THE CLEVELANDELECTRIC ILLUMINATING COMPANY TO JPMORGAN CHASE BANK,N.A. (formerly known asTHE CHASE MANHATTAN BANK), (successor to MorganGuaranty Trust Company of New York, formerly GuarantyTrust Company of New York) as Trusteeunder The ClevelandElectric Illuminating Companys Mortgage and Deed of Trust,Dated July 1, 1940 NinetiethSupplemental Indenture Dated as of August1, 2009 First MortgageBonds, 5.50% Series due 2024

THE CLEVELAND ELECTRIC ILLUMINATING COMPANY

TO

JPMORGAN CHASE BANK, N.A.

(formerly known as THE CHASE MANHATTAN BANK),

(successor to Morgan Guaranty Trust Company of New York,

formerly Guaranty Trust Company of New York)

as Trustee under

The Cleveland Electric Illuminating Company’s Mortgage

and Deed of Trust, Dated July 1, 1940

Ninetieth Supplemental Indenture

Dated as of August 1, 2009

First Mortgage Bonds, 5.50% Series due 2024

 

 

 

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NINETIETH SUPPLEMENTAL INDENTURE, dated as of August 1, 2009, made by and between THE CLEVELAND ELECTRIC ILLUMINATING COMPANY, a corporation organized and existing under the laws of the State of Ohio (the “Company”), and JPMORGAN CHASE BANK, N.A., a national banking association (formerly known as THE CHASE MANHATTAN BANK), successor by merger to The Chase Manhattan Bank (National Association), which in turn was successor to Morgan Guaranty Trust Company of New York, formerly Guaranty Trust Company of New York, (the “Trustee”), as Trustee under the Mortgage and Deed of Trust dated July 1, 1940, hereinafter mentioned:

 

RECITALS

 

In order to secure First Mortgage Bonds of the Company (“Bonds”), the Company has heretofore executed and delivered to the Trustee the Mortgage and Deed of Trust dated July 1, 1940 (the “1940 Mortgage”) and eighty-nine Supplemental Indentures thereto; and

 

The 1940 Mortgage, as supplemented and modified by said Supplemental Indentures and by this Ninetieth Supplemental Indenture, will be hereinafter collectively referred to as the “Indenture” and this Ninetieth Supplemental Indenture will be hereinafter referred to as “this Supplemental Indenture” and shall be filed for record in the filing offices set forth on Schedule 1 attached hereto and incorporated herein by reference; and

 

The Indenture provides among other things that the Company, from time to time, in addition to the Bonds authorized to be executed, authenticated and delivered pursuant to other provisions therein, may execute and deliver additional Bonds to the Trustee and the Trustee shall thereupon authenticate and deliver such Bonds to or upon the order of the Company; and

 

Pursuant to the provisions of the Indenture, the Company has issued 142 series of Bonds in the aggregate principal amount of $8,018,555,376, of which 139 series in the aggregate principal amount of $7,268,555,376 are no longer outstanding; and

 

The Company has determined to create pursuant to the provisions of the Indenture one new series of Bonds designated as “First Mortgage Bonds, 5.50% Series due 2024” with the denominations, rate of interest, date of maturity, redemption provisions and other provisions and agreements in respect thereof as in this Supplemental Indenture set forth; and

 

The Company, in the exercise of the powers and authority conferred upon and reserved to it under the provisions of the Indenture, and pursuant to appropriate resolutions of its Board of Directors, has duly resolved and determined to make, execute and deliver to the Trustee this Supplemental Indenture in the form hereof for the purposes herein provided; and

 

All conditions and requirements necessary to make this Supplemental Indenture a valid, binding and legal instrument have been done, performed and fulfilled and the execution and delivery hereof have been in all respects duly authorized.

 

NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:

 

That The Cleveland Electric Illuminating Company, in consideration of the premises and of the mutual covenants herein contained and of the sum of One Dollar ($1.00) to it duly paid by

 

 

 

the Trustee at or before the ensealing and delivery of these presents and for other valuable considerations, the receipt whereof is hereby acknowledged, and in order to secure the payment of the principal and interest (and premium, if any) on all Bonds at any time issued and outstanding under the Indenture according to their tenor and effect and the performance and observance of all the covenants and conditions contained in such Bonds and in the Indenture, has granted, bargained, sold, warranted, aliened, remised, released, conveyed, assigned, transferred, mortgaged, pledged, set over and confirmed, and by these presents does grant, bargain, sell, warrant, alien, remise, release, convey, assign, transfer, mortgage, pledge, set over and confirm unto the Trustee and to its successors in said trust, and to its and their assigns, forever, all of the Company’s interests in the parcels of land described in the Indenture.

 

TOGETHER with all and singular the buildings, improvements, tenements, hereditaments and appurtenances belonging or in anywise appertaining, or hereafter to belong or appertain, to the aforesaid property or any part thereof, with the reversion and reversions, remainder and remainders, tolls, rents, revenues, issues, income, products and profits thereof, and all the estate, right, title, interest and claim whatsoever which the Company now has or may hereafter acquire in and to the same, at law as well as in equity, and every part and parcel thereof.

 

TO HAVE AND TO HOLD the same unto the Trustee and to its successors and assigns forever;

 

SUBJECT, HOWEVER, to the exceptions and reservations and matters hereinabove and in the Indenture recited, to existing leases other than leases which by their terms are subordinate to the lien of the Indenture, to existing “liens upon rights-of-way for the transmission or distribution line purposes,” as defined in Article I of the Indenture, and any extensions thereof, and subject to existing easements for streets, alleys, rights-of way and railroad purposes over, upon or across certain of the property hereinbefore described, and also any restrictions as to use imposed by law and to the lien of certain judgments against the Company not exceeding $75,000 in aggregate amount, and subject also to all the terms, conditions, agreements, covenants, exceptions and reservations expressed or provided in the deeds or other instruments, respectively, under and by virtue of which the Company now owns or may hereafter acquire any property subject to the lien of the Indenture and to undetermined lines and charges, if any, incidental to construction or other existing permitted liens as defined in Article I of the Indenture;

 

IN TRUST, NEVERTHELESS, upon the terms and trusts set forth in the Indenture for the equal and proportionate benefit and security of all present and future holders of the Bonds and coupons issued and to be issued under the Indenture, without preference of any such Bonds and coupons of any particular series over the Bonds and coupons of any other series, by reason of priority in the time of the issue, sale or negotiation thereof, or by reason of the purpose of issue or otherwise, howsoever, except as otherwise provided in Section 2 of Article IV of the Indenture.

 

 

 

 

 

 

ARTICLE I

 

 

 

 

CONFIRMATION OF 1940

 

The 1940 Mortgage (as modified in Article V of the Supplemental Indenture dated December 1, 1947, Article V of the Supplemental Indenture dated May 1, 1954, Article V of the Supplemental Indenture dated March 1, 1958, Article V of the Supplemental Indenture dated January 15, 1969, Article III of the Supplemental Indenture dated November 23, 1976, Article III of the Supplemental Indenture dated April 15, 1985 and Article II of the Supplemental Indenture dated as of June 30, 1999) and the Supplemental Indentures dated July 1, 1940, August 18, 1944, December 1, 1947, September 1, 1950, June 1, 1951, May 1, 1954, March 1, 1958, April 1, 1959, December 20, 1967, January 15, 1969, November 1, 1969, June 1, 1970, November 15, 1970, May 1, 1974, April 15, 1975, April 16, 1975, May 28, 1975, February 1, 1976, November 23, 1976, July 26, 1977, September 27, 1977, May 1, 1978, September 1, 1979, April 1, 1980, April 15, 1980, May 28, 1980, June 9, 1980, December 1, 1980, July 28, 1981, August 1, 1981, March 1, 1982, July 15, 1982, September 1, 1982, November 1, 1982, November 15, 1982, May 24, 1983, May 1, 1984, May 23, 1984, June 27, 1984, September 4, 1984, November 14, 1984, November 15, 1984, April 15, 1985, May 28, 1985, August 1, 1985, September 1, 1985, November 1, 1985, April 15, 1986, May 14, 1986, May 15, 1986, February 25, 1987, October 15, 1987, February 24, 1988, September 15, 1988, May 15, 1989, June 13, 1989, October 15, 1989, January 1, 1990, June 1, 1990, August 1, 1990, May 1, 1991, May 1, 1992, July 31, 1992, January 1, 1993, February 1, 1993, May 20, 1993, June 1, 1993, September 15, 1994, May 1, 1995, May 2, 1995, June 1, 1995, July 15, 1995, August 1, 1995, June 15, 1997, August 1, 1997, October 15, 1997, June 1, 1998 and October 1, 1998, October 1, 1998, April 1, 1999, June 30, 1999, January 15, 2000, May 15, 2002, October 1, 2002, September 1, 2004, October 1, 2004, April 1, 2005, July 1, 2005 and November 1, 2008, respectively, are hereby in all respects confirmed.

 

 

ARTICLE II

 

 

CREATION, PROVISIONS, REDEMPTION,

 

 

 

 

 

 

Section 2.03 

 

(a)           The Bonds of Series due 2024 shall be dated the date of authentication, shall mature on August 15, 2024, and shall bear interest from the time hereinafter provided at the rate of 5.50% per annum payable on February 15 and August 15 in each year beginning on February 15, 2010 (each such date hereinafter called an “interest payment date”) on and until maturity, or, in the case of any such Bonds of Series due 2024 duly called for redemption, on and until the redemption date, or, in the case of any default by the Company in the payment of the principal due on any such Bonds of Series due 2024, until the Company’s obligation with respect to the payment of the principal shall be discharged as provided in the Indenture.  If the maturity date or any redemption date should fall on a day that is not a Business Day, the principal due on such date shall be paid on the next succeeding Business Day and no interest shall accrue for the intervening period with respect to the payment so deferred.

 

(b)           The Bonds of Series due 2024 shall be payable as to principal (and premium, if any) and interest at the agency of the Company in the Borough of Manhattan, The City of New York, State of New York, the City of Akron, State of Ohio, or the City of Cleveland, State of Ohio in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts; provided that payment by wire transfer of immediately available funds shall be required with respect to principal of (and premium, if any), and interest on the Bonds of Series due 2024 so long as such Bonds are held by a Depository (as hereinafter defined) in the form of one or more Global Bonds (as hereinafter defined).

 

(c)           Except as hereinafter provided, each Bond of Series due 2024 shall bear interest from the most recent date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, then from the date of initial authentication of such Bonds of Series due 2024, until the principal of such Bonds of Series due 2024 is paid or duly provided for.  Interest on the Bonds of Series due 2024 shall be computed on the basis of twelve 30-day months and a 360-day year and for any period shorter than a full month, on the basis of the actual number of days elapsed in such period.

 

(d)           The interest payable on any interest payment date shall be paid to the respective persons in whose name the Bonds of Series due 2024 shall be registered at the close of business on the Record Date (as hereinafter defined) with respect to such interest payment date, notwithstanding the cancellation of any such Bonds of Series due 2024 upon any transfer or exchange thereof subsequent to such Record Date and prior to such interest payment date; provided, however, that if and to the extent the Company shall default in the payment of the interest due on such interest payment date, such defaulted interest shall be paid to the respective persons in whose names such outstanding Bonds of Series due 2024 are registered at the close of business on a date (the “Subsequent Record Date”) not less than ten (10) days nor more than fifteen (15) days next preceding the date of payment of such defaulted interest, such Subsequent Record Date to be established by the Company by notice given by mail by or on behalf of the Company to the registered owners of Bonds of Series due 2024 not less than ten (10) days next preceding such Subsequent Record Date. Notwithstanding the foregoing, interest payable at maturity or upon earlier redemption will be payable to the person to whom principal shall be payable.  If any interest payment date should fall on a day that is not a Business Day (as

 

 

 

 

hereinafter defined), then the interest payment shall be made on the next succeeding Business Day and no interest shall accrue for the intervening period with respect to the payment so deferred.

 

(e)           The term “Record Date” shall mean, with respect to each interest payment date (other than an interest payment date that is the maturity date or redemption date) of any Bond of Series due 2024, the close of business on the fifteenth (15th) calendar day next preceding the respective interest payment date (whether or not a Business Day); provided, however, that so long as the Bonds of Series due 2024 are held by a Depository (as defined below) in the form of one or more Global Bonds, the Record Date with respect to each interest payment date (other than an interest payment date that is the maturity date or redemption date) will be the close of business on the Business Day before the applicable interest payment date.

 

(f)           The term “Business Day” shall mean, any day, other than a Saturday or Sunday, which is not a day on which the corporate trust office of the Trustee or banking institutions or trust companies in New York, New York are generally authorized or required by law, regulation or executive order to remain closed.

 

Section 2.04 

 

(a)           In the manner and subject to the limitations provided in the Indenture and herein, Bonds of Series due 2024 may be transferred or may be exchanged for a like aggregate principal amount of Bonds of Series due 2024 of other authorized denominations, in either case without charge, except for any tax or taxes or other governmental charges incidental to such transfer or exchange, at the office or agency of the Company in the Borough of Manhattan, The City of New York, State of New York, the City of Akron, State of Ohio or the City of Cleveland, State of Ohio.

 

(b)           In the event less than all of the Bonds of Series due 2024 at the time outstanding are called for redemption, the Company shall not be required (a) to register any transfer or make any exchange of any such Bonds of Series due 2024 for a period of fifteen (15) days next preceding the mailing of the notice of redemption of any such Bonds of Series due 2024, (b) to register any transfer or make any exchange of any such Bonds of Series due 2024 so called for redemption in its entirety or (c) to register any transfer or make any exchange of any portion of any such Bonds of Series due 2024 which has been called for redemption.

 

(c)           Except as otherwise provided in Section 2.03 of this Article II with respect to the payment of interest, the Company, the agencies of the Company and the Trustee may deem and treat the person in whose name a Bond of this Series due 2024 is registered as the absolute owner thereof for the purpose of receiving any payment and for all other purposes.

 

Section 2.06 

 

 

 

 

 

(a)           The Bonds of Series 2024 are subject to redemption, at the option of the Company prior to maturity in whole or in part at any time, at a redemption price (the “redemption price”) equal to the greater of (1) 100% of the principal amount of the Bonds of Series 2024 to be redeemed and (2) the sum of the present values of the Remaining Scheduled Payments (as hereinafter defined) discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as hereinafter defined) plus 30 basis points, plus, in the case of each of clause (1) and (2), accrued and unpaid interest, if any, to the redemption date. The Bonds of Series due 2024 shall not otherwise be subject to redemption by the Company prior to maturity.

 

(b)           For purposes of this Section 2.06 and the form of Bond of Series due 2024, the following terms shall have the meanings set forth below:

“Comparable Treasury Issue” shall mean the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term (“Remaining Life”) of the Bonds of Series due 2024 to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Bonds.

 

“Comparable Treasury Price” shall mean with respect to any redemption date: (1) the average of three Reference Treasury Dealer Quotations for such redemption date after excluding the highest and lowest Reference Treasury Dealer Quotations, or (2) if the Independent Investment Banker obtains fewer than three such Reference Treasury Dealer Quotations, the average of all such quotations.

 

“Independent Investment Banker” shall mean one of the Reference Treasury Dealers appointed by the Company, as selected by the Company, or, if such firm is unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing selected by the Company.

 

“Reference Treasury Dealer” shall mean (1) each of Goldman, Sachs & Co. and UBS Securities LLC, and their respective successors, provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in the United States (a “Primary Treasury Dealer”), the Company shall substitute therefor another Primary Treasury Dealer; and (2) any other Primary Treasury Dealer selected by the Independent Investment Banker after consultation with the Company.

 

“Reference Treasury Dealer Quotations” shall mean, with respect to each Reference Treasury Dealer and any redemption date, the average as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker at 5:00 p.m. New York City time, on the third Business Day preceding such redemption date.

 

“Remaining Scheduled Payments” shall mean, with respect to the Bonds of Series due 2024 to be redeemed, the remaining scheduled payments of principal and

 

 

 

 

 

interest on the Bonds of Series due 2024 that would be due after the related redemption date but for such redemption.  If such redemption date is not an interest payment date with respect to such Bonds of Series due 2024, the amount of the next succeeding scheduled interest payment on those Bonds of Series due 2024 will be reduced by the amount of interest accrued on such Bonds of Series due 2024 to such redemption date.

 

“Treasury Rate” shall mean, with respect to any redemption date,

 

·

the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)”, or any successor publication which is published weekly by the Federal Reserve and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the Remaining Life, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or

·

if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.

The Treasury Rate shall be calculated on the third Business Day preceding the redemption date.

 

 

 

 

Section 2.10 

 

(a)           Bonds of Series due 2024 shall be issued initially in the form of one or more permanent global securities in definitive, fully registered form without interest coupons with the global bonds legend set forth on the form of Bonds of Series due 2024 (each, a “Global Bond”), deposited with, or on behalf of, The Depository Trust Company (the “Depository”) and registered in the name of Cede & Co., as the Depository’s nominee and duly executed by the Company and authenticated by the Trustee as hereinafter provided.  Each such Global Bond shall be deposited with the Trustee as custodian for the Depository.

 

(b)           Members of, or participants in, the Depository (“Agent Members”) shall have no rights under this Supplemental Indenture or the Indenture with respect to any Global Bond held on their behalf by the Depository or by the Trustee as the custodian for the Depository or under such Global Bond, and the Depository may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of such Global Bond for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Agent Members, the operation of customary practices of such Depository governing the exercise of the rights of a holder of a beneficial interest in any Global Bond.

 

(c)           Except as provided in this Section 2.10, owners of beneficial interests in Global Bonds will not be entitled to receive physical delivery of Bonds of Series due 2024.

 

(d)           Neither the Company, the Trustee nor any agent of the Company or the Trustee shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Bond or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

 

 

 

 

(e)           A Global Bond may not be transferred except by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or to a successor Depository or its nominee.

 

(f)           Subject to the procedures of the Depository, a Global Bond shall be exchangeable for Bonds of Series due 2024 registered in the names of persons other than the Depository or its nominee only if (i) the Depository notifies the Company that it is unwilling or unable to continue as a Depository for such Global Bond and no successor Depository shall have been appointed by the Company, or if at any time the Depository ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, at a time when the Depository is required to be so registered to act as such Depository and no successor Depository shall have been appointed by the Company, in each case within 90 days after the Company receives such notice or becomes aware of such cessation, (ii) the Company in its sole discretion determines that such Global Bond shall be so exchangeable, or (iii) there shall have occurred an event of default with respect to the Bonds of Series due 2024.  Any Global Bond that is exchangeable pursuant to the preceding sentence shall be exchangeable for Bonds of Series due 2024 registered in such names as the Depository shall direct.

 

Section 2.11 The aggregate principal amount of Bonds of Series due 2024 which may be authenticated and delivered hereunder shall not exceed $300,000,000, except as otherwise provided in the Indenture.

 

Section 2.12 The form of the fully registered Bonds of Series due 2024, and of the Trustee’s certificate of authentication thereon, shall be substantially as follows:

 

[FORM OF FULLY REGISTERED BONDS OF SERIES 2024]

[GLOBAL BONDS LEGEND]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE CLEVELAND ELECTRIC ILLUMINATING COMPANY (“COMPANY”) OR ITS AGENTS FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR 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.

TRANSFERS OF THIS GLOBAL BOND SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL BOND SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO BELOW.

 

 

 

Incorporated under the laws of the State of Ohio

THE CLEVELAND ELECTRIC ILLUMINATING COMPANY, a corporation organized and existing under the laws of the State of Ohio (hereinafter called the “Company,” which term shall include any successor corporation as defined in the Indenture hereinafter referred to), for value received, hereby promises to pay to _____________________________, or registered assigns, the sum of _____________________________________________ Dollars ($________________) or the aggregate unpaid principal amount hereof, whichever is less, on August 15, 2024, in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts, and to pay interest on the unpaid principal amount hereof in like coin or currency from the time hereinafter provided, at the rate specified in the title hereof, such interest to be payable on February 15 and August 15 in each year beginning on February 15, 2010 (each such date herein called an “interest payment date”), and on and until the date of maturity of this Bond, or, if this Bond shall be duly called for redemption, on and until the redemption date, or, if the Company shall default in the payment of the principal amount of this Bond, until the Company’s obligation with respect to the payment of such principal shall be discharged as provided in said Indenture.  Interest on this Bond shall be computed on the basis of twelve 30-day months and a 360-day year and for any period shorter than a full month on the basis of the actual number of days elapsed in such period.  Except as hereinafter provided, this Bond shall bear interest from the most recent date to which interest has been paid or, if no interest has been paid or duly provided for, then from the date of initial authentication of this Bond, until the principal of this Bond has been paid or duly provided for. Subject to certain exceptions provided in said Indenture, the interest payable on any interest payment date shall be paid to the person in whose name this Bond shall be registered at the close of business on the Record Date (hereinafter defined) or, in the case of defaulted interest, in the manner and to the person as provided in the Supplemental Indenture (hereinafter defined).

 

 

 

 

 

 

(subsequently Morgan Guaranty Trust Company of New York and then The Chase Manhattan Bank (National Association)), now succeeded by JPMorgan Chase Bank, N.A. (formerly known as The Chase Manhattan Bank), as Trustee (herein called the “Trustee”), and all indentures supplemental thereto (said Mortgage as so supplemented herein called the “Indenture”) to which reference is hereby made for a description of the properties mortgaged and pledged, the nature and extent of the security, the rights of the registered owner or owners of the Bonds and of the Trustee in respect thereof, and the terms and conditions upon which the Bonds are, and are to be, secured. The Bonds may be issued in series, for various principal sums, may mature at different times, may bear interest at different rates and may otherwise vary as in the Indenture provided. This Bond is one of a series designated as the First Mortgage Bonds, 5.50% Series due 2024 (herein called the “Bonds of this Series”) limited, except as otherwise provided in the Indenture, in aggregate principal amount to $300,000,000, issued under and secured by the Indenture and described in the Ninetieth Supplemental Indenture dated as of August 1, 2009, between the Company and the Trustee (herein called the “Supplemental Indenture”).

 

The Bonds of this Series are subject to redemption, at the option of the Company prior to maturity in whole or in part at any time, as provided in Article II of the Supplemental Indenture, at a redemption price equal to the greater of (1) 100% of the principal amount of the Bonds of this Series to be redeemed and (2) the sum of the present values of the Remaining Scheduled Payments (as defined in the Supplemental Indenture) discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined in the Supplemental Indenture) plus 30 basis points, plus, in the case of each of clause (1) and (2), accrued and unpaid interest, if any, to the redemption date.

 

Any redemption of the Bonds of this Series shall be made after written notice has been given by the Trustee by mailing to each registered owner of such Bonds to be redeemed a notice of such redemption, first class postage prepaid, at its last address as it shall appear upon the books of the Company for the registration and transfer of such Bonds.  Any notice of redemption shall be mailed at least thirty (30) days and not more than sixty (60) days before the redemption date, unless a shorter notice period is consented to in writing by the registered owner or owners of all Bonds of this Series to be redeemed and such consent is filed with the Trustee.  In the event of a partial redemption of Bonds of this Series, the Trustee shall select the Bonds of this Series to be redeemed, subject to the provisions of the Supplemental Indenture, in such manner as the Trustee shall deem appropriate and fair.  Any notice of redemption of the Bonds of this Series may be conditional on the Company depositing funds with the Trustee, or irrevocably directing the Trustee to apply moneys held by it, sufficient to pay the redemption price thereof, and if such funds are not so deposited or such direction is not given, such notice shall be of no effect.

 

In the Forty-Third Supplemental Indenture, dated April 15, 1985, between the Company and the Trustee, the Company has modified, in certain respects, the redemption provisions in the Indenture effective only with respect to the Bonds of all series established or created in said Forty-Third Supplemental Indenture and all supplemental indentures dated after May 28, 1985.

 

In the Eighty-First Supplemental Indenture, dated June 30, 1999, between the Company and the Trustee, the Company has modified the Indenture to except and exclude nuclear fuel (to the extent, if any, not otherwise excepted and excluded) from the lien and operation thereof as

 

 

 

 

 

authorized by the requisite consent of holders of Bonds in accordance with the Nineteenth Supplemental Indenture, dated November 23, 1976, between the Company and the Trustee.

 

In the Eighty-ninth Supplemental Indenture, dated as of November 1, 2008, the Company has modified the net earnings certificate provisions in the Indenture, effective only from and after the time when none of the Bonds of any series established or created prior to the execution of said Eighty-ninth Supplemental Indenture shall remain outstanding, so that net earnings for interest and property retirement appropriations may be calculated based on any twelve (12) calendar months during the period of eighteen (18) calendar months, rather than twelve (12) calendar months during the period of fifteen (15) calendar months, immediately preceding the first day of the month in which (i) an application for authentication and delivery of additional Bonds is made, (ii) the first acquisition of property subject to a lien or liens which will on acquisition be an unfunded prior lien or prior liens occurs, (iii) additional prior lien bonds are to be issued, and (iv) a consolidation of the Company with, or the merger of the Company into, any other corporation, or sale by the Company of its property as an entirety or substantially as an entirety is to be made.  In said Eighty-ninth Supplemental Indenture, the Company has also modified, effective immediately, the provisions relating to the Trustee in the Indenture by deleting the requirement that the Trustee, or successor thereto, have a principal office in the Borough of Manhattan, in the City of New York, State of New York and by substituting therefor the requirement that the Trustee have its principal office in the United States.

 

To the extent permitted by and as provided in the Indenture, modifications or alterations of the Indenture, or of any indenture supplemental thereto, and of the rights and obligations of the Company and of the holders of the Bonds and coupons may be made with the consent of the Company by an affirmative vote of not less than 60% in principal amount of the Bonds entitled to vote then outstanding, at a meeting of Bondholders called and held as provided in the Indenture, and, in case one or more but less than all of the series of Bonds then outstanding under the Indenture are so affected, by an affirmative vote of not less than 60% in principal amount of the Bonds of any series entitled to vote then outstanding and affected by such modification or alteration; provided, however, that no such modification or alteration shall be made which will affect the terms of payment of the principal of, or premium if any, or interest on this Bond or change the voting percentage described above to less than 60% with respect to any Bonds outstanding when such modification becomes effective.

 

If an event of default, as defined in the Indenture, shall occur, the principal of all the Bonds at any such time outstanding under the Indenture may be declared or may become due and payable, upon the conditions and in the manner and with the effect provided in the Indenture. The Indenture provides that such declaration may in certain events be waived by the holders of a majority in principal amount of the Bonds outstanding.

 

The term “Record Date” shall mean, with respect to any interest payment date (other than an interest payment date that is a maturity date or redemption date) of any Bond of this Series, the close of business on the fifteenth (15th) calendar day next preceding the respective interest payment date (whether or not a Business Day, as defined in the Supplemental Indenture); provided, however, that so long as the Bonds of this Series are held by a Depository in the form of one or more Global Bonds, the Record Date with respect to each interest payment date (other

 

 

 

 

 

than an interest payment date that is the maturity date or redemption date) will be the close of business on the Business Day before the applicable interest payment date.

 

Subject to the limitations provided in the Indenture and the Supplemental Indenture, this Bond is transferable by the registered owner hereof, in person or by duly authorized attorney, on the books of the Company to be kept for that purpose at the office or agency of the Company in the Borough of Manhattan, The City of New York, State of New York, the City of Akron, State of Ohio, or City of Cleveland, State of Ohio upon surrender and cancellation of this Bond, and upon presentation of a duly executed written instrument of transfer, and thereupon a new fully registered Bond or Bonds of this Series, of the same aggregate principal amount and in authorized denominations will be issued to the transferee or transferees in exchange herefor, and this Bond, with or without others of the same series, may in like manner be exchanged for one or more new fully registered Bonds of this Series of other authorized denominations but of the same aggregate principal amount; all without charge, except for any tax or taxes or other governmental charges incidental to such transfer or exchange and all subject to the terms and conditions set forth in the Indenture and the Supplemental Indenture. In the event less than all of the Bonds of this Series at the time outstanding are called for redemption, the Company shall not be required (a) to register any transfer or make any exchange of any such Bond of this Series for a period of fifteen (15) days next preceding the mailing of the notice of redemption of any such Bonds of this Series, (b) to register any transfer or make any exchange of any such Bond of this Series so called for redemption in its entirety or (c) to register any transfer or make any exchange of any portion of any such Bond of this Series which has been called for redemption.  Except as otherwise provided herein or in the Supplemental Indenture with respect to the payment of interest, the Company, the agencies of the Company and the Trustee may deem and treat the person in whose name this Bond is registered as the absolute owner hereof for the purpose of receiving any payment and for all other purposes.

 

No recourse shall be had for the payment of the principal of (or premium, if any) or the interest on this Bond, or for any claim based hereon or on the Indenture or any indenture supplemental thereto, against any incorporator, or against any stockholder, director or officer, past, present or future, of the Company, or of any predecessor or successor corporation, as such, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability, whether at common law, in equity, by any constitution or statute or otherwise, of incorporators, stockholders, directors or officers being released by every owner hereof by the acceptance of this Bond and as part of the consideration for the issue hereof, and being likewise released by the terms of the Indenture.

 

This Bond shall not be entitled to any benefit under the Indenture or any indenture supplemental thereto, or become valid or obligatory for any purpose, until the Trustee under the Indenture, or a successor trustee thereto under the Indenture, shall have signed the form of certificate of authentication endorsed hereon.

 

 

 

 

 

 

IN WITNESS WHEREOF, The Cleveland Electric Illuminating Company has caused this Bond to be signed in its name by its President or a Vice President and its corporate seal to be hereunto affixed and attested by its Corporate Secretary or an Assistant Corporate Secretary.

 

Dated:

 

[affix corporate seal]

 

[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION]

This Bond is one of the Bonds of the series designated and described in the within-mentioned Indenture and Supplemental Indenture.

[END OF FORM OF FULLY REGISTERED BOND OF SERIES DUE 2024]

 

 

 

 

 

 

 

ARTICLE III

 

 

 

 

 

 

Section 3.04 The Company shall cause any agency of the Company, other than the Trustee, which it may appoint from time to time to act as such agency in respect of the Bonds of Series due 2024, to execute and deliver to the Trustee an instrument in which such agency shall:

 

(a) Agree to keep and maintain, and furnish to the Trustee from time to time as reasonably requested by the Trustee, appropriate records of all transactions carried out by it as such agency and to furnish the Trustee such other information and reports as the Trustee may reasonably require;

 

(b) Certify that it is eligible for appointment as such agency and agree to notify the Trustee promptly if it shall cease to be so eligible; and

 

(c) Agree to indemnify the Trustee, in a manner satisfactory to the Trustee, against any loss, liability or expense incurred by, and defend any claim asserted against, the Trustee by reason of any acts or failures to act as such agency, except for any liability resulting from any action taken by it at the specific direction of the Trustee;

 

provided, however, that the Company, in lieu of causing any such agency to furnish such an instrument, may make such other arrangements with the Trustee in respect of any such agency as shall be satisfactory to the Trustee.

 

 

 

 

 

 

 

ARTICLE IV

 

 

 

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