S-3/A

As filed with the Securities and Exchange Commission on June 4, 2013.

Registration Nos. 333-187692 and 333-187692-01 through -05

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 3

to

Form S-3

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

CEI Funding LLC OE Funding LLC TE Funding LLC

(Registrants and Issuers of the Phase-In-Recovery Bonds)

(Exact name of registrant as specified in its charter)

Delaware	Delaware	Delaware
(State or other jurisdiction of incorporation or organization)	(State or other jurisdiction of incorporation or organization)	(State or other jurisdiction of incorporation or organization)
46-1367273	46-1367425	46-1367453
(I.R.S. Employer Identification No.)	(I.R.S. Employer Identification No.)	(I.R.S. Employer Identification No.)

The Cleveland Electric Illuminating Company Ohio Edison Company The Toledo Edison Company

(Registrants, Sponsors, Sellers, Initial Servicers and Depositors)

(Exact name of registrant as specified in its charter)

Ohio	Ohio	Ohio
(State or other jurisdiction of incorporation or organization)	(State or other jurisdiction of incorporation or organization)	(State or other jurisdiction of incorporation or organization)
34-0150020	34-0437786	34-4375005
(I.R.S. Employer Identification No.)	(I.R.S. Employer Identification No.)	(I.R.S. Employer Identification No.)
	c/o FirstEnergy Corp. 76 South Main Street Akron, Ohio 44308 (800) 736-3402

Rhonda S. Ferguson, Esq.

Vice President and Corporate Secretary

FirstEnergy Corp.

76 South Main Street

Akron, Ohio 44308

(800) 736-3402

(Name, address, including zip code, and telephone number, including area code, of agent for service)

With copies to:

Lucas F. Torres, Esq. Akin Gump Strauss Hauer & Feld LLP One Bryant Park New York, New York 10036 (212) 872-1000 Douglas E. Davidson, Esq. Morgan, Lewis & Bockius LLP
101 Park Avenue New York, New York 10178-0060 (212) 309-6000

Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement.

If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.  ¨

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box.  x

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ¨

If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box.  ¨

If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x  (do not check if a smaller reporting company)	Smaller reporting company	¨

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price per Certificate(1)	Proposed Maximum Aggregate Offering Price(2)	Amount of Registration Fee(3)
Pass-Through Trust Certificates of FirstEnergy Ohio PIRB Special Purpose Trust 2013	$505,000,000	100%	$505,000,000	$68,882
Phase-In-Recovery Bonds of CEI Funding LLC	(2)	(2)	(2)	None
Phase-In-Recovery Bonds of OE Funding LLC	(2)	(2)	(2)	None
Phase-In-Recovery Bonds of TE Funding LLC	(2)	(2)	(2)	None
Total	$505,000,000	100%	$505,000,000	$68,882

(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) under the Securities Act of 1933, as amended.

(2) No additional consideration will be paid by the purchasers of the Pass-Through Trust Certificates for the Phase-In-Recovery Bonds that secure the Pass-Through Trust Certificates.

(3) Previously paid.

The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus supplement is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus supplement is not an offer to sell these securities nor is it seeking an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion, dated June 4, 2013

Prospectus Supplement to Prospectus, dated                     , 2013

$        

FirstEnergy Ohio PIRB Special Purpose Trust 2013

Issuing Entity

Pass-Through Trust Certificates

CEI Funding LLC OE Funding LLC TE Funding LLC

Issuers of the Phase-In-Recovery Bonds

The Cleveland Electric Illuminating Company

Ohio Edison Company The Toledo Edison Company

Sponsors, Sellers, Initial Servicers and Depositors

Tranche

Expected Weighted Average Life (Years)

Principal Amount Issued

Certificate Interest  Rate

Price to Public

Underwriting Discounts  and Commissions

Proceeds to Issuing  Entity (Before Expenses)

Scheduled Final Payment Date

Final Maturity Date

A-1

$

%

%

%

%

A-2

$

%

%

%

%

A-3

$

%

%

%

%

The total price to the public is $         . The total amount of the underwriting discounts and commissions is $         . The total amount of proceeds to the issuing entity after underwriting discounts and commissions and before deduction of expenses is $        .

Investing in the pass-through trust certificates involves risks. Please read “Risk Factors” beginning on page 16 of the accompanying prospectus.

FirstEnergy Ohio PIRB Special Purpose Trust 2013, referred to herein as the issuing entity, is offering $         of pass-through trust certificates in three tranches, designated A-1, A-2 and A-3, referred to herein as the certificates. The certificates will represent fractional undivided beneficial interests in the phase-in-recovery bonds, collectively referred to herein as the bonds, of CEI Funding LLC, a wholly-owned subsidiary of The Cleveland Electric Illuminating Company, OE Funding LLC, a wholly-owned subsidiary of Ohio Edison Company, and TE Funding LLC, a wholly-owned subsidiary of The Toledo Edison Company and other specified property of the issuing entity constituting trust property. CEI Funding LLC, OE Funding LLC and TE Funding LLC are collectively referred to herein as the bond issuers. The bonds will be 100% owned by the issuing entity. The issuing entity will grant to the certificate trustee, for the benefit of the certificateholders, a lien on the bonds of each bond issuer and other trust property. The Cleveland Electric Illuminating Company, Ohio Edison Company and The Toledo Edison Company are the sellers of the phase-in-recovery properties (described below) and will serve as the initial servicers with regard to the bonds.

Each of the bonds will be secured primarily by the right to impose, charge and collect irrevocable nonbypassable usage-based charges payable by retail electric customers in the service territories of The Cleveland Electric Illuminating Company, Ohio Edison Company and The Toledo Edison Company, as the case may be. Each of the bonds will be a non-recourse obligation of CEI Funding LLC, OE Funding LLC or TE Funding LLC, as the case may be. Neither the bonds nor the certificates will be legal obligations of CEI, OE or TE, as the sponsors, sellers, initial servicers and depositors.

Payment on the bonds of each bond issuer and thus payment on the certificates will be supported by credit enhancement consisting principally of a semiannual true-up adjustment of phase-in-recovery charges intended to ensure recovery of amounts sufficient to timely pay scheduled principal and interest and other approved financing costs and amounts available in the capital subaccount under each bond indenture to the extent there are insufficient funds in the general subaccount and excess funds subaccount to pay interest and principal on the bonds.

Neither the certificates, the bonds nor the phase-in-recovery property securing the bonds is an obligation of the State of Ohio, the Public Utilities Commission of Ohio, or any political subdivision, governmental agency, authority or instrumentality of the State of Ohio or of FirstEnergy Corp., The Cleveland Electric Illuminating Company, Ohio Edison Company or The Toledo Edison Company or any of their respective affiliates, except for the bond issuers and the issuing entity.

Neither the full faith and credit nor the taxing power of the State of Ohio, nor the Public Utilities Commission of Ohio, nor any political subdivision, agency, authority or instrumentality of the State of Ohio is pledged to the payment of principal of, or interest on, the certificates or the bonds, or the payments securing the bonds. Furthermore, neither the State of Ohio, nor the Public Utilities Commission of Ohio, nor any political subdivision, agency, authority or instrumentality of the State of Ohio will appropriate any funds for the payment of any of the certificates or the bonds.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The underwriters expect to deliver the certificates through the book-entry facilities of The Depository Trust Company against payment in immediately available funds on or about                     , 2013. Each certificate will be entitled to interest on             and             of each year. The first scheduled payment date is                     , 2013. Interest will accrue from                     , 2013 and must be paid by the purchaser if the certificates are delivered after that date. There currently is no secondary market for the certificates, and we cannot assure you that one will develop.

Joint Bookrunning Managers

Citigroup Credit Agricole Securities Goldman, Sachs & Co.

Co-Managers

Barclays BofA Merrill Lynch RBS

Prospectus Supplement dated                     , 2013

TABLE OF CONTENTS

PROSPECTUS SUPPLEMENT

	Page
READING THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS		S-iii
SUMMARY OF THE TERMS		S-1
DESCRIPTION OF THE CERTIFICATES		S-10
Distributions and Allocations		S-10
DESCRIPTION OF THE BONDS		S-12
Interest		S-12
Principal		S-13
EXPECTED AMORTIZATION SCHEDULES		S-15
Weighted Average Life Sensitivity		S-15
Assumptions		S-16
Fees and Expenses		S-16
THE PHASE-IN-RECOVERY PROPERTY		S-17
THE TRUSTEES		S-18
CREDIT ENHANCEMENT		S-19
Statutory True-Up Adjustment Mechanism for Payment of Scheduled Principal and Interest and Other Financing Costs		S-19
Collection Accounts and Subaccounts		S-19
HOW FUNDS IN THE COLLECTION ACCOUNT WILL BE ALLOCATED		S-21
Cap on Certain Financing Costs		S-22
UNDERWRITING		S-23
RATINGS		S-25
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES		S-26
LEGAL PROCEEDINGS		S-26
WHERE YOU CAN FIND MORE INFORMATION		S-26
LEGAL MATTERS		S-26
OFFERING RESTRICTIONS IN CERTAIN JURISDICTIONS		S-27

S-i

PROSPECTUS

	Page
READING THIS PROSPECTUS		iv
PROSPECTUS SUMMARY		1
RISK FACTORS		16
REVIEW OF PHASE-IN-RECOVERY PROPERTY		28
THE SECURITIZATION ACT		31
DESCRIPTION OF THE PHASE-IN-RECOVERY PROPERTY		36
SALE AGREEMENTS		40
BANKRUPTCY AND CREDITORS’ RIGHTS ISSUES		46
THE ISSUING ENTITY		50
THE TRUSTEES		51
THE BOND ISSUERS		54
THE SPONSORS, SELLERS, INITIAL SERVICERS AND DEPOSITORS		58
AFFILIATIONS AND TRANSACTIONS AMONG THE TRANSACTION PARTIES		68
SERVICING AGREEMENTS		69
DESCRIPTION OF THE BONDS		77
DESCRIPTION OF THE CERTIFICATES		89
WEIGHTED AVERAGE LIFE AND YIELD CONSIDERATIONS FOR THE CERTIFICATES		98
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES		99
OHIO STATE TAXATION		103
CERTAIN ERISA AND OTHER CONSIDERATIONS		104
USE OF PROCEEDS		107
PLAN OF DISTRIBUTION		107
RATINGS		107
WHERE YOU CAN FIND MORE INFORMATION		108
REPORTS TO HOLDERS		109
LEGAL MATTERS		109
GLOSSARY OF DEFINED TERMS		110

Until 90 days after the date of this prospectus supplement, all dealers that effect transactions in these securities, whether or not participating in the offering described in this prospectus supplement, may be required to deliver a prospectus supplement and prospectus. This is in addition to the dealers’ obligation to deliver a prospectus supplement and prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

S-ii

READING THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS

This prospectus supplement and the accompanying prospectus provide information about us, the certificates, the bonds, the bond issuers and The Cleveland Electric Illuminating Company, Ohio Edison Company and The Toledo Edison Company, as the Ohio Companies, sponsors, sellers, initial servicers and depositors.

The specific terms of the certificates are contained in this prospectus supplement. The accompanying prospectus provides general information about the certificates. You should read both of these documents in full before buying the certificates.

References in this prospectus supplement and the accompanying prospectus to the terms we, us, our or the issuing entity mean FirstEnergy Ohio PIRB Special Purpose Trust 2013, the entity which will issue the certificates. References to the pass-through trust certificates or the certificates, unless the context otherwise requires, means the trust certificates offered pursuant to this prospectus supplement. References to the certificateholders or the holders, unless the context otherwise requires, means the registered holders of the certificates. References to the bond issuers refer to CEI Funding LLC, OE Funding LLC and TE Funding LLC, as the case may be. References to the phase-in-recovery bonds or the bonds refer to the phase-in-recovery bonds issued by the bond issuers. The Ohio Companies are also sometimes referred to respectively as CEI, OE and TE. FirstEnergy Corp., the parent of the Ohio Companies, is referred to herein and in the accompanying prospectus as FirstEnergy. References to the Securitization Act refer to Sections 4928.23 through 4928.2318 of the Ohio Revised Code, passed by the Ohio House of Representatives and the Ohio Senate in December 2011, and effective March 2012, which Securitization Act created the regulatory structure that allows electric utilities to issue bonds to securitize certain phase-in costs. Unless the context otherwise requires, the term customer or retail customer means a retail end user of electricity and related services provided by a retail electric service provider via the transmission and distribution system of an electric distribution utility. References to the Ohio commission or the PUCO refer to the Public Utilities Commission of Ohio. You can find a glossary of certain defined terms used in this prospectus supplement and the accompanying prospectus on page 110 of the accompanying prospectus.

We have included cross-references to sections in this prospectus supplement and the accompanying prospectus where you can find further related discussions.

You should rely only on information about the certificates provided in this prospectus supplement and the accompanying prospectus. We have not authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not offering to sell the certificates in any jurisdiction where the offer or sale is not permitted. The information in this prospectus supplement is current only as of the date of this prospectus supplement.

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SUMMARY OF THE TERMS

The following section is a summary of selected information and will not provide you with all the information you will need to make your investment decision. You will find a detailed description of the offering of the certificates following this summary. To understand all of the terms of this offering of the certificates, carefully read the entire prospectus supplement and accompanying prospectus. This prospectus supplement and the accompanying prospectus contain terms, appearing in bold text at their first usage, that are specific to the regulated utility industry and to the certificates and may be technical in nature. Please refer to the Glossary of Defined Terms.

Securities Offered $         FirstEnergy Ohio PIRB Special Purpose Trust 2013 Pass-Through Trust Certificates. The certificates offered will be issued in three tranches, tranche A-1, tranche A-2 and tranche A-3. No other tranches will be offered in this transaction.

Each tranche of certificates will represent fractional undivided beneficial interests in the bonds of each of the bond issuers and other trust property. Holders of each tranche of certificates will receive payments received by the issuing entity on the corresponding tranche of bonds of each bond issuer, which will be the primary source of distributions on a tranche of certificates. Please read “Description of the Certificates” and “Description of the Bonds” in this prospectus supplement and the accompanying prospectus. The issuing entity will be the initial sole holder of all of the bonds. While it is expected that the issuing entity will be at all times the sole holder of all of the bonds, it is possible that one or more bonds could be sold as a result of an event of default.

Issuing Entity and Capital Structure FirstEnergy Ohio PIRB Special Purpose Trust 2013.

The issuing entity was formed by the bond issuers on May 7, 2013 specifically for the purpose of purchasing the bonds from the bond issuers and issuing the certificates offered hereby. The issuing entity is a Delaware statutory trust. The principal assets of the issuing entity will be the bonds. The declaration of trust does not permit the issuing entity to engage in any activities other than acquiring the bonds, holding the bonds, issuing the certificates and engaging in other related activities. The issuing entity may not issue additional certificates other than in connection with transfers, exchanges or replacements permitted under the certificate indenture.

Each bond issuer will be capitalized by an upfront cash deposit by CEI, in the case of CEI Funding LLC, OE, in the case of OE Funding LLC and TE, in the case of TE Funding LLC, of 0.50% or, in the case of TE Funding LLC, 0.60% of the initial principal amount of the bonds of the related bond issuer (to be held in the capital subaccount) and will have an excess funds subaccount to retain, until the next payment date, any amounts collected remaining after all payments on the bonds have been made (and otherwise in accordance with the priority of payments). Please read “How Funds In The Collection Account Will Be Allocated” in this prospectus supplement.

Relationship with the PUCO Pursuant to the financing order:

• the PUCO or its designated representative has a decision-making role co-equal with the sponsors with respect to the structuring

S-1

and pricing of the certificates and all matters related to the structuring and pricing of the certificates will be determined through a joint decision of the sponsors and the PUCO or its designated representative or financial advisor;

• the PUCO’s financial advisor will participate fully in all plans and decisions related to the pricing, marketing and structuring of the bonds and certificates and will be provided timely information as necessary to fulfill its obligation to advise the PUCO in a timely manner but makes no representations as to any of the information contained herein; and

• the servicers will file periodic adjustments to the phase-in- recovery charges with the PUCO on our and the bond issuers’ behalf.

The bond issuers have agreed that certain reports concerning phase-in-recovery charge collections will be provided to the PUCO.

Our Address c/o FirstEnergy Service Company

76 South Main Street

Akron, Ohio 44308

Our Telephone Number (800) 736-3402

Bond Issuers CEI Funding LLC, or CEI Funding, OE Funding LLC, or OE Funding, and TE Funding LLC, or TE Funding. The address of the bond issuers is c/o FirstEnergy Service Company, 76 South Main Street, Akron, Ohio 44308. The telephone number of the bond issuers is (800) 736-3402.

Trustees U.S. Bank Trust National Association, a national banking association, will serve as the Delaware trustee of the issuing entity and U.S. Bank National Association, a national banking association, will serve as trustee under the certificate indenture and each bond indenture. Please read “The Trustees” in this prospectus supplement for a description of certain of the trustee’s relevant prior experience and “The Trustees” in the accompanying prospectus for a description of the trustee’s duties and responsibilities as certificate trustee under the certificate indenture and as bond trustee under each bond indenture. The Ohio Companies will serve as administrative trustees of the issuing entity under the declaration of trust.

Purpose of the Offering The issuance of the bonds and the certificates is intended to enable the sponsors to recover certain previously approved costs, referred to as phase-in costs, on terms more favorable to customers than would be achievable through the recovery methods previously approved by the PUCO. Please read “The Securitization Act” in the accompanying prospectus.

Phase-In-Recovery Property The phase-in-recovery property of each bond issuer generally consists of its irrevocable right to impose, charge and collect nonbypassable

S-2

usage-based phase-in-recovery charges from retail electric customers in its sponsor’s service territory. Each bond issuer will purchase its phase-in-recovery property from its seller. See “The Phase-In- Recovery Property” in this prospectus supplement and “Description of the Phase-In-Recovery Property” in the accompanying prospectus.

Sponsors, Sellers, Initial Servicers and Depositors The Cleveland Electric Illuminating Company, or CEI, is a public electric utility, which provides regulated electric distribution services in northeastern Ohio, and a wholly-owned subsidiary of FirstEnergy.

Ohio Edison Company, or OE, is a public electric utility, which provides regulated electric distribution services in central and northeastern Ohio, and a wholly-owned subsidiary of FirstEnergy.

The Toledo Edison Company, or TE, is a public electric utility, which provides regulated electric distribution services in northwestern Ohio, and a wholly-owned subsidiary of FirstEnergy.

Each of the Ohio Companies has an address at 76 South Main Street, Akron, Ohio 44308. The telephone number of the sponsors, sellers, initial servicers and depositors is (800) 736-3402.

CEI, OE and TE, acting as the initial servicers, and any successor servicer(s), referred to in this prospectus supplement and the accompanying prospectus as the servicers, will service the phase-in-recovery property securing the bonds under separate servicing agreements with the bond issuers. Please read “Servicing” and “The Sponsors, Sellers, Initial Servicers and Depositors” in the accompanying prospectus.

None of the Ohio Companies, FirstEnergy or any of their respective affiliates (other than the bond issuers and the issuing entity) is an obligor on the bonds or the certificates.

Servicing Fees Each servicer will be entitled to receive an annual servicing fee in an amount equal to 0.10% of the initial principal balance of the bonds of the applicable bond issuer. If any servicer is replaced by a non-utility successor servicer, such non-utility successor servicer may be paid a servicing fee of up to 0.75% per year of the initial principal balance of the applicable bonds.

Each bond trustee will pay the unpaid servicing fees semiannually on each payment date to the extent of available funds prior to the distribution of any interest on and principal of its bonds.

Expected Settlement                     , 2013, settling flat. DTC, Clearstream and Euroclear.

State of Ohio Pledge The Securitization Act contains a pledge and agreement by the State of Ohio with the bondholders and bond issuers that the State of Ohio

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will not take or permit any action that impairs the value of phase-in-recovery property under a financing order or revises the phase-in-costs for which recovery is authorized under a financing order or, except for the approved adjustment mechanism authorized in a financing order and allowed under the Securitization Act, reduce, alter or impair phase-in-recovery charges until the bonds, all financing costs and all amounts to be paid under any ancillary agreement are paid or performed in full. The PUCO invoked this pledge on behalf of the State of Ohio in the financing order.

Optional Redemption Neither the certificate indenture nor the bond indentures permit an optional redemption of the certificates or the bonds, respectively.

Minimum Denomination of the Certificates $100,000 or integral multiples of $1,000 in excess thereof except for one certificate of each tranche, which may be of a smaller denomination.

Ratings We expect the bonds and the certificates will receive credit ratings from three nationally recognized statistical rating organizations, or NRSROs. Please see “Ratings” in this prospectus supplement.

Initial Phase-In-Recovery Charges as a Portion of Customers Total Electricity Bill Phase-in-recovery charges are nonbypassable in that such charges cannot be avoided by any customer or other person obligated to pay the charges. Subject to the methodology approved in the financing order, the phase-in-recovery charges will apply to all customers of CEI, OE and TE, as the case may be, for as long as they remain customers of such electric distribution utility. If a customer of the electric distribution utility purchases electric generation service from a competitive retail electric service provider, the electric distribution utility is authorized by the Securitization Act to collect the phase-in-recovery charges directly from that customer.

The phase-in-recovery charges are separate and apart from CEI’s, OE’s and TE’s base rates, and are subject to adjustment semiannually (other than the initial adjustment, which will be completed within 12 months after the issuance date of the bonds, and adjustments during the period commencing with the start of the last year that the last maturing tranche of bonds of each bond issuer is expected to be outstanding and ending with the final maturity date, in which case adjustments as frequently as monthly may be necessary). See “Phase-In-Recovery Property” in this prospectus supplement and “Description of the Phase-In-Recovery Property—Adjustments to the Phase-In-Recovery Charges” in the accompanying prospectus.

CEI customers are expected to have estimated initial phase-in-recovery charges of      cents/kWh resulting in an estimated monthly cost of $         for the typical residential bill (1,000 kWh), which represents approximately         % of such monthly residential bill. Under current recovery methods, a 1,000 kWh residential customer would pay on average an estimated total monthly charge of      cents/kWh resulting in a monthly cost of $        .

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OE customers are expected to have estimated initial phase-in-recovery charges of      cents/kWh resulting in an estimated monthly cost of $         for the typical residential bill (1,000 kWh), which represents approximately         % of such monthly residential bill. Under current recovery methods, a 1,000 kWh residential customer would pay on average an estimated total monthly charge of      cents/kWh resulting in a monthly cost of $        .

TE customers are expected to have estimated initial phase-in-recovery charges of      cents/kWh resulting in an estimated monthly cost of $         for the typical residential bill (1,000 kWh), which represents approximately         % of such monthly residential bill. Under current recovery methods, a 1,000 kWh residential customer would pay on average an estimated total monthly charge of      cents/kWh resulting in a monthly cost of $        .

The amounts shown above are dependent on a number of assumptions and based on estimates and market conditions as of                     , 2013. Such amounts will also periodically change throughout the recovery period in accordance with the approved adjustment mechanism described in the accompanying prospectus.

True-Up Adjustment Mechanism for Payments on the Bonds and other Financing Costs Please read “Credit Enhancement” in this prospectus supplement and “Prospectus Summary—Adjustments to the Phase-In-Recovery Charges” and “Description of the Phase-In-Recovery Property—Adjustments to the Phase-In-Recovery Charges” in the accompanying prospectus.

Pursuant to the Securitization Act, the PUCO provided a description in the financing order of the adjustment mechanism to be used in the imposition, charging and collection of the phase-in-recovery charges, such phase-in-recovery charges to be reviewed and adjusted semiannually as provided in the financing order, based on estimates of consumption for each customer class and other mathematical factors. The PUCO’s review of these requests is limited to determining whether there is any mathematical error in the servicer’s application of the adjustment mechanism to the phase-in-recovery charges, including the calculation of any proportionate charges allocated to governmental aggregation customers as directed in the financing order. Such adjustments will become automatically effective 60 days after the request is submitted unless otherwise ordered by the PUCO.

Priority of Payments Please read “How Funds In The Collection Account Will Be Allocated” in this prospectus supplement for a description of how funds will be allocated under each bond issuer’s bond indenture.

Except as noted below, to the extent funds are available (and subject to the priority of payments), each bond issuer will pay principal in respect of its bonds on each payment date in the following order of priority: first, to the holders of tranche A-1 bonds until the principal

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balance of that tranche is paid in full, second, to the holders of tranche A-2 bonds until the principal balance of that tranche is paid in full, and third, to the holders of tranche A-3 bonds until the principal balance of that tranche is paid in full.

• So long as no event of default has occurred and is continuing, a bond issuer will not pay principal on a payment date of any tranche of bonds if making the payment would reduce the principal balance of that tranche to an amount lower than that specified in the expected amortization schedule for that tranche on that payment date.

• Payments of principal due and payable on the bonds of a bond issuer as a result of an event of default (and assuming all bonds have been declared immediately due and payable), or upon final maturity, will be paid pro rata in accordance with that bond issuer’s bond indenture. See “Description of the Bonds” in this prospectus supplement and in the accompanying prospectus.

• Proceeds received by the certificate trustee from the sale of any bond or recoveries received by the certificate trustee as a result of the institution of certain judicial proceedings by the certificate trustee, in each case as a result of an event of default and subject to the terms of the certificate indenture, will be applied (after the payment of any interest owed on the certificates) to due and unpaid principal pro rata on each tranche of certificates based on the respective outstanding principal amount of the certificates of each tranche. See “Description of the Certificates—Events of Default” in the accompanying prospectus.

Use of Proceeds The issuing entity will use the entire proceeds received from the sale of the certificates, net of underwriting discounts, to purchase the bonds from the bond issuers. Each bond issuer will use the net proceeds from the sale of its bonds to pay its share of the expenses of the issuance and sale of the bonds and the certificates and to purchase the phase-in-recovery property from its seller. The sellers will use the net proceeds from the sale of the phase-in-recovery properties primarily to repay outstanding debt. Net proceeds may also be used by any seller for other general corporate purposes to the extent set forth in the financing order.

Up-front expenses incurred in connection with issuance and sale of the bonds and the certificates and the selection and acquisition of the phase-in-recovery property, net of underwriting discounts and expenses of $                , are expected to be approximately $                . An aggregate of approximately $300,000 of such expenses are payable to the servicers in connection with set-up costs of such servicers, including costs incurred in connection with establishing the bond issuers and issuing entity and setting up the necessary information technology systems, processes and reports. In

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addition, approximately $                 of such expenses are payable to an underwriter who previously acted as structuring advisor for the transaction as described under “Underwriting” in this prospectus supplement.

Security / Credit Enhancement Each tranche of certificates will represent fractional undivided beneficial interests in the bonds of each of the bond issuers and other trust property. The issuing entity will grant to the certificate trustee, for the benefit of the certificateholders, a lien on the bonds of each of the bond issuers and other trust property. See “Description of the Certificates” in this prospectus supplement and in the accompanying prospectus. The bonds issued by each bond issuer will be secured primarily by the phase-in-recovery property of such bond issuer, which will generally consist of its irrevocable right to impose, charge and collect nonbypassable usage-based phase-in-recovery charges from retail electric customers in its sponsor’s service territory. Credit enhancement for the bonds, through a true-up adjustment mechanism and capital subaccount, is intended to protect against losses or delays in scheduled payments on the bonds and accordingly, the certificates. Please read “The Phase-In-Recovery Property” and “Credit Enhancement” in this prospectus supplement, as well as “The Securitization Act” and “Description of the Phase-In-Recovery Property” in the accompanying prospectus.

Tax Status of the Certificates For federal income tax purposes, the issuing entity will be treated as a “grantor trust,” and thus not taxable as a corporation, and each tranche of certificates will be treated as representing ownership of fractional undivided beneficial interests in the bonds of each of the bond issuers and other trust property. Interest and original issue discount, if any, on the certificates, and any gain on the sale of the certificates, generally will be included in gross income of certificateholders for federal income tax purposes. See “Material U.S. Federal Income Tax Consequences.” Interest on the certificates and any profit on the sale of the certificates are subject to Ohio personal income taxes. For taxpayers other than a limited class of financial institutions, Ohio does not currently impose a personal property tax to which the certificates would be subject. See “Ohio State Taxation” in the accompanying prospectus.

ERISA See “Certain ERISA and Other Considerations,” which begins on page 104 of the accompanying prospectus.

Payment Dates and Interest Accrual Interest will be distributed on the certificates semiannually, on             and             . The first scheduled interest and principal distribution date is                     , 2013. If any interest distribution date is not a business day, distributions scheduled to be made on such date may be made on the next succeeding business day and no interest shall accrue upon such payment during the intervening period. On each distribution date, the certificate trustee will distribute interest on and principal of the certificates to the extent interest and principal is

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received on the corresponding tranches of bonds to the holders of each tranche of certificates as of the close of business on the record date. Interest on the bonds will be calculated on a 30/360 basis. See “Description of the Certificates” and “Description of the Bonds” in this prospectus supplement and the accompanying prospectus.

Interest is due on each distribution date and principal is due upon the final maturity date for each tranche of certificates.

Scheduled Final Distribution and Payment Dates; Final Maturity Dates The scheduled final distribution dates and final maturity dates of each tranche of certificates are listed below:

Tranche	Scheduled Final Distribution Date	Final Maturity Date
A-1
A-2
A-3

The scheduled final payment dates and final maturity dates of each tranche of bonds are listed below:

Tranche	Scheduled Final Payment Date	Final Maturity Date
A-1
A-2
A-3

Continuing Disclosure Each bond issuer will or will cause its sponsor to, post on http://www.firstenergycorp.com/investor, a collective website to be used by all bond issuers, periodic reports containing the information required by the related bond indenture (which will include reports and other information required to be filed with the SEC and information regarding the phase-in-recovery charges). See “Description of the Bonds—Website Disclosure” in the accompanying prospectus.

Information available on FirstEnergy’s website, other than the reports and other information we, the bond issuers or the sponsors, solely in their capacity as sponsors, are required to file with the SEC that are incorporated by reference in this prospectus supplement and the accompanying prospectus, does not constitute a part of this prospectus supplement or the accompanying prospectus.

Events of Default Events of default under each of the bond indentures include a default in the payment of interest on the applicable bonds and a default in the payment of unpaid principal on the final maturity date. An event of default under any of the bond indentures will constitute an event of default under the certificate indenture. Please read “Description of the Bonds—Bond Events of Default; Rights on Bond Event of Default” and “Description of the Certificates—Events of Default” in the accompanying prospectus. An event of default in respect of the bonds of one bond issuer will not constitute an event of default with respect to the bonds of any other bond issuers.

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Risk Factors You should carefully consider the risk of investing in the certificates. See “Risk Factors,” which begins on page 16 of the accompanying prospectus.

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DESCRIPTION OF THE CERTIFICATES

The certificates issued by the issuing entity will represent fractional undivided beneficial interests in the bonds of CEI Funding, OE Funding and TE Funding, and other trust property. The issuing entity will grant to the certificate trustee, for the benefit of the certificateholders, a lien on the bonds of each of the bond issuers and other trust property. Each tranche of CEI Funding bonds, OE Funding bonds and TE Funding bonds will have the same interest rate, scheduled final distribution date and final maturity date as the related tranche of certificates. Taken together, the tranches of bonds of each of the bond issuers corresponding to a tranche of certificates will have the same aggregate principal amount and expected amortization schedule as that tranche of certificates. See “Description of the Bonds.” The issuing entity will issue the certificates in minimum denominations of $100,000 or in integral multiples of $1,000 in excess thereof except for one certificate of each tranche, which may be of a smaller denomination. The initial principal amounts, the interest rates, the scheduled final distribution dates and final maturity dates of the certificates of each tranche are listed below:

Tranche	Expected Weighted Average Life (Years)	Principal Amount  Issued	Certificate Interest  Rate		Scheduled Final Distribution Date	Final Maturity Date
A-1		$		%
A-2		$		%
A-3		$		%

The scheduled final distribution date for a tranche of certificates is the date when the issuing entity expects to receive in full all interest on, and principal of, the corresponding tranche of bonds of each of the bond issuers, and distribute such amounts as payment of all interest on, and principal of, that tranche of certificates. The final maturity date for a tranche of certificates is the legal maturity date of that tranche. The failure to distribute the portion of principal of any tranche of certificates representing principal of either the CEI Funding bonds, the OE Funding bonds or the TE Funding bonds in full by the final maturity date for that tranche is an event of default with respect to the bonds of the defaulting bond issuer, and, if that occurs, the certificate trustee may vote all, and upon the written direction of the holders of at least a majority (greater than 50%) in principal amount of all outstanding certificates, will vote a corresponding majority, of the bonds of the defaulting bond issuer in favor of declaring the unpaid principal amount of all such bonds and accrued interest thereon to be due and payable. A foreclosure on the phase-in-recovery property securing the bonds of a defaulting bond issuer upon the acceleration of the unpaid principal amount of the bonds of such defaulting bond issuer may be an inadequate remedy due to the limited market for phase-in recovery property. See “Risk Factors—Risks Related to Limited Source of Payments and Credit Enhancement—You could experience payment delays or losses as a result of limited sources of payment for the certificates and limited credit enhancement” in the accompanying prospectus. A default on the bonds of one bond issuer will not constitute a default with respect to the bonds of any other bond issuer or the certificates to the extent that they represent fractional undivided interests in the bonds of any non-defaulting bond issuer. See “Description of the Certificates—Events of Default” in the accompanying prospectus.

The fees and expenses related to retirement of the certificates will be allocated to the bond issuers pro rata based on the original principal amount of the bonds of each bond issuer.

Distributions and Allocations

Interest on each tranche of certificates will accrue from its issuance date at the interest rate listed in the preceding table. The certificate trustee is required to make distributions of interest on and principal of the certificates semiannually on             and             (or, if any distribution date is not a business day, the following business day) of each year, beginning on                     , 2013. On each distribution date, the certificate trustee will distribute interest on and principal of the certificates to the extent interest and principal is received on the corresponding tranches of bonds to the holders of each tranche of certificates as of the close of business on the record date. The record date for any distribution of interest on, and principal of, the certificates will be the

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business day immediately before the distribution date. Each distribution date will also be a payment date for interest on, and principal of, the bonds. The certificate trustee is scheduled to receive payments of interest on and principal of the bonds of each of the bond issuers on each payment date. The bond trustees will make payments on the bonds of the bond issuers on any payment date as described under “How Funds In The Collection Account Will Be Allocated,” “Description of the Bonds—Interest” and “Description of the Bonds—Principal” in this prospectus supplement and “Description of the Bonds—Allocations and Payments” in the accompanying prospectus. After paying interest, to the extent funds are available, each bond issuer will pay principal in respect of its bonds on each payment date in the following order of priority: first, to the holders of the tranche A-1 bonds until the principal balance of that tranche is paid in full, second, to the holders of the tranche A-2 bonds until the principal balance of that tranche is paid in full, and third, to the holders of the tranche A-3 bonds until the principal balance of that tranche is paid in full; provided that a bond issuer will not pay principal on a payment date of any tranche of bonds if making the payment would reduce the principal balance of that tranche to an amount lower than that specified in the expected amortization schedule for that tranche on that payment date. See “Description of the Bonds—Principal.” Payments of principal due and payable on the bonds of a bond issuer as a result of an event of default (and assuming all bonds have been declared immediately due and payable), or upon final maturity, will be paid pro rata based on the respective principal amounts of such bonds. See “Description of the Bonds” in this prospectus supplement and in the accompanying prospectus. Proceeds received by the certificate trustee from the sale of any bond or recoveries received by the certificate trustee as a result of the institution of certain judicial proceedings by the certificate trustee, in each case as a result of an event of default and subject to the terms of the certificate indenture, will be applied (after the payment of any interest owed on the certificates) to due and unpaid principal pro rata on each tranche of certificates based on the respective outstanding principal amount of the certificates of each tranche. See “Description of the Certificates—Events of Default” in the accompanying prospectus.

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DESCRIPTION OF THE BONDS

Each of CEI Funding, OE Funding and TE Funding will issue and sell its respective bonds to the issuing entity, in each case, in exchange for an allocable portion (based on the aggregate principal amount of the bonds of each bond issuer) of the net proceeds from the sale of the certificates by the issuing entity. Each tranche of bonds of CEI Funding, OE Funding and TE Funding will provide funds for the payment of an allocable portion of the related tranche of certificates and will have the same interest rate, scheduled maturity date and final maturity date as the related tranche of certificates. Taken together, the tranches of bonds of each of the bond issuers corresponding to a tranche of certificates will have the same aggregate principal amount and expected amortization schedule as the corresponding tranche of certificates.

The bonds will consist of the following tranches, in the initial principal amounts and bearing the interest rates and having the scheduled maturity dates and final maturity dates listed below:

CEI Funding LLC

Tranche	Expected Weighted Average Life (Years)	Principal Amount  Issued	Bond Interest Rate		Scheduled Final Payment Date	Final Maturity Date
A-1		$		%
A-2		$		%
A-3		$		%

OE Funding LLC

Tranche	Expected Weighted Average Life (Years)	Principal Amount  Issued	Bond Interest Rate		Scheduled Final Payment Date	Final Maturity Date
A-1		$		%
A-2		$		%
A-3		$		%

TE Funding LLC

Tranche	Expected Weighted Average Life (Years)	Principal Amount  Issued	Bond Interest Rate		Scheduled Final Payment Date	Final Maturity Date
A-1		$		%
A-2		$		%
A-3		$		%

The scheduled final payment date for a tranche of bonds is the final date by which the bond issuer expects to distribute in full all interest on, and principal of, that tranche of bonds. The final maturity date for a tranche of bonds is the legal maturity date of that tranche.

Interest

Interest on each tranche of bonds will accrue from its issuance date at the interest rate listed in the preceding table. The bond issuers are required to pay interest to the issuing entity semiannually on             and             (or, if any payment date is not a business day, the following business day) of each year, beginning on                     , 2013.

The bond issuers will pay interest on the bonds prior to paying principal of the bonds. See “Description of the Bonds—Allocations and Payments” in the accompanying prospectus.

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On each payment date, each bond issuer will pay interest as follows:

• if there has been a payment default in respect of any tranche of the bonds of the bond issuer, any unpaid interest payable on any prior payment dates, together with, to the extent lawful, interest at the applicable bond interest rate on any of this unpaid interest; and

• accrued interest on the principal balance of each tranche of bonds of the bond issuer as of the close of business on the preceding payment date, or the date of the original issuance of the tranche of bonds, if applicable, after giving effect to all payments of principal made on the preceding payment date, or the date of the original issuance of the tranche of bonds, if applicable.

If there is a shortfall in the amounts necessary to make these interest payments, the related bond trustee will distribute interest pro rata on each such tranche of bonds of the related bond issuer based on the respective amounts of interest owed on the bonds of each such tranche. The distributions to the certificateholders of the corresponding tranches will be reduced by an amount equal to the shortfalls in respect of the corresponding tranches of bonds.

The bond issuers will calculate interest on the basis of a 360-day year of twelve 30-day months.

Principal

After paying interest as described above, to the extent funds are available, each bond issuer will pay principal in respect of its bonds on each payment date in the following order of priority:

(1) to the holders of the A-1 bonds, until the principal balance of that tranche has been reduced to zero;

(2) to the holders of the A-2 bonds, until the principal balance of that tranche has been reduced to zero; and

(3) to the holders of the A-3 bonds, until the principal balance of that tranche has been reduced to zero.

A bond issuer will not pay principal, however, on a payment date of any tranche of bonds if making the payment would reduce the principal balance of that tranche to an amount lower than that specified in the expected amortization schedule for that tranche on that payment date. If an event of default under the bond indenture applicable to a bond issuer has occurred and is continuing, the bond trustee may declare the unpaid principal amount of all outstanding bonds of that bond issuer and accrued interest on such bonds to be due and payable. Payments of principal due and payable on the bonds of a bond issuer as a result of an event of default (and assuming all bonds have been declared immediately due and payable), or upon final maturity, will be paid pro rata based on the respective principal amounts of such bonds. An event of default under the bond indenture of one bond issuer will not constitute an event of default under the bond indenture of any other bond issuer.

The following expected amortization schedules list the scheduled outstanding principal balance for each tranche of bonds of the bond issuers on each payment date from the issuance date to the scheduled maturity date, after giving effect to the payments expected to be made on the payment dates. In preparing the following tables, we have assumed, among other things, that:

• the bonds are issued on                     , 2013;

• payments on the bonds are made on each payment date, commencing                     , 2013;

• annual servicing fee will equal 0.10% of the initial principal amount of the bonds of the respective bond issuers;

• there are no earnings on amounts on deposit in the collection accounts;

• annual operating expenses are not expected to exceed $270,000 in the case of CEI Funding, $210,000 in the case of OE Funding, and $50,000 in the case of TE Funding, including the administration fee,

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which, as to each administrator is expected to be its pro rata portion, based on bond issuance amount, of $100,000, payable semiannually, amounts owed to the bond trustee, the Delaware trustee and the certificate trustee (which is not expected to exceed in the aggregate $3,000 per year in the case of CEI Funding, $3,000 per year in the case of OE Funding and $3,000 per year in the case of TE Funding) and amounts owed to the independent directors of each bond issuer (which is not expected to exceed in the aggregate $2,000 per year in the case of CEI Funding, $2,000 per year in the case of OE Funding and $2,000 per year in the case of TE Funding); and

• collections from phase-in-recovery charges are deposited in the collection accounts of the bond issuers as expected.

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EXPECTED AMORTIZATION SCHEDULES

Outstanding Bond Balances

CEI Funding LLC

Date Tranche A-1 Tranche A-2 Tranche A-3

OE Funding LLC

Date Tranche A-1 Tranche A-2 Tranche A-3

TE Funding LLC

Date Tranche A-1 Tranche A-2 Tranche A-3

Outstanding Certificate Balances

FirstEnergy Ohio PIRB Special Purpose Trust 2013

Date Tranche A-1 Tranche A-2 Tranche A-3

We cannot assure you that the principal balances of the tranches of bonds of any of the bond issuers, and the related tranches of certificates, will be amortized according to the tables above. The actual amortization of principal may be slower (but cannot be faster) than that indicated in the tables. See “Risk Factors” in the accompanying prospectus for various factors that may, individually or in the aggregate, affect the expected amortization of the principal balances of any tranches of bonds and the related tranches of certificates.

On each payment date, the trustee will make principal payments on the bonds to the extent the principal balance of each tranche of the bonds exceeds the amount indicated for that payment date in the tables above and to the extent of funds available in the collection account after payment of certain fees and expenses and interest. The bonds will not be in default if principal is not paid as specified in the tables above unless the principal of any tranche is not paid in full on or before the final maturity date of that tranche.

Weighted Average Life Sensitivity

Weighted average life refers to the average amount of time from the date of issuance of a security until each dollar of principal of the security has been repaid to the investor. The rate of principal payments, the amount of each interest payment and the final maturity date for each tranche of bonds, and, thus, a related portion of the certificates, will be dependent on the rate and timing of receipt of phase-in-recovery charge collections supporting the payment of such bonds. Please read “Weighted Average Life and Yield Considerations for the Certificates” in the accompanying prospectus for further information. Changes in the expected weighted average

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lives of the respective tranches of the bonds on an aggregate basis, and, thus, a related portion of the certificates, in relation to variances in actual energy consumption levels (retail electric sales) from forecast levels are shown below.

Tranche	Expected Weighted Average  Life (WAL) (Years)	Forecast Error of 5%		Forecast Error of 15%
		WAL (yrs)	Change (days)*	WAL (yrs)	Change (days)*

* Number is rounded to whole days.

Assumptions

For the purposes of preparing the above charts, the following assumptions, among others, have been made:

(i) the forecast error stays constant over the life of the bonds and is equal to an over-estimate of electricity consumption of 5% or 15%;

(ii) each servicer makes timely and accurate filings to true-up the phase-in-recovery charges semiannually (other than the initial adjustment, which will be completed within 12 months after the issuance date of the bonds, and the period commencing with the start of the last year that the last maturing tranche of bonds is expected to be outstanding and ending with the final maturity date, during which adjustments may be made as frequently as monthly);

(iii) customer charge-off rates are held constant at 0.75% for each of CEI and TE and 0.55% for OE, in each case for all classes of customers;

(iv) operating expenses are equal to projections;

(v) there is no acceleration of the final maturity date of the bonds;

(vi) a permanent loss of all customers has not occurred; and

(vii) the closing date is                     , 2013.

(viii) There can be no assurance that the weighted average lives of the bonds and, thus, a related portion of the certificates, will be as shown.

Fees and Expenses

As set forth in the table below, we are obligated to pay fees to the servicers, the trustees, the independent directors and the administrators from the phase-in-recovery charge collections and investment earnings. The following table illustrates this arrangement.

Recipient	Estimated Fees and Expenses Payable
Each servicer	An annual amount equal to 0.10% of the initial principal balance of the bonds of the applicable bond issuer (so long as such servicer is CEI, OE or TE or a successor electric distribution utility, as the case may be).
Bond trustee	$3,000 per annum plus expenses.
Certificate trustee	$1,500 per annum plus expenses.
Delaware trustee	$2,000 per annum plus expenses.
Independent directors	An aggregate of $5,700 per annum plus expenses.
Each administrator	Its pro rata portion (based on bond issuance amount) of $100,000 per annum.

If any servicer is replaced by a non-utility successor servicer, such non-utility successor servicer may be paid a servicing fee of up to 0.75% per year of the initial principal balance of the bonds.

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THE PHASE-IN-RECOVERY PROPERTY

The phase-in-recovery property of each bond issuer consists generally of its property, rights and interests under the financing order issued by the PUCO on October 10, 2012, as amended by the entry on rehearing, issued by the PUCO on December 19, 2012, and as further amended by the entry nunc pro tunc issued by the PUCO on January 9, 2013, collectively referred to herein as the financing order, including each bond issuer’s right:

• to impose, charge and collect irrevocable, nonbypassable phase-in-recovery charges from each retail customer within the service territory of CEI, OE or TE, as applicable, and

• to adjust those phase-in-recovery charges, in accordance with the adjustment mechanism set forth in the financing order, in an amount sufficient to pay principal and interest on its bonds and, subject to the cap to the extent applicable, other financing costs approved under the financing order.

Each bond issuer will purchase its phase-in-recovery property from its seller. The bonds of each bond issuer are secured primarily by the phase-in-recovery property of such bond issuer. The phase-in-recovery property is not a receivable and, as the primary collateral securing the bonds of the bond issuer, is not a pool of receivables. Collections from the phase-in-recovery charges, as such charges may be adjusted pursuant to the adjustment mechanism, will be used to pay principal and interest on the bonds and, subject to the cap to the extent applicable, other financing costs approved under the financing order. These irrevocable nonbypassable charges will be included in the customer bills of CEI, OE or TE, as applicable, and will be collected until the applicable bonds and approved financing costs are paid in full. Phase-in-recovery charges may not be reduced, impaired or adjusted by the PUCO except for periodic adjustments, in accordance with the adjustment mechanism, to correct overcollections or undercollections to ensure the recovery of amounts sufficient to timely provide all payments of principal and interest on the bonds and, subject to the cap to the extent applicable, other approved financing costs. All revenues and collections from the phase-in-recovery charges provided for in the financing order are part of the phase-in-recovery property. Please read “Credit Enhancement” in this prospectus supplement and “Description of the Phase-In-Recovery Property” in the accompanying prospectus for more information relating to the phase-in-recovery property.

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THE TRUSTEES

U.S. Bank Trust National Association, a national banking association, or U.S. Bank Trust, will serve as Delaware trustee of the issuing entity. U.S. Bank National Association, a national banking association, or U.S. Bank, will serve as trustee under the certificate indenture and each bond indenture. U.S. Bank will also act as paying agent and registrar in each trustee capacity. U.S. Bank Trust is a wholly-owned subsidiary of U.S. Bank. U.S. Bancorp, with total assets exceeding $354 billion as of December 31, 2012, is the parent of U.S. Bank, the fifth largest commercial bank in the United States. As of December 31, 2012, U.S. Bancorp served approximately 17 million customers and operated over 3,000 branch offices in 25 states. A network of specialized U.S. Bancorp offices across the nation provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses, governments and institutions.

U.S. Bank has one of the largest corporate trust businesses in the country with office locations in 48 domestic and three international cities. The certificate indenture and each bond indenture will be administered from U.S. Bank’s corporate trust office located at 190 S. LaSalle Street, 7th Floor, Chicago, IL 60603.

U.S. Bank has provided corporate trust services since 1924. As of December 31, 2012, U.S. Bank was acting as trustee with respect to over 87,000 issuances of securities with an aggregate outstanding principal balance of over $2.8 trillion. This portfolio includes corporate and municipal bonds, mortgage-backed and asset-backed securities and collateralized debt obligations.

The certificate trustee shall make available to the certificateholders via the certificate trustee’s website at www.usbank.com/abs all bond payments reports, certificate distribution reports, periodic reports and related information provided to the trustee by the respective bond issuers or their respective sponsors. Certificateholders with questions may direct them to the certificate trustee’s bondholder services group at (800) 934-6802.

U.S. Bank and U.S. Bank Trust serve or has served as trustee, paying agent and registrar on several issues of similar asset-backed securities.

Except for the information set forth in this section titled “The Trustees,” neither U.S. Bank nor U.S. Bank Trust has participated in the preparation of this prospectus supplement or the accompanying prospectus and assumes no responsibility for their contents.

The Ohio companies will serve as administrative trustees of the issuing entity under the declaration of trust.

None of the bond trustee, the Delaware trustee or the certificate trustee has any obligation with respect to the bonds or the certificates except for its express obligations under the bond indenture, the declaration of trust or the certificate indenture, as the case may be.

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CREDIT ENHANCEMENT

Credit enhancement for the bonds is intended to protect you against losses or delays in scheduled payments on the bonds and, thus, the certificates.

Statutory True-Up Adjustment Mechanism for Payment of Scheduled Principal and Interest and Other Financing Costs

Consistent with the Securitization Act and the irrevocable financing order, phase-in-recovery charges on all retail electric customers in the sponsors’ respective service territories will be reviewed and adjusted within 12 months after the issuance of the bonds and then semiannually to ensure the recovery of amounts sufficient to timely provide payment of scheduled principal and interest on the bonds and other approved financing costs. During the period commencing with the start of the last year that the last maturing tranche of the bonds of each bond issuer is expected to be outstanding and ending with the final maturity date, adjustment of the phase-in-recovery charges may occur as frequently as monthly. The PUCO will act pursuant to the financing order to ensure the full and timely imposition, charging, collection and adjustment, pursuant to the approved adjustment mechanism, of the phase-in-recovery charges. The State of Ohio has pledged and agreed in the Securitization Act and the PUCO has pledged in the financing order not to take or permit any action that impairs the value of the phase-in-recovery property or, except as allowed under the Securitization Act, reduces, alters or impairs phase-in-recovery charges that are imposed, charged, collected or remitted until the bonds and all other approved financing costs are paid in full. The obligations of the PUCO and the State of Ohio in the final financing order are direct, explicit, irrevocable and unconditional upon issuance of the bonds and are legally enforceable by bondholders against the State of Ohio. Please read “The Phase-In-Recovery Property” in this prospectus supplement and “Description of the Phase-In-Recovery Property” and “The Securitization Act” in the accompanying prospectus.

While there is no “cap” on the level of phase-in-recovery charges that may be imposed on retail electric customers to pay on a timely basis scheduled principal and interest on the bonds and replenish capital subaccounts, there is a “cap” on certain approved financing costs that may be recovered through phase-in-recovery charges. Please read “How Funds in the Collection Account Will Be Allocated—Cap on Certain Financing Costs” in this prospectus supplement and “Description of the Bonds—Allocations and Payments” in the accompanying prospectus.

Collection Accounts and Subaccounts

The bond trustee for each bond issuer will establish a collection account to hold payments arising from the phase-in-recovery charges as well as the capital contributions made to that bond issuer. Each collection account will consist of three subaccounts:

• a general subaccount;

• a capital subaccount for the capital contributions to the bond issuer; and

• an excess funds subaccount.

Withdrawals from, and deposits to, these subaccounts will be made as described under “Description of the Bonds—Allocations and Payments” in the accompanying prospectus.

General Subaccount. The bond trustee for each bond issuer will deposit collected phase-in-recovery charges remitted to it by its servicer with respect to its bonds into the general subaccount. On each payment date, the bond trustee will allocate amounts in the general subaccount as described under “How Funds in the Collection Account Will Be Allocated” in this prospectus supplement and “Description of the Bonds—Allocations and Payments” in the accompanying prospectus.

Capital Subaccount. Prior to the issuance of the bonds, CEI will contribute capital of $         to CEI Funding, OE will contribute capital of $         to OE Funding and TE will contribute capital of $         to TE

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Funding, which amounts represent, in the case of each of CEI Funding LLC and OE Funding LLC, 0.50% of the initial principal amount of the bonds of each such bond issuer and, in the case of TE Funding LLC, 0.60% of the initial principal amount of the bonds of such bond issuer. The bond trustee for each bond issuer will deposit the capital into the capital subaccount of the bond issuer. A bond trustee will draw on amounts available in the capital subaccount of the related bond issuer, to the extent amounts available in the general subaccount and excess funds subaccount of that bond issuer are insufficient to pay interest on, and principal of, its bonds and, subject to the cap to the extent applicable, fees and expenses of servicing and retiring such bonds and an allocable portion of the certificates.

If a bond trustee uses amounts on deposit in a capital subaccount to make payments on the bonds of the related bond issuer on a payment date, then that capital subaccount will be replenished by the related bond issuer on subsequent payment dates to the extent the servicer remits payments arising from phase-in-recovery charges exceeding the amounts required to pay amounts having a higher priority of payment.

Excess Funds Subaccount. Each excess funds subaccount will be funded with collected phase-in-recovery charges and earnings on amounts in the collection account in excess of the amount necessary to:

• subject to the cap to the extent applicable, pay fees and expenses (including any indemnity payments) related to the servicing and retirement of the bonds (including without limitation trustee, independent director and administration fees and expenses) of that bond issuer and the portion of the certificates allocable to that bond issuer;

• pay interest on, and principal of, such bonds to the extent required to be paid on that payment date;

• replenish the capital subaccount of that bond issuer to the required capital level; and

• pay the return on investment due to that bond issuer’s seller and pay any reimbursement amount due to that bond issuer’s servicer pursuant to section 6.02 of the applicable servicing agreement.

A bond trustee will draw on amounts in the excess funds subaccount of a bond issuer to the extent amounts available in the bond issuer’s general subaccount are insufficient to pay the amounts listed above.

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HOW FUNDS IN THE COLLECTION ACCOUNT WILL BE ALLOCATED

On each semiannual payment date, or for any amount payable under clauses (1) through (4) below, on any business day, a bond trustee will allocate or, subject to the cap (discussed below under “—Cap on Certain Financing Costs”) if applicable, pay all amounts on deposit in the collection account of the related bond issuer, including earnings on those amounts, as follows and in the following order of priority:

(1) first, all fees, costs, expenses (including legal fees and expenses) and indemnity amounts owed by that bond issuer to the related bond trustee, the certificate trustee and the Delaware trustee under the applicable basic documents will be paid to such bond trustee, certificate trustee and Delaware trustee (subject to section 6.07 of the bond indenture), respectively, and second, all fees, costs, expenses (including legal fees and expenses) and indemnity amounts owed by that bond issuer to the issuing entity under the applicable basic documents will be paid to the issuing entity; provided that the total of the foregoing amounts paid will not exceed $100,000 annually;

(2) the servicing fee and all unpaid servicing fees from any prior payment dates will be paid to that bond issuer’s servicer;

(3) the administration fee and all unpaid administration fees from prior payment dates and amounts due independent directors will be paid to that bond issuer’s administrator and the independent directors, respectively;

(4) payment of all other operating expenses, such as accounting and audit fees, rating agency fees, legal fees and certain reimbursable costs of the servicer under the related servicing agreement, and taxes and indemnities payable by that bond issuer will be paid to the persons entitled thereto;

(5) first, any overdue semiannual interest on the bonds of that bond issuer (together with, to the extent lawful, interest on such overdue interest at the applicable bond interest rate) and second, semiannual interest then due and payable on such bonds will be paid to the certificate trustee, as bondholder, for distribution to the applicable certificateholders;

(6) first, principal due and payable on the bonds of that bond issuer as a result of a bond event of default or on the final maturity date of a tranche of bonds of that bond issuer will be paid to the certificate trustee, as bondholder, for distribution to the applicable certificateholders and second, semiannual principal based on the priorities described above under “Description of the Bonds—Principal” will be paid to the certificate trustee, as bondholder, for distribution to the applicable certificateholders according to the expected amortization schedule for each tranche of bonds;

(7) unpaid operating expenses (including, without limitation, fees, expenses and indemnity amounts) owed by that bond issuer under the basic documents will be paid first, to the persons entitled thereto (other than the bond trustee, the Delaware trustee and certificate trustee) and second, to the bond trustee, Delaware trustee and certificate trustee;

(8) the amount, if any, by which that bond issuer’s capital subaccount needs to be funded to equal the required capital level as of such payment date will be allocated to that capital subaccount;

(9) an amount equal to one-half of 6.85% of the required capital level will be paid to that bond issuer’s seller;

(10) reimbursement of the servicer for any amounts paid by that servicer to the bond trustee, Delaware trustee or certificate trustee pursuant to section 6.02(f) of the servicing agreement;

(11) allocation of the remainder, if any, to the excess funds subaccount for distribution on subsequent payment dates; and

(12) following, first, the payment of all principal of and interest on all bonds and all other approved financing costs, and, second, the payment of any unpaid amounts due the Delaware trustee, the certificate trustee and the related bond trustee under clause (1) above that exceeded the cap, then the balance, if any, will be paid to that bond issuer free from the lien of the bond indenture.

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If on any payment date, or for any amounts payable under clauses (1) through (4) above, on any business day, funds on deposit in the general subaccount of a bond issuer are insufficient to make the payments contemplated by clauses (1) through (6) above, the related bond trustee will:

• first, draw from amounts on deposit in the excess funds subaccount of that bond issuer; and

• second, draw from amounts on deposit in the capital subaccount of that bond issuer,

up to the amount of the shortfall, in order to make the payments described above.

In addition, if on any payment date funds on deposit in the general subaccount of a bond issuer are insufficient to make the transfer described in clause (8) above, the related bond trustee will draw from amounts on deposit in the excess funds subaccount of that bond issuer to make the required transfer.

Payments of principal due and payable on the bonds of a bond issuer as a result of an event of default (and assuming all bonds have been declared immediately due and payable), or upon final maturity, will be paid pro rata based on the respective principal amounts of such bonds.

See “Description of the Certificates—Events of Default” in the accompanying prospectus for a description of the allocation of proceeds from the sale of any bond by the certificate trustee or of amounts recovered by the certificate trustee as a result of the institution of certain judicial proceedings by the certificate trustee, in each case as a result of an event of default and subject to the terms of the certificate indenture.

Cap on Certain Financing Costs

Pursuant to the financing order, certain approved ongoing financing costs recoverable through phase-in recovery charges (including those referenced in clauses (1) through (4), (7), (9) and (10) above) may not exceed on an annual basis the aggregate amount approved for such ongoing financing costs by more than 5%. The sum of such approved annual ongoing financing costs ($1,072,732) plus an amount equal to 5% of such costs is equal to $1,126,369, which amount is referred to as the cap. The ongoing financing costs referenced in clauses (1) through (4), (7), (9) and (10) above, to the extent in excess of the cap for any given annual period, may be recovered in any subsequent annual period (subject to the annual cap in such subsequent period). Unused cap amounts in a given year will not be available for recovery of any ongoing financing costs in a subsequent year. In the case of a non-utility servicer with a servicing fee of 0.75% of the initial principal balance of the bonds (the maximum permitted to be paid to a non-utility servicer under the financing order), as compared to 0.10% to be paid to the initial servicer, the cap would be $4,277,550.

The initial servicer of each bond issuer will agree in its servicing agreement to indemnify the bond trustee and, as to such bond issuer’s allocable portion only (pro rata in proportion to the original principal amount of such bond issuer’s bonds unless directly allocable to such bond issuer), the Delaware trustee and the certificate trustee, for all due and unpaid compensation, expenses and indemnity amounts (owed by such bond issuer to such trustee under, and to the extent set forth in, section 6.07 of the bond indenture, sections 1 through 4 of the fee and indemnity agreement and any applicable provisions of the other applicable basic documents), that exceed the cap. Each servicing agreement will provide that this initial servicer indemnity obligation will continue as an obligation of such initial servicer in the event a successor servicer is appointed.

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UNDERWRITING

The issuing entity, the bond issuers, CEI, OE, TE and the underwriters for the offering named below have entered into an underwriting agreement relating to the certificates. Assuming that conditions in the underwriting agreement are met, each underwriter has severally agreed to purchase the respective principal amount of certificates indicated in the following table.

Underwriters	Tranche A-1	Tranche A-2	Tranche A-3
Citigroup Global Markets Inc.
Credit Agricole Securities (USA) Inc.
Goldman, Sachs & Co.
Barclays Capital Inc.
Merrill Lynch, Pierce, Fenner & Smith     Incorporated
RBS Securities Inc.

The underwriters are committed to take and pay for all of the certificates being offered, if any are taken. If an underwriter defaults, the underwriting agreement provides that the purchase commitment of the non-defaulting underwriters may be increased or the underwriting agreement may be terminated, depending on the amount of certificates to which the default relates.

Certificates sold by the underwriters to the public will be initially offered at the initial public offering prices set forth on the cover of this prospectus supplement. We and the bond issuers have been advised that the underwriters propose initially to offer the certificates to dealers at the initial public offering prices, less a selling concession not to exceed the percentage of the certificate denomination set forth below, and that the underwriters may allow and dealers may reallow a discount not to exceed the percentage of the certificate denomination set forth below:

Tranche Selling
Concession Reallowance
Discount

After the initial public offering, the public offering prices, selling concessions and reallowance discounts may change.

The certificates are a new issue of securities with no established trading market. We and the bond issuers have been advised by the underwriters that the underwriters intend to make a market in the certificates but are not obligated to do so and may discontinue market making at any time without notice. The certificates will not be listed on any securities exchange. No assurance can be given as to the ability of holders of the certificates to resell the certificates.

In connection with the offering, the underwriters may purchase and sell certificates in the open market. These transactions may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Short sales involve the sale by the underwriters of a greater number of certificates than they are required to purchase in the offering. Stabilizing transactions consist of certain bids or purchases made for the purpose of preventing or retarding a decline in the market price of the certificates while the offering is in progress.

The underwriters also may impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased certificates sold by or for the account of such underwriter in stabilizing or short covering transactions.

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These activities by the underwriters may stabilize, maintain or otherwise affect the market price of the certificates. As a result, the price of the certificates may be higher than the price that otherwise might exist in the open market. If these activities are commenced, they may be discontinued by the underwriters at any time. These transactions may be effected in the over-the-counter market or otherwise.

The bond issuers estimate that their share of the total expenses of the offering of the certificates, excluding underwriting discounts and commissions, will be approximately $         million.

The bond issuers and each of CEI, OE and TE have agreed to indemnify the underwriters and the issuing entity against certain liabilities, including liabilities under the Securities Act.

The underwriters or their respective affiliates have, from time to time, performed, and may in the future perform, various financial advisory and investment banking services for CEI, OE and TE, for which they received or will receive customary fees and expenses. Goldman, Sachs & Co., previously served as the structuring advisor to CEI, OE and TE, and in such role, it has rendered certain structuring services to CEI, OE and TE in respect of the bond issuers and the issuing entity and received a fee for such services and reimbursement for certain expenses in connection with such services.

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RATINGS

We expect that the certificates will receive credit ratings from three NRSROs.

A security rating is not a recommendation to buy, sell or hold securities and may be revised or withdrawn at any time by the assigning NRSRO. Each rating should be evaluated independently of any other rating. No person is obligated to maintain its rating on the certificates, and accordingly, we cannot assure you that a rating assigned to any tranche of the certificates upon initial issuance will not be revised or withdrawn by an NRSRO at any time thereafter. If a rating of any tranche of the certificates is revised or withdrawn, the liquidity of that tranche may be adversely affected. In general, ratings address credit risk and do not represent any assessment of the likelihood of any particular level of principal payments on the certificates other than payment in full of each tranche of the certificates by the applicable final maturity date, as well as the timely payment of interest.

Under Rule 17g-5 of the Exchange Act, NRSROs providing the sponsors with the requisite certification will have access to all information posted on a website by the sponsors for the purpose of determining the initial rating and monitoring the rating after the closing date in respect of the certificates. As a result, an NRSRO other than an NRSRO hired by the sponsor, referred to as a hired NRSRO may issue ratings on the certificates, or Unsolicited Ratings, which may be lower, and could be significantly lower, than the ratings assigned by a hired NRSRO. The Unsolicited Ratings may be issued prior to, or after, the closing date in respect of the certificates. Issuance of any Unsolicited Rating will not affect the issuance of the certificates. Issuance of an Unsolicited Rating lower than the ratings assigned by a hired NRSRO on the certificates might adversely affect the value of the certificates and, for regulated entities, could affect the status of the certificates as a legal investment or the capital treatment of the certificates. Investors in the certificates should consult with their legal counsel regarding the effect of the issuance of a rating by a non-hired NRSRO that is lower than the rating of a hired NRSRO.

In addition to the fees paid by the Ohio Companies to a hired NRSRO at closing, the sponsors may pay a fee to the NRSRO for ongoing surveillance for so long as the certificates are outstanding. However, no NRSRO is under any obligation to continue to monitor or provide a rating on the certificates. There can be no assurance that the credit ratings will be maintained.

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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

Based on certain assumptions and subject to certain qualifications, Akin Gump Strauss Hauer & Feld LLP will opine that (i) none of CEI, OE or TE will be treated as recognizing gross income upon the receipt of the financing order, the receipt of cash or other valuable consideration in exchange for the transfer of the phase-in-recovery property to the bond issuers, or the receipt of cash or other valuable consideration in exchange for the phase-in-recovery bonds issued by the bond issuers, (ii) the underlying bonds of each bond issuer will be treated as obligations of CEI, OE or TE, as the case may be, within the meaning of Revenue Procedure 2005-62, 2005-2 C.B. 507, (iii) the bond issuers will not be subject to U.S. federal income tax as entities separate from the sellers and (iv) the issuing entity will not be classified as a corporation or a publicly traded partnership treated as a corporation, but will be treated as a grantor trust. Please read “Material U.S. Federal Income Tax Consequences” in the accompanying prospectus.

LEGAL PROCEEDINGS

There are no legal or governmental proceedings pending against us, the sponsors, sellers, bond issuers, bond trustees, certificate trustee or servicers, or of which any property of the foregoing is subject, that is material to the holders of the certificates.

WHERE YOU CAN FIND MORE INFORMATION

To the extent that we are required to file such reports and information with the SEC under the Exchange Act, we will file (or any of the sponsors, in its capacity as sponsor, will file on our behalf) annual reports on Form 10-K, distribution reports on Form 10-D and current reports on Form 8-K with the SEC. We are incorporating by reference any future filings which we (file no. 333-187692-01 through -05) or any sponsor, but solely in its capacity as a sponsor, makes with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering of the certificates, excluding any information that is furnished to, and not filed with, the SEC. These reports will be filed under the issuing entity’s name. Please also read “Where You Can Find More Information” in the accompanying prospectus. We may voluntarily suspend or terminate our filing obligations as issuing entity with the SEC to the extent permitted by law.

LEGAL MATTERS

Certain legal matters relating to the issuing entity, bond issuers, the bonds and the certificates, including certain U.S. federal income tax matters, will be passed on by Akin Gump Strauss Hauer & Feld LLP, New York, New York, counsel to the issuing entity, the sellers and the bond issuers. Certain legal matters relating to the bonds and Ohio law will be passed upon by Calfee, Halter & Griswold LLP, Cleveland, Ohio, special local counsel to the sellers and the bond issuers. Certain legal matters relating to the issuing entity, the bond issuers and the certificates will be passed upon by Richards, Layton & Finger, P.A., Wilmington, Delaware, Delaware counsel to the issuing entity and the bond issuers. Morgan, Lewis & Bockius LLP, New York, New York, is counsel to the underwriters. Morgan, Lewis & Bockius LLP has in the past represented, and continues to represent, the Ohio Companies and certain of their affiliates on other matters.

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OFFERING RESTRICTIONS IN CERTAIN JURISDICTIONS

NOTICE TO RESIDENTS OF SINGAPORE

EACH UNDERWRITER ACKNOWLEDGES THAT THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS HAVE NOT BEEN REGISTERED AS A PROSPECTUS WITH THE MONETARY AUTHORITY OF SINGAPORE. ACCORDINGLY, EACH UNDERWRITER REPRESENTS, WARRANTS AND AGREES THAT IT HAS NOT OFFERED OR SOLD ANY CERTIFICATES OR CAUSED THE CERTIFICATES TO BE MADE THE SUBJECT OF AN INVITATION FOR SUBSCRIPTION OR PURCHASE, AND WILL NOT OFFER OR SELL ANY CERTIFICATES OR CAUSE THE CERTIFICATES TO BE MADE THE SUBJECT OF AN INVITATION FOR SUBSCRIPTION OR PURCHASE, AND HAS NOT CIRCULATED OR DISTRIBUTED, NOR WILL IT CIRCULATE OR DISTRIBUTE THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS OR ANY OTHER DOCUMENT OR MATERIAL IN CONNECTION WITH THE OFFER OR SALE, OR INVITATION FOR SUBSCRIPTION OR PURCHASE, OF CERTIFICATES, WHETHER DIRECTLY OR INDIRECTLY, TO PERSONS IN SINGAPORE OTHER THAN (I) TO AN INSTITUTIONAL INVESTOR UNDER SECTION 274 OF THE SECURITIES AND FUTURES ACT, CHAPTER 289 OF SINGAPORE (THE “SFA”), OR ANY PERSON PURSUANT TO SECTION 275(1A), AND IN ACCORDANCE WITH THE CONDITIONS SPECIFIED IN SECTION 275 OF THE SFA OR (II) TO A RELEVANT PERSON PURSUANT TO SECTION 275(1) OR ANY PERSON PURSUANT TO SECTION 275(1A) OF THE SFA, AND IN ACCORDANCE WITH THE CONDITIONS SPECIFIED IN SECTION 275 OF THE SFA OR (III) OTHERWISE PURSUANT TO, AND IN ACCORDANCE WITH THE CONDITIONS OF, ANY OTHER APPLICABLE PROVISION OF THE SFA.

WHERE THE CERTIFICATES ARE SUBSCRIBED OR PURCHASED UNDER SECTION 275 BY A RELEVANT PERSON WHICH IS:

(A) A CORPORATION (WHICH IS NOT AN ACCREDITED INVESTOR (AS DEFINED IN SECTION 4A OF THE SFA)) THE SOLE BUSINESS OF WHICH IS TO HOLD INVESTMENTS AND THE ENTIRE SHARE CAPITAL OF WHICH IS OWNED BY ONE OR MORE INDIVIDUALS, EACH OF WHOM IS AN ACCREDITED INVESTOR; OR

(B) A TRUST (WHERE THE TRUSTEE IS NOT AN ACCREDITED INVESTOR) WHOSE SOLE PURPOSE IS TO HOLD INVESTMENTS AND EACH BENEFICIARY OF THE TRUST IS AN INDIVIDUAL WHO IS AN ACCREDITED INVESTOR,

SHARES, DEBENTURES AND UNITS OF SHARES AND DEBENTURES OF THAT CORPORATION OR THE BENEFICIARIES’ RIGHTS AND INTEREST (HOWSOEVER DESCRIBED) IN THAT TRUST SHALL NOT BE TRANSFERRED WITHIN 6 MONTHS AFTER THAT CORPORATION OR THAT TRUST HAS ACQUIRED THE CERTIFICATES PURSUANT TO AN OFFER MADE UNDER SECTION 275 EXCEPT:

(1) TO AN INSTITUTIONAL INVESTOR (FOR CORPORATIONS, UNDER SECTION 274 OF THE SFA) OR TO A RELEVANT PERSON DEFINED IN SECTION 275(2) OF THE SFA, OR TO ANY PERSON PURSUANT TO AN OFFER THAT IS MADE ON TERMS THAT SUCH RIGHTS OR INTEREST ARE ACQUIRED AT A CONSIDERATION OF NOT LESS THAN S$200,000 (OR ITS EQUIVALENT IN A FOREIGN CURRENCY) FOR EACH TRANSACTION, WHETHER SUCH AMOUNT IS TO BE PAID FOR IN CASH OR BY EXCHANGE OF SECURITIES OR OTHER ASSETS, AND FURTHER FOR CORPORATIONS, IN ACCORDANCE WITH THE CONDITIONS SPECIFIED IN SECTION 275 OF THE SFA;

(2) WHERE NO CONSIDERATION IS OR WILL BE GIVEN FOR THE TRANSFER; OR

(3) WHERE THE TRANSFER IS BY OPERATION OF LAW. THE PROSPECTUS RELATING TO THE CERTIFICATES (“PROSPECTUS”) WILL, PRIOR TO ANY SALE OF SECURITIES PURSUANT TO THE

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PROVISIONS OF SECTION 106D OF THE COMPANIES ACT (CAP.50), BE LODGED, PURSUANT TO SAID SECTION 106D, WITH THE REGISTRAR OF COMPANIES IN SINGAPORE, WHICH WILL TAKE NO RESPONSIBILITY FOR ITS CONTENTS. HOWEVER, NEITHER THIS PROSPECTUS SUPPLEMENT NOR THE PROSPECTUS HAS BEEN AND NOR WILL THEY BE REGISTERED AS A PROSPECTUS WITH THE REGISTRAR OF COMPANIES IN SINGAPORE. ACCORDINGLY, THE CERTIFICATES MAY NOT BE OFFERED, AND NEITHER THIS PROSPECTUS SUPPLEMENT NOR ANY OTHER OFFERING DOCUMENT OR MATERIAL RELATING TO THE CERTIFICATES MAY BE CIRCULATED OR DISTRIBUTED, DIRECTLY OR INDIRECTLY, TO THE PUBLIC OR ANY MEMBER OF THE PUBLIC IN SINGAPORE OTHER THAN TO INSTITUTIONAL INVESTORS OR OTHER PERSONS OF THE KIND SPECIFIED IN SECTION 106C AND SECTION 106D OF THE COMPANIES ACT OR ANY OTHER APPLICABLE EXEMPTION INVOKED UNDER DIVISION 5A OF PART IV OF THE COMPANIES ACT. THE FIRST SALE OF SECURITIES ACQUIRED UNDER A SECTION 106C OR SECTION 106D EXEMPTION IS SUBJECT TO THE PROVISIONS OF SECTION 106E OF THE COMPANIES ACT.

NOTICE TO RESIDENTS OF THE PEOPLE’S REPUBLIC OF CHINA

THE CERTIFICATES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES LAW OF THE PEOPLE’S REPUBLIC OF CHINA (AS THE SAME MAY BE AMENDED FROM TIME TO TIME) AND ARE NOT TO BE OFFERED OR SOLD TO PERSONS WITHIN THE PEOPLE’S REPUBLIC OF CHINA (EXCLUDING THE HONG KONG AND MACAU SPECIAL ADMINISTRATIVE REGIONS).

NOTICE TO RESIDENTS OF JAPAN

THE CERTIFICATES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES AND EXCHANGE LAW OF JAPAN (THE “SEL”), AND MAY NOT BE OFFERED OR SOLD IN JAPAN OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY RESIDENT OF JAPAN OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY RESIDENT OF JAPAN OR TO OTHERS FOR RE-OFFERING OR RESALE, DIRECTLY OR INDIRECTLY, IN JAPAN OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY RESIDENT OF JAPAN, EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF, AND OTHERWISE IN COMPLIANCE WITH, THE SEL, AND IN COMPLIANCE WITH THE OTHER RELEVANT LAWS AND REGULATIONS OF JAPAN. AS USED IN THIS PARAGRAPH, “RESIDENT OF JAPAN” MEANS ANY PERSON RESIDENT IN JAPAN, INCLUDING ANY CORPORATION OR OTHER ENTITY ORGANIZED UNDER THE LAWS OF JAPAN.

NOTICE TO RESIDENTS OF HONG KONG

EACH UNDERWRITER HAS REPRESENTED AND AGREED THAT:

IT HAS NOT OFFERED OR SOLD AND WILL NOT OFFER OR SELL IN HONG KONG, BY MEANS OF ANY DOCUMENT, ANY CERTIFICATES OTHER THAN (A) TO PERSONS WHOSE ORDINARY BUSINESS IS TO BUY OR SELL SHARES OR DEBENTURES (WHETHER AS PRINCIPAL OR AGENT); OR (B) TO PROFESSIONAL INVESTORS WITHIN THE MEANING OF THE SECURITIES AND FUTURES ORDINANCE (CAP. 571) OF THE LAWS OF HONG KONG AND ANY RULES MADE THEREUNDER; OR (C) IN CIRCUMSTANCES THAT DO NOT RESULT IN THE DOCUMENT BEING A “PROSPECTUS” AS DEFINED IN THE COMPANIES ORDINANCE (CAP. 32) OF THE LAWS OF HONG KONG OR THAT DO NOT CONSTITUTE AN OFFER TO THE PUBLIC WITHIN THE MEANING OF THAT ORDINANCE; AND

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IT HAS NOT ISSUED OR HAD IN ITS POSSESSION FOR THE PURPOSE OF ISSUE, AND WILL NOT ISSUE OR HAVE IN ITS POSSESSION FOR THE PURPOSE OF ISSUE, WHETHER IN HONG KONG OR ELSEWHERE ANY ADVERTISEMENT, INVITATION OR DOCUMENT RELATING TO THE CERTIFICATES, WHICH IS DIRECTED AT, OR THE CONTENTS OF WHICH ARE LIKELY TO BE ACCESSED OR READ BY, THE PUBLIC OF HONG KONG (EXCEPT IF PERMITTED TO DO SO UNDER THE SECURITIES LAWS OF HONG KONG) OTHER THAN WITH RESPECT TO CERTIFICATES THAT ARE INTENDED TO BE DISPOSED OF ONLY TO PERSONS OUTSIDE HONG KONG OR ONLY TO “PROFESSIONAL INVESTORS” AS DEFINED UNDER THE SECURITIES AND FUTURES ORDINANCE (CAP. 571) OF THE LAWS OF HONG KONG AND ANY RULES MADE UNDER THAT ORDINANCE.

NOTICE TO RESIDENTS OF THE EUROPEAN ECONOMIC AREA

IN RELATION TO EACH MEMBER STATE OF THE EUROPEAN ECONOMIC AREA WHICH HAS IMPLEMENTED THE PROSPECTUS DIRECTIVE, WHICH WE REFER TO HEREIN AS A RELEVANT MEMBER STATE, EACH UNDERWRITER HAS REPRESENTED AND AGREED THAT WITH EFFECT FROM AND INCLUDING THE DATE ON WHICH THE PROSPECTUS DIRECTIVE IS IMPLEMENTED IN THAT RELEVANT MEMBER STATE (THE “RELEVANT IMPLEMENTATION DATE”), IT HAS NOT MADE AND WILL NOT MAKE AN OFFER OF CERTIFICATES TO THE PUBLIC IN THAT RELEVANT MEMBER STATE PRIOR TO THE PUBLICATION OF A PROSPECTUS IN RELATION TO THE CERTIFICATES WHICH HAS BEEN APPROVED BY THE COMPETENT AUTHORITY IN THAT RELEVANT MEMBER STATE OR, WHERE APPROPRIATE, APPROVED IN ANOTHER RELEVANT MEMBER STATE AND NOTIFIED TO THE COMPETENT AUTHORITY IN THAT RELEVANT MEMBER STATE, ALL IN ACCORDANCE WITH THE PROSPECTUS DIRECTIVE, EXCEPT THAT IT MAY, WITH EFFECT FROM AND INCLUDING THE RELEVANT IMPLEMENTATION DATE, MAKE AN OFFER OF CERTIFICATES TO THE PUBLIC IN THAT RELEVANT MEMBER STATE AT ANY TIME:

(A) TO QUALIFIED INVESTORS AS DEFINED IN THE PROSPECTUS DIRECTIVE;

(B) TO FEWER THAN 100 (OR, IF THE RELEVANT MEMBER STATE HAS IMPLEMENTED THE RELEVANT PROVISION OF THE 2010 PD AMENDING DIRECTIVE, 150) NATURAL OR LEGAL PERSONS (OTHER THAN QUALIFIED INVESTORS AS DEFINED IN THE PROSPECTUS DIRECTIVE) SUBJECT TO OBTAINING THE PRIOR CONSENT OF THE REPRESENTATIVES FOR ANY SUCH OFFER; OR

(C) IN ANY OTHER CIRCUMSTANCES WHICH DO NOT REQUIRE THE PUBLICATION BY THE ISSUING ENTITY OF A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS DIRECTIVE.

FOR THE PURPOSES OF THIS PROVISION, THE EXPRESSION AN “OFFER OF CERTIFICATES TO THE PUBLIC” IN RELATION TO ANY CERTIFICATES IN ANY RELEVANT MEMBER STATE MEANS THE COMMUNICATION IN ANY FORM AND BY ANY MEANS OF SUFFICIENT INFORMATION ON THE TERMS OF THE OFFER AND THE CERTIFICATES TO BE OFFERED SO AS TO ENABLE AN INVESTOR TO DECIDE TO PURCHASE OR SUBSCRIBE THE CERTIFICATES, AS THE SAME MAY BE VARIED IN THAT RELEVANT MEMBER STATE BY ANY MEASURE IMPLEMENTING THE PROSPECTUS DIRECTIVE IN THAT RELEVANT MEMBER STATE, THE EXPRESSION “PROSPECTUS DIRECTIVE” MEANS DIRECTIVE 2003/71/EC AND INCLUDES ANY RELEVANT IMPLEMENTING MEASURE IN EACH RELEVANT MEMBER STATE AND THE EXPRESSION “2010 PD AMENDING DIRECTIVE” MEANS DIRECTIVE 2010/73/EU.

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NOTICE TO RESIDENTS OF THE UNITED KINGDOM

THE UNDERWRITER HAS REPRESENTED AND AGREED THAT:

(A) IT HAS ONLY COMMUNICATED OR CAUSED TO BE COMMUNICATED AND WILL ONLY COMMUNICATE OR CAUSE TO BE COMMUNICATED AN INVITATION OR INDUCEMENT TO ENGAGE IN INVESTMENT ACTIVITY (WITHIN THE MEANING OF SECTION 21 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED (THE “FSMA”)) RECEIVED BY IT IN CONNECTION WITH THE ISSUE OR SALE OF THE CERTIFICATES IN CIRCUMSTANCES IN WHICH SECTION 21(1) OF THE FSMA DOES NOT APPLY TO THE ISSUING ENTITY; AND

(B) IT HAS COMPLIED AND WILL COMPLY WITH ALL APPLICABLE PROVISIONS OF THE FSMA WITH RESPECT TO ANYTHING DONE BY IT IN RELATION TO THE CERTIFICATES IN, FROM OR OTHERWISE INVOLVING THE UNITED KINGDOM.

THIS OFFERING DOCUMENT IS DIRECTED ONLY AT PERSONS WHO (I) ARE OUTSIDE THE UNITED KINGDOM OR (II) ARE INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 AS AMENDED (THE “ORDER”) OR (III) ARE HIGH NET WORTH ENTITIES FALLING WITHIN ARTICLE 49(2)(A) TO (D) OF THE ORDER OR (IV) SUCH OTHER PERSONS TO WHOM IT MAY LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS “RELEVANT PERSONS”). THIS OFFERING DOCUMENT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS OFFERING DOCUMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.

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The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities nor is it seeking an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion, dated June 4, 2013

PROSPECTUS

FirstEnergy Ohio PIRB Special Purpose Trust 2013

Issuing Entity

Pass-Through Trust Certificates

CEI Funding LLC

OE Funding LLC

TE Funding LLC

Issuers of the Phase-In-Recovery Bonds

The Cleveland Electric Illuminating Company

Ohio Edison Company

The Toledo Edison Company

Sponsors, Sellers, Initial Servicers and Depositors

See “Risk Factors” beginning on page 16 to read about factors you should consider before buying the certificates.

The issuing entity will offer three tranches of certificates as described in the prospectus supplement. Each tranche of certificates will represent fractional undivided beneficial interests in the bonds of CEI Funding LLC, OE Funding LLC and TE Funding LLC held by the issuing entity. The principal assets of the issuing entity will be the bonds, which are known as “phase-in-recovery bonds” under Ohio law. The issuing entity will grant to the certificate trustee, for the benefit of certificateholders, a lien on the bonds of each bond issuer and other trust property.

Each of the bonds will be secured primarily by the right to impose, charge and collect irrevocable nonbypassable usage-based charges payable by retail electric customers in the service territories of CEI, OE or TE, as the case may be. Each of the bonds will be a non-recourse obligation of CEI Funding LLC, OE Funding LLC or TE Funding LLC, as the case may be. Neither the bonds nor the certificates will be legal obligations of CEI, OE or TE, as the sponsors, sellers, initial servicers and depositors.

Payment on the bonds of each bond issuer and thus payment on the certificates will be supported by credit enhancement consisting principally of a semiannual true-up adjustment of phase-in-recovery charges intended to ensure recovery of amounts sufficient to timely pay scheduled principal and interest and other approved financing costs and amounts available in the capital subaccount under each bond indenture to the extent there are insufficient funds in the general subaccount and excess funds subaccount to pay interest and principal on the bonds.

Neither the certificates, the bonds or the phase-in-recovery property securing the bonds are an obligation of the State of Ohio, the Public Utilities Commission of Ohio, or any political subdivision, governmental agency, authority or instrumentality of the State of Ohio or of FirstEnergy, CEI, OE or TE or any of their respective affiliates, except for the bond issuers and the issuing entity.

Neither the full faith and credit or the taxing power of the State of Ohio, nor the Public Utilities Commission of Ohio, nor any political subdivision, agency, authority or instrumentality of the State of Ohio, is pledged to the payment of principal of, or interest on, the certificates or the bonds, or the payments securing the bonds. Furthermore, neither the State of Ohio, nor the Public Utilities Commission of Ohio, nor any political subdivision, agency, authority or instrumentality of the State of Ohio will appropriate any funds for the payment of any of the certificates or the bonds.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is                     , 2013

TABLE OF CONTENTS

PROSPECTUS

	Page
READING THIS PROSPECTUS		iv
PROSPECTUS SUMMARY		1
RISK FACTORS		16
Risks Related to Limited Source of Payments and Credit Enhancement		16
Risks Associated with Potential Judicial, Legislative or Regulatory Actions		16
Servicing Risks		19
Storm-Related Risks		22
Risks Related to the Phase-In-Recovery Property		22
Bankruptcy and Creditors’ Rights Issues		22
Other Risks Associated with an Investment in the Certificates		25
REVIEW OF PHASE-IN-RECOVERY PROPERTY		28
THE SECURITIZATION ACT		31
Background and Regulatory Overview		31
Recovery of Phase-In Costs		31
CEI, OE and TE and Other Utilities May Securitize Phase-In Costs		32
DESCRIPTION OF THE PHASE-IN-RECOVERY PROPERTY		36
Overview		36
Financing Order and Issuance Advice Letters		36
Phase-In-Recovery Property		37
Phase-In-Recovery Charges		37
Adjustments to the Phase-In-Recovery Charges		38
SALE AGREEMENTS		40
Seller Representations and Warranties		40
Seller Covenants		42
BANKRUPTCY AND CREDITORS’ RIGHTS ISSUES		46
True Sale		46
Substantive Consolidation		47
Estimation of Claims; Challenges to Indemnity Claims		48
Enforcement of Rights by the Bond Trustee		48
Bankruptcy of a Servicer		48
THE ISSUING ENTITY		50
THE TRUSTEES		51
Certificate Trustee		51
Bond Trustee		52
Delaware Trustee		52
THE BOND ISSUERS		54
Restricted Purpose		54
Management		55
Limitation on Liabilities		55
Bond Issuers’ Relationship with the Ohio Companies		56
Relationship with PUCO		56
Administration Agreement		56
Cross-Indemnity Agreement		57
THE SPONSORS, SELLERS, INITIAL SERVICERS AND DEPOSITORS		58
Revenues, Customer Base and Energy Consumption		59
Electricity Delivered to Retail Customers, Electric Delivery Revenues and Retail Customers		59
Forecasting Electricity Consumption		61

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	Page
Billing and Collections		64
Credit Policy		64
Billing		65
Collection Process		65
Loss Experience		66
Days Sales Outstanding		66
Delinquencies		67
Where to Find Information about CEI, OE and TE		67
AFFILIATIONS AND TRANSACTIONS AMONG THE TRANSACTION PARTIES		68
SERVICING AGREEMENTS		69
Servicing Procedures		69
Servicing Standards and Covenants		69
True-Up Adjustment Process		70
Remittances to Collection Account		71
Servicing Compensation		71
Third Party Billers		71
Servicer Representations and Warranties; Indemnification		72
Statements by Servicers		73
Evidence as to Compliance		74
Matters Regarding the Servicers		74
Servicer Defaults		75
Rights When a Servicer Defaults		75
Waiver of Past Defaults		76
Successor Servicer		76
Amendment		76
DESCRIPTION OF THE BONDS		77
Security		77
State Pledge		77
Collection Account		78
General Subaccount		79
Capital Subaccount		79
Excess Funds Subaccount		79
Interest and Principal		79
Optional Redemption		80
Allocations and Payments		80
Actions by Bondholders		82
Bond Events of Default; Rights on Bond Event of Default		82
Covenants of the Bond Issuers		84
Reports to Bondholders		86
Website Disclosure		86
Annual Compliance Statement		87
Bond Trustee Report to Bondholders		87
Satisfaction and Discharge of Bond Indenture		87
Legal Defeasance and Covenant Defeasance Options		88
DESCRIPTION OF THE CERTIFICATES		89
Payments and Distributions		89
Voting of the Certificates		90
Events of Default		91
Reports to Certificateholders		92
Website Disclosure		93
Annual Compliance Statement		93
Certificate Trustee Report to Certificateholders		93

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	Page
Supplemental Certificate Indentures		94
List of Certificateholders		94
Registration and Transfer of the Certificates		95
Book-Entry Registration and Definitive Certificates		95
WEIGHTED AVERAGE LIFE AND YIELD CONSIDERATIONS FOR THE CERTIFICATES		98
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES		99
General		99
Treatment of the Certificates		100
Taxation of U.S. Certificateholders		100
Non-U.S. Certificateholders		101
Information Reporting and Backup Withholding		102
OHIO STATE TAXATION		103
CERTAIN ERISA AND OTHER CONSIDERATIONS		104
USE OF PROCEEDS		107
PLAN OF DISTRIBUTION		107
RATINGS		107
WHERE YOU CAN FIND MORE INFORMATION		108
REPORTS TO HOLDERS		109
LEGAL MATTERS		109
GLOSSARY OF DEFINED TERMS		110

iii

READING THIS PROSPECTUS

This prospectus provides information about us, the certificates, the bonds, the bond issuers and The Cleveland Electric Illuminating Company, Ohio Edison Company and The Toledo Edison Company, as the Ohio Companies, sponsors, sellers, initial servicers and depositors.

The specific terms of the certificates are contained in the prospectus supplement that accompanies this prospectus. This prospectus provides general information about the certificates. You should read both of these documents in full before buying the certificates.

References in this prospectus to the terms we, us, our or the issuing entity mean FirstEnergy Ohio PIRB Special Purpose Trust 2013, the entity which will issue the certificates. References to the pass-through trust certificates or the certificates, unless the context otherwise requires, means the trust certificates offered pursuant to this prospectus and the accompanying prospectus supplement. References to the certificateholders or the holders, unless the context otherwise requires, means the registered holders of the certificates. References to the bond issuers refer to CEI Funding LLC, OE Funding LLC and TE Funding LLC, as the case may be. References to the phase-in-recovery bonds or the bonds refer to the phase-in-recovery bonds issued by the bond issuers. The Ohio Companies are also referred to respectively as CEI, OE and TE. FirstEnergy Corp., the parent of the Ohio Companies, is referred to herein as FirstEnergy. References to the Securitization Act refer to Sections 4928.23 through 4928.2318 of the Ohio Revised Code, passed by the Ohio House of Representatives and the Ohio Senate in December 2011, and effective March 2012, which Securitization Act created the regulatory structure that allows electric utilities to issue bonds to securitize certain phase-in costs. Unless the context otherwise requires, the term customer or retail customer means a retail end user of electricity and related services provided by a retail electric service provider via the transmission and distribution system of an electric distribution utility. References to the Ohio commission or the PUCO refer to the Public Utilities Commission of Ohio. You can find a glossary of certain defined terms used in this prospectus on page 110.

We have included cross-references to sections in this prospectus where you can find further related discussions.

You should rely only on information on the certificates provided in this prospectus and the accompanying prospectus supplement. We have not authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not offering to sell the certificates in any jurisdiction where the offer or sale is not permitted. The information in this prospectus is current only as of the date of this prospectus.

iv

PROSPECTUS SUMMARY

This summary highlights some information from this prospectus. Because this is a summary, it does not contain all of the information that may be important to you. You should read both this prospectus and the accompanying prospectus supplement before you buy the certificates. This prospectus contains terms, appearing in bold text on their first usage, that are specific to the regulated utility industry and the certificates and may be technical in nature. Please refer to the Glossary of Defined Terms.

Issuing Entity FirstEnergy Ohio PIRB Special Purpose Trust 2013, a Delaware statutory trust formed on May 7, 2013.

Certificates FirstEnergy Ohio PIRB Special Purpose Trust 2013 Pass-Through Trust Certificates, consisting of tranche A-1, tranche A-2 and tranche A-3.

The issuing entity will issue certificates in three tranches under the certificate indenture between the issuing entity and the certificate trustee. Each tranche of certificates will represent fractional undivided beneficial interests in the bonds of each of the bond issuers and other trust property. Holders of each tranche of certificates will receive payments received by the issuing entity on the corresponding tranche of bonds of each bond issuer (with payments of principal due and payable on the bonds of a bond issuer as a result of an event of default (and assuming all bonds have been declared immediately due and payable) under that bond issuer’s bond indenture, or upon final maturity, to be paid pro rata based on the respective principal amounts of such bonds). These payments will be the primary source of distributions on a tranche of certificates. The issuing entity may not issue additional certificates other than in connection with transfers, exchanges or replacements permitted under the certificate indenture. See “Description of the Certificates” in this prospectus.

Bonds CEI Funding bonds, OE Funding bonds and TE Funding bonds.

Each tranche of the CEI Funding bonds, OE Funding bonds and TE Funding bonds will have the same interest rate, scheduled maturity date and final maturity date as the related tranche of certificates. Taken together, the tranches of bonds of each of the bond issuers corresponding to a tranche of certificates will have the same aggregate principal amount and expected amortization schedule as the corresponding tranche of certificates, all as described in the accompanying prospectus supplement. The CEI Funding bonds will be secured primarily by the phase-in-recovery property relating thereto sold to it by CEI. The OE Funding bonds will be secured primarily by the phase-in-recovery property relating thereto sold to it by OE. The TE Funding bonds will be secured primarily by the phase-in-recovery property relating thereto sold to it by TE. See “Description of the Bonds” in this prospectus.

Purpose of the Offering The issuance of the bonds and the certificates is intended to enable the sponsors to recover certain previously approved costs, referred to as phase-in costs, on terms more favorable to customers than would be achievable through the recovery methods previously approved by the PUCO. Please read “The Securitization Act” in this prospectus.

1

Relationship with the PUCO Pursuant to the financing order:

• the PUCO or its designated representative has a decision-making role co-equal with the sponsors with respect to the structuring and pricing of the certificates and all matters related to the structuring and pricing of the certificates will be determined through a joint decision of the sponsors and the PUCO or its designated representative or financial advisor;

• the PUCO’s financial advisor will participate fully in all plans and decisions related to the pricing, marketing and structuring of the bonds and certificates and will be provided timely information as necessary to fulfill its obligation to advise the PUCO in a timely manner but makes no representations as to any of the information contained herein; and

• the servicers will file periodic adjustments to the phase-in recovery charges with the PUCO on our behalf.

The bond issuers have agreed that certain reports concerning phase-in-recovery charge collections will be provided to the PUCO.

Transaction Overview Ohio law permits electric distribution utilities, such as CEI, OE and TE, to issue bonds to securitize certain costs that have been previously approved by the Ohio commission to be deferred as regulatory assets and collected from customers at a later date, including certain fuel costs, purchase power costs, infrastructure costs and environmental clean-up expenses. Once securitized through bonds issued pursuant to a final financing order of the Ohio commission, these costs, which are referred to as phase-in costs, may be recovered through usage-based charges called phase-in-recovery charges that are imposed on an electric distribution utility’s customers.

Ohio law permits special purpose entities formed by electric distribution utilities to issue and sell bonds, referred to as phase-in-recovery bonds, secured by property, rights and interests of an electric distribution utility, or assignee, under a financing order, including the right to impose, charge and collect the phase-in-recovery charges to be used to pay and secure the payment of such phase-in-recovery bonds and financing costs, the right to obtain adjustments to those charges and any revenues, rights to payments, moneys or other proceeds arising from the rights and interests created under the financing order, if doing so would measurably enhance cost savings for the electric distribution utility’s customers and would mitigate rate impacts to customers as compared with the previously-approved recovery methods. The foregoing property, rights and interests are referred to as the phase-in-recovery property. See “Description of the Phase-In-Recovery Property” in this prospectus.

2

The following sets forth the primary steps of the transaction underlying the offering of the certificates:

• The Cleveland Electric Illuminating Company, or CEI, will sell its phase-in-recovery property to CEI Funding LLC, or CEI Funding, in exchange for the net proceeds from the sale of the bonds issued by CEI Funding.

Ohio Edison Company, or OE, will sell its phase-in-recovery property to OE Funding LLC, or OE Funding, in exchange for the net proceeds from the sale of the bonds issued by OE Funding.

The Toledo Edison Company, or TE, will sell its phase-in-recovery property to TE Funding LLC, or TE Funding, in exchange for the net proceeds from the sale of the bonds issued by TE Funding.

Unless the context otherwise requires, we refer to the bonds issued by CEI Funding, OE Funding and TE Funding collectively as the bonds.

• Each of CEI Funding, OE Funding and TE Funding will sell its respective bonds to the issuing entity, in each case in exchange for an allocable portion, based on the aggregate principal amounts of the bonds of each bond issuer, of the net proceeds from the sale of the certificates issued by the issuing entity.

• The issuing entity, whose principal assets are the bonds, will sell the certificates to the underwriters named in the accompanying prospectus supplement.

• CEI will act as the servicer of CEI Funding’s phase-in-recovery property and as the administrator of CEI Funding. OE will act as the servicer of OE Funding’s phase-in-recovery property and as the administrator of OE Funding. TE will act as the servicer of TE Funding’s phase-in-recovery property and as the administrator of TE Funding.

Neither the certificates, the bonds nor the phase-in-recovery property securing the bonds is an obligation of the State of Ohio, the PUCO or any political subdivision, governmental agency, authority or instrumentality of the State of Ohio or of CEI, OE, TE, FirstEnergy or any of their respective affiliates, except for the bond issuers and the issuing entity.

3

The following diagram shows the parties to the transaction related to this offering and summarizes their roles and their relationship to each other:

4

Risk Factors You should consider and carefully read the risks described under “Risk Factors,” which begin on page 16 before investing in the certificates. These risks may delay the distribution of interest on, and principal of, the certificates or cause you to suffer a loss on your investment.

Sponsors, Sellers, Initial Servicers and Depositors CEI is a public electric utility, which provides regulated electric distribution services in northeastern Ohio, and a wholly-owned subsidiary of FirstEnergy. It will be the seller of phase-in-recovery property to CEI Funding and will serve as the initial servicer for the CEI Funding bonds.

OE is a public electric utility, which provides regulated electric distribution services in central and northeastern Ohio, and a wholly-owned subsidiary of FirstEnergy. It will be the seller of phase-in-recovery property to OE Funding and will serve as the initial servicer for the OE Funding bonds.

TE is a public electric utility, which provides regulated electric distribution services in northwestern Ohio, and a wholly-owned subsidiary of FirstEnergy. It will be the seller of phase-in-recovery property to TE Funding and will serve as the initial servicer for the TE Funding bonds.

Please read “The Sponsors, Sellers, Initial Servicers and Depositors” in this prospectus.

Our Address c/o FirstEnergy Service Company

76 South Main Street

Akron, Ohio 44308

Our Telephone Number (800) 736-3402

Bond Issuers CEI Funding, OE Funding and TE Funding, each having an address at 76 South Main Street, Akron, Ohio 44308. The telephone number of the bond issuers is (800) 736-3402.

Trustees U.S. Bank Trust National Association, a national banking association, will serve as the Delaware trustee of the issuing entity and U.S. Bank National Association, a national banking association, will serve as trustee under the certificate indenture and under each bond indenture. Please read “The Trustees” in the prospectus supplement for a description of certain of the trustee’s relevant prior experience and “The Trustees” in this prospectus for a description of the trustee’s duties and responsibilities as certificate trustee under the certificate indenture and as bond trustee under each bond indenture. The Ohio Companies will serve as administrative trustees of the issuing entity under the declaration of trust.

Interest Interest payable with respect to each tranche of certificates will represent the sum of the interest paid on the corresponding tranches of bonds and will accrue at the interest rate specified in the accompanying prospectus supplement. The certificate trustee will distribute interest accrued on each tranche of certificates on each distribution date, to the extent interest is paid on the corresponding tranches of bonds of each bond issuer on the related payment date.

5

Principal The certificate trustee will distribute principal of each tranche of certificates, to the extent principal is paid on the corresponding tranches of bonds on the related payment date in the amounts and on the distribution dates specified in the expected amortization schedule in the accompanying prospectus supplement. See “Description of the Bonds—Allocations and Payments” and “Description of the Certificates—Payments and Distributions” in this prospectus.

On any payment date, the bond issuers will pay principal of their respective bonds only until the outstanding principal balances of the various tranches have been reduced to the principal balances specified for those tranches in the expected amortization schedules for such bonds. If cash is not available to a bond issuer to make such principal payments in respect of all tranches of bonds of that bond issuer, principal will be paid in respect of such tranches of bonds in the order of priority set forth in the accompanying prospectus supplement.

If an event of default under a bond indenture in respect of the bonds of a bond issuer has occurred and is continuing, the certificate trustee may vote all, and upon the written direction of the holders of at least a majority in principal amount of the outstanding certificates will vote a corresponding majority of, the bonds of that bond issuer held by the certificate trustee in favor of directing the bond trustee to declare the unpaid principal amount of the outstanding bonds of that bond issuer, and accrued interest thereon, to be due and payable. See “Description of the Certificates—Events of Default” in this prospectus. Principal due and payable on the bonds of a bond issuer as the result of an event of default will be paid pro rata based on the outstanding principal amount of the bonds of each tranche of the defaulting bond issuer in accordance with that bond issuer’s bond indenture. See “Description of the Bonds—Allocations and Payments” in this prospectus. Proceeds received by the certificate trustee from the sale of any bond or from the institution of certain judicial proceedings by the certificate trustee, in each case as a result of an event of default and subject to the terms of the certificate indenture, will be applied (after the payment of any interest then owed on the certificates) to due and unpaid principal pro rata on each tranche of certificates based on the respective outstanding principal amount of the certificates of each tranche. See “Description of Certificates—Events of Default” in this prospectus.

Final Payment / Final Maturity Date Failure to pay a scheduled principal payment on any payment date or the entire outstanding amount of the bonds of any tranche by the scheduled final payment date will not result in a default with respect to that tranche of bonds of a bond issuer. The failure to pay the entire outstanding principal balance of the bonds of any tranche will result in a default only if such payment has not been made by the final maturity date for such tranche. For the scheduled final payment date and the final maturity date of each tranche of bonds of each bond issuer, see “Description of the Bonds” in the accompanying prospectus supplement.

6

Payment and Record Dates The payment and record dates for the bonds and certificates will be specified in the prospectus supplement. See “Description of the Certificates—Distributions and Allocations” and “Description of the Bonds” in the accompanying prospectus supplement.

Ratings We expect the bonds and the certificates will receive credit ratings from three nationally recognized statistical rating organizations, or NRSROs. Please see “Ratings” in this prospectus and in the accompanying prospectus supplement.

Phase-In-Recovery Charges CEI, OE and TE have obtained from the PUCO, which regulates electric distribution utilities in Ohio, a financing order (i) designating the phase-in costs and approving certain financing costs associated with issuing and servicing the CEI Funding bonds, the OE Funding bonds and the TE Funding bonds, respectively, (ii) authorizing the sale of the phase-in-recovery property to CEI Funding, OE Funding and TE Funding and (ii) authorizing the issuing entity structure. This order, referred to as the financing order, authorizes CEI, OE and TE to recover their respective phase-in costs and approved financing costs and authorizes the billing and collection by CEI, OE and TE of the respective phase-in-recovery charges (as defined in the glossary on page 110) as servicers of the bond issuers.

Phase-in-recovery charges are nonbypassable in that such charges cannot be avoided by any customer or other person obligated to pay the charges. Subject to the methodology approved in the financing order, the phase-in-recovery charges will apply to all retail electric customers of CEI, OE and TE, as the case may be, for as long as they remain retail customers of such electric distribution utility. If a customer of the electric distribution utility purchases electric generation service from a competitive retail electric service provider, the electric distribution utility is authorized by the Securitization Act to collect the phase-in-recovery charges directly from that customer.

The phase-in-recovery charges are separate and apart from CEI’s, OE’s and TE’s base rates, and are subject to adjustment semiannually (other than the initial adjustment, which will be completed within 12 months after the issuance date of the bonds, and adjustments in the period commencing with the start of the last year that the last maturing tranche of bonds of each bond issuer is expected to be outstanding and ending with the final maturity date, in which case adjustments as frequently as monthly may be necessary). See “—Statutory Adjustments to the Phase-In-Recovery Charges” and “Description of the Phase-In-Recovery Property—Adjustments to the Phase-In-Recovery Charges” in this prospectus.

Customers All retail customers of CEI, OE and TE within their respective geographic territories will be subject to the phase-in-recovery charges.

7

Statutory Adjustments to the Phase-In-Recovery Charges Each of the servicers will calculate and set their respective initial phase-in-recovery charges at a level estimated to generate sufficient revenues (and taking into account the cap on certain ongoing financing costs):

• to pay fees and expenses related to the servicing and retirement of the bonds of the related bond issuer and of the certificates allocable to the bond issuer, including, without limitation, trustee fees and expenses, servicing costs, rating agency surveillance fees, legal and accounting fees and other ongoing financing costs, as well as adjustments for dealing with estimated and actual costs;

• to pay interest on the bonds;

• to pay principal of each tranche of such bonds according to the related expected amortization schedule;

• to replenish the capital subaccount to the required capital level; and

• to pay all additional fees, costs and charges and other financing costs approved under the financing order.

The initial adjustment to the phase-in-recovery charges will be completed within 12 months after the issuance date of the bonds. Thereafter, such adjustments will be made semiannually, with the exception of the period commencing with the start of the last year that the last maturing tranche of bonds is expected to be outstanding and ending with the final maturity date, in which case adjustments may be made as frequently as monthly, if necessary.

Each servicer will base adjustments to the related phase-in-recovery charges on actual overcollections and undercollections, debt service costs and updated assumptions as to various factors, including electricity usage by customers and rates of charge-offs. These adjustments will continue until interest on and principal of all tranches of the CEI Funding bonds, in the case of CEI, OE Funding bonds, in the case of OE and the TE Funding bonds, in the case of TE, have been paid in full.

No later than November 1 and May 1 of each year after the initial adjustment, each servicer will file with the PUCO its semiannual request for approval of the adjusted phase-in-recovery charges. Such adjustments will become automatically effective 60 days after the request is submitted unless otherwise ordered by the PUCO. The PUCO’s review of these requests is limited to determining whether there is any mathematical error in the servicer’s application of the adjustment mechanism to the phase-in-recovery charges.

See “Description of the Phase-In-Recovery Property—Adjustments to the Phase-In-Recovery Charges” in this prospectus.

Security / Credit Enhancement The bonds issued by each bond issuer will be secured primarily by the phase-in-recovery property of such bond issuer, generally consisting

8

of the respective bond issuer’s irrevocable right to impose, charge and collect nonbypassable usage-based phase-in-recovery charges from retail electric customers in the sponsors’ respective service territories. The certificates will be secured primarily by the bonds. Credit enhancement for the bonds, through a true-up adjustment mechanism and capital subaccount, is intended to protect against losses or delays in scheduled payments on the bonds and, accordingly, the certificates. There will be no other forms of credit enhancement for the bonds except for amounts held in the excess funds subaccount. We do not anticipate that the bonds or the certificates will have the benefit of any liquidity facility or of any third-party credit enhancement, such as guarantees, letters of credit or insurance. The bonds of a bond issuer will be payable only from its phase-in-recovery property and its other property constituting collateral and not from the phase-in-recovery property or other property constituting collateral of the two other bond issuers. See “The Securitization Act” and “Description of the Phase-In-Recovery Property” in this prospectus.

State of Ohio Pledge The Securitization Act and the financing order contains a pledge and agreement by the State of Ohio with the bondholders and bond issuers that the State of Ohio will not take or permit any action that impairs the value of phase-in-recovery property under the financing order or revises the phase-in-costs for which recovery is authorized under the financing order or, except for the approved adjustment mechanism authorized in the financing order and allowed under the Securitization Act, reduce, alter or impair phase-in-recovery charges until the bonds, all financing costs and all amounts to be paid under any ancillary agreement are paid or performed in full.

Optional Redemption Neither the certificate indenture nor the bond indentures permit an optional redemption of the certificates or the bonds, respectively.

Collection Accounts and Subaccounts Each bond issuer will establish a collection account to hold collections of its phase-in-recovery charges as well as the capital contributions made to that bond issuer. Each collection account will consist of three subaccounts:

• a general subaccount;

• a capital subaccount for the initial capital contributions to the bond issuer; and

• an excess funds subaccount.

All amounts in a collection account not allocated to any other subaccount will be allocated to the general subaccount. Withdrawals from and deposits to these subaccounts will be made as described under “Description of the Bonds—Allocations and Payments.”

Capital Subaccounts Prior to issuance of the bonds, CEI will contribute capital to CEI Funding, OE will contribute capital to OE Funding and TE will

9

contribute capital to TE Funding, in each case, in the amount specified in the accompanying prospectus supplement. Each bond issuer will deposit the capital into its capital subaccount. A bond trustee will draw on amounts available in the related bond issuer’s capital subaccount to the extent that amounts available in that bond issuer’s general subaccount and excess funds subaccount are insufficient to pay interest on, or principal of, its bonds and, subject to the cap, the fees and expenses of servicing and retiring such bonds and an allocable portion of the certificates.

If a bond trustee uses amounts on deposit in a capital subaccount to make payments on the related bonds on a payment date, then that capital subaccount will be replenished by the related bond issuer on subsequent payment dates to the extent the servicer remits payments arising from the phase-in-recovery charges exceeding the amounts required to pay amounts having a higher priority of payment. See “Description of the Bonds—Allocations and Payments” in this prospectus.

Excess Funds Subaccounts Each excess funds subaccount will be funded with collected phase-in-recovery charges and earnings on amounts in the collection account in excess of the amount necessary to:

• subject to the cap to the extent applicable, pay fees and expenses (including any indemnity payments) related to the servicing and retirement of the bonds (including without limitation trustee, independent director and administration fees and expenses) of that bond issuer and the portion of the certificates allocable to that bond issuer;

• pay interest on, and principal of, such bonds to the extent required to be paid on that payment date;

• replenish the capital subaccount of that bond issuer to the required capital level; and

• pay the return on investment due to that bond issuer’s seller and pay any reimbursement amount due to that bond issuer’s servicer pursuant to section 6.02 of the applicable servicing agreement.

A bond trustee will draw on amounts in the excess funds subaccount of a bond issuer to the extent amounts available in the bond issuer’s general subaccount are insufficient to pay the amounts listed above.

Collections; Allocations; Distributions; Priority of Payments Starting with the first deemed collection date after the issuance of the bonds, each servicer will remit daily to the collection account for its bond issuer an amount equal to the actual phase-in-recovery charges billed, less an allowance for estimated charge-offs, within two business days after the day payments arising from the phase-in-recovery charges are deemed to be collected, subject to a semiannual reconciliation. See “Servicing Agreements—Remittances to Collection Account” in this prospectus.

On each semiannual payment date, or for any amount payable under clauses (1) through (4) below, on any business day, each bond trustee will allocate or, subject to the cap to the extent applicable, pay all

10

amounts in the collection account of the related bond issuer, including earnings on these amounts, as follows and in the following order of priority:

(1) first, all fees, costs, expenses (including legal fees and expenses) and indemnity amounts owed by that bond issuer to the related bond trustee, the certificate trustee and the Delaware trustee under the applicable basic document will be paid to such bond trustee, certificate trustee and Delaware trustee (subject to section 6.07 of the bond indenture), respectively, and second, all fees, costs, expenses (including legal fees and expenses) and indemnity amounts owed by that bond issuer to the issuing entity under the applicable basic documents will be paid to the issuing entity, provided that the total of the foregoing amounts paid will not exceed $100,000 annually;

(2) the servicing fee and all unpaid servicing fees from any prior payment dates will be paid to that bond issuer’s servicer;

(3) the administration fee and all unpaid administration fees from any prior payment dates and amounts due independent directors will be paid to that bond issuer’s administrator and the independent directors, respectively;

(4) payment of all other operating expenses, such as accounting and audit fees, rating agency fees, legal fees and certain reimbursable costs of the servicer under the related servicing agreement, and taxes and indemnities payable by that bond issuer will be paid to the persons entitled thereto;

(5) first, any overdue semiannual interest on the bonds of that bond issuer (together with, to the extent lawful, interest on such overdue interest at the applicable bond interest rate) and second, semiannual interest then due and payable on such bonds will be paid to the certificate trustee, as bondholder, for distribution to the applicable certificateholders;

(6) first, principal due and payable on the bonds of that bond issuer as a result of a bond event of default or on the final maturity date of a tranche of bonds of that bond issuer will be paid to the certificate trustee, as bondholder, for distribution to the applicable certificateholders and second, semiannual principal based on the priorities described in the accompanying prospectus supplement will be paid to the certificate trustee, as bondholder, for distribution to the applicable certificateholders according to the expected amortization schedule for each tranche of bonds;

(7) unpaid operating expenses (including, without limitation fees, expenses), and indemnity amounts owed by that bond issuer under the basic documents will be paid first to the persons entitled thereto (other than the bond trustee, the Delaware trustee and the certificate trustee) and second, to the bond trustee, Delaware trustee and certificate trustee;

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(8) the amount, if any, by which that bond issuer’s capital subaccount needs to be funded to equal the required capital level as of such payment date will be allocated to that capital subaccount;

(9) an amount equal to one-half of 6.85% of the required capital level will be paid to that bond issuer’s seller;

(10) reimbursement of the servicer for any amounts paid by that servicer to the bond trustee, Delaware trustee or certificate trustee pursuant to section 6.02(f) of the servicing agreement;

(11) allocation of the remainder, if any, to the excess funds subaccount; and

(12) following, first, the payment of all principal of and interest on all bonds and all other approved financing costs, and, second, the payment of any unpaid amounts due the Delaware trustee, the certificate trustee and the related bond trustee under clause (1) above that exceeded the cap, then the balance, if any, will be paid to that bond issuer free from the lien of the bond indenture.

If, on any payment date, or for any amounts payable under clauses (1) through (4) above, on any business day, funds on deposit in the general subaccount of the bond issuer are insufficient to make the payments contemplated by clauses (1) through (6) above, the bond trustee will first, draw from amounts on deposit in the excess funds subaccount of the bond issuer and second, draw from amounts on deposit in the bond issuer’s capital subaccount, up to the amount of the shortfall, in order to make the payments described above. In addition, if on any payment date funds on deposit in the general subaccount of a bond issuer are insufficient to make the transfer described in clause (8) above, the related bond trustee will draw from amounts on deposit in the excess funds subaccount of that bond issuer to make the required transfer. See “Description of the Bonds—Allocations and Payments” in this prospectus.

Payments of principal due and payable on the bonds of a bond issuer as a result of an event of default (and assuming all bonds have been declared immediately due and payable), or upon final maturity, will be paid pro rata based on the respective principal amounts of such bonds.

See “Description of the Certificates—Events of Default” in the prospectus for a description of the allocation of proceeds from the sale of any bond by the certificate trustee or of amounts recovered by the certificate trustee as a result of the institution of certain judicial proceedings by the certificate trustee, in each case as a result of an event of default and subject to the terms of the certificate indenture.

The following diagram provides a general summary of the flow of funds from the customers of a bond issuer through the servicer to the collection account of that bond issuer, and the various allocations from the collection account:

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Cap on Certain Financing Costs Pursuant to the financing order, certain approved ongoing financing costs recoverable through phase-in-recovery charges (including those referenced in clauses (1) through (4), (7), (9) and (10) above) may not exceed on an annual basis the aggregate amount approved for such ongoing financing costs by more than 5%. The sum of such approved annual ongoing financing costs ($1,072,732) plus an amount equal to 5% of such costs is equal to $1,126,369, which amount is referred to as the cap. The ongoing financing costs referenced in clauses (1) through (4), (7), (9) and (10) above, to the extent in excess of the cap for any given annual period, may be recovered in any subsequent annual period (subject to the annual cap in such subsequent period). Unused cap amounts in a given year will not be available for recovery of any ongoing financing costs in a subsequent year. See “Description of the Bonds—Allocations and Payments.” In the case of a non-utility servicer with a servicing fee of 0.75% of the initial principal balance of the bonds (the maximum permitted to be paid to a non-utility servicer under the financing order) as compared to 0.10% to be paid to the initial servicer, the cap would be $4,277,550.

The initial servicer of each bond issuer will agree in its servicing agreement to indemnify the bond trustee and, as to such bond issuer’s allocable portion only (pro rata in proportion to the original principal amount of such bond issuer’s bonds unless directly allocable to such bond issuer), the Delaware trustee and the certificate trustee, for all due and unpaid compensation, expenses and indemnity amounts (owed by such bond issuer to such trustee under, and to the extent set forth in, section 6.07 of the bond indenture, sections 1 through 4 of the fee and indemnity agreement and any applicable provisions of the other applicable basic documents), that exceed the cap. Each servicing agreement will provide that this initial servicer indemnity obligation will continue as an obligation of such servicer in the event a successor servicer is appointed.

Servicing The servicers will service and administer the respective phase-in-recovery properties and bill and collect the respective phase-in-recovery charges in the same manner that they service and administer bill collections for their own account and the accounts they service for others, if any. See “Servicing Agreements—Servicing Standards and Covenants.”

Servicing Compensation Each servicer will be entitled to receive an annual servicing fee in an amount equal to 0.10% of the initial principal balance of the bonds of its bond issuer. If any of the servicers are replaced by a non-utility successor servicer, such non-utility successor servicer may be paid an annual servicing fee of up to 0.75% of the initial principal balance of the bonds.

The bond trustees will pay the unpaid servicing fees semiannually on each payment date to the extent of available funds prior to the distribution of any interest on and principal of its bonds.

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Tax Status of the Certificates For federal income tax purposes, the issuing entity will be treated as a “grantor trust,” and thus not taxable as a corporation, and each tranche of certificates will be treated as representing ownership of fractional undivided beneficial interests in the bonds of each of the bond issuers and other trust property. Interest and original issue discount, if any, on the certificates, and any gain on the sale of the certificates, generally will be included in gross income of certificateholders for federal income tax purposes. See “Material U.S. Federal Income Tax Consequences” in this prospectus. Interest on the certificates and any profit on the sale of the certificates are subject to Ohio personal income taxes. For taxpayers other than a limited class of financial institutions, Ohio does not currently impose a personal property tax to which the certificates would be subject. See “Ohio State Taxation” in this prospectus.

ERISA See “Certain ERISA and Other Considerations” in this prospectus.

Payment Dates and Interest Accrual Interest will be distributed on the certificates semiannually, on              and             . The first scheduled interest and principal distribution date is                     , 2013. If any interest distribution date is not a business day, distributions scheduled to be made on such date may be made on the next succeeding business day and no interest shall accrue upon such payment during the intervening period. On each distribution date, the certificate trustee will distribute interest on and principal of the certificates to the extent interest and principal is received on the corresponding tranche of bonds of each bond issuer to the holders of each tranche of certificates as of the close of business on the record date. Interest on the bonds will be calculated on a 30/360 basis. See “Description of the Certificates” and “Description of the Bonds.”

Interest is due on each distribution date and principal is due upon the final maturity date for each tranche of certificates.

Continuing Disclosure Each bond issuer will or will cause its sponsor to, post on http://www.firstenergycorp.com/investor, a collective website to be used by all bond issuers, periodic reports containing the information required by the related bond indenture (which will include reports and other information required to be filed with the SEC and information regarding the Phase-In-Recovery Charges). See “Description of the Bonds—Website Disclosure” in this prospectus.

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RISK FACTORS

Before investing in the certificates you should carefully consider the risks described below, as well as the other information contained in this prospectus and the accompanying prospectus supplement. These are risks we consider to be material to your decision whether to invest in the certificates. There may be risks that you view in a different way than we do, and we may omit a risk that we consider immaterial, but you consider important. If any of the risks discussed below occur, an investment in the certificates could be materially harmed.

Risks Related to Limited Source of Payments and Credit Enhancement

You could experience payment delays or losses as a result of limited sources of payment for the certificates and limited credit enhancement.

You could experience payment delays or losses on your certificates because payments on each tranche of bonds that correspond to your tranche of certificates are the primary source of distributions on the certificates. The bonds are the principal assets of the issuing entity. The phase-in-recovery properties and the other bond collateral, which is expected to be of relatively small value, are in turn the only sources of payments on the bonds.

There will be no forms of credit enhancement for the bonds except for the right to adjust the phase-in-recovery charges and amounts held in the capital subaccounts and excess funds subaccounts. We do not anticipate that the bonds or the certificates will have the benefit of any liquidity facility or of any third-party credit enhancement, such as guarantees, letters of credit or insurance. The bonds of a bond issuer will be payable only from its phase-in-recovery property and its other bond collateral and not from the phase-in-recovery property or other bond collateral of any other bond issuer. The obligations of the bond issuers in respect of the bonds are separate and an event of default on the bonds of one bond issuer will not cause an event of default on the bonds of any other bond issuer.

If distributions are not made on the certificates in a timely manner as a result of nonpayment of any bonds of any of the bond issuers when due (and, for the avoidance of doubt, excluding the failure to pay principal in accordance with the expected amortization table), the holders of at least a majority of the outstanding principal amount of all tranches of the certificates (voting as one class) may direct the certificate trustee to bring an action against the defaulting bond issuer to foreclose on the phase-in-recovery property of that bond issuer and the other bond collateral securing its bonds. There is not likely to be a market, however, for the sale of the phase-in-recovery property and the other bond collateral.

Risks Associated with Potential Judicial, Legislative or Regulatory Actions

You could experience payment delays or losses as a result of amendment, repeal or invalidation of the Securitization Act or breach of the pledge of the State of Ohio.

In the Securitization Act, the State of Ohio and in the financing order, the PUCO on behalf of the State of Ohio, has pledged and agreed that it will not take or permit any action that impairs the value of the phase-in-recovery property or, except as allowed under the Securitization Act, reduce or impair phase-in-recovery charges that are imposed, charged or collected until the bonds and all other approved financing costs are paid in full. Even though the obligations of the PUCO and the State of Ohio in the financing order are direct, explicit, irrevocable and unconditional upon issuance of the bonds and are legally enforceable by the bond issuers, the bond trustee and the bond holders against the State of Ohio, it is possible that actions could be taken (even if such actions were ultimately found to be unlawful) to alter the provisions of the Securitization Act or limit or alter the phase-in-recovery properties or the financing order.

Ohio has both an initiative and a referendum process. The time for challenging the Securitization Act through referendum has expired, but the right of voters in Ohio to enact laws by initiative can be exercised at any time, provided a lengthy process is followed and successfully concluded. Supporters first must petition the Ohio legislature, and the legislature then has an opportunity to act on the proposed legislation. If the legislature rejects the proposed legislation or takes no action, then the initiative question will go to the ballot if additional signature requirements are met. Ohio voters may also initiate constitutional amendments by a similar process involving the Secretary of State, the Attorney General and the Ohio Ballot Board.

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Legislative Actions

Our counsel has opined to us that under applicable constitutional principles relating to the impairment of contracts, the State of Ohio could not repeal or amend the Securitization Act, or take or permit any action prohibited by, or fail to take any action required, under its pledge described above, if the repeal or amendment or the action or inaction would impair the value of the phase-in-recovery property or, except as allowed under the Securitization Act, reduce or impair phase-in-recovery charges that are imposed, charged or collected until the bonds and all other approved financing costs are paid in full, so as to cause a substantial impairment of the contractual obligation undertaken in the pledge, absent a demonstration by the State of Ohio that is a reasonable exercise of its sovereign power and of a character reasonable and appropriate to the public purpose justifying such action.

Although there have been numerous cases in which legislative or popular concerns with the burden of taxation or governmental charges have led to adoption of legislation reducing or eliminating taxes or charges that supported bonds or other contractual obligations entered into by public instrumentalities, courts have generally not considered these concerns by themselves to provide sufficient justification for a substantial impairment of the pledged security provided by the taxes or governmental charges for such bonds or obligations. Based on these court decisions (which, however, to date have not addressed directly the bonds and, thus, the certificates, or the State of Ohio’s pledge described above or any substantially similar bonds, certificates or pledges), it would appear unlikely that the State of Ohio could substantially impair the value of the phase-in-recovery property, or reduce or impair phase-in-recovery charges, unless the action is reasonable and appropriate to further a legitimate public purpose.

Moreover, in the opinion of our counsel, under the takings clauses of the United States and Ohio Constitutions, the State of Ohio could not repeal or amend the Securitization Act (by way of legislative process, including voter initiative, or take or refuse to take any action in contravention of its pledge (described above)) without paying just compensation to the bondholders (and, thus, the certificateholders), as determined by a court of competent jurisdiction, if doing so would deny all economically beneficial or productive use of the phase-in-recovery property of the bondholders (and, thus, the certificateholders) or if the court determined that the State of Ohio’s action rose to the level of a taking based upon the character of the action, the economic impact of the State of Ohio’s regulation and the extent to which the regulation interfered with distinct investment-backed expectations of the bondholders and certificateholders in connection with their investments in the bonds and certificates, respectively. There is no assurance, however, that, even if a court were to award just compensation, it would be sufficient to pay the full amount of principal of and interest on the bonds and distributions on the certificates.

To the extent voter initiative is relevant, Article 2, Section 1 of the State of Ohio Constitution specifically limits the rights of the people themselves to enact laws to the same limits applicable to the General Assembly and provides that “[t]he limitations expressed in the constitution, on the power of the General Assembly to enact laws, shall be deemed limitations on the power of the people to enact laws.” Thus, any State of Ohio constitutional limitations with respect to impairment of legislation would also apply to any voter initiative.

We are not aware of any proposed or pending initiative petition or of any proposed or pending legislation in the State of Ohio that would affect any of the provisions of the Securitization Act, and we are not aware of any pending suit that challenges any of the provisions of the Securitization Act, relating to the issuance by the PUCO of a financing order, the creation or characterization of the phase-in-recovery property or the issuance of “phase-in-recovery bonds,” such as the bonds.

Nonetheless, we cannot assure you that a repeal or amendment of the Securitization Act will not be adopted or sought or that any action or refusal to act by the State of Ohio will not occur, any of which may constitute a violation of the State of Ohio’s pledge to the owners of the phase-in-recovery properties. If a violation of this pledge occurred, costly and time consuming litigation might ensue. Any litigation might adversely affect the price of the certificates and your ability to resell the certificates and might delay the timing of distributions on the

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certificates. Moreover, given the lack of controlling judicial precedent directly addressing the bonds and, thus, the certificates and the State of Ohio’s pledge, we cannot predict the outcome of any litigation with certainty, and, accordingly, you could experience a delay in receipt of distributions on or incur a loss on your investment in the certificates.

Court Decisions

If a court were to determine that the relevant provisions of the Securitization Act or the financing order are unlawful, invalid or unenforceable in whole or in part, it could adversely affect the validity of the bonds and the certificates or the issuing entity’s ability to make distributions on the certificates. In either case, you could suffer a loss on your investment in the certificates.

CEI, OE or TE will not indemnify you for any changes in the law, including any amendment or repeal of the Securitization Act that may affect the value of your certificates. See “—Risks Related to the Phase-In-Recovery Property—Limited rights and remedies may impair ability to realize on collateral” below.

Litigation and other events in jurisdictions other than Ohio could adversely affect certificateholders.

Other states have passed laws permitting securitization by electric utilities similar to those permitted by the Securitization Act, and some of these laws have been challenged by judicial actions. To date, none of these challenges have succeeded, but future challenges might be made. A legal action successfully challenging under the U.S. Constitution or other federal law a state statute similar to the Securitization Act adopted by a jurisdiction other than the State of Ohio could establish legal principles that would serve as a basis to challenge the Securitization Act. Although the Securitization Act would not become invalid automatically as a result of a court decision invalidating another state’s statute, such a decision could establish a legal precedent for a successful challenge to the Securitization Act. One of the unsuccessful challenges was a claim that a similar state scheme was impermissible state regulation of interstate commerce in violation of the Commerce Clause of the U.S. Constitution, which limits the authority of States to regulate interstate commerce. Other unsuccessful challenges based on claims that could arise under the U.S. Constitution or other federal law included claims that allowing utilities to recover nonbypassable charges from certain classes of ratepayers operated as takings of the ratepayers’ property or treated different classes of ratepayers differently in violation of equal protection. Similarly, legislative, administrative, political or other actions in other states would not directly impact the Securitization Act or the interests of certificateholders, but could heighten awareness of the political and other risks associated with these types of securities as perceived by the capital markets, and in that way, limit the ability of certificateholders to resell the certificates and impair their value. We cannot assure you that future challenges to similar types of electric distribution utility securitizations in other states will not significantly impair your ability to resell the certificates or the value of the certificates.

The federal government might preempt the Securitization Act without full compensation.

Federal preemption of the Securitization Act could prevent bondholders from receiving payments on the bonds, and thus, certificateholders from receiving distributions on the certificates and cause a loss on your investment in the certificates. In the past, bills have been introduced in Congress to prohibit the recovery of charges similar to the phase-in-recovery charges, although Congress has not enacted any such law. As of the date of this prospectus, we are not aware of the House, the Senate, or committees thereof having primary relevant jurisdiction having considered legislation that would prohibit the recovery of charges similar to the phase-in-recovery charges. However, we can give no assurances that Congress may not do so in the future. Enactment of a federal law prohibiting the recovery of charges similar to the phase-in-recovery charges might have the effect of preempting the Securitization Act and thereby prohibiting the recovery of the phase-in-recovery charges, which would cause delays and losses on payments on the bonds and, thus, distributions on the certificates.

We can give no assurances that a court would consider the preemption by federal law of the Securitization Act to be a taking of property from the bond issuers, from us as the bondholders or, thus, from the

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certificateholders under the U.S. Constitution or under the Constitution of the State of Ohio. Moreover, even if this preemption of the Securitization Act by the federal government were considered a taking under the U.S. Constitution or under the Constitution of the State of Ohio for which the federal government had to pay “just compensation,” we can give no assurance that this compensation would be sufficient to pay the full amount of principal of and interest on the bonds, and, thus, distributions on the certificates, or to pay such amounts on a timely basis.

The PUCO might take actions that could reduce the value of your investment in the certificates.

The Securitization Act provides that a final financing order is irrevocable and that the PUCO may not reduce, impair, postpone, or terminate the phase-in-recovery charges authorized in the final financing order or impair the property or the collection or recovery of phase-in costs. However, the PUCO retains the power to adopt, revise or rescind rules or regulations affecting the Ohio Companies. The PUCO also retains the power to interpret the financing order granted to the Ohio Companies, and in that capacity might be called upon to rule on the meanings of provisions of the order that might need further elaboration. Any new or amended regulations or orders from the PUCO might affect the ability of the servicers to collect the phase-in-recovery charges in full and on a timely basis, the rating of the bonds and the certificates and, accordingly, the amortization of the bonds and certificates and their weighted average lives, which in turn could adversely affect distributions on your certificates.

The financing order provides for a formula-based mechanism relating to adjustments to phase-in-recovery charges. See “Description of the Phase-In-Recovery Property—Adjustments to the Phase-In-Recovery Charges.” Applications of adjustment procedures similar to the ones set forth in the financing order have been challenged in the past in other states and may be challenged in the future. Past challenges have included claims that utility commissions in other states have used methods for calculating adjustments that were inconsistent with the governing statute, or have used procedures that were insufficient to guarantee due process. Challenges to or delays in the adjustment process might adversely affect the market perception and valuation of the certificates. Also, any litigation might materially delay phase-in-recovery charge collections due to delayed implementation of adjustments and might result in missing payments or payment delays and lengthened weighted average life of the bonds, and, thus, missing distributions or distribution delays and lengthened average life of the certificates.

Servicing Risks

Inaccurate consumption forecasting might result in phase-in-recovery charges that result in inadequate collections to make scheduled payments on the bonds and, thus, scheduled distributions on the certificates.

The phase-in-recovery charges are imposed based on forecasted customer usage, i.e., kilowatt-hours of electricity consumed by customers. The amount and timeliness of phase-in-recovery charge collections will depend in part on actual electricity usage and the amount of collections and write-offs for each customer class. If the servicers inaccurately forecast electricity consumption when setting or adjusting the phase-in-recovery charges, there could be a shortfall or material delay in phase-in-recovery charge collections, which might result in missed or delayed payments of principal and interest and lengthened weighted average life of the bonds, which in turn could lead to missed or delayed distributions and lengthened weighted average life of the certificates. Please read “Description of the Phase-In-Recovery Property—Financing Order and Issuance Advice Letters” and “—Adjustments to the Phase-In-Recovery Charges” in this prospectus.

Inaccurate forecasting of electricity consumption by the servicers might result from, among other things, the general economic environment in the service territories of the Ohio Companies being worse than expected, causing retail electric customers to migrate from the Ohio Companies’ service territories or reduce their electricity consumption; the impact of weather conditions, resulting in less electricity consumption than forecast; levels of business activity; customers consuming less electricity than anticipated because of increased energy prices, unanticipated increases in conservation efforts or unanticipated increases in electric usage efficiency; the

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occurrence of a natural or other disaster, or an act of terrorism, cyber attack or other catastrophic event; unanticipated changes in the market structure of the electric industry; or customers switching to alternative sources of energy, including self-generation of electric power.

Your investment in the certificates depends on the actions of the Ohio Companies or their successors or assignees, as servicers of the phase-in-recovery property.

The Ohio Companies, as servicers, will be responsible for, among other things, calculating, billing and collecting the phase-in-recovery charges from customers, submitting requests to the PUCO to adjust these charges, monitoring the collateral for the bonds and taking certain actions in the event of non-payment by a retail electric customer. The bond trustees’ receipt of collections in respect of the phase-in-recovery charges, which will be used to make payments on the bonds resulting in distributions on the certificates, will depend in part on the skill and diligence of the servicers in performing these functions. Difficulties or failures in the servicers’ handling of the collateral could result in a shortfall in funds to pay debt service on the bonds and, thus, distributions on the certificates. The systems that the servicers have in place for phase-in-recovery charge billings and collections might, in particular circumstances, cause the servicers to experience difficulty in performing these functions in a timely and completely accurate manner.

If the servicers fail to make collections for any reason, then the servicers’ payments to the bond trustees in respect of the phase-in-recovery charges might be delayed or reduced. In that event, payments on the bonds might be delayed or reduced resulting in delayed or reduced distributions on the certificates.

If the bond issuers have to replace the Ohio Companies as the servicers, they may experience difficulties finding and using replacement servicers.

If the Ohio Companies cease to service the phase-in-recovery properties, it might be difficult to find successor servicers. Also, any successor servicers might have less experience and ability than the Ohio Companies and might experience difficulties in collecting phase-in-recovery charges and determining appropriate adjustments to the phase-in-recovery charges and billing and/or payment arrangements may change, resulting in delays or disruptions in collections. In the event of the commencement of a case by or against any of the servicers under the United States Bankruptcy Code or similar laws, the bond trustees might be prevented from effecting a transfer of servicing due to operation of the bankruptcy code. Any of these factors and others might delay the timing of payments and may reduce the value of your investment in the certificates. Please read “Servicing” in this prospectus.

Changes to billing and collection practices might reduce the value of your investment in the certificates.

The financing order specifies the methodology for determining the amount of the phase-in-recovery charges that may be imposed. The servicers may not change this methodology without approval from the PUCO. Also, the servicers may change billing and collection practices, which might adversely impact the timing and amount of customer payments and might reduce phase-in-recovery charge collections, thereby limiting our ability to make scheduled distributions on the certificates. Separately, the PUCO might require changes to these practices. Any changes in billing and collection practices regulations might make it more difficult for the servicers to collect the phase-in-recovery charges which could adversely affect the value of your investment in the certificates. Please read “The Sponsors, Sellers, Initial Servicers and Depositors” in this prospectus.

Limits on rights to terminate electric service might make it more difficult to collect the phase-in-recovery charges.

Ohio statutory requirements and the rules and regulations of the PUCO, which may change from time to time, regulate and control the right to disconnect service. For example, retail electric providers in Ohio generally may not terminate service to a customer (1) on a holiday or weekend day or after 12:30 p.m. on the day

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immediately preceding a holiday or weekend, (2) during the period of November through April 15^th except under certain conditions, (3) if such disconnection would be especially dangerous to the health of a person, (4) if such customer is an energy assistance client under certain circumstances or (5) if the customer is a mastermetered apartment complex unless certain notices are given. To the extent these retail electric customers do not pay for their electric service, retail electric providers will not be able to collect phase-in-recovery charges from these retail electric customers. Although retail electric providers will have to pay the servicers the phase-in-recovery charges on behalf of those customers (subject to any charge-off allowance and reconciliation rights), required service to nonpaying end-use customers could affect the ability of retail electric providers to make such payment.

Future adjustments to the phase-in-recovery charges by rate schedule might result in insufficient collections.

The customers of each Ohio Company are provided service under one of eight different rate schedules. The phase-in-recovery charges imposed by the related bond issuer will be allocated among these rate schedules and imposed in accordance with the formula required under the Securitization Act and specified in the financing order. A shortfall in collections of the phase-in-recovery charges will be corrected in the next adjustment to the phase-in-recovery charges and allocated to such Ohio Company’s rate schedules in the same fashion. If enough customers receiving service under an individual rate schedule fail to pay the phase-in-recovery charges or cease to be customers, the applicable servicer might have to substantially increase the phase-in-recovery charges for the remaining customers. These increases could lead to further failures by the remaining customers to pay the phase-in-recovery charges, thereby increasing the risk of a shortfall in funds to pay debt service on the bonds of the applicable bond issuer and, thus, distributions on the certificates.

Phase-in-recovery charges will apply to all retail customers of an electric distribution utility for as long as they remain customers of such electric distribution utility. If a customer of the utility subsequently receives retail electric distribution service from another electric distribution utility operating in the same service area, including by succession, assignment, transfer or merger, the phase-in-recovery charges will continue to apply to that customer. However, if a customer switches its retail electric distribution service to a municipal utility, the phase-in-recovery charges will not continue to apply to that customer.

Expenses may be incurred in excess of the cap on certain financing costs provided in the financing order.

Under the financing order, phase-in-recovery charges may not be imposed by the respective bond issuers for certain ongoing financing costs to the extent they exceed the cap for such amounts. In addition, the respective bond issuers’ other assets, substantially all of which are pledged to the trustee under the respective bond indentures, may not be used by the trustee to pay such excess amounts. Examples of the costs subject to the cap include payment of specified fees and expenses to the trustees, the servicer and the administrator. No assurance can be given that expenses will not be incurred for these purposes in excess of the cap level and, if this were to occur, there may not be sufficient funds to make payments for these excess amounts. Creditors which are owed these amounts and not paid may obtain judgment liens against a bond issuer’s assets or seek to place a bond issuer in bankruptcy. The foregoing events could adversely affect the issuing entity, as holder of the bonds, and thus, certificateholders.

The initial servicer of each bond issuer will agree in its servicing agreement to indemnify each applicable trustee (i.e., its bond trustee and its allocable portion as to the certificate trustee and Delaware trustee) for all due and unpaid indemnity and other payments, of the applicable bond issuer under the applicable basic documents, that exceed the cap. Each servicing agreement will provide that this initial servicer obligation will continue as an obligation of such initial servicer in the event a successor servicer is appointed.

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Storm-Related Risks

Storm damage to the service territories could impair the payment of distributions on the certificates.

The Ohio Companies’ service territories have been impacted by severe weather, such as tornadoes, hurricanes, such as Hurricane Sandy, ice or snowstorms, droughts and other natural disasters, which disrupt the Ohio Companies’ operations. Future storms could have similar effects. Transmission, distribution and usage of electricity could be interrupted temporarily, reducing the amount of phase-in-recovery charges collected. There could be longer-lasting weather-related adverse effects on residential and commercial development and economic activity in the Ohio Companies’ service territories, which could cause the per-KWh phase-in-recovery charge to be greater than expected after the adjustment process. Legislative action adverse to the certificateholders might be taken in response, and such legislation, if challenged as violative of the State of Ohio’s pledge, might be defended on the basis of public necessity. Please read “The Securitization Act—CEI, OE and TE and Other Utilities May Securitize Phase-In Costs—The State Pledge” and “Risk Factors—Risks Associated with Potential Judicial, Legislative or Regulatory Actions—Legislative Actions” in this prospectus.

Risks Related to the Phase-In-Recovery Property

Foreclosure of the bond trustees’ lien on the phase-in-recovery property securing the bonds might not be practical, and acceleration of the bonds before maturity might have little practical effect.

Under the Securitization Act and the bond indentures, the bond trustees have the right to foreclose or otherwise enforce the lien on the phase-in-recovery property securing the bonds. However, in the event of foreclosure, there is likely to be a limited market, if any, for the phase-in-recovery property. Therefore, foreclosure might not be a realistic or practical remedy. Moreover, although payments on the bonds will be due and payable upon acceleration of the bonds before maturity, the phase-in-recovery charges likely would not be accelerated. The true-up adjustment mechanism will be used to adjust phase-in-recovery charges to meet scheduled payments but not accelerated maturity. As a result, the nature of the bond issuers’ business will result in payments on the bonds being paid as funds become available. If there is an acceleration of the bonds, all tranches of the bonds will be paid pro rata; therefore, some tranches might be paid earlier than expected and some tranches might be paid later than expected, which could adversely affect distributions on the certificates and affect the value of your investment in the certificates.

Bankruptcy and Creditors’ Rights Issues

The bankruptcy of an Ohio Company could delay or reduce payments on the bonds of its related bond issuer and, thus, an allocable portion of the certificates and adversely affect the ability to resell the phase-in-recovery property of that bond issuer.

If an Ohio Company were to become a debtor in a bankruptcy case, and a creditor or bankruptcy trustee of the Ohio Company or the Ohio Company itself as debtor in possession were to take the position that the phase-in-recovery property constituted property of the Ohio Company’s bankruptcy estate, and a court were to adopt this position, then delays or reductions in payments on bonds of the related bond issuer, and therefore an allocable portion of the certificates, could result. For example, a creditor or bankruptcy trustee of an Ohio Company or the Ohio Company itself as debtor in possession might argue that, contrary to Ohio law as set forth in the Securitization Act, the sale of the phase-in-recovery property to the bond issuers was a loan to the Ohio Company from its respective bond issuer, secured by a pledge of the phase-in-recovery property rather than an absolute transfer and true sale of such phase-in-recovery property. If the bankruptcy court accepted that argument, the phase-in-recovery property would be considered property of the bankruptcy estate of the Ohio Company, the exercise of rights of the bond issuer in respect of the phase-in-recovery property would be subject to the automatic stay that arises upon the commencement of the Ohio Company’s bankruptcy case, and the rights of the related bond issuer as secured creditor would be subject to modification to the extent permitted under the Bankruptcy Code. Such modifications could include, among other things, reductions of the amounts of payment of interest and principal on the bonds, delays in payments and alteration of other terms of the bonds, leading to delays or reductions in payments on the certificates.

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Generally, bankruptcy courts look to state law to create and define property interests held by a debtor in a bankruptcy case. The Securitization Act provides, among other things, that, a financing order shall remain in effect and unabated notwithstanding the bankruptcy, reorganization, or insolvency of the electric distribution utility or any affiliate of the electric distribution utility or the commencement of any judicial or nonjudicial proceeding on the financing order. It also provides that any sale, assignment or transfer of phase-in-recovery property under a financing order sale shall be an absolute transfer and true sale of, and not a pledge of or secured transaction relating to, the seller’s right, title, and interest in, to, and under the property, if the documents governing the transaction expressly state that the transaction is a sale or other absolute transfer. Each of the sale agreements contains an explicit statement that this securitization is an absolute transfer and true sale. See “Bankruptcy and Creditors’ Rights Issues—True Sale.”

Nevertheless, by reason of the so-called Supremacy Clause and Article I, Section 8, clause 4 of the United States Constitution, Congress has the right to enact bankruptcy legislation that could overturn or be inconsistent with the Securitization Act. Further, to the extent that a bankruptcy court determined that the provisions of the Securitization Act dealing with the creation and definition of the phase-in-recovery property, or the treatment of the sale of the phase-in-recovery property as an absolute transfer, as in a true sale, were in actual conflict with existing provisions of the Bankruptcy Code, the bankruptcy court could ignore those provisions of the Securitization Act and, among other things, determine that the phase-in-recovery property was property of the bankruptcy estate of the Ohio Company.

Under certain circumstances, a court might hold that, notwithstanding the creation and definition of phase-in-recovery property under Ohio law, the bankruptcy estate of an Ohio Company retains some interest in the phase-in-recovery property sufficient to justify the exercise by the Ohio Company’s bankruptcy court of jurisdiction over the phase-in-recovery property. In 2001, in the case of LTV Steel Company, Case No. 00-43866 in the United States Bankruptcy Court for the Northern District of Ohio, the court initially ruled that the debtor retained “some equitable interest” in securitized receivables and inventory sufficient to permit the bankruptcy court to authorize the debtor to use proceeds of such securitized assets as cash collateral for post-petition operations of the debtor. In refusing to modify the interim cash collateral order, the court stated that it could not conclude that the receivables were not property of the debtor’s estate until an evidentiary hearing on such issue was held. While the parties to the LTV Steel Company proceeding ultimately settled their disputes, and the court entered an order affirming the true sale nature of the underlying securitization, the initial ruling was not vacated. There is no assurance that a bankruptcy court in a bankruptcy case of an Ohio Company might not take a similar view, particularly if failure to do so would cause significant harm to the seller’s bankruptcy estate or otherwise to the continued operations of the Ohio Company, its ultimate reorganization under the Bankruptcy Code or other significant public interests, such as the delivery of electricity to consumers.

Because the phase-in-recovery charges are usage-based, if an Ohio Company were to become the debtor in a bankruptcy case, a creditor of, or a bankruptcy trustee for, the Ohio Company, or the Ohio Company itself as debtor in possession could argue that its related bond issuer should pay a portion of the costs of the Ohio Company associated with the generation, transmission or distribution of the electricity the price of which gave rise to the payments arising from the phase-in-recovery charges that are used to make distributions on the bond issuer’s bonds and an allocable portion of the certificates. If a court were to adopt this position, the amounts paid to the bond trustee, and thus to the holders of the certificates, could be reduced.

Regardless of whether an Ohio Company is the debtor in a bankruptcy case, and notwithstanding that the Securitization Act states that the phase-in-recovery property shall constitute an existing, present property right, notwithstanding any requirement that the imposition, charging, and collection of phase-in-recovery charges depend on the electric distribution utility continuing to deliver retail electric distribution service or continuing to perform its servicing functions relating to the collection of phase-in-recovery charges or on the level of future energy consumption, if a court were to accept the arguments of a creditor of the Ohio Company that phase-in-recovery property comes into existence only as customers use electricity, a tax, government lien or other lien on

property of the Ohio Company arising before the phase-in-recovery property came into existence may have

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priority over the related bond issuer’s interest in the phase-in-recovery property, which could result in the bond issuer being treated as an unsecured creditor in the seller’s bankruptcy case and a potential reduction in the amounts distributed to certificateholders. See “Bankruptcy and Creditors’ Rights Issues.”

Regardless of whether the bankruptcy court made any adverse determination in an Ohio Company bankruptcy case, the mere existence of an Ohio Company bankruptcy case could have an adverse effect on the resale market for the certificates and the market value of the certificates.

The bankruptcy of an Ohio Company or any successor entity might limit the remedies available to the bond trustee.

Upon an event of default under a bond indenture, the bond trustee will enforce the security interest in the phase-in-recovery property in accordance with the terms of the bond indenture. Under the Securitization Act, if a utility servicer defaults on any required payment of phase-in-recovery revenues, a court, upon application by the bond trustee (or any other interested party) and without limiting any other remedies available to the bond trustee, shall order the sequestration and payment of the revenues for the benefit of bondholders, the applicable bond issuer and any bond trustee or other financing party. The court order shall remain in full force and effect notwithstanding any bankruptcy, reorganization, or other insolvency proceedings with respect to the electric distribution utility or any affiliate. There can be no assurance, however, that a court would issue this order after an Ohio Company’s bankruptcy in light of the automatic stay provisions of Section 362 of the United States Bankruptcy Code. In that event, the bond trustee would likely seek an order from the bankruptcy court lifting the automatic stay to permit or authorize this action by the court, and an order requiring an accounting and segregation of the revenues arising from the phase-in-recovery property. There can be no assurance that a court would grant either order.

The Ohio Companies and any successor servicers will commingle the phase-in-recovery charges with other revenues they collect, which might obstruct access to the phase-in-recovery charges in case of a servicer’s bankruptcy and reduce the value of the bonds and, thus, your investment in the certificates.

The servicers will be required to remit collections to the bond trustees within two business days after the payments arising from the phase-in-recovery charges are deemed to be collected as described under “Servicing—Remittances to Collection Account.” The servicers will not segregate the phase-in-recovery charges from the other funds they collect from retail electric customers or retail electric providers or their general funds. The phase-in-recovery charges will be segregated only when the servicers pay them to the bond trustees.

Despite this requirement, the servicers might fail to pay the full amount of the phase-in-recovery charges to the bond trustees or might fail to do so on a timely basis. This failure, whether voluntary or involuntary, might materially reduce the amount of phase-in-recovery charge collections available to make payments on the bonds and, thus, distributions on the certificates.

The Securitization Act provides that the bond issuers’ rights to the phase-in-recovery property are not affected by the commingling of these funds with any other funds of the servicers. In a bankruptcy of a servicer, however, a bankruptcy court might rule that federal bankruptcy law does not recognize a bond issuer’s right to collections of the phase-in-recovery charges that are commingled with other funds of the servicer as of the date of bankruptcy. If so, the collections of the phase-in-recovery charges held by the servicer as of the date of bankruptcy would not be available to pay amounts owing on the bonds and distributions on the certificates. In this case, the bond issuers’ would have only a general unsecured claim against the servicer for those amounts. This decision could cause material delays in payments of principal or interest, or losses, on the bonds and material delays in payment of distributions, or losses, on the certificates, which could materially reduce the value of your investment in the certificates. Please read “Bankruptcy and Creditors’ Rights Issues” in this prospectus.

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Bankruptcy of a servicer could also delay or reduce payments.

The bankruptcy or insolvency of a servicer could result in delays or reductions in distributions on the certificates. Each of the servicers will remit payments arising from the respective phase-in-recovery charges out of its general funds and will not segregate these amounts from its general funds. In the event of a bankruptcy of a servicer, the related bond trustee likely will not have a perfected interest in commingled funds and the inclusion of the commingled funds in the bankruptcy estate of the affected servicer may result in delays and reductions in distributions on the related bond issuer’s bonds and an allocable portion of the certificates. To the extent that a servicer had made payment of phase-in-recovery charges out of commingled funds to the bond issuer during a period of up to one year prior to the commencement of the bankruptcy case of the servicer, a trustee in bankruptcy of the servicer, or the servicer as debtor-in-possession, may contend that some portion or all of such payments are recoverable as preferences from the bond issuer for the benefit of the bankruptcy estate of the servicer. If a bankruptcy court determined that such payments were preferences, and no applicable defenses to the recovery thereof was available, the bond issuer could be required to repay such preferences to the bankruptcy estate of the servicer. In that event, the bond issuer would have an unsecured claim against the bankruptcy estate of the servicer for the amounts that it had repaid to the estate of the servicer. Furthermore, if a servicer is in bankruptcy, it may stop performing its functions as servicer and it may be difficult to find a third party to act as successor servicer. See “—Servicing Risks.”

Claims against an Ohio Company or any successor entity might be limited in the event of a bankruptcy of such Ohio Company.

If an Ohio Company were to become a debtor in a bankruptcy case, claims, including indemnity claims, by the bond issuer against the Ohio Company under the sale agreement and the other documents executed in connection with the sale agreement would be unsecured claims and could be modified or eliminated altogether disposed of in the bankruptcy case. In addition, the bankruptcy court might estimate any contingent claims that the bond issuer has against the Ohio Company and, if it determines that the contingency giving rise to these claims is unlikely to occur, estimate the claims at a lower amount. A party in interest in the bankruptcy of the Ohio Company might challenge the enforceability of the indemnity provisions in a sale agreement. If a court were to hold that the indemnity provisions were unenforceable, the bond issuer would be left with a claim for actual damages against the Ohio Company based on breach of contract principles, which would be subject to estimation and/or calculation by the court. We cannot give any assurance as to the result if any of the above-described actions or claims were made. Furthermore, we cannot give any assurance as to what percentage of their claims, if any, unsecured creditors would receive in any bankruptcy proceeding involving the Ohio Company.

Other Risks Associated with an Investment in the Certificates

The Ohio Companies’ ratings might affect the market value of the certificates.

A downgrading of the credit ratings on the debt of an Ohio Company could have an adverse effect on the market value of the bonds and, thus, the certificates. Credit ratings may change at any time. A rating agency has the authority to revise or withdraw its rating based solely upon its own judgment.

The Ohio Companies’ indemnification obligations under the sale and servicing agreements are limited and might not be sufficient to protect your investment in the certificates.

Each Ohio Company, in its capacity as seller, is obligated under its sale agreement to indemnify its bond issuer and the bond trustee, for itself and on behalf of the bondholders, only in specified circumstances and will not be obligated to repurchase or replace any phase-in-recovery property in the event of a breach of any of its representations, warranties or covenants regarding the phase-in-recovery property. Similarly, each Ohio Company is obligated under its servicing agreement, in its capacity as servicer, to indemnify the bond issuers and the bond trustee, for itself and on behalf of the bondholders, only in specified circumstances. Please read “Sale Agreements—Seller Covenants” and “Servicing Agreements—Servicer Representations and Warranties; Indemnification” in this prospectus.

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No bond trustee or the bondholders will have the right to accelerate payments on the applicable bonds as a result of a breach under the applicable sale agreement or servicing agreement, absent an event of default under the applicable bond indenture. See “Description of the Bonds—Events of Default.” Furthermore, the Ohio Companies might not have sufficient funds available to satisfy its indemnification obligations under these agreements, and the amount of any indemnification paid by the Ohio Companies might not be sufficient for you to recover all of your investment in the certificates. In addition, if the Ohio Companies become obligated to indemnify bondholders, the ratings on the certificates may be downgraded as a result of the circumstances causing the breach. Bondholders would be unsecured creditors of the Ohio Companies with respect to any of these indemnification amounts.

The sellers will not be in breach of any representation or warranty as a result of a change in law.

No seller will be in breach of any representation or warranty as a result of a change in the law by means of a legislative enactment, constitutional amendment or voter initiative. Each seller will agree in its sale agreement and each servicer will agree in its servicing agreement to institute any action or proceeding as may be reasonably necessary to block or overturn any attempts to cause a repeal, modification or supplement to the Securitization Act that would be adverse to its bond issuer, bond trustee or bondholders (and thus the issuing entity, the certificate trustee and the Delaware trustee). Please read “Sale Agreements—Seller Covenants” and “Servicing Agreements—Servicing Procedures.” However, we cannot assure you that any of the Ohio Companies would be able to take this action or that any such action would be successful.

The credit ratings are no indication of the expected rate of payment of principal on the bonds and, thus, distributions on the certificates.

We expect the bonds and the certificates will receive credit ratings from three NRSROs. A rating is not a recommendation to buy, sell or hold the bonds or the certificates. The ratings merely analyze the probability that the bond issuers and thus the certificate issuer, will repay the total principal amount of the bonds and the certificates, respectively, at the final maturity date (which is later than the scheduled final payment date) and will make timely interest payments. The ratings are not an indication that the rating agencies believe that principal payments are likely to be paid on time according to the expected amortization schedules.

Under Rule 17g-5 of the Exchange Act, NRSROs providing the sponsor with the requisite certification will have access to all information posted on a website by the sponsor for the purpose of determining the initial rating and monitoring the rating after the closing date in respect of the bonds. As a result, an NRSRO other than an NRSRO hired by the sponsor, referred to as a hired NRSRO, may issue ratings on the certificates, or Unsolicited Ratings, which may be lower, and could be significantly lower, than the ratings assigned by a hired NRSROs. The Unsolicited Ratings may be issued prior to, or after, the closing date in respect of the bonds. Issuance of any Unsolicited Rating will not affect the issuance of the bonds. Issuance of an Unsolicited Rating lower than the ratings assigned by a hired NRSRO on the bonds might adversely affect the value of the bonds and, thus, the certificates, and, for regulated entities, could affect the status of the bonds and, thus, the certificates as a legal investment or the capital treatment of the bonds and, thus, the certificates. Investors in the certificates should consult with their legal counsel regarding the effect of the issuance of a rating by a non-hired NRSRO that is lower than the rating of a hired NRSRO. None of the Ohio Companies, the bond issuers, us, the underwriters or any of their affiliates will have any obligation to inform you of any unsolicited ratings assigned after the date of this prospectus. In addition, if we, the bond issuers or the Ohio Companies fail to make available to a non-hired NRSRO any information provided to any hired rating agency for the purpose of assigning or monitoring the ratings on the bonds or certificates, a hired NRSRO could withdraw its ratings on the bonds or certificates, which could adversely affect the market value of your certificates and/or limit your ability to resell your certificates.

Other subsidiaries or affiliates of the Ohio Companies may issue other similar bonds or certificates similar to the certificates in the future without your prior review or approval.

The Ohio Companies may sell property created pursuant to a financing order it may obtain in the future to other subsidiaries or affiliates of the Ohio Companies in connection with the issuance of other similar bonds or

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certificates in the future without your prior review or approval. In the event a customer who is taking generation service from a retail electric service provider does not pay in full all amounts owed under any bill, including phase-in-recovery charges for the bonds and other similar bonds, pursuant to Ohio administrative rules or PUCO order requirements, the amount remitted shall first be credited to past due charges for such retail electric service, second be credited to past due electric utility distribution and transmission charges, including phase-in-recovery charges for the bonds and other similar bonds, and thereafter to current electric utility distribution and transmission charges, including phase-in-recovery charges for the bonds and other similar bonds. Amounts credited to electric utility distribution and transmission charges will be allocated ratably among the phase-in-recovery charges relating to all such bonds and other distribution and transmission charges and fees and charges. We cannot assure you that the issuance of additional bonds similar to the bonds would not cause reductions or delays in payments on the bonds and, thus, distributions on the certificates.

Regulatory provisions affecting certain investors could adversely affect the liquidity of the certificates.

Regulatory or legislative provisions applicable to certain investors may (if and to the extent they apply in relation to an investment in the certificates) have the effect of limiting or restricting their ability to hold or acquire the certificates, which in turn may adversely affect the ability of investors in the certificates who are not subject to those provisions to sell their certificates in the secondary market. For example, certain member states of the European Economic Area, or EEA, have implemented, or are expected to implement, Article 122a of Directive 2006/48/EC, as amended, or Article 122a, which may apply to the purchase of the certificates by certain investors. Among other provisions, Article 122a prohibits investments by an EEA regulated credit institution in securitizations that fail to comply with certain requirements concerning retention by the originator, sponsor or original lender of the securitized assets of a portion of the securitization’s credit risk. Under Article 122a the regulator of such an EEA-regulated credit institution may impose a substantial additional capital charge on that institution if it acquires securities in a securitization and that securitization fails to meet the requirements of Article 122a. None of the Ohio Companies, the bond issuers or us have taken, or intend to take, any steps to comply with the requirements of Article 122a, nor to determine if and to what extent Article 122a applies to the certificates. The fact that the certificates have not been structured to comply with Article 122a could limit the ability of an EEA-regulated credit institution to purchase certificates, which in turn may adversely affect the liquidity of the certificates in the secondary market. This could adversely affect the liquidity of the market should you seek to sell your certificates or the price you may receive upon any sale of your certificates.

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REVIEW OF PHASE-IN-RECOVERY PROPERTY

Pursuant to the rules of the SEC, the sponsors have performed, as described below, a review of the phase-in-recovery property underlying the bonds. As required by these rules, the review was designed and effected to provide reasonable assurance that disclosure regarding the phase-in-recovery property is accurate in all material respects. The sponsors did not engage a third party in conducting their review.

The bonds are secured primarily by the phase-in-recovery property of the bond issuers. The phase-in-recovery property is a present property right authorized and created pursuant to the Securitization Act and an irrevocable financing order. The phase-in-recovery property includes the irrevocable right to impose, charge and collect nonbypassable phase-in-recovery charges from each retail customer within the service territory of CEI, OE or TE, as applicable, and to adjust those phase-in-recovery charges, in accordance with the adjustment mechanism set forth in the financing order, in an amount sufficient to pay principal and interest on the bonds and, subject to the cap to the extent applicable, other approved financing costs.

The phase-in-recovery property is not a static pool of receivables or assets. Phase-in-recovery charges authorized in the financing order that relate to the phase-in-recovery property are irrevocable and may not be reduced, impaired or adjusted by the PUCO except for periodic adjustments, in accordance with the adjustment mechanism, to correct overcollections or undercollections to ensure the recovery of amounts sufficient to timely provide all payments of debt service on the bonds and, subject to the cap to the extent applicable, other approved financing costs. While there is no “cap” on the level of phase-in-recovery charges that may be imposed on retail electric customers to pay on a timely basis scheduled principal of and interest on the bonds and replenish capital subaccounts, there is a “cap” on certain approved financing costs. See “Description of the Bonds—Allocations and Payments” in this prospectus. All revenues and collections resulting from the phase-in-recovery charges provided for in the financing order that relate to the bonds are part of the phase-in-recovery property. The phase-in-recovery property relating to the bonds is described in more detail under “Description of the Phase-In-Recovery Property” in this prospectus.

In the financing order, the PUCO, among other things:

• orders that each of CEI, OE and TE, as applicable, as servicer under its respective servicing agreement, shall collect from all customers required to pay or collect phase-in-recovery charges under the financing order, phase-in-recovery charges in an amount sufficient to timely provide all payments of debt service on the bonds and, subject to the cap to the extent applicable, other approved financing costs,

• orders that upon the transfer of the phase-in-recovery property to bond issuers by sellers, the bond issuers shall have all of the rights, title and interest of the sellers with respect to its respective phase-in-recovery property, and

• states that it will act pursuant to the financing order as expressly authorized by the Securitization Act to ensure that expected phase-in-recovery charge revenues are sufficient to pay on a timely basis scheduled principal and interest on the bonds and, subject to the cap to the extent applicable, other approved financing costs.

Please read “The Securitization Act” and “Description of the Phase-In-Recovery Property—Financing Order and Issuance Advice Letters” in this prospectus for more information.

The characteristics of phase-in-recovery property are unlike the characteristics of assets underlying mortgage and other commercial asset securitizations because phase-in-recovery property is a creature of statute and state regulatory commission proceedings. Because the nature and characteristics of the phase-in-recovery property and many elements of the securitization are set forth and constrained by the Securitization Act, the sponsors do not select the assets to be securitized in ways common to many securitizations. Moreover, the bonds do not contain origination or underwriting elements similar to typical mortgage or other loan transactions involved in other forms of asset-backed securities. The Securitization Act and the PUCO require the imposition

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on, and collection of phase-in-recovery charges from, existing and future retail customers located within the sponsors’ respective service territories. Since the phase-in-recovery charges are imposed on all such retail customers and the true-up adjustment mechanism adjusts for the impact of customer defaults, the collectability of the phase-in-recovery charges is not ultimately dependent upon the credit quality of particular customers; as would be the case in the absence of the true-up adjustment mechanism.

The review by the sponsors of the phase-in-recovery property underlying the bonds has involved a number of discrete steps and elements as described in more detail below. First, each sponsor has analyzed and applied the Securitization Act’s requirements for securitization of phase-in costs in seeking approval of the PUCO for the issuance of the financing order and in its proposal with respect to the characteristics of the phase-in-recovery property to be created pursuant to the financing order. In preparing this proposal, the sponsors worked with their counsel and its financial advisor in preparing the application for a financing order. Moreover, the sponsors worked with their counsel, their financial advisor and counsel to the underwriters in preparing the legal agreements that provide for the terms of the bonds and the security for the bonds. Each sponsor has analyzed economic issues and practical issues for the scheduled payment of the bonds and reviewed the prior experience of its affiliates in terms of impacts of economic factors, potentials for disruptions due to weather or catastrophic events and its own forecasts for customer growth as well as the historic accuracy of its prior forecasts.

In light of the unique nature of the phase-in-recovery property, each sponsor has taken (or prior to this offering, will take) the following actions in connection with its review of its respective phase-in-recovery property and the preparation of the disclosure for inclusion in this prospectus and the accompanying prospectus supplement describing the phase-in-recovery property, the bonds and the proposed securitization:

• reviewed the Securitization Act and the rules and regulations of the PUCO as they relate to the phase-in-recovery property in connection with the preparation and filing of the application with the PUCO for the approval of the financing order in order to confirm that the application and proposed financing order satisfied applicable statutory and regulatory requirements;

• actively participated in the proceeding before the PUCO relating to the approval of the requested financing order;

• compared the financing order, as issued by the PUCO, to the Securitization Act and the rules and regulations of the PUCO as they relate to the phase-in-recovery property to confirm that the financing order met such requirements;

• compared the proposed terms of the bonds to the applicable requirements in the Securitization Act, the financing order and the regulations of the PUCO to confirm that they met such requirements;

• prepared and reviewed the agreements to be entered into in connection with the issuance of the bonds and compared such agreements to the applicable requirements in the Securitization Act, the financing order and the regulations of the PUCO to confirm that they met such requirements;

• reviewed the disclosure in this prospectus and the accompanying prospectus supplement regarding the Securitization Act, the financing order and the agreements to be entered into in connection with the issuance of the bonds, and compared such descriptions to the relevant provisions of the Securitization Act, the financing order and such agreements to confirm the accuracy of such descriptions;

• consulted with legal counsel to assess if there is a basis upon which the bondholders (or the bond trustee acting on their behalf) could successfully challenge the constitutionality of any legislative action by the State of Ohio (including the PUCO) that could repeal or amend the securitization provisions of the Securitization Act that could substantially impair the value of the phase-in-recovery property, or substantially reduce, alter or impair the phase-in-recovery charges;

• reviewed the process and procedures in place for it, as servicer, to perform its obligations under the servicing agreement, including without limitation, billing and collecting the phase-in-recovery charges to be provided for under the phase-in-recovery property, forecasting phase-in-recovery charge revenues and preparing and filing applications for true-up adjustments to the phase-in-recovery charges;

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• reviewed the operation of the true-up adjustment mechanism for adjusting phase-in-recovery charge levels to meet the scheduled payments on the bonds; and

• assisted its financial advisor and the underwriters with the preparation of financial models in order to set the initial phase-in-recovery charges to be provided for under the phase-in-recovery property at a level sufficient to pay on a timely basis scheduled principal and interest on the bonds.

In connection with its assistance with the preparation of such models, each sponsor:

• reviewed (i) the historical retail electric usage and customer growth within its service territory and (ii) forecasts of expected energy sales and customer growth;

• reviewed its historical collection of rate charges; and

• analyzed the sensitivity of the weighted average life of the bonds in relation to variances in actual energy consumption levels (retail electric sales) from forecasted levels and in relation to the true-up adjustment mechanism in order to assess the probability that the weighted average life of the bonds may be extended as a result of such variances, and in the context of the operation of the true-up adjustment mechanism for adjustment of phase-in-recovery charges to address under or overcollections in light of scheduled payments on the bonds.

As a result of this review, each sponsor has concluded that:

• the phase-in-recovery property, the financing order and the agreements to be entered into in connection with the issuance of the bonds meet in all material respects the applicable statutory and regulatory requirements;

• the disclosure in this prospectus and the accompanying prospectus supplement regarding the Securitization Act, the financing order and the agreements to be entered into in connection with the issuance of the bonds is, or in the case of the accompanying prospectus supplement, will be, as of its respective date, accurate in all material respects;

• it, as servicer, has adequate processes and procedures in place to perform its obligations under the servicing agreement;

• phase-in-recovery charge revenues, as adjusted from time to time as provided in the Securitization Act and the financing order, are expected to be sufficient to pay on a timely basis scheduled principal and interest on the bonds and, as a result, the distributions on the certificates; and

• the design and scope of its review of the phase-in-recovery property as described above is effective to provide reasonable assurance that the disclosure regarding the phase-in-recovery property in this prospectus and the accompanying prospectus supplement is accurate in all material respects.

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THE SECURITIZATION ACT

Background and Regulatory Overview

On December 21, 2011, the Governor of Ohio signed into law Sections 4928.23 through 4928.2318 of the Ohio Revised Code, referred to herein as the Securitization Act, which amended and enacted certain provisions of Ohio law to establish standards for the securitization of certain costs for electric distribution utilities. The Securitization Act became effective on March 22, 2012. Among other things, the Securitization Act:

• permits an electric distribution utility, such as CEI, OE and TE, to apply to the PUCO for a financing order authorizing the issuance of bonds to recover certain uncollected “phase-in costs” previously authorized by the PUCO and financing costs through securitization;

• permits an electric distribution utility under a financing order to impose, charge and collect phase-in-recovery charges on retail customers as long as they remain customers, or if they receive distribution from another electric distribution utility operating in the same service area, in accordance with a PUCO-approved adjustment mechanism;

• specifies that the phase-in-recovery charges are nonbypassable as long as bonds and financing costs have not been paid in full;

• specifies that financing orders are irrevocable and remain in effect until the bonds and financing costs on the bonds have been paid in full;

• provides for the creation of phase-in-recovery property and contains provisions regarding transferring, conveying and pledging the phase-in-recovery property to facilitate the securitization and secure payment of bonds and financing costs, and the creation, perfection, enforcement and priority of any security interest in the phase-in-recovery property; and

• exempts the imposition, charging, collection and receipt of the phase-in-recovery revenues and the transfer and ownership of phase-in-recovery property from Ohio state taxation and similar charges.

On May 3, 2012, CEI, OE and TE filed a joint application with the PUCO requesting the issuance of an irrevocable financing order to recover through securitization certain uncollected “phase-in costs” previously authorized by the PUCO for recovery and associated financing costs, and to impose, charge and collect the phase-in-recovery charges.

On October 10, 2012, the PUCO issued a financing order authorizing CEI, OE and TE to recover the previously authorized “phase-in costs,” enter into transactions for the issuance of the bonds and to impose, charge and collect the phase-in-recovery charges.

On November 9, 2012, CEI, OE and TE filed a joint application with the PUCO for rehearing of the financing order to clarify and amend certain provisions of the financing order.

On December 19, 2012, the PUCO issued an entry on rehearing, which amended the financing order previously issued by the PUCO.

On January 9, 2013, the PUCO issued an entry nunc pro tunc, which further amended the financing order to provide for certain revisions and corrections to the entry on rehearing.

Recovery of Phase-In Costs

In Case No. 08-935-EL-SSO Order, dated March 25, 2009, the PUCO approved the recovery, by CEI, of certain deferred costs, with carrying charges, associated with purchase power costs incurred that exceeded the purchase power recovery mechanism revenue from January 1, 2009 through May 31, 2009, which, prior to the issuance of the bonds, were recovered through a separate rider mechanism, namely the Deferred Generation Cost Recovery Rider, or Rider DGC.

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In Case No. 08-935-EL-SSO Order, dated March 25, 2009, Case No. 07-1003-EL-ATA Order, dated March 24, 2010, and continued by Case No. 10-388-EL-SSO dated August 25, 2010, the PUCO approved the recovery, by each of CEI, OE and TE, of certain deferred costs, with carrying charges, associated with the actual fuel costs incurred that exceeded the fuel recovery mechanism revenues collected from January 1, 2006 through December 31, 2007, which, prior to the issuance of the bonds, were recovered through a separate rider mechanism, namely the Deferred Fuel Cost Recovery Rider, or Rider DFC.

In Case No. 10-176-EL-ATA Order, dated May 25, 2011, the PUCO approved the recovery of certain deferred costs, with carrying charges, associated with purchase power costs incurred from March 17, 2010 through June 30, 2011 that exceeded the associated purchase power recovery mechanism revenue due to implementation of the Residential Generation Credit Rider, or Rider RGC, which, prior to the issuance of the bonds, were recovered through a separate rider mechanism, namely the Residential Electric Heating Recovery Rider, or Rider RER1.

On February 18, 2013, the financing order, which (among other things) authorizes CEI, OE and TE to recover their respective uncollected balances in Rider DGC, Rider DFC and Rider RER1, as applicable, as phase-in costs became final. See “Description of the Phase-In-Recovery Property—Financing Order and Issuance Advice Letters.”

CEI, OE and TE and Other Utilities May Securitize Phase-In Costs

The Bond Issuers May Issue Bonds to Recover CEI’s, OE’s and TE’s Phase-In Costs. The Securitization Act authorizes the PUCO to issue financing orders approving the issuance of bonds to recover certain phase-in costs of an electric distribution utility. A utility or an assignee of a utility may obtain securitization financing through the issuance of bonds. Under the Securitization Act, proceeds of the issuance of the bonds must be used to recover, finance or refinance phase-in costs and financing costs. Such bonds are secured by, and payable from, phase-in-recovery property, which includes the right to impose, charge and collect phase-in-recovery charges.

The Securitization Act contains a number of provisions designed to facilitate the securitization of phase-in costs, as set out below.

Creation of Phase-In-Recovery Property. Under the Securitization Act, phase-in-recovery property may be created when the rights and interests of an electric distribution utility under a financing order, including the right to impose, charge and collect phase-in-recovery charges authorized in the financing order, are first transferred to an assignee, such as to the bond issuers, and pledged in connection with the issuance of bonds.

A Financing Order is Irrevocable. A financing order, once effective, together with the phase-in-recovery charges authorized in the financing order, is irrevocable and the PUCO may not reduce, impair, postpone or terminate the phase-in-recovery charges authorized in the financing order or impair the property or the collection or recovery of phase-in costs, except for periodic adjustments, in accordance with the adjustment mechanism, to correct overcollections or undercollections to ensure the recovery of amounts sufficient to timely provide all payments of debt service on the bonds and other approved financing costs. Although a financing order is irrevocable, the Securitization Act allows electric utilities to apply for one or more new financing orders to provide for retiring and refunding bonds upon satisfaction of certain requirements set forth in the Securitization Act.

The State Pledge. Under the Securitization Act, the State of Ohio has pledged, for the benefit of the bondholders and the bond issuers, and agreed that it will not take or permit any action that impairs the value of the phase-in-recovery property or, except for adjustments as discussed in “Description of the Phase-In-Recovery Property—Adjustments to the Phase-In-Recovery Charges,” reduce, alter or impair the phase-in-recovery charges that are imposed, charged, collected or remitted for the benefit of bondholders, until the bonds and all other approved financing costs are paid in full. For a description of risks related to the enforcement of this pledge,

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please read “Risk Factors—Risks Associated with Potential Judicial, Legislative or Regulatory Actions—Legislative Actions” and “Risk Factors—Risks Associated with Potential Judicial, Legislative or Regulatory Actions— The PUCO might take actions that could reduce the value of your investment in the certificates” in this prospectus.

Constitutional Matters. To date, no federal or Ohio cases addressing the repeal or amendment of securitization provisions analogous to those contained in the Securitization Act have been decided. There have been cases in which federal courts have applied the Contract Clause of the United States Constitution and Ohio courts have applied the Contract Clause of the Ohio Constitution, which is interpreted by the Ohio Supreme Court by reference to United States Supreme Court precedent, to strike down legislation regarding similar or analogous matters, such as legislation reducing or eliminating taxes, statutory fees, public charges or other sources of revenues servicing other types of bonds issued by public instrumentalities or private issuers, or otherwise substantially impairing or eliminating the security for bonds or other indebtedness.

Based upon this case law, Akin Gump Strauss Hauer & Feld LLP, federal counsel to the bond issuers and issuing entity, and Calfee, Halter & Griswold LLP, Ohio counsel to the bond issuers, expect to deliver an opinion prior to the closing of the offering of the bonds to the effect that the pledge described above creates a binding contractual obligation for purposes of the Contract Clauses of the United States and Ohio constitutions, respectively, and provides a basis upon which the bondholders (or the bond trustees acting on their behalf), and the Certificate Trustee (as holder of the bonds on behalf of the certificateholders), could challenge successfully, under the Contract Clauses of the United States and Ohio Constitutions, the constitutionality of any action by the State of Ohio (including the PUCO) of a legislative character, including as a result of voter initiative including the repeal or amendment of the securitization provisions of the Securitization Act, that violates the pledge described above in a way that a court would determine impairs the value of the phase-in-recovery property, or reduces, alters or impairs the phase-in-recovery charges, so as to cause a substantial impairment of the contract, unless such action is a reasonable exercise of the sovereign powers of the State of Ohio and of a character reasonable and appropriate to the public purpose justifying such action.

It may be possible for the Ohio legislature to repeal or amend the Securitization Act, or for the PUCO to amend or revoke the financing order notwithstanding the State’s pledge, if the legislature or the PUCO acts in order to serve a significant and legitimate public purpose, such as protecting the public health and safety or responding to a national or regional catastrophe affecting CEI’s, OE’s or TE’s respective service territories, or if the legislature otherwise acts in the valid exercise of the state’s police power.

In addition, any action of the Ohio legislature or as a result of voter initiative adversely affecting the phase-in-recovery property or the ability to impose, charge or collect phase-in-recovery charges may be considered a “taking” under the United States or Ohio Constitutions. Akin Gump Strauss Hauer & Feld LLP and Calfee, Halter & Griswold LLP, respectively, have advised us that they are not aware of any federal or Ohio court cases addressing the applicability of the Takings Clause of the United States or Ohio Constitution, respectively, in a situation analogous to that which could be involved in an amendment or repeal of the Securitization Act. It is possible that a court would decline even to apply a Takings Clause analysis to a claim based on an amendment or repeal of the Securitization Act, since, for example, a court might determine that a Contract Clause analysis rather than a Takings Clause analysis should be applied. Assuming a Takings Clause analysis were applied under the United States or Ohio Constitution, Akin Gump Strauss Hauer & Feld LLP and Calfee, Halter & Griswold LLP, respectively, expect to render opinions prior to the closing of the offering of the certificates to the effect that under existing case law, if a court concludes that the phase-in-recovery property is protected by the Takings Clause of the United States or Ohio Constitution, respectively, it would find a compensable taking if the State of Ohio were to enact a law that, without paying just compensation to the bondholders or the certificateholders (i) permanently appropriates the phase-in-recovery property or denies all economically productive use of the phase-in-recovery property; or (ii) destroys the phase-in-recovery property, other than in response to emergency conditions; or (iii) substantially impairs the value of the phase-in-recovery property, if the law inflicts severe economic impact on the bondholders or certificateholders and unduly interferes with such bondholders’ and

certificateholders’ reasonable investment backed expectations. In examining whether action of the Ohio

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legislature or action by voter initiative amounts to a regulatory taking, both federal and state courts will consider the character of the governmental action and whether such action substantially advances the State’s legitimate governmental interests, the economic impact of the governmental action on the bondholders and certificateholders, and the extent to which the governmental action interferes with distinct investment-backed expectations. There is no assurance, however, that, even if a court were to award just compensation, it would be sufficient for bondholders to recover fully their investment in the bonds or, thus, for you to recover fully your investment in the certificates.

In connection with the foregoing, our legal counsel has advised us that issues relating to the Contract and Takings Clauses of the United States and Ohio constitutions are essentially decided on a case by case basis and that the courts’ determinations, in most cases, appear to be strongly influenced by the facts and circumstances of the particular case. We have been further advised that there are no reported controlling judicial precedents that are directly on point. The opinions described above will be subject to the qualifications included in them. The degree of impairment necessary to meet the standards for relief under a Takings Clause analysis or Contract Clause analysis could be substantially in excess of what a bondholder or you would consider material. Copies of the opinions described above will be filed with the SEC as an exhibit to an amendment to the registration statement of which this prospectus is a part.

For a discussion of risks associated with potential judicial, legislation or regulatory actions, please read “Risk Factors—Risks Associated with Potential Judicial, Legislative or Regulatory Actions—Legislative Actions” and “Risk Factors—Risks Associated with Potential Judicial, Legislative or Regulatory Actions—Court Decisions” in this prospectus.

The PUCO May Adjust Phase-In-Recovery Charges. Pursuant to the Securitization Act, the PUCO provided a description in the financing order of the adjustment mechanism to be used in the imposition, charging and collection of the phase-in-recovery charges, such phase-in-recovery charges to be reviewed and adjusted semiannually as provided in the financing order, based on estimates of consumption for each customer class and other mathematical factors. The PUCO’s review of these requests is limited to determining whether there is any mathematical error in the servicer’s application of the adjustment mechanism to the phase-in-recovery charges, including the calculation of any proportionate charges allocated to governmental aggregation customers as directed in the financing order. Such adjustments will become automatically effective 60 days after the request is submitted unless otherwised ordered by the PUCO.

Phase-In-Recovery Charges are Nonbypassable. The Securitization Act provides that, as long as the bonds are outstanding and the related phase-in costs and approved financing costs have not been recovered in full, the phase-in-recovery charges authorized under the financing order are nonbypassable. Nonbypassable means that phase-in-recovery charges cannot be avoided by any customer or other person obligated to pay such charges. Subject to the adjustment mechanism discussed above, phase-in-recovery charges will apply to all retail customers of an electric distribution utility for as long as they remain customers of such electric distribution utility. If a customer of the electric distribution utility purchases electric generation service from a competitive retail electric service provider, the utility will collect the phase-in-recovery charges directly from that customer. If a customer of the utility subsequently receives retail electric distribution service from another electric distribution utility operating in the same service area, including by succession, assignment, transfer or merger, the phase-in-recovery charges will continue to apply to that customer. If a customer switches its retail electric distribution service to a municipal utility, the phase-in-recovery charges will not continue to apply to that customer.

The Securitization Act Protects the Bond Trustee’s Lien on Phase-In-Recovery Property. The Securitization Act provides that a valid and binding security interest in phase-in-recovery property may be created only by a financing order and the execution and delivery of a security agreement in connection with the issuance of bonds. The security interest attaches without any physical delivery of collateral or other act. Upon filing of a financing statement with the office of the Secretary of State of Ohio, the lien of the security interest is valid, binding and perfected against all parties having claims of any kind in tort, contract or otherwise against the person granting

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the security interest, regardless of whether the parties have notice of the lien. A security interest in the phase-in-recovery property under a financing order is created, valid and binding on the later of:

• the date on which the security agreement is executed and delivered, or

• the date on which value is received for the bonds.

The Securitization Act provides that the description of the phase-in-recovery property in a transfer or security agreement and a financing statement is sufficient only if the description refers to the applicable section of the Securitization Act and the financing order creating the phase-in-recovery property.

On perfection through the filing of a financing statement with the Secretary of State of Ohio, the security interest (1) will be a continuously perfected lien and security interest in the phase-in-recovery property and (2) will have a priority over all parties having claims, including judicial or other lien creditors, other than creditors holding a prior security interest, ownership interest or assignment previously perfected in accordance with the statutory provision.

The Securitization Act provides that priority of a security interest in phase-in-recovery property will not be impaired by:

• commingling of phase-in-recovery revenues with other amounts, or

• application of the adjustment mechanism described in “Description of the Phase-In-Recovery Property—Adjustments to the Phase-In-Recovery Charges.”

The Securitization Act Characterizes the Transfer of Phase-In-Recovery Property as a True Sale. The Securitization Act provides (and each sale agreement also provides as required by the Securitization Act) that an electric utility’s or an assignee’s transfer of phase-in-recovery property under a financing order is a “true sale” under Ohio law and is not a pledge or a secured transaction, if the documents governing that transfer expressly state that the transfer is a sale or other absolute transfer. Please read “Bankruptcy and Creditors’ Rights Issues” and “Risk Factors—Bankruptcy and Creditors’ Rights Issues” in this prospectus.

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DESCRIPTION OF THE PHASE-IN-RECOVERY PROPERTY

Overview

The phase-in-recovery property of each bond issuer consists generally of its property, rights and interests under the financing order issued by the PUCO on October 10, 2012, as amended by the entry on rehearing issued by the PUCO on December 19, 2012 upon application for rehearing, and entry nunc pro tunc issued by the PUCO on January 9, 2013, collectively referred to herein as the financing order, including each bond issuer’s right:

• to impose, charge and collect irrevocable, nonbypassable phase-in-recovery charges from each retail customer within the service territory of CEI, OE or TE, as applicable, and

• to adjust those phase-in-recovery charges, in accordance with the adjustment mechanism set forth in the financing order, in an amount sufficient to pay principal and interest on its bonds and, subject to the cap to the extent applicable, other financing costs approved under the financing order.

Portions of the financing order are summarized in this section and elsewhere in this prospectus. We have filed the financing order as an exhibit to the registration statement of which this prospectus is a part.

Each bond issuer will purchase its phase-in-recovery property from its seller. The bonds of each bond issuer are secured primarily by the phase-in-recovery property of the bond issuers. The phase-in-recovery property is not a receivable and, as the primary collateral securing the bonds of the bond issuer, is not a pool of receivables. Collections from the phase-in-recovery charges, as such charges may be adjusted pursuant to the adjustment mechanism, will be used to pay principal and interest on the bonds and, subject to the cap to the extent applicable, other financing costs approved under the financing order. These irrevocable nonbypassable charges will be included in the retail customer bills of CEI, OE or TE, as applicable, and will be collected until the bonds and approved financing costs are paid in full. Phase-in-recovery charges may not be reduced, impaired or adjusted by the PUCO except for periodic adjustments, in accordance with the adjustment mechanism, to correct overcollections or undercollections to ensure the recovery of amounts sufficient to timely provide all payments of debt service on the bonds and, subject to the cap to the extent applicable, other approved financing costs. All revenues and collections from phase-in-recovery charges provided for in the financing order are part of the phase-in-recovery property. Please read “Credit Enhancement” in the accompanying prospectus supplement for more information relating to the phase-in-recovery property.

Financing Order and Issuance Advice Letters

The Securitization Act authorizes the PUCO to issue a financing order, which is a regulatory order that approves the amount of an electric utility’s phase-in costs that it is permitted to finance through the issuance of bonds. On May 3, 2012, CEI, OE and TE filed a joint petition for a financing order with the PUCO. The PUCO issued a financing order dated October 10, 2012, as amended, which authorized the issuance of up to $555 million aggregate principal amount of bonds based upon then current estimates of unrecovered phase-in-cost balances of the Ohio Companies as of December 31, 2012.

The financing order, together with the issuance advice letters, establishes, among other things, the phase-in-recovery charges for each Ohio Company to recover its reimbursable phase-in costs and financing costs as specified in the financing order. The phase-in-recovery charges of each Ohio Company are nonbypassable in that customers must pay it whether or not they purchase energy from CEI, OE and TE, or a third party supplier of energy. The Securitization Act provides that the right to collect payments based on the phase-in-recovery charges is a property right which may be pledged, transferred, assigned or sold in connection with the issuance of the bonds. Under the financing order, the phase-in-recovery property is created simultaneous with its sale to the applicable bond issuer who, as the owner of such phase-in-recovery property, is entitled to impose, bill and collect the phase-in-recovery charges until it has received payments from customers of the applicable Ohio Company sufficient to retire all outstanding bonds and to pay all other approved financing costs, including all upfront and ongoing financing costs approved in the financing order. Phase-in-recovery charges are subject to adjustment semiannually (other than the

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initial adjustment, which will be completed within 12 months after the issuance date of the bonds, and the period commencing with the start of the last year that the last maturing tranche of bonds of each bond issuer is outstanding and ending with the final maturity date, during which adjustments may be made as frequently as monthly). Such charges will be included in retail customers’ bills, and there will be a separate notation on customers’ bills denoting that the right to impose, charge and collect phase-in-recovery charges is owned by the applicable bond issuer. Please read “—Phase-In-Recovery Charges” and “—Adjustments to the Phase-In-Recovery Charges” below.

The financing order requires each of the sellers to submit an issuance advice letter relating to the bonds to the PUCO no later than the end of the first business day after the pricing date for that tranche of bonds. Each issuance advice letter, in the form set forth in the financing order and filed as an exhibit to the registration statement of which this prospectus is a part, will establish final terms and conditions of the applicable bonds. The financing order also requires each of the sellers to file updated tariff sheets to reflect the final initial phase-in-recovery charges based upon actual costs and any other revised assumptions at the time of pricing of the bonds. The initial phase-in-recovery charges and final terms of the bonds as set forth in an issuance advice letter will automatically become effective no later than the fourth business day after pricing unless prior to such time the PUCO issues an order finding that market conditions are such that customers will not realize cost savings from the issuance of the bonds and directing the bond issuers not to proceed with the securitization.

Phase-In-Recovery Property

The phase-in-recovery property is a property right consisting generally of the right to impose, charge and collect phase-in-recovery charges from retail customers, the right to adjust those phase-in-recovery charges and the right to all revenues, collections, claims, payments, money or proceeds of or arising from the phase-in-recovery charges and the property, rights and interests created under the financing order. The bonds of each bond issuer will be secured by the phase-in-recovery property, as well as the other bond collateral described under “Description of the Bonds—Security.”

Phase-In-Recovery Charges

The phase-in-recovery charges of each Ohio Company are designed to recover on a fully reconciling basis all of its respective phase-in costs. The phase-in-recovery charges are the mechanism through which each of CEI, OE and TE is allowed to recover its respective phase-in costs. Recovery of the phase-in costs was previously approved by the PUCO through separate existing riders. See “The Securitization Act—Recovery of Phase-In Costs.”

Each of the servicers will calculate and set their respective initial phase-in-recovery charges at a level estimated to generate sufficient revenues (and taking into account the cap on certain ongoing financing costs):

• to pay fees and expenses related to the servicing and retirement of the bonds of the related bond issuer and of the certificates allocable to the bond issuer, including, without limitation, fees and expenses related to trustee costs, rating agency surveillance fees, legal and accounting fees and other ongoing financing costs, as well as adjustments for dealing with estimated and actual costs;

• to pay interest on the bonds;

• to pay principal of each tranche of such bonds according to the related expected amortization schedule;

• to replenish the capital subaccount to the required capital level; and

• to pay all additional fees, costs and charges and, subject to the cap to the extent applicable, other financing costs approved under the financing order.

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The table below sets forth each Ohio Company’s estimate of its respective initial phase-in-recovery charges as of                     , 2013, compared with the estimate of the charges based on current recovery methods. The amounts shown in the table are dependent on a number of assumptions as described below and based on current estimates and market conditions. Such amounts will also periodically change throughout the recovery period in accordance with the approved adjustment mechanism described below. See “—Adjustments to the Phase-In-Recovery Charges.”

Company	Estimated  Initial Phase-In-Recovery Charges (per kWh)	Estimated Monthly Cost for Typical Residential Bill (per 1,000 kWh)	Average  Total Monthly Charge for 1,000 kWh Residential Customer Under Current Recovery	Estimated Total Monthly Savings for 1,000 kWh Residential Customer
CEI	$	$	$	$
OE	$	$	$	$
TE	$	$	$	$

The estimated initial phase-in-recovery charges are based on a number of assumptions as of                     , 2013 including but not limited to the settlement date of the transaction, the long-term electricity sales forecast, interest rates, average uncollectible percentages, average days sales outstanding and financing costs.

Adjustments to the Phase-In-Recovery Charges

The initial adjustment to the phase-in-recovery charges will be completed within 12 months after the issuance date for the bonds. Thereafter, during the life of the bonds of a bond issuer, the related servicer will calculate and adjust the phase-in-recovery charges semiannually, with the exception of the period commencing with the start of the last year that the last maturing tranche of the bonds is expected to be outstanding and ending with the final maturity date, in which case adjustments as frequently as monthly may be necessary. These adjustments to the phase-in-recovery charges will be set at levels estimated to generate revenues sufficient to pay, subject to the cap to the extent applicable, approved fees and expenses of servicing the bonds and an allocable portion of the certificates, to pay interest on, and principal of, the bonds and, thus, an allocable portion of the certificates, to fund and replenish other subaccounts of the bond issuer as required for the upcoming year and other financing costs approved in financing order.

Each servicer will increase or decrease the phase-in-recovery charges for its bond issuer over the life of the bonds issuer’s bonds as a result of several factors, including but not limited to:

• changes in electricity sales forecasts;

• changes in weighted average days outstanding of customer receivables and charge-off experience (including defaults by any third party billers);

• changes in any ongoing fees, costs and expenses or other ongoing financing costs; and

• unpaid interest on or deferred principal of the bonds.

The adjustments to the phase-in-recovery charges will continue until all interest on, and principal of, all tranches of bonds of the related bond issuer, and, thus, an allocable portion of the related tranches of certificates, and, subject to the cap to the extent applicable, other approved financing costs have been paid or distributed in full.

The financing order provides that the servicers will each file adjustment requests as follows:

• No later than November 1 and May 1 of each year (subject to the exceptions described above for the initial adjustment and the last year each tranche of bonds is expected to be outstanding), each servicer will file with the PUCO an adjustment request for approval of such servicers’ adjusted phase-in-recovery charges and corresponding amended tariff sheets.

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• Unless otherwise ordered by the PUCO, these adjusted phase-in-recovery charges and the associated tariff amendments will become automatically effective on a service rendered basis 60 days after the filing of the adjustment request. The PUCO’s review of these requests is limited to determining whether there is any mathematical error in the servicer’s application of the adjustment mechanism to the phase-in-recovery charges.

The adjustment requests will take into account amounts available in a bond issuer’s general subaccount and excess funds subaccount, and amounts necessary to replenish the capital subaccount to its required level, in addition to amounts payable on the bonds and related fees and expenses.

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SALE AGREEMENTS

The following summary describes particular material terms and provisions of the sale agreements pursuant to which each bond issuer will purchase phase-in-recovery property from its seller. We have filed the form of the sale agreement as an exhibit to the registration statement of which this prospectus forms a part. This summary does not purport to be complete and is subject and qualified by reference to the provisions of the sale agreements.

The Ohio Companies, as sellers, have agreed in the sale agreements not to sell phase-in-recovery property to secure another issuance of bonds or certificates if it would cause the then existing ratings on the certificates from Standard & Poor’s, Moody’s and Fitch’s to be downgraded.

On the issuance date of the certificates, each seller will sell and assign to the applicable bond issuer, without recourse, its entire interest in its phase-in-recovery property. Each seller’s phase-in-recovery property will include all of such seller’s rights under the financing order related to such phase-in-recovery property to impose, charge and collect phase-in-recovery charges in an amount sufficient to pay the applicable bond issuer’s bonds and approved financing costs. Each bond issuer will apply the net proceeds from the sale of its bonds to the issuing entity to purchase its phase-in-recovery property. Each seller’s financial statements will indicate that it is not the owner of the phase-in-recovery property. However, for financial reporting and tax purposes a seller will treat the bonds as representing debt of such seller.

Seller Representations and Warranties

In the sale agreements, each of the sellers will separately represent and warrant to its bond issuer, as of the closing date, among other things, that:

(a) the information describing such seller in “The Sponsors, Sellers, Initial Servicers and Depositors” section of this prospectus is correct in all material respects;

(b) the seller has transferred the phase-in-recovery property, free and clear of all security interests, liens, charges and encumbrances (other than any created by Section 4928.2312 of the Securitization Act and any in favor of the bond issuer);

(c) the phase-in-recovery property has been validly transferred and sold to the bond issuer and all filings (including filings with the Secretary of State of the State of Ohio as required under the Securitization Act) necessary in any jurisdiction to give the bond issuer a valid, perfected ownership interest (subject to any lien created by Section 4928.2312 of the Securitization Act) in the phase-in-recovery property have been made;

(d) under the laws of the State of Ohio (including the Securitization Act) and the United States in effect on the closing date:

• the financing order pursuant to which the phase-in-recovery property has been created is in full force and effect;

• the bondholders are entitled to the protections of the Securitization Act and the financing order is not revocable by the PUCO;

• the State of Ohio may not rescind, alter or amend the Securitization Act or take or permit any other action that impairs the value of the phase-in-recovery property or revise the phase-in costs for which recovery is authorized under the financing order or, except for periodic adjustments allowed in accordance with the adjustment mechanism in Section 4928.238 of the Securitization Act, reduce, alter or impair phase-in-recovery charges that are imposed, collected or remitted for the benefit of the bondholders in a manner that would substantially impair the rights of bondholders, absent a demonstration by the State of Ohio that an impairment is a reasonable exercise of its sovereign power and of a character reasonable and appropriate to the public purpose justifying such action until the bonds, together with accrued interest, and, subject to the cap to the extent applicable, all other approved financing costs are fully paid and performed in full;

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• the process by which the financing order was adopted and approved, and the financing order and issuance advice letters themselves, comply with all applicable laws, rules and regulations;

• the issuance advice letters have been filed in accordance with the financing order;

• the PUCO may not, either by rescinding, altering or amending the financing order, in any way reduce, impair, postpone or terminate the phase-in-recovery charges or impair the phase-in-recovery property or the collection or recovery of the phase-in costs absent a demonstration by the State of Ohio that an impairment is a reasonable exercise of its sovereign power and of a character reasonable and appropriate to the public purpose justifying such action until the bonds, together with accrued interest, and, subject to the cap to the extent applicable, all other approved financing costs are fully paid and performed in full; and

• no other approval, order or other action of, or sale or filing with any other governmental body is required in connection with the creation of the phase-in-recovery property, except those that have been obtained or made or will be obtained or made on the closing date;

(e) based on information available to the seller on the closing date, the assumptions used in calculating the initial phase-in-recovery charges are reasonable and are made in good faith;

(f) upon the sale by the seller to the bond issuer of all of its phase-in-recovery property:

• there will arise and constitute an existing present property right in all of the phase-in-recovery property which shall continue to exist until the bonds, interest thereon and all other approved financing costs are paid in full;

• the creation of the phase-in-recovery property is confirmed and is simultaneous with the sale by the seller to the bond issuer of the phase-in-recovery property;

• the phase-in-recovery property includes the right to all revenues, collections, claims, payments, money, or proceeds of or arising from the phase-in-recovery charges, as adjusted from time to time pursuant to the financing order, and all rights to obtain adjustments to the phase-in-recovery charges pursuant to the financing order; and

• the owner of the phase-in-recovery property is legally entitled to collect payments arising from the phase-in-recovery charges in the aggregate sufficient, subject to the cap to the extent applicable, to pay the interest on and principal of the bonds of the bond issuer, to pay the fees and expenses incurred by or allocable to the bond issuer in connection with the servicing of the bonds and an allocable portion of the certificates and to replenish the capital subaccount to the required capital level until the bonds together with interest thereon and all other approved financing costs are paid in full;

(g) the seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Ohio, with the requisite corporate power and authority to own its properties as owned on the closing date and to conduct its business as conducted by it on the closing date and to execute, deliver and perform the terms of the sale agreement;

(h) the execution, delivery and performance of the sale agreement have been duly authorized by all necessary corporate action on the part of the seller;

(i) the sale agreement constitutes a legal, valid and binding obligation of the seller, enforceable against it in accordance with its terms, subject to applicable insolvency, reorganization, moratorium, fraudulent transfer and other laws relating to or affecting creditors’ or secured parties’ rights generally from time to time in effect and to general principles of equity, regardless of whether considered in a proceeding in equity or law;

(j) the consummation of the transactions contemplated by the sale agreement do not conflict with the seller’s articles of incorporation or code of regulation or any material agreement or instrument to which

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the seller is a party or bound, result in the creation or imposition of any lien upon the seller’s properties pursuant to the terms of a material agreement or instrument (other than any lien that may be granted under the basic documents or any lien created by Section 4928.2312 of the Securitization Act) or violate any existing law or any existing order, rule or regulation applicable to the seller or any federal or state court or regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the seller or its properties;

(k) no governmental approvals, authorizations, consents, orders or other actions or filings are required for the seller to execute, deliver and perform its obligations under the sale agreement except those which have previously been obtained or made or which are required to be obtained or made in the future pursuant to the servicing agreement; and

(l) except as disclosed to the bond issuer, no court or administrative proceeding or investigation is pending and, to the seller’s knowledge, no court or administrative proceeding or investigation is threatened:

• asserting the invalidity of the sale agreement, the Securitization Act or the financing order, or seeking to prevent the consummation of the transactions contemplated by, the sale agreement or other basic documents;

• seeking a determination that might materially adversely affect the performance by the seller of its obligations under, or the validity or enforceability of, the sale agreement, the Securitization Act or the financing order; or

• adversely affect the federal or state income tax classification of the bonds or the certificates as debt.

Notwithstanding the above, the sellers will not be in breach of a representation or warranty due to a change in law by legislative enactment, constitutional amendment or initiative petition and will not represent or warrant that any amounts actually collected arising from the phase-in-recovery charges will in fact be sufficient to meet payment obligations on the bonds, and thus its bond issuer’s allocable portion of the certificates, or that assumptions made in calculating the phase-in-recovery charges will in fact be realized.

Seller Covenants

In the sale agreements, each of the sellers will separately make the following covenants:

(a) so long as any of the bonds of the applicable bond issuer are outstanding, except as otherwise provided under the sale agreement, such seller (a) will keep in full force and effect its existence, rights and franchises as a corporation under the laws of the jurisdiction of its organization and (b) will obtain and preserve its qualification to do business, in each case to the extent that in each such jurisdiction such existence or qualification is or shall be necessary to protect the validity and enforceability of the sale agreement, the other basic documents to which such seller is a party and each other instrument or agreement necessary or appropriate to the proper administration of the sale agreement and the transactions contemplated thereby;

(b) except for the conveyances under the sale agreement, the lien under the Securitization Act or the back-up security interest, the seller will not sell, pledge, assign or transfer, or grant, create, or incur any lien on, any of the phase-in-recovery property, or any interest therein, and such seller shall defend the right, title and interest of its bond issuer and the bond trustee in, to and under the phase-in-recovery property against all claims of third parties claiming through or under such seller. Such seller, in its capacity as seller, will not at any time assert any lien against, or with respect to, any of the phase-in-recovery property;

(c) if the seller receives any payments in respect of the phase-in-recovery charge or the proceeds thereof when it is not acting as the servicer, such seller will pay to the servicer all payments received by it in respect thereof as soon as practicable after receipt by it;

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(d) the seller will notify the applicable bond issuer and bond trustee promptly after becoming aware of any lien on any of the phase-in-recovery property, other than the conveyances under the sale agreement, any lien under the basic documents or the lien under the Securitization Act or for the benefit of the bond issuer;

(e) the seller will comply with its organizational and governing documents and all laws, treaties, rules, regulations and determinations of any governmental instrumentality applicable to it, except to the extent that failure to so comply would not adversely affect the applicable bond issuer’s or the bond trustee’s interests in the phase-in-recovery property or under any of the other basic documents to which such seller is party or the seller’s performance of its obligations under the sale agreement or under any of the other basic documents to which it is party;

(f) so long as any of the bonds of the applicable bond issuer are outstanding:

• the seller will treat such bonds as debt of the applicable bond issuer and not of such seller, except for financial accounting or tax reporting purposes;

• the seller will indicate in its financial statements that it is not the owner of the phase-in-recovery property and will disclose the effects of all transactions between itself and the applicable bond issuer in accordance with generally accepted accounting principles; and

• the seller will not own or purchase any bonds or certificates;

(g) the seller agrees that, upon the sale by such seller of the phase-in-recovery property to the applicable bond issuer pursuant to the sale agreement:

• to the fullest extent permitted by law, including applicable PUCO regulations, such bond issuer will have all of the rights originally held by the seller with respect to the phase-in-recovery property, including the right (subject to the terms of the servicing agreement) to exercise any and all rights and remedies to collect any amounts payable by any customer in respect of the phase-in-recovery property, notwithstanding any objection or direction to the contrary by the seller; and

• any payment by any customer to such bond issuer will discharge such customer’s obligations in respect of the phase-in-recovery property to the extent of such payment, notwithstanding any objection or direction to the contrary by the seller;

(h) so long as any of the bonds of the applicable bond issuer are outstanding:

• the seller will not make any statement or reference in respect of the phase-in-recovery property that is inconsistent with the ownership thereof by the applicable bond issuer (other than for financial accounting or tax reporting purposes); and

• the seller will not take any action in respect of the phase-in-recovery property except solely in its capacity as the servicer thereof pursuant to the servicing agreement or as otherwise contemplated by the basic documents;

(i) the seller will execute and file such filings, including filings with the PUCO pursuant to the Securitization Act and UCC filings, and cause to be executed and filed such filings, all in such manner and in such places as may be required by law fully to preserve, maintain and protect the ownership interest of the applicable bond issuer, and the security interest of the applicable bond trustee, in the phase-in-recovery property and the back-up security interest, including all filings required under the Securitization Act and the applicable UCC relating to the transfer of the ownership interest in the phase-in-recovery property by such seller to such bond issuer, the granting of a security interest in the phase-in-recovery property by such bond issuer to such bond trustee, and the back-up security interest, and the continued perfection of such ownership interest, security interest and back-up security interest. Such seller shall deliver (or cause to be delivered) to the bond trustee (with copies to the applicable bond issuer) file-stamped copies of, or filing receipts for, any document filed as provided above, as

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soon as available following such filing. Such seller will institute any action or proceeding necessary to compel performance by the PUCO or the State of Ohio of any of their obligations or duties under the Securitization Act or the financing order, and such seller will take such legal or administrative actions, including defending against or instituting and pursuing legal actions and appearing or testifying at hearings or similar proceedings, as may be reasonably necessary (i) to protect the applicable bond issuer, bond trustee, bondholders, and any of their respective affiliates, officials, directors, employees, and agents from claims, state actions or other actions or proceedings of third parties which, if successfully pursued, would result in a breach of any representation set forth in the sale agreement or (ii) to block or overturn any attempts to cause a repeal of, modification of or supplement to the Securitization Act, the financing order, the issuance advice letter, any other adjustment request (as defined in the applicable servicing agreement), or the rights of applicable bondholders by executive action, legislative enactment or constitutional amendment that would be adverse to the applicable bond issuer, bond trustee or bondholders. If the applicable servicer performs its obligations under the applicable provision of its servicing agreement, such performance will be deemed to constitute performance of such seller’s obligations pursuant to clause (ii) of the preceding sentence. In such event, such seller agrees to assist the servicer as reasonably necessary to perform its obligations under such provisions of its servicing agreement. The costs of any such actions or proceedings shall be payable from phase-in-recovery charge collections as an operating expense in accordance with the priorities and subject to the cap set forth in the applicable bond indenture. Such seller’s obligations pursuant to this covenant in the sale agreement will survive and continue notwithstanding the fact that the payment of operating expenses pursuant to the priorities set forth in the applicable bond indenture may be delayed (it being understood that such seller may be required to advance its own funds to satisfy its obligations thereunder);

(j) notwithstanding any prior termination of the applicable sale agreement or bond indenture, but subject to the right of a court of competent jurisdiction to order the sequestration and payment of revenues arising with respect to the phase-in-recovery property notwithstanding any bankruptcy, reorganization or other insolvency proceedings with respect to such seller pursuant to Section 4928.2310 of the Securitization Act, such seller solely in its capacity as a creditor of such bond issuer shall not, prior to the date which is one year and one day after the termination of the bond indenture, petition or otherwise invoke or cause such bond issuer to invoke the process of any court or government authority for the purpose of commencing or sustaining an involuntary case against such bond issuer under any Federal or state bankruptcy, insolvency or similar law, appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of such bond issuer or any substantial part of the property of such bond issuer, or, to the fullest extent permitted by law, ordering the winding up or liquidation of the affairs of such bond issuer;

(k) so long as any of the bonds of the applicable bond issuer are outstanding, such seller will, and will cause each of its subsidiaries to, pay all material taxes, assessments and governmental charges imposed upon it or any of its properties or assets or with respect to any of its franchises, business, income or property before any penalty accrues thereon if the failure to pay any such taxes, assessments and governmental charges would, after any applicable grace periods, notices or other similar requirements, result in a lien on the phase-in-recovery property; provided that no such tax need be paid if such seller or one of its subsidiaries is contesting the same in good faith by appropriate proceedings promptly instituted and diligently conducted and if such seller or such subsidiary has established appropriate reserves as shall be required in conformity with generally accepted accounting principles;

(l) so long as any of the bonds of the applicable bond issuer are outstanding, such seller will not sell any “phase-in-recovery property” (as defined in the Securitization Act) to secure another issuance of “phase-in-recovery bonds” (as defined in the Securitization Act) if it would cause the then existing ratings on the certificates from the rating agencies to be downgraded; and

(m) the seller agrees not to withdraw the filing of the issuance advice letter with the PUCO.

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In the event of a seller’s willful misconduct or gross negligence in the performance of its duties or observance of the covenants under the sale agreement or a breach of any representation or warranty in the sale agreement, the seller shall be required to indemnify, defend and hold harmless its bond issuer and the bondholders against any costs, expenses, losses, claims, damages and liabilities incurred as a result of the breach, except to the extent of any costs, expenses, losses, claims, damages and liabilities either resulting from the willful misconduct or gross negligence of such indemnified person or resulting from a breach of a representation and warranty made by such indemnified person in any basic document that gives rise to the seller’s breach; provided, however, that the bondholders may only enforce their rights against the seller through an action brought by the bond trustee. The remedies provided for in the sale agreement are the sole and exclusive remedies of the bond issuer and the bond trustee (for the benefit of the bondholders) against the seller for breach of its representations and warranties in the sale agreement.

In addition, a seller shall indemnify and hold harmless the related bond trustee, the Delaware trustee, the certificate trustee, the issuing entity and any of their respective affiliates, officials, officers, directors, employees and agents against any expenses (including legal fees and expenses), losses, claims, damages and liabilities incurred by any of these persons as a result of the seller’s willful misconduct or gross negligence in the performance of its duties or observance of the covenants under the sale agreement or a breach in any material respect by the seller of its representations and warranties in the sale agreement, except to the extent of amounts either resulting from the willful misconduct or negligence of the indemnified person or resulting from a breach of a representation or warranty made by the indemnified person in the basic documents that gives rise to the seller’s breach.

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BANKRUPTCY AND CREDITORS’ RIGHTS ISSUES

True Sale

Each seller will represent and warrant to its bond issuer in its sale agreement that the transfer of the phase-in-recovery property to its bond issuer is a valid sale and assignment of the phase-in-recovery property from the seller to the bond issuer. Each seller will also represent and warrant that it will take the appropriate actions under the Securitization Act to perfect this sale. The Securitization Act provides that the transactions described in the sale agreement shall constitute an absolute, true sale of the phase-in-recovery property to the bond issuer, and the seller and the bond issuer will treat the transactions as a sale under applicable law, although for financial reporting and federal income tax purposes the transactions will be treated as a secured borrowing of the seller. Please read “Material U.S. Federal Income Tax Consequences” and “Risk Factors—Bankruptcy and Creditors’ Rights Issues” in this prospectus.

In the event of a bankruptcy of a party to a sale agreement, if a party in interest in the bankruptcy were to take the position that the transfer of the phase-in-recovery property to a bond issuer pursuant to that sale agreement was a financing transaction and not a true sale under applicable creditors’ rights principles, there can be no assurance that a court would not adopt this position. Even if a court did not ultimately recharacterize the transaction as a financing transaction, the mere commencement of a bankruptcy of CEI, OE or TE and the attendant possible uncertainty surrounding the treatment of the transaction could result in delays in payments on the bonds and, thus, the certificates.

In that regard, we note that the bankruptcy court in In re: LTV Steel Company, Inc., et al., 274 B.R. 278 (Bankr. N. D. Oh. 2001) issued an interim order that observed that a debtor, LTV Steel Company, which had previously entered into securitization arrangements with respect both to its inventory and its accounts receivable, may have “at least some equitable interest in the inventory and receivables, and that this interest is property of the debtor’s estate…sufficient to support the entry of” an interim order permitting the debtor to use proceeds of the property sold in the securitization. 274 B.R. at 285. The court based its decision in large part on its view of the equities of the case.

LTV and the securitization investors subsequently settled their dispute over the terms of the interim order and the bankruptcy court entered a final order in which the parties admitted and the court found that the pre-petition transactions constituted “true sales.” The court did not otherwise overrule its earlier ruling. The LTV memorandum opinion serves as an example of the pervasive equity powers of bankruptcy courts and the importance that such courts may ascribe to the goal of reorganization, particularly where the assets sold are integral to the ongoing operation of the debtor’s business.

Even if creditors did not challenge the sale of phase-in-recovery property as a true sale, a bankruptcy filing by CEI, OE or TE could trigger a bankruptcy filing by the bond issuers with similar negative consequences for bondholders and ultimately for holders of the certificates. In a recent bankruptcy case, In re General Growth Properties, Inc., General Growth Properties, Inc. filed for bankruptcy together with many of its direct and indirect subsidiaries, including many subsidiaries that were organized as special purpose vehicles. The bankruptcy court upheld the validity of the filings of these special purpose subsidiaries and allowed the subsidiaries, over the objections of their creditors, to use the lenders’ cash collateral to make loans to the parent for general corporate purposes. The creditors received adequate protection in the form of current interest payments and replacement liens to mitigate any diminution in value resulting from the use of the cash collateral, but the opinion serves as a reminder that bankruptcy courts may subordinate legal rights of creditors to the interests of helping debtors reorganize.

We, the bond issuers and the sellers have attempted to mitigate the impact of a possible recharacterization of a sale of phase-in-recovery property as a financing transaction under applicable creditors’ rights principles. Should the transfer of the phase-in-recovery property to a bond issuer be recharacterized, in a bankruptcy case of the seller or otherwise, as a borrowing by the seller, the Securitization Act provides that there is a perfected first

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priority statutory lien on the phase-in-recovery property that secures all obligations to the bondholders. In addition, in the sale agreement, the seller grants to the bond issuer a security interest in the phase-in-recovery property and covenants that it will take appropriate actions to perfect the security interest, although the seller takes the position that it has no rights in the phase-in-recovery property to which a security interest could attach.

A creditor or bankruptcy trustee of a seller or a seller itself as debtor in possession might argue that, contrary to Ohio law as set forth in the Securitization Act, the sale of the phase-in-recovery property to its bond issuer was a loan to the seller from the related bond issuer, secured by a pledge of the phase-in-recovery property. If the bankruptcy court accepted that argument or other arguments that the seller retained an interest of some kind in the phase-in-recovery property, the phase-in-recovery property could be treated as property of the bankruptcy estate of the seller or in which the bankruptcy estate had an interest. In such event, the exercise of rights of the related bond issuer in respect of the phase-in-recovery property would be subject to the automatic stay that arises upon the commencement of the seller’s bankruptcy case, and the rights of the bond issuer as secured creditor would be subject to modification to the extent permitted under the Bankruptcy Code. Such modifications could include, among other things, reductions of the amounts of payment of interest and principal on the bonds, delays in time of payments and alteration of other terms of the bonds, leading to delays or reductions in payments on the certificates.

Under the Securitization Act, on the effective date of the financing order, the phase-in-recovery property identified in the issuance advice letter constitutes a property right that continuously exists as property for all purposes. Nonetheless, if a seller were to become the debtor in a bankruptcy case, a creditor of, or a bankruptcy trustee for, the seller, or the seller itself as debtor in possession, may attempt to take the position that, because the payments based on the phase-in-recovery charges are usage-based charges, phase-in-recovery property comes into existence only as customers use electricity. If a court were to adopt this position, we cannot assure you that either the statutory lien created by the statute or the security interest granted in the sale agreement would be valid as to electricity consumed after the commencement of a bankruptcy case by or against the seller.

If a court were to determine that the phase-in-recovery property has not been sold to a bond issuer, and that the statutory lien created by the Securitization Act and the security interest granted in the sale agreement are invalid against payments arising from the phase-in-recovery charges that become collectible as a result of the consumption of electricity consumed after the commencement of a bankruptcy case of the seller, then the certificate trustee, as bondholder and for the benefit of holders of the certificates, would be an unsecured creditor of the seller, and delays or reductions in distributions on the certificates could result.

Whether or not the court determined that the phase-in-recovery property had been sold to a bond issuer, the court could rule that any payments arising from the phase-in-recovery charges that become collectible as a result of the consumption of electricity after the commencement of the related seller’s bankruptcy cannot be transferred to the bond trustee or the certificate trustee, thus resulting in delays or reductions of distributions on the certificates.

To the extent that claims are made by a bond issuer against the bankruptcy estate of a seller on the basis of contractual indemnity in its related sale agreement or any other documentation, such claims may be subject to significant requirements of proof of actual damage, may be subject to disallowance as contingent to the extent that actual damage has not yet occurred and may hold only the status of unsecured claims against the bankruptcy estate of the seller.

Substantive Consolidation

The sellers and the bond issuers have taken steps to reduce the risk that, in the event a seller or an affiliate of a seller were to become the debtor in a bankruptcy case, a court would order that the assets and liabilities of the bond issuer be substantively consolidated with those of the seller or an affiliate. These steps include the fact that each of the bond issuers is a separate, special purpose limited liability company, the organizational documents of

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which provide, among other things, that it shall not commence a voluntary bankruptcy case without the unanimous affirmative vote of all of its directors, including two directors independent of the seller. Nonetheless, these steps may not be completely effective, and thus if a seller or an affiliate of a seller were to become a debtor in a bankruptcy case, a court may order that the assets and liabilities of the bond issuer be consolidated with those of the seller or an affiliate, thus potentially resulting in delays or reductions in payments on the bonds and, thus, distributions on the certificates. Other factors that may tend to support consolidation include the ownership of a bond issuer by a seller, the designation of officers or employees of a seller as directors, other than independent directors, of the bond issuer and the existence of indemnities by a seller for some liabilities of the bond issuer.

Estimation of Claims; Challenges to Indemnity Claims

If a seller were to become a debtor in a bankruptcy case, claims, including indemnity claims, by the bondholders or the bond trustee against CEI, OE or TE, as the case may be, as a seller under its sale agreement and the other documents executed in connection therewith would be unsecured claims and would be subject to being discharged in the bankruptcy case. In addition, a party in interest in the bankruptcy may request that the bankruptcy court estimate any contingent claims that the bondholders or the bond trustee have against CEI, OE or TE, as the case may be. That party may then take the position that these claims should be estimated at zero or at a low amount because the contingency giving rise to these claims is unlikely to occur. If a court were to hold that the indemnity provisions were unenforceable, such parties would be left with a claim for actual damages against CEI, OE or TE, as the case may be, based on breach of contract principles. The actual amount of these damages would be subject to estimation and/or calculation by the court. No assurances can be given as to the result of any of the above-described actions or claims. Furthermore, no assurance can be given as to what percentage of their claims, if any, unsecured creditors would receive in any bankruptcy proceeding involving CEI, OE or TE.

Enforcement of Rights by the Bond Trustee

Upon an event of default of the bonds under the applicable bond indenture, the bond trustee will enforce the security interest in the phase-in-recovery property in accordance with the terms of the bond indenture. Under the Securitization Act, if a utility servicer defaults on any required payment of phase-in-recovery revenues, a court, upon application by the bond trustee (or any other interested party) and without limiting any other remedies available to the bond trustee (or other interested party), shall order the sequestration and payment of the revenues for the benefit of bondholders, the applicable bond issuer, any other assignee and any financing parties. The court order shall remain in full force and effect notwithstanding any bankruptcy, reorganization, or other insolvency proceedings with respect to the electric distribution utility or any affiliate. There can be no assurance, however, that a court would issue this order after an Ohio Company’s bankruptcy in light of the automatic stay provisions of Section 362 of the United States Bankruptcy Code. In that event, the bond trustee would likely seek an order from the bankruptcy court lifting the automatic stay to permit or authorize this action by the court, and an order requiring an accounting and segregation of the revenues arising from the phase-in-recovery property. There can be no assurance that a court would grant either order.

Bankruptcy of a Servicer

Each servicer is entitled to commingle the phase-in-recovery charges that it receives with its own funds until each date on which such servicer is required to remit funds to the bond trustee as specified in its respective servicing agreement. The Securitization Act provides that the bond issuers’ rights to the phase-in-recovery property are not affected by the commingling of these funds with any other funds of the servicers. In a bankruptcy of a servicer, however, a bankruptcy court might rule that federal bankruptcy law does not recognize a bond issuer’s right to collections of the phase-in-recovery charges that are commingled with other funds of the servicer as of the date of bankruptcy. If so, the collections of the phase-in-recovery charges held by the servicer as of the date of bankruptcy would not be available to pay amounts owing on the bonds and, thus, distributions

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on the certificates. In this case, the bond issuers would have only a general unsecured claim against the servicer for those amounts. This decision could cause material delays in payments of principal or interest, or losses, on the bonds and, thus, material delays in distributions, or losses, on the certificates, which could materially reduce the value of your investment in the certificates.

The servicing agreement will provide that in the event of a bankruptcy of a servicer, either the applicable bond trustee or holders of bonds of the applicable bond issuer evidencing not less than 25% in principal amount of then outstanding bonds may terminate all the rights and obligations of the servicer (other than the servicer’s indemnity obligation) under the servicing agreement, whereupon a successor servicer appointed by the bond issuer, with the prior written consent of the bond trustee and the approval of the PUCO, will succeed to all the responsibilities, duties and liabilities of the servicer under the servicing agreement.

If, however, a bankruptcy trustee or similar official has been appointed for a servicer, and no servicer default other than an appointment of a bankruptcy trustee or similar official has occurred, that trustee or official may have the power to prevent the bond trustee or the bondholders from effecting a transfer of servicing. The servicing agreement will also provide that the bond trustee may appoint, or petition a court of competent jurisdiction for the appointment of, a successor servicer which satisfies criteria specified by the nationally recognized statistical rating organizations rating the certificates. However, the automatic stay in effect during a servicer bankruptcy might delay or prevent a successor servicer’s replacement of the servicer. Even if a successor servicer may be appointed and may replace the servicer, a successor may be difficult to obtain and may not be capable of performing all of the duties that CEI, OE or TE, as the case may be, as servicer was capable of performing. Furthermore, should the servicer enter into bankruptcy, it may be permitted to stop acting as servicer.

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THE ISSUING ENTITY

The issuing entity was formed by the bond issuers specifically for the purpose of acquiring the bonds from the bond issuers and issuing the certificates offered by this prospectus and the accompanying prospectus supplement. The issuing entity is a Delaware statutory trust. In connection with the issuance and sale of the certificates, the bond issuers, U.S. Bank Trust National Association, a national banking association, not acting in its individual capacity but acting as the Delaware trustee on behalf of the issuing entity, and the Ohio Companies, as administrative trustees, entered into an amended and restated declaration of trust to continue the issuing entity. The principal assets of the issuing entity will be the bonds. The declaration of trust does not permit, and may not be amended, modified or supplemented to permit, the issuing entity to engage in any activities other than holding the bonds, issuing the certificates and engaging in other related activities.

Each tranche of certificates will represent fractional undivided beneficial interests in the bonds of each of the bond issuers. Holders of each tranche of certificates will receive payments received by the issuing entity on the corresponding tranche of bonds of each bond issuer (with payments of principal due and payable on the bonds of a bond issuer as a result of an event of default (and assuming all bonds have been declared immediately due and payable) under that bond issuer’s bond indenture, or upon final maturity, to be paid pro rata based on the respective principal amounts of such bonds). These payments will be the primary source of distributions on a tranche of certificates. See “Description of the Certificates—Payments and Distributions,” “Description of the Certificates—Events of Default” and “Description of the Bonds—Allocations and Payments.”

The bond issuers, the issuing entity, the Delaware trustee and the certificate trustee will enter into a fee and indemnity agreement under which the bond issuers, subject to the cap, will each pay an allocable portion of the Delaware trustee’s and the certificate trustee’s reasonable compensation and reasonable fees and expenses. The fee and indemnity agreement will further provide that the bond issuers, subject to the cap, will indemnify the issuing entity, the Delaware trustee and the certificate trustee for, and hold them harmless against, among other things, any loss, liability or expense incurred by them arising from the failure of any party to perform its obligations under the various basic documents. Any amounts due and owing to the Delaware trustee or the certificate trustee under the applicable basic documents that exceed the cap will be paid by the applicable initial servicer pursuant to the servicing agreement.

The fiscal year of the issuing entity is the calendar year.

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THE TRUSTEES

The initial certificate trustee and each initial bond trustee will be U.S. Bank National Association, a national banking association, whose address, principal office and experience are provided in the accompanying prospectus supplement. The initial Delaware trustee will be U.S. Bank Trust National Association, a national banking association, whose address, principal office and experience is provided in the accompanying prospectus supplement.

None of the bond trustees, the Delaware trustee or the certificate trustee will be obligated to supervise the servicers or have any liability for a servicer default or misconduct. In no event shall any of the foregoing trustees be required to act as a successor servicer.

Certificate Trustee

The certificate trustee may resign under certain circumstances provided in the certificate indenture, including at any time upon 30 days’ prior written notice to us, the bond issuers and the bond trustee. Upon 30 days prior written notice, the holders of a majority in principal amount of the certificates then outstanding may remove the certificate trustee by so notifying the certificate trustee, the bond issuers and the bond trustees. The certificate trustee may also be removed under other circumstances provided in the certificate indenture, including by us upon failure of the certificate trustee to company with Section 310 of the Trust Indenture Act, the certificate trustee ceasing to be eligible pursuant to the eligibility requirements in the certificate indenture or the certificate trustee being adjudged bankrupt or insolvent. If the certificate trustee shall resign or be removed, we are obligated to promptly appoint a successor. No resignation or removal of the certificate trustee and no appointment of a successor certificate trustee will be effective until a successor has been appointed and has accepted such appointment and, in certain cases, receipt of written confirmation from each rating agency that no lowering or withdrawal of the then current ratings will result from such appointment.

The certificate trustee will at all times be eligible to act as a trustee under Section 310(a) of the Trust Indenture Act, have a combined capital and surplus of at least $50 million and a long-term debt rating of at least “A” (or the equivalent thereof) by each of the rating agencies. If the certificate trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the resulting, surviving or transferee corporation will without any further action be the successor certificate trustee, provided that such entity is otherwise qualified and eligible under the terms of the certificate indenture.

The certificate trustee will not be liable for any action it takes or omits to take in good faith which it reasonably believes to be authorized or within its discretion, rights or powers under the certificate indenture so long as its conduct does not constitute willful misconduct, negligence or bad faith. Pursuant to the fee and indemnity agreement, the bond issuers have agreed to indemnify the certificate trustee and its affiliates, officers, directors, employees and agents against any and all losses, liabilities and expenses (including liabilities under state and federal securities laws) arising in connection with the certificate indenture and other basic documents and the transactions contemplated by each of the foregoing, provided that no bond issuer will be required to indemnify any loss, liability or expense resulting from the willful misconduct or negligence of any such indemnified person.

The role and responsibilities of the certificate trustee is set out in the certificate indenture, a form of which is filed as an exhibit to the registration statement of which this prospectus forms a part, and this description is qualified by reference to the provisions in the certificate indenture. The certificate trustee will be required to discharge (or cause to be discharged) all of its responsibilities pursuant to the terms of the certificate indenture and will perform such duties and only such duties as are specifically set out in the certificate indenture. If an event of default under the certificate indenture (defined as an event of default under a bond indenture) has occurred and is continuing, the certificate trustee shall exercise the rights and powers vested in it by the certificate indenture, which include the right to vote the bonds of a defaulting bond issuer in favor of declaring the bonds of that bond issuer due and payable and, subject to the terms of the certificate indenture, the right to

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sell any or all of the bonds issued by that defaulting bond issuer. For more information about the certificate trustee, see “Description of the Certificates” in this prospectus.

Bond Trustee

Each bond trustee may resign at any time upon written notice to the applicable bond issuer; provided, however, that no such resignation will be effective until either a qualified successor has been designated and accepted such appointment or the collateral has been completely liquidated and the proceeds thereof distributed to bondholders. Bondholders holding a majority in principal amount of bonds outstanding may remove the bond trustee and appoint a successor. A bond issuer must remove a bond trustee if (i) the bond trustee ceases to be eligible to continue in its capacity as bond trustee under the bond indenture, (ii) the bond trustee is adjudged a bankrupt or insolvent, (iii) a receiver or other public officer takes charge of the bond trustee or its property, (iv) the bond trustee otherwise becomes incapable of acting or (v) the bond trustee fails to provide to the bond issuer or the sponsor any information reasonably requested by the bond issuer and necessary for the bond issuer to comply with its reporting obligations under the Exchange Act and Regulation AB and such failure is not resolved to the bond issuer’s and bond trustee’s mutual satisfaction within a reasonable period of time. If a bond trustee resigns or is removed or if a vacancy exists in the office of the bond trustee for any reason, the applicable bond issuer will promptly appoint a successor bond trustee meeting the eligibility requirements of the bond indenture. The successor bond trustee will mail notice of such appointment to bondholders and each rating agency.

Each bond trustee must at all times satisfy the requirements of Section 310(a) of the Trust Indenture Act, have a combined capital and surplus of at least $50 million and a long-term debt rating of at least “A” (or the equivalent thereof) by each of the rating agencies. If a bond trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation or banking association will without any further act be the successor bond trustee. The successor bond trustee will mail a notice of such merger, conversion, consolidation or transfer to each rating agency.

No bond trustee will be liable for any action it takes or omits to take in good faith in accordance with a direction received by it under the bond indenture or for any error in judgment made in good faith by a responsible officer unless it is proved that the bond trustee was negligent in ascertaining the particular facts. Each bond issuer has agreed to indemnify its bond trustee and such bond trustee’s affiliates, officers, directors, employees and agents against any and all losses, liabilities or expenses (including liabilities under state or federal securities laws) arising in connection with the bond indenture and other basic documents and the transactions contemplated by each of the foregoing, provided no bond issuer will be required to indemnify any loss, liability or expense resulting from the willful misconduct or negligence of any such indemnified person.

The role and responsibilities of the bond trustee is set out in the bond indentures, a form of which is filed as an exhibit to the registration statement of which this prospectus forms a part, and this description is qualified by reference to the provisions in the bond indenture. The bond trustee will be required to discharge (or cause to be discharged) all of its responsibilities pursuant to the terms of the bond indenture and will perform such duties and only such duties as are specifically set out in the bond indenture. If an event of default under a bond indenture has occurred and is continuing, the bond trustee shall exercise the rights and powers vested in it by the bond indenture, which include the right to declare all bonds of a defaulting bond issuer due and payable and the right to sell the phase-in-recovery property of that bond issuer or maintain possession of such phase-in-recovery property and continue to apply phase-in-recovery charge collections to the bonds of that bond issuer. For more information about the bond trustee, see “Description of the Bonds” in this prospectus.

Delaware Trustee

The role and responsibilities of the Delaware trustee under the declaration of trust are primarily limited to the following: (i) executing and delivering on behalf of the issuing entity all Basic Documents to which the

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issuing entity or the Delaware trustee may be a party, including any amendments or supplements to such Basic Documents, (ii) accepting legal process served on the issuing entity in the State of Delaware and (iii) executing and delivering all certifications required to be filed with the Secretary of State of the State of Delaware in order to form, maintain and terminate the existence of the issuing entity under the Statutory Trust Act (as instructed by the bond issuers).

Except for its own willful misconduct or negligence in the performance of its specified duties under the declaration of trust, the Delaware trustee has no duty or liability with respect to the administration of the issuing entity, the investment of the issuing entity’s property or the payment of dividends or other distributions of income or principal to the certificate holders. The Delaware trustee may not be personally liable under any circumstances, except for its own willful misconduct or negligence.

The Delaware trustee may resign under certain circumstances provided in the declaration of trust, including at any time upon 30 days’ prior written notice to the certificate trustee, the bond issuers, the administrative trustees and the issuing entity. Any successor Delaware trustee must satisfy the requirement of Section 3807(a) of the Statutory Trust Act.

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THE BOND ISSUERS

Each of the bond issuers is a limited liability company organized under the laws of the State of Delaware. CEI is the sole member of CEI Funding, OE is the sole member of OE Funding and TE is the sole member of TE Funding. The principal executive office of each of the bond issuers is located at 76 South Main Street, Akron, Ohio 44308. The telephone number for each of the bond issuers is (800) 736-3402. The sellers organized the bond issuers for the limited purpose of holding the phase-in-recovery properties and issuing bonds secured by the phase-in-recovery properties and the other bond collateral and related activities. The bond issuers’ organizational documents restrict them from engaging in other activities other than those described below. In addition, the bond issuers’ organizational documents require them to operate in a manner intended to reduce the likelihood that they would be consolidated in a seller’s bankruptcy estate if the seller becomes involved in a bankruptcy proceeding. Selected provisions of the bond issuers’ amended and restated limited liability company agreements are summarized below and forms of such agreements have been filed as an exhibit to the registration statement of which this prospectus is a part.

On the date of issuance of the bonds, the capital of each bond issuer will be at least equal to 0.50% (in the case of each of CEI Funding LLC and OE Funding LLC) or 0.60% (in the case of TE Funding LLC) of the principal amount of the bonds issued by such bond issuer or such greater amount as may allow the bonds to achieve the desired security rating and treat the bonds as debt of the applicable bond issuer under applicable guidance issued by the Internal Revenue Service.

The assets of each bond issuer will consist of:

• its respective phase-in-recovery property,

• its rights under the basic documents to which it is a party,

• the collection account and all subaccounts established in the bond indentures,

• the cash used to capitalize such bond issuer,

• all other property owned by the bond issuers, including all present and future claims, demands, causes and choses in action in respect of any or all of the foregoing, and

• all proceeds of each of the foregoing.

The bond issuers are recently formed entities and, as of the date of this prospectus, have not carried on any business activities and have no operating history.

Restricted Purpose

Each bond issuer has been created for the sole purpose of:

• acquiring, owning, administering, servicing or entering into agreements regarding the receipt and servicing of its phase-in-recovery property and the other collateral;

• managing, selling, assigning, pledging, collecting amounts due on, or otherwise dealing with the phase-in-recovery property and the other bond collateral and related assets of such bond issuer;

• negotiating, authorizing, executing, assuming such bond issuers’ obligations under, and performing such bond issuers’ duties under, the basic documents and any other agreement or document relating to its activities;

• filing with the SEC one or more registration statements, including pre-effective or post-effective amendments and filing such applications, reports, surety bonds, consents, appointments of attorney for service of process and other papers and documents necessary or desirable to register the bonds and certificates;

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• authorizing, executing, delivering, issuing and registering the bonds of such bond issuer;

• making payments on the bonds of such bond issuer;

• pledging its interest in the phase-in-recovery property and other collateral to the bond trustee under its bond indenture in order to secure the bonds; and

• performing other activities, and exercising any powers permitted, that are incidental to, or necessary, suitable or convenient to accomplish these purposes.

The bond issuers’ organizational documents will not permit them to engage in any activities not related to these purposes or required or authorized by the transaction documents, including issuing securities (other than the bonds), borrowing money or making loans to other persons. The list of permitted activities set forth in each bond issuer’s limited liability company agreement may not be altered, amended or repealed without the unanimous affirmative vote of such bond issuer’s management committee, which vote must include the affirmative vote of each of its independent directors. The bond issuers’ limited liability company agreement and the bond indentures will prohibit the bond issuers from issuing any phase-in-recovery bonds other than the bonds that the bond issuers will offer pursuant to the prospectus supplement.

Management

The business of each bond issuer will be managed by a management committee consisting of at least three and no more than five directors. Each of the bond issuers will at all times have at least two directors who are Independent Directors (as defined in the glossary on page 110). The same people will serve as officers and directors of all three bond issuers. The following is a list of the executive officers and directors of the bond issuers upon the closing of the offering:

Name	Age		Title
Charles E. Jones, Jr.		57	President
Leila L. Vespoli		53	Executive Vice President and General Counsel
James F. Pearson		58	Senior Vice President and Chief Financial Officer
Rhonda S. Ferguson		43	Vice President and Corporate Secretary
Steven R. Staub		41	Vice President and Treasurer
Jon K. Taylor		39	Vice President and Controller
Anthony J. Alexander		61	Director
Mark T. Clark		62	Director
Charles E. Jones, Jr.		57	Director
Michelle Dreyer		42	Director
Brian Harrison		42	Director

All of the bond issuers’ executive officers and directors, including the Independent Directors, will begin to serve effective immediately prior to the closing of the offering. Pursuant to an agreement between CEI, OE, TE and Corporation Service Company, pursuant to which Corporation Service Company has agreed to make Michelle Dreyer and Brian Harrison available to the Ohio Companies as Independent Directors, the initial aggregate annual compensation for both of the Independent Directors will be $5,700. The officers and directors of each bond issuer, other than the Independent Directors, will not be compensated for their services on behalf of the bond issuers. Any officer of a bond issuer will serve at the discretion of the bond issuer’s directors. None of the bond issuers’ managers or officers has been involved in any legal proceedings which are specified in Item 401(f) of the SEC’s Regulation S-K.

Limitation on Liabilities

The organizational documents of each bond issuer provide that, to the extent permitted by law, neither the bond issuer’s member nor its special member nor any director, officer, employee or agent of the bond issuer (the

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“covered persons”) shall be personally liable to such bond issuer for any loss, damage or claim incurred by reason of any act taken or omission made by such covered person in good faith on behalf of such bond issuer and in a manner reasonably believed to be within the scope of authority conferred on such covered person, without gross negligence or willful misconduct. In addition, the organizational documents of each bond issuer provide that, to the fullest extent permitted by law, it will indemnify its respective covered persons against liabilities incurred in connection with their services on behalf of the bond issuer for any act or omission performed or omitted by such covered person in good faith on behalf of such bond issuer and in a manner reasonably believed to be within the scope of authority conferred on such covered person, without the gross negligence or willful misconduct. The officers and directors will devote as much time as is necessary to the affairs of the bond issuers. The bond issuers will have sufficient officers, directors and employees to carry on their business.

Bond Issuers’ Relationship with the Ohio Companies

On the issue date for the bonds, the Ohio Companies will sell their respective phase-in-recovery property to the related bond issuer pursuant to a sale agreement between such Ohio Company and its related bond issuer. The Ohio Companies will service the phase-in-recovery property pursuant to a servicing agreement between such Ohio Company and its related bond issuer and will provide administrative services to each bond issuer pursuant to an administration agreement between such Ohio Company and its related bond issuer. The Ohio Companies will also serve as administrative trustees of the issuing entity under the declaration of trust.

Relationship with PUCO

Pursuant to the financing order:

• the PUCO or its designated representative has a decision-making role co-equal with the sponsors with respect to the structuring and pricing of the certificates and all matters related to the structuring and pricing of the certificates will be determined through a joint decision of the sponsors and the PUCO or its designated representative or financial advisor;

• the PUCO’s financial advisor will participate fully in all plans and decisions related to the pricing, marketing and structuring of the bonds and certificates and will be provided timely information as necessary to fulfill its obligation to advise the PUCO in a timely manner but makes no representations as to any of the information contained herein; and

• the servicers will file periodic adjustments to the phase-in-recovery charges with the PUCO on the bond issuers’ behalf.

The bond issuers have agreed that certain reports concerning phase-in-recovery charge collections will be provided to the PUCO.

Administration Agreement

The bond issuers do not have any employees (other than their officers), but CEI, OE and TE, as the case may be, will provide their respective bond issuer with administrative services, including services relating to the preparation of financial statements, required filings with the SEC, any tax returns we might be required to file under applicable law, qualifications to do business, and minutes of our managers’ meetings, and office space according to the terms of an administration agreement.

Each bond issuer is required to pay its administrator such bond issuer’s pro rata portion (based on bond issuance amount) of $100,000 payable semiannually, for as long as CEI, OE and TE, as the case may be, provide these services, plus the reimbursement for all costs and expenses for services performed by unaffiliated third parties and actually incurred by CEI, OE and TE, as the case may be, in performing such services described above.

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This description of the administration agreement does not purport to be complete and is subject and qualified by reference to the provisions of the administration agreements, a form of which is filed as an exhibit to the registration statement of which this prospectus forms a part.

Cross-Indemnity Agreement

Pursuant to a cross-indemnity agreement among the three bond issuers, each bond issuer will agree to indemnify and/or contribute to the other bond issuers for any loss, damage, liability or claim (or actions in respect thereof) arising out of any material misstatements or omissions in the registration statement of which this prospectus is a part or under the underwriting agreement (including its pro rata share of any legal or other expenses reasonably incurred by any of them in connection with investigating or defending any such loss, damage, liability, claim or action), in each case pro rata based on the original aggregate principal amount of bonds issued by such bond issuer; provided, however, that a bond issuer will be solely liable to the extent any such loss, damage, liability, claim or action arises out of or is based upon (x) any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished by such bond issuer specifically for inclusion in the registration statement or (y) a breach of a representation, warranty or covenant by such bond issuer under the underwriting agreement.

This description of the cross-indemnity agreement does not purport to be complete and is subject and qualified by reference to the provisions of the cross-indemnity agreement, a form of which is filed as an exhibit to the registration statement of which this prospectus forms a part.

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THE SPONSORS, SELLERS, INITIAL SERVICERS, AND DEPOSITORS

CEI, OE and TE will be the sellers and initial servicers of the phase-in-recovery properties securing the bonds, and will be the sponsors and depositors of the securitization in which the bonds and certificates covered by this prospectus are issued. CEI, OE and TE are all wholly owned, electric distribution utility subsidiaries of FirstEnergy and each company is incorporated in Ohio. FirstEnergy is a diversified energy company with 10 electric distribution companies comprising one of the nation’s largest investor-owned electric systems. FirstEnergy’s diverse generating fleet features non-emitting nuclear, scrubbed baseload coal, natural gas, hydro and pumped-storage hydro and other renewables and has a total generating capacity of approximately 20,000 megawatts.

CEI was organized under the laws of the State of Ohio in 1892 and does business as an electric public utility in that state. CEI provides regulated electric distribution services in an area of 1,600 square miles in northeastern Ohio, serving 747,000 customers. The area it serves has a population of approximately 1.7 million. CEI also procures generation services for those customers electing to retain them as their power supplier. As of December 31, 2012, CEI’s distribution system consisted of 33,252 pole miles of distribution lines; and its substations’ transformer capacity is 8,938,000 kV amperes.

OE was organized under the laws of the State of Ohio in 1930 and owns property and does business as an electric public utility in that state. OE engages in the distribution and sale of electric energy to communities in a 7,000 square mile area of central and northeastern Ohio, serving 1,032,000 customers. OE conducts business in portions of Ohio, providing regulated electric distribution services and procurement of generation services for those franchise customers electing to retain it as their power supplier. The area served by OE has a population of approximately 2.3 million. As of December 31, 2012, OE’s transmission and distribution system consisted of 62,238 pole miles of distribution lines and 461 pole miles of transmission lines; and its substations’ transformer capacity is 7,763,000 kV amperes. OE also engages in the distribution and sale of electric energy through its wholly owned subsidiary, Pennsylvania Power Company, to approximately 161,000 customers in western Pennsylvania; however those customers will not be subject to phase-in-recovery charges and that subsidiary will not be involved in any manner in the transactions described in this prospectus and the accompanying prospectus supplement.

TE was organized under the laws of the State of Ohio in 1901 and does business as an electric public utility in that state. TE provides regulated electric distribution services in an area of 2,300 square miles in northwestern Ohio, serving 309,000 customers. The area it serves has a population of approximately 0.7 million. TE also provides generation services to those customers electing to retain them as their power supplier. As of December 31, 2012, TE’s transmission and distribution system consisted of 17,593 pole miles of distribution lines and 81 pole miles of transmission lines; and its substations’ transformer capacity is 3,040,000 kV amperes.

The retail rates, conditions of service, issuance of securities and other matters regarding CEI, OE and TE are subject to regulation by the PUCO in the State of Ohio — the state in which each company operates as an electric distribution utility. In addition, under Ohio law, municipalities may regulate rates of a public utility, subject to appeal to the PUCO if not acceptable to the utility. On the federal level, each of CEI, OE and TE are subject to regulation by the Federal Energy Regulatory Commission.

None of CEI, OE and TE have any experience as sponsors or servicers of phase-in-recovery property. In fact, the financing order was the first granted by the PUCO in the State of Ohio and the Securitization Act, which provides for the creation of phase-in-recovery property, only became effective in early 2012. Nor have any of CEI, OE and TE previously acted as a sponsor or servicer for any other property or pool of assets in any securitization transaction, other than as originators, sponsors and servicers of accounts receivable financings from time to time in the past. However, six other FirstEnergy utility subsidiaries have experience as sponsors and servicers in ten similarly-structured utility securitization transactions in three other states with similar enabling statutes. Moreover, CEI, OE and TE have been billing and collecting charges from electric customers since 1892, 1930 and 1901, respectively.

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Revenues, Customer Base and Energy Consumption

The retail customer bases of CEI, OE and TE consist of four customer classes: residential, commercial, industrial and public street and highway lighting. The customer classes are broad groups that include accounts with a wide range of load characteristics served under a variety of rate designs. Several factors influence the number of retail customers served by CEI, OE and TE and the amount of energy consumed by such customers, including general economic conditions and weather conditions in the respective service territories. General economic conditions affect migration of residential, commercial and industrial customers into and out of the service territories and weather conditions affect the amount of electricity consumed, with higher consumption typically occurring in the winter and summer months when heating or cooling demands are highest.

The following tables show the electricity delivered to retail customers, retail electric revenues and number of retail customers for each of the four revenue reporting customer classes for the periods indicated. There can be no assurances that the retail electricity sales, retail electric revenues and number of retail customers or the composition of any of the foregoing will remain at or near the levels reflected in the following tables.

Electricity Delivered to Retail Customers, Electric Delivery Revenues and Retail Customers

CEI

Retail Electric Usage (As Measured by Billed GWh Sales) by Customer Class and Percentage Composition
Customer Class	Year ended December 31,
	2009				2010				2011				2012
Residential		5,429	30.8	%		5,726	30.3	%		5,710	30.2	%		5,678	30.2	%
Commercial		4,646	26.3	%		4,779	25.3	%		6,774	35.8	%		6,665	35.4	%
Industrial		7,410	42.0	%		8,216	43.5	%		6,284	33.2	%		6,324	33.6	%
Public Street and Highway Lighting		155	0.9	%		149	0.8	%		148	0.8	%		138	0.7	%
Total Retail		17,639	100.0	%		18,870	100.0	%		18,916	100.0	%		18,805	100.0	%

Retail Electric Revenue by Customer Class and Percentage Composition (Dollars in thousands)
Customer Class	Year ended December 31,
	2009				2010				2011				2012
Residential		567,111	34.2	%		466,689	38.6	%		366,117	42.2	%		385,200	46.1	%
Commercial		509,576	30.8	%		343,758	28.4	%		379,719	43.8	%		326,006	39.0	%
Industrial		559,517	33.8	%		377,038	31.2	%		100,704	11.6	%		105,444	12.6	%
Public Street and Highway Lighting		20,390	1.2	%		22,676	1.9	%		20,540	2.4	%		19,531	2.3	%
Total Retail		1,656,595	100.0	%		1,210,161	100.0	%		867,080	100.0	%		836,180	100.0	%

Average Number of Metered Retail Electric Customers and Percentage Composition
Customer Class	Year ended December 31,
	2009				2010				2011				2012
Residential		667,171	88.5	%		666,343	88.6	%		664,170	88.7	%		660,818	88.7	%
Commercial		84,152	11.2	%		83,304	11.1	%		83,728	11.2	%		83,432	11.2	%
Industrial		2,243	0.3	%		2,212	0.3	%		650	0.1	%		657	0.1	%
Public Street and Highway Lighting		299	0.0	%		348	0.0	%		387	0.1	%		421	0.1	%
Total Retail		753,865	100.0	%		752,207	100.0	%		748,935	100.0	%		745,328	100.0	%

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OE

Retail Electric Usage (As Measured by Billed GWh Sales) by Customer Class and Percentage Composition
Customer Class	Year ended December 31,
	2009				2010				2011				2012
Residential		8,974	39.3	%		9,493	39.3	%		9,512	38.6	%		9,400	38.5	%
Commercial		6,835	29.9	%		7,006	29.0	%		6,726	27.3	%		6,691	27.4	%
Industrial		6,900	30.2	%		7,510	31.1	%		8,272	33.5	%		8,208	33.6	%
Public Street and Highway Lighting		148	0.6	%		146	0.6	%		146	0.6	%		142	0.6	%
Total Retail		22,857	100.0	%		24,155	100.0	%		24,656	100.0	%		24,441	100.0	%

Retail Electric Revenue by Customer Class and Percentage Composition (Dollars in thousands)
Customer Class	Year ended December 31,
	2009				2010				2011				2012
Residential		956,441	47.1	%		774,436	56.8	%		653,195	55.5	%		690,782	58.3	%
Commercial		654,638	32.3	%		389,146	28.6	%		323,340	27.5	%		301,274	25.4	%
Industrial		404,866	19.9	%		184,852	13.6	%		186,616	15.9	%		179,053	15.1	%
Public Street and Highway Lighting		13,634	0.7	%		13,836	1.0	%		13,944	1.2	%		13,128	1.1	%
Total Retail		2,029,579	100.0	%		1,362,269	100.0	%		1,177,095	100.0	%		1,184,237	100.0	%

Average Number of Metered Retail Electric Customers and Percentage Composition
Customer Class	Year ended December 31,
	2009				2010				2011				2012
Residential		922,861	88.9	%		922,104	88.9	%		921,314	89.1	%		918,450	89.0	%
Commercial		112,265	10.8	%		111,978	10.8	%		109,747	10.6	%		109,836	10.6	%
Industrial		906	0.1	%		900	0.1	%		1,423	0.1	%		1,415	0.1	%
Public Street and Highway Lighting		1,966	0.2	%		1,999	0.2	%		2,050	0.2	%		2,060	0.2	%
Total Retail		1,037,998	100.0	%		1,036,981	100.0	%		1,034,534	100.0	%		1,031,761	100.0	%

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TE

Retail Electric Usage (As Measured by Billed GWh Sales) by Customer Class and Percentage Composition
Customer Class	Year ended December 31,
	2009				2010				2011				2012
Residential		2,405	25.3	%		2,588	25.0	%		2,596	24.9	%		2,569	24.7	%
Commercial		2,584	27.2	%		2,680	25.9	%		2,039	19.5	%		2,018	19.4	%
Industrial		4,466	47.0	%		5,014	48.5	%		5,750	55.1	%		5,743	55.3	%
Public Street and Highway Lighting		48	0.5	%		51	0.5	%		51	0.5	%		51	0.5	%
Total Retail		9,503	100.0	%		10,334	100.0	%		10,437	100.0	%		10,381	100.0	%
Retail Electric Revenue by Customer Class and Percentage Composition (Dollars in thousands)
Customer Class	Year ended December 31,
	2009				2010				2011				2012
Residential		266,912	34.8	%		208,372	47.6	%		191,981	49.6	%		194,611	49.8	%
Commercial		257,319	33.5	%		139,351	31.9	%		111,540	28.8	%		99,318	25.4	%
Industrial		235,460	30.7	%		81,965	18.7	%		74,933	19.4	%		88,903	22.7	%
Public Street and Highway Lighting		7,616	1.0	%		7,811	1.8	%		8,448	2.2	%		8,082	2.1	%
Total Retail		767,307	100.0	%		437,499	100.0	%		386,902	100.0	%		390,914	100.0	%
Average Number of Metered Retail Electric Customers and Percentage Composition
Customer Class	Year ended December 31,
	2009				2010				2011				2012
Residential		272,839	87.8	%		272,283	87.9	%		272,771	88.3	%		272,006	88.3	%
Commercial		37,042	11.9	%		36,427	11.8	%		34,781	11.3	%		34,641	11.2	%
Industrial		213	0.1	%		210	0.1	%		459	0.1	%		479	0.2	%
Public Street and Highway Lighting		631	0.2	%		980	0.3	%		1,009	0.3	%		1,021	0.3	%
Total Retail		310,725	100.0	%		309,900	100.0	%		309,020	100.0	%		308,147	100.0	%

For each of the Ohio Companies, the decrease in retail electric revenue (which includes generation sales as well as transmission and distribution revenues) since 2009 reflected in the tables above results primarily from a decrease in retail generation sales volume primarily due to increased customer shopping in the Ohio Companies’ service territories. This increased customer shopping, which does not impact earnings for the Ohio Companies, is expected to continue. Total generation provided by alternative suppliers as a percentage of total megawatt-hour deliveries increased to 79% in 2012 from 76% in 2011 for the Ohio Companies.

Forecasting Electricity Consumption

CEI, OE and TE prepare kilowatt-hour and revenue forecasts for annual planning purposes. These forecasts are updated periodically throughout the year, typically on a quarterly basis, based on most current available information and known results to date. The Ohio Companies monitor the accuracy of each forecast by conducting variance analysis on a monthly basis taking into account weather impacts on kilowatt-hour sales and deviations from forecast within the customer count. The most current sales forecast will be used for the semiannual updates to the phase-in-recovery charges. In addition to the internal planning process described above, the Ohio Companies also file a long-term sales forecast with the PUCO on an annual basis. This long-term forecast is typically prepared at the beginning of the year and filed in early spring; it includes a forecast for the current calendar year, as well as ten years into the future.

The Ohio Companies’ forecasting process incorporates analyses for each major customer class (residential, commercial, industrial, and public street and highway lighting) and takes into account local and national

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economic conditions, as well as historical usage patterns and energy efficiency reductions, which information is processed by statistical energy forecasting software developed by a third party vendor. Historic data include economic data supplied by a third party service and weather data. Variables are then modeled and evaluated for a best fit. The model is then tested using ordinary least squares regression and modified, if appropriate based on statistical results, for the best fit. The forecast is adjusted for the energy-efficiency impacts associated with achieving the energy savings benchmarks defined in Ohio Senate Bill 221.

A brief description of the forecasting methodology utilized for the most recent long-term sales forecast filed with the PUCO, by customer class, is provided below:

• Residential—The residential class energy forecast is the product of the forecasted number of customers and average use per customer. Information used for this class’ forecast includes the results of a residential appliance saturation survey conducted in 2010 by FirstEnergy, as well as regional information from the U.S. Energy Information Administration on regional appliance saturation

• Commercial & Industrial—Economic and demographic variables considered in regression models for the commercial and industrial sectors include weather variables, disposable income, non-agricultural employment, and local contribution to gross domestic product. In addition, projections of industrial production and manufacturing employment are considered in the development of the forecast for the industrial sector

• Public Street & Highway Lighting—The forecast was estimated using an analytical approach. The forecast for this class is based on the nominal wattages and the standard burning hours of each installed lighting fixture, along with the recent history of traffic lighting use. The street lighting usage was trended downward assuming that, as mercury vapor lights failed, they would be replaced with sodium vapor lights. A 20-year life for mercury vapor lights and a 45% reduction in energy when replaced by sodium vapor lighting was used to establish this downward trend. Other than for the month-to-month fluctuations, traffic lighting use was kept constant throughout the forecast period

In addition, the most recent long-term sales forecast filed with the PUCO reflects the impact of customer self-generation that occurs “behind-the-meter” using analytical and statistical techniques. In order to estimate the impact of customer self-generation, the previous year’s year-end amount of energy resulting from known installed solar and wind customer-owned generation is determined. This amount is then increased at the same annual percentage rate as the increase in the renewable benchmarks for the State of Ohio from Ohio Senate Bill 221 and reflected in the forecasted projections.

The Ohio constitution permits municipalities to form municipal electric utilities and has permitted municipalities to take such action since 1912, but also provides limits on how much utility service may be provided outside of municipal boundaries. Ohio statutory provisions and Ohio Supreme Court opinions further refine parameters of constitutional authority. For forecasting purposes, the Ohio Companies do not make adjustments associated with municipal electric utilities.

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CEI

Annual Forecast Variance for Ultimate Electric Delivery (GWh)

	Year ended December 31,
	2009		2010		2011		2012
Residential
Forecast		5,600		5,622		5,462		5,532
Actual		5,429		5,726		5,710		5,678
Variance (%)		3.2%		-1.8%		-4.3%		-2.6%
Commercial
Forecast		4,879		4,830		6,870		7,060
Actual		4,646		4,779		6,774		6,665
Variance (%)		5.0%		1.1%		1.4%		5.9%
Industrial
Forecast		7,643		7,901		5,721		6,331
Actual		7,410		8,216		6,284		6,324
Variance (%)		3.1%		-3.8%		-9.0%		0.1%
Public Street and Highway Lighting
Forecast		165		164		163		162
Actual		155		149		148		138
Variance (%)		6.6%		10.1%		9.9%		17.3%
Total
Forecast		18,287		18,517		18,215		19,086
Actual		17,639		18,870		18,916		18,805
Variance (%)		3.7%		-1.9%		-3.7%		1.5%

OE

Annual Forecast Variance for Ultimate Electric Delivery (GWh)

	Year ended December 31,
	2009		2010		2011		2012
Residential
Forecast		9,317		9,359		9,079		9,130
Actual		8,974		9,493		9,512		9,400
Variance (%)		3.8%		-1.4%		-4.6%		-2.9%
Commercial
Forecast		7,085		7,116		6,852		6,715
Actual		6,835		7,006		6,726		6,691
Variance (%)		3.7%		1.6%		1.9%		0.4%
Industrial
Forecast		7,499		9,147		7,853		8,269
Actual		6,900		7,510		8,272		8,208
Variance (%)		8.7%		21.8%		-5.1%		0.7%
Public Street and Highway Lighting
Forecast		141		141		141		139
Actual		148		146		146		142
Variance (%)		-4.6%		-3.7%		-3.7%		-1.9%
Total
Forecast		24,042		25,763		23,925		24,253
Actual		22,857		24,155		24,656		24,441
Variance (%)		5.2%		6.7%		-3.0%		-0.8%

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TE

Annual Forecast Variance for Ultimate Electric Delivery (GWh)

	Year ended December 31,
	2009		2010		2011		2012
Residential
Forecast		2,515		2,529		2,449		2,505
Actual		2,405		2,588		2,596		2,569
Variance (%)		4.6%		-2.3%		-5.7%		-2.5%
Commercial
Forecast		2,808		2,745		2,169		2,150
Actual		2,584		2,680		2,039		2,018
Variance (%)		8.7%		2.4%		6.3%		6.6%
Industrial
Forecast		4,393		4,839		5,455		6,164
Actual		4,466		5,014		5,750		5,743
Variance (%)		-1.6%		-3.5%		-5.1%		7.3%
Public Street and Highway Lighting
Forecast		57		55		55		54
Actual		48		51		51		51
Variance (%)		17.3%		7.7%		6.7%		4.7%
Total
Forecast		9,773		10,167		10,127		10,873
Actual		9,503		10,334		10,437		10,381
Variance (%)		2.8%		-1.6%		-3.0%		4.7%

Billing and Collections

Each servicer will bill its retail electric customers for charges arising from the phase-in-recovery property attributable to that customer and will be obligated to remit daily to its respective bond trustee an amount equal to the actual phase-in-recovery charges billed, less an allowance for estimated phase-in-recovery charge charge-offs, within two business days after the day payments arising from the phase-in-recovery charges are deemed to be collected as described under “Servicing—Remittances to Collection Account.” A servicer’s duties will include responding to inquiries from customers and the PUCO regarding the phase-in-recovery property and the phase-in-recovery charges, calculating electricity usage, accounting for collections, furnishing periodic reports and statements to its bond issuer, the bond trustee and the certificate trustee and periodically adjusting the phase-in-recovery charges. See “Servicing Agreements” in this prospectus.

The Ohio Companies, as servicers, are permitted to commingle the phase-in-recovery charges with other revenues they collect prior to remitting such charges to the bond trustee pursuant to the servicing agreements, the financing order and the Securitization Act. All collections and other funds for each of the Ohio Companies are currently remitted to a centralized bank account held under the name of an affiliate, FirstEnergy Service Company (FESC), as administrator of the FirstEnergy regulated utility money pool. As such, those collections and other funds for each of the Ohio Companies that come into the money pool administered by FESC are commingled with the collections and other funds of the other FirstEnergy regulated utility affiliates participating in the money pool. As needed, funds from the money pool are remitted on behalf of the applicable money pool participant by FESC, pursuant to its obligations to provide administrative, management and other services (including treasury services) to the Ohio Companies and other FirstEnergy regulated utility affiliates under that certain Service Agreement dated as of February 25, 2011. In the case of collections of phase-in-recovery charges that are initially commingled within the money pool, FESC will remit such funds to the applicable bond trustee on behalf of the applicable Ohio Company servicer for deposit in the applicable collection account within the time frames contemplated by the applicable basic documents.

Credit Policy

The credit and collections policies of CEI, OE and TE are regulated by the PUCO. Under PUCO regulations, the Ohio Companies are obligated to provide service to all customers within their respective service territory.

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On application for service, the identification and credit standing of all customers is verified through the use of a major credit-reporting bureau. In instances where customers do not meet minimum credit standards, credit must be established. This can be done through providing a security deposit (130% of the average monthly bill), third party guarantor (residential only), furnishing a surety bond and/or a bank letter of credit. The PUCO does not permit the Ohio Companies to obtain security deposits from their residential customers that are enrolled in a low income payment plan.

According to PUCO regulations, each Ohio Company may refuse to provide service, at any location, to an applicant who is indebted to it for any service previously furnished to the applicant. Each Ohio Company will commence service, however, if a reasonable payment plan for the indebtedness is first made between a residential applicant and the Ohio Company, and it may likewise commence service for an industrial or commercial applicant.

Billing

Each of CEI, OE and TE bill their respective customers about once every 30.9 days, with approximately an equal number of bills being distributed each business day. For the year ending December 31, 2012, CEI produced an average of 35,475 bills, OE produced an average of 49,137 bills, and TE produced an average of 14,661 bills, on each business day to customers in their various customer categories.

Budget billing is limited to residential customers. Approximately 90,407 residential customers, who constitute approximately 13.69% of CEI’s residential customer base, approximately 127,848 residential customers, who constitute approximately 13.92% of OE’s residential customer base and approximately 32,085 residential customers, who constitute approximately 11.8% of TE’s residential customer base, choose to be billed using the Ohio Companies’ budget billing program. For these customers, the Ohio Companies determine and bill a monthly budget amount based on the last 12 months of billing history for each account. The budget amount is recalculated each March and September, if necessary. Overpayments or underpayments for actual usage during the prior year are reconciled on each customer’s August bill.

For accounts with potential billing errors exception reports are generated for manual review. This review examines accounts that have abnormally high or low bills, potential meter-reading errors and possible meter malfunctions.

Collection Process

CEI, OE and TE receive a large percentage of their payments via the U.S. mail; however, other payment options are also available. These options include electronic payments, credit card, check free, pay by phone and automatic check withdraw and electronic fund transfers, as well as direct payment at the Ohio Companies’ payment agency network.

The Ohio Companies consider residential and nonresidential customer bills to be delinquent if they are unpaid 30 days after the billing date. In general, the Ohio Companies’ collection process begins when balances are unpaid for 30 days or more from the billing date. At that time, the Ohio Companies begin collection activities ranging from delinquency notice mailings, to telephone calls, to personal collection and ending with electricity shut-off. The Ohio Companies outsource a portion of their residential and commercial collection activity to two unaffiliated vendors, which handle incoming collection calls. In addition, one of these vendors provides outbound collection calls for the Ohio Companies. The Ohio Companies also sell bad debt and use collection agencies and legal collection experts as needed throughout the collection process.

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Loss Experience

The following tables set forth information relating to the annual net charge-offs for CEI, OE and TE.

CEI

Net Charge-Offs as a Percentage of Billed Transmission & Distribution Revenues

	As of 12/31/09		As of 12/31/10		As of 12/31/11		As of 12/31/12
Billed Electric Revenues ($000)		1,656,594		1,210,160		867,080		836,180
Net Charge-Offs ($000)		9,557		13,133		6,923		8,266
Percentage of Billed Revenue		0.58%		1.09%		0.80%		0.99%

OE

Net Charge-Offs as a Percentage of Billed Transmission & Distribution Revenues

	As of 12/31/09		As of 12/31/10		As of 12/31/11		As of 12/31/12
Billed Electric Revenues ($000)		2,029,578		1,362,268		1,177,095		1,184,237
Net Charge-Offs ($000)		14,365		8,234		6,558		9,691
Percentage of Billed Revenue		0.71%		0.60%		0.56%		0.82%

TE

Net Charge-Offs as a Percentage of Billed Transmission & Distribution Revenues

	As of 12/31/09		As of 12/31/10		As of 12/31/11		As of 12/31/12
Billed Electric Revenues ($000)		767,307		437,498		386,901		390,914
Net Charge-Offs ($000)		7,867		4,243		3,333		4,177
Percentage of Billed Revenue		1.03%		0.97%		0.86%		1.07%

Days Sales Outstanding

The following tables set forth information relating to the average number of days that retail customer bills from CEI, OE and TE remained outstanding during the calendar year (or other period referred to below) ending on each of the dates referred to below.

CEI

Average Days Sales Outstanding

	As of 12/31/09		As of 12/31/10		As of 12/31/11		As of 12/31/12
Average Days Sales Outstanding		22		22		20		24

OE

Average Days Sales Outstanding

	As of 12/31/09		As of 12/31/10		As of 12/31/11		As of 12/31/12
Average Days Sales Outstanding		21		20		18		21

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TE

Average Days Sales Outstanding

	As of 12/31/09		As of 12/31/10		As of 12/31/11		As of 12/31/12
Average Days Sales Outstanding		23		24		21		24

Delinquencies

The following tables set forth information relating to the delinquency experience of CEI, OE and TE as of each of the dates shown below.

CEI

Delinquencies as a Percentage of Total Billed Revenues

	As of 12/31/09			As of 12/31/10			As of 12/31/11			As of 12/31/12
30-59 days		0.34	%		0.39	%		0.41	%		0.44	%
60-89 days		0.16	%		0.19	%		0.24	%		0.30	%
90+ days		0.59	%		0.75	%		0.89	%		1.14	%
Total		1.09	%		1.34	%		1.54	%		1.89	%
OE Delinquencies as a Percentage of Total Billed Revenues
	As of 12/31/09			As of 12/31/10			As of 12/31/11			As of 12/31/12
30-59 days		0.29	%		0.33	%		0.39	%		0.49	%
60-89 days		0.13	%		0.19	%		0.22	%		0.27	%
90+ days		0.44	%		0.58	%		0.56	%		0.73	%
Total		0.87	%		1.10	%		1.17	%		1.50	%
TE Delinquencies as a Percentage of Total Billed Revenues
	As of 12/31/09			As of 12/31/10			As of 12/31/11			As of 12/31/12
30-59 days		0.27	%		0.37	%		0.46	%		0.47	%
60-89 days		0.18	%		0.24	%		0.26	%		0.31	%
90+ days		0.78	%		1.01	%		1.02	%		1.11	%
Total		1.24	%		1.62	%		1.74	%		1.89	%

Where to Find Information about CEI, OE and TE

Although CEI, OE and TE are not currently required to file periodic reports with the SEC, FirstEnergy, the parent company of CEI, OE and TE, does file periodic reports with the SEC as required by the Exchange Act. The periodic reports of FirstEnergy filed with the SEC can be inspected at the SEC’s website at www.sec.gov and are available through FirstEnergy’s website at www.firstenergycorp.com; however, those reports are not intended to be incorporated by reference in this prospectus or the accompanying prospectus supplement. Except as provided in the accompanying prospectus supplement, no other information contained on the SEC’s website or FirstEnergy’s website constitutes a part of this prospectus or the accompanying prospectus supplement related to the bonds or the certificates.

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AFFILIATIONS AND TRANSACTIONS AMONG THE TRANSACTION PARTIES

CEI, OE and TE, which we refer to as the Ohio Companies, are all wholly-owned, electric distribution utility subsidiaries of FirstEnergy. CEI Funding’s sole member is CEI, OE Funding’s sole member is OE, and TE Funding’s sole member is TE. The issuing entity is a Delaware statutory trust and was formed by the bond issuers—CEI Funding, OE Funding and TE Funding. CEI, OE and TE will be the sellers and initial servicers of the phase-in-recovery properties securing the bonds, and will be the sponsors and depositors of the securitization in which the bonds and certificates covered by this prospectus are issued. CEI, OE and TE will also serve as the administrative trustees of the issuing entity under the declaration of trust.

U.S. Bank Trust will serve as the trustee to the issuing entity and is referred to as the Delaware trustee. U.S. Bank Trust is a wholly-owned subsidiary of U.S. Bank. U.S. Bank will serve as trustee under the certificate indenture and each bond indenture and is referred to in its separate capacities as the certificate trustee and the bond trustee.

None of the bond issuers, the Ohio Companies, or the issuing entity is an affiliate of the Delaware trustee, certificate trustee or the bond trustee. The bond issuers, the issuing entity, the Delaware trustee and the certificate trustee will enter into a fee and indemnity agreement under which the bond issuers, subject to the cap, will each pay an allocable portion of the Delaware trustee’s and the certificate trustee’s reasonable compensation and reasonable fees and expenses. See “The Issuing Entity” in this prospectus.

The bond issuers, the Ohio Companies, the issuing entity and their respective affiliates may from time to time enter into normal banking and trustee relationships with U.S. Bank Trust and U.S. Bank and their respective affiliates. No relationships currently exist or existed during the past two years between the bond issuers, the Ohio Companies, the issuing entity and their respective affiliates, on the one hand, and U.S. Bank Trust and U.S. Bank and their respective affiliates, on the other hand, that would be outside the ordinary course of business or on terms other than would be obtained in an arm’s length transaction with an unrelated third party.

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SERVICING AGREEMENTS

The following summary describes the material terms and provisions of each servicing agreement pursuant to which each servicer is undertaking to service the phase-in-recovery property of a bond issuer. We have filed the form of the servicing agreement as an exhibit to the registration statement of which this prospectus forms a part. This summary does not purport to be complete and is subject and qualified by reference to the provisions of the servicing agreements.

Servicing Procedures

A servicer, on behalf of a bond issuer, will manage, service and administer, and bill and collect payments arising from, the phase-in-recovery property according to the terms of the servicing agreement between the servicer and bond issuer. A servicer’s duties will include responding to inquiries of customers, the PUCO and competitive retail suppliers (if any) and any federal, local or other state governmental authorities regarding the phase-in-recovery property and the phase-in-recovery charges, calculating electricity usage, accounting for collections, furnishing periodic reports and statements to its bond issuer, the rating agencies, the PUCO, the bond trustee and the certificate trustee, making all filings with the PUCO and taking all other actions necessary to perfect the bond issuer’s ownership interest in and the bond trustee’s first priority security interest in the phase-in-recovery property, and periodically adjusting the phase-in-recovery charges.

In addition, the servicers will take legal or administrative actions, including defending against or instituting and pursuing legal actions and appearing or testifying in hearings or similar proceedings, as may be reasonably necessary to block or overturn any attempts to cause a repeal of, modification of or supplement to the Securitization Act or the financing order or the rights of holders of phase-in-recovery property by legislative enactment, initiative petition or constitutional amendment that would be adverse to bondholders and, thus, certificateholders. The cost of any action will be payable from payments arising from the phase-in-recovery charges as an expense of the bond issuers.

The servicers will also prepare any reports required to be filed by us with the SEC and will cause to be delivered required opinions of counsel to the effect that all filings with the PUCO necessary to preserve and protect the interests of the trustee in the phase-in-recovery property of the respective bond issuers have been made.

Servicing Standards and Covenants

The servicing agreements will require the servicers, in servicing and administering the phase-in-recovery properties, to employ or cause to be employed procedures and exercise or cause to be exercised the same care they customarily employ and exercise in servicing and administering bill collections for their own accounts and, if applicable, for others.

Consistent with the foregoing, a servicer may in its own discretion waive any late payment charge or any other fee or charge relating to delinquent payments, if any, and may waive, vary or modify any terms of payment of any amounts payable by a customer, in each case, if the waiver or action:

• would comply with the servicer’s policies and practices for comparable assets that it services for itself and for others; and

• would comply in all material respects with applicable law.

In addition, a servicer may write off any amounts that it deems uncollectible according to its customary practices.

In the servicing agreement, a servicer will covenant that, in servicing the phase-in-recovery property, it will:

• manage, service, administer and make collections of payments arising from the phase-in-recovery property with reasonable care and in compliance with applicable law, including all applicable

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regulations and guidelines of the PUCO, using the same degree of care and diligence that the servicer exercises for bill collections for its own account and, if applicable, for others;

• follow customary standards, policies and procedures for the industry in performing its duties as servicer;

• use all reasonable efforts, consistent with its customary servicing procedures, to bill and collect the phase-in-recovery charges;

• comply in all material respects with laws applicable to and binding on it relating to the phase-in-recovery property;

• submit semiannually a request to the PUCO seeking a true-up adjustment, if any, of the phase-in-recovery charges; and

• make all filings to maintain the first priority security interest of the bond trustee in the phase-in-recovery property.

True-Up Adjustment Process

Among other things, the financing order and the servicing agreements both require the servicer to file adjustment requests within 12 months after the issuance of the bonds and then semiannually (and as frequently as monthly during the period commencing with the start of the last year that the last maturing tranche of the bonds is expected to be outstanding and ending with the final maturity date) to ensure the expected recovery of amounts sufficient to provide timely payment of principal of and interest on the bonds, together with other approved financing costs.

As part of each true-up adjustment, the servicer will calculate the phase-in-recovery charges which must be billed in order to generate the revenues for the ensuing six-month period necessary to result in:

• all accrued and unpaid interest on the bonds being paid in full,

• the outstanding principal balance of the bonds equaling the amount provided in the expected amortization schedule,

• the amount on deposit in the capital subaccount equaling the required capital level, and

• all other fees, expenses and indemnities of the issuing entity (subject to the cap to the extent applicable) being paid.

In calculating the necessary true-up adjustment, the servicer will use its most recent forecast of electric consumption and its most current estimates of ongoing transaction-related expenses. The true-up adjustment will reflect any defaults or charge-offs and the allowances for charge-offs and payment lags between the billing and collection of phase-in-recovery charges based upon the servicer’s most recent experience regarding collection of phase-in-recovery charges. The true-up adjustment will also take into account any amounts due as a result of the reconciliation of the remittances and collections, and any undercollections due to any reason.

While there is no “cap” on the total amount of phase-in-recovery charges that may be imposed on retail electric customers to pay on a timely basis scheduled principal and interest on the bonds and replenish the capital subaccount, there is a “cap” on certain approved financing costs that may be recovered through phase-in-recovery charges. See “Description of the Bonds—Allocations and Payments.”

In the event any correction to a true-up adjustment due to mathematical errors in the calculation of the adjustment or otherwise is necessary, the corrections will be made in a future true-up adjustment. Unless otherwise ordered by the PUCO, true-up adjustments will become effective on a service rendered basis within 60 days after the filing of the adjustment request.

In calculating any true-up adjustment, each servicer will allocate payment responsibility among customer classes in accordance with the requirements of the financing order.

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In the case any true-up adjustment goes into effect after the last scheduled payment date, the calculation period shall begin on the date the true-up adjustment goes into effect and end on the payment date next following such true-up adjustment date.

Remittances to Collection Account

The servicers will remit to the respective bond trustees on each business day (commencing 45 days after the date of the servicing agreements) an amount equal to the actual phase-in-recovery charges billed, less an allowance for estimated phase-in-recovery charge charge-offs, within two business days after the day payments arising from the phase-in-recovery charges are deemed to be collected. The deemed collection date for payments arising from the phase-in-recovery charge payments will be the weighted average number of days, based on CEI’s, OE’s or TE’s historical collections experience, as the case may be, that a monthly bill for services remains outstanding before payment.

Within 12 months after the issuance of the bonds and then semiannually (or as frequently as monthly during the period commencing with the start of the last year that the last maturing tranche of the bonds is expected to be outstanding and ending with the final maturity date), each servicer will reconcile remittances of estimated payments arising from phase-in-recovery charges with the bond trustee to more accurately reflect the amount of billed phase-in-recovery charges that should have been remitted, based on the actual system-wide charge-off percentage, as reduced for estimates of partially paid bills (which are deemed to have paid the phase-in-recovery charges in full). To the extent the remittances of estimated payments arising from the phase-in-recovery charges for a bond issuer exceeds the actual payments arising from the phase-in-recovery charges collected by the related servicer, the servicer will be entitled to reduce the amount of remittances to be made to the related bond trustee, in an amount equal to such excess amount. To the extent the remittances of estimated payments arising from the phase-in-recovery charges are less than the actual payments arising from the phase-in-recovery charges collected, the servicer will remit the amount of the shortfall to the bond trustee on the next remittance date following the determination. Although the servicer will remit estimated payments arising from the phase-in-recovery charges to the bond trustee, the servicer is not obligated to make any payments on the bonds or the certificates.

Servicing Compensation

Each servicer will be entitled to receive an annual servicing fee in an amount equal to 0.10% of the initial principal balance of the bonds of its bond issuer. If any of the servicers are replaced by a non-utility successor servicer, such non-utility successor servicer may be paid a servicing fee of up to 0.75% per year of the initial principal balance of the bonds.

The bond trustees will pay the servicing fees semiannually (together with any portion of the servicing fees that remains unpaid from prior payment dates) to the extent of available funds and subject to the cap prior to the distribution of any interest on and principal of its bonds. See “Description of the Bonds—Allocations and Payments.”

Third Party Billers

Currently, Ohio law and the Securitization Act do not authorize third parties to bill, collect and remit the phase-in-recovery charges, but is not restricted from doing so in the future. When a third party bills, collects and remits billed amounts arising from the phase-in-recovery charges, there is a greater risk that a servicer will receive payments arising from the phase-in-recovery charges later than it otherwise would. The greater the delay in receipt of payment, the larger the amount of payments that bear the risk of non-payment due to default, bankruptcy or insolvency of the third party holding the funds. Third party billing also places increased information requirements on a servicer. The servicers will have the responsibility of accounting for payments arising from the phase-in-recovery charges due to bondholders and, thus, certificateholders, regardless of which entity provides or bills for a customer’s electric power.

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In order to mitigate the risks associated with a third party biller, the financing order provides that if the PUCO subsequently allows third parties to bill and/or collect any phase-in-recovery charges, the PUCO will take steps to ensure the nonbypassability of such phase-in-recovery charges and minimize the likelihood of default by third party billers, such steps to generally include:

• establishing operational standards and minimum credit requirements for any such third party billing servicer, or requiring a cash deposit, letter of credit or other credit mitigant in lieu thereof;

• a finding that, regardless of who is responsible for billing, the customers of that electric distribution utility shall continue to be responsible for phase-in-recovery charges;

• if a third party meters and bills for the phase-in-recovery charges, a finding that the electric distribution utility (as servicer) will have access to information on billing and usage by customers to provide for proper reporting to the bond issuer and to perform its obligations as servicer;

• a finding that, in the case of a third party default, billing responsibilities will be promptly transferred to another party to minimize potential losses; and

• allowing service termination by the electric distribution utility on behalf of its respective bond issuer of any customers failing to pay phase-in-recovery charges in accordance with PUCO-approved service termination rules and orders.

None of CEI, OE or TE nor a successor servicer will pay any shortfalls resulting from the failure of any third party biller to remit payments arising from the phase-in-recovery charges to a servicer. The true-up adjustment mechanism for the phase-in-recovery charges, as well as the amounts deposited in the capital subaccount, are intended to mitigate the risk of shortfalls. Any shortfalls that occur will delay the payment of interest on and principal of the bonds of the affected bond issuer, and, therefore, distributions on the certificates. The financing order further provides that the PUCO will not permit the implementation of any third party billing that would result in a downgrade of the bonds of any bond issuer.

Servicer Representations and Warranties; Indemnification

In the servicing agreements, each of the servicers will represent and warrant to their respective bond issuer, as of the closing of the issuance of the certificates, among other things, that:

• the servicer is a corporation duly organized and in good standing under the laws of the State of Ohio, with the requisite corporate power and authority to own its properties as owned by it on the bond issuance date and to conduct its business as its business is conducted by it on the bond issuance date and to execute, deliver and carry out the terms of the servicing agreement;

• the execution, delivery and carrying out of the terms of the servicing agreement have been duly authorized by all necessary corporate action on the part of the servicer;

• the servicing agreement constitutes a legal, valid and binding obligation of the servicer, enforceable against it in accordance with its terms, subject to insolvency, reorganization, moratorium, fraudulent transfer and other laws relating to or affecting creditors’ rights generally from time to time in effect and to general principles of equity, regardless of whether considered in a proceeding in equity or at law;

• the consummation of the transactions contemplated by the servicing agreement does not conflict with the servicer’s articles of incorporation or code of regulations or any material agreement or instrument to which the servicer is a party or bound, result in the creation or imposition of any lien on the servicer’s properties pursuant to a material agreement or instrument or violate any existing law or any existing order, rule or regulation applicable to the servicer or any federal or state court or regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the servicer or its properties;

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• no governmental approvals, authorizations or filings are required for the servicer to execute, deliver and perform its obligations under the servicing agreement except those which have previously been obtained or made or which are required to be obtained or made in the future pursuant to the servicing agreement; and

• except those that have been obtained or made and that the servicer is required to make in the future pursuant to the servicing agreement, no court or administrative proceeding is pending and, to the servicer’s knowledge, no court or administrative proceeding is threatened and no investigation is pending or, to the servicer’s knowledge, threatened, asserting the invalidity of, or seeking to prevent the consummation of the transactions contemplated by, the servicing agreement or seeking a determination that might materially adversely affect the performance by the servicer of its obligations under, or the validity or enforceability of, the servicing agreement.

In the event of willful misconduct or negligence by a servicer under its servicing agreement or in the event of a servicer’s breach in any material respect of any of the representations and warranties in the preceding paragraph, the servicer will indemnify, defend and hold harmless the applicable bond issuer and bondholders, against any costs, expenses, losses, claims, damages and liabilities incurred as a result of these events; provided, however, that such bondholders may only enforce their rights against the servicer through an action brought by the bond trustee; and, provided, further, that the servicer shall not be liable for any costs, expenses, losses, claims, damages or liabilities resulting from the willful misconduct or gross negligence of the indemnified persons; and, provided, further, that the servicer shall not be liable for any costs, expenses, losses, claims, damages or liabilities, regardless of when incurred, after the bonds and all other approved financing costs have been discharged in full, except as provided in the following paragraph.

In the event of willful misconduct or negligence by a servicer under its servicing agreement or in the event of a servicer’s breach in any material respect of any of the representations and warranties above, the servicer will indemnify, defend and hold harmless the related bond trustee (for itself), the certificate trustee (for itself), the Delaware trustee and the issuing entity and any of their respective affiliates, officials, officers, directors, employees and agents against any costs, expenses, losses, claims, damages and liabilities incurred as a result of these events; provided, however, that the servicer shall not be liable for any costs, expenses, losses, claims, damages or liabilities resulting from the willful misconduct or negligence of the indemnified person or resulting from a breach of a representation or warranty made by an indemnified person in the basic document that gives rise to the servicer’s breach.

Each initial servicer will indemnify the related bond trustee and, as to the applicable bond issuer’s allocable portion only, the Delaware trustee and certificate trustee for all due and unpaid compensation, expenses and indemnity amounts that exceed the cap.

No servicer is responsible for any ruling, decision, action or determination made or not made, or any delay of the PUCO (except any delay caused by the servicer’s failure to file required applications in a timely and correct manner or other material breach of its duties under the servicing agreement that materially adversely affects the true-up adjustments) in any way related to the phase-in-recovery property, the phase-in-recovery charges or any true-up adjustment. No servicer is liable for the calculation of the phase-in-recovery charges and adjustments, including any inaccuracy in the assumptions made in the calculation, so long as the servicer has not acted in a negligent manner or for any person, including the bondholders or certificateholders, not receiving any payment, amount or return anticipated or expected or in respect of any bond or certificate generally.

Statements by Servicers

On or before January 1 and July 1 of each year, each servicer will prepare and furnish semiannually to the respective bond trustee, the certificate trustee and the respective bond issuer a statement for the applicable six month reconciliation period setting forth either the amount of any excess payments arising from the phase-in-recovery charges remitted by the servicer to the bond trustee or the amount of any shortfall in remittances.

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In addition, each servicer will prepare, and the applicable bond trustee will furnish to the bondholders on each payment date the semiannual servicer’s certificate described under “Description of the Bonds—Reports to Bondholders.” Each servicer will also prepare and the certificate trustee will furnish to the certificateholders on each distribution date the reports described under “Description of the Certificates—Reports to Certificateholders.”

Evidence as to Compliance

Each servicing agreement will provide that the respective servicer will furnish annually to the applicable bond issuer and bond trustee, the certificate trustee, the rating agencies and the PUCO on or before March 31 of each year, beginning March 31, 2014 or, if earlier, on the date on which the annual report relating to the certificates is required to be filed with the SEC, a report on its assessment of compliance with specified servicing criteria as required by Item 1122(a) of Regulation AB, during the preceding 12 months ended December 31(or preceding period since the issuance date of the bonds in the case of the first statement), together with a certificate by an officer of the servicer certifying the statements set forth therein.

Each of the servicing agreements will provide that a firm of independent certified public accountants, at the applicable bond issuer’s expense, will furnish annually to the applicable bond issuer and bond trustee, the certificate trustee, the rating agencies and the PUCO on or before March 31 of each year, beginning March 31, 2014, or, if earlier, on the date on which the annual report relating to the certificates is required to be filed with the SEC, an annual accountant’s report, which will include any required attestation report that attests to and reports on the servicer’s assessment report described in the immediately preceding paragraph, to the effect that the accounting firm has performed agreed upon procedures in connection with the servicer’s compliance with its obligations under the servicing agreement during the preceding 12 months, identifying the results of the procedures and including any exceptions noted. The report will also indicate that the accounting firm providing the report is independent of the servicer within the meaning of the rules of The Public Company Accounting Oversight Board.

Copies of the above reports will be filed with the SEC. You may also obtain copies of the above statements and certificates by sending a written request addressed to the certificate trustee.

Each servicer will also be required to deliver to the applicable bond issuer and bond trustee, the certificate trustee and the rating agencies monthly reports setting forth certain information relating to collections of phase-in-recovery charges received during the preceding calendar month and, shortly before each payment date, a report setting forth the amount of principal and interest payable to bondholders on such date, the difference between the principal outstanding on the bonds and the amounts specified in the related expected amortization schedule after giving effect to any such payments, and the amounts on deposit in the capital subaccount and excess funds subaccount after giving effect to all transfers and payments to be made on such payment date. Each servicer is required to file copies of these reports with the SEC.

In addition, each servicer is required to send copies of each filing or notice evidencing a true-up adjustment to the applicable bond issuer and bond trustee, the certificate trustee and the rating agencies. Each servicer is also required to prepare and deliver certain notices to customers if, and as, required by applicable PUCO regulations.

Matters Regarding the Servicers

The servicing agreements will provide that the servicer may not resign from its obligations and duties as servicer thereunder, except when such servicer delivers to the bond trustee and PUCO an opinion of independent legal counsel that performance of its duties is no longer permissible under applicable law.

No resignation by CEI, OE or TE as servicer will become effective until a successor servicer has assumed its servicing obligations and duties under the applicable servicing agreement.

Each of the servicing agreements will further provide that neither the servicer nor any of its directors, officers, employees, and agents will be liable to the applicable bond issuer or bond trustee, the issuing entity, the

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applicable bondholders, the certificate trustee, the Delaware trustee, the certificateholders or any other person or entity, except as provided under the servicing agreement, for taking any action or for refraining from taking any action under the servicing agreement or for errors in judgment; provided, however, that neither the servicer nor any director, officer, employee or agent of the servicer will be protected against any liability that would otherwise be imposed by reason of willful misconduct or negligence in the performance of duties under the servicing agreement. The servicer and any officer, director, employee or agent of the servicer may rely in good faith on the advice of counsel reasonably acceptable to the bond trustee or on any document submitted in respect of matters arising under the servicing agreement. In addition, the servicing agreement will provide that the servicer is under no obligation to appear in, prosecute, or defend any legal action, except as provided in the servicing agreement at the bond issuer’s expense.

Subject to the satisfaction of the conditions specified in the servicing agreements, any entity into which a servicer may be merged or consolidated, or any entity resulting from any merger or consolidation to which a servicer is a party, or any entity succeeding to the properties and assets of the servicer substantially as a whole, which entity in any of the foregoing cases assumes the obligations of the servicer under the servicing agreement, will be the successor of the servicer under the servicing agreement.

Servicer Defaults

Servicer defaults under a servicing agreement will include:

• any failure by the servicer to remit payments arising from the phase-in-recovery charges into the collection account as required under the servicing agreement, which failure continues unremedied for five business days after written notice of such failure from the bond issuer or the bond trustee is received by the servicer;

• any failure by the servicer duly to observe or perform in any material respect any other covenant or agreement of the servicer in the servicing agreement, which failure materially adversely affects the rights of bondholders and which continues unremedied for 60 days after the giving of written notice of such failure and requiring the same to be remedied (i) to the servicer by the bond issuer or (ii) to the servicer by the bond trustee by holders of bonds evidencing not less than 25% in principal amount of the outstanding bonds;

• any representation or warranty made by the servicer in the servicing agreement proves to have been incorrect in any material respect when made, which has a material adverse effect on the bondholders and which material adverse effect continues unremedied for a period of 60 days after written notice of such failure is received by the servicer from the bond issuer or the bond trustee; and

• events of bankruptcy, insolvency, receivership or liquidation with respect to the servicer.

Rights When a Servicer Defaults

In the event of a servicer default that remains unremedied, either the applicable bond trustee or holders of bonds of the applicable bond issuer evidencing not less than 25% in principal amount of then outstanding bonds by written notice to the servicer may terminate all the rights and obligations of the servicer (other than the servicer’s indemnity obligation and obligation to continue performing its duties as servicer until a successor servicer is appointed) under the servicing agreement, whereupon a successor servicer appointed by the bond issuer, with the prior written consent of the bond trustee and the approval of the PUCO, will succeed to all the responsibilities, duties and liabilities of the servicer under the servicing agreement. Regarding actions by bondholders, see “Description of the Bonds—Actions by Bondholders,” which discusses certain rights of the certificate trustee on behalf of the issuing entity as the sole bondholder. In addition, when a servicer defaults, each of the following shall be entitled to apply to the PUCO for sequestration and payment of revenues arising from the phase-in-recovery property:

• the bondholders (subject to the provisions of the bond indentures) and the bond trustees as beneficiary of any statutory lien permitted by the Securitization Act;

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• the bond issuer or its assignees; or

• financing parties or other assignees under the Securitization Act.

If, however, a bankruptcy trustee or similar official has been appointed for a servicer, and no servicer default other than an appointment of a bankruptcy trustee or similar official has occurred, that trustee or official may have the power to prevent the bond trustee or the bondholders from effecting a transfer of servicing. The bond trustee may appoint, or petition a court of competent jurisdiction for the appointment of, a successor servicer which satisfies criteria specified by the nationally recognized statistical rating organizations rating the certificates. The bond trustee may make arrangements for compensation to be paid to the successor servicer.

If within 30 days after delivery of a termination notice the bond issuer has not obtained a successor servicer, the bond trustee may petition the PUCO or a court of competent jurisdiction to appoint a successor servicer under the servicing agreement. To qualify as a successor servicer, a person must be permitted under the PUCO regulations to perform the duties of the servicer, the rating agency condition must be satisfied and such person must enter into a servicing agreement with substantially the same provisions with bond issuer.

Waiver of Past Defaults

Holders of bonds of a bond issuer evidencing at least a majority in principal amount of the then outstanding bonds of that bond issuer, on behalf of all such bondholders, may waive in writing any default by the servicer for that bond issuer in the performance of its obligations under the servicing agreement (applicable to such bonds) and its consequences, except a default in making any required remittances to the collection account under the servicing agreement. Regarding actions by bondholders, see “Description of the Bonds—Actions by Bondholders,” which discusses certain rights of the certificate trustee on behalf of the issuing entity as the sole bondholder. The servicing agreements provide that no waiver will impair the bondholders’ rights relating to subsequent defaults.

Successor Servicer

If for any reason a third party assumes the role of a servicer under a servicing agreement, the servicing agreement will require the servicer to cooperate with the bond issuer, the bond trustee and the successor servicer in terminating the servicer’s rights and responsibilities under the servicing agreement, including the transfer to the successor servicer of all cash amounts then held by the servicer for remittance or subsequently acquired. The servicing agreement will provide that the servicer shall be liable for its reasonable costs and expenses incurred in transferring servicing responsibilities to the successor servicer. The servicing agreement also will provide that any successor servicer, upon appointment and acceptance as servicer, shall be deemed appointed an administrative trustee of the issuing entity under the declaration of trust.

Amendment

A servicing agreement may be amended by the parties thereto, without the consent of the holders of the bonds of the bond issuer that is a party to that servicing agreement, but with the consent of the applicable bond trustee (not to be unreasonably withheld) and 10 servicer business days prior written notice to the rating agencies and PUCO, to cure any ambiguity, correct or supplement any provisions or for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the servicing agreement or of modifying in any manner the rights of such bondholders, provided that the action will not, as certified in a certificate of an officer of such servicer delivered to the bond trustee and the bond issuer, adversely affect in any material respect the interests of any bondholder. A servicing agreement may also be amended by the servicer and the bond issuer party thereto with the consent of the applicable bond trustee and 10 business days prior written notice to the rating agencies and PUCO and, subject to the prior sentence, the holders of bonds evidencing at least a majority in principal amount of the then outstanding bonds of that bond issuer for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the servicing agreement or of modifying in any manner the rights of such bondholders; provided that an amendment of the provisions of the servicing agreement relating to the servicer’s remittance and phase-in-recovery charge adjustment obligations will satisfy the rating agency condition. Regarding actions by bondholders, see “Description of the Bonds—Actions by Bondholders,” which discusses certain rights of the certificate trustee on behalf of the issuing entity as the sole bondholder.

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DESCRIPTION OF THE BONDS

Each of the bond issuers will issue its respective bonds to the issuing entity under the terms of a bond indenture between a bond issuer and U.S. Bank National Association, a national banking association, acting as the bond trustee and as the securities intermediary. Each tranche of bonds of a bond issuer will be in an aggregate principal amount which, taken together with the corresponding tranche of bonds of the other bond issuers, will equal the initial aggregate principal amount of the related tranche of certificates. The following summary describes the material terms and provisions of the bond indentures. The particular terms of the bonds of any tranche will be established in the bond indenture applicable to each bond issuer. This summary is not complete. You should read this summary together with the accompanying prospectus supplement and the terms and provisions of the bond indentures, forms of which are filed as exhibits to the registration statement relating to this prospectus, prior to investing in the certificates.

The bond issuers will issue the bonds in three tranches. All bonds of a particular tranche will be identical in all respects except for their denominations. The bond issuers may not issue any additional bonds other than in connection with transfers, exchanges or replacements permitted under the bond indentures. The aggregate principal amount of the bonds that may be authenticated and delivered under the bond indentures and the financing order may not exceed $             million.

Security

To secure the payment of interest on and principal of the bonds of a bond issuer, such bond issuer will grant to the bond trustee for such bonds a security interest in all of the bond issuer’s right, title and interest in and to:

• the phase-in-recovery property sold to it;

• its phase-in-recovery property sale agreement;

• its phase-in-recovery property servicing agreement;

• its administration agreement;

• its collection account and all amounts or investment property on deposit in the collection account;

• all other property of whatever kind owned from time to time by the bond issuer;

• all security interests with respect to the phase-in-recovery property granted by the seller and by statute;

• all present and future claims, demands, causes and choses in action on account of any or all of the foregoing and all payments on or under the foregoing; and

• all proceeds on account of any and all of the foregoing.

We refer to the assets in which a bond issuer will grant the bond trustee a security interest as the bond collateral in respect of that bond issuer.

The bond collateral for a bond issuer will not include, however, the following:

• amounts in the collection account required to be released to the bond issuer pursuant to the bond indenture; and

• proceeds from the sale of the bonds required to pay the purchase price of the phase-in-recovery property and the costs of issuance of the bonds and an allocable amount of the certificates.

State Pledge

Pursuant to Section 4928.2315 of the Securitization Act, the State of Ohio pledges and agrees with each bond issuer for the benefit of the bondholders as follows:

“The state pledges to and agrees with the bondholders, any assignee, and any financing parties under a final financing order that the state will not take or permit any action that impairs the value of phase-in-recovery property under the final financing order or revises the phase-in costs for which recovery is authorized under the final financing order or, except as allowed under section 4928.238 of the Revised Code, reduce, alter, or impair

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phase-in-recovery charges that are imposed, charged, collected, or remitted for the benefit of the bondholders, any assignee, and any financing parties, until any principal, interest, and redemption premium in respect of phase-in-recovery bonds, all financing costs, and all amounts to be paid to an assignee or financing party under an ancillary agreement are paid or performed in full.”

Collection Account

The bond trustee for each bond issuer will cause to be established with the securities intermediary, in the name of the bond trustee for the bonds of that bond issuer, a segregated identifiable collection account. The securities intermediary is an eligible institution (as described below). The bond trustee for each bond issuer will hold in the collection account of a bond issuer for the benefit of the holders of the bonds of that bond issuer all payments arising from the bond issuer’s phase-in-recovery charges as well as the capital contributions made to that bond issuer. Each collection account will consist of three subaccounts:

• a general subaccount;

• a capital subaccount for capital contributions of the bond issuer; and

• an excess funds subaccount.

All payments arising from phase-in-recovery charges remitted to the collection account will be deposited in the subaccounts. All amounts in the collection account not allocated to any other subaccount will be allocated to the general subaccount. Unless the context indicates otherwise, all references to the collection account include each of the three subaccounts.

An eligible institution means (a) the corporate trust department of a bond trustee so long as any securities of the bond trustee have either a short-term credit rating from Moody’s of at least “P-1” or a long-term unsecured debt rating from Moody’s of at least “A2” and have a credit rating from each other rating agency in one of its generic rating categories which signifies investment grade, or (b) a depository institution organized under the laws of the United States of America or any state or the District of Columbia (or any domestic branch of a foreign bank), which has either a long-term issuer rating of “AA-” or higher by Standard & Poor’s and “A2” or higher by Moody’s, and, if rated by Fitch, the equivalent of the lower of those two ratings by Fitch or a short-term issuer rating of “A-1+” or higher by Standard & Poor’s and “P-1” or higher by Moody’s, and, if Fitch provides a rating thereon, “F1+” by Fitch, or any other long-term, short-term or certificate of deposit rating acceptable to Standard & Poor’s and Moody’s, and whose deposits are insured by the Federal Deposit Insurance Corporation.

Funds in the collection account may be invested only in such instruments and investments denominated in U.S. currency as meet the criteria described below and which mature on or before the business day preceding the next payment date:

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

(ii) demand deposits, time deposits or certificates of deposit and bankers’ acceptances of eligible institutions (including the bond trustee in its commercial capacity);

(iii) commercial paper (other than commercial paper issued by CEI, OE or TE and their respective affiliates) having, at the time of investment or contractual commitment, a rating of not less than A-1 from Standard & Poor’s, not less than P-1 by Moody’s and not less than F1 by Fitch (including commercial paper issued by the bond trustee);

(iv) money market funds, which have the highest rating from each rating agency from which a rating is available (including funds for which the bond trustee or any respective affiliate is an investment manager or adviser);

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(v) repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the United States of America or certain of its agencies or instrumentalities, entered into with eligible institutions;

(vi) repurchase obligations with respect to any security or whole loan entered into with an eligible institution or a registered broker-dealer, acting as principal and that meets certain ratings criteria set forth in the bond indenture; and

(vii) any other investment permitted by each rating agency.

We refer to each of the investments listed above as the eligible investments. The bond trustees will have access to the collection accounts for the purpose of making deposits and withdrawals under the bond indentures.

General Subaccount

The general subaccount will hold all funds held in the collection account that are not held in the other two subaccounts. Each servicer will remit all phase-in-recovery charge payments to the general subaccount. On each payment date, the bond trustee for each bond issuer will draw on amounts in the general subaccount to pay expenses and to pay interest and make scheduled payments on its bonds, and to make other payments and transfers in accordance with the terms of its bond indenture. Funds in the general subaccount will be invested in the eligible investments described above.

Capital Subaccount

Prior to the issuance of the bonds, CEI, OE and TE will each contribute capital to its bond issuer in the amount specified in the accompanying prospectus supplement. The bond trustees will deposit the capital into the capital subaccounts of the respective bond issuers. On each payment date, a bond trustee will draw on amounts, if any, in the capital subaccount of the applicable bond issuer to the extent amounts available in the general subaccount and the excess funds subaccount of that bond issuer are insufficient to make scheduled payments on the bonds of that bond issuer and pay fees and expenses. Deposits to the capital subaccounts will be made as described under “—Allocations and Payments” below. Amounts in the capital subaccounts will be invested in eligible investments.

Excess Funds Subaccount

A bond trustee, at the direction of its applicable servicer, will allocate to the excess funds subaccount of its bond issuer phase-in-recovery charge collections with respect to any payment date in excess of amounts necessary to make the payments or allocations specified on such payment date. The excess funds subaccount of a bond issuer will also hold all investment earnings on the collection account of such bond issuer in excess of such amounts.

Interest and Principal

Interest will accrue on the principal balance of a tranche of bonds from its issuance date at the per annum rate specified in the accompanying prospectus supplement and will be payable on the payment dates specified in such prospectus supplement. Collections arising from the phase-in-recovery charges held by a bond trustee in the general subaccount of a bond issuer and any amounts that are available in the capital subaccount and excess funds subaccount of the related bond issuer will be available to make interest payments to the bondholders of each tranche of bonds of the bond issuer on each payment date.

Principal of each tranche of bonds will be payable in the amounts and on the payment dates specified in the accompanying prospectus supplement to the extent of available cash (except on the final maturity date), and with the other limitations described below. The prospectus supplement will set forth the expected amortization schedule for the various tranches of bonds. On any payment date, a bond issuer will pay principal of a tranche of bonds only until the outstanding principal balance of that tranche has been reduced to the principal balance specified in the expected amortization schedule.

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However, if insufficient collections arising from phase-in-recovery charges are in the collection account of a bond issuer on any payment date, principal of any tranche of bonds of that bond issuer may be paid later than expected. The entire unpaid principal amount of the bonds of a bond issuer will be due and payable on the date on which a bond event of default has occurred and is continuing, if the bond trustee or the holders of at least a majority in principal amount of the outstanding bonds have declared the bonds to be immediately due and payable. See “—Bond Events of Default; Rights Upon Bond Event of Default.”

Optional Redemption

The indentures do not permit an optional redemption of bonds under any circumstances.

Allocations and Payments

On any business day that a bond trustee receives a written request from a bond issuer’s administrator stating that any fees, costs, expenses and indemnities payable by the bond issuer, as described in clauses (1) through (4) below, will become due and payable prior to the next succeeding payment date, and setting forth the amount and nature of the expense, as well as any supporting documentation that the bond trustee may reasonably request, the bond trustee, after receiving the information and subject to the “cap” (defined below), will make payment of the expense on or before the date the payment is due from amounts on deposit in the general subaccount, the excess funds subaccount and the capital subaccount of the bond issuer, in that order and only to the extent required to make the payment.

On each semiannual payment date, or for any amount payable under clauses (1) through (4) below, on any business day, each bond trustee, subject to the cap if applicable, will allocate or pay all amounts in the collection account of the related bond issuer, including earnings on these amounts, as follows and in the following order of priority:

(1) first, all fees, costs, expenses (including legal fees and expenses) and indemnity amounts owed by that bond issuer to the related bond trustee, the certificate trustee and the Delaware trustee under the applicable basic documents will be paid to such bond trustee, certificate trustee and Delaware trustee (subject to section 6.07 of the bond indenture), respectively, and second, all fees, costs, expenses (including legal fees and expenses) and indemnity amounts owed by that bond issuer to the issuing entity under the applicable basic documents will be paid to the issuing entity; provided that the total of the foregoing amounts paid will not exceed $100,000 annually;

(2) the servicing fee and all unpaid servicing fees from any prior payment dates will be paid to that bond issuer’s servicer;

(3) the administration fee and all unpaid administration fees from any prior payment dates and amounts due independent directors will be paid to that bond issuer’s administrator and independent directors, respectively;

(4) payment of all other operating expenses, such as accounting and audit fees, rating agency fees, legal fees and certain reimbursable costs under the related servicing agreement, and taxes and indemnities payable by the bond issuer will be paid to the persons entitled thereto;

(5) first, any overdue semiannual interest on the bonds of that bond issuer (together with, to the extent lawful, interest on such overdue interest at the applicable bond interest rate) and second, semiannual interest then due and payable on such bonds will be paid to the bondholders;

(6) first, principal due and payable on the bonds of that bond issuer as a result of a bond event of default or on the final maturity date of a tranche of the bonds of that bond issuer will be paid to the bondholders and second, semiannual principal for such payment date will be paid to the bondholders (in accordance with the priorities set forth in section 2.01(c)(iii) of the bond indenture);

(7) unpaid operating expenses (including, without limitation, fees, expenses and indemnity amounts) owed by that bond issuer under the basic documents will be paid first, to the persons entitled thereto

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(other than the bond trustee, Delaware trustee and certificate trustee) and second, to the bond trustee, Delaware trustee and certificate trustee;

(8) the amount, if any, by which that bond issuer’s capital subaccount needs to be funded to equal the required capital level as of such payment date will be allocated to that capital subaccount;

(9) an amount equal to one-half of 6.85% of the required capital level will be paid to that bond issuer’s seller;

(10) reimbursement of the servicer for any amounts paid by the servicer to the bond trustee, Delaware trustee or certificate trustee pursuant to section 6.02(f) of the servicing agreement;

(11) allocation of the remainder, if any, to the excess funds subaccount for distribution on subsequent payment dates; and

(12) following, first, the payment of all principal of and interest on all bonds and all other approved financing costs and second, the payment of any unpaid amounts due the Delaware trustee, the certificate trustee and the related bond trustee under clause (1) above that exceeded the cap, then the balance, if any, will be paid to that bond issuer free from the lien of the bond indenture.

If on any payment date, or for any amounts payable under clauses (1) through (4) above, on any business day, funds on deposit in the general subaccount of the bond issuer are insufficient to make the payments contemplated by clauses (1) through (6) above, the bond trustee will:

• first, draw from amounts on deposit in the excess funds subaccount of the bond issuer; and

• second, draw from amounts on deposit in the capital subaccount of the bond issuer;

up to the amount of the shortfall, in order to make the payments described above.

In addition, if on any payment date funds on deposit in the general subaccount of the bond issuer are insufficient to make the transfer described in clause (8) above, the bond trustee will draw from amounts on deposit in the excess funds subaccount of that bond issuer to make the required transfer.

If on any payment date funds on deposit in the collection account of the bond issuer are insufficient to make the transfers contemplated by clause (5) above, the bond trustee will allocate the funds in the collection account among the tranches, as specified in the accompanying prospectus supplement.

Payments of principal due and payable on the bonds of a bond issuer as a result of an event of default (and assuming all bonds have been declared immediately due and payable), or upon final maturity, will be paid pro rata based on the respective principal amounts of such bonds.

See “Description of the Certificates—Events of Default” for a description of the allocation of proceeds from the sale of any bond by the certificate trustee or of amounts recovered by the certificate trustee as a result of the institution of certain judicial proceedings by the certificate trustee, in each case as a result of an event of default and subject to the terms of the certificate indenture.

Pursuant to the financing order, certain approved ongoing financing costs (including those referenced in clauses (1) through (4), (7), (9) and (10) above) may not exceed on an annual basis the aggregate amount approved for such ongoing financing costs by more than 5%. The sum of such approved annual ongoing financing costs ($1,072,732) plus an amount equal to 5% of such costs is equal to $1,126,369, which amount is referred to as the cap. The ongoing financing costs referenced in clauses (1) through (4), (7), (9) and (10) above, to the extent in excess of the cap for any given annual period, may be recovered in any subsequent annual period (subject to the annual cap in such subsequent period). Unused cap amounts in a given year will not be available for recovery of any ongoing financing costs in a subsequent year. In the case of a non-utility servicer with a servicing fee of 0.75% of the initial principal of the bonds (the maximum permitted to be paid to a non-utility servicer under the financing order), as compared to 0.10% to be paid to the initial servicer, the cap would be $4,277,550.

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The initial servicer of each bond issuer will agree in its servicing agreement to indemnify the bond trustee and, as to such bond issuer’s allocable portion only, the Delaware trustee and the certificate trustee for all due and unpaid compensation, expenses and indemnity amounts (owned by such bond issuer to such trustee under, and to the extent set forth in, section 6.07 of the bond indenture, sections 1 through 4 of the fee and indemnity agreement and any applicable provisions of the other applicable basic documents), that exceed the cap. Each servicing agreement will provide that this initial servicer indemnity obligation will continue as an obligation of such initial servicer in the event a successor servicer is appointed.

Actions by Bondholders

The certificate trustee, on behalf of the issuing entity as sole holder of the bonds of the bond issuers, has the right to vote and give consents and waivers for modifications to any tranche of bonds of a bond issuer and to the provisions of other agreements under the bond indentures. In general, the certificate trustee may vote all, and, with the written direction of the holders of the certificates representing not less than a majority of the outstanding principal amount of the certificates, shall vote a corresponding majority of the bonds for any such consent or waiver. With some exceptions, the holders of a majority of the outstanding principal amount of the bonds of a bond issuer shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the bond trustee in respect of those bonds, or exercising any trust or power conferred on the bond trustee under a bond indenture, provided that:

• the direction shall not be in conflict with any rule of law or with the bond indenture and not involve the bond trustee in any personal liability or expense;

• other than in the case of a default in the payment of principal or interest on any bond, any direction to the bond trustee to sell or liquidate the bond collateral shall be by the holders of 100% of the outstanding principal amount of the bonds of the bond issuer;

• if the bond trustee elects to maintain possession of the bond collateral in compliance with the bond indenture, then any direction to the bond trustee by holders of bonds of the bond issuer representing less than 100% of the outstanding principal amount of the bonds to sell or liquidate the bond collateral shall be of no force and effect; and

• the bond trustee may take any other action deemed proper by the bond trustee that is not inconsistent with the direction. See “Description of the Certificates—Voting of the Certificates.”

Bond Events of Default; Rights on Bond Event of Default

An event of default on the bonds of a bond issuer is defined in the bond indentures as being:

• a default in the payment of interest on any bond of the bond issuer that is not cured within five business days after the payment date;

• a default in the payment of the then unpaid principal of any bond of the bond issuer on the final maturity date;

• a default in the observance or performance in any material respect of any covenant or agreement of the bond issuer made in the bond indenture, and which continues unremedied for 30 days after notice is given to the bond issuer by the bond trustee or to the bond issuer and the bond trustee by the holders of at least 25% in principal amount of the bonds of the bond issuer then outstanding;

• any representation or warranty made by the bond issuer in the bond indenture or in any certificate delivered by the bond issuer in connection with the bond indenture proving to have been incorrect in a material respect when made and which continues unremedied for a period of 30 days after notice is given to the bond issuer by the bond trustee or to the bond issuer and the bond trustee by the holders of at least 25% in principal amount of the bonds of the bond issuer then outstanding;

• events of bankruptcy, insolvency, receivership or liquidation of the bond issuer; or

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• any act or failure to act by the State of Ohio or any of its agencies (including the PUCO), which violates or is not in accordance with the State Pledge.

If a bond event of default should occur and be continuing on the bonds of a bond issuer, the bond trustee or holders of not less than a majority in principal amount of the bond issuer’s bonds then outstanding may declare the bonds of that bond issuer to be immediately due and payable. Under circumstances set forth in the bond indenture, the holders of a majority in principal amount of bonds of the bond issuer then outstanding may rescind the declaration.

If the bonds of a bond issuer have been declared to be due and payable following a bond event of default, the related bond trustee may, in its discretion, either sell the phase-in-recovery property of that bond issuer or elect to maintain possession of the phase-in-recovery property and continue to apply payments arising from the phase-in-recovery charges remitted to the bond trustee as if there had been no declaration of acceleration. We expect that there will be a limited resale market, if any, for the phase-in-recovery property following a foreclosure because of the unique nature of the phase-in-recovery property as an asset and other factors discussed in this prospectus.

In addition, the bond trustee is prohibited from selling the phase-in-recovery property of a bond issuer following a bond event of default of that bond issuer, other than a default in the payment of principal or interest on any bond of that bond issuer, unless:

• the holders of all the outstanding bonds of that bond issuer consent to the sale;

• the proceeds of the sale are sufficient to pay in full the accrued interest on and the principal of the outstanding bonds of the bond issuer; or

• the bond trustee determines that the proceeds of the phase-in-recovery property of a bond issuer would not be sufficient on an ongoing basis to make all payments on its bonds as those payments would have become due if the bonds had not been declared due and payable, and the bond trustee obtains the consent of the holders of 66-2/3% of the outstanding amount of the bonds of the bond issuer.

In case a bond event of default occurs and is continuing with respect to the bonds of a bond issuer, the bond trustee will be under no obligation to exercise any of the rights or powers under the bonds at the request or direction of any of the holders of bonds if the bond trustee reasonably believes it will not be adequately indemnified against the costs, expenses and liabilities that it might incur in complying with the request. The holders of a majority in principal amount of the outstanding bonds of a bond issuer will have the right to direct the time, method and place of conducting any proceeding or any remedy available to the bond trustee and the holders of a majority in principal amount of the outstanding bonds of that bond issuer may, in some cases, waive any default with respect thereto, except a default in the payment of principal or interest or a default arising from a covenant or provision of the bond indenture that cannot be modified without the consent of all of the holders of the outstanding bonds of all tranches affected.

No holder of any bond of a bond issuer will have the right to institute any proceeding on the bonds, unless:

• the holder previously has given to the bond trustee written notice of a continuing event of default;

• the holders of not less than a majority in principal amount of the outstanding bonds of the bond issuer have made written request of the bond trustee to institute the proceeding in its own name as bond trustee;

• the holder or holders have offered the bond trustee reasonable indemnity;

• the bond trustee has failed for 60 days after receipt of notice to institute a proceeding; and

• no direction inconsistent with the written request has been given to the bond trustee during the 60-day period by the holders of a majority in principal amount of the outstanding bonds.

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In addition, the servicers will covenant that they will not at any time institute against the bond issuers or the issuing entity any involuntary bankruptcy, reorganization or other proceeding under any federal or state bankruptcy or similar law.

If a default should occur and be continuing on the bonds of a bond issuer and is actually known to a responsible officer of the bond trustee, the bond trustee will transmit to each bondholder and to the rating agencies notice of such default within 30 days after actual notice of such default was received by the responsible officer of the bond trustee. Other than in the case of a default in the payment of principal of or interest on any bond, the bond trustee may withhold such notice if and so long as a committee of its responsible officers in good faith after consultation with the certificate trustee determines that prompt notice of the default is not likely to be material to certificateholders and the default is likely to be cured and therefore that withholding the notice is in the interests of the bondholders and the certificateholders.

Covenants of the Bond Issuers

A bond issuer may not consolidate with or merge into any other entity, unless:

• the entity formed by or surviving a consolidation or merger of the bond issuer is organized under the laws of the United States, any state or the District of Columbia;

• the entity expressly assumes by an indenture supplemental to the bond indenture the bond issuer’s obligation to make due and punctual payments on the bonds and the performance or observance of every agreement and covenant of the bond issuer under the bond indenture;

• no event of default will have occurred and be continuing immediately after giving effect to the merger or consolidation of the bond issuer;

• the transaction will not result in a reduction or withdrawal of the then current ratings on any tranche of bonds or certificates;

• the bond issuer has received an opinion of counsel to the effect that the consolidation or merger would have no material adverse tax consequence to the bond issuer, the issuing entity, any bondholder or any certificateholder and the consolidation or merger complies with the bond indenture and all conditions precedent relating to the transaction have been complied with; and

• any action as is necessary to maintain the lien and security interest created by the bond indenture will have been taken.

A bond issuer may not convey or transfer any of its properties or assets to any person or entity, unless:

(a) the person or entity acquiring the properties and assets:

• is a United States citizen or an entity organized under the laws of the United States, any state or the District of Columbia;

• expressly assumes by an indenture supplemental to the bond indenture the bond issuer’s obligation to make due and punctual payments on the bonds and the performance or observance of every agreement and covenant of the bond issuer under the bond indenture;

• expressly agrees by a supplemental indenture that all right, title and interest so conveyed or transferred will be subject and subordinate to the rights of bondholders;

• unless otherwise expressly waived by the bond issuer, expressly agrees to indemnify, defend and hold harmless the bond trustee against and from any loss, liability or expense arising under or related to the bond indenture and the bonds; and

• expressly agrees by means of a supplemental indenture that the person (or if a group of persons, then one specified person) shall make all filings with the SEC (and any other appropriate person) required by the Exchange Act in connection with the bonds;

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(b) no event of default under the bond indenture will have occurred and be continuing immediately after the transaction;

(c) the transaction will not result in a reduction or withdrawal of the then current ratings on any tranche of bonds or certificates;

(d) the bond issuer has received an opinion of counsel to the effect that the transaction will not have any material adverse tax consequence to the bond issuer, the issuing entity, any bondholder or any certificateholder and the conveyance or transfer complies with the bond indenture and all conditions precedent relating to the transaction have been complied with; and

(e) any action as is necessary to maintain the lien and security interest created by its bond indenture shall have been taken.

A bond issuer will not, among other things:

• except as expressly permitted by its bond indenture, sell, transfer, exchange or otherwise dispose of any of the assets of the bond issuer, unless directed to do so by the bond trustee;

• claim any credit on, or make any deduction from the principal or interest payable on, its bonds (other than amounts properly withheld under the Internal Revenue Code of 1986) or assert any claim against any present or former bondholder because of the payment of taxes levied or assessed on any part of the bond collateral;

• terminate its existence, dissolve or liquidate in whole or in part;

• permit the validity or effectiveness of the bond indenture to be impaired;

• permit the lien of its bond indenture to be amended, hypothecated, subordinated, terminated or discharged or permit any person to be released from any covenants or obligations with respect to its bonds except as may be expressly permitted by the bond indenture;

• permit any lien, charge, excise, claim, security interest, mortgage or other encumbrance, other than the lien and security interest created by the bond indenture or the statutory lien under the Securitization Act, to be created on or extend to or otherwise arise on or burden the bond collateral or any part of it or any interest in it or the proceeds from it; or

• except for the statutory lien under the Securitization Act, permit the lien of the bond indenture not to constitute a valid first priority security interest in the bond collateral.

A bond issuer may not engage in any business other than financing, purchasing, owning and managing the phase-in-recovery property in the manner contemplated by its bond indenture and the other basic documents relating to the issuance of the bonds and certificates and related activities. A bond issuer will not issue, incur, assume, guarantee or otherwise become liable for any indebtedness except for the bonds.

A bond issuer will not, except for any eligible investments as contemplated by its bond indenture and the other basic documents relating to the issuance of the bonds and the certificates, make any loan or advance or credit to, or guarantee, endorse or otherwise become contingently liable in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any other person. A bond issuer will not, other than expenditures in connection with the purchase of the phase-in-recovery property from the seller, make any expenditure (by long-term or operating lease or otherwise) for capital assets (either real or personal property). A bond issuer will not, directly or indirectly, make payments to or distributions from its collection account except in compliance with the bond indenture and the other basic documents relating to the issuance of its bonds and the certificates.

A bond issuer will not make any payments, distributions or dividends to any owner of beneficial interests in the bond issuer arising from the beneficial interests in the bond issuer if any bond event of default has occurred

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and is continuing or if distributions cause the amount of the capital subaccount to fall below 0.50% (in the case of each of CEI Funding LLC and OE Funding LLC) or 0.60% (in the case of TE Funding LLC) of the initial principal amount of its bonds outstanding under the bond indenture.

A bond issuer will deliver to, among others, the bond trustee and the certificate trustee the annual accountant’s certificates, compliance certificates, reports regarding distributions and statements to bondholders and the certificateholders required by the servicing agreement.

Reports to Bondholders

On or prior to each payment date, each servicer will prepare and provide to its bond issuer and the bond trustee for that bond issuer a statement to be delivered to the bondholders of that bond issuer on the payment date and the bond trustee will make available on its website (currently located at http://www.usbank.com/abs). Each statement will include (to the extent applicable) the following information with respect to a bond issuer for a payment date or the period since the previous payment date, as applicable

• the amount of the payment to bondholders allocable to interest;

• the amount of the payment to bondholders allocable to principal;

• the outstanding principal balance of the bonds, after giving effect to payments allocated to principal reported above;

• the difference, if any, between the outstanding principal balance of the bonds of the particular bond issuer and the principal amount scheduled to be outstanding on a payment date according to the expected amortization schedule, after giving effect to payments to be made on such payment date;

• the amount on deposit in the capital subaccount as of the payment date;

• the amount, if any, on deposit in the excess funds subaccount as of the payment date;

• the amount paid to the related bond trustee, the Delaware trustee and the certificate trustee since the previous payment date;

• the amount paid to the related servicer since the previous payment date;

• the amount paid to the related administrator since the previous payment date; and

• any other transfers and payments to be made pursuant to the related bond indenture since the previous payment date.

Upon the written request of a bondholder, the bond trustee will deliver to such holder of the bonds information in the bond trustee’s possession that may be required to enable the holder to prepare its federal and state income tax returns. See “Material U.S. Federal Income Tax Consequences” and “Ohio State Taxation.”

Website Disclosure

Each bond issuer will, or will cause its sponsor to, post on a collective website for all bond issuers, currently located at http://www.firstenergycorp.com/investor, periodic reports containing to the extent such information is reasonably available to us:

• the final prospectus for the certificates;

• a statement of phase-in-recovery charge remittances made to the trustee for the respective bond issuers;

• a statement reporting the balances in the respective collection accounts and in each subaccount of such collection accounts as of the end of each quarter or the most recent date available,

• a statement showing the balance of outstanding bonds of each bond issuer that reflects the actual periodic payments made on the bonds of each bond issuer during the applicable period;

• the monthly and semiannual servicer’s certificates delivered for the bonds of each bond issuer pursuant to the applicable servicing agreement;

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• the text (or a link to the website where a reader can find the text) of each periodic adjustment filing in respect of the outstanding bonds of each bond issuer and the results of each such periodic adjustment filing;

• any change in the long-term or short-term credit ratings of the servicer for each bond issuer assigned by the rating agencies;

• material legislative or regulatory developments directly relevant to the transition bonds; and

• any reports and other information required to be filed with the SEC under the Exchange Act.

Information available on FirstEnergy’s website, other than the reports and other information we, the bond issuers or the sponsors, solely in their capacity as sponsors, are required to file with the SEC that are incorporated by reference in this prospectus, does not constitute a part of this prospectus.

Annual Compliance Statement

Each of the bond issuers will file annually with the bond trustee for its bonds, the certificate trustee, the PUCO and the rating agencies a written statement as to whether it has fulfilled its obligations under the bond indenture applicable to it.

Bond Trustee Report to Bondholders

If required by the Trust Indenture Act, the trustee for each of the bond issuers will be required to mail each year to all applicable bondholders a brief report. The report must state, among other things:

• the trustee’s eligibility and qualification to continue as the bond trustee under the applicable bond indenture;

• any amounts advanced by it under the applicable bond indenture;

• the amount, interest rate and maturity date of specific indebtedness owing by us to the bond trustee in the bond trustee’s individual capacity;

• the property and funds physically held by the bond trustee;

• any additional issue of the bonds not previously reported; and

• any action taken by it that materially affects the bonds and that has not been previously reported.

Satisfaction and Discharge of Bond Indenture

A bond indenture will cease to be of further effect with respect to the related bonds, and the bond trustee, on reasonable written demand of and at expense of the related bond issuer, will execute such instruments as the bond issuer reasonably requests acknowledging satisfaction and discharge of the bond indenture with respect to the bonds, when:

• either all bonds which have already been authenticated or delivered, with certain exceptions set forth in the bond indenture, have been delivered to the bond trustee for cancellation or the scheduled final payment date has occurred with respect to all not previously delivered for cancellation and the bond issuer has irrevocably deposited or caused to be irrevocably deposited in trust with the bond trustee cash in an amount sufficient to pay and discharge the entire indebtedness on such bonds not previously delivered for cancellation on the scheduled final payment date,

• the bond issuer has paid all other sums payable by the bond issuer under the bond indenture, and

• the bond issuer has delivered to the bond trustee an officer’s certificate, an opinion of counsel, and if required by the Trust Indenture Act or the bond trustee, a certificate from a firm of independent registered public accountants, each stating that there has been compliance with the conditions precedent in the bond indenture relating to the satisfaction and discharge of the bond indenture.

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Legal Defeasance and Covenant Defeasance Options

A bond issuer may, at any time, terminate:

• all of its obligations under the bond indenture with respect to the bonds, a legal defeasance; or

• its obligations to comply with some of the covenants in the bond indenture, a covenant defeasance.

The legal defeasance option is a bond issuer’s right to terminate at any time all of its obligations under the bond indenture with respect to the bonds. The covenant defeasance option is the bond issuer’s right at any time to terminate its obligations to comply with the covenants in the bond indenture. If a bond issuer exercises the legal defeasance option, the bonds may not be accelerated because of an event of default. If a bond issuer exercises the covenant defeasance option, the bonds may not be accelerated because of an event of default due to breach of covenants.

A bond issuer may exercise the legal defeasance option or the covenant defeasance option with respect to the bonds only if:

• the bond issuer irrevocably deposits or causes to be deposited in trust with the trustee cash or U.S. government obligations specified in the bond indenture for the payment of principal and interest on the bond issuer’s bonds to the scheduled maturity date therefor, as applicable;

• the bond issuer delivers to the trustee a certificate from a nationally recognized firm of independent accountants expressing its opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. government obligations plus any deposited cash without investment will provide cash at times and in sufficient amounts to pay in respect of the bonds:

^¡   principal in accordance with the expected amortization schedule therefor, and

^¡   interest when due;

• in the case of the legal defeasance option, 91 days pass after the deposit is made and during the 91-day period no default relating to events of bankruptcy, insolvency, receivership or liquidation of the bond issuer occurs and is continuing at the end of the period;

• no default has occurred and is continuing on the day of the deposit and after giving effect thereto;

• in the case of the legal defeasance option, the bond issuer delivers to the bond trustee an opinion of counsel stating that:

^¡   the bond issuer has received from, or there has been published by, the Internal Revenue Service a ruling, or

^¡   since the date of execution of the bond indenture, there has been a change in the applicable federal income tax law, and

in either case confirming that the holders of the bonds will not recognize income, gain or loss for federal income tax purposes as a result of the exercise of the legal defeasance option and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the legal defeasance had not occurred;

• in the case of the covenant defeasance option, the bond issuer delivers to the trustee an opinion of counsel to the effect that the holders of the bonds will not recognize income, gain or loss for federal income tax purposes as a result of the exercise of the covenant defeasance option and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the covenant defeasance had not occurred; and

• the bond issuer delivers to the trustee an officer’s certificate and an opinion of counsel, each stating that all conditions precedent to the legal defeasance option or the covenant defeasance option, as applicable, have been complied with as required by the bond indenture.

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DESCRIPTION OF THE CERTIFICATES

The issuing entity will issue the certificates under the certificate indenture between the issuing entity and U.S. Bank National Association, a national banking association, acting as the certificate trustee and the securities intermediary. The following summary describes the material terms and provisions of the certificate indenture. The particular terms of the certificates of any tranche will be established in the certificate indenture. This summary is not complete. You should read this summary together with the accompanying prospectus supplement and the terms and provisions of the certificate indenture, a form of which is filed as an exhibit to the registration statement of which this prospectus forms a part, before buying the certificates.

Each tranche of certificates will represent fractional undivided beneficial interests in the bonds of each of the bond issuers. Each certificate will be issued in the minimum denominations specified in the accompanying prospectus supplement. The issuing entity may not issue additional certificates other than in connection with transfers, exchanges or replacements permitted under the certificate indenture. The issuing entity will grant to the certificate trustee, for the benefit of the certificateholders, a lien on the bonds and other property constituting the trust property, all as provided in the certificate indenture.

Each tranche of certificates will have the same interest rate, scheduled final distribution date and final maturity date as the corresponding tranche of bonds of each of the bond issuers and, taken together, the corresponding tranches of bonds will have the same aggregate principal amount and expected amortization schedule as the related tranche of certificates. See “Description of the Bonds—Interest and Principal.” Payments of interest and principal made on any tranche of bonds of a bond issuer are required to be passed through to holders of the related tranche of certificates at the times and in the manner described below. See “—Payments and Distributions” below and “Description of the Bonds—Interest and Principal.”

Payments and Distributions

The certificate trustee is scheduled to receive payments of interest on and principal of the bonds of each of the bond issuers on each payment date. The bond trustees will make payments on the bonds of the bond issuers on any payment date as described under “Description of the Bonds—Allocations and Payments.”

The certificate trustee will distribute on each distribution date to the holders of each tranche of certificates all payments of interest on and principal of the corresponding tranche of bonds of each bond issuer, other than payments received following a payment default on a tranche of bonds of a bond issuer, the receipt of which is confirmed by the certificate trustee by 1:00 p.m. New York City time on a distribution date or, if receipt is confirmed after 1:00 p.m. New York City time on a distribution date, then on the following business day. Each distribution, other than the final distribution for any certificate, will be made by the certificate trustee to the holders of record of the certificates of the applicable tranche on the record date for a distribution date. If a payment of principal or interest on any tranche of the bonds of a bond issuer, other than a payment received following a payment default on a tranche of bonds of that bond issuer, is not received by the certificate trustee on a distribution date but is received within five days thereafter, it will be distributed to the holders of record on the date receipt is confirmed by the certificate trustee, if receipt is confirmed by the certificate trustee by 1:00 p.m. New York City time or, if receipt is confirmed after 1:00 p.m. New York City time, then on the following business day. If payment is received by the certificate trustee after the five day period, it will be treated as a payment received following a payment default on a tranche of bonds of that bond issuer and distributed as described below.

Any payment received by the certificate trustee following a payment default on any tranche of bonds of a bond issuer, referred to as Special Payments, will be distributed on the later of the date receipt is confirmed by the certificate trustee and the date on which any Special Payment is scheduled to be distributed by the certificate trustee, or referred to as a Special Distribution Date. However, in the case of any Special Payment receipt of which is confirmed after 1:00 p.m. New York City time, a Special Payment will be distributed on the following

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business day. The certificate trustee will send notice to the holders of record of certificates of the applicable tranche as of a date not less than 20 days prior to the Special Distribution Date on which any Special Payment is scheduled to be distributed for certificates of a tranche stating the anticipated Special Distribution Date. Each distribution of any Special Payment will be made by the certificate trustee on the Special Distribution Date to the holders of record of the certificates of a tranche as of the special record date. See “—Events of Default” below.

The certificate indenture requires the certificate trustee to establish and maintain or cause to be established with the securities intermediary for each tranche of certificates, for the issuing entity and on behalf of the certificateholders, two certificate accounts, one of which will be non-interest bearing, for the deposit of payments on the related tranche of bonds of each of the bond issuers. The certificate trustee is required to deposit any payments received by it arising from the bonds in the appropriate certificate account. The certificate trustee will distribute all amounts so deposited to holders of the certificates on a distribution date or a Special Distribution Date, as appropriate, unless a different date for distribution of the amount is specified in the certificate indenture.

At any time, if any, that the certificates are issued in registered form and not to the Depository Trust Company, or DTC, or its nominee, distributions by the certificate trustee from the certificate accounts on a distribution date or a Special Distribution Date will be made by check mailed to each holder of record of a certificate on the applicable record date at its address appearing on the register maintained for the certificates, or, on application by a holder of any certificates in the principal amount of $1,000,000 or more to the certificate trustee not later than the applicable record date, by wire transfer to an account maintained by the payee in New York, New York. The final distribution for the certificates, however, will be made only on presentation and surrender of the certificates at the office or agency of the certificate trustee specified in the notice given by the certificate trustee of the final distribution. The certificate trustee will send notice of the final distribution to the certificateholders, specifying the date set for the final distribution and the amount of the final distribution.

If any Special Distribution Date or other date specified in this prospectus for distribution of any distributions to certificateholders is not a business day, distributions scheduled to be made on a Special Distribution Date or other date may be made on the following business day and no interest shall accrue on the distribution during the intervening period.

Voting of the Certificates

The nominee for DTC as sole initial holder of the certificates, has the right to vote and give consents and waivers relating to any modifications to any tranche of certificates. With some exceptions, the holders of at least a majority of the outstanding principal amount of the certificates shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the certificate trustee, or exercising any trust or power conferred on the certificate trustee under the certificate indenture, including any right of the certificate trustee as holder of the bonds, in each case unless a different percentage is specified in the certificate indenture; provided, however, that, among other things:

• the direction shall not be in conflict with any rule of law or with the certificate indenture and would not involve the certificate trustee in personal liability or expense;

• the certificate trustee shall not have determined that the action so directed would be unjustly prejudicial to the certificateholders not taking part in the direction; and

• the certificate trustee may take any other action deemed proper by the certificate trustee that is not inconsistent with the direction.

If the certificate trustee is required to seek instructions from the holders of the certificates regarding any action or vote, the certificate trustee will take the action or vote for or against any proposal in proportion to the principal amount of the certificates taking the corresponding position.

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Events of Default

An event of default on the certificates is defined as the occurrence and continuance of a bond event of default with respect to the bonds of a bond issuer. An event of default in respect of the bonds of a bond issuer will not constitute an event of default with respect to the bonds of any other bond issuers.

The certificate indenture provides that, if a bond event of default occurs and is continuing with respect to the bonds of a bond issuer, the certificate trustee may vote all and, with the written direction of holders representing not less than a majority of the outstanding principal amount of the certificates shall vote a corresponding majority of the bonds of that bond issuer in favor of declaring the unpaid principal amount of the bonds of that bond issuer and accrued interest to be due and payable. In addition, the certificate indenture provides that, if a bond event of default occurs and is continuing, the certificate trustee may vote all and, with the written direction of holders representing not less than a majority of the outstanding principal amount of the certificates, shall vote a corresponding majority of the bonds of the defaulting bond issuer in favor of directing the bond trustee as to the time, method and place of conducting any proceeding for any remedy available to the bond trustee, including the sale of any or all of the collateral for the bonds of the defaulting bond issuer, without recourse to or warranty by the certificate trustee or any certificateholder, to any person or entity, or of exercising any trust or power conferred on the bond trustee under the bond indenture. For a description of the bond events of default, see “Description of the Bonds—Bond Events of Default; Rights On Bond Event of Default.”

If, under the terms of the certificate indenture, the certificate trustee decides, or is required, to sell the bonds of a defaulting bond issuer, the certificate trustee may, and if directed by the holders of not less than a majority of the certificates shall, take action to complete the sale of that bond issuer’s bonds upon such terms and conditions and at such prices as it, or if directed by the certificateholders, upon such terms and conditions as the certificateholders, may deem advisable, so as to provide for the full payment of all amounts due on the certificates in respect of such bonds.

In any event, the certificate trustee is prohibited from selling any bonds following bond events of default, other than payment defaults, unless (x) the certificate trustee determines that the amounts receivable from the bond collateral are not sufficient to pay in full the principal of and accrued interest on the bonds of the defaulting bond issuer and to pay all sums due to the certificate trustee by such bond issuer and other administrative expenses specified in the certificate indenture allocable to that bond issuer and the certificate trustee obtains the written consent of holders of certificates representing 66 2/3% of the outstanding principal amount of certificates or (y) the certificate trustee obtains the written consent of holders of 100% of the outstanding principal amount of certificates. Any proceeds received by the certificate trustee on any sale will be deposited in the certificate account and will be distributed to the certificateholders on a Special Distribution Date.

If a breach by the State of Ohio of its pledge under the Securitization Act has occurred, then the certificate trustee, in its own name and as trustee of an express trust, as holder of the bonds, shall be, to the extent permitted by state and federal law, entitled and empowered to institute any suits, actions or proceedings at law, in equity or otherwise, to enforce the pledge and to collect any monetary damages as a result of a breach, and may prosecute any of these suits, actions or proceedings to final judgment or decree.

Any proceeds from the sale of any bond by the certificate trustee pursuant to the terms of the certificate indenture or amounts recovered by the certificate trustee as a result of the institution of certain judicial proceedings by the certificate trustee, in each case as a result of an event of default and subject to the terms of the certificate indenture, will be allocated first, to due and unpaid interest pro rata on each tranche of certificates based on the respective amounts of interest owed on the certificates of each such tranche and second, to due and unpaid principal pro rata on each tranche of certificates based on the respective outstanding principal amount of the certificates of each tranche.

Any funds (a) representing payments received arising from bonds in default, or (b) representing the proceeds from the sale by the certificate trustee of any bonds held by the certificate trustee or amounts recovered from the institution of certain judicial proceedings by the certificate trustee in the certificate account shall, to the extent practicable,

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be invested and reinvested by the certificate trustee (at the written direction of the servicer for the bonds for which such special payment has been made by the certificate trustee) in eligible investments permitted under the certificate indenture maturing in not more than 60 days or a lesser time as is required for the distribution of any funds on a Special Distribution Date, pending the distribution of the funds to certificateholders as described in this prospectus.

The certificate indenture provides that, for the certificates of any tranche, within 30 days after the occurrence of any event that is, or after notice or lapse of time or both would become, an event of default for a tranche of certificates in respect of a tranche of bonds of a bond issuer, the certificate trustee will give notice, transmit by mail, to the issuing entity, the applicable bond trustee and the certificateholders of all uncured or unwaived defaults known to it. Except in the case of a default relating to the payment of principal of or interest on any of the bonds, however, the certificate trustee will be protected in withholding notice if in good faith it determines that the withholding of notice is in the interests of the certificateholders.

The certificate indenture contains a provision entitling the certificate trustee to be indemnified by the certificateholders before proceeding to exercise any right or power under the certificate indenture at the request or direction of certificateholders.

In some cases, the holders of certificates representing not less than a majority of the outstanding principal amount of the certificates may waive any certificate event of default in respect of the bonds of a bond issuer and thereby annul any previous direction given by the certificate trustee with respect thereto, except a default:

• in the deposit or distribution of any payment on the bonds or Special Payment required to be made on any tranche of certificates;

• in the payment of principal of or interest on any of the bonds; or

• arising from any covenant or provision of the certificate indenture that cannot be modified or amended without the consent of the holders of each certificate affected by a default.

With respect to any such waiver or annulment the certificate trustee shall vote a corresponding percentage of the bonds of a defaulting bond issuer in favor of the waiver. The bonds provide that, with some exceptions, the holders of not less than a majority of the outstanding principal amount of the bonds of the defaulting bond issuer may waive any bond event of default or any event that is, or after notice or passage of time, or both, would be, a bond event of default.

The issuing entity will initially hold three tranches of bonds of a bond issuer, each of which may have a different interest rate, a different or potentially different schedule for the repayment of principal and different rights in the security for the bonds. Accordingly, the certificateholders of one tranche may have divergent or conflicting interests from the certificateholders of other tranches in respect of the bonds of the corresponding tranches of the defaulting bond issuer. As a result, the bond trustee for that bond issuer and the certificate trustee may be required to seek the appointment of additional trustee(s) to represent the interests of one or more tranches with divergent or conflicting interests.

Reports to Certificateholders

On each distribution date, Special Distribution Date or any other date specified in the certificate indenture for distribution of any payments on any tranche of certificates, the certificate trustee will include with each distribution and make available on its website (currently https://www.usbank.com/abs) a statement (prepared by the servicers and provided to the bond trustees for delivery to the certificate trustee) setting forth the following information, in each case, to the extent received by the certificate trustee from the bond trustees, no later than two business days prior to a distribution date, Special Distribution Date or other date specified herein for distribution:

• the amount of the distribution to certificateholders allocable to principal and interest in respect of the bonds of each bond issuer, in each case per $100,000 original principal amount of each tranche of certificates;

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• the aggregate outstanding principal balance of the certificates and of the bonds of each bond issuer, after giving effect to distributions allocated to principal reported above;

• the difference, if any, between the aggregate outstanding principal balance of the certificates scheduled to be outstanding on a distribution date according to the expected amortization schedule, and the same information for each bond issuer;

• for each bond issuer, the amount on deposit in the capital subaccount and the required capital level;

• for each bond issuer, the amount, if any, on deposit in the excess funds subaccount as of the payment date;

• for each bond issuer, the amount paid to the related bond trustee, the Delaware trustee and the certificate trustee since the previous payment date;

• for each bond issuer, the amount paid to the related servicer since the previous payment date;

• for each bond issuer, the amount paid to the related administrator since the previous payment date; and

• any other transfers and payments to be made pursuant to each bond indenture since the previous payment date.

Within the prescribed period of time for tax reporting purposes after the end of each calendar year during the term of the bonds, the certificate trustee will mail to each person or entity who at any time during a calendar year has been a certificateholder and received any distribution on the certificates, a statement containing information for the purposes of a certificateholder’s preparation of federal and state income tax returns. See “Material U.S. Federal Income Tax Consequences” and “Ohio State Taxation.”

Website Disclosure

The certificate trustee will make available on its website (currently https://www.usbank.com/abs) all periodic reports and related information (identified under “Description of the Bonds—Website Disclosure”) posted on the websites of the respective bond issuers (or their respective sponsors) and their bond trustees.

Annual Compliance Statement

The administrative trustees, on behalf of the issuing entity, will prepare and file annually with the certificate trustee, the PUCO and the rating agencies a written statement as to whether the issuing entity has fulfilled its obligations under the certificate indenture.

Certificate Trustee Report to Certificateholders

If required by the Trust Indenture Act, the certificate trustee will be required to mail each year to all certificateholders a brief report. The report must state, among other things:

• the certificate trustee’s eligibility and qualification to continue as the certificate trustee under the certificate indenture;

• any amounts advanced by it under the certificate indenture;

• the amount, interest rate and maturity date of specific indebtedness owing by us to the certificate trustee in the certificate trustee’s individual capacity;

• the property and funds physically held by the certificate trustee;

• any additional issue of the certificates not previously reported; and

• any action taken by it that materially affects the certificates and that has not been previously reported.

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Supplemental Certificate Indentures

The certificate trustee and the Delaware trustee, on behalf of the issuing entity, will, from time to time, and without the consent of the certificateholders, enter into one or more agreements supplemental to the certificate indenture to:

• add to the covenants of the issuing entity for the benefit of the certificateholders, or to surrender any right or power in the certificate indenture conferred on the issuing entity;

• correct or supplement any provision in the certificate indenture or in any supplemental certificate indenture that may be defective or inconsistent with any other provision in the certificate indenture or in any supplemental agreement or to make any other provisions regarding matters or questions arising under the certificate indenture; provided that none of these actions shall adversely affect in any material respect the interests of the certificateholders;

• cure any ambiguity or correct any mistake; or

• qualify, if necessary, the certificate indenture, including any supplemental certificate indenture, under the Trust Indenture Act.

In addition, the certificate trustee and the Delaware trustee, acting on behalf of the issuing entity, will, with the consent of certificateholders holding not less than a majority of the outstanding principal amount of the certificates of each affected tranche of certificates, enter into one or more certificate indentures supplemental to the certificate indenture for the purpose of, among other things, adding any provisions to or changing in any manner or eliminating any of the provisions of the certificate indenture. However, no supplemental certificate indenture may, among other things, without the consent of each certificateholder affected thereby:

• reduce the amount of any payment, change any date of payment on any certificate or bond, or change the place of payment where, or the currency in which, any certificate or bond is payable, or impair the right to sue for the enforcement of any payment or distribution on or after the distribution date, Special Distribution Date or other date specified in the prospectus;

• permit the disposition of any bond held by the issuing entity except as permitted by the certificate indenture, or otherwise deprive any certificateholder of the benefit of the ownership of the related bonds held by the issuing entity;

• reduce the percentage of the aggregate outstanding amount of the certificates of any tranche that is required for any such supplemental indenture, or reduce such percentage required for any waiver or consent (of compliance with certain provisions of the certificate indenture or certain defaults under the certificate indenture and their consequences) provided for in the certificate indenture;

• modify the provisions in the certificate indenture relating to amendments with the consent of certificateholders, except to increase the percentage vote necessary to approve amendments or to add further provisions which cannot be modified or waived without the consent of all certificateholders; or

• adversely affect the status of the issuing entity as a grantor trust not taxable as a corporation for federal income tax purposes.

Promptly following the execution of any amendment to the certificate indenture (other than an amendment described in the preceding paragraph), the certificate trustee will furnish written notice of the substance of an amendment to the certificateholders to which such amendment relates.

List of Certificateholders

With the written request of any certificateholder or group of certificateholders of record holding certificates evidencing not less than ten percent of the outstanding principal amount of the certificates, the certificate trustee will give such certificateholders access during business hours to the current list of certificateholders for purposes of communicating with other certificateholders about their rights under the certificate indenture.

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Neither the declaration of trust nor the certificate indenture provides for any annual or other meetings of certificateholders.

Registration and Transfer of the Certificates

If so specified in the accompanying prospectus supplement, the certificates will be issued in definitive form and will be transferable and exchangeable at the office of the registrar identified in such prospectus supplement. No service charge will be made for any registration or transfer of the certificates, but the owner may be required to pay a sum sufficient to cover any tax or other governmental charge.

Book-Entry Registration and Definitive Certificates

One or more tranches of the certificates will be issued as book-entry certificates, and these tranches will be represented by one or more certificates registered in the name of a nominee for the depository, DTC.

DTC is a limited-purpose trust company organized under the laws of the New York Banking Law, “a banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the Uniform Commercial Code and a “clearing agency” registered under the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for its participating organizations, or Participants, and facilitate the clearance and settlement of securities transactions between Participants through electronic book-entry changes in their accounts, thereby eliminating the need for physical movement of certificates. Participants include securities brokers and dealers, banks, trust companies and clearing corporations and may include other organizations. Indirect access to the DTC system also is available to others such as banks, brokers, dealers and trust companies, or Indirect Participants, that clear through or maintain a custodial relationship with a Participant, either directly or indirectly.

Investors that are not Participants or Indirect Participants but desire to purchase, sell or otherwise transfer ownership of, or other interests in, book-entry certificates may do so only through Participants and Indirect Participants. In addition, these beneficial owners will receive all distributions on the book-entry certificates through DTC and its Participants. Under a book-entry format, beneficial owners will receive payments after a distribution date because, while payments are required to be forwarded to Cede & Co., as nominee for DTC, on a distribution date, DTC will forward the payments to its Participants which thereafter will be required to forward them to Indirect Participants or beneficial owners. The only registered certificateholder will be Cede & Co., as nominee of DTC, and the beneficial owners will not be recognized by the certificate trustee as certificateholders under the certificate indenture. Beneficial owners will be permitted to exercise the rights of certificateholders under the certificate indenture, only indirectly through the Participants who in turn will exercise their rights through DTC.

Under the rules, regulations and procedures creating and affecting DTC and its operations, DTC is required to make book-entry transfers among participants on whose behalf it acts regarding the book-entry certificates and is required to receive and transmit distributions of interest on and principal of the book-entry certificates. Participants and Indirect Participants with which beneficial owners have accounts for book-entry certificates similarly are required to make book-entry transfers and receive and transmit the payments on behalf of their respective beneficial owners.

Because DTC can act only on behalf of Participants, who in turn act on behalf of Indirect Participants and banks, the ability of a beneficial owner to pledge its interest in the book-entry certificates to persons or entities that do not participate in the DTC system, or otherwise take actions arising from its interest in the book-entry certificates, may be limited due to the lack of a physical certificate evidencing its interest.

DTC has advised the certificate trustee that it will take any action permitted to be taken by a certificateholder under the certificate indenture only at the direction of one or more Participants to whose account with DTC interests in the book-entry certificates are credited.

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Clearstream Banking, Luxembourg, S.A., referred to as Clearstream, holds securities for its customers and facilitates the clearance and settlement of securities transactions between Clearstream customers through electronic book-entry changes in accounts of Clearstream customers, thereby eliminating the need for physical movement of certificates. Transactions may be settled by Clearstream in any of various currencies, including United States dollars.

Clearstream provides to its Clearstream customers, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream interfaces with domestic markets in several countries. Clearstream is registered as a bank in Luxembourg, subject to regulations by the Commission de Surveillance de Secteur Financier, which supervises Luxembourg banks. Clearstream customers are recognized financial institutions around the world, including underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and other organizations and may include the underwriters. Indirect access to Clearstream is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Clearstream customers, either directly or indirectly.

The Euroclear System was created in 1968 in Brussels to hold securities for Euroclear Participants and to clear and settle transactions between Euroclear Participants through simultaneous electronic book-entry delivery against payment, thereby eliminating the need for physical movement of certificates and any risk from lack of simultaneous transfers of securities and cash. Transactions may now be settled in Euroclear in any of various currencies, including United States dollars. The Euroclear System includes various other services, including securities lending and borrowing, and interfaces with domestic markets in several countries generally similar to the arrangements for cross-market transfers with DTC. The Euroclear System is operated by Euroclear Bank SA/NV. Euroclear Participants include banks (including central banks), securities brokers and dealers and other professional financial intermediaries and may include the underwriters. Indirect access to the Euroclear System is also available to other firms that clear through or maintain a custodial relationship with a Euroclear Participant, either directly or indirectly.

Securities clearance accounts and cash accounts with Euroclear are governed by the Terms and Conditions, referred to as the Terms and Conditions, governing use of Euroclear and the related Operating Procedures of the Euroclear System, and applicable Belgian Law. These Terms and Conditions govern transfers of securities and cash within the Euroclear System, withdrawal of securities and cash from the Euroclear System, and receipt of payments for securities in the Euroclear System. All securities in the Euroclear System are held on a fungible basis without attribution of specific certificates to specific securities clearance accounts. The Euroclear acts under the Terms and Conditions only on behalf of Euroclear Participants and has no record of or relationship with persons holding through Euroclear Participants.

Distributions for certificates held through Clearstream or Euroclear will be credited to the cash accounts of Clearstream customers or Euroclear Participants in compliance with the relevant system’s rules and procedures. These distributions will be subject to tax reporting in compliance with relevant United States tax laws and regulations. See “Material U.S. Federal Income Tax Consequences.” Clearstream customers will take any other action permitted to be taken by a certificateholder under the certificate indenture on behalf of a Clearstream customer and the Euroclear will take any other action permitted to be taken by a certificateholder under the certificate indenture on behalf of a Euroclear Participant only under its relevant rules and procedures and limited by its depositary’s ability to effect these actions on its behalf through DTC.

Cede & Co., as nominee for DTC, will hold the certificates. Clearstream will hold omnibus positions in the certificates on behalf of the Clearstream customers and Euroclear will hold omnibus positions in the certificates on behalf of the Euroclear Participants, in each case through customers’ securities accounts in their names on the books of their respective depositaries, which in turn will hold positions in customers’ securities accounts in the depositaries’ names on the books of DTC. Transfers between the Participants will comply with DTC rules. Transfers between Clearstream customers and Euroclear Participants will comply with their applicable rules and operating procedures.

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Cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, and directly or indirectly through Clearstream customers or Euroclear Participants, on the other, will be effected in DTC under DTC rules on behalf of the relevant European international clearing system by its depositary; however, these cross-market transactions will require delivery of instructions to the relevant European international clearing system by the counterparty in the system according to its rules and procedures and within its established deadlines. The relevant European international clearing system will, if the transaction meets its settlement requirements, deliver instructions to its depositary to take action to effect final settlement on its behalf by delivering or receiving securities in DTC, and making or receiving payment under normal procedures for same-day funds settlement applicable to DTC. Clearstream customers and Euroclear Participants may not deliver instructions directly to their depositaries.

Because of time zone differences, credits of securities in Clearstream or Euroclear as a result of a transaction with a Participant will be made during the subsequent securities settlement processing, dated the business day following the DTC settlement date, and the credit or any transactions in the securities settled during the processing will be reported to the relevant Clearstream customers or Euroclear Participants on that business day. Cash received in Clearstream or Euroclear as a result of sales of securities by or through a Clearstream customer or a Euroclear Participant to a Participant will be received with value on the DTC settlement date but will be available in the relevant Clearstream or Euroclear cash account only as of the business day following settlement in DTC.

Although DTC, Clearstream and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of securities among participants of DTC, Clearstream and Euroclear, they are under no obligation to perform or continue to perform these procedures and these procedures may be discontinued at any time.

If any of DTC, Clearstream or Euroclear should discontinue its services, the certificate trustee would seek an alternative depository, if available, or cause the issuance of definitive certificates to the owners of certificates or their nominees in the manner described below.

Definitive certificates initially issued in book-entry form will be issued to beneficial owners or their nominees, rather than to DTC or its nominee only if:

• the DTC advises the certificate trustee in writing that DTC is no longer willing or able to properly discharge its responsibilities as depository for the certificates and the certificate trustee is unable to locate a qualified successor; or

• after the occurrence of an event of default under the certificate indenture, holders of certificates representing not less than 50% of the outstanding principal amount of certificates advise DTC in writing that the continuation of a book-entry system through DTC is no longer in the best interests of certificateholders.

If either of the events described in the immediately preceding paragraph occurs, DTC is required to notify all Participants of the availability through DTC of definitive certificates for the beneficial owners. With the surrender by DTC of the certificate or certificates representing the book-entry certificates, together with instructions for registration, the certificate trustee will issue (or cause to be issued) to the beneficial owners identified in the instructions the definitive certificates to which they are entitled, and thereafter the certificate trustee will recognize the holders of the Definitive Certificates as certificateholders under the certificate indenture.

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WEIGHTED AVERAGE LIFE AND YIELD CONSIDERATIONS FOR THE CERTIFICATES

The rate of principal payments, the amount of each interest payment and the final maturity date for each tranche of bonds, and, thus, a related portion of the certificates, will be dependent on the rate and timing of receipt of phase-in-recovery charge collections supporting the payment of such bonds. Higher than estimated receipts of phase-in-recovery charge collections will not, however, result in payment of principal on such bonds, and, thus, a related portion of the certificates, earlier than as reflected in the expected amortization schedule for such bonds. This is because receipts in excess of the amounts necessary to amortize the bonds in accordance with the applicable expected amortization schedules, to pay interest and premium, if any, on the bonds and to pay other approved financing costs, such as to fund or replenish the capital subaccount, will be allocated to the excess funds subaccounts under the related bond indentures. However, delayed receipts of phase-in-recovery charge collections may result in principal payments on the bonds, and, thus, a related portion of the certificates, occurring more slowly than as reflected in the expected amortization schedule or later than the related scheduled maturity dates.

The actual payments on each payment date for each tranche of bonds, and, thus, a related portion of the certificates, and the weighted average life thereof will be affected primarily by the rate and the timing of receipt of phase-in-recovery charge collections supporting the payment of such bonds. Amounts available in the excess funds subaccount and the capital subaccount for the bonds of a bond issuer will also affect the weighted average life of the bonds of that bond issuer, and, thus, a related portion of the certificates. The aggregate amount of phase-in-recovery charge collections and the rate of principal amortization on the bonds will depend, in part, on actual energy usage by customers of CEI, OE or TE, as applicable, and their respective rates of delinquencies and charge-offs. This is because the phase-in-recovery charges will be calculated based on estimates of usage and collections revenue. The phase-in-recovery charges for the customers of each Ohio Company will be adjusted from time to time based in part on the actual rate of phase-in-recovery charge collections. However, there can be no assurance that the servicers will be able to forecast accurately actual electricity usage and the rate of delinquencies, and charge-offs or implement adjustments to the phase-in-recovery charges that will cause phase-in-recovery charge collections to be received at any particular rate. See “Risk Factors—Servicing Risks—Inaccurate consumption forecasting might result in phase-in-recovery charges that result in inadequate collections to make scheduled payments on the bonds and, thus, scheduled distributions on the certificates.”

A payment on a date that is later than the expected final payment date might result in a longer weighted average life of the bonds, and, thus, a related portion of the certificates. In addition, if scheduled payments on the bonds are received later than the applicable scheduled payment dates, this might result in a longer weighted average life of the bonds, and, thus, a related portion of the certificates.

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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

General

The following is a summary of the material U.S. federal income tax consequences to certificateholders, and is based on the opinion of Akin Gump Strauss Hauer & Feld LLP. Akin Gump Strauss Hauer & Feld LLP has advised the issuing entity that the description of the material U.S. federal income tax consequences in this summary is accurate in all material respects. The opinion of Akin Gump Strauss Hauer & Feld LLP is based on some assumptions and is limited by some qualifications stated in this discussion or in that opinion. This discussion is based on current provisions of the Internal Revenue Code of 1986 as amended, or the Internal Revenue Code, currently applicable Treasury regulations, and judicial and administrative rulings and decisions. Legislative, judicial or administrative changes could alter or modify the statements and conclusions in this discussion. Any legislative, judicial or administrative changes or new interpretations may be retroactive and could affect tax consequences to certificateholders.

This discussion applies to certificateholders who acquire the certificates at original issue for cash equal to the issue price of those certificates and hold the certificates as capital assets. This discussion does not address all of the tax consequences relevant to a particular certificateholder in light of that certificateholder’s circumstances, and some certificateholders may be subject to special tax rules and limitations not discussed below (for example, life insurance companies, tax-exempt organizations, financial institutions, dealers in securities, S corporations, taxpayers subject to the alternative minimum tax provisions of the code, broker-dealers, persons who hold the certificates as part of a hedge, straddle, “synthetic security,” or other integrated investment, risk reduction or constructive sale transaction and persons that have a “functional currency” other than the U.S. dollar). This discussion also does not address the tax consequences to nonresident aliens, foreign corporations, foreign partnerships or foreign trusts that are subject to U.S. federal income tax on a net basis on income with respect to a certificate because that income is effectively connected with the conduct of a U.S. trade or business. Those holders generally are taxed in a manner similar to U.S. certificateholders; however, special rules not applicable to U.S. certificateholders may apply. In addition, except as described below, this discussion does not address any tax consequences under state, local or foreign tax laws.

YOU SHOULD CONSULT YOUR TAX ADVISER TO DETERMINE THE U.S. FEDERAL, STATE AND LOCAL AND FOREIGN INCOME AND ANY OTHER TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE CERTIFICATES.

As used in this summary, the term U.S. certificateholder means a beneficial owner of a certificate that is any of the following, for U.S. federal income tax purposes:

• a citizen or resident of the United States;

• a corporation (or other entity taxable as a corporation) created or organized in or under the laws of the U.S. or any political subdivision of the U.S.;

• an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

• a trust if (i) its administration is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all of its substantial decisions, or (ii) it has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.

The term non-U.S. certificateholder means a beneficial owner of a certificate that is not a U.S. certificateholder.

If an entity classified as a partnership for U.S. federal income tax purposes holds certificates, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. If you are a partner of a partnership holding certificates, you should consult your tax advisers.

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The sellers have not and will not seek any rulings from the Internal Revenue Service, or IRS, with respect to the matters discussed below. There can be no assurance that the IRS will not take a different position concerning the tax consequences of the purchase, ownership or disposition of the certificates or that any such position would not be sustained.

Treatment of the Certificates

Based on certain assumptions and subject to certain qualifications, Akin Gump Strauss Hauer & Feld LLP will opine that (i) none of CEI, OE or TE will be treated as recognizing gross income upon the receipt of the financing order, the receipt of cash or other valuable consideration in exchange for the transfer of the phase-in-recovery property to the bond issuers, or the receipt of cash or other valuable consideration in exchange for the phase-in-recovery bonds issued by the bond issuers, (ii) the underlying bonds of each bond issuer will be treated as obligations of CEI, OE or TE, as the case may be, within the meaning of Revenue Procedure 2005-62, 2005-2 C.B. 507, (iii) the bond issuers will not be subject to U.S. federal income tax as entities separate from the sellers and (iv) the issuing entity will not be a classified as a corporation or a publicly traded partnership treated as a corporation, but will be treated as a grantor trust.

Based on the assumptions and subject to the qualifications stated herein, it is the opinion of Akin Gump Strauss Hauer & Feld LLP that the material U.S. federal income tax consequences to certificateholders are as follows:

Taxation of U.S. Certificateholders

In General

A U.S. certificateholder must allocate the purchase price for a certificate between the different underlying bonds represented by the certificate in proportion to the respective fair market values of the different underlying bonds on the purchase date. The amount allocated to any particular underlying bond will represent the initial adjusted basis of the U.S. certificateholder’s interest in that underlying bond. Thereafter, a U.S. certificateholder should calculate separately the items of income, gain, loss, deduction and credit with respect to the U.S. certificateholder’s interest in the different underlying bonds.

This discussion assumes that each certificate is issued in registered form. Moreover, this discussion assumes that any original issue discount on any underlying bond (that is, any excess of the stated redemption price at maturity of an underlying bond over its issue price) is less than a statutory minimum amount (equal to 0.25 percent of its stated redemption price at maturity multiplied by the underlying bond’s weighted average maturity), all as provided in the United States Treasury’s original issue discount regulations.

Payments of Interest

Stated interest on the underlying bonds will be taxable as ordinary interest income when received or accrued by U.S. certificateholders under their method of accounting. Generally, interest payable on the underlying bonds will constitute “investment income” for purposes of limitations under the Internal Revenue Code on the deductibility of investment interest expense.

Original Issue Discount

As noted above, this discussion assumes that any original issue discount on the underlying bonds is less than the statutory minimum amount. In that case, unless a special election is made to treat all interest on the underlying bonds as original issue discount, any such de minimis original issue discount generally will be taken into income by a U.S. certificateholder as gain from the retirement of an underlying bond (as described below under “—Sale or Other Taxable Disposition of Certificates”) ratably as principal payments are made on the underlying bond.

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Sale or Other Taxable Disposition of the Certificates

If there is a sale, exchange, redemption, retirement or other taxable disposition of a certificate, a U.S. certificateholder generally will recognize gain or loss equal to the difference, if any, between (a) the amount of cash and the fair market value of any other property treated as received for the interest represented by the certificate in each underlying bond (other than amounts attributable to, and taxable as, accrued stated interest on the underlying bond) and (b) the U.S. certificateholder’s adjusted tax basis in the underlying bond. The amount of cash and property treated as received for each underlying bond will be the amount of cash and property received for the certificate allocated between the different underlying bonds based on their proportionate fair market values at the time the certificate is sold or otherwise disposed of. The U.S. certificateholder’s adjusted tax basis in each underlying bond generally will equal the amount of the purchase price allocated to the underlying bond upon purchase of the certificate, increased by any original issue discount included in income with respect to the underlying bond prior to its disposition and reduced by any payments reflecting principal or original issue discount previously received with respect to the underlying bond and any amortized premium with respect to the underlying bond. Gain or loss generally will be capital gain or loss if a certificate was held as a capital asset.

Medicare Tax on Unearned Income

A 3.8% tax is imposed on the “net investment income” of certain U.S. citizens and resident aliens, and on the undistributed “net investment income” of certain estates and trusts, in both cases to the extent that net investment income exceeds a certain threshold. Among other items, “net investment income” generally includes interest and certain net gains from the disposition of property, less certain deductions.

Prospective holders should consult their own tax advisors with respect to such tax.

Non-U.S. Certificateholders

In general, a non-U.S. certificateholder will not be subject to U.S. withholding tax on interest (including original issue discount) on an underlying bond unless:

• the non-U.S. certificateholder is a controlled foreign corporation that is related, directly or indirectly, to the issuer of the underlying bond through stock ownership;

• the non-U.S. certificateholder is a bank which receives interest on the underlying bond as described in Code Section 881(3)(A); or

• the non-U.S. certificateholder actually or constructively owns 10% or more of the total combined voting power of all classes of stock of the issuer of the underlying bond entitled to vote.

In order for interest payments to qualify for the exemption from U.S. taxation described above (i) non-U.S. certificateholders must certify to the withholding agent on IRS Form W-8BEN (or appropriate substitute form), under penalties of perjury, that such non-U.S. certificateholder is not a U.S. person or (ii) if non-U.S. certificateholders hold the certificates through a financial institution or other agent acting on their behalf, such non-U.S. certificateholder must provide appropriate documentation to the agent and the agent then must provide certification to the withholding agent, either directly or through other intermediaries.

A non-U.S. certificateholder may also be exempt from U.S. withholding tax on interest if the non-U.S. certificateholder is entitled to the benefits of a U.S. treaty providing an exemption from such withholding and the non-U.S. certificateholder or its agent provides the withholding agent a properly executed W-8BEN (or an appropriate substitute form) evidencing eligibility for the exemption.

Generally, any gain or income realized by a non-U.S. certificateholder from the sale, exchange, redemption, retirement or other disposition of a certificate (other than gain attributable to accrued interest or original issue discount, which is addressed above) will not incur U.S. federal income tax liability, provided, in the case of a

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non-U.S. certificateholder who is an individual, that such non-U.S. certificateholder is not present in the United States for 183 or more days during the taxable year in which a disposition of a certificate occurs. Exceptions may be applicable, and non-U.S. certificateholders should consult a tax adviser regarding the tax consequences of a disposition of a certificate.

Information Reporting and Backup Withholding

Some certificateholders may be subject to backup withholding, currently at the rate of 28%, on amounts payable to the certificateholder on the certificate, including principal payments. Generally, backup withholding will apply if the certificateholder fails to provide identifying information (such as the payee’s taxpayer identification number) in the manner required, or if the payee has failed to report properly the receipt of reportable interest or dividend payments and the IRS has notified the payor that backup withholding is required. Some certificateholders (including, among others, corporations and some tax-exempt organizations) generally are not subject to backup withholding.

Backup withholding and information reporting generally will not apply to a certificate issued in registered form that is beneficially owned by a non-U.S. certificateholder if the certification described above in “—Non-U.S. Certificateholders,” is provided to the withholding agent as long as the payor does not have actual knowledge that the non-U.S. certificateholder should be subject to such backup withholding and information reporting rules. Non-U.S. certificateholders should consult their tax advisers regarding the application of information reporting and backup withholding to their particular situations, the availability of an exemption therefrom and the procedure for obtaining such an exemption, if available. The withholding agent may be required to report annually to the IRS and to each non-U.S. certificateholder the amount of interest paid to, and the tax withheld, if any, for each non-U.S. certificateholder, even if a certification is provided and U.S. federal income tax and backup withholding tax does not apply.

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OHIO STATE TAXATION

In the opinion of Calfee, Halter & Griswold LLP, it is more likely than not that the following material Ohio tax consequences apply to holders of the certificates who receive or accrue interest or who sell, exchange, or otherwise dispose of certificates (referred to herein as Ohio certificate income):

1. Ohio certificate income is subject to the Ohio Individual Income Tax. Ohio certificate income is sitused to the state of domicile of the recipient. Accordingly, a non-Ohio resident not otherwise subject to the Ohio Individual Income Tax would not incur liability under such taxes due to having realized Ohio certificate income.

2. Ohio certificate income realized by most individuals and businesses is not subject to income taxes levied by municipal corporations in Ohio.

3. Ohio School District Income Taxes for individuals may be assessed under two alternate methods. Ohio certificate income is subject to such tax under one alternate method of computing taxable income, but not under the other method.

4. Ohio certificate income is subject to the Ohio Corporation Franchise Tax, to the extent computed on the net income basis. Other than certain financial institutions and their holding companies and other affiliates, few corporations remain subject to the Ohio Corporation Franchise Tax.

5. Ohio certificate income is not subject to the Ohio Commercial Activity Tax if the certificates are capital assets of a holder, regardless of the length of time the certificates are held by the holder.

6. Ohio no longer levies an ad valorem tax on intangible personal property held by individuals or most business entities, other than a limited class of financial institutions.

This discussion does not address the taxation of the issuing entity or the tax consequences of the purchase, ownership or disposition of the certificates under any state or local tax law other than that of the State of Ohio. You should consult your tax adviser regarding state and local tax consequences.

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CERTAIN ERISA AND OTHER CONSIDERATIONS

The following is a summary of certain considerations associated with the purchase and holding of our certificates by (i) an “employee benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, or ERISA) that is subject to Part 4 of Subtitle B of Title I of ERISA, (ii) a plan, individual retirement account or other arrangement that is subject to Section 4975 of the U.S. Internal Revenue Code or provisions under Similar Law (which we define as certain governmental plans, church plans and non-U.S. plans, which while not subject to Title I of ERISA or Section 4975 of the U.S. Internal Revenue Code, may nevertheless be subject to other state, local, non-U.S. or other laws or regulations that would have the same effect as U.S. Department of Labor Regulations Section 2510.3-101, as modified by Section 3(42) of ERISA, or the Plan Asset Regulations, so as to cause our underlying assets to be treated as assets of an investing entity by virtue of its investment (or any beneficial interest) in us and thereby subject us to laws or regulations that are similar to the fiduciary responsibility or prohibited transaction provisions contained in Title I of ERISA or Section 4975 of the U.S. Internal Revenue Code), and (iii) entities whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each of (i), (ii) and (iii), a Benefit Plan Investor).

This summary is general in nature and is not intended to be all-inclusive. Due to the complexity of these rules and the penalties that may be imposed upon persons involved in non-exempt prohibited transactions, it is particularly important that fiduciaries, or other persons considering purchasing or holding our certificates on behalf of, or with the assets of, any employee benefit plan, consult with their counsel to determine whether such employee benefit plan is subject to Part 4 of Subtitle B of Title I of ERISA, Section 4975 of the U.S. Internal Revenue Code or any Similar Laws.

Section 3(42) of ERISA and the Plan Asset Regulations generally provide that when a Benefit Plan Investor subject to Part 4 of Subtitle B of Title I of ERISA or Section 4975 of the U.S. Internal Revenue Code, or a Covered Plan, acquires an equity interest in an entity that is neither a “publicly offered security” (as defined in the Plan Asset Regulations) nor a security issued by an investment company registered under the U.S. Investment Company Act, the Covered Plan’s assets include both the equity interest and an undivided interest in each of the underlying assets of the entity unless it is established either that equity participation in the entity by the Covered Plan is not significant or that the entity is an “operating company,” in each case as defined in Section 3(42) of ERISA and the Plan Asset Regulations.

For purposes of ERISA, equity participation in an entity by Covered Plans will not be “significant” if they hold, in the aggregate, less than 25% (or such higher percentage as may be specified by regulations of the Department of Labor) of the value of each class of equity interests of such entity, excluding equity interests held by any person (other than an Covered Plan) who has discretionary authority or control with respect to the assets of the entity or who provides investment advice for a fee (direct or indirect) with respect to such assets, and any affiliates of such person.

The Plan Asset Regulations generally define an “operating company” to mean an entity that is primarily engaged, directly or through majority owned subsidiaries, in the production of a product or service other than the investment of capital.

The certificates are likely to be treated as “equity interests” in the issuing entity under the Plan Asset Regulations which provides that beneficial interests in a trust are equity interests.

It is anticipated (i) that the certificates will not constitute “publicly offered securities” for purposes of the Plan Asset Regulations, (ii) that the issuing entity will not be an investment company registered under the U.S. Investment Company Act and (iii) the issuing entity will not qualify as an operating company within the meaning of the Plan Asset Regulations. In addition, neither CEI, OE, TE, the certificate trustee, the underwriters nor any of their affiliates is required and does not intend to monitor whether investment in the certificates by Benefit Plan

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Investors will equal or exceed the 25% (or higher) threshold for purposes of ERISA. Therefore, if the certificates are purchased with plan assets, the assets of the issuing entity may be deemed plan assets of the investing Benefit Plan Investors which, in turn, would subject the issuing entity and its assets to the fiduciary responsibility provisions of ERISA and the prohibited transaction provisions of ERISA and Section 4975 of the Code if Benefit Plan Investor participation is significant. Even though only minimal administrative activity is expected at the issuing entity level, it is likely that the issuing entity will interact with CEI, OE, TE, the certificate trustee, the underwriters and their affiliates. If CEI, OE, TE, the certificate trustee, the underwriters or any of their affiliates is a party in interest as defined in ERISA or a disqualified person as defined in the Code to a Benefit Plan Investor that purchases certificates, violations of the prohibited transaction rules could occur at the issuing entity level, unless a statutory or administrative exemption applies or an exception applies under the Plan Asset Regulations.

Whether or not the assets of the issuing entity are deemed to include “plan assets”, the acquisition and/or holding of certificates by a Benefit Plan Investor with respect to which the issuing entity, CEI, OE, TE, the certificate trustee, the underwriters or any of their affiliates are considered a party in interest or a disqualified person may constitute or result in a direct or indirect prohibited transaction under Section 406 of ERISA and/or Section 4975 of the Code, unless the investment is acquired and is held in accordance with an applicable statutory, class or individual prohibited transaction exemption. In this regard, the U.S. Department of Labor has issued prohibited transaction class exemptions, or PTCEs, that may apply to the acquisition and holding of the certificates. These class exemptions include, without limitation, PTCE 75-1, which exempts certain transactions between a plan and certain broker dealers, reporting dealers and banks, PTCE 84-14 respecting transactions determined by independent qualified professional asset managers, PTCE 90-1 respecting insurance company pooled separate accounts, PTCE 91-38 respecting bank collective investment funds, PTCE 95-60 respecting life insurance company general accounts and PTCE 96-23 respecting transactions determined by in-house asset managers, although there can be no assurance that all of the conditions of any such exemptions will be satisfied. In addition, the statutory service provider exemption provided by Section 408(b)(17) of ERISA and Section 4975(d)(20) of the Code, which exempts certain transactions between plans and parties in interests that are not fiduciaries with respect to the transaction could apply.

We cannot provide any assurance that any of these class exemptions or statutory exemptions will apply with respect to any particular investment in the certificates by, or on behalf of, a plan or, even if it were deemed to apply, that any exemption would apply to all transactions that may occur in connection with the investment. Even if one of these class exemptions or statutory exemptions were deemed to apply, certificates may not be purchased with assets of any plan if the issuing entity, CEI, OE, TE, the certificate trustee, any underwriter or any of their affiliates:

• has investment discretion over the assets of the plan used to purchase the certificate;

• has authority or responsibility to give, or regularly gives, investment advice regarding the assets of the plan used to purchase the certificate for a fee and under an agreement or understanding that the advice will serve as a primary basis for investment decisions for the assets of the plan, and will be based on the particular investment needs of the plan; or

• unless PTCE 90-1 or 91-38 applied to the purchase and holding of the certificate, is an employer maintaining or contributing to the plan.

Because of the foregoing, the certificates may not be purchased or held by any person investing “plan assets” of any Benefit Plan Investor, unless such purchase and holding will not constitute a non-exempt prohibited transaction under ERISA and the Code or similar violation of any applicable Similar Laws.

Without limiting the foregoing, each purchaser of certificates is deemed to represent, warrant and agree, that either (x) no part of the assets to be used to purchase or hold the certificates constitutes or will constitute the assets of any “employee benefit plan” (as defined in Section 3(3) of ERISA) subject to the fiduciary requirements of Title I of ERISA, a plan that is subject to the prohibited transaction provisions of Section 4975 of the Code, an

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entity whose underlying assets include “plan assets” by reason of a plan investment in such entity (including but not limited to an insurance company general account), or any entity that otherwise constitutes a benefit plan investor within the meaning of the Plan Asset Regulations; or (y) that such purchaser’s purchase and holding of the certificates will not constitute or result in a non-exempt “prohibited transaction” under Section 406 of ERISA or Section 4975 of the Code or a violation of any applicable Similar Laws.

In addition, fiduciaries and other plan investors should also consider the fiduciary standards under ERISA or other Similar Law in the context of the plan’s particular circumstances before authorizing an investment of plan assets in the certificates. Among other factors, fiduciaries and other plan investors should consider whether the investment:

• satisfies the diversifications requirement of ERISA or other Similar Law;

• complies with the plan’s governing instruments; and

• is prudent in light of the “Risk Factors” and other factors discussed in this prospectus.

The foregoing discussion is general in nature and is not intended to be all-inclusive. Due to the complexity of these rules and the penalties that may be imposed upon persons involved in non-exempt prohibited transactions, it is particularly important that fiduciaries, or other persons considering purchasing the certificates on behalf of, or with the assets of, any Benefit Plan Investor, consult with their counsel regarding the potential applicability of ERISA, Section 4975 of the Code and any Similar Laws to such investment and whether an exemption would be applicable to the purchase and holding of the certificates.

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USE OF PROCEEDS

The issuing entity will use the entire proceeds received from the sale of the certificates, net of underwriting discount, to purchase the bonds from the bond issuers. Each bond issuer will use the net proceeds from the sale of its bonds to pay its share of the expenses of the issuance and sale of the bonds and the certificates and to purchase the phase-in-recovery property from its seller. The sellers will use the net proceeds from the sale of the phase-in-recovery properties primarily to repay outstanding debt. Net proceeds may also be used by any seller for other general corporate purposes to the extent set forth in the financing order.

PLAN OF DISTRIBUTION

The issuing entity may sell the certificates to or through the underwriters named in the accompanying prospectus supplement by a negotiated firm commitment underwriting and public reoffering by the underwriters or another underwriting arrangement that may be specified in such prospectus supplement or the issuing entity may offer or place the certificates either directly or through agents. The bond issuers and the issuing entity intend that certificates will be offered through these various methods from time to time and that offerings may be made concurrently through more than one of these methods or that an offering of the certificates may be made through a combination of these methods.

The distribution of certificates may be effected in one or more transactions at a fixed price or prices, which may be changed, or at market prices prevailing at the time of sale, at prices related to prevailing market prices or in negotiated transactions or otherwise at varying prices to be determined at the time of sale.

In connection with the sale of the certificates, underwriters or agents may receive compensation in the form of discounts, concessions or commissions. Underwriters may sell certificates to dealers at prices less a concession. Underwriters may allow, and the dealers may reallow, a concession to other dealers. Underwriters, dealers and agents that participate in the distribution of the certificates may be deemed to be underwriters and any discounts or commissions received by them from the issuing entity and any profit on the resale of the certificates by them may be deemed to be underwriting discounts and commissions under the Securities Act. We will identify any of these underwriters or agents, and describe any compensation we give them, in the accompanying prospectus supplement.

RATINGS

We expect that the certificates will receive credit ratings from NRSROs.

A security rating is not a recommendation to buy, sell or hold securities and may be revised or withdrawn at any time by the assigning NRSRO. Each rating should be evaluated independently of any other rating. No person is obligated to maintain its rating on the certificates, and accordingly, we cannot assure you that a rating assigned to any tranche of the certificates upon initial issuance will not be revised or withdrawn by an NRSRO at any time thereafter. If a rating of any tranche of the certificates is revised or withdrawn, the liquidity of that tranche may be adversely affected. In general, ratings address credit risk and do not represent any assessment of the likelihood of any particular level of principal payments on the certificates other than payment in full of each tranche of the certificates by the applicable final maturity date, as well as the timely payment of interest.

Under Rule 17g-5 of the Exchange Act, NRSROs providing the sponsors with the requisite certification will have access to all information posted on a website by the sponsors for the purpose of determining the initial rating and monitoring the rating after the closing date in respect of the certificates. As a result, an NRSRO other than a hired NRSRO may issue Unsolicited Ratings which may be lower, and could be significantly lower, than the ratings assigned by a hired NRSRO. The Unsolicited Ratings may be issued prior to, or after, the closing date

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in respect of the certificates. Issuance of any Unsolicited Rating will not affect the issuance of the certificates. Issuance of an Unsolicited Rating lower than the ratings assigned by a hired NRSRO on the certificates might adversely affect the value of the certificates and, for regulated entities, could affect the status of the certificates as a legal investment or the capital treatment of the certificates. Investors in the certificates should consult with their legal counsel regarding the effect of the issuance of a rating by a non-hired NRSRO that is lower than the rating of a hired NRSRO.

A portion of the fees paid by the sponsors to an NRSRO that is hired to assign a rating on the certificates is contingent upon the issuance of the certificates. In addition to the fees paid by the Ohio Companies to a hired NRSRO at closing, the sponsors may pay a fee to the NRSRO for ongoing surveillance for so long as the certificates are outstanding. However, no NRSRO is under any obligation to continue to monitor or provide a rating on the certificates. There can be no assurance that the credit ratings will be maintained.

WHERE YOU CAN FIND MORE INFORMATION

This prospectus is part of a registration statement we, the bond issuers and the sponsors have filed with the SEC relating to the certificates. This prospectus and the accompanying prospectus supplement describe the material terms of those documents that have been filed as exhibits to the registration statement that are material to the offering of the certificates. However, this prospectus and the accompanying prospectus supplement do not contain all of the information contained in the registration statement and the exhibits. Information filed with the SEC can be inspected at the SEC’s Internet site located at http://www.sec.gov. You may also read and copy the registration statement, the exhibits and any other documents we file with the SEC at the SEC’s Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. You may obtain further information regarding the operation of the SEC’s Public Reference Room by calling the SEC at 1-800-SEC-0330. You may also obtain a copy of the filings or any information that has been incorporated by reference with the SEC at no cost, by writing to or telephoning us at the following address:

c/o FirstEnergy Corp.

76 South Main Street

Akron, Ohio 44308

(800) 736-3402

Our SEC Securities Act file number is 333-187692-01 through -05.

To the extent that we are required to file such reports and information with the SEC under the Exchange Act, we will file (or any of the sponsors in its capacity as sponsor, will file on our behalf) annual reports on Form 10-K, distribution reports on Form 10-D and current reports on Form 8-K with the SEC. None of us, the bond issuers or the sponsors intend to file any such reports relating to the certificates and bonds following completion of the reporting period required by Rule 15d-1 of Regulation 15D under the Exchange Act, unless required by law. Unless specifically stated in any such report, the reports and any information included in any such report will neither be examined nor reported on by an independent public accountant. For a more detailed description of the information to be included in these periodic reports, please read “Description of the Bonds—Sellers Website Disclosure.”

The SEC allows us to “incorporate by reference” into this prospectus information that we, the bond issuers or the sponsors file with the SEC. This means we can disclose important information to you by referring you to the documents containing the information. The information we incorporate by reference is considered to be part of this prospectus, unless we update or supersede that information by the information contained in a prospectus supplement or information that we, the bond issuers or the sponsors file subsequently that is incorporated by reference into this prospectus. We are incorporating into this prospectus any future filings which we, the bond

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issuers or the sponsors, solely in their capacity as sponsors, make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering of the certificates, excluding any information that is furnished to, and not filed with, the SEC. These reports will be filed under our name as issuing entity. Any statement contained in this prospectus, in the accompanying prospectus supplement or in a document incorporated or deemed to be incorporated by reference in this prospectus or the accompanying prospectus supplement will be deemed to be modified or superseded for purposes of this prospectus and the accompanying prospectus supplement to the extent that a statement contained in this prospectus, the accompanying prospectus supplement or in any separately filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes that statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute part of this prospectus or the accompanying prospectus supplement.

REPORTS TO HOLDERS

During any period when the issuing entity issues the certificates in book-entry form, CEI, OE and TE, acting as the servicers of the property securing the bonds, or a successor servicer to either, will provide periodic reports concerning the certificates. You may obtain copies of the periodic reports by requesting them from your broker or dealer. If you are the registered holder of the certificates, you will receive the reports from the certificate trustee. See “Description of the Bonds—Reports to Bondholders” and “Description of the Certificates—Reports to Certificateholders.”

LEGAL MATTERS

Certain legal matters relating to the issuing entity, bond issuers, the bonds and the certificates, including certain U.S. federal income tax matters, will be passed on by Akin Gump Strauss Hauer & Feld LLP, New York, New York, counsel to the issuing entity, the sellers and the bond issuers. Certain legal matters relating to the bonds and Ohio law will be passed upon by Calfee, Halter & Griswold LLP, Cleveland, Ohio, special local counsel to the sellers and the bond issuers. Certain legal matters relating to the issuing entity, the bond issuers and the certificates will be passed upon by Richards, Layton & Finger, P.A., Wilmington, Delaware, Delaware counsel to the issuing entity and the bond issuers. Morgan, Lewis & Bockius LLP, New York, New York, is counsel to the underwriters. Morgan, Lewis & Bockius LLP has in the past represented, and continues to represent, the Ohio Companies and certain of their affiliates on other matters.

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GLOSSARY OF DEFINED TERMS

Set forth below is a list of the defined terms used in this prospectus which, except as otherwise noted in a prospectus supplement, are also used in the accompanying prospectus supplement:

Bankruptcy Code means Title 11 of the United States Code, as amended.

Basic Documents means for any bond issuer, collectively, its bond indenture, the certificate indenture, the declaration of trust, its sale agreement, its servicing agreement, its administration agreement, its bond purchase agreement, the fee and indemnity agreement, the cross-indemnity agreement and the underwriting agreement.

Bond indentures means the indentures to be entered into between the respective bond issuers and the bond trustee, providing for the issuance of bonds, as the same may be amended and supplemented from time to time.

Bond issuers means, collectively, CEI Funding, OE Funding and TE Funding.

Business day means any day other than a Saturday, a Sunday or a day on which banking institutions in New York, New York, Columbus, Ohio or Wilmington, Delaware are authorized or obligated by law, regulation or executive order to remain closed.

CEI means The Cleveland Electric Illuminating Company.

CEI Funding means CEI Funding LLC.

Clearstream means Clearstream Banking, Luxembourg, S.A.

Collection account means the segregated trust account relating to the bonds designated the collection account and held by the bond trustee under the indentures.

DTC means the Depository Trust Company, New York, New York, and its nominee holder, Cede & Co.

ERISA means the Employee Retirement Income Security Act of 1974, as amended.

Euroclear means the Euroclear System.

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

Financing costs has the meaning specified in Section 4928.23(E) of the Securitization Act and the financing order.

Financing order means, unless the context indicates otherwise, the financing order issued by the PUCO to the Ohio Companies on October 10, 2012, Case No. 12-1465-EL-ATS, as amended by the entry on rehearing issued by the PUCO on December 19, 2012 upon application for rehearing, and as further amended by the entry nunc pro tunc issued by the PUCO on January 9, 2013.

FirstEnergy means FirstEnergy Corp.

Fitch means Fitch Ratings, or its successor.

GWh means gigawatt hour.

Independent Director means an individual who (1) has prior experience as an independent director, independent manager or independent member, (2) is employed by a nationally-recognized company that provides

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professional independent directors and other corporate services in the ordinary course of its business, (3) is duly appointed as an independent director and (4) is not and has not been for at least five years from the date of his, her or its appointment, and will not while serving as independent director, be any of the following:

(i) a member, partner, equityholder, manager, director, officer or employee of a bond issuer or any of its equityholders or affiliates (other than as an independent director, independent manager or special member of a bond issuer or an affiliate of a bond issuer that is not in the direct chain of ownership of the bond issuer and that is required by a creditor to be a single purpose bankruptcy remote entity); provided, that the indirect or beneficial ownership of stock of a member or its affiliates through a mutual fund or similar diversified investment vehicle with respect to which the owner does not have discretion or control over the investments held by such diversified investment vehicle shall not preclude such owner from being an independent director;

(ii) a creditor, supplier or service provider (including provider of professional services) to a bond issuer, a member or any of their respective equityholders or affiliates (other than a nationally-recognized company that routinely provides professional independent directors and other corporate services to a bond issuer, a member or any of its affiliates in the ordinary course of its business);

(iii) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or

(iv) a person that controls (whether directly, indirectly or otherwise) any of (i), (ii) or (iii) above.

A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (i) by reason of being the independent manager or independent director of a “special purpose entity” affiliated with a bond issuer shall be qualified to serve as an independent director of a bond issuer, provided that the fees that such individual earns from serving as an independent manager or independent director of affiliates of a bond issuer in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year. For purposes of this paragraph, a “special purpose entity” is an entity, whose organizational documents contain restrictions on its activities and impose requirements intended to preserve such entity’s separateness that are substantially similar to the “special purpose provisions” in the limited liability company agreements of the bond issuers.

Internal Revenue Code means the Internal Revenue Code of 1986, as amended.

Issuing entity means FirstEnergy Ohio PIRB Special Purpose Trust 2013.

kW means kilowatt.

kWh means kilowatt-hour.

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

Nonbypassable means that phase-in-recovery charges cannot be avoided by any customer or other person obligated to pay such charges. Subject to the adjustment mechanism described in this prospectus, phase-in-recovery charges will apply to all customers of an electric distribution utility for as long as they remain customers of such electric distribution utility. If a customer of the electric distribution utility purchases electric generation service from a competitive retail electric service provider, the utility will collect the phase-in-recovery charges directly from that customer. If a customer of the utility subsequently receives retail electric distribution service from another electric distribution utility operating in the same service area, including by succession, assignment, transfer or merger, the phase-in-recovery charges will continue to apply to that customer.

NRSRO means a nationally recognized statistical rating organization.

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OE means Ohio Edison Company.

OE Funding means OE Funding LLC.

Ohio Companies means, collectively, CEI, OE and TE.

Payment date means the date or dates on which interest and principal are to be payable on the certificates.

PUCO means the Public Utilities Commission of Ohio and any successor thereto.

Phase-in costs means the costs of an electric distribution utility recoverable through the issuance of bonds.

Phase-in-recovery charges means a seller’s phase-in-recovery charge designated pursuant to the financing order, as the same may be adjusted from time to time as provided in the financing order.

Phase-in-recovery property means the phase-in-recovery property that is created simultaneous with the sale of such property by a seller to the applicable bond issuer and continues to exist pursuant to and in accordance with paragraph VI.A(6) of the financing order and sections 4928.232, 4928.234 and 4928.2312 of the Securitization Act and is sold by a seller to the applicable bond issuer under a sale agreement.

Rating agencies means Moody’s, Standard & Poor’s and Fitch.

Regulation AB means the rules of the SEC promulgated under Subpart 229.1100 – Asset-Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such may be amended from time to time.

Required capital level means the amount required to be funded in the capital subaccount of each bond issuer, which will equal 0.50% (in the case of each of CEI Funding LLC and OE Funding LLC) or 0.60% (in the case of TE Funding LLC) of the principal amount of bonds issued by each bond issuer.

Retail customer means a retail end user of electricity and related services provided by a retail electric service provider via the transmission and distribution system of a utility such as CEI, OE and TE.

Retail electric customer means a retail customer within CEI’s, OE’s and TE’s service territory, as the case may be.

SEC means the U.S. Securities and Exchange Commission (and any successor thereto).

Securitization Act means the Ohio House Bill 364, as passed by the Ohio legislature in December 2012 and effective on March 22, 2012, which enacted Ohio Revised Code §§ 4928.23 through 4928.2318.

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

Statutory Trust Act means Chapter 38 of Title 12 of the Delaware Code, 12 Del. C., § 3801 et seq., as the same may be amended from time to time and any successor statute.

TE means The Toledo Edison Company.

TE Funding means TE Funding LLC.

Treasury Regulations means proposed or issued regulations promulgated from time to time under the Internal Revenue Code.

Trust Indenture Act means the Trust Indenture Act of 1939, as amended.

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Trust property means, all bonds of each of the bond issuers held as the property of the issuing entity and all monies at any time paid thereon and all monies due and to become due thereunder, all rights of the certificate trustee or the certificate issuer, as holder of such bonds, in and to the collateral of each such bond issuer and any proceeds thereof, all funds and investment property from time to time deposited in the certificate account for each tranche of certificates, each certificate account for such tranche of certificates, all proceeds from the sale by the certificate trustee pursuant to Article V of the certificate indenture of bonds of any bond issuer and all amounts recovered by the certificate trustee from the institution by the certificate trustee of any judicial proceeding pursuant to section 5.03 of the certificate indenture, and all proceeds of each of the foregoing.

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$        

FirstEnergy Ohio PIRB Special Purpose Trust 2013

Issuing Entity

CEI Funding LLC

OE Funding LLC

TE Funding LLC

Issuers of the Bonds

The Cleveland Electric Illuminating Company

Ohio Edison Company

The Toledo Edison Company

Sponsors, Sellers, Initial Servicers and Depositors

Pass-Through Trust Certificates

PROSPECTUS SUPPLEMENT

Joint Bookrunning Managers

Citigroup Credit Agricole Securities Goldman, Sachs & Co.

Co-Managers

Barclays BofA Merrill Lynch RBS

No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. You must not rely on any unauthorized information or representations. This prospectus is an offer to sell only the certificates offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution

The following is an itemized list of the estimated expenses to be incurred in connection with the offering of the securities being offered hereunder other than underwriting discounts and commissions.

SEC registration fee	$	68,882
Legal fees and expenses	$	4,000,000
Blue sky fees and expenses	$	25,000
Accounting fees and expenses	$	210,000
Rating agencies’ fees and expenses	$	550,000
Printing fees and expenses	$	105,000
Trustees’ fees and expenses	$	35,000
Miscellaneous	$	10,000
Total	$	5,003,882

Item 15. Indemnification of Directors and Officers

Bond Issuers

Section 18-108 of the Delaware Limited Liability Company Act provides that subject to such standards and restrictions, if any, as are set forth in its limited liability company agreement, a limited liability company may and has the power to indemnify and hold harmless any member or other person from and against any and all claims and demands whatsoever.

Section 18 of the Amended and Restated Limited Liability Company Agreement (the “Agreement”) of each of the bond issuers provides as follows:

“The Company is hereby authorized to, and shall, indemnify such persons and entities, including Directors and officers, as determined by the Board of Directors from time to time. In addition, each person who at any time shall be, or shall have been, a Member or Director, or any person who, while a Member, Director or agent of the Company, is or was serving at the request of the Company as a director, member, manager, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another entity, shall be entitled to indemnification by the Company as and to the fullest extent permitted by the provisions of Delaware law or any successor statutory provisions, as from time to time amended.”

Sections 10.1(b) and 10.1(c) of the Agreement of each of the bond issuers is expected to provide that each bond issuer shall indemnify its member, special member, and any officer, director, employee or agent of such bond issuer and any employee, representative, agent or affiliate of the member or special member, to the fullest extent permitted by law, against any loss, damage or claim incurred by such person by reason of any act or omission performed or omitted by such person in good faith on behalf of the bond issuer and in a manner reasonably believed to be within the scope of the authority conferred on such person by the Agreement, except that no person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such person by reason of his or her gross negligence or willful misconduct with respect to such acts or omissions. To the fullest extent permitted by applicable law, expenses (including legal fees) incurred by an indemnified person defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the bond issuer prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the bond issuer of an undertaking by or on behalf of the indemnified person to repay such amount if it shall be determined that such person is not entitled to be indemnified as described in the Agreement.

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The Ohio Companies

Section 1701.13(E) of the Ohio General Corporation Law provides that an Ohio corporation may indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that the person is or was a director, officer, employee or agent of that corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, member, manager, or agent of another entity against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding, if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal matter, if the person had no reasonable cause to believe his conduct was unlawful. In addition, no indemnification shall be made in respect of a claim against such person by or in the right of the corporation, if the person is adjudged to be liable for negligence or misconduct in the performance of his duty to the corporation except to the extent provided in the court order. Indemnification may be made if ordered by a court or authorized in each specific case by the directors of the indemnifying corporation acting at a meeting at which, for the purpose, any director who is a party to or threatened with any such action, suit or proceeding may not be counted in determining the existence of a quorum and may not vote. If, because of the foregoing limitations, the directors are unable to act in this regard, such determination may be made by written opinion of independent legal counsel other than an attorney, or a firm having associated with it an attorney, who has been retained by or who has performed services for the corporation or any person to be indemnified during the five years preceding the date of determination. Alternatively, such determination may be made by the corporation’s shareholders.

Section 1701.13(E) of the Ohio General Corporation Law provides that the indemnification thereby permitted shall not be exclusive of any other rights that directors, officers or employees may have, including rights under insurance purchased by the corporation. Further, a right to indemnification or to advancement of expenses arising under a provision of the articles or the regulations of a corporation may not be eliminated or impaired by an amendment to that provision after the occurrence of the act or omission that becomes the subject of the civil, criminal, administrative, or investigative action, suit, or proceeding for which the indemnification or advancement of expenses is sought, unless the provision in effect at the time of that act or omission explicitly authorizes that elimination or impairment after the act or omission has occurred.

Section 38 of CEI’s Amended and Restated Code of Regulations provides as follows:

“The Corporation shall indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director, officer, employee, or agent of the Corporation, or is or was serving at the request of the Corporation as a director, trustee, officer, employee, member, manager, or agent of another corporation, limited liability company, partnership, joint venture, trust or other enterprise, against expenses, including attorney’s fees, judgments, fines and amounts paid in settlement, actually and reasonably incurred by him or her in connection with such action, suit, or proceeding, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, if he or she had no reasonable cause to believe his or her conduct was unlawful, to the full extent and according to the procedures and requirements set forth in the Ohio General Corporation Law as now in effect or as amended from time to time. The Corporation shall pay, to the full extent then permitted by law, expenses, including attorney’s fees, incurred by a member of the Board of Directors in defending any such action, suit or proceeding as they are incurred, in advance of the final disposition thereof, and may pay, in the same manner and to the full extent then permitted by law, such expenses incurred by any other person.

The indemnification and payment of expenses provided hereby shall not be exclusive of, and shall be in addition to, any other rights granted to those seeking indemnification under any law, the Articles of Incorporation, any agreement, vote of shareholders or disinterested members of the Board of Directors, or otherwise, both as to action in official capacities and as to action in another capacity while he or she is a member

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of the Board of Directors, or an officer, employee or agent of the Corporation, and shall continue as to a person who has ceased to be a member of the Board of Directors, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.”

Section 39 of CEI’s Amended and Restated Code of Regulations provides as follows:

“The Corporation may, to the full extent then permitted by law and authorized by the Board of Directors, purchase and maintain insurance or furnish similar protection, including but not limited to trust funds, letters of credit or self-insurance, on behalf of or for any persons described in Section 38 against any liability asserted against and incurred by any such person in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify such person against such liability. Insurance may be purchased from or maintained with a person in which the Corporation has a financial interest.”

Section 38 of OE’s Amended and Restated Code of Regulations provides as follows:

“The Corporation shall indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director, officer, employee, or agent of the Corporation, or is or was serving at the request of the Corporation as a director, trustee, officer, employee, member, manager, or agent of another corporation, limited liability company, partnership, joint venture, trust or other enterprise, against expenses, including attorney’s fees, judgments, fines and amounts paid in settlement, actually and reasonably incurred by him or her in connection with such action, suit, or proceeding, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, if he or she had no reasonable cause to believe his or her conduct was unlawful, to the full extent and according to the procedures and requirements set forth in the Ohio General Corporation Law as now in effect or as amended from time to time. The Corporation shall pay, to the full extent then permitted by law, expenses, including attorney’s fees, incurred by a member of the Board of Directors in defending any such action, suit or proceeding as they are incurred, in advance of the final disposition thereof, and may pay, in the same manner and to the full extent then permitted by law, such expenses incurred by any other person.

The indemnification and payment of expenses provided hereby shall not be exclusive of, and shall be in addition to, any other rights granted to those seeking indemnification under any law, the Articles of Incorporation, any agreement, vote of shareholders or disinterested members of the Board of Directors, or otherwise, both as to action in official capacities and as to action in another capacity while he or she is a member of the Board of Directors, or an officer, employee or agent of the Corporation, and shall continue as to a person who has ceased to be a member of the Board of Directors, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.”

Section 39 of OE’s Amended and Restated Code of Regulations provides as follows:

“The Corporation may, to the full extent then permitted by law and authorized by the Board of Directors, purchase and maintain insurance or furnish similar protection, including but not limited to trust funds, letters of credit or self-insurance, on behalf of or for any persons described in Section 38 against any liability asserted against and incurred by any such person in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify such person against such liability. Insurance may be purchased from or maintained with a person in which the Corporation has a financial interest.”

Section 38 of TE’s Amended and Restated Code of Regulations provides as follows:

“The Corporation shall indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director, officer, employee, or agent of the Corporation, or is or was serving at the request of the Corporation as a director, trustee, officer, employee,

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member, manager, or agent of another corporation, limited liability company, partnership, joint venture, trust or other enterprise, against expenses, including attorney’s fees, judgments, fines and amounts paid in settlement, actually and reasonably incurred by him or her in connection with such action, suit, or proceeding, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, if he or she had no reasonable cause to believe his or her conduct was unlawful, to the full extent and according to the procedures and requirements set forth in the Ohio General Corporation Law as now in effect or as amended from time to time. The Corporation shall pay, to the full extent then permitted by law, expenses, including attorney’s fees, incurred by a member of the Board of Directors in defending any such action, suit or proceeding as they are incurred, in advance of the final disposition thereof, and may pay, in the same manner and to the full extent then permitted by law, such expenses incurred by any other person.

The indemnification and payment of expenses provided hereby shall not be exclusive of, and shall be in addition to, any other rights granted to those seeking indemnification under any law, the Articles of Incorporation, any agreement, vote of shareholders or disinterested members of the Board of Directors, or otherwise, both as to action in official capacities and as to action in another capacity while he or she is a member of the Board of Directors, or an officer, employee or agent of the Corporation, and shall continue as to a person who has ceased to be a member of the Board of Directors, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.”

Section 39 of TE’s Amended and Restated Code of Regulations provides as follows:

“The Corporation may, to the full extent then permitted by law and authorized by the Board of Directors, purchase and maintain insurance or furnish similar protection, including but not limited to trust funds, letters of credit or self-insurance, on behalf of or for any persons described in Section 38 against any liability asserted against and incurred by any such person in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify such person against such liability. Insurance may be purchased from or maintained with a person in which the Corporation has a financial interest.”

The bond issuers believe that the officers and the non-independent directors of the bond issuers are serving at the request of the Ohio Companies and are therefore entitled to such indemnity from the Ohio Companies.

Directors and Officers Liability Insurance. Each Ohio Company maintains and pays the premium on contracts insuring it (with certain exclusions) against any liability to directors and officers it may incur under the above indemnity provisions and insuring its directors and officers (with certain exclusions) against liability and expense, including legal fees, which he or she may incur by reason of his or her relationship to such companies.

Indemnification Agreements. Each Ohio Company has entered into indemnification agreements with its respective directors. Each indemnification agreement provides, among other things, that the applicable Ohio Company will, subject to the agreement terms, indemnify a director if, by reason of the individual’s status as a director, the person incurs losses, liabilities, judgments, fines, penalties, or amounts paid in settlement in connection with any threatened, pending, or completed proceeding, whether of a civil, criminal, administrative, or investigative nature. In addition, each indemnification agreement provides for the advancement of expenses incurred by a director, subject to certain exceptions, in connection with proceedings covered by the indemnification agreement.

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Item 16. Exhibits

Exhibit Number	Description
1.1	Form of Underwriting Agreement.*
3.1	Certificate of Formation of CEI Funding LLC.**
3.2	Amended & Restated Limited Liability Company Agreement of CEI Funding LLC.**
3.3	Certificate of Formation of OE Funding LLC.**
3.4	Amended & Restated Limited Liability Company Agreement of OE Funding LLC.**
3.5	Certificate of Formation of TE Funding LLC.**
3.6	Amended & Restated Limited Liability Company Agreement of TE Funding LLC.**
4.1	Form of Bond Indenture.***
4.2	Form of Certificate Indenture.***
4.3	Form of Amended and Restated Declaration of Trust.**
4.4	Form of Bond (included in Exhibit 4.1).***
4.5	Form of Certificate (included in Exhibit 4.2).***
5.1	Opinion of Calfee, Halter & Griswold LLP, with respect to the legality of the Bonds.**
5.2	Opinion of Richards, Layton & Finger, P.A., with respect to the legality of the Certificates.**
5.3	Opinion of Richards, Layton & Finger, P.A., with respect to the due authorization of the Bonds of CEI Funding LLC.**
5.4	Opinion of Richards, Layton & Finger, P.A., with respect to the due authorization of the Bonds of OE Funding LLC.**
5.5	Opinion of Richards, Layton & Finger, P.A., with respect to the due authorization of the Bonds of TE Funding LLC.**
8.1	Opinion of Akin Gump Strauss Hauer & Feld LLP, with respect to federal tax matters.**
8.2	Opinion of Calfee, Halter & Griswold LLP, with respect to Ohio tax matters.**
10.1	Form of Phase-In-Recovery Property Purchase and Sale Agreement.**
10.2	Form of Phase-In-Recovery Property Servicing Agreement.***
10.3	Form of Bond Purchase Agreement.**
10.4	Form of Administration Agreement.**
10.5	Form of Fee and Indemnity Agreement.**
10.6	Form of Cross-Indemnity Agreement.**
23.1	Consent of Calfee, Halter & Griswold LLP (contained in its opinion to be filed as Exhibits 5.1, 8.2 and 99.7).**
23.2	Consent of Richards, Layton & Finger, P.A. (contained in its opinions to be filed as Exhibits 5.2, 5.3, 5.4 and 5.5).**
23.3	Consent of Akin Gump Strauss Hauer & Feld LLP (contained in its opinions to be filed as Exhibits 8.1 and 99.6).**
24.1	Powers of Attorney (included as part of signature pages filed herewith).**
25.1	Statement of Eligibility and Qualification of Bond Trustee on Form T-1 (CEI Funding LLC).***
25.2	Statement of Eligibility and Qualification of Bond Trustee on Form T-1 (OE Funding LLC).***
25.3	Statement of Eligibility and Qualification of Bond Trustee on Form T-1 (TE Funding LLC).***
25.4	Statement of Eligibility and Qualification of Certificate Trustee on Form T-1.**
99.1	Joint Application for Financing Order dated May 3, 2012, and amendment dated August 16, 2012.**
99.2	PUCO Financing Order dated October 10, 2012.**
99.3	Joint Application for Rehearing of PUCO Financing Order dated November 9, 2012.**
99.4	PUCO Financing Order—Entry on Rehearing dated December 19, 2012.**
99.5	PUCO Financing Order—Nunc pro tunc dated January 9, 2013.**
99.6	Form of Opinion of Akin Gump Strauss Hauer & Feld LLP, with respect to certain federal constitutional law matters.*
99.7	Form of Opinion of Calfee, Halter & Finger, P.A., with respect to certain Ohio state constitutional law matters.*
99.8	Consent of Director Nominee.**
99.9	Consent of Director Nominee.**

* Filed herewith.

** Previously filed.

*** Previously filed and re-filed herewith.

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Item 17. Undertakings

(A)  (a)   As to Rule 415:

Each undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the “Securities Act”);

(ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission (the “Commission”) pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

provided, however, that the undertakings set forth in clauses (i), (ii) and (iii) above do not apply if the information required to be included in a post-effective amendment by those clauses is contained in reports filed with or furnished to the Commission by the Registrants pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are incorporated by reference in this registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) of the Securities Act that is part of this registration statement; and provided further, however, that the undertakings set forth in clauses (i) and (ii) above do not apply if the information required to be included in a post-effective amendment by those clauses is provided pursuant to Item 1100(c) of Regulation AB.

(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) That, for the purpose of determining liability under the Securities Act to any purchaser, if the Registrants are relying on Rule 430B:

(i) each prospectus filed by the Registrants pursuant to Rule 424(b)(3) shall be deemed to be part of this registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

(ii) each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of an issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which the prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided,

II-6

however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.

(5) That, for the purpose of determining liability of such registrant under the Securities Act to any purchaser in the initial distribution of the securities, each Registrant undertakes that in a primary offering of securities of such Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the Registrants will be sellers to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) any preliminary prospectus or prospectus of an undersigned Registrants relating to the offering required to be filed pursuant to Rule 424;

(ii) any free writing prospectus relating to the offering prepared by or on behalf of an undersigned registrant or used or referred to by the Registrants;

(iii) the portion of any other free writing prospectus relating to the offering containing material information about the Registrant or its securities provided by or on behalf of the Registrants; and

(iv) any other communication that is an offer in the offering made by the Registrant to the purchaser.

(6) As to qualification of trust indentures:

The Registrants hereby undertake to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”) in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Trust Indenture Act.

(7) As to documents subsequently filed that are incorporated by reference:

The Registrants hereby undertake that, for purposes of determining any liability under the Securities Act each filing of the Registrants’ annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(8) As to indemnification:

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of each Registrant pursuant to the provisions described in Item 15 above, or otherwise, each Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by a Registrant of expenses incurred or paid by a director, officer or controlling person of a registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, that registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

(8) As to indemnification:

The Registrants hereby undertake that, for purposes of determining any liability under the Securities Act each filing of an annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act of a

third party that is incorporated by reference in this registration statement in accordance with Item 1100(c)(1) of Regulation AB shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-3 and has duly caused this registration statement on Form S-3 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Akron and State of Ohio, on the 4^th day of June, 2013:

THE CLEVELAND ELECTRIC ILLUMINATING COMPANY

/s/ James F. Pearson

By: James F. Pearson

Title: Senior Vice President and

          Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated:

Signature	Title	Date
/s/ Charles E. Jones, Jr.	President and Director (Principal Executive Officer)	June 4, 2013
Charles E. Jones, Jr.
/s/ James F. Pearson	Senior Vice President and Chief Financial Officer (Principal Financial Officer)	June 4, 2013
James F. Pearson
/s/ K. Jon Taylor	Vice President and Controller (Principal Accounting Officer)	June 4, 2013
K. Jon Taylor
/s/ Anthony J. Alexander	Director	June 4, 2013
Anthony J. Alexander
/s/ Mark T. Clark	Director	June 4, 2013
Mark T. Clark

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-3 and has duly caused this registration statement on Form S-3 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Akron and State of Ohio, on the 4^th day of June, 2013:

OHIO EDISON COMPANY
/s/ James F. Pearson
By:	James F. Pearson
Title:	Senior Vice President and Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated:

Signature	Title	Date
/s/ Charles E. Jones, Jr.	President and Director (Principal Executive Officer)	June 4, 2013
Charles E. Jones, Jr.
/s/ James F. Pearson	Senior Vice President and Chief Financial Officer (Principal Financial Officer)	June 4, 2013
James F. Pearson
/s/ K. Jon Taylor	Vice President and Controller (Principal Accounting Officer)	June 4, 2013
K. Jon Taylor
/s/ Anthony J. Alexander	Director	June 4, 2013
Anthony J. Alexander
/s/ Mark T. Clark	Director	June 4, 2013
Mark T. Clark

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-3 and has duly caused this registration statement on Form S-3 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Akron and State of Ohio, on the 4th day of June, 2013:

THE TOLEDO EDISON COMPANY
/s/ James F. Pearson
By:	James F. Pearson
Title:	Senior Vice President and Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated:

Signature	Title	Date
/s/ Charles E. Jones, Jr.	President and Director (Principal Executive Officer)	June 4, 2013
Charles E. Jones, Jr.
/s/ James F. Pearson	Senior Vice President and Chief Financial Officer (Principal Financial Officer)	June 4, 2013
James F. Pearson
/s/ K. Jon Taylor	Vice President and Controller (Principal Accounting Officer)	June 4, 2013
K. Jon Taylor
/s/ Anthony J. Alexander	Director	June 4, 2013
Anthony J. Alexander
/s/ Mark T. Clark	Director	June 4, 2013
Mark T. Clark

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-3 and has duly caused this registration statement on Form S-3 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Akron and State of Ohio, on the 4th d day of June, 2013:

CEI FUNDING LLC
/s/ James F. Pearson
By:	James F. Pearson
Title:	Senior Vice President and Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated:

Signature	Title	Date
/s/ Charles E. Jones, Jr.	President and Director (Principal Executive Officer)	June 4, 2013
Charles E. Jones, Jr.
/s/ James F. Pearson	Senior Vice President and Chief Financial Officer (Principal Financial Officer)	June 4, 2013
James F. Pearson
/s/ K. Jon Taylor	Vice President and Controller (Principal Accounting Officer)	June 4, 2013
K. Jon Taylor
/s/ Anthony J. Alexander	Director	June 4, 2013
Anthony J. Alexander
/s/ Mark T. Clark	Director	June 4, 2013
Mark T. Clark

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-3 and has duly caused this registration statement on Form S-3 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Akron and State of Ohio, on the 4th day of June, 2013:

OE FUNDING LLC
/s/ James F. Pearson
By:	James F. Pearson
Title:	Senior Vice President and Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated:

Signature	Title	Date
/s/ Charles E. Jones, Jr.	President and Director (Principal Executive Officer)	June 4, 2013
Charles E. Jones, Jr.
/s/ James F. Pearson	Senior Vice President and Chief Financial Officer (Principal Financial Officer)	June 4, 2013
James F. Pearson
/s/ K. Jon Taylor	Vice President and Controller (Principal Accounting Officer)	June 4, 2013
K. Jon Taylor
/s/ Anthony J. Alexander	Director	June 4, 2013
Anthony J. Alexander
/s/ Mark T. Clark	Director	June 4, 2013
Mark T. Clark

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-3 and has duly caused this registration statement on Form S-3 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Akron and State of Ohio, on the 4th day of June, 2013:

TE FUNDING LLC

/s/ James F. Pearson

By: James F. Pearson

Title: Senior Vice President and Chief Financial           Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated:

Signature	Title	Date
/s/ Charles E. Jones, Jr.	President and Director (Principal Executive Officer)	June 4, 2013
Charles E. Jones, Jr.
/s/ James F. Pearson	Senior Vice President and Chief Financial Officer (Principal Financial Officer)	June 4, 2013
James F. Pearson
/s/ K. Jon Taylor	Vice President and Controller (Principal Accounting Officer)	June 4, 2013
K. Jon Taylor
/s/ Anthony J. Alexander	Director	June 4, 2013
Anthony J. Alexander
/s/ Mark T. Clark	Director	June 4, 2013
Mark T. Clark

EXHIBIT INDEX

Exhibit Number	Description
1.1	Form of Underwriting Agreement.*
3.1	Certificate of Formation of CEI Funding LLC.**
3.2	Form of Amended & Restated Limited Liability Company Agreement of CEI Funding LLC.**
3.3	Certificate of Formation of OE Funding LLC.**
3.4	Form of Amended & Restated Limited Liability Company Agreement of OE Funding LLC.**
3.5	Certificate of Formation of TE Funding LLC.**
3.6	Form of Amended & Restated Limited Liability Company Agreement of TE Funding LLC.**
4.1	Form of Bond Indenture.***
4.2	Form of Certificate Indenture.***
4.3	Form of Amended & Restated Declaration of Trust.**
4.4	Form of Bond (included in Exhibit 4.1).***
4.5	Form of Certificate (included in Exhibit 4.2).***
5.1	Opinion of Calfee, Halter & Griswold LLP, with respect to the legality of the Bonds.**
5.2	Opinion of Richards, Layton & Finger, P.A., with respect to the legality of the Certificates.**
5.3	Opinion of Richards, Layton & Finger, P.A., with respect to the due authorization of the Bonds of CEI Funding LLC.**
5.4	Opinion of Richards, Layton & Finger, P.A., with respect to the due authorization of the Bonds of OE Funding LLC.**
5.5	Opinion of Richards, Layton & Finger, P.A., with respect to the due authorization of the Bonds of TE Funding LLC.**
8.1	Opinion of Akin Gump Strauss Hauer & Feld LLP, with respect to federal tax matters.**
8.2	Opinion of Calfee, Halter & Griswold LLP, with respect to Ohio tax matters.**
10.1	Form of Phase-In-Recovery Property Purchase and Sale Agreement.**
10.2	Form of Phase-In-Recovery Property Servicing Agreement.***
10.3	Form of Bond Purchase Agreement.**
10.4	Form of Administration Agreement.**
10.5	Form of Fee and Indemnity Agreement.**
10.6	Form of Cross-Indemnity Agreement.**
23.1	Consent of Calfee, Halter & Griswold LLP (contained in its opinion to be filed as Exhibits 5.1, 8.2 and 99.7).**
23.2	Consent of Richards, Layton & Finger, P.A. (contained in its opinions to be filed as Exhibits 5.2, 5.3, 5.4 and 5.5).**
23.3	Consent of Akin Gump Strauss Hauer & Feld LLP (contained in its opinions to be filed as Exhibits 8.1 and 99.6).**
24.1	Powers of Attorney (included as part of signature pages filed herewith).**
25.1	Statement of Eligibility and Qualification of Bond Trustee on Form T-1 (CEI Funding LLC).***
25.2	Statement of Eligibility and Qualification of Bond Trustee on Form T-1 (OE Funding LLC).***
25.3	Statement of Eligibility and Qualification of Bond Trustee on Form T-1 (TE Funding LLC).***
25.4	Statement of Eligibility and Qualification of Certificate Trustee on Form T-1.**
99.1	Joint Application for Financing Order dated May 3, 2012, and amendment dated August 16, 2012.**
99.2	PUCO Financing Order dated October 10, 2012.**
99.3	Joint Application for Rehearing of PUCO Financing Order dated November 9, 2012.**
99.4	PUCO Financing Order—Entry on Rehearing dated December 19, 2012.**
99.5	PUCO Financing Order—Nunc pro tunc dated January 9, 2013.**

Exhibit Number	Description
99.6	Form of Opinion of Akin Gump Strauss Hauer & Feld LLP, with respect to certain federal constitutional law matters.*
99.7	Form of Opinion of Calfee, Halter & Griswold LLP, with respect to certain Ohio state constitutional law matters.*
99.8	Consent of Director Nominee.**
99.9	Consent of Director Nominee.**

* Filed herewith.

** Previously filed.

*** Previously filed and re-filed herewith.

EX-1.1

Exhibit 1.1

FirstEnergy Ohio PIRB Special Purpose Trust 2013

(a Delaware statutory trust)

$[        ],000,000 [        ]% Pass-Through Trust Certificates, Tranche A-1, due 20[        ]

$[        ],000,000 [        ]% Pass-Through Trust Certificates, Tranche A-2, due 20[        ]

$[        ],000,000 [        ]% Pass-Through Trust Certificates, Tranche A-3, due 20[        ]

FORM OF UNDERWRITING AGREEMENT

June , 2013

Citigroup Global Markets Inc.

388 Greenwich Street

New York, NY 10013

Credit Agricole Securities (USA) Inc.

1301 Avenue of the Americas

New York, NY 10019

Goldman, Sachs & Co.

200 West Street

New York, NY 10282-2198

As Representatives of the Several

Underwriters named in Schedule I to the

Underwriting Agreement (as hereinafter defined)

Ladies and Gentlemen:

FirstEnergy Ohio PIRB Special Purpose Trust 2013, a statutory trust organized under the laws of the State of Delaware (the “Issuing Entity”), proposes, subject to the terms and conditions stated herein, to issue and sell to the several underwriters named in Schedule I hereto (the “Underwriters”, which term, when the context permits, shall also include any underwriters substituted as hereinafter provided in Section 15), for whom Citigroup Global Markets Inc., Credit Agricole Securities (USA) Inc., and Goldman, Sachs & Co. are acting as representatives (in such capacity, the “Representatives”), $[            ],000,000 aggregate principal amount of its Pass-Through Trust Certificates, Tranche A-1, due 20[__] (the “A-1 Certificates”), $[            ],000,000 aggregate principal amount of its Pass-Through Trust Certificates, Tranche A-2, due 20[__] (the “A-2 Certificates”), and $[            ],000,000 aggregate principal amount of its Pass-Through Trust Certificates, Tranche A-3, due 20[__] (the “A-3 Certificates” and, together with the A-1 Certificates and the A-2 Certificates, the “Certificates”), to be issued under the Certificate Indenture (as hereinafter defined), to be dated on or about the Closing Date (as hereinafter defined), between the Issuing Entity and U.S. Bank National Association, as trustee (the “Certificate Trustee”), as amended or supplemented from time to time (as so amended or supplemented, the “Certificate Indenture”) in accordance

with the terms set forth in this underwriting agreement (the “Underwriting Agreement”). The Certificates shall have the series designation, denominations, issue prices, maturities, interest rates, redemption provisions, if any, and other terms as set forth in the General Disclosure Package (as hereinafter defined).

The Certificates will represent fractional undivided beneficial interests in the phase-in-recovery bonds (the “Bonds”) of CEI Funding LLC (“CEI Funding”), a wholly-owned Delaware limited liability company subsidiary of The Cleveland Electric Illuminating Company, an Ohio corporation (“Cleveland Electric”), OE Funding LLC (“OE Funding”), a wholly-owned Delaware limited liability company subsidiary of Ohio Edison Company, an Ohio corporation (“Ohio Edison”), and TE Funding LLC (“TE Funding” and, together with CEI Funding and OE Funding, the “Bond Issuers”), a wholly-owned Delaware limited liability company subsidiary of The Toledo Edison Company, an Ohio corporation (“Toledo Edison” and, together with Cleveland Electric and Ohio Edison, the “Sponsors”). The Bonds will be 100% owned by the Issuing Entity. The Bonds will be issued pursuant to separate bond indentures (the “Bond Indentures”), each to be dated on or about the Closing Date, between each Bond Issuer and U.S. Bank National Association, as bond trustee (the “Bond Trustee”), and purchased by the Issuing Entity pursuant to separate Bond Purchase Agreements, each to be dated on or about the Closing Date (the “Bond Purchase Agreements”), between the Issuing Entity and each Bond Issuer.

The Bonds of each Bond Issuer will be secured primarily by, and will be payable from, the Phase-in-Recovery Property and the related Phase-in Recovery Charge (the “PIR Charge”) of each Bond Issuer described in the Issuance Advice Letter, as defined in the Financing Order (as hereinafter defined). Cleveland Electric will sell its Phase-in-Recovery Property to CEI Funding pursuant to a Phase-in-Recovery Property Purchase and Sale Agreement to be dated on or about the Closing Date (the “CEI Sale Agreement”), between Cleveland Electric and CEI Funding. Ohio Edison will sell its Phase-in-Recovery Property to OE Funding pursuant to a Phase-in-Recovery Property Purchase and Sale Agreement to be dated on or about the Closing Date (the “OE Sale Agreement”), between Ohio Edison and OE Funding. Toledo Edison will sell its Phase-in-Recovery Property to TE Funding pursuant to a Phase-in-Recovery Property Purchase and Sale Agreement to be dated on or about the Closing Date (the “TE Sale Agreement,” and together with the CEI Sale Agreement and the OE Sale Agreement, the “Sale Agreements”), between Toledo Edison and TE Funding. The Phase-in-Recovery Property sold pursuant to the CEI Sale Agreement will be serviced pursuant to a servicing agreement, to be dated on or about the Closing Date (the “CEI Servicing Agreement”), between Cleveland Electric, as servicer, and CEI Funding. The Phase-in-Recovery Property sold pursuant to the OE Sale Agreement will be serviced pursuant to a servicing agreement, to be dated on or about the Closing Date (the “OE Servicing Agreement”), between Ohio Edison, as servicer, and OE Funding. The Phase-in-Recovery Property sold pursuant to the TE Sale Agreement will be serviced pursuant to a servicing agreement, to be dated on or about the Closing Date (the “TE Servicing Agreement” and, together with the CEI Servicing Agreement and the OE Servicing Agreement, the “Servicing Agreements”), between Toledo Edison, as servicer, and TE Funding. Cleveland Electric will provide administrative services to CEI Funding pursuant to an administration agreement, to be dated on or about the Closing Date (the “CEI Administration Agreement”), between Cleveland Electric, as administrator, and CEI Funding. Ohio Edison will provide administrative services to OE Funding pursuant to an administration agreement, to be dated on or about the Closing Date (the “OE Administration Agreement”), between Ohio Edison, as

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administrator, and OE Funding. Toledo Edison will provide administrative services to TE Funding pursuant to an administration agreement, to be dated on or about the Closing Date (the “TE Administration Agreement” and, together with the CEI Administration Agreement and the OE Administration Agreement, the “Administration Agreements”), between Toledo Edison, as administrator, and TE Funding.

In connection with the transaction contemplated herein, the Public Utilities Commission of Ohio (“PUCO”) issued a Financing Order, dated October 12, 2012, as amended by Entry on Rehearing, dated December 19, 2012 and the Entry Nunc Pro Tunc, dated January 9, 2012 (the “Financing Order”).

Capitalized terms not hereinafter defined shall have the meanings ascribed to them in the Bond Indenture.

SECTION 1. Representations and Warranties.

(a) Representations and Warranties of the Bond Issuers. The Bond Issuers jointly and severally represent and warrant to, and agree with, each Underwriter that:

(i) The Bond Issuers, the Bonds and the Certificates meet the requirements for the use of Form S-3 under the Securities Act of 1933, as amended (the “Securities Act”) and the rules and regulations promulgated thereunder (the “Rules and Regulations”). The Bond Issuers, in their capacity as co-registrants and issuing entities with respect to the Bonds, and the Sponsors, in their capacities as co-registrants and sponsors for the Bond Issuers, have filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (File Nos. 333-187692, 333-187692-01, 333-187692-02, 333-187692-03, 333-187692-04 and 333-187692-05) on April 2, 2013, as amended by Amendment No. 1 thereto filed May 7, 2013, as further amended by Amendment No. 2 thereto filed May 24, 2013 and as further amended by Amendment No. 3 thereto filed June 4, 2013, including a prospectus and a form of prospectus supplement, for the registration under the Securities Act of up to $505,000,000 aggregate principal amount of the Certificates and a like aggregate principal amount of the Bonds. Such registration statement, as amended, has been declared effective by the Commission, and is currently effective. No stop order suspending the effectiveness of the Registration Statement (as hereinafter defined) has been issued under the Securities Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Sponsors or the Bond Issuers, threatened by the Commission. No securities registered with the Commission under the Securities Act pursuant to the Registration Statement Nos. 333-187692, 333-187692-01, 333-187692-02, 333-187692-03, 333-187692-04 and 333-187692-05 have been previously issued. References herein to the “Registration Statement” shall be deemed to refer to Registration Statement Nos. 333-187692, 333-187692-01, 333-187692-02, 333-187692-03, 333-187692-04 and 333-187692-05, including any amendments thereto, all documents incorporated by reference therein pursuant to Item 12 of Form S-3 (the “Incorporated Documents”) and any information in a prospectus or a prospectus supplement deemed or retroactively deemed to be a part thereof pursuant to Rule 430B under the Securities Act that has not been superseded or modified. “Registration Statement” without reference to a time means the Registration Statement as of the Applicable Time (as hereinafter defined), which time shall be considered the “Effective Date” of the Registration Statement relating to the Certificates and the Bonds. For purposes of

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this definition, information contained in a form of prospectus or prospectus supplement that is deemed retroactively to be a part of the Registration Statement pursuant to Rule 430B shall be considered to be included in the Registration Statement as of the time specified in Rule 430B. For purposes of this Underwriting Agreement, “Statutory Prospectus” as of any time means the preliminary prospectus supplement (which term includes the base prospectus) relating to the Certificates that is included in the Registration Statement immediately prior to that time, including any document incorporated by reference therein and any basic prospectus or prospectus supplement deemed to be a part thereof pursuant to Rule 430B or 430C that has not been superseded or modified. For purposes of this definition, information contained in a form of prospectus (including a prospectus supplement) that is deemed retroactively to be a part of the Registration Statement pursuant to Rule 430B shall be considered to be included in the Statutory Prospectus only as of the actual time that form of prospectus (including a prospectus supplement) is filed with the Commission pursuant to Rule 424(b) and not retroactively. “Prospectus” means the final prospectus supplement (which term includes the base prospectus) that discloses the public offering prices and other final terms of the Certificates and otherwise satisfies Section 10(a) of the Securities Act. The Statutory Prospectus and the Issuer Free Writing Prospectus (as hereinafter defined) identified in Section B of Schedule II hereto, considered together, are referred to herein as the “General Disclosure Package”.

(ii) At the time the Registration Statement initially became effective, at the time that each amendment thereto for the purposes of complying with Section 10(a)(3) of the Securities Act (whether by post-effective amendment, incorporated report or form of prospectus) became effective and on the Effective Date relating to the Certificates, the Registration Statement conformed and will conform in all material respects to the requirements of the Securities Act and the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), as the case may be, and the Rules and Regulations and did not and will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. On the date hereof, on the date of any filing pursuant to Rule 424(b) and on the Closing Date, the Registration Statement and the Prospectus will conform in all material respects to the requirements of the Securities Act, the Trust Indenture Act and the Rules and Regulations, and neither of such documents will include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, except that the foregoing does not apply to statements in or omissions from any of such documents made in reliance upon and in conformity with information furnished in writing to the Bond Issuers or the Sponsors by any Underwriter through the Representatives, if any, specifically for use therein or to any statements in or omissions from the Statement of Eligibility on Form T-1 of each of the Bond Trustees under the Bond Indentures or the Certificate Trustee under the Certificate Indenture filed as exhibits to the Registration Statement or to any statements or omissions made in the Registration Statement or the Prospectus relating to The Depository Trust Company Book Entry System, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 8(b) hereof, but nothing contained herein is intended as a waiver of compliance with the Securities Act or the Rules and Regulations.

(iii) The documents incorporated or deemed to be incorporated by reference in the General Disclosure Package and the Prospectus, at the time they were or hereafter are filed

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with the Commission, complied and will comply in all material respects with the requirements, as applicable, of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the Commission thereunder, and, when read together with other information in the General Disclosure Package or the Prospectus, as applicable, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they are made, not misleading.

(iv)(A) At the earliest time after the filing of the Registration Statement that the Bond Issuers or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Securities Act) of the Certificates and (B) on the date hereof, none of the Bond Issuers was and no Bond Issuer is an “ineligible issuer,” as defined in Rule 405.

(v) As of the Applicable Time, neither (A) the General Disclosure Package, nor (B) any electronic road show used in connection with the offering of the Certificates or any individual Issuer Free Writing Prospectus, in each case when considered together with the General Disclosure Package, included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from any prospectus included in the Registration Statement or any Issuer Free Writing Prospectus in reliance upon and in conformity with information furnished in writing to the Bond Issuers or the Sponsors by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 8(b) hereof. “Applicable Time” means [            ] [a.m.][p.m.] (Eastern Time) on the date hereof. “Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 (“Rule 433”) under the Securities Act, relating to the Certificates.

(vi) Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the public offering and sale of the Certificates or until any earlier date that the Bond Issuers or Sponsors notified or notify the Representatives as described in the next sentence and in Section 3(j) hereof, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information then contained in the Registration Statement, the General Disclosure Package and the Prospectus. The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus in reliance upon and in conformity with information furnished in writing to the Bond Issuers or the Sponsors by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 8(b) hereof.

(vii) Since the most recent time as of which information is given in the General Disclosure Package, other than as set forth therein or contemplated thereby, there has not occurred any change, or any development involving a prospective change, which has had or would reasonably be expected to have a Bond Issuer Material Adverse Effect (as hereinafter defined).

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(viii) Each Bond Issuer has been duly formed and is validly existing as a limited liability company in good standing under the laws of the State of Delaware, has the power and authority to execute, deliver and perform its obligations under this Underwriting Agreement, its Bonds, its Bond Indenture, its Sale Agreement, its Servicing Agreement, its LLC Agreement, its Administration Agreement, the Fee and Indemnity Agreement, the Cross-Indemnity Agreement and the other agreements and instruments contemplated by the Prospectus and the General Disclosure Package (collectively, the “Bond Issuer Documents”) and to own, lease or operate its property and to conduct its business as described in the Prospectus and the General Disclosure Package and is qualified to transact business and is in good standing in each other jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the condition (financial or otherwise), earnings, business or properties of the Bond Issuer (a “Bond Issuer Material Adverse Effect”); each Bond Issuer has conducted and will conduct no business in the future that would be inconsistent with the description of such Bond Issuer’s business set forth in the Prospectus and the General Disclosure Package; each Bond Issuer is not a party to or bound by any agreement or instrument other than the Bond Issuer Documents and other agreements or instruments incidental to its formation; each Bond Issuer has no liabilities or obligations other than those arising out of the transactions contemplated by the Bond Issuer Documents and as described in the Prospectus and the General Disclosure Package; Cleveland Electric is the sole owner of the limited liability company interests of CEI Funding; Ohio Edison is the sole owner of the limited liability company interests of OE Funding; Toledo Edison is the sole owner of the limited liability company interests of TE Funding; and based on current law, each Bond Issuer is not classified as an entity taxable as a corporation for United States federal income tax purposes.

(ix) The Bond Issuers have no subsidiaries.

(x) This Underwriting Agreement has been authorized, executed and delivered by the Bond Issuers.

(xi) Each Bond Indenture has been, and on the Closing Date, each Bond Indenture will be, (1) qualified under the Trust Indenture Act and (2) authorized, executed and delivered by the applicable Bond Issuer and each Bond Indenture will constitute a valid and binding agreement enforceable against the applicable Bond Issuer in accordance with its terms except as may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting the enforcement of creditors’ rights generally, by general equitable principles (whether enforceability is considered in a proceeding in equity or in law) and by an implied covenant of good faith and fair dealing.

(xii) The Bonds of each Bond Issuer have been authorized by such Bond Issuer, and, when they have been executed by such Bond Issuer, authenticated by the Bond Trustee in the manner provided for in the applicable Bond Indenture, and issued and delivered against payment therefor as provided in the applicable Bond Purchase Agreement, such Bonds will constitute valid and binding obligations of such Bond Issuer enforceable against such Bond Issuer in accordance with their terms, except as may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting the enforcement of creditors’ rights generally, by general equitable principles (whether such

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enforceability is considered in a proceeding in equity or at law) and by an implied covenant of good faith and fair dealing and will be entitled to the benefits provided by the applicable Bond Indenture.

(xiii) The Bonds and the Bond Indentures conform, and on the Closing Date, will conform, in all material respects to the descriptions thereof contained in the Prospectus and the General Disclosure Package.

(xiv) Neither the issuance and sale of the Bonds, the purchase of the Phase-in-Recovery Property by each Bond Issuer from the applicable Sponsor, nor the execution and delivery by the Bond Issuers of, and the performance by the Bond Issuers of their obligations under, this Underwriting Agreement, the Bond Purchase Agreements, the Bond Indentures and the Bonds will result in a violation or default of, or the imposition of any lien, charge or encumbrance upon any property or assets of the Bond Issuers pursuant to, (a) any provision of applicable law, (b) the certificate of formation or limited liability company agreement, each as amended, of the Bond Issuers, (c) any agreement or other instrument binding upon the Bond Issuers or (d) any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Bond Issuers or any of their properties, except in the case of clauses (a), (c) and (d) for any such violation, default, lien, charge or encumbrance that would not reasonably be expected to have a Bond Issuer Material Adverse Effect. Furthermore, the Bond Issuers are not (x) in violation of any applicable law, or (y) in violation of or default under its respective certificate of formation or limited liability company agreement, as the case may be, each as amended, or in the performance of any bond, debenture, note or any other evidence of indebtedness or any indenture, mortgage, deed of trust or other contract, lease or other instrument to which it is a party or by which it is bound, or to which any of its property or assets is subject, except such violations or defaults as have been waived or that would not reasonably be expected to have, singly or in the aggregate, a Bond Issuer Material Adverse Effect.

(xv) Other than as disclosed in the Prospectus and the General Disclosure Package, there are no legal or governmental proceedings pending or, to the knowledge of the Bond Issuers, threatened, to which the Bond Issuers are a party or to which any of the properties of the Bond Issuers are subject wherein an unfavorable decision, ruling or finding would reasonably be expected to have a Bond Issuer Material Adverse Effect or a material adverse effect on the power or ability of the Bond Issuers to perform their obligations under this Underwriting Agreement, or to consummate the transactions contemplated by the Prospectus and the General Disclosure Package.

(xvi) Other than the (1) filing of the Issuance Advice Letter, the Certification (as defined in the Financing Order) and non-action on the part of the PUCO as and within the time period contemplated by ordering paragraphs F(4) and F(5) of the Financing Order, (2) financing statements to perfect liens contemplated by the Prospectus and (3) as otherwise set forth or contemplated in the Prospectus or the Financing Order, no consent, approval, authorization, filing with or order of any court or governmental agency or body is required in connection with the transactions contemplated herein, except such as have been obtained under the Securities Act and the Trust Indenture Act and such as may be required under the blue sky laws of any jurisdiction in connection with the purchase and distribution of the Certificates by the Underwriters in the manner contemplated herein and in the General Disclosure Package.

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Each Bond Issuer has all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted except where the failure to do so, in each case, would not reasonably be expected to have a Bond Issuer Material Adverse Effect.

(xvii) Each Bond Issuer is not, and after giving effect to the offering and sale of the Certificates and the application of the proceeds thereof as described in the Prospectus and the General Disclosure Package will not be, an “investment company” within the meaning of the Investment Company Act of 1940, as amended (the “1940 Act”).

(xviii) Each of the Bond Purchase Agreements, Sale Agreements, Servicing Agreements, LLC Agreements, Administration Agreements, the Fee and Indemnity Agreement, the Cross-Indemnity Agreement and this Underwriting Agreement has been duly authorized by the Bond Issuers party thereto, and when executed and delivered by the Bond Issuers and the other parties thereto, will constitute a valid and legally binding obligation of such Bond Issuers, enforceable against such Bond Issuers in accordance with its terms, except as may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting the enforcement of creditors’ rights generally, by general equitable principles (whether enforceability is considered in a proceeding in equity or in law) and by an implied covenant of good faith and fair dealing.

(xix) Each Bond Issuer has complied with the written representations, acknowledgements and covenants (the “17g-5 Representations”) relating to compliance with Rule 17g-5 under the Exchange Act set forth in the (i) undertaking, dated as of August 20, 2012, by the Sponsors to Moody’s Investor Service, Inc. (“Moody’s”), (ii) letter, dated August 20, 2012, from the Sponsors to Standard & Poor’s Rating Services, a division of the McGraw Hill Companies, Inc. (“S&P”), and (iii) letter, dated August 20, 2012, by the Sponsors to Fitch Ratings Inc. (“Fitch”, and together with Moody’s and S&P, the “Rating Agencies”), other than any noncompliance that would not have a material adverse effect on the rating of the Certificates or the Certificates or arising from the breach by an Underwriter of the representations and warranties and covenants set forth in Section 12 hereof.

(xx) Each Bond Issuer will comply, and has complied, in all material respects, with its diligence and disclosure obligations in respect to the Certificates or the Bonds under Rule 193 of the Securities Act and Items 1111(a)(7) and 1111(a)(8) of Regulation AB.

(b) Representations and Warranties of the Sponsors. The Sponsors [jointly and severally] represent and warrant to, and agree with, each Underwriter that:

(i) The Sponsors, in their capacities as co-registrants and sponsors with respect to the Certificates and the Bonds, and the Bond Issuers meet the requirements for the use of Form S-3 under the Securities Act and the Rules and Regulations. The Bond Issuers, in their capacity as co-registrants and issuing entities with respect to the Bonds, and the Sponsors, in their capacities as co-registrants and sponsors for the Bond Issuers and the Issuing Entity, have filed with the Commission the Registration Statement for the registration under the Securities Act of up to $505,000,000 aggregate principal amount of the Certificates. The Registration Statement has been declared effective by the Commission, and is currently effective. No stop order suspending the effectiveness of the Registration Statement has been issued under the

8

Securities Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Bond Issuers, threatened by the Commission. No securities registered with the Commission under the Securities Act pursuant to the Registration Statement have been previously issued.

(ii) At the time the Registration Statement initially became effective, at the time that each amendment thereto for the purposes of complying with Section 10(a)(3) of the Securities Act (whether by post-effective amendment, incorporated report or form of prospectus) became effective and on the Effective Date relating to the Certificates and the Bonds, the Registration Statement conformed and will conform in all material respects to the requirements of the Securities Act and the Trust Indenture Act, as the case may be, and the Rules and Regulations and did not and will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. On the date hereof, on the date of any filing pursuant to Rule 424(b) and on the Closing Date, the Registration Statement and the Prospectus will conform in all material respects to the requirements of the Securities Act, the Trust Indenture Act and the Rules and Regulations, and neither of such documents will include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, except that the foregoing does not apply to statements in or omissions from any of such documents made in reliance upon and in conformity with information furnished in writing to the Sponsors by any Underwriter through the Representatives, if any, specifically for use therein or to any statements in or omissions from the Statement of Eligibility on Form T-1 of the Bond Trustee under the applicable Bond Indenture or the Certificate Trustee under the Certificate Indenture, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 8(b) hereof, but nothing contained herein is intended as a waiver of compliance with the Securities Act or the Rules and Regulations.

(iii) The documents incorporated or deemed to be incorporated by reference in the General Disclosure Package and the Prospectus, at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements, as applicable, of the Exchange Act and the rules and regulations of the Commission thereunder, and, when read together with other information in the General Disclosure Package or the Prospectus, as applicable, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they are made, not misleading.

(iv)(A) At the earliest time after the filing of the Registration Statement that the Issuing Entity or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Securities Act) of the Certificates and (B) on the date hereof, none of the Bond Issuers is an “ineligible issuer,” as defined in Rule 405.

(v) As of the Applicable Time, neither (A) the General Disclosure Package, nor (B) any electronic road show used in connection with the offering of the Certificates or any individual Issuer Free Writing Prospectus, in each case when considered together with the General Disclosure Package, included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the

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circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from any prospectus included in the Registration Statement or any Issuer Free Writing Prospectus in reliance upon and in conformity with information furnished in writing to the Sponsors or the Bond Issuers by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 8(b) hereof.

(vi) Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the public offering and sale of the Certificates or until any earlier date that the Sponsors or the Bond Issuers notified or notify the Representatives as described in the next sentence and in Section 3(j) hereof, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information then contained in the Registration Statement, the General Disclosure Package and the Prospectus. The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus in reliance upon and in conformity with information furnished in writing to the Sponsors by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 8(b) hereof.

(vii) Since the most recent time as of which information is given in the General Disclosure Package, other than as set forth therein or contemplated thereby, there has not occurred any change, or any development involving a prospective change, which has had or would reasonably be expected to have a Sponsor Material Adverse Effect (as hereinafter defined).

(viii) Each Sponsor has been incorporated and is validly existing as a corporation in good standing under the laws of the State of Ohio, has the corporate power and authority to execute, deliver and perform its obligations under this Underwriting Agreement, its Sale Agreement, its Servicing Agreement, its Administration Agreement and the other agreements and instruments contemplated by the Prospectus and the General Disclosure Package (collectively, the “Sponsor Documents”) and to own, lease or operate its property and to conduct its business as described in the Prospectus and the General Disclosure Package and is qualified to transact business and is in good standing in each other jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the condition (financial or otherwise), earnings, business or properties of the Sponsor and its subsidiaries, taken as a whole (a “Sponsor Material Adverse Effect”); each Sponsor has all requisite power and authority to sell its Phase-in-Recovery Property as described in the Prospectus and the General Disclosure Package and to otherwise perform its obligations under any Sponsor Document to which it is a party. Cleveland Electric is the sole owner of the limited liability company interests of CEI Funding; Ohio Edison is the sole owner of the limited liability company interests of OE Funding; and Toledo Edison is the sole owner of the limited liability company interests of TE Funding.

(ix) As of March 31, 2013, other than Ohio Edison each Sponsor has no significant subsidiaries (as defined in Regulation S-X).

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(x) This Underwriting Agreement has been authorized, executed and delivered by each Sponsor.

(xi) The transfer by each Sponsor of all of its rights and interests under the Financing Order relating to the Certificates and the Bonds and the execution and delivery by each Sponsor of, and the performance by each Sponsor of its obligations under, this Underwriting Agreement will not result in a violation or default of, or the imposition of any lien, charge or encumbrance upon any property or assets of such Sponsor pursuant to, (a) any provision of applicable law, (b) the articles of incorporation or code of regulations or bylaws, as the case may be, each as amended, of such Sponsor, (c) any agreement or other instrument binding upon such Sponsor or (d) any judgment, order or decree of any governmental body, agency or court having jurisdiction over such Sponsor or any of its properties, except in the case of clauses (a), (c) and (d) for any such violation, default, lien, charge or encumbrance that would not reasonably be expected to have a Sponsor Material Adverse Effect. Furthermore, no Sponsor is (x) in violation of any applicable law, or (y) in violation of or default under, its respective articles of incorporation or code of regulations or bylaws, as the case may be, each as amended, or in the performance of any bond, debenture, note or any other evidence of indebtedness or any indenture, mortgage, deed of trust or other contract, lease or other instrument to which it is a party or by which it is bound, or to which any of its property or assets is subject, except such violations or defaults as have been waived or that would not reasonably be expected to have, singly or in the aggregate, a Sponsor Material Adverse Effect.

(xii) Other than as disclosed in the Prospectus and the General Disclosure Package, there are no legal or governmental proceedings pending or, to the knowledge of the Sponsors, threatened, to which the Sponsors or the Bond Issuers are a party or to which any of their properties are subject wherein an unfavorable decision, ruling or finding would reasonably be expected to have a Sponsor Material Adverse Effect or a material adverse effect on the power or ability of the Sponsors to perform their obligations under this Underwriting Agreement, or to consummate the transactions contemplated by the Prospectus and the General Disclosure Package.

(xiii) Other than the (1) filing of the Issuance Advice Letter, the Certification (as defined in the Financing Order) and non-action on the part of the PUCO as and within the time period contemplated by ordering paragraphs F(4) and F(5) of the Financing Order, (2) financing statements to perfect liens contemplated by the Prospectus and (3) as otherwise set forth or contemplated in the Prospectus or the Financing Order, no consent, approval, authorization, filing with or order of any court or governmental agency or body is required in connection with the transactions contemplated herein, except such as have been obtained under the Securities Act and the Trust Indenture Act and such as may be required under the blue sky laws of any jurisdiction in connection with the purchase and distribution of the Certificates by the Underwriters in the manner contemplated herein and in the General Disclosure Package. The Sponsors have all governmental licenses, authorizations, consents and approvals required to carry on their business as now conducted except where the failure to do so, in each case, would not reasonably be expected to have a Sponsor Material Adverse Effect.

(xiv) The Sponsors are not, and after giving effect to the offering and sale of the Certificates and the application of the proceeds thereof as described in the Prospectus and the

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General Disclosure Package, neither the Sponsors, the Bond Issuers nor the Issuing Entity will be, an “investment company” within the meaning of the 1940 Act.

(xv) The nationally recognized accounting firm reasonably acceptable to the Representatives, which has performed certain procedures with respect to statistical and structural information contained in the Statutory Prospectus and the Prospectus, is an independent registered public accounting firm as required by the Securities Act and the Rules and Regulations and the rules and regulations of the Public Company Accounting Oversight Board.

(xvi) Each of the Sale Agreements, Servicing Agreements, Administration Agreements, and this Underwriting Agreement has been duly authorized by the Sponsors party thereto, and when executed and delivered by each of the Sponsors party thereto and the other parties thereto, will constitute a valid and legally binding obligation of such Sponsors, enforceable against such Sponsors in accordance with its terms, except as may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting the enforcement of creditors’ rights generally, by general equitable principles (whether enforceability is considered in a proceeding in equity or in law) and by an implied covenant of good faith and fair dealing.

(xvii) The Sponsors have complied with the 17g-5 Representations relating to compliance with Rule 17g-5 under the Exchange Act set forth in the (i) letter, dated as of August 20, 2012, from the Sponsors to Moody’s, (ii) letter, dated August 20, 2012, from the Sponsors to S&P, and (iii) letter, dated August 20, 2012, from the Sponsors to Fitch, other than any noncompliance that would not have a material adverse effect on the rating of the Certificates or the Certificates or arising from the breach by an Underwriter of the representations and warranties and covenants set forth in Section 12 hereof.

(xviii) The Sponsors will comply, and have complied, in all material respects, with its diligence and disclosure obligations in respect to the Certificates and the Bonds under Rule 193 of the Securities Act and Items 1111(a)(7) and 1111(a)(8) of Regulation AB.

(c) The Sponsors and the Bond Issuers further [jointly] represent and warrant to, and agree with, each of the Underwriters as follows:

(i) The operations of the Sponsors, the Bond Issuers and the Issuing Entity are and have been conducted at all times in material compliance with all applicable financial recordkeeping and reporting requirements, including those of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and the applicable anti-money laundering statutes of jurisdictions where the Sponsors, the Bond Issuers and the Issuing Entity conduct business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Anti-Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving any of the Sponsors, the Bond Issuers and the Issuing Entity with respect to the Anti-Money Laundering Laws is pending or, to the best knowledge of the Sponsors and the Bond Issuers, threatened.

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(ii) None of the Sponsors, the Bond Issuers, the Issuing Entity or any of their respective affiliates, nor any director, officer, or employee, nor, to their knowledge, any agent or representative of the Sponsors, the Bond Issuers or the Issuing Entity or of any of their respective affiliates, has taken or will take any action in furtherance of an offer, payment, promise to pay, or authorization or approval of the payment or giving of money, property, gifts or anything else of value, directly or indirectly, to any “government official” (including any officer or employee of a government or government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office) to influence official action or secure an improper advantage; and the Sponsors, the Bond Issuers and the Issuing Entity and their respective affiliates have conducted their businesses in compliance with applicable anti-corruption laws and have instituted and maintain and will continue to maintain policies and procedures designed to promote and achieve compliance with such laws and with the representation and warranty contained herein.

(iii)(x) None of the Sponsors, the Bond Issuers or the Issuing Entity, or to the knowledge of the Sponsors and the Bond Issuers, any director, officer, employee, agent, affiliate or representative of the Sponsors or the Bond Issuers or the Issuing Entity is an individual or entity (“Person”) that is, or is owned or controlled by a Person that is: (A) the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the United Nations Security Council (“UNSC”), the European Union (“EU”), Her Majesty’s Treasury (“HMT”), or other relevant sanctions authority (collectively, “Sanctions”), nor (B) located, organized or resident in a country or territory that is the subject of Sanctions (including, without limitation, Burma/Myanmar, Cuba, Iran, North Korea, Sudan and Syria), and (y) each Sponsor and Bond Issuer covenants that it will not, directly or indirectly, use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person: (A) to fund or facilitate any activities or business of or with any Person or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions; or (B) in any other manner that will result in a violation of Sanctions by any Person (including any Person participating in the offering, whether as underwriter, advisor, investor or otherwise).

(iv) There are no Ohio transfer taxes relating to the transfer of the Phase-in-Recovery Property by each Sponsor to the applicable Bond Issuer or the issuance of the Certificates to the Underwriters pursuant to this Underwriting Agreement required to be paid at or prior to the Closing Date by the Sponsors, the Bond Issuers or the Issuing Entity.

(d) Representations and Warranties of the Issuing Entity. The Issuing Entity represents and warrants to, and agrees with, each Underwriter that:

(i) The Issuing Entity has been duly formed and is validly existing as a statutory trust under the laws of the State of Delaware, has the power and authority to execute, deliver and perform its obligations under this Underwriting Agreement, the Certificate Indenture and the other agreements and instruments contemplated by the Prospectus and the General Disclosure Package (collectively, the “Issuing Entity Documents”) and to own, lease or operate its property and to conduct its business as described in the Prospectus and the General Disclosure Package and is qualified to transact business and is in good standing in each other jurisdiction in

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which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the condition (financial or otherwise), earnings, business or properties of the Issuing Entity (an “Issuing Entity Material Adverse Effect”); the Issuing Entity has conducted and will conduct no business in the future that would be inconsistent in any material respect with the description of its business set forth in the Prospectus and the General Disclosure Package; the Issuing Entity is not a party to or bound by any agreement or instrument other than the Issuing Entity Documents and other agreements or instruments incidental to its formation; the Issuing Entity has no liabilities or obligations other than those arising out of the transactions contemplated by the Issuing Entity Documents and as described in the Prospectus and the General Disclosure Package.

(ii) This Underwriting Agreement has been authorized, executed and delivered by the Issuing Entity.

(iii) The Certificate Indenture has been, and on the Closing Date will be, (1) qualified under the Trust Indenture Act and (2) authorized, executed and delivered by the Issuing Entity and the Certificate Indenture is a valid and binding agreement enforceable against the Issuing Entity in accordance with its terms except as may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting the enforcement of creditors’ rights generally, by general equitable principles (whether enforceability is considered in a proceeding in equity or in law) and by an implied covenant of good faith and fair dealing.

(iv) The Certificates have been authorized by such Issuing Entity, and, when they have been executed by such Issuing Entity, authenticated by the Certificate Trustee in the manner provided for in the Certificate Indenture, and issued and delivered against payment therefor as provided therein, such Certificates will constitute valid and binding obligations of such Issuing Entity enforceable against such Issuing Entity in accordance with their terms, except as may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting the enforcement of creditors’ rights generally, by general equitable principles (whether such enforceability is considered in a proceeding in equity or at law) and by an implied covenant of good faith and fair dealing and will be entitled to the benefits provided by the Certificate Indenture.

(v) The Certificates and the Certificate Indenture conform, and on the Closing Date, will conform, in all material respects to the descriptions thereof contained in the Prospectus and the General Disclosure Package.

(e) Officer’s Certificates. Any certificate signed by any authorized officer of the Bond Issuers or Sponsors and delivered to the Underwriters or to counsel for the Underwriters in connection with this offering shall be deemed a representation and warranty by the Bond Issuers or Sponsors to the Underwriters as to the matters covered thereby as of the date of such certificate.

SECTION 2. Sale and Delivery to Underwriters; Closing.

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(a) Purchase and Sale. Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Issuing Entity agrees to sell to each Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Issuing Entity, at a purchase price of [            ]%, in the case of the A-1 Certificates, and [            ]%, in the case of the A-2 Certificates, [            ]%, in the case of the A-3 Certificates, of the principal amount thereof, plus accrued interest, if any, from [            ], 2013 to the Closing Date, the principal amount of the Certificates set forth opposite such Underwriter’s name in Schedule I hereto plus any additional principal amount of Certificates which such Underwriter may become obligated to purchase pursuant to the provisions of Section 13, subject to such adjustments among the Underwriters as the Representatives, on behalf of the Underwriters, shall make to eliminate any sales or purchases of fractional Certificates.

(b) Payment and Delivery. Payment of the purchase price for, and delivery of certificates for, the Certificates shall be made at the office of Akin Gump Strauss Hauer & Feld LLP, One Bryant Park, New York, New York 10036, or at such other place as shall be agreed upon by the Issuing Entity and the Representatives on behalf of the Underwriters, at 10:00 a.m., (Eastern Time), on the sixth (or if the Certificates are priced, as contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30 p.m. Eastern time, the seventh) full business day after the date hereof, or such other time not later than ten business days after such date as shall be agreed upon by the Issuing Entity and the Representatives on behalf of the Underwriters (such time and date of payment and delivery being herein called the “Closing Date”).

Payment shall be made to the Issuing Entity by wire transfer of immediately available funds to a bank account designated by the Issuing Entity, against delivery to the Underwriters for the account of the Underwriters of the Certificates to be purchased by them.

The delivery of the Certificates shall be made in fully registered form, registered in the name of CEDE & CO., to the offices of The Depository Trust Company (the “DTC”) in New York, New York, or its designee, and the Underwriters shall accept such delivery.

The certificate(s) representing the Certificates shall be made available by the Issuing Entity for examination by the Representatives not later than 2:00 p.m. (Eastern Time) on the last business day prior to the Closing Date at such place as may be agreed upon between the Representatives and the Issuing Entity.

SECTION 3. Covenants of the Bond Issuers. The Bond Issuers covenant with the Underwriters as follows:

(a) To promptly file each Statutory Prospectus and the Prospectus with the Commission pursuant to Rule 424(b) under the Securities Act.

(b) To advise the Representatives promptly of the institution by the Commission of any stop order proceedings in respect of the Registration Statement or of any part thereof or any order suspending or preventing the use of the Statutory Prospectus, the Prospectus or any Issuer Free Writing Prospectus, and will use its reasonable best efforts to prevent the issuance of any such stop order or other such order and to obtain as soon as possible its lifting, if issued.

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(c) To furnish without charge to the Representatives as many copies of the Prospectus and any documents incorporated by reference therein at or after the date thereof and any amendments and supplements thereto as the Representatives may reasonably request. The terms “supplement” and “amendment” as used in this Underwriting Agreement shall include all documents filed by the Issuing Entity with the Commission subsequent to the date of the Prospectus pursuant to the Exchange Act which are deemed to be incorporated by reference in the Prospectus.

(d) Before amending or supplementing the Registration Statement or any Statutory Prospectus or filing with the Commission any document pursuant to Section 13, 14 or 15(d) of the Exchange Act, during the period referred to in paragraph (e) below, to furnish to the Representatives a copy of each such proposed amendment, supplement or document for the Representatives’ review prior to filing and not to file any such proposed amendment, supplement or document to which the Representatives reasonably object.

(e) To promptly notify the Underwriters, and confirm such notice in writing (which notice and confirmation may be satisfied by providing the Underwriters with any related periodic report filed under the Exchange Act), of (x) any filing made by the Bond Issuers, Issuing Entity or Sponsors of information relating to the offering of the Certificates with any securities exchange or any other regulatory body in the United States or any other jurisdiction, and (y) any material changes in or affecting the business, properties, results of operations or financial condition of the Bond Issuers and their subsidiaries, taken as a whole, which (i) make any statement in the Prospectus as then amended or supplemented materially false or misleading or (ii) are not disclosed in the Prospectus as then amended or supplemented. If, at any time when a prospectus covering the Certificates is (or but for the exemption in Rule 172 under the Securities Act would be) required by law to be delivered in connection with sales of the Certificates by an Underwriter or dealer, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or counsel for the Bond Issuers, Issuing Entity or Sponsors, to amend the Registration Statement or to amend or supplement the Prospectus or modify the information incorporated by reference therein in order that the Prospectus will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Prospectus is (or but for the exemption in Rule 172 under the Securities Act would be) delivered to a purchaser, not misleading, or if it is necessary to amend or supplement the Prospectus or modify such information to comply with the Securities Act and the Rules and Regulations, forthwith to prepare and file with the Commission and to furnish (subject to the conditions in paragraph (c) above), at its own expense, to the Underwriters and to the dealers (whose names and addresses the Representatives will furnish to the Bond Issuers to which Certificates may have been sold by the Underwriters), and to any other dealers upon request, such amendments or supplements to the Prospectus or modifications to the documents incorporated by reference therein, so that the statements in the Prospectus as so amended, supplemented or modified will not, in the light of the circumstances existing at the time such Prospectus is delivered to a purchaser, be misleading or so that the Prospectus will comply with the Securities Act and the Rules and Regulations. If, prior to the Closing Date, there occurs an event or development as a result of which the General Disclosure Package would include an untrue statement of a material fact or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances when the General Disclosure

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Package is delivered to a purchaser, not misleading, to promptly notify the Representatives so that any use of the General Disclosure Package may cease until it is amended or supplemented, and will promptly prepare an amendment or supplement that will correct such statement or omission.

(f) The Bond Issuers will use commercially reasonable efforts, in cooperation with the Underwriters, to qualify the Certificates for offering and sale under the applicable securities laws of such jurisdictions as the Underwriters may designate and will maintain such qualifications in effect as long as required for the sale of the Certificates; provided, however, that the Bond Issuers shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. The Bond Issuers will file such statements and reports as may be required by the laws of each jurisdiction in which the Certificates have been qualified as above provided. The Bond Issuers will promptly advise the Representatives of the receipt by the Bond Issuers of any notification with respect to the suspension of the qualification of the Certificates for sale in any such state or jurisdiction or the initiating or threatening of any proceedings for such purpose. The Bond Issuers will also supply the Underwriters with such information as is necessary for the determination of the legality of the Certificates for investment under the laws of such jurisdictions as the Underwriters may reasonably request.

(g) The Bond Issuers shall take all reasonable action necessary to enable the Rating Agencies to provide their respective credit ratings of the Certificates.

(h) The Bond Issuers will use and will cause the Issuing Entity to use the proceeds received from the sale of the Bonds in the manner specified in the Prospectus under “Use of Proceeds.”

(i) During a period beginning on the date of this Underwriting Agreement and continuing to and including the Closing Date, the Bond Issuers will not, and will cause the Issuing Entity to not, without the prior written consent of the Representatives, directly or indirectly, issue, sell, offer or agree to sell, grant any option for the sale of, or otherwise dispose of, any other debt securities issued or guaranteed by the Bond Issuers or any of their subsidiaries substantially similar to the Certificates or securities of the Bond Issuers or any of their subsidiaries that are convertible into, or exchangeable for, the Certificates.

(j) If at any time following the issuance of an Issuer Free Writing Prospectus there occurs an event or development as a result of which such Issuer Free Writing Prospectus would conflict with the information then contained in the Registration Statement, would include an untrue statement of a material fact or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that time, not misleading, (A) the Bond Issuers will promptly notify the Representatives and (B) the Bond Issuers will promptly amend or supplement and will cause the Issuing Entity to promptly amend or supplement such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.

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(k) Each Bond Issuer will make generally available, or cause its Servicer to make generally available, to its security holders, as soon as it is practicable to do so, an earning statement (which need not be audited, unless required so to be under Section 11(a) of the Securities Act), covering a period of at least 12 months beginning within three months after the “effective date” (as defined in Rule 158 under the Securities Act) of the Registration Statement, which earning statement shall satisfy the requirements of Section 11(a) of the Securities Act.

(l) For a period from the date of this Underwriting Agreement until the retirement of the Bonds or until such time as the Underwriters shall cease to maintain a secondary market in the Certificates, whichever occurs first, the Bond Issuers shall (or shall cause the Sponsors to) post on its website and, to the extent consistent with the Bonds Issuers’ and the Sponsors’ obligations under applicable law, file with or furnish to the Commission in periodic reports and other reports as are required from time to time under Section 13 or Section 15(d) of the Exchange Act, and shall direct the Bond Trustee to post on its website for Bondholders such information as is required by Section 3.07(g) of the Bond Indenture. To the extent that the Bond Issuers’ obligations are terminated or limited by an amendment to Section 3.07(g) of the Bond Indenture, or otherwise, such obligations shall be correspondingly terminated or limited hereunder.

(m) So long as any of the Certificates are outstanding, the Bond Issuers will furnish to the Representatives, if and to the extent not posted on the Bond Issuers’ or its affiliate’s website, (A) as soon as available, a copy of each report of the Bond Issuers filed with the Commission under the Exchange Act or mailed to the Bondholders (to the extent such reports are not publicly available on the Commission’s website), (B) a copy of any filings with the PUCO pursuant to the Financing Order including, but not limited to, any issuance advice letter or any annual, semi-annual or more frequent phase-in-recovery charge adjustment filings, and (C) from time to time, any information concerning the Bond Issuers as the Representatives may reasonably request.

(n) So long as the Certificates or the Bonds are rated by any Rating Agency, the Issuing Entity and the Bond Issuers will comply with the 17g-5 Representations, other than any noncompliance that would not have a material adverse effect on the rating of the Certificates or the Certificates or arising from the breach by an Underwriter of the representations and warranties and covenants set forth in Section 12 hereof

SECTION 4. Covenants of the Sponsors. The Sponsors covenant with the Underwriters as follows:

(a) The Sponsors shall promptly file or cause the Bond Issuers and the Issuing Entity to file each Statutory Prospectus and Prospectus with the Commission pursuant to Rule 424(b) of the Securities Act.

(b) The extent permitted by applicable law and the agreements and instruments that bind the Sponsors, the Sponsors will use their reasonable best efforts to cause the Bond Issuers to comply with the covenants set forth in Section 3 hereof.

(c) The Sponsors will promptly advise the Representatives promptly of the institution by the Commission of any stop order proceedings in respect of the Registration Statement or of

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any part thereof or any order suspending or preventing the use of the Statutory Prospectus, the Prospectus or any Issuer Free Writing Prospectus, and will use its reasonable best efforts to prevent the issuance of any such stop order or other such order and to obtain as soon as possible its lifting, if issued.

(d) Before amending or supplementing the Registration Statement or any Statutory Prospectus or filing with the Commission any document pursuant to Section 13, 14 or 15(d) of the Exchange Act, during the period referred to in paragraph (e) below, to furnish to the Representatives a copy of each such proposed amendment, supplement or document for the Representatives’ review prior to filing and not to file any such proposed amendment, supplement or document to which the Representatives reasonably object.

(e) The Sponsors will promptly notify the Underwriters, and confirm such notice in writing (which notice and confirmation may be satisfied by providing the Underwriters with any related periodic report filed under the Exchange Act), of (x) any filing made by the Sponsors or the Bond Issuers of information relating to the offering of the Certificates with any securities exchange or any other regulatory body in the United States or any other jurisdiction, and (y) any material changes in or affecting the business, properties, results of operations or financial condition of the Sponsors or the Bond Issuers that (i) make any statement in the Prospectus as then amended or supplemented materially false or misleading or (ii) are not disclosed in the Prospectus as then amended or supplemented. If, at any time when a prospectus covering the Certificates is (or but for the exemption in Rule 172 under the Securities Act would be) required by law to be delivered in connection with sales of the Certificates by an Underwriter or dealer, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or counsel for the Sponsors, to amend the Registration Statement or to amend or supplement the Prospectus or modify the information incorporated by reference therein in order that the Prospectus will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Prospectus is (or but for the exemption in Rule 172 under the Securities Act would be) delivered to a purchaser, not misleading, or if it is necessary to amend or supplement the Prospectus or modify such information to comply with the Securities Act and the Rules and Regulations, forthwith to prepare and file with the Commission and to furnish (subject to the conditions in paragraph (c) above), at its own expense, to the Underwriters and to the dealers (whose names and addresses the Representatives will furnish to the Sponsors) to which Certificates may have been sold by the Underwriters, and to any other dealers upon request, such amendments or supplements to the Prospectus or modifications to the documents incorporated by reference therein, so that the statements in the Prospectus as so amended, supplemented or modified will not, in the light of the circumstances existing at the time such Prospectus is delivered to a purchaser, be misleading or so that the Prospectus will comply with the Securities Act and the Rules and Regulations. If, prior to the Closing Date, there occurs an event or development as a result of which the General Disclosure Package would include an untrue statement of a material fact or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances when the General Disclosure Package is delivered to a purchaser, not misleading, the Sponsors promptly will notify the Representatives so that any use of the General Disclosure Package may cease until it is amended or supplemented, and will promptly prepare an amendment or supplement that will correct such statement or omission.

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(f) The Sponsors will cause the Bond Issuers and the Issuing Entity to use the proceeds received by them from the sale of the Bonds and the Certificates, respectively, in the manner specified in the Prospectus under “Use of Proceeds.”

(g) During a period beginning on the date of this Underwriting Agreement and continuing to and including the Closing Date, the Bond Issuers will not, without the prior written consent of the Representatives, directly or indirectly, issue, sell, offer or agree to sell, grant any option for the sale of, or otherwise dispose of, any other debt securities issued or guaranteed by the Bond Issuers substantially similar to the Certificates or securities of the Bond Issuers that are convertible into, or exchangeable for, the Certificates.

(h) The Sponsors shall take all reasonable action necessary to enable the Rating Agencies to provide their respective credit ratings of the Certificates.

(i) The Sponsors will make generally available to its security holders, as soon as it is practicable to do so, an earnings statement (which need not be audited, unless required so to be under Section 11(a) of the Securities Act), covering a period of at least 12 months beginning within three months after the “effective date” (as defined in Rule 158 under the Securities Act) of the Registration Statement, which earning statement shall satisfy the requirements of Section 11(a) of the Securities Act.

(j) The initial PIR Charge will be calculated in accordance with the Financing Order.

(k) If at any time following the issuance of an Issuer Free Writing Prospectus there occurs an event or development as a result of which such Issuer Free Writing Prospectus would conflict with the information then contained in the Registration Statement, would include an untrue statement of a material fact or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that time, not misleading, (A) the Sponsors will cause the Bond Issuers to promptly notify the Representatives and (B) the Sponsors will cause the Bond Issuers to promptly amend or supplement such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.

(l) So long as the Certificates or the Bonds are rated by any Rating Agency, the Sponsors, the Issuing Entity and the Bond Issuers will comply with the 17g-5 Representations, other than any noncompliance that would not have a material adverse effect on the rating of the Certificates or the Certificates or arising from the breach by an Underwriter of the representations and warranties and covenants set forth in Section 12 hereof.

SECTION 5. Free Writing Prospectuses.

(a) Free Writing Prospectuses. The Bond Issuers and Sponsors represent and agree that without the prior written consent of the Representatives, and each Underwriter represents and agrees that, unless it obtains the prior written consent of the Bond Issuers, the Sponsors and the Representatives, the Issuing Entity has not made and will not make any offer relating to the Certificates that would constitute an Issuer Free Writing Prospectus, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405, required to be filed with the Commission. The Bond Issuers and the Sponsors further represent that they and the Issuing Entity have complied and will comply with the requirements of Rule 164 under the Securities

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Act and Rule 433 applicable to any Issuer Free Writing Prospectus, including timely Commission filing where required, legending and record keeping. The parties hereto agree that the only Issuer Free Writing Prospectuses issued on or prior to the Applicable Time and consented to by the parties are specified on Schedule II hereto (including the final term sheet prepared in accordance with Section 5(b) below).

(b) Final Term Sheet. The Bond Issuers will prepare a final term sheet relating to the Certificates, containing only information that describes the final terms of the Certificates and otherwise in a form consented to by the Representatives, and will file such final term sheet within the period required by Rule 433(d)(5)(ii). Any such final term sheet is an Issuer Free Writing Prospectus for purposes of this Underwriting Agreement and is specified in Schedule II hereto.

SECTION 6. Payment of Expenses.

(a) Expenses. Unless otherwise indicated, the Bond Issuers and the Sponsors, subject to the Cap (as defined in the Bond Indenture), to the extent applicable, will pay (or cause to be paid) all expenses incident to the performance of their obligations under this Underwriting Agreement, including (i) the preparation, printing and any filing of each Statutory Prospectus, the Prospectus, any electronic road show and each Issuer Free Writing Prospectus and of each amendment or supplement thereto, (ii) the preparation, reproduction and delivery to the Underwriters of this Underwriting Agreement and such other documents as may be required in connection with the offering, purchase, sale and delivery of the Certificates, (iii) the preparation, issuance and delivery of the certificates for the Certificates to the Underwriters, including any charges of DTC in connection therewith, (iv) the fees and disbursements of the Bond Issuers, the Sponsors and the Issuing Entity’s counsel, accountants and other advisors, including counsel and advisors to the PUCO and the fees and disbursements of the Underwriters’ counsel (such fees and disbursements not to exceed the estimated amounts of such fees and disbursements set forth in Exhibit C to the application for the Financing Order filed with the PUCO by the Sponsors, (v) the qualification of the Certificates under securities laws in accordance with the provisions of Section 3(f) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of the Blue Sky Survey, any supplement thereto and any legal investment survey (such fees and disbursements not to exceed $7,500), (vi) the fees and expenses of the Bond Trustees and the Certificate Trustee, including the fees and disbursements of counsel for the Bond Trustees and the Certificate Trustee in connection with the Bond Indentures and the Certificate Indenture and (vii) any fees payable in connection with the rating of the Certificates in accordance with Section 3(g) hereof.

(b) Termination of Underwriting Agreement. Neither the Sponsors nor the Bond Issuers shall be required to pay any amount for any expenses of the Underwriters (other than as contemplated by Section 6(a)(iv) above), except that if this Underwriting Agreement is terminated by the Underwriters in accordance with the provisions of Section 7, the Bond Issuers shall reimburse the Underwriters for all of their reasonable out-of-pocket expenses, including fees and disbursements of counsel for the Underwriters which were reasonably incurred.

SECTION 7. Conditions of Underwriters’ Obligations. The obligations of the Underwriters hereunder are subject to the accuracy of the representations and warranties of the Bond Issuers and the Sponsors contained in Sections 1(a) and (b), respectively, and in

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Section 1(c) as of the Applicable Time, the time this Underwriting Agreement is executed and delivered by the parties hereto and the Closing Date, of the Sponsors contained in Article III of the Sale Agreements and Section 6.01 of the Servicing Agreements, and to the accuracy of the statements made in any certificates delivered pursuant to the provisions hereof, to the performance by the Issuing Entity, the Bond Issuers and the Sponsors of their covenants and other obligations hereunder, and to the following further conditions:

(a) Opinions of Counsel.

(i) Morgan, Lewis & Bockius LLP, counsel for the Underwriters, shall have furnished to the Representatives their written opinion, dated the Closing Date, in form and substance reasonably acceptable to the Underwriters, with respect to the issuance and sale of the Certificates, [the Bonds], the Certificate Indenture, [the Bond Indentures,] the other Issuing Entity, Bond Issuers and Sponsor Documents, the Registration Statement and other related matters; and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters.

(ii) Richards, Layton & Finger, P.A., special Delaware counsel for the Issuing Entity, the Bond Issuers and the Sponsors, shall have furnished to the Representatives their written opinion, dated the Closing Date, in form and substance reasonably acceptable to the Underwriters, regarding the filing of a voluntary bankruptcy petition.

(iii) Richards, Layton & Finger, P.A., special Delaware counsel for the Issuing Entity, the Bond Issuers and the Sponsors, shall have furnished to the Representatives their written opinion, dated the Closing Date, in form and substance reasonably acceptable to the Underwriters, regarding certain Delaware Uniform Commercial Code matters with respect to the Issuing Entity and the Bond Issuers.

(iv) Akin Gump Strauss Hauer & Feld LLP, counsel for the Bond Issuers and the Sponsors, shall have furnished to the Representatives their written opinion, dated the Closing Date, in form and substance reasonably acceptable to the Underwriters, regarding the 1940 Act, Trust Indenture Act and perfection by control for deposit accounts and securities accounts under New York law and effectiveness of the Registration Statement and fair summary matters under Federal law.

(v) Akin Gump Strauss Hauer & Feld LLP, counsel for the Bond Issuers and the Sponsors, shall have furnished to the Representatives their letter, dated the Closing Date, in form and substance reasonably acceptable to the Underwriters, regarding negative assurances.

(vi) Akin Gump Strauss Hauer & Feld LLP, counsel for the Bond Issuers and the Sponsors, shall have furnished to the Representatives their written opinion, dated the Closing Date, in form and substance reasonably acceptable to the Underwriters, with respect to federal “substantive consolidation” matters.

(vii) Richards, Layton & Finger, P.A., counsel for the Issuing Entity, the Bond Issuers and the Sponsors, shall have furnished to the Representatives their written opinion,

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dated the Closing Date, in form and substance reasonably acceptable to the Underwriters, regarding certain limited liability company matters under Delaware law related to the Bond Issuers, the LLC Agreements and the LLC Act.

(viii) Akin Gump Strauss Hauer & Feld LLP, counsel for the Bond Issuers and the Sponsors, shall have furnished to the Representatives their written opinion, dated the Closing Date, in form and substance reasonably acceptable to the Underwriters, regarding certain federal tax matters.

(ix) Calfee, Halter & Griswold LLP, counsel for the Bond Issuers and the Sponsors, shall have furnished to the Representatives their written opinion, dated the Closing Date, in form and substance reasonably acceptable to the Underwriters, with respect to the characterization of the transfer of the Phase-in-Recovery Property by each Sponsor to the applicable Bond Issuer as a “true sale” for Ohio law purposes.

(x) Akin Gump Strauss Hauer & Feld LLP, counsel for the Bond Issuers and the Sponsors, shall have furnished to the Representatives their written opinions, dated the Closing Date, in form and substance reasonably acceptable to the Underwriters, regarding certain federal constitutional matters.

(xi) Richards, Layton & Finger, P.A., counsel for the Certificate Trustee, shall have furnished to the Representatives their written opinions, dated the Closing Date, in form and substance reasonably acceptable to the Underwriters, regarding certain matters relating to the Certificate Trustee and the Certificate Indenture.

(xii) Calfee, Halter & Griswold LLP, counsel for the Issuing Entity, the Bond Issuers and the Sponsors, shall have furnished to the Representatives their opinion, dated the Closing Date, in form and substance reasonably acceptable to the Underwriters, regarding certain Ohio constitutional matters and the Statute.

(xiii) Calfee, Halter & Griswold LLP, counsel for the Issuing Entity, the Bond Issuers and the Sponsors, shall have furnished to the Representatives their opinion, dated the Closing Date, in form and substance reasonably acceptable to the Underwriters, with respect to the treatment of retail electric provider payments as PIR Charges.

(xiv) Calfee, Halter & Griswold LLP, counsel for the Issuing Entity, the Bond Issuers and the Sponsors, shall have furnished to the Representatives their written opinion, dated the Closing Date, in form and substance reasonably acceptable to the Underwriters, regarding enforceability and certain Ohio perfection and priority issues.

(xv) Akin Gump Strauss Hauer & Feld LLP, counsel for the Bond Issuers and the Sponsors, shall have furnished to the Representatives their written opinion, dated the Closing Date, in form and substance reasonably acceptable to the Underwriters, with respect to federal “true sale” matters.

(xvi) Richards, Layton & Finger, P.A., counsel for the Issuing Entity, the Bond Issuers and the Sponsors, shall have furnished to the Representatives their written opinion, dated the Closing Date, in form and substance reasonably acceptable to the Underwriters, regarding certain statutory trust matters under Delaware law related to the Issuing Entity, the Certificates and certain of the Basic Documents.

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(xvii) Calfee, Halter & Griswold LLP, counsel to the Bond Issuers and the Sponsors, shall have furnished to the Representatives their written opinion, dated the Closing Date, in form and substance reasonably acceptable to the Underwriters, regarding certain Ohio tax matters.

(xviii) Calfee, Halter & Griswold LLP, counsel to the Bond Issuers and the Sponsors, shall have furnished to the Representatives their written opinion, dated the Closing Date, in form and substance reasonably acceptable to the Underwriters, regarding the Bonds, the Bond Indenture and certain additional corporate matters.

(b) AUP Letter. On or before the date of this Underwriting Agreement and on or before the Closing Date, a nationally recognized accounting firm reasonably acceptable to the Representatives shall have furnished to the Representatives one or more reports regarding certain calculations and computations relating to the Bonds and the Certificates, in form or substance reasonably satisfactory to the Representatives, in each case in respect of which the Representatives shall have made specific requests therefor and shall have provided acknowledgment or similar letters to such firm reasonably necessary in order for such firm to issue such reports.

(c) No Stop Orders. Subsequent to the execution and delivery of this Underwriting Agreement and prior to the Closing Date, no stop order suspending the effectiveness of the Registration Statement or any part thereof shall be in effect, no order of the Commission directed to the adequacy or accuracy of any document incorporated or deemed to be incorporated by reference in the Prospectus shall be in effect, and no proceedings for either purpose or pursuant to Section 8A of the Securities Act against the Issuing Entity or relating to the offering of the Certificates shall be pending before or threatened by the Commission.

(d) No Material Adverse Change. Subsequent to the execution and delivery of this Underwriting Agreement and prior to the Closing Date, there shall not have been, since the date hereof or since the respective dates as of which information is given in the General Disclosure Package and the Prospectus (exclusive of any amendments or supplements thereto subsequent to the Applicable Time), any Bond Issuer Material Adverse Effect, Sponsor Material Adverse Effect or Issuing Entity Material Adverse Effect whether or not arising in the ordinary course of business.

(e) Officer’s Certificate. The Underwriters shall have received on the Closing Date a certificate, dated the Closing Date and signed by an executive officer of each Bond Issuer and each Sponsor, to the effect set forth in Sections 7(c) and (d) above and to the effect that the representations and warranties of the Bond Issuers in Section 1(a), the representations and warranties of the Sponsors in Section 1(b), and the representations and warranties of the Sponsors and the Bond Issuers in Section 1(c) were true and correct in all material respects when made and are true and correct in all material respects with the same force and effect as though expressly made at and as of the Closing Date, and that the Bond Issuers, Sponsors [and the Issuing Entity] have each complied in all material respects with all agreements and satisfied all

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conditions on its part to be performed or satisfied at or prior to the Closing Date. The executive officer signing and delivering such certificate may rely upon the best of his or her knowledge as to proceedings threatened.

(f) Maintenance of Ratings. The Sponsors shall have delivered to the Underwriters a letter, dated on or about the Closing Date, from each of Moody’s, S&P and Fitch, or other evidence reasonably satisfactory to the Underwriters, confirming that the Certificates have been assigned the ratings set forth on the Issuer Free Writing Prospectus substantially in the form attached as Annex A to Schedule II hereof and filed with the Commission on the date hereof; and since the date of this Underwriting Agreement, there shall not have occurred any downgrading or withdrawal, nor shall any notice have been given of any intended or potential downgrading or withdrawal or of any surveillance or review for a possible change that either indicates a negative change or does not indicate the direction of the possible change, in the rating accorded any of the Issuing Entity’s securities by Moody’s, S&P or Fitch.

(g) Clearance and Settlement. At the Closing Date, the Certificates shall be eligible for clearance and settlement through the facilities of DTC.

(h) Additional Documents. At the Closing Date, counsel for the Underwriters shall have been furnished with such documents and opinions as they may reasonably require for the purpose of enabling them to pass upon the issuance and sale of the Certificates as herein contemplated, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained.

(i) Termination of Underwriting Agreement. If any condition contemplated by this Section shall not have been fulfilled when and as required to be fulfilled, this Underwriting Agreement may be terminated by the Underwriters by notice to the Issuing Entity, the Bond Issuers and the Sponsors at any time at or prior to the Closing Date, and such termination shall be without liability of any party to any other party except as provided in Section 6 and except that Sections 8, 9, 10, 16(a) and 16(b) shall survive any such termination and remain in full force and effect.

SECTION 8. Indemnification.

(a) Indemnification of Underwriters. The Bond Issuers and Sponsors [jointly and severally] agree to indemnify and hold harmless each Underwriter, each of its directors and officers and each person, if any, who controls any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages and liabilities that arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement at any time, any Statutory Prospectus at any time, the Prospectus, the General Disclosure Package, any Issuer Free Writing Prospectus or the Issuance Advice Letters, or arise out of or are based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and agrees to reimburse each Underwriter and each such controlling person, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage or liability, except insofar as such losses, claims, damages or liabilities that are finally

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judicially determined to arise out of or be based upon any such untrue statement or omission or alleged untrue statement or omission are based upon information furnished in writing to the Bond Issuers and Sponsors by any Underwriter expressly for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 8(b) hereof, or are based upon statements or omissions from that part of the Registration Statement that constitutes the Statement of Eligibility on Form T-1 of the Bond Trustees and the Certificate Trustee. This indemnity agreement will be in addition to any liability which the Bond Issuers and the Sponsors may otherwise have.

(b) Indemnification of Company, Directors and Officers. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Bond Issuers, the Sponsors and the Issuing Entity, their respective directors, its officers who sign the Registration Statement and any person controlling the Bond Issuers, the Sponsors and the Issuing Entity within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity and reimbursement obligation from the Bond Issuers and Sponsors to each Underwriter, but only with respect to untrue statements or alleged untrue statements or omissions or alleged omissions made in the Registration Statement, any Statutory Prospectus, the Prospectus, the General Disclosure Package or any Issuer Free Writing Prospectus in reliance upon and in conformity with written information furnished to the Bond Issuers and the Sponsors by the Underwriters through the Representative expressly for use therein. The Bond Issuers and the Sponsors acknowledge that the statements set forth in the last paragraph of the cover page of the Prospectus regarding delivery of the Certificates and, under the caption “Underwriting,” (i) the concession and reallowance figures appearing in the third paragraph, (ii) the fourth paragraph, (iii) the seventh paragraph, and (iv) the third sentence in the eighth paragraph related to market making activities, in the Prospectus constitute the only information furnished in writing by or on behalf of the several Underwriters for use in the Registration Statement, any Statutory Prospectus, the Prospectus or any Issuer Free Writing Prospectus. This indemnity agreement will be in addition to any liability which the Underwriters may otherwise have.

(c) Actions Against Parties; Notification. In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to either of the two preceding paragraphs, such person (the “indemnified party”) shall promptly notify the person against whom such indemnity may be sought (the “indemnifying party”) in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. The omission so to notify the indemnifying party (i) will not relieve it from any liability under paragraph (a) or (b) above unless and to the extent such failure results in the loss by the indemnifying party of substantial rights and defenses and (ii) will not, in any event relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel, (ii) the named parties to any such action (including any impleaded parties) include both the indemnified party and the indemnifying party, and the indemnified party shall have reasonably concluded upon advice of

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counsel that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party or (iii) the indemnifying party fails to assume the defense of such proceeding or to employ counsel reasonably satisfactory to the indemnified party. It is understood that, except as provided in the preceding sentence, the indemnifying party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate counsel (in addition to local counsel) for all such indemnified parties. Such counsel shall be designated in writing by the Representatives in the case of parties indemnified pursuant to the second preceding paragraph, and by the Bond Issuers in the case of parties indemnified pursuant to the first preceding paragraph.

(d) Settlement. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there has been a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding and (ii) does not include any statement as to, or any admission of, fault, culpability or failure to act by or on behalf of any indemnified party.

SECTION 9. Contribution. In the event that the indemnity provided for in Section 8 is held by a court to be unavailable, in whole or in part, to hold harmless an indemnified party for any reason, the Bond Issuers, the Sponsors and the Underwriters, severally and not jointly, agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending the same) (collectively, the “Losses”) to which the Bond Issuers, the Sponsors and any of the Underwriters may be subject in such proportion as is appropriate to reflect the relative benefits received by the Bond Issuers and the Sponsors on the one hand and by the Underwriters on the other hand from the offering of the Certificates. If the allocation provided by the immediately preceding sentence is held by a court to be unavailable for any reason, the Bond Issuers, the Sponsors and the Underwriters, severally and not jointly, agree to contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Bond Issuers and the Sponsors on the one hand and of the Underwriters on the other hand in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations. Benefits received by the Bond Issuers and the Sponsors shall be deemed to be equal to the total net proceeds from the offering (before deducting expenses) received by the Bond Issuers and the Sponsors, and benefits received by the Underwriters shall be deemed to be equal to the discounts and commissions received by the Underwriters. Relative fault shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information provided by the Bond Issuers and the Sponsors on the one hand or the Underwriters on the other hand, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. Notwithstanding the

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provisions of this Section 9, no Underwriter shall be required to contribute any amount in excess of the total amount of discounts and commissions received by such Underwriter. The Bond Issuers, the Sponsors and the Underwriters agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation that does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this Section 9, no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

For purposes of this Section 9, each person, if any, who controls an Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as such Underwriter, and each director of the Bond Issuers and the Sponsors, each officer that signs the Registration Statement and each person, if any, who controls the Bond Issuers and the Sponsors within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Bond Issuers and the Sponsors. The Underwriters’ respective obligations to contribute pursuant to this Section 9 are several in proportion to the principal amount of Certificates set forth opposite their respective names in Schedule I hereto and not joint.

SECTION 10. Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and indemnity and contribution agreements contained in this Underwriting Agreement or in certificates of the Issuing Entity submitted pursuant hereto shall remain operative and in full force and effect, regardless of any termination of this Underwriting Agreement, any investigation made by or on behalf of the Underwriters or controlling person, or by or on behalf of the Issuing Entity, and shall survive delivery of the Certificates to the Underwriters.

SECTION 11. Termination of Underwriting Agreement. The Underwriters may terminate this Underwriting Agreement by notice given by the Representatives to the Bond Issuers and the Sponsors, if after the effectiveness of this Underwriting Agreement and prior to delivery of and payment for the Certificates (i) trading generally shall have been suspended or materially limited on, or by, the New York Stock Exchange, (ii) trading of any securities of the Sponsors shall have been suspended on any exchange or in any over the counter market, (iii) any moratorium on commercial banking activities shall have been declared by Federal or New York State authorities or any material disruption in commercial banking, securities settlement, payment or clearance services in the United States shall have occurred, or (iv) there shall have occurred any outbreak or escalation of hostilities, or any change in financial markets, any declaration of war by Congress, or any calamity or crisis that, in the judgment of the Representatives, is material and adverse and which, singly or together with any other event specified in this clause (iv), makes it, in the judgment of the Representatives, impracticable or inadvisable to proceed with the offer, sale or delivery of the Certificates on the terms and in the manner contemplated in the General Disclosure Package and the Prospectus. Sections 8, 9, 10, 16(a) and 16(b) shall survive any termination under this Section 11 and remain in full force and effect.

SECTION 12. Representations, Warranties and Covenants of the Underwriters. The Underwriters, severally and not jointly, represent, warrant and agree with the Bond Issuers and

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the Sponsors that, unless the Underwriters obtained, or will obtain, the prior written consent of each of the Bond Issuers or each of the Sponsors, the Representatives (x) have not delivered, and will not deliver, any Rating Information (as defined below) to any Rating Agency until and unless the Sponsors advise the Underwriters that such Rating Information is posted to the Bond Issuers’ website maintained by the Sponsors pursuant to paragraph (a)(3)(iii)(B) of Rule 17g-5 under the Exchange Act in the same form as it will be provided to such Rating Agency, and (y) have not participated, and will not participate, with any Rating Agency in any oral communication of any Rating Information without the participation of a representative of the Sponsors. For purposes of this Section 12, “Rating Information” means any information provided to a Rating Agency for the purpose of determining an initial credit rating on the Bonds.

SECTION 13. Default by One or More of the Underwriters. If one or more of the Underwriters shall fail at the Closing Date to purchase the Certificates which it or they are obligated to purchase under this Underwriting Agreement (the “Defaulted Certificates”), the Underwriters shall have the right, but not the obligation, within 36 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other Underwriters, to purchase all, but not less than all, of the Defaulted Certificates in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Underwriters shall not have completed such arrangements within such 36-hour period, then:

(a) if the number of Defaulted Certificates does not exceed 10% of the aggregate principal amount of the Certificates, each of the non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective obligations to purchase hereunder bear to the obligations of all non-defaulting Underwriters, or

(b) if the number of Defaulted Certificates exceeds 10% of the aggregate principal amount of the Certificates, this Underwriting Agreement shall terminate without liability on the part of any non-defaulting Underwriter.

No action taken pursuant to this Section 13 shall relieve any defaulting Underwriter from liability in respect of its default under this Underwriting Agreement.

In the event of any such default which does not result in a termination of this Underwriting Agreement, either the Underwriters or the Bond Issuers shall have the right to postpone the Closing Date for a period not exceeding seven days in order to effect any required changes in the Prospectus or in any other documents or arrangements.

SECTION 14. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to Citigroup Global Markets Inc., 388 Greenwich St., New York, NY 10013, Attention: General Counsel, Facsimile (212) 816-7912; Goldman, Sachs & Co., 200 West Street, New York, NY 10282, Attention: Prospectus Department, Facsimile (212) 902-9316; Credit Agricole Securities (USA) Inc., 1301 Avenue of the Americas, New York, NY 10019, Attention: [Securitization], Facsimile (917) 849-5427; notices to the Issuing Entity, the Bond Issuers and the Sponsors shall be directed to them at 76 South Main Street, Akron, Ohio 44308, Attention: Treasurer, Facsimile: (330) 384-3772.

29

SECTION 15. Parties. This Underwriting Agreement shall inure to the benefit of and be binding upon the Underwriters, the Issuing Entity, the Bond Issuers, the Sponsors and their respective successors. Nothing expressed or mentioned in this Underwriting Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters, the Issuing Entity and their respective successors and the controlling persons and officers and directors referred to in Sections 8 and 9 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Underwriting Agreement or any provision herein contained. This Underwriting Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Underwriters, the Issuing Entity, the Bond Issuers, the Sponsors and their respective successors, and said controlling persons, officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Certificates from the Underwriters shall be deemed to be a successor by reason merely of such purchase.

SECTION 16. Absence of Fiduciary Relationship. The Bond Issuers and the Sponsors acknowledge and agree that:

(a) the Representatives have been retained solely to act as underwriters in connection with the sale of Certificates and that no fiduciary, advisory or agency relationship between the Issuing Entity, the Bond Issuers, the Sponsors and the Representatives have been created in respect of any of the transactions contemplated by this Underwriting Agreement, irrespective of whether the Representatives have advised or are advising the Sponsors on other matters;

(b) the price of the Certificates set forth in the final term sheet attached as Annex A to Schedule II hereto was established by the Bond Issuers and the Sponsors following discussions and arms-length negotiations with the Representatives and the Bond Issuers and the Sponsors are capable of evaluating and understanding and understand and accept the terms, risks and conditions of the transactions contemplated by this Underwriting Agreement;

(c) the Bond Issuers and the Sponsors have been advised that the Representatives and their affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Bond Issuers or the Sponsors and that the Representatives have no obligation to disclose such interests and transactions to the Bond Issuers or the Sponsors by virtue of any fiduciary, advisory or agency relationship; and

(d) the Issuing Entity, the Bond Issuers and the Sponsors waive, to the fullest extent permitted by law, any claims it may have against the Representatives for breach of fiduciary duty or alleged breach of fiduciary duty and agrees that the Representatives shall have no liability (whether direct or indirect) to the Issuing Entity, the Bond Issuers or the Sponsors in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in right of the Issuing Entity, the Bond Issuers and the Sponsors including stockholders, employees or creditors of the Issuing Entity, the Bond Issuers and the Sponsors.

SECTION 17. Miscellaneous.

30

(a) GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF. EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.

The Issuing Entity, the Bond Issuers, the Sponsors and the Underwriters hereby submit to the exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Underwriting Agreement or the transactions contemplated hereby.

(b) Waiver of Jury Trial. The Issuing Entity, the Bond Issuers, the Sponsors and the Underwriters hereby irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Underwriting Agreement or the transactions contemplated hereby.

(c) Counterparts. This Underwriting Agreement may be executed in any number of separate counterparts, each of which, when so executed and delivered, shall be deemed to be an original and all of which taken together, shall constitute but one and the same agreement.

(d) Successors. This Underwriting Agreement shall inure to the benefit of and be binding upon, each of the Issuing Entity, the Bond Issuers, the Sponsors, the several Underwriters, and their respective successors and the officers and directors and controlling persons referred to in Sections 8 and 9 hereof. The term “successor” as used in this Section shall not include any purchaser, as such, of any Certificates from the Underwriters.

(e) Integration. This Underwriting Agreement supersedes all prior agreements and understandings (whether written or oral) between the Issuing Entity, the Bond Issuers, the Sponsors and the Underwriters, or any of them, with respect to the subject matter hereof.

(f) Effect of Headings. The section headings herein are for convenience only and shall not affect the construction hereof.

(g) No Recourse. It is expressly understood and agreed by the parties hereto that (a) this Underwriting Agreement is executed and delivered by U.S. Bank Trust National Association, not individually or personally but solely as Delaware Trustee of the Issuing Entity, in the exercise of the powers and authority conferred and vested in it pursuant to the [Amended and Restated Declaration of Trust], (b) each of the representations, undertakings and agreements herein made on the part of the Issuing Entity, is made and intended not as personal representations, undertakings and agreements by U.S. Bank Trust National Association but is made and intended for the purpose of binding only the Issuing Entity, [(c) nothing herein contained shall be construed as creating any liability on U.S. Bank Trust National Association, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto and] (d) under no circumstances shall U.S. Bank Trust National Association be personally liable for the payment of any indebtedness or expenses of the Issuing Entity or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuing Entity, under this Underwriting Agreement or any other related documents.

31

If the foregoing is in accordance with your understanding of our agreement, please sign counterparts hereof.

		Very truly yours,
THE CLEVELAND ELECTRIC ILLUMINATING COMPANY		CEI FUNDING LLC
By:		By:
	Name: Title:		Name: Title:
OHIO EDISON COMPANY		OE FUNDING LLC
By:		By:
	Name: Title:		Name: Title:
THE TOLEDO EDISON COMPANY		TE FUNDING LLC
By:		By:
	Name: Title:		Name: Title:
FIRSTENERGY OHIO PIRB SPECIAL PURPOSE TRUST 2013
By: U.S. Bank Trust National Association, not in its individual capacity but solely as Delaware Trustee
By:
	Name: Title:

Signature Page to Underwriting Agreement

CONFIRMED AND ACCEPTED, as of the date first above written:

CITIGROUP GLOBAL MARKETS INC.
By:
	Name: Title:
CREDIT AGRICOLE SECURITIES (USA) INC.
By:
	Name: Title:
GOLDMAN, SACHS & CO.
By:
	Name: Title:

Acting as representatives of the several Underwriters named in Schedule I.

Signature Page to Underwriting Agreement

Schedule I

Underwriters	Principal Amount of Tranche A-1 Certificates	Principal Amount of Tranche A-2 Certificates	Principal Amount of Tranche A-3 Certificates
Citigroup Global Markets Inc.
Credit Agricole Securities (USA) Inc.
Goldman Sachs & Co.
Barclays Capital Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
RBS Securities Inc.
Total

Sch I

Schedule II

Schedule of Issuer Free Writing Prospectuses

A. Issuer free writing prospectuses not required to be filed with the Commission:

Electronic Road Show

B. Issuer free writing prospectuses required to be filed with the Commission:

Preliminary term sheet, as filed with the Securities and Exchange Commission on [    ], 2013

Final pricing term sheet, as filed with the Securities and Exchange Commission on [    ], 2013

Sch. II

EX-4.1

EXHIBIT 4.1

[CEI FUNDING LLC,] [OE FUNDING LLC,]

[TE FUNDING LLC,]

as Bond Issuer

and

U.S. BANK NATIONAL ASSOCIATION,

as Bond Trustee and Securities Intermediary

[FORM OF]

BOND INDENTURE

Dated as of                     , 2013

$      ,000,000

[CEI FUNDING LLC] [OE FUNDING LLC]

[TE FUNDING LLC] BONDS

TABLE OF CONTENTS

ARTICLE I

Definitions and Incorporation by Reference

		Page
Section 1.01	Definitions		2
Section 1.02	Incorporation by Reference of Trust Indenture Act		9
Section 1.03	Rules of Construction		10
	ARTICLE II The Bonds
Section 2.01	Terms of the Bonds		10
Section 2.02	Form		11
Section 2.03	Execution, Authentication and Delivery		12
Section 2.04	Temporary Bonds		12
Section 2.05	Registration; Registration of Transfer and Exchange		12
Section 2.06	Mutilated, Destroyed, Lost or Stolen Bonds		13
Section 2.07	Persons Deemed Owner		14
Section 2.08	Payment of Principal and Interest; Interest on Overdue Principal; Principal and Interest Rights Preserved		14
Section 2.09	Cancellation		15
Section 2.10	Authentication and Delivery of Bonds		15
Section 2.11	Release of Collateral		18
Section 2.12	Tax Treatment		18
Section 2.13	State Pledge		18
Section 2.14	Security Interest		19
	ARTICLE III Covenants
Section 3.01	Payment of Principal and Interest		20
Section 3.02	Maintenance of Office or Agency		20
Section 3.03	Money for Payments To Be Held in Trust		20
Section 3.04	Existence		21
Section 3.05	Protection of Collateral		21
Section 3.06	Opinions as to Collateral		22
Section 3.07	Performance of Obligations; Servicing; Commission Filings		22
Section 3.08	Negative Covenants		25
Section 3.09	Annual Statement as to Compliance		25
Section 3.10	Bond Issuer May Consolidate, etc., Only on Certain Terms		25
Section 3.11	Successor or Transferee		27
Section 3.12	No Other Business		27
Section 3.13	No Borrowing		27
Section 3.14	Servicer’s Obligations		27
Section 3.15	No Additional Bonds		27
Section 3.16	Guarantees, Loans, Advances and Other Liabilities		27
Section 3.17	Capital Expenditures		27
Section 3.18	Intentionally Omitted		28
Section 3.19	Restricted Payments		28
Section 3.20	Notice of Events of Default		28
Section 3.21	Further Instruments and Acts		28
Section 3.22	Change in Chief Executive Office or Jurisdiction of Organization		28

i

	ARTICLE IV Satisfaction and Discharge; Defeasance
Section 4.01	Satisfaction and Discharge of Bond Indenture; Defeasance	28
Section 4.02	Conditions to Defeasance	29
Section 4.03	Application of Trust Money	30
Section 4.04	Repayment of Moneys Held by Paving Agent	30
	ARTICLE V Remedies
Section 5.01	Events of Default	31
Section 5.02	Acceleration of Maturity; Rescission and Annulment	31
Section 5.03	Collection of Indebtedness and Suits for Enforcement by Bond Trustee	32
Section 5.04	Remedies; Priorities	34
Section 5.05	Optional Possession of the Collateral	34
Section 5.06	Limitation of Suits	34
Section 5.07	Unconditional Rights of Bondholders To Receive Principal and Interest	35
Section 5.08	Restoration of Rights and Remedies	35
Section 5.09	Rights and Remedies Cumulative	35
Section 5.10	Delay or Omission Not a Waiver	35
Section 5.11	Control by Bondholders	36
Section 5.12	Waiver of Past Defaults	36
Section 5.13	Undertaking for Costs	36
Section 5.14	Waiver of Stay or Extension Laws	37
Section 5.15	Action on Bonds	37
Section 5.16	Performance and Enforcement of Certain Obligations	37
	ARTICLE VI The Bond Trustee
Section 6.01	Duties of Bond Trustee	38
Section 6.02	Rights of Bond Trustee	39
Section 6.03	Individual Rights of Bond Trustee	40
Section 6.04	Bond Trustee’s Disclaimer	41
Section 6.05	Notice of Defaults	41
Section 6.06	Reports by Bond Trustee to Holders	41
Section 6.07	Compensation and Indemnity	42
Section 6.08	Replacement of Bond Trustee and Securities Intermediary	43
Section 6.09	Successor Bond Trustee by Merger	44
Section 6.10	Appointment of Co-Trustee or Separate Trustee	44
Section 6.11	Eligibility; Disqualification	45
Section 6.12	Preferential Collection of Claims Against Bond Issuer	45
Section 6.13	Representations and Warranties of Bond Trustee	45
Section 6.14	Custody of Collateral	45
	ARTICLE VII Bondholders’ Lists and Reports
Section 7.01	Bond Issuer To Furnish Bond Trustee Names and Addresses of Bondholders	46
Section 7.02	Preservation of Information: Communications to Bondholders	46
Section 7.03	Reports by Bond Issuer	46
Section 7.04	Reports by Bond Trustee	47

ii

	ARTICLE VIII Accounts, Disbursements and Releases
Section 8.01	Collection of Money	47
Section 8.02	Collection Account	47
Section 8.03	General Provisions Regarding the Collection Account	50
Section 8.04	Release of Collateral	50
Section 8.05	Opinion of Counsel	51
Section 8.06	Reports by Independent Registered Accountants	51
	ARTICLE IX Supplemental Bond Indentures
Section 9.01	Supplemental Bond Indentures Without Consent of Bondholders	51
Section 9.02	Supplemental Bond Indentures with Consent of Bondholders	52
Section 9.03	Execution of Supplemental Bond Indentures	53
Section 9.04	Effect of Supplemental Bond Indenture	54
Section 9.05	Conformity with Trust Indenture Act	54
	ARTICLE X Redemption of Bonds
Section 10.01	Optional Redemption by Bond Issuer	54
	ARTICLE XI Miscellaneous
Section 11.01	Compliance Certificates and Opinions, etc.	54
Section 11.02	Form of Documents Delivered to Bond Trustee	55
Section 11.03	Acts of Bondholders	56
Section 11.04	Notices	56
Section 11.05	Notices to Bondholders: Waiver	58
Section 11.06	Conflict with Trust Indenture Act	58
Section 11.07	Effect of Headings and Table of Contents	58
Section 11.08	Successors and Assigns	58
Section 11.09	Severability	59
Section 11.10	Benefits of Bond Indenture	59
Section 11.11	Legal Holidays	59
Section 11.12	Governing Law	59
Section 11.13	Counterparts	59
Section 11.14	Recording of Bond Indenture	59
Section 11.15	Bond Issuer Obligation	59
Section 11.16	No Recourse to Bond Issuer	60
Section 11.17	Inspection	60
Section 11.18	No Petition	60
Section 11.19	Securities Intermediary	61
Section 11.20	Trustee Capacities; Affiliated Parties	61
Section 11.21	Waiver of Jury Trial.	61
Section 11.22	Rule 17g-5 Compliance.	61

iii

SIGNATURE PAGE

SCHEDULE A	—	Expected Amortization Schedule
EXHIBIT A-1	—	Form of Sale Agreement
EXHIBIT A-2	—	Form of Servicing Agreement
EXHIBIT B	—	Form of Bond
EXHIBIT C	—	Servicing Criteria to be Addressed by Bond Trustee in Assessment of Compliance

iv

TRUST INDENTURE ACT CROSS REFERENCE TABLE

TIA SECTION		INDENTURE SECTION
310	(a)(1)	6.11
	(a)(2)	6.11
	(a)(3)	6.10(b)(i)
	(a)(4)	N.A.
	(a)(5)	6.11
	(b)	6.11
311	(a)	6.12
	(b)	6.12
312	(a)	7.01 and 7.02
	(b)	7.02(b)
	(c)	7.02(c)
313	(a)	7.04
	(b)(1)	7.04
	(b)(2)	7.04
	(c)	7.04
	(d)	7.04
314	(a)	3.09, 4.01, and 7.03(a)
	(b)	3.06 and 4.01
	(c)(1)	2.10, 4.01, 8.04(b) and 11.01(a)
	(c)(2)	2.10, 4.01, 8.04(b) and 11.01(a)
	(c)(3)	2.10, 4.01 and 11.01(a)
	(d)	2.10, 8.04(b) and 11.01(b)
	(e)	11.01(a)
	(f)	11.01(a)
315	(a)	6.01(b)(i) and (ii)
	(b)	6.05
	(c)	6.01 (a)
	(d)	6.01(c)(i)-(iii)
	(e)	5.13
316	(a) (last sentence)	1.01 (definition of “Outstanding”)
	(a)(1)(A)	5.11

v

TIA SECTION		INDENTURE SECTION
	(a)(1)(B)	5.12
	(a)(2)	N/A
	(b)	5.07
	(c)	1.01 (definition of “Record Date”)
317	(a)(1)	5.03(a), (b) and (c)
	(a)(2)	5.03(d)(i)
	(b)	3.03
318	(a)	11.06
	(b)	11.06
	(c)	11.06

** “N.A.” shall mean “not applicable.”

THIS CROSS REFERENCE TABLE SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE

PART OF THIS INDENTURE.

vi

BOND INDENTURE dated as of                     , 2013, between [CEI Funding LLC] [OE Funding LLC] [TE Funding LLC], a Delaware limited liability company (the “Bond Issuer”), and U.S. Bank National Association, a national banking association, in its capacity as bond trustee (the “Bond Trustee”) and in its capacity as a securities intermediary (the “Securities Intermediary”).

RECITALS

The Bond Issuer has duly authorized the execution and delivery of this Bond Indenture to provide for the issuance of its Bonds with an aggregate principal amount of $            ,000,000 and the Bond Issuer and the Bond Trustee are executing and delivering this Bond Indenture in order to provide for the issuance of the Bonds.

GRANTING CLAUSE

The Bond Issuer hereby Grants to the Bond Trustee at the Issuance Date, as Bond Trustee for the benefit of the Holders of the Bonds and the Bond Trustee, all of the Bond Issuer’s right, title and interest in and to (a) the Phase-In-Recovery Property (created by Sections 4928.232, 4928.234 and 4928.2312 of the Statute and paragraph VI.A(6) of the Financing Order) transferred by the Seller to the Bond Issuer pursuant to the Sale Agreement and all proceeds thereof, (b) the Statutory Lien, (c) the Sale Agreement, (d) the Servicing Agreement, (e) the Administration Agreement, (f) the Collection Account (including all subaccounts thereof) and all amounts or investment property on deposit therein or credited thereto from time to time, (g) all other property of whatever kind owned from time to time by the Bond Issuer, including accounts, general intangibles, equipment, deposit accounts, securities accounts and inventory, (h) the security interest with respect to the Phase-In-Recovery Property granted by the Seller to the Bond Issuer in the Sale Agreement, (i) all present and future claims, demands, causes and choses in action in respect of any or all of the foregoing and all payments on or under and all proceeds of every kind and nature whatsoever in respect of any or all of the foregoing, including all proceeds of the conversion thereof, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts, securities accounts, insurance proceeds, condemnation awards, rights to payment of any and every kind, and other forms of obligations and receivables, instruments and other property which at any time constitute all or part of or are included in the proceeds of any of the foregoing and (j) all proceeds of the foregoing (collectively, the “Collateral”; it being understood that the following do not constitute Collateral: (i) amounts required to be released pursuant to or contemplated by the terms hereof and (ii) proceeds from the sale of the Bonds required to pay the purchase price of the Phase-In-Recovery Property paid pursuant to the Sale Agreement and the costs of issuance with respect to the Bonds or an allocable portion of the Certificates as set forth on the flow of funds memorandum delivered on the Issuance Date (together with any interest earnings thereon), it being understood that such amounts described in clauses (i) and (ii) above shall not be subject to Section 3.19.

The foregoing Grants are made to the Bond Trustee in trust to secure the payment of principal of, interest on, and all other amounts (which shall include all amounts payable to the Bond Trustee under this Bond Indenture, the Certificate Indenture, the Fee and Indemnity Agreement and the other Basic Documents) owing in respect of, the Bonds, including all amounts payable to the Bond Trustee, the Certificate Trustee and the Delaware Trustee under this Bond Indenture, the Certificate Indenture, the Fee and Indemnity Agreement and the other Basic Documents, equally and ratably without prejudice, priority or distinction, except as expressly provided in this Bond Indenture, and to secure compliance with the provisions of this Bond Indenture with respect to the Bonds, all as provided in this Bond Indenture (collectively, the “Secured Obligations”). This Bond Indenture constitutes a security agreement within the meaning of the UCC or the Statute to the extent that, under Ohio law, the provisions of the UCC or the Statute are applicable hereto.

The Bond Trustee, as trustee on behalf of the Holders of the Bonds and as agent for itself, acknowledges such Grants, accepts the trusts hereunder in accordance with the provisions hereof and agrees to perform its duties specifically required herein.

AND IT IS HEREBY COVENANTED, DECLARED AND AGREED between the parties hereto that all Bonds are to be issued, countersigned and delivered and that all of the Collateral is to be held and applied, subject to the further covenants, conditions, releases, uses and trusts hereinafter set forth, and the Bond Issuer, for itself and any successor, does hereby covenant and agree to and with the Bond Trustee and its successors in said trust, for the benefit of the Holders and the Bond Trustee, as follows:

ARTICLE I

Definitions and Incorporation by Reference

Section 1.01 Definitions.

Except as otherwise specified herein or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Bond Indenture.

“Act” has the meaning specified in Section 11.03(a).

“Administration Agreement” means the Administration Agreement dated as of                     , 2013, between [The Cleveland Electric Illuminating Company] [Ohio Edison Company] [The Toledo Edison Company], as Administrator, and the Bond Issuer, as the same may be amended and supplemented from time to time.

“Administration Fee” means the fee payable to the Administrator pursuant to the Administration Agreement.

“Administrative Trustee” means The Cleveland Electric Illuminating Company, Ohio Edison Company and The Toledo Edison Company, collectively (in each case, in its capacity as a servicer).

“Administrator” means [The Cleveland Electric Illuminating Company] [Ohio Edison Company] [The Toledo Edison Company], an Ohio corporation, or any successor Administrator under the Administration Agreement.

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

“Authorized Officer” means, with respect to the Bond Issuer, any officer of the Bond Issuer who is authorized to act for the Bond Issuer in matters relating to the Bond Issuer and who is identified on the list of Authorized Officers delivered by the Bond Issuer to the Bond Trustee on the Issuance Date (as such list may be modified or supplemented by the Bond Issuer from time to time thereafter).

“Basic Documents” means, collectively, this Bond Indenture, the Certificate Indenture, the Declaration of Trust, the Sale Agreement, the Servicing Agreement, the Administration Agreement, the Bond Purchase Agreement, the Fee and Indemnity Agreement, the Cross-Indemnity Agreement and the Underwriting Agreement.

“Bondholder” or “Holder” means the Person in whose name a Bond is registered on the Bond Register.

“Bond Indenture” or “this Bond Indenture” means this instrument as originally executed and, as from time to time supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, as so supplemented or amended, or both, and shall include the forms and terms of the Bonds established hereunder.

“Bond Interest Rate” means, with respect to any Tranche of Bonds, the Bond Interest Rate therefor, as specified in Section 2.01(b).

“Bond Issuer” means the party named as such in this Bond Indenture until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained herein and required by the Trust Indenture Act, each other obligor on the Bonds.

2

“Bond Purchase Agreement” has the meaning set forth in the Certificate Indenture.

“Bond Register” and “Bond Registrar” have the respective meanings specified in Section 2.05.

“Bonds” has the meaning specified in Section 2.01(a).

“Bond Trustee” means U.S. Bank National Association, as Bond Trustee under this Bond Indenture, or any successor Bond Trustee under this Bond Indenture.

“Business Day” means any day other than a Saturday, a Sunday or a day on which banking institutions or trust companies in New York, New York, Chicago, Illinois, St. Paul, Minnesota, Akron, Ohio or Wilmington, Delaware are authorized or obligated by law, regulation or executive order to remain closed.

“Cap” has the meaning specified in Section 8.02(e).

“Capital Subaccount” has the meaning set forth in Section 8.02(a).

“Certificate Indenture” means the Certificate Indenture dated as of                     , 2013, between the Certificate Issuer and the Certificate Trustee, as the same may be further amended and supplemented from time to time.

“Certificate Issuer” has the meaning set forth in the Certificate Indenture.

“Certificate Trustee” means the Person acting as certificate trustee under the Certificate Indenture.

“Certificates” has the meaning set forth in the Certificate Indenture.

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

“Collateral” has the meaning specified in the Granting Clause of this Bond Indenture.

“Collection Account” has the meaning specified in Section 8.02(a).

“Corporate Trust Office” means the office of the Bond Trustee at which at any particular time this Bond Indenture shall be administered, which office at the date of the execution of this Bond Indenture is located at 190 South LaSalle Street, 7^th Floor, Mail Code MK-IL-SL 7R, Chicago, IL 60603, Attention: FirstEnergy Ohio PIRB Special Purpose Trust 2013, or at such other address as the Bond Trustee may designate from time to time by notice to the Bondholders and the Bond Issuer, or the principal corporate trust office of any successor Bond Trustee (the address of which the successor Bond Trustee will notify the Bondholders and the Bond Issuer).

“Covenant Defeasance Option” has the meaning specified in Section 4.01(b).

“Cross-Indemnity Agreement” means the Cross-Indemnity Agreement dated as of                     , 2013 between the Bond Issuer and [other two bond issuers], as the same may be amended and supplemented from time to time.

“Declaration of Trust” has the meaning set forth in the Certificate Indenture.

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

“Delaware Trustee” means the Person acting as Delaware trustee under the Declaration of Trust.

“Delaware UCC” means the Delaware Uniform Commercial Code.

3

“DTC Agreement” has the meaning set forth in the Certificate Indenture.

“Eligible Account” means a segregated trust account with an Eligible Institution.

“Eligible Institution” means (a) the corporate trust department of the Bond Trustee so long as any securities of the Bond Trustee have either a short-term credit rating from Moody’s of at least “P-1” or a long-term unsecured debt rating from Moody’s of at least “A2” and have a credit rating from each other rating agency in one of its generic categories which signifies investment grade, or (b) a depository institution organized under the laws of the United States of America, any State or the District of Columbia (or any domestic branch of a foreign bank), (i) which has either (A) a long-term issuer rating of “AA-” or higher by Standard & Poor’s and “A2” or higher by Moody’s, and, if rated by Fitch, the equivalent of the lower of those two ratings by Fitch, or (B) a short-term issuer rating of “A-1+” or higher by Standard & Poor’s and “P-1” or higher by Moody’s, and, if Fitch provides a rating thereon, “F1+” by Fitch, or any other long-term, short-term or certificate of deposit rating acceptable to Standard & Poor’s and Moody’s and (ii) whose deposits are insured by the FDIC. If so qualified under clause (b) above, the Bond Trustee may be considered an Eligible Institution for the purposes of clause (a) of the definition of Eligible Account.

“Eligible Investments” mean instruments and investment property denominated in United States currency which mature on or before the business day preceding the next payment date and meet the criteria described below:

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

(b) demand deposits, time deposits or certificates of deposit and bankers’ acceptances of Eligible Institutions (including the Bond Trustee in its commercial capacity);

(c) commercial paper (other than commercial paper of The Cleveland Electric Illuminating Company, Ohio Edison Company or The Toledo Edison Company and their respective affiliates) having, at the time of the investment or contractual commitment, a rating of not less than “A-1” from Standard & Poor’s, not less than “P-1” by Moody’s and not less than “F1” by Fitch (including commercial paper issued by the Bond Trustee);

(d) money market funds which have the highest rating from each of the Rating Agencies from which a rating is available (including funds for which the Bond Trustee or any of its Affiliates is an investment manager or advisor);

(e) repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the United States of America or certain of its agencies or instrumentalities, entered into with Eligible Institutions;

(f) repurchase obligations with respect to any security or whole loan entered into with an Eligible Institution or a registered broker-dealer, acting as principal and that meets certain ratings criteria set forth below:

(i) a broker/dealer (acting as principal) registered as a broker or dealer under Section 15 of the Exchange Act (any broker/dealer being referred to in this definition as a “broker/dealer”), the unsecured short-term debt obligations of which are rated at least “P-1” by Moody’s, “A-1+” by Standard & Poor’s and, if Fitch provides a rating thereon, “F-1+” by Fitch, and the long-term debt obligations of which are rated at least “Aa3” by Moody’s, in each case at the time of entering into this repurchase obligation, or

(ii) an unrated broker/dealer acting as principal, that is a wholly-owned subsidiary of a non-bank or bank holding company the unsecured short-term debt obligations of which are rated at least “P-1” by Moody’s, “A-1+” by Standard & Poor’s and, if Fitch provides a rating thereon, “F-1+” by Fitch, and the long-term debt obligations of which are rated at least “Aa3” by Moody’s, in each case at the time of purchase so long as the obligations of such unrated broker/dealer are unconditionally guaranteed by such non-bank or bank holding company; and

(g) any other investment permitted by each of the Rating Agencies.

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“Event of Default” has the meaning specified in Section 5.01.

“Excess Funds Subaccount” has the meaning specified in Section 8.02(a).

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

“Expected Amortization Schedule” means, with respect to each Tranche of Bonds, the schedule attached as Schedule A hereto.

“FDIC” means the Federal Deposit Insurance Corporation or any successor.

“Fee and Indemnity Agreement” means the fee and indemnity agreement dated as of                     , 2013, among the Bond Issuer, [other two bond issuers], the Delaware Trustee, the Certificate Trustee and the Certificate Issuer.

“Final Maturity Date” means, with respect to any Tranche of Bonds, the Final Maturity Date therefor, as specified in Section 2.01(b).

“financial asset” has the meaning given such term in Section 8-102(a)(9) of the UCC.

“Financing Costs” has the meaning specified in Section 4928.23(E) of the Statute and the Financing Order.

“Fitch” means Fitch Ratings, or its successor.

“General Subaccount” has the meaning set forth in Section 8.02(a).

“Grant” means mortgage, pledge, collaterally assign and grant a Lien upon and a security interest pursuant to this Bond Indenture. A Grant of the Collateral or of any other agreement or instrument shall include all rights, powers and options (but none of the obligations) of the Granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for payments in respect of the Collateral and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the Granting party or otherwise and generally to do and receive anything that the Granting party is or may be entitled to do or receive thereunder or with respect thereto.

“Independent” means, when used with respect to any specified Person, that the Person (a) is in fact independent of the Bond Issuer, any other obligor upon the Bonds, the Seller, the Servicer and any Affiliate of any of the foregoing Persons, (b) does not have any direct financial interest or any material indirect financial interest in the Bond Issuer, any such other obligor, the Seller, the Servicer or any Affiliate of any of the foregoing Persons and (c) is not connected with the Bond Issuer, any such other obligor, the Seller, the Servicer or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions (other than service as an Independent director of [other two bond issuers]).

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

“investment property” has the meaning given such term in the UCC.

“Issuance Date” has the meaning set forth in Section 2.01(c)(i).

“Issuer Order” and “Issuer Request” means a written order or request signed in the name of the Bond Issuer by any one of its Authorized Officers and delivered to the Bond Trustee.

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“Legal Defeasance Option” has the meaning specified in Section 4.01(b).

“Lien” means a security interest, Lien, mortgage, charge, pledge, claim, or encumbrance of any kind.

“LLC Agreement” means the Amended and Restated Limited Liability Company Agreement of [CEI Funding LLC] [OE Funding LLC] [TE Funding LLC], dated as of                     , 2013, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Member” means [The Cleveland Electric Illuminating Company] [Ohio Edison Company] [The Toledo Edison Company].

“Minimum Denomination” means $100,000 or in integral multiples of $1,000 in excess thereof.

“Moody’s” means Moody’s Investors Service Inc. or its successor.

“Officer’s Certificate” means a certificate signed by any Authorized Officer of the Bond Issuer, under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.01, and delivered to the Bond Trustee.

“Ohio UCC” means the Ohio Uniform Commercial Code.

“Operating Expenses” means all fees, costs and expenses of, and indemnities owed by, the Bond Issuer, including all amounts owed by the Bond Issuer to the Bond Trustee, the Certificate Issuer, the Certificate Trustee, the Delaware Trustee, [other two bond issuers] and the Rating Agencies, the Servicing Fee, the Administration Fee, any fees, costs and expenses payable or reimbursable by the Bond Issuer to the Administrator, Seller or Servicer and legal and accounting fees, taxes, costs and expenses of the Bond Issuer and the Certificate Issuer that are allocable to the Bond Issuer.

“Opinion of Counsel” means one or more written opinions of counsel who may, except as otherwise expressly provided in this Bond Indenture, be an employee of or counsel to the Bond Issuer and who shall be reasonably satisfactory to the Bond Trustee, and which opinion or opinions shall be addressed to the Bond Trustee, as trustee, shall comply with any applicable requirements of Section 11.01, and shall be in form and substance reasonably satisfactory to the Bond Trustee.

“Outstanding” means, as of the date of determination, all Bonds theretofore authenticated and delivered under this Bond Indenture except:

(b) Bonds theretofore cancelled by the Bond Registrar or delivered to the Bond Registrar for cancellation;

(c) Bonds or portions thereof the payment for which money in the necessary amount has been theretofore deposited with the Bond Trustee or any Paying Agent in trust for the Holders of such Bonds; and

(d) Bonds in exchange for or in lieu of other Bonds which have been authenticated and delivered pursuant to this Bond Indenture unless proof satisfactory to the Bond Trustee is presented that any such Bonds are held by a bona fide purchaser; provided, however, that in determining whether the Holders of the requisite Outstanding Amount of the Bonds or any Tranche thereof have given any request, demand, authorization, direction, notice, consent or waiver hereunder or under any Basic Document, Bonds owned by the Bond Issuer, any other obligor upon the Bonds, the Seller or any Affiliate of any of the foregoing Persons (other than the Certificate Issuer, the Delaware Trustee or the Certificate Trustee) shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Bond Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bonds that the Bond Trustee actually knows to be so owned shall be so disregarded. Bonds so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Bond Trustee the pledgee’s right so to act with respect to such Bonds and that the pledgee is not the Bond Issuer, any other obligor upon the Bonds, the Seller or any Affiliate of any of the foregoing Persons (other than the Certificate Issuer, the Delaware Trustee or the Certificate Trustee).

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“Outstanding Amount” means the aggregate principal amount of all Bonds or, if the context requires, all Bonds of a Tranche, Outstanding at the date of determination.

“Paying Agent” means the Bond Trustee or any other Person that meets the eligibility standards for the Bond Trustee specified in Section 6.11 and is authorized by the Bond Issuer to make payment of principal of or interest on the Bonds on behalf of the Bond Issuer.

“Payment Date” has the meaning specified in Section 2.01(c)(ii).

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

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

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

“Projected Principal Balance” means, as of any Payment Date on any Tranche of Bonds, the projected outstanding principal amount of such Tranche of Bonds for such Payment Date set forth in the Expected Amortization Schedule.

“PUCO” means the Public Utilities Commission of Ohio and any successor thereto.

“Rating Agency” means, collectively, Moody’s, Standard & Poor’s and Fitch. If no such organization or successor is any longer in existence, “Rating Agency” shall be a nationally recognized statistical rating organization or other comparable Person designated by the Bond Issuer, notice of which designation shall be given to the Bond Trustee, the Certificate Trustee and the Servicer.

“Rating Agency Condition” means, with respect to any action, not less than ten Business Days’ prior written notification to each Rating Agency of such action, and written confirmation from each of Standard & Poor’s and Moody’s to the Servicer, the Bond Trustee and the Bond Issuer that such action will not result in a suspension, reduction or withdrawal of the then current rating by such Rating Agency of any Tranche of Bonds and that prior to the taking of the proposed action no other Rating Agency shall have provided written notice to the Bond Issuer that such action has resulted or would result in the suspension, reduction or withdrawal of the then current rating of any Tranche of Bonds; provided, that if within such ten Business Day period, any Rating Agency (other than Standard & Poor’s) has neither replied to such notification nor responded in a manner that indicates that such Rating Agency is reviewing and considering the notification, then (i) the Bond Issuer shall be required to confirm that such Rating Agency has received the Rating Agency Condition request, and if it has, promptly request the related Rating Agency Condition confirmation and (ii) if the Rating Agency neither replies to such notification nor responds in a manner that indicates it is reviewing and considering the notification within five Business Days following such second request, the applicable Rating Agency Condition requirement shall not be deemed to apply to such Rating Agency. For the purposes of this definition, any confirmation, request, acknowledgment or approval that is required to be in writing may be in the form of electronic mail or a press release (which may contain a general waiver of a Rating Agency’s right to review or consent).

“Record Date” means, with respect to a Payment Date, the close of business on the last day of the calendar month preceding the calendar month in which such Payment Date occurs.

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“Registered Holder” means the Person in whose name a Bond is registered on the Bond Register on the applicable Record Date.

“Required Capital Level” means, as of any Payment Date, [0.50%] [0.60%] of the initial principal amount of the Bonds.

“Responsible Officer” means, with respect to the Bond Trustee, any officer assigned to the Corporate Trust Office, including any Vice President, Assistant Vice President, Secretary, Assistant Secretary, Treasurer or Assistant Treasurer or any other officer of the Bond Trustee customarily performing functions similar to those performed by any of the above designated officers, in each case having direct responsibility for the administration of this Bond Indenture.

“Sale Agreement” means the Phase-In-Recovery Property Purchase and Sale Agreement dated as of , 2013, between the Bond Issuer and the Seller, in the form of Exhibit A-1, as amended and supplemented from time to time.

“Scheduled Final Payment Date” means, with respect to any Tranche of Bonds, the Scheduled Final Payment Date therefor, as specified in Section 2.01(b).

“Secured Obligations” has the meaning specified in the Granting Clause of this Bond Indenture.

“Securities Account” means the Collection Account (to the extent it constitutes a “securities account”) as defined in Section 8-501 of the UCC).

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

“Securities Intermediary” means U.S. Bank National Association, a national banking association, solely in its capacity as a “securities intermediary” as defined in Section 8-102(a)(14) of the UCC, or any successor securities intermediary.

“Security Entitlement” means “security entitlement” as defined in Section 8-102(a)(17) of the UCC, with respect to financial assets now or hereafter credited to the Securities Account.

“Seller” means [The Cleveland Electric Illuminating Company] [Ohio Edison Company] [The Toledo Edison Company].

“Semiannual Interest” has the meaning specified in Section 2.01(c)(iv).

“Semiannual Principal” means, with respect to any Payment Date on any Tranche of Bonds, the excess, if any, of the Outstanding Amount of such Tranche of Bonds over the outstanding principal balance of such Tranche of Bonds specified for such Payment Date in the Expected Amortization Schedule.

“Servicing Agreement” means the Phase-In-Recovery Property Servicing Agreement dated as of                     , 2013, between the Bond Issuer and the Servicer, in the form of Exhibit A-2, as amended and supplemented from time to time.

“Standard & Poor’s” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. or its successor.

“State” means any one of the 50 states of the United States of America or the District of Columbia.

“State Pledge” has the meaning specified in Section 2.13.

“Statute” means Ohio Revised Code, Sections 4928.23 through 4928.2318.

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“Statutory Lien” means the Lien on the Phase-In-Recovery Property created by Section 4928.2312 of the Statute and the Financing Order.

“Successor Servicer” has the meaning specified in Section 3.07(d).

“Tranche” means any one of the tranches of Bonds.

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

“UCC” means, unless the context otherwise requires, the Uniform Commercial Code, as in effect in the relevant jurisdiction, as amended from time to time.

“Underwriting Agreement” means the Underwriting Agreement dated as of                     , 2013, among the Certificate Issuer, Seller, the Bond Issuer, [other two Sellers], [other two bond issuers] and the underwriters named therein.

“U.S. Government Obligations” means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged.

“17g-5 Website” has the meaning specified in Section 11.22.

Except as otherwise specified herein or as the context may otherwise require, the following terms have the respective meanings set forth in the Servicing Agreement as in effect on the Issuance Date for all purposes of this Bond Indenture, and the definitions of such terms are equally applicable both to the singular and plural forms of such terms:

Term	Section of Servicing Agreement
Adjustment Letter		Section 1.01
Estimated Phase-In-Recovery Charge Payments		Section 1.01
Financing Order		Section 1.01
Issuance Advice Letter		Section 1.01
Principal Balance		Section 1.01
Phase-In-Recovery Charge		Section 1.01
Phase-In-Recovery Charge Collections		Section 1.01
Phase-In-Recovery Property		Section 1.01
Regulation AB		Section 1.01
Seller		Section 1.01
Semiannual Servicer Certificate		Section 1.01
Servicer		Section 1.01
Servicer Default		Section 1.01
Servicing Fee		Section 1.01
Sponsor		Section 1.01
True-Up Adjustments		Section 1.01

Section 1.02 Incorporation by Reference of Trust Indenture Act.

Whenever this Bond Indenture refers to a provision of the Trust Indenture Act, the provision is incorporated by reference in and made a part of this Bond Indenture. The following Trust Indenture Act terms used in this Bond Indenture have the following meanings:

“Commission” means the Securities and Exchange Commission.

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“indenture securities” means the Bonds.

“indenture security holder” means a Bondholder.

“indenture to be qualified” means this Bond Indenture.

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

“obligor” on the indenture securities means the Bond Issuer and any other obligor on the indenture securities.

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

Section 1.03 Rules of Construction. Unless the context otherwise requires:

(a) a term has the meaning assigned to it;

(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles as in effect from time to time;

(c) “or” is not exclusive;

(d) “including” means including without limitation;

(e) words in the singular include the plural and words in the plural include the singular;

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

(g) all references in this Bond Indenture to designated “Articles,” “Sections” and other subdivisions are to the designated Articles, Sections and other subdivisions of this Bond Indenture; and

(h) except as otherwise specified herein, UCC terms shall have the meanings given to such terms in the UCC.

ARTICLE II

The Bonds

Section 2.01 Terms of the Bonds.

(a) Authorization; Designation. The issuance of the Bonds in an aggregate initial principal amount of $_,000,000 is hereby authorized and the Bonds shall be designated as the [CEI Funding LLC] [OE Funding LLC] [TE Funding LLC] Bonds (the “Bonds”), and further denominated as Tranches A-1 through A-3.

(b) Initial Principal Amount: Bond Interest Rate: Scheduled Final Payment Date: Final Maturity Date. The Bonds of each Tranche shall have the aggregate initial principal amount, bear interest at the rates per annum and shall have Scheduled Final Payment Dates and Final Maturity Dates as set forth below:

Tranche Initial Principal Amount Bond Interest Rate Scheduled Final Payment Date Final Maturity Date

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The Bond Interest Rate shall be computed on the basis of a 360-day year of twelve 30-day months.

The Bonds shall be issuable in not less than Minimum Denominations.

(c) Authentication Date; Payment Dates: Expected Amortization Schedule for Principal; Semiannual Interest.

(i) Authentication Date. The Bonds that are authenticated and delivered by the Bond Trustee to or upon the order of the Bond Issuer on                     , 2013 (the “Issuance Date”) shall have as their date of authentication                     , 2013.

(ii) Payment Dates. The Payment Dates for the Bonds shall be [            ] and [            ] of each year or, if any such date is not a Business Day, the next succeeding Business Day, commencing on [            ] and continuing until the earlier of repayment of the Bonds in full or the Final Maturity Date for Tranche A-[            ] of the Bonds.

(iii) Expected Amortization Schedule for Principal. Unless an Event of Default shall have occurred and be continuing and the unpaid principal amount of all Bonds and accrued interest thereon has been declared to be due and payable, on each Payment Date, the Bond Trustee shall pay to the Bondholders of record as of the related Record Date amounts payable pursuant to Section 8.02(e) as principal, in the following order and priority: (1) to the holders of the Tranche A-1 Bonds, until the Outstanding Amount of such Tranche of Bonds thereof has been reduced to zero; (2) to the holders of the Tranche A-2 Bonds, until the Outstanding Amount of such Tranche of Bonds thereof has been reduced to zero; and (3) to the holders of the Tranche A-3 Bonds until the Outstanding Amount of such Tranche of Bonds thereof has been reduced to zero; provided, however, that in no event shall a principal payment pursuant to this Section 2.01(c)(iii) on any Tranche on a Payment Date be greater than the amount that reduces the Outstanding Amount of such Tranche of Bonds to the amount specified in the Expected Amortization Schedule. Partial payments of any scheduled amortization payment shall be allocated within any Tranche of Bonds pro rata.

(iv) Semiannual Interest. Semiannual Interest will be payable on each Tranche of Bonds on each Payment Date in an amount equal to one-half of the product of (A) the applicable Bond Interest Rate and (B) the Outstanding Amount of the related Tranche of Bonds as of the close of business on the preceding Payment Date after giving effect to all payments of principal made to the Holders of the related Tranche of Bonds on such preceding Payment Date; provided, however that with respect to the initial Payment Date or, if no payment has yet been made, interest on the outstanding principal balance will accrue from and including the Issuance Date to, but excluding, that Payment Date.

Section 2.02 Form.

The Bonds and the Bond Trustee’s certificate of authentication shall be in substantially the forms set forth in Exhibit B, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Bond Indenture and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistently herewith, be determined by the officers executing such Bonds, as evidenced by their execution of such Bonds. Any portion of the text of any Bond may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Bond.

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

The terms of the Bonds set forth in Exhibit B are part of the terms of this Bond Indenture.

Section 2.03 Execution, Authentication and Delivery.

The Bonds shall be executed on behalf of the Bond Issuer by any of its Authorized Officers. The signature of any such Authorized Officer on the Bonds may be manual or facsimile.

Bonds bearing the manual or facsimile signature of individuals who were at any time Authorized Officers of the Bond Issuer shall bind the Bond Issuer, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Bonds or did not hold such offices at the date of such Bonds.

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

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

Section 2.04 Temporary Bonds.

Pending the preparation of definitive Bonds, the Bond Issuer may execute, and upon receipt of an Issuer Order the Bond Trustee shall authenticate and deliver, temporary Bonds which are printed, lithographed, typewritten, mimeographed or otherwise produced, of the tenor of the definitive Bonds in lieu of which they are issued and with such variations not inconsistent with the terms of this Bond Indenture as the officers executing such Bonds may determine, as evidenced by their execution of such Bonds.

If temporary Bonds are issued, the Bond Issuer will cause definitive Bonds to be prepared without unreasonable delay. After the preparation of definitive Bonds, the temporary Bonds shall be exchangeable for definitive Bonds upon surrender of the temporary Bonds at the office or agency of the Bond Issuer to be maintained as provided in Section 3.02, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Bonds, the Bond Issuer shall execute and the Bond Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Bonds of Minimum Denominations. Until so exchanged, the temporary Bonds shall in all respects be entitled to the same benefits under this Bond Indenture as definitive Bonds.

Section 2.05 Registration; Registration of Transfer and Exchange.

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

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If a Person other than the Bond Trustee is appointed by the Bond Issuer as Bond Registrar, the Bond Issuer will give the Bond Trustee prompt written notice of the appointment of such Bond Registrar and of the location, and any change in the location, of the Bond Register, and the Bond Trustee shall have the right to inspect the Bond Register at all reasonable times and to obtain copies thereof, and the Bond Trustee shall have the right to rely upon a certificate executed on behalf of the Bond Registrar by a Responsible Officer thereof as to the names and addresses of the Holders of the Bonds and the principal amounts and number of such Bonds.

Upon surrender for registration of transfer of any Bond at the office or agency of the Bond Issuer to be maintained as provided in Section 3.02, the Bond Issuer shall execute, and the Bond Trustee shall authenticate and the Bondholder shall obtain from the Bond Trustee, in the name of the designated transferee or transferees, one or more new Bonds in any Minimum Denominations, of a like Tranche and aggregate principal amount.

At the option of the Holder, Bonds may be exchanged for other Bonds in any Minimum Denominations, of a like Tranche and aggregate principal amount, upon surrender of the Bonds to be exchanged at such office or agency. Whenever any Bonds are so surrendered for exchange, the Bond Issuer shall execute, and the Bond Trustee shall authenticate and the Bondholder shall obtain from the Bond Trustee, the Bonds which the Bondholder making the exchange is entitled to receive.

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

Every Bond presented or surrendered for registration of transfer or exchange shall be duly endorsed by, or be accompanied by (a) a written instrument of transfer in form satisfactory to the Bond Trustee duly executed by the Holder thereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by an institution which is a member of one of the following recognized Signature Guaranty Programs: (i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) in such other guarantee program acceptable to the Bond Trustee, and (b) such other documents as the Bond Trustee may require.

No service charge shall be made to a Holder for any registration of transfer or exchange of Bonds, but the Bond Issuer may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Bonds, other than exchanges pursuant to Section 2.04 not involving any transfer.

The preceding provisions of this Section notwithstanding, the Bond Issuer shall not be required to make and the Bond Registrar need not register transfers or exchanges of any Bond for a period of 15 days preceding the date for any payment with respect to the Bond.

Section 2.06 Mutilated, Destroyed, Lost or Stolen Bonds.

If (i) any mutilated Bond is surrendered to the Bond Trustee, or the Bond Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Bond, and (ii) there is delivered to the Bond Trustee such security or indemnity as may be required by it to hold the Bond Issuer and the Bond Trustee harmless, then, in the absence of notice to the Bond Issuer, the Bond Registrar or the Bond Trustee that such Bond has been acquired by a protected purchaser, the Bond Issuer shall execute and, upon its request, the Bond Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Bond, a replacement Bond of like Tranche, tenor and principal amount, bearing a number not contemporaneously outstanding; provided, however, that if any such destroyed, lost or stolen Bond, but not a mutilated Bond, shall have become or within seven days shall be due and payable, instead of issuing a replacement Bond, the Bond Issuer may pay such destroyed, lost or stolen Bond when so due or payable, without surrender thereof. If, after the delivery of such replacement Bond or payment of a destroyed, lost or stolen Bond pursuant to the proviso to the preceding sentence, a protected purchaser of the original Bond in lieu of which such replacement Bond was issued presents for payment such original Bond, the Bond Issuer and the Bond Trustee shall be entitled to recover such replacement Bond (or such payment) from the Person to whom it was delivered or any Person taking such replacement Bond from such Person to whom such replacement Bond was delivered or any assignee of such Person, except a protected purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Bond Issuer or the Bond Trustee in connection therewith.

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Upon the issuance of any replacement Bond under this Section, the Bond Issuer may require the payment by the Holder of such Bond of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the Bond Trustee) connected therewith.

Every replacement Bond issued pursuant to this Section in replacement of any mutilated, destroyed, lost or stolen Bond shall constitute an original additional contractual obligation of the Bond Issuer, whether or not the mutilated, destroyed, lost or stolen Bond shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Bond Indenture equally and proportionately with any and all other Bonds duly issued hereunder.

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

Section 2.07 Persons Deemed Owner.

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

Section 2.08 Payment of Principal and Interest; Interest on Overdue Principal; Principal and Interest Rights Preserved.

(a) Any installment of interest or principal payable on any Bond which is punctually paid or duly provided for by the Bond Issuer on the applicable Payment Date shall be paid to the Person in whose name such Bond (or one or more Predecessor Bonds) is registered on the Record Date for such Payment Date, by check mailed first-class, postage prepaid to such Person’s address as it appears on the Bond Register on such Record Date, except that with respect to Bonds registered on the Record Date in the name of the Certificate Trustee payments will be made by wire transfer in immediately available funds to the account designated by the Certificate Trustee and except for the final installment of principal payable with respect to such Bond on a Payment Date which shall be payable as provided below. The funds represented by any such checks returned undelivered shall be held in accordance with Section 3.03.

(b) The principal of each Bond of each Tranche shall be paid, to the extent funds are available therefor in the Collection Account, in installments on each Payment Date specified in Section 2.01. Notwithstanding the foregoing, the entire unpaid principal amount of the Bonds shall be due and payable, if not previously paid, on the date on which an Event of Default shall have occurred and be continuing, if the Bond Trustee or the Holders of the Bonds representing not less than a majority of the Outstanding Amount of the Bonds have declared the Bonds to be immediately due and payable in the manner provided in Section 5.02. In such event, all payments of principal on the Bonds shall be made pro rata. The Bond Trustee shall notify the Person in whose name a Bond is registered at the close of business on the Record Date preceding the Payment Date on which the Bond Issuer expects that the final installment of principal of and interest on such Bond will be paid. Such notice shall be sent no later than five days prior to such final Payment Date and shall specify that such final installment will be payable only upon presentation and surrender of such Bond and shall specify the place where such Bond may be presented and surrendered for payment of such installment.

(c) If the Bond Issuer defaults in a payment of interest on the Bonds when due, the Bond Issuer shall be required to pay such defaulted interest (plus interest on such defaulted interest at the applicable Bond Interest Rate to the extent lawful) to the Persons who are Bondholders on a subsequent special record date, which date shall be at least five Business Days prior to the payment date. The Bond Issuer shall fix or cause to be fixed any such special record date and payment date, and, at least 20 days before any such special record date, the Bond Issuer shall mail to each affected Bondholder a notice that states the special record date, the payment date and the amount of defaulted interest (plus interest on such defaulted interest) to be paid.

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Section 2.09 Cancellation.

All Bonds surrendered for payment, registration of transfer or exchange shall, if surrendered to any Person other than the Bond Trustee, be delivered to the Bond Trustee and shall be promptly cancelled by the Bond Trustee. The Bond Issuer may at any time deliver to the Bond Trustee for cancellation any Bonds previously authenticated and delivered hereunder which the Bond Issuer may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the Bond Trustee. No Bonds shall be authenticated in lieu of or in exchange for any Bonds cancelled as provided in this Section, except as expressly permitted by this Bond Indenture. All cancelled Bonds may be held or disposed of by the Bond Trustee in accordance with its standard retention or disposal policy as in effect at the time.

Section 2.10 Authentication and Delivery of Bonds.

On the Issuance Date, the Bonds shall be executed by the Bond Issuer and delivered to the Bond Trustee for authentication and thereupon the same shall be authenticated and delivered by the Bond Trustee upon Issuer Request and upon receipt by the Bond Trustee or satisfaction of the following upon which the Bond Trustee may conclusively rely to the extent permitted to so rely under Article VI hereof:

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

(b) Authorizations.

(i) An Opinion of Counsel that no authorization, approval or consent of any Ohio, Delaware or federal governmental body or bodies at the time having jurisdiction in the premises is required to be obtained by the Bond Issuer for the valid issuance, authentication and delivery of such Bonds, except for such registrations as are required under the blue sky and securities laws of any State or such authorizations, approvals or consents of governmental bodies that have been obtained.

(ii) An Opinion of Counsel that no authorization, approval or consent of any governmental body or bodies at the time having jurisdiction in the premises is required for the valid execution and delivery by the Bond Issuer of each of the Basic Documents to which the Bond Issuer is a party, except for such authorizations, approvals or consents of governmental bodies that have been obtained.

(c) Authorizing Certificate. A certificate of an Authorized Officer of the Bond Issuer certifying that the Bond Issuer has duly authorized the execution and delivery of this Bond Indenture and the execution, authentication and delivery of the Bonds.

(d) The Collateral. The Bond Issuer shall have made or caused to be made all filings with the Delaware Secretary of State, the Ohio Secretary of State, PUCO and all other filings necessary to perfect the Grant of the Collateral to the Bond Trustee and the Lien of this Bond Indenture.

(e) Certificates of the Bond Issuer and the Seller.

(i) An Officer’s Certificate from the Bond Issuer, dated as of the Issuance Date:

(A) to the effect that the Bond Issuer is not in Default under this Bond Indenture and that the issuance of the Bonds applied for will not result in any Default or in any material breach of any of the terms, conditions or provisions of or constitute a default under any material indenture, mortgage, deed of trust or other agreement or instrument to which the Bond Issuer is a party or by which it or its property is bound or any order of any court or administrative agency entered in any Proceeding to which the Bond Issuer is a party or by which it or its property may be bound or to which it or its property may be subject; and that all conditions precedent provided in this Bond Indenture relating to the authentication and delivery of the Bonds applied for have been complied with;

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

(C) to the effect that the Bond Issuer has not assigned any interest or participation in the Collateral except for the Lien of this Bond Indenture and of the Statute; the Bond Issuer has the power and right to Grant the Collateral to the Bond Trustee as security hereunder; and the Bond Issuer, subject to the terms of this Bond Indenture, has Granted to the Bond Trustee all of its right, title and interest in and to such Collateral free and clear of any Lien, mortgage, pledge, charge, security interest, adverse claim or other encumbrance, except the Lien of this Bond Indenture and of the Statute;

(D) to the effect that the Bond Issuer has appointed a firm of Independent certified public accountants as contemplated in Section 8.06 hereof;

(E) to the effect that attached thereto are duly executed, true and complete copies of the Sale Agreement and the Servicing Agreement; and

(F) stating that all filings with the PUCO pursuant to the Statute, the Financing Order and all UCC financing statements with respect to the Collateral, which are required to be filed to cause the Bond Trustee to have a first priority perfected security interest in the Collateral, have been filed.

(ii) An Officer’s Certificate (as defined in the Sale Agreement) from the Seller, dated as of the Issuance Date, to the effect that (A) the representations and warranties set forth in Article III of the Sale Agreement are true and correct and (B) the attached copies of the Financing Order creating the Phase-In-Recovery Property and Issuance Advice Letter are true and correct.

(f) Opinion of Counsel. An Opinion of Counsel, portions of which may be delivered by counsel for the Bond Issuer, portions of which may be delivered by counsel for the Seller and the Servicer, and portions of which may be delivered by counsel to the Certificate Issuer, dated the Issuance Date, in each case subject to the customary exceptions, qualifications and assumptions contained therein (and upon which the Certificate Trustee shall be entitled to rely), to the collective effect that:

(i) the Bond Indenture has been duly qualified under the Trust Indenture Act;

(ii) the Bond Issuer has the limited liability company power and authority to execute and deliver this Bond Indenture and to issue the Bonds, and this Bond Indenture and the Bonds have been duly authorized and the Bond Issuer is duly formed and is validly existing in good standing under the laws of the jurisdiction of its organization;

(iii) the Bond Indenture has been duly authorized, executed and delivered by the Bond Issuer;

(iv) the Bonds applied for have been duly authorized and executed and, when authenticated in accordance with the provisions of the Bond Indenture and delivered against payment of the purchase price therefor, will constitute valid and binding obligations of the Bond Issuer, entitled to the benefits of the Bond Indenture subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other laws relating to or affecting the rights of creditors generally and general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law);

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(v) this Bond Indenture, the Sale Agreement, the Servicing Agreement, the Fee and Indemnity Agreement and the Cross-Indemnity Agreement are valid and binding agreements of the Bond Issuer, enforceable in accordance with their respective terms, except as such enforceability against the Bond Issuer may be subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other laws relating to or affecting the rights of creditors generally and general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law);

(vi)(A) the provisions of the Bond Indenture create a valid security interest securing the Secured Obligations in favor of the Bond Trustee in the Collateral, (B) the financing statements to be filed with the Delaware Secretary of State and the Ohio Secretary of State include all of the information required by Section 9-502(a) of the UCC and Section 4928.2312 of the Statute, (C) the financing statements have been presented for filing and all filing fees required in connection therewith have been paid, (D) the security interest granted by the Bond Issuer under this Bond Indenture which can be perfected by the filing of financing statements under the UCC are perfected, (E) the provisions of the Bond Indenture are effective to create in favor of the Bond Trustee a perfected security interest in the Collection Account to the extent constituting a securities account under the UCC, (F) search reports set forth the proper filing offices and proper debtor necessary to identify the persons who under the UCC have on file financing statements covering the Collateral, or a portion thereof, (G) by operation of Section 4928.2312 thereof, the Statute creates, upon the effective date of the Financing Order, a first priority Statutory Lien on the Phase-In-Recovery Property securing the Secured Obligations, and (H) the Statutory Lien is valid, perfected and enforceable against the Bond Issuer and all third parties without any further public notice;

(vii) either (A) the Registration Statement covering the Bonds and the Certificates is effective under the Securities Act and, to the best of such counsel’s knowledge and information, no stop order suspending the effectiveness of such Registration Statement has been issued under the Securities Act and no proceedings for that purpose have been initiated or are pending or threatened by the Commission or (B) the Bonds and the Certificates are exempt from the registration requirements under the Securities Act;

(viii) the Bond Issuer is not an “investment company” or under the “control” of an “investment company” as such terms are defined under the Investment Company Act of 1940, as amended;

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

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

(xi) upon the delivery of the fully executed Sale Agreement to the Bond Issuer and the payment of the purchase price of the Phase-In-Recovery Property by the Bond Issuer to the Seller pursuant to the Sale Agreement, then (A) the transfer of the Phase-In-Recovery Property by the Seller to the Bond Issuer pursuant to the Sale Agreement conveys all of the Seller’s right, title and interest in the Phase-In-Recovery Property to the Bond Issuer and such transfer will be treated under the laws of the State of Ohio as an absolute transfer and true sale of all of the Seller’s right, title, and interest in the Phase-In-Recovery Property, other than for federal and state income and franchise tax purposes, and (B) such transfer and true sale of the Phase-In-Recovery Property is effective and perfected against all third parties pursuant to Section 4928.2313 of the Statute;

(xii)(A) the Financing Order has been duly issued and authorized by the PUCO and the Financing Order, giving effect to the Issuance Advice Letter, is effective; (B) in reliance on the opinion of [            ] that the Bonds are “bonds” under Section 4928.23(C) of the Statute, as of the issuance of the Bonds, the Bonds are entitled to the protections provided in Sections 4928.235 and 4928.2315 of the Statute and the Financing Order, and that the Certificate Trustee, in its own name and as

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trustee of an express trust, as Holder of the Bonds shall be, to the extent permitted by state and federal law, entitled to enforce the protections of such Sections of the Statute; (C) the Financing Order is no longer subject to appeal by any person in the state courts of the State of Ohio; and (D) the Servicer is authorized to file True-Up Adjustments to the Phase-In-Recovery Charge to the extent necessary to ensure the timely recovery of revenues sufficient to provide for the payment of all principal and interest on the Bonds and all other approved Financing Costs;

(xiii) any state action (whether by legislative, PUCO, citizen initiative or otherwise) to revoke or limit the Financing Order, the Issuance Advice Letter, the Phase-In-Recovery Property or the Phase-In-Recovery Charge in a manner which would substantially impair the rights of Bondholders would be subject to a successful constitutional contracts clause defense; and

(xiv) such other matters as the Bond Trustee may reasonably require.

(g) Accountant’s Letter. A letter addressed to the Bond Issuer and the Bond Trustee complying with the requirements of Section 11.01(a) hereof, of a firm of Independent registered public accountants of recognized national reputation to the effect that (i) such accountants are Independent with respect to the Bond Issuer within the meaning of the Bond Indenture, and are independent public accountants within the meaning of the standards of The American Institute of Certified Public Accountants, and (ii) with respect to the Collateral, they have made certain specified recalculations of calculations and information provided by the Seller for the purpose of determining that, based on certain specified assumptions used in calculating estimated collections based on the initial Phase-In-Recovery Charge, as of the Issuance Date such estimated collections based on the initial Phase-In-Recovery Charge are sufficient to pay (i) assumed Operating Expenses when incurred, plus (ii) interest on the Bonds at their respective Bond Interest Rates when due as set forth in the Final Prospectus, plus (iii) principal of the Bonds in accordance with the Expected Amortization Schedule set forth in the Final Prospectus and found the calculations to be mathematically correct.

(h) Rating Agency Condition. The Bond Trustee shall receive a letter from each of the Rating Agencies confirming that the Bonds have received the ratings from the Rating Agencies required by the Underwriting Agreement as a condition to the issuance of the Bonds.

(i) Other Requirements. Such other documents, certificates, agreements, instruments or opinions as the Bond Trustee may reasonably require.

(j) Satisfaction of Conditions. Payment of the purchase price for the Bonds by the Certificate Issuer in accordance with the Bond Purchase Agreement shall constitute satisfaction of the conditions set forth in this Section 2.10.

Section 2.11 Release of Collateral.

Subject to Section 11.01, the Bond Trustee shall release property from the Lien of this Bond Indenture only as specified in Section 8.04.

Section 2.12 Tax Treatment.

The Bond Issuer and the Bond Trustee, by entering into this Bond Indenture, and the Bondholders and any Persons holding a beneficial interest in any Bond, by acquiring any Bond or interest therein, (a) express their intention that, solely for the purposes of federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for the purposes of state, local and other taxes, the Bonds qualify under applicable tax law as indebtedness of the Member secured by the Collateral and (b) solely for the purposes of federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for purposes of state, local and other taxes, so long as any of the Bonds are Outstanding, agree to treat the Bonds as indebtedness of the Member secured by the Collateral unless otherwise required by appropriate taxing authorities.

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Section 2.13 State Pledge.

Section 4928.2315 of the Statute (the “State Pledge”) provides as follows:

“The state pledges to and agrees with the bondholders, any assignee, and any financing parties under a final financing order that the state will not take or permit any action that impairs the value of phase-in-recovery property under the final financing order or revises the phase-in costs for which recovery is authorized under the final financing order or, except as allowed under section 4928.238 of the Revised Code, reduce, alter, or impair phase-in-recovery charges that are imposed, charged, collected, or remitted for the benefit of the bondholders, any assignee, and any financing parties, until any principal, interest, and redemption premium in respect of phase-in-recovery bonds, all financing costs, and all amounts to be paid to an assignee or financing party under an ancillary agreement are paid or performed in full.”

The Bond Issuer hereby acknowledges that the purchase of any Bond by a Holder or the purchase of any beneficial interest in a Bond by any Person and the Bond Trustee’s obligations to perform hereunder are made in reliance on such agreement and pledge by the State of Ohio. The Bond Issuer hereby represents and warrants to the Bond Trustee, for the benefit of the Bondholders that it constitutes an “assignee” under Section 4928.23(B) of the Statute, that the Bonds constitute “bonds” under Section 4928.23(C) of the Statute, that the Bonds are entitled to the protections provided in Sections 4928.235 and 4928.2315 of the Statute, and that the Certificate Trustee, in its own name and as trustee of an express trust, as Holder of the Bonds shall be, to the extent permitted by state and federal law, entitled to enforce such sections of the Statute.

Section 2.14 Security Interest.

The Bond Issuer hereby makes the following representations and warranties. Other than the security interest granted to the Bond Trustee pursuant to this Bond Indenture, the Bond Issuer has not pledged, granted, sold, conveyed or otherwise assigned any interest or security interest in the Collateral and no security agreement, financing statement or equivalent security or Lien instrument listing the Bond Issuer as debtor covering all or any part of the Collateral is on file or of record in any jurisdiction, except such as may have been filed, recorded or made by the Bond Issuer in favor of the Bond Trustee for the benefit of the Bondholders, the Bond Trustee and any other holders of Secured Obligations, in connection with this Bond Indenture. This Bond Indenture constitutes a valid and continuing Lien on, and first priority perfected security interest in, the Collateral in favor of the Bond Trustee for the benefit of the Bondholders, the Bond Trustee and any other holders of Secured Obligations, which Lien and security interest is prior to all other Liens and is enforceable as such as against creditors of and purchasers from the Bond Issuer in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors’ rights generally or by general equitable principles, whether considered in a proceeding at law or in equity and by an implied covenant of good faith and fair dealing. With respect to all Collateral, this Bond Indenture creates a valid and continuing first priority perfected security interest (as defined in the UCC and as such term is used in the Statute) in such Collateral, which security interest is prior to all other Liens and is enforceable as such as against creditors of and purchasers from the Bond Issuer in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors’ rights generally or by general equitable principles, whether considered in a proceeding at law or in equity and by an implied covenant of good faith and fair dealing. The Bond Issuer has good and marketable title to the Collateral free and clear of any Lien, claim or encumbrance of any Person other than the Lien of this Bond Indenture. All of the Collateral constitutes either Phase-In-Recovery Property or accounts, deposit accounts, securities accounts, investment property or general intangibles (as each such term is defined in the UCC) except that proceeds of the Collateral may also take the form of instruments. The Bond Issuer has taken, or caused the Servicer to take, all action necessary to perfect the security interest in the Collateral granted to the Bond Trustee, for the benefit of the Bondholders, the Bond Trustee and any other holders of Secured Obligations. The Bond Issuer has filed (or has caused the Servicer to file) all appropriate financing statements in the proper filing offices in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Collateral granted to the Bond Trustee. The Bond Issuer has not authorized the filing of and is not aware, after due inquiry, of any financing statements against the Bond Issuer that include a description of the Collateral other than those filed in favor of the Bond Trustee. The Bond Issuer is not aware of any judgment or tax Lien filings against the Bond Issuer. The Collection Account (including all subaccounts thereof) constitutes a “securities account” within the meaning of the UCC. The Bond Issuer has taken all steps necessary to cause the Securities Intermediary of each such securities account to identify in its records the Bond Trustee as the person having

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a security entitlement against the Securities Intermediary in such securities account, neither the Collection Account or any subaccount thereof is in the name of any person other than the Bond Trustee, and the Bond Issuer has not consented to the Securities Intermediary of the Collection Account to comply with entitlement orders of any person other than the Bond Trustee. All of the Collateral constituting investment property has been and will have been credited to the Collection Account or a subaccount thereof, and the Securities Intermediary for the Collection Account has agreed to treat all assets credited to the Collection Account as “financial assets” within the meaning of the UCC. Accordingly, the Bond Trustee has a first priority perfected security interest in the Collection Account, all funds and financial assets on deposit therein, and all securities entitlements relating thereto. The representations and warranties set forth in this Section 2.14 shall survive the execution and delivery of this Bond Indenture and the issuance of any Bonds, shall be deemed re-made on each date on which any funds in the Collection Account are distributed to the Bond Issuer or otherwise released from the Lien of the Bond Indenture.

ARTICLE III

Covenants

Section 3.01 Payment of Principal and Interest.

The Bond Issuer will duly and punctually pay the principal of and interest on the Bonds in accordance with the terms of the Bonds and this Bond Indenture. Amounts properly withheld under the Code by any Person from a payment to any Bondholder of interest or principal shall be considered as having been paid by the Bond Issuer to such Bondholder for all purposes of this Bond Indenture.

Section 3.02 Maintenance of Office or Agency.

The Bond Issuer will maintain in the Borough of Manhattan, The City of New York, an office or agency where Bonds may be surrendered for registration of transfer or exchange. The Bond Issuer hereby initially appoints the Bond Trustee to serve as its agent for the foregoing purposes. The Bond Issuer will give prompt written notice to the Bond Trustee of the location, and of any change in the location, of any such office or agency. If at any time the Bond Issuer shall fail to maintain any such office or agency or shall fail to furnish the Bond Trustee with the address thereof, such surrenders may be made at the Corporate Trust Office, and the Bond Issuer hereby appoints the Bond Trustee as its agent to receive all such surrenders.

Section 3.03 Money for Payments To Be Held in Trust.

As provided in Section 8.02(a), all payments of amounts due and payable with respect to any Bonds that are to be made from amounts withdrawn from the Collection Account pursuant to Section 8.02(e) shall be made on behalf of the Bond Issuer by the Bond Trustee or by another Paying Agent, and no amounts so withdrawn from the Collection Account for payments of Bonds shall be paid over to the Bond Issuer except as provided in this Section 3.03 and Section 8.02.

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

(a) hold all sums held by it for the payment of amounts due with respect to the Bonds in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided;

(b) give the Bond Trustee and the Certificate Trustee notice of any Default by the Bond Issuer (or any other obligor upon the Bonds) of which it has actual knowledge in the making of any payment required to be made with respect to the Bonds;

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

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

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

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

Subject to applicable laws with respect to escheat of funds, any money held by the Bond Trustee or any Paying Agent in trust for the payment of any amount due with respect to any Bond and remaining unclaimed for two years after such amount has become due and payable shall be discharged from such trust and be paid to the Bond Issuer on Issuer Request; and, subject to Section 11.16, the Holder of such Bond shall thereafter, as an unsecured general creditor, look only to the Bond Issuer for payment thereof (but only to the extent of the amounts so paid to the Bond Issuer), and all liability of the Bond Trustee or such Paying Agent with respect to such trust money shall thereupon cease; provided, however, that the Bond Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Bond Issuer cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Bond Issuer. The Bond Trustee may also adopt and employ, at the expense of the Bond Issuer, any other reasonable means of notification of such repayment (including mailing notice of such repayment to Holders whose right to or interest in moneys due and payable but not claimed is determinable from the records of the Bond Trustee or of any Paying Agent, at the last address of record for each such Holder).

Section 3.04 Existence.

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

Section 3.05 Protection of Collateral.

The Bond Issuer will from time to time execute and deliver all such supplements and amendments hereto and except to the extent required to be made by the Seller or Servicer, make all such filings with the PUCO pursuant to the Statute or the Financing Order, UCC financing statements, UCC continuation statements, instruments of further assurance and other instruments, and will take such other action necessary or advisable to:

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

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

(c) enforce any of the Collateral;

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(d) preserve and defend title to the Collateral and the rights of the Bond Trustee and the Bondholders in such Collateral against the claims of all Persons and parties, including the challenge by any party to the validity or enforceability of the Financing Order, any Adjustment Letter or the Phase-In-Recovery Property or any proceeding relating thereto and institute any action or proceeding necessary to compel performance by the PUCO or the State of Ohio of any of its obligations or duties under the Statute, the Financing Order or any Adjustment Letter; or

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

The Bond Issuer hereby designates the Bond Trustee its agent and attorney-in-fact with authorization to execute and/or file on behalf of the Bond Issuer any filings with the PUCO pursuant to the Statute or, except to the extent required to be filed or furnished by the Seller or Servicer, the Financing Order, UCC financing statement, UCC continuation statement or other instrument required by the Bond Trustee pursuant to this Section, it being understood that the Bond Trustee shall have no such obligation.

Section 3.06 Opinions as to Collateral.

(a) On the Issuance Date, the Bond Issuer shall furnish to the Bond Trustee an Opinion of Counsel either stating that, in the opinion of such counsel, (i) such action has been taken (and reciting the details of such action) with respect to the recording and filing of this Bond Indenture and any other requisite documents, and with respect to the execution and filing of any filings with the PUCO pursuant to the Statute or, except to the extent required to be filed or furnished by the Seller or Servicer, the Financing Order, UCC financing statements and UCC continuation statements, as are necessary to perfect the Lien and security interest of this Bond Indenture, or (ii) no such action is necessary to make such Lien and security interest effective. The delivery of the Opinion of Counsel referenced in Section 2.10 shall be deemed to satisfy this requirement.

(b) Within ninety days after the beginning of each calendar year beginning with the calendar year beginning January 1, 2014, the Bond Issuer shall furnish to the Bond Trustee an Opinion of Counsel of counsel of the Bond Issuer either stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, re-recording and refiling of this Bond Indenture, any indentures supplemental hereto and any other requisite documents and with respect to the execution and filing of any filings with the PUCO pursuant to the Statute and the Financing Order and any financing statements and continuation statements as are necessary to maintain the Lien and the first priority perfected security interest created by this Bond Indenture and reciting the details of such action or stating that, in the opinion of such counsel, no such action is necessary to maintain such Lien and security interest. Such Opinion of Counsel shall also describe the recording, filing, re-recording and refiling of this Bond Indenture, any indentures supplemental hereto and any other requisite documents and the execution and filing of any filings with the PUCO, financing statements and continuation statements that will, in the opinion of such counsel, be required within the twelve-month period following the date of such opinion to maintain the Lien and the first priority perfected security interest created by this Bond Indenture.

(c) Prior to the effectiveness of any amendment to the Sale Agreement, the Bond Issuer shall furnish to the Bond Trustee an Opinion of Counsel either (i) stating that, in the opinion of such counsel, all filings, including filings with the PUCO pursuant to the Statute or the Financing Order and any UCC financing statements, have been executed and filed that are necessary fully to preserve and protect the interest of the Bond Issuer and the Bond Trustee in the Phase-In-Recovery Property and the proceeds thereof, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (ii) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interest.

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Section 3.07 Performance of Obligations; Servicing; Commission Filings.

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

(a) The Bond Issuer may contract with other Persons to assist it in performing its duties under this Bond Indenture, and any performance of such duties by a Person identified to the Bond Trustee in an Officer’s Certificate of the Bond Issuer shall be deemed to be action taken by the Bond Issuer. Initially, the Bond Issuer has contracted with the Administrator and the Servicer to assist the Bond Issuer in performing its duties under this Bond Indenture.

(b) The Bond Issuer will punctually perform and observe all of its obligations and agreements contained in this Bond Indenture, the Basic Documents and in the instruments and agreements included in the Collateral, including filing or causing to be filed all filings with the PUCO pursuant to the Statute or the Financing Order, UCC financing statements and continuation statements required to be filed by it by the terms of this Bond Indenture, the Sale Agreement and the Servicing Agreement in accordance with and within the time periods provided for herein and therein. Except as otherwise expressly permitted therein, the Bond Issuer shall not waive, amend, modify, supplement or terminate any Basic Document or any provision thereof without the written consent of the Bond Trustee (which consent shall not be withheld if (i) the Bond Trustee shall have received an Officer’s Certificate stating that such waiver, amendment, modification, supplement or termination shall not adversely affect in any material respect the interests of the Bondholders or the holders of Certificates and (ii) the Rating Agency Condition shall have been satisfied with respect thereto) or the Holders of at least a majority of the Outstanding Amount of Bonds.

(c) If the Bond Issuer shall have knowledge of the occurrence of a Servicer Default under the Servicing Agreement, the Bond Issuer shall promptly give written notice thereof to the Bond Trustee, the Certificate Trustee and the Rating Agencies, and shall specify in such notice the action, if any, the Bond Issuer is taking with respect of such default. If a Servicer Default shall arise from the failure of the Servicer to perform any of its duties or obligations under the Servicing Agreement with respect to the Phase-In-Recovery Property, including the Phase-In-Recovery Charge, the Bond Issuer shall take all reasonable steps available to it to remedy such failure.

(d) As promptly as possible after the giving of notice to the Servicer, the Bond Trustee, the Certificate Trustee and the Rating Agencies of termination of the Servicer’s rights and powers pursuant to Section 7.01 of the Servicing Agreement, the Bond Issuer, subject to the approval of the PUCO pursuant to the Financing Order and certain other conditions set forth in the Servicing Agreement, shall appoint a successor Servicer (the “Successor Servicer”) with the Bond Trustee’s prior written consent thereto (which consent shall not be unreasonably withheld and shall be given upon the written direction of Holders of not less than a majority of the Outstanding Amount of the Bonds), and such Successor Servicer shall accept its appointment by a written assumption in a form acceptable to the Bond Issuer and the Bond Trustee. If within 30 days after the delivery of the notice referred to above, the Bond Issuer shall not have obtained such a new Servicer, the Bond Trustee, at the expense of the Bond Issuer, may petition the PUCO or a court of competent jurisdiction to appoint a Successor Servicer. In connection with any such appointment, the Bond Issuer may make such arrangements for the compensation of such successor as it and such successor shall agree, subject to the limitations set forth below and in the Servicing Agreement, and in accordance and in compliance with Section 7.02 of the Servicing Agreement, the Bond Issuer shall enter into an agreement with such successor for the servicing of the Phase-In-Recovery Property (such agreement to be in form and substance satisfactory to the Bond Trustee).

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

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(f) Without derogating from the absolute nature of the assignment granted to the Bond Trustee under this Bond Indenture or the rights of the Bond Trustee hereunder, the Bond Issuer agrees that it will not, without the prior written consent of the Bond Trustee or the Holders of at least a majority in Outstanding Amount of the Bonds, amend, modify, waive, supplement, terminate or surrender, or agree to any amendment, modification, supplement, termination, waiver or surrender of, the terms of any Collateral or the Basic Documents, or waive timely performance or observance of any material term by the Seller or the Servicer under the Sale Agreement or the Servicing Agreement, respectively. If any such amendment, modification, supplement or waiver shall be so consented to by the Bond Trustee or such Holders, the Bond Issuer agrees to execute and deliver, in its own name and at its own expense, such agreements, instruments, consents and other documents as shall be necessary or appropriate in the circumstances. The Bond Issuer agrees that no such amendment, modification, supplement or waiver shall adversely affect the rights of the Holders of the Bonds or Certificates Outstanding at the time of any such amendment, modification, supplement or waiver, except as otherwise agreed to by the Holders in accordance with the Basic Documents.

(g) The Bond Issuer shall (or shall cause the Sponsor to) post on a collective website (the Bond Issuer together with [other two bond issuers]) and, to the extent consistent with the Bond Issuer’s and the Sponsor’s obligations under applicable law, file with or furnish to the Commission in periodic reports and other reports as are required from time to time under Section 13 or Section 15(d) of the Exchange Act, and shall direct the Bond Trustee to post on such website for Bondholders the following information (other than any such information filed with the Commission and publicly available unless the Bond Issuer specifically requests such items to be posted) with respect to the Outstanding Bonds, in each case to the extent such information is reasonably available to the Bond Issuer:

(i) statements of any remittances of Phase-In-Recovery Charges made to the Bond Trustee (to be included in a Form 10-D or Form 10-K, or successor forms thereto);

(ii) a statement reporting the balances in the Collection Account and in each subaccount of the Collection Account as of the end of each quarter or the most recent date available (to be included in a Form 10-D or Form 10-K, or successor forms thereto);

(iii) a statement showing the balance of Outstanding Bonds that reflects the actual periodic payments made on the Bonds during the applicable period (to be included in the next Form 10-D or Form 10-K filed, or successor forms thereto);

(iv) the Semiannual Servicer Certificate as required to be submitted pursuant to the Servicing Agreement (to be filed with a Form 10-D, Form 10-K or Form 8-K, or successor forms thereto);

(v) the Monthly Servicer Certificate as required to be submitted pursuant to the Servicing Agreement;

(vi) the text (or a link to the website where a reader can find the text) of each filing of a True-Up Adjustment and the results of each such filing;

(vii) any change in the long-term or short-term credit ratings of the Servicer assigned by the Rating Agencies;

(viii) material legislative or regulatory developments directly relevant to the Outstanding Bonds (to be filed or furnished in a Form 8-K);

(ix) any reports and other information that the Bond Issuer is required to file with the Commission under the Securities Exchange Act of 1934; and

(x) the final prospectus for the Certificates.

Notwithstanding the foregoing, nothing herein shall preclude the Bond Issuer from voluntarily suspending or terminating its filing obligations as Bond Issuer with the Commission to the extent permitted by applicable law.

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For purposes of this Section 3.07, the address of the Bond Trustee’s website is https://www.usbank.com/abs. The Bond Trustee shall immediately notify the Bond Issuer, the Bondholders and the Rating Agencies of any change to the address of such website.

(h) The Bond Issuer shall make all filings required under the Statute or the Financing Order relating to the transfer of the ownership or the grant of a security interest in the Phase-In-Recovery Property other than those required to be made by the Seller or the Servicer pursuant to the Basic Documents.

Section 3.08 Negative Covenants.

So long as any Bonds are Outstanding, the Bond Issuer shall not:

(a) except as expressly permitted by this Bond Indenture, sell, transfer, exchange or otherwise dispose of any of the properties or assets of the Bond Issuer, including those included in the Collateral, unless directed to do so by the Bond Trustee in accordance with Article V;

(b) claim any credit on, or make any deduction from the principal or interest payable in respect of, the Bonds (other than amounts properly withheld from such payments under the Code) or assert any claim against any present or former Bondholder by reason of the payment of the taxes levied or assessed upon any part of the Collateral;

(c) terminate its existence or dissolve or liquidate in whole or in part; or

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

Section 3.09 Annual Statement as to Compliance.

The Bond Issuer will deliver to the Bond Trustee, the Certificate Trustee and the Rating Agencies not later than [March 30] of each year (commencing with [March 30, 2014]), an Officer’s Certificate stating, as to the Authorized Officer signing such Officer’s Certificate, that

(a) a review of the activities of the Bond Issuer during the preceding twelve months ended [December 31] (or, in the case of the first Officer’s Certificate, since the date of this Bond Indenture), and of performance under this Bond Indenture has been made; and

(b) to the best of such Authorized Officer’s knowledge, based on such review, the Bond Issuer has in all material respects complied with all conditions and covenants under this Bond Indenture throughout such twelve month period (or shorter period in the case of the first such Officer’s Certificate), or, if there has been a default in so complying with any such condition or covenant, specifying each such default known to such Authorized Officer and the nature and status thereof.

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Section 3.10 Bond Issuer May Consolidate, etc., Only on Certain Terms.

(a) The Bond Issuer shall not consolidate or merge with or into any other Person, unless

(i) the Person (if other than the Bond Issuer) formed by or surviving such consolidation or merger shall be a Person organized and existing under the laws of the United States of America, any State or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Bond Trustee, in form and substance reasonably satisfactory to the Bond Trustee, the due and punctual payment of the principal of and interest on all Bonds and the performance or observance of every agreement and covenant of this Bond Indenture on the part of the Bond Issuer to be performed or observed, all as provided herein;

(ii) immediately after giving effect to such transaction, no Event of Default shall have occurred and be continuing;

(iii) the transaction shall not result in a reduction or withdrawal of the then current ratings on any Tranche of Bonds or Certificates;

(iv) the Bond Issuer shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Bond Trustee) to the effect that such transaction will not have any material adverse tax consequence to the Bond Issuer, the Certificate Issuer, any Bondholder or any Certificateholder;

(v) any action as is necessary to maintain the Lien and security interest created by this Bond Indenture shall have been taken; and

(vi) the Bond Issuer shall have delivered to the Bond Trustee an Officer’s Certificate and an Opinion of Counsel each stating that such consolidation or merger and such supplemental bond indenture comply with this Section 3.10 and that all conditions precedent herein provided for relating to such transaction have been complied with (including any filing required by the Exchange Act).

(b) Except as specifically provided herein, the Bond Issuer shall not convey or transfer any of its properties or assets, including those included in the Collateral, to any Person, unless

(i) the Person that acquires by conveyance or transfer the properties and assets of the Bond Issuer the conveyance or transfer of which is hereby restricted shall (A) be a United States citizen or a Person organized and existing under the laws of the United States of America, any State or the District of Columbia, (B) expressly assume, by an indenture supplemental hereto, executed and delivered to the Bond Trustee, in form and substance reasonably satisfactory to the Bond Trustee, the due and punctual payment of the principal of and interest on all Bonds and the performance or observance of every agreement and covenant of this Bond Indenture on the part of the Bond Issuer to be performed or observed, all as provided herein, (C) expressly agree by means of such supplemental bond indenture that all right, title and interest so conveyed or transferred shall be subject and subordinate to the rights of Holders of the Bonds, (D) unless otherwise provided in the supplemental bond indenture referred to in clause (B) above, expressly agree to indemnify, defend and hold harmless the Bond Trustee against and from any loss, liability or expense arising under or related to this Bond Indenture and the Bonds and (E) expressly agree by means of such supplemental bond indenture that such Person (or if a group of Persons, then one specified Person) shall make all filings with the Commission (and any other appropriate Person) required by the Exchange Act in connection with the Bonds;

(ii) immediately after giving effect to such transaction, no Event of Default shall have occurred and be continuing;

(iii) the transaction will not result in a reduction or withdrawal of the then current ratings on any Tranche of Bonds or Certificates;

(iv) the Bond Issuer shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Bond Trustee) to the effect that such transaction will not have any material adverse tax consequence to the Bond Issuer, the Certificate Issuer, any Bondholder or any Certificateholder;

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(v) any action as is necessary to maintain the Lien and security interest created by this Bond Indenture shall have been taken; and

(vi) the Bond Issuer shall have delivered to the Bond Trustee an Officer’s Certificate and an Opinion of Counsel each stating that such conveyance or transfer and such supplemental bond indenture comply with this Section 3.10 and that all conditions precedent herein provided for relating to such transaction have been complied with (including any filing required by the Exchange Act).

Section 3.11 Successor or Transferee.

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

(b) Except as set forth in Section 6.07, upon a conveyance or transfer of all the assets and properties of the Bond Issuer pursuant to Section 3.10(b), Bond Issuer will be released from every covenant and agreement of this Bond Indenture to be observed or performed on the part of the Bond Issuer with respect to the Bonds immediately upon the delivery of written notice by Bond Issuer to the Bond Trustee stating that Bond Issuer is to be so released.

Section 3.12 No Other Business.

The Bond Issuer shall not engage in any business other than financing, purchasing, owning and managing the Phase-In-Recovery Property in the manner contemplated by this Bond Indenture and the Basic Documents and activities incidental thereto.

Section 3.13 No Borrowing.

The Bond Issuer shall not issue, incur, assume, guarantee or otherwise become liable, directly or indirectly, for any indebtedness except for the Bonds.

Section 3.14 Servicer’s Obligations.

The Bond Issuer shall enforce the Servicer’s compliance with all of the Servicer’s material obligations under the Servicing Agreement.

Section 3.15 No Additional Bonds.

The Bond Issuer shall not issue any additional Bonds hereunder, except pursuant to Section 2.05 or Section 2.06.

Section 3.16 Guarantees, Loans, Advances and Other Liabilities.

Except as otherwise contemplated by the Sale Agreement, the Servicing Agreement or this Bond Indenture, the Bond Issuer shall not make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another’s payment or performance on any obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any other Person.

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Section 3.17 Capital Expenditures.

Other than expenditures in connection with the Bond Issuer’s purchase of Phase-In-Recovery Property from the Seller, the Bond Issuer shall not make any expenditure (by long-term or operating lease or otherwise) for capital assets (either realty or personalty).

Section 3.18 Intentionally Omitted.

Section 3.19 Restricted Payments.

The Bond Issuer shall not, directly or indirectly, while the Bonds are Outstanding (a) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, to any owner of a beneficial interest in the Bond Issuer or otherwise with respect to any ownership or equity interest or security in or of the Bond Issuer, (b) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or security or (c) set aside or otherwise segregate any amounts for any such purpose; provided, however that, if no Event of Default shall have occurred and be continuing, the Bond Issuer may make, or cause to be made, any such distributions to any owner of a beneficial interest in the Bond Issuer or otherwise with respect to any ownership or equity interest or security in or of the Bond Issuer using funds distributed to the Bond Issuer pursuant to Section 8.02 to the extent that such distributions would not cause the amount of the Capital Subaccount to decline below the Required Capital Level. The Bond Issuer will not, directly or indirectly, make payments to or distributions from the Collection Account except in accordance with this Bond Indenture and the Basic Documents.

Section 3.20 Notice of Events of Default.

The Bond Issuer agrees to give the Bond Trustee, the Certificate Trustee and the Rating Agencies prompt written notice of each Event of Default hereunder and each default on the part of the Seller or the Servicer of its obligations under the Sale Agreement or the Servicing Agreement, respectively.

Section 3.21 Further Instruments and Acts.

Upon request of the Bond Trustee, the Bond Issuer will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Bond Indenture. The Bond Issuer will take all actions, and make all filings, necessary to obtain and maintain a first priority perfected security interest in the Collateral in favor of the Bond Trustee.

Section 3.22 Change in Chief Executive Office or Jurisdiction of Organization.

The Bond Issuer shall not change its chief executive office or the jurisdiction of its formation without previously having delivered to the Bond Trustee an Opinion of Counsel to the effect that all actions have been taken, and all filings have been made, as are necessary to continue and maintain the first priority perfected security interest of the Bond Trustee in the Collateral.

ARTICLE IV

Satisfaction and Discharge; Defeasance

Section 4.01 Satisfaction and Discharge of Bond Indenture; Defeasance.

(a) This Bond Indenture shall cease to be of further effect with respect to the Bonds and the Bond Trustee, on reasonable written demand of and at the expense of the Bond Issuer, shall execute such instruments as the Bond Issuer reasonably requests acknowledging satisfaction and discharge of this Bond Indenture with respect to the Bonds, when

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(i) either

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

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

(ii) the Bond Issuer has paid or caused to be paid all other sums payable hereunder by the Bond Issuer; and

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

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

If the Bond Issuer exercises the Legal Defeasance Option, the maturity of the Bonds may not be accelerated because of an Event of Default. If the Bond Issuer exercises the Covenant Defeasance Option, the maturity of the Bonds may not be accelerated because of an Event of Default specified in Section 5.01(c).

Upon satisfaction of the conditions set forth herein to the exercise of the Legal Defeasance Option or the Covenant Defeasance Option, the Bond Trustee, on reasonable written demand of and at the expense of the Bond Issuer, shall execute such instruments as the Bond Issuer reasonably requests acknowledging satisfaction and discharge of the obligations that are terminated pursuant to such exercise.

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

Section 4.02 Conditions to Defeasance.

The Bond Issuer may exercise the Legal Defeasance Option or the Covenant Defeasance Option of Bonds only if:

(a) the Bond Issuer irrevocably deposits or causes to be deposited in trust with the Bond Trustee cash or U.S. Government Obligations for the payment of principal of and interest on each such Bond to the Scheduled Maturity Date;

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(b) the Bond Issuer delivers to the Bond Trustee a certificate from a nationally recognized firm of Independent accountants expressing its opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited cash without investment will provide cash at such times and in such amounts (but, in the case of the Legal Defeasance Option only, not more than such amounts) as will be sufficient to pay in respect of the Bonds (i) subject to clause (ii), principal in accordance with the Expected Amortization Schedule therefor, and (ii) interest when due;

(c) in the case of the Legal Defeasance Option, 91 days pass after the deposit is made and during the 91-day period no Default specified in Section 5.01(d) or (e) occurs which is continuing at the end of the period;

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

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

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

(g) the Bond Issuer delivers to the Bond Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent to the satisfaction and discharge of the Bonds to the extent contemplated by this Article IV have been complied with.

Section 4.03 Application of Trust Money.

All moneys or U.S. Government Obligations deposited with the Bond Trustee pursuant to Section 4.01 or 4.02 hereof shall be held in trust and applied by it, in accordance with the provisions of the Bonds and this Bond Indenture, to the payment, either directly or through any Paying Agent, as the Bond Trustee may determine, to the Holders of the particular Bonds for the payment of which such moneys or U.S. Government Obligations have been deposited with the Bond Trustee, of all sums due and to become due thereon for principal and interest, but such moneys need not be segregated from other funds except to the extent required herein or in the Servicing Agreement or required by law.

Section 4.04 Repayment of Moneys Held by Paving Agent.

In connection with the satisfaction and discharge of this Bond Indenture or the Covenant Defeasance Option or Legal Defeasance Option with respect to the Bonds, all moneys then held by any Paying Agent other than the Bond Trustee under the provisions of this Bond Indenture with respect to such Bonds shall, upon demand of the Bond Issuer, be paid to the Bond Trustee to be held and applied according to Section 3.03 and thereupon such Paying Agent shall be released from all further liability with respect to such moneys.

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ARTICLE V

Remedies

Section 5.01 Events of Default.

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

(a) default in the payment of any interest on any Bond when the same becomes due and payable, and such default shall continue for a period of five days; or

(b) default in the payment of the then unpaid principal of any Bond on the Final Maturity Date; or

(c) default in the observance or performance in any material respect of any covenant or agreement of the Bond Issuer made in this Bond Indenture (other than a covenant or agreement, a default in the observance or performance of which is elsewhere in this Section specifically dealt with), or any representation or warranty of the Bond Issuer made in this Bond Indenture or in any certificate or other writing delivered pursuant hereto or in connection herewith proving to have been incorrect in any material respect as of the time when the same shall have been made, and such default shall continue or not be cured, or the circumstance or condition in respect of which such misrepresentation or warranty was incorrect shall not have been eliminated or otherwise cured, for a period of 30 days after there shall have been given, by registered or certified mail, to the Bond Issuer by the Bond Trustee or to the Bond Issuer and the Bond Trustee by the Holders of at least 25 percent of the Outstanding Amount of the Bonds, a written notice specifying such default or incorrect representation or warranty and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or

(d) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of the Bond Issuer or any substantial part of the Collateral in an involuntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Bond Issuer or for any substantial part of the Collateral, or ordering the winding-up or liquidation of the Bond Issuer’s affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or

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

(f) any act or failure to act by the State of Ohio or any of its agencies (including the PUCO), which violates or is not in accordance with the State Pledge.

The Bond Issuer shall deliver to a Responsible Officer of the Bond Trustee, the Certificate Trustee and the Rating Agencies, within five days after an Authorized Officer has knowledge of the occurrence thereof, written notice in the form of an Officer’s Certificate of any event (i) which is an Event of Default under clause (a), (b), (d), (e) or (f) or (ii) which with the giving of notice, the lapse of time, or both would become an Event of Default under clause (b) or (c), including, in each case, the status of such Default or Event of Default and what action the Bond Issuer is taking or proposes to take with respect thereto.

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Section 5.02 Acceleration of Maturity; Rescission and Annulment.

If an Event of Default should occur and be continuing, then and in every such case the Bond Trustee or the Holders of Bonds representing not less than a majority of the Outstanding Amount of the Bonds may declare all the Bonds to be immediately due and payable, by a notice in writing to the Bond Issuer (and to the Bond Trustee if given by Bondholders), and upon any such declaration the unpaid principal amount of the Bonds, together with accrued and unpaid interest thereon through the date of acceleration, shall become immediately due and payable.

At any time after such declaration of acceleration of maturity has been made and before a judgment or decree for payment of the money due has been obtained by the Bond Trustee as hereinafter in this Article V provided, the Holders of Bonds representing a majority of the Outstanding Amount of the Bonds, by written notice to the Bond Issuer and the Bond Trustee, may rescind and annul such declaration and its consequences if

(a) the Bond Issuer has paid or deposited with the Bond Trustee a sum sufficient to pay:

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

(ii) all sums paid or advanced by the Bond Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Bond Trustee and its agents and counsel and all amounts due under the Fee and Indemnity Agreement; and

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

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

Section 5.03 Collection of Indebtedness and Suits for Enforcement by Bond Trustee.

(a) The Bond Issuer covenants that if (i) default is made in the payment of any interest on any Bond when the same becomes due and payable, and such default continues for a period of five days or (ii) default is made in the payment of the then unpaid principal of any Bond on the Final Maturity Date for such Bond, the Bond Issuer will, upon demand of the Bond Trustee, pay to it, for the benefit of the Holders of the Bonds, the whole amount then due and payable on such Bonds for principal and interest, with interest upon the overdue principal and, to the extent payment at such rate of interest shall be legally enforceable, upon overdue installments of interest, at the respective rate borne by the Bonds of the applicable Tranche and in addition thereto such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Bond Trustee and its agents and counsel and an amount sufficient to cover all amounts required to be paid by the Bond Issuer under the Fee and Indemnity Agreement.

(b) Subject to Section 11.16 and Section 11.18, in case the Bond Issuer shall fail forthwith to pay such amounts upon such demand, the Bond Trustee, in its own name and as trustee of an express trust, may institute a Proceeding for the collection of the sums so due and unpaid, and may prosecute such Proceeding to judgment or final decree, and may enforce the same against the Bond Issuer or other obligor upon such Bonds and collect in the manner provided by law out of the property of the Bond Issuer or other obligor upon such Bonds, wherever situated, the moneys adjudged or decreed to be payable.

(c) If an Event of Default occurs and is continuing, the Bond Trustee may, as more particularly provided in Section 5.04, in its discretion, proceed to protect and enforce its rights and the rights of the Bondholders, by such appropriate Proceedings as the Bond Trustee shall deem most effective to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Bond Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Bond Trustee by this Bond Indenture or by law.

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

(i) to file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of the Bonds and to file such other papers or documents as may be necessary or advisable in order to have the claims of (A) the Bond Trustee (including any claim for reasonable compensation to the Bond Trustee and each predecessor Bond Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Bond Trustee and each predecessor Bond Trustee, except as a result of negligence or willful misconduct), (B) the Bondholders and (C) each Person for whom a claim may be made under this Bond Indenture and the Fee and Indemnity Agreement, allowed in such Proceedings;

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

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

and any trustee, receiver, liquidator, custodian or other similar official in any such Proceeding is hereby authorized by each of such Bondholders to make payments to the Bond Trustee, and, in the event that the Bond Trustee shall consent to the making of payments directly to such Bondholders, to pay to the Bond Trustee (or such other beneficiary under this Bond Indenture and the Fee and Indemnity Agreement) such amounts as shall be sufficient to cover reasonable compensation and other amounts owing hereunder to the Bond Trustee or such Person, each predecessor Bond Trustee and their respective agents, attorneys and counsel, and all other reasonable expenses and liabilities incurred, and all advances made, by the Bond Trustee and each predecessor Bond Trustee except as a result of negligence or willful misconduct.

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

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

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

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Section 5.04 Remedies; Priorities.

(a) If an Event of Default shall have occurred and be continuing, the Bond Trustee may do one or more of the following (subject to Section 5.05):

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

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

(iii) exercise any remedies of a secured party under the UCC, the Statute or other applicable law and take any other appropriate action to protect and enforce the rights and remedies of the Bond Trustee and the Holders of the Bonds; and

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

provided, however, that the Bond Trustee may not sell or otherwise liquidate any portion of the Collateral following an Event of Default, other than an Event of Default described in Section 5.01(a) or (b) unless (A) the Holders of 100 percent of the Outstanding Amount of the Bonds consent thereto, (B) the proceeds of such sale or liquidation distributable to the Bondholders are sufficient to discharge in full all amounts then due and unpaid upon such Bonds for principal and interest after taking into account payment of all amounts due prior thereto pursuant to the priorities set forth in Section 8.02(e) or (C) the Bond Trustee determines that the Collateral will not continue to provide sufficient funds for all payments on the Bonds as they would have become due if the Bonds had not been declared due and payable, and the Bond Trustee obtains the consent of Holders of at least 66 2/3 percent of the Outstanding Amount of the Bonds. In determining such sufficiency or insufficiency with respect to clause (B) and (C), the Bond Trustee may, but need not, obtain and conclusively rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Collateral for such purpose.

(b) If the Bond Trustee collects any money pursuant to this Article V, it shall pay out such money in accordance with the priorities set forth in Section 8.02(e).

Section 5.05 Optional Possession of the Collateral.

If the Bonds have been declared to be due and payable under Section 5.02 following an Event of Default and such declaration and its consequences have not been rescinded and annulled, the Bond Trustee may, but need not, elect to maintain possession of the Collateral. It is the desire of the parties hereto and the Bondholders that there be at all times sufficient funds for the payment of principal of and interest on the Bonds, and the Bond Trustee shall take such desire into account when determining whether or not to maintain possession of the Collateral. In determining whether to maintain possession of the Collateral, the Bond Trustee may, but need not, obtain and conclusively rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Collateral for such purpose.

Section 5.06 Limitation of Suits.

No Holder of any Bond shall have any right to institute any Proceeding, judicial or otherwise, with respect to this Bond Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder and each Holder agrees, by its acceptance of any Bond, to the fullest extent permitted by law, not to avail itself of any remedies in the Statute or to utilize or enforce the Statutory Lien, unless:

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

(b) the Holders of not less than a majority of the Outstanding Amount of the Bonds have made written request to the Bond Trustee to institute such Proceeding in respect of such Event of Default in its own name as Bond Trustee hereunder;

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

(d) the Bond Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute such Proceedings; and

(e) no direction inconsistent with such written request has been given to the Bond Trustee during such 60-day period by the Holders of at least a majority of the Outstanding Amount of the Bonds;

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

In the event the Bond Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of Holders of Bonds, each representing less than a majority of the Outstanding Amount of the Bonds, the Bond Trustee in its sole discretion may determine what action, if any, shall be taken, notwithstanding any other provisions of this Bond Indenture.

Section 5.07 Unconditional Rights of Bondholders To Receive Principal and Interest.

Notwithstanding any other provisions in this Bond Indenture, the Holder of any Bond shall have the right, which is absolute and unconditional, (a) to receive payment of (i) the interest, if any, on such Bond on or after the due dates thereof expressed in such Bond or in this Bond Indenture or (ii) the unpaid principal, if any, of such Bonds on or after the Final Maturity Date therefor and (b) to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder.

Section 5.08 Restoration of Rights and Remedies.

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

Section 5.09 Rights and Remedies Cumulative.

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

Section 5.10 Delay or Omission Not a Waiver.

No delay or omission of the Bond Trustee or any Bondholder to exercise any right or remedy accruing upon any Default or Event of Default shall impair any such right or remedy or constitute a waiver of any such

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Default or Event of Default or an acquiescence therein. Every right and remedy given by this Article V or by law to the Bond Trustee or to the Bondholders may be exercised from time to time, and as often as may be deemed expedient, by the Bond Trustee or by the Bondholders, as the case may be.

Section 5.11 Control by Bondholders.

The Holders of a majority of the Outstanding Amount of the Bonds (or, if less than all Tranches are affected, the affected Tranche or Tranches) shall have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Bond Trustee with respect to the Bonds of such Tranche or Tranches or exercising any trust or power conferred on the Bond Trustee with respect to such Tranche or Tranches; provided, however, that

(a) such direction shall not be in conflict with any rule of law or with this Bond Indenture and not involve the Bond Trustee in any personal liability or expense;

(b) subject to the express terms of Section 5.04, any direction to the Bond Trustee to sell or liquidate the Collateral shall be by the Holders of Bonds representing not less than 100 percent of the Outstanding Amount of the Bonds;

(c) if the conditions set forth in Section 5.05 have been satisfied and the Bond Trustee elects to retain the Collateral pursuant to such Section 5.05, then any direction to the Bond Trustee by Holders of Bonds representing less than 100 percent of the Outstanding Amount of the Bonds to sell or liquidate the Collateral shall be of no force and effect; and

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

provided, however, that, subject to Section 6.01, the Bond Trustee need not take any action that it determines might involve it in liability or might materially adversely affect the rights of any Bondholders not consenting to such action. Furthermore and without limiting the foregoing, the Bond Trustee shall not be required to take any action for which it reasonably believes that it will not be indemnified to its satisfaction against any cost, expense or liability.

Section 5.12 Waiver of Past Defaults.

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

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

Section 5.13 Undertaking for Costs.

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

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costs of such suit, and that such court may in its discretion, subject to applicable law, assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 5.13 shall not apply to (a) any suit instituted by the Bond Trustee, (b) any suit instituted by any Bondholder, or group of Bondholders, in each case holding in the aggregate more than 10 percent of the Outstanding Amount of the Bonds or (c) any suit instituted by any Bondholder for the enforcement of the payment of (i) interest on any Bond on or after the due dates expressed in such Bond and in this Bond Indenture or (ii) the unpaid principal, if any, of any Bond on or after the Final Maturity Date therefor.

Section 5.14 Waiver of Stay or Extension Laws.

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

Section 5.15 Action on Bonds.

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

Section 5.16 Performance and Enforcement of Certain Obligations.

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

(b) If an Event of Default has occurred, the Bond Trustee may, and, at the direction (which direction shall be in writing, sent electronically or by telephone (confirmed in writing promptly thereafter)) of the Holders of at least 66 2/3 percent of the Outstanding Amount of the Bonds shall, subject to Article VI, exercise all rights, remedies, powers, privileges and claims of the Bond Issuer against the Seller or the Servicer under or in connection with the Sale Agreement and the Servicing Agreement, respectively, including the right or power to take any action to compel or secure performance or observance by the Seller or the Servicer of each of their obligations to the Bond Issuer thereunder and to give any consent, request, notice, direction, approval, extension or waiver under the Sale Agreement or the Servicing Agreement, respectively, and any right of the Bond Issuer to take such action shall be suspended.

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ARTICLE VI

The Bond Trustee

Section 6.01 Duties of Bond Trustee.

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

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

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

(ii) in the absence of bad faith on its part, the Bond Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Bond Trustee and conforming to the requirements of this Bond Indenture; however, the Bond Trustee shall examine the certificates and opinions to determine whether or not they appear on their face to conform to the requirements of this Bond Indenture.

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

(i) this paragraph does not limit the effect of paragraph (b) of this Section;

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

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

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

(e) The Bond Trustee shall not be liable for interest on any money received by it except as the Bond Trustee may agree in writing with the Bond Issuer.

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

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

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

(i) In the event that the Bond Trustee is also acting as Paying Agent or Bond Registrar hereunder, this Article VI shall also be afforded to such Paying Agent or Bond Registrar.

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

(k) Commencing with March 15, 2014, and to the extent required by law, on or before March 15th of each fiscal year ending December 31, the Bond Trustee shall (i) deliver to the Bond Issuer a report (in form and substance reasonably satisfactory to the Bond Issuer and addressed to the Bond Issuer and signed by an authorized officer of the Bond Trustee) regarding the Bond Trustee’s assessment of compliance, during the immediately preceding fiscal year ending December 31, with each of the applicable servicing criteria specified on Exhibit C hereto as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB and (ii) deliver to the Bond Issuer a report of an Independent registered public accounting firm reasonably acceptable to the Bond Issuer that attests to and reports on, in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the Exchange Act, the assessment of compliance made by the Bond Trustee and delivered pursuant to clause (i).

Section 6.02 Rights of Bond Trustee.

Subject to the provisions of Trust Indenture Act § 315:

(a) the Bond Trustee may conclusively rely and shall be fully protected in acting or refraining from acting in reliance upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, paper or other document believed by it to be genuine and to have been signed or presented by the proper party or parties and the Bond Trustee need not investigate any matter or fact stated in such document;

(b) any request or direction of the Bond Issuer mentioned herein shall be sufficiently evidenced by an Issuer Request;

(c) before the Bond Trustee acts or refrains from acting, it may require and shall be entitled to receive an Officer’s Certificate or an Opinion of Counsel of external counsel of the Bond Issuer (at no cost or expense to the Bond Trustee) that such action is required or permitted hereunder. The Bond Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel.

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

(e) the Bond Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Bond Indenture or to institute, conduct or defend any litigation hereunder or in relation hereto at the request or direction of any of the Bondholders pursuant to this Bond Indenture, unless such Bondholders shall have offered to the Bond Trustee security or indemnity satisfactory to it against the cost, expenses (including reasonable legal fees and expenses) and liabilities that might be incurred by it in compliance with such request or direction;

(f) the Bond Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, paper or other document;

(g) the Bond Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees and the Bond Trustee shall not be responsible for any misconduct or negligence on the part of, or for the supervision of, any agent, attorney custodian or nominee appointed with due care by it hereunder; and the Bond Trustee shall give prompt written notice to the Rating Agencies of the appointment of any such agent, custodian or nominee to whom it delegates any of its express duties under this Bond Indenture; provided, that the Bond Trustee

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shall not be obligated to give such notice (i) if the Bond Issuer or the Holders have directed the Bond Trustee to appoint such agent, custodian or nominee (in which event the Bond Issuer shall give prompt notice to the Rating Agencies of any such direction) or (ii) of the appointment of any agents, custodians or nominees made at any time that an Event of Default on account of non-payment of principal or interest on the Bonds or insolvency of the Bond Issuer has occurred and is continuing.

(h) the Bond Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of Bonds relating to the time, method and place of conducting any proceeding for any remedy available to the Bond Trustee, or exercising any trust or power conferred upon the Bond Trustee, under this Bond Indenture;

(i) the Bond Trustee shall not be required to expend or risk its own funds in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk is not reasonably assured to it;

(j) the Bond Trustee shall not be personally liable for any action taken or suffered or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Bond Indenture; provided, however, that the Bond Trustee’s conduct does not constitute willful misconduct, negligence or bad faith;

(k) in the event that the Bond Trustee is also acting as Paying Agent, authenticating agent or Bond Registrar hereunder, the rights and protections afforded to the Bond Trustee pursuant to this Article VI shall also be afforded to such Paying Agent, authenticating agent or Bond Registrar;

(l) the Bond Trustee shall not be charged with knowledge of an Event of Default unless a Responsible Officer obtains actual knowledge of such event or the Bond Trustee receives written notice of such event from the Bond Issuer, the Servicer or a majority of the Holders of Bonds of the Tranche or Tranches so affected;

(m) without limiting its rights under bankruptcy law, when the Bond Trustee incurs expenses or renders services in connection with the insolvency or bankruptcy of any party hereto or with the Basic Documents to which it is a party such expenses (including the fees and expenses of its counsel) and the compensation for such services are intended to constitute expenses of administration under any bankruptcy or insolvency law;

(n) the Bond Trustee shall not be required to give any bond or surety in respect of the execution of the trust created herby or the power granted hereunder;

(o) in no event shall the Bond Trustee be liable for special, punitive, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Bond Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action;

(p) the right of the Bond Trustee to perform any discretionary act enumerated in this Bond Indenture shall not be construed as a duty, and the Bond Trustee shall not be answerable for other than its negligence or willful misconduct in the performance of any such act;

(q) the Bond Trustee shall have no duty to file any financing statement or continuation statement evidencing a security interest or to maintain any such filing, or to maintain any insurance; and

(r) the Bond Trustee shall have no obligation to supervise the Servicer or act as successor Servicer, and shall not be liable for any default or misconduct of the Servicer.

Section 6.03 Individual Rights of Bond Trustee.

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The Bond Trustee in its individual or any other capacity may become the owner or pledgee of Bonds and may otherwise deal with the Bond Issuer or its affiliates with the same rights it would have if it were not Bond Trustee. Any Paying Agent, Bond Registrar, co-registrar or co-paying agent may do the same with like rights. However, the Bond Trustee must comply with Sections 6.11 and 6.12.

Section 6.04 Bond Trustee’s Disclaimer.

Except as set forth in Section 6.13, the Bond Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Bond Indenture or the Bonds, it shall not be accountable for the Bond Issuer’s use of the proceeds from the Bonds, and it shall not be responsible for any statement of the Bond Issuer in the Bond Indenture or in any document issued in connection with the sale of the Bonds or in the Bonds other than the Bond Trustee’s certificate of authentication. The Bond Trustee shall not be responsible for the form, character, genuineness, sufficiency, value or validity of any of the Collateral, for the validity, priority or perfection of any lien or security interest granted to it hereunder (except to the extent impaired by action or omission constituting negligence or willful misconduct on the part of the Bond Trustee, or for or in respect of the Bonds (other than the certificate of authentication for the Bonds) or the Basic Documents and the Bond Trustee shall in no event assume or incur any liability, duty or obligation to any Holder, other than as expressly provided in this Bond Indenture. The Bond Trustee shall not be liable for the default or misconduct of the Bond Issuer or the Servicer under the Basic Documents or otherwise, and the Bond Trustee shall have no obligation or liability to perform the obligations of such Persons.

Section 6.05 Notice of Defaults.

If a Default occurs and is continuing and if it is actually known to a Responsible Officer of the Bond Trustee, the Bond Trustee shall transmit to each Holder of Bonds and to the Rating Agencies notice of the Default within 30 days after actual notice of such Default was received by a Responsible Officer of the Bond Trustee (provided that the Bond Trustee shall give the Rating Agencies prompt written notice of any payment Default in respect of the Bonds). Except in the case of a Default in payment of principal of or interest on any Bond, the Bond Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith after consultation with the Certificate Trustee determines that prompt notice of the Default is not likely to be material to Holders and the Default is likely to be cured and therefore that withholding the notice is in the interests of Bondholders and the Certificateholders.

Section 6.06 Reports by Bond Trustee to Holders.

(a) So long as the Bond Trustee is the Bond Registrar and Paying Agent, upon the written request of a Bondholder the Bond Trustee shall deliver to such Bondholder such information in its possession as may be required to enable such Holder to prepare its federal and state income tax returns.

(b) On or prior to each Payment Date therefor, the Bond Trustee will provide to each Holder of Bonds on such Payment Date a statement prepared by the Servicer and provided to the Bond Trustee which will include (to the extent applicable) the following information as to the Bonds with respect to such Payment Date or the period since the previous Payment Date, as applicable:

(i) the amount of the payment to Bondholders allocable to principal;

(ii) the amount of the payment to Bondholders allocable to interest;

(iii) the Outstanding Amount, after giving effect to payments allocated to principal reported under (i) above;

(iv) the difference, if any, between the Outstanding Amount and the Projected Principal Balance as of such Payment Date, after giving effect to payments to be made on such Payment Date;

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(v) the amount on deposit in the Capital Subaccount as of the Payment Date;

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

(vii) the amount paid to the Bond Trustee, the Delaware Trustee, and the Certificate Trustee since the previous Payment Date;

(viii) the amount paid to the Servicer since the previous Payment Date;

(ix) the amount paid to the Administrator since the previous Payment Date; and

(x) any other transfers and payments to be made pursuant to the Bond Indenture since the previous Payment Date.

(c) The Bond Issuer shall send a copy of each Certificate of Compliance delivered to it pursuant to Section 3.03 of the Servicing Agreement and Annual Accountant’s Report delivered to it pursuant to Section 3.04 of the Servicing Agreement to the Bond Trustee, the Certificate Trustee, the Bondholders and the Rating Agencies and to the Servicer for posting on the 17g-5 Website in accordance with Rule 17g-5 of the Commission.

(d) The Bond Trustee will provide to the Certificate Trustee the statement required to be sent to Certificateholders pursuant to Section 4.03 of the Certificate Indenture, such statement to be prepared by the Servicer and provided to the Bond Trustee with the statement referenced in 6.06(b) above.

Section 6.07 Compensation and Indemnity.

Subject to Section 8.02(e), the Bond Issuer shall pay to the Bond Trustee from time to time reasonable compensation for its services. The Bond Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust.

Subject to Section 8.02(e), the Bond Issuer shall reimburse the Bond Trustee for all reasonable out-of-pocket expenses, disbursements and advances incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Bond Trustee’s agents, counsel, accountants and experts. Subject to Section 8.02(e), the Bond Issuer shall indemnify, defend and hold harmless the Bond Trustee and any of its affiliates, officials, officers, directors, employees, consultants, counsel and agents (the “Indemnified Persons”) from and against any and all losses, claims, actions, suits, taxes, damages, expenses (including, without limitation, reasonable legal fees and expenses) and liabilities (including liabilities under state or federal securities laws) of any kind and nature whatsoever (collectively, “Expenses”), to the extent that such Expenses arise out of or are imposed upon or asserted against such Indemnified Persons with respect to the creation, administration, operation or termination of this trust and the performance by the Bond Trustee of its duties hereunder, the failure of the Bond Issuer or any other Person (other than the Person being indemnified) to perform its obligations hereunder or under any of the Basic Documents, or otherwise in connection with the Basic Documents or the transactions contemplated thereby, provided, however , that the Bond Issuer is not required to indemnify any Indemnified Person for any Expenses that result from the willful misconduct or negligence of such Indemnified Person. The willful misconduct or negligence of any Bond Trustee shall not affect the rights of any predecessor or successor Bond Trustee hereunder. The Indemnified Person shall notify the Bond Issuer as soon as is reasonably practicable of any claim for which it may seek indemnity. Failure by the Indemnified Person to so notify the Bond Issuer shall not relieve the Bond Issuer of its obligations hereunder. The Bond Issuer shall defend the claim and the Indemnified Person may have separate counsel and the Bond Issuer shall pay the fees and expenses of such counsel. The Bond Issuer will not, without the prior written consent of the Indemnified Person, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought under this Section 6.07, (whether or not the Indemnified Person is an actual or potential party to such claim or action) unless such settlement, compromise or consent includes an unconditional release of the Indemnified Person from all liability arising out of such claim, action, suit or proceeding.

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The Bond Issuer’s payment obligations to the Bond Trustee pursuant to this Section shall survive the discharge of this Bond Indenture or the earlier resignation or removal of the Bond Trustee. When the Bond Trustee incurs expenses after the occurrence of an Event of Default specified in Section 5.01(d) or (e) with respect to the Bond Issuer, the expenses are intended to constitute expenses of administration under Title Il of the United States Code or any other applicable federal or state bankruptcy, insolvency or similar law.

The Bond Issuer acknowledges and agrees that under the Certificate Indenture the Certificate Trustee shall pay the fees and expenses of, and shall indemnify and hold harmless the Bond Trustee and the Delaware Trustee, to the extent that payments required to be made by the Bond Issuer to the Bond Trustee under this Section 6.07 or to the Delaware Trustee under the Fee and Indemnity Agreement, as the case may be, are not made by the Bond Issuer when due.

Section 6.08 Replacement of Bond Trustee and Securities Intermediary.

The Bond Trustee may resign at any time by so notifying the Bond Issuer, provided, however, that no such resignation shall be effective until either (a) the Collateral has been completely liquidated and the proceeds of the liquidation distributed to the Bondholders or (b) a successor trustee having the qualifications set forth in Section 6.11 has been designated and has accepted such trusteeship. The Holders of a majority in Outstanding Amount of the Bonds may remove the Bond Trustee by so notifying the Bond Trustee and may appoint a successor Bond Trustee. The Bond Issuer shall remove the Bond Trustee if:

(a) the Bond Trustee fails to comply with Section 6.11;

(b) the Bond Trustee is adjudged a bankrupt or insolvent;

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

(d) the Bond Trustee otherwise becomes incapable of acting; or

(e) the Bond Trustee fails to provide to the Bond Issuer any information reasonably requested by Bond Issuer pertaining to the Bond Trustee and necessary for the Bond Issuer or the Sponsor to comply with its reporting obligations under the Exchange Act and Regulation AB and such failure is not resolved to the Bond Issuer’s and the Bond Trustee’s mutual satisfaction within a reasonable period of time.

Any removal or resignation of the Bond Trustee shall also constitute a removal or resignation of the Securities Intermediary.

If the Bond Trustee resigns or is removed or if a vacancy exists in the office of Bond Trustee for any reason (the Bond Trustee in such event being referred to herein as the retiring Bond Trustee), the Bond Issuer shall promptly appoint a successor Bond Trustee and Securities Intermediary.

A successor Bond Trustee shall deliver a written acceptance of its appointment to the retiring Bond Trustee and to the Bond Issuer. Thereupon the resignation or removal of the retiring Bond Trustee shall become effective, and the successor Bond Trustee shall have all the rights, powers and duties of the Bond Trustee and Securities Intermediary under this Bond Indenture. The successor Bond Trustee shall mail a notice of its succession to Bondholders and to the Rating Agencies. The retiring Bond Trustee shall promptly transfer all property held by it as Bond Trustee to the successor Bond Trustee.

If a successor Bond Trustee does not take office within 60 days after the retiring Bond Trustee resigns or is removed, the retiring Bond Trustee, the Bond Issuer or the Holders of a majority in Outstanding Amount of the Bonds may petition any court of competent jurisdiction for the appointment of a successor Bond Trustee.

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

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Notwithstanding the replacement of the Bond Trustee pursuant to this Section, the Bond Issuer’s obligations under Section 6.07 shall continue for the benefit of the retiring Bond Trustee.

Section 6.09 Successor Bond Trustee by Merger.

If the Bond Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation or banking association without any further act shall be the successor Bond Trustee. The successor Bond Trustee shall mail a notice of its merger, conversion, consolidation or transfer to the Rating Agencies.

In case at the time such successor or successors by merger, conversion, consolidation or transfer to the Bond Trustee shall succeed to the trusts created by this Bond Indenture any of the Bonds shall have been authenticated but not delivered, any such successor to the Bond Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Bonds so authenticated; and in case at that time any of the Bonds shall not have been authenticated, any successor to the Bond Trustee may authenticate such Bonds either in the name of any predecessor hereunder or in the name of the successor to the Bond Trustee; and in all such cases such certificates shall be valid for all purposes hereunder and under the Bonds.

Section 6.10 Appointment of Co-Trustee or Separate Trustee.

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

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

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

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

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

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

(d) Any separate trustee or co-trustee may at any time constitute the Bond Trustee, its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Bond Indenture on its behalf and in its name. If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Bond Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.

Section 6.11 Eligibility; Disqualification.

The Bond Trustee shall at all times satisfy the requirements of Trust Indenture Act Section 310(a) and Section 310(a)(5). The Bond Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition and it shall have a long term debt rating of at least “A” (or the equivalent thereof) or better by the Rating Agencies. The Bond Trustee shall comply with Trust Indenture Act Section 310(b), including the optional provision permitted by the second sentence of Trust Indenture Act Section 310(b)(9); provided, however, that there shall be excluded from the operation of Trust Indenture Act Section 310(b)(1) any indenture or indentures under which other securities of the Bond Issuer are outstanding if the requirements for such exclusion set forth in Trust Indenture Act Section 310(b)(1) are met.

Section 6.12 Preferential Collection of Claims Against Bond Issuer.

The Bond Trustee shall comply with Trust Indenture Act Section 311(a), excluding any creditor relationship listed in Trust Indenture Act Section 311(b). A Bond Trustee who has resigned or been removed shall be subject to Trust Indenture Act Section 311(a) to the extent indicated therein.

Section 6.13 Representations and Warranties of Bond Trustee.

The Bond Trustee hereby represents and warrants that:

(a) the Bond Trustee is a national banking association validly existing in good standing under the laws of the United States; and

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

Section 6.14 Custody of Collateral.

The Bond Trustee shall hold such of the Collateral (and any other collateral that may be granted to the Bond Trustee) as consists of instruments, deposit accounts, securities accounts, negotiable documents, money, goods, letters of credit, and advices of credit in the State of New York. The Bond Trustee shall hold such of the Collateral as constitutes investment property through the Securities Intermediary (which, as of the date hereof, is U.S. Bank National Association). The initial Securities Intermediary, hereby agrees (and each future Securities Intermediary shall agree) with the Bond Trustee that (a) such investment property shall at all times be credited to a securities account of the Bond Trustee, (b) the Securities Intermediary shall treat the Bond Trustee as entitled to exercise the rights that comprise each financial asset credited to such securities account, (c) all property credited to such securities account shall be treated as a financial asset, (d) the Securities Intermediary shall comply with

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entitlement orders originated by the Bond Trustee without the further consent of any other Person, (e) the Securities Intermediary will not agree with any Person other than the Bond Trustee to comply with entitlement orders originated by such other Person, (f) such securities accounts and the property credited thereto shall not be subject to any Lien or right of set-off in favor of the Securities Intermediary or anyone claiming through it (other than the Bond Trustee), and (g) such securities accounts shall be governed by the internal laws of the State of New York. Terms used in the preceding sentence that are defined in the UCC and not otherwise defined herein shall have the meaning set forth in the UCC. Except as permitted by this Section 6.14, or elsewhere in this Bond Indenture, the Bond Trustee shall not hold Collateral through an agent or a nominee.

ARTICLE VII

Bondholders’ Lists and Reports

Section 7.01 Bond Issuer To Furnish Bond Trustee Names and Addresses of Bondholders.

The Bond Issuer will furnish or cause to be furnished to the Bond Trustee (a) not more than five days after the earlier of (i) each Record Date and (ii) six months after the last Record Date, a list, in such form as the Bond Trustee may reasonably require, of the names and addresses of the Holders of Bonds as of such Record Date, (b) at such other times as the Bond Trustee may request in writing, within 30 days after receipt by the Bond Issuer of any such request, a list of similar form and content as of a date not more than 10 days prior to the time such list is furnished; provided however that so long as the Bond Trustee is the Bond Registrar, no such list shall be required to be furnished.

Section 7.02 Preservation of Information: Communications to Bondholders.

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

(b) Bondholders may communicate pursuant to Trust Indenture Act Section 312(b) with other Bondholders with respect to their rights under this Bond Indenture or under the Bonds.

(c) The Bond Issuer, the Bond Trustee and the Bond Registrar shall have the protection of Trust Indenture Act Section 312(c).

Section 7.03 Reports by Bond Issuer.

(a) The Bond Issuer shall:

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

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

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

(b) Unless the Bond Issuer otherwise determines and provides written notice to the Bond Trustee, the fiscal year of the Bond Issuer shall end on December 31 of each year.

Section 7.04 Reports by Bond Trustee.

If required by Trust Indenture Act Section 313(a), within 60 days after December 31 of each year, commencing [                    ], the Bond Trustee shall transmit to each Holder of Bonds as required by Trust Indenture Act Section 313(c) a brief report dated as of such date that complies with Trust Indenture Act Section 313(a). The Bond Trustee also shall comply with Trust Indenture Act Section 313(b); provided, however, that the initial report so issued shall be delivered not more than twelve (12) months after the date hereof.

A copy of each report at the time of its mailing to Bondholders shall be filed by the Bond Trustee with the Commission and each stock exchange, if any, on which the Bonds are listed. The Bond Issuer shall notify the Bond Trustee if and when the Bonds are listed on any stock exchange.

ARTICLE VIII

Accounts, Disbursements and Releases

Section 8.01 Collection of Money.

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

Section 8.02 Collection Account.

(a)(i) Prior to the Issuance Date, the Bond Trustee shall cause to be established with the Securities Intermediary, in the Bond Trustee’s name, located at the Bond Trustee’s Corporate Trust Office, or at another Eligible Institution, one or more segregated trust accounts in the Bond Trustee’s name for the deposit of Estimated Phase-In-Recovery Charge Payments and other amounts remitted under the Servicing Agreement (collectively, the “Collection Account”). The Bond Trustee shall hold the Collection Account for the benefit of Bondholders, the Bond Trustee and the other Persons indemnified hereunder or under the Fee and Indemnity Agreement. The Collection Account will consist of three subaccounts: a general subaccount (the “General Subaccount”), an excess funds subaccount (the “Excess Funds Subaccount” and a capital subaccount (the “Capital Subaccount”). All amounts in the Collection Account not allocated to any other subaccount shall be allocated to the General Subaccount. Prior to the initial Payment Date, all amounts in the Collection Account shall be allocated to the General Subaccount. All references to the Collection Account shall be deemed to include reference to all subaccounts contained therein. Withdrawals from and deposits to each of the foregoing subaccounts of the Collection Account shall be made as set forth in this Section 8.02. The Collection Account shall at all times be maintained in an Eligible Account and only the Bond Trustee shall have access to the Collection Account for the purpose of making deposits in and withdrawals from the Collection Account in accordance with this Bond

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Indenture. Funds in the Collection Account shall not be commingled with any other moneys. Except as provided in Section 8.03, all moneys deposited from time to time in the Collection Account, all deposits therein pursuant to this Bond Indenture, and all investments made in Eligible Investments with such moneys, including all income or other gain from such investments, shall be held by the Bond Trustee in the Collection Account as part of the Collateral as herein provided.

(ii) The Securities Intermediary hereby confirms that (A) the Collection Account is, or at inception will be established as, a “securities account” as such term is defined in Section 8-501(a) of the UCC, (B) it is a “securities intermediary” (as such term is defined in Section 8-102(a) (14) of the UCC) and is acting in such capacity with respect to such accounts, and (C) the Bond Trustee for the benefit of the Bondholders is the sole “entitlement holder” (as such term is defined in Section 8-102(a)(7) of the UCC) with respect to such accounts and no other Person shall have the right to give “entitlement orders” (as such term is defined in Section 8-102(a)(8)) with respect to such accounts. The Securities Intermediary hereby further agrees that each item of property (whether investment property, financial asset, security, instrument or cash) received by it will be credited to the Collection Account and shall be treated by it as a “financial asset” within the meaning of Section 8-102(a)(9) of the UCC. Notwithstanding anything to the contrary, New York State shall be deemed to be the jurisdiction of the Securities Intermediary for purposes of Section 8-110 of the UCC, and the Collection Account (as well as the securities entitlements related thereto) shall be governed by the laws of the State of New York.

(b) The Bond Trustee shall have sole dominion and exclusive control over all moneys in the Collection Account and shall apply such amounts therein as provided in this Section 8.02. The Bond Trustee shall also pay from the Collection Account any amounts requested to be paid by the Servicer pursuant to Section 4.03(b) of the Servicing Agreement.

(c) All Estimated Phase-In-Recovery Charge Payments and other remittances under the Servicing Agreement shall be deposited in the General Subaccount as provided in Section 4.03 of the Servicing Agreement. All deposits to and withdrawals from the Collection Account and all allocations to the subaccounts of the Collection Account shall be made by the Bond Trustee in accordance with the written instructions provided by the Servicer in the Semiannual Servicer Certificate or as otherwise provided herein.

(d) On any Business Day upon which the Bond Trustee receives a written request from the Administrator stating that any Operating Expense payable by the Bond Issuer (but only as described in clauses (i) through (iv) below) will become due and payable prior to the next succeeding Payment Date, and setting forth the amount and nature of such Operating Expenses, as well as any supporting documentation that the Bond Trustee may reasonably request, the Bond Trustee, upon receipt of such information and subject to the Cap, will make payment of such Operating Expenses on or before the date such payment is due from amounts on deposit in the General Subaccount, the Excess Funds Subaccount and the Capital Subaccount, in that order and only to the extent required to make such payment.

(e) On each semiannual Payment Date, or for any amount payable under clauses (i) through (iv) below, on any Business Day, the Bond Trustee shall apply, at the direction of the Servicer and subject to the Cap if applicable, all amounts on deposit in the Collection Account, including all earnings thereon, to allocate or pay the following amounts, in accordance with the Semiannual Servicer Certificate, in the following priority:

(i) first, all fees, costs, expenses (including legal fees and expenses) and indemnity amounts owed by the Bond Issuer to the Bond Trustee, Certificate Trustee and Delaware Trustee under the applicable Basic Documents shall be paid to the Bond Trustee, Certificate Trustee and Delaware Trustee (subject to Section 6.07), respectively, and, second, all fees, costs, expenses (including legal fees and expenses) and indemnity amounts owed by the Bond Issuer to the Certificate Issuer under the applicable Basic Documents shall be paid to the Certificate Issuer; provided that the total of the foregoing amounts paid shall not exceed $100,000 annually;

(ii) the Servicing Fee for such Payment Date and all unpaid Servicing Fees from prior Payment Dates shall be paid to the Servicer;

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(iii) the Administration Fee and all unpaid Administration Fees from prior Payment Dates shall be paid to the Administrator and amounts due independent directors of the Bond Issuer shall be paid to such independent directors;

(iv) the payment of all other Operating Expenses for such Payment Date shall be paid to the Persons entitled thereto;

(v) first, any overdue Semiannual Interest (together with, to the extent lawful, interest on such overdue Semiannual Interest at the applicable Bond Interest Rate) and second, Semiannual Interest for such Payment Date shall be paid to the Bondholders;

(vi)(A) first, principal due and payable on the Bonds as a result of an Event of Default (and assuming the Bonds have been declared immediately due and payable) or on the Final Maturity Date of a Tranche of the Bonds shall be paid to the Bondholders and (B) second, Semiannual Principal for such Payment Date shall be paid to the Bondholders in accordance with the priorities set forth in Section 2.01(c)(iii);

(vii) unpaid Operating Expenses (including, without limitation, fees, expenses and indemnity amounts) owed by the Bond Issuer under the Basic Documents shall be paid first, to the Persons entitled thereto (other than the Bond Trustee, Delaware Trustee and Certificate Trustee) and second, to the Bond Trustee, Delaware Trustee and Certificate Trustee;

(viii) the amount, if any, by which the Required Capital Level exceeds the amount in the Capital Subaccount as of such Payment Date shall be allocated to the Capital Subaccount;

(ix) an amount equal to one-half of 6.85% of the Required Capital Level shall be paid to the Seller;

(x) reimbursement of the Servicer for any amounts paid by the Servicer to the Bond Trustee, Delaware Trustee or Certificate Trustee pursuant to Section 6.02(f) of the Servicing Agreement;

(xi) the balance, if any, shall be allocated to the Excess Funds Subaccount for distribution on subsequent Payment Dates; and

(xii) after, first, the payment of all principal of and interest on all Bonds and all other approved Financing Costs, and second, the payment of any unpaid amounts due the Bond Trustee, the Certificate Trustee or the Delaware Trustee under clause (i) above that exceeded the Cap, then the balance, if any, shall be paid to the Bond Issuer, free from the Lien of this Bond Indenture.

All payments of interest pursuant to clause (v), shall be allocated among each Tranche of Bonds pro rata based upon the respective amounts of interest owed on the Bonds of each Tranche, and allocated and paid to Holders within each Tranche pro rata based upon the respective principal amount of Bonds held. All payments of principal pursuant to clause (vi)(A) shall be made to such Holders pro rata based on the respective principal amounts of Bonds held by such Holders. All payments of principal pursuant to clause (vi)(B) above shall be made to the Holders of the Tranche then entitled to payment, based upon the Expected Amortization Schedule in accordance with the priority set forth in Section 2.01(c)(iii).

In accordance with the Financing Order, certain approved ongoing Financing Costs recoverable through Phase-In-Recovery Charges (including, without limitation, those referenced in clauses (i) through (iv), (vii), (ix) and (x) above) may not exceed on an annual basis the aggregate amount approved for such ongoing Financing Costs by more than 5%. The sum of such approved annual ongoing Financing Costs ($1,072,732) plus an amount equal to 5% of such costs is equal to $1,126,369, which amount is referred to as the “Cap”. The ongoing Financing Costs referenced in clauses (i) through (iv), (vii), (ix) and (x) above, to the extent in excess of the Cap for any given annual period, may be recovered in any subsequent annual period (subject to the annual Cap in such subsequent period). Unused Cap amounts in a given year will not be available for recovery of any ongoing Financing Costs in a subsequent year. In the case of a non-utility Servicer with a servicing fee of 0.75% of the initial principal balance of the Bonds (the maximum permitted to be paid to a non-utility Servicer under the Financing Order), as compared to 0.10% to be paid to the initial Servicer, the Cap would be $4,277,550.

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(f) If on any Payment Date, or for any amounts payable under clauses (i) through (iv) above, on any Business Day, funds on deposit in the General Subaccount are insufficient to make the payments contemplated by clauses (i) through (vi) of Section 8.02(e), the Bond Trustee shall (i) first, draw from amounts on deposit in the Excess Funds Subaccount and (ii) second, draw from amounts on deposit in the Capital Subaccount, in each case, up to the amount of such shortfall in order to make the payments contemplated by clauses (i) through (vi) of Section 8.02(e). In addition, if on any Payment Date funds on deposit in the General Subaccount are insufficient to make the allocation contemplated by clause (viii) of Section 8.02(e), the Bond Trustee shall draw from amounts on deposit in the Excess Funds Subaccount to make such allocation. If on any Payment Date funds on deposit in the Collection Account are insufficient to make the transfers contemplated by clause (v) of Section 8.02(e), the Bond Trustee will allocate the funds drawn pursuant to the first sentence of this paragraph among the Tranches pro rata as provided in Section 8.02(e).

Section 8.03 General Provisions Regarding the Collection Account.

(a) So long as no Default or Event of Default shall have occurred and be continuing, all or a portion of the funds in the Collection Account shall be invested in Eligible Investments and reinvested by the Bond Trustee upon Issuer Order. All income or other gain from investments of moneys deposited in the Collection Account shall be deposited by the Bond Trustee in the Collection Account, and any loss resulting from such investments shall be charged to the Collection Account. The Bond Issuer will not direct the Bond Trustee to make any investment of any funds or to sell any investment held in the Collection Account unless the security interest Granted and perfected in such Collection Account will continue to be perfected in such investment or the proceeds of such sale, in either case without any further action by any Person, and, in connection with any direction to the Bond Trustee to make any such investment or sale, if requested by the Bond Trustee, the Bond Issuer shall deliver to the Bond Trustee an Opinion of Counsel, reasonably acceptable to the Bond Trustee, to such effect. In no event shall the Bond Trustee be liable for the selection of Eligible Investments or for investment losses incurred thereon. The Bond Trustee shall have no liability in respect of losses incurred as a result of the liquidation of any Eligible Investment prior to its stated maturity or the failure of the Bond Issuer to provide timely written investment direction. The Bond Trustee shall have no obligation to invest or reinvest any amounts held hereunder in the absence of written investment direction pursuant to an Issuer Order. If the rating of the Eligible Institution, which may be the Bond Trustee’s Corporate Trust Office, falls below the rating requirements set forth in clause (b) of the definition of Eligible Institution, the Bond Issuer on behalf of the Certificate Issuer shall, within one month after notice of such rating change, cause the Collection Account to be transferred to an institution meeting the requirements set forth in clause (b) of the definition of “Eligible Institution.”

(b) Subject to Section 6.01(c), the Bond Trustee shall not in any way be held liable by reason of any insufficiency in the Collection Account resulting from any loss on any Eligible Investment included therein except for losses attributable to the Bond Trustee’s failure to make payments on such Eligible Investments issued by the Bond Trustee, in its commercial capacity as principal obligor and not as trustee, in accordance with their terms.

(c) If (i) the Bond Issuer shall have failed to give written investment directions for any funds on deposit in the Collection Account to the Bond Trustee by 11:00 am. Eastern Time (or such other time as may be agreed by the Bond Issuer and Bond Trustee) on any Business Day; or (ii) a Default or Event of Default shall have occurred and be continuing with respect to the Bonds but the Bonds shall not have been declared due and payable pursuant to Section 5.02; then the Bond Trustee shall, to the fullest extent practicable, invest and reinvest funds in the Collection Account in the money market fund (described in clause (d) of the definition of “Eligible Investments”) specified in the most recent investment directions delivered by the Bond Issuer to the Bond Trustee with respect to such type of Eligible Investments; provided that if the Bond Issuer has never delivered written investment directions to the Bond Trustee, the Bond Trustee shall not invest or reinvest such funds in any investments.

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Section 8.04 Release of Collateral.

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

(b) The Bond Trustee shall, at such time as there are no Bonds Outstanding and all sums payable by the Bond Issuer to the Bond Trustee, the Certificate Trustee and the Delaware Trustee under this Bond Indenture have been paid, release any remaining portion of the Collateral that secured the Bonds from the Lien of this Bond Indenture and release to the Bond Issuer or any other Person entitled thereto any funds then on deposit in the Collection Account. The Bond Trustee shall release property from the Lien of this Bond Indenture pursuant to this Section 8.04(b) only upon receipt of an Issuer Request accompanied by an Officer’s Certificate, an Opinion of Counsel and (if required by the Trust Indenture Act) Independent Certificates in accordance with Trust Indenture Act Sections 314(c) and 314(d)(I) meeting the applicable requirements of Section 11.01.

Section 8.05 Opinion of Counsel.

The Bond Trustee shall receive at least seven days’ notice when requested by the Bond Issuer to take any action pursuant to Section 8.04 (a), accompanied by copies of any instruments involved, and the Bond Trustee shall also require, as a condition to such action, an Opinion of Counsel, in form and substance reasonably satisfactory to the Bond Trustee, stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that all conditions precedent to the taking of such action have been complied with and such action will not materially and adversely impair the security for the Bonds or the rights of the Bondholders in contravention of the provisions of this Bond Indenture; provided, however that such Opinion of Counsel shall not be required to express an opinion as to the fair value of the Collateral. Counsel rendering any such opinion may rely, without independent investigation, on the accuracy and validity of any certificate or other instrument delivered to the Bond Trustee in connection with any such action.

Section 8.06 Reports by Independent Registered Accountants.

As of the Issuance Date, the Bond Issuer shall appoint a firm of Independent registered public accountants of recognized national reputation for purposes of preparing and delivering the reports or certificates of such accountants required by this Bond Indenture. Upon any resignation by such firm the Bond Issuer shall provide written notice thereof to the Bond Trustee and shall promptly appoint a successor thereto that shall also be a firm of Independent registered public accountants of recognized national reputation. If the Bond Issuer shall fail to appoint a successor to a firm of Independent registered public accountants that has resigned within 15 days after such resignation, the Bond Trustee shall promptly notify the Bond Issuer of such failure in writing. If the Bond Issuer shall not have appointed a successor within 10 days thereafter the Bond Trustee shall promptly appoint a successor firm of Independent registered public accountants of recognized national reputation; provided, however, that the Bond Trustee shall have no liability with respect to such appointment if the Bond Trustee acted with due care with respect thereto. The fees of such Independent registered public accountants and its successor shall be payable by the Bond Issuer.

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ARTICLE IX

Supplemental Bond Indentures

Section 9.01 Supplemental Bond Indentures Without Consent of Bondholders.

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

(i) to correct or amplify the description of any property at any time subject to the Lien of this Bond Indenture, or better to assure, convey and confirm unto the Bond Trustee any property subject or required to be subjected to the Lien of this Bond Indenture, or to subject to the Lien of this Bond Indenture additional property;

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

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

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

(v) to cure any ambiguity, to correct or supplement any provision herein or in any supplemental bond indenture which may be inconsistent with any other provision herein or in any supplemental bond indenture or to make any other provisions with respect to matters or questions arising under this Bond Indenture or in any supplemental bond indenture; provided, however, that such action shall not adversely affect the interests of the Holders of the Bonds or holders of the Certificates;

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

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

The Bond Trustee is hereby authorized to join in the execution of any such supplemental bond indenture and to make any further appropriate agreements and stipulations that may be therein contained.

(b) The Bond Issuer and the Bond Trustee, when authorized by an Issuer Order, may, also without the consent of any of the Holders of the Bonds, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Bond Indenture or of modifying in any manner the rights of the Holders of the Bonds under this Bond Indenture; provided, however, that (i) such action shall not, as evidenced by an Officer’s Certificate, adversely affect in any material respect the interests of the Bondholders or the holders of Certificates and (ii) the Rating Agency Condition shall have been satisfied with respect thereto.

Section 9.02 Supplemental Bond Indentures with Consent of Bondholders.

The Bond Issuer and the Bond Trustee, when authorized by an Issuer Order, also may, with prior notice to the Rating Agencies and with the consent of the Holders of not less than a majority of the Outstanding Amount of the Bonds of each Tranche to be affected, by Act of such Holders delivered to the Bond Issuer and the Bond Trustee, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Bond Indenture or of modifying in any manner the rights of the Holders of the Bonds under this Bond Indenture; provided, however, that no such supplemental bond indenture shall, without the consent of the Holder of each Outstanding Bond of each Tranche affected thereby:

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(i) change the date of payment of any installment of principal of or interest on any Bond, or reduce the principal amount thereof or the interest rate thereon, change the provisions of this Bond Indenture relating to the application of collections on, or the proceeds of the sale of, the Collateral to payment of principal of or interest on the Bonds, or change any place of payment where, or the coin or currency in which, any Bond or the interest thereon is payable, or impair the right to institute suit for the enforcement of the provisions of this Bond Indenture requiring the application of funds available therefor, as provided in Article V, to the payment of any such amount due on the Bonds on or after the respective due dates thereof;

(ii) reduce the percentage of the Outstanding Amount of the Bonds or of a Tranche thereof, the consent of the Holders of which is required for any such supplemental bond indenture, or the consent of the Holders of which is required for any waiver of compliance with certain provisions of this Bond Indenture or certain defaults hereunder and their consequences provided for in this Bond Indenture;

(iii) modify or alter the provisions of the proviso to the definition of the term “Outstanding”;

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

(v) modify any provision of this Section 9.02 except to increase any percentage specified herein or to provide that certain additional provisions of this Bond Indenture or the Basic Documents cannot be modified or waived without the consent of the Holder of each Outstanding Bond affected thereby;

(vi) modify any of the provisions of this Bond Indenture in such manner as to affect the calculation of the amount of any payment of interest or principal due on any Bond on any Payment Date (including the calculation of any of the individual components of such calculation); or

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

The Bond Trustee, after consultation with the Certificate Trustee, may in its discretion determine whether or not any Bonds or Certificates of a Tranche would be affected by any supplemental bond indenture and any such determination shall be conclusive upon the Holders of all Bonds and holders of all Certificates of such Tranche, whether theretofore or thereafter authenticated and delivered hereunder. Neither the Bond Trustee nor the Certificate Trustee shall be liable for any such determination made in good faith.

It shall not be necessary for any Act of Bondholders under this Section 9.02 to approve the particular form of any proposed supplemental bond indenture, but it shall be sufficient if such Act shall approve the substance thereof.

Promptly after the execution by the Bond Issuer and the Bond Trustee of any supplemental bond indenture pursuant to this Section 9.02, the Bond Issuer shall send to the Rating Agencies, the Certificate Trustee and the Holders of the Bonds to which such amendment or supplemental bond indenture relates a copy such supplemental bond indenture. Any failure of the Bond Trustee to send such copy, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental bond indenture.

Section 9.03 Execution of Supplemental Bond Indentures.

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

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Section 9.04 Effect of Supplemental Bond Indenture.

Upon the execution of any supplemental bond indenture pursuant to the provisions hereof, this Bond Indenture shall be and be deemed to be modified and amended in accordance therewith with respect to each Tranche of Bonds affected thereby, and the respective rights, limitations of rights, obligations, duties, liabilities and immunities under this Bond Indenture of the Bond Trustee, the Bond Issuer and the Holders of the Bonds shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental bond indenture shall be and be deemed to be part of the terms and conditions of this Bond Indenture for any and all purposes. If required by the Bond Trustee, Bonds may bear a notation in form approved by the Bond Trustee as to any matter provided for in such supplemental bond indenture. If the Bond Issuer or the Bond Trustee shall so determine, new Bonds so modified as to conform, in the opinion of the Bond Trustee and the Bond Issuer, to any such supplemental bond indenture may be prepared and executed by the Bond Issuer and authenticated and delivered by the Bond Trustee in exchange for Outstanding Bonds.

Section 9.05 Conformity with Trust Indenture Act.

Every amendment of this Bond Indenture and every supplemental bond indenture executed pursuant to this Article IX shall conform to the requirements of the Trust Indenture Act as then in effect so long as this Bond Indenture shall then be qualified under the Trust Indenture Act.

ARTICLE X

Redemption of Bonds

Section 10.01 Optional Redemption by Bond Issuer.

This Bond Indenture does not permit optional redemption of Bonds under any circumstances.

ARTICLE XI

Miscellaneous

Section 11.01 Compliance Certificates and Opinions, etc.

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

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

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

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

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

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

(b) (i) Prior to the deposit of any Collateral or other property or securities with the Bond Trustee that is to be made the basis for the release of any property or securities subject to the Lien of this Bond Indenture, the Bond Issuer shall, in addition to any obligation imposed in Section 11.01(a) or elsewhere in this Bond Indenture, furnish to the Bond Trustee an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days of such deposit) to the Bond Issuer of the Collateral or other property or securities to be so deposited.

(ii) Whenever the Bond Issuer is required to furnish to the Bond Trustee an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (i) above, the Bond Issuer shall also deliver to the Bond Trustee an Independent Certificate as to the same matters, if the fair value to the Bond Issuer of the securities to be so deposited and of all other such securities made the basis of any such withdrawal or release since the commencement of the then-current fiscal year of the Bond Issuer, as set forth in the certificates delivered pursuant to clause (i) above and this clause (ii), is ten percent or more of the Outstanding Amount of the Bonds, but such a certificate need not be furnished with respect to any securities so deposited, if the fair value thereof to the Bond Issuer as set forth in the related Officer’s Certificate is less than $25,000 or less than one percent of the Outstanding Amount of the Bonds.

(iii) Whenever any property or securities are to be released from the Lien of this Bond Indenture other than pursuant to Section 8.02, the Bond Issuer shall also furnish to the Bond Trustee an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days of such release) of the property or securities proposed to be released and stating that in the opinion of such person the proposed release will not impair the security under this Bond Indenture in contravention of the provisions hereof.

(iv) Whenever the Bond Issuer is required to furnish to the Bond Trustee an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (iii) above, the Bond Issuer shall also furnish to the Bond Trustee an Independent Certificate as to the same matters if the fair value of the property or securities and of all other property, or securities released from the Lien of this Bond Indenture (other than pursuant to Section 8.02 hereof) since the commencement of the then-current calendar year, as set forth in the certificates required by clause (iii) above and this clause (iv), equals 10 percent or more of the Outstanding Amount of the Bonds, but such certificate need not be furnished in the case of any release of property or securities if the fair value thereof as set forth in the related Officer’s Certificate is less than $25,000 or less than one percent of the then Outstanding Amount of the Bonds.

(v) Notwithstanding Section 2.11 or any other provision of this Section 11.01, the Bond Issuer may (A) collect, liquidate, sell or otherwise dispose of the Phase-In-Recovery Property and the Phase-In-Recovery Charge as and to the extent permitted or required by the Basic Documents and (B) cause the Bond Trustee to make cash payments out of the Collection Account as and to the extent permitted or required by the Basic Documents.

Section 11.02 Form of Documents Delivered to Bond Trustee.

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

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

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

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

Section 11.03 Acts of Bondholders.

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Bond Indenture to be given or taken by Bondholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Bondholders in person or by agents duly appointed in writing; and except as herein otherwise expressly provided such action shall become effective when such instrument or instruments are delivered to the Bond Trustee, and, where it is hereby expressly required, to the Bond Issuer. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Bondholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Bond Indenture and (subject to Section 6.01) conclusive in favor of the Bond Trustee and the Bond Issuer, if made in the manner provided in this Section 11.03.

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

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

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

Section 11.04 Notices.

(a) Unless otherwise specifically provided herein, all notices, directions, consents and waivers required under the terms and provisions of this Bond Indenture shall be in English and in writing, and any such notice, direction, consent or waiver may be given by United States mail, courier service, facsimile transmission or electronic mail (confirmed by telephone, United States mail or courier

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service in the case of notice by facsimile transmission or electronic mail) or any other customary means of communication, and any such notice, direction, consent or waiver shall be effective when delivered, or if mailed, three days after deposit in the United States mail with proper postage for ordinary mail prepaid,

if to the Certificate Issuer, to:

U.S. Bank Trust National Association, as Delaware Trustee for FirstEnergy Ohio PIRB Special Purpose Trust 2013

190 S. LaSalle Street, 7th Floor

Mail Code: MK-IL-SL7R

Chicago, IL 60603

Attention: First Energy Ohio PIRB Special Purpose Trust 2013

Facsimile: 312-332-7996

Telephone: 312-332-7496

E-mail: melissa.rosal@usbank.com

With a copy to the Administrative Trustee

if to the Bond Issuer, to:

[CEI Funding LLC] [OE Funding LLC]

[TE Funding LLC]

c/o First Corp.

76 South Main Street

Akron, OH 44308

Attention: James W. Burk, Counsel of Record

Facsimile: 330-384-3875

Telephone: 330-384-5861

if to the Bond Trustee or the Certificate Trustee, to:

U.S. Bank National Association

190 S. LaSalle Street, 7th Floor

Mail Code: MK-IL-SL7R

Chicago, IL 60603

Attention: First Energy Ohio PIRB Special Purpose Trust 2013

Facsimile: 312-332-7996

Telephone: 312-332-7496

E-mail: melissa.rosal@usbank.com

if to the Rating Agencies, to:

Standard & Poor’s Ratings Services

55 Water Street

New York, New York 10041

Attention: Structured Credit Surveillance

E-mail: servicer-report@standardandpoors.com

Telephone: 212-438-8991

and

Moody’s Investors Service, Inc.

25^th Floor, 7 World Trade Center, 250 Greenwich

New York, New York 10007

Attention: ABS/RMBS Monitoring Department

E-mail: ServicerReports@moodys.com

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and

Fitch Ratings

One State Street Plaza

New York, New York 10004

Attention: ABS Surveillance

Telephone: 212-908-0500

Facsimile: 212-908-0355

Section 11.05 Notices to Bondholders: Waiver.

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

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

In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail notice of any event of Bondholders when such notice is required to be given pursuant to any provision of this Bond Indenture, then any manner of giving such notice as shall be satisfactory to the Bond Trustee shall be deemed to be a sufficient giving of such notice.

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

Section 11.06 Conflict with Trust Indenture Act.

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

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

Section 11.07 Effect of Headings and Table of Contents.

The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

Section 11.08 Successors and Assigns.

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All covenants and agreements in this Bond Indenture and the Bonds by the Bond Issuer shall bind its successors and assigns, whether so expressed or not. All agreements of the Bond Trustee in this Bond Indenture shall bind its successors.

Section 11.09 Severability.

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

Section 11.10 Benefits of Bond Indenture.

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

Section 11.11 Legal Holidays.

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

Section 11.12 Governing Law.

THIS BOND INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF OHIO, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. PURSUANT TO NEW YORK UCC SECTION 8-110(e)(1) AND, TO THE EXTENT APPLICABLE, NEW YORK UCC SECTION 9-304(b)(1), THE STATE OF NEW YORK IS THE JURISDICTION OF THE BOND TRUSTEE, AS BANK OR SECURITIES INTERMEDIARY WITH RESPECT TO ANY SECURITIES ACCOUNT, AND THE PERFECTION, EFFECT OF PERFECTION OR NONPERFECTION AND THE PRIORITY OF THE SECURITY INTEREST IN THE SECURITIES ACCOUNT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

Section 11.13 Counterparts.

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

Section 11.14 Recording of Bond Indenture.

If this Bond Indenture is subject to recording in any appropriate public recording offices, such recording is to be effected by the Bond Issuer and at its expense accompanied by an Opinion of Counsel (which may be counsel to the Bond Trustee or any other counsel reasonably acceptable to the Bond Trustee) to the effect that such recording is necessary either for the protection of the Bondholders or any other Person secured hereunder or for the enforcement of any right or remedy granted to the Bond Trustee under this Bond Indenture.

Section 11.15 Bond Issuer Obligation.

No recourse may be taken, directly or indirectly, with respect to the obligations of the Bond Issuer or the Bond Trustee on the Bonds or under this Bond Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) any owner of a membership interest in the Bond Issuer or (ii) any shareholder, partner, owner, beneficiary, agent, officer, director or employee of the Bond Trustee, the managers of the Bond

59

Issuer or any owner of a membership interest in the Bond Issuer in its respective individual capacity, or of any successor or assign of any of them in their respective individual or corporate capacities, except as any such Person may have expressly agreed in writing. Each Bondholder by accepting a Bond specifically confirms the non recourse nature of these obligations and waives and releases all such liability. These waivers and releases are part of the consideration for issuance of the Bonds.

Section 11.16 No Recourse to Bond Issuer.

Notwithstanding any provision of this Bond Indenture or any Supplemental Bond Indenture to the contrary, Bondholders shall have no recourse against the Bond Issuer, but shall look only to the Collateral, with respect to any amounts due to the Bondholders hereunder and under the Bonds. Each Bondholder by accepting a Bond specifically confirms the non recourse nature of these obligations and waives and releases all such liability. These waivers and releases are part of the consideration for issuance of the Bonds.

Section 11.17 Inspection.

The Bond Issuer agrees that, on reasonable prior notice, it will permit any representative of the Bond Trustee, during the Bond Issuer’s normal business hours, to examine all the books of account, records, reports, and other papers of the Bond Issuer, to make copies and extracts therefrom, to cause such books to be audited by Independent certified public accountants, and to discuss the Bond Issuer’s affairs, finances and accounts with the Bond Trustee’s officers, employees, and Independent certified public accountants, all at such reasonable times and as often as may be reasonably requested. The Bond Trustee shall and shall cause its representatives to hold in confidence all such information except to the extent disclosure may be required by law (and all reasonable applications for confidential treatment are unavailing) and except to the extent that the Bond Trustee may reasonably determine that such disclosure is consistent with its obligations hereunder. Notwithstanding anything herein to the contrary, the foregoing shall not be construed to prohibit (i) disclosure of any and all information that is or becomes publicly known, or information obtained by the Bond Trustee from sources other than the Bond Issuer, provided such parties are rightfully in possession of such information and do not have an obligation of confidentiality, (ii) disclosure of any and all information (A) if required to do so by any applicable statute, law, rule or regulation, (B) pursuant to any subpoena, civil investigative demand or similar demand or request of any court or regulatory authority exercising its proper jurisdiction, (C) in any preliminary or final offering circular, registration statement or contract or other document pertaining to the transactions contemplated by this Bond Indenture or the Basic Documents approved in advance by the Bond Issuer or (D) to any affiliate, independent or internal auditor, agent, employee or attorney of the Bond Trustee having a need to know the same, provided that such parties agree to be bound by the confidentiality provisions contained in this Section 11.17, or (iii) any other disclosure authorized by the Bond Issuer.

Section 11.18 No Petition.

The Bond Trustee, by entering into this Bond Indenture, each Holder, by accepting a Bond (or interest therein) issued hereunder, hereby covenant and agree that they shall not, prior to the date which is one year and one day after the termination of this Bond Indenture, acquiesce, petition or otherwise invoke or cause the Bond Issuer or any manager under the LLC Agreement to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Bond Issuer under any insolvency law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Bond Issuer or any substantial part of its respective property, or ordering the dissolution, winding up or liquidation of the affairs of the Bond Issuer. Nothing in this paragraph shall preclude, or be deemed to estop, such Holder or the Bond Trustee (A) from taking or omitting to take any action prior to such date in (i) any case or proceeding voluntarily filed or commenced by or on behalf of the Bond Issuer under or pursuant to any such law or (ii) any involuntary case or proceeding pertaining to the Bond Issuer which is filed or commenced by or on behalf of a Person other than such Holder and is not joined in by such Holder (or any person to which such holder shall have assigned, transferred or otherwise conveyed any part of the obligations of the Bond Issuer hereunder) under or pursuant to any such law, or (B) from commencing or prosecuting any legal action which is not an involuntary case or proceeding under or pursuant to any such law against the Bond Issuer or any of its properties.

60

Section 11.19 Securities Intermediary. The Securities Intermediary, in acting under this Bond Indenture, is entitled to all rights, benefits, protections, immunities and indemnities accorded U.S. Bank National Association, a national banking association, in its capacity as Bond Trustee under this Bond Indenture.

Section 11.20 Trustee Capacities; Affiliated Parties Each of the Bondholders by accepting the Bonds shall be deemed to acknowledge and consent to U.S. Bank Trust National Association acting in the capacity of Delaware Trustee and U.S. Bank National Association acting in the capacities of Bond Trustee and Certificate Trustee.

Section 11.21 Waiver of Jury Trial. EACH OF THE BOND ISSUER AND THE BOND TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS BOND INDENTURE, THE BONDS OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 11.22 Rule 17g-5 Compliance.

(a) The Bond Trustee agrees that any notice, report, request for satisfaction of the Rating Agency Condition, document or other information provided by the Bond Trustee to any Rating Agency under this Bond Indenture or any other Basic Document to which it is a party for the purpose of determining the initial credit rating of the Bonds or undertaking credit rating surveillance of the Bonds shall be provided, substantially concurrently, to the Servicer for posting on a password-protected website (the “17g-5 Website”). The Servicer shall be responsible for posting all of the information on the 17g-5 Website.

(b) The Bond Trustee will not be responsible for creating or maintaining the 17g-5 Website, posting any information to the 17g-5 Website or assuring that the 17g-5 Website complies with the requirements of this Bond Indenture, Rule 17g-5 or any other law or regulation. In no event shall the Bond Trustee be deemed to make any representation in respect of the content of the 17g-5 Website or compliance by the 17g-5 Website with this Bond Indenture, Rule 17g-5 or any other law or regulation. The Bond Trustee shall have no obligation to engage in or respond to any oral communications with respect to the transactions contemplated hereby, any transaction documents relating hereto or in any way relating to the Bonds or for the purposes of determining the initial credit rating of the Bonds or undertaking credit rating surveillance of the Bonds with any Rating Agency or any of its respective officers, directors or employees. The Bonds Trustee shall not be responsible or liable for the dissemination of any identification numbers or passwords for the 17g-5 Website, including by the Servicer, the Rating Agencies, a nationally recognized statistical rating organization (“NRSRO”), any of their respective agents or any other party. Additionally, the Bond Trustee shall not be liable for the use of the information posted on the 17g-5 Website, whether by the Servicer, the Rating Agencies, an NRSRO or any other third party that may gain access to the 17g-5 Website or the information posted thereon.

61

IN WITNESS WHEREOF, the Bond Issuer and the Bond Trustee have caused this Bond Indenture to be duly executed by their respective officers, thereunto duly authorized and duly attested, all as of the day and year first above written.

[CEI Funding LLC] [OE Funding LLC] [TE Funding LLC]

By:                                                                                                    

Name:                                                                                  

Title:                                                                                                 

U.S. Bank National Association,

as Bond Trustee and Securities Intermediary,

By:                                                                                                    

Name:                                                                                  

Title:                                                                                                 

STATE OF [                                             ]	§
	§
COUNTY OF [                                         ]	§

On the ___ day of ________________________, 2013, before me, a Notary Public in and for said county and state, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person and officer whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument [CEI Funding LLC] [OE Funding LLC] [TE Funding LLC], a Delaware limited liability company and the entity upon which the person acted, executed this instrument.

WITNESS my hand and official seal.

Notary Public

My commission expires:                                                  

STATE OF [                                             ]	§
	§
COUNTY OF [                                         ]	§

On the ___ day of ________________________, 2013, before me, a Notary Public in and for said county and state, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person and officer whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument, U.S. Bank National Association, a national banking association, and the entity upon which the person acted, executed this instrument.

WITNESS my hand and official seal.

Notary Public

My commission expires:                                                  

SCHEDULE A

Expected Amortization Schedule

Outstanding Principal Balance

Payment Date Tranche A-1 Tranche A-2 Tranche A-3 Issuance Date

A-1

EXHIBIT B

FORM OF BOND

REGISTERED $[                             ]

NO. [                    ]

SEE REVERSE FOR CERTAIN DEFINITIONS

THE PRINCIPAL OF THIS TRANCHE A-[            ] BOND WILL BE PAID IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS TRANCHE A-[            ] BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THE HOLDER OF THIS BOND HAS NO RECOURSE TO THE BOND ISSUER HEREOF AND AGREES TO LOOK ONLY TO THE COLLATERAL, AS DESCRIBED IN THE BOND INDENTURE, FOR PAYMENT OF ANY AMOUNTS DUE HEREUNDER. ALL OBLIGATIONS OF THE BOND ISSUER OF THIS TRANCHE A-[            ] BOND UNDER THE TERMS OF THE BOND INDENTURE WILL BE RELEASED AND DISCHARGED UPON PAYMENT IN FULL HEREOF OR AS OTHERWISE PROVIDED IN THE BOND INDENTURE. THE HOLDER OF THIS TRANCHE A-[            ] BOND HEREBY COVENANTS AND AGREES THAT PRIOR TO THE DATE WHICH IS ONE (1) YEAR AND ONE (1) DAY AFTER THE PAYMENT IN FULL OF THE TRANCHE A-[ ] BONDS, IT WILL NOT INSTITUTE AGAINST, OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST, THE BOND ISSUER ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS OR OTHER SIMILAR PROCEEDING UNDER THE LAWS OF THE UNITED STATES OR ANY STATE OF THE UNITED STATES. NOTHING IN THIS PARAGRAPH SHALL PRECLUDE, OR BE DEEMED TO ESTOP, SUCH HOLDER (A) FROM TAKING OR OMITTING TO TAKE ANY ACTION PRIOR TO SUCH DATE IN (I) ANY CASE OR PROCEEDING VOLUNTARILY FILED OR COMMENCED BY OR ON BEHALF OF THE BOND ISSUER UNDER OR PURSUANT TO ANY SUCH LAW OR (II) ANY INVOLUNTARY CASE OR PROCEEDING PERTAINING TO THE BOND ISSUER WHICH IS FILED OR COMMENCED BY OR ON BEHALF OF A PERSON OTHER THAN SUCH HOLDER AND IS NOT JOINED IN BY SUCH HOLDER (OR ANY PERSON TO WHICH SUCH HOLDER SHALL HAVE ASSIGNED, TRANSFERRED OR OTHERWISE CONVEYED ANY PART OF THE OBLIGATIONS OF THE BOND ISSUER HEREUNDER) UNDER OR PURSUANT TO ANY SUCH LAW, OR (B) FROM COMMENCING OR PROSECUTING ANY LEGAL ACTION WHICH IS NOT AN INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE BOND ISSUER OR ANY OF ITS PROPERTIES.

[CEI FUNDING LLC] [OE FUNDING LLC]

[TE FUNDING LLC] BONDS

TRANCHE A-[    ]

Interest Rate	Original Principal Amount	Final Maturity Date
[    ]%	$[                             ]

PRINCIPAL AMOUNT:

[CEI Funding LLC] [OE Funding LLC] [TE Funding LLC], a limited liability company formed and existing under the laws of the State of Delaware (herein referred to as the “Bond Issuer”), for value received, hereby promises to pay to FirstEnergy Ohio PIRB Special Purpose Trust 2013, or registered assigns, the Original Principal Amount shown above in semiannual installments on the Payment Dates and in the amounts specified on the reverse hereof or, if less, the amounts determined pursuant to Section 8.02 of the Bond Indenture, in each year, commencing on the date determined as provided on the reverse hereof and ending on or before the Final Maturity Date and to pay interest, at the Interest Rate shown above, on each [                    ] and [                    ] or if any such day is not a Business Day, the next succeeding Business Day, commencing on [                    ], 2014 and continuing until the earlier of the

B-1

payment of the principal hereof or the Final Maturity Date (each a “Payment Date”), on the principal amount of this Tranche A-[                    ] Bond. Interest on this Tranche A-[    ] Bond will accrue for each Payment Date from the most recent Payment Date on which interest has been paid to but excluding such Payment Date or, if no interest has yet been paid, from [                    ], 2014. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Such principal of and interest on this Tranche A-[    ] Bond shall be paid in the manner specified on the reverse hereof.

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

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

The Holder of this Tranche A-[    ] Bond by the acceptance hereof agrees to be bound by the terms of the Bond Indenture.

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

B-2

IN WITNESS WHEREOF, the Bond Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer.

Date: [                    ], 2013

[CEI Funding LLC] [OE Funding LLC][TE Funding LLC]

By:                                                                                                           

Name:                                                                                       

Title:                                                                                         

B-3

BOND TRUSTEE’S CERTIFICATE OF AUTHENTICATION

Dated: [                    ], 2013

This is one of the Bonds referred to in the within-mentioned Bond Indenture.

U.S. Bank National Association,

not in its individual capacity but solely as Bond Trustee,

By:                                                                                                           

Name:                                                                                       

Title:                                                                                         

B-4

[REVERSE OF BOND]

This Tranche A-[    ] Bond is one of a duly authorized issue of Bonds of the Bond Issuer, designated as its [CEI Funding LLC] [OE Funding LLC] [TE Funding LLC] Bonds (herein called the “Bonds”), issuable in one or more Tranches, and further designated as a Tranche A-[    ] Bond (collectively with all other Tranche A-[    ] Bonds of this issue, the “Tranche A-[    ] Bonds”), all issued under a Bond Indenture dated as of [                    ], 2013 (the “Bond Indenture”), between the Bond Issuer and U.S Bank National Association, as Bond Trustee (the “Bond Trustee,” which term includes any successor trustee under the Bond Indenture), to which Bond Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Bond Issuer, the Bond Trustee and the Holders of the Bonds. All terms used in this Tranche A-[    ] Bond that are defined in the Bond Indenture, as supplemented or amended, shall have the meanings assigned to them in the Bond Indenture, as supplemented or amended.

The Tranche A-[    ] Bonds and the other Tranches of Bonds issued by the Bond Issuer are and will be equally and ratably secured by the Collateral, as provided in the Bond Indenture.

The principal of this Tranche A-[    ] Bond shall be payable on each Payment Date only to the extent that amounts in the Collection Account are available therefor, and only until the outstanding principal balance thereof on such Payment Date (after giving effect to all payments of principal, if any, made on such Payment Date) has been reduced to the principal balance specified in the Expected Amortization Schedule which is attached to the Bond Indenture as Schedule A, unless payable earlier either because an Event of Default shall have occurred and be continuing and the Bond Trustee or the Holders of Bonds representing not less than a majority of the Outstanding Amount of the Bonds have declared the Bonds to be immediately due and payable in accordance with Section 5.02 of the Bond Indenture. However, actual principal payments may be made in lesser than expected amounts and at later than expected times as determined pursuant to Section 8.02 of the Bond Indenture. The entire unpaid principal amount of this Tranche A-[    ] Bond shall be due and payable on the Final Maturity Date hereof. Notwithstanding the foregoing, the entire unpaid principal amount of the Bonds shall be due and payable, if not then previously paid, on the date on which an Event of Default shall have occurred and be continuing and the Bond Trustee or the Holders of the Bonds representing not less than a majority of the Outstanding Amount of the Bonds have declared the Bonds to be immediately due and payable in the manner provided in Section 5.02 of the Bond Indenture. All principal payments on the Tranche A-[    ] Bonds shall be made pro rata to the Tranche A-[    ] Bondholders entitled thereto based on the respective principal amounts of the Tranche A-[    ] Bonds held by them.

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

The Bond Issuer shall pay interest on overdue installments of interest at the Bond Interest Rate to the extent lawful.

B-5

As provided in the Bond Indenture and subject to certain limitations set forth therein, the transfer of this Tranche A-[    ] Bond may be registered on the Bond Register upon surrender of this Tranche A-[    ] Bond for registration of transfer at the office or agency designated by the Bond Issuer pursuant to the Bond Indenture, duly endorsed by, or accompanied by (a) a written instrument of transfer in form satisfactory to the Bond Trustee duly executed by the Holder hereof or his attorney duly authorized in writing, with such signature guaranteed by an institution which is a member of one of the following recognized Signature Guaranty Programs: (i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) in such other guarantee program acceptable to the Bond Trustee, and (b) such other documents as the Bond Trustee may require, and thereupon one or more new Tranche A-[    ] Bonds of Minimum Denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Tranche A-[    ] Bond, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange, other than exchanges pursuant to Section 2.04 of the Bond Indenture not involving any transfer.

Each Bondholder, by acceptance of a Bond, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Bond Issuer or the Bond Trustee on the Bonds or under the Bond Indenture or any certificate or other writing delivered in connection therewith, against (i) any owner of a limited liability company interest in the Bond Issuer or (ii) any shareholder, partner, owner, beneficiary, agent, officer, director or employee of the Bond Trustee, the managers of the Bond Issuer or any owner of a membership interest in the Bond Issuer in its respective individual capacity, or of any successor or assign of any of them in their respective individual or corporate capacities, except as any such Person may have expressly agreed in writing.

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

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

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

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

The Tranche A-[    ] Bonds are issuable only in registered form in denominations as provided in the Bond Indenture, subject to certain limitations therein set forth.

This Tranche A-[    ] Bond and the Bond Indenture shall be construed in accordance with the laws of the State of Ohio, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.

B-6

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

The Holder of this Tranche A-[    ] Bond by the acceptance hereof agrees that, notwithstanding any provision of the Bond Indenture to the contrary, the Holder shall have no recourse against the Bond Issuer, but shall look only to the Collateral, with respect to any amounts due to the Holder under this Tranche A-[    ] Bond.

Subject to and in accordance with the terms of the Bond Indenture and pursuant to Section 4928.2315 of the Statute, the State of Ohio has pledged and agreed with the Bond Issuer and the Holders of the Bonds (the “State Pledge”), as follows:

“The state pledges to and agrees with the bondholders, any assignee, and any financing parties under a final financing order that the state will not take or permit any action that impairs the value of phase-in-recovery property under the final financing order or revises the phase-in costs for which recovery is authorized under the final financing order or, except as allowed under section 4928.238 of the Revised Code, reduce, alter, or impair phase-in-recovery charges that are imposed, charged, collected, or remitted for the benefit of the bondholders, any assignee, and any financing parties, until any principal, interest, and redemption premium in respect of phase-in-recovery bonds, all financing costs, and all amounts to be paid to an assignee or financing party under an ancillary agreement are paid or performed in full.”

B-7

ASSIGNMENT

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

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

(name and address of assignee)

the within Tranche A-[    ] Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney, to transfer said Tranche A-[    ] Bond on the books kept for registration thereof, with full power of substitution in the premises.

Dated:                                                          

Signature Guaranteed:

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

B-8

EXHIBIT C

SERVICING CRITERIA TO BE ADDRESSED

BY BOND TRUSTEE IN ASSESSMENT OF COMPLIANCE

Reg AB Reference	Servicing Criteria	Applicable  Indenture Trustee Responsibility
	General Servicing Considerations
1122(d)(1)(i)	Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.
1122(d)(1)(ii)	If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities.
1122(d)(1)(iii)	Any requirements in the transaction agreements to maintain a back-up servicer for the pool assets are maintained.
1122(d)(1)(iv)	A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements.
	Cash Collection and Administration
1122(d)(2)(i)	Payments on pool assets are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two (2) business days following receipt, or such other number of days specified in the transaction agreements.	X
1122(d)(2)(ii)	Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.	X
1122(d)(2)(iii)	Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements.
1122(d)(2)(iv)	The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements.	X
1122(d)(2)(v)	Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.	X
1122(d)(2)(vi)	Unissued checks are safeguarded so as to prevent unauthorized access.

C-1

Reg AB Reference	Servicing Criteria	Applicable  Indenture Trustee Responsibility
1122(d)(2)(vii)	Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within thirty (30) calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within ninety (90) calendar days of their original identification, or such other number of days specified in the transaction agreements.
	Investor Remittances and Reporting
1122(d)(3)(i)	Reports to investors, including those to be filed with the SEC, are maintained in accordance with the transaction agreements and applicable SEC requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the SEC as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of pool assets serviced by the servicer.
1122(d)(3)(ii)	Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.	X
1122(d)(3)(iii)	Disbursements made to an investor are posted within two (2) business days to the servicer’s investor records, or such other number of days specified in the transaction agreements.	X
1122(d)(3)(iv)	Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.	X
	Pool Asset Administration
1122(d)(4)(i)	Collateral or security on pool assets is maintained as required by the transaction agreements or related pool asset documents.
1122(d)(4)(ii)	Pool assets and related documents are safeguarded as required by the transaction agreements.
1122(d)(4)(iii)	Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.
1122(d)(4)(iv)	Payments on pool assets, including any payoffs, made in accordance with the related pool asset documents are posted to the servicer’s obligor records maintained no more than two (2) business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related pool asset documents.
1122(d)(4)(v)	The servicer’s records regarding the pool assets agree with the servicer’s records with respect to an obligor’s unpaid principal balance.
1122(d)(4)(vi)	Changes with respect to the terms or status of an obligor’s pool assets (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents.

C-2

Reg AB Reference	Servicing Criteria	Applicable  Indenture Trustee Responsibility
1122(d)(4)(vii)	Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements.
1122(d)(4)(viii)	Records documenting collection efforts are maintained during the period a pool asset is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent pool assets including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).
1122(d)(4)(ix)	Adjustments to interest rates or rates of return for pool assets with variable rates are computed based on the related pool asset documents.
1122(d)(4)(x)	Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s pool asset documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable pool asset documents and state laws; and (C) such funds are returned to the obligor within thirty (30) calendar days of full repayment of the related pool assets, or such other number of days specified in the transaction agreements.
1122(d)(4)(xi)	Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least thirty (30) calendar days prior to these dates, or such other number of days specified in the transaction agreements.
1122(d)(4)(xii)	Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicer’s funds and not charged to the obligor, unless the late payment was due to the obligor’s error or omission.
1122(d)(4)(xiii)	Disbursements made on behalf of an obligor are posted within two (2) business days to the obligor’s records maintained by the servicer, or such other number of days specified in the transaction agreements.
1122(d)(4)(xiv)	Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements.
1122(d)(4)(xv)	Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements.

C-3

EX-4.2

EXHIBIT 4.2

FIRSTENERGY OHIO PIRB SPECIAL PURPOSE TRUST 2013,

as Certificate Issuer

and

U.S. Bank National Association,

as Certificate Trustee and Securities Intermediary

CERTIFICATE INDENTURE

Dated as of [            ], 2013

$[        ]

FIRSTENERGY OHIO PIRB SPECIAL PURPOSE TRUST 2013

PASS-THROUGH CERTIFICATES

TABLE OF CONTENTS

		Page
ARTICLE I
DEFINITIONS
Section 1.01	Definitions		2
Section 1.02	Compliance Certificates and Opinions		11
Section 1.03	Form of Documents Delivered to Certificate Trustee		11
Section 1.04	Acts of Certificateholders		12
ARTICLE II
THE CERTIFICATES
Section 2.01	Terms of the Certificates		13
Section 2.02	Issuance of Certificates		13
Section 2.03	Form, Denomination and Execution of Certificates		15
Section 2.04	Authentication of Certificates		16
Section 2.05	Temporary Certificates		16
Section 2.06	Registration of Transfer and Exchange of Certificates		16
Section 2.07	Certificateholders’ Lists and Reports by Certificate Trustee		17
Section 2.08	Mutilated, Destroyed, Lost or Stolen Certificates		18
Section 2.09	Persons Deemed Owners		18
Section 2.10	Cancellation		18
Section 2.11	Limitation of Liability for Payments		19
Section 2.12	Book-Entry and Definitive Certificates		19
Section 2.13	Tax Treatment		20
Section 2.14	Security Interest		20
ARTICLE III
COVENANTS
Section 3.01	Compliance with Declaration of Trust		21
Section 3.02	No Additional Certificates		21
Section 3.03	Protection of Trust Property		21
Section 3.04	Opinions as to Trust Property		22
Section 3.05	Further Instruments and Acts		22
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 4.01	Certificate Accounts		22
Section 4.02	Distributions from Certificate Accounts		23
Section 4.03	Statements to Certificateholders		25
Section 4.04	Investment of Special Payment Moneys		26
Section 4.05	Reduction in Principal		26
ARTICLE V
DEFAULTS AND REMEDIES
Section 5.01	Events of Default		26
Section 5.02	Incidents of Sale of Bonds		27
Section 5.03	Judicial Proceedings Instituted by Certificate Trustee		27
Section 5.04	Control by Certificateholders		27
Section 5.05	Waiver of Past Defaults		28
Section 5.06	Right of Certificateholders To Receive Payments Not To Be Impaired		28
Section 5.07	Certificateholders May Not Bring Suit Except Under Certain Conditions		28
Section 5.08	Certificate Trustee May Bring Suit		29
Section 5.09	Remedies Cumulative		29
ARTICLE VI
THE CERTIFICATE TRUSTEE
Section 6.01	Notice of Defaults		29
Section 6.02	Duties of Certificate Trustee		29

i

Section 6.03	Certain Rights of Certificate Trustee	30
Section 6.04	Certificate Trustee’s Disclaimer	32
Section 6.05	May Hold Certificates	32
Section 6.06	Money Held in Trust	32
Section 6.07	Compensation and Reimbursement; Indemnification	32
Section 6.08	Corporate Certificate Trustee Required; Eligibility	33
Section 6.09	Resignation and Removal; Appointment of Successor	33
Section 6.10	Acceptance of Appointment by Successor	35
Section 6.11	Merger, Conversion, Consolidation or Succession to Business	35
Section 6.12	Maintenance of Agencies	35
Section 6.13	Money for Certificate Payments To Be Held in Trust	36
Section 6.14	Registration of Bonds in Certificate Trustee’s Name	37
Section 6.15	Representations and Warranties of Certificate Trustee	37
Section 6.16	Withholding Taxes; Information Reporting	37
Section 6.17	Obligations to Bond Trustees and Delaware Trustee	38
Section 6.18	Custody of Trust Property	38
Section 6.19	Appointment of Co-Trustee or Separate Trustee	38
ARTICLE VII
SUPPLEMENTAL CERTIFICATE INDENTURES
Section 7.01	Supplemental Certificate Indentures Without Consent of Certificateholders	39
Section 7.02	Supplemental Certificate Indentures With Consent of Certificateholders	40
Section 7.03	Documents Affecting Immunity or Indemnity	40
Section 7.04	Execution of Supplemental Certificate Indentures	40
Section 7.05	Effect of Supplemental Certificate Indentures	40
Section 7.06	Conformity with Trust Indenture Act	41
Section 7.07	Reference in Certificates to Supplemental Certificate Indentures	41
ARTICLE VIII
AMENDMENTS AND SUPPLEMENTS TO BONDS, BOND INDENTURES AND OTHER BASIC DOCUMENTS
Section 8.01	Amendments and Supplements to Bonds, Bond Indentures and Other Basic Documents	41
ARTICLE IX
SATISFACTION AND DISCHARGE
Section 9.01	Satisfaction and Discharge of Certificate Indenture	41
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01	Certificates and Bonds Not Obligation of the State of Ohio or Sellers	42
Section 10.02	Limitation on Rights of Certificateholders	43
Section 10.03	No Recourse to Certificate Issuer	43
Section 10.04	Certificates Nonassessable and Fully Paid	43
Section 10.05	Notices	43
Section 10.06	Governing Law	46
Section 10.07	Severability of Provisions	46
Section 10.08	Conflict With Trust Indenture Act	46
Section 10.09	Effect of Headings and Table of Contents	46
Section 10.10	Successors and Assigns; Delegation	46
Section 10.11	Benefits of Certificate Indenture	46
Section 10.12	Legal Holidays	46
Section 10.13	Counterparts	46
Section 10.14	The Delaware Trustee	47
Section 10.15	Certificate Issuer Obligation	47
Section 10.16	No Petition	47
Section 10.17	Trustee Capacities; Affiliated Parties	47
Section 10.18	Waiver of Jury Trial	47
Section 10.19	Rule 17g-5 Compliance	47
Signature		S-1
EXHIBIT A – FORM OF CERTIFICATE		A-1

ii

TRUST INDENTURE ACT CROSS REFERENCE TABLE

TIA SECTION		INDENTURE SECTION
310	(a)(1)	6.08
	(a)(2)	6.08
	(a)(3)	6.19
	(a)(4)	6.14
	(a)(5)	6.08
	(b)	6.08 and 6.09
311	(a)	6.05
	(b)	6.05
312	(a)	2.07
	(b)	2.07
	(c)	2.07
313	(a)	2.07
	(b)(1)	2.07
	(b)(2)	2.07
	(c)	2.07
	(d)	2.07
314	(a)	2.07 and 9.01
	(b)	3.04 and 9.01
	(c)(1)	2.02 and 2.07
	(c)(2)	2.02
	(c)(3)	N.A.
	(d)	2.02
	(e)	1.02
	(f)	1.02
315	(a)	6.03
	(b)	6.01
	(c)	6.03
	(d)	6.03(j)
	(e)	10.08
316	(a) (last sentence)	1.01(a) (definition of “Outstanding”)
	(a)(1)(A)	5.04
	(a)(1)(B)	5.05

iii

TIA SECTION		INDENTURE SECTION
	(a)(2)	N.A.
	(b)	5.06
	(c)	1.01(a) (definition of “Record Date”) and 1.01(e)
317	(a)(1)	5.03
	(a)(2)	5.03, 5.08 and 5.09
	(b)	4.01
318	(a)	10.08
	(b)	10.08
	(c)	10.08

** “N.A.” shall mean “not applicable.”

THIS CROSS REFERENCE TABLE SHALL NOT, FOR ANY PURPOSE,

BE DEEMED TO BE PART OF THIS INDENTURE.

iv

CERTIFICATE INDENTURE, dated as of [            ] [    ], 2013, between FirstEnergy Ohio PIRB Special Purpose Trust 2013, a Delaware statutory trust (the “Certificate Issuer”) continued under the Declaration of Trust and U.S. Bank National Association, in its capacity as certificate trustee (the “Certificate Trustee”) and in its separate capacity as a securities intermediary (the “Securities Intermediary”).

RECITALS

The CEI Bond Issuer intends to issue the CEI Funding LLC Bonds (the “CEI Bonds”) with an aggregate principal amount of $[        ], consisting of Tranches A-1, A-2 and A-3 pursuant to the CEI Bond Indenture. The OE Bond Issuer intends to issue the OE Funding LLC Bonds (the “OE Bonds”) with an aggregate principal amount of $[        ], consisting of Tranches A-1, A-2 and A-3 pursuant to the OE Bond Indenture. The TE Bond Issuer intends to issue the TE Funding LLC Bonds (the “TE Bonds”) with an aggregate principal amount of $[        ], consisting of Tranches A-1, A-2 and A-3 pursuant to the TE Bond Indenture. In order to finance the purchase of the CEI Bonds pursuant to the CEI Bond Purchase Agreement, the OE Bonds pursuant to the OE Bond Purchase Agreement and the TE Bonds pursuant to the TE Bond Purchase Agreement, the Certificate Issuer shall issue, pursuant to this Certificate Indenture, its FirstEnergy Ohio PIRB Special Purpose Trust 2013 Certificates (the “Certificates”) with an aggregate principal amount of $[        ], consisting of Tranches A-1, A-2 and A-3, each of which shall represent a fractional undivided beneficial interest in the Bonds of the Bond Issuers and the proceeds thereof.

The Certificate Issuer has duly authorized the execution and delivery of this Certificate Indenture to provide the terms and conditions for the issuance of the Certificates. The Certificate Issuer is entering into this Certificate Indenture, and the Certificate Trustee is accepting the trusts created hereby, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.

GRANTING CLAUSE

The Certificate Issuer hereby Grants to the Certificate Trustee, as Certificate Trustee for the benefit of the Holders of the Certificates, a security interest in all of the Certificate Issuer’s right, title and interest in and to the Trust Property, including the Bonds acquired pursuant to the Bond Purchase Agreements, together with all payments thereon and proceeds thereof, and other property constituting the Trust Property.

The foregoing Grant is made in trust to secure the payment of principal of and interest on, and any other amounts owing in respect of, the Certificates, and to secure compliance with the provisions of this Certificate Indenture with respect to such Certificates, all as provided in this Certificate Indenture (the “Secured Obligations”). This Certificate Indenture constitutes a security agreement within the meaning of the UCC to the extent that, under Delaware law, the provisions of the UCC are applicable hereto.

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

AND IT IS HEREBY COVENANTED, DECLARED AND AGREED between the parties hereto that all Certificates are to be issued, countersigned and delivered and that all of the Trust Property is to be held and applied, subject to the further covenants, conditions, releases, uses and trusts hereinafter set forth, and the Certificate Issuer, for itself and any successor, does hereby covenant and agree to and with the Certificate Trustee and its successors in said trust, for the benefit of the Holders, as follows:

ARTICLE I

DEFINITIONS

Section 1.01 Definitions.

(a) For all purposes of this Certificate Indenture, except as otherwise expressly provided or unless the context otherwise requires:

(i) a term has the meaning assigned to it;

(ii) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles as in effect from time to time;

(iii) “or” is not exclusive;

(iv) “including” means including without limitation;

(v) words in the singular include the plural and words in the plural include the singular;

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

(vii) all references in this Certificate Indenture to designated “Articles,” “Sections” and other subdivisions are to the designated Articles, Sections and other subdivisions of this Certificate Indenture; and

(viii) whenever this Certificate Indenture refers to a provision of the Trust Indenture Act, the provision is incorporated by reference in and made a part of this Certificate Indenture. The following Trust Indenture Act terms used in this Certificate Indenture have the following meanings:

“Commission” means the Securities and Exchange Commission.

“indenture securities” means the Certificates.

“indenture security holder” means a Certificateholder.

“indenture to be qualified” means this Certificate Indenture.

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

“obligor” on the indenture securities means the Certificate Issuer and any other obligor on the indenture securities.

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

“Act,” when used with respect to any Certificateholder, has the meaning specified in Section 1.04.

“Administrators” means the CEI Administrator, the OE Administrator and the TE Administrator.

“Administrative Trustee” means The Cleveland Electric Illuminating Company, Ohio Edison Company and The Toledo Edison Company, collectively (in each case, in its capacity as a servicer).

“Authentication Agent” means the authentication agent appointed pursuant to Section 6.12.

“Authorized Agent” means any Paying Agent, Authentication Agent or Certificate Registrar.

“Authorized Representative” means, with respect to any entity, any Person who is authorized to act for such entity in matters relating to such entity and who is identified on the list of Authorized Representatives or Authorized Officers delivered by such entity to the Certificate Trustee on the Issuance Date (as such list may be modified or supplemented from time to time thereafter) and, with respect to the Certificate Issuer, means any Authorized Representative of the Delaware Trustee or any Administrative Trustee.

“Avoidable Tax” has the meaning set forth in Section 6.09(f).

2

“Basic Documents” means the CEI Basic Documents, the OE Basic Documents and the TE Basic Documents.

“Bond Event of Default” means, with respect to the CEI Bonds, the OE Bonds or the TE Bonds, any Event of Default (as such term is defined in the related Bond Indenture); provided that an Event of Default (as such term is defined in each Bond Indenture) under one of the Bond Indentures will not result in the occurrence of a Bond Event of Default under the other Bond Indentures.

“Bond Indentures” means the CEI Bond Indenture, the OE Bond Indenture and the TE Bond Indenture.

“Bond Issuers” means the CEI Bond Issuer, the OE Bond Issuer and the TE Bond Issuer.

“Bond Purchase Agreements” means the CEI Bond Purchase Agreement, the OE Bond Purchase Agreement and the TE Bond Purchase Agreement.

“Bond Trustees” means the CEI Bond Trustee, the OE Bond Trustee and the TE Bond Trustee.

“Bonds” means the CEI Bonds, the OE Bonds and the TE Bonds.

“Book-Entry Certificates” means, with respect to any Certificate, a beneficial interest in such Certificate, ownership and transfers of which shall be made through book entries by a Clearing Agency as described in Section 2.12.

“Business Day” means any day other than a Saturday, a Sunday or a day on which banking institutions or trust companies in New York, New York, Chicago, Illinois, St. Paul, Minnesota, Akron, Ohio, or Wilmington, Delaware are authorized or obligated by law, regulation or executive order to remain closed.

“CEI Administrator” means Administrator as defined in the CEI Bond Indenture.

“CEI Basic Documents” means Basic Documents as defined in the CEI Bond Indenture.

“CEI Bond Indenture” means the Bond Indenture dated as of [            ] [    ], 2013, between the CEI Bond Issuer and the CEI Bond Trustee, as amended and supplemented from time to time.

“CEI Bond Issuer” means CEI Funding LLC, a Delaware limited liability company, and its successors in interest.

“CEI Bond Purchase Agreement” means the Bond Purchase Agreement dated as of [            ] [    ], 2013 between the CEI Bond Issuer and the Certificate Issuer, as the same may be amended or supplemented from time to time.

“CEI Bond Trustee” means the Person acting as Bond Trustee under the CEI Bond Indenture.

“CEI Bonds” has the meaning set forth in the recitals to this Certificate Indenture.

“CEI Collateral” means Collateral as defined in the CEI Bond Indenture.

“CEI Phase-In-Recovery Property” means Phase-In-Recovery Property as defined in the CEI Servicing Agreement.

“CEI Sale Agreement” means the Phase-In-Recovery Property Purchase and Sale Agreement dated as of [            ] [    ], 2013, between the CEI Seller and the CEI Bond Issuer, as amended and supplemented from time to time.

3

“CEI Seller” means The Cleveland Electric Illuminating Company, an Ohio corporation, and its permitted successors and assigns under the CEI Sale Agreement.

“CEI Servicer” means The Cleveland Electric Illuminating Company, an Ohio corporation, in its capacity as servicer under the CEI Servicing Agreement, including its successors in interest, until a successor Person shall have become the servicer pursuant to the CEI Servicing Agreement, and thereafter “CEI Servicer” shall mean such successor Person.

“CEI Servicing Agreement” means the Phase-In-Recovery Property Servicing Agreement dated as of [            ] [    ], 2013, between the CEI Servicer and the CEI Bond Issuer, as amended and supplemented from time to time.

“Certificate Account” means, with respect to any Tranche of Certificates, each deposit account and securities account established and maintained with respect to such Tranche of Certificates pursuant to Section 4.01(a).

“Certificate Indenture” means this instrument as originally executed and, as from time to time supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, as so supplemented or amended or both, and shall include the forms and terms of the Certificates established hereunder.

“Certificate Owner” means the Person who owns a Book-Entry Certificate.

“Certificate Register” has the meaning set forth in Section 2.06.

“Certificate Registrar” means, initially, the Certificate Trustee, pursuant to Section 2.06, and any successor registrar that meets the eligibility standards specified in Section 6.12(b).

“Certificate Trustee” means U.S. Bank National Association, as Certificate Trustee under this Certificate Indenture, and its successors in interest, and any successor Certificate Trustee appointed as provided herein.

“Certificate Trustee Expenses” has the meaning set forth in Section 6.07.

“Certificate Trustee Indemnified Persons” has the meaning set forth in Section 6.07.

“Certificateholder” or “Holder” means the Person in whose name a Certificate is registered on the Certificate Register.

“Certificates” has the meaning set forth in Section 2.01(a).

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

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

“Collateral” means the CEI Collateral, the OE Collateral and the TE Collateral.

“Corporate Trust Office” means the office of the Certificate Trustee at which at any particular time this Certificate Indenture shall be administered, which office at the date of the execution of this Certificate Indenture is located at 190 South LaSalle Street, 7^th Floor, Mail Code MK-IL-SL7R, Chicago, IL 60603, Attention: FirstEnergy Ohio PIRB Special Purpose Trust 2013, or at such other address as the Certificate Trustee may designate from time to time by notice to the Certificateholders and the Certificate Issuer, or the principal corporate trust office of any successor Certificate Trustee (the address of which the successor Certificate Trustee will notify the Certificateholders and the Certificate Issuer).

4

“Declaration of Trust” means the Amended and Restated Declaration of Trust, relating to the continuation of the Certificate Issuer, dated as of [            ] [    ], 2013 by U.S. Bank Trust National Association, as Delaware Trustee, CEI Funding LLC, OE Funding LLC and TE Funding LLC, acting jointly as settlors thereunder, and the Administrative Trustee, as the same may be further amended, supplemented or otherwise modified from time to time.

“Defaulting Bond Issuer” means a Bond Issuer for which a Bond Event of Default has occurred and is continuing.

“Definitive Certificates” has the meaning set forth in Section 2.12(a).

“Distribution Date” means, with respect to the Certificates, a Payment Date with respect to the Bonds.

“DTC Agreement” means the agreement between the Certificate Trustee, on behalf of the Certificate Issuer, and The Depository Trust Company, as the initial Clearing Agency, dated as of [            ] [    ], 2013, relating to the Certificates, as the same may be amended and supplemented from time to time. The Certificate Trustee is hereby directed to execute and deliver the DTC Agreement on behalf of the Certificate Issuer.

“Eligible Account” means a segregated trust account with an Eligible Institution.

“Eligible Institution” means (a) the corporate trust department of the Certificate Trustee so long as any securities of the Certificate Trustee have either a short-term credit rating from Moody’s of at least “P-1” or a long-term unsecured debt rating from Moody’s of at least “A2” and have a credit rating from each other rating agency in one of its generic categories which signifies investment grade, or (b) a depository institution organized under the laws of the United States of America, any State or the District of Columbia (or any domestic branch of a foreign bank), (i) which has either (A) a long-term issuer rating of “AA-” or higher by Standard & Poor’s and “A2” or higher by Moody’s and, if rated by Fitch, the equivalent of the lower of those two ratings by Fitch or (B) a short-term issuer rating of “A-1+” or higher by Standard & Poor’s and “P-1” or higher by Moody’s and, if Fitch provides a rating thereon, “F1+” by Fitch, or any other long-term, short-term or certificate of deposit rating acceptable to Standard & Poor’s and Moody’s and (ii) whose deposits are insured by the FDIC. If so qualified under clause (b) above, the Certificate Trustee may be considered an Eligible Institution for the purposes of clause (a) of the definition of Eligible Account.

“Eligible Investments” mean instruments and investment property denominated in United States currency which mature on or before the business day preceding the next payment date and meet the criteria described below:

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

(b) demand deposits, time deposits or certificates of deposit and bankers’ acceptances of Eligible Institutions (including the Certificate Trustee in its commercial capacity);

(c) commercial paper (other than commercial paper of The Cleveland Electric Illuminating Company, Ohio Edison Company or The Toledo Edison Company and their respective affiliates) having, at the time of the investment or contractual commitment, a rating of not less than “A-1” from Standard & Poor’s, not less than “P-1” by Moody’s and not less than F1 by Fitch (including commercial paper issued by the Certificate Trustee);

(d) money market funds which have the highest rating from each of the Rating Agencies from which a rating is available (including funds for which the Certificate Trustee or any of its Affiliates is an investment manager or advisor);

(e) repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the United States of America or certain of its agencies or instrumentalities, entered into with Eligible Institutions;

5

(f) repurchase obligations with respect to any security or whole loan entered into with an Eligible Institution or a registered broker-dealer, acting as principal and that meets certain ratings criteria set forth below:

(i) a broker/dealer (acting as principal) registered as a broker or dealer under Section 15 of the Exchange Act (any broker/dealer being referred to in this definition as a “broker/dealer”), the unsecured short-term debt obligations of which are rated at least “P-1” by Moody’s, “A-1+” by Standard & Poor’s and, if Fitch provides a rating thereon, “F-1+” by Fitch, and the long-term debt obligations of which are rated at least “Aa3” by Moody’s, in each case at the time of entering into this repurchase obligation, or

(ii) an unrated broker/dealer acting as principal, that is a wholly-owned subsidiary of a non-bank or bank holding company the unsecured short-term debt obligations of which are rated at least “P-1” by Moody’s, “A-1+” by Standard & Poor’s and, if Fitch provides a rating thereon, “F-1+” by Fitch, and the long-term debt obligations of which are rated at least “Aa3” by Moody’s, in each case at the time of purchase so long as the obligations of such unrated broker/dealer are unconditionally guaranteed by such non-bank or bank holding company; and

(g) any other investment permitted by each of the Rating Agencies.

“Event of Default” has the meaning set forth in Section 5.01.

“FDIC” means the Federal Deposit Insurance Corporation or any successor.

“Fee and Indemnity Agreement” means the fee and indemnity agreement dated as of [            ] [    ], 2013, among the Bond Issuers, the Delaware Trustee, the Certificate Trustee and the Certificate Issuer.

“financial asset” has the meaning given such term in Section 8-102(a)(9) of the UCC.

“Final Maturity Date” means, with respect to any Tranche of Certificates, the Final Maturity Date of the corresponding Tranches of Bonds.

“Interest Rate” has the meaning set forth in Section 2.01(b).

“investment property” has the meaning given such term in the UCC.

“Minimum Denomination” means $100,000 or integral multiples of $1,000 in excess thereof, except for one Certificate of each Tranche which may be of a smaller denomination.

“OE Administrator” means Administrator as defined in the OE Bond Indenture.

“OE Basic Documents” means Basic Documents as defined in the OE Bond Indenture.

“OE Bond Indenture” means the Bond Indenture dated as of [            ] [    ] 2013, between the OE Bond Issuer and the OE Bond Trustee, as amended and supplemented from time to time.

“OE Bond Issuer” means OE Funding LLC, a Delaware limited liability company, and its successors in interest

“OE Bond Purchase Agreement” means the Bond Purchase Agreement dated as of [            ] [    ] 2013, between the OE Bond Issuer and the Certificate Issuer, as the same may be amended or supplemented from time to time.

“OE Bond Trustee” means the Person acting as Bond Trustee under the OE Bond Indenture.

“OE Bonds” has the meaning set forth in the recitals to this Certificate Indenture.

“OE Collateral” means Collateral as defined in the OE Bond Indenture.

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“OE Phase-In-Recovery Property” means Phase-In-Recovery Property as defined in the OE Servicing Agreement.

“OE Sale Agreement” means the Phase-In-Recovery Property Purchase and Sale Agreement dated as of [            ] [    ] 2013, between the OE Seller and the OE Bond Issuer, as amended and supplemented from time to time.

“OE Seller” means Ohio Edison Company, an Ohio corporation, and its permitted successors and assigns under the OE Sale Agreement.

“OE Servicer” means Ohio Edison Company, an Ohio corporation, in its capacity as servicer under the OE Servicing Agreement, including its successors in interest, until a successor Person shall have become the servicer pursuant to the OE Servicing Agreement, and thereafter “OE Servicer” shall mean such successor Person.

“OE Servicing Agreement” means the Phase-In-Recovery Property Servicing Agreement dated as of [            ] [    ], 2013, between the OE Servicer and the OE Bond Issuer, as amended and supplemented from time to time.

“Officer’s Certificate” means a certificate signed by any Authorized Representative of the Certificate Issuer, under the circumstances described in, and otherwise complying with, the applicable requirements of Section 1.02, and delivered to the Certificate Trustee.

“Opinion of Counsel” means one or more written opinions of counsel who may, except as otherwise expressly provided in this Certificate Indenture, be an employee of or counsel to the Certificate Issuer and who shall be reasonably satisfactory to the Certificate Trustee, and which opinion or opinions shall be addressed to the Certificate Trustee, as trustee, shall comply with any applicable requirements of Section 1.02, and shall be in form and substance reasonably satisfactory to the Certificate Trustee.

“Original Principal Amount” means, with respect to any Certificate, the amount set forth as such on the face of such Certificate on the date of its issuance.

“Outstanding” means, as of the date of determination, all Certificates theretofore authenticated and delivered under this Certificate Indenture except:

(i) Certificates theretofore cancelled by the Certificate Registrar or delivered to the Certificate Registrar for cancellation;

(ii) Certificates or portions thereof the payment for which money in the necessary amount has been theretofore deposited with the Certificate Trustee or any Paying Agent in trust for the Holders of such Certificates; and

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

In determining whether the Holders of the requisite Outstanding Amount of the Certificates or any Tranche thereof have given any request, demand, authorization, direction, notice, consent or waiver hereunder or under any Basic Document, Certificates owned by any Bond Issuer, the Certificate Issuer, any other obligor upon the Certificates, any Seller, or any Affiliate of any of the foregoing Persons shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Certificate Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Certificates that a Responsible Officer of the Certificate Trustee actually knows to be so owned shall be so disregarded. Certificates so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Certificate Trustee the pledgee’s right so to act with respect to such Certificates and that the pledgee is not either Bond Issuer, any other obligor upon the Certificates, the Certificate Issuer, any Seller, or any Affiliate of any of the foregoing Persons.

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“Outstanding Amount” means the aggregate principal amount of all Certificates, or, if the context requires, all Certificates of a Tranche, Outstanding at the date of determination.

“Paying Agent” means the Certificate Trustee or any other Person that meets the eligibility standards specified in Section 6.12(b) and is authorized by the Certificate Issuer (with the prior written approval of the Bond Issuers) to make distributions of principal of or interest with respect to the Certificates.

“Payment” means, with respect to any Bonds, any payment (other than a Special Payment) of principal of or interest thereon.

“Payment Date” means, with respect to any Bonds, the date or dates specified as Payment Dates therefor in the Bond Indenture for such Bonds.

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

“Phase-In-Recovery Property” means the CEI Phase-In-Recovery Property, the OE Phase-In-Recovery Property and the TE Phase-In-Recovery Property.

“Record Date” means, with respect to any Distribution Date, the Business Day immediately preceding such Distribution Date or, if Definitive Certificates are issued, the last day of the calendar month preceding the calendar month in which such Distribution Date occurs.

“Request” means a written request by the Certificate Issuer setting forth the subject matter of the request accompanied by an Officer’s Certificate and an Opinion of Counsel as provided in Section 1.02.

“Responsible Officer” means, with respect to the Certificate Trustee or the Delaware Trustee, as applicable, any officer assigned to the Corporate Trust Office, including any Vice President, Assistant Vice President, Secretary, Assistant Secretary or Trust Officer or any other officer of the Certificate Trustee or Delaware Trustee, as applicable, customarily performing functions similar to those performed by any of the above designated officers in each case, having direct responsibility for the administration of this Certificate Indenture, or, in the case of the Delaware Trustee, the Declaration of Trust.

“Sale Agreements” means the CEI Sale Agreement, the OE Sale Agreement and the TE Sale Agreement.

“Scheduled Final Distribution Date” means, with respect to any Tranche of Certificates, the Scheduled Maturity Date of the related Tranche of Bonds.

“Secretary of State” means the Secretary of State of the State of Delaware.

“Secured Obligations” has the meaning set forth in the Granting Clause to this Certificate Indenture.

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

“securities account” means any Certificate Account that constitutes a “securities account” as defined in Section 8-501 of the UCC.

“Securities Intermediary” means U.S. Bank National Association, a national banking association, solely in its capacity as a “securities intermediary” as defined in Section 8-102(a)(14) of the UCC, or any successor securities intermediary.

“Security Entitlement” means “security entitlement” as defined in Section 8-102(a)(17) of the UCC, with respect to financial assets now or hereafter credited to a securities account.

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“Sellers” means the CEI Seller, the OE Seller and the TE Seller.

“Servicers” means the CEI Servicer, the OE Servicer and the TE Servicer.

“Servicing Agreements” means the CEI Servicing Agreement, the OE Servicing Agreement and the TE Servicing Agreement.

“Special Distribution Date” means, with respect to the distribution of any Special Payment with respect to any Tranche of Bonds of any Bond Issuer, the later of (i) the date receipt of such Special Payment is confirmed by the Certificate Trustee and (ii) the date that is the earlier of (A) if the Certificate Trustee shall have received such Special Payment without prior notice thereof, 20 days after such receipt is confirmed or (B) unless such Special Payment represents the proceeds of a sale of such Bonds by the Certificate Trustee (in which event the Special Distribution Date for such proceeds shall be the earliest date for which it is practicable for the Certificate Trustee to give the 20-day notice required by Section 4.02(d)), the date that is 20 days after the Certificate Trustee receives notice from any Bond Issuer of the anticipated payment of such Special Payment.

“Special Payment” means, with respect to any Tranche of Bonds of any Bond Issuer, (i) any payment of principal of, or interest on (including any interest accruing upon default), or any other amount in respect of, the Bonds of such Bond Issuer of such Tranche that is paid more than five days after the Payment Date applicable thereto or (ii) any proceeds from the sale of such Bonds by the Certificate Trustee pursuant to Article V hereof or any amounts recovered from the institution of any judicial proceeding by the Certificate Trustee pursuant to Section 5.03 hereof.

“Special Record Date” means, with respect to any Special Distribution Date, the close of business on the 15th day (whether or not a Business Day) preceding such Special Distribution Date.

“State Pledge” means the pledge and agreement made by the State of Ohio to the Bond Issuers and Holders of the Bonds pursuant to Section 4928.2315 of the Statute.

“Statutory Trust Statute” means Chapter 38 of Title 12 of the Delaware Code, 12 Del.C., Section 3801 et seq., as the same may be amended from time to time and any successor statute.

“TE Administrator” means Administrator as defined in the TE Bond Indenture.

“TE Basic Documents” means Basic Documents as defined in the TE Bond Indenture.

“TE Bond Indenture” means the Bond Indenture dated as of [            ] [    ] 2013, between the TE Bond Issuer and the TE Bond Trustee, as amended and supplemented from time to time.

“TE Bond Issuer” means TE Funding LLC, a Delaware limited liability company, and its successors in interest

“TE Bond Purchase Agreement” means the Bond Purchase Agreement dated as of [            ] [    ] 2013, between the TE Bond Issuer and the Certificate Issuer, as the same may be amended or supplemented from time to time.

“TE Bond Trustee” means the Person acting as Bond Trustee under the TE Bond Indenture.

“TE Bonds” has the meaning set forth in the recitals to this Certificate Indenture.

“TE Collateral” means Collateral as defined in the TE Bond Indenture.

“TE Phase-In-Recovery Property” means Phase-In-Recovery Property as defined in the TE Servicing Agreement.

“TE Sale Agreement” means the Phase-In-Recovery Property Purchase and Sale Agreement dated as of [            ] [            ]2013, between the TE Seller and the TE Bond Issuer, as amended and supplemented from time to time.

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“TE Seller” means The Toledo Edison Company, an Ohio corporation, and its permitted successors and assigns under the TE Sale Agreement.

“TE Servicer” means The Toledo Edison Company, an Ohio corporation, in its capacity as servicer under the TE Servicing Agreement, including its successors in interest, until a successor Person shall have become the servicer pursuant to the TE Servicing Agreement, and thereafter “TE Servicer” shall mean such successor Person.

“TE Servicing Agreement” means the Phase-In-Recovery Property Servicing Agreement dated as of [            ] [    ], 2013, between the TE Servicer and the TE Bond Issuer, as amended and supplemented from time to time.

“Tranche” means any one of the Tranches of Certificates and, with respect to the Bonds, any one of the Tranches of Bonds of a Bond Issuer.

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

“Trust Property” means the Bonds of each of the Bond Issuers held as the property of the Certificate Issuer and all monies at any time paid thereon and all monies due and to become due thereunder, all rights of the Certificate Trustee or the Certificate Issuer, as holder of such Bonds, in and to the Collateral of each such Bond Issuer and any proceeds thereof, all funds and investment property from time to time deposited in the Certificate Accounts of the Certificate Issuer in respect of each Tranche of Certificates, all Certificate Accounts of the Certificate Issuer in respect of each Tranche of Certificates, all proceeds from the sale by the Certificate Trustee pursuant to Article V hereof of Bonds of any Bond Issuer and all amounts recovered by the Certificate Trustee from the institution by the Certificate Trustee of any judicial proceeding pursuant to Section 5.03 hereof, and all proceeds of each of the foregoing.

“Underwriters” means the underwriters who purchase the Certificates from the Certificate Issuer and sell the Certificates in a public offering.

(b) Except as otherwise specified herein or as the context may otherwise require, the following terms have the respective meanings set forth in the Bond Indentures as in effect on the Issuance Date for all purposes of this Certificate Indenture.

Term	Section of Bond Indenture
Affiliate		1.01
Cap		1.01
Capital Subaccount		1.01
Code		1.01
Delaware Trustee		1.01
Excess Funds Subaccount		1.01
Exchange Act		1.01
Expected Amortization Schedule		1.01
Final Maturity Date		1.01
Financing Order		1.01
Fitch		1.01
Grant		1.01
Issuance Date		1.01
Lien		1.01
Moody’s		1.01
PUCO		1.01
Rating Agency		1.01
Rating Agency Condition		1.01
Required Capital Level		1.01
Scheduled Final Payment Date		1.01
Standard & Poor’s		1.01
Statutory Lien		1.01
State		1.01
Statute		1.01
UCC		1.01
Underwriting Agreement		1.01

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Section 1.02 Compliance Certificates and Opinions. Upon any application or request by the Certificate Issuer to the Certificate Trustee to take any action under any provision of this Certificate Indenture, the Certificate Issuer shall furnish to the Certificate Trustee an Officer’s Certificate stating that, in the opinion of the signer thereof, all conditions precedent, if any, provided for in this Certificate Indenture relating to the proposed action have been complied with and, if requested by the Certificate Trustee, an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Certificate Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.

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

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

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

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

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

Section 1.03 Form of Documents Delivered to Certificate Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

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

Whenever in this Certificate Indenture, in connection with any application or certificate or report to the Certificate Trustee, it is provided that the Certificate Issuer shall deliver any document as a condition of the granting of such application, or as evidence of the Certificate Issuer’s compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the effective date of such certificate or report

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(as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Certificate Issuer to have such application granted or to the sufficiency of such certificate or report. The foregoing shall not, however, be construed to affect the Certificate Trustee’s right to rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Article VI.

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

Section 1.04 Acts of Certificateholders.

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Certificate Indenture to be given or taken by Certificateholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Certificateholders in person or by their agents duly appointed in writing; and except as herein otherwise expressly provided such request, demand, authorization, direction, notice, consent, waiver or other action shall become effective when such instrument or instruments are delivered to the Certificate Trustee, and, where it is hereby expressly required, to the Certificate Issuer and one or both of the Bond Trustees. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Certificateholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Certificate Indenture and (subject to Article VI) conclusive in favor of the Certificate Trustee, the Certificate Issuer and the Bond Trustees, if made in the manner provided in this Section.

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

(c) The ownership of Certificates shall be proved by the Certificate Register.

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

(e) The Certificate Issuer may at its option by delivery of an Officer’s Certificate to the Certificate Trustee set a record date to determine the Holders of any Tranche of Certificates entitled to give any consent, request, demand, authorization, direction, notice, waiver or other Act. Notwithstanding Section 316(c) of the Trust Indenture Act, such record date shall be the record date specified in such Officer’s Certificate, which shall be the date not more than 30 days prior to the first solicitation of Certificateholders in connection therewith. If such a record date is fixed, such consent, request, demand, authorization, direction, notice, waiver or other Act may be given before or after such record date, but only the Holders of Certificates of the applicable Tranche at the close of business on such record date shall be deemed to be Certificateholders of such Tranche for the purposes of determining whether Holders of the requisite aggregate Outstanding Amount of Certificates of such Tranche have authorized or agreed or consented to such consent, request, demand, authorization, direction, notice, waiver or other Act, and for that purpose the aggregate Outstanding Amount of Certificates of such Tranche shall be computed as of such record date, but that no such consent, request, demand, authorization, direction, notice, waiver or other Act by the Holders of Certificates of such Tranche on such record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Certificate Indenture not later than one year after the record date.

(f) Except as otherwise provided in the definition of Outstanding, Certificates of any Tranche owned by or pledged to any Person shall have an equal and proportional benefit under the provisions of this Certificate Indenture, without preference, priority or distinction as among all of the Certificates of that Tranche.

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ARTICLE II

THE CERTIFICATES

Section 2.01 Terms of the Certificates.

(a) Authorization; Designation. The issuance of the Certificates is hereby authorized and the Certificates shall be designated generally as the FirstEnergy Ohio PIRB Special Purpose Trust 2013 Certificates (the “Certificates”), and further designated as Tranches A-1, A-2 and A-3. Each such Tranche shall be in an aggregate principal amount equal to the aggregate of the corresponding Tranche of Bonds set forth in each of the Bond Purchase Agreements. Holders of each Tranche of Certificates will receive payments received by the Certificate Issuer on the corresponding Tranche of Bonds of each Bond Issuer (with payments of principal due and payable on the Bonds of a Bond Issuer as a result of an Event of Default (assuming all Bonds have been declared immediately due and payable) under that Bond Issuer’s Bond Indenture, or upon the Final Maturity Date, to be paid pro rata based on the respective principal amounts of such Bonds). Certificateholders may also receive payments as a result of a sale by the Certificate Trustee of any Bond pursuant to Article V hereof or as a result of the institution by the Certificate Trustee of a judicial proceeding pursuant to Section 5.03. Such payments shall be allocated in accordance with Section 4.02(c). Separate and distinct records (including tax records) shall be maintained by the Certificate Issuer for each Tranche of Certificates and the corresponding Tranches of Bonds associated with each such Tranche of Certificates shall be held, maintained and accounted for separately from the Tranches of Bonds corresponding to any other Tranche of Certificates. Except as set forth above, the payments received on the Tranches of Bonds corresponding to each Tranche of Certificates shall not be applied to payments with respect to any other Tranche of Certificates.

(b) Initial Principal Amount; Certificate Interest Rate; Scheduled Final Distribution Date; Final Maturity Date. The Certificates of each Tranche shall have the initial principal amount, bear interest at the rates per annum and shall have Scheduled Final Distribution Dates and Final Maturity Dates as set forth below:

Tranche Initial Principal Amount Certificate Interest Rate Scheduled Final Distribution Date Final Maturity Date

The Interest Rate of the Certificates shall be computed on the basis of a 360-day year of twelve 30-day months. The Certificates shall be issued in not less than Minimum Denominations.

Section 2.02 Issuance of Certificates. On the Issuance Date, the Certificate Issuer, subject to the provisions of this Certificate Indenture and each of the Bond Purchase Agreements, shall issue, and the Delaware Trustee shall execute on behalf of the Certificate Issuer and the Certificate Trustee shall authenticate and deliver, in fully registered form only, the Tranche A-1, A-2 and A-3 Certificates, each such Tranche of Certificates associated with the corresponding Tranche of Bonds of each Bond Issuer issued on such Issuance Date, all in accordance with each of the Bond Purchase Agreements. Each Certificate represents a fractional undivided beneficial interest in the Trust Property. Prior to the execution and authentication of the Tranche A-1, A-2 and A-3 Certificates, the Certificate Trustee shall have received the following or the following shall have otherwise been satisfied, upon which the Certificate Trustee may conclusively rely to the extent permitted to so rely under Article VI hereof:

(a) As to each Tranche of Certificates to be issued, the corresponding Tranche of Bonds of each Bond Issuer, duly executed by each such Bond Issuer and authenticated by the Bond Trustee for each such Bond Issuer;

(b) A certificate of an Authorized Representative of each Bond Issuer to the effect that all conditions required to be satisfied under Section 2.10 of its Bond Indenture for the issuance of its respective Tranches of Bonds and all conditions required to be satisfied under its Bond Purchase Agreement for the purchase of each Tranche of its Bonds by the Certificate Issuer in each case on behalf and in respect of a specific Tranche of Certificates have been satisfied, together with executed copies of all documents, certificates, opinions, orders or approvals establishing satisfaction of such conditions;

(c) An order of an Authorized Representative of the Certificate Issuer (i) directing the Delaware Trustee on behalf of the Certificate Issuer to execute and deliver this Certificate Indenture to be executed in connection with the Certificates to be issued hereunder, (ii) directing the Delaware Trustee on behalf of the Certificate Issuer to execute and deliver the Bond Purchase Agreements and (iii) directing the Delaware Trustee to execute and deliver on behalf of the Certificate Issuer, and the Certificate Trustee to authenticate, as Authentication Agent, global Certificates, each to be registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”), and to confirm its custody of the Certificates to DTC in New York, New York so that the Certificates may be credited to or upon the order of the Underwriters named in said order for the purchase price specified therein and directing the application of the proceeds thereof;

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(d) An Opinion of Counsel, portions of which may be delivered by counsel to the Certificate Issuer and portions of which may be delivered by counsel to the Certificate Trustee or other counsel satisfactory to the Certificate Trustee, dated the Issuance Date in each case subject to the customary exceptions, qualifications and assumptions contained therein (which may include, for the purpose of the Issuance Date, the assumption that the Financing Order has been duly authorized by the PUCO and is in full force and effect), to the effect that:

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

(ii) this Certificate Indenture constitutes a valid and binding agreement of the Certificate Issuer and Certificate Trustee, enforceable in accordance with its terms except as enforcement thereof may be subject to or limited by bankruptcy, insolvency, moratorium, receivership, reorganization, fraudulent conveyance, fraudulent transfer or other similar laws relating to or affecting the enforcement of creditors’ rights generally and by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law), including that the availability of specific enforcement or injunctive relief is subject to the discretion of the court before which any such proceeding is brought;

(iii) all instruments furnished to the Certificate Trustee as conditions precedent to the authentication and delivery of the Certificates conform to the requirements of this Certificate Indenture and constitute all documents required to be delivered thereunder to authorize the Certificate Trustee to execute, authenticate and deliver the Certificates;

(iv) the Certificates to be issued have been duly authorized and executed and, when authenticated in accordance with the provisions of this Certificate Indenture and delivered to and paid for by the Underwriters pursuant to the Underwriting Agreement dated [            ] [    ], 2013, among the Certificate Issuer, Sellers, the Bond Issuers and the underwriters named therein, will represent valid, fully paid and nonassessable undivided beneficial interests in the Trust Property, entitled to the benefits of this Certificate Indenture;

(v) each Bond Purchase Agreement has been duly executed and delivered by the Delaware Trustee on behalf of the Certificate Issuer and, assuming due authorization, execution and delivery thereof by the Bond Issuer party to such Bond Purchase Agreement, constitutes a legal, valid and binding agreement of the Certificate Issuer, enforceable against the Certificate Issuer in accordance with its terms except as enforcement thereof may be subject to or limited by bankruptcy, insolvency, moratorium, receivership, reorganization, fraudulent conveyance, fraudulent transfer or other similar laws relating to or affecting the enforcement of creditors’ rights generally and by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law), including that the availability of specific enforcement or injunctive relief is subject to the discretion of the court before which any such proceeding is brought;

(vi) the Certificate Issuer is a duly formed and validly existing statutory trust under the Statutory Trust Statute and is in good standing;

(vii) this Certificate Indenture has been duly qualified under the Trust Indenture Act or no such qualification is necessary;

(viii) each Bond Issuer constitutes an “assignee” under Section 4928.23(B) of the Statute, the Bonds constitute “bonds” under Section 4928.23(C) of the Statute, the holders of the Bonds are entitled to the rights and benefits under Sections 4928.235 and 4928.2315 of the Statute, the pledge of the Trust Property to secure the Secured Obligations is permitted under the Statute, and the Certificate Trustee, in its own name and as trustee of an express trust, as holder of the Bonds, shall be, to the extent permitted by applicable state and federal law, entitled to enforce such Sections of the Statute;

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(ix) for Federal income tax purposes, the Certificate Issuer is not a business entity classified as a corporation or a publicly traded partnership treated as a corporation, but is a “grantor trust” not taxable as a corporation;

(x) the Statute creates, upon the effective date of the Financing Order, a first priority lien in the Phase-In-Recovery Property securing all obligations, then existing or subsequently arising, to the Holders of the Bonds in respect of such Bonds or to the Bond Trustees in their capacity as such;

(xi) (i) the provisions of this Certificate Indenture create a valid security interest securing the Secured Obligations in favor of the Certificate Trustee in all right, title and interest of the Certificate Issuer in the Trust Property, (ii) the financing statement to be filed with the Delaware Secretary of State includes all of the information required by Section 9-502(a) of the UCC, (iii) the financing statement has been presented for filing and all filing fees required in connection therewith have been paid, (iv) the security interest granted by the Certificate Issuer under this Certificate Indenture which can be perfected by the filing of a financing statement under the UCC is perfected, (v) the provisions of the Certificate Indenture are effective to create in favor of the Certificate Trustee a perfected security interest in the Certificate Accounts, and (vi) the delivery to and continued possession by the Certificate Trustee of the Bonds creates in favor of the Certificate Trustee a perfected security interest in the Bonds;

(xii) the Certificate Issuer is not an “investment company” or under the “control” of an “investment company” as such terms are defined under the Investment Company Act of 1940, as amended;

(xiii) such other matters as the Certificate Trustee may reasonably require.

(e) Sufficient funds to pay the purchase price for the Bonds of each Bond Issuer, as specified in Section 1(b) of the respective Bond Purchase Agreements;

(f) The Certificate Trustee shall receive a letter from each Rating Agency confirming that the Certificates have received the ratings from the Rating Agencies required by the Underwriting Agreement as a condition to the issuance of the Certificates;

(g) The Certificate Issuer shall have made or caused to be made all filings with the Delaware Secretary of State and all other filings necessary to perfect the Grant of the Trust Property to the Certificate Trustee and the Lien of this Indenture; and

(h) Payment of the purchase price for the Certificates by the Underwriters shall constitute satisfaction of the conditions set forth in Section 2.02(a) through (g).

Section 2.03 Form, Denomination and Execution of Certificates. The Certificates shall be issued in registered form without coupons and shall be substantially in the form attached hereto as Exhibit A, with the following filled in: (a) the designation of the Tranches thereof, which shall be the same designation as the related Tranche or Tranches of Bonds of each Bond Issuer, (b) the Certificate number or numbers thereof, (c) the date of authentication thereof, which shall be the same as the Issuance Date of the related Tranche or Tranches of Bonds of each Bond Issuer, and (d) the Original Principal Amount thereof, which shall equal, in the aggregate, the aggregate principal amount of the Bonds of the Bond Issuers; and with such omissions, variations and insertions as are permitted by this Certificate Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements printed, lithographed or engraved thereon as may be required to comply with the rules of any securities exchange on which any Tranche or Tranches of the Certificates may be listed or to conform to any usage in respect thereof, or as may, consistently herewith, be prescribed by the Certificate Trustee or by the Certificate Issuer (with the prior written approval of the Bond Issuers), and as evidenced by the execution and authentication of such Certificates.

Except as provided in Section 2.12, the definitive Certificates of each Tranche shall be printed, lithographed or engraved or produced by any combination of these methods or may be produced in any other manner permitted by the rules of any securities exchange on which the Certificates of such Tranche may be listed, as evidenced by an order by an Authorized Representative of the Certificate Issuer, relating to the authentication of such Certificates by the Certificate Trustee.

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The Certificates of each Tranche shall be issued in not less than Minimum Denominations.

The Certificates shall be executed on behalf of the Certificate Issuer by the Delaware Trustee by manual or facsimile signature of a Responsible Officer of the Delaware Trustee. Certificates bearing the manual or facsimile signature of an individual who was, at the time when such signature was affixed, authorized to sign on behalf of the Certificate Issuer shall be validly issued by the Certificate Issuer, notwithstanding that such individual has ceased to be so authorized prior to the authentication and delivery of such Certificates or did not hold such office at the date of such Certificates. No Certificate shall be entitled to any benefit under this Certificate Indenture, or be valid for any purpose, unless there appears on such Certificate a certificate of authentication substantially in the form set forth in Exhibit A hereto, executed by the Certificate Trustee (or any Authentication Agent) by manual signature, and such certificate of authentication upon any Certificate shall be conclusive evidence, and the only evidence, that such Certificate has been duly authenticated and delivered hereunder. All Certificates shall be dated the date of their authentication. Each of the Certificates issued in accordance with this Certificate Indenture shall represent valid, fully paid and nonassessable undivided beneficial interests in the Trust Property, entitled to the benefits of this Certificate Indenture.

Section 2.04 Authentication of Certificates. Subject to satisfaction of the conditions in Section 2.02, the Certificate Trustee shall duly authenticate and deliver Certificates of each Tranche in authorized denominations equaling, in the aggregate for each Tranche of Certificates, the aggregate initial principal amount of the Bonds of such Tranche.

Section 2.05 Temporary Certificates. Pending the preparation of definitive Certificates of any Tranche, the Delaware Trustee on behalf of the Certificate Issuer may execute, and the Certificate Trustee or any Authentication Agent upon written order of the Certificate Issuer shall authenticate and deliver, temporary Certificates of such Tranche that are printed, lithographed, typewritten or otherwise produced, in any denomination, containing substantially the same terms and provisions as set forth in Exhibit A, except for such appropriate insertions, omissions, substitutions and other variations relating to their temporary nature as the Certificate Issuer may determine, as evidenced by the execution of such temporary Certificates by the Delaware Trustee on behalf of the Certificate Issuer.

If temporary Certificates of any Tranche are issued, the Certificate Issuer will cause definitive Certificates of such Tranche to be prepared without unreasonable delay. After the preparation of definitive Certificates of such Tranche, the temporary Certificates shall be exchangeable for definitive Certificates of such Tranche upon surrender of the temporary Certificates at the Corporate Trust Office of the Certificate Trustee, or at the office or agency of the Certificate Trustee maintained in accordance with Section 6.12, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Certificates, the Delaware Trustee on behalf of the Certificate Issuer shall execute and the Certificate Trustee shall authenticate and deliver in exchange therefor definitive Certificates (of the same Tranche as the temporary Certificates surrendered) of authorized denominations of a like aggregate Original Principal Amount. Until so exchanged, such temporary Certificates shall in all respects be entitled to the same benefits under this Certificate Indenture as definitive Certificates of the same Tranche.

Section 2.06 Registration of Transfer and Exchange of Certificates. The Certificate Trustee shall cause to be kept at the office of agency to be maintained by it in accordance with the provisions of Section 6.12 a register (the “Certificate Register”) in which, subject to such reasonable regulations as it may prescribe, the Certificate Trustee shall provide for the registration of Certificates and of transfers and exchanges of Certificates as herein provided. The Certificate Trustee shall initially be the registrar (the “Certificate Registrar”) for the purpose of registering Certificates and transfers and exchanges of Certificates as herein provided.

Subject to this Section 2.06, upon surrender for registration of transfer of any Certificate at the Corporate Trust Office or such other office or agency maintained by the Certificate Trustee in accordance with Section 6.12, the Delaware Trustee on behalf of the Certificate Issuer shall execute, and the Certificate Trustee shall authenticate and deliver, in the name of the designated transferee, one or more new Certificates (of the same Tranche as the Certificates surrendered for registration of transfer) in authorized denominations of a like aggregate Original

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Principal Amount, but that if any such surrendered Certificate shall have become or within 15 days shall be due and payable, instead of issuing a replacement Certificate, the Certificate Trustee may pay such surrendered Certificate when so due and payable or upon the Special Distribution Date without surrender thereof.

At the option of a Certificateholder, Certificates may be exchanged for other Certificates (of the same Tranche as the Certificates surrendered for registration of exchange) of authorized denominations of a like aggregate Original Principal Amount, upon surrender of the Certificates to be exchanged at any such office or agency. Whenever any Certificates are so surrendered for exchange, the Delaware Trustee on behalf of the Certificate Issuer shall execute, and the Certificate Trustee shall authenticate and deliver the Certificates that the Certificateholder making the exchange is entitled to receive.

Every Certificate presented or surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the Certificate Trustee and the Certificate Registrar duly executed by the Certificateholder thereof or its attorney duly authorized in writing.

No service charge shall be made to a Certificateholder for any registration of transfer or exchange of Certificates, but the Certificate Trustee shall require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Certificates.

All Certificates surrendered for registration of transfer or exchange shall be cancelled and subsequently destroyed by the Certificate Trustee in accordance with its customary practices.

The preceding provisions of this Section notwithstanding, the Certificate Issuer shall not be required to make and the Certificate Registrar need not register transfers or exchanges of any Certificate for a period of 15 days preceding the date for any payment with respect to the Certificate.

Section 2.07 Certificateholders’ Lists and Reports by Certificate Trustee.

(a) The Certificate Issuer To Furnish Certificate Trustee with Names and Addresses of Certificateholders. The Certificate Registrar on behalf of the Certificate Issuer will furnish or cause to be furnished to the Certificate Trustee within 15 days after each Record Date, and at such other times as the Certificate Trustee may request in writing, within 30 days after receipt by the Certificate Issuer of any such request, a list, in such form as the Certificate Trustee may reasonably require, of all information in the possession or control of the Certificate Issuer as to the names and addresses of the Certificateholders, in each case as of a date not more than 15 days prior to the time such list is furnished. So long as the Certificate Trustee is the sole Certificate Registrar and a copy of the Certificate Register is being furnished to the Certificate Trustee pursuant to Section 6.12, no such list need be furnished.

Upon the written request of any Certificateholder or Certificateholders of record holding Certificates evidencing not less than ten percent of the aggregate Outstanding Amount of Certificates, the Certificate Trustee shall afford such Certificateholder or Certificateholders access during business hours to the current list of Certificateholders for purposes of communicating with other Certificateholders with respect to their rights under this Certificate Indenture.

(b) Preservation of Information. The Certificate Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Certificateholders contained in the most recent list furnished to the Certificate Trustee as provided in Section 6.12 or Section 2.07(a), as the case may be, and the names and addresses of Certificateholders received by the Certificate Trustee in its capacity as Certificate Registrar, if so acting. The Certificate Trustee may destroy any list furnished to it as provided in Section 6.12 or Section 2.07(a), as the case may be, upon receipt of a new list so furnished.

(c) Communications Among Certificateholders. Certificateholders may communicate pursuant to Section 312(b) of the Trust Indenture Act with other Certificateholders with respect to their rights under this Certificate Indenture or under the Certificates.

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(d) Reports by Certificate Trustee. To the extent that any of the events described in Section 313(a) of the Trust Indenture Act shall have occurred, within 60 days after December 31 of each year, commencing with the year 2013, the Certificate Trustee shall transmit to the Certificateholders (and make available on its website, currently https://www.usbank.com/abs), as provided in Section 313(c) of the Trust Indenture Act, a brief report dated as of such December 31, if required by Section 313(a) of the Trust Indenture Act. The Certificate Trustee also shall comply with Section 313 (b) of the Trust Indenture Act.

A copy of each report at the time of its transmission to Certificateholders shall be filed by the Certificate Trustee with the Commission and with each stock exchange, if any, on which the Certificates are listed and of which listing the Certificate Trustee has been informed. The Certificate Issuer shall notify the Certificate Trustee if and when the Certificates are listed on any stock exchange.

(e) Reports by the Certificate Issuer. Pursuant to Section 314(a)(4) of the Trust Indenture Act, the Administrative Trustee, on behalf of the Certificate Issuer, shall furnish to the Certificate Trustee, not less often than annually and prior to [                    ] of each year, commencing [            ], 2013, a certificate prepared by such Administrative Trustee on behalf of the Certificate Issuer as to the Certificate Issuer’s compliance with all conditions and covenants under this Certificate Indenture. For purposes of this Section 2.07(e), such compliance shall be determined without regard to any period of grace or requirement of notice provided under this Certificate Indenture. In addition, the Certificate Trustee shall transmit such certificate to the Certificateholders.

(f) Protections. The Certificate Issuer, the Certificate Trustee and the Certificate Registrar shall have the protection of Section 312(c) of the Trust Indenture Act.

Section 2.08 Mutilated, Destroyed, Lost or Stolen Certificates. If (a) any mutilated Certificate is surrendered to the Certificate Registrar, or the Certificate Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Certificate, and (b) there is delivered to the Certificate Registrar and the Certificate Trustee such security, indemnity or bond as may be required by them to save each of them harmless, then, in the absence of notice to the Certificate Registrar or the Certificate Trustee that such Certificate has been acquired by a bona fide purchaser, the Delaware Trustee, on behalf of the Certificate Issuer shall execute, and the Certificate Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate (of the same Tranche as the Certificate so mutilated, destroyed, lost or stolen) of like Original Principal Amount. In connection with the issuance of any new Certificate under this Section 2.08, the Certificate Trustee shall require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Certificate Trustee and the Certificate Registrar) connected therewith. Any duplicate Certificate issued pursuant to this Section 2.08 shall constitute conclusive evidence of the same interest in the Certificate Issuer, as if originally issued, whether or not the lost, stolen or destroyed Certificate shall be found at any time.

Every replacement Certificate issued pursuant to this Section 2.08 in replacement of any mutilated, destroyed, lost or stolen Certificate shall constitute an original additional contractual obligation of the Certificate Issuer, whether or not the mutilated, destroyed, lost or stolen Certificate shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Certificate Indenture equally and proportionately with any and all other Certificates duly issued hereunder.

Section 2.09 Persons Deemed Owners. Prior to due presentation of a Certificate for registration of transfer, the Certificate Trustee, the Certificate Registrar and any Paying Agent of the Certificate Trustee may treat the Person in whose name any Certificate is registered as the owner of such Certificate for the purpose of receiving distributions pursuant to Section 4.02 and for all other purposes whatsoever, and none of the Certificate Trustee, the Certificate Registrar nor any Paying Agent of the Certificate Trustee shall be affected by any notice to the contrary.

Section 2.10 Cancellation. All Certificates surrendered for payment or transfer or exchange shall, if surrendered to any party hereto other than the Certificate Registrar, be delivered to the Certificate Registrar for cancellation. No Certificates shall be authenticated in lieu of or in exchange for any Certificates cancelled as provided in this Section 2.10, except as expressly permitted by this Certificate Indenture. All cancelled Certificates held by the Certificate Registrar shall be delivered to the Certificate Trustee and, in accordance with Section 2.06, destroyed.

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Section 2.11 Limitation of Liability for Payments. Except as otherwise provided in this Certificate Indenture, including without limitation in Section 2.01 hereof, all payments or distributions made to Holders of Certificates under this Certificate Indenture in respect of the Bonds of a Bond Issuer shall be made only from the Trust Property with respect to that Tranche of Certificates and only to the extent that the Certificate Trustee shall have sufficient income or proceeds from such Trust Property to make such payments in accordance with the terms of Article IV of this Certificate Indenture. Except as otherwise provided in this Certificate Indenture, including without limitation in Section 2.01 hereof, each Holder of a Certificate of any Tranche, by its acceptance of a Certificate of that Tranche, agrees that it will look solely to the income and proceeds from the Trust Property with respect to that Tranche to the extent available for distribution to the Holder thereof as provided in this Certificate Indenture. It is expressly understood and agreed by the parties hereto that (a) the Certificates are executed, authenticated and delivered by the Delaware Trustee and the Certificate Trustee, respectively, not individually or personally but solely in their respective capacity as Delaware Trustee and Certificate Trustee in the exercise of the powers and authority conferred and vested in them, and (b) under no circumstances shall the Delaware Trustee or Certificate Trustee be personally liable for the payment of any of the Certificates or any indebtedness or expenses of the Certificate Issuer, or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Certificate Issuer under this Certificate indenture.

Section 2.12 Book-Entry and Definitive Certificates.

(a) The Certificates of any Tranche may be issued in the form of one or more typewritten certificates representing the Book-Entry Certificates of that Tranche, to be delivered to The Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the Certificate Issuer. In such case, the Certificates of such Tranche delivered to The Depository Trust Company shall initially be registered on the Certificate Register in the name of Cede & Co., the nominee of the initial Clearing Agency, and no Certificate Owner will receive a definitive Certificate representing such Certificate Owner’s interest in the Certificate of such Tranche, except as provided in Section 2.12(c) below. Unless and until definitive, fully registered Certificates (“Definitive Certificates”) of such Tranche have been issued pursuant to Section 2.12(c) below:

(i) the provisions of this Section 2.12(a) shall be in full force and effect with respect to the Certificates of such Tranche;

(ii) the Certificate Issuer, the Paying Agent, the Certificate Registrar and the Certificate Trustee may deal with the Clearing Agency for all purposes (including the making of distributions on the Certificates of such Tranche) as the authorized representative of the Certificate Owners of Certificates of such Tranche;

(iii) to the extent that the provisions of this Section 2.12 conflict with any other provisions of this Certificate Indenture, the provisions of this Section 2.12 shall control;

(iv) the rights of Certificate Owners of such Tranche shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Certificate Owners and the Clearing Agency Participants; and until Definitive Certificates of such Tranche are issued pursuant to Section 2.12(c) below, the Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit distributions of principal of and interest on the Certificates of such Tranche to such Clearing Agency Participants; and

(v) whenever this Certificate Indenture requires or permits actions to be taken based upon instructions or directions of Certificateholders holding Certificates of such Tranche representing a specified percentage of the aggregate Outstanding Amount of Certificates of such Tranche, the Clearing Agency shall be deemed to represent such percentage only to the extent that it has received instructions to such effect from Certificate Owners or Clearing Agency Participants owning or representing, respectively, Certificates representing such percentage of the aggregate Outstanding Amount of Certificates of such Tranche, and has delivered such instructions to the Certificate Trustee; the Certificate Trustee shall have no obligation to determine whether the Clearing Agency has in fact received any such instructions.

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(b) Whenever notice or other communication to the Holders of Certificates of any Tranche issued in the form of Certificates representing Book-Entry Certificates is required under this Certificate Indenture, unless and until Definitive Certificates of such Tranche shall have been issued pursuant to Section 2.12(c), the Certificate Trustee shall give all such notices and communications specified herein to be given to Holders of Certificates of such Tranche to the Clearing Agency.

(c) If (i) the Clearing Agency advises the Certificate Trustee in writing that the Clearing Agency is no longer willing or able to properly discharge its responsibilities with respect to the Certificates of a Tranche, and the Certificate Trustee or the Certificate Issuer is unable to locate a qualified successor, (ii) the Certificate Issuer (with the prior written approval of the Bond Issuers) at its option advises the Certificate Trustee in writing that it elects to terminate the book-entry system through the Clearing Agency with respect to the Certificates of such Tranche or (iii) after the occurrence of a Bond Event of Default with respect to any Tranche of Certificates, Certificate Owners representing beneficial interests aggregating at least a majority of the Outstanding Amount of the Certificates advise the Clearing Agency and the Certificate Trustee in writing that the continuation of a book-entry system through the Clearing Agency is no longer in the best interests of the Certificate Owners, then the Clearing Agency shall notify all Certificate Owners and the Certificate Trustee of the occurrence of any such event and of the availability of Definitive Certificates to Certificate Owners requesting the same. Upon surrender to the Certificate Trustee of the typewritten certificate or certificates representing the Book-Entry Certificates by the Clearing Agency, accompanied by registration instructions, and upon written direction by the Certificate Issuer, the Delaware Trustee shall execute on behalf of the Certificate Issuer and the Certificate Trustee shall authenticate the Definitive Certificates in accordance with the instructions of the Clearing Agency. None of the Certificate Issuer, the Certificate Registrar or the Certificate Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be fully protected in relying on, such instructions. Upon the issuance of Definitive Certificates, the Certificate Trustee shall recognize the Holders of the Definitive Certificates as Certificateholders.

Section 2.13 Tax Treatment.

(a) It is the intention of the parties hereto that the Certificate Issuer shall be treated as a “grantor trust” for federal income tax purposes and all transactions contemplated by this Certificate Indenture will be reported consistent with such treatment.

(b) The provisions of this Certificate Indenture shall be construed, and the affairs of the Certificate Indenture shall be conducted, so as to achieve treatment of the Certificate Indenture as a “grantor trust” for federal income tax purposes.

Section 2.14 Security Interest. The Certificate Issuer hereby makes the following representations and warranties. Other than the security interest granted to the Certificate Trustee pursuant to this Certificate Indenture, the Certificate Issuer has not pledged, granted, sold, conveyed or otherwise assigned any interests or security interests in the Trust Property and no security agreement, financing statement or equivalent security or Lien instrument listing the Certificate Issuer as debtor covering all or any part of the Trust Property is on file or of record in any jurisdiction, except such as may have been filed, recorded or made by the Certificate Issuer in favor of the Certificate Trustee on behalf of the Certificateholders in connection with this Certificate Indenture. This Certificate Indenture constitutes a valid and continuing Lien on, and first priority perfected security interest in, the Trust Property in favor of the Certificate Trustee on behalf of the Certificateholders, which Lien and security interest is prior to all other Liens and is enforceable as such as against creditors of and purchasers from the Certificate Issuer in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors’ rights generally or by general equitable principles, whether considered in a proceeding at law or in equity and by an implied covenant of good faith and fair dealing. This Certificate Indenture creates valid, enforceable and continuing first priority perfected security interest (as defined in the UCC) in the Trust Property securing the Secured Obligations in favor of the Certificate Trustee on behalf of the Certificateholders. The Certificate Issuer has good and marketable title to the Trust Property free and clear of any Lien, claim or encumbrance of any Person other than the Liens of this Certificate Indenture. The Certificate Issuer has taken all action necessary to perfect the security interest in the Trust Property granted to the Certificate Trustee for the benefit of the Certificateholders. The Certificate Issuer has filed all appropriate financing statements in the proper filing offices in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Trust Property granted to the Certificate Trustee. The Certificate Issuer has not authorized the filing of and is not aware, after due inquiry, of any financing statements against the Certificate Issuer that include a description of all or any part of the Trust Property other than those filed in favor of the Certificate Trustee. The Certificate Issuer is not aware of

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any judgment or tax Lien filings against the Certificate Issuer. The Certificate Issuer has delivered the certificated Bonds to the Certificate Trustee, together with duly executed bond powers covering such Bonds, for the benefit of Certificateholders and the Certificate Trustee agrees to hold the Bonds in the State of New York. Each Certificate Account constitutes a “deposit account” or “securities account” within the meaning of the UCC. Each Certificate Account constituting a deposit account shall be maintained with the Certificate Trustee. The Certificate Issuer has taken all steps necessary to cause the Securities Intermediary of each securities account to identify in its records the Certificate Trustee as the person having a security entitlement against the Securities Intermediary in such securities account, no Certificate Account constituting a securities account is in the name of any Person other than the Certificate Trustee, and the Certificate Issuer has not consented to the Securities Intermediary of any such Certificate Account constituting a securities account to comply with entitlement orders of any Person other than the Certificate Trustee. All of the Trust Property constituting investment property (but expressly excluding the Bonds) has been and will have been credited to a Certificate Account constituting a securities account, and the Securities Intermediary for such Certificate Accounts has agreed to treat all assets credited to such Certificate Accounts as “financial assets” within the meaning of the UCC. Accordingly, the Certificate Trustee has a first priority perfected security interest in each Certificate Account and (a) to the extent constituting a deposit account, all funds on deposit therein and (b) to the extent constituting a securities account, all funds and financial assets on deposit therein and all securities entitlements relating thereto. The representations and warranties set forth in this Section 2.14 shall survive the execution and delivery of this Certificate Indenture and the issuance of any Certificates, shall be deemed re-made on each date on which any funds in the Certificate Account are distributed to the Certificate Issuer or otherwise released from the Lien of the Certificate Indenture and may not be waived by any party hereto.

ARTICLE III

COVENANTS

Section 3.01 Compliance with Declaration of Trust. The Certificate Issuer covenants and agrees to operate in strict conformity with the Declaration of Trust, the terms of which are incorporated herein by reference, and shall not amend the Declaration of Trust except as expressly permitted thereunder or in any manner that would adversely affect the interests of the Certificateholders.

This Certificate Indenture and the Declaration of Trust shall, together, constitute the governing instrument of the Trust. To the extent that the provisions of this Certificate Indenture and the Declaration of Trust conflict with respect to the issuance of the Certificates and the rights of the holders thereof, this Certificate Indenture shall control.

Section 3.02 No Additional Certificates. The Certificate Issuer shall not issue any additional Certificates hereunder, except pursuant to Section 2.06 and Section 2.08.

Section 3.03 Protection of Trust Property. The Certificate Issuer will from time to time execute and deliver all such supplements and amendments hereto and make all such filings of UCC financing statements, UCC continuation statements, instruments of further assurance and other instruments, and will take such other action necessary or advisable to:

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

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

(iii) enforce any of the Trust Property;

(iv) preserve and defend title to the Trust Property and the rights of the Certificate Trustee and the Certificateholders in such Trust Property against the claims of all Persons and parties; or

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

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The Certificate Issuer hereby designates the Certificate Trustee its agent and attorney-in-fact with authorization to execute and/or file on behalf of the Certificate Issuer any filings of UCC financing statements, UCC continuation statements or other instruments required to be filed by the Certificate Issuer pursuant to this Section 3.03, it being understood that the Certificate Trustee shall have no such obligation.

Section 3.04 Opinions as to Trust Property.

(a) On the Issuance Date, the Certificate Issuer shall furnish to the Certificate Trustee an Opinion of Counsel either stating that, in the opinion of such counsel, (A) such action has been taken (and reciting the details of such action) with respect to the recording and filing of this Certificate Indenture and any other requisite documents, and with respect to the execution and filing of any UCC financing statements and UCC continuation statements, as are necessary to perfect the Lien and security interest of this Certificate Indenture, or (B) no such action is necessary to make such Lien and security interest effective. The delivery of the Opinion of Counsel referred to in Section 2.02 shall be deemed to satisfy this requirement.

(b) Within ninety days after the beginning of each calendar year beginning with the calendar year beginning January 1, 2014, the Certificate Issuer shall furnish to the Certificate Trustee an Opinion of Counsel of counsel of the Certificate Issuer either stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, re-recording and refiling of this Certificate Indenture, any indentures supplemental hereto and any other requisite documents and with respect to the execution and filing of any financing statements and continuation statements as are necessary to maintain the Liens and the first priority perfected security interest created by this Certificate Indenture and reciting the details of such action or stating that, in the opinion of such counsel, no such action is necessary to maintain such Liens and security interest. Such Opinion of Counsel shall also describe the recording, filing, re-recording and refiling of this Certificate Indenture, any indentures supplemental hereto and any other requisite documents and the execution and filing of any financing statements and continuation statements that will, in the opinion of such counsel, be required within the twelve-month period following the date of such opinion to maintain the Liens and the first priority perfected security interest created by this Certificate Indenture.

Section 3.05 Further Instruments and Acts. Upon request of the Certificate Trustee, the Certificate Issuer will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this Certificate Indenture. The Certificate Issuer will take all actions, and make all filings, necessary to obtain and maintain first priority perfected security interests in the Trust Property in favor of the Certificate Trustee.

ARTICLE IV

DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS

Section 4.01 Certificate Accounts.

(a) (i) The Certificate Trustee shall establish and maintain or shall cause to be established with the Securities Intermediary, as applicable, for the Certificate Issuer, on behalf of the Holders of Certificates of each Tranche one or more segregated trust accounts with respect to such Tranche (each, a “Certificate Account”), which shall be non-interest bearing deposit accounts maintained with the Certificate Trustee or constituting securities accounts, as provided in Section 4.04, located at the Certificate Trustee’s Corporate Trust Office, or at another Eligible Institution, in each case in the name of the Certificate Trustee. The Certificate Trustee shall hold each Certificate Account in trust for the benefit of the Holders of Certificates, and shall make or permit withdrawals therefrom only as provided in this Certificate Indenture. On each day when a Payment or Special Payment (other than a Special Payment that represents the proceeds of any sale pursuant to Article V hereof by the Certificate Trustee of any Bond of a Bond Issuer or amounts recovered by the Certificate Trustee from any judicial proceeding instituted by the Certificate Trustee pursuant to Section 5.03 hereof) is made to the Certificate Trustee, as holder of Bonds of such Bond Issuer of any Tranche, the Certificate Trustee upon receipt shall immediately deposit the aggregate amount of such Payment or Special Payment in a Certificate Account for the corresponding Tranche of Certificates. Upon the sale of any Bond of a Bond Issuer by the Certificate Trustee pursuant to Article V and the realization of any proceeds thereof or the institution of any judicial proceeding by the Certificate Trustee pursuant to Section 5.03 hereof and the realization of any amounts therefrom, the Certificate Trustee shall deposit the aggregate amount of such proceeds as a Special Payment in the respective Certificate Accounts for each Tranche of Certificates. All Special Payments not promptly distributed shall be deposited in a Certificate Account constituting a securities account as provided in Section 4.04.

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(ii) The Certificate Trustee hereby confirms that the applicable Certificate Accounts are, or at inception will be established as, a “deposit account” as such term is defined in the UCC.

(iii) The Securities Intermediary hereby confirms that (A) the applicable Certificate Accounts are, or at inception will be established as, a “securities account” as such term is defined in Section 8-501(a) of the UCC, (B) it is a “securities intermediary” (as such term is defined in Section 8-102(a) (14) of the UCC) and is acting in such capacity with respect to such securities accounts, and (C) the Certificate Trustee is the sole “entitlement holder” (as such term is defined in Section 8-102(a)(7) of the UCC) with respect to such securities accounts and no other Person shall have the right to give “entitlement orders” (as such term is defined in Section 8-102(a)(8)) with respect to such securities accounts. The Securities Intermediary hereby further agrees that each item of property (whether investment property (but expressly excluding the Bonds), financial asset, security, instrument or cash) received by it will be credited to the applicable Certificate Account and shall be treated by it as a “financial asset” within the meaning of Section 8-102(a)(9) of the UCC.

(iv) Notwithstanding anything to the contrary, the State of New York shall be deemed to be the jurisdiction of the Certificate Trustee and the Securities Intermediary for purposes of the UCC, and the Certificate Accounts (as well as the securities entitlements related thereto, to the extent such Certificate Accounts constitute securities accounts) shall be governed by the laws of the State of New York.

(b) The Certificate Trustee shall present each Bond to the applicable Bond Trustee for payment on its Final Maturity Date, or, in the case of any repayment of a Bond in full prior to its Final Maturity Date, on the applicable Payment Date therefor.

(c) The Certificate Trustee (or any Paying Agent other than the Certificate Trustee) shall have sole dominion and exclusive control over all amounts in the Certificate Accounts and shall apply such amounts therein as provided in this Article IV. Except as provided in Section 4.04, funds in the Certificate Account shall not be invested.

(d) The Certificate Trustee shall maintain separate and distinct records for each Tranche of Certificates. The Certificate Trustee will not (i) maintain the corporate, financial and accounting books and records and statements of the Certificate Issuer or any Tranche of Certificates in a manner such that they cannot be separated from those of any other Tranche of Certificates, (ii) take any action that would cause the funds and other Trust Property corresponding to a Tranche of Certificates not to be identifiable or the bank accounts, corporate records and books of account, if any, of the corresponding Tranches of Bonds not to be separable from those corresponding to any other Tranche and (iii) take any actions with respect to any Tranche of Certificates except in its capacity as Certificate Trustee.

Section 4.02 Distributions from Certificate Accounts.

(a) On any Distribution Date, the Certificate Trustee shall distribute out of the Certificate Account for the corresponding Tranche of Certificates, in the manner described in Section 4.02(e), the entire amount of such Payment deposited therein pursuant to Section 4.01(a); provided, however, and in the event receipt of any such Payment is not confirmed by the Certificate Trustee by 1:00 p.m. (New York City time) on such Distribution Date, distribution thereof shall be made on the day receipt thereof is confirmed by the Certificate Trustee by 1:00 p.m. (New York City time) or, if receipt thereof is confirmed by the Certificate Trustee after 1:00 p.m. (New York City time), on the following Business Day. There shall be so distributed to each Holder of such Tranche of Certificates on the Record Date with respect to such Distribution Date (other than as provided in Section 9.01 with respect to a final distribution) such Certificateholder’s fractional undivided share (based on the aggregate Outstanding Amount of Certificates of such Tranche held by such Certificateholder) of the aggregate amount in the related Certificate Account. The foregoing notwithstanding, if a Payment is not received by the Certificate Trustee by the day that is five days after the related Payment Date, but is subsequently received, it will be treated as a Special Payment pursuant to Section 4.02(b).

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The final distribution with respect to any Certificate will be made only upon presentation and surrender of such Certificate at the office or agency of the Certificate Trustee specified in the notice given by the Certificate Trustee with respect to such final payment. The Certificate Trustee will provide notice of a final distribution to each Holder as of the date such notice is given with respect to any Certificate as soon as practicable following receipt of the notices from the Bond Trustees of the final payments on the corresponding Bonds.

(b) On each Special Distribution Date with respect to the distribution of any Special Payment with respect to any Tranche of Bonds of a Bond Issuer, the Certificate Trustee shall distribute out of the Certificate Account for the corresponding Tranche of Certificates, in the manner described in Section 4.02(e), the entire amount of such Special Payment deposited therein pursuant to Section 4.01(a) and any income and earnings received from the investment of such Special Payment pursuant to Section 4.04; provided, however, that in the event receipt of any such Special Payment is not confirmed by the Certificate Trustee by 1:00 p.m. (New York City time) on such Special Distribution Date, distribution thereof shall be made on the day receipt thereof is confirmed by the Certificate Trustee by 1:00 p.m. (New York City time) or, if receipt thereof is confirmed by the Certificate Trustee after 1:00 p.m. (New York City time), on the following Business Day. There shall be so distributed to each Holder of such Tranche of Certificates on the Special Record Date with respect to such Special Distribution Date (other than as provided in Section 9.01 with respect to a final distribution) such Certificateholder’s fractional undivided share (based on the aggregate Outstanding Amount of Certificates of such Tranche held by such Certificateholder) of the aggregate amount of such Special Payment and any income and earnings received from the investment of such Special Payment pursuant to Section 4.04.

(c) The Certificate Trustee shall allocate amounts distributed to Holders of Certificates of any Tranche on any Distribution Date or Special Distribution Date as follows: (i) to the extent such amounts represent the proceeds of the sale of any Bond of a Bond Issuer by the Certificate Trustee pursuant to Article V or amounts recovered by the Certificate Trustee from any judicial proceeding instituted by the Certificate Trustee pursuant to Section 5.03, such amounts shall be allocated first, to due and unpaid interest pro rata on each Tranche of Certificates based on the respective amounts of interest owed on the Certificates of each such Tranche and second, to due and unpaid principal pro rata on each Tranche of Certificates based on the respective outstanding principal amount of the Certificates of each Tranche, (ii) to the extent such amounts represent payments of principal of the corresponding Tranche of Bonds of a Bond Issuer, such amounts shall be allocated to principal of such Certificates and (iii) all other such amounts shall be allocated to interest on such Certificates. The Certificate Trustee may conclusively rely on the payment statement received by it from each Servicer pursuant to its Servicing Agreement with any payment in respect of any Tranche of Bonds of a Bond Issuer as to whether the amount so paid in respect of the Bonds of such Bond Issuer is in respect of principal of or interest on such Bonds. If no statement is received, such payments received with respect to any Tranche of Bonds of any Bond Issuer shall first be allocable to interest to the extent of interest accrued and payable on such Tranche of Bonds, and then to principal.

(d) The Certificate Trustee shall cause notice of each Special Payment with respect to any Tranche of Bonds of a Bond Issuer to be sent to each Holder of Certificates of the corresponding Tranche at its address as it appears in the Certificate Register. In the case of any Special Payment, such notice shall be sent not less than 20 days prior to the Special Distribution Date on which any Special Payment is scheduled to be distributed in respect of Certificates of such Tranche stating such anticipated Special Distribution Date. Any such notice sent by the Certificate Trustee shall set forth:

(i) the Special Distribution Date, and the Special Record Date (except as otherwise provided in Section 9.01);

(ii) the amount of the Special Distribution for each $1,000 Original Principal Amount of Certificates of the applicable Tranche and the amount thereof constituting principal and interest;

(iii) the reason for the Special Distribution; and

(iv) the total amount to be received on such date for each $1,000 Original Principal Amount of Certificates of the applicable Tranche but only, in the case of a Special Payment, if the related Special Distribution Date is also a Distribution Date.

(e) Distributions to Holders of Certificates shall be by check sent by first-class mail to the address of such Holder appearing on the Certificate Register at the relevant Record Date or Special Record Date or, upon written application of a Holder of Certificates of any Tranche in the Original Principal Amount of $1,000,000 or more to the Certificate Trustee made at any time not later than such Record Date or Special Record Date or continuing in effect from a prior request, by wire transfer in immediately available funds to the account of such Holder at such bank

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located in New York, New York, having wire transfer capability as may be designated by such Holder; except that the final distribution in respect of any Certificate shall be made only as provided in Section 9.01. The foregoing notwithstanding, any distributions made to Cede & Co., as the nominee of the initial Clearing Agency, shall be made by wire transfer of immediately available funds.

Section 4.03 Statements to Certificateholders.

(a) On each Distribution Date, Special Distribution Date or any other date specified herein for distribution of any payments with respect to any Tranche of Certificates, or as soon as practicable following such Distribution Date, Special Distribution Date or other date (unless the Certificate Trustee is the Bond Trustee for the Bonds to which such date applies and the statement required below (prepared by the Servicers and provided to the Bond Trustee) is provided by such Bond Trustee no later than two Business Days prior to such distribution), the Certificate Trustee will send and make available on its website (currently https://www.usbank.com/abs), with respect to each distribution, to Holders of Certificates of such Tranche a statement (prepared by the Servicers and provided to the Bond Trustee to provide to the Certificate Trustee) with respect to such distribution to be made on such Distribution Date, Special Distribution Date or other date, as the case may be, setting forth the following information:

(i) the amount of such distribution to Holders of Certificates allocable to (A) principal and (B) interest in respect of the Bonds of each Bond Issuer, in each case per $1,000 Original Principal Amount of each Tranche of Certificates;

(ii) the aggregate outstanding principal balance of the Certificates in respect of the Bonds of each Bond Issuer, after giving effect to payments allocated to principal reported under (i) above;

(iii) the difference, if any, between the aggregate outstanding principal balance of the Certificates scheduled to be outstanding on such date according to the Expected Amortization Schedule and the same information in respect of the Bonds of each Bond Issuer.

(iv) the amount on deposit in the Capital Subaccount for each Bond Issuer as of such date, after giving effect to the payments and deposits to be made on such date, and the Required Capital Level for each Bond Issuer;

(v) any amounts on deposit in the Excess Funds Subaccount of each Bond Issuer as of such date, after giving effect to the payments and deposits to be made on such date;

(vi) the amount paid by each Bond Issuer to each of the Bond Trustees and the Delaware Trustee and Certificate Trustee since the previous payment date to and including such payment date;

(vii) the amount paid by each Bond Issuer to the related Servicer since the previous payment date to and including such payment date;

(viii) the amount paid by each Bond Issuer to the related Administrator since the previous payment date to and including such payment date; and

(ix) any other transfers and payments made pursuant to each Bond Indenture since the previous payment date.

In providing the foregoing statement, the Certificate Trustee may rely upon the statements provided by any Bond Trustee pursuant to Section 6.06 of the Bond Indentures (such statements prepared by the Servicers and provided to the Bond Trustee). The Certificate Trustee shall distribute each report distributed to Holders to the Rating Agencies.

(b) Within a reasonable period of time after the end of each calendar year but not later than the latest date permitted by law, the Certificate Trustee shall furnish to each Person who at any time during such calendar year was a Holder of any Tranche of Certificates and received a distribution thereon, a statement containing the sum of the

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amounts determined pursuant to clause (a) (i) above with respect to such Tranche of Certificates for such calendar year, or, in the event such Person was a Holder of such Tranche of Certificates during a portion of such calendar year, for the applicable portion of such year, and such other items as are readily available to the Certificate Trustee and that a Certificateholder shall reasonably request as necessary for the purpose of such Certificateholder’s preparation of its federal and state income tax returns.

Section 4.04 Investment of Special Payment Moneys. Any money received by the Certificate Trustee pursuant to Section 4.01(a) representing a Special Payment that is not to be promptly distributed, to the extent practicable, shall be deposited in the proper Certificate Account (also constituting a securities account) and invested in Eligible Investments at the written direction of the Servicer for the Bonds for which such Special Payment has been made by the Certificate Trustee pending distribution of such Special Payment pursuant to Section 4.02. Any investment made pursuant to this Section 4.04 shall be in such Eligible Investment maturing in not more than 60 days or such lesser time as is required for the distribution of any such funds on a Special Distribution Date pending the distribution of such funds to Certificateholders as described herein. The Certificate Trustee shall hold any such Eligible Investments until maturity. The Certificate Trustee shall have no liability with respect to any investment made pursuant to this Section 4.04 (including any losses on such investments), other than by reason of the willful misconduct or negligence of the Certificate Trustee. All income and earnings from such investments shall be distributed, if and as received, on such Special Distribution Date as part of such Special Payment and shall be treated as payments of interest on the Certificates.

Section 4.05 Reduction in Principal. Any reduction in the principal amount of any Certificate effected by any distribution in respect of principal thereof shall be binding upon all Holders of such Certificate and of any Certificate issued upon the registration or transfer thereof or in lieu thereof, whether or not noted thereon.

ARTICLE V

DEFAULTS AND REMEDIES

Section 5.01 Events of Default.

(a) Event of Default means the occurrence and continuation of any Bond Event of Default. If any Bond Event of Default shall occur and be continuing, then, and in each and every case, the Certificate Trustee may vote all, and, upon the written direction of Holders representing not less than a majority of the Outstanding Amount of the Certificates then Outstanding, shall vote a corresponding majority of the Bonds issued by the Defaulting Bond Issuer in favor of declaring the unpaid principal amount of all such Bonds then outstanding and accrued interest thereon to be due and payable in accordance with the provisions thereof. In addition, if a Bond Event of Default shall have occurred and be continuing, the Certificate Trustee may vote all, and, upon the written direction of Holders representing not less than a majority of the Outstanding Amount of the Certificates then Outstanding, shall vote a corresponding majority, of the Bonds of the Defaulting Bond Issuer in favor of directing the Bond Trustee therefor as to the time, method and place of conducting any proceeding for any remedy available to such Bond Trustee, including the sale of any or all of the Collateral Granted to such Bond Trustee by the Defaulting Bond Issuer, without recourse to or warranty by the Certificate Trustee or any Certificateholder, to any Person, or of exercising any trust or power conferred on such Bond Trustee under its Bond Indenture.

(b) After a Bond Event of Default shall have occurred and be continuing, subject to Section 5.01(c), the Certificate Trustee may, and upon the written direction of Holders of Certificates representing not less than a majority of the Outstanding Amount of Certificates, by such officer or agent as it may appoint, shall, sell, convey, transfer and deliver any Bond or Bonds issued by the Defaulting Bond Issuer, without recourse to or warranty by the Certificate Trustee or any Certificateholder, to any Person, for cash, all upon such terms and conditions as the Certificate Trustee may reasonably deem advisable or, if so directed by the Certificateholders, upon such terms and conditions as the Certificateholders may approve.

(c) The foregoing provisions of Section 5.01(b) notwithstanding, the Certificate Trustee shall not sell any Bonds following the occurrence of any Bond Event of Default with respect to such Bonds, other than a Bond Event of Default arising with respect to such Bonds described in Section 5.01(a) or (b) of the Bond Indenture for such Bonds, unless (i) the Certificate Trustee determines that the amounts receivable from the Collateral securing such Bonds are not sufficient to pay in full the principal of and accrued interest on such Bonds and all amounts payable

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pursuant to clauses (i) through (iv) of Section 8.02(e) of the Bond Indenture for such Bonds and the Certificate Trustee obtains the written consent of Holders of Certificates representing 66-2/3 percent of the aggregate Outstanding Amount of all Tranches of the Certificates, or (ii) the Certificate Trustee obtains the written consent of Holders of Certificates representing 100 percent of the aggregate Outstanding Amount of all Tranches of the Certificates.

Section 5.02 Incidents of Sale of Bonds. Upon any sale of any Bonds of any Bond Issuer made either under the power of sale given under this Certificate Indenture or otherwise for the enforcement of this Certificate Indenture, the following shall be applicable:

(a) Certificateholders and Certificate Trustee May Purchase Bonds. Any Certificateholder, the Certificate Trustee in its individual or any other capacity or any other Person (other than any Seller) may bid for and purchase any of the Bonds, and upon compliance with the terms of sale, may hold, retain, possess and dispose of such Bonds in their own absolute right without further accountability.

(b) Receipt of Certificate Trustee Shall Discharge Purchaser. The receipt of the Certificate Trustee, on behalf of the Certificate Issuer, shall be a sufficient discharge to any purchaser for its purchase money, and, after paying such purchase money and receiving such receipt, such purchaser or its personal representative or assigns shall not be obliged to see to the application of such purchase money, or be in any way answerable for any loss, misapplication or nonapplication thereof.

(c) Application of Moneys Received upon Sale. Any moneys collected by the Certificate Issuer or the Certificate Trustee upon any sale made either under the power of sale given by this Certificate Indenture or otherwise for the enforcement of this Certificate Indenture, shall be applied as provided in Section 4.02.

Section 5.03 Judicial Proceedings Instituted by Certificate Trustee. If there shall be a failure to make payment when due of the principal of (and, for the avoidance of doubt, this excludes the failure to pay principal on the Bonds in accordance with the Expected Amortization Schedule) or interest on any Bond of any Bond Issuer, then the Certificate Trustee in its own name, and as trustee of an express trust, as holder of such Bond, may, and if directed in writing by the Holders of a majority of the Outstanding Amount of the Certificates but subject to the provisions of Article VI, shall, to the extent permitted by and in accordance with the terms of such Bonds, be entitled and empowered to institute any suits, actions or proceedings at law, in equity or otherwise, including the power to make a demand on the Bond Trustee for such Bonds to take action under the Bond Indenture for such Bonds to enforce the Bonds, for the collection of the sums so due and unpaid on such Bonds and may prosecute any such claim or proceeding to judgment or final decree with respect to the whole amount of any such sums so due and unpaid.

Section 5.04 Control by Certificateholders. The Holders of a majority of the Outstanding Amount of the Certificates (or, if less than all Tranches are affected, the affected Tranche or Tranches) shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Certificate Trustee, or exercising any trust or power conferred on the Certificate Trustee under this Certificate Indenture, including any right of the Certificate Trustee as holder of the Bonds of any Bond Issuer of the corresponding Tranche or Tranches, in each case unless a different percentage is specified herein; provided, however, that:

(a) such direction shall not be in conflict with any rule of law or with this Certificate Indenture and would not involve the Certificate Trustee in personal liability or expense;

(b) the Certificate Trustee shall not determine that the action so directed would be unjustly prejudicial to the Holders of Certificates of such Tranche or Tranches not taking part in such direction;

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

(d) such Holders shall have offered to the Certificate Trustee security or indemnity against the costs, expenses or liabilities which may be incurred thereby; and

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(e) if a Bond Event of Default with respect to such Tranche of Bonds shall have occurred and be continuing, such direction shall not obligate the Certificate Trustee to vote more than a corresponding majority of the related Bonds held by the Certificate Trustee in favor of declaring the unpaid principal amount of the Bonds and accrued interest thereon to be due and payable or directing any action by the Bond Trustee for such Bonds with respect to such Bond Event of Default.

Section 5.05 Waiver of Past Defaults. Prior to the declaration of the acceleration of the maturity of the Bonds of a Bond Issuer as provided in Section 5.01, the Holders of Certificates of not less than a majority of the Outstanding Amount of the Certificates may direct the waiver of any past default or Bond Event of Default and its consequences except a default or Bond Event of Default (a) in the payment of principal of or interest on any of the Bonds of such Bond Issuer, (b) in respect of a covenant or provision under any Bond Indenture that cannot be modified or amended without the consent of the Holder of each Certificate of all Tranches affected or (c) in the deposit or distribution of any Payment or Special Payment under Section 4.01 or in the distribution of any payment under Section 4.02. Upon any such direction, the Certificate Trustee shall vote the percentage of the Bonds of the corresponding Tranche issued by such Defaulting Bond Issuer held by the Certificate Trustee as corresponds to the percentage of the aggregate Outstanding Amount of the Certificates of such Tranche held by Holders who directed the Certificate Trustee to waive such default or Bond Event of Default hereunder.

Upon any waiver that is effective under the terms of a Bond Indenture to waive a Bond Event of Default, such Bond Event of Default shall cease to exist with respect to this Certificate Indenture, and, in the case of a default, any Bond Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Certificate Indenture and any written direction given by the Certificate Trustee on behalf of the Certificateholders to the Bond Trustee for the Bonds under which such Bond Event of Default has been waived or in respect of any such Bonds shall be annulled with respect thereto; but no such waiver shall extend to any subsequent or other default or Bond Event of Default or impair any right consequent thereon.

Section 5.06 Right of Certificateholders To Receive Payments Not To Be Impaired. Anything in this Certificate Indenture to the contrary notwithstanding, including Section 5.07 hereof, the right of any Certificateholder to receive distributions of payments required pursuant to Section 4.02 hereof on the Certificates when due, or to institute suit for the enforcement of any such payment on or after the applicable Distribution Date, Special Distribution Date or other date specified herein for the making of such payment, shall not be impaired or affected without the consent of such Certificateholder.

Section 5.07 Certificateholders May Not Bring Suit Except Under Certain Conditions. A Certificateholder shall not have the right to institute any suit, action or proceeding at law or in equity or otherwise with respect to this Certificate Indenture, for the appointment of a receiver or for the enforcement of any other remedy under this Certificate Indenture and each Holder agrees, by its acceptance of any Certificate, to the fullest extent permitted by law, not to avail itself of any remedies, unless:

(a) such Certificateholder has previously given written notice to the Certificate Trustee of a continuing Bond Event of Default with respect to the Tranche of Certificates held by such Holder;

(b) the Holders of not less than a majority of the Outstanding Amount of the Certificates have made written request to the Certificate Trustee to institute such action, suit or proceeding in respect of such Bond Event of Default in its own name as Certificate Trustee hereunder;

(c) such Certificateholder or Certificateholders have offered to the Certificate Trustee indemnity satisfactory to it against the costs, expenses (including legal fees and expenses) and liabilities to be incurred in complying with such request;

(d) the Certificate Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute such action, suit or proceedings; and

(e) no direction inconsistent with such written request has been given to the Certificate Trustee during such 60-day period by the Holders of at least a majority of the Outstanding Amount of the Certificates;

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it being understood and intended that no one or more Holders of Certificates shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Certificate Indenture to affect, disturb or prejudice the rights of any other Holders of Certificates or to obtain or to seek to obtain priority or preference over any other Certificateholders or to enforce any right under this Certificate Indenture, except in the manner herein provided. The provisions of this Section 5.07 shall be deemed to modify, to the fullest extent permitted by law, the rights of the Certificateholders under Section 3816 of the Statutory Trust Statute.

In the event the Certificate Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of Holders of Certificates, each representing less than a majority of the Outstanding Amount of the Certificates, the Certificate Trustee in its sole discretion may determine what action, if any, shall be taken, notwithstanding any other provisions of this Certificate Indenture.

Section 5.08 Certificate Trustee May Bring Suit. If there shall be a breach of the State Pledge by the State of Ohio, then the Certificate Trustee, in its own name and as trustee of an express trust, as holder of the Bonds, shall be, to the extent permitted by state and federal law, entitled and empowered to institute any suits, actions or proceedings at law, in equity or otherwise, to enforce the State Pledge and to collect any monetary damages as a result of a breach thereof, and may prosecute any such suit, action or proceeding to final judgment or decree.

Section 5.09 Remedies Cumulative. No remedy given hereunder to the Certificate Trustee or to any of the Certificateholders shall be exclusive of any other remedy or remedies, and every such remedy shall be cumulative and in addition to every other remedy given hereunder or now or hereafter given by statute, law, equity or otherwise.

ARTICLE VI

THE CERTIFICATE TRUSTEE

Section 6.01 Notice of Defaults. As promptly as practicable after, and in any event within 30 days after, receipt by a Responsible Officer of the Certificate Trustee of written notice or actual knowledge of the occurrence of any default (as such term is defined below) hereunder, the Certificate Trustee shall transmit to the Certificate Issuer, the Bond Trustee for the Bond Indenture under which such default has arisen and the Holders of Certificates in accordance with Section 313(c) of the Trust Indenture Act, notice of such default, unless such default shall have been cured or waived; provided, however, that, except in the case of a default hereunder with respect to any Tranche of Certificates arising from a default under any Bond Indenture in the payment of the principal of or interest on any Bond, the Certificate Trustee shall be fully protected in withholding such notice if and so long as a trust committee of Responsible Officers of the Certificate Trustee in good faith determines that the withholding of such notice is in the interests of the Holders of the Certificates. For the purpose of this Section, the term “default” means any event that is, or after notice or lapse of time or both would become, an Event of Default with respect to a Tranche of Certificates.

Section 6.02 Duties of Certificate Trustee.

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

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

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

(ii) in the absence of bad faith on its part, the Certificate Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Certificate Trustee and conforming to the requirements of this Certificate Indenture; however, the Certificate Trustee shall examine the certificates and opinions to determine whether or not they appear on their face to conform to the requirements of this Certificate Indenture.

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

(i) this paragraph does not limit the effect of paragraph (b) of this Section;

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

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

(d) Every provision of this Certificate Indenture that in any way relates to the Certificate Trustee is subject to paragraphs (a), (b) and (c) of this Section 6.02.

(e) The Certificate Trustee shall not be liable for interest on any money received by it except as the Certificate Trustee may agree in writing with the Certificate Issuer.

(f) Money held in trust by the Certificate Trustee need not be segregated from other funds except to the extent required by law, including Section 3804(a) of the Statutory Trust Statute, or the terms of this Certificate Indenture.

(g) Every provision of this Certificate Indenture relating to the conduct or affecting the liability of or affording protection to the Certificate Trustee shall be subject to the provisions of this Section 6.02 and to the provisions of the Trust Indenture Act.

(h) Under no circumstances shall the Certificate Trustee be liable for any indebtedness of the Certificate Issuer.

Section 6.03 Certain Rights of Certificate Trustee. Subject to the provisions of Section 315 of the Trust Indenture Act:

(a) the Certificate Trustee may conclusively rely and shall be fully protected in acting or refraining from acting in reliance upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

(b) any request or direction of the Certificate Issuer mentioned herein shall be sufficiently evidenced by a Request;

(c) before the Certificate Trustee acts or refrains from acting, it may require and shall be entitled to receive an Officer’s Certificate or an Opinion of Counsel of external counsel of the Certificate Issuer (at no cost or expense to the Certificate Trustee) that such action is required or permitted hereunder. The Certificate Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel;

(d) The Certificate Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel;

(e) the Certificate Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Certificate Indenture, or to institute, conduct or defend any litigation hereunder or in relation hereto at the request or direction of any of the Certificateholders pursuant to this Certificate Indenture, unless such Certificateholders shall have offered to the Certificate Trustee security or indemnity satisfactory to it against the cost, expenses (including reasonable legal fees and expenses) and liabilities that might be incurred by it in compliance with such request or direction;

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(f) the Certificate Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, paper or other document;

(g) the Certificate Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees and the Certificate Trustee shall not be responsible for any misconduct or negligence on the part of, or for the supervision of, any agent, attorney, custodian or nominee appointed with due care by it hereunder; and the Certificate Trustee shall give prompt written notice to the Rating Agencies of the appointment of any such agent, custodian or nominee to whom it delegates any of its duties under the Certificate Indenture, provided that the Certificate Trustee shall not be obligated to give such notice (i) if the Certificate Issuer or the requisite Holders have directed the Certificate Trustee to appoint such agent, custodian or nominee (in which event the Certificate Issuer shall give prompt notice to the Rating Agencies of any such direction) or (ii) of the appointment of any agents, custodians or nominees made at any time that an Event of Default on account of non-payment of principal or interest on the Certificates or insolvency of a Bond Issuer has occurred and is continuing;

(h) the Certificate Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of Certificates relating to the time, method and place of conducting any proceeding for any remedy available to the Certificate Trustee, or exercising any trust or power conferred upon the Certificate Trustee, under this Certificate Indenture;

(i) the Certificate Trustee shall not be required to expend or risk its own funds in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk is not reasonably assured to it;

(j) the Certificate Trustee shall not be personally liable for any action taken or suffered or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Certificate Indenture so long as that the Certificate Trustee’s conduct does not constitute willful misconduct, negligence or bad faith;

(k) in the event that the Certificate Trustee is also acting as Paying Agent, Authenticating Agent or Certificate Registrar hereunder, the rights and protections afforded to the Certificate Trustee pursuant to this Article VI shall also be afforded to such Paying Agent, Authenticating Agent or Certificate Registrar;

(l) the Certificate Trustee shall not be charged with knowledge of any Bond Event of Default unless a Responsible Officer obtains actual knowledge of such event or the Certificate Trustee receives written notice of such event from the Certificate Issuer, any Bond Trustee, any Servicer or a majority of the Holders of Certificates of the Tranche or Tranches so affected;

(m) without limiting its rights under bankruptcy law, when the Certificate Trustee incurs expenses or renders services in connection with the insolvency or bankruptcy of any party hereto or with the Basic Documents to which it is a party, such expenses (including the fees and expenses of its counsel) and the compensation for such services are intended to constitute expenses of administration under any bankruptcy or insolvency law;

(n) in no event shall the Certificate Trustee be liable for special, punitive, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Certificate Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action;

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(o) the right of the Certificate Trustee to perform any discretionary act enumerated in this Certificate Indenture shall not be construed as a duty, and the Certificate Trustee shall not be answerable for other than its negligence or willful misconduct in the performance of any such act;

(p) the Certificate Trustee shall have no duty to file any financing statement or continuation statement evidencing a security interest, or to maintain any such filing, or to maintain any insurance;

(q) the Certificate Trustee shall have no obligation to supervise any Servicer or act as successor servicer, and shall not be liable for any default or misconduct of any Servicer; and

(r) the Certificate Trustee shall not be required to give any bond or surety in respect of the execution of the trust created hereby or the powers granted hereunder.

Section 6.04 Certificate Trustee’s Disclaimer. The recitals contained herein and in the Certificates, except the certificates of authentication, shall not be taken as the statements of the Certificate Trustee, and the Certificate Trustee assumes no responsibility for their correctness. Except as set forth in Section 6.15, the Certificate Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Certificate Indenture or the Certificates, it shall not be accountable for the Certificate Issuer’s use of the proceeds from the Certificates, and it shall not be responsible for any statement of the Certificate Issuer in the Certificate Indenture or in any document issued in connection with the sale of the Certificates or in the Certificates other than the Certificate Trustee’s certificate of authentication. The Certificate Trustee shall not be responsible for the form, character, genuineness, sufficiency, value or validity of any of the Trust Property, for the validity, priority or perfection of any Lien or security interest granted to it hereunder (except to the extent impaired by action or omission constituting negligence, bad faith or willful misconduct on the part of the Certificate Trustee), or for or in respect of the Certificates (other than the certificate of authentication for the Certificates) or the Basic Documents and the Certificate Trustee shall in no event assume or incur any liability, duty or obligation to any Holder, other than as expressly provided in this Certificate Indenture. The Certificate Trustee shall not be liable for the default or misconduct of the Certificate Issuer or the Servicers under the Basic Documents or otherwise, and the Certificate Trustee shall have no obligation or liability to perform the obligations of such Persons.

Section 6.05 May Hold Certificates. The Certificate Trustee, any Paying Agent, any Certificate Registrar or any of their Affiliates or any other agent, in their respective individual or any other capacity, may become the owner or pledgee of Certificates and, subject to Sections 310(b) and 311 of the Trust Indenture Act, may otherwise deal with the Certificate Issuer, the Bond Issuers or the Bond Trustees with the same rights it would have if it were not Certificate Trustee, Paying Agent, Certificate Registrar or such other agent.

Section 6.06 Money Held in Trust. Money held by the Certificate Trustee or the Paying Agent in trust hereunder need not be segregated from other funds except to the extent required herein or by law, including Section 3804(a) of the Statutory Trust Statute, and neither the Certificate Trustee nor the Paying Agent shall have any liability for interest upon any such moneys except as provided for herein.

Section 6.07 Compensation and Reimbursement; Indemnification.

(a) Pursuant to the Fee and Indemnity Agreement and subject to the terms and conditions thereof, the Bond Issuers have agreed to pay, or cause to be paid, to the Certificate Trustee from time to time reasonable compensation for its services and to reimburse it for its reasonable expenses.

(b) Pursuant to the Fee and Indemnity Agreement, to the fullest extent permitted by law but subject to the Cap, the Bond Issuers shall indemnify, defend and hold harmless the Certificate Trustee and any of the affiliates, officers, directors, employees and agents of the Certificate Trustee (the “Certificate Trustee Indemnified Persons”) from and against any and all losses, claims, actions, suits, taxes, damages, expenses and liabilities (including liabilities under state or federal securities laws) of any kind and nature whatsoever (collectively, “Certificate Trustee Expenses”), to the extent that such Certificate Trustee Expenses arise out of or are imposed upon or asserted against such Certificate Trustee Indemnified Persons with respect to the creation, operation, dissolution or termination of the Certificate Issuer, the execution, delivery, enforcement or performance of the Declaration of Trust or this Certificate

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Indenture, as the case may be, or the transactions contemplated hereby, the failure of any Bond Issuer or any other Person (other than the Person being indemnified) to perform its obligations under the Fee and Indemnity Agreement or under any of the Basic Documents, or otherwise in connection with the Basic Documents or the transactions contemplated thereby, but no Bond Issuer shall be required to indemnify any Certificate Trustee Indemnified Person for any Certificate Trustee Expenses that result from the willful misconduct or negligence of such Certificate Trustee Indemnified Person. The Bond Issuers will not, without the prior written consent of the Certificate Trustee Indemnified Person, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought under this Section 6.07(b), (whether or not the Certificate Trustee Indemnified Person is an actual or potential party to such claim or action) unless such settlement, compromise or consent includes an unconditional release of the Certificate Trustee Indemnified Person from all liability arising out of such claim, action, suit or proceeding. The obligations of the Bond Issuers to indemnify the Certificate Trustee Indemnified Persons shall survive the termination of the Fee and Indemnity Agreement, this Certificate Indenture and the resignation or removal of the Certificate Trustee.

Notwithstanding anything to the contrary in this Certificate Indenture, the Certificate Trustee shall have no recourse against the Certificate Issuer or the Bonds of any Bond Issuer or payments thereon or proceeds thereof for payment of any amounts required to be paid to the Certificate Trustee under this Section 6.07(b).

(c) Each initial Servicer has agreed in its Servicing Agreement to indemnify the Certificate Trustee (limited to such Servicer’s allocable portion) for all due and unpaid indemnity and other payments, of the applicable Bond Issuer under the applicable Basic Documents, that exceed the Cap.

Section 6.08 Corporate Certificate Trustee Required; Eligibility.

(a) The Certificate Trustee shall at all times be eligible to act as a trustee under Section 310(a) and Section 310(a)(5) of the Trust Indenture Act, shall have a combined capital and surplus of at least $50,000,000 and shall have a long-term debt rating of at least “A” (or the equivalent thereof) by Moody’s, Standard & Poor’s and Fitch. If such entity publishes reports of conditions at least annually, pursuant to law or to the requirements of federal, state, territorial or District of Columbia supervising or examining authority, then for the purposes of this Section 6.08, the combined capital and surplus of such entity shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.

(b) In determining whether the Certificate Trustee has a conflicting interest under Section 310(b) of the Trust Indenture Act and this Section, each other Tranche of Certificates will be treated as having been issued under an indenture other than this Certificate Indenture.

(c) If at any time the Certificate Trustee shall cease to be eligible in accordance with the provisions of this Section 6.08, the Certificate Trustee shall resign immediately in the manner and with the effect specified in Section 6.09.

Section 6.09 Resignation and Removal; Appointment of Successor.

(a) No resignation or removal of the Certificate Trustee and no appointment of a successor Certificate Trustee pursuant to this Article shall become effective (i) until the acceptance of appointment by the successor Certificate Trustee under Section 6.10 and (ii) other than in the case of paragraph (b) below, unless a successor Certificate Trustee has been appointed and has accepted such appointment and the Bond Issuers and the Certificate Issuer have received written confirmation from each of the Rating Agencies that no lowering or withdrawal of the then current ratings of any Tranche of Certificates will result from such appointment.

(b) The Certificate Trustee may resign at any time in the case of a conflicting interest as determined in accordance with Section 6.08(b) by giving written notice thereof to the Certificate Issuer, the Authorized Agents, the Bond Issuers and the Bond Trustees. If an instrument of acceptance by a successor Certificate Trustee shall not have been delivered to the Certificate Issuer and the Certificate Trustee within 30 days after the giving of such notice of resignation, the resigning Certificate Trustee may petition any court of competent jurisdiction for the appointment of a successor Certificate Trustee.

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(c) The Certificate Trustee may be removed at any time in the case of a conflicting interest as determined in accordance with Section 6.08(b) by Act of Certificateholders holding Certificates representing not less than 51 percent of the Outstanding Amount of the Certificates delivered to the Certificate Trustee and to the Certificate Issuer, the Bond Issuers and the Bond Trustees.

(d) Upon 30 days’ written notice, the Certificate Trustee (i) may resign with respect to the Certificates as a whole by giving such written notice to the Certificate Issuer, the Authorized Agents, the Bond Issuers and the Bond Trustees or (ii) may be removed with respect to the Certificates as a whole by Act of Certificateholders holding Certificates representing not less than a majority of the Outstanding Amount of Certificates delivered to the Certificate Issuer, the Bond Issuers and the Bond Trustees. If an instrument of acceptance by a successor Certificate Trustee with respect to the Certificates as a whole shall not have been delivered to the Certificate Issuer, the Bond Issuers and the Bond Trustees within 90 days after the giving of such notice of resignation or Act by the Certificateholders as a whole for removal of the Certificate Trustee, the Certificate Issuer may petition any court of competent jurisdiction for the appointment of a successor Certificate Trustee with respect to the Certificates as a whole.

(e) If at any time:

(i) the Certificate Trustee shall fail to comply with Section 310 of the Trust Indenture Act after written request therefor by the Certificate Issuer or by any Holder of Certificates who has been a bona fide Holder of Certificates for at least six months; or

(ii) the Certificate Trustee shall cease to be eligible under Section 6.08 and shall fail to resign after written request therefor by the Certificate Issuer or by any Certificateholder; or

(iii) the Certificate Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Certificate Trustee or of its property shall be appointed or any public officer shall take charge or control of the Certificate Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation;

then, in any case, (x) the Certificate Issuer may remove the Certificate Trustee or (y) any Holder of Certificates who has been a bona fide Holder of Certificates for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Certificate Trustee and the appointment of a successor Certificate Trustee.

(f) If a Responsible Officer of the Certificate Trustee shall have received written notice of an Avoidable Tax that has been or is likely to be asserted, the Certificate Trustee shall promptly notify the Certificate Issuer and the Bond Issuers thereof and shall, within 30 days of such notification, resign hereunder unless within such 30-day period the Certificate Trustee shall have received notice that either the Certificate Issuer or the Bond Issuers have agreed to pay such tax. In such event, the Certificate Issuer (with the prior written approval of the Bond Issuers) shall promptly appoint a successor Certificate Trustee in a jurisdiction where there are no Avoidable Taxes. As used herein, an “Avoidable Tax” means a state or local tax: (i) upon (w) the Certificate Issuer, (x) the Trust Property, (y) the Certificateholders or (z) the Certificate Trustee for which the Certificate Trustee is entitled to seek reimbursement from the Trust Property, and (ii) that would be avoided if the Certificate Trustee were located in another state, or jurisdiction within a state, within the United States. A tax shall not be an Avoidable Tax if either the Certificate Issuer or the Bond Issuers shall agree to pay, and shall pay, such tax.

(g) If the Certificate Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of the Certificate Trustee for any reason, the Certificate Issuer (with the prior written approval of the Bond Issuers) shall promptly appoint a successor Certificate Trustee and Securities Intermediary. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Certificate Trustee shall be appointed by Act of the Certificateholders representing not less than a majority of the Outstanding Amount of the Certificates delivered to the Certificate Issuer, the Bond Trustees and the retiring Certificate Trustee, the successor Certificate Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Certificate Trustee and supersede the successor Certificate Trustee appointed as provided above. If no successor Certificate Trustee shall have been so appointed as provided above and accepted appointment in the manner

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hereinafter provided, any Holder of Certificates who has been a bona fide Holder of Certificates for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Certificate Trustee.

(h) The successor Certificate Trustee shall give notice of the resignation and removal of the Certificate Trustee and appointment of the successor Certificate Trustee by sending written notice of such event to the Holders as their names and addresses appear in the Certificate Register and to each Rating Agency and the Certificate Issuer. Each notice shall include the name of such successor Certificate Trustee and the address of the corporate trust office of such successor Certificate Trustee.

(i) The Certificate Issuer shall notify the Rating Agencies of any resignation and removal of the Certificate Trustee and appointment of a successor Certificate Trustee under this Section 6.09.

(j) Any removal or resignation of the Certificate Trustee shall also constitute a removal or resignation of the Securities Intermediary.

Section 6.10 Acceptance of Appointment by Successor. Every successor Certificate Trustee appointed hereunder shall execute, acknowledge and deliver to the Certificate Issuer and to the retiring Certificate Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Certificate Trustee shall become effective and such successor Certificate Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Certificate Trustee; but, on request of the Certificate Issuer or the successor Certificate Trustee, such retiring Certificate Trustee shall execute and deliver an instrument transferring to such successor Certificate Trustee all the rights, powers and trusts of the retiring Certificate Trustee and shall duly assign, transfer and deliver to such successor Certificate Trustee all property and money held by such retiring Certificate Trustee hereunder. Upon request of any such successor Certificate Trustee, the Certificate Issuer, the retiring Certificate Trustee and such successor Certificate Trustee shall execute and deliver any and all instruments containing such provisions as shall be necessary or desirable to transfer and confirm to, and for more fully and certainly vesting in, such successor Certificate Trustee all such rights, powers and trusts. No Certificate Trustee hereunder shall be liable for the acts or omissions of any successor Certificate Trustee.

No successor Certificate Trustee shall accept its appointment unless at the time of such acceptance such successor Certificate Trustee shall be qualified and eligible under this Article and any and all amounts due and payable to the predecessor Certificate Trustee have been paid.

Section 6.11 Merger, Conversion, Consolidation or Succession to Business. Any Person into which the Certificate Trustee may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Certificate Trustee shall be a party, or any Person succeeding to all or substantially all of the corporate trust business of the Certificate Trustee, shall be the successor of the Certificate Trustee hereunder; provided, such Person shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. Notice of any such event shall be promptly given to each Rating Agency. In case any Certificates shall have been authenticated, but not delivered, by the Certificate Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Certificate Trustee may adopt such authentication and deliver the Certificates so authenticated with the same effect as if such successor Certificate Trustee had itself authenticated such Certificates.

Section 6.12 Maintenance of Agencies.

(a) There shall at all times be maintained in the Borough of Manhattan, The City of New York, an office or agency where Certificates may be presented or surrendered for registration of transfer or for exchange, and for payment thereof and where notices and demands to or upon the Certificate Trustee on behalf of the Certificate Issuer in respect of the Certificates or of this Certificate Indenture may be served. At no time shall there be any other such office or agency outside the United States. Such office or agency shall be initially at 100 Wall St., Suite 1600, New York, NY 10005, Attention: Bond Drop Windows. Written notice of any change of location thereof shall be given by the Certificate Trustee to the Certificate Issuer, the Bond Trustees, the Bond Issuers, the Certificateholders and the Rating Agencies. In the event that no such office or agency shall be maintained or no such notice of location or of change of location shall be given, presentations and demands may be made and notices may be served at the Corporate Trust Office of the Certificate Trustee.

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(b) There shall at all times be a Certificate Registrar, an Authentication Agent and a Paying Agent hereunder. Each such Authorized Agent shall be a bank or trust company, shall be a entity organized and doing business under the laws of the United States or any state, with a combined capital and surplus of at least $50,000,000, shall have a long-term debt rating of at least “A” (or the equivalent thereof)” by Moody’s, Standard & Poor’s and Fitch, shall be authorized under such laws to exercise corporate trust powers and shall be subject to supervision by federal or state authorities. The Certificate Trustee shall initially be the Paying Agent, Authentication Agent, and, as provided in Section 2.06, Certificate Registrar hereunder. Each Certificate Registrar, if other than the Certificate Trustee, shall furnish to the Certificate Trustee, at stated intervals of not more than six months, and at such other times as the Certificate Trustee may request in writing, a copy of the Certificate Register.

(c) Any Person into which any Authorized Agent may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, consolidation or conversion to which any Authorized Agent shall be a party, or any Person succeeding to the corporate trust business of any Authorized Agent, shall be the successor of such Authorized Agent hereunder, if such successor Person is otherwise eligible under this Section 6.12, without the execution or filing of any paper or any further act on the part of the parties hereto or such Authorized Agent or such successor Person.

(d) Any Authorized Agent may at any time resign by giving written notice of resignation to the Certificate Trustee, the Certificate Issuer and the Bond Trustees. The Certificate Issuer (with the prior written approval of the Bond Issuers) may, and at the request of the Certificate Trustee shall, at any time terminate the agency of any Authorized Agent by giving written notice of termination to such Authorized Agent, the Bond Trustees and to the Certificate Trustee. Upon the resignation or termination of an Authorized Agent or in case at any time any such Authorized Agent shall cease to be eligible under this Section 6.12 (when, in either case, no other Authorized Agent performing the functions of such Authorized Agent shall have been appointed by the Certificate Trustee), the Certificate Issuer (with the prior written approval of the Bond Issuers) shall promptly appoint one or more qualified successor Authorized Agents, reasonably satisfactory to the Certificate Trustee, to perform the functions of the Authorized Agent who has resigned or whose agency has been terminated or who shall have ceased to be eligible under this Section. The Certificate Issuer shall give written notice of any such appointment made by it to the Certificate Trustee and the Bond Trustees; and in each case the Certificate Trustee shall send notice of such appointment to all Certificateholders as their names and addresses appear on the Certificate Register.

(e) Pursuant and subject to the Fee and Indemnity Agreement, the Bond Issuers have agreed to pay, or cause to be paid, from time to time to each Authorized Agent reasonable compensation for its services and to reimburse it for its reasonable expenses, and no Authorized Agent shall have any recourse against the Certificate Issuer or the Trust Property for payment of such amounts.

Section 6.13 Money for Certificate Payments To Be Held in Trust.

(a) All moneys deposited with any Paying Agent for the purpose of any payment on Certificates of any Tranche shall be deposited and held in trust for the benefit of the Certificateholders of such Tranche entitled to such payment, subject to the provisions of this Section 6.13.

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

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

(i) hold all sums held by it for the payment of amounts due with respect to the Certificates in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided;

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(ii) give the Certificate Trustee notice of any default under this Certificate Indenture of which it has actual knowledge in the making of any payment required to be made by the Certificate Issuer (or any other obligor on the Certificates) with respect to the Certificates;

(iii) at any time during the continuance of such default, upon the written request of the Certificate Trustee, forthwith pay to the Certificate Trustee all sums held by it in trust for the payment of the Certificates if at any time it ceases to meet the standards required to be met by a Paying Agent at the time of its appointment; and

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

Section 6.14 Registration of Bonds in Certificate Trustee’s Name. The Certificate Trustee agrees that all Bonds of each Bond Issuer and all Eligible Investments, if any, shall be issued in the name of the Certificate Trustee or its nominee, on behalf of the Certificate Issuer, and held by the Certificate Trustee; or, if not so held, the Certificate Trustee or its nominee, on behalf of the Certificate Issuer, shall be reflected as the owner of such Bonds or Eligible Investments, as the case may be, in the register of the Bond Issuer of such Bonds or issuer of such Eligible Investments. In no event shall the Certificate Trustee invest in, or hold, Bonds or Eligible Investments in a manner that would cause the Certificate Trustee not to have the ownership interest in such Bonds or Eligible Investments under the applicable provisions of the Uniform Commercial Code in effect in the location where the Certificate Trustee holds such Bonds or Eligible Investments or other applicable law then in effect. The Certificate Trustee shall at all times maintain possession of the Bonds in the State of New York.

Section 6.15 Representations and Warranties of Certificate Trustee. The Certificate Trustee hereby represents and warrants that:

(a) the Certificate Trustee is validly existing as a national banking association in good standing under the laws of the United States;

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

(c) when delivered by the Certificate Trustee, the Certificates will have been duly authenticated by the Certificate Trustee.

Section 6.16 Withholding Taxes; Information Reporting. The Certificate Trustee, as trustee for the assets of a grantor trust, shall exclude and withhold from each distribution of principal and interest and other amounts due hereunder or under the Certificates any and all withholding taxes applicable thereto as required by law. The Certificate Trustee agrees that it will act as such withholding agent and, in connection therewith, whenever any present or future taxes or similar charges are required to be withheld with respect to any amounts payable in respect of the Certificates, to withhold such amounts and timely pay the same to the appropriate authority in the name of and on behalf of the Certificateholders, that it will file any necessary withholding tax returns or statements when due, and that, as promptly as possible after the payment thereof, it will deliver to each Certificateholder appropriate documentation showing the payment thereof, together with such additional documentary evidence as such Certificateholders may reasonably request from time to time. At the request of the Servicers, the Certificate Trustee agrees to execute on behalf of the Certificate Issuer and

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file any other information reports as it may be required to file with respect to taxes, including by reason of Treasury Regulations 1.671-5, such information reports to be prepared by the Servicers. For purposes of reporting on Internal Revenue Service Form 1041 (and any statement attached thereto) (such Form 1041s and any statements attached thereto to be prepared by the Servicers), Internal Revenue Service Form 1099 (if applicable) or any successor form thereto, the Certificate Trustee will separately set forth information reported with respect to each Tranche of Certificates.

Section 6.17 Obligations to Bond Trustees and Delaware Trustee. It is agreed by the parties hereto that the services of the Bond Trustees and the Delaware Trustee are an essential part of the transactions contemplated hereby. Therefore, to the extent amounts payable under the Fee and Indemnity Agreement to the Bond Trustees and/or the Delaware Trustee are not paid when due, the payment of such amounts shall be made by the Certificate Trustee and any amounts so paid or to be paid by the Certificate Trustee shall constitute expenses of the Certificate Trustee for which it is entitled to reimbursement under Section 6.07 of this Certificate Indenture and under Section 1(a) of the Fee and Indemnity Agreement. Notwithstanding the foregoing, the Delaware Trustee and the Bond Trustees shall not have recourse against the Certificate Trustee with respect to such amounts except to the extent the Certificate Trustee is reimbursed under the Fee and Indemnity Agreement or realizes against the Collateral under the Bond Indentures or pursuant to any Lien created by the Statute or the Financing Order with respect to such amounts.

Section 6.18 Custody of Trust Property. The Certificate Trustee shall hold such of the Trust Property (and any other property that may be granted to the Certificate Trustee) as consists of instruments, deposit accounts, securities accounts, investment property, negotiable documents, money, goods, letters of credit, and advices of credit in the State of New York. The Certificate Trustee shall hold such of the Trust Property as constitutes investment property (but expressly excluding the Bonds) through the Securities Intermediary (which, as of the date hereof, is U.S. Bank National Association). The initial Securities Intermediary hereby agrees (and each future Securities Intermediary shall agree) with the Certificate Trustee that (a) such investment property shall at all times be credited to a securities account of the Certificate Trustee, (b) the Securities Intermediary shall treat the Certificate Trustee as entitled to exercise the rights that comprise each financial asset credited to such securities account, (c) all property credited to such securities account shall be treated as a financial asset, (d) the Securities Intermediary shall comply with entitlement orders originated by the Certificate Trustee without the further consent of any other Person, (e) the Securities Intermediary will not agree with any Person other than the Certificate Trustee to comply with entitlement orders originated by such other Person, (f) such securities accounts and the property credited thereto shall not be subject to any Lien or right of set-off in favor of the Securities Intermediary or anyone claiming through it (other than the Certificate Trustee), and (g) such securities accounts shall be governed by the internal laws of the State of New York. Terms used in the preceding sentence that are defined in the UCC and not otherwise defined herein shall have the meaning set forth in the UCC. Except as permitted by this Section 6.18, or elsewhere in this Certificate Indenture, the Certificate Trustee shall not hold Trust Property through an agent or a nominee.

Section 6.19 Appointment of Co-Trustee or Separate Trustee.

(a) Notwithstanding any other provisions of this Certificate Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the Trust Property may at the time be located or addressing divergent or conflicting interests among Holders of Certificates of separate Tranches of Certificates as a result of variations in terms of the respective underlying Bonds of corresponding Tranches, the Certificate Trustee shall have the power and may execute and deliver all instruments to appoint one or more Persons to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part of the Trust Property, and to vest in such Person or Persons, in such capacity and for the benefit of the Certificateholders, such title to the Trust Property, or any part hereof, and, subject to the other provisions of this Section 6.19, such powers, duties, obligations, rights and trusts as the Certificate Trustee may consider necessary or desirable in order to meet the legal requirements or to address the divergent or conflicting interests that led to the appointment of such co-trustee or separate trustee. No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 6.08 and no notice to Certificateholders of the appointment of any co-trustee or separate trustee shall be required under Section 6.09 hereof. Notice of any appointment shall be promptly given to each Rating Agency by the Certificate Trustee.

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

(i) all rights, powers, duties and obligations conferred or imposed upon the Certificate Trustee shall be conferred or imposed upon and exercised or performed by the Certificate Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act

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separately without the Certificate Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Certificate Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Trust Property or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Certificate Trustee;

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

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

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

(d) Any separate trustee or co-trustee may at any time constitute the Certificate Trustee, its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Certificate Indenture on its behalf and in its name. If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Certificate Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.

ARTICLE VII

SUPPLEMENTAL CERTIFICATE INDENTURES

Section 7.01 Supplemental Certificate Indentures Without Consent of Certificateholders. Without the consent of Certificateholders, the Certificate Issuer (with the prior written approval of the Bond Issuers) may, and the Certificate Trustee (subject to Section 7.03) shall, at any time and from time to time enter into one or more supplemental certificate indenture hereto, in form satisfactory to the Certificate Trustee, for any of the following purposes:

(a) to add to the covenants of the Certificate Issuer for the benefit of the Certificateholders, or to surrender any right or power herein conferred upon the Certificate Issuer;

(b) to correct or supplement any provision herein or in any supplemental certificate indenture that may be defective or inconsistent with any other provision herein or in any supplemental certificate indenture or to make any other provisions with respect to matters or questions arising under this Certificate Indenture; provided, however, that any such action shall not adversely affect in any material respect the interests of the Certificateholders;

(c) to cure any ambiguity or correct any mistake; or

(d) to qualify, if necessary, this Certificate Indenture (including any supplemental certificate indenture) under the Trust Indenture Act, or under any similar federal statute hereafter enacted, and to add to this Certificate Indenture such other provisions as may be expressly permitted by the Trust Indenture Act, excluding, however, the provisions referred to in Section 316(a)(2) of the Trust Indenture Act as in effect at the date as of which this instrument was executed or any corresponding provision in any similar federal statute hereafter enacted.

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Section 7.02 Supplemental Certificate Indentures With Consent of Certificateholders. With the consent of the Certificateholders holding Certificates representing not less than a majority of the aggregate Outstanding Amount of Certificates of each Tranche affected thereby, by Act of said Certificateholders delivered to the Certificate Issuer, the Bond Trustees and the Certificate Trustee, the Certificate Issuer (with the prior written approval of the Bond Issuers) may, and the Certificate Trustee (subject to Section 7.03) shall, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Certificate Indenture or of modifying in any manner the rights and obligations of the Holders of Certificates of each such Tranche under this Certificate Indenture; provided, however, that no such supplemental certificate indenture shall, without the consent of the Certificateholder of each Outstanding Certificate affected thereby:

(a) reduce in any manner the amount of, or delay the timing of, any receipt by the Certificate Trustee of payments on the Bonds of any Bond Issuer or distributions that are required to be made herein on any Certificate, or change any date of payment on any Certificate, or change the place of payment where, or the coin or currency in which, any Certificate is payable, or impair the right to institute suit for the enforcement of any such payment or distribution on or after the Distribution Date, Special Distribution Date or other date specified herein applicable thereto;

(b) permit the disposition of any Bond of any Bond Issuer in the Trust Property except as permitted by this Certificate Indenture, or otherwise deprive any Holder of Certificates of any Tranche of the benefit of the ownership of the Bonds of any Bond Issuer of the corresponding Tranche in the Trust;

(c) reduce the percentage of the aggregate Outstanding Amount of the Certificates of any Tranche that is required for any such supplemental certificate indenture, or reduce such percentage required for any waiver or consent (of compliance with certain provisions of this Certificate Indenture or certain defaults hereunder and their consequences) provided for in this Certificate Indenture;

(d) modify any of the provisions of this Section, except to increase any percentage set forth herein or to provide that certain other provisions of this Certificate Indenture cannot be modified or waived without the consent of the Holder of each Certificate affected thereby; or

(e) adversely affect the status of the Certificate Issuer as a grantor trust for federal income tax purposes.

It shall not be necessary for any Act of Certificateholders under this Section to approve the particular form of any proposed supplemental certificate indenture, but it shall be sufficient if such Act shall approve the substance thereof. The Certificate Issuer shall give each Rating Agency five Business Days prior written notice of any such proposed supplemental certificate indenture. Promptly after the execution by the Certificate Issuer and the Certificate Trustee of any supplemental certificate indenture pursuant to this Section 7.02, the Certificate Trustee shall send to the Holders of the Certificates to which such supplemental certificate indenture relates a copy of such supplemental certificate indenture. Any failure of the Certificate Trustee to send such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental certificate indenture.

Section 7.03 Documents Affecting Immunity or Indemnity. If in the opinion of the Certificate Trustee any document required to be executed by it pursuant to the terms of Section 7.01 or 7.02 adversely affects any interest, right, duty, immunity or indemnity in favor of the Certificate Trustee under this Certificate Indenture, the Certificate Trustee may in its discretion decline to execute such document.

Section 7.04 Execution of Supplemental Certificate Indentures. In executing, or accepting the additional trusts created by, any supplemental certificate indenture permitted by this Article VII or the modifications thereby of the trusts created by this Certificate Indenture, the Certificate Trustee shall be entitled to receive, and shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental certificate indenture is authorized or permitted by this Certificate Indenture and all conditions precedent have been satisfied.

Section 7.05 Effect of Supplemental Certificate Indentures. Upon the execution of any supplemental certificate indenture under this Article VII, this Certificate Indenture shall be modified in accordance therewith, and such supplemental certificate indenture shall form a part of this Certificate Indenture for all purposes; and every Holder of any Certificate theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

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Section 7.06 Conformity with Trust Indenture Act. Every supplemental certificate indenture executed pursuant to this Article VII shall conform to the requirements of the Trust Indenture Act as then in effect, so long as this Certificate Indenture shall then be qualified under the Trust Indenture Act.

Section 7.07 Reference in Certificates to Supplemental Certificate Indentures. Certificates authenticated and delivered after the execution of any supplemental certificate indenture pursuant to this Article may bear a notation in form approved by the Certificate Trustee as to any matter provided for in such supplemental certificate indenture; and, in such case, suitable notation may be made upon Outstanding Certificates after proper presentation and demand.

ARTICLE VIII

AMENDMENTS AND SUPPLEMENTS TO BONDS, BOND INDENTURES AND OTHER BASIC DOCUMENTS

Section 8.01 Amendments and Supplements to Bonds, Bond Indentures and Other Basic Documents. In the event that the Certificate Issuer or the Certificate Trustee, as holder of the Bonds of each Tranche in trust for the benefit of the Holders of Certificates, receives a request for a consent to any amendment, modification, waiver or supplement under the Bonds of any Bond Issuer, any Bond Indenture or any other Basic Document to which the Certificate Issuer or the Certificate Trustee is a party, the Certificate Issuer shall forward such request for consent to the Certificate Trustee, and the Certificate Trustee shall forthwith send a notice of such proposed amendment, modification, waiver or supplement, to each Holder of Certificates of such Tranche registered on the Certificate Register as of such date. The Certificate Trustee shall request from such Certificateholders directions as to (a) whether or not the Certificate Trustee should take or refrain from taking any action that a holder of such Bond has the option to direct, (b) whether or not to give or execute or direct the Certificate Issuer to give or execute any waivers, consents, amendments, modifications or supplements as a holder of such Bond and (c) how to vote such Bond if a vote has been called for with respect thereto; provided, however, in the case of any change to the terms of, or modification to, the Bonds of any Bond Issuer, the Certificateholders may not direct any such action to be taken or direct whether or not to give or execute any such waiver, consent, amendment, modification or supplement that is not pursuant to the original terms of such Bonds, unless the Certificate Trustee obtains an Opinion of Counsel at the expense of the Certificate Issuer of independent tax counsel to the effect that after any such action, waiver, consent, amendment, modification or supplement the Certificate Issuer will continue to be treated as a “grantor trust” for federal income tax purposes. If such a request for Certificateholder direction shall have been made, in directing any action or casting any vote or giving any consent as the holder of the Bonds of any Bond Issuer, the Certificate Trustee shall vote or consent with respect to such Bonds in the same proportion as the Certificates of the corresponding Tranche were actually voted by Acts of the Holders thereof delivered to the Certificate Trustee prior to two Business Days before the Certificate Trustee takes such action or casts such vote or gives such consent.

ARTICLE IX

SATISFACTION AND DISCHARGE

Section 9.01 Satisfaction and Discharge of Certificate Indenture. This Certificate Indenture shall cease to be of further effect with respect to the Certificates, and the Certificate Trustee, on reasonable demand of and at the expense of the Certificate Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Certificate Indenture with respect to the Certificates, upon the distribution to all Holders of Certificates and the Certificate Trustee of all amounts required to be distributed to them pursuant to this Certificate Indenture and the disposition of all property held as part of the Trust Property. The Certificate Issuer shall pay or provide for the payment of all remaining liabilities of the Certificate Trustee, but solely from amounts payable by the Bond Issuers under the Fee and Indemnity Agreement.

Notice of any distribution pursuant to the paragraph above shall be mailed promptly by the Certificate Trustee to Holders of Certificates then outstanding. Such notice shall specify the Distribution Date or Special Distribution Date, as the case may be, upon which the Holders of Certificates may surrender their Certificates to the

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Certificate Trustee for payment of the final distribution and cancellation. Such notice shall be mailed (a) if with respect to a final distribution, as soon as practicable following receipt of notice from a Bond Trustee of a final payment on a corresponding Bond or (b) if with respect to a Special Payment, not earlier than the 60th day and not later than the 20th day next preceding such final distribution. Such notice shall specify (a) the Distribution Date or Special Distribution Date, as the case may be, upon which the proposed final payment of the Certificates will be made upon presentation and surrender of such Certificates at the office or agency of the Certificate Trustee therein specified, (b) the amount of any such proposed final payment and (c) that the Record Date otherwise applicable to such Distribution Date or the Special Record Date otherwise applicable to such Special Distribution Date, as the case may be, is not applicable, payments being made only upon presentation and surrender of the Certificates at the office or agency of the Certificate Trustee therein specified. The Certificate Trustee shall give such notice to the Certificate Registrar at the time such notice is given to Holders of Certificates. Upon presentation and surrender of such Certificates, the Certificate Trustee shall cause to be distributed to the Holders thereof amounts distributable thereon on such Distribution Date or Special Distribution Date, as the case may be, pursuant to Section 4.02.

In the event that all of the Holders of Certificates shall not surrender their Certificates for cancellation within six months after the date specified in the above mentioned written notice, the Certificate Trustee shall give a second written notice to the remaining Holders of such Certificates to surrender their Certificates for cancellation and receive the final distribution with respect thereto. In the event that any money held by the Certificate Trustee for the payment of distributions on the Certificates shall remain unclaimed for two years (or such lesser time as the Certificate Trustee shall be satisfied, after 60 days’ notice from the Certificate Issuer (with the prior written approval of the Bond issuers), is one month prior to the escheat period provided under applicable law) after the final distribution date with respect thereto, the Certificate Trustee shall pay such money to the Bond Trustees (pro rata based on the initial principal amount of the Bonds issued under each Bond Indenture) for deposit into the respective collection account of each such Bond Trustee or, if such collection account no longer exists, to the applicable Bond Issuer. The Certificate Trustee or the Bond Issuers shall give written notice thereof to the Bond Trustees, the Bond Issuers and the Certificate Issuer.

ARTICLE X

MISCELLANEOUS PROVISIONS

Section 10.01 Certificates and Bonds Not Obligation of the State of Ohio or Sellers.

(a) The Certificate Issuer, as owner of the Bonds, does hereby pledge and agree with the Bond Issuers and the Holders of the Certificates that it will not act in a manner inconsistent with the State Pledge and will not take any action that would impair any rights of any Bond Issuer or the Holders of the Bonds of any Bond Issuer, the Phase-In-Recovery Property of any Bond Issuer or the Holders of Certificates. The Certificate Issuer hereby further agrees to treat the Bonds as debt of the Bond Issuers, secured by, among other things, the Phase-In-Recovery Property of any Bond Issuer and the equity of each Bond Issuer on deposit in its Capital Subaccount, for all purposes.

Each Bond Issuer has represented and warranted to its Bond Trustee, for the benefit of such Bond Issuer’s Bondholders, that it constitutes an “assignee” under Section 4928.23(B) of the Statute, that the Bonds issued by it constitute “bonds” under Section 4928.23(C) of the Statute, that such Bonds are entitled to the protections provided in Sections 4928.235 and 4928.2315 of the Statute, and that the Certificate Trustee, in its own name and as trustee of an express trust, as holder of the Bonds shall be, to the extent permitted by applicable state and federal law, entitled to enforce such Sections of the Statute.

(b) Each Certificate represents a fractional undivided beneficial interest in the Bonds and the proceeds thereof. The Bonds of a Bond Issuer represent the obligations only of that Bond Issuer and do not represent obligations of any other Bond Issuer.

Neither the Certificates nor the Bonds of any Bond Issuer represent an interest in or obligation of the State of Ohio, the PUCO or any political subdivision, governmental agency, authority or instrumentality of the State of Ohio or the Sellers or any of their respective Affiliates, except for CEI Funding LLC, which is an Affiliate of The Cleveland Electric Illuminating Company, OE Funding LLC which is an Affiliate of Ohio Edison Company, and TE Funding LLC, which is an Affiliate of The Toledo Edison Company. None of the Certificates, the Bonds of any Bond Issuer or the underlying Phase-In-Recovery Property of any Bond Issuer will be guaranteed or insured by the State of Ohio, the PUCO or any political subdivision, or any other governmental agency, authority or instrumentality of the State of Ohio or by the Sellers or any of their respective Affiliates.

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Neither the full faith and credit nor the taxing power of the State of Ohio or the PUCO, or any other political subdivision, governmental agency or instrumentality of the State of Ohio is pledged to the payment of the principal of, purchase price of, or interest on, the Certificates or the Bonds of any Bond Issuer, or to the payments in respect of the Phase-In-Recovery Property of any Bond Issuer, nor are the State of Ohio or the PUCO, or any other political subdivision, governmental agency or instrumentality of the State of Ohio in any manner obligated to make any appropriation for the payment thereof.

Section 10.02 Limitation on Rights of Certificateholders. The death or incapacity of any Certificateholder shall not operate to terminate this Certificate Indenture, the Declaration of Trust or the Certificate Issuer, nor entitle such Certificateholder’s legal representatives or heirs to claim an accounting or to take any action or commence any proceeding in any court for a partition or winding up of the Certificate Issuer, nor otherwise affect the rights, obligations, and liabilities of the parties hereto or any of them.

Section 10.03 No Recourse to Certificate Issuer. Notwithstanding any provision of this Certificate Indenture or any supplemental certificate indenture to the contrary, Holders shall have no recourse against the Certificate Trustee or the Certificate Issuer, but shall look only to the Trust Property with respect to any amounts due to the Holders hereunder and under the Certificates.

Section 10.04 Certificates Nonassessable and Fully Paid. Pursuant to Section 3803(a) of the Statutory Trust Statute, Certificateholders shall be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. Certificateholders shall not be personally liable for obligations of the Certificate Issuer, the interests in the Certificate Issuer represented by the Certificates shall be nonassessable for any losses or expenses of the Certificate Issuer or for any reason whatsoever, and upon authentication of the Certificates by the Certificate Trustee pursuant to Section 2.04, the Certificates are and shall be deemed fully paid and non-assessable. No Certificateholder shall have any right (except as expressly provided herein) to vote or in any manner otherwise control the operation and management of the Trust Property, the Certificate Issuer, or the obligations of the parties hereto, nor shall anything set forth herein, or contained in the terms of the Certificates, be construed so as to constitute the Certificateholders from time to time as partners or members of an association.

Section 10.05 Notices.

(a) Unless otherwise specifically provided herein, all notices, directions, consents and waivers required under the terms and provisions of this Certificate Indenture shall be in English and in writing, and any such notice, direction, consent or waiver may be given by United States mail, courier service, facsimile transmission or electronic mail (confirmed by telephone, United States mail or courier service in the case of notice by facsimile transmission or electronic mail) or any other customary means of communication, and any such notice, direction, consent or waiver shall be effective when delivered, or if mailed, three days after deposit in the United States mail with proper postage for ordinary mail prepaid,

if to the Certificate Issuer, to:

U.S. Bank Trust National Association, as Delaware Trustee

for the FirstEnergy Ohio PIRB Special Purpose Trust 2013

190 S. LaSalle Street, 7th Floor

Mail Code: MK-IL-SL7R

Chicago, IL 60603

Attention: First Energy Ohio PIRB Special Purpose Trust 2013

Facsimile: 312-332-7996

Telephone: 312-332-7496

E-mail: melissa.rosal@usbank.com

With a copy to the Administrative Trustee

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if to the Certificate Trustee, to:

U.S. Bank National Association

190 S. LaSalle Street, 7th Floor

Mail Code: MK-IL-SL7R

Chicago, IL 60603

Attention: First Energy Ohio PIRB Special Purpose Trust 2013

Facsimile: 312-332-7996

Telephone: 312-332-7496

E-mail: melissa.rosal@usbank.com

if to the Delaware Trustee, to:

U.S. Bank Trust National Association, as Delaware Trustee

for the FirstEnergy Ohio PIRB Special Purpose Trust 2013

190 S. LaSalle Street, 7th Floor

Mail Code: MK-IL-SL7R

Chicago, IL 60603

Attention: First Energy Ohio PIRB Special Purpose Trust 2013

Facsimile: 312-332-7996

Telephone: 312-332-7496

E-mail: melissa.rosal@usbank.com

if to the Administrative Trustee, to:

The Cleveland Electric Illuminating Company, Ohio Edison Company and

The Toledo Edison Company

76 South Main Street

Akron, OH 43038

Attention: James W. Burk, Counsel of Record

Facsimile: 330-384-3875

Telephone: 330-384-5861

if to the CEI Bond Issuer, to:

CEI Funding LLC

c/o FirstEnergy Corp.

76 South Main Street

Akron, OH 44308

Attention: James W. Burk, Counsel of Record

Facsimile: 330-384-3875

Telephone: 330-384-5861

if to the OE Bond Issuer, to:

OE Funding LLC

c/o FirstEnergy Corp.

76 South Main Street

Akron, OH 44308

Attention: James W. Burk, Counsel of Record

Facsimile: 330-384-3875

Telephone: 330-384-5861

if to the TE Bond Issuer, to:

TE Funding LLC

c/o FirstEnergy Corp.

76 South Main Street

Akron, OH 44308

Attention: James W. Burk, Counsel of Record

Facsimile: 330-384-3875

Telephone: 330-384-5861

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if to the Bond Trustee (for the respective Bond Issuers), to:

U.S. Bank National Association

190 S. LaSalle Street, 7th Floor

Mail Code: MK-IL-SL7R

Chicago, IL 60603

Attention: First Energy Ohio PIRB Special Purpose Trust 2013

Facsimile: 312-332-7996

Telephone: 312-332-7496

E-mail: melissa.rosal@usbank.com

if to the Rating Agencies, to:

Standard & Poor’s Ratings Services

55 Water Street

New York, New York 10041

Attention: Structured Credit Surveillance

E-mail: servicer-report@standardandpoors.com

Telephone: 212-438-8991

and

Moody’s Investors Service, Inc.

25^th Floor, 7 World Trade Center, 250 Greenwich

New York, New York 10007

Attention: ABS/RMBS Monitoring Department

E-mail: ServicerReports@moodys.com

and

Fitch Ratings

One State Street Plaza

New York, New York 10004

Attention: ABS Surveillance

Telephone: 212-908-0500

Facsimile: 212-908-0355

(b) The Certificate Issuer, the Certificate Trustee, the Bond Issuers or the Bond Trustees, by notice to the others, may designate additional or different addresses for subsequent notices or communications.

(c) Any notice or communication to Certificateholders shall be mailed by first-class mail to the addresses for each Certificateholder shown on the Certificate Register kept by the Certificate Registrar. Failure so to mail a notice or communication or any defect in such notice or communication shall not affect its sufficiency with respect to other Certificateholders.

(d) If a notice or communication is mailed in the manner provided above within the time prescribed, it is conclusively presumed to have been duly given, whether or not the addressee receives it.

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(e) If the Certificate Issuer mails a notice or communication to the Certificateholders, it shall mail a copy to the Certificate Trustee, to each Paying Agent and to the Bond Issuers at the same time.

(f) Notwithstanding the foregoing, all communications or notices to the Certificate Trustee shall be deemed to be given only when received by a Responsible Officer of the Certificate Trustee.

Section 10.06 Governing Law. THIS CERTIFICATE INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAW OF THE STATE OF DELAWARE WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAW. PURSUANT TO NEW YORK UCC SECTION 8-110(e)(1) AND, TO THE EXTENT APPLICABLE, NEW YORK UCC SECTION 9-304(b)(1), THE STATE OF NEW YORK IS THE JURISDICTION OF THE CERTIFICATE TRUSTEE, AS BANK OR SECURITIES INTERMEDIARY WITH RESPECT TO ANY SECURITIES ACCOUNT, AND THE PERFECTION, EFFECT OF PERFECTION OR NONPERFECTION AND THE PRIORITY OF THE SECURITY INTEREST IN THE SECURITIES ACCOUNT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

Section 10.07 Severability of Provisions. If any one or more of the covenants, agreements, provisions or terms of this Certificate Indenture shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Certificate Indenture and shall in no way affect the validity or enforceability of the other provisions of this Certificate Indenture, or of the Certificates or the rights of the Certificateholders thereof.

Section 10.08 Conflict With Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with another provision hereof that is required to be included in this Certificate Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control.

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

Section 10.09 Effect of Headings and Table of Contents. The Article and Section headings herein and in the Table of Contents are for convenience only and shall not affect the construction hereof.

Section 10.10 Successors and Assigns; Delegation.

(a) All covenants, agreements, representations and warranties in this Certificate Indenture by the Certificate Trustee and the Certificate Issuer shall bind and, to the extent permitted hereby, shall inure to the benefit of and be enforceable by their respective successors and assigns, whether so expressed or not.

(b) No party to this Certificate Indenture shall assign or delegate this Certificate Indenture or all or any part of its rights or obligations hereunder to any Person without the prior written consent of the other parties.

Section 10.11 Benefits of Certificate Indenture. Nothing in this Certificate Indenture or in the Certificates, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, the Certificateholders and, to the extent provided herein, the Bond Issuers, any benefit or any legal or equitable right, remedy or claim under this Certificate Indenture.

Section 10.12 Legal Holidays. In any case where any date for any distribution in respect of any Certificate shall not be a Business Day, then (notwithstanding any other provision of this Certificate Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on such first date, and no interest shall accrue during the intervening period.

Section 10.13 Counterparts. For the purpose of facilitating the execution of this Certificate Indenture and for other purposes, this Certificate Indenture may be executed simultaneously in any number of counterparts, each of which counterparts shall be deemed to be an original, and all of which counterparts shall constitute but one and the same instrument.

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Section 10.14 The Delaware Trustee. Each Certificateholder by accepting the Certificates, shall be deemed to acknowledge and agree that (a) each of the representations, undertakings and agreements herein made on the part of the Certificate Issuer, is made and intended not as personal representations, undertakings and agreements by U.S. Bank Trust National Association but is made and intended for the purpose of binding only the Certificate Issuer, (b) nothing herein contained shall be construed as creating any liability of U.S. Bank Trust National Association, individually or personally, to perform any covenant of the Certificate Issuer either expressed or implied contained herein, all such liability, if any, deemed waived and (c) under no circumstances shall U.S. Bank Trust National Association be personally liable for the payment of any indebtedness or expenses of the Certificate Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Certificate Issuer under this Certificate Indenture or the Certificates.

Section 10.15 Certificate Issuer Obligation. No recourse may be taken, directly or indirectly, with respect to the obligations of the Certificate Issuer or the Certificate Trustee on the Certificates or under this Certificate Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) any settlor of the Certificate Issuer, the Certificate Trustee or the Delaware Trustee or (ii) any shareholder, partner, owner, beneficiary, agent, officer, director or employee of the Certificate Trustee, the Delaware Trustee or any settlor of the Certificate Issuer in its respective individual capacity, or of any successor or assign of any of them in their respective individual or corporate capacities, except as any such Person may have expressly agreed in writing. Each Certificateholder by accepting a Certificate specifically confirms the non recourse nature of these obligations and waives and releases all such liability. These waivers and releases are part of the consideration for issuance of the Certificates.

Section 10.16 No Petition. The Certificate Trustee, by entering into this Certificate Indenture, and each Certificateholder, by accepting a Certificate (or interest therein) issued hereunder, hereby covenants and agrees that they shall not, prior to the date which is one year and one day after the termination of this Certificate Indenture, acquiesce, petition or otherwise invoke or cause the Certificate Issuer or the Delaware Trustee under the Declaration of Trust to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Certificate Issuer under any insolvency law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Certificate Issuer or any substantial part of the Trust Property, or ordering the dissolution, winding up or liquidation of the affairs of the Certificate Issuer. Nothing in this paragraph shall preclude, or be deemed to estop, such Certificateholder or the Certificate Trustee (A) from taking or omitting to take any action prior to such date in (i) any case or proceeding voluntarily filed or commenced by or on behalf of the Certificate Issuer under or pursuant to any such law or (ii) any involuntary case or proceeding pertaining to the Certificate Issuer which is filed or commenced by or on behalf of a Person other than such Certificateholder and is not joined in by such Certificateholder (or any Person to which such holder shall have assigned, transferred or otherwise conveyed any part of the obligations of the Certificate Issuer hereunder) under or pursuant to any such law, or (B) from commencing or prosecuting any legal action which is not an involuntary case or proceeding under or pursuant to any such law against the Certificate Issuer or any of its properties.

Section 10.17 Trustee Capacities; Affiliated Parties. Each of the Certificateholders by accepting the Certificates, shall be deemed to acknowledge and consent to U.S. Bank Trust National Association acting in the capacity of Delaware Trustee and U.S. Bank National Association acting in the capacities of Bond Trustee and Certificate Trustee.

Section 10.18 Waiver of Jury Trial. EACH OF THE CERTIFICATE ISSUER AND THE CERTIFICATE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS CERTIFICATE INDENTURE, THE CERTIFICATES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 10.19 Rule 17g-5 Compliance.

(a) The Certificate Trustee agrees that any notice, report, request for satisfaction of the Rating Agency Condition, document or other information provided by the Certificate Trustee to any Rating Agency under this Certificate Indenture or any other Basic Document to which it is a party for the purpose of determining the initial credit rating of the Certificates or undertaking credit rating surveillance of the Certificates shall be provided, substantially concurrently, to the Servicers for posting on a password-protected website (the “17g-5 Website”). The Servicers shall be responsible for posting all of the information on the 17g-5 Website.

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(b) The Certificate Trustee will not be responsible for creating or maintaining the 17g-5 Website, posting any information to the 17g-5 Website or assuring that that the 17g-5 Website complies with the requirements of this Certificate Indenture, Rule 17g-5 or any other law or regulation. In no event shall the Certificate Trustee be deemed to make any representation in respect of the content of the 17g-5 Website or compliance by the 17g-5 Website with this Certificate Indenture, Rule 17g-5 or any other law or regulation. The Certificate Trustee shall have no obligation to engage in or respond to any oral communications with respect to the transactions contemplated hereby, any transaction documents relating hereto or in any way relating to the Certificates or for the purposes of determining the initial credit rating of the Certificates or undertaking credit rating surveillance of the Certificates with any Rating Agency or any of its respective officers, directors or employees. The Certificate Trustee shall not be responsible or liable for the dissemination of any identification numbers or passwords for the 17g-5 Website, including by the Servicers, the Rating Agencies, a nationally recognized statistical rating organization (“NRSRO”), any of their respective agents or any other party. Additionally, the Certificate Trustee shall not be liable for the use of the information posted on the 17g-5 Website, whether by the Servicers, the Rating Agencies, an NRSRO or any other third party that may gain access to the 17g-5 Website or the information posted thereon.

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IN WITNESS WHEREOF, the Certificate Issuer and the Certificate Trustee have caused this Certificate Indenture to be duly executed by duly authorized officers or representatives, all as of the day and year first above written.

FirstEnergy Ohio PIRB Special Purpose Trust 2013
By:	U.S. Bank Trust National Association,
	not in its individual capacity but solely as Delaware Trustee
By:
Name:
Title:
U.S. Bank National Association
as Certificate Trustee and Securities Intermediary
By:
Name:
Title:

EXHIBIT A

FORM OF CERTIFICATE

REGISTERED $[        ]

NO. [    ]

FIRSTENERGY OHIO PIRB SPECIAL PURPOSE TRUST 2013

TRANCHE [    ]

PASS-THROUGH TRUST CERTIFICATE

INTEREST RATE SCHEDULED FINAL
DISTRIBUTION DATE FINAL MATURITY DATE CUSIP

REGISTERED OWNER: Cede & Co.

PRINCIPAL AMOUNT:

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THE HOLDER OF THIS CERTIFICATE HAS NO RECOURSE TO THE TRUST (AS DEFINED BELOW) AND AGREES TO LOOK ONLY TO THE TRUST PROPERTY, AS DESCRIBED IN THE CERTIFICATE INDENTURE, FOR PAYMENT OF ANY AMOUNTS DUE HEREUNDER. ALL OBLIGATIONS OF THE TRUST OF THIS TRANCHE [    ] CERTIFICATE UNDER THE TERMS OF THE CERTIFICATE INDENTURE WILL BE RELEASED AND DISCHARGED UPON PAYMENT IN FULL HEREOF OR AS OTHERWISE PROVIDED IN THE CERTIFICATE INDENTURE. THE HOLDER OF THIS TRANCHE [    ] CERTIFICATE HEREBY COVENANTS AND AGREES THAT PRIOR TO THE DATE WHICH IS ONE (1) YEAR AND ONE (1) DAY AFTER THE PAYMENT IN FULL OF THE TRANCHE [    ] CERTIFICATES, IT WILL NOT INSTITUTE AGAINST, OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST, THE TRUST ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS OR OTHER SIMILAR PROCEEDING UNDER THE LAWS OF THE UNITED STATES OR ANY STATE OF THE UNITED STATES. NOTHING IN THIS PARAGRAPH SHALL PRECLUDE, OR BE DEEMED TO ESTOP, SUCH HOLDER (A) FROM TAKING OR OMITTING TO TAKE ANY ACTION PRIOR TO SUCH DATE IN (I) ANY CASE OR PROCEEDING VOLUNTARILY FILED OR COMMENCED BY OR ON BEHALF OF THE TRUST UNDER OR PURSUANT TO ANY SUCH LAW OR (II) ANY INVOLUNTARY CASE OR PROCEEDING PERTAINING TO THE TRUST WHICH IS FILED OR COMMENCED BY OR ON BEHALF OF A PERSON OTHER THAN SUCH HOLDER AND IS NOT JOINED IN BY SUCH HOLDER (OR ANY PERSON TO WHICH SUCH HOLDER SHALL HAVE ASSIGNED, TRANSFERRED OR OTHERWISE CONVEYED ANY PART OF THE OBLIGATIONS OF THE TRUST HEREUNDER) UNDER OR PURSUANT TO ANY SUCH LAW, OR (B) FROM COMMENCING OR PROSECUTING ANY LEGAL ACTION WHICH IS NOT AN INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE TRUST OR ANY OF ITS PROPERTIES.

Each Holder of a Certificate, by acceptance of a Certificate, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Bond Issuer or the Bond Trustee on the Bonds or under the Bond Indenture or any certificate or other writing delivered in connection therewith, against (i) any owner of a limited liability company interest in the Bond Issuer or (ii) any shareholder, partner, owner, beneficiary, agent, officer, director or employee of the Bond Trustee, the managers of the Bond Issuer or any owner of a limited liability company interest in the Bond Issuer in its respective individual capacity, or of any successor or assign of any of them in their respective individual or corporate capacities, except as any such Person may have expressly agreed in writing.

A-1

This Certificate evidences a fractional undivided beneficial interest in the bonds issued by CEI Funding LLC, a Delaware limited liability company, OE Funding LLC, a Delaware limited liability company, and TE Funding LLC, a Delaware limited liability company (collectively, the “Bonds”), and the other Trust Property, held by a trust or registered assigns, as more fully described herein. The Bonds of a Bond Issuer represent the obligations only of that Bond Issuer, and do not represent obligations of any other Bond Issuer.

This Certificate does not represent an interest in or obligation of the State of Ohio, the PUCO or any political subdivision, governmental agency, authority or instrumentality of the State of Ohio or The Cleveland Electric Illuminating Company, Ohio Edison Company or The Toledo Edison Company. None of the Certificates, the Underlying Bonds or the underlying Phase-In-Recovery Property will be guaranteed or insured by the State of Ohio, the PUCO or any political subdivision, or any other governmental agency, authority or instrumentality of the State of Ohio or by the Sellers or any of their respective Affiliates.

Neither the full faith and credit nor the taxing power of the State of Ohio, or the PUCO, or any other political subdivision, governmental agency or instrumentality of the State of Ohio is pledged to the payment of the principal of, purchase price of, or interest on, the Certificates or the Bonds, or to the payments in respect of the Phase-In-Recovery Property of any Bond Issuer, nor are the State of Ohio or the PUCO, or any other political subdivision, governmental agency or instrumentality of the State of Ohio in any manner obligated to make any appropriation for the payment thereof.

To the extent not otherwise defined herein, the capitalized terms used herein have the meanings assigned to them in the Certificate Indenture.

THIS CERTIFIES THAT CEDE & CO., as nominee for The Depository Trust Company, for value received, is the registered owner of a Principal Amount (stated above) of nonassessable, fully-paid, fractional undivided beneficial interest in the Bonds and other Trust Property held by FirstEnergy Ohio PIRB Special Purpose Trust 2013 (the “Trust”) or registered assigns. The Trust has been continued pursuant to an Amended and Restated Declaration of Trust dated as of [            ] [    ], 2013 (the “Declaration of Trust”) by U.S. Bank Trust National Association, as Delaware Trustee (the “Delaware Trustee”), the Bond Issuers, acting jointly as settlors thereunder, and the Administrative Trustee. This Certificate is issued under and is subject to the terms, provisions, and conditions of, a Certificate Indenture dated as of [            ] [    ], 2013 (the “Certificate Indenture”), by and among U.S. Bank National Association, as certificate trustee (the “Certificate Trustee”), and the Trust, a summary of certain of the pertinent provisions of which is set forth below. This Certificate is one of the duly authorized Tranche of Certificates designated as “FirstEnergy Ohio PIRB Special Purpose Trust 2013 Pass-Through Trust Certificates, Tranche [    ]” (herein called the “Tranche [    ] Certificates”). The Tranche [    ] Certificates are one of a Tranche of Certificates issued under the Certificate Indenture (such Tranche [    ] Certificates, together with other Tranches of Certificates issued on the date hereof under the Certificate Indenture being herein called the “Certificates”). The holder of this Certificate (the “Holder”), by virtue of its acceptance hereof, assents and agrees to be bound by the terms of the Certificate Indenture and the Declaration of Trust. This Tranche [    ] Certificate represents a fractional undivided beneficial interest in the Bonds issued by CEI Funding LLC, as CEI Bond Issuer, OE Funding LLC, as OE Bond Issuer, and TE Funding LLC, as TE Bond Issuer, together with the payments on and proceeds of the Bonds and other Trust Property. Holders of each Tranche of Certificates will receive payments received by the Certificate Issuer on the corresponding Tranche of Bonds of each Bond Issuer (with payments of principal due and payable on the Bonds of a Bond Issuer as a result of an Event of Default (assuming all Bonds have been declared immediately due and payable) under that Bond Issuer’s Bond Indenture, or upon the Final Maturity Date, to be paid pro rata based on the respective principal amounts of such Bonds). Certificateholders may also receive payments as a result of a sale by the Certificate Trustee of any Bond pursuant to Article V of the Certificate Indenture or as a result of the institution by the Certificate Trustee of a judicial proceeding pursuant to Section 5.03 of the Certificate Indenture. The Bonds are secured by a security interest in the property right created under the Statute, pursuant to the order of the Public Utilities Commission of Ohio, (the “PUCO”), issued October 10, 2012, as amended by the entry on rehearing issued by the PUCO on December 19, 2012 and as further amended by the entry nunc pro tunc issued by the PUCO on January 9, 2013 (the “Financing Order”), representing the irrevocable right of each of The Cleveland Electric Illuminating Company, Ohio Edison Company or The Toledo Edison Company or their assignees (i.e., the Bond Issuers) to receive a certain nonbypassable charge (as adjusted from time to time) from certain retail customers of The Cleveland Electric Illuminating Company’s, Ohio Edison Company’s or The Toledo Edison Company’s respective distribution systems, together with certain related collateral, all as more fully described in the Bond Indentures.

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The aggregate principal amount of all Certificates of all Tranches issued under the Certificate Indenture equals the aggregate principal amount of the Bonds of all Tranches of each Bond Issuer, and all such Certificates are and will be equally secured by the pledge and covenants made therein, except as otherwise expressly provided or permitted in the Certificate Indenture.

Subject to and in accordance with the terms of the Certificate Indenture, there will be distributed on each [            ] and [            ] of each year or, if any such day is not a Business Day, the next succeeding Business Day (each, a “Distribution Date”), commencing on [            ], 2013 to the Person in whose name this Certificate is registered at the close of business on the last Business Day immediately preceding the related Distribution Date or, if Definitive Certificates are issued, the last day of the immediately preceding calendar month (each, a “Record Date”), such Holder’s share of the payments made on the corresponding Tranche of Bonds of each Bond Issuer due on the related Payment Date, the receipt of which has been confirmed by the Certificate Trustee. Subject to and in accordance with the terms of the Certificate Indenture, in the event that a Special Payment on a corresponding Tranche of Bonds of a Bond Issuer is received by the Certificate Trustee, from funds then available to the Certificate Trustee, there will be distributed on the applicable Special Distribution Date, to the Person in whose name this Certificate is registered on the Record Date preceding the Special Distribution Date, as applicable, such Holder’s share of such amount. The Special Distribution Date will be determined as provided in the Certificate Indenture. The Certificate Trustee will mail notice of each Special Payment and the related Special Distribution Date to the Holder as provided in the Certificate Indenture.

Distributions on this Certificate will be made as provided in the Certificate Indenture by the Certificate Trustee by wire transfer or check mailed to the Holder of record in the Certificate Register without the presentation or surrender of this Certificate or the making of any notation hereon, except that with respect to Certificates registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee. Except as otherwise provided in the Certificate Indenture and notwithstanding the above, the final distribution on this Certificate will be made after due notice by the Certificate Trustee of the pendency of such distribution and only upon presentation and surrender of this Certificate at the office of the Paying Agent or the office or agency maintained for that purpose by the Certificate Trustee in The City of New York.

The Trust, as owner of the Bonds, has pledged and agreed with the Bond Issuers and the Holders of the Certificates that it will not act in a manner inconsistent with the State Pledge and will not take any action that would impair any rights of any Bond Issuer or the holders of the Bonds of any Bond Issuer, the Phase-In-Recovery Property of any Bond Issuer or the Holders of Certificates.

Reference is hereby made to the further provisions of this Certificate set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon shall have been executed by an authorized officer of the Certificate Trustee by manual signature, this Certificate shall not be entitled to any benefit under the Certificate Indenture or any other Basic Document or be valid for any purpose.

THIS CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAW OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAW.

Any reduction in the principal amount of any Certificate effected by any distribution in respect of principal thereof shall be binding upon all Holders of such Certificate and of any Certificate issued upon the registration of transfer thereof or in exchange thereof or in lieu thereof, whether or not noted thereon.

It is expressly agreed and understood by the parties hereto that (a) this Certificate is executed by U.S. Bank Trust National Association and authenticated and delivered by U.S. Bank National Association, not individually or personally but solely as Delaware Trustee and Certificate Trustee, respectively, on behalf of the Trust in the exercise of the powers and authority conferred and vested in them, (b) the representations, undertakings and

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agreements herein made by the Delaware Trustee and Certificate Trustee on behalf of the Trust are made and intended not as personal representations, undertakings and agreements of either trustee, but are made and intended for the purpose of binding only the Trust, (c) nothing herein contained shall be construed as creating any liability on U.S. Bank Trust National Association or U.S. Bank National Association, individually or personally, to perform any covenant either expressed or implied herein, except in their capacity as Delaware Trustee and Certificate Trustee, respectively, all such liability being expressly waived by all Persons, and (d) under no circumstances shall U.S. Bank Trust National Association or U.S. Bank National Association be personally liable for the payment of any indebtedness or expenses of the Trust, or be personally liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Trust under the Certificate Indenture.

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IN WITNESS WHEREOF, the Delaware Trustee on behalf of the Trust has caused this Certificate to be duly executed.

FIRSTENERGY OHIO PIRB SPECIAL PURPOSE TRUST 2013
By:	U.S. Bank Trust National Association,
	not in its individual capacity but solely as Delaware Trustee
	By:
	Name:
	Title:

CERTIFICATE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

[FORM OF REVERSE OF CERTIFICATE]

Date: [            ]

This is one of the Certificates referred to in the within-mentioned Certificate Indenture.

U.S. Bank National Association, not in its individual capacity but solely as Certificate Trustee

By:

Name:

Title:

[FORM OF REVERSE OF CERTIFICATE]

The Certificates are limited in right of payment, all as more specifically set forth on the face hereof and in the Certificate Indenture. All payments or distributions made to Holders under the Certificate Indenture shall be made only from the Trust Property and only to the extent that the Certificate Trustee shall have sufficient income or proceeds from the Trust Property to make such payments in accordance with the terms of the Certificate Indenture. Each Holder, by its acceptance hereof, agrees that it will look solely to the income and proceeds from the Trust Property to the extent available for distribution to such Holder as provided in the Certificate Indenture. Subject to the terms, limitations and exceptions in the Certificate Indenture, amounts paid to the Holders under the Certificate Indenture shall be allocated to principal on the Certificates to the extent such amounts represented principal payments on the Bonds of the corresponding Tranche of each Bond Issuer and shall be allocated to interest on the Certificates to the extent such amounts represented interest on the Bonds of the corresponding Tranche of each Bond Issuer. This Certificate does not purport to summarize the Certificate Indenture and reference is made to the Certificate Indenture for information with respect to the interests, rights, benefits, obligations, proceeds, and duties evidenced hereby. A copy of the Certificate Indenture may be examined during normal business hours at the principal office of the Certificate Trustee, and at such other places, if any, designated by the Certificate Trustee, by any Holder upon request.

The Certificate Indenture permits, with certain exceptions therein provided, the amendment thereof and the modification of the rights of the Holders under the Certificate Indenture at any time by the Trust and the Certificate Trustee with the consent of the Holders holding Certificates representing not less than a majority of the aggregate Outstanding Amount of Certificates of each affected Tranche issued by the Trust. Any such amendment or modification adopted in accordance with the Certificate Indenture shall be conclusive and binding on such Holder and upon all future Holders of this Certificate and of any Certificate issued upon the transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent is made upon this Certificate. The Certificate Indenture also permits the amendment thereof, in certain limited circumstances, without the consent of the Holders of any of the Certificates.

As provided in the Certificate Indenture and subject to certain limitations therein set forth, the transfer of this Certificate is registerable in the Certificate Register upon surrender of this Certificate for registration of transfer at the offices or agencies maintained by the Certificate Trustee in its capacity as Certificate Registrar, or by any successor Certificate Registrar, in the Borough of Manhattan, The City of New York, duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the Certificate Trustee and the Certificate Registrar duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Certificates of authorized denominations and of a like Tranche and aggregate principal amount will be issued to the designated transferee or transferees.

The Certificates are issuable only as registered Certificates without coupons in Minimum Denominations of $100,000 Original Principal Amount or integral multiples of $1,000 in excess thereof, except for one Certificate of each Tranche which may be of a smaller denomination. As provided in the Certificate Indenture and subject to certain limitations therein set forth, Certificates are exchangeable for new Certificates of authorized denominations and of a like Tranche and aggregate principal amount, as requested by the Holder surrendering the same.

The Holder, by purchase of this certificate, will be deemed to represent that such purchase will not result in a non-exempt prohibited transaction under the Internal Revenue Code of 1986, as amended, or the Employee Retirement Income Security Act of 1974, as amended, and, in each case, the rules and regulations thereunder.

Each Certificateholder, by acceptance of a Certificate, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Certificate Issuer or the Certificate Trustee on the Certificates or under the Certificate Indenture or any certificate or other writing delivered in connection therewith, against (i) any settlor of the Certificate Issuer, the Certificate Trustee or the Delaware Trustee or (ii) any shareholder, partner, owner, beneficiary, agent, officer, director or employee of the Certificate Trustee, the Delaware Trustee or any settlor of the Certificate Issuer in its respective individual capacity, or of any successor or assign of any of them in their respective individual or corporate capacities, except as any such Person may have expressly agreed in writing.

No service charge will be made for any such registration of transfer or exchange, but the Certificate Trustee shall require payment of a sum sufficient to cover any tax or governmental charge payable in connection therewith.

The Certificate Trustee, the Certificate Registrar, and any agent of the Certificate Trustee or the Certificate Registrar may treat the Person in whose name this Certificate is registered as the owner hereof for all purposes, and neither the Certificate Trustee, the Certificate Registrar, nor any such agent shall be affected by any notice to the contrary.

The obligations and responsibilities created by the Certificate Indenture shall terminate with respect to the Certificates upon the distribution to the Holders of all amounts required to be distributed to them pursuant to the Certificate Indenture and the disposition of all property held as part of the Trust Property, except certain indemnity obligations of the Bond Issuers to the Certificate Trustee under the Fee and Indemnity Agreement.

EX-10.2

EXHIBIT 10.2

[CEI FUNDING LLC] [OE FUNDING LLC]

[TE FUNDING LLC],

as Bond Issuer

AND

[THE CLEVELAND ELECTRIC ILLUMINATING COMPANY]

[OHIO EDISON COMPANY]

[THE TOLEDO EDISON COMPANY],

as Servicer

[FORM OF]

PHASE-IN-RECOVERY PROPERTY SERVICING AGREEMENT

Dated as of                          , 2013

TABLE OF CONTENTS

		Page
ARTICLE I. DEFINITIONS			1
Section 1.01.	Definitions		1
Section 1.02.	Other Definitional Provisions		5
ARTICLE II. APPOINTMENT AND AUTHORIZATION			5
Section 2.01.	Appointment of Servicer; Acceptance of Appointment		5
Section 2.02.	Authorization		5
Section 2.03.	Dominion and Control Over the Phase-In-Recovery Property		6
ARTICLE III. BILLING SERVICES			6
Section 3.01.	Duties of Servicer		6
Section 3.02.	Servicing and Maintenance Standards		7
Section 3.03.	Certificate of Compliance		8
Section 3.04.	Annual Report by Independent Registered Public Accountants		8
ARTICLE IV. SERVICES RELATED TO TRUE-UP ADJUSTMENTS; REMITTANCES AND RECONCILIATIONS			9
Section 4.01.	True-Up Adjustments		9
Section 4.02.	Limitation of Liability		10
Section 4.03.	Remittances; Reconciliations		10
ARTICLE V. THE PHASE-IN-RECOVERY PROPERTY			11
Section 5.01.	Custody of Phase-In-Recovery Property Records		11
Section 5.02.	Duties of Servicer as Custodian		11
Section 5.03.	Instructions; Authority to Act		12
Section 5.04.	Effective Period and Termination		12
Section 5.05.	Third-Party Billers		12
Section 5.06.	Custodian’s Indemnification		12
ARTICLE VI. THE SERVICER			13
Section 6.01.	Representations and Warranties of Servicer		13
Section 6.02.	Indemnities of Servicer		14
Section 6.03.	Limitation on Liability of Servicer and Others		15
Section 6.04.	Merger or Consolidation of, or Assumption of the Obligations of, Servicer		16
Section 6.05.	[The Cleveland Electric Illuminating Company][Ohio Edison Company][The Toledo Edison Company] Not to Resign as Servicer		16
Section 6.06.	Servicing Compensation		16
Section 6.07.	Compliance with Applicable Law		17
Section 6.08.	Access to Certain Records and Information Regarding Phase-In-Recovery Property		17
Section 6.09.	Appointments		17
Section 6.10.	No Servicer Advances		17
Section 6.11.	Maintenance of Operations		17
ARTICLE VII. DEFAULT			17
Section 7.01.	Servicer Default		17
Section 7.02.	Appointment of Successor		18
Section 7.03.	Waiver of Past Defaults		19
Section 7.04.	Notice of Servicer Default		19
ARTICLE VIII. MISCELLANEOUS PROVISIONS			19
Section 8.01.	Amendment		19
Section 8.02.	Maintenance of Accounts and Records		20
Section 8.03.	Notices		20
Section 8.04.	Assignment		21

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Section 8.05.	Limitations on Rights of Third Parties	21
Section 8.06.	Severability	22
Section 8.07.	Separate Counterparts	22
Section 8.08.	Headings	22
Section 8.09.	Governing Law	22
Section 8.10.	Collateral Assignment to Bond Trustee	22
Section 8.11.	Nonpetition Covenant	22
Section 8.12.	Rule 17g-5 Compliance	22

EXHIBITS AND SCHEDULES

Exhibit A-1	Form of Servicer Certificate
Exhibit A-2	Certificate of Compliance
Exhibit B	Form of Semiannual True-Up Filing
Exhibit C	Form of Monthly Servicer Certificate
Exhibit D	Form of Semiannual Servicer Certificate
Exhibit E	Form of Semiannual Reconciliation
Schedule 4.01(a)	Expected Amortization Schedule

ANNEXES

Annex I	Servicing Procedures
Annex II	Third-Party Billing

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This PHASE-IN-RECOVERY PROPERTY SERVICING AGREEMENT, dated as of                          , 2013, is between [CEI Funding LLC] [OE Funding LLC] [TE Funding LLC], a Delaware limited liability company (the “Bond Issuer”), and [The Cleveland Electric Illuminating Company][Ohio Edison Company][The Toledo Edison Company], an Ohio corporation.

RECITALS

Pursuant to the Statute and the Financing Order, the Seller and the Bond Issuer are concurrently entering into the Sale Agreement pursuant to which the Seller is selling to the Bond Issuer the Seller’s Phase-In-Recovery Property created pursuant to the Statute and the Financing Order.

In connection with the Bond Issuer’s ownership of the Phase-In-Recovery Property and in order to collect the Phase-In-Recovery Charge, the Bond Issuer desires to engage the Servicer to carry out the functions described herein. The Servicer currently performs similar functions for itself with respect to its own charges to its customers and for others. In addition, the Bond Issuer desires to engage the Servicer to act on its behalf in obtaining True-Up Adjustments from the PUCO. The Servicer desires to perform all of these activities on behalf of the Bond Issuer.

NOW, THEREFORE, in consideration of the promises and the mutual covenants herein contained, the parties hereto agree as follows:

ARTICLE I.

DEFINITIONS

Section 1.01. Definitions. Whenever used in this Agreement, the following words and phrases shall have the following meanings:

“Adjustment Request” means any filing made with the PUCO by the Servicer on behalf of the Bond Issuer to set or adjust the Phase-In-Recovery Charge, including the Issuance Advice Letter or a Semiannual True-Up Filing.

“Administrative Trustee” means The Cleveland Electric Illuminating Company, Ohio Edison Company and The Toledo Edison Company, collectively (in each case, in its capacity as a servicer).

“Agreement” means this Phase-In-Recovery Property Servicing Agreement, together with all Exhibits, Schedules and Annexes hereto, as the same may be amended and supplemented from time to time.

“Annual Accountant’s Report” has the meaning set forth in Section 3.04.

“Bills” means each of the regular monthly bills, summary bills and other bills issued to Customers by [The Cleveland Electric Illuminating Company][Ohio Edison Company][The Toledo Edison Company] on its own behalf and in its capacity as Servicer or by a TPB.

“Bond Indenture” means the Bond Indenture, dated as of                          , 2013, between the Bond Issuer and the Bond Trustee, as the same may be amended and supplemented from time to time.

“Bond Issuer” has the meaning set forth in the preamble to this Agreement.

“Certificate of Compliance” means the certificate referred to in Section 3.03.

“Closing Date” means                          , 2013.

“Customers” means all classes of retail users of the Seller’s distribution system within its geographic service territory at any given time.

“Declaration of Trust” means the Amended and Restated Declaration of Trust dated as of                          , 2013 by U.S. Bank Trust National Association, as Delaware Trustee, the Administrative Trustee, CEI Funding LLC, OE Funding LLC and TE Funding LLC, as the same may be further amended and supplemented from time to time.

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“Deemed Phase-In-Recovery Charge Payments” means the payments in respect of the Phase-In-Recovery Charge, which are deemed to have been received by the Servicer, directly or indirectly (including through any TPB), from or on behalf of Customers, calculated in accordance with Annex I hereto.

“Estimated Phase-In-Recovery Charge Payments” means the estimated payments in respect of the Phase-In-Recovery Charge, which are deemed to have been received by the Servicer, directly or indirectly (including through any TPB), from or on behalf of Customers, calculated in accordance with Annex I hereto.

“Expected Amortization Schedule” means Schedule 4.01(a) hereto.

“Financing Order” means the order of the PUCO issued on October 10, 2012, as amended by the entry on rehearing issued by the PUCO on December 19, 2012 and as further amended by the entry nunc pro tunc issued by the PUCO on January 9, 2013.

“Governmental Authority” means any nation or government, any federal, state, local or other political subdivision thereof and any court, administrative agency, or other instrumentality or entity exercising executive, legislative, judicial, regulatory or administrative function of government.

“Insolvency Event” means, with respect to a specified Person, (a) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of such Person or any substantial part of its property in an involuntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or ordering the winding-up or liquidation of such Person’s affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (b) the commencement by such Person of a voluntary case under any applicable Federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or the failure by such Person generally to pay its debts as such debts become due.

“Issuance Advice Letter” means the initial Issuance Advice Letter, dated                          , 2013, filed by the Servicer with the PUCO pursuant to the Financing Order.

“Losses” has the meaning assigned to that term in Section 6.02(b).

“Monthly Servicer Certificate” has the meaning assigned to that term in Section 4.01(d)(ii).

“Officer’s Certificate” means a certificate of the Servicer signed by a Responsible Officer.

“Opinion of Counsel” means one or more written opinions of counsel who may be an employee of or counsel to the party providing such opinion(s) of counsel, which counsel shall be reasonably acceptable to the party receiving such opinion(s) of counsel.

“Phase-In-Recovery Charge” means the Seller’s Phase-In-Recovery Charge designated pursuant to the Financing Order, as the same may be adjusted from time to time as provided in the Financing Order.

“Phase-In-Recovery Charge Collections” means the Estimated Phase-In-Recovery Charge Payments remitted to the Collection Account.

“Phase-In-Recovery Property” means the phase-in-recovery property that is created simultaneous with the sale of such property by the Seller to the Bond Issuer and continues to exist pursuant to and in accordance with paragraph VI.A(6) of the Financing Order and Sections 4928.232, 4928.234 and 4928.2312 of the Statute and is sold by the Seller to the Bond Issuer under the Sale Agreement.

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“Phase-In-Recovery Property Records” has the meaning assigned to that term in Section 5.01.

“Principal Balance” means, as of any Payment Date, the sum of the outstanding principal amount of the Bonds.

“Projected Principal Balance” means, as of any Payment Date, the sum of the projected outstanding principal amount of the Bonds for such Payment Date set forth in the Expected Amortization Schedule.

“PUCO” means the Public Utilities Commission of Ohio and any successor thereto.

“PUCO Regulations” means all regulations, rules, tariffs and laws applicable to public utilities or TPBs, as the case may be, and promulgated by, enforced by or otherwise within the jurisdiction of the PUCO.

“Rating Agency Condition” means, with respect to any action, not less than ten Business Days’ prior written notification to each Rating Agency of such action, and written confirmation from each of Standard & Poor’s and Moody’s to the Servicer, the Bond Trustee and the Bond Issuer that such action will not result in a suspension, reduction or withdrawal of the then current rating by such Rating Agency of any Tranche of Bonds and that prior to the taking of the proposed action no other Rating Agency shall have provided written notice to the Bond Issuer that such action has resulted or would result in the suspension, reduction or withdrawal of the then current rating of any Tranche of Bonds; provided, that if within such ten Business Day period, any Rating Agency (other than Standard & Poor’s) has neither replied to such notification nor responded in a manner that indicates that such Rating Agency is reviewing and considering the notification, then (i) the Bond Issuer shall be required to confirm that such Rating Agency has received the Rating Agency Condition request, and if it has, promptly request the related Rating Agency Condition confirmation and (ii) if the Rating Agency neither replies to such notification nor responds in a manner that indicates it is reviewing and considering the notification within five Business Days following such second request, the applicable Rating Agency Condition requirement shall not be deemed to apply to such Rating Agency. For the purposes of this definition, any confirmation, request, acknowledgment or approval that is required to be in writing may be in the form of electronic mail or a press release (which may contain a general waiver of a Rating Agency’s right to review or consent).

“Rating Agency” means, collectively, Moody’s, Standard & Poor’s and Fitch. If no such organization or successor is any longer in existence, “Rating Agency” shall be a nationally recognized statistical rating organization or other comparable Person designated by the Bond Issuer, notice of which designation shall be given to the Bond Trustee, the Certificate Trustee and the Servicer.

“Reconciliation Period” means the semiannual periods commencing on April 1 and October 1 of each year and ending on September 30 and March 31, respectively, of each year; provided, however, that the initial Reconciliation Period shall commence on the Closing Date and end on or before the date which is 12 months after the Closing Date.

“Regulation AB” means the rules of the Commission promulgated under Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R. Sections 229.1100-229.1123, as such may be amended from time to time.

“Remittance” means each remittance hereunder of Estimated Phase-In-Recovery Charge Payments by the Servicer to the Bond Trustee.

“Remittance Date” means each Servicer Business Day on which a Remittance is to be made by the Servicer pursuant to Section 4.03.

“Remittance Excess” means the amount, if any, calculated for a particular Reconciliation Period, by which all Phase-In-Recovery Charge Collections during such Reconciliation Period exceed Deemed Phase-In-Recovery Charge Payments during such Reconciliation Period.

“Remittance Period” means the semiannual periods commencing on January 1 and July 1 of each year and ending on June 30 and December 31, respectively, of each year; provided, however, that the initial Remittance Period shall commence on the Closing Date and end on or before the date which is three months after the end of the initial Reconciliation Period.

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“Remittance Shortfall” means the amount, if any, calculated for a particular Reconciliation Period, by which Deemed Phase-In-Recovery Charge Payments during such Reconciliation Period exceed Phase-In-Recovery Charge Collections during such Reconciliation Period.

“Required Debt Service” means, for any Remittance Period, the total dollar amount calculated by the Servicer in accordance with Section 4.01(b)(i) as necessary to be remitted to the Collection Account during such Remittance Period (after giving effect to (a) the allocation and distribution of amounts on deposit in the Excess Funds Subaccount at the time of calculation and which are available for payments on the Bonds, (b) any shortfalls in Required Debt Service for any prior Remittance Period, (c) the required payment or credit of any Remittance Excess or Remittance Shortfall during such Remittance Period and (d) any Remittances based upon the Phase-In-Recovery Charge in effect in the prior Remittance Period that are expected to be realized in such Remittance Period) in order to ensure that, as of the Payment Date immediately following the end of such period, (i) all accrued and unpaid interest on the Bonds then due shall have been paid in full, (ii) the Principal Balance of the Bonds is equal to the Projected Principal Balance of the Bonds for that Payment Date, (iii) the balance on deposit in the Capital Subaccount equals the Required Capital Level, and (iv) all other fees, expenses and indemnities due and owing and required or allowed to be paid under Section 8.02 of the Bond Indenture as of such date shall have been paid in full; provided, however, that, with respect to any True-Up Adjustment occurring after the last Scheduled Maturity Date for any Bonds, the Required Debt Service shall be calculated to ensure that sufficient amounts will be collected to retire such Bonds in full as of the earlier of (x) the next Payment Date and (y) the Final Maturity Date for such Bonds.

“Responsible Officer” means the chief executive officer, the president, any vice president, the treasurer, any assistant treasurer, the clerk, any assistant clerk, the controller or the director of corporate finance and cash management of the Servicer.

“Retirement of the Bonds” means the day on which the final payment is made to the Bond Trustee in respect of the last outstanding Bond.

“Sale Agreement” means the Phase-In-Recovery Property Purchase and Sale Agreement dated as of                          , 2013, between [The Cleveland Electric Illuminating Company][Ohio Edison Company][The Toledo Edison Company], as Seller, and the Bond Issuer, as the same may be amended and supplemented from time to time.

“Seller” means [The Cleveland Electric Illuminating Company][Ohio Edison Company][The Toledo Edison Company], an Ohio corporation, and its permitted successors and assigns under the Sale Agreement.

“Semiannual Servicer Certificate” has the meaning assigned to that term in Section 4.01(d)(iii).

“Semiannual True-Up Filing” means an adjustment request filed with the PUCO on or prior to November 1 and May 1 in each year (after the initial adjustment request to be filed with the PUCO within 12 months after the issuance date of the Bonds, which initial adjustment request shall also constitute a Semiannual True-Up Filing), in respect of an adjustment request; provided that during the period commencing with the start of the last year that the last maturing tranche of Bonds is expected to be outstanding and ending with the Final Maturity Date, “Semiannual True-Up Filing” means a True-Up Adjustment filed as frequently as monthly. Unless otherwise ordered by the PUCO, a Semiannual True-Up Filing will become effective on a service tendered basis sixty (60) days after the filing with the PUCO.

“Servicer” means [The Cleveland Electric Illuminating Company][Ohio Edison Company][The Toledo Edison Company], as the servicer of the Phase-In-Recovery Property, or each successor (in the same capacity) pursuant to Section 6.04 or 7.02.

“Servicer Business Day” means any Business Day on which the Servicer’s offices in the State of Ohio are open for business.

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“Servicer Default” means an event specified in Section 7.01.

“Servicing Fee” has the meaning set forth in Section 6.06(a).

“Sponsor” means [The Cleveland Electric Illuminating Company][Ohio Edison Company][The Toledo Edison Company], an Ohio corporation, and its permitted successors and assigns under the Sale Agreement.

“Statute” means Ohio Revised Code, Sections 4928.23 through 4928.2318.

“Termination Notice” has the meaning assigned to that term in Section 7.01.

“TPB” means a third party who bills and collects the Phase-In-Recovery Charge to and from Customers in accordance with the Statute, PUCO Regulations and any order of the PUCO.

“True-Up Adjustment” means each adjustment to the Phase-In-Recovery Charge made pursuant to the terms of the Financing Order and in accordance with Section 4.01 hereof.

“Weighted Average Days Outstanding” means the weighted average number of days [The Cleveland Electric Illuminating Company][Ohio Edison Company][The Toledo Edison Company]’s monthly retail customer bills remain outstanding during the calendar year immediately preceding the calculation thereof pursuant to Section 4.01(b)(i). For all purposes of this Agreement, the calculation of Weighted Average Days Outstanding pursuant to Section 4.01(b)(i) shall become effective on [            ] of each year. The initial Weighted Average Days Outstanding shall be [            ] days until updated pursuant to Section 4.01(b)(i).

Section 1.02. Other Definitional Provisions.

(a) Capitalized terms used herein and not otherwise defined herein have the meanings assigned to them in the Bond Indenture.

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

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

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

ARTICLE II.

APPOINTMENT AND AUTHORIZATION

Section 2.01. Appointment of Servicer; Acceptance of Appointment. Subject to Section 6.05 and Article 7, the Bond Issuer hereby appoints the Servicer, and the Servicer hereby accepts such appointment, to perform the Servicer’s obligations pursuant to this Agreement on behalf of and for the benefit of the Bond Issuer or any assignee thereof in accordance with the terms of this Agreement and applicable law. This appointment and the Servicer’s acceptance thereof may not be revoked except in accordance with the express terms of this Agreement.

Section 2.02. Authorization. With respect to all or any portion of the Phase-In-Recovery Property, the Servicer is authorized and empowered by the Bond Issuer to (a) execute and deliver, on behalf of itself and/or the Bond Issuer, as the case may be, any and all instruments, documents or notices, and (b) on behalf of itself and/or the Bond Issuer, as the case may be, make any filing and participate in proceedings of any kind with any governmental authorities, including with the PUCO. The Bond Issuer shall execute and/or furnish the Servicer such documents as

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

Section 2.03. Dominion and Control Over the Phase-In-Recovery Property. Notwithstanding any other provision herein, the Bond Issuer shall have dominion and control over the Phase-In-Recovery Property, and the Servicer, in accordance with the terms hereof, is acting solely as the servicing agent and custodian for the Bond Issuer with respect to the Phase-In-Recovery Property and the Phase-In-Recovery Property Records. The Servicer shall not take any action that is not authorized by this Agreement or that shall impair the rights of the Bond Issuer or the Bond Trustee in the Phase-In-Recovery Property, in each case unless such action is required by applicable law.

ARTICLE III.

BILLING SERVICES

Section 3.01. Duties of Servicer. The Servicer, as agent for the Bond Issuer, shall have the following duties:

(a) Duties of Servicer Generally.

(i) General Duties. The Servicer’s duties in general shall include management, servicing and administration of the Phase-In-Recovery Property; obtaining meter reads, calculating electricity usage, billing, collection and posting of all payments in respect of the Phase-In-Recovery Property; responding to inquiries by Customers, the PUCO, competitive retail electric suppliers (if any) or any federal, local or other state governmental authorities with respect to the Phase-In-Recovery Charges or Phase-In-Recovery Property; delivering Bills to Customers, investigating and handling delinquencies, processing and depositing collections and making periodic remittances; furnishing periodic reports to the Bond Issuer, the Bond Trustee, the Certificate Trustee, the Rating Agencies and the PUCO; making all filings with the PUCO and taking such other action as may be necessary to perfect the Bond Issuer’s ownership interest in and the Bond Trustee’s first priority security interest in the Phase-In-Recovery Property; making all filings and taking such other action as may be necessary to perfect and maintain the perfection and priority of the Bond Trustee’s security interest in the Collateral; selling, as the agent for the Bond Issuer as its interests may appear, defaulted or written off accounts in accordance with the Servicer’s usual and customary practices; taking all necessary action in connection with True-Up Adjustments as set forth herein; and performing such other duties as may be specified in the Financing Order to be performed by it. To the extent allowed by law and PUCO Regulations, certain of the duties set forth above may be performed by TPBs. Without limiting the generality of this Section 3.01(a)(i), in furtherance of the foregoing, the Servicer hereby agrees that it shall also have, and shall comply with, the duties and responsibilities relating to data acquisition, usage and bill calculation, billing, customer service functions, collection, payment processing and remittance set forth in Annex I hereto, as it may be amended from time to time. For the avoidance of doubt, the term “usage” when used herein refers to both kilowatt hour consumption and kilowatt demand.

(ii) PUCO Regulations Control. Notwithstanding anything to the contrary in this Agreement, the duties of the Servicer set forth in this Agreement shall be qualified in their entirety by any PUCO Regulations, the Financing Order and the federal securities laws and rules and regulations promulgated thereunder, including without limitation, Regulation AB, as in effect at the time such duties are to be performed.

(b) Reporting Functions.

(i) Semiannual Reconciliation Report. The Servicer shall deliver a semiannual written reconciliation report substantially in the form of Exhibit E hereto as required by Section 4.03(b) hereof.

(ii) Notification of Laws and Regulations. The Servicer shall promptly notify the Bond Issuer, the Bond Trustee, the Certificate Trustee and the Rating Agencies in writing of any laws or PUCO Regulations hereafter promulgated that have a material adverse effect on the Servicer’s ability to perform its duties under this Agreement.

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(iii) Other Information. Upon the reasonable request of the Bond Issuer, the Bond Trustee, the Certificate Trustee, any Rating Agency, or the PUCO, the Servicer shall provide to such Bond Issuer, Bond Trustee, Certificate Trustee, the Rating Agencies, or the PUCO, as the case may be, any public financial information in respect of the Servicer, or any material information regarding the Phase-In-Recovery Property to the extent it is reasonably available to the Servicer, as may be reasonably necessary and permitted by law, including all applicable PUCO Regulations and guidelines, for the Bond Issuer, the Bond Trustee, the Certificate Trustee, or the Rating Agencies to monitor the Servicer’s performance hereunder.

(iv) Preparation of Reports to be Filed with the Commission. The Servicer shall prepare and deliver such additional reports as are required under this Agreement, including a copy of each Semiannual Servicer Certificate described in Section 4.01(d)(iii), the annual Certificate of Compliance described in Section 3.03, and the Annual Accountant’s Report described in Section 3.04. In addition, the Servicer shall prepare, procure, deliver and/or file, or cause to be prepared, procured, delivered or filed, any reports, attestations, exhibits, certificates or other documents required to be delivered or filed with the Commission (and/or any other Governmental Authority) by the Bond Issuer or the Sponsor under the federal securities or other applicable laws or in accordance with the Basic Documents, including, without limitation, filing with the Commission, if applicable and required by applicable law, a copy or copies of (i) each Monthly Servicer Certificate described in Section 4.01(d)(ii) (under Form 10-D or any other applicable form), (ii) each Semiannual Servicer Certificate described in Section 4.01(d)(iii) (under Form 10-D or any other applicable form), (iii) the annual statements of compliance, attestation reports and other certificates described in Section 3.03, and (iv) the Annual Accountant’s Report (and any attestation required under Regulation AB) described in Section 3.04. In addition, the appropriate officer or officers of the Servicer shall (in its separate capacity as Servicer) sign the Sponsor’s annual report on Form 10-K (and any other applicable Commission or other reports, attestations, certifications and other documents, to the extent that the Servicer’s signature is required by, and consistent with, the federal securities laws and/or any other applicable law.

(c) Opinions of Counsel. The Servicer shall deliver to the Bond Issuer and the Bond Trustee:

(i) promptly after the execution and delivery of this Agreement and of each amendment hereto, an Opinion of Counsel from external counsel of the Bond Issuer either (A) to the effect that, in the opinion of such counsel, all filings, including filings with the PUCO and all filings pursuant to the UCC, that are necessary under the UCC and the Statute to fully preserve, protect and perfect the Lien of the Bond Trustee in the Phase-In-Recovery Property have been authorized, executed and filed, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (B) to the effect that, in the opinion of such counsel, no such action shall be necessary to preserve, protect and perfect such Lien; and

(ii) within ninety days after the beginning of each calendar year beginning with the first calendar year beginning more than three months after the date hereof, an Opinion of Counsel from external counsel of the Issuer, dated as of a date during such ninety-day period, either (A) to the effect that, in the opinion of such counsel, all filings, including filings with the PUCO and all filings pursuant to the UCC, that are necessary under the UCC and the Statute to fully preserve, protect and perfect the Lien of the Bond Trustee in the Phase-In-Recovery Property, have been authorized, executed and filed and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (B) to the effect that, in the opinion of such counsel, no such action shall be necessary to preserve, protect and perfect such Lien.

Each Opinion of Counsel referred to in clause (i) or (ii) above shall specify any action necessary (as of the date of such opinion) to be taken in the following year to preserve, protect and perfect such interest or Lien.

(d) Duties of Servicer as Administrative Trustee. The Servicer, in addition to the Delaware Trustee, shall serve as a trustee of the Trust, and as a trustee shall have the administrative duties set forth in the Declaration of Trust including without limitation those duties designated for such trustee in Article IV of the Declaration of Trust. The Servicer’s appointment as a trustee of the Trust shall become effective as of the Closing Date and shall continue in full force and effect until terminated pursuant to this Section 3.01(d). If any Servicer shall resign as Servicer in accordance with the provisions of this Agreement or if all the rights and obligations of any Servicer shall have terminated under Section 7.01, the appointment of such Servicer as a trustee under the Declaration of Trust shall terminate upon appointment of a successor Servicer, subject to the approval of the PUCO, and acceptance by such successor Servicer of such appointment.

Section 3.02. Servicing and Maintenance Standards. On behalf of the Bond Issuer, the Servicer shall (a) manage, service, administer and make collections in respect of the Phase-In-Recovery Property with reasonable care and in accordance with applicable law, including all applicable PUCO Regulations and guidelines, using the same degree of care and diligence that the Servicer exercises with respect to similar assets for its own account and, if applicable, for others; (b) follow customary standards, policies and procedures for the industry in performing its duties as Servicer; (c) use all reasonable efforts, consistent with its customary servicing procedures, to bill and collect the Phase-In-Recovery Charge; (d) file all filings under the applicable UCC or the Statute necessary or desirable to maintain the first priority perfected security interest of the Bond Trustee in the Phase-In-Recovery Property; (e) comply in all material respects with all laws and regulations applicable to and binding on it relating to

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the Phase-In-Recovery Property; and (f) submit semiannually a request to the PUCO seeking a True-Up Adjustment, if any is required, of the Phase-In-Recovery Charge. The Servicer shall follow such customary and usual practices and procedures as it shall deem necessary or advisable in its servicing of all or any portion of the Phase-In-Recovery Property, which, in the Servicer’s judgment, may include the taking of legal action, at the Bond Issuer’s expense but subject to the priority of payments and Cap set forth in Section 8.02(e) of the Bond Indenture.

Section 3.03. Certificate of Compliance.

(a) The Servicer shall deliver to the Bond Issuer, the Bond Trustee, the Certificate Trustee, the Rating Agencies, and the PUCO, on or before (a) March 31 of each year or (b) if earlier, for any calendar year in which the Sponsor is required to file an annual report on Form 10-K in accordance with the Exchange Act and the rules and regulations thereunder, the date on which such annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations thereunder, certificates from a Responsible Officer of the Servicer (i) containing, and certifying as to, the statements of compliance required by Item 1123 (or any successor or similar item or rule) of Regulation AB, as then in effect and (ii) containing, and certifying as to, the statements and assessment of compliance required by Item 1122(a) (or any successor or similar item or rule) of Regulation AB, as then in effect. These certificates may be in the form of, or shall include the forms attached hereto as Exhibit A-1 and Exhibit A-2, with, in the case of Exhibit A-1, such changes as may be required to conform to the applicable securities law.

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

(c) The initial Servicer, in its capacity as Sponsor, shall post on its website and file with or furnish to the Commission, in periodic reports and other reports as are required from time to time under Section 13 or Section 15(d) of the Exchange Act, the information described in Section 3.07(g) of the Bond Indenture to the extent such information is reasonably available to the Sponsor. Except to the extent permitted by applicable law, the initial Servicer, in its capacity as Sponsor, shall not voluntarily suspend or terminate its filing obligations as Sponsor with the SEC as described in this Section 3.03(c). The covenants of the initial Servicer, in its capacity as Sponsor, pursuant to this Section 3.03(c) shall survive the resignation, removal or termination of the initial Servicer as Servicer hereunder.

Section 3.04. Annual Report by Independent Registered Public Accountants.

(a) The Servicer, at its own expense in partial consideration of the Servicing Fee paid to it, shall cause a firm of Independent registered public accountants (which may provide other services to the Servicer or the Seller) to prepare annually, and the Servicer shall deliver annually to the Bond Issuer, the Bond Trustee, Certificate Trustee, the Rating Agencies, and the PUCO, on or before the earlier of (a) March 31 of each year, [beginning March 31, 2014,] or (b) with respect to each calendar year during which the Sponsor’s annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations thereunder, the date on which the annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the rule and regulations thereunder, a report addressed to the Servicer (the “Annual Accountant’s Report”) to the effect that such firm has performed certain procedures, agreed between the Servicer and such accountants, in connection with the Servicer’s compliance with its obligations under this Agreement during the preceding twelve months ended December 31 (or, in the case of the first Annual Accountant’s Report to be delivered on or before March 31, [2014], the period of time from the date of this Agreement until December 31, [2013]), identifying the results of such procedures and including any exceptions noted.

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

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ARTICLE IV.

SERVICES RELATED TO TRUE-UP ADJUSTMENTS; REMITTANCES AND RECONCILIATIONS

Section 4.01. True-Up Adjustments. From time to time, until the Retirement of the Bonds, the Servicer shall identify the need for True-Up Adjustments and shall take all reasonable action to obtain and implement such True-Up Adjustments, all in accordance with the following:

(a) Expected Amortization Schedule. The Expected Amortization Schedule is attached hereto as Schedule 4.01(a).

(b) True-Up Filings.

(i) Semiannual True-Up Filings. For the purpose of preparing a Semiannual True-Up Filing, the Servicer shall: (A) update the assumptions underlying the calculation of the Phase-In-Recovery Charge, including energy usage volume, the rate of charge-offs and estimated expenses and fees of the Bond Issuer and the Certificate Issuer to the extent not fixed, in each case for the Remittance Periods beginning on January 1 and July 1 of such year; (B) update the calculation of Weighted Average Days Outstanding; (C) determine the Required Debt Service for each such Remittance Period based upon such updated assumptions; and (D) determine the Phase-In-Recovery Charge to be charged during each such Remittance Period based upon such Required Debt Service. The Servicer shall file a Semiannual True-Up Filing with the PUCO no later than November 1 and May 1 of each year (no later than [            ] for the first Semiannual True-Up Filing).

(ii) True-Up Adjustments. The Servicer shall take all reasonable actions and make all reasonable efforts to secure any True-Up Adjustments.

(c) Intentionally Omitted.

(d) Reports.

(i) Notification of Adjustment Request Filings and True-Up Adjustments. Whenever the Servicer files an Adjustment Request with the PUCO, the Servicer shall send a copy of such filing to the Bond Issuer, the Bond Trustee, the Certificate Trustee and the Rating Agencies concurrently therewith. If any True-Up Adjustment requested in any such Adjustment Request filing does not become effective on the applicable date as provided by the Financing Order, the Servicer shall notify the Bond Issuer, the Bond Trustee, the Certificate Trustee and the Rating Agencies by the end of the second Servicer Business Day after such applicable date.

(ii) Monthly Servicer Certificate. So long as any Bonds are outstanding, not later than fifteen (15) days after the end of each month after the Certificates are issued (excluding                          , 2013), or if such day is not a Servicer Business Day, the next succeeding Servicer Business Day, the Servicer shall deliver a written report substantially in the form of Exhibit C hereto (the “Monthly Servicer Certificate”) to the Bond Issuer, the Bond Trustee, the Certificate Trustee, the Rating Agencies, and the PUCO.

(iii) Semiannual Servicer Certificate. So long as any Bonds are outstanding, not later than the Servicer Business Day immediately preceding each Payment Date, the Servicer shall deliver a written report substantially in the form of Exhibit D hereto (the “Semiannual Servicer Certificate”) to the Bond Issuer, the Bond Trustee, the Certificate Trustee, the Rating Agencies, and the PUCO.

(iv) Reports to Customers. After each revised Phase-In-Recovery Charge has gone into effect pursuant to a True-Up Adjustment, the Servicer shall, to the extent and in the manner and time frame required by applicable PUCO Regulations, if any, cause to be prepared and delivered to customers any required notices announcing such revised Phase-In-Recovery Charges.

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Section 4.02. Limitation of Liability.

(a) The Bond Issuer and the Servicer expressly agree and acknowledge that:

(i) In connection with any True-Up Adjustment, the Servicer is acting solely in its capacity as the servicing agent hereunder.

(ii) Neither the Servicer nor the Bond Issuer shall be responsible in any manner for, and shall have no liability whatsoever as a result of, any action, decision, ruling or other determination made or not made, or any delay (other than any delay resulting from the Servicer’s failure to file the applications required by Section 4.01 in a timely and correct manner or other material breach by the Servicer of its duties under this Agreement that materially adversely affects the True-Up Adjustments), by the PUCO in any way related to the Phase-In-Recovery Property or in connection with any True-Up Adjustment, the subject of any filings under Section 4.01, any proposed True-Up Adjustment, or the approval of the Phase-In-Recovery Charge and the adjustments thereto.

(iii) The Servicer shall have no liability whatsoever relating to the calculation of the Phase-In-Recovery Charge and the adjustments thereto, including as a result of any inaccuracy of any of the assumptions made in such calculation regarding expected energy usage volume, the rate of charge-offs, estimated expenses and fees of the Bond Issuer and the Certificate Issuer, so long as the Servicer has not acted in a negligent manner in connection therewith, nor shall the Servicer have any liability whatsoever as a result of any Person, including the Bondholders or the Certificateholders, not receiving any payment, amount or return anticipated or expected in respect of any Bond or Certificate generally, except only to the extent that the Servicer is liable under Section 6.02 of this Agreement.

(b) Notwithstanding the foregoing, this Section 4.02 shall not relieve the Servicer of any liability under Section 6.02 for any misrepresentation by the Servicer under Section 6.01 or for any breach by the Servicer of its obligations under this Agreement.

Section 4.03. Remittances; Reconciliations.

(a) Subject to Section 4.03(b) below, on each Servicer Business Day commencing 45 days after the date of this Agreement, the Servicer shall cause to be made within two (2) Servicer Business Days of deemed receipt a wire transfer of immediately available funds to the General Subaccount of the Collection Account in an amount equal to the Estimated Phase-In-Recovery Charge Payments (as calculated in accordance with Annex I hereto) received on such day and on any prior day that was not a Servicer Business Day for which a Remittance has not previously been made (taking into account the Weighted Average Days Outstanding in effect from time to time). Prior to or simultaneous with each Remittance to the General Subaccount of the Collection Account pursuant to this Section, the Servicer shall provide written notice to the Bond Trustee of each such Remittance (including the exact dollar amount to be remitted).

(b) Within 12 months after the issuance of the Bonds and then on or before each January 1 and July 1 (and as frequently as monthly during the period commencing with the start of the last year that the last maturing tranche of Bonds is expected to be outstanding and ending with the Final Maturity Date), the Servicer shall calculate the amount of any Remittance Shortfall or Remittance Excess attributable to the prior Reconciliation Period and (A) if a Remittance Shortfall exists, the Servicer shall make a supplemental wire transfer of immediately available funds to the General Subaccount of the Collection Account on the next Servicer Business Day following such calculation in the amount of such Remittance Shortfall, or (B) if a Remittance Excess exists, the Servicer may reduce the amount of Remittances to be made to the Bond Issuer on succeeding Servicer Business Days in an amount equal to the amount of such Remittance Excess until the balance of the Remittance Excess has been reduced to zero. The Servicer shall deliver a written report setting forth in reasonable detail the calculation of any Remittance Excess or Remittance Shortfall to the Bond Issuer, the Bond Trustee, the Certificate Trustee, the Rating Agencies, and the PUCO.

(c) The Servicer agrees and acknowledges that it will remit Estimated Phase-In-Recovery Charge Payments in accordance with this Section 4.03 without any surcharge, fee, offset, charge or other deduction except (i) as set forth in Section 4.03(b) above and (ii) for late fees permitted by Section 6.06.

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ARTICLE V.

THE PHASE-IN-RECOVERY PROPERTY

Section 5.01. Custody of Phase-In-Recovery Property Records. To assure uniform quality in servicing the Phase-In-Recovery Property and to reduce administrative costs, the Bond Issuer hereby revocably appoints the Servicer, and the Servicer hereby accepts such appointment, to act as the agent of the Bond Issuer and the Bond Trustee as custodian of any and all documents and records that the Servicer shall keep on file, in accordance with its customary procedures, relating to the Phase-In-Recovery Property, including copies of the Financing Order and Adjustment Requests relating thereto and all documents filed with the PUCO in connection with any True-Up Adjustment and computational records relating thereto (collectively, the “Phase-In-Recovery Property Records”), which are hereby constructively delivered to the Bond Trustee, as pledgee of the Bond Issuer with respect to all Phase-In-Recovery Property.

Section 5.02. Duties of Servicer as Custodian.

(a) Safekeeping. The Servicer shall hold the Phase-In-Recovery Property Records on behalf of the Bond Issuer and the Bond Trustee and maintain such accurate and complete accounts, records and computer systems pertaining to the Phase-In-Recovery Property Records on behalf of the Bond Issuer and the Bond Trustee as shall enable the Bond Issuer to comply with this Agreement and the Bond Indenture. In performing its duties as custodian the Servicer shall act with reasonable care, using that degree of care and diligence that the Servicer exercises with respect to comparable assets that the Servicer services for itself or, if applicable, for others. The Servicer shall promptly report to the Bond Issuer and the Bond Trustee any failure on its part to hold the Phase-In-Recovery Property Records and maintain its accounts, records and computer systems as herein provided and promptly take appropriate action to remedy any such failure. Nothing herein shall be deemed to require an initial review or any periodic review by the Bond Issuer or the Bond Trustee of the Phase-In-Recovery Property Records. The Servicer’s duties to hold the Phase-In-Recovery Property Records on behalf of the Bond Issuer set forth in this Section 5.02, to the extent such Phase-In-Recovery Property Records have not been previously transferred to a successor Servicer pursuant to Article VII, shall terminate one year and one day after the earlier of the date on which (i) the Servicer is succeeded by a successor Servicer in accordance with Article VII hereof and (ii) no Bonds are outstanding.

(b) Maintenance of and Access to Records. The Servicer shall maintain at all times records and accounts that permit the Servicer to identify Phase-In-Recovery Charges billed. The Servicer shall maintain the Phase-In-Recovery Property Records in Akron, Ohio or at such other office as shall be specified to the Bond Issuer and the Bond Trustee by written notice at least 30 days prior to any change in location. The Servicer shall make available for inspection to the Bond Issuer and the Bond Trustee or their respective duly authorized representatives, attorneys or auditors the Phase-In-Recovery Property Records at such times during normal business hours as the Bond Issuer or the Bond Trustee shall reasonably request and which do not unreasonably interfere with the Servicer’s normal operations. Nothing in this Section 5.02(b) shall affect the obligation of the Servicer to observe any applicable law (including any PUCO Regulations) prohibiting disclosure of information regarding the Customers, and the failure of the Servicer to provide access to such information as a result of such obligation shall not constitute a breach of this Section 5.02(b).

(c) Release of Documents. Upon instruction from the Bond Trustee in accordance with the Bond Indenture, the Servicer shall release any Phase-In-Recovery Property Records to the Bond Trustee, the Bond Trustee’s agent or the Bond Trustee’s designee, as the case may be, at such place or places as the Bond Trustee may designate, as soon as practicable.

(d) Defending Phase-In-Recovery Property Against Claims. The Servicer, on behalf of the Bondholders, shall institute any action or proceeding necessary to compel performance by the PUCO or the State of Ohio of any of their obligations or duties under the Statute, the Financing Order or any Adjustment Request, and the Servicer agrees to take such legal or administrative actions, including defending against or instituting and pursuing legal actions and appearing or testifying at hearings or similar proceedings, as may be reasonably necessary to block or overturn any attempts to cause a repeal of, modification of or supplement to the Statute or the Financing Order or the rights of holders of Phase-In-Recovery Property by legislative enactment, voter initiative or constitutional amendment that would be adverse to the Bondholders, the Bond Issuer or the Bond Trustee, (and, thus, the Delaware

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Trustee, the Certificate Trustee and the Certificateholders). The costs of any such action shall be payable from Phase-In-Recovery Charge Collections as an Operating Expense in accordance with the priorities and Cap set forth in Section 8.02(e) of the Bond Indenture. The Servicer’s obligations pursuant to this Section 5.02 shall survive and continue notwithstanding the fact that the payment of Operating Expenses pursuant to Section 8.02(e) of the Bond Indenture may be delayed (it being understood that the Servicer may be required to initially advance its own funds to satisfy its obligations hereunder).

Section 5.03. Instructions; Authority to Act. For so long as any Bonds remain outstanding, the Servicer shall be deemed to have received proper instructions with respect to the Phase-In-Recovery Property Records upon its receipt of written instructions signed by a Responsible Officer of the Bond Trustee.

Section 5.04. Effective Period and Termination. The Servicer’s appointment as custodian shall become effective as of the Closing Date and shall continue in full force and effect until terminated pursuant to this Section 5.04. If any Servicer shall resign as Servicer in accordance with the provisions of this Agreement or if all of the rights and obligations of any Servicer shall have been terminated under Section 7.01, the appointment of such Servicer as custodian shall terminate upon appointment of a successor Servicer, subject to the approval of the PUCO, and acceptance by such successor Servicer of such appointment.

Section 5.05. Third-Party Billers.

(a) The Servicer hereby acknowledges and agrees that:

(i) billing and collection of Phase-In-Recovery Charges by TPBs is not currently permitted by the Statute or PUCO Regulations;

(ii) if at any time in the future the State of Ohio takes any action to amend the Statute, or the PUCO takes any action to adopt, supplement or amend PUCO Regulations, in either case, to permit the billing and/or collecting of Phase-In-Recovery Charges by TPBs, the Servicer, on behalf of the Bondholders, shall take such legal or administrative actions, including defending against or instituting and pursuing legal actions and appearing or testifying at hearings or similar proceedings, as may be reasonably necessary to (A) if the Servicer reasonably believes that such action could result in a downgrade of the Bonds or is otherwise contrary to the Statute or the Financing Order, block or overturn such action of the State or the PUCO, as the case may be, including by asserting that such action violates the State Pledge; and (B) if such challenge or opposition fails, compel performance by the PUCO or the State of Ohio, as the case may be, of their obligations and duties under the Statute and the Financing Order, as applicable, with respect to TPBs, including but not limited to ensuring that the implementation of any such amendment, supplement, rule or regulation does not result in a downgrade in the credit ratings assigned to the Bonds and otherwise conforms with the matters referenced in Annex II hereto;

(iii) it, on behalf of the Bondholders, will take reasonable steps to monitor on an ongoing basis proceedings in the legislature of the State of Ohio and at the PUCO for proposed legislation, rules, regulations or other initiatives that could reasonably result in the taking by the State of Ohio or the PUCO of any action referenced in (ii) above; and

(iv) the costs of any action taken by, and the obligations of, the Servicer under this Section 5.05(a) shall be treated in the same manner as costs and obligations referenced in the second and third sentences, respectively, of Section 5.02(d).

(b) Should the laws of the State of Ohio be changed to permit the billing and/or collecting of Phase-In-Recovery Charges by TPBs, the Servicer shall, using the same degree of care and diligence that it exercises with respect to payments owed to it for its own account, implement such procedures and policies as would be necessary to properly enforce the obligations of each TPB to remit Phase-In-Recovery Charges, in accordance with the terms and provisions of the Financing Order.

Section 5.06. Custodian’s Indemnification. The Servicer as custodian shall indemnify the Bond Issuer and the Bond Trustee (for itself and for the benefit of the Holders) and each of their respective officers, directors,

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employees and agents for, and defend and hold harmless each such Person from and against, any and all liabilities, obligations, losses, damages, payments and claims, and reasonable costs or expenses, of any kind whatsoever (collectively, “Indemnified Losses”) that may be imposed on, incurred by or asserted against each such Person as the result of any negligent act or omission in any way relating to the maintenance and custody by the Servicer, as custodian, of the Phase-In-Recovery Property Records; provided, however, that the Servicer shall not be liable for any portion of any such amount resulting from the willful misconduct, bad faith or gross negligence of the Bond Issuer or the Bond Trustee, as the case may be.

ARTICLE VI.

THE SERVICER

Section 6.01. Representations and Warranties of Servicer. The Servicer makes the following representations and warranties, as of the Closing Date, on which the Bond Issuer is deemed to have relied in entering into this Agreement relating to the servicing of the Phase-In-Recovery Property.

(a) Organization and Good Standing. The Servicer is duly organized and validly existing as a corporation in good standing under the laws of the State of Ohio, with the requisite corporate power and authority to own its properties as such properties are currently owned and to conduct its business as such business is now conducted by it, and has the requisite corporate power and authority to service the Phase-In-Recovery Property and to hold the Phase-In-Recovery Property Records as custodian.

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

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

(d) Binding Obligation. This Agreement constitutes a legal, valid and binding obligation of the Servicer enforceable against it in accordance with its terms, subject to applicable insolvency, reorganization, moratorium, fraudulent transfer and other laws relating to or affecting creditors’ rights generally from time to time in effect and to general principles of equity (including concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether considered in a proceeding in equity or at law.

(e) No Violation. The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not: (i) conflict with or result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time) a default under, the articles of incorporation or code of regulations of the Servicer, or any material indenture, agreement or other instrument to which the Servicer is a party or by which it is bound; (ii) result in the creation or imposition of any Lien upon any of the Servicer’s properties pursuant to the terms of any such indenture, agreement or other instrument; or (iii) violate any existing law or any existing order, rule or regulation applicable to the Servicer of any federal or state court or regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Servicer or its properties.

(f) No Proceedings. There are no proceedings pending and, to the Servicer’s knowledge, there are no proceedings threatened and no investigations pending or threatened, before any federal or state court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Servicer or its properties involving or relating to the Servicer or the Bond Issuer or, to the Servicer’s knowledge, any other Person: (i) asserting the invalidity of this Agreement; (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement; or (iii) seeking any determination or ruling that might materially adversely affect the performance by the Servicer of its obligations under, or the validity or enforceability of, this Agreement.

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(g) Approvals. No approval, authorization, consent, order or other action of, or filing with, any federal or state court, regulatory body, administrative agency or other governmental instrumentality is required in connection with the execution and delivery by the Servicer of this Agreement, the performance by the Servicer of the transactions contemplated hereby or the fulfillment by the Servicer of the terms hereof, except those that have been obtained or made and those that the Servicer is required to make in the future pursuant to Article III or IV hereof.

Section 6.02. Indemnities of Servicer.

(a) The Servicer shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Servicer and as expressly provided under this Section 6.02.

(b) The Servicer shall indemnify the Bond Issuer and the Bondholders for, and defend and hold harmless each such Person from and against, any and all liabilities, obligations, losses, damages, payments, claims, costs or expenses of any kind whatsoever (collectively, “Losses”) that may be imposed on, incurred by or asserted against any such Person as a result of (i) the Servicer’s willful misconduct or negligence in the performance of its duties or observance of its covenants under this Agreement (including the Servicer’s willful misconduct or negligence relating to the maintenance and custody by the Servicer, as custodian, of the Phase-In-Recovery Property Records) or (ii) the Servicer’s breach in any material respect of any of its representations or warranties in this Agreement; provided, however, that the Servicer shall not be liable for any Losses resulting from the willful misconduct or gross negligence of any such indemnified person; and, provided, further, that the Bondholders shall be entitled to enforce their rights and remedies against the Servicer under this Section 6.02(b) solely through a cause of action brought for their benefit by the Bond Trustee; and; provided, further, that the Servicer shall not be liable for any Losses, regardless of when incurred, after the Bonds and all other Financing Costs have been paid in full, except as provided in Section 6.02(c).

(c) The Servicer shall indemnify and hold harmless the Bond Trustee, the Delaware Trustee, the Certificate Trustee and the Certificate Issuer and any of their respective affiliates, officials, officers, directors, employees and agents (each an “Indemnified Person”) for, and defend and hold harmless each such Person from and against, any and all Losses imposed on, incurred by or asserted against any of such Indemnified Persons as a result of: (i) the Servicer’s willful misconduct or negligence in the performance of its duties or observance of its covenants under this Agreement (including the Servicer’s willful misconduct or negligence relating to the maintenance and custody by the Servicer, as custodian, of the Phase-In-Recovery Property Records) or (ii) the Servicer’s breach in any material respect of any of its representations or warranties in this Agreement; provided, however, that the Servicer shall not be liable for any Losses resulting from the willful misconduct or negligence of such Indemnified Person or resulting from a breach of a representation or warranty made by such Indemnified Person in any of the Basic Documents that gives rise to the Servicer’s breach. The Servicer shall not be required to indemnify an Indemnified Person for any amount paid or payable by such Indemnified Person in the settlement of any action, proceeding or investigation without the written consent of the Servicer, which consent shall not be unreasonably withheld. Promptly after receipt by an Indemnified Person of notice of its involvement in any action, proceeding or investigation, such Indemnified Person shall, if a claim for indemnification in respect thereof is to be made against the Servicer under this Section 6.02(c), notify the Servicer in writing of such involvement. Failure by an Indemnified Person to so notify the Servicer shall relieve the Servicer from the obligation to indemnify and hold harmless such Indemnified Person under this Section 6.02(c) only to the extent that the Servicer suffers actual prejudice as a result of such failure. With respect to any action, proceeding or investigation brought by a third party for which indemnification may be sought under this Section 6.02(c), the Servicer shall be entitled to assume the defense of any such action, proceeding or investigation. Upon assumption by the Servicer of the defense of any such action, proceeding or investigation, the Indemnified Person shall have the right to participate in such action or proceeding and to retain its own counsel. The Servicer shall be entitled to appoint counsel of the Servicer’s choice at the Servicer’s expense to represent the Indemnified Person in any action, proceeding or investigation for which a claim of indemnification is made against the Servicer under this Section 6.02(c) (in which case the Servicer shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the Indemnified Person except as set forth below); provided, however, that such counsel shall be reasonably satisfactory to the Indemnified Person. Notwithstanding the Servicer’s election to appoint counsel to represent the Indemnified Person in an action, proceeding or investigation, the Indemnified Person shall have the right to employ separate counsel (including local counsel), and the Servicer shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of

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counsel chosen by the Servicer to represent the Indemnified Person would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the Indemnified Person and the Servicer and the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it that are different from or additional to those available to the Servicer, (iii) the Servicer shall not have employed counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person within a reasonable time after notice of the institution of such action or (iv) the Servicer shall authorize the Indemnified Person to employ separate counsel at the expense of the Servicer. Notwithstanding the foregoing, the Servicer shall not be obligated to pay for the fees, costs and expenses of more than one separate counsel for the Indemnified Persons other than local counsel. The Servicer will not, without the prior written consent of the Indemnified Person, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought under this Section 6.02(c) (whether or not the Indemnified Person is an actual or potential party to such claim or action) unless such settlement, compromise or consent includes an unconditional release of the Indemnified Person from all liability arising out of such claim, action, suit or proceeding.

(d) Indemnification under Sections 6.02(b) and 6.02(c) shall include reasonable fees and out-of-pocket expenses of investigation and litigation (including reasonable attorneys’ fees and expenses), except as otherwise provided in this Agreement.

(e) For purposes of Section 6.02(b) and 6.02(c), in the event of the termination of the rights and obligations of [The Cleveland Electric Illuminating Company][Ohio Edison Company][The Toledo Edison Company] (or any successor thereto pursuant to Section 6.04) as Servicer pursuant to Section 7.01, or a resignation by such Servicer pursuant to this Agreement, such Servicer shall be deemed to be the Servicer pending appointment of a successor Servicer pursuant to Section 7.02.

(f) The initial Servicer shall indemnify the Bond Trustee and, as to the Bond Issuer’s allocable portion only, the Delaware Trustee and the Certificate Trustee for all due and unpaid compensation, expenses and indemnity amounts (owed by the Bond Issuer to such trustee under, and to the extent set forth in, Section 6.07 of the Bond Indenture, Sections 1 through 4 of the Fee and Indemnity Agreement and any applicable provisions of the other applicable Basic Documents) that exceed the Cap. The Servicer’s indemnity obligation under this Section 6.02(f) shall continue as an obligation of [CEI] [OE] [TE], as the initial Servicer under this Agreement, in the event a successor servicer is appointed pursuant to Section 7.02.

(g) The indemnification obligations of the Servicer contained in this Section 6.02 shall survive the resignation or removal of the Bond Trustee, the Certificate Trustee or the Delaware Trustee or the termination of this Agreement or the other applicable Basic Documents.

Section 6.03. Limitation on Liability of Servicer and Others. Except as otherwise provided under this Agreement, neither the Servicer nor any of the directors, officers, employees or agents of the Servicer shall be liable to the Bond Issuer or any other Person for any action taken or for refraining from the taking of any action pursuant to this Agreement or for errors in judgment; provided, however, that this provision shall not protect the Servicer or any director, officer, employee or agent of the Servicer against any liability that would otherwise be imposed by reason of willful misconduct or negligence in the performance of duties under this Agreement. The Servicer and any director, officer, employee or agent of the Servicer may rely in good faith on the advice of counsel reasonably acceptable to the Bond Trustee or on any document of any kind, prima facie properly executed and submitted by any Person, respecting any matters arising under this Agreement.

Except as provided in this Agreement, including but not limited to Section 5.02(d), the Servicer shall not be under any obligation to appear in, prosecute or defend any legal action relating to the Phase-In-Recovery Property that is not directly related to one of the Servicer’s enumerated duties in this Agreement or related to its obligation to indemnify, and that in its reasonable opinion may cause it to incur any expense or liability; provided, however, that the Servicer may, in respect of any Proceeding, undertake any action that it is not specifically identified in this Agreement as a duty of the Servicer but that the Servicer reasonably determines is necessary or desirable in order to protect the rights and duties of the Bond Issuer or the Bond Trustee under this Agreement and the interests of the Holders and Customers under this Agreement. The Servicer’s costs and expenses incurred in connection with any such proceeding shall be payable from Phase-In-Recovery Charges received by the Servicer (to be remitted to the

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Collection Account) as an Operating Expense (and shall not be deemed to constitute a portion of the Servicing Fee) in accordance with the Bond Indenture. The Servicer’s obligations pursuant to this Section 6.03 shall survive and continue notwithstanding that payment of such Operating Expense may be delayed pursuant to the terms of the Bond Indenture (it being understood that the Servicer may be required initially to advance its own funds to satisfy its obligations hereunder).

Section 6.04. Merger or Consolidation of, or Assumption of the Obligations of, Servicer. The Servicer shall not merge or consolidate into, or sell all or substantially all of its assets to, any other Person except in compliance with this Section. Any Person (a) into which the Servicer may be merged or consolidated, (b) which may result from any merger or consolidation to which the Servicer shall be a party or (c) which may succeed to the properties and assets of the Servicer substantially as a whole, which Person in any of the foregoing cases executes an agreement of assumption to perform every obligation of the Servicer hereunder, shall be the successor to the Servicer under this Agreement without further act on the part of any of the parties to this Agreement; provided, however, that (i) immediately after giving effect to such transaction, no Servicer Default and no event which, after notice or lapse of time, or both, would become a Servicer Default shall have occurred and be continuing, (ii) the Servicer shall have delivered to the Bond Issuer and the Bond Trustee an Officers’ Certificate stating that such consolidation, merger or succession and such agreement of assumption comply with this Section and that all conditions precedent provided for in this Agreement relating to such transaction have been complied with, (iii) the Servicer shall have delivered to the Bond Issuer and the Bond Trustee an Opinion of Counsel either (A) stating that, in the opinion of such counsel, all statutory filings to be made by the Servicer, including filings with the PUCO pursuant to the Statute and filings under the applicable UCC, have been executed and filed that are necessary to preserve and protect fully the interests of the Bond Issuer and the Bond Trustee in the Phase-In-Recovery Property and reciting the details of such filings or (B) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interests and (iv) the Rating Agencies shall have received prior written notice of such transaction. When any Person acquires the properties and assets of the Servicer substantially as a whole and becomes the successor to the Servicer in accordance with the terms of this Section 6.04, then upon satisfaction of all of the other conditions of this Section 6.04, the Servicer shall automatically and without further notice be released from all its obligations hereunder.

Section 6.05. [The Cleveland Electric Illuminating Company][Ohio Edison Company][The Toledo Edison Company] Not to Resign as Servicer. Subject to the provisions of Section 6.04, [The Cleveland Electric Illuminating Company][Ohio Edison Company][The Toledo Edison Company] shall not resign from the obligations and duties hereby imposed on it as Servicer under this Agreement unless [The Cleveland Electric Illuminating Company][Ohio Edison Company][The Toledo Edison Company] delivers to the Bond Trustee and the PUCO an opinion of external counsel to the effect that [The Cleveland Electric Illuminating Company’s][Ohio Edison Company’s][The Toledo Edison Company’s] performance of its duties under this Agreement shall no longer be permissible under applicable law. No such resignation shall become effective until a successor Servicer shall have assumed the responsibilities and obligations of [The Cleveland Electric Illuminating Company][Ohio Edison Company][The Toledo Edison Company] in accordance with Section 7.02. In no event shall the Bond Trustee be obligated to supervise the performance of the Servicer hereunder or to act as successor Servicer hereunder. The Bond Trustee shall have no liability for the default of the Servicer hereunder or the misconduct of the Servicer under this Agreement.

Section 6.06. Servicing Compensation.

(a) In consideration for its services hereunder, until the Retirement of the Bonds, the Servicer shall receive an annual fee (the “Servicing Fee”) in an amount (i) equal to 10 one-hundredth of one percent (0.10%) of the initial principal balance of the Bonds for so long as [The Cleveland Electric Illuminating Company][Ohio Edison Company][The Toledo Edison Company] remains the Servicer or (ii) of up to 75 one-hundredth of one percent (0.75%) of the initial principal balance of the Bonds in the case of a non-utility successor Servicer. The Servicing Fee shall be payable in semiannual installments on each Payment Date.

(b) The Servicing Fee set forth in Section 6.06(a) above and expenses provided for in Section 6.06(c) below shall be paid to the Servicer by the Bond Trustee, on each Payment Date in accordance with the priorities and subject to the Cap set forth in Section 8.02(e) of the Bond Indenture, by wire transfer of immediately available funds from the Collection Account to an account designated by the Servicer. Any portion of the Servicing Fee not paid on such date shall be added to the Servicing Fee payable on the subsequent Payment Date.

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(c) The Bond Issuer shall pay all expenses incurred by the Servicer in connection with its activities hereunder (including any fees to and disbursements by accountants, counsel, or any other Person, any taxes imposed on the Servicer (other than taxes based on the Servicer’s net income) and any expenses incurred in connection with reports to Bondholders and Certificateholders, subject to the priorities and Cap set forth in Section 8.02(e) of the Bond Indenture).

Section 6.07. Compliance with Applicable Law. The Servicer covenants and agrees, in servicing the Phase-In-Recovery Property, to comply in all material respects with all laws applicable to, and binding upon, the Servicer and relating to such Phase-In-Recovery Property the noncompliance with which would have a material adverse effect on the value of the Phase-In-Recovery Property; provided, however, that the foregoing is not intended to, and shall not, impose any liability on the Servicer for noncompliance with any law that the Servicer is contesting in good faith in accordance with its customary standards and procedures.

Section 6.08. Access to Certain Records and Information Regarding Phase-In-Recovery Property. The Servicer shall provide to the Bondholders, the Bond Trustee and the Certificate Trustee access to the Phase-In-Recovery Property Records in such cases where the Bondholders, the Bond Trustee and the Certificate Trustee shall be required by applicable law to be provided access to such records. Access shall be afforded without charge, but only upon reasonable request and during normal business hours at the respective offices of the Servicer. Nothing in this Section shall affect the obligation of the Servicer to observe any applicable law (including any PUCO Regulation) prohibiting disclosure of information regarding the Customers, and the failure of the Servicer to provide access to such information as a result of such obligation shall not constitute a breach of this Section.

Section 6.09. Appointments. The Servicer may at any time appoint any Person to perform all or any portion of its obligations as Servicer hereunder; provided, however, that the Rating Agency Condition shall have been satisfied in connection therewith; and, provided, further, that the Servicer shall remain obligated and be liable under this Agreement for the servicing and administering of the Phase-In-Recovery Property in accordance with the provisions hereof without diminution of such obligation and liability by virtue of the appointment of such Person and to the same extent and under the same terms and conditions as if the Servicer alone were servicing and administering the Phase-In-Recovery Property; and, provided, further, however, that nothing herein (including the Rating Agency Condition) shall preclude the execution by the Servicer of an agreement with any TPB permitted by applicable law and PUCO Regulations should the laws of the State of Ohio be changed to permit the billing and/or collecting of Phase-In-Recovery Charges by TPBs.

Section 6.10. No Servicer Advances. Except with respect to Remittances of Estimated Phase-In-Recovery Charge Payments, the Servicer shall not make any advances of interest on or principal of the Bonds or the Certificates.

Section 6.11. Maintenance of Operations. The Servicer agrees to continue to operate its distribution system to provide service to its customers so long as it is acting as the Servicer under this Agreement.

ARTICLE VII.

DEFAULT

Section 7.01. Servicer Default. If any one of the following events (each a “Servicer Default”) shall occur and be continuing:

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(a) any failure by the Servicer to remit to the Collection Account on behalf of the Bond Issuer any required Remittance that shall continue unremedied for a period of five (5) Servicer Business Days after written notice of such failure is received by the Servicer from the Bond Issuer or the Bond Trustee; or

(b) any failure on the part of the Servicer duly to observe or to perform in any material respect any other covenants or agreements of the Servicer set forth in this Agreement, which failure shall (a) materially adversely affect the rights of the Bondholders and (ii) continue unremedied for a period of 60 days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given (A) to the Servicer by the Bond Issuer or (B) to the Servicer by the Bond Trustee or by the Holders of Bonds evidencing not less than 25 percent of the Outstanding Amount of the Bonds; or

(c) any representation or warranty made by the Servicer in this Agreement shall prove to have been incorrect in any material respect when made, which has a material adverse effect on the Bondholders and which material adverse effect continues unremedied for a period of 60 days after written notice of such failure is received by the Servicer from the Bond Issuer or the Bond Trustee; or

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

then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Bond Trustee, or the Holders of Bonds evidencing not less than 25 percent of the Outstanding Amount of the Bonds, by notice then given in writing to the Servicer (and to the Bond Trustee if given by the Bondholders) (a “Termination Notice”) may terminate all the rights and obligations (other than the obligations set forth in Section 6.02 hereof) of the Servicer under this Agreement. In addition, upon a Servicer Default described in Section 7.01(a), each of the following shall be entitled to apply to a court of competent jurisdiction for sequestration and payment of revenues arising with respect to the Phase-In-Recovery Property: (1) the Bondholders and the Bond Trustee as beneficiary of the Statutory Lien permitted by the Statute; (2) the Bond Issuer or (3) financing parties or other assignees under Section 4928.2310 of the Statute, of the Phase-In-Recovery Property. On or after the receipt by the Servicer of a Termination Notice, and subject to the approval of the PUCO, all authority and power of the Servicer under this Agreement, whether with respect to the Bonds, the Phase-In-Recovery Property, the Phase-In-Recovery Charge or otherwise, shall, without further action, pass to and be vested in such successor Servicer as may be appointed under Section 7.02; and, without limitation, the Bond Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Phase-In-Recovery Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the successor Servicer, the Bond Issuer and the Bond Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Agreement, including the transfer to the successor Servicer for administration by it of all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Phase-In-Recovery Property or the Phase-In-Recovery Charge. In case a successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring the Phase-In-Recovery Property Records to the successor Servicer and amending this Agreement to reflect such succession as Servicer pursuant to this Section shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses.

Section 7.02. Appointment of Successor.

(a) Upon the Servicer’s receipt of a Termination Notice pursuant to Section 7.01 or the Servicer’s resignation or removal in accordance with the terms of this Agreement, the predecessor Servicer shall continue to perform its functions as Servicer under this Agreement, and shall be entitled to receive the requisite portion of the Servicing Fee and reimbursement of expenses as provided herein, until a successor Servicer shall have assumed in writing the obligations of the Servicer hereunder as described below. In the event of the Servicer’s termination hereunder, the Bond Issuer shall appoint, subject to the approval of the PUCO, a successor Servicer with the Bond Trustee’s prior written consent thereto (which consent shall not be unreasonably withheld), and the successor Servicer shall accept its appointment by a written assumption in form reasonably acceptable to the Bond Issuer and the Bond Trustee. If within 30 days after the delivery of the Termination Notice, the Bond Issuer shall not have obtained such a new Servicer, the Bond Trustee may petition the PUCO or a court of competent jurisdiction to

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appoint a successor Servicer under this Agreement. A Person shall qualify as a successor Servicer only if (i) such Person is permitted under PUCO Regulations to perform the duties of the Servicer, (ii) the Rating Agency Condition shall have been satisfied and (iii) such Person enters into a servicing agreement with the Bond Issuer having substantially the same provisions as this Agreement.

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

Section 7.03. Waiver of Past Defaults. The Holders of Bonds evidencing not less than a majority of the Outstanding Amount of the Bonds may, on behalf of all Bondholders, waive in writing any default by the Servicer in the performance of its obligations hereunder and its consequences, except a default in making any required Remittances to the Collection Account in accordance with this Agreement. Upon any such waiver of a past default, such default shall cease to exist, and any Servicer Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereto.

Section 7.04. Notice of Servicer Default. The Servicer shall deliver to the Bond Issuer, the Bond Trustee, the Certificate Trustee, the Certificate Issuer, the Rating Agencies, and the PUCO, promptly after having obtained knowledge thereof, but in no event later than five Servicer Business Days thereafter, written notice in an Officer’s Certificate of any event which with the giving of notice or lapse of time, or both, would become a Servicer Default under Section 7.01(a) or (b).

ARTICLE VIII.

MISCELLANEOUS PROVISIONS

Section 8.01. Amendment. This Agreement may be amended in writing by the Servicer and the Bond Issuer with ten Servicer Business Days’ prior written notice given to the Rating Agencies and the PUCO and the prior written consent of the Bond Trustee (which consent shall not be unreasonably withheld), but without the consent of any of the Bondholders (or any other Person), to cure any ambiguity, to correct or supplement any provisions in this Agreement or for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions in this Agreement or of modifying in any manner the rights of the Bondholders; provided, however, that such action shall not, as evidenced by an Officer’s Certificate delivered to the Bond Issuer and the Bond Trustee, adversely affect in any material respect the interests of any Bondholder.

This Agreement may also be amended in writing from time to time by the Servicer and the Bond Issuer with ten Servicer Business Days’ prior written notice given to the Rating Agencies and the PUCO and the prior written consent of the Bond Trustee (which consent shall not be unreasonably withheld) and, subject to the first paragraph of this Section 8.01, the prior written consent of the Holders of Bonds evidencing not less than a majority of the Outstanding Amount of the Bonds, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Bondholders; provided, however, that any amendment of the provisions of Sections 4.01 or 4.03 of this Agreement shall satisfy the Rating Agency Condition.

It shall not be necessary for the consent of Bondholders pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof.

The Bond Issuer shall promptly provide each of the Rating Agencies and the PUCO with a copy of any amendment to this Agreement.

Prior to its consent to any amendment to this Agreement, the Bond Trustee shall be entitled to receive and conclusively rely upon an Opinion of Counsel stating that such amendment is authorized or permitted by this Agreement and all conditions precedent have been met. The Bond Trustee may, but shall not be obligated to, enter into any such amendment which affects the Bond Trustee’s own rights, duties or immunities under this Agreement or otherwise. No amendment to this Agreement which adversely affects, in any material respect, the rights, protections or indemnities of the Certificate Trustee or Delaware Trustee under Section 6.02 shall be effective without its prior written consent (not to be unreasonably withheld).

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Section 8.02. Maintenance of Accounts and Records.

(a) The Servicer shall maintain accounts and records as to the Phase-In-Recovery Property accurately and in accordance with its standard accounting procedures and in sufficient detail to permit reconciliation between Phase-In-Recovery Charge Collections and Deemed Phase-In-Recovery Charge Payments.

(b) The Servicer shall permit the Bond Trustee and its agents at any time during normal business hours, upon reasonable notice to the Servicer and to the extent it does not unreasonably interfere with the Servicer’s normal operations, to inspect, audit and make copies of and abstracts from the Servicer’s records regarding the Phase-In-Recovery Property and the Phase-In-Recovery Charge. Nothing in this Section 8.02(b) shall affect the obligation of the Servicer to observe any applicable law (including any PUCO Regulation) prohibiting disclosure of information regarding the Customers, and the failure of the Servicer to provide access to such information as a result of such obligation shall not constitute a breach of this Section 8.02(b).

Section 8.03. Notices. Unless otherwise specifically provided herein, all notices, directions, consents and waivers required under the terms and provisions of this Agreement shall be in English and in writing, and any such notice, direction, consent or waiver may be given by United States mail, courier service, facsimile transmission or electronic mail (confirmed by telephone, United States mail or courier service in the case of notice by facsimile transmission or electronic mail) or any other customary means of communication, and any such notice, direction, consent or waiver shall be effective when delivered, or if mailed, three days after deposit in the United States mail with proper postage for ordinary mail prepaid:

(a) if to the Servicer, to:

[The Cleveland Electric Illuminating Company][Ohio Edison Company][The Toledo Edison Company]

76 South Main Street

Akron, Ohio 44308

Attention: James W. Burk, Counsel of Record

Facsimile: (330) 384-3875

Telephone: (330) 384-5861

(b) if to the Bond Issuer, to:

[CEI Funding LLC] [OE Funding LLC] [TE Funding LLC]

c/o FirstEnergy Corp.

76 South Main Street

Akron, OH 44308

Attention: James W. Burk, Counsel of Record

Facsimile: (330) 384-3875

Telephone: (330) 384-5861

(c) if to the Bond Trustee, to:

U.S. Bank National Association

190 S. LaSalle Street, 7th Floor

Mail Code: MK-IL-SL7R

Chicago, IL 60603

Attention: First Energy Ohio PIRB Special Purpose Trust 2013

Facsimile: (312) 332-7996

Telephone: (312) 332-7496

E-mail: melissa.rosal@usbank.com

20

(d) if to Moody’s, to:

Moody’s Investors Service, Inc.

25th Floor, 7 World Trade Center, 250 Greenwich

New York, New York 10007

Attention: ABS/RMBS Monitoring Department

E-mail: ServicerReports@moodys.com

(e) if to S&P, to:

Standard & Poor’s Ratings Services

55 Water Street

New York, New York 10041

Attention: Structured Credit Surveillance

E-mail: servicer-report@standardandpoors.com

Telephone: (212) 438-8991

(f) if to Fitch, to:

Fitch Ratings

One State Street Plaza

New York, New York 10004

Attention: ABS Surveillance

Telephone: (212) 908-0500

Facsimile: (212) 908-0355

(g) if to the Certificate Issuer, to:

U.S. Bank Trust National Association, as Delaware Trustee

for the FirstEnergy Ohio PIRB Special Purpose Trust 2013

190 S. LaSalle Street, 7th Floor

Mail Code: MK-IL-SL7R

Chicago, IL 60603

Attention: First Energy Ohio PIRB Special Purpose Trust 2013

Facsimile: (312) 332-7996

Telephone: (312) 332-7496

E-mail: melissa.rosal@usbank.com

With a copy to the Administrative Trustee

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

Section 8.04. Assignment. Notwithstanding anything to the contrary contained herein, except as provided in Section 6.04 and Section 8.10 and as provided in the provisions of this Agreement concerning the resignation of the Servicer, this Agreement may not be assigned by the Servicer.

Section 8.05. Limitations on Rights of Third Parties. The provisions of this Agreement are solely for the benefit of the Servicer, the Bond Issuer, the Bondholders, the Bond Trustee, the Certificate Trustee, the Delaware Trustee, the Certificate Issuer and the other Persons expressly referred to herein and such Persons shall have the right to enforce the relevant provisions of this Agreement, except that the Bondholders shall be entitled to enforce

21

their rights against the Servicer under this Agreement solely through a cause of action brought for their benefit by the Bond Trustee. Nothing in this Agreement, whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the Phase-In-Recovery Property or under or in respect of this Agreement or any covenants, conditions or provisions contained herein.

Section 8.06. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

Section 8.07. Separate Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

Section 8.08. Headings. The headings of the various Articles and Sections herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.

Section 8.09. Governing Law. This Agreement shall be construed in accordance with the substantive laws of the State of Ohio, without giving effect to its conflict of law or other principles that would cause the application of the laws of another jurisdiction, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.

Section 8.10. Collateral Assignment to Bond Trustee. The Servicer hereby acknowledges and consents to the Grant of a security interest and collateral assignment by the Bond Issuer pursuant to the Bond Indenture of all of the Bond Issuer’s rights hereunder to the Bond Trustee for the benefit of the holders of the Bonds and the Bond Trustee and to the Grant of a security interest and collateral assignment by the Bondholder to the Certificate Trustee pursuant to the Certificate Indenture for the benefit of the Certificateholders and the Certificate Trustee in all of the Bondholder’s rights in all rights of the Certificate Trustee or the Certificate Issuer, as holder of the Bonds, in and to this Servicing Agreement.

Section 8.11. Nonpetition Covenant. Notwithstanding any prior termination of this Agreement or the Bond Indenture, but subject to the right of a court of competent jurisdiction to order the sequestration and payment of revenues arising with respect to the Phase-In-Recovery Property notwithstanding any bankruptcy, reorganization or other insolvency proceedings with respect to [The Cleveland Electric Illuminating Company] [Ohio Edison Company] [The Toledo Edison Company] or any of its affiliates pursuant to Section 4928.2310 of the Statute, the Servicer solely in its capacity as creditor of the Bond Issuer, shall not, prior to the date which is one year and one day after the termination of the Bond Indenture with respect to the Bond Issuer, petition or otherwise invoke or cause the Bond Issuer or the Trust to invoke the process of any court or governmental authority for the purpose of commencing or sustaining an involuntary case against the Bond Issuer or the Trust under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Bond Issuer or the Trust or any substantial part of the property of the Bond Issuer or the Trust, or, to the fullest extent permitted by law, ordering the winding up or liquidation of the affairs of the Bond Issuer or the Trust.

Section 8.12. Rule 17g-5 Compliance. The Servicer agrees that any notice, report, request for satisfaction of the Rating Agency Condition, document or other information provided by the Servicer to any Rating Agency under this Agreement or any other Basic Document to which it is a party for the purposes of determining the initial credit rating of the Bonds and Certificates or undertaking credit rating surveillance of the Bonds and Certificates with any Rating Agency, shall be, substantially concurrently, posted by the Servicer on the 17g-5 Website.

22

IN WITNESS WHEREOF, the parties hereto have caused this Phase-In-Recovery Property Servicing Agreement to be duly executed by their respective officers as of the day and year first above written.

[CEI FUNDING LLC] [OE FUNDING LLC] [TE FUNDING LLC]

Bond Issuer

By:

Name:

Title:

[THE CLEVELAND ELECTRIC ILLUMINATING COMPANY] [OHIO EDISON COMPANY][THE TOLEDO EDISON COMPANY]

Servicer

By:

Name:

Title:

23

EXHIBIT A-1

SERVICER’S CERTIFICATE

The undersigned hereby certifies that he/she is the duly elected and acting _______________ of [The Cleveland Electric Illuminating Company] [Ohio Edison Company] [The Toledo Edison Company], as servicer (the “Servicer”) under the Phase-In-Recovery Property Servicing Agreement dated as of [                         ] (the “Servicing Agreement”) between the Servicer and [CEI Funding LLC] [OE Funding LLC] [TE Funding LLC] (the “Bond Issuer”) and further that:

1. The undersigned is responsible for assessing the Servicer’s compliance with the servicing criteria set forth in Item 1122(d) of Regulation AB (the “Servicing Criteria”).

2. With respect to each of the Servicing Criteria, the undersigned has made the following assessment of the Servicing Criteria in accordance with Item 1122(d) of Regulation AB, with such discussion regarding the performance of such Servicing Criteria during the fiscal year covered by the Sponsor’s annual report on Form 10-K Report (such fiscal year, the “Assessment Period”):

Reg AB Reference	Servicing Criteria	Applicable Servicer Criteria
	General Servicing Considerations
1122(d)(1)(i)	Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.	Applicable; assessment below.
1122(d)(1)(ii)	If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities.	Not applicable; no servicing activities were outsourced.
1122(d)(1)(iii)	Any requirements in the transaction agreements to maintain a back-up servicer for pool assets are maintained.	Not applicable; documents do not provide for a back-up servicer.
1122(d)(1)(iv)	A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements.	Not applicable; PUCO Regulations impose credit standards on retail electric providers who handle customer collections and govern performance requirements of utilities.
	Cash Collection and Administration
1122(d)(2)(i)	Payments on pool assets are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number of days specified in the transaction agreements.	Applicable
1122(d)(2)(ii)	Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.	Applicable
1122(d)(2)(iii)	Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements.	Applicable, but no current assessment required; no advances by the Servicer are permitted under the transaction agreements.

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Reg AB Reference	Servicing Criteria	Applicable Servicer Criteria
1122(d)(2)(iv)	The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements.	Applicable, but no current assessment is required since transaction accounts are maintained by and in the name of the Bond Trustee.
1122(d)(2)(v)	Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.	Applicable, but no current assessment required; all “custodial accounts” are maintained by the Bond Trustee.
1122(d)(2)(vi)	Unissued checks are safeguarded so as to prevent unauthorized access.	Not applicable; all transfers made by wire transfer.
1122(d)(2)(vii)	Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements.	Applicable; assessment below.
	Investor Remittances and Reporting
1122(d)(3)(i)	Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of pool assets serviced by the Servicer.	Applicable; assessment below.
1122(d)(3)(ii)	Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.	Not applicable; investor records maintained by Bond Trustee.
1122(d)(3)(iii)	Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the transaction agreements.	Applicable
1122(d)(3)(iv)	Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.	Applicable; assessment below.
	Pool Asset Administration
1122(d)(4)(i)	Collateral or security on pool assets is maintained as required by the transaction agreements or related documents.	Applicable; assessment below.
1122(d)(4)(ii)	Pool assets and related documents are safeguarded as required by the transaction agreements.	Applicable; assessment below.

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Reg AB Reference	Servicing Criteria	Applicable Servicer Criteria
1122(d)(4)(iii)	Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.	Not applicable; no removals or substitutions of phase-in-recovery property are contemplated or allowed under the transaction documents.
1122(d)(4)(iv)	Payments on pool assets, including any payoffs, made in accordance with the related pool asset documents are posted to the Servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related transaction agreements.	Applicable; assessment below.
1122(d)(4)(v)	The Servicer’s records regarding the pool assets agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.	Not applicable; because underlying obligation (phase-in-recovery charge) is not an interest bearing instrument.
1122(d)(4)(vi)	Changes with respect to the terms or status of an obligor’s pool assets (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents.	Applicable; assessment below
1122(d)(4)(vii)	Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements.	Applicable; limited assessment below. Servicer actions governed by PUCO regulations.
1122(d)(4)(viii)	Records documenting collection efforts are maintained during the period any pool asset is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent pool assets including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).	Applicable, but does not require assessment since no explicit documentation requirement with respect to delinquent accounts are imposed under the transactional documents due to availability of “true-up” adjustment mechanism.
1122(d)(4)(ix)	Adjustments to interest rates or rates of return for pool assets with variable rates are computed based on the related pool asset documents.	Not applicable; phase-in-recovery charges are not interest bearing instruments.
1122(d)(4)(x)	Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s pool asset documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable pool asset documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related pool assets, or such other number of days specified in the transaction agreements.	Applicable; [Servicer maintains deposit accounts in accordance with PUCO Regulations].

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Reg AB Reference	Servicing Criteria	Applicable Servicer Criteria
1122(d)(4)(xi)	Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements.	Not applicable; Servicer does not make payments on behalf of obligors.
1122(d)(4)(xii)	Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicer’s funds and not charged to the obligor, unless the late payment was due to the obligor’s error or omission.	Not applicable; Servicer cannot make advances of its own funds on behalf of customers under the transaction documents.
1122(d)(4)(xiii)	Disbursements made on behalf of an obligor are posted within two business days to the obligor’s records maintained by the servicer, or such other number of days specified in the transaction agreements.	Not applicable; Servicer cannot make advances of its own funds on behalf of customers to pay principal or interest on the bonds.
1122(d)(4)(xiv)	Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements.	Applicable; assessment below.
1122(d)(4)(xv)	Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements.	Not applicable; no external enhancement is required under the transaction documents.

3. To the best of the undersigned’s knowledge, based on such review, the Servicer is in compliance in all material respects with the applicable servicing criteria set forth above as of and for the period ending the end of the fiscal year covered by the Sponsor’s annual report on Form 10-K. [If not true, include description of any material instance of noncompliance.]

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Executed as of this      day of                         ,         .

[THE CLEVELAND ELECTRIC ILLUMINATING COMPANY] [OHIO EDISON COMPANY] [THE TOLEDO EDISON COMPANY]
By:
	Name: Title:

28

EX-25.1

EXHIBIT 25.1

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY

UNDER THE TRUST INDENTURE ACT OF 1939

OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE

¨ Check if an Application to Determine Eligibility of a Trustee Pursuant to Section 305(b)(2)

U.S. BANK NATIONAL ASSOCIATION

(Exact name of Trustee as specified in its charter)

31-0841368

I.R.S. Employer

Identification No.

800 Nicollet Mall Minneapolis, Minnesota	55402
(Address of principal executive offices)	(Zip Code)

Melissa A. Rosal

U.S. Bank National Association

190 S. LaSalle Street, 7^th Floor

Chicago, IL 60603

(312) 332-7496

(Name, address and telephone number of agent for service)

CEI Funding LLC

(Issuer with respect to the Securities)

Delaware	46-1367273
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
c/o First Energy Corp. 76 South Main Street Akron, Ohio	44308
(Address of Principal Executive Offices)	(Zip Code)

Phase-In-Recovery Bonds

(Title of the Indenture Securities)

FORM T-1

Item 1. GENERAL INFORMATION. Furnish the following information as to the Trustee.

a) Name and address of each examining or supervising authority to which it is subject.

Comptroller of the Currency

Washington, D.C.

b) Whether it is authorized to exercise corporate trust powers.

Yes

Item 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the Trustee, describe each such affiliation.

None

Items 3-15 Items 3-15 are not applicable because to the best of the Trustee’s knowledge, the obligor is not in default under any Indenture for which the Trustee acts as Trustee.

Item 16. LIST OF EXHIBITS: List below all exhibits filed as a part of this statement of eligibility and qualification.

1. A copy of the Articles of Association of the Trustee.*

2. A copy of the certificate of authority of the Trustee to commence business, attached as Exhibit 2.

3. A copy of the certificate of authority of the Trustee to exercise corporate trust powers, attached as Exhibit 3.

4. A copy of the existing bylaws of the Trustee.**

5. A copy of each Indenture referred to in Item 4. Not applicable.

6. The consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939, attached as Exhibit 6.

7. Report of Condition of the Trustee as of December 31, 2012 published pursuant to law or the requirements of its supervising or examining authority, attached as Exhibit 7.

* Incorporated by reference to Exhibit 25.1 to Amendment No. 2 to registration statement on S-4, Registration Number 333-128217 filed on November 15, 2005.

** Incorporated by reference to Exhibit 25.1 to registration statement on S-4, Registration Number 333-166527 filed on May 5, 2010.

2

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the Trustee, U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Chicago, State of Illinois on the 4th of June, 2013.

By:	/s/ Melissa A. Rosal
	Melissa A. Rosal Vice President

3

Exhibit 2

Comptroller of the Currency

Administrator of National Banks

Washington, DC 20219

CERTIFICATE OF CORPORATE EXISTENCE

I, Thomas J. Curry, Comptroller of the Currency, do hereby certify that:

1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq, as amended, and 12 USC 1, et seq, as amended, has possession, custody, and control of all records pertaining to the chartering, regulation, and supervision of all national banking associations.

2. “U.S. Bank National Association,” Cincinnati, Ohio (Charter No. 24), is a national banking association formed under the laws of the United States and is authorized thereunder to transact the business of banking on the date of this certificate.

	IN TESTIMONY WHEREOF, today, November 28, 2012, I have hereunto subscribed my name and caused my seal of office to be affixed to these presents at the U.S. Department of the Treasury, in the City of Washington, District of Columbia.
	Comptroller of the Currency

4

Exhibit 3

Comptroller of the Currency

Administrator of National Banks

Washington, DC 20219

CERTIFICATE OF CORPORATE EXISTENCE AND FIDUCIARY POWERS

I, John Walsh, Acting Comptroller of the Currency, do hereby certify that:

1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq, as amended, and 12 USC 1, et seq, as amended, has possession, custody, and control of all records pertaining to the chartering, regulation, and supervision of all national banking associations.

2. “U.S. Bank National Association,” Cincinnati, Ohio (Charter No. 24), is a national banking association formed under the laws of the United States and is authorized thereunder to transact the business of banking and exercise fiduciary powers on the date of this certificate.

	IN TESTIMONY WHEREOF, today, March 19, 2012, I have hereunto subscribed my name and caused my seal of office to be affixed to these presents at the U.S. Department of the Treasury, in the City of Washington, District of Columbia.
	Acting Comptroller of the Currency

5

Exhibit 6

CONSENT

In accordance with Section 321(b) of the Trust Indenture Act of 1939, the undersigned, U.S. BANK NATIONAL ASSOCIATION hereby consents that reports of examination of the undersigned by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor.

Dated: June 4, 2013

By:	/s/ Melissa A. Rosal
	Melissa A. Rosal Vice President

6

Exhibit 7

U.S. Bank National Association

Statement of Financial Condition

As of 12/31/2012

($000’s)

	12/31/2012
Assets
Cash and Balances Due From Depository Institutions	$	8,252,302
Securities		74,022,528
Federal Funds		74,234
Loans & Lease Financing Receivables		219,884,343
Fixed Assets		5,024,268
Intangible Assets		12,542,566
Other Assets		25,288,375
Total Assets	$	345,088,616
Liabilities
Deposits	$	253,686,214
Fed Funds		4,291,213
Treasury Demand Notes		0
Trading Liabilities		404,237
Other Borrowed Money		30,911,125
Acceptances		0
Subordinated Notes and Debentures		4,736,320
Other Liabilities		11,473,186
Total Liabilities	$	305,502,295
Equity
Common and Preferred Stock		18,200
Surplus		14,133,290
Undivided Profits		23,981,892
Minority Interest in Subsidiaries	$	1,452,939
Total Equity Capital	$	39,586,321
Total Liabilities and Equity Capital	$	345,088,616

7

EX-25.2

EXHIBIT 25.2

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY

UNDER THE TRUST INDENTURE ACT OF 1939

OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE

¨ Check if an Application to Determine Eligibility of a Trustee Pursuant to Section 305(b)(2)

U.S. BANK NATIONAL ASSOCIATION

(Exact name of Trustee as specified in its charter)

31-0841368

I.R.S. Employer

Identification No.

800 Nicollet Mall Minneapolis, Minnesota	55402
(Address of principal executive offices)	(Zip Code)

Melissa A. Rosal

U.S. Bank National Association

190 S. LaSalle Street, 7^th Floor

Chicago, IL 60603

(312) 332-7496

(Name, address and telephone number of agent for service)

OE FUNDING LLC

(Issuer with respect to the Securities)

Delaware	46-1367425
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
c/o First Energy Corp. 76 South Main Street Akron, Ohio	44308
(Address of Principal Executive Offices)	(Zip Code)

Phase-In-Recovery Bonds

(Title of the Indenture Securities)

FORM T-1

Item 1. GENERAL INFORMATION. Furnish the following information as to the Trustee.

a) Name and address of each examining or supervising authority to which it is subject.

Comptroller of the Currency

Washington, D.C.

b) Whether it is authorized to exercise corporate trust powers.

Yes

Item 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the Trustee, describe each such affiliation.

None

Items 3-15 Items 3-15 are not applicable because to the best of the Trustee’s knowledge, the obligor is not in default under any Indenture for which the Trustee acts as Trustee.

Item 16. LIST OF EXHIBITS: List below all exhibits filed as a part of this statement of eligibility and qualification.

1. A copy of the Articles of Association of the Trustee.*

2. A copy of the certificate of authority of the Trustee to commence business, attached as Exhibit 2.

3. A copy of the certificate of authority of the Trustee to exercise corporate trust powers, attached as Exhibit 3.

4. A copy of the existing bylaws of the Trustee.**

5. A copy of each Indenture referred to in Item 4. Not applicable.

6. The consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939, attached as Exhibit 6.

7. Report of Condition of the Trustee as of December 31, 2012 published pursuant to law or the requirements of its supervising or examining authority, attached as Exhibit 7.

* Incorporated by reference to Exhibit 25.1 to Amendment No. 2 to registration statement on S-4, Registration

Number 333-128217 filed on November 15, 2005.

** Incorporated by reference to Exhibit 25.1 to registration statement on S-4, Registration Number 333-166527 filed on May 5, 2010.

2

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the Trustee, U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Chicago, State of Illinois on the 4th of June, 2013.

By:	/s/ Melissa A. Rosal
	Melissa A. Rosal Vice President

3

Exhibit 2

Comptroller of the Currency

Administrator of National Banks

Washington, DC 20219

CERTIFICATE OF CORPORATE EXISTENCE

I, Thomas J. Curry, Comptroller of the Currency, do hereby certify that:

1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq, as amended, and 12 USC 1, et seq, as amended, has possession, custody, and control of all records pertaining to the chartering, regulation, and supervision of all national banking associations.

2. “U.S. Bank National Association,” Cincinnati, Ohio (Charter No. 24), is a national banking association formed under the laws of the United States and is authorized thereunder to transact the business of banking on the date of this certificate.

	IN TESTIMONY WHEREOF, today, November 28, 2012, I have hereunto subscribed my name and caused my seal of office to be affixed to these presents at the U.S. Department of the Treasury, in the City of Washington, District of Columbia.
	Comptroller of the Currency

4

Exhibit 3

Comptroller of the Currency

Administrator of National Banks

Washington, DC 20219

CERTIFICATE OF CORPORATE EXISTENCE AND FIDUCIARY POWERS

I, John Walsh, Acting Comptroller of the Currency, do hereby certify that:

1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq, as amended, and 12 USC 1, et seq, as amended, has possession, custody, and control of all records pertaining to the chartering, regulation, and supervision of all national banking associations.

2. “U.S. Bank National Association,” Cincinnati, Ohio (Charter No. 24), is a national banking association formed under the laws of the United States and is authorized thereunder to transact the business of banking and exercise fiduciary powers on the date of this certificate.

	IN TESTIMONY WHEREOF, today, March 19, 2012, I have hereunto subscribed my name and caused my seal of office to be affixed to these presents at the U.S. Department of the Treasury, in the City of Washington, District of Columbia.
	Acting Comptroller of the Currency

5

Exhibit 6

CONSENT

In accordance with Section 321(b) of the Trust Indenture Act of 1939, the undersigned, U.S. BANK NATIONAL ASSOCIATION hereby consents that reports of examination of the undersigned by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor.

Dated: June 4, 2013

By:	/s/ Melissa A. Rosal
	Melissa A. Rosal Vice President

6

Exhibit 7

U.S. Bank National Association

Statement of Financial Condition

As of 12/31/2012

($000’s)

	12/31/2012
Assets
Cash and Balances Due From Depository Institutions	$	8,252,302
Securities		74,022,528
Federal Funds		74,234
Loans & Lease Financing Receivables		219,884,343
Fixed Assets		5,024,268
Intangible Assets		12,542,566
Other Assets		25,288,375
Total Assets	$	345,088,616
Liabilities
Deposits	$	253,686,214
Fed Funds		4,291,213
Treasury Demand Notes		0
Trading Liabilities		404,237
Other Borrowed Money		30,911,125
Acceptances		0
Subordinated Notes and Debentures		4,736,320
Other Liabilities		11,473,186
Total Liabilities	$	305,502,295
Equity
Common and Preferred Stock		18,200
Surplus		14,133,290
Undivided Profits		23,981,892
Minority Interest in Subsidiaries	$	1,452,939
Total Equity Capital	$	39,586,321
Total Liabilities and Equity Capital	$	345,088,616

7

EX-25.3

EXHIBIT 25.3

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY

UNDER THE TRUST INDENTURE ACT OF 1939

OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE

¨ Check if an Application to Determine Eligibility of a Trustee Pursuant to Section 305(b)(2)

U.S. BANK NATIONAL ASSOCIATION

(Exact name of Trustee as specified in its charter)

31-0841368

I.R.S. Employer

Identification No.

800 Nicollet Mall Minneapolis, Minnesota	55402
(Address of principal executive offices)	(Zip Code)

Melissa A. Rosal

U.S. Bank National Association

190 S. LaSalle Street, 7^th Floor

Chicago, IL 60603

(312) 332-7496

(Name, address and telephone number of agent for service)

TE FUNDING LLC

(Issuer with respect to the Securities)

Delaware	46-1367453
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
c/o First Energy Corp. 76 South Main Street Akron, Ohio	44308
(Address of Principal Executive Offices)	(Zip Code)

Phase-In-Recovery Bonds

(Title of the Indenture Securities)

FORM T-1

Item 1. GENERAL INFORMATION. Furnish the following information as to the Trustee.

a) Name and address of each examining or supervising authority to which it is subject.

Comptroller of the Currency

Washington, D.C.

b) Whether it is authorized to exercise corporate trust powers.

Yes

Item 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the Trustee, describe each such affiliation.

None

Items 3-15 Items 3-15 are not applicable because to the best of the Trustee’s knowledge, the obligor is not in default under any Indenture for which the Trustee acts as Trustee.

Item 16. LIST OF EXHIBITS: List below all exhibits filed as a part of this statement of eligibility and qualification.

1. A copy of the Articles of Association of the Trustee.*

2. A copy of the certificate of authority of the Trustee to commence business, attached as Exhibit 2.

3. A copy of the certificate of authority of the Trustee to exercise corporate trust powers, attached as Exhibit 3.

4. A copy of the existing bylaws of the Trustee.**

5. A copy of each Indenture referred to in Item 4. Not applicable.

6. The consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939, attached as Exhibit 6.

7. Report of Condition of the Trustee as of December 31, 2012 published pursuant to law or the requirements of its supervising or examining authority, attached as Exhibit 7.

* Incorporated by reference to Exhibit 25.1 to Amendment No. 2 to registration statement on S-4, Registration Number 333-128217 filed on November 15, 2005.

** Incorporated by reference to Exhibit 25.1 to registration statement on S-4, Registration Number 333-166527 filed on May 5, 2010.

2

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the Trustee, U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Chicago, State of Illinois on the 4th of June, 2013.

By:	/s/ Melissa A. Rosal
	Melissa A. Rosal Vice President

3

Exhibit 2

Comptroller of the Currency

Administrator of National Banks

Washington, DC 20219

CERTIFICATE OF CORPORATE EXISTENCE

I, Thomas J. Curry, Comptroller of the Currency, do hereby certify that:

1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq, as amended, and 12 USC 1, et seq, as amended, has possession, custody, and control of all records pertaining to the chartering, regulation, and supervision of all national banking associations.

2. “U.S. Bank National Association,” Cincinnati, Ohio (Charter No. 24), is a national banking association formed under the laws of the United States and is authorized thereunder to transact the business of banking on the date of this certificate.

	IN TESTIMONY WHEREOF, today, November 28, 2012, I have hereunto subscribed my name and caused my seal of office to be affixed to these presents at the U.S. Department of the Treasury, in the City of Washington, District of Columbia.
	Comptroller of the Currency

4

Exhibit 3

Comptroller of the Currency

Administrator of National Banks

Washington, DC 20219

CERTIFICATE OF CORPORATE EXISTENCE AND FIDUCIARY POWERS

I, John Walsh, Acting Comptroller of the Currency, do hereby certify that:

1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq, as amended, and 12 USC 1, et seq, as amended, has possession, custody, and control of all records pertaining to the chartering, regulation, and supervision of all national banking associations.

2. “U.S. Bank National Association,” Cincinnati, Ohio (Charter No. 24), is a national banking association formed under the laws of the United States and is authorized thereunder to transact the business of banking and exercise fiduciary powers on the date of this certificate.

	IN TESTIMONY WHEREOF, today, March 19, 2012, I have hereunto subscribed my name and caused my seal of office to be affixed to these presents at the U.S. Department of the Treasury, in the City of Washington, District of Columbia.
	Acting Comptroller of the Currency

5

Exhibit 6

CONSENT

In accordance with Section 321(b) of the Trust Indenture Act of 1939, the undersigned, U.S. BANK NATIONAL ASSOCIATION hereby consents that reports of examination of the undersigned by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor.

Dated: June 4, 2013

By:	/s/ Melissa A. Rosal
	Melissa A. Rosal
	Vice President

6

Exhibit 7

U.S. Bank National Association

Statement of Financial Condition

As of 12/31/2012

($000’s)

	12/31/2012
Assets
Cash and Balances Due From	$	8,252,302
Depository Institutions Securities		74,022,528
Federal Funds		74,234
Loans & Lease Financing Receivables		219,884,343
Fixed Assets		5,024,268
Intangible Assets		12,542,566
Other Assets		25,288,375
Total Assets	$	345,088,616
Liabilities
Deposits	$	253,686,214
Fed Funds		4,291,213
Treasury Demand Notes		0
Trading Liabilities		404,237
Other Borrowed Money		30,911,125
Acceptances		0
Subordinated Notes and Debentures		4,736,320
Other Liabilities		11,473,186
Total Liabilities	$	305,502,295
Equity
Common and Preferred Stock		18,200
Surplus		14,133,290
Undivided Profits		23,981,892
Minority Interest in Subsidiaries	$	1,452,939
Total Equity Capital	$	39,586,321
Total Liabilities and Equity Capital	$	345,088,616

7

EX-99.6

Exhibit 99.6

[Subject to Completion of the Transaction Documents and Review Thereof]

[            ], 2013

To Each Person Listed on

the Attached Schedule I

Re: FirstEnergy Ohio PIRB Special Purpose Trust 2013 Pass-Through Trust Certificates (“Trust Certificates”); Opinion Regarding Federal Constitutional Law Matters

Ladies and Gentlemen:

We have acted as counsel to (i) FirstEnergy Ohio PIRB Special Purpose Trust 2013, a Delaware statutory trust (the “Trust”), as the issuer of the Trust Certificates, (ii) CEI Funding LLC, a Delaware limited liability company (“CEI LLC”), OE Funding LLC, a Delaware limited liability company (“OE LLC”) and TE Funding LLC, a Delaware limited liability company (“TE LLC”), as the issuers of the Phase-In-Recovery Bonds referred to below (individually, a “Bond Issuer” and collectively, the “Bond Issuers”) and (iii) The Cleveland Electric Illuminating Company, an Ohio corporation (“CEI”), Ohio Edison Company, an Ohio corporation (“OE”) and The Toledo Edison Company, an Ohio corporation (“TE”), as sponsors, sellers and initial servicers (individually, a “Seller” and collectively, the “Sellers”), in connection with the sale by each Seller to its respective Bond Issuer on the date hereof of such Seller’s respective right, title and interest in, to and under certain phase-in-recovery property (such transferred right, title and interest being herein referred to as the “Phase-In-Recovery Property”), the issuance and sale by each Bond Issuer of its respective bonds (collectively, the “Phase-In-Recovery Bonds”) to the Trust, the issuance by the Trust of the Trust Certificates, and the related transactions referred to and described below.

CEI LLC was formed as a limited liability company under Delaware law, pursuant to a Certificate of Formation, as filed with the Secretary of State of the State of Delaware on October 31, 2012 and a Limited Liability Company Agreement dated March 28, 2013, executed by CEI. CEI, as sole member of CEI LLC, executed an Amended and Restated Limited Liability Company Agreement dated as of [            ], 2013.

OE LLC was formed as a limited liability company under Delaware law, pursuant to a Certificate of Formation, as filed with the Secretary of State of the State of Delaware on October 31, 2012 and a Limited Liability Company Agreement dated March 28, 2013, executed by OE. OE, as sole member of OE LLC, executed an Amended and Restated Limited Liability Company Agreement dated as of [            ], 2013.

TE LLC was formed as a limited liability company under Delaware law, pursuant to a Certificate of Formation, as filed with the Secretary of State of the State of Delaware on October 31, 2012 and a Limited Liability Company Agreement dated March 28, 2013, executed by TE. TE, as sole member of TE LLC, executed an Amended and Restated Limited Liability Company Agreement dated as of [            ], 2013.

[            ], 2013

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the Attached Schedule I

The Trust was formed as a statutory trust under the Delaware Statutory Trust Act (being Chapter 38 of Title 12 of the Delaware Code, 12 Del. C., § 3801 et seq., as the same may be amended from time to time and any successor statute), pursuant to (i) a Certificate of Trust, as filed with the Secretary of State of the State of Delaware on May 7, 2013, (ii) a Declaration of Trust dated May 7, 2013 by and among the Bond Issuers, acting jointly as settlers thereunder, each of the Servicers, collectively, as Administrative Trustees (the “Administrative Trustees”) and U.S. Bank Trust National Association, a national banking association, acting thereunder not in its individual capacity but solely as trustee under the laws of the State of Delaware (the “Delaware Trustee”) and (iii) an Amended and Restated Declaration of Trust, relating to the continuation of the Trust, dated as of [            ], 2013 by and among the Bond Issuers, acting jointly as settlers thereunder, the Administrative Trustees and the Delaware Trustee.

THE TRANSACTION

On the date hereof, CEI has sold its respective Phase-In-Recovery Property to CEI LLC under the Sale Agreement dated as of [            ], 2013 between CEI and CEI LLC and the Bill of Sale dated [            ], 2013 (the “CEI Bill of Sale” and, collectively, the “CEI Sale Agreement”). Under the Servicing Agreement dated as of [            ], 2013 (the “CEI Servicing Agreement”) between CEI, in its capacity as Servicer, and CEI LLC, CEI has agreed to service such Phase-In-Recovery Property of CEI LLC. Under the Administration Agreement dated as of [            ], 2013 (the “CEI Administration Agreement”) between CEI, in its capacity as Administrator, and CEI LLC, CEI has agreed to perform certain administrative services on behalf of CEI LLC. On the date hereof, CEI LLC has issued three tranches of its Phase-In-Recovery Bonds (the “CEI LLC Phase-In-Recovery Bonds”) under an Indenture dated as of [            ], 2013 between CEI LLC and U.S. Bank National Association, a national banking association, as trustee (the “Bond Trustee”) (the “CEI Bond Indenture”) and sold the CEI LLC Phase-In-Recovery Bonds to the Trust pursuant to the Bond Purchase Agreement dated as of [            ], 2013 between CEI LLC and the Trust (the “CEI Bond Purchase Agreement”) in exchange for an allocable portion (based on the aggregate principal amount of CEI LLC Phase-In-Recovery Bonds) of the net proceeds from the sale of the Trust Certificates.

On the date hereof, OE has sold its respective Phase-In-Recovery Property to OE LLC under the Sale Agreement dated as of [            ], 2013 between OE and OE LLC and the Bill of Sale dated [            ], 2013 (the “OE Bill of Sale” and, collectively, the “OE Sale Agreement”). Under the Servicing Agreement dated as of [            ], 2013 (the “OE Servicing Agreement”) between OE, in its capacity as Servicer, and OE LLC, OE has agreed to service such Phase-In-Recovery Property of OE LLC. Under the Administration Agreement dated as of [            ],

[            ], 2013

Page 3

To Each Person Listed on

the Attached Schedule I

2013 (the “OE Administration Agreement”) between OE, in its capacity as Administrator, and OE LLC, OE has agreed to perform certain administrative services on behalf of OE LLC. On the date hereof, OE LLC has issued three tranches of its Phase-In-Recovery Bonds (the “OE LLC Phase-In-Recovery Bonds”) under an Indenture dated as of [            ], 2013 between OE LLC and the Bond Trustee (the “OE Bond Indenture”) and sold the OE LLC Phase-In-Recovery Bonds to the Trust pursuant to the Bond Purchase Agreement dated as of [            ], 2013 between OE LLC and the Trust (the “OE Bond Purchase Agreement”) in exchange for an allocable portion (based on the aggregate principal amount of OE LLC Phase-In-Recovery Bonds) of the net proceeds from the sale of the Trust Certificates.

On the date hereof, TE has sold its respective Phase-In-Recovery Property to TE LLC under the Sale Agreement dated as of [            ], 2013 between TE and TE LLC and the Bill of Sale dated [            ], 2013 (the “TE Bill of Sale” and, collectively, the “TE Sale Agreement”). Under the Servicing Agreement dated as of [            ], 2013 (the “TE Servicing Agreement”) between TE, in its capacity as Servicer, and TE LLC, TE has agreed to service such Phase-In-Recovery Property of TE LLC. Under the Administration Agreement dated as of [            ], 2013 (the “TE Administration Agreement”) between TE, in its capacity as Administrator, and TE LLC, TE has agreed to perform certain administrative services on behalf of TE LLC. On the date hereof, TE LLC has issued three tranches of its Phase-In-Recovery Bonds (the “TE LLC Phase-In-Recovery Bonds”) under an Indenture dated as of [            ], 2013 between TE LLC and the Bond Trustee (the “TE Bond Indenture”) and sold the TE LLC Phase-In-Recovery Bonds to the Trust pursuant to the Bond Purchase Agreement dated as of [            ], 2013 between TE LLC and the Trust (the “TE Bond Purchase Agreement”) in exchange for an allocable portion (based on the aggregate principal amount of TE LLC Phase-In-Recovery Bonds) of the net proceeds from the sale of the Trust Certificates.

On the date hereof, the Trust has issued the Trust Certificates under a Certificate Indenture (the “Certificate Indenture”) dated as of [            ], 2013 between the Trust and U.S. Bank Trust National Association, a national banking association, as trustee (the “Certificate Trustee”). Each tranche of Trust Certificates represents fractional undivided beneficial interests in the corresponding classes of Phase-In-Recovery Bonds of each of the Bond Issuers.

Pursuant to the Underwriting Agreement dated [            ], 2013 (the “Underwriting Agreement”) among the Trust, the Sellers, the Bond Issuers and the Underwriters named in Schedule I thereto, such Underwriters have agreed to underwrite the Trust Certificates on behalf of the Trust.

As used herein, “Transaction Documents” means, collectively, the CEI Sale Agreement, the CEI Servicing Agreement, the CEI Administration Agreement, the CEI LLC Phase-In-Recovery Bonds, the CEI Bond Indenture, the OE Sale Agreement, the OE Servicing

[            ], 2013

Page 4

To Each Person Listed on

the Attached Schedule I

Agreement, the OE Administration Agreement, the OE LLC Phase-In-Recovery Bonds, the OE Bond Indenture, TE Sale Agreement, the TE Servicing Agreement, the TE Administration Agreement, the TE LLC Phase-In-Recovery Bonds, the TE Bond Indenture, the Trust Certificates, the Certificate Indenture, the Fee and Indemnity Agreement, the Cross-Indemnity Agreement and the Underwriting Agreement, and “Transaction” means the transactions contemplated by the Transaction Documents. Capitalized terms used and not otherwise defined herein have the meanings set forth in the Transaction Documents.

PLEDGE AND AGREEMENT BY THE STATE OF OHIO

The Phase-In-Recovery Bonds will be secured by a security interest in such Bond Issuer’s Phase-In-Recovery Property, together with certain other property of that Bond Issuer. Generally, Phase-In-Recovery Property is a property right created under the Ohio Revised Code, Sections 4928.23 – 4928.2318 (the “Statute”), pursuant to a financing order issued by the Public Utilities Commission of Ohio (the “PUCO”) on October 10, 2012 (as amended by an entry on rehearing issued on December 19, 2012 and an entry nunc pro tunc issued on January 9, 2013, the “Financing Order”) that, among other things, authorizes the creation and transfer of certain Phase-In-Recovery Property of the respective Sellers, which represents the irrevocable right of each Seller, or its assignee, to impose, charge, collect and receive certain non-bypassable Phase-In-Recovery charges (as adjusted from time to time, the “Phase-In-Recovery Charges”) from each retail customer of such Seller within its service territory.

The Statute contains the following undertaking (the “Ohio Pledge”) from the State of Ohio:

The state pledges to and agrees with the bondholders, any assignee, and any financing parties under a final financing order that the state will not take or permit any action that impairs the value of phase-in-recovery property under the final financing order or revises the phase-in costs for which recovery is authorized under the final financing order or, except as allowed under section 4928.238 of the Revised Code, reduce, alter, or impair phase-in-recovery charges that are imposed, charged, collected, or remitted for the benefit of the bondholders, any assignee, and any financing parties, until any principal, interest, and redemption premium in respect of phase-in-recovery bonds, all financing costs, and all amounts to be paid to an assignee or financing party under an ancillary agreement are paid or performed in full.

[            ], 2013

Page 5

To Each Person Listed on

the Attached Schedule I

Ohio Rev. Code § 4928.2315(A).¹ Section 4928.2315(B) permits any issuer of phase-in recovery bonds “to include the [Ohio] pledge … in the phase-in-recovery bonds, ancillary agreements, and documentation related to the issuance and marketing of the phase-in-recovery bonds.” Id. § 4928.2315(B).

OPINION REQUESTED

You have requested our opinion regarding:

(i) whether, absent a demonstration by the State of Ohio than an impairment is necessary to further a significant and legitimate public purpose, a reviewing court would conclude that the Ohio Pledge provides a basis upon which the bondholders (or Bond Trustee on their behalf), and the certificateholders (or Certificate Trustee on their behalf), could challenge successfully, under the Contract Clause of the United States Constitution, the constitutionality of any law subsequently enacted by the State, whether by legislation or by voter initiative, to reduce, alter or impair the value of the Phase-In-Recovery Property so as to cause an impairment prior to the time that the Phase-In-Recovery Bonds are fully paid and discharged; and

(ii) whether, under the Takings Clause of the United States Constitution, a reviewing court would hold that the State of Ohio would be required to pay just compensation to the bondholders or certificateholders if the State of Ohio’s repeal or amendment of the Statute or taking of any other action in contravention of the Ohio Pledge, whether by legislation or by voter initiative, constituted a permanent appropriation of a substantial property interest of the bondholders in the Phase-In-Recovery Property or deprived the bondholders or certificateholders of their reasonable expectations arising from their investments in the Phase-In-Recovery Bonds and Trust Certificates, respectively.

CONTRACT CLAUSE ANALYSIS

The Contract Clause of the United States Constitution provides that: “No State shall … pass any … Law impairing the Obligation of Contracts.” U.S. Const., Art. I, § 10. Although the Clause “appears literally to proscribe ‘any’ impairment,” the Supreme Court has long recognized

¹  Section 4928.238(A) of the Ohio Revised Code provides a mechanism that allows utilities to seek adjustments to the Phase-In-Recovery Charges in accordance with an adjustment mechanism approved in advance in a final financing order. The PUC’s review of an adjustment application is limited to “a determination of whether there is any mathematical error in the application[.]” Id. 4928.238(B). The analysis in this letter assumes that any challenged action would not qualify as an adjustment under this section.

[            ], 2013

Page 6

To Each Person Listed on

the Attached Schedule I

that “‘the prohibition is not an absolute one,’” and not every “technical impairment” will violate the Clause. United States Trust Co. of N.Y. v. New Jersey, 431 U.S. 1, 21 (1977) (quoting Home Building & Loan Ass’n v. Blaisdell, 290 U.S. 398, 428 (1934)). But neither is the Clause’s “limitation on state power … illusory.” Id. at 17. The Clause accordingly plainly “limits the power of the States to modify their own contracts,” id., but “its prohibition must be accommodated to the inherent police power of the State ‘to safeguard the vital interests of its people’” Energy Reserves Group, Inc. v. Kansas Power & Light Co., 459 U.S. 400, 410 (1983) (quoting Home Bldg. & Loan Ass’n v. Blaisdell, 290 U.S. 398, 434 (1934)).

To determine whether a state law unconstitutionally impairs contract obligations, the Supreme Court has directed a two-tiered analysis.

First, the Court inquires “whether the state law has, in fact, operated as a substantial impairment of a contractual relationship.” Energy Reserves Group, 459 U.S. at 411 (quoting Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 244 (1978)). That inquiry, in turn, has three parts: (a) “whether there is a contractual relationship”; (b) “whether a change in law impairs that contractual relationship”; and (c) “whether the impairment is substantial.” General Motors Corp. v. Romein, 503 U.S. 181, 186 (1992). When a State is a contracting party, there is an additional inquiry, under the “reserved powers” doctrine: whether the state has the “power to create irrevocable contract rights in the first place.” United States Trust, 431 U.S. at 23.

Second, if the state law does substantially impair a binding contractual relationship, the “impairment may be constitutional if it is reasonable and necessary to serve an important public purpose.” United States Trust, 431 U.S. at 25. The “severity of the impairment measures the height of the hurdle the state legislation must clear.” Allied Structural Steel Co., 438 U.S. at 245. “[C]ourts properly defer to legislative judgment as to the necessity and reasonableness of a particular measure” where private contracts are involved, but such deference is “not appropriate” when a State abrogates its own contract obligations. United States Trust, 431 U.S. at 23, 26.

A. The Existence of a Contractual Relationship

Under existing case law, it appears that the Ohio Pledge creates a contractual relationship cognizable under the Contract Clause. “[A]bsent some clear indication that the legislature intends to bind itself contractually,” there is a presumption that “‘a law is not intended to create private contractual or vested rights.’” National R.R. Passenger Corp. v. Atchison, Topeka & Santa Fe Ry. Co., 470 U.S. 451, 465-466 (1985) (quoting Dodge v. Board of Education, 302 U.S. 74, 79 (1937)). The presumption is “grounded in the elementary proposition that the principal function of a legislature is not to make contracts, but to make laws that establish the policy of the state.” Id. at 466.

[            ], 2013

Page 7

To Each Person Listed on

the Attached Schedule I

The “party asserting the creation of a contract must overcome this well-founded presumption, by identifying an “adequate expression of an actual intent of the State to bind itself.” National R.R. Passenger Corp., 470 U.S. at 466-467. That analysis starts with the text. Id. at 466 (“[I]t is of first importance to examine the language of the statute.”); see also Indiana ex rel. Anderson v. Brand, 303 U.S. 95, 104 (1938) (“[T]he cardinal inquiry is as to the terms of the statute supposed to create … a contract.”).

The language of the Ohio Pledge in which the State of Ohio “pledges to and agrees” not to impair the value of the phase-in property or bonds appears to provide the necessary expression of intent to bind the State of Ohio. Although not dispositive, a close analogue is United States Trust, in which the Supreme Court held that similar language constituted a contractual obligation for purposes of the Contract Clause. In that case, New York and New Jersey had enacted statutes providing that the two States “covenant and agree with each other and with the holders of any affected bonds” that until certain Port Authority bonds were repaid, “neither the States nor the port authority nor any subsidiary corporation” would apply any revenues “pledged in whole or in part as security for such bonds” to any passenger railroad purpose, except in limited circumstances. 431 U.S. at 9-10. The purpose of the pledge was to maintain investor confidence in bonds issued by the Port Authority when the authority was taking on a mass transit passenger railroad service that was not self-sustaining. See id. at 9. Several series of bonds were issued after the pledge was made. Id. at 18. Over a decade later, both States retroactively repealed the covenant, allowing the Port Authority to raise and use revenue that would otherwise be pledged to the bondholders to finance mass transit systems instead. Id. at 14.

Although the States did not contest the existence of a contract, the Supreme Court examined the issue and concluded that it had “no doubt that the 1962 covenant has been properly characterized as a contractual obligation of the two States.” United States Trust, 431 U.S. at 18. First, the “intent to make a contract is clear from the statutory language: ‘The 2 States covenant and agree with each other and with the holders of any affected bonds.’” Id. The language of the Ohio Pledge is quite similar: Ohio “pledges to and agrees with the bondholders.” The plain text of the Ohio Pledge thus manifests the State of Ohio’s intent to make a contract.

Second, the Supreme Court considered the circumstances surrounding the potential contract’s adoption and, in particular, whether its purpose appears to be “to invoke the constitutional protection of the Contract Clause as security against repeal,” and for the State to “receive[  ] the benefit [it] bargained for: public marketability of [the] bonds.” United States Trust, 431 U.S. at 18. The Ohio Pledge’s enactment likewise “evince[s] a legislative intent to create private rights of a contractual nature enforceable against the State.” Id. at 17 n.14. Although the bonds at issue in United States Trust differ from the Phase-In-Recovery Bonds in that they were issued by a governmental entity (the Port Authority), rather than a private entity, this distinction does not appear to affect the nature of the relationship created by the Ohio

[            ], 2013

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Pledge. Here, just as much as in United States Trust, the purpose of the pledge was to constrain action by the State in order to improve the marketability of bonds issued by a separate entity that were not the public debt of the State. Compare id. at 5 n.5 (noting that the Port Authority was barred from pledging the credit of either State), with Ohio Rev. Code § 4928.2314 (Phase-In-Recovery Bonds “shall not constitute a debt or a pledge of the faith and credit or taxing power of this state[.]”). And although the Phase-In-Recovery Bonds are issued by private entities, the State of Ohio directly controls the issuance of Phase-In-Recovery Bonds, which may be issued only with the permission of and on the terms established by the PUCO and consistent with the Statute. See Ohio Rev. Code § 4928.232. Accordingly, it appears likely that a court would conclude that the Ohio Pledge creates a contractual obligation of the State to “the bondholders, any assignee, and any financing parties.” Ohio Rev. Code § 4928.2315(A).

The certificateholders are not themselves express parties to the contract between the State of Ohio and “the bondholders, any assignee, and any financing parties,” as those terms are defined in the Statute. See Ohio Rev. Code § 4928.2315(A). The Trust, however is a bondholder, and thus the Certificate Trustee could sue to protect the contractual obligation between the State of Ohio and the bondholders from impairment. It is an open question whether the certificateholders, independently of the Certificate Trustee, would be able to assert a claim under the Contract Clause as third-party beneficiaries of the Ohio Pledge. In United State Trust, the Supreme Court noted, but did not resolve, the question of whether bondholders who were not parties to the state covenant in that case had standing to sue as “third-party beneficiaries of the covenant” because “they were indirectly protected” by it. 431 U.S. at 18 n.15. The Supreme Court did not need to resolve that question because there were contractual parties in the suit, which sufficed for standing. Id. Courts of appeals have allowed clear third-party beneficiaries to make claims based on the Contract Clause. See, e.g., Whirlpool Corp. v. Ritter, 929 F.2d 1318, 1322-1323 (8th Cir. 1991) (upholding Contract Clause claim by life insurance beneficiary that retroactive application of state statute revoking certain beneficiary designations upon divorce impaired life insurance contract); Stillman v. Teachers Ins. & Annuity Ass’n College Retirement Equities Fund, 343 F.3d 1311, 1321-23 (10th Cir. 2003) (rejecting Contract Clause claim by annuity beneficiary on the merits).

B. Impairment Of The Contractual Relationship

Once a binding contractual relationship is established, the remaining two parts of the threshold inquiry are “whether a change in law impairs that contractual relationship, and whether the impairment is substantial.” General Motors Corp., 503 U.S. at 186. The “severity of an impairment can be measured by the factors that reflect the high value the Framers placed on the protection of private contracts,” chiefly reliance and reasonable expectations. Allied Structural Steel Co., 438 U.S. at 245; see also United States Trust, 431 U.S. at 19 n.17 (impairment involves “a more particularized inquiry into the legitimate expectations of the contracting

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parties”). The Supreme Court has thus denoted impairments substantial when a change in state law retroactively changed a company’s contract obligations “in an area where the element of reliance was vital—the funding of a pension plan.” Id. at 246. Imposing “a completely unexpected liability in potentially disabling amounts” by “nullif[ying] express terms of [a] company’s contractual obligations” constituted substantial impairment. Id. at 247. On the other hand, where “the parties are operating in a heavily regulated industry” and state authority to regulate prices “is well established” (even if previously unexercised), a contracting party’s “reasonable expectations [were] not impaired” by state legislation regulating certain prices. Energy Reserves Group, Inc., 459 U.S. at 413, 416.

The severity of the impairment also depends upon the importance of the impaired provision to the contract as a whole. See City of El Paso v. Simmons, 379 U.S. 497, 514 (1965) (considering whether the impaired provision was “the central undertaking of the seller” or “the primary consideration for the buyer’s undertaking”). Where States had specifically made a pledge that was “an important security provision” for a bond, however, and then “outright repeal[ed]” the pledge and “totally eliminated” that security provision, the Supreme Court has found substantial impairment. United States Trust, 431 U.S. at 19; see also W.B. Worthen Co. v. Kavanaugh, 295 U.S. 56, 62 (1935) (finding substantial impairment where multiple changes to municipal bondholders’ remedies for nonpayment of property assessments constituted “destruction of nearly all of the incidents that give attractiveness and value to collateral security”).

As the foregoing principles indicate, the determination of whether particular legislation constitutes a substantial impairment is a fact-specific analysis. Nothing in this letter expresses any opinion as to how a court would resolve the issue of “substantial impairment” with respect to the Phase-In-Recovery Bonds vis-a-vis any particular legislative action as that question would necessarily turn upon the precise content of any future legislation. Therefore, we have assumed for purposes of this letter’s analysis that any impairment resulting from legislation challenged under the Contract Clause would be substantial.

C. The Reserved Powers Doctrine

In cases involving contracts with States, there is an additional component to the threshold inquiry. Even when a statute evinces the intent to create a contract, the “reserved powers” doctrine constrains the State’s authority “to enter into an agreement that limits its power to act in the future.” United States Trust, 431 U.S. at 23. The Contract Clause “does not require a State to adhere to a contract that surrenders an essential attribute of its sovereignty.” Id. Early decisions under the Contract Clause “relied on distinctions among the various powers of the State” in determining whether a contract was unenforceable for surrendering an essential attribute of sovereignty. Id. at 24. It has thus long been settled that “the legislature cannot

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bargain away the police power of a State.” Stone v. Mississippi, 101 U.S. 814, 817 (1880) (upholding the outlawing of lotteries after granting a long-term charter to operate a lottery). Likewise, the State cannot contract away the power of eminent domain. West River Bridge Co. v. Dix, 47 U.S. (6 How.) 507, 525-526 (1848). But “the power to enter into effective financial contracts cannot be questioned.” United States Trust, 431 U.S. at 24. Thus, even though any financial obligation “could be regarded in theory as a relinquishment of the State’s spending power” or “taxing power,” the States “are bound by their debt contracts.” Id.

In United States Trust, the Court held that a state pledge that protected the security for bonds issued by a separate governmental entity was “a financial obligation” that did not “fall within the reserved powers that cannot be contracted away.” 431 U.S. at 24-25. The Court cautioned, however, that “[n]ot every security provision … is necessarily financial,” giving the example of a revenue bond “secured by the State’s promise to continue operating the facility in question,” which could “not validly be construed to bind the State never to close the facility for health or safety reasons.” Id. at 25.

Under that precedent, it appears that the Ohio Pledge does not tread upon any reserved powers of the State of Ohio. The Ohio Pledge does not purport to contract away the State of Ohio’s power of eminent domain or otherwise restrict the State’s ability to legislate for the public welfare or to exercise its police powers. Although the underlying financial obligation on the Phase-In-Recovery Bonds belongs to private entities rather than a governmental entity, as in United States Trust, the Ohio Pledge is nonetheless an undertaking not to impair the financial security for the State-approved Phase-In-Recovery Bonds. The Ohio Pledge, in fact, is intended to induce investment in the Phase-In-Recovery Bonds, as reflected in the State of Ohio’s explicit authorization to include its pledge in the Bonds and associated marketing documents. The State of Ohio did so in order to secure a financial benefit to the State—marketability of the bonds with concomitant expected cost savings to Ohio electric consumers. As such, we believe that the Ohio Pledge is akin to the type of “financial contract” involved in United States Trust and, accordingly, the contractual obligation created by the Ohio Pledge would meet the threshold requirement of enforceability under the Contract Clause.

D. The State’s Burden to Justify a Substantial Impairment

If the (potential) governmental action in contravention of the Ohio Pledge “constitutes a substantial impairment, the State, in justification must have a significant and legitimate public purpose behind the regulation.” Energy Reserves, 459 U.S. at 411. “Once a legitimate public purpose has been identified, the next inquiry is whether the adjustment of ‘the rights and responsibilities of contracting parties [is based] upon reasonable conditions and [is] of a character appropriate to the public purpose justifying [the legislation’s] adoption.’” Id. (quoting United States Trust, 431 U.S. at 22; alteration in original). When the State is not a contracting

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party, then “courts properly defer to legislative judgment as to the necessity and reasonableness of a particular measure.” United States Trust, 431 U.S. at 22-23. But “complete deference to a legislative assessment of reasonableness is not appropriate” when the State abrogates its own contracts and “the State’s self-interest is at stake.” Id. at 26.

In United States Trust, the State repealed a state statute protecting the revenues pledged as security for bonds from being used to finance certain mass transit operations. 431 U.S. at 10. As justification for the repeal, New Jersey asserted the public purposes of mass transportation, energy conservation, and environmental protection, or, more specifically, “encouraging users of private automobiles to shift to public transportation.” Id. at 28-29. The Supreme Court did not doubt the legitimacy of this public purpose, but held that repealing the pledge to bondholders was neither “necessary to achievement of the plan nor reasonable in light of the circumstances.” Id. at 29. First, “a less drastic modification” than repeal of the state pledge “would have permitted the contemplated plan without entirely removing the covenant’s limitations” on the use of revenues to subsidize commuter railroads. Id. at 30. Second, the States could “have adopted alternative means of achieving their twin goals of discouraging automobile use and improving mass transit” without “modifying the covenant at all.” Id. at 30. Accordingly, under United States Trust, at least where a State financial obligation is involved, there is solid precedent for not allowing a State to break its agreements when there are reasonable alternative means to accomplish the same public policy end.

The fact that the Supreme Court construed the state pledge at issue in United States Trust as a financial obligation of the State was important to its analysis. See, e.g., 431 U.S. at 29 (“[A] State cannot refuse to meet its legitimate financial obligations simply because it would prefer to spend the money to promote the public good rather than the private welfare of its creditors.”). The Supreme Court noted that alteration of a public bond contract had only been sustained once in the Twentieth Century, in Faitoute Iron & Steel Co. v. City of Asbury Park, 316 U.S. 502 (1942). 431 U.S. at 27; see also Energy Reserves, 459 U.S. at 412 n.14 (“In almost every case, the Court has held a governmental unit to its contractual obligation when it enters financial or other markets.”). In Faitoute, however, the contract abrogation—through a municipal bankruptcy statute—provided the bondholders with new bonds that were worth something, when the previous bonds “represented only theoretical rights” because, “as a practical matter the city could not raise its taxes enough to pay off its creditors under the old contract terms.” United States Trust, 431 U.S. at 28. Thus, in Faitoute, the contract alteration was “adopted with the purpose and effect of protecting the creditors,” whereas the abrogation of the state pledge at issue in United States Trust was not. Id. In addition, the Supreme Court in United States Trust noted that the public purpose to be served by repealing the state pledge—mass transit—was known at the time the covenant was adopted, making its later repeal unreasonable. Id. at 31. Where, on the other hand, a statutory scheme resulted in “unforeseen advantages or burdens on a contracting party,” the Supreme Court held it was reasonable and constitutional for a State to

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amend the statute to “restrict a party to those gains reasonably to be expected from the contract.” City of El Paso v. Simmons, 379 U.S. 497, 515 (1965) (upholding amendment to state law to limit the period of time in which a purchaser of state land who forfeited his purchase contract could reinstate his right to the land). Accordingly, if a court were to view the Ohio Pledge as a financial obligation of the State of Ohio, it is more likely to find an abrogation of the Pledge unconstitutional. It could sustain the abrogation only if there were no other, less-drastic means of accomplishing an unforeseen legitimate public purpose, or the abrogation could be said to promote the interests of the Phase-In-Recovery Bondholders themselves.

Unlike the Port Authority bonds at issue in United States Trust, however, the Phase-In-Recovery Bonds do not represent the debt of any public entity. It thus is conceivable that a court would not apply the same degree of scrutiny to governmental action as it did in United States Trust and, instead, would defer to legislative judgments regarding the reasonableness and necessity of contract abrogation, or apply some intermediate degree of scrutiny given the State of Ohio’s status as a contracting party. Even so, case law indicates that the State of Ohio would have to establish that any substantial impairment is necessary and reasonably tailored to address a significant and broad public purpose. Spannaus, 438 U.S. at 248-249 (holding legislative imposition of pension obligations was invalid under the Contract Clause where there was “no showing in the record … that this severe disruption of contractual expectations was necessary to meet an important general social problem,” and the law had “an extremely narrow focus” and “can hardly be characterized … as one enacted to protect a broad societal interest rather than a narrow class”). In most cases involving the abrogation of purely private contracts, however, the legislative judgment regarding the need to impair contracts has largely passed constitutional muster. See, e.g., Keystone Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470, 505-506 (1987) (upholding law imposing liability on miners for subsidence damage even where surface owners had waived damages because the State ‘has a strong public interest in preventing this type of harm, the environmental effect of which transcends any private agreement” and the Supreme Court would not “second-guess the [State’s] determinations that” imposing liability was “the most appropriate way[  ] of dealing with the problem”); Blaisdell, 290 U.S. at 444-446 (upholding law impairing mortgage contracts during the Depression because an emergency existed in the State, the legislation was for “the protection of a basic interest of society” rather than “for the mere advantage of particular individuals,” and the conditions under which impairment occurred were not unreasonable).

E. Injunctive Relief

A “preliminary injunction is an extraordinary remedy never awarded as of right.” Winter v. Natural Res. Defense Council, 555 U.S. 7, 24 (2008). Accordingly, a plaintiff seeking a preliminary injunction must establish four factors: “that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of

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equities tips in his favor, and that an injunction is in the public interest.” Id. at 20. To meet the “irreparable harm” factor, a plaintiff must be able to show that his injury “is not fully compensable by monetary damages.” Certified Restoration Dry Cleaning Network, L.L.C. v. Tenke Corp., 511 F.3d 535, 550 (6th Cir. 2007). But “an injury is not fully compensable by money damages if the nature of the plaintiff’s loss would make damages difficult to calculate,” Basicomputer Corp. v. Scott, 973 F.2d 507, 511 (6th Cir. 1992). Depending on the nature of any act by the State of Ohio in contravention of the Ohio Pledge, the impact on the Phase-In-Recovery Property or the Phase-In-Recovery Bonds may be difficult to calculate. See United States Trust, 431 U.S. at 19 (“[N]o one can be sure precisely how much financial loss the bondholders suffered” from repeal of state pledge.). In addition, an injury is not compensable by damages, and thus injunctive relief may be available, if sovereign immunity would preclude a suit for damages. See New Jersey Retail Merchants Ass’n v. Sidamon-Eristoff, 669 F.3d 374, 388 (3d Cir. 2012) (upholding preliminary injunction in Contract Clause case where, in the absence of injunction, merchants would have to pay money to the State that could not later be recovered due to sovereign immunity).

The decision whether to grant a preliminary injunction rests within the discretion of the district court and, in the Sixth Circuit, the appellate court “will reverse a district court’s weighing and balancing of the equities only in the rarest of circumstances.” Mascio v. Public Employees Ret. Sys. of Ohio, 160 F.3d 310, 313 (6th Cir. 1998) (upholding grant of preliminary injunction in Contract Clause case involving impairment of vested pension benefits).

A federal court would apply substantially the same factors in determining whether to grant a permanent injunction, except that the plaintiff must show “actual success” rather than “a likelihood of success on the merits.” Amoco Production Co. v. Village of Gambell, 480 U.S. 531, 546 n.12 (1987). A permanent injunction, too, “is a matter of equitable discretion” and “does not follow from success on the merits as a matter of course.” Winter, 555 U.S. at 32. We note that, to the extent any impairment also constitutes a taking (see discussion below), the availability of a suit for just compensation would constitute an adequate remedy at law rendering equitable relief unavailable to enjoin the taking. Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1016 (1984).

CONTRACT CLAUSE OPINION

While there is no case law addressing the application of the United States Contract Clause specifically to the Statute at issue here, we have considered existing case law concerning the application of the Contract Clause to, inter alia, legislation which reduces or eliminates public charges or other sources of revenues which support bonds, or which otherwise reduces or eliminates the security for bonds. Based upon our review of relevant judicial authority, as discussed in this opinion, but subject to the qualifications, limitations and assumptions set forth

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herein (including the important assumption that any impairment would be “substantial”), it is our opinion that a reviewing court of competent jurisdiction, in a properly prepared and presented case:

(i) would conclude that the Ohio Pledge constitutes a contractual relationship between the State of Ohio and the bondholders;

(ii) would conclude, absent a demonstration that a substantial impairment of that contract was reasonable and necessary to further a significant and legitimate public purpose, that the bondholders (including initially the Certificate Trustee), or the Bond Trustee on their behalf, and the Certificate Trustee (as holder of the bonds on behalf of the certificateholders) could successfully challenge under the federal Contract Clause the constitutionality of any law subsequently enacted, whether by legislation or by voter initiative, to reduce, alter or impair the value or the Phase-In-Recovery Property so as to cause a substantial impairment prior to the time that the Phase-In-Recovery Bonds are fully paid and discharged; and

(iii) although sound and substantial arguments might support the granting of preliminary and permanent injunctive relief to prevent implementation of any law determined to limit, alter, impair or reduce the value of the Phase-In-Recovery Property in violation of the Contract Clause, the decision to do so will be in the discretion of the court requested to take such action, which will be exercised on the basis of the considerations discussed herein.

DISCUSSION OF THE TAKINGS CLAUSE

The Takings Clause of the Fifth Amendment to the United States Constitution provides that “private property” shall not “be taken for public use, without just compensation.” U.S. Const. Amend. V. The prohibition applies to the States through incorporation in the Fourteenth Amendment. Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 160 (1980).

A court analyzing a Takings Clause claim to governmental action impairing the Phase-In-Recovery Bonds or their security would likely proceed in three steps. First, do the bondholders have a relevant “property interest protected by the Fifth Amendment’s Taking Clause”? Ruckelshaus, 467 U.S. at 1000-1001. Second, does the State of Ohio’s act in contravention of the Ohio Pledge constitute a taking? Id. Third, is the taking for public use and is there just compensation? Id.

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A. Existence Of A Cognizable Property Interest

The threshold inquiry in a Takings Clause analysis would be whether the bondholders have a property interest cognizable under the Takings Clause. Property interests “are not created by the Constitution. Rather, they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law.” Webb’s Fabulous Pharmacies, 449 U.S. at 161. The Supreme Court has recognized that intangible property rights recognized by state law are protected by the Takings Clause. See, e.g., Ruckelshaus, 467 U.S. at 1003 (trade secrets); Armstrong v. United States, 364 U.S. 40, 44, 46 (1960) (materialman’s lien); Louisville Joint Stock Land Bank v. Radford, 295 U.S. 555, 596-602 (1935) (real estate lien). Contracts are also property interests protected by the Takings Clause. United States Trust, 431 U.S. at 19 n.16 (“Contract rights are a form of property and as such may be taken for a public purpose provided that just compensation is paid.”); see also Lynch v. United States, 292 U.S. 571, 579 (1934) (repeal of statute providing for vested life insurance contract benefits violated the Fifth Amendment). In holding that trade secrets were a property interest protected by the Takings Clause, the Supreme Court noted that trade secrets “have many of the characteristics of more tangible forms of property,” including that a trade secret is “assignable,” “can form the res of a trust,” and “passes to a trustee in bankruptcy.” Ruckelshaus, 467 U.S. at 1002.

A court would likely undertake a similar analysis of the Phase-In-Recovery Property, the Phase-In-Recovery Bonds, and the Trust Certificates, and reach the conclusion that the bondholders have property interests protected by the Takings Clause. First, the Phase-In-Recovery Bonds and the Trust Certificates themselves are a form of intangible property with the characteristics addressed in Ruckelshaus. In addition, the Phase-In-Recovery Property that secures the bonds, and indirectly secures the Trust Certificates, is plainly property under Ohio law. See Ohio Rev. Code § 4928.234. Finally, for the bondholders, the dicta in United States Trust regarding the Takings Clause indicates that the bondholders’ contract with the State of Ohio—which is a security provision for the Phase-In-Recovery Bonds—is itself a property right protected by the Takings Clause. 431 U.S. at 19 n.16 (“Contract rights are a form of property and as such may be taken for a public purpose provided that just compensation is paid.”). The nature of the challenged act—which could include, inter alia, repealing the Ohio Pledge, invalidating or substantially altering the imposition of the Phase-In-Recovery Charges, or retroactively repealing the regulatory scheme for creating Phase-In-Recovery Property—would affect which particular property interest was taken for purposes of the Takings Clause.

B. Circumstances In Which An Act Contrary To The Ohio Pledge Would Effect A Taking

If a cognizable property interest exists, the next step in the Takings Analysis would be to determine if the state act constitutes a “taking.” This is a complicated inquiry that involves first characterizing the nature of the potential taking as a “physical” or “regulatory” taking. Tahoe-

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Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 US 302, 321 (2002) (“The text of the Fifth Amendment … provides a basis for drawing a distinction between physical takings and regulatory takings.”). If the state act constitutes a physical taking, then generally the government has “a categorical duty to compensate the former owner.” Id. at 322. When the act is more akin to a regulation “that prohibit[s] a property owner from making certain uses of her private property,” then the “regulatory” takings analysis applies, which is “characterized by essentially ad hoc, factual inquiries, designed to allow careful examination and weighing of all the relevant circumstances.” Id. at 321-322 (citations and internal quotation marks omitted).

1. Categorization of the Taking

A so-called “physical” taking occurs when the “government authorizes a physical occupation of property (or actually takes title).” Yee v. City of Escondido, 503 U.S. 519, 522 (1992). For physical takings, “the Takings Clause generally requires compensation.” Id. But “where the government merely regulates the use of property, compensation is required only if considerations such as the purpose of the regulation or the extent to which it deprives the owner of the economic use of the property suggest that the regulation has unfairly singled out the property owner to bear a burden that should be borne by the public as a whole.” Id. at 522-523. This latter category is known as a regulatory taking.

A government appropriation of intangible property, including financial interests, can constitute a “physical” taking. Brown v. Legal Foundation of Wash., 538 U.S. 216 (2003) (state law requiring that interest on lawyers’ trust fund accounts be transferred to State was akin to a physical taking). The dividing line between the two categories is “between acquisitions of property for public use, on the one hand, and regulations prohibiting private uses, on the other.” Tahoe-Sierra, 535 U.S. at 323. Whether any given act in contravention of the Ohio Pledge constitutes a physical or regulatory taking will depend upon a careful analysis of the specific characteristics of the state action at issue and its impact on the property interests at stake.

2. Regulatory Takings Analysis

If a regulation “completely deprive[s] an owner of ‘all economically beneficial us[e]’ of her property,” then it is subject to the same per se rule applicable to physical takings and “the government must pay just compensation for such ‘total regulatory takings.’” Lingle v. Chevron USA Inc., 544 U.S. 528, 538 (2005) (quoting Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1018, 1026 (1992)).

Anything short of a “total regulatory taking,” however, is “governed by the standards set forth in Penn Central Transp. Co. v. New York City, 438 U. S. 104 (1978).” Lingle, 544 U.S. at

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538. Although the Supreme Court in Penn Central eschewed any “set formula” for evaluating regulatory takings, it identified “several factors that have particular significance.” 438 U.S. at 124. Those three factors are: “the character of the governmental action,” the “economic impact of the regulation on the claimant,” and “the extent to which the regulation has interfered with distinct investment-backed expectations.” Id. The purpose of the test is to reveal “the magnitude or character of the burden a particular regulation imposes upon private property rights” and “how any regulatory burden is distributed among property owners” in order to identify regulations “whose effects are functionally comparable to government appropriation or invasion of private property.” Lingle, 544 U.S. at 542. Those factors were developed in the context of real property regulation, but have often been applied to cases involving intangible property. See Eastern Enters. v. Apfel, 524 U.S. 498, 523-524 (1998) (plurality) (applying Penn Central framework to financial obligation to fund health benefits); Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211, 224-225 (1986) (same for obligation to contribute to pension plan upon withdrawal); Ruckelshaus, 467 U.S. at 1005 (same for trade secrets)

The first factor—the character of the governmental action—focuses on the degree to which the government act is more like a physical taking, as opposed to “some public program adjusting the benefits and burdens of economic life to promote the common good.” Penn Central, 438 U.S. at 124. To the extent that the government act eliminates an entire type of property rights with respect to a piece of property, or all rights with respect to a divisible portion of property, this factor is more likely to weigh in favor of finding a taking. See Hodel v. Irving, 481 U.S. 704, 716 (1987) (finding government regulation abrogating authority to pass to heirs small undivided interests in land was a taking because the “character of the Government regulation … is extraordinary” and “destroyed one of the most essential sticks in the bundle of rights that are commonly characterized as property”). Where a regulation does not “permanently appropriate any of the [regulated party’s] assets for its own use,” this factor will weigh against finding a taking. Connolly, 475 U.S. at 225.

Under the first factor, the Supreme Court has also often considered the public purpose to be served by the state act, and the extent to which the costs of the act have been imposed on a small group. See, e.g., Keystone Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470, 485 (1987) (finding no taking where, inter alia, state law precluding mining within a certain distance of a structure did “not merely involve a balancing of the private economic interests of coal companies against the private interests of the surface owners” but served “important public interests”); Eastern Enters., 524 U.S. at 537 (plurality) (finding a taking where, inter alia, the “nature of the governmental action” was “quite unusual” in that it “single[d] out certain employers to bear a burden that is substantial in amount” and unrelated to injury they caused); cf. United States v. Armstrong, 364 U.S. 40, 49 (1960) (“The Fifth Amendment’s guarantee that private property shall not be taken for a public use without just compensation was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and

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justice, should be borne by the public as a whole.”). The Supreme Court has abandoned, however, an independent purpose-based test for determining when a government act is a taking. Lingle, 544 U.S. at 548 (rejecting test that would find a taking if a regulation “‘does not substantially advance [a] legitimate state interes[t].’”) (quoting Agins v. Tiburon, 447 U.S. 255, 260 (1980)).

The second factor in a regulatory takings analysis is the severity of the economic impact. The assessment of economic impact “is not made in a vacuum,” but turns upon the proportionality between the impact and the regulated party’s responsibility for or relationship with the problem addressed by the regulation. Connolly, 475 U.S. at 225 (finding economic impact did not weigh in favor of a taking where liability imposed upon employers withdrawing from pension plans “directly depend[ed] on the relationship between the employer and the plan” and there were “a significant number of provisions in the Act that moderate and mitigate the economic impact”). Where the economic impact is “a considerable financial burden” that does not “reflect some ‘proportion[ality] to [the regulated party’s] experience with’” the government program at issue, it may weigh in favor of a taking. Apfel, 524 U.S. at 529, 530 (plurality) (quoting Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for S. Cal., 508 U.S. 602, 645 (1993)) (first alteration in original). But the Supreme Court has found that, where coal mining companies did not show that the state regulation “made mining of certain coal commercially impracticable,” then they had “not shown any deprivation significant enough to satisfy the heavy burden placed upon one alleging a regulatory taking.” Keystone Bituminous Coal, 480 U.S. at 493. Furthermore, even severe economic impact, including total destruction of the property, may not constitute a taking, if the state act is taken in response to emergency conditions. See United States v. Caltex, 344 U.S. 149, 154 (1952) (recognizing common law principle that, “in times of imminent peril—such as when fire threatened a whole community—the sovereign could, with immunity, destroy the property of a few” in order to save the community, and thereby finding no compensation required for the destruction of oil facilities in advance of Japanese takeover of the Philippines).

The final factor is the regulation’s “interference with reasonable investment-backed expectations.” Ruckleshaus, 467 U.S. at 1005. An “explicit government guarantee” can “form[] the basis of a reasonable investment-backed expectation.” Ruckelshaus, 467 U.S. at 1011 (finding that federal statute’s assurance that the EPA was prohibited from publicly disclosing trade-secret information gave rise to a reasonable expectation that the EPA would not disclose that information, weighing in favor of disclosure constituting a taking). Far reaching and unexpected retroactivity can also substantially interfere with reasonable investment-backed expectations. Eastern Enters., 524 U.S. at 532 (plurality) (retroactive liability reaching back thirty to fifty years). On the other hand, in general, operation in a regulated field weighs against a reasonable expectation of non-interference by regulation. See, e.g., Connolly, 475 U.S. at 227 (finding no taking by imposition of liability for withdrawal from pension plan where “[p]rudent

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employers … had more than sufficient notice not only that pension plans were currently regulated, but also that withdrawal itself might trigger additional financial obligations”); Concrete Pipe, 508 U.S. at 645 (Those “who do business in the regulated field cannot object if the legislative scheme is buttressed by subsequent amendments to achieve the legislative end.”) (internal quotation marks omitted).

3. Application to the Phase-In-Recovery Bonds and Trust Certificates

To determine whether any act in contravention of the Ohio Pledge constituted a taking, the court would first have to determine whether the act was akin to a physical taking or otherwise deprived the bondholders of all economically beneficial or productive use of the Phase-In-Recovery Bonds or Phase-In-Recovery Property, or deprived the certificateholders of all economically beneficial use of the Trust Certificates. For example, if the State of Ohio eliminated Phase-In-Recovery Charges, or banned the use of Phase-In-Recovery Property for timely payments of principal and interest on the Phase-In-Recovery Bonds, then a court might conclude that such an act falls within the category of a per se taking that requires compensation. Although the effect on the certificateholders would be more indirect, they would suffer a deprivation to their intangible property interest as owners of fractional undivided beneficial interests in the Phase-In-Recovery Bonds of the same magnitude as the bondholders in those circumstances. But “the fact that legislation disregards or destroys existing contractual rights does not always transform the regulation into an illegal taking.” Connolly, 475 US at 224.

If all economically beneficial or productive use of the Phase-In-Recovery Bonds or Trust Certificates were not denied, the court would undertake an ad hoc factual inquiry considering the Penn Central factors, which include: (1) the character of the government action, (2) the economic impact and severity of the regulation, and (3) the extent to which the regulation interfered with reasonable investment-backed expectations. While the character of any future act in contravention of the Ohio Pledge cannot be known at this time, absent a complete confiscation of the Phase-In-Recovery Bonds or complete destruction of the Phase-In-Recovery Property, it is likely that the court would apply the regulatory takings analysis. Regarding the economic impact, although the effect cannot be known at this time, any act that substantially impaired the security for payment of the Phase-In-Recovery Bonds, and thereby substantially impaired the security for payment of the Trust Certificates, would likely be found to have a severe economic impact on the bondholders and certificateholders, respectively. Moreover, it is likely that an act in contravention of the Ohio Pledge that prevented the timely payment of principal and interest on the Phase-In-Recovery Bonds would interfere with the bondholders’ and certificateholders reasonable investment-backed expectations. That is because payment of the Phase-In-Recovery Bonds, and ultimately the Trust Certificates, with the Phase-In-Recovery Property is the primary investment-backed expectation of the bondholders and certificateholders, respectively, and the Ohio Pledge itself makes that expectation reasonable because the Ohio Pledge guarantees, inter

[            ], 2013

Page 20

To Each Person Listed on

the Attached Schedule I

alia, that Ohio would not act to impair the value of the Phase-In-Recovery Property. See Ruckelshaus, 467 U.S. at 1011. The retroactivity of any such act, as applied to bonds issued prior to repeal or amendment of the Pledge, would reinforce the unfairness of interference with the bondholders’ and certificateholders’ investment-backed expectations. See Eastern Enters., 524 U.S. at 532 (plurality).

C. Public Purpose And Just Compensation

Even if a state act in contravention of the Ohio Pledge constitutes a taking, the Takings Clause “does not prohibit the taking of private property, but instead places a condition on the exercise of that power.” First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304, 314 (1987). The property may only be taken for a public purpose, but the Supreme Court has “defined that concept broadly, reflecting [its] longstanding policy of deference to legislative judgments in this field,” Kelo v. City of New London, 545 U.S. 469, 480 (2005), and stated it is “coterminous with the scope of a sovereign’s police powers,” Hawaii Housing Auth. v. Midkiff, 467 U.S. 229, 240 (1984). Adequate compensation must be paid, which is measured by the value of the property at the time of the taking. See United States v. 50 Acres of Land, 469 U.S. 24, 29 (1984) (just compensation based on value “at the time of the taking”); Kirby Forest Indus. v. United States, 467 U.S. 1, 10 (1984) (value is “the fair market value of the property on the date it is appropriated”). That fair market value includes interest. See Jacobs v. United States, 290 U.S. 13, 17–18 (1933).

TAKINGS CLAUSE OPINION

Based on our review of relevant judicial authority, as discussed in this opinion, but subject to the qualifications, limitations and assumptions set forth herein, it is our opinion that a reviewing court of competent jurisdiction, in a properly prepared and presented case, would conclude that the State of Ohio would be required to pay just compensation to the holders of Phase-In-Recovery Bonds, or the holders of the Trust Certificates, if the State of Ohio took or permitted an act in contravention of the Ohio Pledge, after the Phase-In-Recovery Bonds are issued, but before they are fully paid, that materially affected a substantial property interest of such bondholders in the Phase-In-Recovery Bonds or the Phase-In-Recovery Property, and of the certificateholders in the Trust Certificates and as owners of beneficial interests in the Phase-In-Recovery Bonds, and the action: (i) constituted a permanent appropriation of that property interest or denied all economically beneficial or productive use of the Phase-In-Recovery Property; (ii) destroyed the Phase-In-Recovery Property, other than in response to so-called emergency conditions; or (iii) substantially reduced, altered or impaired the value of the Phase-In-Recovery Property in a manner that inflicts a severe economic impact on such bondholders or certificateholders and unduly interferes with their reasonable expectations. It must be noted, moreover, that takings of financial interests can be particularly difficult to establish in a manner that distinguishes them from constitutionally permissible economic regulation.

[            ], 2013

Page 21

To Each Person Listed on

the Attached Schedule I

Further, there can be no assurance that any award of compensation would be sufficient to pay the full amount of principal of and interest on the Phase-In-Recovery Bonds and therefore to satisfy in full the Trust Certificates. Moreover, because the availability of just compensation would constitute an adequate remedy at law, “[e]quitable relief is not available to enjoin an alleged taking of private property for a public use … when a suit for compensation can be brought against the sovereign subsequent to the taking.” Ruckelshaus, 467 U.S. at 1016.

* * *

We note that judicial analysis of issues relating to the Contract Clause and the Takings Clause has typically proceeded on a case-by-case basis and that a court’s determination, in most instances, is strongly influenced by the facts and circumstances of the particular case, many of which cannot be known or reasonably predicted at this time. We further note that there are no reported, controlling judicial precedents of which we are aware directly on point. Our analysis is necessarily a reasoned application of judicial decisions involving similar or analogous circumstances. Moreover, the application of equitable principles (including the availability of injunctive relief or the issuance of a stay pending appeal) is subject to the discretion of the court which is asked to apply those principles. We cannot predict the facts and circumstances that will be present in the future and may be relevant to the exercise of such discretion. Consequently, there can be no assurance that a court will follow our reasoning or reach the conclusions that we believe current judicial precedent supports. None of the foregoing opinions is intended to be a guaranty as to what a particular court would actually hold. Rather, each such opinion is only an expression as to the decision a court ought to reach if the issue were properly prepared and presented to it and the court followed what we believe to be the applicable legal principles under existing judicial precedent. The recipients of this letter should take these considerations into account in analyzing the risks associated with the Transaction.

The opinions set forth above are given as of the date hereof and we disavow any undertakings or obligations to advise you of any changes in the law (whether constitutional, statutory, regulatory or judicial) which may hereafter occur or any facts or circumstances that may hereafter occur or come to our attention that could affect such opinions.

This opinion is solely for your benefit in connection with the Transaction and may not be relied upon, used or circulated by, quoted, or otherwise referred to by, nor may copies hereof be delivered to, any other person without our prior written approval.

[            ], 2013

Page 22

To Each Person Listed on

the Attached Schedule I

We hereby consent to the filing of this letter as an exhibit to the Registration Statement filed with the Securities and Exchange Commission (the “Commission”) on April 2, 2013, as amended by Amendment No. 1 thereto, dated May 7, 2013, Amendment No. 2 thereto, dated May 24, 2013 and Amendment No. 3 thereto, dated June 4, 2013 (the “Registration Statement”), and to all references to our firm included in or made a part of the Registration Statement. In giving the foregoing consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the related rules and regulations of the Commission.

Very truly yours,

***DRAFT***

AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.

Schedule I

CEI Funding LLC

c/o FirstEnergy Corp.

76 South Main Street

Akron, OH 44308

The Cleveland Electric Company

c/o FirstEnergy Corp.

76 South Main Street

Akron, OH 44308

OE Funding LLC

c/o First Energy Corp.

76 South Main Street

Akron, OH 44308

Ohio Edison Company

c/o FirstEnergy Corp.

76 South Main Street

Akron, OH 44308

TE Funding LLC

c/o FirstEnergy Corp.

76 South Main Street

Akron, OH 44308

The Toledo Edison Company

c/o First Energy Corp.

76 South Main Street

Akron, OH 44308

FirstEnergy Ohio PIRB Special Purpose Trust 2013

c/o U.S. Bank Trust National Association

190 S. LaSalle Street, 7 Floor

Mail Code: MK-IL-SL7R

Chicago, IL 60603

Attention: FirstEnergy Ohio PIRB Special Purpose Trust 2013

Fitch, Inc.

One State Street Plaza

New York, NY 10004

Attention: ABS Surveillance

I-1

Moody’s Investors Service, Inc.

7 World Trade Center at

250 Greenwich Street, 24^th Floor

New York, NY 10007

Attention: ABS/RMBS Monitoring Department

Standard & Poor’s Ratings Services

55 Water Street

New York, NY 10041

Attention: Structured Credit Surveillance

As Representatives of the Underwriters named in Schedule I to the Underwriting Agreement:

Citigroup Global Markets Inc.

388 Greenwich Street

New York, NY 10013

Credit Agricole Securities (USA) Inc.

1301 Avenue of the Americas

New York, NY 10019

Goldman, Sachs & Co.

200 West Street

New York, NY 10282-2198

U.S. Bank National Association, as Bond Trustee

190 S. LaSalle Street, 7th Floor

Mail Code: MK-IL-SL7R

Chicago, IL 60603

Attention: First Energy Ohio PIRB Special Purpose Trust 2013

U.S. Bank National Association, as Certificate Trustee

190 S. LaSalle Street, 7th Floor

Mail Code: MK-IL-SL7R

Chicago, IL 60603

Attention: First Energy Ohio PIRB Special Purpose Trust 2013

I-2

EX-99.7

Exhibit 99.7

[Subject to Completion of the Transaction Documents and Review Thereof]

            , 2013

To Each Person Listed on

the Attached Schedule I

Re: Phase-In-Recovery Bonds of CEI Funding LLC, Phase-In-Recovery Bonds of OE Funding LLC and Phase-In-Recovery Bonds of TE Funding LLC (collectively, the “Phase-In-Recovery Bonds”): Opinion Regarding Ohio Constitutional Matters and the Securitization Act

Ladies and Gentlemen:

We have acted as counsel to (i) CEI Funding LLC, a Delaware limited liability company (“CEI LLC”), OE Funding LLC, a Delaware limited liability company (“OE LLC”) and TE Funding LLC, a Delaware limited liability company (“TE LLC”), as the issuers of the Phase-In-Recovery Bonds referred to below (individually, a “Bond Issuer” and collectively, the “Bond Issuers”) and (ii) The Cleveland Electric Illuminating Company, an Ohio corporation (“CEI”), Ohio Edison Company, an Ohio corporation (“OE”) and The Toledo Edison Company, an Ohio corporation (“TE”), as sponsors, sellers and initial servicers (individually, a “Seller” and collectively, the “Sellers”), in connection with the sale by each Seller to its respective Bond Issuer on the date hereof of such Seller’s respective right, title and interest in, to and under certain phase-in-recovery property (such transferred right, title and interest being herein referred to as the “Phase-In-Recovery Property”), the issuance and sale by each Bond Issuer of its respective Phase-In-Recovery Bonds to FirstEnergy Ohio PIRB Special Purpose Trust 2013, a Delaware statutory trust (the “Trust”), and the related transactions referred to and described below.

CEI LLC was formed as a limited liability company under Delaware law, pursuant to a Certificate of Formation, as filed with the Secretary of State of the State of Delaware on October 31, 2012 (the “CEI LLC Certificate of Formation”) and a Limited Liability Company Agreement dated March 28, 2013, executed by CEI. CEI, as sole member of CEI LLC, executed an Amended and Restated Limited Liability Company Agreement dated as of [            ], 2013 (as amended and restated, the “CEI LLC Limited Liability Company Agreement” and, collectively with the CEI LLC Certificate of Formation, the “CEI LLC Formation Documents”).

            , 2013

Page 2

OE LLC was formed as a limited liability company under Delaware law, pursuant to a Certificate of Formation, as filed with the Secretary of State of the State of Delaware on October 31, 2012 (the “OE LLC Certificate of Formation”) and a Limited Liability Company Agreement dated March 28, 2013, executed by OE. OE, as sole member of OE LLC, executed an Amended and Restated Limited Liability Company Agreement dated as of [            ], 2013 (as amended and restated, the “OE LLC Limited Liability Company Agreement” and, collectively with the OE LLC Certificate of Formation, the “OE LLC Formation Documents”).

TE LLC was formed as a limited liability company under Delaware law, pursuant to a Certificate of Formation, as filed with the Secretary of State of the State of Delaware on October 31, 2012 (the “TE LLC Certificate of Formation”) and a Limited Liability Company Agreement dated March 28, 2013, executed by TE. TE, as sole member of TE LLC, executed an Amended and Restated Limited Liability Company Agreement dated as of [            ], 2013 (as amended and restated, the “TE LLC Limited Liability Company Agreement” and, collectively with the TE LLC Certificate of Formation, the “TE LLC Formation Documents”). The CEI LLC Formation Documents, the OE LLC Formation Documents and the TE LLC Formation Documents are collectively referred to herein as the Bond Issuers Formation Documents.

THE TRANSACTION

On the date hereof, CEI has sold its respective Phase-In-Recovery Property to CEI LLC under the Phase-In-Recovery Property Purchase and Sale Agreement dated as of [            ], 2013 between CEI and CEI LLC and the Bill of Sale dated [            ], 2013 (the “CEI Bill of Sale” and, collectively, the “CEI Sale Agreement”). Under the Servicing Agreement dated as of [            ], 2013 (the “CEI Servicing Agreement”) between CEI, in its capacity as Servicer, and CEI LLC, CEI has agreed to service such Phase-In-Recovery Property of CEI LLC. Under the Administration Agreement dated as of [            ], 2013 (the “CEI Administration Agreement”) between CEI, in its capacity as Administrator, and CEI LLC, CEI has agreed to perform certain administrative services on behalf of CEI LLC. On the date hereof, CEI LLC has issued three tranches of its Phase-In-Recovery Bonds (the “CEI LLC Phase-In-Recovery Bonds”) under an Indenture dated as of [            ], 2013 between CEI LLC and U.S. Bank National Association, a national banking association, as trustee (the “Bond Trustee”) (the “CEI Bond Indenture”) and sold the CEI LLC Phase-In-Recovery Bonds to the Trust pursuant to the Bond Purchase Agreement dated as of [            ], 2013 between CEI LLC and the Trust (the “CEI Bond Purchase Agreement”) in exchange for an allocable portion (based on the aggregate principal amount of CEI LLC Phase-In-Recovery Bonds) of the net proceeds from the sale of the FirstEnergy Ohio PIRB Special Purpose Trust 2013 Pass-Through Trust Certificates (“Trust Certificates”).

On the date hereof, OE has sold its respective Phase-In-Recovery Property to OE LLC under the Phase-In-Recovery Property Purchase and Sale Agreement dated as of [            ], 2013 between OE and OE LLC and the Bill of Sale dated [            ], 2013 (the “OE Bill of Sale” and, collectively, the “OE Sale Agreement”). Under the Servicing Agreement dated as of [            ], 2013 (the “OE Servicing Agreement”) between OE, in its capacity as Servicer, and OE LLC, OE has agreed to service such Phase-In-Recovery Property of OE LLC. Under the Administration Agreement dated as of [            ], 2013 (the “OE Administration Agreement”)

            , 2013

Page 3

between OE, in its capacity as Administrator, and OE LLC, OE has agreed to perform certain administrative services on behalf of OE LLC. On the date hereof, OE LLC has issued three tranches of its Phase-In-Recovery Bonds (the “OE LLC Phase-In-Recovery Bonds”) under an Indenture dated as of [            ], 2013 between OE LLC and the Bond Trustee (the “OE Bond Indenture”) and sold the OE LLC Phase-In-Recovery Bonds to the Trust pursuant to the Bond Purchase Agreement dated as of [            ], 2013 between OE LLC and the Trust (the “OE Bond Purchase Agreement”) in exchange for an allocable portion (based on the aggregate principal amount of OE LLC Phase-In-Recovery Bonds) of the net proceeds from the sale of the Trust Certificates.

On the date hereof, TE has sold its respective Phase-In-Recovery Property to TE LLC under the Phase-In-Recovery Property Purchase and Sale Agreement dated as of [            ], 2013 between TE and TE LLC and the Bill of Sale dated [            ], 2013 (the “TE Bill of Sale” and, collectively, the “TE Sale Agreement”). Under the Servicing Agreement dated as of [            ], 2013 (the “TE Servicing Agreement”) between TE, in its capacity as Servicer, and TE LLC, TE has agreed to service such Phase-In-Recovery Property of TE LLC. Under the Administration Agreement dated as of [            ], 2013 (the “TE Administration Agreement”) between TE, in its capacity as Administrator, and TE LLC, TE has agreed to perform certain administrative services on behalf of TE LLC. On the date hereof, TE LLC has issued three tranches of its Phase-In-Recovery Bonds (the “TE LLC Phase-In-Recovery Bonds”) under an Indenture dated as of [            ], 2013 between TE LLC and the Bond Trustee (the “TE Bond Indenture”) and sold the TE LLC Phase-In-Recovery Bonds to the Trust pursuant to the Bond Purchase Agreement dated as of [            ], 2013 between TE LLC and the Trust (the “TE Bond Purchase Agreement”) in exchange for an allocable portion (based on the aggregate principal amount of TE LLC Phase-In-Recovery Bonds) of the net proceeds from the sale of the Trust Certificates.

Pursuant to the Underwriting Agreement dated [            ], 2013 (the “Underwriting Agreement”) among the Trust, the Sellers, the Bond Issuers and the Underwriters named in Schedule I thereto, such Underwriters have agreed to underwrite the Trust Certificates on behalf of the Trust.

As used herein, “Transaction Documents” means, collectively, the CEI Sale Agreement, the CEI Servicing Agreement, the CEI Administration Agreement, the CEI LLC Phase-In-Recovery Bonds, the CEI Bond Indenture, the OE Sale Agreement, the OE Servicing Agreement, the OE Administration Agreement, the OE LLC Phase-In-Recovery Bonds, the OE Bond Indenture, TE Sale Agreement, the TE Servicing Agreement, the TE Administration Agreement, the TE LLC Phase-In-Recovery Bonds, the TE Bond Indenture, the Fee and Indemnity Agreement and the Underwriting Agreement, and “Transaction” means the transactions contemplated by the Transaction Documents. Capitalized terms used and not otherwise defined herein have the meanings set forth in the Transaction Documents.

            , 2013

Page 4

FACTS AND ASSUMPTIONS

In connection with rendering the opinions set forth below, we have examined and, as to various factual matters, relied upon originals or copies, certified or otherwise identified to our satisfaction, of the following:

i. the Transaction Documents;

ii. a certified copy of the Financing Order issued by the Public Utilities Commission of Ohio (the “PUCO”) on October 10, 2012, as amended by the Entry on Rehearing issued by the PUCO on December 19, 2012 upon application for rehearing and as further amended by the Entry Nunc Pro Tunc issued by the PUCO on January 9, 2013 (collectively, as amended, the “Financing Order”);

iii. a registration statement (Registration Nos. 333-187692 and 333-187692 through -05) filed by the Bond Issuers with the Securities and Exchange Commission (the “Commission”) on Form S-3 under the Securities Act of 1933, as amended (the “Securities Act”), with respect to the Phase-In-Recovery Bonds and the Trust Certificates (such registration statement as of the time it became effective, the “Registration Statement”), including the final prospectus filed with the Commission on             , 2013 (the “Final Prospectus”);

iv. Ohio Revised Code (“O.R.C.”) Sections 4928.23 through 4928.2318, inclusive (the “Securitization Act”); and

v. the opinion letter of Akin Gump Strauss Hauer & Feld LLP on Federal Constitutional Issues.

We have made no independent investigation of the facts referred to herein, and with respect to such facts, we have relied, for the purpose of rendering this opinion and, except to the extent such statement constitutes a statement of a legal conclusion expressed in this opinion or as otherwise stated herein, exclusively on the factual statements contained and matters provided for in all of the closing documents delivered in connection with the closing of the Transaction, the documents referenced above, including the factual representations, warranties and covenants contained therein as made by the respective parties thereto.

We have also reviewed such constitutional, statutory, legislative and judicial authority as we deem necessary for the purposes of this opinion.

OPINIONS

Based on the foregoing facts and assumptions being correct and continuing to be correct at all relevant times, and subject to the qualifications, limitations and assumptions set forth herein and while courts may differ and no cases interpreting the transfer of the Phase-in-Recovery Property under the Securitization Act have been decided, it is our opinion that a

            , 2013

Page 5

reviewing court, in a properly prepared and presented case, relying on the facts on which we have relied and giving them the proper weight and authority, properly applying the Securitization Act to the Transaction would conclude that:

1. The Phase-In-Recovery Bonds are “Bonds” as defined in the Securitization Act.

2. The provisions of the Securitization Act relating to Phase-In-Recovery Bonds are constitutional under the Constitution of the State of Ohio (the “Ohio Constitution”).

3. Although the Ohio Constitution and applicable state law give the people of Ohio the power to enact or repeal laws through an initiative or referendum process, (a) the deadline for any state referendum of the Securitization Act has passed and (b) with respect to any voter initiative, the Ohio Constitution and other applicable law limit the rights of the people themselves to enact laws to the same limits applicable to the General Assembly.

4. The pledge by the State of Ohio (the “State”) contained in Section 4928.2315 of the Securitization Act and in the Financing Order (the “Pledge”) and agreement with bondholders, any assignees and any financing parties (as such terms are defined in the Securitization Act) under the Financing Order not to take or permit any action that impairs the value of the Phase-In-Recovery Property under the Financing Order or revises the phase-in costs for which recovery has been authorized under the Financing Order or, except as allowed under Section 4928.238 of the Securitization Act, reduce, alter or impair Phase-in-Recovery Charges as provided in the Financing Order that are imposed, charged, collected or remitted for the benefit of the bondholders, any assignee and any financing party as more fully described in the Pledge, is enforceable by the bondholders, any assignees and any financing parties (as such terms are defined in the Securitization Act).

5. Under the Contract Clause of Section 28, Article II of the Ohio Constitution, the State, whether through legislation or voter initiative, could not repeal or amend the Securitization Act or take any action that substantially impairs the rights of the holders of the Phase-In-Recovery Bonds or contravenes the Pledge (an “Impairment Action”), unless the State is reasonably exercising its sovereign power for a significant and legitimate state purpose. A court would not uphold an Impairment Action unless it is based on reasonable conditions and is of a character appropriate to the public purpose justifying that action. A court would examine any State interference with its own contractual obligations with a higher level of scrutiny.

6. Under the Takings Clause of Section 19, Article I of the Ohio Constitution, the State, whether through legislation or voter initiative, could not take an Impairment Action without paying just compensation to the Trust as holders of the Phase-In-Recovery Bonds or to the certificateholders in the Trust Certificates, as owners of beneficial interests in the Phase-In-Recovery Bonds, if doing so would (a) constitute a permanent appropriation of the property interest of such holders or certificateholders in the Phase-In-Recovery Property or deny all economic productive use of the Phase-In-Recovery Property, (b) destroy the

            , 2013

Page 6

Phase-In-Recovery Property, other than in response to so-called emergency conditions; or (c) rise to the level of a taking based upon the character of the action, the economic impact of the State of Ohio’s regulation and the extent to which the regulation interfered with distinct investment-backed expectations of such holders or certificateholders in connection with their investment in the Phase-In-Recovery Bonds. It must be noted that takings of financial interests can be particularly difficult to establish in a manner that distinguishes them from constitutionally permissible economic regulation. Further, there can be no assurance that any award of compensation would be sufficient to pay the full amount of principal of and interest on the Phase-In-Recovery Bonds and therefore to satisfy in full the Trust Certificates.

7. The Securitization Act is severable. In accordance with Section 4928.2317 of the Securitization Act, if any provision of the Securitization Act is held to be invalid or is superseded, replaced, repealed, or expires for any reason, that occurrence shall not affect any action allowed under the Securitization Act that is taken prior to that occurrence by the public utilities commission, an electric distribution utility, an assignee, a collection agent, a financing party, a bondholder, or a party to an ancillary agreement (as such terms are defined in the Securitization Act). Any such action shall remain in full force and effect.

8. An Impairment Action by the State, the PUCO or any State entity would be subject to preliminary injunction if any court of competent jurisdiction hearing a request for preliminary injunction finds: (a) a strong or substantial likelihood or probability of success on the merits; (b) that the holders of the Phase-In-Recovery Bonds will suffer irreparable injury from the Impairment in the absence of an injunction; (c) that no third parties will be harmed by the issuance of the injunction; and (d) that the public interest will be served by the issuance of the injunction. Further, upon final adjudication of the challenged Impairment, a court of competent jurisdiction would permanently enjoin the alleged wrongful conduct if the court concluded that such conduct constituted a legal wrong for which no adequate remedy at law was available.

9. The Financing Order has been duly authorized and adopted by the PUCO and is in full force and effect.

10. Upon issuance of the Phase-In-Recovery Bonds, holders thereof are entitled to protections provided in the Securitization Act.

11. In accordance with Section 4928.233 of the Securitization Act, the Financing Order is final and non-appealable.

12. The statements in the Pricing Disclosure Package and Final Prospectus under “The Securitization Act” and “Description of the Phase-In-Recovery Property—Financing Order and Issuance Advice Letters” to the extent they purport to summarize provisions of the Securitization Act and the Financing Order, fairly summarize such provisions.

13. The Bond Issuers constitute “Assignees” under Section 4928.23(B) of the Securitization Act. The Bond Trustee constitutes a “Financing party” under Section 4928.23(H) of the Securitization Act. The Trust constitutes a “Bondholder” under Section 4928.23(D) of the Securitization Act.

            , 2013

Page 7

QUALIFICATIONS

We note that judicial analysis of issues relating to the Ohio Constitution, as well as the Constitution of the United States of America has typically proceeded on a case-by-case basis and that the court’s determination usually is strongly influenced by the facts and circumstances of a particular case. We further note that there is no reported controlling precedent of which we are aware directly on point. Our analysis is necessarily a reasoned application of judicial decisions involving similar or analogous circumstances. Moreover, the application of equitable principles (including the availability of injunctive relief) is subject to the discretion of the court which is asked to apply them. A court’s decision regarding matters upon which we opine in this letter will be based on the court’s analysis and interpretation of the evidence before the court and of applicable legal principles. We cannot predict the facts and circumstances which will be present in the future and may be deemed relevant by the court.

Our opinions are given under the federal laws of the United States of America and the laws of Ohio. We express no opinion regarding applicable tax, bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent transfer, marshaling or similar laws affecting creditors’ rights generally heretofore or hereafter enacted to the extent applicable, whose enforcement may also be subject to the exercise of judicial discretion in appropriate cases. No opinion may be inferred to extend our opinions beyond the matters expressly stated in this letter.

This letter is being delivered solely for the benefit of the persons to whom it is addressed; accordingly, it may not be relied upon by any person, quoted, filed with any governmental authority or other regulatory agency or otherwise circulated or used for any other purpose without our prior written consent. This opinion speaks only as of its date and we assume no obligation to update or supplement the opinions or statements expressed to reflect any facts or circumstances which may come to our attention after the date of this letter, including any changes to applicable law which may occur.

It is our and your understanding that none of our opinions in this letter is intended to be a guaranty as to what a particular court would hold, rather each opinion is only an expression of our view of the decision a court would reach if the issue were properly prepared and presented to it and the court followed what we believe to be the applicable legal principles under existing judicial precedent. The recipients of this letter should take these considerations into account in analyzing the risks associated with the subject transaction.

            , 2013

Page 8

We hereby consent to the filing of this letter as an exhibit to the Registration Statement filed with the Securities and Exchange Commission (the “Commission”) on April 2, 2013, as amended by Amendment No. 1 thereto, dated May 7, 2013, Amendment No. 2 thereto, dated May 24, 2013 and Amendment No. 3 thereto, dated June 4, 2013 (the “Registration Statement”), and to all references to our firm included in or made a part of the Registration Statement. In giving the foregoing consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the related rules and regulations of the Commission.

Very truly yours,

***DRAFT***

CALFEE, HALTER & GRISWOLD LLP

Schedule I

CEI Funding LLC

c/o FirstEnergy Corp.

76 South Main Street

Akron, OH 44308

The Cleveland Electric Company

c/o FirstEnergy Corp.

76 South Main Street

Akron, OH 44308

OE Funding LLC

c/o First Energy Corp.

76 South Main Street

Akron, OH 44308

Ohio Edison Company

c/o FirstEnergy Corp.

76 South Main Street

Akron, OH 44308

TE Funding LLC

c/o FirstEnergy Corp.

76 South Main Street

Akron, OH 44308

The Toledo Edison Company

c/o First Energy Corp.

76 South Main Street

Akron, OH 44308

FirstEnergy Ohio PIRB Special Purpose Trust 2013

c/o U.S. Bank Trust National Association

190 S. LaSalle Street, 7 Floor

Mail Code: MK-IL-SL7R

Chicago, IL 60603

Attention: FirstEnergy Ohio PIRB Special Purpose Trust 2013

Fitch, Inc.

One State Street Plaza

New York, NY 10004

Attention: ABS Surveillance

Moody’s Investors Service, Inc.

7 World Trade Center at

250 Greenwich Street, 24^th Floor

New York, NY 10007

Attention: ABS/RMBS Monitoring Department

Standard & Poor’s Ratings Services

55 Water Street

New York, NY 10041

Attention: Structured Credit Surveillance

As Representatives of the Underwriters named in Schedule I to the Underwriting Agreement:

Citigroup Global Markets Inc.

388 Greenwich Street

New York, NY 10013

Credit Agricole Securities (USA) Inc.

1301 Avenue of the Americas

New York, NY 10019

Goldman, Sachs & Co.

200 West Street

New York, NY 10282-2198

U.S. Bank National Association, as Bond Trustee

190 S. LaSalle Street, 7th Floor

Mail Code: MK-IL-SL7R

Chicago, IL 60603

Attention: First Energy Ohio PIRB Special Purpose Trust 2013

U.S. Bank National Association, as Certificate Trustee

190 S. LaSalle Street, 7th Floor

Mail Code: MK-IL-SL7R

Chicago, IL 60603

Attention: First Energy Ohio PIRB Special Purpose Trust 2013