Unassociated Document


    EXHIBIT
      10.2

     

    EXECUTION
      COPY

     

    


     

    


     

    


     

    SERVICING
      AGREEMENT

     

    BONDABLE
      TRANSITION
      PROPERTY SERVICING AGREEMENT

     

    


     

    between

     

    


     

    JCP&L
      TRANSITION
      FUNDING II LLC

     

    Issuer

     

    and

     

    JERSEY
      CENTRAL POWER
& LIGHT COMPANY

     

    Servicer

     

    Dated
      as of August
      10, 2006

    



    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
           

        

      

    


    TABLE
      OF
      CONTENTS

     

    

      
        	
                  ARTICLE
                  I 

              
	
                   DEFINITIONS

              
	 	 	 
	 Section
                1.01	 Definitions	 1
	 Section
                1.02	 Other
                Definitional Provisions	 1
	 	
              	 
	
                 ARTICLE
                  II

              
	
                 APPOINTMENT
                  AND AUTHORIZATION OF
                  SERVICER        

              
	
                 Section 2.01        

              	
                 Appointment
                  of Servicer; Acceptance of Appointment

              	
                 2

              
	 Section
                2.02	 Authorization	 2
	 Section
                2.03    	 Dominion
                and Control Over Transferred Bondable Transition
                Property            	 2
	 
	
                  ARTICLE
                  III

              
	
                  BILLING
                  SERVICES

              
	 Section
                3.01	 Duties
                of Servicer        	 2
	 Section
                3.02	 Collection
                and Allocation of the Transition Bond Charge	 3
	 Section
                3.03	 Payment
                of TBC Collections	 4
	 Section
                3.04	 Servicing
                and Maintenance Standards 	 5 
	 Section
                3.05	 Servicer's
                Certificates	 6
	 Section
                3.06	 Annual
                Statement as to Compliance	 6
	 Section
                3.07	 Annual
                Independent Registered Public Accountants' Report	 6
	 Section
                3.08	 Bondable
                Transition Property Documentation	 7
	 Section
                3.09	 Computer
                Records; Audits of Documentation	 7
	 Section
                3.10	 Defending
                Transferred Bondable Transition Property Against Claims	 8
	 	 	 
	
                 ARTICLE
                  IV

              
	
                SERVICES
                  RELATED TO TRANSITION BONDS CHARGE
                  ADJUSTMENTS    

              
	 Section
                4.01	 Transition
                Bond Charge Adjustments	 8
	 	 	 
	
                  ARTICLE
                  V

              
	
                  THE
                  SERVICER

              
	 Section
                5.01	 Representations
                and Warranties of Servicer	9
	 Section
                5.02	 Indemnities
                of Servicer; Release of Claims	10
	 Section
                5.03	 Merger
                or Consolidation of, or Assumption of the Obligations of,
                Servicer	12
	 Section
                5.04	 Assignment
                of Servicer's Obligations	13
	 Section
                5.05	 Limitation
                on Liability of Servicer and Others	14
	 Section
                5.06	 JCP&L
                Not to Resign as Servicer	14
	 Section
                5.07	 Quarterly
                Servicing Fee	14
	 Section
                5.08    	 Servicer
                Expenses	15
	 Section
                5.09	 Subservicing	15 
	 Section
                5.10	 No
                Servicer Advances	15
	 Section
                5.11	 Remittances	15
	 Section
                5.12	 Protection
                of Title	16
	 
	
                  ARTICLE
                  VI

              
	
                SERVICER
                  DEFAULT  

              
	 Section
                6.01	 Servicer
                Default	 16
	 Section
                6.02	 Notice
                of Servicer Default	 18
	 Section
                6.03	 Waiver
                of Past Defaults	 18
	 Section
                6.04	 Appointment
                of Successor	 18
	 Section
                6.05	 Cooperation
                With Successor	 19
	 	 	 
	 	
                 ARTICLE
                  VII

              	 
	 	
                 MISCELLANEOUS
                  PROVISIONS

              	 
	 Section
                7.01	 Amendment	 19
	 Section
                7.02	 Notices	 21
	 Section
                7.03	 Limitations
                on Rights of Others	 21
	 Section
                7.04	 Severability	 21
	 Section
                7.05	 Separate
                Counterparts	 21
	 Section
                7.06	 Headings
                	 22
	 Section
                7.07	 Govering
                Law	 22
	 Section
                7.08	 Assignment
                to the Trustee	 22
	 Section
                7.09	 Nonpetition
                Covenants	 22
	 Section
                7.10	 Termination	 22
	 	 	 
	 ANNEX
                1	 Issuer
                Annex	 
	 EXHIBIT
                A	 Servicing
                Procedures	 
	 	 


      

    

     

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

    



    BONDABLE
      TRANSITION
      PROPERTY SERVICING AGREEMENT, dated as of August 10, 2006, by and between
      JCP&L TRANSITION FUNDING II LLC, a Delaware limited liability company, as
      Issuer (the “Issuer”), and JERSEY CENTRAL POWER & LIGHT COMPANY, a New
      Jersey corporation, in its capacity as Servicer (the “Servicer”) of the Bondable
      Transition Property hereunder. 

     

    W
      I T N E S S E T H:

     

    WHEREAS
      the Servicer
      is willing to service all Transferred Bondable Transition Property purchased
      from the Seller by the Issuer; 

     

    WHEREAS,
      the TBC
      Collections initially will be commingled with other funds collected by the
      Servicer; 

     

    WHEREAS,
      certain
      parties may have an interest in such commingled collections, and such parties
      have entered into an Intercreditor Agreement as of the date hereof that allows
      the Servicer to allocate the collected, commingled funds according to each
      party’s interest; and

     

    WHEREAS
      the Issuer,
      in connection with its ownership of the Transferred Bondable Transition
      Property, desires to engage the Servicer to carry out the functions described
      herein.

     

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

     

       
      ARTICLE I  

     

    DEFINITIONS

     

    Section
      1.01  Definitions.
      Capitalized
      terms
      used and not otherwise defined herein shall have the meanings assigned to them
      in Appendix A of the Indenture dated as of August 10, 2006 between the Issuer
      and The Bank of New York, as Trustee (the “Trustee”).

     

    Section
      1.02  Other
      Definitional Provisions.

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

     

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

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    (c)
  The
      words “hereof”,
“herein”, “hereunder” and words of similar import when used in this Servicing
      Agreement shall refer to this Servicing Agreement as a whole and not to any
      particular provision of this Servicing Agreement; Article, Section, Annex,
      Schedule and Exhibit references contained in this Servicing Agreement are
      references to Articles, Sections, Annexes, Schedules and Exhibits in or to
      this
      Servicing Agreement unless otherwise specified; and the term “including” shall
      mean “including without limitation”.

     

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

     

    ARTICLE
      II  

     

    APPOINTMENT
      AND AUTHORIZATION OF SERVICER

     

    Section
      2.01  Appointment
      of Servicer; Acceptance of Appointment.
      The Issuer hereby
      appoints the Servicer, and the Servicer hereby accepts such appointment, to
      perform the Servicer’s obligations pursuant to this Servicing Agreement on
      behalf of and for the benefit of the Issuer in accordance with and subject
      to
      the terms of this Servicing Agreement. This appointment and the Servicer’s
      acceptance thereof may not be revoked except in accordance with the express
      terms of this Servicing Agreement.

     

    Section
      2.02  Authorization.
      With respect to all
      or any portion of the Transferred Bondable Transition Property and in connection
      with the performance of its duties hereunder, the Servicer shall be, and hereby
      is, authorized and empowered by the Issuer to:

     

    (a)
  on
      behalf of itself,
      the Issuer, or both of them, as the case may be, execute and deliver any and
      all
      instruments, documents or notices; and

    
       

      (b)
  on
        behalf of itself,
        the Issuer, or both of them, as the case may be, make any filing and participate
        in proceedings of any kind with any governmental authorities, including with
        the
        BPU and the Securities and Exchange Commission (“SEC”).

       

    

    The
      Issuer shall furnish the Servicer with such executed documents as have been
      prepared by the Servicer for execution by the Issuer, and with such other
      documents as may be in the Issuer’s possession, that are necessary or
      appropriate to enable the Servicer to carry out its servicing and administrative
      duties hereunder. Upon the written request of the Servicer, the Issuer shall
      furnish the Servicer with any powers of attorney or other documents necessary
      or
      appropriate to enable the Servicer to carry out its duties
      hereunder.

     

    Section
      2.03  Dominion
      and
      Control Over Transferred Bondable Transition Property. 

     

    Notwithstanding
      any
      other provision herein, the Servicer and the Issuer agree that the Issuer shall
      have dominion and control over the Transferred Bondable Transition Property,
      and
      the Servicer, in accordance with the terms hereof, is acting solely as the
      servicing agent of the Issuer with respect to the Transferred Bondable
      Transition Property. The Servicer hereby agrees that it shall not take any
      action hereunder that is not authorized by this Servicing Agreement, the
      Competition Act or the Financing Order, that is not consistent with its
      customary procedures and practices, or that shall impair the rights of the
      Issuer with respect to the Transferred Bondable Transition Property, in each
      case unless such action is required by law or court or regulatory
      order.

     

    ARTICLE
      III  

     

    BILLING
      SERVICES

     

    Section
      3.01  Duties
      of
      Servicer.
      The Servicer, as
      agent for the Issuer (to the extent provided herein), shall have the following
      duties: 

     

    (a)
  Duties
      of
      Servicer Generally.
      The Servicer will
      manage, service, administer and make collections in respect of the Transition
      Bond Charge. The Servicer’s duties will include:

     

    (i)  obtaining
      meter
      reads, calculating and billing the Transition Bond Charge in accordance with
      the
      Financing Order and collecting the Transition Bond Charge from Customers and
      Third Parties, as applicable;

     

    (ii)  responding
      to
      inquiries by Customers, Third Parties, the BPU, or any federal, local or other
      state governmental authority with respect to the Transition Bond
      Charge;

     

    (iii)  delivering
      bills or
      arranging for the delivery of bills to Customers and Third Parties, accounting
      for TBC Collections, investigating and resolving delinquencies (and furnishing
      reports with respect to such delinquencies to the Issuer), processing and
      depositing collections, making periodic remittances and furnishing periodic
      reports to the Issuer, the Trustee and the Rating Agencies;

     

    (iv)  selling,
      as the
      agent for the Issuer, as its interest may appear, defaulted or written off
      accounts in accordance with the Servicer’s usual and customary practices for
      accounts of its own electric service customers; and

     

    (v)  taking
      action in
      connection with Transition Bond Charge Adjustments as set forth
      herein.

     

    Anything
      to the
      contrary notwithstanding, the duties of the Servicer set forth in this Servicing
      Agreement shall be qualified in their entirety by the Competition Act and any
      other applicable law effective in New Jersey, the Financing Order, any BPU
      Regulations and the federal securities laws and the rules and regulations
      promulgated thereunder, including without limitation, Regulation AB, as in
      effect at the time such duties are to be performed. Without limiting the
      generality of this Section 3.01(a), in furtherance of the foregoing, the
      Servicer hereby agrees that it shall also have, and shall comply with, the
      procedures, duties and responsibilities set forth in Exhibit A hereto which,
      among other things, relate to data acquisition, usage and bill calculation,
      billing, customer service functions, collections, payment processing and
      remittance. 

     

    (b)
  Notification
      of
      Laws and Regulations.
      The Servicer shall
      immediately notify the Issuer, the Trustee and the Rating Agencies in writing
      of
      any laws or BPU Regulations hereafter promulgated that have or will reasonably
      be likely to have a material adverse effect on the Servicer’s ability to perform
      its duties under this Servicing Agreement.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

      (c)
  Other
        Information.
        Upon the reasonable
        request of the Issuer, the Trustee or any Rating Agency, the Servicer shall
        provide to the Issuer, the Trustee or the Rating Agencies, as the case may
        be,
        any public financial information in respect of the Servicer, or any material
        information regarding the Transferred Bondable Transition Property (or related
        TBC Collections) to the extent it is reasonably available to the Servicer,
        that
        may be reasonably necessary and permitted by law for the Issuer, the Trustee
        or
        the Rating Agencies to monitor the performance by the Servicer hereunder.
        In
        addition, so long as any of the Transition Bonds of any Series are Outstanding,
        the Servicer shall provide to the Issuer and to the Trustee, within a reasonable
        time after written request therefor, any information available to the Servicer
        or reasonably obtainable by the Servicer that is necessary to calculate the
        Transition Bond Charge.

    

     

    (d)
  Preparation
      of
      Reports, Certifications, etc.
      The Servicer shall
      prepare, procure, deliver and/or file, or cause to be prepared, procured,
      delivered or filed, any reports, attestations, exhibits, certifications or
      other
      documents required to be delivered or filed with the SEC (and/or any other
      governmental or regulatory agency) by the Issuer under the federal securities
      or
      other applicable laws or in accordance with the Basic Documents, including,
      but
      without limiting the generality of foregoing, filing with the SEC, if
      applicable, a copy or copies of (i) the certificates described in Section 3.05
      and Annex 1 hereof (under Form 10-D or any other applicable form), (ii) the
      annual statements of compliance, attestation reports and other certifications
      described in Section 3.06 hereof, and (iii) the Annual Independent Certified
      Public Accountant’s Report (and any attestation required under Regulation AB)
      described in Section 3.07 hereof. In addition, the appropriate officer or
      officers of the Servicer shall sign the Issuer’s Form 10-K (and any other
      applicable SEC or other reports, attestations, certifications and other
      documents), to the extent required by, and consistent with, the federal
      securities laws and/or any other applicable law.

     

    Section
      3.02  Collection
      and Allocation of the Transition Bond Charge.

     

    (a)
  The
      Servicer shall
      use all reasonable efforts, consistent with its customary servicing procedures,
      to collect all amounts owed in respect of the Transition Bond Charge as and
      when
      the same shall become due and shall follow such collection procedures as the
      Servicer follows with respect to collection activities that the Servicer
      conducts for itself and others. The Servicer shall not change the amount of
      or
      reschedule the due date of any scheduled payment of the Transition Bond Charge,
      except as contemplated in this Servicing Agreement or as required by law or
      court order or BPU Regulations; provided, however, that the Servicer may take
      any of the foregoing actions to the extent that such action would be in
      accordance with customary billing and collection practices of the Servicer
      with
      respect to billing and collection activities that the Servicer conducts for
      itself. The Servicer shall diligently enforce the obligations of any Third
      Parties providing billing and collection services with respect to the Transition
      Bond Charge.

     

    (b)
  As
      specified in the
      Petition and the Financing Order, any amounts received by the Servicer from
      a
      Customer that represent a partial payment toward an outstanding balance will
      be
      applied in the following manner:

     

    (i)  to
      sales taxes with
      respect to the partial payment (which the Servicer collects as trustee for
      the
      State of New Jersey and not for its own account or for that of the
      Issuer);

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (ii)  pro
      rata to the
      Transition Bond Charge and the Servicer’s other charges and taxes, where any of
      such charges are in arrears, based on their proportion to the Servicer’s total
      charges in arrears for that period; and

     

    (iii)  pro
      rata to the
      Transition Bond Charge and the Servicer’s other charges and taxes, where any of
      such charges are current charges, based on their proportion to the Servicer’s
      total current charges assessed for that period.

     

    JCP&L’s
      other
      charges may include the Market Transition Charge, the MTC-Tax and all other
      charges that JCP&L and any Third Party may be authorized to bill and collect
      from Customers on account of the provision of electric service. If there is
      more
      than one series of transition bonds outstanding, whether they be Transition
      Bonds issued by the Issuer, or transition bonds issued by JCP&L Transition
      Funding LLC or any other issuer for which the Servicer is acting as servicer,
      the Servicer shall allocate partial payments among such series in accordance
      with the Intercreditor Agreement.

     

    Section
      3.03  Payment
      of
      TBC Collections.

     

    (a)
      With the exception of the Quarterly Servicing Fee, which the Servicer is
      entitled to withhold from TBC Collections pursuant to Section 5.07 hereof,
      the
      Servicer agrees to remit to the Trustee for deposit in the Collection Account
      TBC Collections for each Billing Month based on its estimated system-wide
      write-off percentage and the average number of days outstanding of bills, as
      in
      effect from time to time as follows:

     

    (i)  on
      each Monthly
      Remittance Date, for so long as the Servicer has satisfied the conditions of
      Section 5.11(b), the Servicer shall remit to the Trustee for each preceding
      Billing Month an amount equal to the amount of TBC Collections deemed to have
      been received during the preceding calendar month, based on the estimated
      system-wide write-off percentage and the average number of days outstanding
      of
      bills then in effect; and

     

    (ii)  on
      each Daily
      Remittance Date, for so long as the Servicer has not satisfied the conditions
      of
      Section 5.11(b), the Servicer shall remit to the Trustee an amount equal to
      the
      amount of TBC Collections deemed to have been received during the Business
      Day
      which is two Business Days preceding such Daily Remittance Date, including
      (for
      the first Daily Remittance Date following a period when the Servicer had been
      remitting on a Monthly Remittance Date) any amounts on deposit with the Servicer
      (for the Billing Month and any prior Billing Month) prior to such Daily
      Remittance Date during a period when the Servicer had been remitting on a
      Monthly Remittance Date based on the estimated system-wide write-off percentage
      and the average number of days outstanding of bills then in effect.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (b)
  On
      or before each
      Reconciliation Date, the Servicer will reconcile actual TBC Collections with
      estimated TBC Collections previously made to the Trustee in respect of (i)
      each
      Annual Reconciliation Date, each of the twelve Billing Months beginning fifteen
      months before the month in which such Reconciliation Date occurs (or from the
      first Series Issuance Date, if less than fifteen months have elapsed), and
      (ii)
      each Monthly Reconciliation Date, the Billing Month that is three months prior
      to the Billing Month in which such Reconciliation Date occurs. In the event
      that
      there is a payment shortfall (i.e., the remittances of the estimated payments
      are less than the actual payments arising from the transition bond charges)
      with
      respect to the applicable Billing Months or Billing Month, as the case may
      be,
      the Servicer shall pay the shortfall to the Trustee for deposit into the
      Collection Account within two Business Days of that Reconciliation Date, or,
      if
      the Servicer remits TBC Collections on each Monthly Remittance Date in
      accordance with Section 5.11(b), on the next Monthly Remittance Date. In the
      event that there is an overpayment (i.e., the remittances of estimated payments
      exceed the amounts that should have been remitted based on the actual
      system-wide write-offs) for the applicable Billing Months or Billing Month,
      as
      the case may be, the Servicer may either (A) reduce the amount that the Servicer
      is required to remit to the Trustee for deposit in the Collection Account on
      the
      following Remittance Date (and, if necessary, succeeding Remittance Dates)
      by
      the amount of the overpayment or (B) direct the Trustee in writing to pay to
      the
      Servicer from the General Subaccount the amount of the overpayment, which upon
      payment shall become the property of the Servicer.

     

    (c)
  In
      the event that
      the Servicer makes changes to its current computerized customer information
      system that would allow the Servicer to track actual TBC Collections and/or
      otherwise monitor payment and collection activity more efficiently or accurately
      than is currently being done under this Servicing Agreement, the Servicer may
      substitute actual remittance procedures for the estimated remittance procedures
      described above and otherwise modify the remittance procedures described above
      as may be appropriate in the interests of efficiency, accuracy, cost and/or
      system capabilities. However, the Servicer may not make any such modification
      or
      substitution that will materially and adversely affect the Transition
      Bondholders. The Servicer must also give notice to the Rating Agencies of any
      such computer system changes no later than sixty business days after the date
      on
      which all customer accounts are first billed on the new system. 

     

    (d)
  The
      Servicer and
      Issuer agree and acknowledge that, although the Servicer will remit estimated
      payments arising from the TBC Collections to the Trustee, the Servicer is not
      obligated to make any payments on the Transition Bonds. The Servicer agrees
      and
      acknowledges that it holds all TBC Collections collected by it for the benefit
      of the Issuer and that all amounts will be remitted by the Servicer in
      accordance with this Servicing Agreement without any surcharge, fee, offset,
      charge or other deduction and without making any claim to reduce its obligation
      to remit all TBC Collections collected by it, except (i) as set forth in clause
      (b) above, (ii) with respect to the Quarterly Servicing Fee that it may withhold
      pursuant to Section 5.07 hereof and (iii) with respect to late fees permitted
      by
      Section 5.07. 

     

    Section
      3.04  Servicing
      and Maintenance Standards.
      The Servicer shall,
      on behalf of the Issuer:

     

    (a)
  manage,
      service,
      administer and make collections in respect of the Transferred Bondable
      Transition Property with reasonable care and in material compliance with
      applicable law and regulations, including all applicable BPU Regulations, using
      the same degree of care and diligence that the Servicer exercises with respect
      to billing and collection activities that the Servicer conducts for itself
      and
      others;

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (b)
  follow
      standards,
      policies and procedures in performing its duties as Servicer that are customary
      in the electric power distribution industry in New Jersey;

     

    (c)
  use
      all reasonable
      efforts, consistent with its customary servicing procedures, to enforce and
      maintain the rights of the Issuer and the Trustee in respect of the Transferred
      Bondable Transition Property; and

     

    (d)
  calculate
      the
      Transition Bond Charge in compliance with the Competition Act, the Financing
      Order and any applicable tariffs; 

     

    except
      where the
      failure to comply with any of the foregoing would not have a material adverse
      effect on the Issuer’s or the Trustee’s respective interests in the Transferred
      Bondable Transition Property. The Servicer shall follow such customary and
      usual
      practices and procedures as it shall deem necessary or advisable in its
      servicing of the Transferred Bondable Transition Property, which, in the
      Servicer’s judgment, may include the taking of legal action pursuant to Section
      3.10 or otherwise. Notwithstanding the foregoing, the Servicer shall not change
      its customary and usual practices and procedures in any manner that would have
      a
      material adverse effect on the Issuer’s or the Trustee’s respective interests in
      the Transferred Bondable Transition Property unless it shall have provided
      the
      Rating Agencies with prior written notice.

     

    Section
      3.05  Servicer’s
      Certificates.
      The Servicer will
      provide to the Issuer and to the Trustee the statements specified in Annex
      1 at
      the times indicated therein.

     

    Section
      3.06  Annual
      Statement as to Compliance.
      The
      Servicer shall
      deliver to the Issuer and the Trustee, on or before the earlier of
      (a) March 31 of each year or (b) with respect to each calendar
      year during which the Issuer’s annual report on Form 10-K is required to be
      filed in accordance with the Exchange Act and the rules and regulations
      thereunder, the date on which the annual report on Form 10-K is required to
      be
      filed in accordance with the Exchange Act and the rules and regulations
      thereunder, (i) a Servicer Officers’ Certificate containing, and certifying as
      to, the statements of compliance required by Item 1123 (or any successor or
      similar items or rule) of Regulation AB, as then in effect and (ii) a Servicer
      Officers’ Certificate containing, and certifying as to, the statements and
      assessment of compliance required by Item 1122(a) (or any successor or similar
      items or rule) of Regulation AB, as then in effect.

     

    The
      Servicer shall use commercially reasonable efforts to obtain from each other
      party participating in the servicing function any additional certifications
      as
      to the statements and assessment required under Item 1122 or Item 1123 of
      Regulation AB to the extent required in connection with the filing of the annual
      report on Form 10-K; provided, however, that a failure to obtain such
      certifications shall not be a breach of the Servicer’s duties
      hereunder.

     

    Section
      3.07  Annual
      Independent Registered Public Accountants’ Report.

     

    (a)
  The
      Servicer shall
      cause a firm of Independent registered public accountants (which may also
      provide other services to the Servicer or the Seller) to prepare, and the
      Servicer shall deliver to the Issuer, to the Trustee and to each Rating Agency,
      on or before the earlier of (a) March 31 of each year or (b) with
      respect to each calendar year during which the Issuer’s annual report on Form
      10-K is required to be filed in accordance with the Exchange Act and the rules
      and regulations thereunder, the date on which the annual report on Form 10-K
      is
      required to be filed in accordance with the Exchange Act and the rules and
      regulations thereunder, a report addressed to the Servicer (the “Annual
      Accountant’s Report”), which may be included as part of the Servicer’s customary
      auditing activities, to the effect that such firm has performed certain
      procedures in connection with the Servicer’s compliance with its obligations
      under this Servicing Agreement during the preceding calendar year (or, in the
      case of the first Annual Accountant’s Report, the period of time from the
      Initial Transfer Date until December 31, 2006), identifying the results of
      such
      procedures and including any exceptions noted. In the event such accounting
      firm
      requires the Trustee or the Issuer to agree or consent to the procedures
      performed by such firm, the Issuer shall direct the Trustee in writing to so
      agree, it being understood and agreed that the Trustee will deliver such letter
      of agreement or consent in conclusive reliance upon the direction of the Issuer,
      and the Trustee will not make any independent inquiry or investigation as to,
      and shall have no obligation or liability in respect of, the sufficiency,
      validity or correctness of such procedures. 

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (b)
  The
      Annual
      Accountant’s Report shall also indicate that the accounting firm providing such
      report is independent of the Servicer in accordance with the Rules of the Public
      Company Accounting Oversight Board and shall include the attestation report
      required under Item 1122(b) of Regulation AB (or any successor or similar items
      or rule), as then in effect.

     

    Section
      3.08  Bondable
      Transition Property Documentation.
      To assure uniform
      quality in servicing the Transferred Bondable Transition Property and to reduce
      administrative costs, the Servicer shall keep on file, in accordance with its
      customary procedures, all Bondable Transition Property Documentation, it being
      understood that the Servicer is acting solely as the servicing agent and
      custodian for the Issuer with respect to the Bondable Transition Property
      Documentation.

     

    Section
      3.09  Computer
      Records; Audits of Documentation.

     

    (a)
  Safekeeping.
      The Servicer shall
      maintain accurate and complete accounts, records and computer systems pertaining
      to the Transferred Bondable Transition Property and the Bondable Transition
      Property Documentation in accordance with its standard accounting procedures
      and
      in sufficient detail to permit reconciliation between payments or recoveries
      on
      (or with respect to) the Transition Bond Charge and the estimated TBC
      Collections from time to time remitted to the Trustee pursuant to Section 3.03
      and to enable the Issuer to comply with this Servicing Agreement and the
      Indenture. The Servicer shall conduct, or cause to be conducted, periodic audits
      of the Bondable Transition Property Documentation held by it under this
      Servicing Agreement and of the related accounts, records and computer systems,
      in such a manner as shall enable the Issuer and the Trustee, as pledgee of
      the
      Issuer, to verify the accuracy of the Servicer’s record keeping. The Servicer
      shall promptly report to the Issuer and to the Trustee any failure on the
      Servicer’s part to hold the Bondable Transition Property Documentation and
      maintain its accounts, records and computer systems as herein provided and
      shall
      promptly take appropriate action to remedy any such failure. Nothing herein
      shall be deemed to require an initial review or any periodic review by the
      Issuer or the Trustee of the Bondable Transition Property Documentation. The
      Servicer’s duties to hold the Bondable Transition Property Documentation on
      behalf of the Issuer set forth in this Section 3.09, to the extent such Bondable
      Transition Property Documentation has not been previously transferred to a
      Successor Servicer, shall terminate three years after the earlier of the date
      on
      which (i) the Servicer is succeeded by a Successor Servicer pursuant to the
      provisions of this Servicing Agreement or (ii) no Transition Bonds of any Series
      are Outstanding.

     

    
      
        
        

      

      
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    (b)
  Maintenance
      of
      and Access to Records.
      The Servicer shall
      maintain the Bondable Transition Property Documentation at 76 South Main Street,
      Akron, Ohio 44308 or at such other office as shall be specified to the Issuer
      and to the Trustee by written notice not later than thirty days prior to any
      change in location. The Servicer shall permit the Issuer and the Trustee or
      their respective duly authorized representatives, attorneys, agents or auditors
      at any time during normal business hours to inspect, audit and make copies
      of
      and abstracts from the Servicer’s records regarding the Transferred Bondable
      Transition Property, the Transition Bond Charge and the Bondable Transition
      Property Documentation. The failure of the Servicer to provide access to such
      information as a result of an obligation or applicable law (including BPU
      Regulations) prohibiting disclosure of information regarding customers shall
      not
      constitute a breach of this Section 3.09(b).

     

    Section
      3.10  Defending
      Transferred Bondable Transition Property Against Claims.
      The Servicer shall
      institute and maintain any action or proceeding necessary to compel performance
      by the BPU or the State of New Jersey of any of their obligations or duties
      under the Competition Act or the Financing Order with respect to the Transferred
      Bondable Transition Property, and the Servicer agrees to take such legal or
      administrative actions, including defending against or instituting and pursuing
      legal actions and appearing or testifying at hearings or similar proceedings,
      as
      may be reasonably necessary to block or overturn any attempts to cause a repeal
      of, modification of or supplement to the Competition Act, the Financing Order
      or
      the Restructuring Order (to the extent it affects the rights of Transition
      Bondholders or the validity or value of the Transferred Bondable Transition
      Property), as the case may be, the Bondable Transition Property or the rights
      of
      the holders of Transferred Bondable Transition Property if such repeal,
      modification or supplement would be adverse to the Transition Bondholders.
      The
      costs of any such action reasonably allocated by the Servicer to the Transferred
      Bondable Transition Property shall be payable from TBC Collections as an
      Operating Expense in accordance with the Indenture. The Servicer’s obligations
      pursuant to this Section 3.10 shall survive and continue notwithstanding the
      fact that the payment of Operating Expenses pursuant to the Indenture may be
      delayed (it being understood that the Servicer may be required to advance its
      own funds to satisfy its obligations under this Section 3.10).

     

    ARTICLE
      IV  

     

    SERVICES
      RELATED TO TRANSITION BOND CHARGE ADJUSTMENTS

     

    Section
      4.01  Transition
      Bond Charge Adjustments.The
      Servicer shall
      perform the calculations and take the actions relating to adjusting the
      Transition Bond Charge, as set forth in Section 5 of Annex 1, at the times
      indicated therein.

     

    
      
        
        

      

      
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    ARTICLE
      V  

     

    


     

    THE
      SERVICER

     

    Section
      5.01  Representations
      and Warranties of Servicer.
      The
      Servicer makes
      the following representations and warranties as of the Transfer Date, on which
      the Issuer has relied and will rely in acquiring Transferred Bondable Transition
      Property and in entering into this Servicing Agreement. These representations
      and warranties shall survive the execution and delivery of this Servicing
      Agreement, the sale, transfer, assignment and conveyance of the Transferred
      Bondable Transition Property to the Issuer pursuant to the Sale Agreement and
      the pledge thereof to the Trustee pursuant to the Indenture.

     

    (a)
  Organization
      and
      Good Standing.
      The Servicer is a
      corporation duly organized and in good standing under the laws of the State
      of
      its incorporation, with the corporate power and authority to own its properties
      and to conduct its business as such properties are currently owned and such
      business is presently conducted and to execute, deliver and carry out the terms
      of this Servicing Agreement, and has the power, authority and legal right to
      service the Transferred Bondable Transition Property. 

     

    (b)
  Due
      Qualification.
      The Servicer is
      duly qualified to do business as a foreign corporation in good standing, and
      has
      obtained all necessary licenses and approvals, in all jurisdictions in which
      the
      ownership or lease of property or the conduct of its business (including the
      servicing of the Transferred Bondable Transition Property as required by this
      Servicing Agreement) requires such qualifications, licenses or approvals (except
      where the failure to so qualify would not be reasonably likely to have a
      material adverse effect on the Servicer’s business, operations, assets,
      revenues, properties or prospects or on the transactions contemplated by this
      Servicing Agreement).

     

    (c)
  Power
      and
      Authority.
      The Servicer has
      the corporate power and authority to execute and deliver this Servicing
      Agreement and to carry out its terms; and the execution, delivery and
      performance of this Servicing Agreement have been duly authorized by the
      Servicer by all necessary corporate action.

     

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

     

    (e)
  No
      Violation.
      The consummation of
      the transactions contemplated by this Servicing Agreement and the fulfillment
      of
      the terms hereof will not: conflict with, result in any breach of any of the
      terms and provisions of, or constitute (with or without notice or lapse of
      time
      or both) a default under, the articles of incorporation, by-laws or other
      constituent documents of the Servicer, or any indenture, material agreement
      or
      other material instrument to which the Servicer is a party or by which it is
      bound; or result in the creation or imposition of any Lien upon any of its
      properties pursuant to the terms of any such indenture, material agreement
      or
      other material instrument; or violate any law or any order, rule or regulation
      applicable to the Servicer of any court or of any federal or State regulatory
      body, administrative agency or other governmental instrumentality having
      jurisdiction over the Servicer or its properties.

     

    
      
        
        

      

      
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    (f)
  Approvals.
      Except for filings
      with the BPU for adjusting the Transition Bond Charge pursuant to Section 4.01
      and Annex 1, the filing of financing statements under the New Jersey UCC and
      the
      Delaware UCC, and the filing of continuation filings under the New Jersey UCC
      and the Delaware UCC, no approval, authorization, consent, order or other action
      of, or filing with, any court, federal or state regulatory body, administrative
      agency or other governmental instrumentality is required in connection with
      the
      execution and delivery by the Servicer of this Servicing Agreement, the
      performance by the Servicer of the transactions contemplated hereby or the
      fulfillment by the Servicer of the terms hereof, except those that have been
      obtained or made. 

     

    (g)
  Reports
      and
      Certificates.
      Each report and
      certificate delivered in connection with any filing made with the BPU by the
      Servicer on behalf of the Issuer with respect to the Transition Bond Charge
      or
      Transition Bond Charge Adjustments will constitute a representation and warranty
      by the Servicer that each such report or certificate, as the case may be, is
      true and correct in all material respects; provided, however, that to the extent
      any such report or certificate is based in part upon or contains assumptions,
      forecasts or other predictions of future events, this representation and
      warranty of the Servicer with respect thereto will be limited to the
      representation and warranty that such assumptions, forecasts or other
      predictions of future events are reasonable based upon historical performance
      or
      facts known to the Servicer on the date such report or certificate is
      delivered.

     

    (h)
  No
      Proceedings.
      There are no
      proceedings or investigations pending or, to the Servicer’s best knowledge,
      threatened before any court, federal or state regulatory body, administrative
      agency or other governmental instrumentality having jurisdiction over the
      Servicer or its properties:

     

    (i)  seeking
      to prevent
      the issuance of the Transition Bonds or the consummation of any of the
      transactions contemplated by this Servicing Agreement or any of the other Basic
      Documents;

     

    (ii)  except
      as disclosed
      by the Servicer to the Issuer (or as disclosed in filings with the Commission
      made by the Servicer), seeking any determination or ruling that might materially
      and adversely affect the performance by the Servicer of its obligations under,
      or the validity or enforceability against the Servicer of, this Servicing
      Agreement or any of the other Basic Documents; or 

     

    (iii)  relating
      to the
      Servicer and which might materially and adversely affect the federal or State
      income tax attributes of the Transition Bonds.

     

    Section
      5.02  Indemnities
      of Servicer; Release of Claims.

     

    (a)
  
      The Servicer shall
      be liable as such in accordance herewith only to the extent of the obligations
      specifically undertaken by the Servicer under this Servicing
      Agreement.

     

    
      
        
        

      

      
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    (b)
  The
      Servicer shall
      indemnify the Issuer and the Trustee (for itself and on behalf of the Transition
      Bondholders) and each of their respective trustees, members, managers, officers,
      directors, employees and agents for, and defend and hold harmless each such
      person from and against, any and all Losses that may be imposed upon, incurred
      by or asserted against any such person as a result of:

     

    (i)  the
      Servicer’s
      willful misconduct, bad faith or gross negligence in the performance of its
      duties or observance of its covenants under this Servicing Agreement or the
      Servicer’s reckless disregard of its obligations and duties under this Servicing
      Agreement;

     

    (ii)  the
      Servicer’s
      breach of any of its representations or warranties in this Servicing Agreement;
      and

     

    (iii)  litigation
      and
      related expenses relating to its status and obligations as Servicer (other
      than
      any proceedings the Servicer is required to institute under this Servicing
      Agreement);

     

    provided,
      however,
      that the Servicer shall not be liable for any Losses resulting from the willful
      misconduct or gross negligence of any person indemnified pursuant to this
      Section 5.02 (each, an “Indemnified Person”) or resulting from a breach of a
      representation or warranty made by such Indemnified Person in any of the Basic
      Documents that gives rise to the Servicer’s breach.

     

    Promptly
      after
      receipt by an Indemnified Person of notice of its involvement in any action,
      proceeding or investigation, such Indemnified Person shall, if a claim for
      indemnification in respect thereof is to be made against the Servicer under
      this
      Section 5.02, notify the Servicer in writing of such involvement. Failure by
      an
      Indemnified Person to so notify the Servicer shall relieve the Servicer from
      the
      obligation to indemnify and hold harmless such Indemnified Person under this
      Section 5.02 only to the extent that the Servicer suffers actual prejudice
      as a
      result of such failure. With respect to any action, proceeding or investigation
      brought by a third party for which indemnification may be sought under this
      Section 5.02, the Servicer shall be entitled to assume the defense of any such
      action, proceeding or investigation unless (x) such action, proceeding or
      investigation exposes the Indemnified Person to a risk of criminal liability
      or
      forfeiture, (y) the Servicer and such Indemnified Person have a conflict of
      interest in their respective defenses of such action, proceeding or
      investigation or (z) there exists at the time the Servicer would assume such
      defense an ongoing Servicer Default. Upon assumption by the Servicer of the
      defense of any such action, proceeding or investigation, the Indemnified Person
      shall have the right to participate in such action or proceeding and to retain
      its own counsel (including local counsel), and the Servicer shall bear the
      reasonable fees, costs and expenses of such separate counsel. The Indemnified
      Person shall not settle or compromise or consent to the entry of any judgment
      with respect to any pending or threatened claim, action, suit or proceeding
      in
      respect of which indemnification may be sought under this Section 5.02 (whether
      or not the Servicer is an actual or potential party to such claim or action)
      unless the Servicer agrees in writing to such settlement, compromise or consent
      and such settlement, compromise or consent includes an unconditional release
      of
      the Servicer from all liability arising out of such claim, action, suit or
      proceeding.

     

    
      
        
        

      

      
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    (c)
  The
      Servicer’s
      indemnification obligations under Section 5.02(b) for events occurring prior
      to
      the removal or resignation of the Trustee or the termination of this Servicing
      Agreement shall survive the resignation or removal of the Trustee or the
      termination of this Servicing Agreement and shall include reasonable costs,
      fees
      and expenses of investigation and litigation (including the Issuer’s and the
      Trustee’s reasonable attorneys’ fees and expenses).

     

    (d)
  Except
      to the extent
      expressly provided for in the Basic Documents (including the Servicer’s claims
      with respect to the Quarterly Servicing Fees and the Seller’s claim for payment
      of the purchase price of the Transferred Bondable Transition Property), the
      Servicer hereby releases and discharges the Issuer (including its Member,
      Managers, officers, employees and agents, if any) and the Trustee (including
      its
      respective officers, directors, employees and agents) (collectively, the
“Released Parties”) from any and all actions, claims and demands whatsoever,
      which the Servicer shall or may have against any such person relating to the
      Transferred Bondable Transition Property or the Servicer’s activities with
      respect thereto other than any actions, claims and demands arising out of the
      willful misconduct, bad faith or gross negligence of the Released
      Parties.

     

    Section
      5.03  Merger
      or
      Consolidation of, or Assumption of the Obligations
      of, Servicer.
      Any Person or
      Persons:

     

    (a)
  into
      which the
      Servicer may be merged or consolidated and which succeeds to all or a
      significant part of the electric distribution business of the
      Servicer,

     

    (b)
  which
      results from
      the division of the Servicer into two or more Persons and which succeeds to
      all
      or a significant part of the electric distribution business of the
      Servicer,

     

    (c)
  which
      may result
      from any merger or consolidation to which the Servicer shall be a party and
      which succeeds to all or a significant part of the electric distribution
      business of the Servicer,

     

    (d)
  which
      may, in a
      transaction or a series of related transactions, succeed to the properties
      and
      assets of the Servicer substantially as a whole and which, in a transaction
      or a
      series of related transactions, succeeds to all or a significant part of the
      electric distribution business of the Servicer, or 

     

    (e)
  which
      may otherwise
      succeed to all or a significant part of the electric distribution business
      of
      the Servicer,

     

    which
      Person or
      Persons in any of the foregoing cases executes or execute an agreement of
      assumption to perform every obligation of the Servicer under this Servicing
      Agreement, shall be the successor or successors to the Servicer hereunder
      without the execution or filing of any document or any further act by any of
      the
      parties to this Servicing Agreement; provided, however, that:

     

    (i)  immediately
      after
      giving effect to such transaction, no representation or warranty made pursuant
      to Section 5.01 shall have been breached and no Servicer Default, and no event
      that, after notice or lapse of time, or both, would become a Servicer Default,
      shall have occurred and be continuing;

     

    
      
        
        

      

      
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    (ii)  the
      Servicer shall
      have delivered to the Issuer, the Trustee and the Rating Agencies a Servicer
      Officers’ Certificate and an Opinion of Counsel each stating that such
      consolidation, merger or succession and such agreement of assumption comply
      with
      this Section 5.03 and that all conditions precedent, if any, provided for in
      this Servicing Agreement relating to such transaction have been complied
      with;

     

    (iii)  the
      Servicer shall
      have delivered to the Issuer, the Trustee and the Rating Agencies an Opinion
      of
      Counsel either:

     

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

            


    

     

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

            


    

     

    (iv)  the
      Rating Agencies
      shall have received prior written notice of such transaction, and the then
      current ratings on any of the Outstanding Transition Bonds will not be withdrawn
      or downgraded by the Rating Agencies; and

     

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

     

    The
      Servicer shall not consummate any transaction referred to in clauses (a), (b),
      (c), (d) or (e) above except upon execution of the above described agreement
      of
      assumption and compliance with subclauses (i), (ii), (iii), (iv) and (v) above.
      When any Person or Persons acquires or acquire the properties and assets of
      the
      Servicer substantially as a whole and becomes or become the successor or
      successors to the Servicer in accordance with the terms of this Section 5.03,
      then upon the satisfaction of all of the other conditions of this Section 5.03,
      the Servicer shall automatically and without further notice be released from
      its
      obligations hereunder.

     

    Section
      5.04  Assignment
      of Servicer’s Obligations.
      Subject
      to the
      provisions of Section 5.06, the Servicer may assign any or all of its
      obligations hereunder to any successor if either (i) prior written notice has
      been provided to the Rating Agencies and the then current ratings on any of
      the
      Outstanding Transition Bonds will not be withdrawn or downgraded by the Rating
      Agencies and any other conditions specified in the Financing Order have been
      satisfied or (ii) the Servicer is replaced by a successor pursuant to Section
      5.03 hereof.

     

    
      
        
        

      

      
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    Section
      5.05  Limitation
      on Liability of Servicer and Others.
      The
      Servicer, in
      such capacity, shall not be liable to the Issuer, the Trustee, or the Transition
      Bondholders except as provided under this Servicing Agreement, for any action
      taken or for refraining from the taking of any action pursuant to this Servicing
      Agreement or for good faith errors in judgment; provided, however, that this
      provision shall not protect the Servicer against any liability that would
      otherwise be imposed by reason of willful misconduct, bad faith or gross
      negligence in the performance of its duties or by reason of reckless disregard
      of its obligations and duties under this Servicing Agreement. The Servicer
      and
      any director, officer, employee or agent of the Servicer may rely in good faith
      on the advice of counsel reasonably acceptable to the Trustee or on any document
      of any kind, prima facie properly executed and submitted by any Person,
      respecting any matters arising under this Servicing Agreement.

     

    Except
      as provided
      in this Servicing Agreement, the Servicer, in such capacity, shall not be under
      any obligation to appear in, prosecute or defend any legal action that is not
      incidental to its duties to service the Transferred Bondable Transition Property
      in accordance with this Servicing Agreement or related to its indemnification
      obligations, and that in its reasonable opinion may cause it to incur any
      expense or liability.

     

    Section
      5.06  JCP&L
      Not to Resign as Servicer.
      Subject
      to the
      provisions of Sections 5.03 and 5.04, JCP&L shall not resign from the
      obligations and duties imposed on it as Servicer under this Servicing Agreement
      except upon a determination that the performance of its duties under this
      Servicing Agreement shall no longer be permissible under applicable law. Any
      such resignation shall not be effective until approved by the BPU. Notice of
      any
      such determination permitting the resignation of JCP&L shall be communicated
      to the Issuer, the Trustee and each Rating Agency at the earliest practicable
      time (and, if such communication is not in writing, shall be confirmed in
      writing at the earliest practicable time), and any such determination shall
      be
      evidenced by an Opinion of Counsel to such effect delivered to the Issuer and
      the Trustee concurrently with or promptly after such notice. No such resignation
      shall be permitted if such resignation will result in the reduction or
      withdrawal of the then current ratings on any Outstanding Transition Bond.
      No
      such resignation shall become effective until a Successor Servicer has assumed
      the servicing obligations and duties hereunder of the Servicer in accordance
      with Section 6.04.

     

    Section
      5.07  Quarterly
      Servicing Fee.
      The Issuer agrees
      to pay the Servicer the Quarterly Servicing Fee with respect to all Series
      of
      Transition Bonds. On each Monthly Remittance Date that coincides with a Payment
      Date, the Servicer shall be entitled to withhold the amount of the Quarterly
      Servicing Fee from TBC Collections as compensation under this Servicing
      Agreement unless the Trustee has notified the Servicer in writing that the
      Issuer does not hold sufficient funds to pay amounts owed in such month to
      the
      Trustee. For so long as JCP&L is the Servicer, the Quarterly Servicing Fee
      shall be $57,000. The Servicer shall be entitled to retain as additional
      compensation net investment income on TBC Collections related to the Transferred
      Bondable Transition Property received by the Servicer during any Collection
      Period prior to remittance to the Collection Account and the late fees, if
      any,
      paid by Customers to the Servicer. The Issuer and the Servicer agree and
      acknowledge that the foregoing fees constitute a fair and reasonable price
      for
      the obligations to be performed by the Servicer. In no event shall the Trustee
      be liable for any Quarterly Servicing Fee.

     

    
      
        
        

      

      
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    Section
      5.08  Servicer
      Expenses.
      Except
      as otherwise
      expressly provided herein, the Servicer shall be required to pay all expenses
      incurred by it in connection with its activities hereunder, including fees
      and
      disbursements of independent accountants and counsel, taxes imposed on the
      Servicer and expenses incurred in connection with reports to the Transition
      Bondholders and shall not be entitled to any additional payment or reimbursement
      therefor.

     

    Section
      5.09  Subservicing.The
      Servicer may at
      any time appoint a subservicer to perform all or any portion of its obligations
      as Servicer hereunder; provided, however, that written notice has been given
      to
      the Rating Agencies and the Trustee and the then current ratings on any
      Outstanding Transition Bonds will not be withdrawn or downgraded by the Rating
      Agencies; and provided, further, that the Servicer shall remain obligated and
      be
      liable to the Issuer, the Trustee and the Transition Bondholders for the
      servicing and administering of the Transferred Bondable Transition Property
      in
      accordance with the provisions hereof without diminution of such obligation
      and
      liability by virtue of the appointment of such subservicer and to the same
      extent and under the same terms and conditions as if the Servicer alone were
      servicing and administering the Transferred Bondable Transition Property. The
      fees and expenses of the subservicer shall be as agreed between the Servicer
      and
      its subservicer from time to time, and none of the Issuer, the Trustee or the
      Transition Bondholders shall have any responsibility therefor. Any such
      appointment shall not constitute a Servicer resignation under Section 5.06.
      

     

    Section
      5.10  No
      Servicer
      Advances.
      The
      Servicer shall
      not make any advances of interest on or principal of the Transition Bonds.
      

     

    Section
      5.11  Remittances.

     

    (a)
  The
      Servicer shall
      remit TBC Collections (from whatever source) in accordance with
      Section 3.03(a)(ii), and all proceeds of other Collateral of the Issuer, if
      any, received by the Servicer, to the Trustee for deposit pursuant to the
      Indenture, not later than each Daily Remittance Date. The Servicer shall
      promptly remit any Indemnity Amounts paid or received by it immediately to
      the
      Trustee for deposit pursuant to the Indenture.

     

    (b)
  Notwithstanding
      the
      foregoing clause (a), as long as 

     

    (i)  JCP&L
      or any
      successor to JCP&L’s electric distribution business remains the
      Servicer,

     

    (ii)  no
      Servicer Default
      has occurred and is continuing,

     

    (iii)  (A) 
      JCP&L,
      or any
      Successor Servicer to JCP&L’s electric
      distribution business, maintains a short-term rating
      of ‘A-1’ or
      better by S&P, ‘P-1’ or better by Moody’s,
      and ‘F-1’
or better by Fitch,

     

    or

     

     (B)     
      any
      additional conditions or limitations imposed by the
      Rating Agencies
      are complied with and each 

     Rating
      Agency
      has notified the Servicer, the Issuer and
      the Trustee that
      the monthly remittance will not 

    result
      in a
      downgrade or withdrawal of the then current
      ratings of
      any Outstanding Transition Bonds 

    (except
      that with
      regard to Moody’s and Fitch it will
      be sufficient
      to provide ten days notice of any such
      action),

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    (iv)  the
      BPU has approved
      Servicer remittances on a monthly basis and

     

    (v)  the
      Servicer has
      delivered to the Rating Agencies an Opinion of Counsel addressing certain “true
      sale” and “non-consolidation” issues in form and substance reasonably
      satisfactory to such Rating Agencies,

     

    the
      Servicer need not make the daily remittances required by clause (a), but in
      lieu
      thereof, shall remit all TBC Collections (from whatever source) in accordance
      with Section 3.03(a)(i), and all proceeds of other Collateral of the Issuer,
      if
      any, received by the Servicer during any Collection Period to the Trustee for
      deposit pursuant to the Indenture, not later than the corresponding Monthly
      Remittance Date.

     

    Section
      5.12  Protection
      of Title.
      The
      Servicer shall
      execute and file such filings and cause to be executed and filed such filings,
      all in such manner and in such places as may be required by law fully to
      preserve, maintain and protect the interests of the Trustee in the Transferred
      Bondable Transition Property and other Collateral, including all filings
      required under the New Jersey UCC and the Delaware UCC relating to the transfer
      of ownership of or a security interest in the Transferred Bondable Transition
      Property by the Seller to the Issuer or the security interest granted by the
      Issuer to the Trustee in the Transferred Bondable Transition Property and other
      Collateral. The Servicer shall deliver (or cause to be delivered) to the Issuer
      and the Trustee file-stamped copies of, or filing receipts for, any document
      filed as provided above, as soon as available following such
      filing.

     

    ARTICLE
      VI  

     

    SERVICER
      DEFAULT

     

    Section
      6.01  Servicer
      Default.
      If
      any one of the
      following events (a “Servicer Default”) occurs and is continuing:

     

    (a)
  any
      failure by the
      Servicer to remit to the Trustee, on behalf of the Issuer, any required
      remittance that continues unremedied for a period of five Business Days after
      the date it is required to be paid; or

     

    (b)
  any
      failure by the
      Servicer duly to observe or perform in any material respect any other covenant
      or agreement of the Servicer set forth in this Servicing Agreement or any other
      Basic Document to which the Servicer, as such, is a party, which
      failure:

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (i)  materially
      and
      adversely affects the Transferred Bondable Transition Property or the rights
      of
      the Transition Bondholders; and

     

    (ii)  continues
      unremedied
      for a period of sixty days after the date on which written notice of such
      failure has been given to the Servicer by the Issuer, the Trustee or the Holders
      of not less than twenty-five percent of the Outstanding principal balance of
      the
      Transition Bonds of all Series and Classes, acting together as a single class,
      or after discovery of such failure by an officer of the Servicer, as the case
      may be; or

     

    (c)
  any
      representation
      or warranty made by the Servicer in this Servicing Agreement proves to have
      been
      incorrect when made, which has a material adverse effect on the Issuer or the
      Transition Bondholders and which material adverse effect continues unremedied
      for a period of sixty days after the date on which written notice thereof has
      been given to the Servicer by the Issuer, the Trustee or the Holders of not
      less
      than twenty-five percent of the Outstanding principal balance of the Transition
      Bonds of all Series and Classes, acting together as a single class, or after
      discovery of such failure by an officer of the Servicer, as the case may be;
      or

     

    (d)
  an
      Insolvency Event
      occurs with respect to the Servicer; 

     

    then,
      and in each
      and every case, so long as the Servicer Default shall not have been remedied,
      the Trustee, with the written consent of the Holders of a majority of the
      Outstanding principal balance of the Transition Bonds of all Series and Classes,
      voting together as a single class, by notice then given in writing to the
      Servicer (a “Termination Notice”), may terminate all the rights and obligations
      (other than the indemnification obligations set forth in Section 5.02 hereof,
      the obligation under Section 6.04 to continue performing its functions as
      Servicer until a Successor Servicer is appointed and the right to receive the
      requisite portion of the Quarterly Servicing Fees) of the Servicer under this
      Servicing Agreement. In addition, upon a Servicer Default because of a failure
      to make required remittances, the Issuer and the Trustee shall each be entitled
      to apply to the BPU or any court of competent jurisdiction for sequestration
      and
      payment to the Trustee of revenues arising with respect to the Transferred
      Bondable Transition Property.

     

    On
      or after the
      receipt by the Servicer of a Termination Notice, all authority and power of
      the
      Servicer under this Servicing Agreement, whether with respect to the Transferred
      Bondable Transition Property, the related Transition Bond Charge or otherwise,
      shall, upon appointment of a Successor Servicer pursuant to Section 6.04,
      without further action, pass to and be vested in such Successor Servicer and,
      without limitation, the Trustee is hereby authorized and empowered to execute
      and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or
      otherwise, any and all documents and other instruments, and to do or accomplish
      all other acts or things necessary or appropriate to effect the purposes of
      such
      Termination Notice, whether to complete the transfer of the Bondable Transition
      Property Documentation and related documents, or otherwise. The predecessor
      Servicer shall cooperate with the Successor Servicer, the Trustee and the Issuer
      in effecting the termination of the responsibilities and rights of the
      predecessor Servicer under this Servicing Agreement, including the transfer
      to
      the Successor Servicer for administration by it of all cash amounts that shall
      at the time be held by the predecessor Servicer for remittance, or shall
      thereafter be received by it with respect to the Transferred Bondable Transition
      Property or the related Transition Bond Charge. As soon as practicable after
      receipt by the Servicer of such Termination Notice, the Servicer shall deliver
      the Bondable Transition Property Documentation to the Successor Servicer. All
      reasonable costs and expenses (including attorneys’ fees and expenses) incurred
      in connection with transferring the Bondable Transition Property Documentation
      to the Successor Servicer and amending this Servicing Agreement to reflect
      such
      succession as Servicer pursuant to this Section 6.01 shall be paid by the
      predecessor Servicer upon presentation of reasonable documentation of such
      costs
      and expenses. Termination of JCP&L as Servicer shall not terminate
      JCP&L’s rights or obligations under the Sale Agreement.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    Section
      6.02  Notice
      of
      Servicer Default.
      The
      Servicer shall
      deliver to the Issuer, the Trustee and each Rating Agency promptly after having
      obtained knowledge thereof, but in no event later than five Business Days
      thereafter, written notice in a Servicer Officers’ Certificate of any event or
      circumstance which, with the giving of notice or the passage of time or both,
      would become a Servicer Default under Section 6.01. If any Outstanding
      Transition Bonds are listed on the Luxembourg Stock Exchange, such notice shall
      also be given by publication in a daily newspaper in Luxembourg, if the rules
      of
      the Luxembourg Stock Exchange so require. 

     

    Section
      6.03  Waiver
      of
      Past Defaults.
      The
      Trustee, with
      the written consent of the Holders of not less than a majority of the
      Outstanding principal balance of the Transition Bonds of all Series and Classes,
      voting together as a single class, may waive in writing any default by the
      Servicer in the performance of its obligations hereunder and its consequences,
      except a default in making any required remittances to the Trustee of TBC
      Collections in accordance with Section 3.03. Upon any such waiver of a past
      default, such default shall cease to exist, and any Servicer Default arising
      therefrom shall be deemed to have been remedied for every purpose of this
      Servicing Agreement. No such waiver shall extend to any subsequent or other
      default or impair any right consequent thereto. 

     

    Section
      6.04  Appointment
      of Successor.

     

    (a)
  Upon
      the Servicer’s
      receipt of a Termination Notice pursuant to Section 6.01 or the Servicer’s
      resignation in accordance with the terms of this Servicing Agreement, the
      predecessor Servicer shall continue to perform its functions as Servicer under
      this Servicing Agreement and shall be entitled to receive the requisite portion
      of the Quarterly Servicing Fees, until a Successor Servicer has assumed in
      writing the obligations of the Servicer hereunder as described below. In the
      event of the Servicer’s removal or resignation hereunder, the Trustee, as
      assignee of the Issuer, may, at the sole expense of the Issuer, appoint a
      Successor Servicer, with the consent of the Holders of not less than a majority
      of the Outstanding principal balance of the Transition Bonds of all Series
      and
      Classes, voting together as a single class, and the Successor Servicer shall
      accept its appointment by a written assumption in form acceptable to the Issuer
      and the Trustee. If, within thirty days after the delivery of the Termination
      Notice, a new Servicer has not been appointed and accepted such appointment,
      the
      Trustee, at the sole expense of the Issuer, may petition the BPU or a court
      of
      competent jurisdiction to appoint a Successor Servicer under this Servicing
      Agreement. A Person shall qualify as a Successor Servicer only if:

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    (i)  such
      Person is
      permitted to perform the duties of the Servicer pursuant to the Competition
      Act,
      the BPU Regulations, the Financing Order and this Servicing
      Agreement;

     

    (ii)  prior
      notice has
      been given to the Rating Agencies and the then current ratings on any
      Outstanding Transition Bonds shall not be withdrawn or downgraded by the Rating
      Agencies; and 

     

    (iii)  such
      Person enters
      into a servicing agreement with the Issuer having substantially the same
      provisions as this Servicing Agreement.

     

    (b)
  Upon
      appointment,
      the Successor Servicer shall be the successor in all respects to the predecessor
      Servicer under this Servicing Agreement and shall be subject to all the
      responsibilities, duties and liabilities arising thereafter relating thereto
      placed on the predecessor Servicer and shall be entitled to the Quarterly
      Servicing Fee and all the rights granted to the predecessor Servicer by the
      terms and provisions of this Servicing Agreement. 

     

    (c)
  The
      Successor
      Servicer may resign only if it is prohibited from serving as such by applicable
      law.

     

    (d)
  A
      Successor Servicer
      may bring an action against a particular Customer for nonpayment of the
      Transition Bond Charge, or terminate service for failure to pay the Transition
      Bond Charge, only if such Successor Servicer is the electric public utility
      with
      respect to that Customer.

     

    (e)
  All
      expenses
      incurred by the Trustee in connection with the appointment of a Successor
      Servicer shall be reimbursed to the Trustee, pursuant to Section 8.02(d) of
      the
      Indenture.

     

    Section
      6.05  Cooperation
      With Successor.
      The
      Servicer
      covenants and agrees with the Issuer that it will, on an ongoing basis,
      cooperate with the Successor Servicer and provide whatever information is,
      and
      take whatever actions are, reasonably necessary to assist the Successor Servicer
      in performing its obligations hereunder.

     

    ARTICLE
      VII  

     

    MISCELLANEOUS
      PROVISIONS

     

    Section
      7.01  Amendment.

     

    [(a)
  Upon
      five Business
      Days’ prior written notice to the Rating Agencies, this Servicing Agreement may
      be amended by the Servicer and the Issuer with the written consent of the
      Trustee upon receipt of an Issuer Order, but without the consent of the
      Transition Bondholders, to: 

     

    (i)  cure
      any
      ambiguity;

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    (ii)  correct
      or
      supplement any provision in this Servicing Agreement;

     

    (iii)  add
      any provisions
      to or change in any manner or eliminate any of the provisions of this Servicing
      Agreement; or

     

    (iv)  modify
      in any manner
      the rights of the Transition Bondholders;

     

    provided,
      that such
      action will not, as certified in a Servicer Officers’ Certificate of the
      Servicer delivered to the Issuer and to the Trustee and the Managers, adversely
      affect in any material respect the interest of any Holder of Transition Bonds
      then Outstanding.

     

    (b)
  This
      Servicing
      Agreement may be amended by the Servicer and the Issuer with five Business
      Days’
prior written notice to the Rating Agencies and with the written consent of
      the
      Trustee and the consent of the Holders of not less than a majority of the
      Outstanding principal balance of the Transition Bonds of all Series and Classes
      affected thereby, voting together as a single class, for the purpose of adding
      any provisions to or changing in any manner or eliminating any of the provisions
      of this Servicing Agreement or of modifying in any manner the rights of the
      Transition Bondholders; provided, however, no amendment adopted in this manner
      may increase or decrease, or accelerate or delay the timing or collection of
      the
      Transition Bond Charge, or reduce the percentage of Transition Bondholders
      required to consent to amendments.

     

    No
      amendment of the
      provisions of this Servicing Agreement relating to the Servicer’s remittance and
      Transition Bond Charge Adjustment obligations will be permitted absent
      confirmation from the Rating Agencies that such amendment will not result in
      a
      reduction or withdrawal of the then existing ratings of any Outstanding
      Transition Bonds by the Rating Agencies (except that with regard to Moody’s and
      Fitch it will be sufficient to provide ten days’ prior notice of the
      amendment).

     

    (c)
  The
      Issuer may also
      amend the servicing procedures provided in this Servicing Agreement solely
      to
      address changes to the Servicer’s method of calculating payments of the
      Transition Bond Charge received as a result of changes to the Servicer’s current
      computerized information system, if the amendment does not have a material
      adverse effect on the Holders of Transition Bonds then Outstanding, with prior
      written notice to the Trustee and the Rating Agencies, but without the consent
      of the Trustee, any Rating Agency or any Transition Bondholder. These changes
      may include changes that would replace remittances calculated by estimation
      procedures with remittances of TBC Collections actually received.

     

    Prior
      to the
      execution of any amendment to this Servicing Agreement, the Issuer and the
      Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating
      that the execution of such amendment is authorized or permitted by this
      Servicing Agreement and the Opinion of Counsel referred to in Section 3.06(b)
      of
      the Indenture. The Issuer and the Trustee may, but shall not be obligated to,
      enter into any such amendment which affects their own rights, duties or
      immunities under this Servicing Agreement or otherwise. 

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

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

     

    (a)
  in
      the case of the
      Servicer, at Jersey Central Power & Light Company, 76 South Main Street,
      Akron, Ohio 44308;

     

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

     

    (c)
  in
      the case of the
      Trustee, at its Corporate Trust Office;

     

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

     

    (e)
  in
      the case of
      S&P, at Standard & Poor’s, Structured Finance, ABS Surveillance Corp.,
      55 Water Street, 41st
      Floor, New York,
      New York 10041-0003, Fax: 212-438-2664; and

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

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

     

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

     

    Section
      7.08  Assignment
      to the Trustee.
       

     

    (a)   The
      Servicer hereby
      acknowledges and consents to any pledge, assignment and grant of a security
      interest by the Issuer to the Trustee pursuant to the Indenture of all right,
      title and interest of the Issuer in, to and under the Transferred Bondable
      Transition Property and other Collateral owned by the Issuer and the proceeds
      thereof and the assignment of any or all of the Issuer’s rights hereunder to the
      Trustee.

     

    (b) In
      no event shall
      the Trustee have any liability for the representations, warranties, covenants,
      agreements or other obligations of the Issuer hereunder or in any of the
      certificates, notices or agreements delivered pursuant hereto, as to all of
      which recourse shall be had solely to the assets of the Issuer.

     

    (c) The
      Trustee, in
      acting hereunder, is entitled to all rights, benefits, protections, immunities
      and indemnities accorded to it under the Indenture. 

     

    Section
      7.09  Nonpetition
      Covenants.
      Notwithstanding any
      prior termination of this Servicing Agreement or the Indenture, the Servicer
      hereby covenants and agrees that it shall not, prior to the date which is one
      year and one day after the satisfaction and discharge of the Indenture,
      including, without limitation, any amounts owed to third-party credit enhancers,
      and any amounts owed by the Issuer under Interest Rate Swap Agreements,
      acquiesce, petition or otherwise invoke or cause the Issuer to invoke the
      process of any court or government authority for the purpose of commencing
      or
      sustaining a case against the Issuer under any federal or State bankruptcy,
      insolvency or similar law or appointing a receiver, liquidator, assignee,
      trustee, custodian, sequestrator or other similar official of the Issuer or
      any
      substantial part of the property of the Issuer, or ordering the winding up
      or
      liquidation of the affairs of the Issuer.

     

    Section
      7.10  Termination.
      This Servicing
      Agreement shall terminate upon satisfaction and discharge of the Indenture.
      

     

    


     

    


    
      
        
          
            1 

            NY
              #561191 v12

          

          
          

        

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

     

     

    as
      Issuer

     

     

    

      
        	 	 JCP&L
                TRANSITION FUNDING II LLC,
	 	 as
                Issuer
	 	 
	 	 
	
                By:

              	
                  /s/       
                  Randy Scilla

              
	 	
                Name:
                   Randy Scilla

              
	 	
                Title: 
                  Assistant Treasurer

              
	 	 
	 	
                JERSEY
                  CENTRAL POWER & LIGHT 

              
	 	
                COMPANY, 

              
	 	
                as
                  Servicer

              
	 	 
	 	 
	
                By:

              	
                  /s/       
                  Randy Scilla

              
	 	
                Name: 
                  Randy Scilla

              
	 	
                Title:  
                  Assistant Treasurer

              


      

    

     

    

      
        	 Acknowledged
                and Accepted:	 	 
	 	 
	
                 The
                  Bank
                  of New York, 

                as
                  Trustee 

              	 
 	 
 
	
              	
              	 
	 By:
                /s/
                Catherine Cerilles	 
	 Name:
                Catherine Cerilles	 
	 Title:
                Assistant Vice President	 


      

    

     

     

    
 

     

    


    
      
        
          
            A-  NY
              #561191
              v12

          

          
          

        

        
          23

          
            

          

        

        
          
          

          
            


          

        

      

    

    



    ANNEX
      1

     

    TO

     

    SERVICING
      AGREEMENT

     

    The
      Servicer agrees to comply with the following with respect to JCP&L
      Transition Funding II LLC, as Issuer:

     

    Section
      1.  Definitions.
      Capitalized
      terms
      used herein and not otherwise defined shall have the meanings set forth in
      Appendix A to the Indenture dated as of August 10 , 2006 between the Issuer
      and
      The Bank of New York, as Trustee.

     

    Section
      2.  Trustee
      and
      Servicer Payment Date Statements. At
      least one
      Business Day before each date on which distributions to the Trustee and Servicer
      are to be made pursuant to Sections 8.02(d) and (e) of the Indenture, the
      Servicer shall provide the Trustee with a statement setting forth the amounts
      to
      be distributed to each of the Trustee and Servicer pursuant to such
      Sections.

     

    Section
      3.  Payment
      Date
      Statements.
      At least one
      Business Day before each Payment Date, the Servicer shall provide to the Issuer,
      the Trustee, each Rating Agency and, for so long as any Transition Bonds are
      listed on the Luxembourg Stock Exchange, any listing agent in Luxembourg, a
      statement indicating:

     

    
      	1.
                	
              the
                amount to
                be paid to Transition Bondholders of each Series and Class in respect
                of
                principal on such Payment Date in accordance with Section 8.02 of
                the
                Indenture and each Series Supplement
                thereto;

            


    

     

    
      	2.
                	
              the
                amount to
                be paid to Transition Bondholders of each Series and Class in respect
                of
                interest on such Payment Date in accordance with Section 8.02 of
                the
                Indenture and each Series Supplement
                thereto;

            


    

     

    
      	3.
                	
              the
                Transition
                Bond Balance and the Projected Transition Bond Balance and the transition
                bond balance for each Series and Class as of that Payment Date (in
                each
                case, after giving effect to the payments on such Payment
                Date);

            


    

     

    
      	4.
                	
              the
                amount on
                deposit in the Overcollateralization Subaccount for each Series and
                the
                Scheduled Overcollateralization Level for each Series, as of that
                Payment
                Date (after giving effect to the transfers to be made from or into
                the
                Overcollateralization Subaccount on such Payment
                Date);

            


    

     

    
      	5.
                	
              the
                amount on
                deposit in the Capital Subaccount for each Series as of that Payment
                Date
                (after giving effect to the transfers to be made from or into the
                Capital
                Subaccount on such Payment Date);

            


    

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

     

    
      	6.
                	
              the
                amount, if
                any, on deposit in the Reserve Subaccount as of that Payment Date
                (after
                giving effect to the transfers to be made from or into the Reserve
                Subaccount on such Payment Date);

            


    

     

    
      	7.
                	
              the
                amounts to
                be paid to each Swap Counterparty (on a gross and a net basis, separately
                stated) under the related Interest Rate Swap Agreement on or before
                such
                Payment Date;

            


    

     

    
      	8.
                	
              the
                amounts
                paid to the Trustee since the preceding Payment Date pursuant to
                Section
                8.02(d) of the Indenture;

            


    

     

    
      	9.
                	
              the
                amounts
                paid to or withheld by the Servicer since the preceding Payment Date
                pursuant to Section 8.02(e) of the Indenture;
                and

            


    

     

    
      	10.
                	
              the
                amount of
                any other transfers and payments to be made on such Payment Date
                pursuant
                to Sections 8.02(d), (e), (f), (g) and (i) of the
                Indenture.

            


    

     

    Section
      4.  Remittance
      Date Statements.
      At least one
      Business Day before each Remittance Date, and in the case of Daily Remittances,
      on the last Remittance Date of such month, the Servicer shall prepare and
      furnish to the Issuer and the Trustee a statement setting forth the aggregate
      amount remitted or to be remitted by the Servicer to the Trustee (net of any
      payments owed to the Servicer in accordance with Section 3.03(b) of the
      Servicing Agreement) for deposit on such Remittance Date pursuant to the
      Indenture.

     

    Section
      5.  Transition
      Bond Charge Adjustments.

     

    
      	(a)
                	
              Prior
                to each
                Calculation Date, the Servicer shall calculate


            


    

     

    
      	(i)  	
              the
                Transition
                Bond Balance as of such Calculation Date (a written copy of which
                shall be
                delivered by the Servicer to the Trustee within five Business Days
                following such Calculation Date)
                and

            


    

     

    
      	(ii)  	
              the
                revised
                Transition Bond Charge with respect to the Transferred Bondable Transition
                Property in respect of each Adjustment Date such that the Servicer
                projects that TBC Collections therefrom allocable to the Issuer will
                be
                sufficient so that: 

            


    

     

    
      	(A)  	
              the
                Transition
                Bond Balance on the Payment Date immediately preceding the next Adjustment
                Date will equal the Projected Transition Bond Balance as of such
                date or,
                if earlier with respect to any Series or Class of Transition Bonds,
                as of
                the Payment Date immediately preceding the Expected Final Payment
                Date
                therefor;

            


    

     

    
      	(B)  	
              the
                amount on
                deposit in the Overcollateralization Subaccount on the Payment Date
                immediately preceding the next Adjustment Date will equal the Scheduled
                Overcollateralization Level for such date or, if earlier with respect
                to
                any Series or Class of Transition Bonds, as of the Payment Date
                immediately preceding the Expected Final Payment Date
                therefor;

            


    

     

    
      	(C)  	
              the
                amount on
                deposit in the Capital Subaccount on the Payment Date immediately
                preceding the next Adjustment Date will equal its required level
                for such
                date or, if earlier with respect to any Series or Class of Transition
                Bonds, as of the Payment Date immediately preceding the Expected
                Final
                Payment Date therefor; 

            


    

     

    
      	(D)  	
              the
                amount on
                deposit in the Reserve Subaccount on the Payment Date immediately
                preceding the next Adjustment Date, will equal zero;
                and

            


    

     

    
      	(E)  	
              the
                TBC
                Collections will provide for (i) amortization of the remaining outstanding
                principal balance of each Series in accordance with the Expected
                Amortization Schedule therefor, (ii) payment of interest on each
                Series
                when due and payment of any amounts (other than termination or breakage
                amounts) under each Interest Rate Swap Agreement, (iii) payment of
                all
                Operating Expenses of the Issuer when due in accordance with the
                Indenture
                and (iv) deposits to the Overcollateralization Subaccount such that
                the
                balance therein will equal the Scheduled Overcollateralization Level
                on
                each Payment Date.

            


    

     

    
      	(b)
                	
              On
                each
                Calculation Date, the Servicer shall file an Adjustment Request with
                the
                BPU. This filing shall include the data specified in the Petition
                and the
                Financing Order.

            


    

     

    
      	(c)
                	
              On
                each
                Adjustment Date, the Servicer shall


            


    

     

    
      	(i)  	
              take
                all
                reasonable actions and make all reasonable efforts to effectuate
                all
                adjustments to the Transition Bond Charge either approved by the
                BPU or
                effective on an interim basis pending final approval
                and

            


    

     

    
      	(ii)  	
              promptly
                send
                to the Trustee copies of all material notices and documents relating
                to
                such adjustments.

            


    

     

    
      	(d)
                	
              On
                each
                Adjustment Date, the Servicer shall provide Moody’s with a schedule
                indicating any changes to the Transition Bond Charge.
                

            


    

     

    
      	(e)
                	
              If
                deemed
                appropriate by the Servicer to protect Transition Bondholders and
                to
                remedy a significant and recurring variance between actual and expected
                TBC Collections, as authorized by the Financing Order, the Servicer
                shall
                make “non-routine” adjustments to the Transition Bond Charge and the
                MTC-Tax (as defined in the Financing Order) to accommodate material
                changes to the methodology described in Attachment E-3 to Revised
                Exhibit
                E-Supplement of the Petition. Such filings shall be made at least
                thirty
                days prior to the proposed effective date of the proposed adjustments.
                The
                Servicer shall provide notice of such non-routine adjustment and
                resulting
                change to the Transition Bond Charge to
                Fitch.

            


    

     

    


     

    


    


    
      
        
          
            A-  NY
              #561191
              v12

          

          
          

        

        
          25

          
            

          

        

        
          
          

          
            


          

        

      

    

    



    EXHIBIT
      A

     

    


     

    SERVICING
      PROCEDURES

     

    The
      Servicer agrees to comply with the following servicing procedures (and to
      consider and use the criteria specified in Item 1122(d) of Regulation AB (or
      any
      successor regulation), in effect from time to time, to assess its compliance
      with applicable servicing criteria.

     

    Section
      1.   Definitions.

     

    
      	(a)
                	
              Capitalized
                terms used herein and not otherwise defined shall have the meanings
                set
                forth in Appendix A to the Indenture dated as of August 10 , 2006
                between
                the Issuer and The Bank of New York, as
                Trustee.

            


    

     

    
      	(b)
                	
              Whenever
                used
                in this Exhibit A, the following words and phrases shall have the
                following meanings:

            


    

     

    Adjustment
      Request
      has, with respect
      to the Issuer, the meaning given to such term in Appendix A.

     

    Applicable
      MDMA
      means, with respect
      to each Customer, the meter data management agent or Third Party, if any,
      providing meter reading services for that Customer's account.

     

    Applicable
      Third Party
      means, with respect
      to each Customer, the Third Party, if any, providing billing or metering
      services to that Customer.

     

    Billed
      Transition Bond Charges
      means the amounts
      billed to Customers pursuant to the Transition Bond Charge, whether billed
      directly to such Customers by the Servicer or indirectly through a Third Party
      pursuant to Consolidated Third Party Billing. 

     

    Bills
      means each of the
      regular monthly bills, the summary bills, the opening bills and the Closing
      Bills issued to Customers or Third Parties by JCP&L.

     

    Budget
      Payment Plan
      means a levelized
      payment plan offered by JCP&L, which, if elected by a Customer, provides for
      level monthly Bill charges to such Customer. For residential Customers, this
      charge is calculated by calculating actual electricity charges for the previous
      year and dividing this amount by twelve. The number which results from this
      calculation is charged to the residential Customer each month. In the twelfth
      month, JCP&L bills the residential Customer for actual use in that month,
      adjusted for any excess or deficit the Customer has paid JCP&L over the
      prior eleven months. If the Customer owes JCP&L $4 or more over the normal
      budget amount, that Customer has the option of repaying the full amount in
      the
      twelfth month, or spreading the amount of this deficit in equal installments
      over the first four months of the Customer's next budget year. The procedure
      is
      similar for small industrial and commercial Customers.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    Closing
      Bill
      means the final
      bill issued to a Customer at the time service is terminated.

     

    Consolidated
      Third Party Billing
      means the billing
      option available to Customers served by a Third Party pursuant to which such
      Third Party will be responsible for billing and collecting all charges to
      Customers electing such billing option, including the Transition Bond Charge,
      and will become obligated to the Servicer for the Billed Transition Bond
      Charges, all in accordance with applicable BPU Regulations and the Financing
      Order. 

     

    Net
      Write-Off Percent
      means the number
      (expressed as a percent) equal to

     

    
      	(i)  	
              the
                amount by
                which Write-Offs attributable to a particular billing period exceed
                Write-Off recoveries attributable to such billing period, divided
                by

            


    

     

    
      	(ii)  	
              the
                total
                billed revenue attributable to such billing period.
                

            


    

     

    Servicer
      Policies and Practices
      means, with respect
      to the Servicer’s duties under this Exhibit A, the policies and practices of the
      Servicer applicable to such duties that the Servicer follows with respect to
      comparable assets that it services for itself.

     

    Transition
      Bond Charge Effective Date
      means the date on
      which the initial Transition Bond Charge goes into effect pursuant to the
      Financing Order.

     

    Variables
      includes the
      following variables used in calculating Adjustment Requests:

     

    
      	(i)  	
              the
                estimated
                Net Write-Off Percent; and

            


    

     

    
      	(ii)  	
              the
                projected
                billed consumption to which the Transition Bond Charge
                applies.

            


    

     

    Write-Offs
      means arrears that
      remain unpaid by Customers generally as of ninety days after the issuance of
      the
      Closing Bills containing such charges, unless payment arrangements are made
      and
      are being kept.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    Section
      2.  Data
      Acquisition.

     

    
      	(a)
                	
              Installation
                and Maintenance of Meters.
                Except to the
                extent that a Third Party is responsible for such services, the Servicer
                shall use its best efforts to cause to be installed, replaced and
                maintained meters in such places and in such condition as will enable
                the
                Servicer to obtain usage measurements for each Customer approximately
                every thirty days or as provided in the applicable
                tariff.

            


    

     

    
      	(b)
                	
              Meter
                Reading.
                At least once
                each calendar month, the Servicer shall obtain usage measurements
                from the
                Applicable MDMA for each Customer; provided, however, that the Servicer
                may determine any Customer’s usage on the basis of estimates in accordance
                with applicable BPU Regulations.

            


    

     

    
      	(c)
                	
              Cost
                of
                Metering.
                The Issuer
                shall not be obligated to pay any costs associated with the metering
                duties set forth in this Section 2, including, but not limited to,
                the
                costs of installing, replacing and maintaining meters, nor shall
                the
                Issuer be entitled to any credit against the Servicing Fee for any
                cost
                savings realized by the Servicer or any Third Party as a result of
                new
                metering and/or billing
                technologies.

            


    

     

    Section
      3.  Usage
      and
      Bill Calculation.

     

    The
      Servicer shall obtain a calculation of each Customer’s usage (which may be based
      on data obtained from such Customer’s meter read or on usage estimates
      determined in accordance with applicable BPU Regulations) at least once each
      calendar month and shall determine therefrom each Customer’s individual charge
      relating to the Transition Bond Charge to be included on such Customer’s Bill
      pursuant to the Financing Order and BPU Regulations.

     

    Section
      4.  Billing.

     

    The
      Servicer shall implement the Transition Bond Charge as of the Transition Bond
      Charge Effective Date and shall thereafter bill each Customer or the Applicable
      Third Party for the respective Customer’s outstanding current and past due
      charges relating to the Transition Bond Charge, accruing until all payments
      of
      principal and interest on each Series of Transition Bonds and all other costs
      and expenses related to such Series have been paid in accordance with the
      Indenture, all in accordance with the following:

     

    
      	(a)
                	
              Frequency
                of Bills; Billing Practices.
                In accordance
                with the Servicer’s then-existing Servicer Policies and Practices, as such
                Servicer Policies and Practices may be modified from time to time,
                the
                Servicer shall generate and issue a Bill to each Customer, or, in
                the case
                of a Customer who has elected Consolidated Third Party Billing, to
                an
                Applicable Third Party, for such Customer’s respective Transition Bond
                Charge as a general practice once approximately every thirty days
                or such
                other time period as allowed by the BPU, at the same time, with the
                same
                frequency and on the same Bill as that containing the Servicer’s own
                charges to such Customer or Third Party, as the case may be. In the
                event
                that the Servicer makes any material modification to these practices,
                it
                shall notify the Issuer, the Trustee and the Rating Agencies as soon
                as
                practicable, and in no event later than sixty Business Days after
                such
                modification goes into effect; provided, however,
                that

            


    

     

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    
      	(i)  	
              the
                Servicer
                may not make any modification that will materially adversely affect
                the
                Transition Bondholders and

            


    

     

    
      	(ii)  	
              the
                Rating
                Agencies shall receive prior notice of any modification that would
                change
                the frequency with which Bills are issued or would change any tariff
                charged.

            


    

     

    
      	(b)
                	
              Format.

            


    

     

    
      	(i)  	
              Each
                Bill to a
                Customer shall contain the charge corresponding to the Transition
                Bond
                Charge owed by such Customer for the billing period. The Customer’s Bill
                will contain in text or in a footnote, text substantially to the
                effect
                that a portion of the monthly charge representing that Bondable Transition
                Property is being collected on behalf of the Issuer as owner of the
                Bondable Transition Property.

            


    

     

    
      	(ii)  	
              In
                the case of
                each Customer that has elected Consolidated Third Party Billing,
                the
                Servicer shall deliver to the Applicable Third Party itemized charges
                for
                such Customer including the amount of such Customer’s Transition Bond
                Charge to be remitted by the Servicer to the
                Issuer.

            


    

     

    
      	(iii)  	
              The
                Servicer
                shall conform to such requirements in respect of the format, structure
                and
                text of Bills delivered to Customers and Third Parties as applicable
                BPU
                Regulations shall from time to time prescribe. To the extent that
                Bill
                format, structure and text are not prescribed by the Competition
                Act,
                other applicable law or BPU Regulations, the Servicer shall, subject
                to
                clauses (i) and (ii) above, determine the format, structure and text
                of
                all Bills in accordance with its reasonable business judgment, its
                Servicer Policies and Practices with respect to its own charges and
                prevailing industry standards.

            


    

     

    
      	(c)
                	
              Delivery.
                The Servicer
                shall deliver all Bills to Customers


            


    

     

    
      	(i)  	
              by
                United
                States mail in such class or classes as are consistent with the Servicer
                Policies and Practices followed by the Servicer with respect to its
                own
                charges or

            


    

     

    
      	(ii)  	
              by
                any other
                means, whether electronic or otherwise, that the Servicer may from
                time to
                time use to present its own charges to its
                Customers.

            


    

     

    In
      the case of Customers that have elected Consolidated Third Party Billing, the
      Servicer shall deliver all Bills to the Applicable Third Parties by such means
      as are prescribed by applicable BPU Regulations, or, if not prescribed by
      applicable BPU Regulations, by such means as are mutually agreed upon by the
      Servicer and the Applicable Third Party and are consistent with BPU Regulations.
      The Servicer or a Third Party, as applicable, shall pay from its own funds
      all
      costs of issuance and delivery of all Bills, including but not limited to
      printing and postage costs as the same may increase or decrease from time to
      time.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    Section
      5.  Customer
      Service Functions.

     

    The
      Servicer shall handle all Customer inquiries and other Customer service matters
      according to the same procedures it uses to service Customers with respect
      to
      its own charges.

     

    Section
      6.  Collections;
      Payment Processing; Remittance.

     

    
      	(a)
                	
              Collection
                Efforts; Policies; Procedures.

            


    

     

    
      	(i)  	
              The
                Servicer
                shall use reasonable efforts to collect all Billed Transition Bond
                Charges
                from Customers and Third Parties as and when the same become due
                and shall
                follow such collection procedures as it follows with respect to comparable
                assets that it services for itself or others, including, as
                follows:

            


    

     

    
      	(A)  	
              The
                Servicer
                shall prepare and deliver overdue notices to Customers and Third
                Parties
                in accordance with applicable BPU Regulations and the Servicer Policies
                and Practices.

            


    

     

    
      	(B)  	
              The
                Servicer
                shall apply late payment charges to outstanding Customer and Third
                Party
                balances in accordance with applicable BPU Regulations. All late
                payment
                charges collected shall be payable to and retained by the Servicer
                as a
                component of its compensation under the Servicing Agreement, and
                the
                Issuer shall not have any right to share in the
                same.

            


    

     

    
      	(C)  	
              The
                Servicer
                shall deliver verbal and written final call notices in accordance
                with
                applicable BPU Regulations and Servicer Policies and
                Practices.

            


    

     

    
      	(D)  	
              The
                Servicer
                shall adhere to and carry out disconnection policies in accordance
                with
                the Competition Act, other applicable law and BPU Regulations and
                Servicer
                Policies and Practices.

            


    

     

    
      	(E)  	
              The
                Servicer
                may employ the assistance of collections agents in accordance with
                applicable BPU Regulations and Servicer Policies and
                Practices.

            


    

     

    
      	(F)  	
              The
                Servicer
                shall apply Customer and Third Party deposits, Customers’ letters of
                credit and Customer posted surety bonds to the payment of delinquent
                accounts in accordance with applicable BPU Regulations and Servicer
                Policies and Practices and according to the priorities set forth
                in
                Sections 6(b)(ii), (iii) and (iv) of this Exhibit
                A.

            


    

     

    
      	(G)  	
              The
                Servicer
                shall promptly take all necessary action in accordance with applicable
                BPU
                Regulations to terminate billing of Transition Bond Charges by Third
                Parties whose payments are twenty-two or more days delinquent, or
                as the
                then current BPU Regulations and any billing services agreements
                allow,
                and to resume, prospectively, to collect the Billed Transition Bond
                Charges directly from the applicable Customers. At such time, the
                Servicer
                will apply the Third Party’s security deposit to satisfy charges billed
                previously by the Third Party which remain outstanding, including
                outstanding Transition Bond
                Charges.

            


    

     

    
      	(ii)  	
              The
                Servicer
                shall not waive any late payment charge or any other fee or charge
                relating to delinquent payments, if any, or waive, vary or modify
                any
                terms of payment of any amounts payable by a Customer, in each case
                unless
                such waiver or action:

            


    

     

    
      	(A)  	
              would
                be in
                accordance with the Servicer’s customary practices or those of any
                Successor Servicer with respect to comparable assets that it services
                for
                itself and for others;

            


    

     

    
      	(B)  	
              would
                not
                materially adversely affect the rights of the Transition Bondholders;
                and

            


    

     

    
      	(C)  	
              would
                comply
                with applicable law;

            


    

     

    provided,
      however,
      that notwithstanding anything in the Servicing Agreement or this Exhibit A
      to
      the contrary, the Servicer is authorized to write off any Billed Transition
      Bond
      Charges in accordance with its Servicer Policies and Practices.

     

    
      	(iii)  	
              The
                Servicer
                shall accept payment from Customers in respect of Billed Transition
                Bond
                Charges in such forms and methods and at such times and places as
                it
                accepts for payment of its own charges. The Servicer shall accept
                payment
                from Third Parties in respect of Billed Transition Bond Charges in
                such
                forms and methods and at such times and places as the Servicer and
                each
                Third Party shall mutually agree in accordance with applicable BPU
                Regulations.

            


    

     

    
      	(b)
                	
              Payment
                Processing; Allocation; Priority of Payments.

            


    

     

    
      	(i)  	
              The
                Servicer
                shall post all payments received to Customer accounts as promptly
                as
                practicable, and, in any event, substantially all payments shall
                be posted
                no later than two Business Days after
                receipt.

            


    

     

    
      	(ii)  	
              Subject
                to
                clause (iii) below, the Servicer shall apply payments received to
                each
                Customer’s or Third Party’s account in proportion to the charges contained
                on the outstanding Bill to such Customer or Third
                Party.

            


    

     

    
      	(iii)  	
              Any
                amounts
                collected by the Servicer that represent partial payments of the
                total
                Bill to a Customer or Third Party shall be allocated in accordance
                with
                the priorities set forth in Section 3.02(b) of the Servicing
                Agreement.

            


    

     

    
      	(iv)  	
              The
                Servicer
                shall hold all over-payments for the benefit of the Issuer and shall
                apply
                such funds to future Bill charges in accordance with clauses (ii)
                and
                (iii) above as such charges become
                due.

            


    

     

    
      	(v)  	
              For
                Customers
                on a Budget Payment Plan, the Servicer shall treat TBC Collections
                received from such Customers as if such Customers had been billed
                for the
                Transition Bond Charge in the absence of the Budget Payment Plan.
                Partial
                payment of a Budget Payment Plan payment shall be allocated according
                to
                clause (iii) above, and overpayment of a Budget Payment Plan payment
                shall
                be allocated according to clause (iv)
                above.

            


    

     

    
      	(c)
                	
              Accounts;
                Records.

            


    

     

    
      	(i)  	
              The
                Servicer
                shall maintain accounts and records as to the Transferred Bondable
                Transition Property accurately and in accordance with its standard
                accounting procedures and in sufficient detail to permit reconciliation
                between payments or recoveries with respect to the Transferred Bondable
                Transition Property and the amounts from time to time remitted to
                the
                Collection Account in respect of the Transferred Bondable Transition
                Property.

            


    

     

    
      	(ii)  	
              The
                Servicer
                shall maintain accounts and records as to Third Parties performing
                Consolidated Third Party Billing for Customers accurately and in
                accordance with its standard accounting procedures and in sufficient
                detail to permit reconciliation between payments or recoveries with
                respect to the Transferred Bondable Transition Property and amounts
                owed
                by such Customers in respect of the Transition Bond
                Charge.

            


    

     

    
      	(d)
                	
              Investment
                of TBC Collections.
                Prior to
                remittance on the applicable Remittance Date, the Servicer may invest
                TBC
                Collections received at its own risk and for its own benefit, and
                such
                investments and funds shall not be required to be segregated from
                the
                other investments and funds of the
                Servicer.

            


    

     

    
      	(e)
                	
              Calculation
                of Collections; Determination of Aggregate Remittance
                Amount.

            


    

     

    
      	(i)  	
              On
                or before
                each Remittance Date, the Servicer shall calculate the total TBC
                Collections received by the Servicer from or on behalf of Customers
                during
                prior Collection Periods in respect of all previously Billed Transition
                Bond Charges.

            


    

     

    
      	(ii)  	
              In
                accordance
                with Section 4.01 of the Servicing Agreement and Annex 1, the Servicer
                shall update the Variables and shall prepare Adjustment Requests
                to
                reflect the updated Variables when required to do so pursuant to
                Annex
                1.

            


    

     

    
      	(f)
                	
              Remittances.

            


    

     

    
      	(i)  	
              The
                Servicer
                shall make remittances to the Issuer in accordance with Section 5.11
                of
                the Servicing Agreement.

            


    

     

    
      	(ii)  	
              In
                the event
                of any change of account or change of institution affecting the
                remittances, the Issuer shall provide written notice thereof to the
                Servicer by the earlier of

            


    

     

    
      	(A)  	
              five
                Business
                Days from the effective date of such change,
                or

            


    

     

    
      	(B)  	
              five
                Business
                Days prior to the next applicable Remittance
                Date.

            


    

     

    


    
      
        
        

      

      
        30