1
EXHIBIT 4.2

CENTERIOR FUNDING CORPORATION, Transferor

THE CLEVELAND ELECTRIC ILLUMINATING COMPANY

and

THE TOLEDO EDISON COMPANY,

each as a Servicer

and

CITIBANK, N.A., as Trustee

SERIES 1996-1 SUPPLEMENT

Dated as of _________, 1996

POOLING AND SERVICING AGREEMENT

Dated as of ___________, 1996

CENTERIOR ENERGY RECEIVABLES MASTER TRUST

$_________ Series 1996-1 Fixed Rate
Receivables-Backed Certificates

TABLE OF CONTENTS

ARTICLE I CREATION OF THE SERIES 1996-1 CERTIFICATES
SECTION 1.01. Designation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II DEFINITIONS
SECTION 2.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

ARTICLE III CONDITIONS PRECEDENT
SECTION 3.01. Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE IV RIGHTS OF SERIES 1996-1 INVESTORS AND ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.01. Establishment of Series Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 4.02. Allocation of Collections To and From The Series 1996-1 Defeasance Account . . . . . . . . . . . . . . 9

ARTICLE V PAYMENTS OF YIELD
SECTION 5.01. Yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 5.02. No Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

ARTICLE VI EARLY AMORTIZATION EVENTS
SECTION 6.01. Additional Early Amortization Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

ARTICLE VII MISCELLANEOUS PROVISIONS
SECTION 7.01. Ratification of Pooling and Servicing
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 7.02. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 7.03. Governing Law; Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 7.04. The Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 7.05. Restrictions on Transfer to Benefit Plan
Investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

EXHIBIT A Form of Series 1996-1 Investor Certificate

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SERIES 1996-1 SUPPLEMENT, dated as of _________, 1996 (the
"SERIES SUPPLEMENT"), among CENTERIOR FUNDING CORPORATION ("CFC"), a Delaware
corporation, as Transferor (the "TRANSFEROR"), THE CLEVELAND ELECTRIC
ILLUMINATING COMPANY, an Ohio corporation ("CEI") and THE TOLEDO EDISON
COMPANY, an Ohio corporation ("TE"), each as Servicer (collectively, the
"SERVICERS" and individually, a "SERVICER"), and CITIBANK, N.A., a national
banking association, as Trustee (the "TRUSTEE").

Pursuant to Section 6.09 of the Pooling and Servicing
Agreement dated as of __________, 1996 (as amended and supplemented, the
"POOLING AND SERVICING AGREEMENT"), among the Transferor, the Servicer and the
Trustee, the Transferor may from time to time direct the Trustee to issue, on
behalf of the Trust, one or more Series of Investor Certificates representing
fractional undivided interests in the Trust. The Principal Terms of any new
Series are to be set forth in a Supplement to the Pooling and Servicing
Agreement, of which this Series Supplement is one. Capitalized terms used in
this Series Supplement without definition shall have the meanings specified in
the Pooling and Servicing Agreement.

Pursuant to this Series Supplement, the Transferor and the
Trustee shall create a Series of Investor Certificates and specify the
Principal Terms thereof.

ARTICLE I

CREATION OF THE SERIES 1996-1 CERTIFICATES

SECTION 1.01. DESIGNATION. (a) There is hereby created a
Series of Investor Certificates to be issued pursuant to the Pooling and
Servicing Agreement and this Series Supplement to be known as the "Fixed Rate
Receivables-Backed Certificates, Series 1996-1" (the "SERIES 1996-1
CERTIFICATES"). This Series shall consist of a Senior Class. Subject to the
conditions set forth in ARTICLE III hereof, the Trustee shall authenticate and
deliver the Series 1996-1 Certificates in the form attached hereto as Exhibit
A, to or upon the written order of the Transferor, in an aggregate initial
Invested Amount of $_________. The Series 1996-1 Certificates shall be issued
in Book-Entry Form.

(b) In the event that any term or provision contained herein shall conflict
with or be inconsistent with any term or provision contained in the
Pooling and Servicing Agreement, the terms and provisions of this
Series Supplement shall govern.

ARTICLE II

DEFINITIONS

SECTION 2.01. DEFINITIONS. (a) Whenever used in this Series
Supplement the following words and phrases shall have the following meanings.

"ADDITIONAL EARLY AMORTIZATION EVENT" shall have the meaning
specified in SECTION 6.01.

"AMORTIZATION DATE" shall mean the earlier of (i) the
Scheduled Amortization Date and (ii) the date on which an Early Amortization
Period is deemed to have occurred.

"APPLICABLE STRESS FACTOR" shall mean, with respect to the
Series 1996-1 Certificates, 2.0.

"APPLICABLE RESERVE RATIO" shall mean, at any time with
respect to the Series 1996-1 Certificates, a percentage calculated by the
Master Servicer in the most recent Determination Date Certificate to equal the
greater of (a) the Minimum Required Reserve Ratio with respect to such Series
and (b) the sum of the Loss Reserve Ratio and the Dilution Reserve Ratio with
respect to such Series.

"AVERAGE DILUTION RATIO" shall mean, for any Collection
Period, the average of the Dilution Ratios for such Collection Period and for
the immediately preceding eleven consecutive Collection Periods.

"CARRYING COST RESERVES" shall mean, with respect to the
Series 1996-1 Certificates at any time, an amount equal to the following:

CCR = (ACC - CCA) + AIA x WFR x ( 2 x TD)
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360
where:

CCR = the Carrying Cost Reserves;

CCA = the aggregate balance of funds on balance in the
Carrying Cost Account as of such date and allocated
to the Series 1996-1 Certificates;

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ACC = accrued and unpaid Carrying Costs plus the amount of
Carrying Costs (exclusive of Yield on the Investor
Certificates) that will, or are estimated to, have
accrued by the next fifteenth calendar day of any
month (or, if such day is not a Business Day, the
immediately succeeding Business Day, in each case as
set forth in the then-effective Determination Date
Certificate (such total being herein called the
"ACCRUED CARRYING COSTS");

AIA = the Invested Amount of the Series 1996-1 Certificates
as of such date;

WFR = the sum of (a) the Certificate Rate then in
effect PLUS (b) the Servicing Fee rate
(computed at the fixed rate for a Successor
Servicer); and

TD = Turnover Days.

"CERTIFICATE RATE" shall mean, with respect to the Series
1996-1 Certificates, ____%.

"CHANGE IN DEFERRED ARRANGEMENT PLAN BALANCE" shall mean, as
calculated by the Master Servicer in each Determination Date Certificate for
the most recent Collection Period, an amount equal to the excess, if any, of
(i) the aggregate Outstanding Balance of all Deferred Arrangement Payment Plan
Receivables as of the last Business Day of such Collection Period, over (ii)
the average of the Outstanding Balances of all Deferred Arrangement Payment
Plan Receivables as of the last Business Day of each of the twelve most recent
Collection Periods.

"CLOSING DATE" shall mean ________, 1996.

"DILUTION" shall mean, with respect to any Receivable, any
reduction in the Outstanding Balance thereof on account of such Receivable or
any portion thereof becoming a Diluted Receivable; PROVIDED, that for purposes
of calculating the Dilution Ratio, Dilution shall not include any refunds or
setoffs of any security deposits or credit balances which were subtracted from
the Outstanding Balances of Eligible Receivables included in the calculation of
the Net Receivables Balance.

"DILUTION HORIZON RATIO" shall mean, as calculated by the
Master Servicer in each Determination Date Certificate for the most recently
ended Collection Period, a fraction, (i) the numerator of which equals the sum
of (A) the aggregate amounts of all new billed Pool Receivables generated
during the most recently ended Collection Period and (B) the aggregate

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Outstanding Balances of Unbilled Receivables as determined on the last Business
Day of the most recently ended Collection Period, and (ii) the denominator of
which equals the Net Receivables Balance as determined on the last Business Day
of the most recently ended Collection Period.

"DILUTION RATIO" shall mean, as calculated by the Master
Servicer in each Determination Date Certificate for the most recently ended
Collection Period, the percentage equivalent of a fraction (a) the numerator of
which equals the aggregate amount of Dilution on the Pool Receivables during
such Collection Period and (b) the denominator of which equals the aggregate
amounts of new billed Pool Receivables generated during the Collection Period
immediately preceding the most recently ended Collection Period (so that, for
example, if the Collection Period specified in CLAUSE (A) corresponded to the
month of February, the Collection Period in this CLAUSE (B) would be the one
corresponding to the month of January).

"DILUTION RESERVE RATIO" shall mean, as calculated by the
Master Servicer in each Determination Date Certificate for the Series 1996-1
Certificates for the most recently ended Collection Period, the percentage
equivalent of a fraction equal to the product of:

(a) the sum of

(i) the product of (A) the Applicable Stress Factor
for such Series and (B) the Average Dilution Ratio for such
Collection Period, and

(ii) the Dilution Volatility Factor, TIMES

(b) the Dilution Horizon Ratio then in effect.

"DILUTION VOLATILITY FACTOR" shall mean, as calculated by the
Master Servicer in each Determination Date Certificate for the Series 1996-1
Certificates for the most recently ended Collection Period, the percentage
equivalent of a fraction equal to the product of (i) the amount by which (A)
the highest Dilution Ratio for any Collection Period ending during the most
recently ended twelve-month period exceeds (B) the Average Dilution Ratio for
the most recent Collection Period and (ii) a fraction equal to (A) the highest
Dilution Ratio for any Collection Period ending during such twelve-month period
divided by (B) the Average Dilution Ratio for the most recent Collection
Period.

"DISTRIBUTION DATE" shall mean (i) during the Revolving
Period, each ______ and ______ of each year, commencing __________, 199__, and
(ii) during the Amortization Period, the fifteenth day of each calendar month
commencing (A) in the event that the Amortization Period commences on the
Scheduled Amortization Date,

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on the Expected Final Payment Date and (B) in the event the Amortization Period
occurs as a result of an early Amortization Event, on the first such day which
is at least 30 days after the commencement of the Amortization Period or, if
any such date described above is not a Business Day, the next succeeding
Business Day.

"EARLY AMORTIZATION EVENT" shall mean any Early Amortization
Event specified in Section 9.01 of the Pooling and Servicing Agreement.

"EXPECTED FINAL PAYMENT DATE" shall mean the Distribution Date
occurring in ______________, 2001.

"GROSS LOSS RATIO" shall mean, as calculated by the Master
Servicer in each Determination Date Certificate for the most recent Collection
Period, the percentage equivalent of a fraction, (a) the numerator of which
equals the sum of (i) the aggregate Outstanding Balances of all Pool
Receivables which were written off as uncollectible during such Collection
Period and (ii) the Change in Deferred Arrangement Plan Balance for such
Collection Period, and (b) the denominator of which equals the aggregate amount
of new billed Pool Receivables generated during the Collection Period that
occurred six Collection Periods prior to the most recently ended Collection
Period.

"INITIAL INVESTED AMOUNT" shall mean, with respect to the
Series 1996-1 Certificates in the aggregate, the initial principal amount
thereof, which shall equal $____________.

"INTEREST PERIOD" shall have the meaning specified in the
Pooling and Servicing Agreement.

"INVESTED AMOUNT" shall mean, with respect to the Series
1996-1 Certificates as of any date, (a) the Initial Invested Amount of such
Certificates MINUS (b) the aggregate amount of distributions to the Holders of
such Certificates in reduction of the Invested Amount thereof; PROVIDED,
HOWEVER, that the "Invested Amount" shall not be reduced by any amount of funds
so received and distributed if at any time such distribution of such amount is
rescinded or must otherwise be returned for any reason.

"LOSS HORIZON RATIO" shall mean, as calculated by the Master
Servicer in each Determination Date Certificate for the most recently ended
Collection Period, a fraction, (i) the numerator of which equals the sum of (A)
the aggregate amounts of new billed Pool Receivables generated during the most
recently ended Collection Period and the immediately preceding Collection
Period and (B) the aggregate Outstanding Balances of Unbilled Receivables as
determined on the last Business Day of the most recently ended Collection
Period and (ii) the denominator of

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which equals the Net Receivables Balance as determined on the last Business Day
of the most recently ended Collection Period.

"LOSS RESERVE RATIO" shall mean, as calculated by the Master
Servicer in each Determination Date Certificate for the Series 1996-1
Certificates for the most recently ended Collection Period, the percentage
equivalent of a fraction equal to the product of (a) the Applicable Stress
Factor TIMES (b) the highest average of the Gross Loss Ratios for any three
consecutive Collection Periods that occurred during the twelve-month period
ending on the last Business Day of the most recently ended Collection Period
TIMES (c) the Loss Horizon Ratio then in effect.

"MINIMUM REQUIRED RESERVE RATIO" shall mean, at any time, as
calculated by the Master Servicer for the Series 1996-1 Certificates in the
most recent Determination Date Certificate, a percentage equal to the higher of
(i) 7.5% and (ii) the sum of (x) six times the percentage set forth in the
definition of Excess Concentration Balances for Obligors in the category "Not
rated/other" and (y) the product of (1) the Average Dilution Ratio for the most
recently ended Collection Period times (2) the Dilution Horizon Ratio for such
Collection Period.

"RATING AGENCIES" shall mean Moody's and S&P.

"REQUIRED RESERVES" shall mean, as of any date of
determination with respect to the Series 1996-1 Certificates, the product of
(i) the Applicable Reserve Ratio with respect to such Certificates as of such
date and (ii) the Net Receivables Balance as of such date.

"REVOLVING PERIOD" shall mean the period beginning on the
Closing Date and terminating on the earlier of (a) the close of business on the
Business Day immediately preceding the Amortization Date and (b) the close of
business on the Business Day immediately preceding the day on which any Early
Amortization Event which has not been waived shall occur.

"SCHEDULED AMORTIZATION DATE" shall mean the first
Distribution Date following the last day of the 57th month following the month
during which the Closing Date shall have occurred.

"SERIES CUT-OFF DATE" shall mean the close of business on the
Business Day immediately preceding the Closing Date.

"SERIES 1996-1" shall mean the Series of Investor
Certificates, the terms of which are specified in this Series Supplement.

"SERIES 1996-1 DEFEASANCE ACCOUNT" shall have the meaning
specified in SECTION 4.01(d).

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"SERIES 1996-1 INVESTORS" shall mean the Holders of the Series
1996-1 Certificates.

"UNDIVIDED FRACTIONAL INTEREST" shall mean the undivided
fractional interest in the aggregate Investors' Interest evidenced by a Series
1996-1 Certificate, the numerator of which equals the Ratable Principal Amount
of such Series 1996-1 Certificate at the time of determination and the
denominator of which equals the aggregate of the Ratable Principal Amounts of
all Investor Certificates.

"YIELD" shall mean with respect to any Interest Period, (i)
the product of (a) the Certificate Rate TIMES (b) the outstanding Invested
Amount of such Certificate TIMES (c) the number of months elapsed in such
Interest Period times 30 DIVIDED BY (d) 360.

(b) All capitalized terms used herein and not otherwise
defined herein have the meanings ascribed to them in the Pooling and Servicing
Agreement. Each capitalized term defined herein shall relate only to the
Series 1996-1 Certificates and no other Series of Certificates issued by the
Trust. The definitions in SECTION 2.01 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 genders of such terms.

(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Series Supplement shall refer to this Series
Supplement as a whole and not to any particular provision of this Series
Supplement; references to any Article, Section or Exhibit are references to
Articles, Sections and Exhibits in or to this Series Supplement unless
otherwise specified; and the term "including" shall mean "including without
limitation".

ARTICLE III

CONDITIONS PRECEDENT

SECTION 3.01. CONDITIONS PRECEDENT. The Trustee will not
authenticate the Series 1996-1 Certificates to be issued hereunder unless:

(a) The Trustee shall have received written certification
from the Transferor and the Servicers that the Receivables Purchase
Agreement and the Pooling and Servicing Agreement have become
effective in accordance with the terms thereof;

(b) All conditions to the issuance of the Series 1996-1
Certificates set forth in SECTION 6.09 of the Pooling and Servicing
Agreement shall have been satisfied; and

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(c) On or prior to the Closing Date, the Trustee shall have
received copies of ratings letters from each Rating Agency confirming
that the Series 1996-1 Certificates shall be rated at least 'AAA' by
S&P and 'Aaa' by Moody's.

ARTICLE IV

RIGHTS OF SERIES 1996-1 INVESTORS AND
ALLOCATION AND APPLICATION OF COLLECTIONS

SECTION 4.01. ESTABLISHMENT OF SERIES ACCOUNTS. (a) (i) The
Master Servicer, for the benefit of the Series 1996-1 Investors, shall
establish and maintain in the name of the Trustee, on behalf of the Trust, with
an Eligible Institution (which shall initially be the Trustee) a Trust Account
accessible only by the Trustee (the "SERIES 1996-1 DEFEASANCE ACCOUNT"), which
shall be identified as the "Defeasance Account for the Centerior Energy
Receivables Master Trust, Series 1996-1" and shall bear a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Series 1996-1 Investors. The Series 1996-1 Defeasance Account shall be a
Defeasance Account within the meaning of the Pooling and Servicing Agreement.

(ii) At the direction of the Master Servicer (which may be a
standing direction), funds on deposit in the Series 1996-1 Defeasance Account
shall be invested by the Trustee in Eligible Investments selected by the Master
Servicer. All such Eligible Investments shall be held by the Trustee for the
benefit of the Series 1996-1 Investors. Funds on deposit in the Series 1996-1
Defeasance Account shall be invested in Eligible Investments that will mature
so that such funds will be available on the next "Distribution Date" (as
defined in the Pooling and Servicing Agreement) with respect to any Collection
Period (whether or not such date is a Distribution Date within the meaning of
this Supplement).

(b)(i) The Trustee shall possess all right, title and
interest in and to all funds on deposit from time to time in, and all Eligible
Investments credited to, the Series 1996-1 Defeasance Account and in all
proceeds thereof. The Series 1996-1 Defeasance Account shall be under the sole
dominion and control of the Trustee for the benefit of the Series 1996-1
Investors and shall, except as expressly set forth in this Series Supplement,
be subject to the provisions of the Pooling and Servicing Agreement relating to
all Trust Accounts.

(c) Any request by the Master Servicer to invest funds on
deposit in any Series 1996-1 Defeasance Account shall be in writing and shall
certify that the requested investment is an

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Eligible Investment which matures at or prior to the time required hereby.

SECTION 4.02. ALLOCATION OF COLLECTIONS TO AND FROM THE
SERIES 1996-1 DEFEASANCE ACCOUNT. (a) During the Revolving Period, no
reductions shall be made to the Invested Amounts of the Series 1996-1
Certificates.

(b) On each Business Day during the Amortization Period, the
Trustee shall, out of the Collections and other funds made available for
allocation to the Series 1996-1 Investors pursuant to CLAUSE FIRST, SECOND
and/or THIRD of SECTION 4.03(C)(III), deposit all such funds into the Series
1996-1 Defeasance Account until the amount on deposit therein equals the
Invested Amount of the Series 1996-1 Certificates, plus all accrued Yield
thereon through the next applicable Distribution Date. On each Distribution
Date during the Amortization Period, the Paying Agent shall distribute all
amounts on deposit in the Series 1996-1 Defeasance Account to the Series 1996-1
Investors until the Invested Amount of the Series 1996-1 Certificates and all
Yield thereon have been paid in full, and any funds thereafter remaining shall
be returned to the Transferor in satisfaction of the Deferred Payment Right.

Notwithstanding anything to the contrary hereinabove, on any Distribution Date
which is not the final Distribution Date for the Series 1996-1 Investors, the
Paying Agent may, in its sole discretion and for purposes of administrative
convenience, retain funds in the Series 1996-1 Defeasance Account in lieu of
distributing the same provided that such funds are not in excess of $100,000.
All amounts distributed to the Series 1996-1 Investors from the Series 1996-1
Defeasance Account during the Amortization Period shall be distributed in the
following order of priority:

FIRST, to the payment of all accrued and unpaid Yield owing to
the holders of the Series 1996-1 Certificates until such Yield has
been paid in full; and

SECOND, to the reduction of the Invested Amount of the Series
1996-1 Certificates until such Invested Amount has been reduced to
zero.

If the funds available for distribution from the Series 1996-1
Defeasance Account under any of the immediately preceding CLAUSES FIRST through
SECOND above are less than the amounts to be paid pursuant to any such clause,
then, in any such case, such available funds shall be allocated by the Master
Servicer PRO RATA for distribution to the Investors to whom such amounts are
owed according to the respective Invested Amounts of the Investors entitled to
payment under such clause. All obligations

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in lower priority categories shall remain unsatisfied until the obligations in
the preceding category have been satisfied.

ARTICLE V

PAYMENTS OF YIELD

SECTION 5.01. YIELD. (a) The outstanding Invested Amount of
the Series 1996-1 Certificates shall accrue Yield at the Certificate Rate until
such Invested Amount has been reduced to zero. On each Distribution Date
during the Revolving Period, the Trustee shall make available to the Paying
Agent and the Paying Agent shall distribute to the Series 1996-1 Investors, out
of the Collections and other funds on deposit in the Carrying Cost Account
allocable to the Series 1996-1 Investors, an amount equal to all accrued and
unpaid Yield on the Series 1996-1 Certificates. If the amounts so made
available are insufficient to pay such accrued and unpaid Yield in full, then
the Paying Agent shall distribute such funds to the holders of the Series
1996-1 Certificates ratably in accordance with their respective Invested
Amounts until the Yield owing on the Series 1996-1 Certificates has been paid
in full. Any Yield due but not paid on any Distribution Date will be due on
the next succeeding Distribution Date with additional interest on such overdue
amount at the applicable Certificate Rate to the extent permitted by applicable
law.

SECTION 5.02. NO OPTIONAL PREPAYMENTS. (a) The Transferor
shall not have the right to cause the Series 1996-1 Certificates to be prepaid
in full, or, in part, at any time prior to the Expected Final Payment Date.

ARTICLE VI

EARLY AMORTIZATION EVENTS

SECTION 6.01. ADDITIONAL EARLY AMORTIZATION EVENTS. It shall
constitute an Additional Early Amortization Event with respect to the Series
1996-1 Certificates if the average of the Applicable Reserve Ratios for the
Series 1996-1 Certificates, as calculated by the Master Servicer in the
relevant Determination Date Certificates for any three (3) consecutive
Collection Periods, shall exceed thirty percent (30%).

ARTICLE VII

MISCELLANEOUS PROVISIONS

SECTION 7.01. RATIFICATION OF POOLING AND SERVICING
AGREEMENT. As supplemented by this Series Supplement, the

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Pooling and Servicing Agreement is in all respects ratified and confirmed and
the Pooling and Servicing Agreement as so supplemented by this Series
Supplement shall be read, taken and construed as one and the same instrument.

SECTION 7.02. COUNTERPARTS. This Series Supplement may be
executed in two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which together
shall constitute one and the same instrument.

SECTION 7.03. GOVERNING LAW; JURISDICTION. (A) THIS SERIES
SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW BUT OTHERWISE WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

[(b) JURISDICTION. Each of the parties hereto hereby
irrevocably and unconditionally submits to the nonexclusive jurisdiction of any
federal court of the United States of America sitting in New York City or, if
jurisdiction is not available in such federal court, New York State court, and
any appellate court from any thereof, in any action or proceeding arising out
of or relating to this Series Supplement, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State or, to
the extent permitted by law, in such federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgement
or in any other manner provided by law.]

(c) CONSENT TO SERVICE OF PROCESS. Each party to this Series
Supplement irrevocably consents to service of process in the manner provided
for notices in Section 13.05 of the Pooling and Servicing Agreement. Nothing
in this Series Supplement will affect the right of any party to this Agreement
to serve process in any other manner permitted by law.

SECTION 7.04. THE TRUSTEE. The Trustee shall not be
responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Series Supplement, or for or in respect of the recitals
contained herein, all of which recitals are made solely by the Transferor and
the Servicers.

SECTION 7.05. RESTRICTIONS ON TRANSFER TO BENEFIT PLAN
INVESTORS. Notwithstanding anything to the contrary in the Pooling and
Servicing Agreement, the Series 1996-1 Certificates may not be issued, assigned
or transferred to or otherwise held by any "benefit plan investor" as defined
in Section 2510.3-101(f)(2) of the Labor Regulations promulgated under ERISA
unless

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the acquisition or holding of such Certificates by such benefit plan investor
is exempted from the "prohibited transaction" provisions of ERISA.
Notwithstanding anything to the contrary herein or in the Pooling and Servicing
Agreement, any purported transfer of a Series 1996-1 Certificate to a benefit
plan investor in violation of this SECTION 7.05 shall be void and of no effect.
Each benefit plan investor which acquires any Series 1996-1 Certificates shall
be deemed to have represented and warranted to the Trust that such Investor's
acquisition or holding of the Series 1996-1 Certificates does not constitute a
nonexempt "prohibited transaction" under the applicable provisions of ERISA and
the Internal Revenue Code. The Trustee shall be entitled to rely on such deemed
representation and shall have no responsibility for, nor any liability in
respect of, the inaccuracy of any such representation or warranty or the failure
of any issuance, assignment, transfer or holding to otherwise be in compliance
with this Section 7.05.

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IN WITNESS WHEREOF, the Transferor, the Servicers and the
Trustee have caused this Series Supplement to be duly executed by their
respective officers as of the day and year first above written.

CENTERIOR FUNDING CORPORATION
Transferor

By: ______________________________
Name:
Title:

THE CLEVELAND ELECTRIC ILLUMINATING
COMPANY and THE TOLEDO EDISON
COMPANY, as Servicers

By:___________________________
Name:
Title:

CITIBANK, N.A., as Trustee

By:___________________________
Name:
Title:

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EXHIBIT A

FORM OF SERIES 1996-1 CERTIFICATE

Number ____________ CUSIP ___________
Initial Invested Amount $_____________

FIXED RATE RECEIVABLES-BACKED CERTIFICATE
SERIES 1996-1

THIS CERTIFICATE REPRESENTS AN
UNDIVIDED INTEREST IN CERTAIN ASSETS OF THE

CENTERIOR ENERGY RECEIVABLES MASTER TRUST

the corpus of which consists primarily of certain receivables generated from
time to time by The Cleveland Electric Company ("CEI") and The Toledo Edison
Company ("TE" and, together with CEI, collectively, the "Originators") and
purchased by Centerior Funding Corporation (the "Transferor"), which in turn
transfers and assigns such receivables to the Centerior Energy Receivables
Master Trust. This Certificate does not represent any recourse obligation of,
and is not guaranteed by, the Transferor, any Originator or any Affiliate of
any of them.

This certifies that

(the
"Holder"), is the registered owner of a fractional undivided interest in the
assets of the Centerior Energy Receivables Master Trust (the "Trust"), created
pursuant to the Pooling and Servicing Agreement, dated as of ______________,
1996 (as supplemented or modified, the "Agreement"), by and among the
Transferor, CEI and TE, as Servicers, and Citibank, N.A., as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to them in the Agreement. Unless the
certificate of authentication hereon has been executed by or on behalf of the
Trustee by manual or facsimile signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

Reference is hereby made to the further provisions of this
Certificate set forth below, which further provisions shall for all purposes
have the same effect as if set forth at this place.

This Certificate is one of the duly authorized Series 1996-1
Certificates designated and issued under the Agreement on the Closing Date and
constitutes a Senior Class.

The corpus of the Trust consists of (i) a portfolio of
receivables (the "Receivables") transferred under the Agreement from time to
time, (ii) funds collected or to be collected from Obligors in respect of the
Receivables, (iii) all funds which are from time to time on deposit in the
Collection Accounts, the
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Concentration Account and any other account or accounts held for the benefit of
Certificateholders and (iv) all other assets and interests constituting the
Trust Assets.

This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement and the Series 1996-1 Supplement
relating thereto (the "Supplement"), to which Agreement and Supplement, as
amended from time to time, the Holder by virtue of the acceptance hereof
assents and is bound. Although a summary of certain provisions of the
Agreement is set forth below, this Investor Certificate does not purport to
summarize the Agreement and the Supplement and is qualified in its entirety by
the terms and provisions of the Agreement and the Supplement. Reference is
made to the Agreement and the Supplement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and obligations of the Trustee, the Servicers and the
other parties bound thereby. A copy of the Agreement and Supplement may be
requested by writing to the Trustee at 111 Wall Street, 5th Floor, New York,
New York 10043, Attention: _________, at the expense of the Transferor.

This Certificate is an Investor Certificate. The Trust's
assets are allocated in part to the Holder, the other Investors of this Series
and the Investors of other Series, if any, with the remainder allocated to the
Transferor. The Investor Certificates represent an undivided fractional
beneficial interest in the Trust and the right to receive, to the extent
necessary to make the required payments with respect to the Investor
Certificates, at the times and in the amounts specified in the Agreement and
the Supplement, of the Investors' Interest of Collections from time to time,
with any excess of the Investors' Interest of Collections over the amount of
such required payments to be remitted to the Transferor in satisfaction of the
Deferred Payment Right.

The Initial Invested Amount on the Closing Date is $________.
The Invested Amount with respect to any date will be an amount equal to (a) the
Initial Invested Amount, MINUS (b) the amount of any distributions to the
Investor in reduction of the Invested Amount on or prior to such date pursuant
to the terms of the Agreement. The Initial Invested Amount and the
distributions of principal to the Investors shall be recorded on the
Certificate Register.

Yield with respect to this Certificate shall be distributed to
the Holder hereof on each Distribution Date as provided in the Supplement.
Payment of any installment of Yield on this Certificate will be made or caused
to be made by the Paying Agent to the person in whose name such Certificate is
registered at the close of business on the Record Date. Payment of such
interest will be made by wire transfer to a designated account maintained by
the Holder, provided that such Holder has

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provided the Paying Agent with the wire transfer designation, in writing,
received by the Paying Agent on or prior to the relevant Record Date. In the
absence of such timely wire transfer instructions, payment will be made by
check to the address of record of the Holder.

Payment of principal in respect of this Certificate will be
made by transfer to an account maintained by the Holder. The final
distribution on this Certificate will be made after due notice by the Trustee
of the pendency of such distribution and upon presentation and surrender of
this Certificate at the Corporate Trust Office of the Trustee. Upon payment of
the final distribution on this Certificate, all further payments on account of
the Holder's interest in the Trust shall be remitted to the Transferor in
satisfaction of the Deferred Payment Right.

This Certificate does not represent an obligation of, or an
interest in, the Transferor, any Servicer, any Originator or any Affiliate of
any of them. This Certificate is limited in right of payment to certain
Collections of the Receivables (and certain other amounts), all as more
specifically set forth hereinabove, in the Agreement and in the Supplement.

The Agreement may be amended by the Transferor, the Servicers
and the Trustee, without the consent of any Investor, under certain
circumstances and may also be amended by the Servicers, the Transferor and the
Trustee, with the consent of the Investors owning a Majority in Interest of the
Investor Certificates of each adversely affected Series, all as more fully
described in SECTION 13.01 of the Agreement.

As provided in the Agreement and subject to certain
limitations therein set forth, this Certificate is exchangeable for a new
Investor Certificate evidencing a like fractional undivided interest in the
Trust, as requested by the Investor surrendering this Certificate. No service
charge will be imposed for any such transfer or exchange, but the Transfer
Agent and Registrar may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection therewith.

This Certificate shall be construed in accordance with and
governed by the laws of the State of New York, including without limitation
Section 5-1401 of the General Obligations Law but otherwise without reference
to its conflict of law provisions.

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IN WITNESS WHEREOF, the Transferor has caused this Certificate
to be duly executed.

CENTERIOR FUNDING CORPORATION

By: ______________________________
Name:
Title:

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Investor Certificates described in the
within-mentioned Pooling and Servicing Agreement.

Dated: ______________________

CITIBANK, N.A.,
not its individual capacity but
solely as Trustee

By: ________________________ OR ______________________________
Authorized Officer ______________________________ as
Authenticating Agent for
the Trustee

By: _________________________
Authorized Officer

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