Unassociated Document





    
      
         

        
           

        

        Exhibit 4.1

        
           

        

        
           

        

        EXECUTION COPY

        
           

        

        
          	
                   

                
	
                  INDENTURE

                  
                     

                  

                
	
                  
                     

                  

                  JCP&L TRANSITION FUNDING
                    II LLC,

                  
                     

                  

                
	
                  as Issuer

                  
                     

                  

                
	
                  and

                  
                     

                  

                
	
                  THE BANK OF NEW
                    YORK

                  
                     

                  

                
	
                  as Trustee

                  
                     

                  

                
	
                   

                
	
                  
                     

                  

                  INDENTURE

                  
                     

                  

                
	
                  Dated as of August
                    10,
                    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

                	
                  3

                
	
                  
                    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

                	
                  9

                
	
                  
                    SECTION 2.10

                  

                	
                  AMOUNT; AUTHENTICATION AND DELIVERY OF TRANSITION BONDS

                	
                  9

                
	
                  
                    SECTION 2.11

                  

                	
                  BOOK-ENTRY TRANSITION BONDS

                	
                  14

                
	
                  
                    SECTION 2.12

                  

                	
                  NOTICES TO CLEARING AGENCY

                	
                  15

                
	
                  
                    SECTION 2.13

                  

                	
                  DEFINITIVE TRANSITION BONDS

                	
                  15

                
	
                   

                	
                   

                	
                   

                
	
                  ARTICLE III COVENANTS

                	
                  16

                
	
                  
                    SECTION 3.01

                  

                	
                  PAYMENT OF PRINCIPAL AND INTEREST

                	
                  16

                
	
                  
                    SECTION 3.02

                  

                	
                  MAINTENANCE OF OFFICE OR AGENCY

                	
                  16

                
	
                  
                    SECTION 3.03

                  

                	
                  MONEY FOR PAYMENTS TO BE HELD IN TRUST

                	
                  16

                
	
                  
                    SECTION 3.04

                  

                	
                  EXISTENCE

                	
                  18

                
	
                  
                    SECTION 3.05

                  

                	
                  PROTECTION OF COLLATERAL

                	
                  18

                
	
                  
                    SECTION 3.06

                  

                	
                  OPINIONS AS TO COLLATERAL

                	
                  18

                
	
                  
                    SECTION 3.07

                  

                	
                  PERFORMANCE OF OBLIGATIONS

                	
                  19

                
	
                  
                    SECTION 3.08

                  

                	
                  NEGATIVE COVENANTS

                	
                  19

                
	
                  
                    SECTION 3.09

                  

                	
                  ANNUAL STATEMENT AS TO COMPLIANCE

                	
                  20

                
	
                  
                    SECTION 3.10

                  

                	
                  ISSUER MAY CONSOLIDATE, ETC.

                	
                  20

                
	
                  
                    SECTION 3.11

                  

                	
                  SUCCESSOR OR TRANSFEREE

                	
                  21

                
	
                  
                    SECTION 3.12

                  

                	
                  NO OTHER BUSINESS

                	
                  21

                
	
                  
                    SECTION 3.13

                  

                	
                  NO BORROWING

                	
                  21

                
	
                  
                    SECTION 3.14

                  

                	
                  GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES

                	
                  21

                
	
                  
                    SECTION 3.15

                  

                	
                  CAPITAL EXPENDITURES

                	
                  22

                
	
                  
                    SECTION 3.16

                  

                	
                  RESTRICTED PAYMENTS

                	
                  22

                
	
                  
                    SECTION 3.17

                  

                	
                  NOTICE OF EVENTS OF DEFAULT

                	
                  22

                
	
                  
                    SECTION 3.18

                  

                	
                  INSPECTION

                	
                  22

                
	
                  
                    SECTION 3.19

                  

                	
                  ADJUSTED OVERCOLLATERALIZATION BALANCE SCHEDULES

                	
                  22

                
	
                  
                    SECTION 3.20

                  

                	
                  SALE AGREEMENT, INTERCREDITOR AGREEMENT, SERVICING AGREEMENT
                    AND
                    INTEREST RATE SWAP AGREEMENT
                    COVENANTS        

                	
                  23

                
	
                  
                    SECTION 3.21

                  

                	
                  TAXES

                	
                  26

                
	
                   

                	
                   

                	
                   

                
	
                  ARTICLE IV SATISFACTION AND DISCHARGE; DEFEASANCE

                	
                  26

                
	
                  
                    SECTION 4.01

                  

                	
                  SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE

                	
                  26

                
	
                  
                    SECTION 4.02

                  

                	
                  CONDITIONS TO DEFEASANCE

                	
                  28

                
	
                  
                    SECTION 4.03

                  

                	
                  APPLICATION OF TRUST MONEY

                	
                  29

                
	
                  
                    SECTION 4.04

                  

                	
                  REPAYMENT OF MONEYS HELD BY PAYING AGENT

                	
                  29

                
	
                   

                	
                   

                	
                   

                
	
                  ARTICLE V REMEDIES

                	
                  29

                
	
                  
                    SECTION 5.01

                  

                	
                  EVENTS OF DEFAULT

                	
                  29

                
	
                  
                    SECTION 5.02

                  

                	
                  ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT

                	
                  30

                
	
                  
                    SECTION 5.03

                  

                	
                  COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
                    TRUSTEE

                	
                  31

                
	
                  
                    SECTION 5.04

                  

                	
                  REMEDIES

                	
                  33

                
	
                  
                    SECTION 5.05

                  

                	
                  OPTIONAL PRESERVATION OF THE COLLATERAL

                	
                  34

                
	
                  
                    SECTION 5.06

                  

                	
                  LIMITATION OF PROCEEDINGS

                	
                  34

                
	
                  
                    SECTION 5.07

                  

                	
                  UNCONDITIONAL RIGHTS OF TRANSITION BONDHOLDERS TO RECEIVE
                    PRINCIPAL
                    AND INTEREST

                	
                  35

                
	
                  
                    SECTION 5.08

                  

                	
                  RESTORATION OF RIGHTS AND REMEDIES

                	
                  35

                
	
                  
                    SECTION 5.09

                  

                	
                  RIGHTS AND REMEDIES CUMULATIVE

                	
                  36

                
	
                  
                    SECTION 5.10

                  

                	
                  DELAY OR OMISSION NOT A WAIVER

                	
                  36

                
	
                  
                    SECTION 5.11

                  

                	
                  CONTROL BY TRANSITION BONDHOLDERS

                	
                  36

                
	
                  
                    SECTION 5.12

                  

                	
                  WAIVER OF PAST DEFAULTS

                	
                  37

                
	
                  
                    SECTION 5.13

                  

                	
                  UNDERTAKING FOR COSTS

                	
                  37

                
	
                  
                    SECTION 5.14

                  

                	
                  WAIVER OF STAY OR EXTENSION LAWS

                	
                  37

                
	
                  
                    SECTION 5.15

                  

                	
                  ACTION ON TRANSITION BONDS

                	
                  37

                
	
                  
                    SECTION 5.16

                  

                	
                  APPLICATION OF TRUST MONEY

                	
                  38

                
	
                   

                	
                   

                	
                   

                
	
                  ARTICLE VI THE TRUSTEE

                	
                  38

                
	
                  
                    SECTION 6.01

                  

                	
                  DUTIES AND LIABILITIES OF TRUSTEE

                	
                  38

                
	
                  
                    SECTION 6.02

                  

                	
                  RIGHTS OF TRUSTEE

                	
                  39

                
	
                  
                    SECTION 6.03

                  

                	
                  INDIVIDUAL RIGHTS OF TRUSTEE

                	
                  40

                
	
                  
                    SECTION 6.04

                  

                	
                  TRUSTEE’S DISCLAIMER

                	
                  40

                
	
                  
                    SECTION 6.05

                  

                	
                  NOTICE OF DEFAULTS

                	
                  40

                
	
                  
                    SECTION 6.06

                  

                	
                  REPORTS BY TRUSTEE TO HOLDERS

                	
                  40

                
	
                  
                    SECTION 6.07

                  

                	
                  COMPENSATION AND INDEMNITY

                	
                  42

                
	
                  
                    SECTION 6.08

                  

                	
                  REPLACEMENT OF TRUSTEE.

                	
                  42

                
	
                  
                    SECTION 6.09

                  

                	
                  SUCCESSOR TRUSTEE BY MERGER

                	
                  43

                
	
                  
                    SECTION 6.10

                  

                	
                  APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE

                	
                  44

                
	
                  
                    SECTION 6.11

                  

                	
                  ELIGIBILITY; DISQUALIFICATION

                	
                  45

                
	
                  
                    SECTION 6.12

                  

                	
                  PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE ISSUER

                	
                  45

                
	
                  
                    SECTION 6.13

                  

                	
                  REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE

                	
                  45

                
	
                  
                    SECTION 6.14

                  

                	
                  RIGHT OF TRUSTEE IN CAPACITY OF REGISTRAR OR PAYING AGENT

                	
                  45

                
	
                   

                	
                   

                	
                   

                
	
                  ARTICLE VII TRANSITION BONDHOLDERS' LIST AND REPORTS

                	
                  45

                
	
                  
                    SECTION 7.01

                  

                	
                  ISSUER TO FURNISH TRUSTEE NAMES AND ADDRESSES OF TRANSITION
                    BONDHOLDERS

                	
                  45

                
	
                  
                    SECTION 7.02

                  

                	
                  PRESERVATION OF INFORMATION; COMMUNICATIONS TO TRANSITION
                    BONDHOLDERS

                	
                  46

                
	
                  
                    SECTION 7.03

                  

                	
                  REPORTS BY ISSUER

                	
                  46

                
	
                  
                    SECTION 7.04

                  

                	
                  REPORTS BY TRUSTEE

                	
                  46

                
	
                  
                    SECTION 7.05

                  

                	
                  PROVISION OF SERVICER REPORTS

                	
                  47

                
	
                   

                	
                   

                	
                   

                
	
                  ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES

                	
                  47

                
	
                  
                    SECTION 8.01

                  

                	
                  COLLECTION OF MONEY

                	
                  47

                
	
                  
                    SECTION 8.02

                  

                	
                  COLLECTION ACCOUNT

                	
                  48

                
	
                  
                    SECTION 8.03

                  

                	
                  RELEASE OF COLLATERAL

                	
                  54

                
	
                  
                    SECTION 8.04

                  

                	
                  ISSUER OPINION OF COUNSEL

                	
                  55

                
	
                  
                    SECTION 8.05

                  

                	
                  REPORTS BY INDEPENDENT ACCOUNTANTS

                	
                  55

                
	
                   

                	
                   

                	
                   

                
	
                   ARTICLE IX SUPPLEMENTAL INDENTURES

                	
                  55

                
	
                  
                    SECTION 9.01

                  

                	
                  SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF TRANSITION
                    BONDHOLDERS

                	
                  55

                
	
                  
                    SECTION 9.02

                  

                	
                  SUPPLEMENTAL INDENTURES WITH CONSENT OF TRANSITION
                    BONDHOLDERS

                	
                  57

                
	
                  
                    SECTION 9.03

                  

                	
                  EXECUTION OF SUPPLEMENTAL INDENTURES

                	
                  58

                
	
                  
                    SECTION 9.04

                  

                	
                  EFFECT OF SUPPLEMENTAL INDENTURE

                	
                  59

                
	
                  
                    SECTION 9.05

                  

                	
                  CONFORMITY WITH TRUST INDENTURE ACT

                	
                  59

                
	
                  
                    SECTION 9.06

                  

                	
                  REFERENCE IN TRANSITION BONDS TO SUPPLEMENTAL INDENTURES

                	
                  59

                
	
                   

                	
                   

                	
                   

                
	
                  ARTICLE X REDEMPTION OF TRANSITION BONDS

                	
                  59

                
	
                  
                    SECTION 10.01

                  

                	
                  OPTIONAL REDEMPTION BY ISSUER

                	
                  59

                
	
                  
                    SECTION 10.02

                  

                	
                  MANDATORY REDEMPTION BY ISSUER

                	
                  59

                
	
                  
                    SECTION 10.03

                  

                	
                  FORM OF REDEMPTION NOTICE

                	
                  60

                
	
                  
                    SECTION 10.04

                  

                	
                  PAYMENT OF REDEMPTION PRICE

                	
                  61

                
	
                   

                	
                   

                	
                   

                
	
                  ARTICLE XI MISCELLANEOUS

                	
                  61

                
	
                  
                    SECTION 11.01

                  

                	
                  COMPLIANCE CERTIFICATES AND OPINIONS, ETC.

                	
                  61

                
	
                  
                    SECTION 11.02

                  

                	
                  FORM OF DOCUMENTS DELIVERED TO TRUSTEE

                	
                  62

                
	
                  
                    SECTION 11.03

                  

                	
                  ACTS OF TRANSITION BONDHOLDERS.

                	
                  62

                
	
                  
                    SECTION 11.04

                  

                	
                  NOTICES, ETC.

                	
                  63

                
	
                  
                    SECTION 11.05

                  

                	
                  NOTICES TO TRANSITION BONDHOLDERS; WAIVER

                	
                  64

                
	
                  
                    SECTION 11.06

                  

                	
                  ALTERNATE PAYMENT AND NOTICE PROVISIONS

                	
                  64

                
	
                  
                    SECTION 11.07

                  

                	
                  CONFLICT WITH TRUST INDENTURE ACT

                	
                  64

                
	
                  
                    SECTION 11.08

                  

                	
                  EFFECT OF HEADINGS AND TABLE OF CONTENTS

                	
                  64

                
	
                  
                    SECTION 11.09

                  

                	
                  SUCCESSORS AND ASSIGNS

                	
                  65

                
	
                  
                    SECTION 11.10

                  

                	
                  SEVERABILITY

                	
                  65

                
	
                  
                    SECTION 11.11

                  

                	
                  BENEFITS OF INDENTURE

                	
                  65

                
	
                  
                    SECTION 11.12

                  

                	
                  LEGAL HOLIDAYS

                	
                  65

                
	
                  
                    SECTION 11.13

                  

                	
                  GOVERNING LAW

                	
                  65

                
	
                  
                    SECTION 11.14

                  

                	
                  COUNTERPARTS

                	
                  65

                
	
                  
                    SECTION 11.15

                  

                	
                  ISSUER OBLIGATION

                	
                  65

                
	
                  
                    SECTION 11.16

                  

                	
                  NO PETITION

                	
                  66

                
	
                  
                    SECTION 11.17

                  

                	
                  INTERCREDITOR AGREEMENT

                	
                  66

                
	
                   

                	
                   

                	
                   

                
	
                   

                	
                   

                	
                   

                
	
                  APPENDIX A

                	
                  MASTER DEFINITIONS

                	
                   

                


        

         

         

         

        
          
            NY #569889 v17

          

          
            i

            
              

            

          

        

         

        
           

          INDENTURE, dated as of August 10, 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”).

          
             

          

           

          
            
              1

              
                

              

            

          

           

          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; 

          

          
             

          

          
            (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 

          

          
             

          

          
             

          

          
            
              2

              
                

              

            

          

          
            (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”.

          

          
             

          

          
            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.

          

          
             

          

           

          
            
              3

              
                

              

            

          

           

          
             

          

          
             

          

          
            (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:

          

          
             

          

          
            (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;

          

          
             

          

          
             

          

          
            
              4

              
                

              

            

          

          
            (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 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. 

          

          
             

          

           

          
            
              5

              
                

              

            

          

           

           

          
             

          

          
            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. 

          

          
             

          

          
            (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.

          

          
             

          

           

          
            
              6

              
                

              

            

          

          
             

          

          
            (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, 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.

          

          
             

          

          
             

          

          
            
              7

              
                

              

            

          

          
            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
              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. 

          

          
             

          

          
             

          

          
            
              8

              
                

              

            

          

          
             

          

          
            (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. 

          

          
             

          

          
            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.

          

          
             

          

          
            
              9

              
                

              

            

          

          
             

          

          
            (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 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

          

          
             

          

          
             

          

          
            
              10

              
                

              

            

          

          
            (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.

          

          
             

          

          
            (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);

          

          
             

          

          
             

          

          
            
              11

              
                

              

            

          

          
            (G)   the Servicing Agreement is a valid
              and binding agreement of the Servicer, enforceable against the Servicer
              in
              accordance with its terms 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 applied for has been duly qualified under
              the Trust
              Indenture Act or no such qualification of such Series Supplement is
              necessary;

          

          
             

          

          
            
              12

              
                

              

            

          

          
            (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
              (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, if any when due, plus (3) the
              Overcollateralization Amount, if any, for such Series set forth in
              the
              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 Prospectus, plus (5) principal of the
              Transition Bonds in accordance with the Expected Amortization Schedule
              set forth
              in the related Series Supplement, as of each Payment Date and found
              such
              calculations to be mathematically correct.

          

          
             

          

          
             

          

          
            
              13

              
                

              

            

          

          
            (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
              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 

          

          
             

          

          
             

          

          
            
              14

              
                

              

            

          

          
            (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 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. 

          

          
             

          

           

          
            
              15

              
                

              

            

          

              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 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:

          

          
             

          

          
             

          

          
            
              16

              
                

              

            

          

          
            (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.

          

          
             

          

          
            (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). 

          

          
             

          

          
             

          

          
            
              17

              
                

              

            

          

          
            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:

          

          
             

          

          
            (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

          

          
             

          

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

          

          
             

          

          
            (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.

          

          
             

          

          
            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.

          

          
             

          

          
             

          

          
            
              18

              
                

              

            

          

          
            (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 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 

          

          
             

          

          
             

          

          
            
              19

              
                

              

            

          

          
            (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 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; 

          

          
             

          

          
            
              20

              
                

              

            

          

          
            (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.

          

          
             

          

          
            (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.

          

          
             

          

          
            
              21

              
                

              

            

          

          
            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 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.

          

          
             

          

          
            
              22

              
                

              

            

          

          
            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 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.

          

          
             

          

          
             

          

          
            
              23

              
                

              

            

          

          
            (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 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).

          

          
             

          

          
            
              24

              
                

              

            

          

          
            (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 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.

          

          
             

          

          
            
              25

              
                

              

            

          

          
            (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.

          

          
             

          

          
            (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

          

          
             

          

          
             

          

          
            
              26

              
                

              

            

          

          
            (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;

          

          
             

          

          
            (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. 

          

          
             

          

          
            
              27

              
                

              

            

          

          
            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:

          

          
             

          

          
            (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
              

          

          
             

          

          
            
              28

              
                

              

            

          

          
            (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 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;

          

          
             

          

          
            (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;

          

          
             

          

          
            
              29

              
                

              

            

          

          
            (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,
              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. 

          

          
             

          

          
             

          

          
            
              30

              
                

              

            

          

          
            (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.
              

          

          
             

          

          
            (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. 

          

          
             

          

          
            
              31

              
                

              

            

          

          
            (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;

          

          
             

          

          
            (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.

          
             

          

          
            
              32

              
                

              

            

          

          
            (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;

          

          
             

          

          
            (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);

          

          
             

          

          
            
              33

              
                

              

            

          

          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 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: 

          

          
             

          

          
             

          

          
            
              34

              
                

              

            

          

          
            (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 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.

          

          
             

          

          
            
              35

              
                

              

            

          

          
            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

          

          
             

          

          
            (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.

          
             

          

          
            
              36

              
                

              

            

          

          
            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 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.

          

          
             

          

          
            
              37

              
                

              

            

          

          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: 

          

          
             

          

          
            (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.

          

          
             

          

          
            
              38

              
                

              

            

          

          
            (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.

          

          
             

          

          
            (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.

          

          
             

          

          
            
              39

              
                

              

            

          

          
            (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.

          

          
             

          

          
            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:

          

          
             

          

          
            
              40

              
                

              

            

          

          
            (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;

          

          
             

          

          
            (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.

          

          
             

          

          
            
              41

              
                

              

            

          

          
            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
              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

          

          
             

          

          
            
              42

              
                

              

            

          

          
            (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.

          

          
             

          

          
            (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.

          

          
             

          

          
            
              43

              
                

              

            

          

          
            SECTION 6.10  APPOINTMENT OF CO-TRUSTEE
              OR SEPARATE TRUSTEE.

          

          
             

          

          
            (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 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.

          

          
             

          

          
            
              44

              
                

              

            

          

          
            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 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. 

          

          
             

          

          
            
              45

              
                

              

            

          

          
            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.

          

          
             

          

          
            (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.

          

          
             

          

          
            
              46

              
                

              

            

          

          
            (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.

          

          
             

          

          
            
              47

              
                

              

            

          

          
            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 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.

          

          
             

          

           

          
            
              48

              
                

              

            

          

           

          (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 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. 

          
             

          

          
            
              49

              
                

              

            

          

          
            (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 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
              $500 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.

          

          
             

          

          
            
              50

              
                

              

            

          

          
            (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.

          

          
             

          

          
            (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;

          

          
             

          

          
            
              51

              
                

              

            

          

          
            (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
              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.

          

          
             

          

          
            
              52

              
                

              

            

          

          
            (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 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.

          

          
             

          

          
            
              53

              
                

              

            

          

          
            (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 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.

          

          
             

          

          
            
              54

              
                

              

            

          

          
            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 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;

          

          
             

          

          
            
              55

              
                

              

            

          

          
            (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;


          

          
             

          

          
            (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.

          

          
             

          

          
            
              56

              
                

              

            

          

          
            (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 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;

          

          
             

          

          
            
              57

              
                

              

            

          

          
            (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;

          

          
             

          

          
            (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.

          

          
             

          

          
            
              58

              
                

              

            

          

           

          
             

          

          
            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 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 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.

          

          
             

          

          
            
              59

              
                

              

            

          

          
            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.

          

          
             

          

          
            
              60

              
                

              

            

          

          
            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

          

          
             

          

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

          

          
             

          

          
            
              61

              
                

              

            

          

          
            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. 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.

          

          
             

          

          
            
              62

              
                

              

            

          

          
            (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.

          
             

          

          
            (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.

          

          
             

          

          
            
              63

              
                

              

            

          

          
            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.

          

          
             

          

          
            (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.

          

          
             

          

          
            
              64

              
                

              

            

          

          
            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. 

          

          
             

          

          
            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).

          

          
             

          

          
            
              65

              
                

              

            

          

          
            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.

          

          
             

          

           

          
             

          

           

          
            
              1

            

            
              66

              
                

              

            

          

          
<![if
            !supportLineBreakNewLine]>
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          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: Richard
                      H. Marsh

                    Title: Manager,
                      Senior Vice
                      President

                  
	
                     

                  
	
                     

                  
	
                     

                  
	
                    
                       

                    

                    THE BANK OF NEW YORK,

                    as Trustee

                     

                    
                       

                    

                    
                       

                    

                    
                       

                    

                  
	
                    By:

                    Name: Catherine
                      Cerilles

                    Title: Assistant
                      Vice
                      President

                    
                       

                    

                  


          

           

           

           

          
            
              Signature Page to Indenture

            

            
              67

              
                

              

            

          

           

          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, 2020, (b) as long as the Transition Bonds are outstanding, March 1,
            June 1,
            September 1, and December 1 of each year, beginning September 1, 2020
            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 August 10, 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 2007 and continuing through May
            2020 (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.

          
             

          

          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,
            2020, (b) February 1, May 1, August 1 and November 1 of each year beginning
            August 1, 2020 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. 

          
             

          

          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. 

          
             

          

          
            
              A-2

            

          

          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 August 10, 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.

          
             

          

          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
            dated August 4, 2006, substantially in the form attached as Appendix
            A to the
            Financing Order.

           

          
            
              A-3

              
                

              

            

          

          DTC Agreement means the agreement between the Issuer and
            The Depository Trust Company, as the initial Clearing Agency, dated on
            or about
            August 8, 2006, relating to the Transition Bonds, as the same may be
            amended or
            supplemented from time to time. 

          
             

          

          Eligible Account means either:

          
             

          

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

          

          
             

          

          	
                  (b)   

                	
                  
                    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):

          
             

          

          
            (a)   a bank;

          

          
             

          

          	
                  (b)   

                	
                  
                    a broker, dealer, municipal securities broker or dealer
                      or government
                      securities broker or dealer; 

                  

                


          
             

          

          	
                  (c)   

                	
                  
                    a credit union;

                  

                


          
             

          

          	
                  (d)   

                	
                  
                    a national securities exchange, registered securities association
                      or
                      clearing agency; or

                  

                


          
             

          

          	
                  (e)   

                	
                  
                    a savings association that is a participant in a securities
                      transfer
                      association. 

                  

                


          
             

          

          Eligible Institution means: 

          
             

          

          	
                  (a)   

                	
                  
                    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
                      

                  

                


          
             

          

          	
                  (b)   

                	
                  
                    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 

                  

                


          
             

          

          
            (i)  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 

                  

                


          
             

          

          
            (ii)  whose deposits are insured by the
              FDIC. 

          

          
             

          

          
            
              A-4

              
                

              

            

          

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

          
             

          

          	
                  (a)   

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

                  

                


          
             

          

          	
                  (b)   

                	
                  
                    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; 

                  

                


          
             

          

          	
                  (c)   

                	
                  
                    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;
                      

                  

                


          
             

          

          	
                  (d)   

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

                  

                


          
             

          

          	
                  (e)   

                	
                  
                    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); 

                  

                


          
             

          

          	
                  (f)   

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

                  

                


          
             

          

          	
                  (g)   

                	
                  
                    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 (b) above; 

                  

                


          
             

          

          	
                  (h)   

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

                  

                


          
             

          

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

          

          
             

          

          	
                  (ii)  

                	
                  
                    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 

                  

                


          
             

          

          
            
              A-5

              
                

              

            

          

          	
                  (iii)  

                	
                  
                    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

                  

                


          
             

          

          	
                  (i)   

                	
                  
                    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 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. 

          
             

          

          
            
              A-6

              
                

              

            

          

          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. 

          
             

          

          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 August 10, 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 

          
             

          

          
            (a)   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, 

                  

                


          
             

          

          
            
              A-7

              
                

              

            

          

          	
                  (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
                      

                  

                


          
             

          

          
            (b)   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, 

          
             

          

          	
                  (a)   

                	
                  
                    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
                      

                  

                


          
             

          

          	
                  (b)   

                	
                  
                    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. 

                  

                


          
             

          

          
            
              A-8

              
                

              

            

          

          Intercreditor Agreement means the Intercreditor Agreement
            dated August 10, 2006 between the Issuer, JCP&L in various capacities, The
            Bank of New York in various capacities, 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 August 10, 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. 

          
             

          

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

          
             

          

          
            
              A-9

              
                

              

            

          

          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 June 2020 (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 September 1, 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: 

          
             

          

          	
                  (a)   

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

                  

                


          
             

          

          	
                  (b)   

                	
                  
                    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
                      

                  

                


          
             

          

          
            
              A-10

              
                

              

            

          

          	
                  (c)   

                	
                  
                    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. 

          
             

          

          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. 

          
             

          

          
            
              A-11

              
                

              

            

          

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

          
             

          

          	
                  (a)   

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

                  

                


          
             

          

          	
                  (b)   

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

                  

                


          
             

          

          	
                  (c)   

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

                  

                


          
             

          

          	
                  (d)   

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

                  

                


          
             

          

          	
                  (e)   

                	
                  
                    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
            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. 

          
             

          

          
            
              A-12

              
                

              

            

          

          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.

          
             

          

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

          
             

          

          Sale Agreement means the Bondable Transition Property Sale
            Agreement dated August 10, 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:

          
             

          

          	
                  (a)   

                	
                  
                    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 

                  

                


          
             

          

          	
                  (b)   

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

                  

                


          
             

          

          
            
              A-13

              
                

              

            

          

          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. 

          
             

          

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

          
             

          

          Servicer Officers’ Certificate means a certificate signed
            by:

          
             

          

          	
                  (a)   

                	
                  
                    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 

                  

                


          
             

          

          	
                  (b)   

                	
                  
                    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 August 10, 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.

          
             

          

          
            
              A-14

              
                

              

            

          

          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. 

          
             

          

          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.


          
             

          

           

          
            
              A-15

              
                

              

            

          

           

          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.


          
             

          

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

          
             

          

          Underwriting Agreement means the Underwriting Agreement
            dated August 4, 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-16

              
                

              

            

          

           

          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

                  
	
                    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.

                  	
                     

                  


          

           

          
             

          

           

          
            
               

            

            
              B-1