Document:

Exhibit 10-FF

                                  GPU COMPANIES

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

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                                  GPU COMPANIES

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

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

1.       Purpose

         This  document  sets  forth the GPU  Companies  Supplemental  Executive
Retirement Plan, as adopted effective July 1, 1999.

         The purpose of the Plan is to provide certain senior  executives of the
GPU Companies with a supplemental  pension  benefit to the extent  necessary for
the executives' total annual retirement income from all pension sources to be at
least equal to the executive's Target Pension Amount, as defined herein.

         The  Plan is  intended  to  constitute  an  unfunded  plan of  deferred
compensation for "a select group of management or highly compensated  employees"
within the meaning of Sections  201(2),  301(a)(3) and 401(a)(1) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").

         Each Company has adopted this Plan as its own plan.  Accordingly,  each
Company  shall be obligated  hereunder  only with respect to amounts  payable to
Participants  who are its own  employees;  and the right to  receive  any amount
payable  hereunder with respect to any  Participant  shall be  enforceable  only
against the Company with which such Participant is or was last employed.

2.       Definitions

         As used herein, the following terms shall have the following meanings:
         "Change in Control"  shall mean the  occurrence  during the term of the
         Plan of:

         (1)  An   acquisition   (other  than   directly  from  GPU,  Inc.  (the
"Corporation") of any common stock of the Corporation  ("Common Stock") or other
voting securities of the Corporation entitled to vote generally for the election
of directors  (the "Voting  Securities")  by any "Person" (as the term person is
used for purposes of Section  13(d) or 14(d) of the  Securities  Exchange Act of
1934, as amended (the "Exchange Act")), immediately after

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which such Person has "Beneficial  Ownership"  (within the meaning of Rule 13d-3
promulgated  under the Exchange Act) of twenty percent (20%) or more of the then
outstanding  shares  of  Common  Stock  or  the  combined  voting  power  of the
Corporation's  then  outstanding  Voting  Securities;   provided,   however,  in
determining  whether a Change in Control has occurred,  Voting  Securities which
are acquired in a "Non-Control  Acquisition" (as hereinafter  defined) shall not
constitute an acquisition which would cause a Change in Control.  A "Non-Control
Acquisition"  shall mean an  acquisition  by (A) an employee  benefit plan (or a
trust forming a part  thereof)  maintained  by (i) the  Corporation  or (ii) any
corporation  or other  Person of which a  majority  of its  voting  power or its
voting equity securities or equity interest is owned, directly or indirectly, by
the  Corporation  (for purposes of this  definition,  a  "Subsidiary"),  (B) the
Corporation  or its  Subsidiaries,  or  (C)  any  Person  in  connection  with a
"Non-Control Transaction" (as hereinafter defined);

         (2) The individuals who, as of August 1, 1996, are members of the board
of directors of the Corporation (the "Incumbent Board"), cease for any reason to
constitute  at least  seventy  percent  (70%)  of the  members  of the  board of
directors  of the  Corporation;  provided,  however,  that if the  election,  or
nomination for election by the Corporation's  shareholders,  of any new director
was approved by a vote of at least two-thirds of the Incumbent  Board,  such new
director  shall,  for purposes of this Plan,  be  considered  as a member of the
Incumbent  Board;  provided  further,  however,  that  no  individual  shall  be
considered a member of the Incumbent Board if such individual  initially assumed
office as a result of either an  actual or  threatened  "Election  Contest"  (as
described in Rule 14a-11  promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the board of directors of the Corporation (a "Proxy Contest")  including by
reason of any  agreement  intended  to avoid or settle any  Election  Contest or
Proxy Contest; or

         (3)      The consummation of:

                           (A) A merger, consolidation or reorganization with or
                  into the Corporation or in which securities of the Corporation
                  are   issued,    unless   such   merger,    consolidation   or
                  reorganization is a "Non-Control  Transaction." A "Non-Control
                  Transaction"   shall   mean   a   merger,   consolidation   or
                  reorganization  with  or  into  the  Corporation  or in  which
                  securities of the Corporation are issued where:

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                                    (i)  the  shareholders  of the  Corporation,
                           immediately  before  such  merger,  consolidation  or
                           reorganization,    own    directly   or    indirectly
                           immediately  following such merger,  consolidation or
                           reorganization,  at least sixty  percent (60%) of the
                           combined  voting  power  of  the  outstanding  voting
                           securities  of the  corporation  resulting  from such
                           merger  or  consolidation  or   reorganization   (the
                           "Surviving  Corporation") in  substantially  the same
                           proportion   as  their   ownership   of  the   Voting
                           Securities    immediately    before   such    merger,
                           consolidation or reorganization,

                                    (ii) the individuals who were members of the
                           Incumbent Board immediately prior to the execution of
                           the    agreement    providing    for   such   merger,
                           consolidation or  reorganization  constitute at least
                           seventy  percent (70%) of the members of the board of
                           directors  of  the   Surviving   Corporation,   or  a
                           corporation,  directly  or  indirectly,  beneficially
                           owning a  majority  of the Voting  Securities  of the
                           Surviving Corporation, and

                                    (iii)   no   Person   other   than  (w)  the
                           Corporation,  (x) any  Subsidiary,  (y) any  employee
                           benefit  plan (or any trust  forming a part  thereof)
                           that, immediately prior to such merger, consolidation
                           or reorganization,  was maintained by the Corporation
                           or any Subsidiary, or (z) any Person who, immediately
                           prior to such merger, consolidation or reorganization
                           had  Beneficial  Ownership of twenty percent (20%) or
                           more of the then  outstanding  Voting  Securities  or
                           common  stock  of  the  Corporation,  has  Beneficial
                           Ownership  of  twenty  percent  (20%)  or more of the
                           combined voting power of the Surviving  Corporation's
                           then  outstanding  voting  securities  or its  common
                           stock.

                           (B)      A complete liquidation or dissolution of the
                  Corporation; or

                           (C)  The  sale  or  other   disposition   of  all  or
                  substantially  all of the  assets  of the  Corporation  to any
                  Person (other than a transfer to a Subsidiary).

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         Notwithstanding the foregoing,  a Change in Control shall not be deemed
to occur solely because any Person (the "Subject  Person")  acquired  Beneficial
Ownership of more than the permitted amount of the then outstanding Common Stock
or Voting  Securities as a result of the  acquisition  of Common Stock or Voting
Securities by the Corporation  which, by reducing the number of shares of Common
Stock or Voting Securities then outstanding,  increases the proportional  number
of shares  Beneficially Owned by the Subject Persons,  provided that if a Change
in Control would occur (but for the  operation of this  sentence) as a result of
the  acquisition  of  shares  of  Common  Stock  or  Voting  Securities  by  the
Corporation,  and after such share  acquisition by the Corporation,  the Subject
Person becomes the Beneficial Owner of any additional  shares of Common Stock or
Voting Securities which increases the percentage of the then outstanding  shares
of Common Stock or Voting Securities  Beneficially  Owned by the Subject Person,
then a Change in Control shall occur.

         "Committee"  shall  mean the  Personnel,  Compensation  and  Nominating
Committee of the Board of Directors of GPU, Inc.

         "Company" shall mean GPU Service, Inc., GPU Nuclear, Inc., GPU
International,  Inc. and any other direct or indirect  subsidiary  of GPU,  Inc.
that has adopted this Plan.  When used in reference to a  Participant,  the term
"Company"  shall mean the  Company  with which such  Participant  is or was last
employed unless the context otherwise requires.

         "GPU Companies" shall mean GPU, Inc. and each of its direct and
indirect subsidiaries.

         "Incentive  Compensation  Plan" shall mean the  Incentive  Compensation
Plan for Elected Officers maintained by any of the GPU Companies,  or the Annual
Performance Award Plan maintained by GPU International, Inc.

         Other Retirement Plan" shall mean, with respect to any Participant, (i)
any defined  benefit  pension  plan,  whether or not tax  qualified,  (including
without  limitation any such plan that is a "cash  balance" plan)  maintained by
any employer other than one of the GPU Companies with which the  Participant was
employed  at any time prior to his or her  Retirement,  and (ii) any  individual
contract  between the Participant  and any of the GPU Companies,  or between the
Participant and any such other former  employer,  under which the Participant is
entitled  to  receive,  upon  his or her  retirement  or  other  termination  of
employment,  a benefit that is defined as, or as the actuarial  equivalent of, a
fixed amount of annual income payable for the Participant's lifetime.

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         "Participant"  shall  mean any  individual  who has been  elected to an
office with a Company that is specified in Section 3.

         "Payment  Starting  Date" shall mean the date as of which  payment of a
Participant's  Supplemental  Pension  Benefit is to be made,  or is to commence,
pursuant to the provisions of Section 4(e) hereof.

         "Pension Plan" shall mean the GPU Companies Employee Pension Plan.

         "Plan"- refers to the GPU Companies  Supplemental  Executive Retirement
Plan as set forth in this document and as it may be amended from time to time in
the future.

         "Retirement"   shall  mean,  with  respect  to  any  Participant,   the
termination of the Participant's employment with all of the GPU Companies at any
time after July 1, 1999,  for any reason other than death,  if (but only if) (i)
at the time of such  termination the Participant has attained age 62, or (ii) at
the  time  of such  termination  the  Participant  has  attained  age 55 and has
completed  at least  15 Years of  Service,  or  (iii)  such  termination  of the
Participant's  employment occurs upon, or at any time after, the occurrence of a
Change in Control.

         "Supplemental  and Excess  Benefits  Plan" shall mean the GPU Companies
Supplemental and Excess Benefits Plan.

         "Years of Service" shall mean, with respect to any Participant, the sum
of (a) his years of  "Creditable  Service" as determined  under Section 5 of the
Pension Plan without  taking into account any  additional  years of  "Creditable
Service"  otherwise credited to the Participant under Section 5.9 of the Pension
Plan, plus (b) such number of additional  years of service,  if any, as provided
in any individual  contract of employment between the Participant and any of the
GPU  Companies  that has been  approved by the  Committee.  Notwithstanding  the
foregoing,  a Participant's Years of Service shall not include any period of the
Participant's  employment  with any of the GPU  Companies  after  the date as of
which he or she has ceased to hold any corporate  office  specified in Section 3
hereof.

  3.     Eligibility

         Any  person who is  elected  to serve in one of the  corporate  offices
listed below shall become eligible for participation in the Plan effective as of
the later of July 1, 1999 or the date as of which  his or her  election  to such
office becomes effective.

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                  Company                             Office

         GPU Service, Inc.                     Chief Executive Officer

                                               Each Executive Vice President
                                               President of Operations Division
                                               President of Fossil Generation

         GPU Nuclear, Inc.                     President

4.       Supplemental Pension Benefit

         Upon a  Participant's  Retirement,  he or she shall become  entitled to
receive  from  his  or  her  Company  a   supplemental   pension   benefit  (the
"Supplemental Pension Benefit") in accordance with the following provisions:

         (a)  The   Supplemental   Pension  Benefit  payable  to  a  Participant
hereunder, when expressed as a single life annuity, shall be an annual amount of
income payable to the Participant for his or her life equal to the Participant's
Target  Pension  Amount,  as  defined  in (b)  below,  reduced by the sum of the
following:

                  (i) The sum of (A) the Basic Pension,  if any,  payable to the
         Participant under the Pension Plan and (B) the aggregate annual benefit
         amount payable to the  Participant in the form of a single life annuity
         under  the   Supplemental  and  Excess  Benefits  Plan,  in  each  case
         determined  for  this  purpose  without  taking  into  account  the 20%
         increase in the  amounts  payable to the  Participant  under such plans
         during the first 12 months for which such amounts are payable.

                  (ii) The  annual  amount  (exclusive  of any  portion  thereof
         attributable to the Participant's own contributions) that is payable to
         the Participant under each of the Participant's  Other Retirement Plans
         (hereinafter  referred to as a "Pension  Amount"),  provided,  however,
         that in the case of any Pension Amount  payable to a Participant  under
         any Other  Retirement  Plan maintained by an Employer other than one of
         the GPU  Companies,  there shall be taken into  account for purposes of
         this Section  4(a)(ii) only the portion of such Pension  Amount that is
         attributable to the same number of the  Participant's  years of service
         with  such  employer  as the  number  of  additional  years of  service
         credited  to the  Participant  under  clause (b) of the  definition  of
         "Years of Service" contained in Section 1; and

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                  (iii)  An  amount   equal  to  the  product   resulting   from
         multiplying by 12 the  Participant's  Social Security Primary Insurance
         Amount, determined as of the date of his or her Retirement (hereinafter
         referred to as the Participant's "Social Security Benefit").

         (b) A Participant's  Target Pension Amount shall be an annual amount of
income  payable  to the  Participant  for  his or her  life  equal  to 2% of the
Participant's  Average Annual  Compensation,  as defined in (c) below,  for each
Year of  Service  (but not  more  than 30 Years  of  Service)  completed  by the
Participant as of the date of his or her Retirement.

         (c) A Participant's Average Annual Compensation shall mean the quotient
resulting  from  dividing  by three the  aggregate  amount of the  Participant's
Earnings,  as defined below,  during his or her highest paid 36 calendar  months
(whether or not  consecutive)  within the  Participant's  most recent  period of
employment with the GPU Companies (not exceeding 10 years) ending on the date of
his or her Retirement. In the case of any Participant who has been employed with
the GPU  Companies  for less than 36  calendar  months at the time of his or her
Retirement,  such Participant's  Average Annual Compensation shall be determined
by first dividing the aggregate amount of the Participant's  Earnings during his
or her entire  period of  employment  by the number of  calendar  months in such
period,  and then,  multiplying  the resulting  quotient by 12, or if less,  the
number of calendar  months in such  period.  For  purposes of the  foregoing,  a
Participant's "Earnings" for any month shall mean his Earnings for such month as
determined  for purposes of the Pension  Plan,  except that for purposes of this
Plan the following provisions shall apply:

                  (i) the limitation on the amount of the Participant's Earnings
         that can be taken into  account  for  purposes  of the  Pension  Plan a
         result of Section  401(a)(17) of the Internal  Revenue Code of 1986, as
         amended, shall not apply;

                  (ii) all amounts of base salary or Incentive Compensation Plan
         awards that are deferred pursuant to the  Participant's  election under
         the GPU Companies  Deferred  Compensation Plan shall be included in the
         Participant's  Earnings for  purposes of this Plan.  Any amount of base
         salary so deferred  shall be treated as Earnings for the month in which
         such amount  would have been paid to the  Participant  in cash if he or
         she had not elected to defer such amount; and a pro rata portion of the
         amount of any Incentive  Compensation  Plan award for any  "Performance
         Period", as defined in such Plan, that is so deferred shall

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         be treated as  Earnings  for each of the  calendar  months  within such
         "Performance  Period"  or,  in the  case  of any  Participant  who  has
         received an award for the  Performance  Period in which his  Retirement
         occurs,  for  each  of the  calendar  months  in the  portion  of  such
         Performance  Period  ending  on or  prior  to  the  date  of his or her
         Retirement.  No amount of base salary or  Incentive  Compensation  Plan
         award so  deferred  shall be treated as Earnings  for any months  other
         than the months determined under the preceding sentence; and

                  (iii) a Participant's Earnings during any period of employment
         with any of the GPU Companies  after the date as of which he or she has
         ceased to hold any corporate office specified in Section 3 shall not be
         taken into account.

         (d) The reduction in the amount of a Participant's Supplemental Pension
Benefit  required  under  Section  4(a)  shall  be made in  accordance  with the
following rules:

                  (i) If the Basic Pension payable to the Participant  under the
         Pension  Plan is not  payable  in the  form of a  single  life  annuity
         commencing on the  Participant's  Payment  Starting Date, the amount of
         the reduction for the Participant's Basic Pension shall be equal to the
         Basic Pension that would be payable to the Participant  under the terms
         of the Pension  Plan if his or her Basic  Pension  were  payable in the
         form of a single life annuity  commencing on the Participant's  Payment
         Starting Date.

                  (ii) If the Pension  Amount payable to the  Participant  under
         any Other  Retirement  Plan is not payable in the form of a single life
         annuity  commencing on the  Participant's  Payment  Starting  Date, the
         reduction for such Pension  Amount shall be equal to the Pension Amount
         that would be payable to the Participant  under the terms of such Other
         Retirement  Plan if such  Pension  Amount were payable in the form of a
         single life annuity  commencing on the  Participant's  Payment Starting
         Date;  provided,  however,  that if the Participant's  Payment Starting
         Date is prior to the earliest  date as of which payment of such Pension
         Amount could  commence under the terms of such Other  Retirement  Plan,
         then

                           (A) the  amount  of the  reduction  for such  Pension
                  Amount  shall be equal to the  Pension  Amount  that  would be
                  payable  to the  Participant  under  the  terms of such  Other
                  Retirement  Plan if such  Pension  Amount were  payable in the
                  form of a single  life  annuity  commencing  on such  earliest
                  date, and

<PAGE>

                           (B) the amount of such reduction shall not be applied
                  to  any  monthly  payment  of the  Participant's  Supplemental
                  Pension  Benefit  hereunder that is payable to the Participant
                  before such earliest date.

               (iii) If the Participant's  Payment Starting Date is prior to the
         earliest date as of which payment of his or her Social Security Benefit
         could commence, then

                           (A) the amount of the reduction for the Participant's
                  Social  Security  Benefit  shall be equal to the amount of the
                  Social   Security   Benefit  that  would  be  payable  to  the
                  Participant if his or her Social Security Benefit were payable
                  commencing on such earliest date, and

                           (B) the amount of such reduction shall not be applied
                  to  any  monthly  payment  of the  Participant's  Supplemental
                  Pension  Benefit  hereunder that is payable to the Participant
                  before such earliest date.

         (e) A Participant's  Supplemental  Pension Benefit shall be paid to the
Participant in the same form, and payment shall be made or shall commence at the
same time,  as the  Participant's  benefits  under the  Supplemental  and Excess
Benefits Plan are paid to the  Participant.  For this  purpose,  any election in
effect for a  Participant  at the time of his or her  Retirement  as to the form
and/or time of payment of his or her benefits under the  Supplemental and Excess
Benefits  Plan  shall  also  govern  the form and time of  payment of his or her
Supplemental  Pension  Benefit  under this Plan;  and the amount of any lump-sum
payment  that is payable with respect to a  Participant's  Supplemental  Pension
Benefit hereunder by virtue of any such election shall be determined in the same
manner as the amount of the lump-sum  payment payable to the  Participant  under
the Supplemental and Excess Benefits Plan is determined.

         (f) The amount of the Supplemental Pension Benefit otherwise payable to
a Participant in accordance with the previous provisions of this Section 4 shall
be subject to the following adjustments:

                  (i)  Except  as  otherwise   provided  in  (ii)  below,  if  a
         Participant's  Payment  Starting  Date  occurs  prior to the first date
         (hereinafter referred to as a Participant's "Early Retirement Date") as
         of which the Participant has either attained age 62 or has attained age
         60 and has completed at least 25 Years of Service, the amount of his or
         her Supplemental Pension Benefit shall be reduced so as to

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         be  equal  to the  Applicable  Percentage,  as  defined  below,  of the
         Supplemental  Pension  Benefit that would be payable to the Participant
         if payment  thereof  commenced on the first day of the month  following
         the Participant's 62nd birthday. The "Applicable Percentage" shall mean
         the percentage determined pursuant to the following table, based on the
         number  of  months by which the  Participant's  Payment  Starting  Date
         precedes the first day of the month following his or her 62nd birthday.

         Number of months
         Before First of
         Month After 62nd                         Applicable
            Birthday                              Percentage

                   0                                 100%
                  12                                  89
                  24                                  79
                  36                                  70
                  48                                  63
                  60                                  56
                  72                                  51
                  84                                  46

                  (ii) If a Participant's  Payment Starting Date occurs prior to
         his or her Early  Retirement  Date,  the  amount  of the  Participant's
         Supplemental  Pension Benefit shall be reduced by 1/12th of 4% for each
         full month by which his or her Payment  Starting  Date precedes the end
         of the month in which the Participant's 62nd birthday occurs, if either
         of the following conditions apply:

                           (A)  the Committee has consented to such reduction,
                         or

                           (B)  the  Participant's  Retirement  occurs  after  a
                         Change in Control.

                  (iii) If a Participant continues in employment with any of the
         GPU Companies after attaining age 65, the Supplemental  Pension Benefit
         payable to the  Participant  upon his  subsequent  Retirement  shall be
         adjusted  so as to be  "actuarially  equivalent"  of  the  Supplemental
         Pension Benefit that would have been payable to the Participant  (based
         on his Average Annual  Compensation and Years of Service to the date of
         his  Retirement) if payment  thereof  commenced on the first day of the
         month following the Participant's 65th birthday.

<PAGE>

                  (iv) With each  monthly  payment of the  Supplemental  Pension
         Benefit  payable  to a  Participant  during the first  12-month  period
         beginning on his or her Payment Starting Date, the Participant shall be
         entitled to receive from his or her Company an additional  amount equal
         to 20% of the amount of such monthly payment.

5.       Supplemental Death Benefit

         If a  Participant  dies  prior to his or her  Retirement  but after the
Participant  has attained age 55 and has completed at least 15 Years of Service,
the  Participant's  surviving  spouse, if any, shall be entitled to receive from
the Participant's  Company an annuity for such spouse's  lifetime,  in an amount
equal to 50% of the Supplemental Pension Benefit that would have been payable to
the Participant  hereunder  (including the 20% increase in the monthly  payments
thereof that would have been payable pursuant to Section  4(f)(iii) above) if he
or she had not died, if the  Participant's  Retirement  had occurred on the last
day of the  month in which  his or her death  occurs,  and if the  Participant's
Supplemental  Pension  Benefit were payable in the form of a single life annuity
commencing on the first day of the month following the date of the Participant's
death.

6.       Administration

         (a) The Plan shall be administered by the Committee. In addition to the
responsibilities and powers assigned to the Committee elsewhere in the Plan, the
Committee shall have the authority, in its discretion, to interpret the Plan, to
decide all questions that may arise as to the construction or application of any
of its provisions,  and make all determinations as to the rights of Participants
or other  persons to  benefits  under the Plan.  Any  determination  made by the
Committee prior to a Change in Control as to the interpretation, construction or
application of the Plan, or as to the rights of any  Participant or other person
to benefits under the Plan, shall be conclusive and binding on all parties.  Any
such  determination  made by the Committee  after the  occurrence of a Change in
Control that denies,  in whole or in part,  any claim made by any individual for
benefits  hereunder  shall be subject  to  judicial  review,  under a "de novo",
rather than a deferential, standard.

         (b) The Committee may delegate any  administerial or  non-discretionary
function  pertaining  to the  administration  of the  Plan  to any  one or  more
officers  or  employees  of any of  the  GPU  Companies,  as the  Committee  may
determine in its discretion.

<PAGE>

7.       Amendment and Termination

         (a) Subject to Section  7(c),  the Plan may be amended or terminated at
any time by GPU Service,  Inc. ("GPUS"),  with the concurrence of the Committee.
Any such  amendment  may be made  with  retroactive  effect  to the  extent  not
prohibited by law.

         (b) Action to amend the Plan may be taken by GPUS either by  resolution
duly adopted by its Board of Directors,  or by an instrument in writing executed
by an officer of GPUS to whom  authority to adopt or approve  amendments  to the
Plan has been  delegated  pursuant to a resolution  duly adopted by the Board of
Directors  of GPUS.  Action  to  terminate  the  Plan  shall be taken by GPUS by
resolution of its Board of Directors.

         (c)      Notwithstanding the provisions of Sections 7(a) and 7(b),

                  (i)      no amendment to or termination of the Plan shall
         impair any rights to benefits which have accrued hereunder, and

                  (ii) no amendment to Section 6(a) or to this Section 7(c), nor
         any termination of the Plan,  effectuated (A) at the request of a third
         party who had  indicated an intention or taken steps to effect a Change
         in Control  and who  effectuates  a Change in  Control,  (B) within six
         months prior to, or otherwise in connection  with,  or in  anticipation
         of, a Change in Control which has been threatened or proposed and which
         actually  occurs,  or (C)  following  a  Change  in  Control,  shall be
         effective if the amendment or termination  adversely affects the rights
         of any Participant under the Plan.

8.       Rights of Participants

         A Participant's rights and interests under the Plan shall be subject to
the following provisions:

         (a) A Participant shall have the status of a general unsecured creditor
of his or her  Company  with  respect to his or her right to receive any payment
under the Plan.  The Plan shall  constitute a mere promise by the  Participant's
Company to make payments in the future of the benefits  provided for herein.  It
is intended that the  arrangements  reflected in the Plan be treated as unfunded
for tax purposes,  as well as for purposes of any applicable provisions of Title
I of ERISA.

<PAGE>

         (b) A  Participant's  rights to  payments  under the Plan  shall not be
subject in any manner to anticipation,  alienation, sale, transfer,  assignment,
pledge, encumbrance,  attachment, or garnishment by creditors of the Participant
or his or her beneficiary.

         (c) Neither the Plan nor any action taken  hereunder shall be construed
as giving any  Participant  any right to be retained in the employment of any of
the GPU Companies.

         (d) Notwithstanding  any other provision herein to the contrary,  there
shall be deducted from any payment  otherwise  required to be made hereunder any
federal,  state or local taxes  required by law to be withheld  with  respect to
such payment.EXHIBIT 10-GG

                     OYSTER CREEK NUCLEAR GENERATING STATION

                           PURCHASE AND SALE AGREEMENT

                                  BY AND AMONG

                               GPU NUCLEAR, INC.,

                JERSEY CENTRAL POWER & LIGHT COMPANY, as SELLERS,

                                       and

                    AMERGEN ENERGY COMPANY, L.L.C., as BUYER

                          Dated as of October 15, 1999

                          PORTIONS OF THE TEXT IN THIS
                           DOCUMENT HAVE BEEN REDACTED
                        BECAUSE THEY CONTAIN CONFIDENTIAL
                        INFORMATION WITHHELD FROM PUBLIC
                          DISCLOSURE PURSUANT TO 10 CFR
                          SECTIONS 2.790 AND 9.17(a)(4)

<PAGE>

REDACTED TEXT CONTAINS CONFIDENTIAL INFORMATION WITHHELD FROM PUBLIC DISCLOSURE
-------------------------------------------------------------------------------
PURSUANT TO 10 CFR SECTIONS 2.790 AND 9.17(a)(4)
-------------------------------------------------

                           PURCHASE AND SALE AGREEMENT
                           ---------------------------

         PURCHASE AND SALE AGREEMENT, dated as of October 15, 1999, by and among
GPU Nuclear,  Inc. a New Jersey  corporation  ("GPUN"),  Jersey  Central Power &
Light  Company,  a New  Jersey  corporation  ("JCP&L")  (GPUN and JCP&L are each
referred to as a "Seller"  collectively  referred to as "Sellers"),  and AmerGen
Energy Company, L.L.C., a Delaware limited liability company ("Buyer").  Sellers
and Buyer are referred to  individually  as a "Party," and  collectively  as the
"Parties."

                               W I T N E S S E T H
                               -------------------

         WHEREAS, JCP&L owns the Plant (as defined herein), Purchased Assets (as
defined herein) and certain facilities and other assets associated therewith and
ancillary thereto;

         WHEREAS, GPUN is responsible for the daily operations of the Plant for
JCP&L ; and

         WHEREAS,  Buyer  desires to purchase,  and JCP&L  desires to sell,  the
Purchased  Assets upon the terms and  conditions  hereinafter  set forth in this
Agreement.

         NOW,   THEREFORE,   in   consideration   of   the   mutual   covenants,
representations,  warranties and agreements hereinafter set forth, and intending
to be legally bound hereby, the Parties agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

         1.1          Definitions.  As used in this Agreement, the following
terms have the meanings specified in this Section 1.1.

         (1)  "Affiliate" has the meaning set forth in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934.

<PAGE>

         (2)  "Agreement"  means this Purchase and Sale Agreement  together with
the Schedules and Exhibits hereto, as the same may be from time to time amended.

         (3) "Ancillary  Agreements" means the  Interconnection  Agreement,  the
Reciprocal Services Agreement,  the Power Purchase Agreement, the EOF Lease, the
Remote Assembly Area Access Agreement and the SBO Service Agreement, as the same
may be from time to time amended.

         (4)  "Assignment  and  Assumption  Agreement"  means the Assignment and
Assumption  Agreement  between  Sellers and Buyer  substantially  in the form of
Exhibit A hereto,  by which Sellers  shall,  subject to the terms and conditions
hereof,  assign  Sellers'  Agreements,  the Real Property  Leases,  Transferable
Permits,  certain  intangible  assets  and other  Purchased  Assets to Buyer and
whereby Buyer shall assume the Assumed Liabilities.

         (5)  "Assumed Liabilities" has the meaning set forth in Section 2.3.

         (6)  "Atomic Energy Act" means the Atomic Energy Act of 1954, as
amended.

         (7)  "Benefit Plans" has the meaning set forth in Section 4.9.

         (8) "Bill of Sale" means the Bill of Sale, substantially in the form of
Exhibit B hereto,  to be delivered at the Closing,  with respect to the Tangible
Personal Property  included in the Purchased Assets  transferred to Buyer at the
Closing.

         (9) "Business Day" shall mean any day other than  Saturday,  Sunday and
any day on which banking institutions in the State of New York are authorized by
law or other governmental action to close.

         (10) "Buyer Benefit Plans" has the meaning set forth in
Section 6.10(f).

         (11) "Buyer NQF" means the external trust fund not meeting the
requirements of section 468A of the Code and Treas. Reg. Section 1.468A-5,  that
will be maintained by Buyer with respect to the Plant after the Closing pursuant
to the Post-Closing Decommissioning Trust Agreement.

                                        2

<PAGE>

         (12)    "Buyer Indemnitee" has the meaning set forth in Section 8.1(b).

         (13)    "Buyer Material Adverse Effect" has the meaning set forth in
Section 5.3(a).

         (14)    "Buyer Required Regulatory Approvals" has the meaning set forth
in Section 5.3(b).

         (15)    "Buyer QF" means the external trust fund meeting the
requirements of section 468A of the Code and Treas. Reg.

Section 1.468A-5, that will be maintained by Buyer with respect to the Plant
after the Closing pursuant to the Post-Closing Decommissioning Trust Agreement.

         (16)    "Buyer's Environmental Inspection" has the meaning set forth in
Section 6.2(i).

         (17)    "Capital Expenditures" has the meaning set forth in
Section 3.3(a)(ii).

         (18)    [Intentionally Omitted)

         (19)    "CERCLA" means the Federal Comprehensive Environmental
Response, Compensation, and Liability Act, as amended.

         (20)    "Class I Assets" shall have the meaning set forth in Temp.
Treas. Reg. Section 1.1060-IT(d)(1).

         (21)    "Closing" has the meaning set forth in Section 3.1.

         (22)    "Closing Adjustment" has the meaning set forth in
Section 3.3(b).

         (23)    "Closing Date" has the meaning set forth in Section 3.1.

         (24)    "COBRA" means the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended.

         (25)    "Code" means the Internal Revenue Code of 1986, as amended.

         (26)    "Collective Bargaining Agreement" has the meaning set forth in
Section 6.10(d).

                                        3

<PAGE>

         (27) "Commercially   Reasonable   Efforts"  means  efforts  which  are
reasonably   necessary  to  cause,  or  assist  in,  the   consummation  of  the
transactions  contemplated  by,  this  Agreement  and which do not  require  the
performing  Party to expend funds,  incur expenses or assume  liabilities  other
than those  which are  reasonable  in nature  and  amount in the  context of the
transactions contemplated by this Agreement in order for the performing Party to
satisfy its obligations hereunder.

         (28) "Confidentiality  Agreement" means the Confidentiality  Agreement,
dated March 29, 1999, by and between Sellers and Buyer.

         (29) "Decommissioning" means the complete retirement and removal of the
Plant from service and the  restoration of the Site, as well as any planning and
administrative  activities incidental thereto,  including but not limited to (a)
the dismantlement,  decontamination, storage, and/or entombment of the Plant, in
whole  or in  part,  and any  reduction  or  removal,  whether  before  or after
termination of the NRC license for the Plant, of  radioactivity at the Site, and
(b)  all   activities   necessary   for  the   retirement,   dismantlement   and
decontamination  of the Plant to comply with all applicable  requirements of the
Atomic Energy Act and the NRC's rules,  regulations,  orders and  pronouncements
thereunder,   the  NRC   Operating   License  for  the  Plant  and  any  related
decommissioning plan.

         (30) "Decommissioning Trust Funds" means the Seller Qualified
Decommissioning  Trust Fund and the Seller  Nonqualified  Decommissioning  Trust
Fund, collectively.

         (31) "Decommissioning   Indenture"  means  the  Indenture  and  Second
Amendment to Indenture  dated October 25, 1990  regarding  the Seller  Qualified
Decommissioning  Trust Fund and the Seller  Nonqualified  Decommissioning  Trust
Fund between JCP&L and Bank of New York, as amended.

         (32) "Department of Energy" or "DOE" means the United States
Department of Energy and any successor agency thereto.

         (33) "Department of Energy  Decommissioning and  Decontamination  Fees"
means all fees  related to the  Department  of Energy's  Special  Assessment  of
utilities for the Uranium Enrichment  Decontamination and Decommissioning  Trust
Fund pursuant to Sections  1801,  1802 and 1803 of the Atomic Energy Act and the
Department  of  Energy's  implementing  regulations  at 10 CFR Part 766,  or any
similar fees assessed under amended or

                                        4

<PAGE>

superseding  statutes  or  regulations   applicable  to  separative  work  units
purchased  from  the  Department  of  Energy  in  order  to  decontaminate   and
decommission the Department's gaseous diffusion enrichment facilities.

         (34) "Direct Claim" has the meaning set forth in Section 8.2(c).

         (35) "Easements"  means,  with respect to the  Purchased  Assets,  the
easements and access rights to be granted pursuant to the Easement Agreement and
the  Interconnection  Agreement,   including,   without  limitation,   easements
authorizing  access, use,  maintenance,  construction,  repair,  replacement and
other  activities,  as  further  described  in the  Easement  Agreement  and the
Interconnection Agreement.

         (36) "Easement  Agreement" means the Easement  Agreement  between JCP&L
and Sithe, whereby Buyer will be provided with certain Easements with respect to
the Real Property being  transferred to Buyer and the adjacent Forked River site
sufficient to operate the Plant substantially as currently operated.

         (37) "18R Outage" has the meaning set forth in Section 6.17(a).

         (38) "Emission  Allowance" means all present and future  authorizations
to emit specified units of pollutants or Hazardous  Substances,  which units are
established by the Governmental Authority with jurisdiction over the Plant under
(i) an air pollution control and emission reduction program designed to mitigate
global warming,  interstate or intra-state  transport of air pollutants;  (ii) a
program  designed to  mitigate  impairment  of surface  waters,  watersheds,  or
groundwater;  or (iii) any pollution  reduction  program with a similar purpose.
Emission  Allowances include  allowances,  as described above,  regardless as to
whether  the  Governmental   Authority  establishing  such  Emission  Allowances
designates such allowances by a name other than "allowances."

         (39) "Emission  Reduction  Credits"  means  credits,  in units that are
established by the Governmental  Authority with jurisdiction over the Plant that
have  obtained the credits,  resulting  from  reductions in the emissions of air
pollutants from an emitting source or facility  (including,  without limitation,
and to the extent allowable under applicable law,  reductions from shut-downs or
control of emissions beyond that

                                        5

<PAGE>

required  by  applicable  law) that:  (i) have been  identified  by the NJDEP as
complying  with  applicable New Jersey law governing the  establishment  of such
credits  (including,  without  limitation,  that such  emissions  reductions are
enforceable,  permanent,  quantifiable  and surplus) and listed in the Emissions
Reduction Credit Registry  maintained by the NJDEP or with respect to which such
identification and listing are pending; or (ii) have been certified by any other
applicable  Governmental  Authority  as complying  with the law and  regulations
governing the  establishment  of such credits  (including,  without  limitation,
certification  that  such  emissions  reductions  are  enforceable,   permanent,
quantifiable and surplus).  The term includes  Emission  Reduction  Credits that
have been approved by the NJDEP and are awaiting USEPA  approval.  The term also
includes certified air emissions reductions,  as described above,  regardless as
to whether the Governmental Authority certifying such reductions designates such
certified air  emissions  reductions  by a name other than  "emission  reduction
credits."

         (40) "Encumbrances"  means any  mortgages,  pledges,  liens,  security
interests,  conditional  and  installment  sale  agreements,  activity  and  use
limitations,  conservation or other easements,  deed restrictions,  encumbrances
and charges of any kind.

         (41) "Energy Reorganization Act" means the Energy Reorganization Act of
1974, as amended.

         (42) "Environmental  Claim" means any and all pending and/or threatened
administrative or judicial  actions,  suits,  orders,  claims,  liens,  notices,
notices of violations,  investigations,  complaints,  requests for  information,
proceedings, or other written communication, whether criminal or civil, pursuant
to or relating to any applicable Environmental Law by any person (including, but
not limited to, any Governmental Authority,  private person and citizens' group)
based  upon,  alleging,  asserting,  or  claiming  any actual or  potential  (a)
violation  of, or liability  under any  Environmental  Law, (b) violation of any
Environmental  Permit, or (c) liability for investigatory  costs, cleanup costs,
removal  costs,  remedial  costs,  response  costs,  natural  resource  damages,
property damage,  personal injury, fines, or penalties arising out of, based on,
resulting from, or related to the presence,  Release, or threatened Release into
the  environment  of any  Hazardous  Substances  at any location  related to the
Purchased Assets,  including, but not limited to, any off-Site location to which
Hazardous Substances, or materials containing Hazardous

                                        6

<PAGE>

Substances, were sent for handling, storage, treatment, or disposal.

         (43)  "Environmental  Condition"  means the  presence or Release to the
environment,  whether  at the  Site or at an  off-Site  location,  of  Hazardous
Substances,  including any migration of those Hazardous  Substances through air,
soil or groundwater to or from the Site or any off-Site  location  regardless of
when such presence or Release occurred or is discovered.

         (44) "Environmental Laws" means all applicable Federal, state
and local, provincial and foreign, civil and criminal laws, regulations,  rules,
ordinances, codes, decrees, judgments, directives, or judicial or administrative
orders relating to pollution or protection of the environment, natural resources
or human health and safety,  including,  without  limitation,  laws  relating to
Releases or  threatened  Releases of Hazardous  Substances  (including,  without
limitation,  Releases to ambient air, surface water, groundwater,  land, surface
and subsurface  strata) or otherwise  relating to the  manufacture,  processing,
distribution,  use, treatment, storage, Release, transport, disposal or handling
of Hazardous  Substances.  "Environmental  Laws"  include,  without  limitation,
CERCLA,  the Hazardous  Materials  Transportation  Act (49  U.S.C.ss.ss.1801  et
seq.), the Resource  Conservation  and Recovery Act (42 U.S.C.  Sections 6901 et
seq.),  the Federal  Water  Pollution  Control Act (33 U.S.C.  Sections  1251 et
seq.), the Clean Air Act (42 U.S.C. Sections 7401 et seq.), the Toxic Substances
Control Act (15 U.S.C.  Sections 2601 et seq.), the Oil Pollution Act (33 U.S.C.
Sections 2701 et seq.), the Emergency  Planning and Community  Right-to-Know Act
(42 U.S.C.  Sections 11001 et seq.), the Occupational  Safety and Health Act (29
U.S.C.  Sections  651 et seq.),  the New Jersey  Water  Pollution  Control  Act,
(N.J.S.A. 58:10-23.11 et seq.), the Spill Compensation and Control Act (N.J.S.A.
13:1E-1 et seq.), the Solid Waste  Management Act (N.J.S.A.  58:4A-4.1 et seq.),
the  Subsurface  and  Percolating  Waters Act  (N.J.S.A.  13:1K-6 et seq.),  the
Industrial  Site Recovery Act (N.J.S.A.  13:1k-6 et seq.),  the  Brownfield  and
Contaminated Site Remediation Act (N.J.S.A.  58:10 B-1) and all applicable other
state  laws  analogous  to any  of the  above.  Notwithstanding  the  foregoing,
Environmental Laws do not include the Atomic Energy Act, NRC rules,  regulations
and orders  promulgated or issued thereunder,  or the Energy  Reorganization Act
and applicable regulations thereunder.

         (45) "Environmental Permits" has the meaning set forth in
Section 4.7(a).

                                        7

<PAGE>

         (46) "Environmental Reports" has the meaning set forth in Section 4.7.

         (47) "EOF  Facility"  means the Emergency  Operations  Facility used in
connection  with the Plant and  located at JCP&L's  premises  in  Lakewood,  New
Jersey.

         (48) "EOF Lease" means the agreement pursuant to which JCP&L will lease
the  EOF  Facility  to  Buyer  for  use in  connection  with  Plant  emergencies
consistent with the general terms and conditions set forth in Schedule 1.1(48).

         (49) "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.

         (50) "ERISA Affiliate" has the meaning set forth in Section 2.4(n).

         (51) "ERISA Affiliate Plans" has the meaning set forth in
Section 2.4(n).

         (52) "Estimated Adjustment" has the meaning set forth in
Section 3.3(b).

         (53) "Estimated Closing Statement" has the meaning set forth in
Section 3.3(b).

         (54) "Excluded Assets" has the meaning set forth in Section 2.2.

         (55) "Excluded Liabilities" has the meaning set forth in Section 2.4.

         (56) "FERC" means the Federal Energy Regulatory Commission or any
successor agency thereto.

         (57) "FIRPTA  Affidavit" means the Foreign  Investment in Real Property
Tax Act  Certification  and  Affidavit,  substantially  in the form of Exhibit C
hereto.

         (58) "Good Utility  Practices"  mean any of the practices,  methods and
acts engaged in or approved by a  significant  portion of the  electric  utility
industry  as good  practices  applicable  to nuclear  generating  facilities  of
similar design, size and capacity or any of the practices, methods or activities
which, in the exercise of reasonable  judgment by a prudent nuclear  operator in
light of the facts known at the time the decision

                                        8

<PAGE>

was made,  could  have been  expected  to  accomplish  the  desired  result at a
reasonable cost consistent with good business  practices,  reliability,  safety,
expedition  and  applicable  law. Good Utility  Practices are not intended to be
limited  to the  optimum  practices,  methods  or acts to the  exclusion  of all
others,  but  rather  to be  acceptable  practices,  methods  or acts  generally
accepted in the electric utility industry.

         (59) "Governmental  Authority" means any federal, state, local or other
governmental,  regulatory  or  administrative  agency,  commission,  department,
board, or other governmental subdivision,  court, tribunal,  arbitrating body or
other governmental authority.

         (60) "GPU" means GPU, Inc., a Pennsylvania corporation and parent
company of Sellers.

         (61) "GPUN" means GPU Nuclear, Inc., a New Jersey corporation and a
wholly-owned subsidiary of GPU.

         (62) "Hazardous  Substances"  means (a) any  petrochemical or petroleum
products, coal ash, oil, radioactive materials,  radon gas, asbestos in any form
that  is  or  could  become  friable,  urea  formaldehyde  foam  insulation  and
transformers or other equipment that contain  dielectric fluid which may contain
levels of polychlorinated biphenyls; (b) any chemicals,  materials or substances
defined as or included in the definition of "hazardous  substances,"  "hazardous
wastes," "hazardous materials," "hazardous constituents,"  "restricted hazardous
materials,"    "extremely    hazardous    substances,"    "toxic    substances,"
"contaminants," "pollutants," "toxic pollutants" or words of similar meaning and
regulatory  effect  under any  applicable  Environmental  Law; and (c) any other
chemical,  material or substance,  exposure to which is  prohibited,  limited or
regulated by any applicable Environmental Law; excluding, however, any "source",
"special nuclear" and "by product" material, as such terms are defined in and to
the extent regulated under the Atomic Energy Act.

         (63) "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.

         (64) "Income Tax" means any  federal,  state,  local or foreign Tax (a)
based upon,  measured by or  calculated  with respect to net income,  profits or
receipts (including,  without limitation, capital gains Taxes and minimum Taxes)
or (b) based upon, measured by or calculated with respect to multiple bases

                                        9

<PAGE>

(including, without limitation, corporate franchise taxes) if one or more of the
bases on which such Tax may be based, measured by or calculated with respect to,
is described in clause (a), in each case together with any interest,  penalties,
or additions to such Tax.

         (65) "Indemnifiable Loss" has the meaning set forth in Section 8.1(a).

         (66) "Indemnifying Party" has the meaning set forth in Section 8.1(d).

         (67) "Indemnitee" has the meaning set forth in Section 8.1(c)(i).

         (68) "Independent  Accounting Firm" means such independent  accounting
firm of national reputation as is mutually appointed by Sellers and Buyer.

         (69) "Inspection" means all tests, reviews, examinations,  inspections,
investigations,  verifications,  samplings and similar  activities  conducted by
Buyer or its agents or Representatives with respect to the Purchased Assets.

         (70) "Intellectual  Property"  means all  patents  and patent  rights,
trademarks  and  trademark  rights,  copyrights  and  copyright  rights owned by
Sellers and necessary for the operation and maintenance of the Purchased Assets,
and all pending  applications  for  registrations  of patents,  trademarks,  and
copyrights, as set forth on Schedule 2.1(l).

         (71) "Interconnection  Agreement" means the Interconnection  Agreement,
between  JCP&L and  Buyer,  the form of which is  attached  as Exhibit D hereto,
under which JCP&L will  provide  Buyer with  interconnection  service to JCP&L's
transmission  facilities and whereby Buyer will provide  Sellers with continuing
access to certain of the Purchased Assets after the Closing Date.

         (72) "Inventories"  means nuclear fuel or alternative fuel inventories,
materials,  spare parts,  consumable  supplies and chemical and gas  inventories
relating to the operation of the Plant located at, or in transit to, the Plant.

         (73) "IRS" means the United States Internal Revenue Service or any
successor agency thereto.

                                       10

<PAGE>

         (74) "ISFSI" means the Independent Spent Fuel Storage Installation
currently installed at the Plant.

         (75) "ISRA" means the New Jersey Industrial Site Recovery Act,
as amended.

         (76) "ISRA Termination Date"  has the meaning as set forth in
Section 9.1(j).

         (77) "Knowledge"  means the actual knowledge of the corporate  officers
or   managerial   representatives   of  the   specified   Person   charged  with
responsibility for the particular function,  after reasonable inquiry by them of
selected  employees of such Person whom they believe,  in good faith,  to be the
persons responsible for the subject matter of the inquiry.

         (78) "Material  Adverse  Effect"  means any change (or  changes  taken
together) in, or effect on, the Purchased  Assets that is materially  adverse to
the  operations or condition  (financial or otherwise) of the Purchased  Assets,
taken as a whole,  other than any change (or changes taken  together)  generally
affecting the international,  national, regional or local electric industry as a
whole and not  affecting  the  Purchased  Assets or the Parties in any manner or
degree significantly  different than the industry as a whole,  including changes
in local wholesale or retail markets for electric power;  national,  regional or
local electric  transmission  systems or operations  thereof,  and any change or
effect  resulting  from  action or  inaction by a  Governmental  Authority  with
respect to an independent system operator or retail access in New Jersey.

         (79) "Mortgage Indenture" means the mortgage originally granted to City
Bank Farmer's Trust Company by JCP&L,  dated as of March 1, 1946, as amended and
supplemented.

         (80) "NJBPU" means the New Jersey Board of Public Utilities and any
successor agency thereto.

         (81) "NJDEP" means the New Jersey Department of Environmental
Protection and any successor agency thereto.

         (82) "Non-Union Employees" has the meaning as set forth in
Sections 6.10(b) and (l).

         (83) "NYPSC" means the New York Public Service Commission and any
successor agency thereto.

                                       11

<PAGE>

         (84) "Nonqualified Decommissioning Trust Fund" means an external trust
fund that does not meet the  requirements  of Code section 468A and Treas.  Reg.
Section 1.468A-5.

         (85) "NRC" means the United States Nuclear Regulatory Commission and
any successor agency thereto.

         (86) "Nuclear  Laws"  means all  Federal,  state,  and local civil and
criminal  laws,  regulations,  rules,  ordinances,  codes,  decrees,  judgments,
directives,  or judicial or  administrative  orders,  to the extent  enforceable
against  Sellers  and  applicable  to  the  Purchased  Assets,  relating  to the
regulation  of  commercial  nuclear power  plants,  Source  Material,  Byproduct
Material and Special Nuclear Materials; the regulation of Low--Level Radioactive
Waste and High-Level  Radioactive  Waste; the transportation and storage of such
Nuclear Materials; the regulation of the Safeguards Information;  the regulation
of nuclear  fuel;  the  enrichment  of uranium;  and the disposal and storage of
High-Level  Radioactive  Waste  and  Spent  Nuclear  Fuel,  including  contracts
therefor  and  payments  into the  Nuclear  Waste  Fund;  but shall not  include
Environmental  Laws.  "Nuclear Material" means Source Material,  Special Nuclear
Material,   Byproduct   Material,   Low-Level   Radioactive  Waste,   High-Level
Radioactive  Waste,  and Spent Nuclear  Fuel. As used herein,  the terms "Source
Material,"  "Special  Nuclear  Material,"   "Byproduct   Material,"   "Low-Level
Radioactive  Waste,"  "High-Level  Radioactive  Waste," "Spent Nuclear Fuel" and
"Safeguards  Information"  have the meanings ascribed to them in the regulations
of the NRC. To the extent that they govern this subject  matter,  "Nuclear Laws"
include the Atomic  Energy Act of 1954,  as amended (42 U.S.C.  Section  2011 et
seq.), the  Price-Anderson Act (Section 170 of the Atomic Energy Act of 1954, as
amended);  the  Energy  Reorganization  Act of 1974 (42 U.S.C.  Section  5801 et
seq.);  Convention on the Physical Protection of Nuclear Material Implementation
Act of 1982 (Public Law 97 - 351; 96 Stat. 1663); the Nuclear  Non-Proliferation
Act of 1978 (22 U.S.C. Section 3201) the Low-Level  Radioactive Waste Policy Act
(42 U.S.C.  Section  2021b et seq.);  the Nuclear  Waste  Policy Act, (42 U.S.C.
Section  10101 et seq.,  as amended);  the  Low-Level  Radioactive  Waste Policy
Amendments Act of 1985 (42 U.S.C. Section 2021d, 471); and the Energy Policy Act
of 1992 (4 U.S.C.  Section  13201 et seq.) and any  applicable  and  enforceable
state or local laws analogous to the foregoing.

         (87) "Nuclear Waste Policy Act" means the Nuclear Waste Policy Act of
1982, as amended.

                                       12

<PAGE>

         (88) "Operational Recovery Work" has the meaning set forth in
Section 7.1(p).

         (89) "Outage Plan" has the meaning set forth in Section 6.17(a).

         (90) "Outage Cost Cap" has the meaning set forth in the Outage Plan.

         (91) "Outage Costs" means the costs,  including additional nuclear fuel
costs,  associated  with the 18R Outage and as set forth in the Outage Plan,  as
the same may be amended from time to time in accordance with the Outage Plan.

         (92) "PaPUC" means the Pennsylvania Public Utility Commission and any
successor agency thereto.

         (93)  "Parent  Guaranty"  means the  agreement  in the form of which is
attached as Exhibit G hereto, separately executed by each of PECO Energy Company
and British Energy,  plc, severally  guarantying the full and timely performance
by Buyer of its obligations under this Agreement,  including, but not limited to
Buyer's obligations under Section 6.17.

         (94) "PBGC" means the Pension Benefit Guaranty Corporation.

         (95) "Permits" has the meaning set forth in Section 4.14.

         (96) "Permitted Encumbrances" means: (i) the Easements;  (ii) those
Encumbrances set forth in Schedule  1.1(96);  (iii) statutory liens for Taxes or
other  governmental  charges or  assessments  not yet due or  delinquent  or the
validity of which is being  contested in good faith by  appropriate  proceedings
provided that the aggregate  amount for all Purchased  Assets being so contested
does not exceed $250,000; (iv) mechanics',  carriers',  workers', repairers' and
other  similar  liens  arising or  incurred in the  ordinary  course of business
relating to  obligations  as to which there is no default on the part of Sellers
or the validity of which are being  contested  in good faith,  and which do not,
individually  or in the aggregate  with respect to all  Purchased  Assets exceed
$250,000; (v) zoning,  entitlement,  conservation restriction and other land use
and environmental regulations by Governmental  Authorities;  and (vi) such other
imperfections in title and restrictions which do not materially, individually or
in the  aggregate,  detract from the value of the Purchased  Assets as currently
used or unreasonably interfere with the present use of the Purchased Assets and

                                       13

<PAGE>

neither secure indebtedness, nor individually or in the aggregate create a
Material Adverse Effect.

         (97) "Person"  means any  individual,  partnership,  limited  liability
company, joint venture,  corporation,  trust,  unincorporated  organization,  or
governmental entity or any department or agency thereof.

         (98) "PJM" means the Pennsylvania-New Jersey-Maryland Interconnection,
LLC.

         (99) "Plant" means the Oyster Creek 619 megawatt boiling water nuclear
generating  station located in Lacey Township,  New Jersey and identified in NRC
Operating License No. DPR-16,  Docket No. 50-219 and related assets as described
in Section 2.1.

         (100) "Pollution  Control Revenue Bonds" means the  outstanding  bonds
listed on Schedule 6.15,  but excluding any bonds issued in connection  with the
refinancing or refunding thereof.

         (101) "Post-Closing  Decommissioning  Trust Agreement" means the trust
agreement  between  Buyer and a trust  company  to be  designated  by Buyer,  as
Trustee, establishing the Buyer QF and the Buyer NQF.

         (102) "Post-Closing Adjustment" has the meaning set forth in
Section 3.3(c).

         (103) "Post-Closing Statement" has the meaning set forth in
Section 3.3(c).

         (104) "Power Purchase  Agreement" means the agreement between JCP&L and
Buyer,  a copy of which is  attached  as Exhibit E hereto,  executed on the date
hereof,  relating to the sale of  installed  capacity and  associated  energy to
JCP&L for a specified period of time following the Closing Date.

         (105) "Proprietary  Information" of a Party means all information about
the  Party  or  its  Affiliates,   including  their  respective   properties  or
operations,  furnished to the other Party or its Representatives by the Party or
its Representatives,  after the date hereof,  regardless of the manner or medium
in which it is furnished,  including information provided to a Party pursuant to
the Confidentiality  Agreement. In addition, after the Closing Date, Proprietary
Information

                                       14

<PAGE>

includes  any  non-public  information  regarding  the  Purchased  Assets or the
transactions  contemplated by this Agreement.  Proprietary  Information does not
include  information that: (a) is or becomes  generally  available to the public
(other  than  as  a  result  of  a   disclosure   by  the  other  Party  or  its
Representatives in violation of a confidentiality  agreement); (b) was available
to the other Party on a  nonconfidential  basis prior to its  disclosure  by the
Party or its  Representatives;  (c)  becomes  available  to the other Party on a
nonconfidential   basis   from  a   person,   other   than  the   Party  or  its
Representatives,  who is not otherwise bound by a confidentiality agreement with
the Party or its Representatives, or is not under any obligation to the Party or
any of its Representatives not to transmit the information to the other Party or
its Representatives; or (d) is independently developed by the other Party.

         (106) "Purchased Assets" has the meaning set forth in Section 2.1.

         (107) "Purchase Price" has the meaning set forth in Section 3.2.

         (108) "Qualified Decommissioning Trust Fund" means an external trust
fund that meets the  requirements  of section  468A of the Code and Treas.  Reg.
Section 1.468A-5.

         (109) "Real Property" has the meaning set forth in Section 2.1(a).

         (110) "Real Property Leases" has the meaning set forth in Section 4.6.

         (111) "Reciprocal  Services  Agreement"  means the  agreement  between
Sellers and Buyer, a copy of which is attached as Exhibit F hereto,  executed on
the date  hereof,  relating to Buyer's  performance  of certain  management  and
consulting  services  relating  to the 18R Outage and  Sellers'  performance  of
certain administrative and other services after the Closing.

         (112) "Release" means release,  spill,  leak,  discharge,  dispose of,
pump, pour, emit, empty, inject,  leach, dump or allow to escape into or through
the environment.

         (113) "Remediation"  means  action of any kind to  address a  Release,
threatened  Release or the  presence  of  Hazardous  Substances  at a Site or an
off-Site location including, without

                                       15

<PAGE>

limitation,  any or all of the following activities to the extent they relate to
or arise from the  presence  of a Hazardous  Substance  at a Site or an off-Site
location:  (a)  monitoring,   investigation,   assessment,  treatment,  cleanup,
containment,  removal,  mitigation,  response or restoration work; (b) obtaining
any permits, consents, approvals or authorizations of any Governmental Authority
necessary to conduct any such activity; (c) preparing and implementing any plans
or  studies  for any such  activity;  (d)  obtaining  a  written  notice  from a
Governmental  Authority with  jurisdiction  over a Site or an off-Site  location
under  Environmental  Laws that no material  additional work is required by such
Governmental Authority; (e) the use, implementation,  application, installation,
operation or maintenance of removal  actions on a Site or an off-Site  location,
remedial technologies applied to the surface or subsurface soils, excavation and
off-Site  treatment  or disposal of soils,  systems for long term  treatment  of
surface water or ground water,  engineering controls or institutional  controls;
and (f) any other activities reasonably determined by a Party to be necessary or
appropriate  or required  under  Environmental  Laws to address the  presence or
Release of Hazardous Substances at a Site or an off-Site location.

         (114) "Remediation  Agreement" means an agreement  between a Party and
the NJDEP  providing  for the  Remediation  of all or a portion of the Purchased
Assets in a manner necessary to comply with ISRA.

         (115) "Remote  Assembly  Area" means the Site  Evacuation and Personnel
Mustering  facility  used in  connection  with the Plant and  located at the GPU
Energy,  Berkley Operations  Headquarters on Route 530 in Berkeley Township, New
Jersey.

         (116) "Remote Assembly Area Access Agreement" means the agreement to be
executed  by the  Parties  giving  Buyer  access  and use  rights to the  Remote
Assembly Area in connection with Plant  emergencies  consistent with the general
terms and conditions set forth in Schedule 1.1(116).

         (117) "Replacement Welfare Plans" has the meaning set forth in
Section 6.10(e).

         (118) "Representatives"  of a Party means the Party's  Affiliates  and
their directors,  officers,  employees,  agents, partners,  advisors (including,
without limitation,  accountants, counsel, environmental consultants,  financial
advisors and other

                                       16

<PAGE>

authorized representatives) and parents and other controlling persons.

         (119) "SEC" means the Securities and Exchange Commission and any
successor agency thereto.

         (120)  "Seller  Nonqualified  Decommissioning  Trust  Fund"  means  the
external  trust  fund  maintained  by JCP&L  and  designated  as a  Nonqualified
Decommissioning  Trust Fund with respect to the Plant prior to Closing  pursuant
to the Decommissioning Indenture.

         (121) "Seller Qualified  Decommissioning Trust Fund" means the external
trust fund  maintained by JCP&L and  designated  as a Qualified  Decommissioning
Trust  Fund  with  respect  to  the  Plant  prior  to  Closing  pursuant  to the
Decommissioning Indenture.

         (122) "Sellers' Agreements" means those contracts, agreements, licenses
and leases relating to the ownership, operation and maintenance of the Plant and
being assigned to Buyer as part of the Purchased  Assets,  as more  particularly
described in Section 4.12.

         (123) "Sellers' Indemnitee" has the meaning set forth in
Section 8.1(a).

         (124) "Sellers' Required Regulatory Approvals" has the meaning set
forth in Section 4.3(b).

         (125) "Settlement  Agreement" means the Settlement  Agreement effective
as of September 1, 1994  between  Sellers and GPU, on the one hand,  and General
Electric Company, on the other hand.

         (126)  "Site"  means,  with  respect  to the Plant,  the Real  Property
(including improvements) forming a part of, or used or usable in connection with
the operation of, the Plant,  including any disposal  sites included in the Real
Property.  Any reference to the Site shall include,  by definition,  the surface
and  subsurface  elements,  including the soils and  groundwater  present at the
Site,  and any reference to items "at the Site" shall include all items "at, on,
in, upon, over, across, under and within" the Site.

         (127) "Sithe" means Sithe Energies, Inc., a Delaware corporation, or
any Affiliate thereof or successor thereto.

                                       17

<PAGE>

         (128) "Spent  Fuel Fees"  means  those fees  assessed  on  electricity
generated at the Plant and sold  pursuant to the Standard  Contract for Disposal
of Spent Nuclear Fuel and/or High Level Waste, as provided in Section 302 of the
Nuclear  Waste  Policy Act and 10 CFR Part 961, as the same may be amended  from
time to time.

         (129) "SBO Service" means the provision of station  blackout service to
the Plant in order to comply with applicable NRC requirements.

         (130) "SBO Service  Agreement"  means the  agreement  pursuant to which
JCP&L will provide or cause to be provided SBO Service to the Plant.

         (131) "Subsidiary"  when used in  reference  to any  Person  means any
entity of which  outstanding  securities having ordinary voting power to elect a
majority of the Board of Directors or other Persons performing similar functions
of such entity are owned directly or indirectly by such Person.

         (132) "System Council" means System Council U-3 of the International
Brotherhood of Electrical Workers.

         (133) "Tangible Personal Property" has the meaning set forth in
Section 2.1(c).

         (134) "Tax Basis" means the adjusted tax basis determined for federal
income tax purposes under Code section 1011(a).

         (135) "Taxes" means all taxes,  charges,  fees,  levies,  penalties or
other  assessments  imposed by any  federal,  state or local or  foreign  taxing
authority,  including,  but not limited  to,  income,  excise,  real or personal
property, sales, transfer,  franchise,  payroll,  withholding,  social security,
gross receipts, license, stamp, occupation, employment or other taxes, including
any interest, penalties or additions attributable thereto.

         (136) "Tax  Return"  means any  return,  report,  information  return,
declaration,  claim for refund or other  document  (including  any  schedule  or
related  or  supporting  information)  required  to be  supplied  to any  taxing
authority with respect to Taxes including amendments thereto.

         (137) "Termination Date" has the meaning set forth in Section 9.1(b).

                                       18

<PAGE>

         (138) "Third Party Claim" has the meaning set forth in Section 8.2(a).

         (139) "Transferable  Permits"  means those  Permits and  Environmental
Permits  which may be  lawfully  transferred  to or assumed  by Buyer  without a
filing with, notice to, consent or approval of any Governmental  Authority,  and
are set forth in Schedule 1.1 (139).

         (140) "Transferred Employees" means Transferred Non-Union Employees and
Transferred Union Employees.

         (141) "Transferred Non-Union Employees" has the meaning set forth in
Section 6.10(b).

         (142) "Transferred Union Employees" has the meaning set forth in
Section 6.10(b).

         (143) "Transferring  Employee  Records"  means all records  related to
Transferred   Employees,   including  records   pertaining  to:  (i)  skill  and
development training and biographies, (ii) seniority histories, (iii) salary and
benefit   information,   including  benefit  census  and  valuation  data,  (iv)
Occupational,  Safety  and Health  Administration  reports,  (v) active  medical
restriction  forms, (vi) fitness for duty and (vii)  disciplinary  actions,  but
excluding prior medical  histories  except to the extent related to specific job
qualification.

         (144) "Transmission Assets" has the meaning set forth in
Section 2.2(a).

         (145) "Trustee" means the trustee of the Decommissioning Trust Funds
appointed by Sellers pursuant to the Decommissioning Indenture.

         (146) "Union Employees" has the meaning set forth in Sections 6.10(a)
and (l).

         (147) "USEPA" means the United States Environmental Protection Agency
and any successor agency thereto.

         (148) "Year 2000 Qualified" means computer  software  applications that
have been  qualified  in  accordance  with a program  based on  NEI/NUSMG  97-07
Nuclear  Utility  Year 2000  Readiness  to  accurately  process  date/time  data
(including but not limited to calculating, comparing and sequencing) from, into

                                       19

<PAGE>

and between the twentieth and twenty-first centuries, the years 1999 and 2000,
and leap-year calculations.

         (149) "WARN Act" means the Federal Worker Adjustment Retraining and
Notification Act of 1988, as amended.

         1.2 Certain Interpretive Matters. In this Agreement, unless the context
otherwise  requires,  the singular shall include the plural, the masculine shall
include  the  feminine  and  neuter,  and vice  versa.  The term  "includes"  or
"including" shall mean "including without limitation."  References to a Section,
Article, Exhibit or Schedule shall mean a Section,  Article, Exhibit or Schedule
of this Agreement,  and reference to a given agreement or instrument  shall be a
reference to that agreement or instrument as modified, amended, supplemented and
restated through the date as of which such reference is made.

                                   ARTICLE II

                                PURCHASE AND SALE

         2.1 Transfer of Assets.  Upon the terms and subject to the satisfaction
of the conditions contained in this Agreement, at the Closing Sellers will sell,
assign, convey,  transfer and deliver to Buyer, and Buyer will purchase,  assume
and  acquire  from  Sellers,  free and  clear of all  Encumbrances  (except  for
Permitted  Encumbrances),  and subject to  Sections  2.2 and the other terms and
conditions of this Agreement,  all of Sellers' right,  title and interest in and
to all assets  constituting,  or used in and necessary for the operation of, the
Plant  as more  fully  identified  in  Schedules  2.1(h),  2.1(l)  and  4.10(b),
including,  without limitation,  those assets described below (but excluding the
Excluded  Assets),  each as in  existence  on the  Closing  Date  (collectively,
"Purchased Assets"):

                  (a) Those  certain  parcels of real  property  (including  all
buildings,  facilities  and other  improvements  thereon  and all  appurtenances
thereto)  described  in  Schedule  4.10(a)  (the  "Real  Property"),  except  as
otherwise constituting part of the Excluded Assets;

                  (b) All Inventories;

                  (c) All machinery,  mobile or otherwise,  equipment (including
computer hardware and software and communications  equipment),  vehicles, tools,
spare parts, fixtures, furniture

                                       20

<PAGE>

and furnishings and other personal property relating to or used in the operation
of the Plant,  including,  without  limitation,  the items of personal  property
included in Schedule  4.10(b),  other than property used or primarily  usable as
part of the Transmission  Assets or otherwise  constituting part of the Excluded
Assets (collectively, "Tangible Personal Property");

                  (d) Subject to the provisions of Section 6.5(d), all Sellers'
Agreements;

                  (e) Subject to the provisions of Section 6.5(d), all  Real
Property Leases;

                  (f) All Transferable Permits;

                  (g) All  books,  operating  records,   Transferring  Employee
Records,   operating,   safety  and  maintenance  manuals,  inspection  reports,
engineering   design   plans,   documents,   blueprints   and  as  built  plans,
specifications,  procedures  and  similar  items of Sellers,  wherever  located,
relating  to the Plant  and  other  Purchased  Assets  (subject  to the right of
Sellers  to retain  copies of same for their  use)  other  than  general  ledger
accounting records;

                  (h) Subject to Section  6.1, all  Emission  Reduction  Credits
associated  with the Plant and identified in Schedule  2.1(h),  and all Emission
Allowances  that have accrued prior to, or that accrue on or after,  the date of
this Agreement but prior to the Closing Date;

                  (i) All unexpired, transferable warranties and guarantees from
third  parties  with respect to any item of Real  Property or personal  property
constituting  part of the Purchased Assets as of the Closing Date and all claims
against third parties relating to Assumed Liabilities;

                  (j) The name "Oyster Creek Nuclear Generating Station".  It is
expressly understood that Sellers are not assigning or transferring to Buyer any
right to use the names "Jersey Central Power & Light Company",  "JCP&L",  "GPU",
"GPU  Energy",  "GPU  Nuclear" or "GPU  Service" or any related or similar trade
names,  trademarks,  service  marks,  corporate  names  and  logos or any  part,
derivative or combination thereof; provided, however, that Sellers will grant to
Buyer a  non-assignable  (except  to  Affiliates),  royalty-free,  non-exclusive
license to use "GPU Nuclear" and any related or similar trade names, trademarks,
service marks, corporate names and logos on

                                       21

<PAGE>

signs and  displays  affixed to the  Purchased  Assets on the Closing Date for a
period of three (3) months  thereafter in order to allow Buyer  adequate time to
change the signage to the name of Buyer;

                  (k) All drafts, memoranda, reports,  information,  technology,
and  specifications  relating to Sellers' plans for Year 2000 Qualification with
respect to the Purchased Assets;

                  (l) A non-assignable (except to Affiliates), royalty-free
non-exclusive license to the Intellectual Property described on Schedule 2.1(l);

                  (m) The substation equipment set forth in Schedule A to the
Interconnection Agreement and designated therein as being transferred to Buyer;

                  (n) The assets comprising the Decommissioning Trust Funds; and

                  (o) All spent fuel  canisters  now  installed or  subsequently
acquired by Sellers  after the date hereof (or the net  proceeds  from  Sellers'
sale or return thereof) as part of the ISFSI.

         2.2 Excluded Assets.  Notwithstanding  anything to the contrary in this
Agreement,  nothing  in  this  Agreement  will  constitute  or be  construed  as
conferring on Buyer, and Buyer is not acquiring, any right, title or interest in
or to the  following  specific  assets which are  associated  with the Purchased
Assets,  but  which  are  hereby  specifically  excluded  from  the sale and the
definition of Purchased Assets herein (the "Excluded Assets"):

                  (a) Except as set forth in  Schedule A to the  Interconnection
Agreement, the electrical transmission or distribution facilities (as opposed to
generation facilities) of Sellers or any of their Affiliates located at the Site
or forming  part of the Plant  (whether or not regarded as a  "transmission"  or
"generation"  asset  for  regulatory  or  accounting  purposes),  including  all
switchyard facilities,  substation facilities and support equipment,  as well as
all  permits,  contracts  and  warranties,  to the  extent  they  relate to such
transmission and distribution assets (collectively,  the "Transmission Assets"),
all as identified on Schedule 2.2(a);

                                       22

<PAGE>

                  (b) Certain revenue meters and remote testing units, drainage
pipes and systems, as identified in the Easement Agreement;

                  (c) Certificates  of  deposit,  shares of stock,  securities,
bonds, debentures,  evidences of indebtedness,  and interests in joint ventures,
partnerships,  limited liability  companies and other entities except the assets
comprising the Decommissioning Trust Funds;

                  (d) All cash, cash  equivalents,  bank deposits,  accounts and
notes receivable (trade or otherwise),  and any income,  sales, payroll or other
tax receivables except the assets comprising the Decommissioning Trust Funds;

                  (e) Subject to the license referred to in Section 2.1(j),  the
rights of Sellers and their  Affiliates  to the names "Jersey  "Central  Power &
Light Company", "JCP&L", "GPU", "GPU Energy", "GPU Nuclear" and "GPU Service" or
any related or similar trade names,  trademarks,  service marks, corporate names
or logos, or any part, derivative or combination thereof;

                  (f) All tariffs,  agreements and  arrangements to which either
of Sellers  is a party for the  purchase  or sale of  electric  capacity  and/or
energy or for the purchase of transmission or ancillary services;

                  (g) The  rights  of  Sellers  in and to any  causes  of action
against third parties (including  indemnification and contribution),  other than
to the extent relating to any Assumed  Liability,  relating to any Real Property
or personal  property,  Permits,  Environmental  Permits,  Taxes,  Real Property
Leases or  Sellers'  Agreements,  if any,  including  any  claims  for  refunds,
prepayments,  offsets,  recoupment,  insurance  proceeds,  condemnation  awards,
judgments and the like,  whether  received as payment or credit  against  future
liabilities,  relating specifically to the Plant or the Site and relating to any
period prior to the Closing Date;

                  (h) All  personnel  records  of  Sellers  or their  Affiliates
relating to the Transferred Employees,  the disclosure of which is prohibited by
law, or legal or regulatory process or subpoena;

                  (i) Any and all of Sellers' rights in any contract
representing  an  intercompany  transaction  between Sellers and an Affiliate of
Sellers, whether or not such transaction relates to

                                       23

<PAGE>

the provision of goods and services, payment arrangements,  intercompany charges
or balances, or the like, except for any contracts listed on Schedule 4.12(a);

                  (j) Sellers'  account  balances  for the Plant  with  Nuclear
Electric  Insurance  Limited and insurance premium refunds from American Nuclear
Insurance relating to periods prior to the Closing Date;

                  (k) Sellers' pension plan and other employee benefit plan
assets relating to their employees; and

                  (l) All claims, rights and causes of action which Sellers have
or may have against the DOE arising prior to the Closing in  connection  with or
in  any  way  related  to  Sellers'   ownership,   operation,   maintenance   or
Decommissioning of the Plant, including any and all proceeds thereof.

         2.3 Assumed  Liabilities.  On the Closing Date,  Buyer shall deliver to
Sellers the Assignment and  Assumption  Agreement  pursuant to which Buyer shall
assume and agree to discharge  when due, all of the  following  liabilities  and
obligations  of  Sellers,  direct or  indirect,  known or  unknown,  absolute or
contingent,   which  relate  to  the  Purchased  Assets,   other  than  Excluded
Liabilities,  in  accordance  with  the  respective  terms  and  subject  to the
respective conditions thereof (collectively, "Assumed Liabilities"):

                  (a) All  liabilities  and obligations of Sellers arising on or
after the Closing Date under Sellers' Agreements,  the Real Property Leases, and
the  Transferable  Permits  in  accordance  with the terms  thereof,  including,
without  limitation,  (i)  the  contracts,  licenses,  agreements  and  personal
property  leases  entered into by Sellers with respect to the Purchased  Assets,
which are disclosed on Schedule 4.12(a) or not required by Section 4.12(a) to be
so disclosed, and (ii) the contracts, licenses, agreements and personal property
leases  entered into by Sellers with respect to the  Purchased  Assets after the
date hereof consistent with the terms of this Agreement,  except in each case to
the extent  such  liabilities  and  obligations,  but for a breach or default by
Sellers,  would have been paid, performed or otherwise discharged on or prior to
the  Closing  Date or to the  extent  the same  arise out of any such  breach or
default or out of any event which after the giving of notice would  constitute a
default by Sellers;

                                       24

<PAGE>

                  (b) All  liabilities  and  obligations  associated  with  the
Purchased  Assets in  respect  of Taxes for which  Buyer is liable  pursuant  to
Sections 3.5 or 6.8(a) hereof;

                  (c) All  liabilities  and  obligations  with  respect  to the
Transferred  Employees  arising on or after the Closing Date (i) for which Buyer
is  responsible  pursuant to Section 6.10 and (ii) relating to the grievance and
arbitration  proceedings  arising  out of or  under  the  Collective  Bargaining
Agreement on or after the Closing Date;

                  (d) Subject  to the  exceptions  set  forth  in this  Section
2.3(d),  any  liability,  obligation  or  responsibility  under  or  related  to
Environmental  Laws or the common law,  whether such  liability or obligation or
responsibility is contingent or accrued, arising as a result of or in connection
with (i) any violation or alleged violation of Environmental Laws, whether prior
to, on or after the Closing Date,  with respect to the ownership or operation of
any of the Purchased Assets; (ii) loss of life, injury to persons or property or
damage to natural resources (whether or not such loss, injury or damage arose or
was made  manifest  before the Closing Date or arises or becomes  manifest on or
after the Closing Date) caused (or allegedly  caused) by the presence or Release
of Hazardous  Substances  at, on, in, under,  adjacent to or migrating  from the
Purchased  Assets  prior to, on or after the Closing  Date,  including,  but not
limited to, Hazardous  Substances contained in building materials at or adjacent
to the Purchased Assets or in the soil, surface water,  sediments,  groundwater,
landfill cells, or in other environmental media at or near the Purchased Assets;
and (iii) the Remediation (whether or not such Remediation  commenced before the
Closing Date or commences on or after the Closing Date) of Hazardous  Substances
that are present or have been  Released  prior to, on or after the Closing  Date
at, on, in, under, adjacent to or migrating from, the Purchased Assets or in the
soil,  surface  water,  sediments,  groundwater,  landfill  cells  or  in  other
environmental media at or adjacent to the Purchased Assets;  provided,  however,
that Buyer shall not assume any such liability,  responsibility or obligation in
respect of the  foregoing  items (i) through  (iii)  inclusive to the extent (x)
disclosed in the Environmental  Reports or (y) disclosed on Schedule 4.7 hereof;
and provided  further,  that nothing set forth in this  subsection  2.3(d) shall
require  Buyer to assume  any  liabilities  or  obligations  that are  expressly
excluded in Section 2.4 including,  without  limitation,  liability for off-Site
disposal  of  Hazardous  Substances  or for toxic torts as set forth in Sections
2.4(h), (i) and (j);

                                       25

<PAGE>

                  (e) All liabilities and obligations of Sellers with respect to
the Purchased  Assets  arising on or after the Closing Date under the agreements
or consent orders set forth on Schedule 2.3(e);

                  (f) With respect to the Purchased Assets,  any Tax that may be
imposed  by any  federal,  state or local  government  on the  ownership,  sale,
operation or use of the Purchased  Assets on or after the Closing  Date,  except
for any Income Taxes attributable to income received by Sellers; and

                  (g) All liabilities and obligations of Sellers for the
Decommissioning of the Plant.

         2.4      Excluded Liabilities.  Buyer shall not assume or be obligated
to pay, perform or otherwise discharge the following  liabilities or obligations
(the "Excluded Liabilities"):

                  (a) Any  liabilities  or  obligations  of Sellers that are not
expressly  set forth as  liabilities  or  obligations  being assumed by Buyer in
Section 2.3 and any liabilities or obligations in respect of any Excluded Assets
or other assets of Sellers which are not Purchased Assets;

                  (b) Any  liabilities  or  obligations  in  respect  of  Taxes
attributable to the ownership,  operation or use of Purchased Assets for taxable
periods,  or portions thereof,  ending before the Closing Date, except for Taxes
for which Buyer is liable pursuant to Sections 3.5 or 6.8(a) hereof;

                  (c) Any liabilities or obligations of Sellers accruing under
any of  Sellers'  Agreements  , the Real  Property  Leases and the  Transferable
Permits prior to the Closing Date;

                  (d) Any fines,  penalties or costs  imposed by a  Governmental
Authority  resulting  from  (i)  an  investigation,   proceeding,   request  for
information or inspection  before or by a Governmental  Authority either pending
prior to or  arising  after  the  Closing  Date but only  regarding  acts  which
occurred prior to the Closing Date, or (ii) illegal acts,  willful misconduct or
gross  negligence  of Sellers prior to the Closing  Date,  other than,  any such
fines, penalties or costs which have been assumed by Buyer in Section 2.3;

                  (e) Any payment obligations of Sellers for goods delivered or
services  rendered  prior to the Closing  Date,  including,  but not limited to,
rental payments pursuant to the

                                       26

<PAGE>

Real Property Leases and any leases relating to Tangible Personal Property;

                  (f) Any liability, obligation or responsibility in respect of
environmental  matters  disclosed in the  Environmental  Reports or disclosed on
Schedule 4.7;

                  (g) Any  liability,  obligation  or  responsibility  under  or
related to  Environmental  Laws or the common law,  whether  such  liability  or
obligation or responsibility is known or unknown, contingent or accrued, arising
as a result of or in connection with loss of life, injury to persons or property
or damage to natural resources (whether or not such loss, injury or damage arose
or was made manifest before the Closing Date or arises or becomes manifest on or
after the  Closing  Date) to the  extent  caused  (or  allegedly  caused) by the
off-Site disposal, storage, transportation,  discharge, Release, or recycling of
Hazardous  Substances,  or the  arrangement  for such  activities,  of Hazardous
Substances,  prior to the Closing  Date,  in  connection  with the  ownership or
operation of the  Purchased  Assets,  provided that for purposes of this Section
"off-Site" does not include any location to which Hazardous  Substances disposed
of or Released at the Purchased Assets have migrated;

                  (h) Any  liability,  obligation  or  responsibility  under  or
related to  Environmental  Laws or the common law,  whether  such  liability  or
obligation or responsibility is known or unknown, contingent or accrued, arising
as a result  of or in  connection  with  the  investigation  and/or  Remediation
(whether or not such  investigation or Remediation  commenced before the Closing
Date or commences on or after the Closing Date) of Hazardous Substances that are
disposed,  stored,   transported,   discharged,   Released,   recycled,  or  the
arrangement of such  activities,  prior to the Closing Date, in connection  with
the ownership or operation of the Purchased  Assets,  at any off-Site  location,
provided  that for  purposes  of this  Section  "off-Site"  does not include any
location to which Hazardous  Substances disposed of or Released at the Purchased
Assets have migrated;

                  (i) Third party  liability for toxic torts arising as a result
of or in connection with loss of life or injury to persons  (whether or not such
loss or injury arose or was made  manifest on or after the Closing  Date) caused
(or allegedly caused) by the presence or Release of Hazardous Substances at, on,
in,  under,  adjacent to or  migrating  from the  Purchased  Assets prior to the
Closing Date;

                                       27

<PAGE>

                  (j) Any liability,  obligation or  responsibility  relating to
(a) the  property,  equipment  or  machinery  within the  switchyards  for which
Sellers  will retain an  Easement,  (b) the  disposal,  discharge  or Release of
Hazardous Substances, whether such liability, obligation or responsibility arose
from the ownership or operation of said property,  equipment or machinery  prior
to or after the Closing Date unless  caused by Buyer's  operations or equipment,
(c) the  transmission  lines  delineated  in the  Easements  or (d) any Sellers'
operations  on, or usage  of,  the  Easements,  including,  without  limitation,
liabilities,  obligations  or  responsibilities  arising  as a  result  of or in
connection with (1) any violation or alleged  violation of Environmental Law and
(2) loss of life, injury to persons or property or damage to natural  resources,
except to the extent caused by Buyer or its Representatives;

                  (k) Any liability or obligation  relating to personal  injury,
discrimination,  wrongful  discharge,  unfair labor practice or similar claim or
cause of action filed with or pending before any court or administrative  agency
on the Closing  Date with  respect to the  Purchased  Assets or the  Transferred
Employees or where the material facts of such claim or cause of action  occurred
prior to the  Closing  Date except to the extent such  liability  or  obligation
directly results from Buyer's unlawful acts or omissions;

                  (l) Any  and  all  asserted  or  unasserted   liabilities  or
obligations to third parties (including  employees) for personal injury or tort,
or similar  causes of action  arising out of the  ownership  or operation of the
Purchased Assets prior to the Closing Date, including liabilities or obligations
arising  out  of or  resulting  from  a  "nuclear  incident"  or  "precautionary
evacuation" (as such terms are defined in the Atomic Energy Act) at the Site, or
any other licensed  nuclear reactor site in the United States,  or in the course
of the transportation of radioactive  materials to or from the Site or any other
site prior to the Closing Date, including, without limitation, liability for any
deferred  premiums  assessed  in  connection  with  such a nuclear  incident  or
precautionary  evacuation  under any  applicable  NRC or industry  retrospective
rating  plan  or  insurance   policy,   including  any  mutual  insurance  pools
established in compliance with the requirements imposed under Section 170 of the
Atomic Energy Act and 10 C.F.R. Part 140, 10 C.F.R. Section50.54(w),  other than
any liabilities or obligations  which have been expressly assumed by Buyer under
Section 2.3;

                                       28

<PAGE>

                  (m) Civil or criminal fines or penalties  wherever assessed or
incurred for violations of Environmental  Laws arising from the operation of the
Purchased Assets prior to the Closing Date;

                  (n) Subject to Section 6.10,  any  liabilities  or obligations
relating  to any  Benefit  Plan  maintained  by Sellers or any trade or business
(whether or not incorporated) which is or ever has been under common control, or
which is or ever has been  treated  as a single  employer,  with  Sellers  under
section  414(b),  (c), (m) or (o) of the Code ("ERISA  Affiliate") or to which a
Seller  or any  ERISA  Affiliate  contributed  (the  "ERISA  Affiliate  Plans"),
including but not limited to any liability with respect to any such plan (i) for
benefits  payable  under  such plan;  (ii) to the PBGC under  Title IV of ERISA;
(iii) relating to any such plan that is a multi-employer plan within the meaning
of Section 3(37) of ERISA; (iv) for  non-compliance  with the notice and benefit
continuation  requirements  of COBRA;  (v) for  noncompliance  with ERISA or any
other  applicable  laws; or (vi) arising out of or in connection  with any suit,
proceeding or claim which is brought  against  Buyer,  any Benefit  Plan,  ERISA
Affiliate Plan, or any fiduciary or former fiduciary of any such Benefit Plan or
ERISA Affiliate Plan;

                  (o) Subject to Section 6.10,  any  liabilities  or obligations
relating to the  employment or termination  of  employment,  by Sellers,  or any
Affiliate of Sellers, of any individual,  that is attributable to any actions or
inactions (including discrimination,  wrongful discharge, unfair labor practices
or  constructive  termination)  by Sellers  prior to the Closing Date other than
such actions or inactions taken at the written direction of Buyer;

                  (p) Subject  to  Section  6.10,  any  obligations  for wages,
overtime,  employment taxes,  severance pay,  transition  payments,  accumulated
vacation and holiday leave time in respect of compensation  or similar  benefits
accruing or arising  prior to the  Closing  under any term or  provision  of any
contract, plan, instrument or agreement relating to any of the Purchased Assets;

                  (q) Any liability of Sellers arising out of a breach by
Sellers or any of their Affiliates of any of their respective  obligations under
this Agreement or the Ancillary Agreements;

                  (r) Any liability relating to the Pollution Control Revenue
Bonds except as provided in Section 6.15; and

                                       29

<PAGE>

                  (s) Any liability for Spent Fuel Fees accruing prior to the
Closing in accordance with Section 6.13.
         2.5     Control of.  The Parties agree and acknowledge that Sellers
shall be  entitled  exclusively  to control,  defend and settle any  litigation,
administrative  or regulatory  proceeding,  and any investigation or Remediation
activities  (including  without  limitation  any  environmental   mitigation  or
Remediation activities),  arising out of or related to any Excluded Liabilities,
and Buyer agrees to cooperate fully in connection therewith;  provided, however,
that (i)  such  defense,  settlement  or other  activities  do not  unreasonably
interfere with Buyer's  operation of the Plant and (ii) without  Buyer's written
consent,  Sellers  shall  not  settle  any such  litigation,  administrative  or
regulatory  proceeding  which would result in a Material  Adverse  Effect on the
related Purchased Assets.

                                   ARTICLE III

                                   THE CLOSING

         3.1  Closing.  Upon the terms and  subject to the  satisfaction  of the
conditions  contained in Article VII of this  Agreement,  the sale,  assignment,
conveyance,  transfer and delivery of the Purchased Assets to Buyer, the payment
of the Purchase Price to Sellers,  and the  consummation of the other respective
obligations of the Parties  contemplated by this Agreement shall take place at a
closing  (the  "Closing"),  to be held at the  offices  of  Berlack,  Israels  &
Liberman LLP, 120 West 45th Street, New York, New York at 10:00 a.m. local time,
or another  mutually  acceptable time and location,  on the date that is fifteen
(15)  Business  Days  following  the  date on which  the last of the  conditions
precedent to Closing set forth in Article VII of this Agreement have been either
satisfied  or waived by the Party for whose  benefit such  conditions  precedent
exist or such other date as the Parties may mutually agree.  The date of Closing
is hereinafter called the "Closing Date." The Closing shall be effective for all
purposes as of 12:01 a.m. on the Closing Date.

         3.2  Payment  of  Purchase  Price.  Upon the terms and  subject  to the
satisfaction of the conditions contained in this Agreement,  in consideration of
the  aforesaid  sale,  assignment,  conveyance,  transfer  and  delivery  of the
Purchased  Assets,  Buyer will pay or cause to be paid to Sellers at the Closing
an aggregate amount of Ten Million United States Dollars (U.S.

                                       30

<PAGE>

$10,000,000)  (the "Purchase  Price") plus or minus any adjustments  pursuant to
the  provisions of this  Agreement,  by wire transfer of  immediately  available
funds  denominated in U.S.  dollars or by such other means as are agreed upon by
Sellers and Buyer.

         3.3      Adjustment to Purchase Price. (a) Subject to Section 3.3(b),
at the Closing, the Purchase Price shall be adjusted,  without  duplication,  to
account for the items set forth in this Section 3.3(a):

                           (i) The  Purchase  Price shall be adjusted to account
         for the items prorated as of the Closing Date pursuant to Section 3.5.

                           (ii) The  Purchase  Price shall be  increased  by the
         amount  expended,  or for which  liabilities  are incurred,  by Sellers
         between the date hereof and the Closing  Date for capital  additions to
         or  replacements  of  property,  plant and  equipment  included  in the
         Purchased Assets and other  expenditures or repairs on property,  plant
         and  equipment   included  in  the  Purchased   Assets  that  would  be
         capitalized by Sellers in accordance with normal  accounting  policies,
         provided, that such expenditures:  (A) are not described in the capital
         budgets  listed  on  Schedule  6.1;  (B) are not  required  (1) for the
         customary  operation  and  maintenance  of the  Plant,  (2) to  replace
         equipment which has failed for any other reason,  or (3) to comply with
         applicable laws, rules and regulations;  and (C) Buyer has specifically
         requested  or  approved  such  expenditures  in writing  (collectively,
         "Capital  Expenditures").  Nothing in this paragraph shall be construed
         to  limit  Sellers'   rights  and   obligations  to  make  all  capital
         expenditures necessary to comply with NRC licenses and other Permits.

                           (ii) The  Purchase  Price shall be  decreased  by the
         cost of Buyer's payment  obligation  with respect to Transferred  Union
         Employees Carried-Over Sick Days, as determined under Section 6.10(k).

                  (b) At least ten (10) Business Days prior to the Closing Date,
Sellers shall prepare and deliver to Buyer an estimated  closing  statement (the
"Estimated  Closing  Statement")  that shall set forth Sellers' best estimate of
the adjustments to the Purchase Price required by Section 3.3(a) (the "Estimated
Adjustment").  Within  five (5)  Business  Days  following  the  delivery of the
Estimated Closing Statement by Sellers to Buyer,

                                       31

<PAGE>

Buyer may object in good faith to the Estimated  Adjustment in writing. If Buyer
objects to the Estimated Adjustment,  the Parties shall attempt to resolve their
differences by negotiation.  If the Parties are unable to do so within three (3)
Business  Days  prior to the  Closing  Date (or if Buyer  does not object to the
Estimated  Adjustment),  the  Purchase  Price  shall be adjusted  (the  "Closing
Adjustment")  for the Closing by the amount of the Estimated  Adjustment  not in
dispute. The disputed portion shall be paid as a Post-Closing  Adjustment to the
extent required by Section 3.3(c).

                  (c) Within sixty (60) days following the Closing Date, Sellers
shall prepare and deliver to Buyer a final closing statement (the  "Post-Closing
Statement")  that shall set forth all adjustments to the Purchase Price required
by Section 3.3(a) (the "Post-Closing  Adjustment").  The Post-Closing  Statement
shall be prepared using the same accounting principles,  policies and methods as
Sellers have  historically  used in connection with the calculation of the items
reflected on such Post-Closing Statement.  Within thirty (30) days following the
delivery of the Post-Closing  Statement by Sellers to Buyer, Buyer may object to
the Post-Closing Adjustment in writing. Sellers agree to cooperate with Buyer to
provide  Buyer and  Buyer's  Representatives  information  used to  prepare  the
Post-Closing Statement and information relating thereto. If Buyer objects to the
Post-Closing  Adjustment,  the Parties  shall attempt to resolve such dispute by
negotiation.  If the Parties are unable to resolve  such dispute  within  thirty
(30) days of any objection by Buyer,  the Parties shall appoint the  Independent
Accounting Firm, which shall, at Sellers' and Buyer's joint expense,  review the
Post-Closing Adjustment and determine the appropriate adjustment to the Purchase
Price, if any, within thirty (30) days of such appointment. The Parties agree to
cooperate  with  the  Independent  Accounting  Firm  and  provide  it with  such
information as it reasonably  requests to enable it to make such  determination.
The finding of such Independent  Accounting Firm shall be binding on the Parties
hereto.  Upon  determination  of the appropriate  adjustment by agreement of the
Parties or by binding  determination of the Independent  Accounting Firm, if the
Post-Closing  Adjustment is more or less than the Closing Adjustment,  the Party
owing the difference  shall deliver such  difference to the other Party no later
than two (2) Business Days after such  determination,  in immediately  available
funds or in any other manner as reasonably requested by the payee.

                  (d) The Purchase Price shall be increased following the
Closing Date (i) to the extent required under Section

                                       32

<PAGE>

6.12(e) and (ii) as and to the extent Buyer obtains  discounts from time to time
for goods and services  under the Settlement  Agreement.  Buyer hereby agrees to
accept assignment of the Settlement Agreement (subject to Seller's obtaining any
requisite  consent  thereto) unless it would have an adverse  economic impact on
Buyer and shall advise Sellers of the amount of any such  discounts  received by
Buyer and shall make  acceptance  payment to Sellers of such amounts  within ten
(10) Business Days following any such receipt.

         3.4 Allocation of Purchase  Price.  Buyer and Sellers shall endeavor to
agree upon an allocation  among the Purchased  Assets of the sum of the Purchase
Price and the Assumed  Liabilities in a manner consistent with the provisions of
section 1060 of the Code and the Treasury  Regulations  thereunder  within sixty
(60) days of the Closing Date.  Buyer and Sellers  shall treat the  transactions
contemplated  by Article II as the  acquisition  by Buyer of a trade or business
for United States federal income tax purposes and agree that no portion of those
transactions  shall be  treated  in whole or in part as a  payment  by Buyer for
services (or future  services)  for United States  federal  income tax purposes.
Each of Buyer and Sellers agrees to file IRS Form 8594, and all federal,  state,
local  and  foreign  Tax  Returns,  in  accordance  with  any such  agreed  upon
allocation. Each of Buyer and Sellers shall report the transactions contemplated
by this  Agreement  for  federal  Tax and all  other  Tax  purposes  in a manner
consistent  with any such agreed  upon  allocation  determined  pursuant to this
Section 3.4. Each of Buyer and Sellers agrees to provide the other promptly with
any  information  required to complete  IRS Form 8594.  Buyer and Sellers  shall
notify and  provide  the other  with  reasonable  assistance  in the event of an
examination,  audit or other proceeding regarding any allocation of the Purchase
Price agreed upon pursuant to this Section 3.4. Buyer and Sellers shall not take
any position in any tax return,  tax  proceeding  or audit that is  inconsistent
with such allocation.

         3.5  Prorations.  (a) Buyer  and  Sellers  agree  that all of the items
normally  prorated,  including  those  listed  below (but not  including  Income
Taxes),  relating to the business and operation of the Purchased Assets shall be
prorated as of the Closing  Date,  with Sellers  liable to the extent such items
relate to any time period  prior to the Closing  Date,  and Buyer  liable to the
extent such items relate to periods  commencing  with the Closing Date (measured
in the same units used to compute the item in  question,  otherwise  measured by
calendar days):

                                       33

<PAGE>

                           (i)   Personal property, real estate and occupancy
         Taxes, assessments and other charges, if any, on or with respect to the
         business and operation of the Purchased Assets;

                           (ii)  Rent, Taxes and all other items (including
         prepaid  services or goods not included in  Inventory)  payable by or
         to Sellers under any of Sellers' Agreements;

                           (iii) Any permit, license,  registration,  compliance
         assurance fees or other fees with respect to any Transferable Permit;

                           (iv)  Sewer rents and charges for water, telephone,
        electricity and other utilities;

                           (v)   Rent and Taxes and other items payable by
         Sellers under the Real Property Leases assigned to Buyer; and

                           (vi)  Dues  and  fees  payable  to the  Institute  of
         Nuclear Power Operations,  the Nuclear Energy  Institute,  the Electric
         Power  Research  Institute  (to the  extent  allocable  to the  Plant's
         operations)  and the Boiling Water  Reactor  Owners Group to the extent
         proration is permitted by such  organizations and periodic fees charged
         by the NRC.

                  (b) In  connection  with  the  prorations  referred  to in (a)
above,  in the event that actual  figures are not available at the Closing Date,
the  proration  shall be based upon the actual  Taxes or other  amounts  accrued
through the Closing Date or paid for the most recent year (or other  appropriate
period)  for  which  actual  Taxes or other  amounts  paid are  available.  Such
prorated Taxes or other amounts shall be re-prorated and paid to the appropriate
Party within sixty (60) days of the date that the previously  unavailable actual
figures become available. The prorations shall be based on the number of days in
a year or  other  appropriate  period  (i)  before  the  Closing  Date  and (ii)
including  and after the Closing  Date.  Sellers and Buyer agree to furnish each
other with such  documents and other  records as may be reasonably  requested in
order to confirm all adjustment and proration calculations made pursuant to this
Section 3.5.

         3.6      Deliveries by Sellers.  At the Closing, Sellers will deliver,
or cause to be delivered, the following to Buyer:

                                       34

<PAGE>

                  (a) The Bill of Sale, duly executed by Sellers, as
appropriate;

                  (b) Copies of any and all  governmental  and other third party
consents,  waivers or  approvals  required  with  respect to the transfer of the
Purchased Assets,  or the consummation of the transactions  contemplated by this
Agreement;

                  (c) The opinions of counsel and officer's certificates
contemplated by Section 7.1;

                  (d) One or more bargain and sale deeds with covenants  against
grantors  acts,  conveying  the Real  Property  to Buyer,  in a form  reasonably
satisfactory to the Parties (including  environmental disclosure required by law
and any provisions regarding grantors covenants necessary to conform them to the
terms hereof), duly executed and acknowledged by Sellers, as appropriate, and in
recordable form;

                  (e) The Assignment and Assumption Agreement and any Ancillary
Agreements which are not executed on the date hereof, duly executed by Sellers,
as appropriate;

                  (f) A FIRPTA Affidavit, duly executed by JCP&L ;

                  (g) Copies, certified by the Secretary or Assistant Secretary
of Sellers, of corporate  resolutions  authorizing the execution and delivery of
this  Agreement and all of the  agreements  and  instruments  to be executed and
delivered  by  Sellers  in  connection  herewith,  and the  consummation  of the
transactions contemplated hereby;

                  (h) A certificate  of the Secretary or Assistant  Secretary of
each Seller  identifying  the name and title and bearing the  signatures  of the
officers of such Seller authorized to execute and deliver this Agreement and the
other agreements and instruments contemplated hereby;

                  (i) Certificates of Good Standing with respect to Sellers,
issued by the Secretary of the State of Sellers' state of incorporation;

                  (j) Tax clearance certificates for each jurisdiction
identified on Schedule 4.16;

                  (k) To the extent available, originals of all Sellers'
Agreements, Real Property Leases, Permits,

                                       35

<PAGE>

Environmental Permits, and Transferable Permits and, if not available,  true and
correct copies thereof, together with the items referred to in Section 2.1(g);

                  (l) All such other  instruments  of  assignment,  transfer  or
conveyance  as shall,  in the  reasonable  opinion of Buyer and its counsel,  be
necessary or desirable to transfer to Buyer the Purchased  Assets, in accordance
with this Agreement and where necessary or desirable in recordable form;

                  (m) Notices,  signed by Sellers,  to all other  parties to the
Sellers'  Agreements  listed under Schedule 4.12(a) where notice to such parties
is required  under the terms of such Sellers'  Agreements or pursuant to Section
6.5(d) hereof;

                  (n) Reliance letters from Woodward & Clyde with respect to the
Environmental  Reports  prepared by Woodward & Clyde  concerning  the  Purchased
Assets and made available for review by Buyer;

                  (o) The assets of the Decommissioning Trust Funds to be
transferred pursuant to Section 6.12(b),  shall be delivered to Buyer (or to the
Trustee of any trust specified by Buyer); and

                  (p) Such  other   agreements,   documents,   instruments  and
writings, including without limitation the Transferring Employee Records, as are
required to be delivered by Sellers at or prior to the Closing Date  pursuant to
this Agreement or otherwise reasonably required in connection herewith.

         3.7      Deliveries by Buyer.  At the Closing, Buyer will deliver, or
cause to be delivered, the following to Sellers:

                  (a) The Purchase Price,  as adjusted  pursuant to Section 3.3,
by wire transfer of  immediately  available  funds in  accordance  with Sellers'
instructions or by such other means as may be agreed to by Sellers and Buyer;

                  (b) The opinions of counsel and officer's certificates
contemplated by Section 7.2;

                  (c) The Assignment and Assumption Agreement and any Ancillary
Agreements which are not executed on the date hereof, duly executed by Buyer;

                                       36

<PAGE>

                  (d) Copies,  certified by the Secretary or Assistant Secretary
of  Buyer,  of  resolutions  authorizing  the  execution  and  delivery  of this
Agreement,  and  all  of the  agreements  and  instruments  to be  executed  and
delivered  by  Buyer  in  connection  herewith,  and  the  consummation  of  the
transactions contemplated hereby;

                  (e) A certificate  of the Secretary or Assistant  Secretary of
Buyer, identifying the name and title and bearing the signatures of the officers
of Buyer  authorized  to  execute  and  deliver  this  Agreement,  and the other
agreements contemplated hereby;

                  (f) All such other  instruments of assumption as shall, in the
reasonable  opinion of Sellers  and their  counsel,  be  necessary  for Buyer to
assume the Assumed Liabilities in accordance with this Agreement;

                  (g) Copies of any and all  governmental  and other third party
consents, waivers or approvals obtained by Buyer with respect to the transfer of
the Purchased  Assets,  or the consummation of the transactions  contemplated by
this Agreement and where necessary or desirable in recordable form;

                  (h) Certificates of Insurance relating to the insurance
policies required pursuant to Article 10 of the Interconnection Agreement;

                  (i) A certificate of an appropriate officer of each of PECO
Energy  Company  and  British  Energy,  plc  certifying  the due  authorization,
execution and delivery of the Parent Guaranty; and

                  (j) Such other agreements, documents, instruments and writings
as are  required  to be  delivered  by Buyer at or  prior  to the  Closing  Date
pursuant to this  Agreement  or  otherwise  reasonably  required  in  connection
herewith.

         3.8 Ancillary  Agreements.  The Parties  acknowledge that the Ancillary
Agreements,  other than the EOF Lease, the Remote Assembly Area Access Agreement
and the SBO Service Agreement, have been executed on the date hereof.

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<PAGE>

                                   ARTICLE IV

             REPRESENTATIONS, WARRANTIES AND DISCLAIMERS OF SELLERS

         Sellers represent and warrant to Buyer as follows:

         4.1  Incorporation;.  Each Seller is a corporation  duly  incorporated,
validly  existing  and in good  standing  under  the  laws of the  state  of its
incorporation and has all requisite corporate power and authority to own, lease,
and operate its material  properties  and assets and to carry on its business as
is now being  conducted.  Each  Seller is duly  qualified  to do  business  as a
foreign  corporation and is in good standing under the laws of each jurisdiction
in which its  business as now being  conducted  requires it to be so  qualified,
except  where the failure to be so qualified  would not have a Material  Adverse
Effect.  Sellers have heretofore  delivered to Buyer true,  complete and correct
copies of their Certificates of Incorporation and Bylaws as currently in effect.

         4.2 Authority  Relative to this Agreement.  Sellers have full corporate
power and authority to execute and deliver this  Agreement and to consummate the
transactions  contemplated  by it hereby.  The  execution  and  delivery of this
Agreement  by  Sellers  and the  consummation  by  Sellers  of the  transactions
contemplated  hereby  have been duly and  validly  authorized  by all  necessary
corporate  action  required on the part of Sellers and this  Agreement  has been
duly and validly  executed and  delivered by Sellers.  Subject to the receipt of
Sellers' Required Regulatory  Approvals,  this Agreement  constitutes the legal,
valid  and  binding  agreement  of  Sellers,   enforceable  against  Sellers  in
accordance  with its terms,  except that such  enforceability  may be limited by
applicable  bankruptcy,  insolvency,   reorganization,   fraudulent  conveyance,
moratorium  or other  similar  laws  affecting  or  relating to  enforcement  of
creditors'  rights  generally and general  principles of equity  (regardless  of
whether enforcement is considered in a proceeding at law or in equity).

         4.3 Consents and  Approvals;  No Violation.  (a) Except as set forth in
Schedule  4.3(a),  and  other  than  obtaining   Sellers'  Required   Regulatory
Approvals,  neither the execution and delivery of this  Agreement by Sellers nor
the  consummation by Sellers of the  transactions  contemplated  hereby will (i)
conflict  with or result in any  breach or  violation  of any  provision  of the
respective  Certificate of Incorporation  or Bylaws of Sellers,  or (ii) require
any consent, approval,

                                       38

<PAGE>

authorization  or permit of, or filing with or notification to, any Governmental
Authority,  or  (iii)  result  in a  default  (or  give  rise  to any  right  of
termination,  consent,  cancellation  or  acceleration)  under any of the terms,
conditions  or  provisions  of any note,  bond,  mortgage,  indenture,  material
agreement or other  instrument  or obligation to which Sellers are a party or by
which it, or any of the Purchased Assets may be bound,  except for such defaults
(or rights of termination,  cancellation or  acceleration) as to which requisite
waivers or consents have been obtained or which,  would not,  individually or in
the aggregate,  create a Material Adverse Effect; or (iv) constitute  violations
of any law, regulation,  order, judgment or decree applicable to Sellers,  which
violations,  individually or in the aggregate,  would create a Material  Adverse
Effect, or create any Encumbrance other than a Permitted Encumbrance.

                  (b) Except as set forth in Schedule  4.3(b),  (the filings and
approvals  referred to in Schedule  4.3(b) are  collectively  referred to as the
"Sellers'  Required  Regulatory  Approvals"),  no consent or approval of, filing
with,  or notice to, any  Governmental  Authority by or for Sellers is necessary
for the execution and delivery of this Agreement by Sellers, or the consummation
by  Sellers  of the  transactions  contemplated  hereby,  other  than  (i)  such
consents,  approvals,  filings or notices which,  if not obtained or made,  will
neither  prevent Sellers from performing  their material  obligations  hereunder
nor, individually or in the aggregate, create a Material Adverse Effect and (ii)
such consents,  approvals, filings or notices which become applicable to Sellers
or the Purchased Assets as a result of the specific  regulatory  status of Buyer
(or any of its  Affiliates) or as a result of any other facts that  specifically
relate to the business or activities  in which Buyer (or any of its  Affiliates)
is or proposes to be engaged.

         4.4  Insurance.  Except  as set forth in  Schedule  4.4,  all  material
policies of fire, liability,  workers' compensation and other forms of insurance
owned or held by,  or on  behalf  of,  Sellers  with  respect  to the  business,
operations or employees at the Plant or the  Purchased  Assets are in full force
and effect,  all premiums  with respect  thereto  covering all periods up to and
including the date hereof have been paid (other than retroactive  premiums which
may be payable  with respect to  comprehensive  general  liability  and workers'
compensation  insurance policies),  and no notice of cancellation or termination
has been  received  with  respect to any such policy  which was not  replaced on
substantially  similar terms prior to the date of such  cancellation.  Except as
described in Schedule 4.4, within the

                                       39

<PAGE>

thirty-six (36) months  preceding the date of this  Agreement,  Sellers have not
been refused any insurance with respect to the Purchased Assets nor has coverage
been limited by any insurance carrier to which Sellers have applied for any such
insurance or with which  Sellers have carried  insurance  during the last twelve
(12) months.

         4.5 Title and Related.  Other than set forth in Schedule 4.5 and except
for  Permitted  Encumbrances,  JCP&L has good and  marketable  title to the Real
Property to be conveyed to Buyer  hereunder free and clear of all  Encumbrances.
The Real Property  constitutes all of the real property necessary to operate the
Plant as currently operated.  Other than as set forth in Schedule 4.5 and except
for Permitted  Encumbrances,  Sellers have good and marketable  title to each of
the  Purchased  Assets  not  constituting  Real  Property  free and clear of all
Encumbrances. JCP&L possesses all such rights in and to the EOF Facility and the
Remote  Assembly  Area in order to lease the EOF Facility and provide  access to
the Remote Assembly Area to Buyer.

         4.6 Real Property  Leases.  Schedule 4.6 lists,  as of the date of this
Agreement,  all real property  leases,  easements,  licenses and other rights in
real property (collectively,  the "Real Property Leases") to which either Seller
is a party and  which (i) are to be  transferred  and  assigned  to Buyer on the
Closing  Date,  (ii) affect all or any part of any Real  Property  and  (iii)(A)
provide  for annual  payments of more than  $100,000 or (B) are  material to the
ownership or operation of the Purchased Assets.  Except as set forth in Schedule
4.6,  all such Real  Property  Leases  are valid,  binding  and  enforceable  in
accordance  with their  terms,  and are in full force and  effect;  there are no
existing  material  defaults  by Sellers or any other party  thereunder;  and no
event has occurred which (whether with or without notice, lapse of time or both)
would constitute a material default by Sellers or any other party thereunder.

         4.7  Environmental.  Except  as  disclosed  in (x)  Schedule  4.7,  (y)
Schedule  2.3(e)  or (z) in the  "Phase I" and  "Phase  II"  environmental  site
assessments prepared by Sellers' outside environmental consultants or in Buyer's
Environmental  Inspection  (collectively the  "Environmental  Reports") and made
available for inspection by Buyer:

                  (a) Sellers  hold,  and are in compliance  with,  all permits,
certificates,  certifications,  licenses and governmental  authorizations  under
applicable  Environmental Laws  ("Environmental  Permits") that are required for
Sellers to own

                                       40

<PAGE>

and conduct the business and operations of the Purchased Assets, and Sellers are
otherwise in compliance with applicable  Environmental  Laws with respect to the
business and  operations  of such  Purchased  Assets except for such failures to
hold or comply with required  Environmental  Permits,  or such failures to be in
compliance with applicable  Environmental Laws, as would not, individually or in
the aggregate, create a Material Adverse Effect;

                  (b)  Sellers  have  not  received  any  written   request  for
information,  or been notified that either of them is a potentially  responsible
party,  under CERCLA or any similar  state law with respect to the Real Property
or any other  Purchased  Assets,  except for such  liability  under such laws as
would not create, individually or in the aggregate, a Material Adverse Effect;

                  (c) Sellers have neither entered into or agreed to any consent
decree  or order  relating  to the  Purchased  Assets,  nor are  subject  to any
outstanding judgment,  decree, or judicial order relating to compliance with any
Environmental  Law or to investigation or cleanup of Hazardous  Substances under
any Environmental Law relating to the Purchased Assets,  except for such consent
decree or order,  judgment  decree or  judicial  order  that  would not  create,
individually or in the aggregate a Material Adverse Effect;

                  (d) There are no underground storage tanks on the Real
Property; and

                  (e) There  is no  Environmental  Condition  in  violation  of
applicable  Environmental Laws (other than ISRA and the regulations of the NJDEP
thereunder) which requires  Remediation.The  representations and warranties made
in this  Section  4.7 are  Sellers'  exclusive  representations  and  warranties
relating to environmental matters.

         4.8 Labor Matters.  Sellers have  previously  delivered to Buyer a true
and correct copy of the Collective Bargaining Agreement, as currently in effect,
which is the only collective  bargaining  agreement to which they are a party or
is subject and which  relates to the business and  operations  of the  Purchased
Assets.  With respect to the business or  operations of such  Purchased  Assets,
except to the extent set forth in  Schedule  4.8 and except for such  matters as
will not,  individually or in the aggregate,  create a Material  Adverse Effect,
(a) Sellers are in compliance with all applicable laws respecting employment and

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<PAGE>

employment  practices,  terms and  conditions of employment and wages and hours;
(b)  Sellers  have not  received  written  notice of any unfair  labor  practice
complaint against them pending before the National Labor Relations Board; (c) no
arbitration  proceeding  arising  out  of or  under  any  collective  bargaining
agreement is pending against Sellers; (d) no labor strike, slow down or stoppage
is actually pending or to Sellers' Knowledge threatened by any representative of
any union or other representation of employees against or affecting Sellers; and
(e) Sellers have not experienced any work stoppage within the three-year  period
prior to the date hereof and to Sellers' Knowledge none is currently threatened.

         4.9 Benefit  Plans;  ERISA.  (a)  Schedule  4.9(a)  lists all  deferred
compensation,   profit-sharing,   retirement   and  pension   plans,   including
multi-employer  plans, and all material bonus, fringe benefit and other employee
benefit  plans  maintained  or with respect to which  contributions  are made by
Sellers in respect  of the  current  employees  of  Sellers  connected  with the
Purchased  Assets  ("Benefit  Plans").  True and complete  copies of all Benefit
Plans have been made available to Buyer.

                  (b) Except as set forth in Schedule 4.9(b),  Sellers and their
ERISA Affiliates have fulfilled their respective  obligations  under the minimum
funding  requirements  of Section 302 of ERISA and section 412 of the Code, with
respect to each  Benefit  Plan which is an "employee  pension  benefit  plan" as
defined in Section 3(2) of ERISA and to which section 412 of the Code or Section
302 of ERISA  applies,  and each  such  plan is in  compliance  in all  material
respects with the currently applicable  provisions of ERISA and the Code and has
been  administered in all material  respects in accordance with its terms as set
forth in the  documents  governing  such  Benefit  Plan.  Except as set forth in
Schedule  4.9(b),  neither  Sellers nor any ERISA  Affiliate  has  incurred  any
liability  under  Section  4062(b) of ERISA to the PBGC in  connection  with any
Benefit Plan which is subject to Title IV of ERISA or any withdrawal  liability,
within the meaning of Section  4201 of ERISA with  respect to any Benefit  Plan,
nor has there been any  reportable  event (as defined in Section 4043 of ERISA),
the  reporting  of which  has not been  waived by the PBGC,  in  respect  of any
Benefit  Plan.  Except as set forth in Schedule  4.9(b),  the IRS has issued for
each Benefit Plan which is intended to be qualified  under section 401(a) of the
Code, a letter  which  determines  that such plan is  qualified  and exempt from
United States Federal  Income Tax under sections  401(a) and 501(a) of the Code,
and Sellers are not aware of any occurrence since the date of any such

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<PAGE>

determination letter which would affect adversely such qualification or tax
exemption.

                  (c) Neither Sellers nor any ERISA Affiliate has engaged in any
transaction described in Section 4069(a) or Section 4212(c) of ERISA. No Benefit
Plan is a multi-employer plan.

                  (d) Sellers and Sellers'  Affiliates have materially  complied
in good faith with any notice and continuation  requirements of Title X of COBRA
with respect to any Benefit Plan subject to such requirements.  Sellers and each
ERISA  Affiliate  have  complied in all material  respects  with any  applicable
requirements of Part 7 of Title I of ERISA.

         4.10 Real Property;  Plant and Equipment. (a) Schedule 4.10(a) contains
a description of the Real Property included in the Purchased  Assets.  Copies of
any current surveys,  abstracts or title opinions in Sellers' possession and any
policies  of title  insurance  in force and in the  possession  of Sellers  with
respect  to the Real  Property  have  heretofore  been made  available  to Buyer
(without  making  any   representation   or  warranty  as  to  the  accuracy  or
completeness  thereof).  Except  as set  forth in  Schedule  4.10(a)-1,  no real
property  other than the Real Property is necessary  for Buyer to own,  maintain
and operate the Purchased Assets as they are currently used.

                  (b) Schedule  4.10(b)  contains  a  description  of the major
equipment  components and personal property (other than Inventories)  comprising
the Purchased Assets as of the date hereof.

                  (c) Other than the exceptions listed in Schedule 4.10(c),  the
Purchased   Assets   conform  in  all   material   respects  to  the   Technical
Specifications  and the Updated Final Safety  Analysis  Report  ("UFSAR") to the
extent required and are being operated and are in material  conformance with all
applicable requirements under Nuclear Laws.

         4.11  Condemnation.  Except as set forth in Schedule 4.11,  neither the
whole nor any part of the Real  Property  or any other real  property  or rights
leased,  used or  occupied  by  Sellers  in  connection  with the  ownership  or
operation  of  the  Purchased   Assets  is  subject  to  any  pending  suit  for
condemnation  or  other  taking  by any  Governmental  Authority,  and  no  such
condemnation or other taking has been threatened.

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<PAGE>

         4.12  Contracts  and Leases (a)  Schedule  4.12(a)  lists each  written
contract,  license,  agreement,  or personal property lease which is material to
the business or  operations of the  Purchased  Assets,  other than any contract,
license,  agreement or personal  property  lease which is listed or described on
another  Schedule,  or which is  expected  to expire or  terminate  prior to the
Closing  Date, or which  provides for annual  payments by Sellers after the date
hereof of less than  $100,000 or  payments  by Sellers  after the date hereof of
less than $500,000 in the aggregate.

                  (b) Except as disclosed  in Schedule  4.12(b),  each  Sellers'
Agreement  listed on such Schedule (i)  constitutes  a legal,  valid and binding
obligation  of the  Seller  party  thereto  and,  to  such  Seller's  Knowledge,
constitutes a valid and binding obligation of the other parties thereto, (ii) is
in full  force  and  effect  and (iii) may be  transferred  to Buyer at  Closing
pursuant to this Agreement  without the consent of the other parties thereto and
will  continue  in full  force  and  effect  thereafter,  in each  case  without
breaching the terms thereof or resulting in the  forfeiture or impairment of any
material rights thereunder.

                  (c) Except as set forth in  Schedule  4.12(c),  there is not,
under Sellers'  Agreements,  any default or event which, with notice or lapse of
time or both,  would  constitute a default on the part of Sellers or to Sellers'
Knowledge,  any of the other parties thereto,  except such events of default and
other  events  which  would  not,  individually  or in the  aggregate,  create a
Material Adverse Effect.

         4.13 Legal  Proceedings,  etc.  Except as set forth in  Schedule  4.13,
there are no actions or proceedings  pending (or to Sellers'  Knowledge  overtly
threatened)  against  Sellers  before  any  court,  arbitrator  or  Governmental
Authority, which could, individually or in the aggregate, reasonably be expected
to create a  Material  Adverse  Effect.  Except as set forth in  Schedule  4.13,
Sellers are not subject to any  outstanding  judgments,  rules,  orders,  writs,
injunctions or decrees of any court,  arbitrator or Governmental Authority which
would, individually or in the aggregate, create a Material Adverse Effect.

         4.14 Permits.  (a) Sellers have all permits,  licenses,  franchises and
other   governmental   authorizations,   consents  and  approvals   (other  than
Environmental Permits, which are addressed in Section 4.7 hereof) (collectively,
"Permits")  necessary to permit Sellers to own and operate the Purchased  Assets
as

                                       44

<PAGE>

presently  conducted  except where the failure to have such  Permits  would not,
individually  or in  the  aggregate,  have  a  material  adverse  effect  on the
ownership, operation or maintenance of the Purchased Assets. Except as disclosed
on Schedule  4.14(a),  Sellers have not received any notification that either of
them is in violation of any such  Permits,  except  notifications  of violations
which would not,  individually  or in the aggregate,  create a Material  Adverse
Effect.   Sellers  are  in  compliance   with  all  such  Permits  except  where
non-compliance  would not,  individually or in the aggregate,  create a Material
Adverse Effect.

                  (b) Schedule  4.14(b)  sets forth all  material  Permits  and
Environmental  Permits,  other than Transferable Permits (which are set forth on
Schedule 1.1(139)) related to the Purchased Assets.

         4.15     NRC Licenses.

                  (a) Sellers have all permits, licenses, and other consents and
approvals issued by the NRC necessary to own and operate the Purchased Assets as
presently operated,  pursuant to the requirements of Nuclear Laws. Except as set
forth in Schedule  4.15(a),  Sellers have not received any written  notification
that either of them is in violation of any of such license,  or any order, rule,
regulation,  or decision of the NRC with respect to the Purchased Assets, except
for  notifications  of  violations  which  would  not,  individually  or in  the
aggregate,  have a Material  Adverse Effect.  Sellers are in compliance with all
Nuclear Laws applicable to them with respect to the Purchased Assets, except for
violations  which,  individually or in the aggregate,  could not have a Material
Adverse Effect.

                  (b) Schedule   4.15(b)  sets  forth  all  material   permits,
licenses,  and other consents and approvals  issued by the NRC applicable to the
Purchased Assets.

         4.16 Taxes. Sellers have filed all returns required to be filed by them
with respect to any Tax relating to the Purchased Assets,  and Sellers have paid
all Taxes that have become due as  indicated  thereon,  except where such Tax is
being contested in good faith by appropriate  proceedings,  or where the failure
to so file or pay would not reasonably be expected to create a Material  Adverse
Effect. Sellers have complied in all material respects with all applicable laws,
rules and  regulations  relating to  withholding  Taxes  relating to Transferred
Employees. All Tax Returns filed with respect to the Purchased Assets are

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<PAGE>

true and  complete  in all  material  respects.  Except as set forth in Schedule
4.16, no notice of  deficiency  or assessment  has been received from any taxing
authority  with  respect to  liabilities  for Taxes of Sellers in respect of the
Purchased  Assets,  which have not been fully paid or finally  settled,  and any
such deficiency  shown in Schedule 4.16 is being contested in good faith through
appropriate  proceedings.  Except as set forth in  Schedule  4.16,  there are no
outstanding  agreements or waivers extending the applicable statutory periods of
limitation for Taxes  associated with the Purchased  Assets that will be binding
upon Buyer after the Closing.  Schedule 4.16 sets forth the taxing jurisdictions
in which Sellers own assets or conducts  business that require a notification to
a taxing  authority of the transactions  contemplated by this Agreement,  if the
failure to make such  notification,  or obtain  Tax  clearance  certificates  in
connection therewith,  would either require Buyer to withhold any portion of the
Purchase Price or subject Buyer to any liability for any Taxes of Sellers.

         4.17 Intellectual Property. Schedule 2.1(l) sets forth all Intellectual
Property used in and,  individually or in the aggregate with other  Intellectual
Property, material to the operation or business of the Purchased Assets, each of
which is owned by Seller.

         4.18  Compliance  With  Laws.   Sellers  are  in  compliance  with  all
applicable  laws,  rules  and  regulations  with  respect  to the  ownership  or
operation of the  Purchased  Assets except where the failure to be in compliance
would not, individually or in the aggregate, create a Material Adverse Effect.

         4.19 PUHCA.  Sellers are wholly owned  subsidiaries  of GPU, which is a
holding company registered under the Public Utility Holding Company Act of 1935.

         4.20 Qualified Decommissioning Trust Fund.

                  (a)The Seller Qualified Decommissioning Trust Fund is a trust,
validly  existing and in good  standing  under the laws of the State of New York
with all requisite authority to conduct its affairs as it now does. Sellers have
heretofore  delivered  to Buyer a copy of the  Decommissioning  Indenture  as in
effect on the date of this Agreement. Sellers agree to furnish Buyer with copies
of all  amendments of the  Decommissioning  Indenture  adopted after the date of
this Agreement  promptly after each such amendment has been adopted.  The Seller
Qualified Decommissioning Trust Fund satisfies the requirements necessary

                                       46

<PAGE>

for such Fund to be treated as a "Nuclear  Decommissioning  Reserve Fund" within
the meaning of Code section 468A(a) and as a "Nuclear  Decommissioning Fund" and
a "Qualified  Nuclear  Decommissioning  Fund" within the meaning of Treas.  Reg.
Section 1.468A-1(b)(3). Such Fund is in compliance in all material respects with
all  applicable  rules and  regulations  of the NRC,  the NJBPU and the IRS. The
Seller  Qualified  Decommissioning  Trust  Fund has not  engaged  in any acts of
"self-dealing"  as defined in Treas.  Reg.  Section  1.468A-5(b)(2).  No "excess
contribution,"  as defined in Treas. Reg. Section  1.468A-5(c)(2)(ii),  has been
made to the  Seller  Qualified  Decommissioning  Trust  Fund  which has not been
withdrawn within the period provided under Treas. Reg. Section 1.468A-5(c)(2)(i)
for  withdrawals  of excess  contributions  to be made  without  resulting  in a
disqualification of the Fund under Treas. Reg Section 1.468A-5(c)(1).  JCP&L has
made  timely and valid  elections  to make  annual  contributions  to the Seller
Qualified  Decommissioning  Trust Fund  since its  establishment.  Sellers  have
heretofore delivered copies of such elections to Buyer.

                  (b) Subject  only to Sellers'  Required  Regulatory Approvals,
Sellers have all requisite authority to cause the assets of the Seller Qualified
Decommissioning  Trust Fund to be  transferred  to Buyer in accordance  with the
provisions of this Agreement.

                  (c  Sellers   and/or  the  Trustee  of  the  Seller  Qualified
Decommissioning  Trust Fund have  filed or caused to be filed with the NRC,  the
IRS and any state or local authority all material forms, statements, reports and
documents (including all exhibits,  amendments and supplements thereto) required
to be filed by either of them.  Sellers  have  delivered  to Buyer a copy of the
schedule  of ruling  amounts  most  recently  issued  by the IRS for the  Seller
Qualified  Decommissioning  Trust Fund,  a copy of the request that was filed to
obtain such  schedule of ruling  amounts and a copy of any pending  requests for
revised ruling amounts, in each case together with all exhibits,  amendments and
supplements  thereto.  As of the  Closing,  Sellers  will have timely  filed all
requests  for  revised  schedules  of ruling  amounts  for the Seller  Qualified
Decommissioning  Trust Fund in accordance with Treas. Reg. Section  1.468A-3(i).
Sellers shall  furnish Buyer with copies of such requests for revised  schedules
of ruling  amounts,  together  with all  exhibits,  amendments  and  supplements
thereto,  promptly  after  they  have  been  filed  with  the IRS.  Any  amounts
contributed  to the  Seller  Qualified  Decommissioning  Trust  Fund  while such
requests are pending before the IRS and which turn out to be in excess of the

                                       47

<PAGE>

applicable  amounts provided in the schedule of ruling amounts issued by the IRS
will be withdrawn from the Seller  Qualified  Decommissioning  Trust Fund within
the period provided under Treas. Reg. Section  1.468A-5(c)(2)(i) for withdrawals
of excess  contributions to be made without resulting in a  disqualification  of
the Funds under Treas.  Reg. Section  1.468A-5(c)(1).  There are no interim rate
orders that may be retroactively adjusted or retroactive  adjustments to interim
rate  orders that may affect  amounts  that JCP&L may  contribute  to the Seller
Qualified  Decommissioning  Trust Fund or may require  distributions  to be made
from the Seller Qualified Decommissioning Trust Fund.

                  (d) Sellers have made available to Buyer the balance sheets
for the Seller Qualified  Decommissioning Trust Fund as of December 31, 1998 and
as of the last  Business Day before the Closing,  and they present  fairly as of
December 31, 1998 and as of the last Business Day before Closing,  the financial
position of the Seller Qualified  Decommissioning  Trust Fund in conformity with
generally accepted  accounting  principles applied on a consistent basis, except
as otherwise  noted therein.  Sellers have made  available to Buyer  information
from  which  Buyer  can  determine  the Tax Basis of all  assets  in the  Seller
Qualified Decommissioning Trust Fund as of the last Business Day before Closing.
There are no liabilities (whether absolute, accrued, contingent or otherwise and
whether  due or to become  due),  including,  but not  limited  to,  any acts of
"self-dealing"  as defined  in Treas.  Reg.  Section1.468A-5(b)(2)  or agency or
other legal proceedings that may materially affect the financial position of the
Seller Qualified  Decommissioning  Trust Fund other than those, if any, that are
disclosed on Schedule 4.20.

                  (e) Sellers have made  available  to Buyer all  contracts  and
agreements to which the Trustee of the Seller  Qualified  Decommissioning  Trust
Fund, in its capacity as such, is a party.

                  (f) The Seller Qualified  Decommissioning Trust Fund has filed
all Tax Returns  required to be filed and all material  Taxes shown to be due on
such Tax Returns have been paid in full.  Except as shown in Schedule  4.20,  no
notice of deficiency or assessment  has been received from any taxing  authority
with  respect to  liability  for Taxes of the Seller  Qualified  Decommissioning
Trust Fund which  have not been  fully  paid or  finally  settled,  and any such
deficiency  shown in such Schedule 4.20 is being contested in good faith through
appropriate  proceedings.  Except as set forth in  Schedule  4.20,  there are no
outstanding agreements or waivers extending the applicable

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<PAGE>

statutory  periods of limitations for Taxes associated with the Seller Qualified
Decommissioning Trust Fund for any period.

                  (g) To the extent Sellers have pooled the assets of the Seller
Qualified Decommissioning Trust Fund for investment purposes in periods prior to
Closing,  such  pooling  arrangement  is a  partnership  for federal  income tax
purposes  and  Sellers  have  filed all Tax  Returns  required  to be filed with
respect to such pooling arrangement for such periods.

         4.21     Nonqualified Decommissioning Trust Fund.

                  (a) The  Seller  Nonqualified  Decommissioning Trust Fund is a
trust validly  existing and in good standing  under the laws of the State of New
York with all  requisite  authority  to conduct its affairs as it now does.  The
Seller  Nonqualified  Decommissioning  Trust Fund is in full compliance with all
applicable rules and regulations of the NRC and the NJBPU.

                  (b) Subject only to Sellers'  Required  Regulatory  Approvals,
Sellers  have  all  requisite  authority  to  cause  the  assets  of the  Seller
Nonqualified Decommissioning Trust Fund to be transferred to Buyer in accordance
with the provisions of this Agreement.

                  (c) Sellers and/or  the  Trustee  of the  Seller  Nonqualified
Decommissioning Trust Fund have filed or caused to be filed with the NRC and any
state or local authority all material forms,  statements,  reports and documents
(including all exhibits,  amendments  and  supplements  thereto)  required to be
filed by either of them.

                  (d) Sellers have made available to Buyer the balance sheet for
the Seller Nonqualified  Decommissioning  Trust Fund as of December 31, 1998 and
as of the last  Business Day before the Closing,  and they present  fairly as of
December 31, 1998 and as of the last Business Day before Closing,  the financial
position of the Seller  Nonqualified  Decommissioning  Trust Fund in  conformity
with generally  accepted  accounting  principles  applied on a consistent basis,
except as otherwise noted therein.  There are no liabilities  (whether absolute,
accrued,  contingent or otherwise  and whether due or to become due)  including,
but not  limited  to,  agency or other legal  proceedings,  that may  materially
affect the financial position of the Seller Nonqualified  Decommissioning  Trust
Fund other than those, if any, that are disclosed on Schedule 4.21.

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<PAGE>

                  (e) Sellers  have made  available  to Buyer all  contracts and
agreements to which the Trustee of the Seller Nonqualified Decommissioning Trust
Fund, in its capacity as such, is a party.

                  (f) To the extent Sellers have pooled the assets of the Seller
Nonqualified Decommissioning Trust Fund for investment purposes in periods prior
to the Closing, such pooling arrangement is not a corporation for federal income
tax purposes  and Sellers  have filed all Tax Returns  required to be filed with
respect to such pooling arrangement for such periods.

         4.22 Undisclosed Liabilities. Except as set forth in Schedule 4.22, the
Purchased  Assets  are not  subject  to any  material  liability  or  obligation
(whether  absolute,  contingent  or  otherwise)  that  has not been  accrued  or
reserved  against in  Sellers'  financial  statements  as of the end of the most
recent fiscal  quarter for which such  statements  are available or disclosed in
the notes thereto in accordance with generally  accepted  accounting  principles
consistently applied.

         4.23 Year 2000  Qualified.  Sellers  have taken,  and will  continue to
take,  all  reasonable  steps  necessary  to address the  computer  software and
application  issues  raised  by Year  2000  and as of the  Closing  Date  all of
Sellers' computer software and applications  affecting the Purchased Assets will
be Year 2000 Qualified, except to the extent that any non-qualification does not
create a Material Adverse Effect.

         4.24   DISCLAIMERS   REGARDING   PURCHASED   ASSETS.   EXCEPT  FOR  THE
REPRESENTATIONS  AND  WARRANTIES  SET  FORTH  IN  THIS  ARTICLE  IV OR AS MAY BE
EXPRESSLY SET FORTH IN THE ANCILLARY AGREEMENTS,  THE PURCHASED ASSETS ARE BEING
SOLD AND TRANSFERRED "AS IS, WHERE IS", AND EXCEPT FOR SUCH  REPRESENTATIONS AND
WARRANTIES SELLERS EXPRESSLY  DISCLAIM ANY  REPRESENTATIONS OR WARRANTIES OF ANY
KIND OR NATURE, EXPRESS OR IMPLIED, AS TO LIABILITIES,  OPERATIONS OF THE PLANT,
THE TITLE, CONDITION,  VALUE OR QUALITY OF THE PURCHASED ASSETS OR THE PROSPECTS
(FINANCIAL AND OTHERWISE), RISKS AND OTHER INCIDENTS OF THE PURCHASED ASSETS AND
SELLERS SPECIFICALLY DISCLAIM ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY,
USAGE,  SUITABILITY  OR FITNESS FOR ANY  PARTICULAR  PURPOSE WITH RESPECT TO THE
PURCHASED ASSETS, OR ANY PART THEREOF, OR AS TO THE WORKMANSHIP  THEREOF, OR THE
ABSENCE OF ANY DEFECTS  THEREIN,  WHETHER LATENT OR PATENT,  OR COMPLIANCE  WITH
ENVIRONMENTAL   REQUIREMENTS,   OR  THE   APPLICABILITY   OF  ANY   GOVERNMENTAL
REQUIREMENTS,  INCLUDING BUT NOT LIMITED TO ANY  ENVIRONMENTAL  LAWS, OR WHETHER
SELLERS POSSESS SUFFICIENT REAL

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<PAGE>

PROPERTY  OR  PERSONAL  PROPERTY  TO OPERATE  THE  PURCHASED  ASSETS.  EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED HEREIN,  SELLERS FURTHER SPECIFICALLY  DISCLAIM ANY
REPRESENTATION  OR WARRANTY  REGARDING  THE ABSENCE OF HAZARDOUS  SUBSTANCES  OR
LIABILITY OR POTENTIAL  LIABILITY ARISING UNDER  ENVIRONMENTAL LAWS WITH RESPECT
TO THE PURCHASED  ASSETS.  WITHOUT  LIMITING THE  GENERALITY  OF THE  FOREGOING,
EXCEPT AS OTHERWISE  EXPRESSLY  PROVIDED HEREIN,  SELLERS EXPRESSLY DISCLAIM ANY
REPRESENTATION  OR WARRANTY OF ANY KIND REGARDING THE CONDITION OF THE PURCHASED
ASSETS OR THE SUITABILITY OF THE PURCHASED ASSETS FOR OPERATION AS A POWER PLANT
AND NO MATERIAL OR INFORMATION  PROVIDED BY OR COMMUNICATIONS MADE BY SELLERS OR
THEIR  REPRESENTATIVES,  OR BY ANY BROKER OR  INVESTMENT  BANKER,  WILL CAUSE OR
CREATE ANY WARRANTY,  EXPRESS OR IMPLIED, AS TO THE TITLE,  CONDITION,  VALUE OR
QUALITY OF THE PURCHASED ASSETS.

                                    ARTICLE V
                     REPRESENTATIONS AND WARRANTIES OF BUYER

         Buyer represents and warrants to Sellers as follows:

         5.1 Organization.  Buyer is a Delaware limited liability company,  duly
organized,  validly existing and in good standing under the laws of the state of
its  organization  and has all requisite  corporate  power and authority to own,
lease and operate its  properties  and to carry on its  business as is now being
conducted.  Buyer is, or by the Closing will be, qualified to do business in the
State of New Jersey.  Buyer has  heretofore  delivered  to Sellers  complete and
correct copies of its Certificate of Formation and Operating Agreement (or other
similar governing documents) as currently in effect.

         5.2 Authority Relative to this Agreement. Buyer has full organizational
power and authority to execute and deliver this  Agreement and to consummate the
transactions  contemplated  hereby. The execution and delivery of this Agreement
by Buyer and the consummation by Buyer of the transactions  contemplated  hereby
have been duly and validly authorized by all necessary corporate action required
on the part of Buyer.  This  Agreement  has been duly and validly  executed  and
delivered  by  Buyer.  Subject  to the  receipt  of  Buyer  Required  Regulatory
Approvals,  this Agreement  constitutes a legal,  valid and binding agreement of
Buyer,  enforceable against Buyer in accordance with its terms, except that such
enforceability   may  be   limited   by   applicable   bankruptcy,   insolvency,
reorganization,   fraudulent  conveyance,   moratorium  or  other  similar  laws
affecting or relating to enforcement of creditors' rights generally and

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<PAGE>

general principles of equity (regardless of whether enforcement is considered in
a proceeding at law or in equity).

         5.3      Consents and Approvals; No Violation.

                  (a) Except as set forth in  Schedule  5.3(a),  and other than
obtaining  Buyer  Required  Regulatory  Approvals,  neither  the  execution  and
delivery  of this  Agreement  by  Buyer  nor the  consummation  by  Buyer of the
transactions  contemplated hereby will (i) conflict with or result in any breach
or  violation  of any  provision  of the  Certificate  of Formation or Operating
Agreement (or other similar  governing  documents) of Buyer, or (ii) require any
consent,  approval,  authorization  or permit of, or filing with or notification
to, any  Governmental  Authority,  or (iii) result in a default (or give rise to
any right of termination,  cancellation or acceleration) under any of the terms,
conditions  or  provisions  of any note,  bond,  mortgage,  indenture,  material
agreement  or  other  instrument  or  obligation  to  which  Buyer or any of its
Subsidiaries is a party or by which any of their respective assets may be bound,
except  for  such   defaults  (or  rights  of   termination,   cancellation   or
acceleration)  as to which  requisite  waivers or consents have been obtained or
which  would not,  individually  or in the  aggregate,  have a material  adverse
effect on the business, assets, operations or condition (financial or otherwise)
of Buyer ("Buyer Material Adverse Effect") or (iv) violate any law,  regulation,
order, judgment or decree applicable to Buyer, which violations, individually or
in the aggregate, would create a Buyer Material Adverse Effect.

                  (b) Except as set forth in Schedule  5.3(b)  (the  filings and
approvals  referred  to in such  Schedule  are  collectively  referred to as the
"Buyer Required Regulatory Approvals"),  no consent or approval of, filing with,
or notice to, any Governmental  Authority is necessary for Buyer's execution and
delivery of this Agreement,  or the  consummation  by Buyer of the  transactions
contemplated  hereby, other than such consents,  approvals,  filings or notices,
which,  if not  obtained or made,  will not prevent  Buyer from  performing  its
obligations under this Agreement.

         5.4      Legal Proceedings. There are no actions or proceedings pending
against Buyer before any court or arbitrator or Governmental  Authority,  which,
individually or in the aggregate, could reasonably be expected to create a Buyer
Material  Adverse  Effect.  Buyer is not subject to any  outstanding  judgments,
rules, orders, writs, injunctions or

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<PAGE>

decrees  of  any  court,  arbitrator  or  Governmental  Authority  which  would,
individually or in the aggregate, create a Buyer Material Adverse Effect.

         5.5  Inspections.  Buyer  acknowledges and agrees that it has, prior to
its execution of this Agreement,  (i) reviewed the Environmental  Reports (other
than  Buyer's  Environmental  Inspection),  and (ii) except as  contemplated  by
Section  6.2,  has had full  opportunity  to conduct  and has  completed  to its
satisfaction  Inspections of the Purchased  Assets.  Subject to Sections 6.2(a),
(h) and (i) , Buyer  acknowledges  that it is satisfied  through such review and
Inspections  that  no  further  investigation  and  study  on or of the  Site is
necessary  for the  purposes  of  acquiring  the  Purchased  Assets for  Buyer's
intended  use.   Buyer   acknowledges   and  agrees  that  subject  to  Sellers'
representations,  warranties  and covenants  contained in this Agreement and the
Ancillary  Agreements and the terms,  conditions,  limitations  and  indemnities
provided  herein,  it will  assume at the Closing  the risk that  adverse  past,
present,  and future physical  characteristics and Environmental  Conditions may
not  have  been  revealed  by the  Inspections  and  the  investigations  of the
Purchased Assets contained in the Environmental Reports.

         5.6 WARN Act.  Buyer  does not  intend to engage in a Plant  Closing or
Mass Layoff as such terms are defined in the WARN Act within  sixty (60) days of
the Closing Date.

                                   ARTICLE VI

                            COVENANTS OF THE PARTIES

         6.1      Conduct of Business Relating to the Purchased Assets

                  (a) Except  as  described  in  Schedule  6.1 or as  expressly
contemplated  by this  Agreement  or to the extent Buyer  otherwise  consents in
writing,  during the period from the date of this Agreement to the Closing Date,
Sellers (i) will operate the Purchased Assets in the ordinary course of business
consistent  with  Good  Utility  Practices,  (ii)  shall  use  all  Commercially
Reasonable  Efforts to preserve  intact such Purchased  Assets,  and endeavor to
preserve the goodwill and  relationships  with  customers,  suppliers and others
having business dealings with them, (iii) shall maintain the insurance  coverage
described in Section 4.4,  (iv) shall comply in all material  respects  with all
applicable laws relating to the Purchased Assets,  including without limitation,
all Nuclear Laws

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<PAGE>

and  Environmental  Laws, and (v) shall continue with Sellers'  program,  or (at
Buyer's expense) as Buyer may direct, to install such equipment or software with
respect to Year 2000 Qualification in accordance with Sellers' plans referred to
in Section 2.1(k). Without limiting the generality of the foregoing, and, except
as (x)  contemplated  in this  Agreement,  (y) described in Schedule 6.1, or (z)
required under  applicable law or by any  Governmental  Authority,  prior to the
Closing Date, without the prior written consent of Buyer, Sellers shall not with
respect to the Purchased Assets:

                           (i)  Make  any  material  change  in  the  levels  of
         Inventories  customarily maintained by Sellers or their Affiliates with
         respect  to  the  Purchased  Assets,   other  than  changes  which  are
         consistent with Good Utility Practices;

                           (ii)  Sell,  lease  (as  lessor),  encumber,  pledge,
         transfer  or  otherwise  dispose  of,  any  material  Purchased  Assets
         individually  or in the aggregate  (except for  Purchased  Assets used,
         consumed or replaced in the ordinary course of business consistent with
         past  practices  of Sellers or their  Affiliates  or with Good  Utility
         Practices)  other than to  encumber  Purchased  Assets  with  Permitted
         Encumbrances;

                           (iii) Modify, amend or voluntarily terminate prior to
         the expiration date any of Sellers'  Agreements or Real Property Leases
         or any of the Permits or Environmental Permits or waive any default by,
         or release,  settle or compromise  and claim  against,  any other party
         thereto, in any material respect, other than (a) in the ordinary course
         of business, to the extent consistent with Good Utility Practices,  (b)
         with cause, to the extent  consistent with Good Utility  Practices,  or
         (c) as may be required in connection with transferring  Sellers' rights
         or obligations thereunder to Buyer pursuant to this Agreement;

                           (iv) Sell,  lease or  otherwise  dispose of  Emission
         Allowances,  or  Emission  Reduction  Credits  identified  in  Schedule
         2.1(h),  except to the extent necessary to operate the Purchased Assets
         in accordance with this Section 6.1;

                           (v)  Except  as  otherwise   provided  herein  or  in
         connection  with the 18R Outage and  consistent  with the Outage  Plan,
         enter into any  commitment  for the  purchase  or sale of nuclear  fuel
         having a term that extends beyond

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<PAGE>

         March 31, 2000 or such other date that the Parties mutually agree;

                           (vi) Enter into any power  sales  agreement  having a
         term that  extends  beyond  March 31,  2000 or such other date that the
         Parties  mutually agree to be the date on which the Closing is expected
         to occur;

                           (vii)  Except  as  otherwise  provided  herein  or in
         connection  with the 18R Outage and  consistent  with the Outage  Plan,
         enter into any contract, agreement,  commitment or arrangement relating
         to the Purchased  Assets for goods or services not addressed in clauses
         (i) through (vi) that individually requires the payment for or delivery
         of goods or  services  with a value  exceeding  $100,000  per annum and
         extends beyond March 31, 2000,  unless it is terminable by Sellers (or,
         after the Closing,  by Buyer)  without  penalty or premium upon no more
         than sixty (60) days notice;

                           (viii)  Except as otherwise  required by the terms of
         the Collective  Bargaining  Agreement,  (a) hire at, or transfer to the
         Purchased Assets, any new employees prior to the Closing, other than to
         fill vacancies in existing  positions in the  reasonable  discretion of
         Sellers,  (b)  increase  salaries  or wages of  employees  employed  in
         connection with the Purchased Assets prior to the Closing other than in
         the ordinary  course of business and in  accordance  with Sellers' past
         practices,  (c) take any action prior to the Closing to effect a change
         in the Collective  Bargaining Agreement or any other Employee agreement
         being assumed by Buyer,  or (d) take any action prior to the Closing to
         increase the aggregate  benefits  payable to the employees  employed in
         connection with the Purchased Assets other than increases for Non-Union
         Employees in the ordinary  course of business  and in  accordance  with
         Sellers' past practices or (e) enter into any employment contracts with
         employees  at  the  Purchased  Assets  or  any  collective   bargaining
         agreements with labor organizations representing such employees;

                           (ix)    Make any Capital Expenditures except as
         permitted by Section 3.3(a)(ii) or for Sellers' account; and

                           (x)     Except as otherwise provided herein, enter
         into any written or oral contract, agreement, commitment or arrangement
         with respect to any of the proscribed

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<PAGE>

         transactions set forth in the foregoing paragraphs (i) through (ix).

                  (b)  Subject  to  applicable  NRC  rules  and  regulations,  a
committee comprised of one or more senior representatives  designated by Sellers
and one or more  senior  representatives  designated  by Buyer (the  "Transition
Committee")  will be established  as soon as practicable  after the execution of
this  Agreement  to permit  Buyer to observe and advise  Sellers  regarding  the
operation  of  the  Purchased  Assets  and to  facilitate  the  transfer  of the
Purchased Assets to Buyer at the Closing.  The Transition Committee will be kept
fully apprised by GPUN of all the Plant's management and operating developments.
The  Transition  Committee  shall  arrange  for  Buyer  to  assess  the  Plant's
management  and employees and shall have access to the  management  and board of
directors of GPUN. The Transition Committee shall be accountable directly to the
respective  chief  executive  officers  of Buyer and GPUN and shall from time to
time report its findings to the senior management of each of Sellers and Buyer.

                  (c) Sellers  shall advise Buyer  regarding  implementation  or
changes  in PJM  rules or  procedures  which  are  reasonably  likely  to have a
Material  Adverse Effect on the Plant.  Sellers agree that they will not take or
cause to be taken any action to reduce the current installed capacity credit PJM
has assigned to the Plant under PJM rules,  regulations or policies in effect on
the date hereof; provided,  however, that the foregoing shall in no way restrict
or  prohibit  Sellers  from  taking or  causing  to take any such  action  which
generally affects Sellers' generating facilities.

         6.2      Access to Information.

                  (a) Between the date of this  Agreement  and the Closing Date,
Sellers  will,  at reasonable  times and upon  reasonable  notice and subject to
compliance with all applicable NRC rules and regulations: (i) give Buyer and its
Representatives  reasonable access to its managerial personnel and to all books,
records,  plans,   equipment,   offices  and  other  facilities  and  properties
constituting  the Purchased  Assets;  (ii) furnish Buyer with such financial and
operating  data and other  information  with respect to the Purchased  Assets as
Buyer may from time to time  reasonably  request,  and permit Buyer to make such
reasonable  Inspections thereof as Buyer may request; (iii) furnish Buyer at its
request a copy of each  material  report,  schedule or other  document  filed by
Sellers or any of

                                       56

<PAGE>

their  Affiliates with respect to the Purchased  Assets with the NRC, SEC, FERC,
NJDEP,  NJBPU or any other Governmental  Authority;  and (iv) furnish Buyer with
all such other  information as shall be reasonably  necessary to enable Buyer to
verify the accuracy of the  representations  and warranties of Sellers contained
in this  Agreement;  provided,  however,  that  (A)  any  such  inspections  and
investigations  shall  be  conducted  in  such a  manner  as  not  to  interfere
unreasonably with the operation of the Purchased  Assets,  (B) Sellers shall not
be  required  to  take  any  action  which  would  constitute  a  waiver  of the
attorney-client  privilege,  and (C)  Sellers  need not  supply  Buyer  with any
information  which Sellers are under a legal or  contractual  obligation  not to
supply.  Notwithstanding  anything in this Section 6.2 to the contrary,  Sellers
will furnish or provide such access to Transferring  Employee  Records or access
to other employee  personnel  records or medical  information only to the extent
not  prohibited  by law,  regulatory  process or  subpoena  unless  specifically
authorized  by the  affected  employee,  and  Buyer  shall not have the right to
administer  to any of Sellers'  employees any skills,  aptitudes,  psychological
profile,  or other employment related test except that Buyer may administer such
tests to Sellers' Non-Union Employees if specifically authorized by the affected
employee.

                  (b) Each Party shall,  and shall use its best efforts to cause
its Representatives to, (i) keep all Proprietary  Information of the other Party
confidential and not to disclose or reveal any such  Proprietary  Information to
any  person  other  than  such  Party's  Representatives  and  (ii) not use such
Proprietary  Information  other than in connection with the  consummation of the
transactions  contemplated  hereby.  After the  Closing  Date,  any  Proprietary
Information  to the extent  related to the  Purchased  Assets shall no longer be
subject to the  restrictions  set forth herein.  The  obligations of the Parties
under this Section  6.2(b) shall be in full force and effect for three (3) years
from the date hereof and will survive the  termination  of this  Agreement,  the
discharge  of all other  obligations  owed by the  Parties to each other and the
closing of the transactions contemplated by this Agreement.

                  (c) For a period of seven (7) years after the Closing Date (or
such longer period as may be required by applicable law or Section 6.8(f)), each
Party and its  Representatives  shall have reasonable access to all of the books
and records of the Purchased Assets, including all Transferring Employee Records
in the  possession  of the  other  Party to the  extent  that  such  access  may
reasonably be required by such Party in connection with the

                                       57

<PAGE>

Assumed Liabilities or the Excluded Liabilities, or other matters relating to or
affected by the operation of the Purchased Assets. Such access shall be afforded
by the  Party in  possession  of any such  books and  records  upon  receipt  of
reasonable  advance written notice and during normal  business hours.  The Party
exercising  this right of access  shall be solely  responsible  for any costs or
expenses  incurred by it or the other Party with respect to such access pursuant
to this Section  6.2(c).  If the Party in  possession  of such books and records
shall desire to dispose of any books and records upon or prior to the expiration
of such seven-year period (or any such longer period),  such Party shall,  prior
to such disposition, give the other Party a reasonable opportunity at such other
Party's  reasonable  expense,  to segregate and remove such books and records as
such other Party may select.

                  (d) Notwithstanding  the terms of Section  6.2(b) above,  the
Parties agree that prior to the Closing Buyer may reveal or disclose Proprietary
Information  to any other  Persons in connection  with Buyer's  financing of its
purchase of the Purchased Assets or any equity participation in Buyer's purchase
of the Purchased Assets (provided that such Persons agree in writing to maintain
the  confidentiality  of the  Proprietary  Information  in accordance  with this
Agreement).

                  (e) Upon the other Party's prior written  approval (which will
not be unreasonably  withheld or delayed),  either Party may provide Proprietary
Information of the other Party to the NJBPU, NYPSC, PaPUC, SEC, NRC, FERC or any
other Governmental  Authority with jurisdiction or any stock exchange, as may be
necessary to obtain Sellers' Required  Regulatory  Approvals,  or Buyer Required
Regulatory Approvals, respectively, or to comply generally with any relevant law
or regulation.  The disclosing  Party will seek  confidential  treatment for the
Proprietary   Information  provided  to  any  Governmental   Authority  and  the
disclosing Party will notify the other Party as far in advance as is practicable
of its  intention  to  release to any  Governmental  Authority  any  Proprietary
Information.

                  (f) Except  as   specifically   provided  herein  or  in  the
Confidentiality Agreement, nothing in this Section shall impair or modify any of
the rights or obligations of Buyer or its Affiliates  under the  Confidentiality
Agreement,  all of which remain in effect until termination of such agreement in
accordance with its terms.

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<PAGE>

                  (g) Except  as  may  be  permitted  in  the   Confidentiality
Agreement, Buyer agrees that, prior to the Closing Date, it will not contact any
vendors, suppliers,  employees, or other contracting parties of Sellers or their
Affiliates  with  respect  to  any  aspect  of  the  Purchased   Assets  or  the
transactions  contemplated hereby, without the prior written consent of Sellers,
which consent shall not be unreasonably withheld.

                  (h) (i) Buyer shall be entitled to inspect, in accordance with
this Section 6.2(h),  all of the Purchased  Assets located adjacent to any Point
of Interconnection  (as defined in the Interconnection  Agreement),  as shown in
Schedule A to the  Interconnection  Agreement,  to verify  and/or  determine the
accuracy of the data,  drawings,  and records  described in such  Schedule.  The
Parties shall cooperate to schedule Buyer's  Inspection at the Plant so that any
interference  with the  operation  of the  Plant  is  minimized,  to the  extent
reasonably feasible, and so that Buyer may complete its Inspections of the Plant
within thirty (30) working days of  commencement  of Inspections  and within two
(2) months after the execution of this Agreement.

                      (ii) Sellers shall provide, or shall cause to be provided,
to  Buyer,  access  to the  Plant at the  times  scheduled  for the  Inspections
referred to in clause (i) above.  Sellers shall provide  qualified  engineering,
operations,  and maintenance personnel to escort Buyer's personnel and to assist
Buyer's  personnel in conducting the  Inspections.  Sellers and Buyer shall each
bear  their  own  costs  of  participating  in the  Inspections.  At a  mutually
convenient  time not more  than one (1) month  after  Buyer  has  completed  its
Inspections,  the  Parties  shall  meet to discuss  whether,  as a result of the
Inspections,  it is  appropriate  to modify  Schedule  A to the  Interconnection
Agreement  to  portray  more  accurately  the  Points  of  Interconnection.  Any
modification  to any portion of Schedule A of the  Interconnection  Agreement to
which the  Parties  agree shall  thereafter  be deemed part of Schedule A of the
Interconnection Agreement for all purposes under the Interconnection Agreement.

                  (i) Between the date  hereof and the  Closing  Date,  Sellers
shall,  permit  Buyer or Buyer's  Representatives  upon  Buyer's  request and at
Buyer's sole cost and expense to perform additional environmental testing on the
Site  ("Buyer's   Environmental   Inspection")  at  reasonable  times  and  upon
reasonable  notice to  Sellers.  The  general  nature  and scope of the  initial
Buyer's Environmental Inspection is set forth on

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Schedule 6.2(i). Buyer may, subject to Sellers' consent, which consent shall not
be unreasonably  withheld,  conduct further Inspections if, based on the results
of the initial  Buyer's  Environmental  Inspection,  such further  Inspection is
reasonably  warranted.  Buyer agrees to comply, and cause its Representatives to
comply, with all safety and security policies adopted by Sellers relating to the
Purchased  Assets.  All  environmental  testing  performed  by Buyer or  Buyer's
Representatives on the Site shall be performed in accordance with all applicable
NRC and other legal or regulatory  requirements of Governmental  Authorities and
in any event shall not unreasonably interfere with the operation of the Plant or
the Purchased Assets.

         6.3  Public  Statements.  Subject  to the  requirements  imposed by any
applicable law or any  Governmental  Authority or stock  exchange,  prior to the
Closing Date, no press release or other public  announcement or public statement
or comment in response to any inquiry relating to the transactions  contemplated
by this  Agreement  shall be  issued  or made by any  Party  without  the  prior
approval  of the  other  Parties  (which  approval  shall  not  be  unreasonably
withheld). The Parties agree to cooperate in preparing such announcements.

         6.4  Expenses.  Except  to the  extent  specifically  provided  herein,
whether or not the transactions  contemplated hereby are consummated,  all costs
and expenses  incurred in connection  with this  Agreement and the  transactions
contemplated  hereby  shall be borne  by the  Party  incurring  such  costs  and
expenses.  Notwithstanding  anything  to the  contrary  herein,  Buyer  will  be
responsible for (a) all costs and expenses  associated with the obtaining of any
title insurance policy and all endorsements  thereto that Buyer elects to obtain
and (b) all filing fees under the HSR Act.

         6.5  Further Assurances

                  (a) Subject to the terms and  conditions  of this  Agreement,
each of the Parties  hereto  shall use its  Commercially  Reasonable  Efforts to
take,  or cause to be taken,  all actions,  and to do, or cause to be done,  all
things  necessary,  proper or advisable under applicable laws and regulations to
consummate  and make  effective  the purchase and sale of the  Purchased  Assets
pursuant  to this  Agreement  and the  assumption  of the  Assumed  Liabilities,
including  without  limitation using its best efforts to ensure  satisfaction of
the  conditions  precedent  to each  Party's  obligations  hereunder,  including
obtaining all necessary

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<PAGE>

consents,  approvals,  and  authorizations  of third  parties  and  Governmental
Authorities  required  to be obtained in order to  consummate  the  transactions
hereunder,  and to effectuate a transfer of the  Transferable  Permits to Buyer.
Buyer  agrees to perform all  conditions  required of Buyer in  connection  with
Sellers' Required Regulatory Approvals,  other than those conditions which would
create a Buyer  Material  Adverse  Effect.  None of the  Parties  hereto  shall,
without  prior  written  consent  of the other  Party,  take or fail to take any
action,  which might  reasonably  be expected to prevent or  materially  impede,
interfere with or delay the transactions contemplated by this Agreement.

                  (b) Buyer agrees that prior to the Closing Date, neither Buyer
nor any of its  Affiliates  will enter into any other  contract to acquire,  nor
acquire,  electric generation  facilities located in the control area recognized
by the  North  American  Reliability  Council  as the  PJM  Control  Area if the
proposed  acquisition of such additional  electric  generation  facilities might
reasonably be expected to prevent or materially impede,  interfere with or delay
the transactions  contemplated by this Agreement;  provided,  however,  that the
foregoing  shall  not  prohibit  Buyer  or  any of its  Affiliates  either  from
acquiring  or agreeing  to acquire an  ownership  interest  in the Peach  Bottom
Nuclear Generating Station from Conectiv,  Inc. or adding generating capacity to
their present generating facilities. Buyer shall give Sellers reasonable advance
notice (and in any event not less than ten (10) days)  before  Buyer enters into
any contract to acquire or acquires any electric  generation facility located in
said PJM Control Area.

                  (c) In the event that any Purchased  Asset shall not have been
conveyed to Buyer at the Closing,  Sellers shall,  subject to Section 6.5(d) and
(e),  use  Commercially  Reasonable  Efforts  to convey  such  asset to Buyer as
promptly as is  practicable  after the  Closing.  In the event that any Easement
shall not have been granted by Buyer to Sellers at the Closing,  Buyer shall use
Commercially Reasonable Efforts to grant such Easement to Sellers as promptly as
is practicable after the Closing.

                  (d) To the extent  that  Sellers'  rights  under any  Sellers'
Agreement  or Real  Property  Lease may not be  assigned  without the consent of
another  Person which consent has not been  obtained by the Closing  Date,  this
Agreement  shall not constitute an agreement to assign the same, if an attempted
assignment would constitute a breach thereof or be unlawful.

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<PAGE>

Sellers  and Buyer agree that if any consent to an  assignment  of any  material
Sellers'  Agreement  or Real  Property  Lease  shall not be  obtained  or if any
attempted  assignment  would be  ineffective  or would impair Buyer's rights and
obligations  under the material  Sellers'  Agreement or Real  Property  Lease in
question,  so that Buyer  would not in effect  acquire  the  benefit of all such
rights and  obligations,  Sellers,  at Buyer's  option and to the maximum extent
permitted by law and such material  Sellers'  Agreement or Real Property  Lease,
shall,  after the Closing Date,  appoint Buyer to be Sellers' agent with respect
to such material  Sellers'  Agreement or Real Property Lease, or, to the maximum
extent  permitted by law and such material  Sellers'  Agreement or Real Property
Lease,  enter into such  reasonable  arrangements  with Buyer or take such other
actions as are necessary to provide Buyer with the same or substantially similar
rights and  obligations  of such  material  Sellers'  Agreement or Real Property
Lease as Buyer may  reasonably  request.  Sellers and Buyer shall  cooperate and
shall each use  Commercially  Reasonable  Efforts prior to and after the Closing
Date to  obtain  an  assignment  of such  material  Sellers'  Agreement  or Real
Property Lease to Buyer.

                  (e) To the extent that  Sellers'  rights under any warranty or
guaranty  described in Section 2.1(i) may not be assigned without the consent of
another  Person,  which consent has not been obtained by the Closing Date,  this
Agreement  shall not  constitute  an agreement  to assign same,  if an attempted
assignment would constitute a breach thereof, or be unlawful.  Sellers and Buyer
agree that if any  consent to an  assignment  of any such  warranty  or guaranty
shall not be obtained,  or if any attempted  assignment  would be ineffective or
would impair  Buyer's rights and  obligations  under the warranty or guaranty in
question,  so that Buyer  would not in effect  acquire  the  benefit of all such
rights and  obligations,  Sellers,  at Buyer's  expense,  shall use Commercially
Reasonable  Efforts,  to the  extent  permitted  by law  and  such  warranty  or
guaranty, to enforce such warranty or guaranty for the benefit of Buyer so as to
provide Buyer to the maximum extent  possible with the benefits and  obligations
of such warranty or guaranty.

         6.6      Consents and Approvals.

                  (a) As  promptly  as  practicable  after  the  date  of  this
Agreement,  Sellers  and Buyer,  as  applicable,  shall each file or cause to be
filed with the Federal  Trade  Commission  and the United  States  Department of
Justice any  notifications  required to be filed under the HSR Act and the rules
and regulations

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<PAGE>

promulgated thereunder with respect to the transactions contemplated hereby. The
Parties  shall use their  respective  best  efforts to respond  promptly  to any
requests for  additional  information  made by either of such  agencies,  and to
cause  the  waiting  periods  under  the HSR Act to  terminate  or expire at the
earliest possible date after the date of filing.  Buyer will pay all filing fees
under the HSR Act but each Party will bear its own costs of the  preparation  of
any filing.

                  (b) As  promptly  as  practicable  after  the  date  of  this
Agreement  and  following  receipt  of any  requisite  determinations  by  other
Governmental Authorities which are a precondition thereto, Buyer shall file with
the FERC an application  requesting Exempt Wholesale Generator status for Buyer,
which filing may be made individually or in conjunction with other filings to be
made  with the FERC  under  this  Agreement,  as  reasonably  determined  by the
Parties.  Prior to Buyer's  submission of that  application with the FERC, Buyer
shall submit such  application to Sellers for review and comment and Buyer shall
incorporate into the application any revisions  reasonably requested by Sellers.
Buyer  shall be solely  responsible  for the cost of  preparing  and filing this
application,  any petition(s) for rehearing,  or any re-application.  If Buyer's
initial  application for Exempt  Wholesale  Generator  status is rejected by the
FERC,  Buyer  agrees to petition the FERC for  rehearing  and/or to re-submit an
application with the FERC, as reasonably  required by Sellers,  provided that in
either  case the action  directed  by Sellers  does not create a Buyer  Material
Adverse Effect.

                  (c) As  promptly  as  practicable  after  the  date  of  this
Agreement, Buyer shall file with the FERC pursuant to Section 205 of the Federal
Power Act a notification of change in status  concerning its  market-based  rate
authority  by  which  Buyer  shall  notify  the  FERC of the  change  in  status
associated with its purchase of the Plant's additional  generating  capacity and
request the FERC to confirm  that such change in status will not affect  Buyer's
authority to engage in  market-based  rate  wholesale  power sale  transactions,
which  filing  may be made  individually  by Buyer or  jointly  with  Sellers in
conjunction with other filings to be made with the FERC under this Agreement, as
reasonably  determined by the Parties.  Prior to the filing of that  application
with the FERC,  Buyer shall  submit such  application  to Sellers for review and
comment  and  Buyer  shall   incorporate  into  the  application  any  revisions
reasonably requested by Sellers.  Buyer shall be solely responsible for the cost
of preparing and filing this application, any petition(s)

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<PAGE>

for rehearing, or any reapplication. If Buyer's filing results in a FERC request
for additional  information or is rejected by the FERC, Buyer shall provide that
information  promptly,  petition the FERC for rehearing  and/or to re-submit the
filing with the FERC, as reasonably  required by Sellers,  provided that Sellers
shall  have a  reasonable  opportunity  to  make  changes  to such a  filing  or
re-submission  and, provided  further,  that the action directed by Sellers does
not create a Buyer Material Adverse Effect.

                  (d) As promptly as  practicable,  and in any case within sixty
(60) days after the date of this  Agreement,  Sellers and Buyer,  as applicable,
shall  file with the  NJBPU,  the  NYPSC,  the FERC and any  other  Governmental
Authority,  and any  other  filings  required  to be made  with  respect  to the
transactions  contemplated  hereby.  The Parties shall  respond  promptly to any
requests  for  additional  information  made by  such  agencies,  and use  their
respective  best  efforts to cause  regulatory  approval  to be  obtained at the
earliest  possible  date after the date of filing.  Each Party will bear its own
costs of the preparation of any such filing.

                  (e) Without  limitation  of Section  10.11,  Sellers and Buyer
shall  cooperate  with each other and  promptly  prepare and file  notifications
with, and request Tax  clearances  from,  state and local taxing  authorities in
jurisdictions  in which a portion of the  Purchase  Price may be  required to be
withheld or in which Buyer would  otherwise be liable for any Tax liabilities of
Sellers pursuant to such state and local Tax law.

                  (f) Buyer shall have the primary  responsibility  for securing
the transfer, reissuance or procurement of the Permits and Environmental Permits
(other than  Transferable  Permits)  effective as of the Closing  Date.  Sellers
shall  cooperate with Buyer's  efforts in this regard and assist in any transfer
or  reissuance  of a Permit  or  Environmental  Permit  held by  Sellers  or the
procurement  of any other  Permit or  Environmental  Permit when so requested by
Buyer.

                  (g) As  promptly  as  practicable  after  the  date  of  this
Agreement,  Buyer and Sellers shall file with the NRC an application  requesting
consent  under  Section 184 of the Atomic Energy Act and 10 CFR ss.50.80 for the
transfer  of the  Plant  license  from  Sellers  to  Buyer,  and any  associated
licenses,  amendments  or approvals.  The Parties shall respond  promptly to any
requests for  additional  information  made by the NRC and use their  respective
best efforts to cause regulatory approval to be

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<PAGE>

obtained at the earliest possible date after the date of filing. Each Party will
bear its own costs of the preparation of any such filing.

                  (h) As  promptly  as  practicable  after  the  date  of  this
Agreement,  Sellers  and  Buyer,  as  applicable,  shall  file  with the IRS the
requests for private letter rulings described in Sections 7.1(m) and 7.2(j). The
Parties shall respond  promptly to any requests for additional  information made
by the IRS, and use their respective  Commercially  Reasonable  Efforts to cause
the private  letter  rulings to be obtained at the earliest  possible date after
the date of filing.  Each of Sellers and Buyer shall  cooperate with one another
to secure the private letter rulings described in Sections 7.1(m) and 7.2(j) and
each shall have the right to review in advance all  information  included in the
requests for private  letter  rulings and  supplemental  submissions to the IRS.
Each Party will bear its own costs of the preparation of such requests.

         6.7 Fees and Commissions.  Sellers,  on the one hand, and Buyer, on the
other hand, represent and warrant to the other that, no broker,  finder or other
Person is entitled  to any  brokerage  fees,  commissions  or  finder's  fees in
connection  with the  transaction  contemplated  hereby by reason of any  action
taken by the Party making such  representation.  Sellers,  on the one hand,  and
Buyer, on the other hand, will pay to the other or otherwise discharge, and will
indemnify and hold the other  harmless  from and against,  any and all claims or
liabilities  for all brokerage  fees,  commissions and finder's fees incurred by
reason of any action taken by the indemnifying party.

         6.8      Tax Matters.

                  (a) All transfer and sales taxes  incurred in connection  with
this Agreement and the  transactions  contemplated  hereby  (including,  without
limitation,  (a) New Jersey  sales tax; and (b) the New Jersey  realty  transfer
taxes on conveyances  of interests in real  property,  shall be borne equally by
Buyer and Sellers. Sellers shall file, to the extent required by, or permissible
under,  applicable law, all necessary Tax Returns and other  documentation  with
respect to all such  transfer  and sales taxes,  and, if required by  applicable
law,  Buyer  shall  join in the  execution  of any such Tax  Returns  and  other
documentation.  Prior to the Closing Date, to the extent applicable, Buyer shall
provide  to  Sellers  appropriate   certificates  of  Tax  exemption  from  each
applicable taxing authority.

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<PAGE>

                  (b) With  respect to Taxes to be prorated in  accordance  with
Section  3.5 of this  Agreement,  Buyer  shall  prepare  and timely file all Tax
Returns  required  to be filed  after  the  Closing  Date  with  respect  to the
Purchased  Assets, if any, and shall duly and timely pay all such Taxes shown to
be due on such Tax Returns. Buyer's preparation of any such Tax Returns shall be
subject to Sellers' approval, which approval shall not be unreasonably withheld.
Buyer shall make such Tax Returns  available for Sellers' review and approval no
later than fifteen (15) Business Days prior to the due date for filing each such
Tax Return.

                  (c) Within  fifteen (15)  Business Days after receipt of a Tax
Return referred to in Section 6.8(b),  Sellers shall pay to Buyer Sellers' share
of the amount shown on such Tax Return,  less  payments on account of such Taxes
previously made by Sellers. To the extent that Sellers' previous payments exceed
Sellers' share, the Buyer shall pay such excess to Sellers. With respect to real
estate taxes,  evidence of payment shall be delivered by Sellers to Buyer at the
Closing.

                  (d) Buyer  and  Sellers  shall  provide  the  other  with such
assistance as may reasonably be requested by the other Party in connection  with
the preparation of any Tax Return,  any audit or other examination by any taxing
authority,  or any judicial or administrative  proceedings relating to liability
for Taxes,  and each shall  retain and  provide  the  requesting  party with any
records or information which may be relevant to such return, audit,  examination
or  proceedings.  Any  information  obtained  pursuant to this Section 6.8(d) or
pursuant to any other Section hereof providing for the sharing of information or
review of any Tax Return or other  instrument  relating  to Taxes  shall be kept
confidential  by the Parties  hereto.  Schedule 6.8 sets forth  procedures to be
followed with respect to the tax appeals and audits referred to therein.

                  (e) In the event that a dispute  arises  between  Sellers  and
Buyer as to the  amount  of  Taxes,  or  indemnification,  or the  amount of any
allocation of Purchase Price under Section 3.4 hereof, the Parties shall attempt
in good faith to resolve such dispute,  and any agreed upon amount shall be paid
to the  appropriate  Party.  If such  dispute is not  resolved  thirty (30) days
thereafter,  the Parties shall submit the dispute to the Independent  Accounting
Firm for resolution,  which resolution shall be final, conclusive and binding on
the Parties.  Notwithstanding  anything in this  Agreement to the contrary,  the
fees and expenses of the Independent Accounting Firm in

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<PAGE>

resolving the dispute  shall be borne equally by Sellers and Buyer.  Any payment
required  to be  made  as a  result  of the  resolution  of the  dispute  by the
Independent Accounting Firm shall be made within ten days after such resolution,
together with any interest  determined by the Independent  Accounting Firm to be
appropriate.

                  (f) Buyer and Sellers  shall  cooperate  fully,  as and to the
extent reasonably requested by the other Party, in connection with the filing of
Tax  Returns  pursuant  to this  Agreement  and any audit,  litigation  or other
proceeding with respect to Taxes.  Such cooperation  shall include the retention
and (upon the other Party's  request) the  provision of records and  information
which are reasonably relevant to any such audit,  litigation or other proceeding
and making  employees (to the extent such  employees  were  responsible  for the
preparation, maintenance or interpretation of information and documents relevant
to Tax matters or to the extent  required as witnesses in any Tax  proceedings),
available on a mutually  convenient basis to provide additional  information and
explanation of any material  provided  hereunder.  The Parties agree to give the
other Party  reasonable  written  notice prior to  transferring,  destroying  or
discarding any such books and records and, if the other Party so requests, Buyer
or Sellers,  as the case may be, shall allow the other Party to take  possession
of such books and records.

         Buyer and Sellers  further  agree,  upon request,  to use  Commercially
Reasonable  Efforts  to  obtain  any  certificate  or  other  document  from any
governmental  authority  or any other  Person as may be  necessary  to mitigate,
reduce or eliminate  any Tax that could be imposed  (including,  but not limited
to, with respect to the transactions contemplated hereby).

         6.9 Advice of Changes.  Prior to the Closing,  each Party will promptly
advise the other in writing with respect to any matter  arising after  execution
of this Agreement of which that Party obtains  Knowledge and which,  if existing
or occurring at the date of this  Agreement,  would have been required to be set
forth in this Agreement, including any of the Schedules hereto, or of any breach
of any representation or warranty or of any other condition or circumstance that
would excuse a Party of timely performance of its obligations hereunder. Sellers
may at any time notify Buyer of any development causing a breach of any of their
representations  and  warranties  in Article IV.  Unless  Buyer has the right to
terminate  this  Agreement  pursuant  to Section  9.1(e)  below by reason of the
developments and exercises

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that right within the period of fifteen (15) days after such right accrues,  the
written notice  pursuant to this Section 6.9 will be deemed to have amended this
Agreement,   including  the   appropriate   Schedule,   to  have  qualified  the
representations and warranties contained in Article IV above; provided, however,
that no such  change in Schedule  2.3(e) may be made  without  Buyer's  consent.
Sellers shall be entitled to amend,  substitute or otherwise modify any Sellers'
Agreement to the extent that such Sellers'  Agreement expires by its terms prior
to the Closing Date or is terminable  without liability to Buyer on or after the
Closing Date, or if the terms and conditions of such modified Sellers' Agreement
constituting  the  Assumed  Liabilities  are on terms  and  conditions  not less
favorable  to Buyer than the  original  Sellers'  Agreement.  Nothing  contained
herein shall relieve Sellers or Buyer of any breach of representation,  warranty
or  covenant  under  this  Agreement  existing  as of  the  date  hereof  or any
subsequent date as of which such representation, warranty or covenant shall have
been made.

         6.10     Employees.

                  (a) At least ninety (90) days prior to the Closing Date, Buyer
shall  provide  Sellers  with  notice  of  its  Union  Employee  staffing  level
requirements  (which  Buyer may  determine  in its sole  discretion),  listed by
classification and operation, and shall offer employment to that number of Union
Employees necessary to satisfy such staffing level requirements. As used herein,
"Union  Employees"  means  such  employees  of  Sellers  who are  covered by the
Collective Bargaining Agreement as defined in Section 6.10(d) below, and who are
listed  in,  or  whose  employment  responsibilities  are  listed  in,  Schedule
6.10(a)(i) as "Plant  Employees" or as "Dedicated  Support  Staff" as associated
with the Plant.

                  (b) As used herein,  "Non-Union Employees" means such salaried
employees of Sellers who are listed in, or whose employment responsibilities are
listed in, Schedule  6.10(b) as "Plant  Employees" or "GPUN  Parsippany  Support
Staff". At least ninety (90) days prior to the Closing Date, Buyer shall provide
Sellers  with  notice of their  staffing  level  requirements  (which  Buyer may
determine in its sole discretion),  listed by classification and operation,  for
those  employees  who are listed in, or whose  employment  responsibilities  are
listed in, Schedule 6.10(b) as Plant Employees, and Buyer shall offer employment
to that  number of such  employees  necessary  to satisfy  such  staffing  level
requirements. Buyer shall also have the opportunity to interview and make offers
of employment to such

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of the employees listed in, or whose employment  responsibilities are listed in,
Schedule  6.10(b) as GPUN Parsippany  Support Staff, as Buyer  determines in its
discretion.  Each person who becomes  employed by Buyer or any of its Affiliates
as a result of an offer of employment  made pursuant to Section  6.10(a) or this
Section 6.10(b) shall be referred to herein as a "Transferred Union Employee" or
"Transferred Non-Union Employee", respectively.

                  (c) All offers of employment made pursuant to Sections 6.10(a)
or (b) shall be made in accordance with all applicable laws and regulations, and
in addition,  for Union  Employees,  in accordance  with seniority and all other
applicable provisions of the Collective  Bargaining  Agreement.  Each of Sellers
agrees that it will not,  during the period from  January 1, 2000 to the Closing
Date, terminate the employment of any Union Employee,  or any Non-Union Employee
who is listed in, or whose employment  responsibilities  are listed in, Schedule
6.10(b),  for any reason except for cause,  without the prior written consent of
Buyer.

                  (d) Schedule  6.10(d)  sets forth the  collective  bargaining
agreement,  the  Agreement  Resulting  from the  Sale of  Oyster  Creek  Nuclear
Generating Station dated July 13, 1999, and amendments thereto, to which Sellers
are a party with the System  Council  and/or with IBEW Local 1289 in  connection
with the Purchased Assets ("Collective Bargaining Agreement"). Transferred Union
Employees  shall retain their seniority and receive full credit for service with
Sellers in connection  with  entitlement  to vacation and all other benefits and
rights under the Collective  Bargaining  Agreement and under each  compensation,
retirement  or other  employee  benefit  plan or program  Buyer is  required  to
maintain for Transferred Union Employees  pursuant to the Collective  Bargaining
Agreement.  For purposes of Buyer's  pension plan,  the service  credit so given
shall be for purposes of eligibility and vesting,  but shall not be for purposes
of level of benefits and benefit accrual except to the extent Buyer Benefit Plan
provides otherwise. With respect to Transferred Union Employees, effective as of
the Closing Date, Buyer shall assume the Collective Bargaining Agreement for the
duration of its term as it relates to Transferred Union Employees to be employed
at the Plant in positions  covered by the  Collective  Bargaining  Agreement and
shall  thereafter  comply with all applicable  obligations  under the Collective
Bargaining  Agreement.  Consistent  with its  obligations  under the  Collective
Bargaining  Agreement and applicable  laws, Buyer shall be required to establish
and maintain a pension plan and other

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<PAGE>

employee benefit  programs for the Transferred  Union Employees for the duration
of the term of the  Collective  Bargaining  Agreement  which  are  substantially
equivalent to Sellers'  plans and programs in effect for the  Transferred  Union
Employees  immediately  prior to the Closing Date (the  "Sellers'  Plans"),  and
which  provide at least the same level of  benefits  or  coverage as do Sellers'
Plans for the duration of the  Collective  Bargaining  Agreement.  Buyer further
agrees to recognize IBEW Local 1289 as the collective  bargaining  agent for the
Transferred Union Employees.

                  (e) In connection with the welfare benefit plans that Buyer or
its Affiliates will provide for the Transferred  Non-Union Employees pursuant to
Sections 6.10(d) and 6.10(f) (the "Replacement Welfare Plans"),  Buyer shall (i)
waive all  limitations  as to  pre-existing  condition  exclusions  and  waiting
periods with respect to the Transferred  Employees under the Replacement Welfare
Plans,  other than, but only to the extent of,  limitations  or waiting  periods
that were in effect  with  respect to such  employees  under the  welfare  plans
maintained by Sellers or their Affiliates and that have not been satisfied as of
the Closing Date, and (ii) provide each Transferred Employee with credit for any
co-payments  and  deductibles  paid prior to the Closing Date in satisfying  any
deductible or out-of-pocket requirements under the Replacement Welfare Plans (on
a pro-rata basis in the event of a difference in plan years).

                  (f) As of the Closing Date, Buyer shall adopt employee benefit
plans that will provide the  Transferred  Non-Union  Employees  with benefits or
coverage  substantially  similar to the  benefits  or  coverage  provided  under
Sellers' plans and programs in effect for the  Transferred  Non-Union  Employees
immediately prior to the Closing Date ("Buyer's  Benefit Plans").  Under each of
the Buyer's Benefit Plans,  the Transferred  Non-Union  Employees shall be given
credit for all of their service with GPUN and its Affiliates. The service credit
so given shall be for purposes of eligibility and vesting,  but shall not be for
purposes of level of benefits and benefit  accrual except to the extent that the
Buyer Benefit Plans otherwise provide.

                  (g) To the extent  allowable by law,  Buyer shall take any and
all necessary  action to cause the trustee of any defined  contribution  plan of
Buyer or its Affiliates in which any Transferred  Employee becomes a participant
to accept a direct  "rollover" of all or a portion of said employee's  "eligible
rollover distribution" within the meaning of section 402 of the

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<PAGE>

Code from the GPU Companies Employee Savings Plan for  Non-Bargaining  Employees
or from the GPU Companies Employee Savings Plan for Employees represented by the
System  Council or by IBEW Local 1289 if requested  to do so by the  Transferred
Employee.

                  (h) (1) Buyer shall provide the severance  benefits  described
in  Section  1 of  Schedule  6.10(h)  to (x)  each  Transferred  Employee  whose
employment  with Buyer is  "Involuntarily  Terminated"  (as that term is defined
below) at any time  within  24  months  after  the  Closing  Date,  and (y) each
Transferred Non-Union Employee who has attained age 50 and completed at least 10
years of  "Creditable  Service"  (as that term is  defined  below)  prior to the
Closing Date and whose employment with Buyer is  Involuntarily  Terminated on or
at any  time  prior  to  December  31,  2004.  Subject  to the  limitations  and
conditions  described below, Seller will reimburse Buyer for all of the costs it
incurs in providing such severance benefits.

         (2) Sellers  shall  cause  the  "bridged"  pension  benefits  and  the
"bridged"  and retiree  welfare  benefits  described in Sections 2(c) and (d) of
Schedule  6.10(h) to be  provided  under the  appropriate  plans  maintained  by
Sellers and/or their Affiliates to each Transferred  Non-Union  Employee who (i)
has attained age 50 and completed at least 10 years of Creditable Service before
the  Closing  Date,  and is  Involuntarily  Terminated  by  Buyer on or prior to
December  31,  2004  and  before  he or she  has  attained  age  55,  or (ii) is
Involuntarily Terminated by Buyer at any time within 24 months after the Closing
Date and  before he or she has  attained  age 55,  and has  attained  age 50 and
completed at least 10 years of Total Creditable Service (as defined below) as of
the date on which he or she is Involuntarily Terminated,  and (iii) has executed
a release as described in Section 1(g) of Schedule 6.10(h).

         (3) Sellers shall cause the severance and other  benefits  described in
Section 2(a) or 2(b) of Schedule 6.10(h), as applicable,  to be provided to each
Union  Employee  and  Non-Union  Employee  (i) who does not  receive an offer of
employment  from  Buyer  and  (ii)  whose  employment  with  JCP&L  or  GPUN  is
Involuntarily  Terminated  at any time  prior to the end of the  third  calendar
month following the Closing Date.

         (4) Sellers  shall not be obligated  to reimburse  Buyer for any amount
pursuant to paragraph (1) above,  to the extent that such amount,  when added to
the sum of (i) all  reimbursement  payments  previously made by Sellers to Buyer
under Section

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<PAGE>

6.10(h),  plus (ii) the aggregate  estimated  cost that Sellers have incurred or
may incur in the future in providing the benefits  described in  paragraphs  (2)
and (3) above to the Union Employees and Non-Union  Employees  therein  referred
to, as determined in accordance  with  paragraph (6) below,  does not exceed $30
million.

         (5) The following will not be included in determining  the amount to be
applied against the $30 million limitation on Sellers' reimbursement  obligation
provided for in paragraph  (4) above:  (i) any benefits  provided by Buyer or by
GPUN  to any  Non-Union  Employees  who  are  listed  in,  or  whose  employment
responsibilities  are listed in, Schedule  6.10(b) as "GPUN  Parsippany  Support
Staff";  (ii) any benefits provided by Buyer or Sellers to any Union Employee or
Non-Union  Employee  whose  employment is  Involuntarily  Terminated at any time
after the second  anniversary of the Closing Date;  (iii) any "bridged"  pension
benefits and any "bridged" and retiree welfare  benefits  provided by Sellers to
any Transferred  Non-Union  Employee at any time after the second anniversary of
the  Closing  Date;  and (iv) any  benefits  provided  by  Sellers  to any Union
Employee  or  Non-Union   Employee  whose  employment  with  JCP&L  or  GPUN  is
Involuntarily Terminated at any time prior to January 1, 2000.

         (6) As of the date of any reimbursement  request made by Buyer pursuant
to paragraph  (9) below,  the  aggregate  estimated  cost that Sellers and their
Affiliates have incurred,  or may incur in the future, in providing the benefits
described in paragraphs  (2) and (3) above to the Union  Employees and Non-Union
Employees  described  therein  whose  employment  with Buyer or Sellers has been
Involuntarily  Terminated on or prior to the date of such reimbursement request,
shall  be  determined  as of the date of each  such  employee's  termination  of
employment,  and shall be calculated by the actuarial  factors regularly engaged
to  provide  actuarial  services  to the GPU  Companies  with  respect  to their
pension,  health care and severance  plans.  Such cost shall be determined using
the  same  assumptions  as to  mortality,  turnover,  interest  rate  and  other
actuarial  assumption as used by such actuarial firm in determining  the cost of
benefits under the GPU Companies'  pension,  health care and severance plans for
purposes of their most recently issued financial statements prior to the Closing
Date. In the case of the "bridged" pension benefits described in Section 2(c) of
Schedule  6.10(h),  the estimated  cost of providing  such benefits shall be the
amount  equal to the excess of (A) the  actuarial  present  value of the pension
payable to the employee under the applicable  Sellers'  pension plan starting at
age 55, using the plan's early

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<PAGE>

         (7) retirement  reduction  factors to determine the employee's  pension
amount, over (B) the actuarial present value of the pension that otherwise would
be so payable to the employee, using the plan's full actuarial reduction factors
to  determine  the  employee's  pension  amount;  and in  each  such  case,  the
employee's  pension  amount shall be  determined by taking into account only the
employee's periods of service and pay with Sellers and their Affiliates. Sellers
shall furnish Buyer with copies of all cost estimates made by Seller's actuarial
firm pursuant to this paragraph (6)

         (8) For  purposes of this  Section  6.10(h) and  Schedule  6.10(h),  an
employee shall be treated as being "Involuntarily Terminated" from Buyer, JCP&L,
or GPUN, if his or her employment with Buyer and all of its Affiliates,  or with
JCP&L or GPUN and all of their Affiliates,  is terminated by Buyer or any of its
Affiliates, or by JCP&L or GPUN or any of their Affiliates, for any reason other
than for  cause or  disability.  A Union  Employee  or  Non-Union  Employee  who
receives an offer of  employment  from Buyer  prior to the Closing  Date and who
fails to accept  such offer and who is  thereafter  terminated  by JCP&L or GPUN
shall not be treated as "Involuntarily Terminated".

         (9) For purposes of this Section 6.10(h) and Schedule  6.10(h),  (i) an
employee's years of "Creditable  Service" shall be determined in accordance with
the definition of such term contained in the GPU Companies Employee Pension Plan
in the case of any Non-Union  Employee,  or contained in the GPU Companies  Plan
for Retirement Annuities for Employees Represented by IBEW System Council U-3 in
the  case of any  Union  Employee,  and  (ii) an  employee's  "Total  Creditable
Service" shall mean the sum of his Creditable  Service,  plus all periods of his
or her employment with Buyer and its Affiliates.

         (10) From time to time after the Closing  Date (but no more  frequently
than  at  3-month  intervals)  Buyer  may  request  reimbursement  hereunder  by
furnishing  Sellers  with  a  written  statement  setting  forth  the  following
information:

                  (i)  the name of each Transferred Employee whose employment
             with Buyer has been Involuntarily Terminated,

                  (ii)  the date of such employee's termination of employment
             with Buyer,

                  (iii)  the total amount of costs actually incurred by Buyer in
             providing each of the benefits described in

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<PAGE>

             Sections 1(a) through (f) of Schedule 6.10(h) to such employee
             since the date of his or her termination of employment, and

                  (iv)  the   portion  of  the  costs  so   incurred   remaining
             unreimbursed as of the date of Buyer's reimbursement request.

The Buyer's reimbursement request with respect to any Transferred Employee shall
be  accompanied  by a copy of the release  executed by such employee as required
under Section 1(g) of Schedule 6.10(h), if one has not previously been furnished
to Sellers.  Within 30 days after  receipt of a request for  reimbursement  from
Buyer,  Sellers  shall pay to Buyer the total amount of the  unreimbursed  costs
shown on the  written  statement  furnished  by Buyer in  connection  with  such
request, subject to the limitation set forth in paragraph (4).

         (10) Notwithstanding any other provision herein, Sellers' obligation to
make  payments  with  respect  to any  cost  reimbursements  requested  by Buyer
hereunder  shall be subject to Sellers'  receipt of such  substantiation  of the
costs incurred by Buyer as Sellers may reasonably request in writing.

                  (i)  Sellers  shall  be  responsible,   with  respect  to  the
Purchased Assets, for performing and discharging all requirements under the WARN
Act  and  under  applicable  state  and  local  laws  and  regulations  for  the
notification of their  employees of any "employment  loss" within the meaning of
the WARN Act which occurs prior to the Closing Date.

                  (j)  Sellers  shall  be   responsible   for  extending   COBRA
continuation coverage to any employees and former employees of JCP&L or GPUN, or
to any  qualified  beneficiaries  of such  employees and former  employees,  who
become or became  entitled to COBRA  continuation  coverage  before the Closing,
including those for whom the Closing occurs during their COBRA election  period.
Buyer shall be  responsible  for providing  COBRA  continuation  coverage to all
Transferred  Employees and qualified  beneficiaries of such employees who become
entitled to such COBRA continuation coverage on or after the Closing Date.

                  (k)      (i)  Sellers or their Affiliates shall pay to all
Transferred   Employees   all   compensation,   bonus,   vacation   and  holiday
compensation,  pension, profit sharing and other deferred compensation benefits,
workers' compensation, or other

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<PAGE>

employment benefits to which they are entitled under the terms of the applicable
compensation or benefit programs at such times as are provided therein.

                           (ii) Under the sick leave program Buyer will maintain
for  Transferred  Union  Employees  pursuant to its  obligations  under  Section
6.10(d),  (A) each  Transferred  Union  Employee  who was hired by JCP&L  before
December 31, 1994 shall be credited with the number of  accumulated  unused sick
leave days  standing to the  employee's  credit under JCP&L's sick leave program
for Union  Employees as of the Closing Date (the employee's  "Carried-Over  Sick
Days"),  and (B) each  such  employee  who has  completed  at least 15 "Years of
Service"  as defined in Section  1(b) of Schedule  6.10(h)  shall be entitled to
receive from Buyer, upon his or her termination of employment with Buyer and its
Affiliates for any reason other than for cause, a lump-sum  payment in an amount
determined by multiplying  the number of the employee's  Carried-Over  Sick Days
remaining  unused at the date of such  termination of his or her employment,  by
75% of the daily rate of base pay in effect for the employee  immediately  prior
to such termination of his or her employment.

                           (iii)    The Purchase Price shall be decreased by an
amount equal to the  estimated  cost of the  payments  Buyer is required to make
hereunder with respect to the Transferred  Union  Employees'  Carried-Over  Sick
Days. In the case of each such Transferred  Union Employee who has not completed
at least 15 Years of Service as of the Closing Date,  such  estimated cost shall
be calculated  by the  actuarial  firm  regularly  engaged to provide  actuarial
services to the GPU  Companies  with respect to their  pension,  health care and
life insurance  plans,  and shall be determined as of the Closing Date using the
same  assumptions as to interest rate and as to mortality,  turnover,  and other
actuarial factors as used by such firm in determining the cost of benefits under
the GPU Companies'  plans for purposes of their most recently  issued  financial
statements prior to the Closing Date; provided,  however, that base pay rates in
effect for the Transferred Union Employees immediately prior to the Closing Date
shall be used to value the Buyer's payment obligation hereunder.  In the case of
each such  Transferred  Union  Employee  who has  completed at least 15 Years of
Service  as of the  Closing  Date,  such  estimated  cost  shall  be the  amount
determined by  multiplying  (A) the number of the employee's  Carried-Over  Sick
Days  by (B)  75% of the  daily  rate of base  pay in  effect  for the  employee
immediately prior to the Closing Date.

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<PAGE>

                  (l) Individuals who are otherwise "Union Employees" as defined
in Section  6.10(a) or "Non-Union  Employees" as defined in Section  6.10(b) but
who on any date are not  actively  at work due to a leave of absence  covered by
the Family and Medical Leave Act ("FMLA"),  or due to any other authorized leave
of absence,  shall nevertheless be treated as "Union Employees" or as "Non-Union
Employees",  as the case may be,  on such date if they are able (i) to return to
work within the  protected  period  under the FMLA or such other leave (which in
any event shall not extend more than twelve (12) weeks after the Closing  Date),
whichever is  applicable,  and (ii) to perform the essential  functions of their
jobs, with or without a reasonable accommodation.

                  (m) To the extent permitted by applicable law, all Transferred
Employee Records shall be delivered promptly after the Closing Date to Buyer.

                  (n)  Sellers shall provide documentation, affidavits and any
other  information  reasonably  requested in support of Buyer's  application for
"successor  employer"  status for purposes of the New Jersey  Unemployment,  New
Jersey Disability Insurance and FICA and FUTA taxes.

         6.11     Risk of Loss.

                  (a) From the date hereof through the Closing Date, all risk of
loss or damage to the property  included in the Purchased  Assets shall be borne
by  Sellers;  provided,  however,  that  except  for  services  provided  by the
Reciprocal  Services  Agreement,  any such loss or damage directly caused by the
negligence or willful misconduct of Buyer or any Buyer  Representative  shall be
the responsibility of Buyer.

                  (b) If,  before the  Closing  Date,  all or any portion of the
Purchased  Assets is (i) taken by eminent  domain or is the subject of a pending
or (to the  Knowledge  of  Sellers)  contemplated  taking  which  has  not  been
consummated,  or (ii) damaged or destroyed  by fire or other  casualty,  Sellers
shall  notify Buyer  promptly in writing of such fact,  and (x) in the case of a
condemnation,  Sellers  shall  assign or pay,  as the case may be, any  proceeds
thereof to Buyer at the Closing and (y) in the case of a casualty, Sellers shall
either restore the damage or assign the insurance proceeds therefor (and pay the
amount of any deductible and/or self-insured amount in respect of such casualty)
to Buyer at the Closing.  Notwithstanding  the above,  if such  casualty or loss
results in a Material  Adverse  Effect,  Buyer and Sellers  shall  negotiate  to
settle the loss resulting

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<PAGE>

from such taking (and such negotiation shall include,  without  limitation,  the
negotiation  of a fair and equitable  adjustment to the Purchase  Price).  If no
such  settlement  is reached  within sixty (60) days after Sellers have notified
Buyer of such  casualty  or loss,  then  Buyer or  Sellers  may  terminate  this
Agreement  pursuant  to Section  9.1(h).  In the event of damage or  destruction
which  Sellers  elect to restore,  Sellers  will have the right to postpone  the
Closing  for up to ninety  (90) days.  Buyer will have the right to inspect  and
observe,   or  have  its  Representatives   inspect  or  observe,   all  repairs
necessitated by any such damage or destruction.

         6.12     Decommissioning Trust Funds.

         [Intentionally Omitted]

         6.13 Spent Fuel Fees. Between the date hereof and the Closing Date, and
at all times thereafter, Sellers will pay all Spent Fuel Fees and any other fees
associated  with  electricity  generated  at the Plant sold prior to the Closing
Date, and Buyer shall have no liability or responsibility  therefor. Buyer shall
pay and  discharge  all fees and  expenses  associated  with  the  nuclear  fuel
consumed in the Plant and associated  with  electricity  generated and sold from
and  after  the  Closing   Date,   and  Sellers   shall  have  no  liability  or
responsibility therefor. Buyer shall assume title to, and responsibility for the
storage and disposal  of, the spent  nuclear fuel in the Plant as of the Closing
Date.  Sellers  shall  assign  to Buyer the DOE  Standard  Spent  Fuel  Disposal
Contract and shall provide the required notice to DOE within ninety (90) days of
transfer of title to spent fuel.

         6.14 Department of Energy  Decontamination  and  Decommissioning  Fees.
Sellers  will  continue  to pay all  Department  of Energy  Decontamination  and
Decommissioning  Fees  relating to nuclear  fuel  purchased  and consumed at the
Plant prior to the Closing Date, including but not limited to all annual Special
Assessment  invoices to be issued  after the Closing Date by the  Department  of
Energy,  as  contemplated  by its  regulations  at 10 CFR Part 766  implementing
Sections 1801, 1802, and 1803 of the Atomic Energy Act.

         6.15 Additional Covenants of Buyer. Notwithstanding any other provision
hereof,  Buyer covenants and agrees that, after the Closing Date, Buyer will not
make any  modifications  to the  facilities  financed by the  Pollution  Control
Revenue Bonds (the "Pollution Control  Facilities") or take any action which, in
and

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<PAGE>

of itself,  results in a loss of the  exclusion  of  interest  on the  Pollution
Control Revenue Bonds issued on behalf of JCP&L in connection with the Purchased
Assets from gross income for federal  income  purposes  under section 103 of the
Code.  Actions  with  respect  to the  Pollution  Control  Facilities  shall not
constitute  a  breach  by the  Buyer  of  this  Section  6.15  in the  following
circumstances:  (i) Buyer ceases to use or  decommissions  any of the  Purchased
Assets or subsequently repowers such Purchased Assets that are no longer used or
decommissioned  (but does not hold such Purchased  Assets for sale);  (ii) Buyer
acts with respect to the Purchased  Assets in order to comply with  requirements
under  applicable  federal,  state  or  local  environmental  or  other  laws or
regulations;  (iii) Buyer  transfers  an  ownership  interest  in the  Purchased
Assets;  or (iv) Buyer acts in a manner the Sellers  (i.e. a reasonable  private
provider of electricity of similar stature as JCP&L) would have acted during the
term of the  Pollution  Control  Revenue Bonds  (including,  but not limited to,
applying new  technology).  In the event Buyer acts or  anticipates  acting in a
manner that will cause a loss of the  exclusion  of  interest  on the  Pollution
Control Revenue Bonds from gross income for federal income tax purposes,  at the
request of Buyer,  Sellers shall take any remedial  actions  permitted under the
federal  income tax law that would prevent a loss of such  inclusion of interest
from  gross  income  on the  Pollution  Control  Revenue  Bonds.  Buyer  further
covenants  and  agrees  that,  in the  event  that  Buyer  transfers  any of the
Purchased Assets or an ownership  interest therein,  Buyer shall obtain from its
transferee a covenant and  agreement  that is analogous to Buyer's  covenant and
agreement pursuant to the immediately  preceding sentence, as well as a covenant
and agreement  that is analogous to that of this  sentence.  In addition,  Buyer
shall not,  without 60 days  advance  written  notice to Sellers  (to the extent
practicable under the circumstances),  take any action which would result in (x)
a change in the use of the assets  financed with the Pollution  Revenue  Control
Bonds from the use in which such assets were originally intended,  or (y) a sale
of such assets separate from the generating assets to which they relate provided
that no notice is required of the events set forth in clauses (i),(ii), or (iii)
above.  This covenant  shall survive the Closing and shall continue in effect so
long as the Pollution Control Revenue Bonds remain outstanding.

         6.16     Cooperation Relating to Insurance and Price-Anderson Act.
Sellers shall cooperate with Buyer's  efforts to ensure  continuity of insurance
coverage and to obtain or, to the extent practicable, effect (but subject to the
provisions of Section

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<PAGE>

2.2(j)) the  transfer of  insurance,  including,  insurance  required  under the
Price-Anderson  Act with respect to the Purchased Assets.  In addition,  Sellers
agree to use  reasonable  efforts to assist  Buyer in making any claims  against
pre-Closing  insurance  policies of Sellers that may provide coverage related to
Assumed  Liabilities.  Buyer  agrees  that it will  indemnify  Sellers for their
reasonable  out of pocket  expenses  incurred in providing  such  assistance and
cooperation.

         6.17     Refueling.

                  (a) Schedule 6.17 sets forth the plan,  scope,  milestones and
budget  (the  "Outage  Plan") for the  Plant's  18R  Refueling  Outage (the "18R
Outage"). The Parties agree that any proposed change in the Outage Plan may only
be made in  accordance  with  the  procedures  set  forth  in the  Outage  Plan.
Notwithstanding the foregoing,  however,  except as otherwise expressly provided
in the Outage  Plan,  no such  change  shall be made in the Outage  Plan if such
change would be a "Material Change" as defined in the Outage Plan.

                  (b)  Irrespective  of when the Closing  Date  occurs,  Sellers
shall be solely responsible for the funding of the Outage Costs as incurred from
time to time and Buyer  hereby  agrees to  reimburse  Sellers for payment of the
"Relevant  Percentage" of any Outage Costs  (whether  incurred prior to or after
the Closing Date);  provided,  however,  that Sellers shall have no liability or
obligation  to fund,  and Buyer have no  liability  or  obligation  to reimburse
Sellers  for,  any Outage  Costs  incurred in excess of the amount of the Outage
Cost Cap. Buyer and Sellers agree that the Party which is the owner of the Plant
at the start of the 18R Outage  shall be solely  responsible  for the payment of
any Outage  Costs  incurred in excess of the Outage Cost Cap, and that the other
Party shall have no responsibility or obligation therefor.  For purposes hereof,
the  "Relevant  Percentage"  shall mean (i) if the Closing  occurs  prior to the
commencement  of the 18R Outage,  one hundred  percent  (100%),  and (ii) if the
Closing  occurs  after  completion  of the  18R  Outage,  sixty  percent  (60%);
provided,  however,  that if the Closing  occurs after the completion of the 18R
Outage, then the Total CV required for the  Decommissioning  Trust Funds and the
aggregate  Cash  Value  required  for  the  assets  of the  Seller  Nonqualified
Decommissioning  Trust Fund as of the  Closing  Date  pursuant  to Section  6.12
hereof  shall be  decreased by the product of (a) the Outage Costs and (b) forty
percent (40%).

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<PAGE>

                  (c) All Outage Costs shall be  budgeted,  tracked and reported
in accordance  with  procedures  established by the Parties and set forth in the
Outage Plan.

                  (d) Buyer hereby  agrees to  reimburse  Sellers for all Outage
Costs  funded by Sellers  (but in no event in excess of Outage Cost Cap) in nine
equal  annual  installments  (but  without  interest)  beginning  on  the  first
anniversary date of the Closing Date.

                  (e) The  Reciprocal  Services  Agreement  will provide,  among
other things,  for Buyer's direct  participation in the planning,  organization,
support  and  coordination  of the 18R  Outage  and for the costs  thereof to be
included in the Outage Costs to be reimbursed by Buyer,  but only if the Closing
occurs.

         6.18     ISRA Compliance.

         (a) As promptly as practicable  following the date hereof,  the Parties
shall  jointly  prepare and submit to the NJDEP an  application  for a Letter of
Non-Applicability  ("LNA") or other  appropriate  exemption or limitation on the
scope of ISRA review by the NJDEP with respect to the transactions  contemplated
hereby.  The  Parties  shall  cooperate  and  consult  with  each  other  in the
preparation and submission of such application and shall jointly  participate in
any meetings with NJDEP representatives.

         (b)  Pending  action by the NJDEP on any such LNA or similar  exemption
request, Seller may prepare and file with the NJDEP a General Information Notice
(as  such  term is  defined  in  ISRA).  In the  event  the  NJDEP  denies  such
application  or  issues  a LNA or  other  exemption  from  ISRA  not  reasonably
satisfactory  to each of the  Parties,  then the  Parties  shall as  promptly as
practicable  prepare and file with the NJDEP all such other  information,  forms
and other  documents  and filings as may be necessary or  appropriate  to comply
with ISRA and the requests of the NJDEP. During the period prior to the Closing,
the Parties shall cooperate and consult with each other regarding  requests made
by the NJDEP and compliance with ISRA, including with respect to the negotiation
of the terms and  conditions  of any  required  Remediation  Agreement  with the
NJDEP.

         (c) The Parties  acknowledge and agree that if the NJDEP does not issue
a LNA or other ISRA  exemption  which is  reasonably  acceptable  to each of the
Parties, it will be necessary to enter

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<PAGE>

into one or more  Remediation  Agreements  with the NJDEP in order to consummate
the transactions  contemplated  hereby and comply with ISRA.  Accordingly,  each
Party hereby agrees to negotiate in good faith and use  Commercially  Reasonable
Efforts to enter into a Remediation  Agreement with the NJDEP in order to comply
with ISRA,  including  the provision of such  financial  assurance in support of
such  Party's  obligations  under  any  such  Remediation  Agreement;  provided,
however,  that it is understood  and agreed that neither Party shall be required
to enter into any such  Remediation  Agreement  unless the terms and  conditions
thereof,  together with any related Site Investigation  Report (as defined under
ISRA and the  regulations  thereunder) and Remedial Action Work Plan (as defined
under ISRA and the regulations thereunder),  in each case as finally approved by
the  NJDEP  (collectively,   the  "ISRA  Remediation  Program")  are  reasonably
satisfactory to such Party.

         (d) The  Parties  hereby  acknowledge  and agree that their  respective
obligations and liabilities for Remediation required to comply with ISRA and the
requirements  of the NJDEP  thereunder  pursuant to any  Remediation  Agreements
shall be as follows:

                  (1)  Ssellers  shall  be  liable  for the  Remediation  of any
Environmental   Condition   arising  out  of  the  matters   disclosed   in  the
Environmental  Reports and for the matters  set forth on  Schedule  4.7,  all of
which  are   Excluded   Liabilities   hereunder,   and  with  respect  to  their
indemnification liability to Buyer as set forth in Article VIII hereof (subject,
however, to the limitation on such indemnification as provided in Section 8.1(g)
hereof), and Sellers shall be responsible for and shall indemnify Buyer pursuant
to said Article VIII from and against any loss, claim,  action, cost, damage and
expense or liability  resulting  therefrom  including  any failure by Sellers to
comply  with  their  obligations   under  any  Remediation   Agreement  or  ISRA
Remediation Program.

                  (2) Buyer  shall be liable  for the  Remediation  of the other
Environmental Condition,  all of which are Assumed Liabilities,  and Buyer shall
be responsible for and shall indemnify  Sellers pursuant to Article VIII hereof,
from and against any loss, claim,  action, cost, damage and expense or liability
resulting   therefrom  including  any  failure  by  Buyer  to  comply  with  its
obligations under any Remediation Agreement or ISRA Remediation Program.

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         (a) If the NJDEP determines that ISRA is applicable to the transactions
contemplated  by this  Agreement,  the Parties shall as promptly as  practicable
conduct,  and  shall  equally  share  the cost  and  expense  of, a  Preliminary
Assessment and submit a Preliminary Assessment Report to the NJDEP.

         (b) Each  Party  shall  bear its own costs  and  expenses  incurred  in
connection with the actions  (including  without  limitation the cost of Buyer's
Environmental Inspection) they are required to take to comply with ISRA prior to
Closing;  provided,  however, that the Parties shall equally share all costs and
expenses  of   attorneys,   environmental   consultants,   engineers  and  other
consultants  they may jointly  retain to comply with ISRA.  Any such third party
consultants,  counsel or engineers shall only be retained upon mutual  agreement
of the Parties.

         (c) In the event Sellers enter into a  Remediation  Agreement  with the
NJDEP,  Buyer  agrees to provide  Sellers  and their  Representatives  with such
access to the Site (but consistent with Buyer's safety and security requirements
and in a manner that does not unreasonably interfere with Plant operations),  to
related  records and documents and further  agrees to cooperate with Sellers and
their  Representatives  from  time  to  time  following  the  Closing  as may be
necessary  or  appropriate  in order for  Sellers to fully and timely  discharge
their  obligations  to the NJDEP  under  the  Remediation  Agreement;  provided,
however,  that Sellers shall  reimburse  Buyer for any  significant  expenses or
costs which Buyer may be obligated to incur in connection with the foregoing.

         (d) Buyer and Sellers hereby agree that no  environmental  condition at
the Site need be remediated to residential or unrestricted remediation standards
(or other more stringent  standard),  but only to  non-residential or restricted
standards,  or such other  standards  as NJDEP or other  Governmental  Authority
approves (including the use of institutional and/or engineering  controls,  deed
notices,  natural  remediation and biodegradation  and classification  exception
areas),  provided  in all  events  that  the use of any such  standard,  and the
receipt of any no further action letter  conditioned on such standard,  does not
actually  materially  interfere with Buyer's ability to operate on the Site as a
nuclear power generation station.

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         6.19 Future  Interconnection  Access.  Buyer  hereby  acknowledges  and
confirms  that JCP&L has advised  Buyer that under a certain  Purchase  and Sale
Agreement  dated October 29, 1998 between  JCP&L and Sithe,  JCP&L has agreed to
use commercially  reasonable efforts as therein defined (consistent with the PJM
Regional Transmission Expansion Protocol) to allow new generation capacity which
Sithe may install at the Forked River  Combustion  Turbine site JCP&L is selling
to Sithe to replace (by assignment or otherwise) Plant generation  capacity (for
PJM interconnection  purposes) which JCP&L may decommission from time to time in
order to  minimize  Sithe's  interconnection  costs  for such new  Forked  River
generation  capacity.  Buyer hereby  undertakes  and agrees that at such time as
Buyer  determines to decommission all or a portion of the Plant's  capacity,  at
JCP&L's written request Buyer will enter into good faith negotiations with JCP&L
if and to the extent it may be necessary or appropriate in order to enable JCP&L
to  discharge  any  such  continuing  obligation  it may  have to  Sithe.  It is
understood  and  agreed,  however,  that the  foregoing  shall  not  impose  any
obligation or commitment on Buyer to sell, transfer, assign or otherwise dispose
of any such interconnection rights to JCP&L or to any third party.

         6.20 SBO Service.  JCP&L agrees that from and after the Closing Date it
will  provide  or cause to be  provided  to Buyer SBO  Service  for the Plant as
currently  provided  by the  Forked  River  combustion  turbines  located on the
adjacent  Forked  River  site as and to the  extent  necessary  to  satisfy  all
applicable NRC  requirements for the Plant and on such  commercially  reasonable
terms and conditions as the Parties shall mutually agree.

         6.21 Easement  Agreement JCP&L agree that it shall not  consummate,  or
permit  the  consummation  of,  the sale,  transfer  or  conveyance  of the real
property  constituting  the Forked  River site  adjacent to the Plant unless and
until (i) the Easement Agreement is properly recorded in the land records of any
relevant jurisdiction,  and (ii) such Easement Agreement is in a form sufficient
to operate the Plant  substantially  as currently  operated and  otherwise  with
terms and conditions reasonably satisfactory to Buyer, including,  among others,
the following:

         (a)      a term continuing through Decommissioning;

         (b)      Buyer shall enjoy the easements and access rights granted
pursuant thereto at no additional cost other than for

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its portion of shared maintenance expenses related to its use of access roads
and similar facilities that would customarily be shared;

         Buyer's  authority to control  activities  within the "exclusion  area"
relating to the Plant, including the exclusion of personnel and property, to the
extent necessary to comply with applicable NRC requirements; and

         Such other terms as are consistent with Good Utility Practice.

                                   ARTICLE VII

                                   CONDITIONS

         7.1  Conditions to  Obligations  of Buyer.  The  obligation of Buyer to
effect  the  purchase  of  the  Purchased  Assets  and  the  other  transactions
contemplated  by this Agreement  shall be subject to the fulfillment at or prior
to the Closing Date (or the waiver by Buyer) of the following conditions:

                  (a) The waiting  period  under the HSR Act  applicable  to the
consummation of the sale of the Purchased Assets  contemplated hereby shall have
expired or been terminated;

                  (b) No preliminary  or permanent  injunction or other order or
decree by any federal or state court or  Governmental  Authority  which prevents
the consummation of the sale of the Purchased Assets  contemplated  herein shall
have been issued and remain in effect (each Party agreeing to use its reasonable
best  efforts  to have  any such  injunction,  order or  decree  lifted)  and no
statute,  rule or  regulation  shall  have been  enacted by any state or federal
government or Governmental  Authority  which  prohibits the  consummation of the
sale of the Purchased Assets;

                  (c)  Buyer  shall  have  received  all  of  Buyer's   Required
Regulatory  Approvals,  and  such  approvals  shall  be in  form  and  substance
reasonably  satisfactory  (including no materially adverse  conditions) to Buyer
and  either (i) final and not  subject to further  rights of review or appeal or
(ii) if not final and  non-appealable,  shall not be subject  to any  pending or
overtly  threatened  appeal or request for review or  reconsideration  which, if
adversely  determined,  would be  reasonably  expected  to have  (x) a  Material
Adverse Effect or (y) a material adverse effect on the Buyer or its members;

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                  (d) Sellers shall have  performed and complied in all material
respects with the covenants and agreements contained in this Agreement which are
required to be performed and complied with by Sellers on or prior to the Closing
Date;

                  (e) The representations and warranties of Sellers set forth in
this Agreement that are qualified by materiality shall be true and correct as of
the Closing Date and all other  representations and warranties shall be true and
correct in all material  respects as of the Closing Date, in each case as though
made at and as of the Closing  Date  unless  otherwise  specified  herein to the
contrary;

                  (f) Buyer shall have received  certificates from an authorized
officer  of  Sellers,  dated the  Closing  Date,  to the  effect  that,  to such
officer's  Knowledge,  the  conditions  set forth in Section 7.1(d) and (e) have
been satisfied by Sellers;

                  (g) Buyer shall have received an opinion from Sellers' counsel
reasonably   acceptable  to  Buyer,   dated  the  Closing  Date  and  reasonably
satisfactory  in form and substance to Buyer and its counsel,  substantially  to
the effect that:

                  (i)  Each  of  Sellers  is a  corporation  duly  incorporated,
         validly  existing and in good  standing  under the laws of its state of
         incorporation  and has the corporate  power and authority to own, lease
         and  operate its  material  assets and  properties  and to carry on its
         business as is now conducted,  and to execute and deliver the Agreement
         and  each  Ancillary  Agreement  and  to  consummate  the  transactions
         contemplated  thereby;  and the execution and delivery of the Agreement
         by Sellers and the consummation of the sale of the Purchased Assets and
         the other transactions  contemplated thereby have been duly and validly
         authorized by all necessary  corporate  action  required on the part of
         Sellers;

                  (ii) The Agreement and each Ancillary Agreement have been duly
         and validly  executed and  delivered by Sellers and  constitute  legal,
         valid and binding agreements of Sellers  enforceable in accordance with
         their  terms,  except  that  such  enforceability  may  be  limited  by
         applicable    bankruptcy,     insolvency,     fraudulent    conveyance,
         reorganization,  moratorium or other similar laws affecting or relating
         to enforcement of creditors' rights generally and general principles of
         equity (regardless of whether

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<PAGE>

         enforcement is considered in a proceeding at law or in equity);

                  (iii) The execution, delivery and performance of the Agreement
         and each  Ancillary  Agreement by Sellers do not (A) conflict  with the
         Certificate  of  Incorporation  or  Bylaws  of  Sellers  or  (B) to the
         knowledge of such  counsel,  constitute a violation of or default under
         those agreements or instruments set forth on a Schedule attached to the
         opinion  and which  have been  identified  to such  counsel  as all the
         agreements  and  instruments  which are  material  to the  business  or
         financial condition of Sellers;

                           (iv) The Bill of Sale,  the deed,  the Assignment and
         Assumption  Agreement  and  other  transfer  instruments  described  in
         Section 3.6 have been duly  executed  and  delivered  and are in proper
         form to  transfer  to Buyer  such  title as was held by  Sellers to the
         Purchased Assets; and

                           (v) No consent or approval of, filing with, or notice
         to, any  Governmental  Authority is  necessary  for the  execution  and
         delivery of this Agreement by Sellers,  or the  consummation by Sellers
         of the transactions  contemplated hereby, other than (i) such consents,
         approvals,  filings or notices  set forth in  Schedule  4.3(b)  each of
         which have been  obtained  or made or which,  if not  obtained or made,
         will not prevent  Sellers from  performing  their material  obligations
         hereunder and (ii) such consents,  approvals,  filings or notices which
         become applicable to Sellers or the Purchased Assets as a result of the
         specific  regulatory status of Buyer (or any of its Affiliates) or as a
         result of any other facts that  specifically  relate to the business or
         activities in which Buyer (or any of its  Affiliates) is or proposes to
         be engaged.

         In  rendering  the  foregoing  opinion,  Sellers'  counsel  may rely on
opinions of counsel as to local laws reasonably acceptable to Buyer.

                  (h)   Sellers shall have delivered, or caused to be delivered,
to Buyer at the Closing, Sellers' closing deliveries described in Section 3.6;

                  (i)   Since the date of this Agreement, no Material Adverse
Effect shall have occurred and be continuing;

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<PAGE>

                  (j) Buyer shall have  received (at Buyer's  cost) from a title
insurance  company and surveyor  reasonably  acceptable to Buyer an ALTA owner's
title  policy,  and  ALTA  survey  together  with  all  endorsements  reasonably
requested by Buyer as are available,  insuring good and marketable  title to all
of the Real Property included in the Purchased Assets, subject only to Permitted
Encumbrances.  Sellers shall  provide  Buyer with a copy of a preliminary  title
report and survey for the Real Property as soon as available;

                  (k) Buyer shall have  received  all Permits and  Environmental
Permits,  to the extent  necessary,  to own and operate the Plant in  accordance
with current  operating  practices,  except for those Permits and  Environmental
Permits, the absence of which would not in the aggregate have a Material Adverse
Effect;

                  (l)      Sellers' Required Regulatory Approvals shall contain
no conditions or terms which would result in a Material Adverse Effect;

                  (m)      [Intentionally omitted]

                  (n)      The Total CV of the Decommissioning Trust Funds shall
be $430 million, adjusted pursuant to Section 6.12(b) and 6.17(b) hereof;

                  (o) Sellers shall have completed in all material  respects and
in accordance  with Good Utility  Practices the work required to be accomplished
as of the milestone  dates set forth in the Outage Plan  occurring  prior to the
Closing Date;

                  (p)  Sellers  shall have  completed  in  accordance  with Good
Utility Practices the work required to be accomplished as of the milestone dates
occurring  prior to the  Closing  the  operational  recovery  work set  forth on
Schedule 7.1(p) (the "Operational Recovery Work");

                  (q)  All  low-level  radioactive  waste,  as  defined  in  NRC
regulations,  and  mixed  radioactive  waste  that  has  been  generated  in the
operations  of the Plant and has been removed from service more than ninety (90)
days prior to the Closing Date shall have been properly  inventoried and shipped
off-Site by Sellers for  permanent  disposal in accordance  with all  applicable
legal requirements;

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<PAGE>

                  (r)  Buyer shall have received regulatory approval of the
Post-Closing Decommissioning Trust Agreement reasonably satisfactory to Buyer;

                  (s)  The lien of the Mortgage Indenture on the Purchased
Assets shall have been released;

                  (t)  JCP&L and  Sithe shall  have  entered  into the  Easement
Agreement in form and substance  satisfactory  to Buyer and such agreement shall
be in full force and effect;

                  (u)  JCP&L shall have entered into the EOF Lease and the
Remote Assembly Area Access Agreement each in a form reasonably  satisfactory to
Buyer and such agreements shall be in full force and effect;

                  (v)  JCP&L shall have  entered  into an  agreement in form and
substance  reasonably  satisfactory to Buyer to provide SBO Service to the Plant
and such agreement shall be in full force and effect;

                  (w)  Sellers  shall have obtained all  necessary  Governmental
Approvals to subdivide, convey and operate the Real Property separately from the
parcel pertaining to the Forked River site and such approvals shall be final and
non-appealable; and

                  (x)  In the event the NJDEP determines that ISRA applies to
the transactions  contemplated  hereby, (1) Buyer and Sellers shall have entered
into one or more Remediation Agreements with the NJDEP and (2) there shall be an
ISRA  Remediation  Program,  in  each  case  in form  and  substance  reasonably
satisfactory to Buyer on or before the ISRA Termination Date.

         7.2 Conditions to Obligations of Sellers.  The obligation of Sellers to
effect the sale of the Purchased Assets and the other transactions  contemplated
by this Agreement shall be subject to the fulfillment at or prior to the Closing
Date (or the waiver by Sellers) of the following conditions:

                  (a)  The waiting  period  under the HSR Act applicable  to the
consummation of the sale of the Purchased Assets  contemplated hereby shall have
expired or been terminated;

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<PAGE>

                  (b)  No preliminary  or permanent injunction or other order or
decree by any federal or state court which prevents the consummation of the sale
of the Purchased Assets contemplated herein shall have been issued and remain in
effect (each Party agreeing to use its reasonable  best efforts to have any such
injunction,  order or decree  lifted) and no statute,  rule or regulation  shall
have been enacted by any state or federal  government or Governmental  Authority
in the  United  States  which  prohibits  the  consummation  of the  sale of the
Purchased Assets;

                  (c)  Sellers  shall have  received  all of  Sellers'  Required
Regulatory  Approvals  applicable  to  them,  in form and  substance  reasonably
satisfactory  (including no materially adverse conditions) to Sellers and either
(i) final and not subject to further rights of review or appeal,  or (ii) if not
final and  non-appealable,  shall  not be  subject  to any  pending  or  overtly
threatened appeal or request for review or  reconsideration  which, if adversely
determined,  would be reasonably  expected to have a material  adverse effect on
Sellers;

                  (d)  All consents and  approvals  for the consummation  of the
sale of the Purchased Assets contemplated hereby required under the terms of any
note,  bond,  mortgage,  indenture,  material  agreement or other  instrument or
obligation  to  which  Sellers  are  party or by  which  Sellers,  or any of the
Purchased Assets, may be bound, shall have been obtained, other than those which
if not obtained, would not, individually and in the aggregate, create a Material
Adverse Effect;

                  (e)  Buyer  shall  have  performed  and  complied  with in all
material respects the covenants and agreements contained in this Agreement which
are  required  to be  performed  and  complied  with by Buyer on or prior to the
Closing Date;

                  (f)  The representations  and  warranties  of  Buyer  that are
qualified  by  materiality  shall be true and correct as of the Closing Date and
all  other  representations  and  warranties  shall be true and  correct  in all
material  respects as of the Closing Date, in each case as though made at and as
of the Closing Date unless otherwise specified herein to the contrary;

                  (g)  Sellers  shall  have  received  a  certificate   from  an
authorized officer of Buyer, dated the Closing Date, to the effect that, to such
officer's  Knowledge,  the conditions set forth in Sections  7.2(e) and (f) have
been satisfied by Buyer;

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<PAGE>

                  (h)  Effective upon Closing, Buyer shall have assumed,  as set
forth in Section 6.10,  all of the applicable  obligations  under the Collective
Bargaining Agreement as they relate to Transferred Union Employees;

                  (i)  Sellers  shall  have  received  an opinion  from  Buyer's
counsel   reasonably   acceptable  to  Sellers,   dated  the  Closing  Date  and
satisfactory  in form and substance to Sellers and their counsel,  substantially
to the effect that:

                           (i)  Buyer  is  a  limited   liability  company  duly
         organized,  validly existing and in good standing under the laws of the
         state of its  organization and is qualified to do business in the State
         of New Jersey and has the full  organizational  power and  authority to
         own, lease and operate its material  assets and properties and to carry
         on its  business  as is now  conducted,  and to execute and deliver the
         Agreement  and  the  Ancillary   Agreements   and  to  consummate   the
         transactions  contemplated  thereby;  and the execution and delivery of
         the  Agreement   and  the   Ancillary   Agreements  by  Buyer  and  the
         consummation of the  transactions  contemplated  thereby have been duly
         authorized by all necessary  corporate  action  required on the part of
         Buyer;

                           (ii) The Agreement and the Ancillary  Agreements have
         been duly and validly  executed and delivered by Buyer,  and constitute
         legal,  valid and  binding  agreements  of Buyer,  enforceable  against
         Buyer, in accordance with their terms,  except that such enforceability
         may be limited by applicable  bankruptcy,  insolvency,  reorganization,
         moratorium,  fraudulent  conveyance or other similar laws  affecting or
         relating to  enforcement  of  creditor's  rights  generally and general
         principles of equity  (regardless of whether  enforcement is considered
         in a proceeding at law or in equity);

                           (iii) The execution,  delivery and performance of the
         Agreement  and the  Ancillary  Agreements  by Buyer do not (A) conflict
         with the  Certificate  of Formation or  Operating  Agreement  (or other
         organizational  documents),  as currently in effect, of Buyer or (B) to
         the  knowledge  of such  counsel,  constitute a violation of or default
         under those agreements or instruments set forth on a Schedule  attached
         to the opinion and which have been  identified  to such  counsel as all
         the agreements and instruments which

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         are material to the business or financial condition of Buyer;

                           (iv) The  Assignment  and  Assumption  Agreement  and
         other transfer instruments  described in Section 3.7 are in proper form
         for Buyer to assume the Assumed Liabilities; and

                           (v) No consent or approval of, filing with, or notice
         to, any Governmental  Authority is necessary for Buyer's  execution and
         delivery  of  the  Agreement  and  the  Ancillary  Agreements,  or  the
         consummation  by  Buyer of the  transactions  contemplated  hereby  and
         thereby,  other than (a) Buyer's Required Regulatory  Approvals each of
         which  has been  obtained  or made and (b)  such  consents,  approvals,
         filings or notices,  which,  if not obtained or made,  will not prevent
         Buyer,  PECO  Energy  Company  or  British  Energy  Company,  plc  from
         performing  their  respective  obligations  under  the  Agreement,  the
         Ancillary Agreements or the Parent Guaranties, as the case may be.

                  (j)      [Intentionally omitted]

                  (k)      Buyer shall have delivered, or caused to be
delivered,  to Sellers at the Closing,  Buyer's closing deliveries  described in
Section 3.7; and

                  (l) In the event the NJDEP determines that ISRA applies to the
transactions  contemplated hereby, (1) Buyer and Sellers shall have entered into
one or more Remediation Agreements with the NJDEP and (2) there shall be an ISRA
Remediation Program, in each case in form and substance reasonably  satisfactory
to Sellers on or before the ISRA Termination Date.

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<PAGE>

                                  ARTICLE VIII

                                 INDEMNIFICATION

         8.1      Indemnification.

                  (a) Buyer shall indemnify,  defend and hold harmless  Sellers,
their officers, directors, employees, shareholders, Affiliates and agents (each,
a "Sellers'  Indemnitee") from and against any and all claims,  demands,  suits,
losses,  liabilities,   damages,  obligations,   payments,  costs  and  expenses
(including,  without limitation,  the costs and expenses of any and all actions,
suits, proceedings, assessments, judgments, settlements and compromises relating
thereto  and  reasonable   attorneys'  fees  and  reasonable   disbursements  in
connection  therewith)  (each, an  "Indemnifiable  Loss"),  asserted  against or
suffered by any Sellers'  Indemnitee  relating to, resulting from or arising out
of (i)  any  breach  by  Buyer  of any  representation,  warranty,  covenant  or
agreement of Buyer  contained in this Agreement,  (ii) the Assumed  Liabilities,
(iii)  any  loss  or  damages  directly  resulting  from or  arising  out of any
negligent   act  or  omission  or  willful   misconduct   of  Buyer  or  Buyer's
Representatives in connection with Buyer's Inspections,  or (iv) any Third Party
Claims against Sellers'  Indemnitee arising out of or in connection with Buyer's
ownership or operation of the Plant and other  Purchased  Assets on or after the
Closing  Date (other than Third  Party  Claims  which arise out of acts by Buyer
permitted by Section 6.12 hereof).

                  (b) Sellers shall jointly and severally indemnify,  defend and
hold  harmless  Buyer,  its  officers,   directors,   employees,   shareholders,
Affiliates and agents (each, a "Buyer  Indemnitee") from and against any and all
Indemnifiable  Losses  asserted  against  or  suffered  by any Buyer  Indemnitee
relating to,  resulting  from or arising out of (i) any breach by Sellers of any
representation,  warranty,  covenant or agreement  of Sellers  contained in this
Agreement,  (ii) the Excluded  Liabilities,  (iii) noncompliance by Sellers with
any bulk sales or transfer laws as provided in Section 10.11,  or (iv) any Third
Party Claims  against a Buyer  Indemnitee  arising out of or in connection  with
Sellers'  ownership or operation  of the  Purchased  Assets prior to the Closing
Date or the Excluded Assets on or after the Closing Date.

                  (c) Notwithstanding anything to the contrary contained herein:

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                           (i) Any Person  entitled  to receive  indemnification
         under  this  Agreement  (an   "Indemnitee")   shall  use   Commercially
         Reasonable  Efforts  to  mitigate  all  losses,  damages  and the  like
         relating to a claim under these indemnification  provisions,  including
         availing itself of any defenses,  limitations,  rights of contribution,
         claims  against  third  Persons and other rights at law or equity.  The
         Indemnitee's   Commercially   Reasonable   Efforts  shall  include  the
         reasonable  expenditure  of money to  mitigate or  otherwise  reduce or
         eliminate  any  loss  or  expenses  for  which   indemnification  would
         otherwise be due, and the Indemnitor shall reimburse the Indemnitee for
         the Indemnitee's  reasonable expenditures in undertaking the mitigation
         (together with interest thereon from the date of payment thereof to the
         date of  repayment  at the "prime rate" as published in The Wall Street
         Journal); and

                           (ii) Any  Indemnifiable  Loss shall be net of (A) the
         dollar amount of any insurance or other proceeds  actually  received by
         the  Indemnitee  or  any  of  its   Affiliates   with  respect  to  the
         Indemnifiable  Loss, and (B) income tax benefits to the Indemnitee , to
         the extent  realized by the  Indemnitee,  but such net amount  shall be
         increased  to give  effect  to the  Income  Taxes  attributable  to the
         receipt of any indemnification  payments  hereunder.  Any Party seeking
         indemnity  hereunder shall use Commercially  Reasonable Efforts to seek
         coverage   (including  both  costs  of  defense  and  indemnity)  under
         applicable  insurance  policies with respect to any such  Indemnifiable
         Loss.

                  (d) The expiration or termination of any covenant or agreement
shall  not  affect  the  Parties'  obligations  under  this  Section  8.1 if the
Indemnitee  provided the Person required to provide  indemnification  under this
Agreement  (the  "Indemnifying  Party") with proper notice of the claim or event
for which  indemnification  is sought prior to such  expiration,  termination or
extinguishment.

                  (e) Except to the extent otherwise provided in Article IX, the
rights and remedies of Sellers and Buyer under this  Article VIII are  exclusive
and in lieu of any and all other rights and remedies which Sellers and Buyer may
have under this Agreement or otherwise for monetary relief,  with respect to (i)
any breach of or failure to perform any covenant,  agreement,  or representation
or warranty set forth in this Agreement, after the occurrence of the Closing, or
(ii) the Assumed Liabilities

                                       93

<PAGE>

or the Excluded Liabilities, as the case may be. The indemnification obligations
of the Parties set forth in this Article VIII apply only to matters  arising out
of this Agreement,  excluding the Ancillary  Agreements.  Any Indemnifiable Loss
arising  under or pursuant to an  Ancillary  Agreement  shall be governed by the
indemnification  obligations, if any, contained in the Ancillary Agreement under
which the Indemnifiable Loss arises.

                  (f) Notwithstanding  anything to the contrary herein, no Party
(including  an  Indemnitee)  shall be entitled  to recover  from any other Party
(including an Indemnifying  Party) for any  liabilities,  damages,  obligations,
payments losses, costs, or expenses under this Agreement any amount in excess of
the actual compensatory damages, court costs and reasonable attorney's and other
advisor  fees  suffered  by such  Party.  Buyer and  Sellers  waive any right to
recover  punitive,  incidental,  special,  exemplary and  consequential  damages
arising in connection with or with respect to this Agreement.  The provisions of
this Section 8.1(f) shall not apply to indemnification for a Third Party Claim.

                  (g) Notwithstanding  anything  to the  contrary  herein,  (i)
except as provided in (ii) below,  each Party's  liability and obligation to the
other Party for an Indemnifiable Loss relating to, resulting from or arising out
of a breach of representation  or warranty shall be [intentionally  omitted] and
must be asserted by the other Party on or before the [intentionally  omitted] of
the Closing  Date,  and (ii) Sellers'  liability and  obligation to Buyer for an
Indemnifiable  Loss  relating to,  resulting  from or arising out of a breach of
representation or warranty with respect to [intentionally  omitted] shall not be
limited in amount but must be asserted by Buyer on or before the  termination of
the  related  survival  period  set  forth  in  Section  10.4.  Nothing  in this
subparagraph (g) is intended to modify or limit Sellers' liability or obligation
hereunder  for any other  Indemnifiable  Loss or to  constitute an assumption by
Buyer of any Excluded Liability.

         8.2      Defense of Claims.

                  (a) If any Indemnitee  receives notice of the assertion of any
claim or of the commencement of any claim, action, or proceeding made or brought
by any Person who is not a party to this  Agreement or any  Affiliate of a Party
to this Agreement (a "Third Party Claim") with respect to which  indemnification
is to be sought from an Indemnifying Party, the Indemnitee shall give

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<PAGE>

such  Indemnifying  Party reasonably  prompt written notice thereof,  but in any
event such notice shall not be given later than ten (10) calendar days after the
Indemnitee's  receipt of notice of such Third Party  Claim.  Such  notice  shall
describe  the nature of the Third  Party  Claim in  reasonable  detail and shall
indicate the estimated  amount, if practicable,  of the Indemnifiable  Loss that
has been or may be sustained by the Indemnitee. The Indemnifying Party will have
the right to participate in or, by giving written notice to the  Indemnitee,  to
elect to assume  the  defense  of any  Third  Party  Claim at such  Indemnifying
Party's expense and by such Indemnifying Party's own counsel,  provided that the
counsel for the  Indemnifying  Party who shall conduct the defense of such Third
Party Claim shall be reasonably  satisfactory to the Indemnitee.  The Indemnitee
shall cooperate in good faith in such defense at such  Indemnitee's own expense.
If an  Indemnifying  Party  elects not to assume the  defense of any Third Party
Claim,  the  Indemnitee may compromise or settle such Third Party Claim over the
objection of the  Indemnifying  Party,  which  settlement  or  compromise  shall
conclusively  establish  the  Indemnifying  Party's  liability  pursuant to this
Agreement.

                  (b) (i) If,  within ten (10) calendar days after an Indemnitee
provides written notice to the Indemnifying Party of any Third Party Claims, the
Indemnitee  receives  written  notice  from the  Indemnifying  Party  that  such
Indemnifying  Party has  elected to assume the defense of such Third Party Claim
as provided in Section 8.2(a), the Indemnifying Party will not be liable for any
legal expenses  subsequently  incurred by the Indemnitee in connection  with the
defense thereof; provided, however, that if the Indemnifying Party shall fail to
take  reasonable  steps  necessary to defend  diligently  such Third Party Claim
within twenty (20) calendar days after receiving notice from the Indemnitee that
the Indemnitee  believes the  Indemnifying  Party has failed to take such steps,
the  Indemnitee may assume its own defense and the  Indemnifying  Party shall be
liable for all  reasonable  expenses  thereof.  (ii)  Without the prior  written
consent  of the  Indemnitee,  the  Indemnifying  Party  shall not enter into any
settlement  of any Third Party Claim which would lead to liability or create any
financial  or other  obligation  on the part of the  Indemnitee  for  which  the
Indemnitee is not entitled to indemnification hereunder. If a firm offer is made
to settle a Third Party Claim without  leading to liability or the creation of a
financial  or other  obligation  on the part of the  Indemnitee  for  which  the
Indemnitee is not entitled to  indemnification  hereunder  and the  Indemnifying
Party desires to accept and agree to such offer, the Indemnifying

                                       95

<PAGE>

Party  shall  give  written  notice to the  Indemnitee  to that  effect.  If the
Indemnitee  fails to consent to such firm offer  within ten (10)  calendar  days
after its receipt of such notice,  the  Indemnifying  Party shall be relieved of
its  obligations to defend such Third Party Claim and the Indemnitee may contest
or defend such Third Party Claim.  In such event,  the maximum  liability of the
Indemnifying  Party as to such  Third  Party  Claim  will be the  amount of such
settlement  offer  plus  reasonable  costs  and  expenses  paid or  incurred  by
Indemnitee up to the date of said notice.

                  (c) Any claim by an Indemnitee on account of an  Indemnifiable
Loss which does not result from a Third Party Claim (a "Direct  Claim") shall be
asserted by giving the  Indemnifying  Party  reasonably  prompt  written  notice
thereof,  stating the nature of such claim in reasonable  detail and  indicating
the estimated amount, if practicable,  but in any event such notice shall not be
given later than ten (10)  calendar days after the  Indemnitee  becomes aware of
such Direct Claim, and the Indemnifying Party shall have a period of thirty (30)
calendar days within which to respond to such Direct Claim. If the  Indemnifying
Party does not  respond  within  such  thirty  (30)  calendar  day  period,  the
Indemnifying  Party  shall  be  deemed  to  have  accepted  such  claim.  If the
Indemnifying  Party  rejects  such claim,  the  Indemnitee  will be free to seek
enforcement of its right to indemnification under this Agreement.

                  (d) If the  amount  of any  Indemnifiable  Loss,  at any  time
subsequent to the making of an indemnity payment in respect thereof,  is reduced
by  recovery,  settlement  or  otherwise  under  or  pursuant  to any  insurance
coverage, or pursuant to any claim, recovery,  settlement or payment by, from or
against any other entity, the amount of such reduction, less any costs, expenses
or premiums  incurred in connection  therewith  (together with interest  thereon
from the date of payment  thereof at the publicly  announced  prime rate then in
effect of Chase  Manhattan  Bank) shall  promptly be repaid by the Indemnitee to
the Indemnifying Party.

                  (e) A  failure  to give  timely  notice  as  provided  in this
Section 8.2 shall not affect the rights or  obligations  of any Party  hereunder
except if, and only to the extent that, as a result of such  failure,  the Party
which was entitled to receive such notice was actually prejudiced as a result of
such failure.

                                       96

<PAGE>

                                   ARTICLE IX

                                   TERMINATION

         9.1 Termination.(a)  This Agreement may be terminated at any time prior
to the Closing Date by mutual written consent of Sellers and Buyer.

                  (b) This  Agreement  may be  terminated by Sellers or Buyer if
(i) any Federal or state court of  competent  jurisdiction  shall have issued an
order,  judgment  or decree  permanently  restraining,  enjoining  or  otherwise
prohibiting  the Closing,  and such order,  judgment or decree shall have become
final and  nonappeallable  or (ii) any statute,  rule, order or regulation shall
have been enacted or issued by any  Governmental  Authority  which,  directly or
indirectly,  prohibits  the  consummation  of the Closing;  or (iii) the Closing
contemplated  hereby  shall  have not  occurred  on or  before  the day which is
eighteen (18) months from the date of this Agreement (the  "Termination  Date");
provided that the right to terminate  this  Agreement  under this Section 9.1(b)
(iii)  shall  not be  available  to any  Party  whose  failure  to  fulfill  any
obligation  under  this  Agreement  has been the cause of, or  resulted  in, the
failure of the Closing to occur on or before such date.

                  (c) Except as  otherwise  provided  in this  Agreement,  this
Agreement  may be  terminated  by  Buyer  if any of  Buyer  Required  Regulatory
Approvals,  the receipt of which is a condition  to the  obligation  of Buyer to
consummate  the Closing as set forth in Section  7.1(c),  shall have been denied
(and a petition for  rehearing or refiling of an  application  initially  denied
without  prejudice  shall also have been  denied) or shall have been granted but
contains  terms or  conditions  which do not satisfy the  closing  condition  in
Section 7.1(c).

                  (d) This  Agreement may be  terminated  by Sellers,  if any of
Sellers' Required Regulatory  Approvals,  the receipt of which is a condition to
the  obligation  of Sellers to  consummate  the  Closing as set forth in Section
7.2(c),  shall have been denied (and a petition for  rehearing or refiling of an
application  initially denied without  prejudice shall also have been denied) or
shall have been granted but contains  terms or  conditions  which do not satisfy
the closing condition in Section 7.2(c).

                                       97

<PAGE>

                  (e) This  Agreement  may be  terminated  by Buyer if there has
been a  violation  or breach  by  Sellers  of any  covenant,  representation  or
warranty  contained in this Agreement  which has resulted in a Material  Adverse
Effect and such  violation  or breach is not cured by the earlier of the Closing
Date or the date thirty (30) days after receipt by Sellers of notice  specifying
particularly such violation or breach, and such violation or breach has not been
waived by Buyer.

                  (f) This Agreement may be terminated by Sellers,  if there has
been a material violation or breach by Buyer of any covenant,  representation or
warranty  contained in this  Agreement and such violation or breach is not cured
by the earlier of the Closing Date or the date thirty (30) days after receipt by
Buyer of notice  specifying  particularly  such  violation  or breach,  and such
violation or breach has not been waived by Sellers.

                  (g) This Agreement may be terminated by Sellers if there shall
have occurred any change that is materially adverse to the business,  operations
or conditions (financial or otherwise) of Buyer.

                  (h) This Agreement may be terminated by either of Sellers or
Buyer in accordance with the provisions of Section 6.11(b).

                  (i) This  Agreement  may be terminated by Sellers in the event
that Buyer's  Environmental  Inspection requires Sellers to assume liability for
Remediation  which in  Sellers'  judgment  is  materially  in excess of Sellers'
liability for  Remediation of those  environmental  conditions  disclosed in the
Environmental  Reports  (other  than  Buyer's  Environmental  Inspection)  or in
Schedule 4.7 on the date hereof.

                  (j) This  Agreement  may be  terminated  by either  Sellers or
Buyer if the NJDEP determines that ISRA applies to the transactions contemplated
hereby and such Party has not  entered  into a  Remediation  Agreement  with the
NJDEP and  there is not in place an ISRA  Remediation  Program,  in each case in
form and substance  reasonably  satisfactory to such Party, on or before (A) the
first  anniversary  date hereof or (B) fifteen (15) Business Days  following the
date on which  the last of the  conditions  precedent  to  Closing  set forth in
Sections 7.1(a),  (c), (j), (k), (l), (m), (q), (r) and (w) and Section 7.2 (a),
(c),  (d) and (j),  of this  Agreement  have been  either  satisfied  or waived,
whichever shall first occur (the "ISRA Termination Date").

                                       98

<PAGE>

         9.2  Procedure and Effect of  No-Default  Termination.  In the event of
termination  of this  Agreement  by either or both of the  Parties  pursuant  to
Section 9.1,  written notice thereof shall forthwith be given by the terminating
Party to the other Party, whereupon, if this Agreement is terminated pursuant to
any of Sections  9.1(a)  through (d) and 9.1(g) and (h), the  liabilities of the
Parties hereunder will terminate, except as otherwise expressly provided in this
Agreement,  and  thereafter  neither  Party shall have any recourse  against the
other by reason of this Agreement.

                                    ARTICLE X

                            MISCELLANEOUS PROVISIONS

         10.1  Amendment  and  Modification.  Subject to  applicable  law,  this
Agreement may be amended,  modified or supplemented only by written agreement of
Sellers and Buyer.

         10.2 Waiver of Compliance;  Consents.  Except as otherwise  provided in
this Agreement, any failure of any of the Parties to comply with any obligation,
covenant,  agreement or condition  herein may be waived by the Party entitled to
the benefits thereof only by a written  instrument  signed by the Party granting
such  waiver,  but  such  waiver  of such  obligation,  covenant,  agreement  or
condition  shall not  operate as a waiver of, or estoppel  with  respect to, any
subsequent failure to comply therewith.

         10.3     Environmental Waiver; Release.

                  Each  Party,  for itself and on behalf of its  Representatives
and Affiliates,  agrees  effective as of the Closing Date to release and forever
discharge the other Party, its Representatives and Affiliates,  from any and all
Indemnifiable Losses of any kind or character,  whether known or unknown, hidden
or concealed,  resulting from or arising out of any  Environmental  Condition or
violation of Environmental Law relating to the Purchased Assets;  provided, that
Sellers' release of Buyer shall not extend to any of Buyer's Assumed Liabilities
set forth in Section 2.3, and provided further,  that Buyer's release of Sellers
shall not extend to any of Sellers'  Excluded  Liabilities  set forth in Section
2.4 or to any  breach  by  Sellers  of  their  representations,  warranties  and
covenants under this  Agreement.  Subject to the foregoing  proviso,  each Party
hereby agrees to waive any and all rights and benefits

                                       99

<PAGE>

with respect to such Indemnifiable  Losses that it now has, or in the future may
have  conferred  upon it by virtue of any statute or common law principle  which
provides that a general release does not extend to claims which a Party does not
know or suspect to exist in its favor at the time of executing  the release,  if
knowledge of such claims would have materially  affected such Party's settlement
with the obligor. In this connection,  each Party hereby acknowledges that it is
aware that factual  matters,  now unknown to it, may have given or may hereafter
give rise to Indemnifiable Losses that are presently unknown,  unanticipated and
unsuspected,  including,  without limitation, due to solid wastes or landfilling
on the Site which may be subject to regulation  under the New Jersey Solid Waste
Management  Act and the  regulations  thereunder,  and each Party further agrees
that this release has been negotiated and agreed upon in light of that awareness
and  it  nevertheless  hereby  intends  to  release  the  other  Party  and  its
Representatives  and Affiliates  subject to the proviso in the first sentence of
this paragraph.

         10.4 Survival.  The representations and warranties given or made by any
Party to this  Agreement or in any  certificate  or other  writing  furnished in
connection  herewith  shall  survive the Closing for a period of  [intentionally
omitted]  after the Closing  Date and shall  thereafter  terminate  and be of no
further  force or effect,  except that (a) all  representations  and  warranties
relating  to Taxes and Tax Returns  shall  survive the Closing for the period of
the applicable  statutes of limitation  plus any extensions or waivers  thereof,
[intentionally  omitted] (b) all  representations and warranties relating to the
Decommissioning Trust Funds shall survive indefinitely.

                       The covenants and obligations of Sellers and Buyer set
forth  in this  Agreement,  including  without  limitation  the  indemnification
obligations of the parties under Article VIII hereof,  shall survive the Closing
indefinitely,  and the Parties shall be entitled to the full performance thereof
by the other Parties hereto  without  limitation as to time or amount (except as
otherwise specifically set forth herein).

         10.5 Notices. All notices and other  communications  hereunder shall be
in writing and shall be deemed  given if  delivered  personally  or by facsimile
transmission,  or mailed by overnight  courier or registered  or certified  mail
(return  receipt  requested),  postage  prepaid,  to the recipient  Party at its
address (or at such other  address or  facsimile  number for a Party as shall be
specified by like notice; provided, however,

                                       100

<PAGE>

that  notices  of a change of  address  shall be  effective  only  upon  receipt
thereof):

                  (a)      If to Sellers, to:

                           c/o GPU Service, Inc.
                           300 Madison Avenue
                           Morristown, New Jersey  07962
                           Attention:  Mr. David C. Brauer, Vice President
                           Facsimile:  (973) 455-8532

                           with a copy to:

                           Berlack, Israels & Liberman LLP
                           120 West 45th Street
                           New York, New York 10036
                           Attention: Douglas E. Davidson, Esq.
                           Facsimile: (212) 704-0196

                  (b)      if to Buyer, to:

                           AmerGen Energy Company, L.L.C.
                           965 Chesterbrook Boulevard, 63C-3
                           Wayne, Pennsylvania 19087
                           Attention: Mr. Charles P. Lewis, Vice President
                           Facsimile: (610) 640-6611

                           with copies to:

                           AmerGen Energy Company, L.L.C.
                           2301 Market Street
                           Philadelphia, PA 19103
                           Attention: John C. Halderman,
                                      Assistant General Counsel

                           Facsimile: (215) 841-4474

                           and

                           Morgan, Lewis & Bockius LLP
                           1701 Market Street
                           Philadelphia, PA 19103
                           Attention: Howard L. Meyers, Esq.
                           Facsimile: (215) 963-5299

                                       101

<PAGE>

         10.6 Assignment.  This Agreement and all of the provisions hereof shall
be  binding  upon and  inure to the  benefit  of the  Parties  hereto  and their
respective  successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any Party
hereto, including by operation of law, without the prior written consent of each
other  Party,  nor is this  Agreement  intended to confer upon any other  Person
except the  Parties  hereto  any  rights,  interests,  obligations  or  remedies
hereunder.  No  provision  of  this  Agreement  shall  create  any  third  party
beneficiary  rights in any employee or former employee of Sellers (including any
beneficiary or dependent thereof) in respect of continued  employment or resumed
employment,  and no provision of this  Agreement  shall create any rights in any
such  Persons in respect  of any  benefits  that may be  provided,  directly  or
indirectly,  under any employee benefit plan or arrangement  except as expressly
provided  for  thereunder.  Notwithstanding  the  foregoing,  without  the prior
written  consent  of  Sellers,  (i)  Buyer  may  assign  all of its  rights  and
obligations  hereunder to any majority owned Subsidiary (direct or indirect) and
upon Sellers' receipt of notice from Buyer of any such assignment, such assignee
will be deemed to have assumed,  ratified, agreed to be bound by and perform all
such  obligations,  and all  references  herein to "Buyer"  shall  thereafter be
deemed to be references to such assignee, in each case without the necessity for
further act or evidence by the Parties hereto or such  assignee,  and (ii) Buyer
or its permitted assignee may assign,  transfer,  pledge or otherwise dispose of
(absolutely  or as security)  its rights and  interests  hereunder to a trustee,
lending  institutions  or other party for the purposes of leasing,  financing or
refinancing  the Purchased  Assets,  including such an  assignment,  transfer or
other  disposition  upon or pursuant to the exercise of remedies with respect to
such leasing,  financing or refinancing,  or by way of  assignments,  transfers,
pledges,  or other dispositions in lieu thereof (and any such assignee may fully
exercise its rights  hereunder or under any other agreement and pursuant to such
assignment  without any further  prior consent of any party  hereto);  provided,
however,  that  no such  assignment  in  clause  (i) or (ii)  shall  relieve  or
discharge the assignor from any of its obligations hereunder.  Sellers agree, at
Buyer's  expense,  to execute and deliver such  documents  as may be  reasonably
necessary  to  accomplish  any  such  assignment,   transfer,  pledge  or  other
disposition of rights and interests  hereunder so long as Sellers'  rights under
this  Agreement  are not  thereby  altered,  amended,  diminished  or  otherwise
impaired.

                                       102

<PAGE>

         10.7 Governing  Law. This Agreement  shall be governed by and construed
in accordance  with the law of the State of New York  (without  giving effect to
conflict of law  principles)  as to all  matters,  including  but not limited to
matters of validity, construction, effect, performance and remedies. THE PARTIES
HERETO  AGREE THAT VENUE IN ANY AND ALL ACTIONS AND  PROCEEDINGS  RELATED TO THE
SUBJECT MATTER OF THIS AGREEMENT SHALL BE IN THE STATE AND FEDERAL COURTS IN AND
FOR NEW YORK COUNTY,  NEW YORK,  WHICH COURTS SHALL HAVE EXCLUSIVE  JURISDICTION
FOR SUCH PURPOSE,  AND THE PARTIES  HERETO  IRREVOCABLY  SUBMIT TO THE EXCLUSIVE
JURISDICTION OF SUCH COURTS AND IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT
FORUM TO THE  MAINTENANCE OF ANY SUCH ACTION OR  PROCEEDING.  SERVICE OF PROCESS
MAY BE MADE IN ANY MANNER RECOGNIZED BY SUCH COURTS.  EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

         10.8  Counterparts.  This  Agreement  may be  executed  in two or  more
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same instrument.

         10.9  Interpretation.  The  articles,  section  and  schedule  headings
contained in this  Agreement  are solely for the purpose of  reference,  are not
part of the agreement of the parties and shall not in any way affect the meaning
or interpretation of this Agreement.

         10.10  Schedules  and  Exhibits.  Except as otherwise  provided in this
Agreement,  all Exhibits and Schedules referred to herein are intended to be and
hereby are specifically made a part of this Agreement.

         10.11 Entire Agreement. This Agreement, the Confidentiality  Agreement,
and the  Ancillary  Agreements  including the  Exhibits,  Schedules,  documents,
certificates  and instruments  referred to herein or therein,  embody the entire
agreement and understanding of the Parties hereto in respect of the transactions
contemplated  by  this   Agreement.   There  are  no   restrictions,   promises,
representations,   warranties,  covenants  or  undertakings,  other  than  those
expressly  set  forth  or  referred  to  herein  or  therein.  It  is  expressly
acknowledged   and   agreed   that   there   are  no   restrictions,   promises,
representations, warranties, covenants or undertakings contained in any material
made available to Buyer pursuant to the terms of the  Confidentiality  Agreement
(including the Offering Memorandum

                                       103

<PAGE>

dated March 29, 1999, previously delivered to Buyer by Sellers).  This Agreement
supersedes  all  prior  agreements  and   understandings   between  the  Parties
(including,  without limitation,  the Letter of Intent between the Parties dated
September  10, 1999) other than the  Confidentiality  Agreement  with respect to
such transactions.

         10.12  Bulk  Sales  Laws.  Buyer  acknowledges  that,   notwithstanding
anything  in  this  Agreement  to the  contrary,  Sellers  may,  in  their  sole
discretion,  not  comply  with  the  provision  of the  bulk  sales  laws of any
jurisdiction in connection with the transactions contemplated by this Agreement.
Buyer hereby waives  compliance by Sellers with the provisions of the bulk sales
laws of all applicable jurisdictions.

         10.13 U.S. Dollars.  Unless otherwise stated, all dollar amounts set
forth herein are United States (U.S.) dollars.

         10.14 Zoning Classification.  Buyer acknowledges that the Real
Properties are zoned as set forth in Schedule 10.14.

         10.15 Sewage Facilities.  Except as set forth in Schedule 10.15, Buyer
acknowledges that there is no community (municipal) sewage system available to
serve the Real Property.

                                       104

<PAGE>

                  IN  WITNESS  WHEREOF,  Sellers  and  Buyer  have  caused  this
Agreement to be signed by their  respective duly  authorized  officers as of the
date first above written.

AMERGEN ENERGY COMPANY, L.L.C.                 JERSEY CENTRAL POWER &
                                                   LIGHT COMPANY

By:_----------------------------               By: ---------------------
Name:                                          Name:
Title:                                         Title:

                                               GPU NUCLEAR, INC.

                                               By: ----------------------
                                               Name:
                                               Title:

                                       105

<PAGE>

                         LIST OF EXHIBITS AND SCHEDULES
                         ------------------------------

                                    EXHIBITS

Exhibit A     Form of Assignment and Assumption Agreement
Exhibit B     Form of Bill of Sale
Exhibit C     Form of FIRPTA Affidavit
Exhibit D     Form of Interconnection Agreement
Exhibit E     Form of Power Purchase Agreement
Exhibit F     Form of Reciprocal Services Agreement
Exhibit G     Form of Parent Guaranty

SCHEDULES

1.1(48)       Terms of EOF Lease
1.1(96)       Permitted Encumbrances

1.1(116)      Access Terms for Remote Assembly Area
1.1(139)      Transferable Permits (both environmental and non-environmental)
2.1(h)        Schedule of Emission Reduction Credits
2.1(l)        Intellectual Property
2.2(a)        Description of Transmission and other Assets Not Included in
              Conveyance
2.3(e)        Consent Decrees Assumed by Buyer
4.3(a)        Third Party Consents
4.3(b)        Sellers' Required Regulatory Approvals
4.4           Insurance Exceptions
4.5           Exceptions to Title
4.6           Real Property Leases
4.7           Schedule of Environmental Matters
4.8           Schedule of Noncompliance with Employment Laws
4.9(a)        Schedule of Benefit Plans
4.9(b)        Benefit Plan Exceptions
4.l0(a)       Description of Real Property
4.10(a)-1     Real Property Matters
4.10(b)       Major Equipment Components and Personal Property
4.10(c)       Technical Specifications and FSAR
4.11          Notices of Condemnation
4.12(a)       List of Contracts
4.12(b)       List of Non-assignable Contracts
4.12(c)       List of Defaults under the Contracts
4.13          List of Litigation
4.14(a)       List of Permit Violations
4.14(b)       List of Material Permits (other than Transferable Permits)
4.15(a)       NRC Violations
4.15(b)       NRC Licenses

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4.16          Tax Matters
4.20          Qualified Decommissioning Trust Fund
4.21          Non-Qualified Decommissioning Trust Fund
4.22          Undisclosed Liabilities
5.3(a)        Third Party Consents
5.3(b)        Buyer's Required Regulatory Approvals
6.1           Schedule of Permitted Activities prior to Closing
6.2(i)        Initial Buyer's Environmental Inspection
6.8           Tax Appeals
6.10(a)(i)    Schedule of Union Employees
6.10(b)       Schedule of Non-Union Employees
6.10(d)       Collective Bargaining Agreements
6.10(h)       Schedule of Severance Benefits
6.15          Pollution Control Revenue Bonds
6.17          Outage Plan
7.1(p)        Operational Recovery Work
10.14         Zoning
10.15         Sewage Matters

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                                TABLE OF CONTENTS

ARTICLE I..................................................................1
     1.1 Definitions.......................................................1
     1.2 Certain Interpretive Matters.....................................20

ARTICLE II................................................................20
     2.1 Transfer of Assets...............................................20
     2.2 Excluded Assets..................................................22
     2.3 Assumed Liabilities..............................................24
     2.4 Excluded Liabilities.............................................26
     2.5 Control of Litigation............................................30

ARTICLE III...............................................................30
     3.1 Closing..........................................................30
     3.2 Payment of Purchase Price........................................30
     3.3 Adjustment to Purchase Price.....................................31
     3.4 Allocation of Purchase Price.....................................33
     3.5 Prorations.......................................................33
     3.6 Deliveries by Sellers............................................34
     3.7 Deliveries by Buyer..............................................36
     3.8 Ancillary Agreements.............................................37

ARTICLE IV................................................................38
     4.1 Incorporation; Qualification.....................................38
     4.2 Authority Relative to this Agreement.............................38
     4.3 Consents and Approvals; No Violation.............................38
     4.4 Insurance........................................................39
     4.5 Title and Related Matters........................................40
     4.6 Real Property Leases.............................................40
     4.7 Environmental Matters............................................40
     4.8 Labor Matters....................................................41
     4.9 Benefit Plans; ERISA.............................................42
     4.10 Real Property; Plant and Equipment..............................43
     4.11 Condemnation....................................................43
     4.12 Contracts and Leases............................................44
     4.13 Legal Proceedings, etc..........................................44
     4.14 Permits.........................................................44
     4.15 NRC Licenses....................................................45
     4.16 Taxes...........................................................45
     4.17 Intellectual Property...........................................46
     4.18 Compliance With Laws............................................46
     4.19 PUHCA...........................................................46
     4.20 Qualified Decommissioning Trust Funds...........................46
     4.21 Nonqualified Decommissioning Trust Funds........................49
     4.22 Undisclosed Liabilities.........................................50

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     4.23 Year 2000 Qualification.........................................50
     4.24 DISCLAIMERS REGARDING PURCHASED ASSETS..........................50

ARTICLE V - REPRESENTATIONS AND WARRANTIES OF BUYER.......................51
     5.1 Organization.....................................................51
     5.2 Authority Relative to this Agreement.............................51
     5.3 Consents and Approvals; No Violation.............................52
     5.4 Legal Proceedings................................................52
     5.6 Inspections......................................................53
     5.7  WARN Act........................................................53

ARTICLE VI................................................................53
     6.1 Conduct of Business Relating to the Purchased Assets.............53
     6.2 Access to Information............................................56
     6.3 Public Statements................................................60
     6.4 Expenses.........................................................60
     6.5 Further Assurances...............................................60
     6.6 Consents and Approvals...........................................62
     6.7 Fees and Commissions.............................................65
     6.8 Tax Matters......................................................65
     6.9 Advice of Changes................................................67
     6.10 Employees.......................................................68
     6.11 Risk of Loss....................................................76
     6.12 Decommissioning Trust Funds.....................................77
     6.13 Spent Fuel Fees.................................................77
     6.14 Department of Energy Decontamination and Decommissioning Fees...77
     6.15 Additional Covenants of Buyer...................................77
     6.16 Cooperation Relating to Insurance and Price-Anderson Act .......78
     6.17 Refueling Outage................................................79
     6.18 ISRA Compliance.................................................80
     6.19 Future Interconnection Access...................................83
     6.20 SBO Service.....................................................83
     6.21 Easement Agreement..............................................83

ARTICLE VII...............................................................84
     7.1 Conditions to Obligations of Buyer...............................84
     7.2 Conditions to Obligations of Sellers.............................88

ARTICLE VIII..............................................................92
     894.1 Indemnification................................................92
     8.297 Defense of Claims..............................................94

ARTICLE IX................................................................97
     9.1 Termination......................................................97
     9.2  Procedure and Effect of No-Default Termination..................99

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ARTICLE X.................................................................99
     10.1 Amendment and Modification......................................99
     10.2 Waiver  of  Compliance; Consents................................99
     10.3 Environmental Waiver; Release...................................99
     10.4 Survival.......................................................100
     10.5 Notices........................................................100
     10.6 Assignment.....................................................102
     10.7 Governing Law..................................................103
     10.8 Counterparts...................................................103
     10.9 Interpretation.................................................103
     10.10 Schedules and Exhibits........................................106
     10.11 Entire Agreement..............................................103
     10.12 Bulk Sales Laws...............................................104
     10.13 U.S. Dollars..................................................104
     10.14 Zoning Classification.........................................104
     10.15 Sewage Facilities.............................................104

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