsible for and makes no representation as to
        the
        validity or adequacy of this Indenture or the Transition Bonds. The Trustee
        shall not be accountable for the Issuer’s use of the proceeds from the
        Transition Bonds, and the Trustee shall not be responsible for any statement
        of
        the Issuer in this Indenture or in any document issued in connection with
        the
        sale of the Transition Bonds or in the Transition Bonds other than the Trustee’s
        certificate of authentication. The Trustee shall not be responsible for the
        form, character, genuineness, sufficiency, value or validity of any of the
        Collateral, or for or in respect of the validity or sufficiency of the
        Transition Bonds (other than the certificate of authentication for the
        Transition Bonds) or the Basic Documents and the Trustee shall in no event
        assume or incur any liability, duty or obligation to any Holder of a Transition
        Bond, other than as expressly provided for in this Indenture. The Trustee
        shall
        not be liable for the default or misconduct of the Issuer, the Seller, the
        Servicer or the Member or any Manager of the Issuer under any Basic Document
        or
        otherwise, or the default or misconduct of any counterparty under any Interest
        Rate Swap Agreement, and the Trustee shall have no obligation or liability
        to
        perform the obligations of the Issuer.

       

      SECTION
        6.05  NOTICE
        OF
        DEFAULTS. 
        If a Default occurs and is continuing with respect to any Class or Series
        and if
        it is actually known to a Responsible Officer of the Trustee, the Trustee
        shall
        mail to each Rating Agency and to each Holder of all Series notice of the
        Default within ninety days after it occurs. Except in the case of a Default
        in
        payment of Principal of or interest on any Transition Bond, the Trustee may
        withhold the notice if and so long as a committee of its Responsible Officers
        in
        good faith determines that withholding the notice is in the interests of
        Transition Bondholders.

       

      SECTION
        6.06  REPORTS
        BY TRUSTEE TO HOLDERS.

       

      (a)
          The
        Trustee shall deliver to each Holder such information as may be required
        to
        enable such Holder to prepare its Federal and state income tax returns.


       

      (b)
          With
        respect to each Series and Class, on or prior to each Payment Date therefor,
        the
        Trustee shall deliver a statement prepared by the Trustee to each Holder
        of such
        Series and Class which shall include (to the extent applicable) the following
        information (and any other information so specified in the Series Supplement
        for
        such Series) as to the Transition Bonds of such Series and Class with respect
        to
        such Payment Date or the period since the previous Payment Date, as
        applicable:

       

      
        (i)   the
          amount paid to Holders of the Transition Bonds of such Series and Class
          in
          respect of Principal, such amount to be expressed as a dollar amount per
          thousand;

         

        
          
            
            

          

          
            43

            
              

            

          

          
            
            

          

        

         

        (ii)   the
          amount paid to Holders of the Transition Bonds of such Series and Class
          in
          respect of interest, such amount to be expressed as a dollar amount per
          thousand;

         

        (iii)   the
          Transition Bond Balance, after giving effect to the payments to be made
          on such
          Payment Date, and the Projected Transition Bond Balance, in each case for
          such
          Series and Class and as of such Payment Date;

         

        (iv)   the
          amount on deposit in the Overcollateralization Subaccount for such Series
          and
          the Scheduled Overcollateralization Level for such Series as of such Payment
          Date;

         

        (v)   the
          amount on deposit in the Series Capital Subaccount for such Series and
          the
          Required Capital Amount for that Series as of such Payment Date;

         

        (vi)   the
          amount, if any, on deposit in the Reserve Subaccount as of such Payment
          Date;

         

        (vii)   the
          amount to be paid to each Swap Counterparty;

         

        (viii)         
          the
          amounts paid to the Trustee since the preceding Payment Date;

         

        (ix)    
the
          amount paid to or withheld by the Servicer since the preceding Payment
          Date;
          and

         

        (x)    
the
          amount of any other transfers and payments made pursuant to this
          Indenture.

         

      

      (c)
          If
        any
        Transition Bonds are listed on the Luxembourg Stock Exchange and the rules
        of
        such exchange so require, the listing agent shall arrange for publication
        in an
        Authorized Newspaper that such statement shall be available with the Issuer’s
        listing agent in Luxembourg appointed pursuant to Section 3.02(b).

       

      (d)
          The
        Trustee’s responsibility for disbursing the information described in clause (b)
        above to Holders is limited to the availability, timeliness and accuracy
        of the
        information provided by the Servicer pursuant to Section 3.05 and Annex 1
        of the
        Servicing Agreement.

       

      SECTION
        6.07  COMPENSATION
        AND INDEMNITY.

       

      (a)
          The
        Issuer shall pay to the Trustee from time to time reasonable compensation
        for
        its services. The Trustee’s compensation shall not be limited by any law on
        compensation of a trustee of an express trust. The Issuer shall reimburse
        the
        Trustee for all reasonable out-of-pocket expenses, disbursements and advances
        incurred or made by it, including costs of collection, in addition to the
        compensation for its services. Such expenses shall include the reasonable
        compensation and expenses, disbursements and advances of the Trustee’s agents,
        counsel, accountants and experts. Notwithstanding the Issuer’s obligations set
        forth above in Section 6.07(a), the Issuer shall indemnify and hold harmless
        the
        Trustee and its

       

      
        
          
          

        

        
          44

          
            

          

        

        
          
          

        

      

       

      officers,
        directors, employees and agents, to the extent permitted by law, from and
        against any and all costs, damages, expenses, losses, taxes (other than taxes
        imposed on the Trustee in connection with any fees earned in accordance with
        this Indenture) liabilities or other amounts whatsoever (including reasonable
        counsel fees and expenses) incurred by the Trustee in connection with the
        administration of this trust, the enforcement of this trust and all of the
        Trustee’s rights, powers and duties under this Indenture and the performance by
        the Trustee of the duties and obligations of the Trustee under or pursuant
        to
        this Indenture and any Series Supplement. The Trustee shall notify the Issuer
        promptly of any claim for which it may seek indemnity. Failure by the Trustee
        to
        so notify the Issuer shall not relieve the Issuer of its obligations
        hereunder.

       

      (b)
          The
        Issuer shall defend such claim and the Trustee may have separate counsel
        and the
        Issuer shall pay the fees and expenses of such counsel. The Issuer need not
        reimburse any expense or indemnify against any loss, liability or expense
        incurred by the Trustee (i) through the Trustee’s own willful misconduct,
        negligence or bad faith or (ii) to the extent the Trustee was reimbursed
        for or
        indemnified against any such loss, liability or expense by the Seller pursuant
        to the Sale Agreement or by the Servicer pursuant to the Servicing
        Agreement.

       

      (c)
          When
        the
        Trustee incurs expenses after the occurrence of an Event of Default specified
        in
        Section 5.01(e) or 5.01(f) with respect to the Issuer, the expenses are intended
        to constitute expenses of administration under Title 11 of the United States
        Code or any other applicable Federal or state bankruptcy, insolvency or similar
        law. The obligations of the Issuer under this Section 6.07 shall survive
        the
        termination of this Indenture and the earlier resignation or removal of the
        Trustee. To secure the Issuer’s payment obligations in this Section 6.07, the
        Trustee shall have a Lien prior to the Transition Bonds on all money or property
        held or collected by the Trustee, in its capacity as Trustee, except that
        held
        in trust to pay Principal and interest on particular Transition Bonds in
        accordance with the priorities established in Section 8.02.

       

      SECTION
        6.08  REPLACEMENT
        OF TRUSTEE.

       

      (a)
          The
        Trustee may resign at any time upon thirty days’ prior written notice to the
        Issuer. The Issuer may remove the Trustee with or without cause at any time,
        with prior notice to the Rating Agencies, upon thirty days’ prior written notice
        to the Trustee, and shall remove the Trustee if:


      
         

        (i)   the
          Trustee fails to comply with Section 6.11; 

         

        (ii)   the
          Trustee is adjudged a bankrupt or insolvent; 

         

        (iii)   a
          receiver or other public officer takes charge of the Trustee or its property;
          or

         

        (iv)   the
          Trustee otherwise becomes incapable of acting.

      

       

      (b)
          If
        the
        Trustee resigns or is removed or if a vacancy exists in the office of Trustee
        for any reason (the Trustee in such event being referred to herein as the
        “Retiring Trustee”), the Issuer shall promptly appoint a successor
        Trustee.

       

      
        
          
          

        

        
          45

          
            

          

        

        
          
          

        

      

       

      (c)
          The
        Holders of a majority in Outstanding Amount of the Transition Bonds of all
        Series, voting together as a single class, may remove the Trustee by so
        notifying the Issuer and the Trustee and such Holders may appoint a successor
        Trustee. 

       

      (d)
          A
        successor Trustee shall deliver a written acceptance of its appointment to
        the
        Retiring Trustee and to the Issuer. Thereupon the resignation or removal
        of the
        Retiring Trustee shall become effective, and the successor Trustee shall
        have
        all the rights, powers and duties of the Trustee under this Indenture and
        the
        Intercreditor Agreement. No resignation or removal of the Trustee pursuant
        to
        this Section 6.08 shall become effective until the acceptance of the appointment
        by a successor Trustee. The successor Trustee shall mail a notice of its
        succession to the Transition Bondholders. The Retiring Trustee shall promptly
        transfer all property held by it as Trustee to the successor
        Trustee.

       

      (e)
          If
        a
        successor Trustee does not take office within thirty days after the Retiring
        Trustee resigns or is removed, the Retiring Trustee, the Issuer or the Holders
        of a majority in Outstanding Amount of the Transition Bonds of all Series
        may
        petition any court of competent jurisdiction for the appointment of a successor
        Trustee.

       

      (f)
          If
        the
        Trustee fails to comply with Section 6.11, any Transition Bondholder may
        petition any court of competent jurisdiction for the removal of the Trustee
        and
        the appointment of a successor Trustee. 

       

      (g)
          Notwithstanding
        the replacement of the Trustee pursuant to this Section 6.08, the Issuer’s
        obligations under Section 6.07 shall continue for the benefit of the Retiring
        Trustee.

       

      SECTION
        6.09  SUCCESSOR
        TRUSTEE BY MERGER.

       

      (a)
          If
        the
        Trustee consolidates with, merges or converts into, or transfers all or
        substantially all of its corporate trust business or assets to, another
        corporation or banking association, the resulting, surviving or transferee
        corporation or banking association shall, without any further act, be the
        successor Trustee. Notice of any such event shall be promptly given to each
        Rating Agency by the successor Trustee.

       

      (b)
          In
        case
        at the time such successor or successors by merger, conversion, consolidation
        or
        transfer shall succeed to the trusts created by this Indenture any of the
        Transition Bonds shall have been authenticated but not delivered, any such
        successor to the Trustee may adopt the certificate of authentication of any
        Retiring Trustee, and deliver such Transition Bonds so authenticated; and
        in
        case at that time any of the Transition Bonds shall not have been authenticated,
        any successor to the Trustee may authenticate such Transition Bonds either
        in
        the name of any Retiring Trustee hereunder or in the name of the successor
        to
        the Trustee; and in all such cases such certificates shall have the full
        force
        and effect granted by the Transition Bonds or by this Indenture and this
        force
        and effect shall be equal to any certificate issued by the Trustee.

       

      SECTION
        6.10  APPOINTMENT
        OF CO-TRUSTEE OR SEPARATE TRUSTEE.

       

      
        
          
          

        

        
          46

          
            

          

        

        
          
          

        

      

       

      (a)
          Notwithstanding
        any other provisions of this Indenture, at any time, for the purpose of meeting
        any legal requirement of any jurisdiction in which any part of the Collateral
        may at the time be located, the Trustee shall have the power and may execute
        and
        deliver all instruments to appoint one or more Persons to act as a co-trustee
        or
        co-trustees, or separate trustee or separate trustees, of all or any part
        of the
        Collateral, and to vest in such Person or Persons, in such capacity and for
        the
        benefit of the Transition Bondholders, such title to the Collateral, or any
        part
        hereof, and, subject to the other provisions of this Section 6.10, such powers,
        duties, obligations, rights and trusts as the Trustee may consider necessary
        or
        desirable. No co-trustee or separate trustee hereunder shall be required
        to meet
        the terms of eligibility as a successor trustee under Section 6.11 and no
        notice
        to the Transition Bondholders of the appointment of any co-trustee or separate
        trustee shall be required under Section 6.08. Notice of any such appointment
        shall be promptly given to each Rating Agency by the Trustee.

       

      (b)
          Every
        co-trustee and separate trustee shall, to the extent permitted by law, be
        appointed and act subject to the following provisions and
        conditions:


      
         

        (i)   all
          rights, powers, duties and obligations conferred or imposed upon the Trustee
          shall be conferred or imposed upon and exercised or performed by the Trustee
          and
          such co-trustee or separate trustee jointly (it being understood that such
          co-trustee or separate trustee is not authorized to act separately without
          the
          Trustee joining in such act), except to the extent that under any law of
          any
          jurisdiction in which any particular act or acts are to be performed the
          Trustee
          shall be incompetent or unqualified to perform such act or acts, in which
          event
          such rights, powers, duties and obligations (including the holding of title
          to
          the Collateral or any portion thereof in any such jurisdiction) shall be
          exercised and performed singly by such co-trustee or separate trustee,
          but
          solely at the direction of the Trustee; 

         

        (ii)   no
          trustee hereunder shall be personally liable by reason of any act or omission
          of
          any other trustee hereunder; and 

         

        (iii)   the
          Trustee may at any time accept the resignation of or remove any co-trustee
          or
          separate trustee.

      

       

      (c)
          Any
        notice, request or other writing given to the Trustee shall be deemed to
        have
        been given to each of the then co-trustees and separate trustees, as effectively
        as if given to each of them. Every instrument appointing any co-trustee or
        separate trustee shall refer to this Indenture and the conditions of this
        Article VI. Each co-trustee and separate trustee, upon its acceptance of
        the
        trusts conferred, shall be vested with the estates or property specified
        in its
        instrument of appointment, either jointly with the Trustee or separately,
        as may
        be provided therein, subject to all the provisions of this Indenture,
        specifically including every provision of this Indenture relating to the
        conduct
        of, affecting the liability of, or affording protection to, the Trustee.
        Every
        such instrument shall be filed with the Trustee.

       

      (d)
          Any
        co-trustee or separate trustee may at any time constitute the Trustee, its
        agent
        or attorney-in-fact with full power and authority, to the extent not prohibited
        by law, to do any lawful act under or in respect of this Indenture on its
        behalf
        and in its name. If any co-trustee or separate trustee shall die, become
        incapable of acting, resign or be removed, all of its

       

      
        
          
          

        

        
          47

          
            

          

        

        
          
          

        

      

       

      estates,
        properties, rights, remedies and trusts shall vest in and be exercised by
        the
        Trustee, to the extent permitted by law, without the appointment of a new
        or
        successor trustee.

       

      SECTION
        6.11  ELIGIBILITY;
        DISQUALIFICATION. 
        The Trustee shall at all times satisfy the requirements of TIA Section 310(a)
        and Section 26(a)(i) of the Investment Company Act of 1940, as amended. The
        Trustee shall have a combined capital and surplus of at least $50,000,000
        as set
        forth in its most recent published annual report of condition and it shall
        have
        a long term debt rating of “BBB-” or better by Standard & Poor’s, “Baa3” or
        better by Moody’s and “BBB-” or better by Fitch. The Trustee shall comply with
        TIA Section 310(b), including the optional provision permitted by the second
        sentence of TIA Section 310(b)(9); provided, however, that there shall be
        excluded from the operation of TIA Section 310(b)(1) any indenture or indentures
        under which other securities of the Issuer are outstanding if the requirements
        for such exclusion set forth in TIA Section 310(b)(1) are met. If at any
        time
        the Trustee shall cease to be eligible in accordance with the provisions
        of this
        section, it shall resign or be removed immediately in the manner and with
        the
        effect specified in Section 6.08.

       

      SECTION
        6.12  PREFERENTIAL
        COLLECTION OF CLAIMS AGAINST THE ISSUER. 
        The Trustee shall comply with TIA Section 311(a), excluding any creditor
        relationship listed in TIA Section 311(b). A Trustee who has resigned or
        been
        removed shall be subject to TIA Section 311(a) to the extent
        indicated.

       

      SECTION
        6.13  REPRESENTATIONS
        AND WARRANTIES OF THE TRUSTEE. 
        The Trustee hereby represents and warrants that:

       

      (a)
          the
        Trustee is a banking corporation validly existing in good standing under
        the
        laws of the State of New York; and 

       

      (b)
          the
        Trustee has full power, authority and legal right to execute, deliver and
        perform this Indenture and the Basic Documents to which the Trustee is a
        party
        and has taken all necessary action to authorize the execution, delivery and
        performance by it of this Indenture and such Basic Documents.

       

      SECTION
        6.14  RIGHT
        OF
        TRUSTEE IN CAPACITY OF REGISTRAR OR PAYING AGENT.  In the event that the
        Trustee is also acting in the capacity of Paying Agent or Transition Bond
        Registrar hereunder, the rights, protections, immunities and indemnities
        afforded to the Trustee shall also be afforded to the Trustee in its capacity
        as
        Paying Agent or Transition Bond Registrar.

       

      ARTICLE
        VII

       

      TRANSITION
        BONDHOLDERS’ LISTS AND REPORTS

       

      SECTION
        7.01  ISSUER
        TO
        FURNISH TRUSTEE NAMES AND ADDRESSES OF TRANSITION BONDHOLDERS. 
        The Issuer shall furnish or cause to be furnished to the Trustee (a) not
        more
        than five days after the earlier of (i) each Record Date with respect to
        each
        Series and (ii) three months after the last Record Date with respect to each
        Series, a list, in such form as the Trustee may reasonably require, of the
        names
        and addresses of the Holders of such Series as of such Record Date, (b) at
        such
        other times as the Trustee may request

       

      
        
          
          

        

        
          48

          
            

          

        

        
          
          

        

      

       

      in
        writing, within thirty days after receipt by the Issuer of any such request,
        a
        list of similar form and content as of a date not more than ten days prior
        to
        the time such list is furnished; provided, however, that so long as the Trustee
        is the Transition Bond Registrar, no such list shall be required to be
        furnished. 

       

      SECTION
        7.02  PRESERVATION
        OF INFORMATION; COMMUNICATIONS TO TRANSITION BONDHOLDERS.

       

      (a)
          The
        Trustee shall preserve, in as current a form as is reasonably practicable,
        the
        names and addresses of the Holders contained in the most recent list furnished
        to the Trustee as provided in Section 7.01 and the names and addresses of
        Holders received by the Trustee in its capacity as Transition Bond Registrar.
        The Trustee may destroy any list furnished to it as provided in such Section
        7.01 upon receipt of a new list so furnished.

       

      (b)
          Transition
        Bondholders may communicate with other Transition Bondholders pursuant to
        Section 312(b) of the TIA, with respect to their rights under this Indenture
        or
        under the Transition Bonds.

       

      (c)
          The
        Issuer, the Trustee and the Transition Bond Registrar shall have the protection
        of Section 312(c) of the TIA.

       

      SECTION
        7.03  REPORTS
        BY ISSUER.

       

      (a)
          The
        Issuer shall: 


      
        (i)   file
          with
          the Trustee within fifteen days after the Issuer is required to file the
          same
          with the Commission, copies of the annual reports and of the information,
          documents and other reports (or copies of such portions of any of the foregoing
          as the Commission may from time to time by rules and regulations prescribe)
          which the Issuer is required to file with the Commission pursuant to Section
          13
          or 15(d) of the Exchange Act;

         

        (ii)   file
          with
          the Trustee and the Commission, in accordance with rules and regulations
          prescribed from time to time by the Commission, such additional information,
          documents and reports with respect to compliance by the Issuer with the
          conditions and covenants of this Indenture as may be required from time
          to time
          by such rules and regulations; and

         

        (iii)   supply
          to
          the Trustee (and the Trustee shall transmit by mail to all Transition
          Bondholders described in TIA Section 313(c)), such summaries of any information,
          documents and reports required to be filed by the Issuer pursuant to clauses
          (i)
          and (ii) of this Section 7.03(a) as may be required by rules and regulations
          prescribed from time to time by the Commission.

         

      

      (b)
          Unless
        the Issuer otherwise determines, the fiscal year of the Issuer shall end
        on
        December 31 of each year. 

       

      SECTION
        7.04  REPORTS
        BY TRUSTEE.

       

      
        
          
          

        

        
          49

          
            

          

        

        
          
          

        

      

       

      (a)
          If
        required by TIA Section 313(a), within sixty days after the end of each fiscal
        year of the Issuer, commencing with the year after the issuance of the
        Transition Bonds of each Series, the Trustee shall mail to each Holder of
        such
        Series as required by TIA Section 313(c) a brief report dated as of such
        date
        that complies with TIA Section 313(a). The Trustee also shall comply with
        TIA
        Section 313(b); provided, however, that the initial report so issued shall
        be
        delivered not more than twelve months after the initial issuance of each
        Series.

       

      (b)
          A
        copy of
        each TIA Section 313(a) report at the time of its mailing to Transition
        Bondholders shall be filed by the Trustee with the Commission and each stock
        exchange, if any, on which the Transition Bonds are listed (to the extent
        required by the rules of such exchange or exchanges). The Issuer shall notify
        the Trustee if and when the Transition Bonds are listed on any stock
        exchange.

       

      SECTION
        7.05  PROVISION
        OF SERVICER REPORTS. 
        Upon the written request of any Transition Bondholder to the Trustee addressed
        to the Corporate Trust Office, the Trustee shall provide such Transition
        Bondholder with a copy of the Officer’s Certificate referred to in Section 3.06
        of the Servicing Agreement and the Annual Accountant’s Report referred to in
        Section 3.07 of the Servicing Agreement.

       

      ARTICLE
        VIII


       

      ACCOUNTS,
        DISBURSEMENTS AND RELEASES

       

      SECTION
        8.01  COLLECTION
        OF MONEY. 
        Except as otherwise expressly provided herein, the Trustee may demand payment
        or
        delivery of, and shall receive and collect, directly and without intervention
        or
        assistance of any fiscal agent or other intermediary, all money and other
        property payable to or receivable by the Trustee pursuant to this Indenture.
        The
        Trustee shall apply all such money received by it as provided in this Indenture.
        Except as otherwise expressly provided in this Indenture, if any default
        occurs
        in the making of any payment or performance under any agreement or instrument
        that is part of the Collateral, the Trustee may take such action as may be
        appropriate to enforce such payment or performance, including the institution
        and prosecution of appropriate Proceedings. Any such action shall be without
        prejudice to any right to claim a Default or Event of Default under this
        Indenture and any right to proceed thereafter as provided in Article
        V.

       

      SECTION
        8.02  COLLECTION
        ACCOUNT.

       


        (a)
            (i)   On
          or prior to the
          Series Issuance Date for the first Series issued hereunder, the Issuer
          shall
          open, at the Trustee’s Corporate Trust Office, or at another Eligible
          Institution, one or more segregated non-interest bearing trust accounts
          in the
          Trustee’s name for the benefit of the Holders (collectively, the “Collection
          Account”). The Collection Account shall initially be divided into subaccounts,
          which need not be separate bank accounts: a general subaccount (the “General
          Subaccount”), unless otherwise provided in the related Series Supplement, an
          overcollateralization subaccount for each Series (each, an
“Overcollateralization Subaccount” or the “Series Overcollateralization
          Subaccount”), a capital subaccount for each Series (each, a “Capital Subaccount”
or the “Series Capital Subaccount”), a reserve subaccount (the “Reserve
          Subaccount”), a series subaccount for each Series (each, a “Series
          Subaccount”) and a class subaccount for any Class of any Series
          which


       

      
        
          
          

        

        
          50

          
            

          

        

        
          
          

        

      

       

      has
        a
        floating rate of interest as specified in any Series Supplement (each, a
“Class
        Subaccount”). If so provided in any Series Supplement, the Series Capital
        Subaccount for the related Series may be divided into separate subaccounts
        bearing the designations specified in such Series Supplement for the purpose
        of
        tracing deposits to and withdrawals from such Series Capital Subaccount,
        provided that in such case the terms Series Capital Subaccount and Capital
        Subaccount with respect to such Series shall refer collectively to all such
        subaccounts except as specified in such Series Supplement for purposes of
        such
        tracing. On or prior to the Series Issuance Date for each Series issued after
        the Series Issuance Date for the first Series issued hereunder, the Issuer
        shall
        establish an additional Series Subaccount therefor and a Class Subaccount
        for
        any Class of such Series which has a floating rate of interest and in respect
        of
        which the Issuer has entered into an Interest Rate Swap Agreement, as
        Subaccounts of the Collection Account. Prior to depositing funds or U.S.
        Government Obligations in the Collection Account pursuant to Sections 4.01
        or
        4.02, the Issuer shall establish defeasance subaccounts (each, a “Defeasance
        Subaccount”) for each Series for which funds shall be deposited, as subaccounts
        of the Collection Account. All amounts in the Collection Account not allocated
        to any other Subaccount shall be allocated to the General Subaccount. Prior
        to
        the initial Payment Date, all amounts in the Collection Account (other than
        funds deposited into the Capital Subaccount, up to the Required Capital Amount)
        shall be allocated to the General Subaccount. All payments received by the
        Trustee from any Swap Counterparty at any time shall be deposited in the
        related
        Class Subaccount. All references to the Collection Account shall be deemed
        to
        include reference to all subaccounts contained therein. Withdrawals from
        and
        deposits to each of the foregoing subaccounts of the Collection Account shall
        be
        made as set forth in Sections 4.01, 4.02, 4.03 and 8.02(d) through (n). The
        Collection Account shall at all times be maintained as an Eligible Account
        and
        only the Trustee shall have access to the Collection Account for the purpose
        of
        making deposits in and withdrawals from the Collection Account in accordance
        with this Indenture. If at any time the Collection Account ceases to be an
        Eligible Account, the Trustee shall, within ten days, establish a new Collection
        Account as an Eligible Account. Funds in the Collection Account shall not
        be
        commingled by the Issuer with any other moneys, and shall not be commingled
        by
        the Trustee. All moneys deposited from time to time in the Collection Account,
        all deposits therein pursuant to this Indenture, and all investments made
        in
        Eligible Investments with such moneys, including all income or other gain
        from
        such investments, shall be held by the Trustee in the Collection Account
        as part
        of the Collateral as herein provided.

       

      (ii)   Notwithstanding
        any other provision of this Indenture, the Collection Account shall be a
        “securities account” (as defined in Section 8-501(a) of the New Jersey UCC) and
        shall be established with the Trustee, acting as a “securities intermediary” (as
        defined in Section 8-102(a)(14) of the New Jersey UCC), and, in its capacity
        as
        securities intermediary, the Trustee hereby agrees that (A) the Collection
        Account shall be a securities account of the Trustee, (B) each item of property
        (whether cash, cash equivalents, instruments, investments, investment property
        or other) credited to the Collection Account shall be treated as a “financial
        asset” within the meaning of Section 8-102(a)(9) of the New Jersey UCC, (C) such
        securities intermediary shall treat the Trustee as an “entitlement holder” (as
        defined in Section 8-102(a)(7) of the New Jersey UCC) entitled to exercise
        the
        rights that comprise each financial asset credited to the Collection Account,
        (D) such securities intermediary shall comply with entitlement orders originated
        by the Trustee without the further consent of the Issuer or any other Person
        or
        entity, (E) such securities intermediary has not agreed to comply with the
        instructions of any person

       

      
        
          
          

        

        
          51

          
            

          

        

        
          
          

        

      

       

      with
        respect to the Collection Account or any security entitlements or financial
        assets relating thereto (other than pursuant to this Indenture) and shall
        not
        agree with any person other than the Trustee to comply with entitlement orders
        originated by such other person in respect of the Collection Account or any
        security entitlement or financial asset carried in the Collection Account,
        (F)
        the Collection Account and all property credited to it shall not be subject
        to
        any Lien, security interest, right of set-off in favor of such securities
        intermediary or anyone claiming through it (other than the Trustee) and in
        the
        event such securities intermediary or anyone claiming through it (other than
        the
        Trustee) has or subsequently obtains by agreement, operation of law or otherwise
        a security interest in the Collection Account, the securities intermediary
        agrees that such security interest shall be subordinate to the security interest
        of the Trustee, (G) such securities intermediary shall not have any knowledge
        without any independent investigation of any adverse claim to the Collection
        Account or to the security entitlements with respect thereto, (H) the securities
        intermediary’s jurisdiction (as defined in Section 8-110(e) of the New Jersey
        UCC) shall be the State of New Jersey and this Indenture is the agreement
        that
        governs the Collection Account for purposes of the New Jersey UCC, (I) all
        securities and other property underlying any financial assets credited to
        the
        Collection Account shall be registered in the name of the Trustee or endorsed
        to
        the Trustee or in blank, and (J) such securities intermediary shall not change
        the name or account number (other than in the normal course of operations
        in
        order to comply with internal system requirements) for the Collection Account
        without the prior written consent of the Trustee or otherwise in accordance
        with
        this Indenture. The Trustee, in its capacity as securities intermediary,
        and the
        parties hereto agree that the Collection Account shall be under the control
        (within the meaning of Section 8-106 of the New Jersey UCC) of the Trustee
        and
        no other person. Each party hereto and the Trustee, in its capacity as
        securities intermediary, agree that from time to time it shall promptly execute
        and deliver all instruments and documents, and take all actions, that may
        be
        reasonably necessary or that the Trustee may reasonably request in order
        to
        perfect and protect the security interest granted or intended to be granted
        hereby or to enable the Trustee to exercise and enforce its rights and remedies
        hereunder with respect to the Collection Account and all proceeds thereof.
        

       

      (b)
          Funds
        in
        the Collection Account shall be invested and reinvested in Eligible Investments
        by the Trustee upon an Issuer Order; provided, however, that no funds in
        the
        Defeasance Subaccount for any Series shall be invested in Eligible Investments
        or otherwise, except that U.S. Government Obligations deposited by the Issuer
        with the Trustee pursuant to Section 4.02 shall remain as such. Except as
        provided in Section 8.02(g)(x), all income or other gain from investments
        of
        moneys deposited in the Collection Account shall be deposited by the Trustee
        in
        the Collection Account, and any loss resulting from such investments shall
        be
        charged to the Collection Account. The Issuer shall not direct the Trustee
        to
        make any investment of any funds or to sell any investment held in the
        Collection Account unless the security interest granted and perfected in
        such
        account will continue to be perfected in such investment or the proceeds
        of such
        sale, in either case without any further action by any Person, and, in
        connection with any direction to the Trustee to make any such investment
        or
        sale, if requested by the Trustee, the Issuer shall deliver to the Trustee
        an
        Issuer Opinion of Counsel, acceptable to the Trustee, to such effect. Subject
        to
        Section 6.01(c), the Trustee shall not in any way be held liable for the
        selection of Eligible Investments or for investment losses incurred thereon
        except for losses attributable to the Trustee’s failure to make payments on such
        Eligible Investments issued by the Trustee, in such entity’s commercial capacity
        as principal obligor and not as Trustee, in accordance with their terms.
        The
        Trustee shall have no liability in respect of losses incurred as a

       

      
        
          
          

        

        
          52

          
            

          

        

        
          
          

        

      

       


        result
          of
          the liquidation of any Eligible Investment prior to its stated maturity
          or the
          failure of the Issuer to provide timely written investment direction. The
          Trustee shall have no obligation to invest or reinvest any amounts held
          hereunder in the absence of written investment direction pursuant to an
          Issuer
          Order.


       

      (c)
          Any
        TBC
        Collections remitted by the Servicer to the Trustee, all investment earnings
        on
        the subaccounts in the Collection Account other than any Capital Subaccount,
        any
        Indemnity Amounts remitted to the Trustee by the Seller or the Servicer or
        otherwise received by the Trustee, any other proceeds of Collateral received
        by
        the Servicer, the Issuer or the Trustee and any amounts paid by any Swap
        Counterparty under an Interest Rate Swap Agreement received by the Servicer,
        the
        Issuer or the Trustee, shall be deposited in the General
        Subaccount.

       

      (d)
          On
        each
        Payment Date, first (i) any expenses, including legal fees and expenses,
        Indemnity Amounts (up to a maximum of $10 million in the aggregate for the
        then
        current and all prior Payment Dates and $2,500,000 for any particular Payment
        Date and for all Series unless the Issuer has received confirmation from
        S&P
        that a further amount will not result in a reduction or withdrawal of the
        then
        current rating of the Outstanding Transition Bonds) and any other amounts
        due
        and owing to the Trustee pursuant to the Basic Documents for such quarter
        so
        long as no Event of Default would result from the payment of such Indemnity
        Amounts (as limited above) or such other amounts, shall, at the direction
        of the
        Servicer, be paid to the Trustee; and after all payments required to be made
        under subsection (i) hereof, then (ii) the fees payable to the Independent
        Managers in an amount equal to $[800] for such quarter and any other amounts
        due
        and owing to the Independent Managers pursuant to the Issuer LLC Agreement
        shall, at the direction of the Servicer, be paid to the Independent
        Managers.

       

      (e)
          On
        each
        Payment Date, after the distributions made pursuant to clause (d) above,
        the
        Quarterly Servicing Fee and any unpaid Quarterly Servicing Fees shall, at
        the
        written direction of the Servicer, be paid to the Servicer to the extent
        that
        such amounts have not been withheld by the Servicer from TBC Collections
        pursuant to Section 5.07 of the Servicing Agreement.

       

      (f)
          On
        each
        Payment Date, or such other date related to such Payment Date as may be
        specified in the related Series Supplement, the Trustee, at the written
        direction of the Servicer, shall allocate to each Class Subaccount the amounts
        specified in the related Series Supplement. Such amounts shall be so allocated
        after taking into account all allocations and payments required in connection
        with such Payment Date under clauses (d) and (e) above and (g)(i) through
        (iii)
        below; provided that in the event of any shortfall of amounts to be allocated
        pursuant to clause (g)(iii) among more than one Class of the applicable Series,
        amounts shall be allocated to such Class Subaccount on a Pro Rata basis with
        all
        other Classes of the relevant Series. Amounts in each Class Subaccount shall
        be
        applied as provided in the related Series Supplement.

       

      
        
          
          

        

        
          53

          
            

          

        

        
          
          

        

      

       

      (g)
          On
        each
        Payment Date, or before each Payment Date to the extent otherwise specified
        in
        the related Series Supplement with respect to any Class Subaccount, by 12:00
        noon (prevailing New York City time), or if such day is not a Business Day,
        on
        the following Business Day, the Trustee shall, at the written direction of
        the
        Servicer, apply all amounts on deposit in the General Subaccount of the
        Collection Account and any investment earnings on the subaccounts in the
        Collection Account, except for earnings in the Capital Subaccount, after
        distribution in accordance with clauses (d) and (e) above, and, subject to
        the
        qualifications therein, after allocation to any Class Subaccount in accordance
        with clause (f) above and payment to each related Swap Counterparty in
        accordance with the related Series Supplement, in the following
        priority:


      
         

        (i)   the
          administration fee payable under, and determined in accordance with, the
          Administration Agreement in an amount not to exceed the Administrator’s actual
          cost, shall be paid to the Administrator; 

         


          (ii)   so
            long
            as no Event of Default has occurred and is continuing or would be caused
            by such
            payment, all Operating Expenses other than distributions in accordance
            with
            clauses (d), (e) and (g)(i) above shall be paid to the Persons entitled
            thereto
            in accordance with the priorities set forth in this § 8.02, provided that
            the amount paid on such Payment Date pursuant to this clause (g)(ii)
            may not
            exceed an annual aggregate of $[250,000] for all Series;


         

        (iii)   payment
          of interest as follows:

         

        (A)   First,
          payment of accrued and unpaid interest on each Series from any prior period,
          including payment of amounts payable, if any, to each Swap Counterparty
          in
          accordance with the related Interest Rate Swap Agreement, which amount
          of unpaid
          interest shall be allocated to the corresponding Series Subaccount;

         

        (B)   Then,
          payment of the current interest then due on each Series, including payment
          of
          amounts payable to each Swap Counterparty in accordance with the related
          Interest Rate Swap Agreement, which amount of current interest shall be
          allocated to the corresponding Series Subaccount (provided, that, to the
          extent
          provided in any Series Supplement with respect to interest on any floating
          rate
          Class, such amount shall be equal to the applicable amount specified in
          the
          related Series Supplement payable with respect to that Class) and if there
          are
          insufficient funds to make such allocation in full, amounts shall be allocated
          on a Pro Rata basis to the corresponding Series Subaccount;

         

        (iv)   an
          amount
          equal to the Principal of each Class of each Series payable as a result
          of
          acceleration pursuant to Section 5.02, the Principal of each Series or
          Class
          payable because such Payment Date is on or after the Final Maturity Date
          of such
          Series or Class, and the Principal of each Series or Class payable on the
          Redemption Date for an optional redemption for such Series or Class shall
          be
          allocated to the corresponding Series Subaccount and, to the extent there
          are
          insufficient funds to make such allocation in full, amounts shall be allocated
          on a Pro Rata basis;

         

        
          
            
            

          

          
            54

            
              

            

          

          
            
            

          

        

         

        (v)   an
          amount
          equal to the Principal scheduled to be paid on each Class of each Series
          on such
          Payment Date according to the Expected Amortization Schedule, excluding
          any
          amounts provided for pursuant to clause (g)(iv) above, shall be allocated
          to the
          corresponding Series Subaccount and, if there are insufficient funds to
          make
          such allocation in full, amounts shall be allocated on a Pro Rata
          basis;

         

        (vi)   all
          remaining unpaid Operating Expenses and Indemnity Amounts shall be paid
          to the
          Persons entitled thereto in accordance with the priorities set forth in
          this
          Section 8.02;

         

        (vii)   an
          amount
          necessary to replenish any shortfalls in the Capital Subaccount for each
          Series
          below the Required Capital Amount for such Series shall be allocated to
          the
          Capital Subaccount for such Series, Pro Rata, based on the Outstanding
          Principal
          balance of each Series;

         

        (viii)   an
          amount
          shall be allocated to the Overcollateralization Subaccount for each Series
          sufficient to cause the amount in the Overcollateralization Subaccount
          for such
          Series to equal the Scheduled Overcollateralization Level for such Series
          as of
          that Payment Date, Pro Rata, based on the Outstanding Principal balance
          of each
          Series;

         

        (ix)   any
          termination or breakage amounts payable by the Issuer under any Interest
          Rate
          Swap Agreement on such Payment Date shall be paid to the Persons entitled
          thereto (provided, however, that for the avoidance of doubt, payments under
          this
          clause (ix) shall be paid on an unsecured basis and shall be paid after
          payment
          on such Payment Date of all amounts provided in (d), (e), (f) and (g)(i)
          through
          (viii) above);

         

        (x)   so
          long
          as no Event of Default has occurred and is continuing, an amount equal
          to
          investment earnings on amounts in the Capital Subaccount shall be released
          to
          the Issuer;

         

        (xi)   the
          balance, if any, shall be allocated to the Reserve Subaccount; and

         

        (xii)   following
          repayment of all amounts payable hereunder and with respect to all outstanding
          Series, subclause (g)(xi) shall cease to apply and the balance, if any,
          shall be
          released to the Issuer free from the Lien of this Indenture.

      

       

      (h)
          For
        purposes of allocations among Series prior to an acceleration of the maturity
        of
        Transition Bonds pursuant to Section 5.02, except as otherwise provided in
        any
        Series Supplement, “Pro Rata” means with respect to any Series a ratio: (i) in
        the case of a payment of interest on any Payment Date, the numerator of which
        is
        the amount of interest payable on such Series on such Payment Date and, with
        respect to any Class of such Series of floating rate Transition Bonds, the
        Gross
        Fixed Amount for that class (as such term is defined by the related Series
        Supplement) on such Payment Date, and the denominator of which is the aggregate
        amount of interest payable on all Series on such Payment Date; (ii) in the
        case
        of a payment of Principal on any Payment Date, the numerator of which is
        the
        aggregate amount of Principal scheduled to be paid or payable, as the case
        may
        be, on such Payment Date with

       

      
        
          
          

        

        
          55

          
            

          

        

        
          
          

        

      

       

      respect
        to such Series and the denominator of which is the sum of the aggregate amounts
        of Principal scheduled to be paid or payable, as the case may be, with respect
        to all Outstanding Series on such Payment Date; and (iii) in the case of
        a
        payment or allocation on any Payment Date other than of interest or Principal,
        the numerator of which is the Outstanding Principal amount of such Series
        immediately prior such Payment Date and the denominator of which is the
        aggregate Outstanding Principal amount of all Series immediately prior such
        Payment Date.

       

      (i)
          If,
        on
        any Payment Date, funds on deposit in the General Subaccount are insufficient
        to
        make the payments and allocations contemplated by subclauses (d), (e), (f)
        and
        (g)(i) through (v), (vii) and (viii) above for all Series, the Trustee shall,
        at
        the written direction of the Servicer, draw from amounts on deposit in the
        following subaccounts in the following order up to the amount of such shortfall,
        in order to make such payments and allocations:


      
         

        (i)   from
          the
          Reserve Subaccount for all Series, Pro Rata, for payments and allocations
          contemplated by subclauses (d), (e), (f) and (g)(i) through (v), (vii)
          and
          (viii);

         

        (ii)   from
          the
          Overcollateralization Subaccount for such Series, Pro Rata, for payments
          and
          allocations contemplated by subclauses (d), (e), (f) and (g)(i) through
          (v);
          and

         

        (iii)   from
          the
          Capital Subaccount for such Series, Pro Rata, for payments and allocations
          contemplated by subclauses (d), (e), (f) and (g)(i) through
          (v);

      

       

      provided
        that no amounts from the Reserve Subaccount, the Overcollateralization
        Subaccount for such Series or the Capital Subaccount for such Series shall
        be
        allocated to any Class Subaccount pursuant to subclause (g)(iii) to the extent
        a
        shortfall in amounts available to pay interest due on the related Class is
        due
        solely to a failure by a Swap Counterparty to make payments due under the
        related Interest Rate Swap Agreement.

       

      (j)
          On
        each
        Payment Date for each Series prior to an acceleration of the maturity of
        Transition Bonds pursuant to Section 5.02, the amounts on deposit in such
        Series
        Subaccount shall be allocated, at the written direction of the Servicer,
        in the
        following order of priority: (i) to pay interest due and payable on the
        Transition Bonds of such Series with respect to such Payment Date to the
        Holders
        of such Series; and (ii) the balance, if any, up to the amount of Principal
        scheduled to be paid or payable on the Transition Bonds of such Series on
        such
        Payment Date, to pay such Principal to the Holders of such Series.

       

      (k)
          Prior
        to
        an acceleration of the Transition Bonds pursuant to Section 5.02, payments
        of
        interest with respect to each Series comprised of two or more Classes shall
        be
        allocated among the Classes within such Series on a Pro Rata basis. All payments
        of Principal shall be made in the order set forth in the Expected Amortization
        Schedule established with respect to each Series and within such Series,
        in
        order of Class, and all payments of Principal that were not made on the
        scheduled Payment Date therefor shall be made in the order that they were
        scheduled for payment.

       

      (l)
          For
        purposes of allocations among Classes within a Series prior to an acceleration
        of the maturity of Transition Bonds pursuant to Section 5.02, except as
        otherwise

       

      
        
          
          

        

        
          56

          
            

          

        

        
          
          

        

      

       

      provided
        in the related Series Supplement, “Pro Rata” means with respect to any Class a
        ratio: (i) in the case of a payment of interest with respect to any Payment
        Date, the numerator of which is the amount of interest payable to such Class
        on
        such Payment Date, or in the case of any Class of floating rate Transition
        Bonds, the Gross Fixed Amount for that class (as such term is defined by
        the
        related Series Supplement) on such Payment Date, and the denominator of which
        is
        the aggregate amount of interest payable on all Classes within such Series
        on
        such Payment Date; and (ii) in the case of a payment of Principal on any
        Payment
        Date, the numerator of which is the aggregate amount of Principal scheduled
        to
        be paid or payable, as the case may be, on such Payment Date with respect
        to
        such Class and the denominator of which is the sum of the aggregate amounts
        of
        Principal scheduled to be paid or payable, as the case may be, with respect
        to
        all Outstanding Classes within such Series on such Payment Date.

       

      (m)
          Prior
        to
        an acceleration of the Transition Bonds pursuant to Section 5.02, all payments
        of Principal and interest to Holders of a single Class, or of a single Series
        without Classes, shall be made on a proportionate basis based on the respective
        Principal amounts of such Transition Bonds held by such Holders.

       

      (n)
          Upon
        an
        acceleration of the maturity of the Transition Bonds pursuant to Section
        5.02,
        the aggregate amount of Principal of and interest accrued and unpaid on each
        Transition Bond shall be payable, without priority of interest over Principal
        or
        of Principal over interest and without regard to Series or Class, in the
        proportion that the aggregate amount of Principal of and interest accrued
        and
        unpaid on such Transition Bond bears to the aggregate amount of Principal
        of and
        interest accrued and unpaid on all Transition Bonds.

       

      (o)
          Notwithstanding
        any other provision in this Indenture to the contrary, in the event of an
        acceleration of the maturity of Transition Bonds and a subsequent liquidation
        of
        the Collateral in accordance with Section 5.04(a), if so required by any
        Interest Rate Swap Agreement, the proceeds of such liquidation allocated
        to the
        related Class of floating rate Transition Bonds in accordance with this Section
        8.02 shall be deposited in the related Class Subaccount and allocated between
        and paid to the Holders of such floating rate Class, on the one hand, and
        the
        related Swap Counterparty, on the other hand, pro rata based on the aggregate
        amount of Principal and interest due and payable on such floating rate Class
        and
        the aggregate amount payable to the related Swap Counterparty in accordance
        with
        such Interest Rate Swap Agreement.

       

      SECTION
        8.03  RELEASE
        OF COLLATERAL.

       

      (a)
          All
        money
        and other property withdrawn from the Collection Account by the Trustee for
        payment to the Issuer as provided in this Indenture in accordance with Section
        8.02 shall be deemed released from this Indenture when so withdrawn and applied
        in accordance with the provisions of Article VIII, without further notice
        to, or
        release or consent by, the Trustee.

       

      (b)
          Other
        than as provided for in clause (a) above, the Trustee shall release property
        from the Lien of this Indenture only as and to the extent permitted by the
        Basic
        Documents and only upon receipt of an Issuer Request accompanied by an Issuer
        Officer’s Certificate, an Issuer Opinion of Counsel and Independent Certificates
        in accordance with TIA

       

      
        
          
          

        

        
          57

          
            

          

        

        
          
          

        

      

       

      Sections
        314(c) and 314(d)(1) meeting the applicable requirements of Section 11.01
        or an
        Issuer Opinion of Counsel in lieu of such Independent Certificates to the
        effect
        that the TIA does not require any such Independent Certificate.

       

      (c)
          Subject
        to the payment of its fees and expenses pursuant to Section 6.07, the Trustee
        may, and when required by the provisions of this Indenture shall, execute
        instruments to release property from the Lien of this Indenture, or convey
        the
        Trustee’s interest in the same, in a manner and under circumstances that are not
        inconsistent with the provisions of this Indenture. No party relying upon
        an
        instrument executed by the Trustee as provided in this Article VIII shall
        be
        bound to ascertain the Trustee’s authority, inquire into the satisfaction of any
        conditions precedent or see to the application of any moneys.

       

      (d)
          Subject
        to Section 8.03(b), the Trustee shall, at such time as there are no Transition
        Bonds Outstanding and all sums due the Trustee pursuant to Section 6.07 have
        been paid, release any remaining portion of the Collateral that secured the
        Transition Bonds from the Lien of this Indenture and release to the Issuer
        or
        any other Person entitled thereto any funds or investments then on deposit
        in or
        credited to the Collection Account.

       

      SECTION
        8.04  ISSUER
        OPINION OF COUNSEL. 
        The Trustee shall receive at least five days written notice when requested
        by
        the Issuer to take any action pursuant to Section 8.03, accompanied by copies
        of
        any instruments involved, and the Trustee shall also require, as a condition
        to
        such action, an Issuer Opinion of Counsel, in form and substance satisfactory
        to
        the Trustee, stating the legal effect of any such action, outlining the steps
        required to complete the same, and concluding that all conditions precedent
        to
        the taking of such action have been complied with and such action will not
        materially and adversely impair the security for the Transition Bonds or
        the
        rights of the Transition Bondholders in contravention of the provisions of
        this
        Indenture; provided, however, that such Issuer Opinion of Counsel shall not
        be
        required to express an opinion as to the fair value of the Collateral. The
        Issuer Opinion of Counsel may be based (without further examination or
        investigation), insofar as it relates to or is dependent upon factual matters,
        information with respect to which is in the possession of the Issuer, upon
        a
        certificate of, or representations by, an officer or officers of the Issuer,
        and
        insofar as it relates to or is dependent upon matters which are subject to
        verification by accountants or other experts, upon a certificate or opinion
        of,
        or representations by, such accountant or other expert, unless such counsel
        has
        actual knowledge that the certificate or opinion or representations with
        respect
        to the matters upon which the opinion may be based as aforesaid are
        erroneous.

       

      SECTION
        8.05  REPORTS
        BY INDEPENDENT ACCOUNTANTS. 
        The Issuer shall appoint a firm of Independent registered public accountants
        of
        recognized national reputation for purposes of preparing and delivering the
        reports or certificates of such accountants required by this Indenture and
        the
        related Series Supplements. Upon any resignation by such firm, the Issuer
        shall
        promptly appoint a successor thereto that shall also be a firm of Independent
        registered public accountants of recognized national reputation. If the Issuer
        shall fail to appoint a successor to a firm of Independent registered public
        accountants that has resigned within fifteen days after such resignation,
        the
        Trustee shall promptly notify the Issuer of such failure in writing. If the
        Issuer shall not have appointed a successor within ten days thereafter, the
        Trustee shall promptly appoint a successor firm of Independent registered
        public

       

      
        
          
          

        

        
          58

          
            

          

        

        
          
          

        

      

       

      accountants
        of recognized national reputation. The fees of such firm of Independent
        registered public accountants and its successor shall be payable by the Issuer.
        

       

      ARTICLE
        IX


       

      SUPPLEMENTAL
        INDENTURES

       

      SECTION
        9.01  SUPPLEMENTAL
        INDENTURES WITHOUT CONSENT OF TRANSITION BONDHOLDERS.

       

      (a)
          Without
        the consent of the Holders of any Transition Bonds or any counterparty under
        any
        Interest Rate Swap Agreement but with prior notice to the Rating Agencies,
        the
        Issuer and the Trustee, when authorized by an Issuer Order, at any time and
        from
        time to time, may enter into one or more indentures supplemental hereto (which
        shall conform to the provisions of the Trust Indenture Act as in force at
        the
        date of the execution thereof), in form satisfactory to the Trustee, for
        any of
        the following purposes:


      
         

        (i)   to
          correct or amplify the description of the Collateral, or to better assure,
          convey and confirm to the Trustee the Collateral, or to subject to the
          Lien of
          this Indenture additional property;

         

        (ii)   to
          evidence the succession, in compliance with the applicable provisions hereof,
          of
          another person to the Issuer, and the assumption by any applicable successor
          of
          the covenants of the Issuer contained herein and in the Transition
          Bonds;

         

        (iii)   to
          add to
          the covenants of the Issuer, for the benefit of the Transition Bondholders,
          or
          to surrender any right or power herein conferred upon the Issuer;

         

        (iv)   to
          convey, transfer, assign, mortgage or pledge any property to the
          Trustee;

         

        (v)   to
          cure
          any ambiguity, to correct or supplement any provision herein or in any
          Supplemental Indenture which may be inconsistent with any other provision
          herein
          or in any Supplemental Indenture or to make any other provisions with respect
          to
          matters or questions arising under this Indenture or in any Supplemental
          Indenture; provided, however, that (A) such action shall not, as evidenced
          by an
          Issuer Opinion of Counsel, adversely affect in any material respect the
          interests of any Transition Bondholder or any counterparty under any Interest
          Rate Swap Agreement and (B) the then current ratings on any Outstanding
          Transition Bonds shall not be withdrawn or downgraded by the Rating
          Agencies;

         

        (vi)   to
          evidence and provide for the acceptance of the appointment hereunder by
          a
          successor Trustee with respect to the Transition Bonds and to add to or
          change
          any of the provisions of this Indenture as shall be necessary to facilitate
          the
          administration of the trusts hereunder by more than one Trustee, pursuant
          to the
          requirements of Article VI; 

         

        
          
            
            

          

          
            59

            
              

            

          

          
            
            

          

        

         

        (vii)   to
          modify, eliminate or add to the provisions of this Indenture to such extent
          as
          shall be necessary to effect the qualification of this Indenture under
          the TIA
          or under any similar or successor federal statute hereafter enacted and
          to add
          to this Indenture such other provisions as may be expressly required by
          the
          TIA;

         

        (viii)   to
          set
          forth the terms of any additional Series that has not theretofore been
          authorized by a Supplemental Indenture, provided that the then current
          ratings
          on any Outstanding Transition Bonds or any outstanding Series 2002-A Transition
          Bonds have not been withdrawn or downgraded by the Rating Agencies and
          will not
          be withdrawn or downgraded as a result of the issuance of such additional
          Series; or

         

        (ix)   to
          provide for one or more Interest Rate Swap Agreements with respect to any
          Series
          or Class which bears a floating rate of interest or any Series or Class
          with
          specified credit enhancement; provided, however, that:

         

        (A)    such
          action shall not, as evidenced by an Opinion of Counsel, adversely affect
          in any
          material respect the interests of any Transition Bondholder or any counterparty
          under any Interest Rate Swap Agreement; 

         

        (B)    the
          then
          current ratings on any Outstanding Transition Bonds or any outstanding
          Series
          2002-A Transition Bonds shall not be withdrawn or downgraded by the Rating
          Agencies.

         

        (x)   to
          authorize the appointment of any listing agent, transfer agent or paying
          agent
          or additional registrar for any Class of any Series required or advisable
          in
          connection with the listing of any Class or any Series on the Luxembourg
          Stock
          Exchange or any other stock exchange, and otherwise to amend this Indenture
          to
          incorporate any changes requested or required by any governmental authority,
          stock exchange authority, listing agent, transfer agent or paying agent
          or
          additional registrar for any Class or any Series in connection with that
          listing.

         

      

      (b)
          The
        Trustee is hereby authorized to join in the execution of any such Supplemental
        Indenture and to make any further appropriate agreements and stipulations
        that
        may be therein contained. 

       

      SECTION
        9.02  SUPPLEMENTAL
        INDENTURES WITH CONSENT OF TRANSITION BONDHOLDERS.

       

      (a)
          The
        Issuer and the Trustee, when authorized by an Issuer Order, also may, upon
        prior
        notice to the Rating Agencies (in each case, accompanied by the form of the
        proposed supplemental indenture) and with the consent of the Holders of not
        less
        than a majority of the Outstanding Amount of the Transition Bonds of each
        Series
        or Class to be affected thereby, voting as a single class, by Act of such
        Holders delivered to the Issuer and the Trustee, enter into an indenture
        or
        indentures supplemental hereto for the purpose of adding any provisions to,
        or
        changing in any manner or eliminating any of the provisions of, this Indenture
        or of modifying in

       

      
        
          
          

        

        
          60

          
            

          

        

        
          
          

        

      

       

      any
        manner the rights of the Holders of the Transition Bonds under this Indenture;
        provided, however, that no such Supplemental Indenture shall, without the
        consent of the Holder of each Outstanding Transition Bond of each Series
        or
        Class and each counterparty under each Interest Rate Swap Agreement affected
        thereby:

      
         

        (i)   change
          the date of payment of any installment of Principal of or premium, if any,
          or
          interest on any Transition Bond, or reduce the Principal amount thereof,
          the
          interest rate thereon or the redemption price or the premium, if any, with
          respect thereto, change the provisions of any Interest Rate Swap Agreement
          relating to the amount, calculation or timing of payments, change the provisions
          of this Indenture and the related applicable Supplemental Indenture or
          Series
          Supplement relating to the application of collections on, or the proceeds
          of the
          sale of, the Collateral to payment of Principal of or premium, if any,
          or
          interest on the Transition Bonds, or change the currency in which any Transition
          Bond or the interest thereon, is payable;

         

        (ii)   impair
          the right to institute suit for the enforcement of the provisions of this
          Indenture requiring the application of funds available therefor, as provided
          in
          Article V, to the payment of any such amount due on the Transition Bonds
          on or
          after the respective due dates thereof (or, in the case of redemption,
          on or
          after the Redemption Date);

         

        (iii)   reduce
          the percentage of the Outstanding Amount of the Transition Bonds or of
          a Series
          or Class thereof, the consent of the Holders of which is required for any
          such
          Supplemental Indenture, or the consent of the Holders of which is required
          for
          any waiver of compliance with provisions of this Indenture or defaults
          hereunder
          and their consequences provided for in this Indenture or modify or alter
          the
          provisions of the proviso to the definition of the term
“Outstanding”;

         

        (iv)   reduce
          the percentage of the Outstanding Amount of the Transition Bonds required
          to
          direct the Trustee to direct the Issuer to sell or liquidate the Collateral
          pursuant to Section 5.04 or to preserve the Collateral pursuant to Section
          5.11;

         

        (v)   modify
          this Section 9.02(a), except to increase any percentage specified in this
          Section 9.02(a) or to provide that this Section 9.02(a) or the Basic Documents
          cannot be modified or waived without the consent of each Holder of Outstanding
          Transition Bonds affected thereby;

         

        (vi)   reduce
          the percentage of the Outstanding Amount of a Series or Class, the consent
          of
          the Holders of which is required for any amendments to the Sale Agreement,
          the
          Administration Agreement, the Servicing Agreement or any Interest Rate
          Swap
          Agreement entered into in connection with any Series or Class;

         

        (vii)   modify
          any of the provisions of this Indenture in such a manner so as to affect
          the
          amount of any payment of interest, Principal or premium, if any, payable
          on any
          Transition Bond on any Payment Date or change the Redemption Dates, Expected
          Amortization Schedules or Final Maturity Date of any Series or Class, or
          the
          method of calculation of interest on any floating rate Transition
          Bond;

         

        
          
            
            

          

          
            61

            
              

            

          

          
            
            

          

        

         

        (viii)   decrease
          the Overcollateralization Amount or Required Capital Amount with respect
          to any
          Series or the Scheduled Overcollateralization Level with respect to any
          Payment
          Date;

         

        (ix)   modify
          or
          alter the provisions of this Indenture regarding the voting of Transition
          Bonds
          held by the Issuer, the Seller, an Affiliate of either of them or any obligor
          on
          the Transition Bonds;

         

        (x)   decrease
          the percentage of the Outstanding Amount of Transition Bonds required to
          amend
          the Sections of this Indenture which specify the applicable percentage
          of the
          Outstanding Amount of the Transition Bonds necessary to amend this Indenture
          or
          any other Basic Document; or

         

        (xi)   permit
          the creation of any Lien ranking prior to or on parity with the Lien of
          this
          Indenture with respect to any part of the Collateral, or, except as otherwise
          permitted or contemplated herein, terminate the Lien of this Indenture
          on any
          property at any time subject hereto or deprive the Holder of any Transition
          Bond
          of the security provided by the Lien of this Indenture.

      

       

      (b)
          It
        shall
        not be necessary for any Act of Transition Bondholders under this Section
        9.02
        to approve the particular form of any proposed Supplemental Indenture, but
        it
        shall be sufficient if such Act shall approve the substance
        thereof.

       

      (c)
          Promptly
        after the execution by the Issuer and the Trustee of any Supplemental Indenture
        pursuant to this Section 9.02, the Trustee shall mail to the Holders of the
        Transition Bonds to which such Supplemental Indenture relates a notice setting
        forth in general terms the substance of such Supplemental Indenture. Any
        failure
        of the Trustee to mail such notice, or any defect therein, shall not, however,
        in any way impair or affect the validity of any such Supplemental Indenture.
        If
        any Transition Bonds are listed on the Luxembourg Stock Exchange and the
        rules
        of such exchange so require, the listing agent shall arrange for publication
        in
        an Authorized Newspaper that such notice shall be available with the Issuer’s
        listing agent in Luxembourg appointed pursuant to Section 3.02(b).

       

      SECTION
        9.03  EXECUTION
        OF SUPPLEMENTAL INDENTURES. 
        In executing, or permitting the additional trusts created by, any Supplemental
        Indenture permitted by this Article IX or the modifications thereby of the
        trusts created by this Indenture, the Trustee shall be entitled to receive,
        and
        subject to Sections 6.01 and 6.02 shall be fully protected in relying upon,
        an
        Issuer Opinion of Counsel stating that the execution of such Supplemental
        Indenture is authorized or permitted by this Indenture. The Trustee may,
        but
        shall not be obligated to, enter into any such Supplemental Indenture that
        affects the Trustee’s own rights, duties, liabilities or immunities under this
        Indenture or otherwise.

       

      SECTION
        9.04  EFFECT
        OF
        SUPPLEMENTAL INDENTURE. 
        Upon the execution of any Supplemental Indenture pursuant to the provisions
        hereof, this Indenture shall be and be deemed to be modified and amended
        in
        accordance therewith with respect to each Series or Class affected thereby,
        and
        the respective rights, limitations of rights, obligations, duties, liabilities
        and immunities under this Indenture of the Trustee, the Issuer, the Holders
        of

       

      
        
          
          

        

        
          62

          
            

          

        

        
          
          

        

      

       

      the
        Transition Bonds and each counterparty under an Interest Rate Swap Agreement
        shall thereafter be determined, exercised and enforced hereunder subject
        in all
        respects to such modifications and amendments, and all the terms and conditions
        of any such Supplemental Indenture shall be and be deemed to be part of the
        terms and conditions of this Indenture for any and all purposes.

       

      SECTION
        9.05  CONFORMITY
        WITH TRUST INDENTURE ACT. 
        Every amendment of this Indenture and every Supplemental Indenture executed
        pursuant to this Article IX shall conform to the requirements of the TIA
        as then
        in effect so long as this Indenture shall then be qualified under the
        TIA.

       

      SECTION
        9.06  REFERENCE
        IN TRANSITION BONDS TO SUPPLEMENTAL INDENTURES. 
        Transition Bonds authenticated and delivered after the execution of any
        Supplemental Indenture pursuant to this Article IX may, and if required by
        the
        Trustee shall, bear a notation in form approved by the Trustee as to any
        matter
        provided for in such Supplemental Indenture. If the Issuer or the Trustee
        shall
        so determine, new Transition Bonds so modified as to conform, in the opinion
        of
        the Trustee and the Issuer, to any such Supplemental Indenture may be prepared
        and executed by the Issuer and authenticated and delivered by the Trustee
        in
        exchange for Outstanding Transition Bonds. 

       

      ARTICLE
        X


       

      REDEMPTION
        OF TRANSITION BONDS

       

      SECTION
        10.01  OPTIONAL
        REDEMPTION BY ISSUER. 
        If so provided in the related Series Supplement and provided that there is
        no
        Interest Rate Swap Agreement with respect to any Class of that Series in
        effect,
        the Issuer may, at its option, redeem all, but not less than all, of the
        Transition Bonds of a Series on any Payment Date if, after giving effect
        to
        payments that would otherwise be made on such Payment Date, the Outstanding
        Amount of any such Series has been reduced to less than five percent of the
        initial principal balance of such Series. The redemption price in any case
        shall
        be equal to the outstanding Principal amount of the Transition Bonds to be
        redeemed plus accrued and unpaid interest thereon at the Interest Rate to
        the
        Redemption Date (the “Redemption Price”). If the Issuer elects to redeem the
        Transition Bonds of a Series pursuant to this Section 10.01, it shall furnish
        notice of such election to (a) the Trustee, not later than twenty-five days
        prior to the Redemption Date for such redemption and (b) the Rating Agencies,
        not later than ten days prior to such Redemption Date, whereupon all such
        Transition Bonds shall be due and payable on such Redemption Date upon the
        furnishing of a notice complying with Section 10.03 to each Holder of the
        Transition Bonds of such Series pursuant to this Section 10.01.

       

      SECTION
        10.02  MANDATORY
        REDEMPTION BY ISSUER. 
        The Issuer shall redeem the Transition Bonds of a Series on the Redemption
        Date
        or Dates, if any, in the amounts required, if any, and at the redemption
        price
        specified in the Series Supplement for such Series, which in any case shall
        be
        not less than the outstanding Principal amount of the Transition Bonds to
        be
        redeemed, plus accrued and unpaid interest thereon to such Redemption Date.
        If
        the Issuer is required to redeem the Transition Bonds of a Series pursuant
        to
        this Section 10.02, it shall furnish notice of such requirement to the Trustee
        not later than twenty-five days

       

      
        
          
          

        

        
          63

          
            

          

        

        
          
          

        

      

       

      prior
        to
        the Redemption Date for such redemption whereupon all such Transition Bonds
        shall be due and payable on the Redemption Date upon the furnishing of a
        notice
        complying with Section 10.03 to each Holder of the Transition Bonds of such
        Series pursuant to this Section 10.02.

       

      SECTION
        10.03  FORM
        OF
        REDEMPTION NOTICE.

       

      (a)
          Unless
        otherwise specified in the Series Supplement relating to a Series, notice
        of
        redemption under Section 10.01 or 10.02 shall be given by the Trustee by
        first-class mail, postage prepaid, mailed not less than five days nor more
        than
        forty-five days prior to the applicable Redemption Date to each Holder to
        be
        redeemed, as of the close of business on the Record Date preceding the
        applicable Redemption Date at such Holder’s address appearing in the Transition
        Bond Register.

       

      (b)
          All
        notices of redemption shall state:

      
         

        (i)   the
          Redemption Date;

         

        (ii)   the
          amount of such Transition Bonds to be redeemed;

         

        (iii)   the
          Redemption Price; and

         

        (iv)   the
          place
          where such Transition Bonds are to be surrendered for payment of the Redemption
          Price (which shall be the office or agency of the Issuer to be maintained
          as
          provided in Section 3.02).

      

       

      (c)
          Notice
        of
        redemption of the Transition Bonds to be redeemed shall be given by the Trustee
        in the name and at the expense of the Issuer. Failure to give notice of
        redemption, or any defect therein, to any Holder of any Transition Bond selected
        for redemption shall not impair or affect the validity of the redemption
        of any
        other Transition Bond. Notice of optional redemption shall be irrevocable
        once
        given. For so long as any Transition Bonds are listed on the Luxembourg Stock
        Exchange and the rules of that exchange so require, notice of redemption
        also
        will be given by publication in a daily newspaper in Luxembourg not less
        than 10
        days prior to the date of redemption.

       

      (d)
          With
        respect to any notice of redemption of Transition Bonds at the election of
        the
        Issuer, unless, upon the giving of such notice, such Transition Bonds shall
        be
        deemed to have been paid in accordance with Section 10.01, such notice may
        state
        that such redemption shall be conditioned upon the receipt by the Paying
        Agent,
        on or prior to the Redemption Date, of money sufficient to pay the Redemption
        Price and that if such money shall not have been so received, such notice
        shall
        be of no force or effect and the Issuer shall not be required to redeem such
        Transition Bonds. In the event that such notice of redemption contains such
        a
        condition and the Redemption Price is not so received, the redemption shall
        not
        be made and within a reasonable time thereafter notice shall be given, in
        the
        manner in which the notice of redemption was given, that such Redemption
        Price
        was not so received and such redemption was not required to be made, and
        the
        Paying Agent shall promptly return to the surrendering Holders all Transition
        Bonds that had been surrendered for payment upon such redemption.

       

      
        
          
          

        

        
          64

          
            

          

        

        
          
          

        

      

       

      SECTION
        10.04  PAYMENT
        OF REDEMPTION PRICE. 
        If notice of redemption has been duly mailed or duly waived by the Holders
        of
        all Transition Bonds called for redemption, then the Transition Bonds called
        for
        redemption shall be payable on the applicable Redemption Date at the applicable
        Redemption Price. No further interest will accrue on the Principal amount
        of any
        Transition Bonds called for redemption after the Redemption Date, and the
        Holders of such Transition Bonds will have no rights with respect thereto,
        if
        payment of the Redemption Price has been duly provided for on or before the
        Redemption Date declared therefor. Notwithstanding the foregoing, the Holders
        of
        the Transition Bonds shall be entitled to payment of interest on the Redemption
        Price accrued at the related Interest Rates to the extent the Issuer fails
        to
        pay the Redemption Price on the Redemption Date. Payment of the Redemption
        Price
        shall be made by the Trustee to or upon the order of the Holders of the
        Transition Bonds called for redemption upon surrender of such Transition
        Bonds,
        and the Transition Bonds so redeemed shall cease to be of further effect
        and the
        Lien hereunder shall be released with respect to such Transition
        Bonds.

       

      ARTICLE
        XI


       

      MISCELLANEOUS

       

      SECTION
        11.01  COMPLIANCE
        CERTIFICATES AND OPINIONS, ETC.

       

      (a)
          Upon
        any
        application or request by the Issuer to the Trustee to take any action under
        any
        provision of this Indenture, the Issuer shall furnish to the Trustee (i)
        an
        Issuer Officer’s Certificate stating that all conditions precedent, if any,
        provided for in this Indenture relating to the proposed action have been
        complied with, (ii) an Issuer Opinion of Counsel stating that in the opinion
        of
        such counsel all such conditions precedent, if any, have been complied with
        and
        (iii) (if required by the TIA) an Independent Certificate from a firm of
        Independent registered public accountants meeting the applicable requirements
        of
        this Section 11.01, except that, in the case of any such application or request
        as to which the furnishing of such documents is specifically required by
        any
        provision of this Indenture, no additional certificate or opinion need be
        furnished.

       

      (b)
          Every
        certificate or opinion with respect to compliance with a condition or covenant
        provided for in this Indenture shall include:


      
         

        (i)   a
          statement that each signatory of such certificate or opinion has read or
          has
          caused to be read such covenant or condition and the definitions herein
          relating
          thereto;

         

        (ii)   a
          brief
          statement as to the nature and scope of the examination or investigation
          upon
          which the statements or opinions contained in such certificate or opinion
          are
          based;

         

        (iii)   a
          statement that, in the opinion of each such signatory, such signatory has
          made
          such examination or investigation as is necessary to enable such signatory
          to
          express an informed opinion as to whether or not such covenant or condition
          has
          been complied with; and

         

        
          
            
            

          

          
            65

            
              

            

          

          
            
            

          

        

         

        (iv)   a
          statement as to whether, in the opinion of each such signatory, such condition
          or covenant has been complied with.

      

       

      SECTION
        11.02  FORM
        OF
        DOCUMENTS DELIVERED TO TRUSTEE.

       

      (a)
          In
        any
        case where several matters are required to be certified by, or covered by
        an
        opinion of, any specified Person, it is not necessary that all such matters
        be
        certified by, or covered by the opinion of, only one such Person, or that
        they
        be so certified or covered by only one document, but one such Person may
        certify
        or give an opinion with respect to some matters and one or more other such
        Persons as to other matters, and any such Person may certify or give an opinion
        as to such matters in one or several documents.

       

      (b)
          Any
        certificate or opinion of an Authorized Officer of the Issuer may be based,
        insofar as it relates to legal matters, upon a certificate or opinion of,
        or
        representations by, counsel, unless such officer knows, or in the exercise
        of
        reasonable care should know, that the certificate or opinion or representations
        with respect to the matters upon which such certificate or opinion is based
        are
        erroneous. Any such certificate of an Authorized Officer or Issuer Opinion
        of
        Counsel may be based, insofar as it relates to factual matters, upon a
        certificate or opinion of, or representations by, an officer or officers
        of the
        Servicer, the Seller or the Issuer, stating that the information with respect
        to
        such factual matters is in the possession of the Servicer, the Seller or
        the
        Issuer, unless such Authorized Officer or counsel knows, or in the exercise
        of
        reasonable care should know, that the certificate or opinion or representations
        with respect to such matters are erroneous.

       

      (c)
          Where
        any
        Person is required to make, give or execute two or more applications, requests,
        consents, certificates, statements, opinions or other instruments under this
        Indenture, they may, but need not, be consolidated and form one
        instrument.

       

      (d)
          Whenever
        in this Indenture, in connection with any application or certificate or report
        to the Trustee, it is provided that the Issuer shall deliver any document
        as a
        condition of the granting of such application, or as evidence of the Issuer’s
        compliance with any term hereof, it is intended that the truth and accuracy,
        at
        the time of the granting of such application or at the effective date of
        such
        certificate or report (as the case may be), of the facts and opinions stated
        in
        such document shall in such case be conditions precedent to the right of
        the
        Issuer to have such application granted or to the sufficiency of such
        certificate or report. The foregoing shall not, however, be construed to
        affect
        the Trustee’s right to conclusively rely upon the truth and accuracy of any
        statement or opinion contained in any such document as provided in Article
        VI.

       

      SECTION
        11.03  ACTS
        OF
        TRANSITION BONDHOLDERS.

       

      (a)
          Any
        request, demand, authorization, direction, notice, consent, waiver or other
        action provided by this Indenture to be given or taken by Transition Bondholders
        may be embodied in and evidenced by one or more instruments of substantially
        similar tenor signed by such Transition Bondholders in person or by agents
        duly
        appointed in writing; and, except as herein otherwise expressly provided,
        such
        action shall become effective when such instrument or instruments are delivered
        to the Trustee, and, where it is hereby expressly required, to the
        Issuer.

       

      
        
          
          

        

        
          66

          
            

          

        

        
          
          

        

      

       

      Such
        instrument or instruments (and the action embodied therein and evidenced
        thereby) are herein sometimes referred to as the “Act” of the Transition
        Bondholders signing such instrument or instruments. Proof of execution of
        any
        such instrument or of a writing appointing any such agent shall be sufficient
        for any purpose of this Indenture and (subject to Section 6.01) conclusive
        in
        favor of the Trustee and the Issuer, if made in the manner provided in this
        Section 11.03.

       

      (b)
          The
        fact
        and date of the execution by any person of any such instrument or writing
        may be
        proved in any manner that the Trustee deems sufficient.

       

      (c)
          The
        ownership of Transition Bonds shall be proved by the Transition Bond Register.
        

       

      (d)
          Any
        request, demand, authorization, direction, notice, consent, waiver or other
        action by the Holder of any Transition Bond shall bind the Holder of every
        Transition Bond issued upon the registration thereof or in exchange therefor
        or
        in lieu thereof, in respect of anything done, omitted or suffered to be done
        by
        the Trustee or the Issuer in reliance thereon, whether or not notation of
        such
        action is made upon such Transition Bond.

       

      SECTION
        11.04  NOTICES,
        ETC.,
        TO
        TRUSTEE, ISSUER AND RATING AGENCIES. 

       

           
(a)  Any
        request, demand,
        authorization, direction, notice, consent, waiver or Act of Transition
        Bondholders or other documents provided or permitted by this Indenture to
        be
        made upon, given or furnished to or filed with 

      
         

        (i)   the
          Trustee by any Transition Bondholder or by the Issuer or

         

        (ii)   the
          Issuer by the Trustee or by any Transition Bondholder 

      

       

      The
        Bank
        of New York

      101
        Barclay Street, 8 West

      New
        York,
        New York 10286

      Attn:
        Asset Backed Securities

      


      shall
        be
        sufficient for every purpose hereunder if in English and in writing, and
        sent 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 request, demand, authorization, direction, notice,
        consent, waiver or Act 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, in the case of the Trustee, addressed
        to
        the Trustee at its Corporate Trust Office, and in the case of the Issuer,
        addressed to: JCP&L Transition Funding II LLC, 103 Foulk Road, Suite 202,
        Wilmington, Delaware 19803, with a copy to JCP&L Transition Funding, c/o
        FirstEnergy Service Company, 76 South Main Street, Akron, Ohio 44308, Attention:
        Managers, or at any other address previously furnished in writing to the
        Trustee
        by the Issuer. The Issuer shall promptly transmit any notice received by
        it from
        the Transition Bondholders to the Trustee.

       

      
        
          
          

        

        
          67

          
            

          

        

        
          
          

        

      

       

      (b)
          Notices
        required to be given to the Rating Agencies by the Issuer, the Trustee or
        a
        Manager shall be in writing, delivered personally, via facsimile transmission,
        by reputable overnight courier or by first-class mail, postage prepaid, to:
        (i)
        in the case of Moody’s: Moody’s Investors Service, Inc., Attention: ABS
        Monitoring Department, 99 Church Street, New York, New York 10007; (ii) in
        the
        case of Standard & Poor’s: Standard & Poor’s, ABS Surveillance Group, 55
        Water Street, 41st
        Floor,
        New York, New York 10041-0003; fax: 212-438-2664; and (iii) in the case of
        Fitch: Fitch, Inc., One State Street Plaza, New York, New York 10004, Attention:
        ABS Surveillance.

       

      SECTION
        11.05  NOTICES
        TO TRANSITION BONDHOLDERS; WAIVER.

       

      (a)
          Where
        this Indenture provides for notice to Transition Bondholders of any event,
        such
        notice shall be sufficiently given (unless otherwise herein expressly provided)
        if in writing and delivered by first-class mail, postage prepaid, to each
        Transition Bondholder affected by such event, at the address of such Transition
        Bondholder as it appears on the Transition Bond Register, not later than
        the
        latest date, and not earlier than the earliest date, prescribed for the giving
        of such notice. In any case where notice to Transition Bondholders is given
        by
        mail, neither the failure to mail such notice nor any defect in any notice
        so
        mailed to any particular Transition Bondholder shall affect the sufficiency
        of
        such notice with respect to other Transition Bondholders, and any notice
        that is
        mailed in the manner herein provided shall conclusively be presumed to have
        been
        duly given.

       

      (b)
          Where
        this Indenture provides for notice in any manner, such notice may be waived
        in
        writing by any Person entitled to receive such notice, either before or after
        the event, and such waiver shall be the equivalent of such notice. Waivers
        of
        notice by Transition Bondholders shall be filed with the Trustee but such
        filing
        shall not be a condition precedent to the validity of any action taken in
        reliance upon such a waiver.

       

      (c)
          In
        case
        it shall be impractical to deliver notice in accordance with clause (a) of
        this
        Section 11.05 to the Holders when such notice is required to be given pursuant
        to any provision of this Indenture, then any manner of giving such notice
        as
        shall be satisfactory to the Trustee shall be deemed to be a sufficient giving
        of such notice. 

       

      (d)
          Where
        this Indenture provides for notice to the Rating Agencies, failure to give
        such
        notice shall not affect any other rights or obligations created hereunder,
        and
        shall not under any circumstance constitute a Default or Event of
        Default.

       

      SECTION
        11.06  ALTERNATE
        PAYMENT AND NOTICE PROVISIONS.
        Notwithstanding any provision of this Indenture or any of the Transition
        Bonds
        to the contrary, the Issuer may enter into any agreement with any Holder of a
        Transition Bond providing for a method of payment, or notice by the Trustee
        or
        any Paying Agent to such Holder, that is different from the methods provided
        for
        in this Indenture for such payments or notices. The Issuer will furnish to
        the
        Trustee a copy of each such agreement and the Trustee will cause payments
        to be
        made and notices to be given in accordance with such agreements.

       

      SECTION
        11.07  CONFLICT
        WITH TRUST INDENTURE ACT.

       

      
        
          
          

        

        
          68

          
            

          

        

        
          
          

        

      

       

      (a)
          If
        any
        provision hereof limits, qualifies or conflicts with another provision hereof
        that is required to be included in this Indenture by any of the provisions
        of
        the TIA, such required provision shall control.

       

      (b)
          The
        provisions of TIA Sections 310 through 317 that impose duties on any person
        (including the provisions automatically deemed included herein unless expressly
        excluded by this Indenture) are a part of and govern this Indenture, whether
        or
        not physically contained herein. 

       

      SECTION
        11.08  EFFECT
        OF
        HEADINGS AND TABLE OF CONTENTS. 
        The Article and Section headings herein and the Table of Contents are for
        convenience only and shall not affect the construction hereof.

       

      SECTION
        11.09  SUCCESSORS
        AND ASSIGNS.

       

      (a)
          All
        covenants and agreements in this Indenture and the Transition Bonds by the
        Issuer shall bind its successors and permitted assigns, whether so expressed
        or
        not, unless expressly agreed to the contrary.

       

      (b)
          All
        agreements of the Trustee in this Indenture shall bind its
        successors.

       

      (c)
          The
        Trustee shall provide prior notice to the Rating Agencies of any assignment
        of
        obligations under this Indenture.

       

      SECTION
        11.10  SEVERABILITY. 
        In case any provision in this Indenture or in the Transition Bonds shall
        be
        invalid, illegal or unenforceable, the validity, legality and enforceability
        of
        the remaining provisions shall not in any way be affected or impaired
        thereby.

       

      SECTION
        11.11  BENEFITS
        OF INDENTURE. 
        Nothing in this Indenture or in the Transition Bonds, express or implied,
        shall
        give to any Person, other than the parties hereto and their successors
        hereunder, and the Transition Bondholders, and any other party secured
        hereunder, and any other Person with an ownership interest in any part of
        the
        Collateral, any benefit or any legal or equitable right, remedy or claim
        under
        this Indenture.

       

      SECTION
        11.12  LEGAL
        HOLIDAYS. 
        In any case where the date on which any payment is due shall not be a Business
        Day, then (notwithstanding any other provision of the Transition Bonds or
        this
        Indenture) payment need not be made on such date, but may be made on the
        next
        succeeding Business Day with the same force and effect as if made on the
        date on
        which nominally due, and no interest shall accrue for the period from and
        after
        any such nominal date.

       

      SECTION
        11.13  GOVERNING
        LAW. 
        THIS INDENTURE SHALL BE GOVERNED BY AND 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. 

       

      
        
          
          

        

        
          69

          
            

          

        

        
          
          

        

      

       

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

       

      SECTION
        11.15  ISSUER
        OBLIGATION. 
        No recourse may be taken, directly or indirectly, with respect to the
        obligations of the Issuer or the Trustee on the Transition Bonds or under
        this
        Indenture or any certificate or other writing delivered in connection herewith
        or therewith, against (i) the Member or any Manager, employee or agent of
        the
        Issuer or (ii) any stockholder, officer, director, employee or agent of the
        Trustee (it being understood that none of the Trustee’s obligations are in its
        individual capacity).

       

      SECTION
        11.16  NO
        PETITION. 
        The Trustee, by entering into this Indenture, and each Transition Bondholder,
        by
        accepting a Transition Bond, hereby covenants and agrees (or shall be deemed
        to
        have covenanted and agreed) that it shall not at any time institute against
        the
        Issuer, or join in the institution against the Issuer of, or 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.

       

      SECTION
        11.17  INTERCREDITOR
        AGREEMENT. 
        The Trustee is hereby authorized and directed by the Issuer to execute and
        deliver the Intercreditor Agreement. The Intercreditor Agreement shall be
        binding on the Holders.

       

      
        
          
          

        

        
          70

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the Issuer and the Trustee have caused this Indenture to
        be
        duly executed and delivered by a Manager and an officer, respectively, thereof,
        each thereunto duly authorized, all as of the day and year first above written.
        

       

              JCP&L
        TRANSITION
        FUNDING II LLC, 

                as
        Issuer 

       

              By:____________________________

                Name: 

                Title:
 

       

       

              THE
        BANK OF NEW
        YORK,

                as
        Trustee

       

              By:____________________________

                Name:  

                Title:
           

       

      
        
          
          

        

        
          71

          
            

          

        

        
          
          

        

      


      APPENDIX
        A 


       

      MASTER
        DEFINITIONS

       

      The
        definitions contained in this Appendix A are applicable to the singular as
        well
        as the plural forms of such terms. 

       

      Act
        has the
        meaning specified in Section 11.03 (a) of the Indenture. 

       

      Adjustment
        Date
        means
        (a) June 1 of each year through June 1, 2007, (b) as long as the Transition
        Bonds are outstanding, September 1, December 1, March 1 and June 1 of each
        year,
        beginning
        [              
], and (c) any other date which is thirty days after a Calculation
        Date.

       

      Adjustment
        Request
        means an
        application filed by the Servicer with the BPU for a Transition Bond Charge
        Adjustment pursuant to Section 5(b) of the Issuer Annex. 

       

      Administration
        Agreement
        means
        the Administration Agreement dated as of _______, 2006, between FirstEnergy
        Service, as administrator, and the Issuer, as the same may be amended or
        supplemented from time to time.

       

      Administrator
        means
        FirstEnergy Service, as administrator under the Administration Agreement,
        and
        each successor to FirstEnergy Service, in the same capacity, pursuant to
        Section
        14 of the Administration Agreement.

       

      Advice
        Letter
        means,
        with respect to any Series, the Issuance Advice Letter, in the form attached
        as
        Appendix [B] to the Financing Order, to be filed with the BPU not later than
        five Business Days after the issuance and sale of the Transition
        Bonds.

       

      Affiliate
        means,
        with respect to any specified Person, any other Person controlling or controlled
        by or under common control with such specified Person. For the purposes of
        this
        definition, control when used with respect to any specified Person means
        the
        power to direct the management and policies of such Person, directly or
        indirectly, whether through the ownership of voting securities, by contract
        or
        otherwise; and the terms controlling and controlled have meanings correlative
        to
        the foregoing.

       

      Annual
        Accountant’s Report
        has the
        meaning assigned to that term in Section 3.07 of the Servicing
        Agreement.

       

      Annual
        Reconciliation Date
        means
        the last Business Day of May of each year, commencing with May 31, 2007 and
        continuing through May [ ] (or such earlier month as the Servicer shall have
        specified to the Issuer and the Trustee by not less than thirty days prior
        written notice).

       

      Article
        9 Collateral
        has the
        meaning specified in Section 2.10(b)(v)(I)(1) of the Indenture.

       

      Authorized
        Denominations
        means,
        with respect to any Series or Class, $1,000 and integral multiples of $1,000
        above that amount, provided, however, that one bond of each Class may have
        denomination of less than $1,000, or such other denominations as may be
        specified in the Series Supplement therefor.

       

      
        
          
          

        

        
          A-1

          
            

          

        

        
          
          

        

      

       

      Authorized
        Newspaper means
        the
        Luxemburger Wort or any other newspaper published in Luxembourg on a daily
        basis.

       

      Authorized
        Officer
        means,
        with respect to the Issuer, (A) any Manager or (B) any person designated
        as an
“Officer” under the Issuer LLC Agreement and authorized thereby to act on behalf
        of the Issuer.

       

      Basic
        Documents
        means
        the Sale Agreement, the Intercreditor Agreement, the Servicing Agreement,
        the
        Indenture and all supplements thereto, the Administration Agreement, each
        Bill
        of Sale, the Formation Documents and each Interest Rate Swap Agreement, as
        each
        may be amended or supplemented from time to time.

       

      Billing
        Month
        means a
        calendar month during which the Transition Bond Charge is billed to
        Customers.

       

      Bill
        of Sale
        means
        each bill of sale issued by the Seller to the Issuer pursuant to the Sale
        Agreement evidencing the sale of Bondable Transition Property by the Seller
        to
        the Issuer. 

       

      Bondable
        Stranded Costs
        means
        those bondable stranded costs, within the meaning specified in the Competition
        Act, approved for recovery in the Financing Order. 

       

      Bondable
        Transition Property
        has the
        meaning assigned to that term in the Competition Act and the Financing Order.
        

       

      Bondable
        Transition Property Documentation
        means
        all documents related to the Transferred Bondable Transition Property, including
        copies of the Petition and the Financing Order and all documents filed with
        the
        BPU in connection with any Transition Bond Charge Adjustment. 

       

      Book-Entry
        Transition Bonds
        means
        beneficial interests in the Transition Bonds, ownership and transfers of
        which
        shall be made through book entries by a Clearing Agency as described in Section
        2.11 of the Indenture. 

       

      BPU
        means
        the New Jersey Board of Public Utilities, and any successor thereof.


       

      BPU
        Regulations
        means
        any regulations, orders, guidelines or directives promulgated, issued or
        adopted
        by the BPU.

       

      Business
        Day
        means
        any day other than a Saturday or Sunday or a day on which banking institutions
        in New York, New York or, with respect to any Transition Bonds listed on
        the
        Luxembourg Stock Exchange, in Luxembourg, are required or authorized by law
        or
        executive order to close.

       

      Calculation
        Date
        means
        (a) May 1 of each year until May 1, 2016, (b) August 1, November 1, February
        1,
        and May 1 of each year beginning August 1, _____ and for so long as the
        Transition Bonds are outstanding, and (c) any other day on which the Servicer
        files an Adjustment Request. 

       

      Capital
        Subaccount
        has the
        meaning specified in Section 8.02(a) of the Indenture. 

       

      
        
          
          

        

        
          A-2

          
            

          

        

        
          
          

        

      

       

      Class
        means,
        with respect to any Series, any one of the classes of Transition Bonds of
        that
        Series, as specified in the Series Supplement for that Series. 

       

      Class
        Final Maturity Date
        means
        the Final Maturity Date of a Class, as specified in the Series Supplement
        for
        the related Series. 

       

      Class
        Subaccount
        has the
        meaning specified in Section 8.02(a) of the Indenture.

       

      Clearing
        Agency
        means an
        organization registered as a “clearing agency” pursuant to Section 17A of the
        Exchange Act. 

       

      Clearing
        Agency Participant
        means a
        broker, dealer, bank, other financial institution or other Person for whom
        from
        time to time a Clearing Agency effects book-entry transfers and pledges of
        securities deposited with the Clearing Agency. 

       

      Closing
        Date
        means
        [                                  
        ], 2006.

       

      Code
        means
        the Internal Revenue Code of 1986, as amended from time to time, and Treasury
        Regulations promulgated thereunder.

       

      Collateral
        has the
        meaning specified in the first paragraph of the Granting Clause of the
        Indenture. 

       

      Collection
        Account
        has the
        meaning specified in Section 8.02(a) of the Indenture. 

       

      Collection
        Period
        means
        the period from and including the first day of a calendar month to but excluding
        the first day of the next calendar month. 

       

      Commission
        means
        the U.S. Securities and Exchange Commission, and any successor thereof.


       

      Competition
        Act
        means
        the Electric Discount and Energy Competition Act, New Jersey Statutes Annotated,
        Title 48, Chapter 3, Article 7, as heretofore amended.

       

      Corporate
        Trust Office
        means
        the principal office of the Trustee at which at any particular time its
        corporate trust business shall be administered, which office at date of the
        execution of the Indenture is located at 101 Barclay Street, 8 West, New
        York,
        New York 10286, Attention: Asset Backed Securities, Phone: 212-815-6258 Fax:
        212-815-3883 or at such other address as the Trustee may designate from time
        to
        time by notice to the Transition Bondholders and the Issuer, or the principal
        corporate trust office of any successor Trustee (the address of which the
        successor Trustee will notify the Transition Bondholders and the Issuer in
        writing). 

       

      Covenant
        Defeasance Option
        has the
        meaning specified in Section 4.01(b) of the Indenture. 

       

      Customer
        means
        each person who is a retail consumer of electricity and who accesses JCP&L’s
        transmission and distribution system, other than certain end users that are
        connected to JCP&L’s transmission and distribution system but who
        self-generate from on-site facilities, regardless of whether such consumer
        elects to purchase electricity from a Third Party.

       

      
        
          
          

        

        
          A-3

          
            

          

        

        
          
          

        

      

       

      Daily
        Remittance Date
        means,
        if the Servicer has not satisfied the conditions of Section 5.11(b) of the
        Servicing Agreement, each Business Day commencing on the second Business
        Day
        following the date on which the Servicer receives TBC Collections.

       

      Default
        means
        any occurrence that is, or with notice or the lapse of time or both would
        become, an Event of Default. 

       

      Defeasance
        Subaccount
        has the
        meaning specified in Section 8.02(a) of the Indenture. 

       

      Definitive
        Transition Bonds
        has the
        meaning specified in Section 2.11 of the Indenture.

       

      Delaware
        UCC
        means
        the Uniform Commercial Code, as in effect in the State of Delaware, as amended
        from time to time.

       

      Designee
        Certification
        means
        the designee certification filed with the BPU on _______, substantially in
        the
        form attached as Appendix A to the Financing Order.

      


      DTC
        Agreement
        means
        the agreement between the Issuer, the Trustee and The Depository Trust Company,
        as the initial Clearing Agency, dated on or about _______, 2006, relating
        to the
        Transition Bonds, as the same may be amended or supplemented from time to
        time.


       

      Eligible
        Account means
        either:

       

      	(i)       
                	
              a
                segregated non-interest bearing trust account with an Eligible
                Institution; or

            


       

      	(ii)      
                	
              a
                segregated non-interest bearing trust account with the corporate
                trust
                department of a depository institution organized under the laws of
                the
                United States of America or any State (or any domestic branch of
                a foreign
                bank), having corporate trust powers and acting as trustee for funds
                deposited in such account, so long as any of the securities of such
                depositary institution shall have a credit rating from each Rating
                Agency
                in one of its generic rating categories which signifies investment
                grade.
                

            


       

      Eligible
        Guarantor Institution
        means a
        firm or other entity identified in Rule 17Ad-15 under the Exchange Act as
“an
        eligible guarantor institution,” including (as such terms are defined
        therein):

       

      	(i)       
                	
              a
                bank;

            


       

      	(ii)      
                	
              a
                broker, dealer, municipal securities broker or dealer or government
                securities broker or dealer; 

            


       

      	(iii)     
                	
              a
                credit union;

            


       

      	(iv)     
                	
              a
                national securities exchange, registered securities association or
                clearing agency; or

            


       

      	(v)      
                	
              a
                savings association that is a participant in a securities transfer
                association. 

            


       

      
        
          
          

        

        
          A-4

          
            

          

        

        
          
          

        

      

       

      Eligible
        Institution
        means:


       

      	(i)      
                	
              the
                corporate trust department of the Trustee, so long as any of the
                securities of the Trustee have a credit rating from each Rating Agency
                in
                one of its generic rating categories which signifies investment grade;
                or
                

            


       

      	(ii)     
                	
              a
                depository institution organized under the laws of the United States
                of
                America or any State (or any domestic branch of a foreign bank),
                which
                

            


       

      (a)
          has
        either 

       

      	(A)         
                 	
              with
                respect to any Eligible Investment having a maturity of greater than
                one
                month, a long-term unsecured debt rating of “AAA” by Standard & Poor’s
                and Fitch and “Aaa” by Moody’s, or 

            


       

      	(B)         
                 	
              with
                respect to any Eligible Investment having a maturity of one month
                or less,
                a certificate of deposit rating of “A-1+” by Standard & Poor’s, “P-1”
                by Moody’s and “F1” by Fitch, or any other long-term, short-term or
                certificate of deposit rating acceptable to the Rating Agencies,
                and
                

            


       

      (b)
          whose
        deposits are insured by the FDIC. 

       

      Eligible
        Investments
        mean
        book-entry securities, negotiable instruments or securities represented by
        instruments in bearer or registered form which evidence: 

       

      	(i)      
                	
              direct
                obligations of, and obligations fully and unconditionally guaranteed
                as to
                timely payment by, the United States of America;
                

            


       

      	(ii)     
                	
              demand
                deposits, time deposits or certificates of deposit of any depository
                institution or trust company (any depositary institution or trust
                company
                being referred to in this definition as a “financial institution”)
                incorporated under the laws of the United States of America or any
                State
                thereof (or any domestic branch of a foreign bank) and subject to
                supervision and examination by Federal or State banking or depositary
                institution authorities; provided, however, that at the time of the
                investment or contractual commitment to invest therein, the commercial
                paper or other short-term unsecured debt obligations (other than
                such
                obligations the rating of which is based on the credit of a Person
                other
                than such depositary institution or trust company) thereof shall
                have a
                credit rating from each of the Rating Agencies in the highest investment
                category granted thereby; 

            


       

      	(iii)    
                	
              commercial
                paper or other short term obligations of any corporation organized
                under
                the laws of the United States of America (other than JCP&L and any of
                its Affiliates) whose ratings, at the time of the investment or
                contractual commitment to invest therein, from each of the Rating
                Agencies
                are in the highest investment category granted thereby;
                

            


       

      
        
          
          

        

        
          A-5

          
            

          

        

        
          
          

        

      

       

      	(iv)    
                	
              demand
                deposits, time deposits and certificates of deposit which are fully
                insured by the FDIC; 

            


       

      	(v)     
                	
              investments
                in money market funds having a rating from each of the Rating Agencies
                in
                the highest investment category granted thereby (including funds
                for which
                the Trustee or any of its Affiliates act as investment manager or
                advisor); 

            


       

      	(vi)    
                	
              bankers’
                acceptances issued by any depositary institution or trust company
                referred
                to in clause (ii) above; 

            


       

      	(vii)   
                	
              repurchase
                obligations with respect to any security that is a direct obligation
                of,
                or fully guaranteed by, the United States of America or any agency
                or
                instrumentality thereof the obligations of which are backed by the
                full
                faith and credit of the United States of America, in either case
                entered
                into with a depositary institution or trust company (acting as principal)
                described in clause (ii) above; 

            


       

      	(viii)  
                	
              repurchase
                obligations with respect to any security or whole loan entered into
                with
                

            


       

      (a)
          a
        financial institution (acting as principal) described in clause (ii) above,
        

       

      	(b)       
                 	
              a
                broker/dealer (acting as principal) registered as a broker or dealer
                under
                Section 15 of the Exchange Act (any broker/dealer being referred
                to in
                this definition as a “broker/dealer”), the unsecured short-term debt
                obligations of which are rated “P-1” by Moody’s and “A-1+” by Standard
                & Poor’s at the time of entering into the repurchase obligation or
                

            


       

      	(c)       
                 	
              an
                unrated broker/dealer, acting as principal, that is a wholly-owned
                subsidiary of a non-bank or bank holding company the unsecured short-term
                debt obligations of which are rated “P-1” by Moody’s and “A-1+” by
                Standard & Poor’s at the time of purchase;
                or

            


       

      	(ix)   
                	
              any
                other investment permitted by each Rating Agency;
                

            


       

      provided,
        however, that, with respect to Moody’s only, the obligor related to clauses (b),
        (c), (d), (f), (g) and (h) above must have both a long term rating of at
        least
“A1” and a short term rating of at least “P-1”, and provided further, that,
        unless otherwise permitted by each Rating Agency, upon the failure of any
        Eligible Institution to maintain any applicable rating set forth in this
        definition or the definition of Eligible Institution, the related investments
        at
        such institution shall be reinvested in Eligible Investments at a successor
        Eligible Institution within ten days, and provided, further, that, any Eligible
        Investment must not:

       

      	(A)         
                 	
              be
                sold, liquidated or otherwise disposed of at a loss, prior to the
                maturity
                thereof, or

            


      
         

        	(B)         
                   	
                mature
                  later than (i) the date on which the proceeds of such Eligible
                  Investment
                  will be required to be on deposit in the

              


         

        
          
            
            

          

          
            A-6

            
              

            

          

          
            
            

          

        

         

      

      	 	
              Collection
                Account in order for the Trustee to make all required and scheduled
                payments and deposits into subaccounts under the Indenture, if such
                Eligible Investment is held by an Affiliate of the Trustee, or (ii)
                the
                Business Day prior to the date on which the proceeds of such Eligible
                Investment will be required to be on deposit in the Collection Account
                in
                order for the Trustee to make all required and scheduled payments
                and
                deposits into Subaccounts under the Indenture, if such Eligible Investment
                is not held by an Affiliate of the
                Trustee.

            


       

      Event
        of Default
        has the
        meaning specified in Section 5.01 of the Indenture.

       

      Exchange
        Act
        means
        the Securities Exchange Act of 1934, as amended. 

       

      Executive
        Officer
        means,
        with respect to any corporation, the chief executive officer, chief operating
        officer, chief financial officer, chief information officer, president,
        executive vice president, any vice president, the secretary or the treasurer
        of
        such corporation; and with respect to any limited liability company, any
        manager
        thereof. 

       

      Expected
        Amortization Schedule
        means,
        with respect to each Series or, if applicable, each Class, the expected
        amortization schedule for principal thereof, as specified in the Series
        Supplement therefor. 

       

      Expected
        Final Payment Date
        means,
        with respect to each Series or, if applicable, each Class, the Payment Date
        related to the date when all interest and principal is scheduled to be paid
        with
        respect to that Series or Class in accordance with the Expected Amortization
        Schedule, as specified in the Series Supplement therefor. 

       

      FDIC
        means
        the Federal Deposit Insurance Corporation or its successor. 

       

      Final
        Maturity Date
        means,
        for each Series or, if applicable, each Class, the Payment Date related to
        the
        date by which all Principal of and interest on such Series or Class is required
        to be paid, as specified in the Series Supplement therefor. 

       

      Financing
        Issuance
        means an
        issuance of a new Series under the Indenture to provide funds to finance
        the
        purchase by the Issuer of Bondable Transition Property. 

       

      Financing
        Order
        means
        the bondable stranded costs rate order, dated June 8, 2006, issued with respect
        to the Issuer’s Transition Bonds by the BPU pursuant to the Competition Act and
        any subsequent bondable stranded costs rate order, if any, issued with respect
        to any of the Issuer’s Transition Bonds by the BPU.

       

      FirstEnergy
        Service means
        FirstEnergy Service Company, an Ohio corporation, or its successor.

       

      Fitch
        means
        Fitch, Inc., or its successor. 

       

      
        
          
          

        

        
          A-7

          
            

          

        

        
          
          

        

      

       

      Formation
        Documents
        means,
        collectively, the Issuer LLC Agreement, the Issuer Certificate of Formation
        and
        any other document pursuant to which the Issuer is formed or governed, as
        each
        may be amended or supplemented from time to time. 

       

      General
        Subaccount
        has the
        meaning specified in Section 8.02(a) of the Indenture. 

       

      Grant
        means
        mortgage, pledge, bargain, sell, warrant, alienate, remise, release, convey,
        assign, transfer, create and grant a Lien
        upon
        and a security interest in and right of set-off against, deposit, set over
        and
        confirm. A Grant of the Collateral or of any other agreement or instrument
        shall
        include all rights, powers and options (but none of the obligations) of the
        granting party thereunder, including the immediate and continuing right to
        claim
        for, collect, receive and give receipt for principal, interest and other
        payments in respect of the Collateral and all other moneys payable thereunder,
        to give and receive notices and other communications, to make waivers or
        other
        agreements, to exercise all rights and options, to bring Proceedings in the
        name
        of the granting party or otherwise and generally to do and receive anything
        that
        the granting party is or may be entitled to do or receive thereunder or with
        respect thereto.

       

      Holder
        or Transition Bondholder
        means
        the Person in whose name a Transition Bond of any Series or Class is registered
        in the Transition Bond Register. 

       

      Indemnification
        Event
        means an
        event which triggers JCP&L’s obligation to indemnify the Issuer and the
        Trustee, for itself and on behalf of the Transition Bondholders, and each
        of
        their respective managers, officers, directors, employees and agents, pursuant
        to Section 5.01 of the Sale Agreement. 

       

      Indemnity
        Amount
        means
        the amount paid by the Servicer, the Issuer or JCP&L to the Trustee, for the
        Trustee itself or on behalf of the Transition Bondholders, in respect of
        indemnification obligations pursuant to the Indenture, the Sale Agreement
        or the
        Servicing Agreement. 

       

      Indenture
        means
        the Indenture dated as of ________, 2006, by and between the Issuer and the
        Trustee, as the same may be amended or supplemented from time to time by
        one or
        more Supplemental Indentures, and shall include each Series Supplement and
        the
        forms and terms of the Transition Bonds established thereunder. 

       

      Independent
        means,
        when used with respect to 

       

      (1) 
        any specified Person (other than registered public accountants), that the
        Person

       

      	(i)      
                	
              is
                in fact independent of the Issuer, any other obligor upon the Transition
                Bonds, JCP&L and any Affiliate of any of the foregoing Persons,
                

            


       

      	(ii)     
                	
              does
                not have any direct financial interest or any material indirect financial
                interest in the Issuer, any such other obligor upon the Transition
                Bonds,
                JCP&L or any Affiliate of any of the foregoing Persons and
                

            


       

      	(iii)    
                	
              is
                not connected with the Issuer, any such other obligor upon the Transition
                Bonds, JCP&L or any Affiliate of any of the foregoing Persons as an
                officer, employee, promoter, underwriter, trustee, partner, director
                or
                person performing similar functions; and 

            


       

      
        
          
          

        

        
          A-8

          
            

          

        

        
          
          

        

      

       

      (2) 
        with respect to registered public accountants, means that such registered public
        accountants are independent in accordance with the Rules of the Public Company
        Accounting Oversight Board. 

       

      Independent
        Certificate
        means a
        certificate or opinion to be delivered to the Trustee under the circumstances
        described in, and otherwise complying with, the applicable requirements of
        Section 11.01 of the Indenture, made by an Independent appraiser or other
        expert
        appointed by an Issuer Order and approved by the Trustee in the exercise
        of
        reasonable care, and such opinion or certificate shall state that the signer
        has
        read the definition of “Independent” in this Appendix A and that the signer is
        Independent within the meaning thereof. 

       

      Independent
        Manager
        has the
        meaning set forth in Section 1.01 of the Issuer LLC Agreement. 

       

      Initial
        Purchase Price
        has the
        meaning set forth in Section 2.01(a) of the Sale Agreement. 

       

      Initial
        Transfer Date
        means
        the Series Issuance Date for the first Series. 

       

      Initial
        Transferred Bondable Transition Property
        means
        the Bondable Transition Property sold by the Seller to the Issuer as of the
        Initial Transfer Date pursuant to the Sale Agreement and the Bill of Sale
        delivered on or prior to the Initial Transfer Date as identified in such
        Bill of
        Sale. 

       

      Insolvency
        Event
        means,
        with respect to a specified Person, 

       

      	(i)      
                	
              the
                filing of a decree or order for relief by a court having jurisdiction
                in
                the premises in respect of such Person or any substantial part of
                its
                property in an involuntary case under any applicable Federal or State
                bankruptcy, insolvency or other similar law now or hereafter in effect,
                or
                appointing a receiver, liquidator, assignee, custodian, trustee,
                sequestrator or similar official for such Person or for any substantial
                part of its property, or ordering the winding-up or liquidation of
                such
                Person’s affairs, and such decree or order shall remain unstayed and in
                effect for a period of ninety consecutive days or
                

            


       

      	(ii)     
                	
              the
                commencement by such Person of a voluntary case under any applicable
                Federal or State bankruptcy, insolvency or other similar law now
                or
                hereafter in effect, or the consent by such Person to the entry of
                an
                order for relief in an involuntary case under any such law, or the
                consent
                by such Person to the appointment of or taking possession by a receiver,
                liquidator, assignee, custodian, trustee, sequestrator or similar
                official
                for such Person or for any substantial part of its property, or the
                making
                by such Person of any general assignment for the benefit of creditors,
                or
                the failure by such Person generally to pay its debts as such debts
                become
                due, or the taking of action by such Person in furtherance of any
                of the
                foregoing. 

            


       

      Intercreditor
        Agreement
        means
        the Intercreditor Agreement dated _________________, 2006 between the Issuer,
        JCP&L in various capacities, The Bank of New York in various
        capacities,

       

      
        
          
          

        

        
          A-9

          
            

          

        

        
          
          

        

      

       

      and
        JCP&L Transition Funding LLC, as the same may be amended or supplemented
        from time to time.

       

      Interest
        Rate
        means,
        with respect to each Series or Class, the rate at which interest accrues
        on the
        Principal balance of Transition Bonds of such Series or Class, as specified
        in
        the Series Supplement therefor.

       

      Interest
        Rate Swap Agreement
        means
        each ISDA Master Agreement, together with the related schedule and
        confirmations, between the Issuer and a Swap Counterparty, as the same may
        be
        amended or supplemented from time to time, with respect to any Series or
        Class.

       

      Issuer
        means
        JCP&L Transition Funding II LLC, a Delaware limited liability company, or
        its successor under the Indenture or the party named as such in the Indenture
        until a successor replaces it and, thereafter, means the successor.


       

      Issuer
        Annex
        means
        Annex 1 to the Servicing Agreement. 

       

      Issuer
        Certificate of Formation means
        the
        Certificate of Formation of the Issuer, dated March 29, 2004, which was
        filed with the Delaware Secretary of State’s Office on March 29, 2004, as
        the same may be amended or supplemented from time to time. 

       

      Issuer
        LLC Agreement
        means
        the Amended and Restated Limited Liability Company Agreement of the Issuer
        between the Member and the Issuer, dated as of _______, 2006, as the same
        may be
        amended or supplemented from time to time. 

       

      Issuer
        Officer’s Certificate
        means a
        certificate signed by any Authorized Officer of the Issuer, under the
        circumstances described in, and otherwise complying with, the applicable
        requirements of Section 11.01 of the Indenture, and in a form reasonably
        satisfactory to and delivered to the Trustee. Unless otherwise specified,
        any
        reference in the Indenture to an Officer’s Certificate shall be to an Officer’s
        Certificate of any Authorized Officer of the Issuer. 

       

      Issuer
        Opinion of Counsel
        means
        one or more written opinions of counsel who may, except as otherwise expressly
        provided in the Indenture, be employees of or counsel to the Issuer or the
        Seller and who shall be reasonably satisfactory to the Trustee, and which
        opinion or opinions shall be addressed to the Trustee, and shall be in a
        form
        reasonably satisfactory to the Trustee. 

       

      Issuer
        Order or Issuer Request
        means a
        written order or request, respectively, signed in the name of the Issuer
        by any
        one of its Authorized Officers and in a form reasonably satisfactory to and
        delivered to the Trustee. 

       

      JCP&L
        means
        Jersey Central Power & Light Company, a New Jersey corporation, or its
        successor. 

       

      Legal
        Defeasance Option
        has the
        meaning specified in Section 4.01(b) of the Indenture. 

       

      Lien
        means a
        security interest, lien, mortgage, charge, claim, pledge, equity or other
        encumbrance of any kind. 

       

      
        
          
          

        

        
          A-10

          
            

          

        

        
          
          

        

      

       

      Losses
        means,
        collectively, any and all liabilities, obligations, losses, damages, payments,
        costs or expenses of any kind whatsoever. 

       

      Manager
        has the
        meaning set forth in Section 1.01 of the Issuer LLC Agreement. 

       

      Market
        Transition Charge
        means
        the market transition charge that JCP&L may impose on Customers pursuant to
        the Competition Act and the Restructuring Order. 

       

      Member
        means
        JCP&L, as the sole member of the Issuer, in its capacity as such member
        under the Issuer LLC Agreement. 

       

      Monthly
        Reconciliation Date
        means
        the last Business Day of each month commencing with _______ (or such earlier
        month as the Servicer shall have specified to the Issuer and the Trustee
        by not
        less than thirty days prior written notice). 

       

      Monthly
        Remittance Date
        means
        the first day of each calendar month (or if such day is not a Business Day,
        the
        preceding Business Day) beginning on _______, 2006.

       

      Moody’s
        means
        Moody’s Investors Service, Inc., or its successor. 

       

      MTC-Tax
        means
        the tax component included in the Market Transition Charge which JCP&L is
        entitled to collect as authorized by the Financing Order and the Restructuring
        Order.

       

      New
        Jersey UCC
        means
        the Uniform Commercial Code, as in effect in the State of New Jersey, as
        amended
        from time to time.

       

      Operating
        Expenses
        means,
        with respect to the Issuer, all fees, costs, expenses and indemnity payments
        owed by the Issuer, including, without limitation, all amounts owed by the
        Issuer to the Trustee, the Quarterly Servicing Fee, the fees and expenses
        payable by the Issuer to the Administrator under the Administration Agreement,
        the fees and expenses payable by the Issuer to the Independent Managers and
        Special Members of the Issuer, all Indemnity Amounts, fees of the Rating
        Agencies, legal fees and expenses of the Servicer pursuant to Section 3.10
        of
        the Servicing Agreement, legal and accounting fees, costs and expenses of
        the
        Issuer, and legal, accounting or other fees, costs and expenses of the Seller
        (including, without limitation, any costs and expenses incurred by the Seller
        pursuant to Section 4.08 of the Sale Agreement) under or in connection with
        the
        Basic Documents or the Financing Order.

       

      Opinion
        of Counsel
        means
        one or more written opinions of counsel who may be an employee of or counsel
        to
        JCP&L, the Issuer or any other Person (as the context may require), which
        counsel shall be reasonably acceptable to the Trustee, the Issuer or the
        Rating
        Agencies, as applicable, and which shall be in form reasonably satisfactory
        to
        the Trustee, if applicable. 

       

      Outstanding
        with
        respect to Transition Bonds means, as of the date of determination, all
        Transition Bonds theretofore authenticated and delivered under the Indenture
        except: 

       

      	(i)      
                	
              Transition
                Bonds theretofore canceled by the Transition Bond Registrar or delivered
                to the Transition Bond Registrar for cancellation;
                

            


       

      
        
          
          

        

        
          A-11

          
            

          

        

        
          
          

        

      

       

      	(ii)     
                	
              Transition
                Bonds or portions thereof the payment for which money in the necessary
                amount has been theretofore deposited with the Trustee or any Paying
                Agent
                in trust for the Holders of such Transition Bonds; provided, however,
                that
                if such Transition Bonds are to be redeemed, notice of such redemption
                has
                been duly given pursuant to the Indenture or provision therefor,
                satisfactory to the Trustee, made; and 

            


       

      	(iii)    
                	
              Transition
                Bonds in exchange for or in lieu of other Transition Bonds which
                have been
                authenticated and delivered pursuant to the Indenture unless proof
                satisfactory to the Trustee is presented that any such Transition
                Bonds
                are held by a bona fide purchaser; 

            


       

      provided,
        however, that in determining whether the Holders of the requisite Outstanding
        Amount of the Transition Bonds or any Series or Class thereof have given
        any
        request, demand, authorization, direction, notice, consent or waiver hereunder
        or under any Basic Document, Transition Bonds owned by the Issuer, any other
        obligor upon the Transition Bonds, JCP&L or any Affiliate of any of the
        foregoing Persons shall be disregarded and deemed not to be Outstanding,
        except
        that, in determining whether the Trustee shall be fully protected in relying
        upon any such request, demand, authorization, direction, notice, consent
        or
        waiver, only Transition Bonds that the Trustee actually knows to be so owned
        shall be so disregarded. Transition Bonds so owned that have been pledged
        in
        good faith may be regarded as Outstanding if the pledgee establishes to the
        satisfaction of the Trustee the pledgee’s right so to act with respect to such
        Transition Bonds and that the pledgee is not the Issuer, any other obligor
        upon
        the Transition Bonds, JCP&L or any Affiliate of any of the foregoing
        Persons. 

       

      Outstanding
        Amount
        means
        the aggregate principal amount of all Outstanding Transition Bonds or, if
        the
        context requires, all Outstanding Transition Bonds of a Series or Class
        Outstanding at the date of determination. 

       

      Overcollateralization
        means,
        with respect to any Payment Date, an amount that, if deposited to the
        Overcollateralization Subaccount, would cause the balance in such subaccount
        to
        equal the Scheduled Overcollateralization Level for such Payment
        Date.

       

      Overcollateralization
        Amount
        means,
        with respect to any Series, the amount specified as such in the Series
        Supplement therefor. 

       

      Overcollateralization
        Subaccount
        has the
        meaning specified in Section 8.02(a) of the Indenture. 

       

      Paying
        Agent
        means
        the Trustee or any other Person, including any Person appointed pursuant
        to
        Section 3.02(b) of the Indenture, that meets the eligibility standards for
        the
        Trustee specified in Section 6.11 of the Indenture and is authorized by the
        Issuer to make the payments of Principal of or premium, if any, or interest
        on
        the Transition Bonds on behalf of the Issuer. 

       

      Payment
        Date
        means,
        with respect to each Series or Class, each date or dates respectively specified
        as Payment Dates for such Series or Class in the Series Supplement therefor.
        

       

      
        
          
          

        

        
          A-12

          
            

          

        

        
          
          

        

      

       

      Person
        means
        any individual, corporation, estate, partnership, joint venture, association,
        joint stock company, trust (including any beneficiary thereof), business
        trust,
        limited liability company, unincorporated organization or government or any
        agency or political subdivision thereof. 

       

      Petition
        means
        the petition filed by JCP&L with the BPU, dated February 14, 2003, as
        amended on September 14, 2003 and December 1, 2003.

       

      Predecessor
        Transition Bond
        means,
        with respect to any particular Transition Bond, every previous Transition
        Bond
        evidencing all or a portion of the same debt as that evidenced by such
        particular Transition Bond; and, for the purpose of this definition, any
        Transition Bond authenticated and delivered under Section 2.06 of the Indenture
        in lieu of a mutilated, lost, destroyed or stolen Transition Bond shall be
        deemed to evidence the same debt as the mutilated, lost, destroyed or stolen
        Transition Bond. 

       

      Principal
        means,
        with respect to any Payment Date and each Series or Class: 

       

      	(i)      
                	
              the
                amount of principal scheduled to be paid on such Payment Date in
                accordance with the Expected Amortization
                Schedule;

            


       

      	(ii)     
                	
              the
                amount of principal due on the Final Maturity Date of any Series
                or Class
                on such Payment Date; 

            


       

      	(iii)    
                	
              the
                amount of principal due as a result of the occurrence and continuance
                of
                an Event of Default and acceleration of the Transition
                Bonds;

            


       

      	(iv)    
                	
              the
                amount of principal and premium, if any, due as a result of a redemption
                of Transition Bonds on such Payment Date; and


            


       

      	(v)     
                	
              any
                overdue payments of principal. 

            


       

      Proceeding
        means
        any suit in equity, action at law or other judicial or administrative
        proceeding. 

       

      Projected
        Transition Bond Balance
        means,
        as of any date, the sum of the amounts provided for in the Expected Amortization
        Schedules for each outstanding Series as of such date. 

       

      Pro
        Rata
        shall
        have the meaning specified in Section 8.02(h) and Section 8.02(l) of the
        Indenture.

       

      Prospectus
        shall
        have the meaning specified in Section 3.06 of the Sale Agreement.

       

      Quarterly
        Servicing Fee
        means
        the fee payable to the Servicer on a quarterly basis for services rendered,
        in
        accordance with Section 5.07 of the Servicing Agreement. 

       

      Rating
        Agency means,
        as
        of any date, any rating agency rating the Transition Bonds of any Class or
        Series at the time of issuance thereof at the request of the Issuer. If no
        such
        organization or successor is any longer in existence, “Rating Agency” shall be a
        nationally recognized

       

      
        
          
          

        

        
          A-13

          
            

          

        

        
          
          

        

      

       

      statistical
        rating organization or other comparable Person designated by the Issuer,
        notice
        of which designation shall be given to the Trustee, the Member and the Servicer.
        

       

      Reconciliation
        Date
        means an
        Annual Reconciliation Date or a Monthly Reconciliation Date, as
        appropriate.

       

      Record
        Date
        has the
        meaning set forth in each Series Supplement.

       

      Redemption
        Date
        means,
        with respect to each Series or Class, the date for the redemption of the
        Transition Bonds of such Series or Class pursuant to Section 10.01 or 10.02
        of
        the Indenture or the Series Supplement for such Series or Class, which in
        each
        case shall be a Payment Date. 

       

      Redemption
        Price
        has the
        meaning set forth in Section 10.01 of the Indenture. 

       

      Refunding
        Issuance
        means an
        issuance of a new Series under the Indenture to pay the cost of refunding,
        through redemption or payment on the Expected Final Payment Date for a Series
        or
        Class, all or part of the Transition Bonds of such Series or Class to the
        extent
        permitted by the terms thereof. 

       

      Registered
        Holder
        means,
        as of any date, the Person in whose name a Transition Bond is registered
        in the
        Transition Bond Register on such date. 

       

      Regulation
        AB
        means
        Subpart 229.1100 - Asset Backed Securities, 17 C.F.R. §§229.1100-229.1123, as
        such may be amended from time to time, and subject to such clarification
        and
        interpretation as have been provided by the Commission in the adopting release
        (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg.
        1,506, 1,531 (Jan. 7, 2005)) or by the staff of the Commission, or as may
        be
        provided by the Commission or its staff from time to time.

       

      Released
        Parties
        has the
        meaning specified in Section 5.02(d) of the Servicing Agreement. 

       

      Remittance
        Date
        means a
        Daily Remittance Date or a Monthly Remittance Date, as applicable. 

       

      Required
        Capital Amount
        means,
        with respect to any Series, the amount required to be deposited in the Capital
        Subaccount on the Series Issuance Date of such Series, as specified in the
        related Series Supplement. 

       

      Reserve
        Subaccount
        has the
        meaning specified in Section 8.02(a) of the Indenture. 

       

      Responsible
        Officer
        means,
        with respect to the Trustee, any officer within the Corporate Trust Office
        of
        the Trustee, including any vice president, assistant vice president, secretary,
        assistant secretary, or any other officer of the Trustee customarily performing
        functions similar to those performed by any of the above designated officers
        and
        also, with respect to a particular matter, any other officer to whom such
        matter
        is referred because of such officer’s knowledge of and familiarity with the
        particular subject. 

       

      Restructuring
        Order
        means
        the order of the BPU issued on March 7, 2001 pursuant to Section 13 of the
        Competition Act (N.J.S.A.
        48:3-61)
        with respect to JCP&L.

       

      
        
          
          

        

        
          A-14

          
            

          

        

        
          
          

        

      

       

      Retiring
        Trustee has
        the
        meaning specified in Section 6.08(b) of the Indenture. 

       

      Sale
        Agreement
        means
        the Bondable Transition Property Sale Agreement dated _______, 2006 between
        the
        Seller and the Issuer, as the same may be amended or supplemented from time
        to
        time. 

       

      Scheduled
        Overcollateralization Level
        means,
        with respect to each Series and each Payment Date, the amount with respect
        to
        such Series set forth as such in Schedule A to the related Series Supplement,
        as
        such Schedule A has been adjusted in accordance with Section 3.19 of the
        Indenture to reflect redemptions or defeasances of Transition Bonds and
        issuances of additional Series.

       

      Secured
        Obligations
        has the
        meaning specified in the second paragraph of the Granting Clause of the
        Indenture.

       

      Securities
        Act
        means
        the Securities Act of 1933, as amended.

       

      Seller
        means
        JCP&L, in its capacity as seller of the Bondable Transition Property to the
        Issuer pursuant to the Sale Agreement. 

       

      Seller
        Officers’ Certificate
        means a
        certificate signed by:

       

      	(i)      
                	
              the
                chairman of the board, the president, the vice chairman of the board,
                any
                executive vice president or any vice president of JCP&L; and
                

            


       

      	(ii)     
                	
              the
                chief financial officer, the treasurer, any assistant treasurer,
                the
                secretary or any assistant secretary of JCP&L.
                

            


       

      Series
        means
        any series of Transition Bonds issued by the Issuer and authenticated by
        the
        Trustee pursuant to the Indenture, as specified in the Series Supplement
        therefor.

       

      Series
        Capital Subaccount
        has the
        meaning specified in Section 8.02(a) of the Indenture. 

       

      Series
        Final Maturity Date
        means
        the Final Maturity Date for a Series. 

       

      Series
        Issuance Date
        means,
        with respect to any Series, the date on which the Transition Bonds of such
        Series are to be originally issued in accordance with Section 2.10 of the
        Indenture and the Series Supplement for such Series. 

       

      Series
        Overcollateralization Subaccount
        has the
        meaning specified in Section 8.02(a) of the Indenture. 

       

      Series
        Subaccount
        has the
        meaning specified in Section 8.02(a) of the Indenture. 

       

      Series
        Supplement
        means an
        indenture supplemental to the Indenture that authorizes a particular Series,
        as
        the same may be amended or supplemented from time to time. 

       

      Servicer
        means
        JCP&L, as the servicer of the Bondable Transition Property, and each
        successor to JCP&L (in the same capacity) pursuant to Section 5.03 or 6.04
        of the Servicing Agreement. 

       

      
        
          
          

        

        
          A-15

          
            

          

        

        
          
          

        

      

       

      Servicer
        Default
        means an
        event specified in Section 6.01 of the Servicing Agreement.

       

      Servicer
        Officers’ Certificate
        means a
        certificate signed by:

       

      	(i)      
                	
              the
                chairman of the board, the president, the vice chairman of the board,
                any
                executive vice president or any vice president of the Servicer; and
                

            


       

      	(ii)     
                	
              the
                chief financial officer, the treasurer, any assistant treasurer,
                the
                secretary or any assistant secretary of the Servicer.
                

            


       

      Servicing
        Agreement
        means
        the Servicing Agreement dated as of _______, 2006, between the Issuer and
        the
        Servicer, as the same may be amended or supplemented from time to time.


       

      Servicing
        Criteria
        means
        the criteria listed on Appendix B of this Indenture.

       

      Special
        Member
        has the
        meaning set forth in the Issuer LLC Agreement. 

       

      Standard
        & Poor’s or S&P
        means
        Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, or
        its successor. 

       

      State
        means
        any one of the fifty states of the United States of America or the District
        of
        Columbia. 

       

      Subaccount
        means
        any of the subaccounts of the Collection Account specified in Section 8.02
        of
        the Indenture.

       

      Subsequent
        Purchase Price
        has the
        meaning specified in Section 2.01(d) of the Sale Agreement.

       

      Subsequent
        Sale
        means
        the sale of additional Bondable Transition Property by the Seller to the
        Issuer
        after the Initial Transfer Date, subject to the satisfaction of the conditions
        specified in the Sale Agreement and the Indenture.

       

      Subsequent
        Transfer Date
        means
        the date that a sale of Subsequent Transferred Bondable Transition Property
        will
        be effective, as specified in a written notice provided by the Seller to
        the
        Issuer pursuant to the Sale Agreement.

       

      Subsequent
        Transferred Bondable Transition Property means
        Bondable Transition Property sold by the Seller to the Issuer as of a Subsequent
        Transfer Date pursuant to the Sale Agreement and the Bill of Sale delivered
        on
        or prior to the Subsequent Transfer Date as identified in such Bill of
        Sale.

       

      Successor
        Servicer
        has the
        meaning specified in Section 3.20(i) of the Indenture. 

       

      Supplemental
        Indenture
        means a
        supplemental indenture entered into by the Issuer and the Trustee pursuant
        to
        Article IX of the Indenture. 

       

      
        
          
          

        

        
          A-16

          
            

          

        

        
          
          

        

      

       

      Swap
        Counterparty
        means,
        with respect to any Interest Rate Swap Agreement, the swap counterparty under
        that Interest Rate Swap Agreement.

       

      TBC
        Collections
        means
        amounts received by the Servicer in respect of the Transition Bond Charge.
        

       

      Termination
        Notice
        has the
        meaning specified in Section 6.01 of the Servicing Agreement. 

       

      Third
        Party
        means
        any third party, including any electric power supplier, providing billing
        or
        metering services, licensed by the BPU pursuant to relevant provisions of
        the
        Competition Act, any BPU Regulations and the Financing Order. 

       

      Transfer
        Date
        means
        the Initial Transfer Date or any Subsequent Transfer Date, as applicable.
        

       

      Transferred
        Bondable Transition Property
        has the
        meaning specified in Section 2.10(b)(v)(H)(1) of the Indenture. 

       

      Transition
        Bond
        means
        any of the transition bonds (as defined in the Competition Act) issued by
        the
        Issuer pursuant to the Indenture. 

       

      Transition
        Bond Balance
        means,
        as of any date, the aggregate Outstanding Amount of all Series on such
        date.

       

      Transition
        Bond Charge
        means
        the Transition Bond Charge authorized by the BPU to be imposed on all Customers
        by JCP&L or its successor to recover Bondable Stranded Costs pursuant to the
        Competition Act and the Financing Order. 

       

      Transition
        Bond Charge Adjustment
        means
        each adjustment to the Transition Bond Charge related to the Transferred
        Bondable Transition Property made in accordance with Section 4.01 of the
        Servicing Agreement and the Issuer Annex. 

       

      Transition
        Bond Charge Adjustment Process
        means
        the process by which the Transition Bond Charge is adjusted pursuant to the
        Servicing Agreement, the Competition Act, the Petition and the Financing
        Order.


       

      Transition
        Bond Owner
        means,
        with respect to a Book-Entry Transition Bond, the Person who is the beneficial
        owner of such Book-Entry Transition Bond, as reflected on the books of the
        Clearing Agency, or on the books of a Person maintaining an account with
        such
        Clearing Agency (directly as a Clearing Agency Participant or as an indirect
        participant, in each case in accordance with the rules of such Clearing Agency).
        

       

      Transition
        Bond Register
        has the
        meaning specified in Section 2.05(a) of the Indenture. 

       

      Transition
        Bond Registrar
        has the
        meaning specified in Section 2.05(a) of the Indenture. 

       

      Trust
        Indenture Act or TIA
        means
        the Trust Indenture Act of 1939, as in force on the date hereof, unless
        otherwise specifically provided. 

       

      
        
          
          

        

        
          A-17

          
            

          

        

        
          
          

        

      

       

      Trustee
        has the
        meaning specified in the first paragraph of the Indenture. 

       

      Underwriting
        Agreement
        means
        the Underwriting Agreement dated _______, 2006, among the Seller, the Issuer
        and
        Goldman, Sachs & Co., on behalf of itself and as the representative of the
        several underwriters named therein.

       

      U.S.
        Government Obligations
        means
        direct obligations (or certificates representing an ownership interest in
        such
        obligations) of the United States of America (including any agency or
        instrumentality thereof) for the payment of which the full faith and credit
        of
        the United States of America is pledged and which are not callable at the
        issuer’s option. 

       

      
        
          
          

        

        
          A-18

          
            

          

        

        
          
          

        

      


      APPENDIX
        B

       

      SERVICING
        CRITERIA

      


      SERVICING
        CRITERIA TO BE ADDRESSED

      BY
        TRUSTEE IN ASSESSMENT OF COMPLIANCE


      


      
        	
                Reg
                  AB Reference

              	
                Servicing
                  Criteria

              	
                Applicable
                  Trustee

                Responsibility

              
	 	
                General
                  Servicing Considerations

              	 
	
                1122(d)(1)(i)

              	
                Policies
                  and procedures are instituted to monitor any performance or other
                  triggers
                  and events of default in accordance with the transaction
                  agreements.

              	 
	
                1122(d)(1)(ii)

              	
                If
                  any material servicing activities are outsourced to third parties,
                  policies and procedures are instituted to monitor the third party’s
                  performance and compliance with such servicing activities.

              	 
	
                1122(d)(1)(iii)

              	
                Any
                  requirements in the transaction agreements to maintain a back-up
                  servicer
                  for the pool assets are maintained.

              	 
	
                1122(d)(1)(iv)

              	
                A
                  fidelity bond and errors and omissions policy is in effect on the
                  party
                  participating in the servicing function throughout the reporting
                  period in
                  the amount of coverage required by and otherwise in accordance
                  with the
                  terms of the transaction agreements.

              	 
	 	
                Cash
                  Collection and Administration

              	 
	
                1122(d)(2)(i)

              	
                Payments
                  on pool assets are deposited into the appropriate custodial bank
                  accounts
                  and related bank clearing accounts no more than two business days
                  following receipt, or such other number of days specified in the
                  transaction agreements.

              	
                X

              
	
                1122(d)(2)(ii)

              	
                Disbursements
                  made via wire transfer on behalf of an obligor or to an investor
                  are made
                  only by authorized personnel.

              	
                X

              
	
                1122(d)(2)(iii)

              	
                Advances
                  of funds or guarantees regarding collections, cash flows or distributions,
                  and any interest or other fees charged for such advances, are made,
                  reviewed and approved as specified in the transaction
                  agreements.

              	 
	
                1122(d)(2)(iv)

              	
                The
                  related accounts for the transaction, such as cash reserve accounts
                  or
                  accounts established as a form of overcollateralization, are separately
                  maintained (e.g., with respect to commingling of cash) as set forth
                  in the
                  transaction agreements.

              	 
	
                1122(d)(2)(v)

              	
                Each
                  custodial account is maintained at a federally insured depository
                  institution as set forth in the transaction agreements. For purposes
                  of
                  this criterion, “federally insured depository institution” with respect to
                  a foreign financial institution means a foreign financial institution
                  that
                  meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange
                  Act.

              	 
	
                1122(d)(2)(vi)

              	
                Unissued
                  checks are safeguarded so as to prevent unauthorized
                  access.

              	 
	
                1122(d)(2)(vii)
                  

              	
                Reconciliations
                  are prepared on a monthly basis for all asset-backed securities
                  related
                  bank accounts, including custodial accounts and related bank clearing
                  accounts. These reconciliations are (A) mathematically accurate;
                  (B)
                  prepared within 30 calendar days after the bank statement cutoff
                  date, or
                  such other number of days specified in the transaction agreements;
                  (C)
                  reviewed and approved by someone other than the person who prepared
                  the
                  reconciliation; and (D) contain explanations for reconciling items.
                  These
                  reconciling items are resolved within 90 calendar days of their
                  original
                  identification, or such other number of days specified in the transaction
                  agreements.

              	 
	 	
                Investor
                  Remittances and Reporting

              	 
	
                1122(d)(3)(i)

              	
                Reports
                  to investors, including those to be filed with the Commission,
                  are
                  maintained in accordance with the transaction agreements and applicable
                  Commission requirements. Specifically, such reports (A) are prepared
                  in
                  accordance with timeframes and other terms set forth in the transaction
                  agreements; (B) provide information calculated in accordance with
                  the
                  terms specified in the transaction agreements; (C) are filed with
                  the
                  Commission as required by its rules and regulations; and (D) agree
                  with
                  investors’ or the trustee’s records as to the total unpaid principal
                  balance and number of pool assets serviced by the
                  servicer.

              	 
	
                1122(d)(3)(ii)

              	
                Amounts
                  due to investors are allocated and remitted in accordance with
                  timeframes,
                  distribution priority and other terms set forth in the transaction
                  agreements.

              	
                X

              


      

       

      
        
          
          

        

        
          B-1

          
            

          

        

        
          
          

        

      

       

      
        	
                Reg
                  AB Reference 

              	
                Servicing
                  Criteria 

              	
                Applicable
                  Trustee Responsibility 

              
	
                1122(d)(3)(iii)

              	
                Disbursements
                  made to an investor are posted within two business days to the
                  servicer’s
                  investor records, or such other number of days specified in the
                  transaction agreements.

              	
                X

              
	
                1122(d)(3)(iv)

              	
                Amounts
                  remitted to investors per the investor reports agree with cancelled
                  checks, or other form of payment, or custodial bank
                  statements.

              	
                X

              
	 	
                Pool
                  Asset Administration

              	 
	
                1122(d)(4)(i)
                  

              	
                Collateral
                  or security on pool assets is maintained as required by the transaction
                  agreements or related pool asset documents.

              	 
	
                1122(d)(4)(ii)

              	
                Pool
                  assets and related documents are safeguarded as required by the
                  transaction agreements.

              	 
	
                1122(d)(4)(iii)

              	
                Any
                  additions, removals or substitutions to the asset pool are made,
                  reviewed
                  and approved in accordance with any conditions or requirements
                  in the
                  transaction agreements.

              	 
	
                1122(d)(4)(iv)

              	
                Payments
                  on pool assets, including any payoffs, made in accordance with
                  the related
                  pool asset documents are posted to the servicer’s obligor records
                  maintained no more than two business days after receipt, or such
                  other
                  number of days specified in the transaction agreements, and allocated
                  to
                  principal, interest or other items (e.g., escrow) in accordance
                  with the
                  related pool asset documents.

              	 
	
                1122(d)(4)(v)

              	
                The
                  servicer’s records regarding the pool assets agree with the servicer’s
                  records with respect to an obligor’s unpaid principal
                  balance.

              	 
	
                1122(d)(4)(vi)

              	
                Changes
                  with respect to the terms or status of an obligor's pool assets
                  (e.g.,
                  loan modifications or re-agings) are made, reviewed and approved
                  by
                  authorized personnel in accordance with the transaction agreements
                  and
                  related pool asset documents.

              	 
	
                1122(d)(4)(vii)

              	
                Loss
                  mitigation or recovery actions (e.g., forbearance plans, modifications
                  and
                  deeds in lieu of foreclosure, foreclosures and repossessions, as
                  applicable) are initiated, conducted and concluded in accordance
                  with the
                  timeframes or other requirements established by the transaction
                  agreements.

              	 
	
                1122(d)(4)(viii)

              	
                Records
                  documenting collection efforts are maintained during the period
                  a pool
                  asset is delinquent in accordance with the transaction agreements.
                  Such
                  records are maintained on at least a monthly basis, or such other
                  period
                  specified in the transaction agreements, and describe the entity’s
                  activities in monitoring delinquent pool assets including, for
                  example,
                  phone calls, letters and payment rescheduling plans in cases where
                  delinquency is deemed temporary (e.g., illness or
                  unemployment).

              	 
	
                1122(d)(4)(ix)

              	
                Adjustments
                  to interest rates or rates of return for pool assets with variable
                  rates
                  are computed based on the related pool asset documents.

              	 
	
                1122(d)(4)(x)

              	
                Regarding
                  any funds held in trust for an obligor (such as escrow accounts):
                  (A) such
                  funds are analyzed, in accordance with the obligor’s pool asset documents,
                  on at least an annual basis, or such other period specified in
                  the
                  transaction agreements; (B) interest on such funds is paid, or
                  credited,
                  to obligors in accordance with applicable pool asset documents
                  and state
                  laws; and (C) such funds are returned to the obligor within 30
                  calendar
                  days of full repayment of the related pool assets, or such other
                  number of
                  days specified in the transaction agreements.

              	 
	
                1122(d)(4)(xi)

              	
                Payments
                  made on behalf of an obligor (such as tax or insurance payments)
                  are made
                  on or before the related penalty or expiration dates, as indicated
                  on the
                  appropriate bills or notices for such payments, provided that such
                  support
                  has been received by the servicer at least 30 calendar days prior
                  to these
                  dates, or such other number of days specified in the transaction
                  agreements.

              	 
	
                1122(d)(4)(xii)

              	
                Any
                  late payment penalties in connection with any payment to be made
                  on behalf
                  of an obligor are paid from the servicer’s funds and not charged to the
                  obligor, unless the late payment was due to the obligor’s error or
                  omission.

              	 
	
                1122(d)(4)(xiii)

              	
                Disbursements
                  made on behalf of an obligor are posted within two business days
                  to the
                  obligor’s records maintained by the servicer, or such other number of days
                  specified in the transaction agreements.

              	 
	
                1122(d)(4)(xiv)
                  

              	
                Delinquencies,
                  charge-offs and uncollectible accounts are recognized and recorded
                  in
                  accordance with the transaction agreements.

              	 
	
                1122(d)(4)(xv)

              	
                Any
                  external enhancement or other support, identified in Item 1114(a)(1)
                  through (3) or Item 1115 of Regulation AB, is maintained as set
                  forth in
                  the transaction agreements.

              	 


      

    

     

    
      
        
        

      

      
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