EXHIBIT 10.1

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AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of February 15, 2012

Among

PROGRESS ENERGY, INC.
(Borrower)

and

THE BANKS LISTED ON THE SIGNATURE PAGES HEREOF
(Banks)

and

CITIBANK, N.A.
(Administrative Agent)

and

CITIBANK, N.A.,
SUNTRUST BANK and
WELLS FARGO BANK, N.A.
(as Issuing Banks)
 

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CITIGROUP GLOBAL MARKETS, INC. and J.P. MORGAN SECURITIES LLC
(Joint Lead Arrangers)

JPMORGAN CHASE BANK, N.A.
(Syndication Agent)
 

 
 
 

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TABLE OF CONTENTS

 

Section Page

 

ARTICLE I DEFINITIONS AND ACCOUNTING TERMS 1

 

Section 1.01. Certain Defined Terms 1 Section 1.02. Computation of Time Periods
13 Section 1.03. Accounting Terms 13

 

ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES 13

 

Section 2.01. The Advances 13 Section 2.02. Making the Advances 14 Section 2.03.
Fees 15 Section 2.04. Reduction of the Commitments 16 Section 2.05. Repayment of
Advances 16 Section 2.06. Interest on Advances 16 Section 2.07. Additional
Interest on Eurodollar Rate Advances 17 Section 2.08. Interest Rate
Determination 17 Section 2.09. Voluntary Conversion of Advances 18 Section 2.10.
Prepayments of Advances 18 Section 2.11. Increased Costs 19 Section 2.12.
Illegality 20 Section 2.13.
Payments and Computations
20 Section 2.14. Sharing of Payments, Etc. 21 Section 2.15. Letters of Credit 22

 

ARTICLE III CONDITIONS PRECEDENT 26

 

Section 3.01. Conditions Precedent to Effectiveness of Amendment and Restatement
26 Section 3.02. Conditions Precedent to Each Borrowing and to the Issuance of
Letters of Credit 27

 

ARTICLE IV REPRESENTATIONS AND WARRANTIES 28

 

Section 4.01. Representations and Warranties of the Borrower 28

 

ARTICLE V COVENANTS OF THE BORROWER 30

 

Section 5.01 Affirmative Covenants 30 Section 5.02. Negative Covenants 32

 

ARTICLE VI EVENTS OF DEFAULT 34

 

Section 6.01. Events of Default 34

 
 
 
 

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ARTICLE VII THE ADMINISTRATIVE AGENT AND THE ISSUING BANKS 36

 

Section 7.01. Authorization and Action 36 Section 7.02. The Adminstrative
Agent's Reliance, Etc. 36 Section 7.03. The Administrative Agent and its
Affiliates 37 Section 7.04. Lender Credit Decision 37 Section 7.05.
Indemnification 37 Section 7.06. Successor Administrative Agent 38 Section 7.07.
Appointment and Resignation of Issuing Banks 38

 
ARTICLE VIII MISCELLANEOUS
39

 

Section 8.01. Amendments, Etc. 39 Section 8.02. Notices, Electronic
Communications, Etc. 39 Section 8.03. No Waiver; Remedies 40 Section 8.04.
Costs, Expenses, Taxes and Indemnification 40 Section 8.05. Right of Set-off 43
Section 8.06.
Binding Effect 44 Section 8.07. Assignments and Participations 44 Section 8.08.
Waiver of Consequential Damages 48 Section 8.09. USA PATRIOT Act Notice 49
Section 8.10. Tax Disclosure 49 Section 8.11. Governing Law 49 Section 8.12.
WAIVER OF JURY TRIAL 49 Section 8.13. Execution of Counterparts 49 Section 8.14.
Severability 50 Section 8.15. Headings 50 Section 8.16. Entire Agreement 50
Section 8.17. Defaulting Lenders 50

 
 
SCHEDULES
 

I - List of Commitments and Applicable Lending Offices II - Adopted Letters of
Credit

 
EXHIBITS
 

A-1 - Form of Notice of Borrowing A-2 - Form of Notice of Conversion B - Form of
Assignment and Acceptance C-1 - Form of Opinion of General Counsel to Progress
Energy Service Company, LLC C-2 - Form of Opinion of Special Counsel for the
Borrower  D - Form of Opinion of Counsel for the Administrative Agent E - Form
of Compliance Certificate

 
 
 
 

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AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of February 15, 2012
 
    This AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) is made by
PROGRESS ENERGY, INC., a North Carolina corporation (the “Borrower”), the banks
listed on the signature pages hereof (the “Banks”), CITIBANK, N.A. (“Citibank”),
as administrative agent (the “Administrative Agent”) for the Lenders (as
hereinafter defined), and CITIBANK, SUNTRUST BANK and WELLS FARGO BANK, N.A., as
the Issuing Banks.
 
WITNESSETH:
 
    WHEREAS, the Borrower has requested that the Banks, the Administrative Agent
and the Issuing Banks agree, on the terms and conditions set forth herein, to
amend and restate the Credit Agreement, dated as of May 3, 2006 (as amended, the
“Prior Credit Agreement”), among the Borrower, the Administrative Agent, and the
banks, financial institutions and other institutional lenders party thereto. The
Banks, the Administrative Agent and the Issuing Banks have indicated their
willingness to amend and restate the Prior Credit Agreement on the terms and
conditions of this Agreement.
 
    NOW, THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the parties hereto hereby agree that, subject
to the satisfaction of the conditions precedent set forth in Section 3.01, the
Prior Credit Agreement is amended and restated as follows:
 
 
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
 
    SECTION 1.01. Certain Defined Terms.
 
    As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
 
       “Administrative Agent” has the meaning specified in the introductory
paragraph of this Agreement.
 
       “Advance” means an advance by a Lender to the Borrower as part of a
Borrowing and refers to a Base Rate Advance or a Eurodollar Rate Advance, each
of which shall be a “Type” of Advance.
 
       “Affiliate” means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by, or is under common control with such
Person or is a director or officer of such Person.
 
       “Applicable Lending Office” means, with respect to each Lender, (i) such
Lender’s Domestic Lending Office in the case of a Base Rate Advance, or (ii)
such Lender’s Eurodollar Lending Office, in the case of a Eurodollar Rate
Advance.
 
 
 
 

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       “Applicable Margin” means for each Type of Advance at all times during
which any Applicable Rating Level set forth below is in effect, the interest
rate per annum set forth below next to such Applicable Rating Level:
 
Applicable Rating
Level
Applicable Margin for Eurodollar Rate Advances
Applicable Margin for Base Rate Advances
1
0.900%
0%
2
1.000%
0%
3
1.075%
0.075%
4
1.275%
0.275%
5
1.475%
0.475%
6
1.625%
0.625%

provided, that
 

 (i)     the Applicable Margins set forth above for each Applicable Rating Level
shall increase upon the occurrence and during the continuance of any Event of
Default by 2.0%, and      (ii)    any change in the Applicable Margin resulting
from a change in the Applicable Rating Level shall become effective upon the
date of announcement of a change in the Moody’s Rating or the S&P Rating that
results in a change in the Applicable Rating Level.

 
       “Applicable Rating Level” at any time shall be determined in accordance
with the then-applicable S&P Rating and the then-applicable Moody’s Rating as
follows:
 
S&P Rating/Moody’s Rating
Applicable Rating Level
A or higher or A2 or higher
1
A- or A3
2
BBB+ or Baa1
3
BBB or Baa2
4
BBB- or Baa3
5
lower than Level 5 or unrated
6

In the event that the S&P Rating and the Moody’s Rating are not at the same
Applicable Rating Level but differ by only one Applicable Rating Level, then the
higher of the two ratings shall determine the Applicable Rating Level, unless
the S&P Rating is below BBB- or the Moody’s Rating is below Baa3. In the event
that the S&P Rating and the Moody’s Rating differ by more
 
 
 

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3
 
than one Applicable Rating Level or the S & P Rating is below BBB- or the
Moody’s Rating is below Baa3, then the Applicable Rating Level immediately below
the higher of the two ratings shall be the Applicable Rating Level. The
Applicable Rating Level shall be redetermined on the date of announcement of a
change in the S&P Rating or the Moody’s Rating.
 
       “Arrangers” means Citigroup Global Markets, Inc. and J.P. Morgan
Securities LLC.
 
       “Assignment and Acceptance” means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by the Administrative
Agent, in substantially the form of Exhibit B hereto.
 
       “Bankruptcy Event” means, with respect to any Person, such Person becomes
the subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, custodian, assignee for the benefit of
creditors or similar Person charged with the reorganization or liquidation of
its business appointed for it, or, in the good faith determination of the
Administrative Agent, has taken any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any such proceeding or appointment,
provided that a Bankruptcy Event shall not result solely by virtue of any
ownership interest, or the acquisition of any ownership interest, in such Person
or the exercise of control over such Person by a governmental authority or
instrumentality thereof if and for so long as such ownership interest does not
result in or provide such Person with immunity from the jurisdiction of courts
within the United States or from the enforcement of judgments or writs of
attachment on its assets or permit such Person (or such governmental authority
or instrumentality) to reject, repudiate, disavow or disaffirm obligations such
as those under this Agreement.
 
       “Banks” has the meaning specified in the introductory paragraph of this
Agreement.
 
       “Base Rate” means, for any Interest Period or any other period, a
fluctuating interest rate per annum as shall be in effect from time to time,
which rate per annum shall at all times be equal to the highest from time to
time of:
 

 (i)      the rate of interest announced publicly by Citibank in New York, New
York, from time to time, as Citibank’s base rate;      (ii)     1/2 of one
percent per annum above the Federal Funds Rate in effect from time to time; and
    (iii)    BBA LIBOR, as published by Reuters (or another commercially
available source providing quotations of BBA LIBOR as designated by the
Administrative Agent from time to time) at 11:00 a.m. (London time) on the date
of determination for a term of one month (or if no such rates are quoted on such
day for any reason, the previous day for which quotations are available) (the
“One-Month LIBOR Rate”) plus 1%; provided, however, if more than one rate is
specified on such service, the applicable rate shall be the arithmetic mean of
all such rates plus 1%.

 
       “Base Rate Advance” means an Advance that bears interest as provided in
Section 2.06(a).
 
 
 

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       “BBA LIBOR” has the meaning specified in the definition of “Eurodollar
Rate”.
 
       “Borrower” has the meaning specified in the introductory paragraph of
this Agreement.
 
       “Borrowing” means a borrowing consisting of simultaneous Advances of the
same Type made by each of the Lenders pursuant to Section 2.01 or Converted
pursuant to Section 2.08 or 2.09.
 
       “Business Day” means a day of the year on which banks are not required or
authorized to close at the principal office of any Lender and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings are
carried on in the London interbank market.
 
       “Change of Control” means the occurrence, after the date of this
Agreement, of any Person or “group” (within the meaning of Rule 13(d) or 14(d)
of the Securities and Exchange Commission under the Exchange Act), directly or
indirectly, acquiring beneficial ownership of or control over securities of the
Borrower (or other securities convertible into such securities) representing 30%
or more of the combined voting power of all securities of the Borrower entitled
to vote in the election of directors; provided, that, the Duke Merger shall not
constitute a “Change of Control”.
 
       “Citibank” has the meaning specified in the introductory paragraph of
this Agreement.
 
       “Commitment” has the meaning specified in Section 2.01.
 
       “Consolidated” refers to the consolidation of the accounts of the
Borrower and its Subsidiaries in accordance with GAAP.
 
       “Convert”, “Conversion” and “Converted” each refers to a conversion of
Advances of one Type into Advances of another Type, or the selection of a new,
or the renewal of the same, Interest Period for Eurodollar Rate Advances,
pursuant to Section 2.08(g) or 2.09.
 
       “CP&L” means the Carolina Power and Light Company.
 
       “Credit Parties” has the meaning specified in the definition of
“Defaulting Lender”.
 
       “Defaulting Lender” means any Lender, as reasonably determined by the
Administrative Agent, that (i) has failed, within three Business Days after the
date required to be funded or paid, (A) to fund any portion of its Advances or
(B) to pay over to any Lender, any Issuing Bank or the Administrative Agent
(collectively, the “Credit Parties”) any other amount required to be paid by it
under this Agreement, unless, in the case of clauses (A) and (B) above, such
Lender notifies the Administrative Agent in writing that such failure is the
result of such Lender’s good faith determination that a condition precedent to
funding (specifically identified and including the particular default, if any)
has not been satisfied, (ii) has notified the Borrower or any Credit Party in
writing that it does not intend to comply with any of its funding obligations
under this Agreement or has made a public statement to the effect that it does
not intend to comply with its funding obligations under this Agreement (unless
such writing or public statement indicates that such position is based on such
Lender’s good faith determination that a condition precedent (specifically
identified and including the particular default, if any) to funding an Advance
cannot
 
 
 
 

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5
 
be satisfied) or generally under other agreements in which it commits to extend
credit, (iii) has failed, within three Business Days after request by the
Administrative Agent, acting in good faith, to provide a certification in
writing from an authorized officer of such Lender that it will comply with its
obligations under the Agreement, provided that such Lender shall cease to be a
Defaulting Lender pursuant to clause (iii) upon such requesting party’s receipt
of such certification in form and substance satisfactory to it and the
Administrative Agent, or (iv) has become the subject of a Bankruptcy Event.
 
       “Domestic Lending Office” means, with respect to any Lender, the office
of such Lender specified as its “Domestic Lending Office” opposite its name on
Schedule I hereto or in the Assignment and Acceptance pursuant to which it
became a Lender, or such other office of such Lender as such Lender may from
time to time specify to the Borrower and the Administrative Agent.
 
       “Duke Merger” means the merger contemplated by the Agreement and Plan of
Merger, dated January 8, 2011, between Diamond Acquisition Corporation and Duke
Energy Corporation pursuant to which Diamond will be merged into the Borrower,
and the Borrower, will become a wholly-owned subsidiary of Duke Energy
Corporation.
 
       “Eligible Assignee” means (i) any other Lender or any Affiliate of a
Lender meeting the criteria set forth in clause (ii) hereof and (ii) (A) any
other commercial bank organized under the laws of the United States, or any
State thereof, and having a combined capital and surplus of at least
$250,000,000 (as established in its most recent report of condition to its
primary regulator), (B) a savings and loan association or savings bank organized
under the laws of the United States, or any State thereof, and having a combined
capital and surplus of at least $250,000,000 (as established in its most recent
report of condition to its primary regulator), (C) a commercial bank organized
under the laws of any other country that is a member of the OECD, or has
concluded special lending arrangements with the International Monetary Fund
associated with its General Arrangements to Borrow, or the Cayman Islands, or a
political subdivision of any such country, and having a combined capital and
surplus of at least $250,000,000 (as established in its most recent report of
condition to its primary regulator); provided that such bank is acting through a
branch or agency located in the United States or in the country in which it is
organized or another country that is described in this clause (C), (D) the
central bank of any country that is a member of the OECD, or (E) a finance
company, insurance company or other financial institution or fund (whether a
corporation, partnership or other entity) that is engaged in making, purchasing
or otherwise investing in commercial loans in the ordinary course of its
business, whose outstanding unsecured indebtedness is rated AA- or better by S&P
or Aa3 or better by Moody’s (or an equivalent rating by another
nationally-recognized credit rating agency of similar standing if neither of
such corporations is then in the business of rating unsecured indebtedness) or,
in the case of an Affiliate of a Lender only, whose obligations are fully
guaranteed by a finance company, insurance company or other financial
institution or fund whose outstanding unsecured indebtedness has such a rating.
 
       “Environmental Laws” means any federal, state or local laws, ordinances
or codes, rules, orders, or regulations relating to pollution or protection of
the environment, including, without limitation, laws relating to hazardous
substances, laws relating to reclamation of land and waterways and laws relating
to emissions, discharges, releases or threatened releases of
 
 
 
 

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6
 
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes into the environment (including, without limitation,
ambient air, surface water, ground water, land surface or subsurface strata) or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollution, contaminants, chemicals,
or industrial, toxic or hazardous substances or wastes.
 
       “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
 
       “Eurocurrency Liabilities” has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
 
       “Eurodollar Lending Office” means, with respect to each Lender, the
office of such Lender specified as its “Eurodollar Lending Office” opposite its
name on Schedule I hereto or in the Assignment and Acceptance pursuant to which
it became a Lender (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Administrative Agent.
 
       “Eurodollar Rate” means, for the Interest Period for each Eurodollar Rate
Advance comprising part of the same Borrowing an interest rate per annum equal
to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by
Reuters (or another commercially available source providing quotations of BBA
LIBOR as designated by the Administrative Agent from time to time) at 11:00 a.m.
(London time), two Business Days prior to the commencement of such Interest
Period, for dollar deposits (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period. If such rate is not
available at such time for any reason, then the “Eurodollar Rate” for such
Interest Period shall be the rate per annum determined by the Administrative
Agent to be the rate at which deposits in U.S. dollars for delivery on the first
day of such Interest Period in same day funds in the approximate amount of the
Eurodollar Rate Advance being made, continued or converted by Citibank and with
a term equivalent to such Interest Period would be offered by Citibank or its
principal London banking Affiliate to major banks in the London interbank
eurodollar market at their request at approximately 11:00 a.m. (London time) two
Business Days prior to the commencement of such Interest Period.
 
       “Eurodollar Rate Advance” means an Advance that bears interest as
provided in Section 2.06(b).
 
       “Eurodollar Rate Reserve Percentage” of any Lender for the Interest
Period for any Eurodollar Rate Advance means the reserve percentage applicable
during such Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for such Lender with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities having a term equal
to such Interest Period.
 
 
 
 

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       “Events of Default” has the meaning assigned to that term in Section
6.01.
 
       “Exchange Act” means the Securities Exchange Act of 1934, and the
regulations promulgated thereunder, in each case as amended and in effect from
time to time.
 
       “Extension of Credit” means (i) the making of an Advance or (ii) the
issuance of a Letter of Credit or the amendment of any Letter of Credit having
the effect of extending the stated termination date thereof or increasing the
maximum amount to be drawn thereunder.
 
       “Facility Fee Percentage” means, at all times during which any Applicable
Rating Level set forth below is in effect, the rate per annum set forth below
next to such Applicable Rating Level:
 
Applicable Rating Level
Facility Fee Percentage
1
0.100%
2
0.125%
3
0.175%
4
0.225%
5
0.275%
6
0.375%

provided, that a change in the Facility Fee Percentage resulting from a change
in the Applicable Rating Level shall become effective upon the date of
announcement of a change in the Moody’s Rating or the S&P Rating that results in
a change in the Applicable Rating Level.
 
       “Federal Funds Rate” means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
 
       “First Mortgage Bonds” means those bonds issued from time to time by CP&L
pursuant to the Mortgage.
 
       “Florida Power” means Florida Power Corporation.
 
       “Florida Power Mortgage” means the Indenture, dated as of January 1,
1944, between Florida Power, Guaranty Trust Company of New York and the Florida
National Bank of Jacksonville, as modified, amended or supplemented from time to
time.
 
 
 
 

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       “Florida Power Mortgage Bonds” means those bonds issued from time to time
by Florida Power pursuant to the Florida Power Mortgage.
 
       “FPC” means Florida Progress Corporation.
 
       “GAAP” means generally accepted accounting principles, including
principles of consolidation, consistent with those applied in the preparation of
the financial statements referred to in Section 4.01(e).
 
       “Granting Lender” has the meaning specified in Section 8.07(j).
 
       “Guaranty” of any Person means any obligation, contingent or otherwise,
of such Person (i) to pay any Liability of any other Person or to otherwise
protect, or having the practical effect of protecting, the holder of any such
Liability against loss (whether such obligation arises by virtue of such Person
being a partner of a partnership or participant in a joint venture or by
agreement to pay, to keep well, to purchase assets, goods, securities or
services or to take or pay, or otherwise) or (ii) incurred in connection with
the issuance by a third Person of a Guaranty of any Liability of any other
Person (whether such obligation arises by agreement to reimburse or indemnify
such third Person or otherwise). The word “Guarantee” when used as a verb has
the correlative meaning.
 
       “Hostile Acquisition” shall mean any Target Acquisition (as defined
below) involving a tender offer or proxy contest that has not been recommended
or approved by the board of directors (or similar governing body) of the Person
that is the subject of such Target Acquisition prior to the first public
announcement or disclosure relating to such Target Acquisition. As used in this
definition, the term “Target Acquisition” shall mean any transaction, or any
series of related transactions, by which any Person directly or indirectly
(i) acquires any ongoing business or all or substantially all of the assets of
any other Person or division thereof, whether through purchase of assets, merger
or otherwise, (ii) acquires (in one transaction or as the most recent
transaction in a series of transactions) control of at least a majority in
ordinary voting power of the securities of any other such Person that have
ordinary voting power for the election of directors or (iii) otherwise acquires
control of more than a 50% ownership interest in any other such Person.
 
       “ISP” means, with respect to any Letter of Credit, the “International
Standby Practices 1998” published by the Institute of International Banking Law
& Practice (or such later version thereof as may be in effect at the time of
issuance).
 
       “Indebtedness” of any Person means (i) any obligation of such Person for
borrowed money, (ii) any obligation of such Person evidenced by a bond,
debenture, note or other similar instrument, (iii) any obligation of such Person
to pay the deferred purchase price of property or services, except a trade
account payable that arises in the ordinary course of business but only if and
so long as the same is payable on customary trade terms, (iv) any obligation of
such Person as lessee under a capital lease, (v) any Mandatorily Redeemable
Stock of such Person (the amount of such Mandatorily Redeemable Stock to be
determined for this purpose as the higher of the liquidation preference and the
amount payable upon redemption of such Mandatorily Redeemable Stock), (vi) any
obligation of such Person to purchase securities or other property
 
 
 
 

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9
 
that arises out of or in connection with the sale of the same or substantially
similar securities or property, (vii) any non-contingent obligation of such
Person to reimburse any other Person in respect of amounts paid under a letter
of credit or other Guaranty issued by such other Person to the extent that such
reimbursement obligation remains outstanding after it becomes non-contingent,
(viii) any Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by) a
mortgage, lien, pledge, charge or other encumbrance on any asset of such Person,
(ix) any Liabilities in respect of unfunded vested benefits under plans covered
by Title IV of ERISA, (x) any Synthetic Lease Obligations of such Person and
(xi) any Indebtedness of others Guaranteed by such Person.
 
       “Interest Period” means, for each Eurodollar Rate Advance comprising part
of the same Borrowing, the period commencing on the date of such Advance or the
date of the Conversion of any Advance into such an Advance and ending on the
last day of the period selected by the Borrower pursuant to the provisions below
and, thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the period
selected by the Borrower pursuant to the provisions below. The duration of each
such Interest Period shall be one, two, three or six months, as the Borrower
may, in the Notice of Borrowing given by the Borrower to the Administrative
Agent pursuant to Section 2.02, select; provided, however, that:
 

 (i)     the Borrower may not select any Interest Period that ends after the
Termination Date;      (ii)    Interest Periods commencing on the same date for
Advances comprising the same Borrowing shall be of the same duration; and    
(iii)   whenever the last day of any Interest Period would otherwise occur on a
day other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day; provided that if such
extension would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day.

 
The Administrative Agent shall promptly advise each Lender by or telecopy
transmission of each Interest Period so selected by the Borrower.
 
       “Issuing Bank” shall mean Citibank, SunTrust Bank and Wells Fargo Bank,
N.A., each as an issuer of Letters of Credit, and any other Lender or Affiliate
thereof that agrees pursuant to Section 7.07 to act as an Issuing Bank
hereunder.
 
       “LC Commitment” shall mean, with respect to any Issuing Bank, the
commitment of such Issuing Bank to issue Letters of Credit on the terms and
conditions hereof in an aggregate stated amount not to exceed the amount agreed
from time to time by such Issuing Bank and the Borrower pursuant to Section
7.07.
 
       “LC Disbursement” shall mean a payment made by an Issuing Bank pursuant
to a Letter of Credit.
 
 
 
 

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10
 
       “LC Documents” shall mean the Letters of Credit and all applications,
agreements and instruments relating to the Letters of Credit.
 
       “LC Exposure” shall mean, at any time, the sum of (i) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (ii) the
aggregate amount of all LC Disbursements that have not been reimbursed by or on
behalf of the Borrower at such time. The LC Exposure of any Lender shall be its
Pro Rata Share of the total LC Exposure at such time. For all purposes of this
Agreement, if on any date of determination a Letter of Credit has expired by its
terms but any amount may still be drawn thereunder by reason of the operation of
Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding”
in the amount so remaining available to be drawn.
 
       “Lenders” means the Banks and each Eligible Assignee that shall become a
party hereto pursuant to Section 8.07.
 
       “Letter of Credit” shall mean any letter of credit issued pursuant to
Section 2.15 by an Issuing Bank for the account of the Borrower.
 
       “Liability” of any Person means any indebtedness, liability or obligation
of or binding upon, such Person or any of its assets, of any kind, nature or
description, direct or indirect, absolute or contingent, due or not due,
contractual or tortious, liquidated or unliquidated, whether arising under
contract, applicable law, or otherwise, whether now existing or hereafter
arising.
 
       “Majority Lenders” means at any time Lenders holding more than 50% of the
aggregate Outstanding Credits, or, if no Outstanding Credits are then
outstanding, Lenders having more than 50% of the Commitments (provided that, for
purposes hereof, neither the Borrower, nor any of its Affiliates, if a Lender,
shall be included in (i) the Lenders holding such amount of the Advances or
having such amount of the Commitments or (ii) determining the aggregate unpaid
principal amount of the Advances or the total Commitments).
 
       “Mandatorily Redeemable Stock” means, with respect to any Person, any
share of such Person’s capital stock to the extent that it is (i) redeemable,
payable or required to be purchased or otherwise retired or extinguished, or
convertible into any Indebtedness or other Liability of such Person, (A) at a
fixed or determinable date, whether by operation of a sinking fund or otherwise,
(B) at the option of any Person other than such Person or (C) upon the
occurrence of a condition not solely within the control of such Person, such as
a redemption required to be made out of future earnings or (ii) convertible into
Mandatorily Redeemable Stock.
 
       “Moody’s” means Moody’s Investors Service, Inc., or any successor
thereto.
 
       “Moody’s Rating” means, on any date of determination, the debt rating
most recently announced by Moody’s with respect to the Borrower’s long-term
senior unsecured non-credit-enhanced debt.
 
       “Mortgage” means the Mortgage and Deed of Trust, dated as of May 1, 1940,
from CP&L to The Bank of New York (formerly Irving Trust Company) and to
Frederick G. Herbst (W.T. Cunningham, successor), as modified, amended or
supplemented from time to time.
 
 
 
 

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11
 
       “Multiemployer Plan” means a “multiemployer plan” as defined in Section
4001(a)(3) of ERISA.
 
       “Notice of Borrowing” has the meaning specified in Section 2.02(a).
 
       “Notice of Conversion” has the meaning specified in Section 2.09.
 
       “OECD” means the Organization for Economic Cooperation and Development.
 
       “One-Month LIBOR Rate” has the meaning specified in the definition of
“Base Rate”.
 
       “Outstanding Credits” means, on any date of determination, an amount
equal to the sum of (i) the aggregate principal amount of all Advances
outstanding on such date plus (ii) the LC Exposure on such date. The
“Outstanding Credits” of any Lender means, on any date of determination, an
amount equal to the sum of (A) the aggregate principal amount of all outstanding
Advances made by such lender plus (B) such Lender’s LC Exposure on such date.
 
       “Patriot Act” means the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001), as in effect from time to time.
 
       “Person” means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a foreign state or
political subdivision thereof or any agency of such state or subdivision.
 
       “Plan” means an employee benefit plan (other than a Multiemployer Plan)
maintained for employees of the Borrower or any of its Affiliates and covered by
Title IV of ERISA.
 
       “Prior Credit Agreement” has the meaning specified in the recitals.
 
       “Pro Rata Share” shall mean, with respect to any Commitment of any Lender
at any time, a percentage, the numerator of which shall be such Lender’s
Commitment (or if the Commitments have been terminated or expired or the
Outstanding Credits have been declared to be due and payable, the Outstanding
Credits made by such Lender), and the denominator of which shall be the sum of
the Commitments of all Lenders (or if the Commitments have been terminated or
expired or the Outstanding Credits have been declared to be due and payable, the
Outstanding Credits made by all Lenders).
 
       “Portfolio Transaction” means the sale of Florida Progress’s and CP&L’s
portfolio of affordable housing investments.
 
       “Register” has the meaning specified in Section 8.07(c).
 
       “Responsible Officer” means the President, any Vice President, the Chief
Financial Officer, the Treasurer, the Controller or any Assistant Treasurer of
the Borrower the signatures of whom, in each case, have been certified to the
Administrative Agent and each other Lender pursuant to Section 3.01(c), or in a
certificate delivered to the Administrative Agent replacing or amending such
certificate. Each Lender may conclusively rely on each certificate so delivered
 
 
 
 

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12
 
until it shall have received a copy of a certificate from the Secretary or an
Assistant Secretary of the Borrower amending, canceling or replacing such
certificate.
 
       “S&P” means Standard & Poor’s Ratings Group or any successor thereto.
 
       “S&P Rating” means, on any date of determination, the debt rating most
recently announced by S&P with respect to the Borrower’s long-term senior
unsecured non-credit-enhanced debt.
 
       “Significant Subsidiary” means CP&L, Florida Power and any other
Subsidiary of the Borrower that at any time constitutes a “significant
subsidiary”, as such term is defined in Regulation S-X of the Securities and
Exchange Commission as in effect on the date hereof (17 C.F.R. Part 210).
 
       “Solvent” means, with respect to any person as of a particular date, that
on such date such person is able to pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the normal course
of business. In computing the amount of contingent liabilities at any time, it
is intended that such liabilities will be computed as the amount which, in light
of all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
 
       “Subsidiary” means, with respect to any Person, any corporation or
unincorporated entity of which more than 50% of the outstanding capital stock
(or comparable interest) having ordinary voting power (irrespective of whether
at the time capital stock (or comparable interest) of any other class or classes
of such corporation or entity shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned by
said Person (whether directly or through one or more other Subsidiaries).
 
       “Syndication Agent” means JPMorgan Chase Bank, N.A.
 
       “Synthetic Lease” means a lease transaction under which the parties
intend that (i) the lease will be treated as an “operating lease” by the lessee
pursuant to Statement of Financial Accounting Standards No. 13, as amended, and
(ii) the lessee will be entitled to various tax and other benefits ordinarily
available to owners (as opposed to lessees) of like property.
 
       “Synthetic Lease Obligations” means, with respect to any Person, the sum
of (i) all remaining rental obligations of such Person as lessee under Synthetic
Leases that are attributable to principal and, without duplication, and (ii) all
rental and purchase price payment obligations of such Person under such
Synthetic Leases assuming such Person exercises the option to purchase the lease
property at the end of the lease term.
 
       “Termination Date” means the earliest to occur of (i) May 3, 2013, (ii)
the date of termination in whole of the Commitments pursuant to Section 2.04 or
6.01 and (iii) the Second Effective Date, as defined in the Credit Agreement,
dated as of November 18, 2011, among Duke Energy Corporation, as a borrower, the
other borrowers party thereto, the lenders party thereto, Wells Fargo Bank,
National Association, as administrative agent, and the other agents party
thereto.
 
 
 
 

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13
 
       “Termination Event” means (i) a Reportable Event described in Section
4043 of ERISA and the regulations issued thereunder (other than a Reportable
Event not subject to the provision for 30-day notice to the Pension Benefit
Guaranty Corporation under such regulations), or (ii) the withdrawal of the
Borrower or any of its Affiliates from a Plan during a plan year in which it was
a “substantial employer” as defined in Section 4001(a)(2) of ERISA, or (iii) the
filing of a notice of intent to terminate a Plan or the treatment of a Plan
amendment as a termination under Section 4041 of ERISA, or (iv) the institution
of proceedings to terminate a Plan by the Pension Benefit Guaranty Corporation,
or (v) any other event or condition that might constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan.
 
       “Total Capitalization” means the sum of the value of the common stock,
retained earnings, and preferred and preference stock of the Borrower (in each
case, determined in accordance with GAAP), plus Consolidated Indebtedness of the
Borrower.
 
    SECTION 1.02. Computation of Time Periods.
 
    In this Agreement in the computation of periods of time from a specified
date to a later specified date, the word “from” means “from and including” and
the words “to” and “until” each means “to but excluding”.
 
    SECTION 1.03. Accounting Terms.
 
    All accounting terms not specifically defined herein shall be construed in
accordance with GAAP.
 
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
 
    SECTION 2.01. The Advances.
 
    (a)   Each Lender severally agrees, on the terms and conditions hereinafter
set forth, to make Advances to the Borrower from time to time on any Business
Day during the period from the date hereof to and including the day prior to the
Termination Date, in an aggregate amount outstanding not to exceed at any time
the amount set forth opposite such Lender’s name on Schedule I hereto or, if
such Lender has entered into any Assignment and Acceptance, set forth for such
Lender in the Register maintained by the Administrative Agent pursuant to
Section 8.07(c), as such amount may be reduced pursuant to Section 2.04 (such
Lender’s “Commitment”), and each Issuing Bank agrees to issue Letters of Credit
for the account of the Borrower from time to time on any Business Day during the
period from the date hereof until the tenth Business Day prior to the
Termination Date in an aggregate amount not to exceed the amount of such Issuing
Bank’s LC Commitment. Each Borrowing shall be in an aggregate amount not less
than $10,000,000 or an integral multiple of $1,000,000 in excess thereof and
shall consist of Advances of the same Type made on the same day by the Lenders
ratably according to their respective Commitments. Until the day prior to the
Termination Date, within the limits of each Lender’s Commitment, the Borrower
may from time to time borrow, repay pursuant to Section 2.05 or prepay pursuant
to Section 2.10(b) and reborrow under this Section
 
 
 
 

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2.01. In no event shall the Borrower be entitled to request or receive any
Extension of Credit that would cause the aggregate Outstanding Credits to exceed
the Commitments.
 
    (b)    Any Lender may request that the Advances made by it be evidenced by
one or more promissory notes. In such event, the Borrower shall prepare, execute
and deliver to such Lender one or more promissory notes payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its assignees)
and in a form approved by the Administrative Agent.
 
    SECTION 2.02. Making the Advances.
 
    (a)   Each Borrowing shall be made on notice, given not later than 11:00
A.M. (New York City time) on the day of such proposed Borrowing, in the case of
a Borrowing comprised of Base Rate Advances, or on the third Business Day prior
to the date of the proposed Borrowing, in the case of a Borrowing comprised of
Eurodollar Rate Advances, by the Borrower to the Administrative Agent, which
shall give to each Lender prompt notice thereof by telecopier. Each such notice
of a Borrowing (a “Notice of Borrowing”) shall be by telecopier, confirmed
promptly in writing, in substantially the form of Exhibit A-1 hereto, specifying
therein the requested (i) date of such Borrowing, (ii) Type of Advances
comprising such Borrowing, (iii) aggregate amount of such Borrowing, and (iv) in
the case of a Borrowing comprised of Eurodollar Rate Advances, the Interest
Period for each such Advance. In the case of a proposed Borrowing comprised of
Eurodollar Rate Advances, the Administrative Agent shall promptly notify each
Lender of the applicable interest rate under Section 2.06(b).  Each Lender
shall, before 1:00 P.M. (New York City time) on the date of such Borrowing, make
available for the account of its Applicable Lending Office to the Administrative
Agent at its address referred to in Section 8.02, in same day funds, such
Lender’s ratable portion of such Borrowing. After the Administrative Agent’s
receipt of such funds and upon fulfillment of the applicable conditions set
forth in Article III, the Administrative Agent will make such funds available to
the Borrower at the Administrative Agent’s aforesaid address.
 
    (b)   Each Notice of Borrowing shall be irrevocable and binding on the
Borrower and, in respect of any Borrowing comprised of Eurodollar Rate Advances,
the Borrower shall indemnify each Lender against any loss or expense incurred by
such Lender as a result of any failure by the Borrower to fulfill on or before
the date specified for such Borrowing the applicable conditions set forth in
Article III, including, without limitation, any loss (including loss of
anticipated profits) or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the
Advance to be made by such Lender as part of such Borrowing when such Advance,
as a result of such failure, is not made on such date.
 
    (c)    Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing (in the case of a Eurodollar
Borrowing) or the time of any Borrowing (in the case of a Base Rate Borrowing)
date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender’s ratable portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
subsection (a) of this Section 2.02 and the Administrative Agent may, in
reliance upon such assumption, make
 
 
 
 

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15
 
available to the Borrower on such date a corresponding amount. If and to the
extent such Lender shall not have so made such ratable portion available to the
Administrative Agent, such Lender and the Borrower severally agree to repay to
the Administrative Agent (without duplication), forthwith on demand, such
corresponding amount, together with interest thereon for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent, at (x) in the case of the Borrower, the
interest rate applicable at the time to Advances comprising such Borrowing and
(y) in the case of such Lender, the Federal Funds Rate. If such Lender shall
repay to the Administrative Agent such corresponding amount, such amount so
repaid shall constitute such Lender’s Advance as part of such Borrowing for
purposes of this Agreement.
 
    (d)   The failure of any Lender to make the Advance to be made by it as part
of any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance on the date of such Borrowing, but no Lender shall
be responsible for the failure of any other Lender to make the Advance to be
made by such other Lender on the date of any Borrowing.
 
    (e)   If, for any reason, a Borrowing is not made on the date specified in
any Notice of Borrowing, the Administrative Agent hereby agrees to repay to each
Lender the amount, if any, that such Lender has made available to the
Administrative Agent as such Lender’s ratable portion of such Borrowing,
together with interest thereon for each day from the date such amount is made
available to the Administrative Agent until the date such amount is repaid to
such Lender, at the Federal Funds Rate.
 
    SECTION 2.03. Fees.
 
    (a)   The Borrower agrees to pay to the Administrative Agent for the account
of each Lender a facility fee on each Lender’s Commitment, irrespective of
usage, (i) from the date hereof, in the case of each Bank, and (ii) from the
effective date specified in the Assignment and Acceptance pursuant to which it
became a Lender, in the case of each other Lender, until the Termination Date at
the rate per annum equal to the Facility Fee Percentage from time to time in
effect. Such fee shall be calculated on the basis of actual number of days
elapsed in a year of 365 or 366 days. Such fee shall be payable quarterly in
arrears on the last day of each March, June, September and December during the
term of such Lender’s Commitment, and on the Termination Date.
 
    (b)   The Borrower agrees to pay to the Administrative Agent an agency fee
in such amounts and payable at such times, as shall be agreed to between them in
writing.
 
    (c)   The Borrower agrees to pay to the Administrative Agent for the account
of each Lender a letter of credit fee at a rate per annum equal to the
Applicable Margin for Eurodollar Rate Advances in effect from time to time on
the average daily amount of each such Lender’s LC Exposure from the date hereof
until the later to occur of the Termination Date and the date on which there is
no amount remaining available to be drawn under any Letter of Credit. Such fee
shall be calculated on the basis of actual number of days elapsed in a year of
360 days. Such fee shall be payable quarterly in arrears on the last day of each
March, June, September and
 
 
 
 

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16
 
December and on the later to occur of the Termination Date and the date on which
there is no amount remaining available to be drawn under any Letter of Credit.
 
    (d)   The Borrower agrees to pay to each Issuing Bank for its own account a
fronting fee and such other customary fees and expenses relating to the
issuance, amendment, and drawings under the Letters of Credit, in such amounts
and payable at such times as shall be agreed between them in writing.
 
    SECTION 2.04. Reduction of the Commitments.
 
    The Borrower shall have the right, upon at least three Business Days’ notice
to the Administrative Agent, irrevocably to terminate in whole or reduce ratably
in part the unused portions of the respective Commitments of the Lenders;
provided that the aggregate amount of the Commitments of the Lenders shall not
be reduced to an amount that is less than the aggregate principal amount of the
Outstanding Credits; and provided, further, that each partial reduction of
Commitments shall be in the aggregate amount of $10,000,000 or an integral
multiple of $1,000,000 in excess thereof. Once terminated or reduced, the
Commitments may not be reinstated.
 
    SECTION 2.05. Repayment of Advances.
 
    The Borrower shall repay the principal amount of each Advance made by each
Lender on the Termination Date.
 
    SECTION 2.06. Interest on Advances.
 
    The Borrower shall pay interest on the unpaid principal amount of each
Advance made by each Lender from the date of such Advance until such principal
amount shall be paid in full, at the following rates per annum:
 
    (a)   Base Rate Advances. If such Advance is a Base Rate Advance, a rate per
annum equal at all times to the Base Rate in effect from time to time, plus the
Applicable Margin, payable quarterly in arrears on the last day of each March,
June, September and December and on the date such Base Rate Advance shall be
paid in full; provided, however, that if and for so long as an Event of Default
has occurred and is continuing, interest on the unpaid principal amount of each
Base Rate Advance shall be payable on demand.
 
    (b)   Eurodollar Rate Advances. If such Advance is a Eurodollar Rate
Advance, a rate per annum equal at all times during each Interest Period for
such Advance to the sum of the Eurodollar Rate for such Interest Period, plus
the Applicable Margin for such Eurodollar Rate Advance in effect from time to
time, payable on the last day of such Interest Period and, if such Interest
Period for such Advance has a duration of more than three months, on each day
that occurs during such Interest Period every three months from the first day of
such Interest Period; provided, however, that if and for so long as an Event of
Default has occurred and is continuing, interest on the unpaid amount of each
Eurodollar Rate Advance shall be payable on demand.
 
 
 
 

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17
 
    SECTION 2.07. Additional Interest on Eurodollar Rate Advances.
 
    The Borrower shall pay to each Lender additional interest on the unpaid
principal amount of each Eurodollar Rate Advance of such Lender, from the date
of such Advance until such principal amount is paid in full, at an interest rate
per annum equal at all times to the remainder obtained by subtracting (i) the
Eurodollar Rate for the Interest Period for such Advance from (ii) the rate
obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus
the Eurodollar Rate Reserve Percentage of such Lender for such Interest Period,
payable on each date on which interest is payable on such Advance. All claims
for such additional interest shall be submitted by such Lender to the Borrower
(with a copy to the Administrative Agent) as soon as is reasonably possible and
in all events within 90 days after the first day of such Interest Period;
provided, however, that if a claim is not submitted to the Borrower within such
90-day period, such Lender shall thereby waive its claim to such additional
interest incurred during such 90-day period but not to any such additional
interest incurred thereafter. A certificate as to the amount of such additional
interest, submitted to the Borrower (with a copy to the Administrative Agent) by
such Lender, shall be conclusive and binding for all purposes, absent manifest
error.
 
    SECTION 2.08. Interest Rate Determination.
 
    (a)   The Administrative Agent shall give prompt notice to the Borrower and
the Lenders of the applicable interest rate determined by the Administrative
Agent for purposes of Section 2.06(a) or (b).
 
    (b)   If, with respect to any Eurodollar Rate Advances, the Majority Lenders
notify the Administrative Agent that the Eurodollar Rate for any Interest Period
for such Advances will not adequately reflect the cost to such Majority Lenders
of making, funding or maintaining their respective Eurodollar Rate Advances for
such Interest Period, the Administrative Agent shall forthwith so notify the
Borrower and the Lenders, whereupon
 

 (i)     each Eurodollar Rate Advance will automatically, on the last day of the
then existing Interest Period therefor, Convert into a Base Rate Advance, and  
   (ii)    the obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Administrative Agent shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist.

 
    (c)   If the Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions
contained in the definition of “Interest Period” in Section 1.01, the
Administrative Agent will forthwith so notify the Borrower and the Lenders and
such Advances will automatically, on the last day of the then existing Interest
Period therefor, Convert into Base Rate Advances.
 
    (d)   On the date on which the aggregate unpaid principal amount of Advances
comprising any Borrowing shall be reduced, by prepayment or otherwise, to less
than $20,000,000, such Advances shall, if they are Advances of a Type other than
Base Rate Advances, automatically Convert into Base Rate Advances, and on and
after such date the right of the Borrower to Convert such Advances into Advances
of a Type other than Base Rate
 
 
 
 

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18
 
Advances shall terminate; provided, however, that if and so long as each such
Advance shall be of the same Type and have the same Interest Period as Advances
comprising another Borrowing or other Borrowings, and the aggregate unpaid
principal amount of all such Advances shall equal or exceed $20,000,000, the
Borrower shall have the right to continue all such Advances as, or to Convert
all such Advances into, Advances of such Type having such Interest Period.
 
    (e)   If an Event of Default has occurred and is continuing, (i) each
Eurodollar Rate Advance will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance and (ii) the
obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended.
 
    SECTION 2.09. Voluntary Conversion of Advances.
 
    The Borrower may, on any Business Day prior to the Termination Date, upon
notice given to the Administrative Agent not later than 11:00 A.M. (New York
City time) on the third Business Day prior to the date of the proposed
Conversion, in the case of any proposed Conversion into Eurodollar Rate
Advances, and on the date of the proposed Conversion, in the case of any
proposed Conversion into Base Rate Advances, and subject to the provisions of
Sections 2.08 and 2.12, Convert all Advances of one Type comprising the same
Borrowing into Advances of another Type; provided, however, that any Conversion
of any Eurodollar Rate Advances into Advances of another Type shall be made on,
and only on, the last day of an Interest Period for such Eurodollar Rate
Advances, except as otherwise provided in Section 2.12. Each such notice of a
Conversion (a “Notice of Conversion”) shall be by telecopier, confirmed promptly
in writing, in substantially the form of Exhibit A-2 hereto and shall, within
the restrictions specified above, specify (i) the date of such Conversion, (ii)
the aggregate amount of, Type of, and Interest Periods applicable to, the
Advances to be Converted, (iii) the Type of Advance to which such Advances (or
portions thereof) are proposed to be Converted, and (iv) if such Conversion is
into or with respect to Eurodollar Rate Advances, the duration of the Interest
Period for each such Advance.
 
    SECTION 2.10. Prepayments of Advances.
 
    (a)    The Borrower shall have no right to prepay any principal amount of
any Advances other than as provided in subsection (b) below.
 
    (b)   The Borrower may, upon notice given to the Administrative Agent at
least two Business Days prior to the proposed prepayment, in the case of any
Eurodollar Rate Advance, and on the date of the proposed prepayment, in the case
of any Base Rate Advance, and if such notice is given the Borrower shall, prepay
the outstanding principal amounts of the Advances comprising the same Borrowing
in whole or ratably in part, together with accrued interest to the date of such
prepayment on the amount prepaid and, in the case of any Eurodollar Rate
Advance, any amount payable pursuant to Section 8.04(b); provided, however, that
(i) each partial prepayment shall be in an aggregate principal amount not less
than $5,000,000 and in integral multiples of $1,000,000 in excess thereof and
(ii) in the case of any such prepayment of a Eurodollar Rate Advance, the
Borrower shall be obligated to reimburse the Lenders in respect thereof pursuant
to Section 8.04(b) on the date of such prepayment.
 
 
 
 

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19
 
    SECTION 2.11. Increased Costs.
 
    (a)   If, due to either (i) the introduction of or any change (other than
any change by way of imposition or increase of reserve requirements, in the case
of Eurodollar Rate Advances, included in the Eurodollar Rate Reserve
Percentage), in or in the interpretation of any law or regulation, or (ii) the
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) (including, in
each case, all requests, rules, guidelines or directives issued in connection
with the Dodd-Frank Wall Street Reform and Consumer Protection Act and all
requests, rules, guidelines or directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Regulations and
Supervisory Practices (or any successor or similar authority) or the United
States financial regulatory authorities, regardless of the date adopted, issued,
promulgated or implemented), there shall be any increase in the cost to any
Lender of agreeing to make or making, funding or maintaining Eurodollar Rate
Advances or any increase in the cost to such Lender or any Issuing Bank of
participating in or issuing any Letter of Credit, then the Borrower shall from
time to time, upon demand by such Lender or such Issuing Bank (with a copy of
such demand to the Administrative Agent), pay to the Administrative Agent for
the account of such Lender or such Issuing Bank additional amounts sufficient to
reimburse such Lender or such Issuing Bank for such increased cost. All claims
for increased cost shall be submitted by such Lender or such Issuing Bank to the
Borrower (with a copy to the Administrative Agent) as soon as is reasonably
possible and in all events within 90 days after such introduction, such change,
or the beginning of such compliance, the occurrence of which resulted in such
increased cost, and the Borrower shall make such payment within five Business
Days after notice of such claim is received; provided, however, that if a claim
is not submitted to the Borrower within such 90-day period, such Lender or such
Issuing Bank shall thereby waive its claim to such increased cost incurred
during such 90-day period but not to any such increased cost incurred
thereafter. A certificate as to the amount of such increased cost, submitted to
the Borrower (with a copy to the Administrative Agent) by such Lender or such
Issuing Bank, shall be conclusive and binding for all purposes, absent manifest
error.
 
    (b)   If any Lender or any Issuing Bank determines that compliance with any
law or regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) (including all
requests, rules, guidelines or directives concerning capital adequacy issued in
connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act
and all requests, rules, guidelines or directives concerning capital adequacy
promulgated by the Bank for International Settlements, the Basel Committee on
Banking Regulations and Supervisory Practices (or any successor or similar
authority) affects or would affect the amount of capital required or expected to
be maintained by such Lender or such Issuing Bank or any corporation controlling
such Lender or such Issuing Bank and that the amount of such capital is
increased by or based upon the existence of such Lender’s commitment to lend or
participate in Letters of Credit or the obligation of such Issuing Bank to issue
Letters of Credit hereunder and other commitments of this type, then, upon
demand by such Lender or such Issuing Bank (with a copy of such demand to the
Administrative Agent), the Borrower shall immediately pay to the Administrative
Agent for the account of such Lender or such Issuing Bank, from time to time as
specified by such Lender or such Issuing Bank, additional amounts sufficient to
compensate such Lender or Issuing Bank or such corporation in the light of such
circumstances, to the extent that such Lender or such Issuing Bank reasonably
determines such
 
 
 
 

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increase in capital to be allocable to the existence of such Lender’s commitment
to lend or participate in Letters of Credit or the obligation of such Issuing
Bank to issue Letters of Credit hereunder. All claims for such additional
amounts shall be submitted by such Lender or such Issuing Bank (with a copy to
the Administrative Agent) as soon as is reasonably possible and in all events
within 90 days after such determination by such Lender or such Issuing Bank, and
the Borrower shall make such payment within five Business Days after notice of
such claim is received; provided, however, that if a claim is not submitted to
the Borrower within such 90-day period, such Lender or such Issuing Bank shall
thereby waive its claim to such additional amounts incurred during such 90-day
period but not to any such additional amounts incurred thereafter. A certificate
as to such amounts submitted to the Borrower and the Administrative Agent by
such Lender or such Issuing Bank shall be conclusive and binding for all
purposes, absent manifest error.
 
    SECTION 2.12. Illegality.
 
    Notwithstanding any other provision of this Agreement, if any Lender shall
notify the Administrative Agent that the introduction of or any change in or in
the interpretation of any law or regulation makes it unlawful, or any central
bank or other governmental authority asserts that it is unlawful, for such
Lender or its Eurodollar Lending Office to perform its obligations hereunder to
make Eurodollar Rate Advances or to fund or maintain Eurodollar Rate Advances
hereunder, (i) the obligation of the Lenders to make Eurodollar Rate Advances or
to Convert Advances into Eurodollar Rate Advances shall be suspended until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist, and (ii) the Borrower
shall forthwith prepay in full all Eurodollar Rate Advances of all Lenders then
outstanding, together with interest accrued thereon, unless the Borrower, within
five Business Days of notice from the Administrative Agent, Converts all
Eurodollar Rate Advances of all Lenders then outstanding into Advances of
another Type in accordance with Section 2.09.
 
    SECTION 2.13. Payments and Computations.
 
    (a)   The Borrower shall make each payment hereunder, without condition or
deduction for any counterclaim, defense, recoupment or setoff, not later than
11:00 A.M. (New York City time) on the day when due in U.S. dollars to the
Administrative Agent at its address referred to in Section 8.02 in same day
funds. The Administrative Agent will promptly thereafter cause to be distributed
like funds relating to the payment of principal or interest or fees (other than
pursuant to Section 2.02(c), 2.07 or 2.11) ratably to the Lenders for the
account of their respective Applicable Lending Offices, and like funds relating
to the payment of any other amount payable to any Issuing Bank or to any Lender
to such Issuing Bank or to such Lender for the account of its Applicable Lending
Office, in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to Section 8.07(d),
from and after the effective date specified in such Assignment and Acceptance,
the Administrative Agent shall make all payments hereunder in respect of the
interest assigned thereby to the Lender assignee thereunder, and the parties to
such Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
 
 
 
 

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    (b)   All computations of interest based on the base rate referred to in
clause (i) of the definition of Base Rate shall be made by the Administrative
Agent on the basis of a year of 365 or 366 days, as the case may be, and all
computations of interest based on the Eurodollar Rate, the One-Month LIBOR Rate
or Federal Funds Rate or of fees payable hereunder shall be made by the
Administrative Agent, and all computations of interest pursuant to Section 2.07
shall be made by a Lender on the basis of a year of 360 days, in each case for
the actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or fees are payable. Each
determination by the Administrative Agent (or, in the case of Section 2.07, by a
Lender) of an interest rate hereunder shall be conclusive and binding for all
purposes.
 
   (c)   Whenever any payment hereunder shall be stated to be due on a day other
than a Business Day, such payment shall be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of payment of interest or fees, as the case may be; provided,
however, that if such extension would cause payment of interest on or principal
of Eurodollar Rate Advances to be made in the next following calendar month,
such payment shall be made on the next preceding Business Day.
 
    (d)   Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Lenders hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Lender on such due date an amount
equal to the amount then due such Lender. If and to the extent the Borrower
shall not have so made such payment in full to the Administrative Agent, each
Lender shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Lender, together with interest thereon for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Administrative Agent at the Federal Funds Rate.
 
    SECTION 2.14. Sharing of Payments, Etc.
 
    (a)   If any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) on
account of the Advances made by it (other than pursuant to Section 2.02(c), 2.07
or 2.11) in excess of its ratable share of payments on account of the Extensions
of Credit obtained by all the Lenders, such Lender shall forthwith purchase from
the other Lenders such participation in the Extensions of Credit made by them as
shall be necessary to cause such purchasing Lender to share the excess payment
ratably with each of them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery, together
with an amount equal to such Lender’s ratable share (according to the proportion
of (i) the amount of such Lender’s required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so
recovered. The Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to this Section 2.14 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-
 
 
 
 

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22
 
off) with respect to such participation as fully as if such Lender were the
direct creditor of the Borrower in the amount of such participation.
 
    (b)    If any Lender shall fail to make any payment required to be made by
it pursuant to Section 2.02(a) or 2.15(e), then the Administrative Agent may, in
its discretion and notwithstanding any contrary provision hereof, (i) apply any
amounts thereafter received by the Administrative Agent for the account of such
Lender for the benefit of the Administrative Agent to satisfy such Lender’s
obligations under such Section until all such unsatisfied obligations are fully
paid, and/or (ii) hold any such amounts in a segregated account as cash
collateral for, and application to, any future funding obligations of such
Lender under any such Section, in the case of each of clauses (i) and (ii)
above, in any order as determined by the Administrative Agent in its discretion.
 
    SECTION 2.15. Letters of Credit.
 
    (a)   From time to time and on any Business Day during the period from the
date hereof to the tenth Business Day preceding the Termination Date, each
Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to
subsection (d) of this Section 2.15, agrees to issue, at the request of the
Borrower, Letters of Credit for the account of the Borrower on the terms and
conditions hereinafter set forth; provided, that (i) each Letter of Credit shall
expire on the earlier of (A) the date one year after the date of issuance of
such Letter of Credit (or in the case of any renewal or extension thereof, one
year after such renewal or extension) and (B) the date that is five Business
Days prior to the Termination Date; (ii) each Letter of Credit shall be in a
stated amount of at least $25,000; and (iii) the Borrower may not request any
Extension of Credit relating to a Letter of Credit if, after giving effect to
such Extension of Credit, (X) the aggregate Outstanding Credits would exceed the
Commitments or (Y) that portion of the LC Exposure arising from Letters of
Credit issued by such Issuing Bank and from LC Disbursements made by such
Issuing Bank would exceed the amount of such Issuing Bank’s LC Commitment. Upon
each Extension of Credit relating to a Letter of Credit issued by any Issuing
Bank, each Lender shall be deemed, and hereby irrevocably and unconditionally
agrees, to purchase from such Issuing Bank without recourse a participation in
such Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate
amount available to be drawn under such Letter of Credit. Each Letter of Credit
shall utilize the Commitment of each Lender by an amount equal to the amount of
such participation.
 
    (b)   To request an Extension of Credit relating to a Letter of Credit, the
Borrower shall give an Issuing Bank and the Administrative Agent irrevocable
written notice at least three Business Days prior to the requested date of such
Extension of Credit specifying the date (which shall be a Business Day) on which
such Extension of Credit is to occur, the expiration date of such Letter of
Credit, the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare,
amend, renew or extend such Letter of Credit. In addition to the satisfaction of
the conditions in Section 3.02, such Extension of Credit will be subject to the
further conditions that such Letter of Credit shall be in such form and contain
such terms as such Issuing Bank shall approve and that the Borrower shall have
executed and delivered any additional applications, agreements and instruments
relating to such Extension of Credit as such Issuing Bank shall reasonably
require; provided, that in the
 
 
 
 

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event of any conflict between such applications, agreements or instruments and
this Agreement, the terms of this Agreement shall control.
 
    (c)    At least two Business Days prior to each Extension of Credit relating
to a Letter of Credit, the applicable Issuing Bank will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent
has received the notice related thereto and, if it has not, such Issuing Bank
will provide the Administrative Agent with a copy thereof. Unless such Issuing
Bank has received notice from the Administrative Agent on or before the Business
Day immediately preceding the date on which such Issuing Bank is to make the
requested Extension of Credit relating to such Letter of Credit directing such
Issuing Bank not to make such Extension of Credit because such Extension of
Credit is not then permitted hereunder because of the limitations set forth in
subsection (a) of this Section 2.15, or that one or more conditions specified in
Section 3.02 are not then satisfied, then, subject to the terms and conditions
hereof, such Issuing Bank shall, on the requested date, make such Extension of
Credit in accordance with such Issuing Bank’s usual and customary business
practices.
 
    (d)   Each Issuing Bank shall examine all documents purporting to represent
a demand for payment under a Letter of Credit promptly following its receipt
thereof.  Such Issuing Bank shall notify the Borrower and the Administrative
Agent (i) of such demand for payment and (ii) whether such Issuing Bank has made
or will make a LC Disbursement thereunder; provided, that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse such Issuing Bank and the Lenders with respect to such LC
Disbursement.The Borrower shall be irrevocably and unconditionally obligated to
reimburse such Issuing Bank for any LC Disbursements paid by such Issuing Bank
in respect of such drawing, without presentment, demand or other formalities of
any kind.  Unless the Borrower shall have notified such Issuing Bank and the
Administrative Agent prior to 11:00 A.M. on the Business Day immediately prior
to the date on which such drawing is honored that the Borrower intends to
reimburse such Issuing Bank for the amount of such drawing in funds other than
from the proceeds of Advances, the Borrower shall be deemed to have timely given
a Notice of Borrowing to the Administrative Agent requesting a Borrowing
compromising Base Rate Advances on the date on which such drawing is honored in
the amount payable to such Issuing Bank in respect of such LC Disbursement;
provided, that for purposes solely of such Borrowing, the conditions precedents
set forth in Section 3.02 hereof shall not be applicable. The Administrative
Agent shall notify the Lenders of such Borrowing in accordance with Section
2.03(a), and each Lender shall make the proceeds of its Base Rate Advance
included in such Borrowing available to the Administrative Agent for the account
of such Issuing Bank in accordance with Section 2.03(a). The proceeds of such
Borrowing shall be applied directly by the Administrative Agent to reimburse
such Issuing Bank for such LC Disbursement.
 
    (e)   If for any reason a Borrowing may not be (as determined in the sole
discretion of the Administrative Agent), or is not, made in accordance with the
foregoing provisions and the Borrower has not otherwise reimbursed an Issuing
Bank for an LC Disbursement, then each Lender shall be obligated to fund the
participation that such Lender purchased pursuant to subsection (a) in an amount
equal to its Pro Rata Share of such LC Disbursement on and as of the date on
which such Borrowing should have occurred. Each Lender’s obligation to fund its
participation shall be absolute and unconditional and shall not be affected by
any circumstance, including without limitation (i) any setoff, counterclaim,
recoupment, defense or other right that
 
 
 
 

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such Lender or any other Person may have against any Issuing Bank or any other
Person for any reason whatsoever, (ii) the existence of an Event of Default or
the termination of the Commitments, (iii) any adverse change in the condition
(financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any
breach of this Agreement by the Borrower or any other Lender, (v) any amendment,
renewal or extension of any Letter of Credit or (vi) any other circumstance,
happening or event whatsoever, whether or not similar to any of the
foregoing.  On the date that such participation is required to be funded, each
Lender shall promptly transfer, in immediately available funds, the amount of
its participation to the Administrative Agent for the account of such Issuing
Bank. Whenever, at any time after such Issuing Bank has received from any such
Lender the funds for its participation in a LC Disbursement, such Issuing Bank
(or the Administrative Agent on its behalf) receives any payment on account
thereof from the Borrower, the Administrative Agent or such Issuing Bank, as the
case may be, will distribute to such Lender its Pro Rata Share of such payment;
provided, that if such payment is required to be returned for any reason to the
Borrower or to a trustee, receiver, liquidator, custodian or similar official in
any bankruptcy proceeding, such Lender will return to the Administrative Agent
or such Issuing Bank any portion thereof previously distributed by the
Administrative Agent or such Issuing Bank to it.
 
    (f)   To the extent that any Lender shall fail to pay when due any amount
required to be paid pursuant to subsection (d) of this Section 2.15, such Lender
shall pay to the applicable Issuing Bank (through the Administrative Agent)
interest on such amount from the date such amount became due and payable to the
date such payment is made at a rate per annum equal to the Federal Funds Rate.
 
    (g)   If any Event of Default shall occur and be continuing, on the Business
Day that the Borrower receives notice from the Administrative Agent or the
Majority Lenders demanding the deposit of cash collateral pursuant to this
paragraph, the Borrower shall deposit in an account with the Administrative
Agent, in the name of the Administrative Agent and for the benefit of each
Issuing Bank and the Lenders, an amount in cash equal to the LC Exposure as of
such date plus any accrued and unpaid fees thereon; provided, that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
notice of any kind, upon the occurrence of any Event of Default described in
subsection (e) of Section 6.01. Such deposit shall be held by the Administrative
Agent as collateral for the payment and performance of the obligations of the
Borrower under this Agreement. The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account. The Borrower agrees to execute any documents and/or certificates to
effectuate the intent of this subsection.  Other than any interest earned on the
investment of such deposits, which investments shall be made at the option and
sole discretion of the Administrative Agent and at the Borrower’s risk and
expense, such deposits shall not bear interest.  Interest and profits, if any,
on such investments shall accumulate in such account. Moneys in such account
shall be applied by the Administrative Agent to reimburse each Issuing Bank for
LC Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrower for the LC Exposure at such time; or, if the maturity of the
Advances has been accelerated, with the consent of the Majority Lenders, be
applied to satisfy other obligations of the Borrower under this Agreement. If
the Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent not
so applied as
 
 
 
 

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25
 
aforesaid) shall be returned to the Borrower promptly after all Events of
Default have been cured or waived.
 
    (h)   Promptly following the end of each fiscal quarter of the Borrower,
each Issuing Bank shall deliver (through the Administrative Agent) to each
Lender and the Borrower a report describing the Letters of Credit outstanding
and the LC Exposure relating to such Issuing Bank at the end of such fiscal
quarter. Upon the request of any Lender from time to time, each Issuing Bank
shall deliver to such Lender any other information reasonably requested by such
Lender with respect to each Letter of Credit then outstanding.
 
    (i)   The Borrower’s obligation to reimburse LC Disbursements hereunder
shall be absolute, unconditional and irrevocable and shall be performed strictly
in accordance with the terms of this Agreement under all circumstances
whatsoever and irrespective of any of the following circumstances:
 

 (i)      any lack of validity or enforceability of any Letter of Credit or this
Agreement;      (ii)     the existence of any claim, set-off, defense or other
right that the Borrower or any Subsidiary or Affiliate of the Borrower may have
at any time against a beneficiary or any transferee of any Letter of Credit (or
any Person or entity for which any such beneficiary or transferee may be
acting), any Lender (including any Issuing Bank) or any other Person, whether in
connection with this Agreement or any Letter of Credit or any document related
hereto or thereto or any unrelated transaction;     (iii)    any draft or other
document presented under a Letter of Credit proving to be forged, fraudulent or
invalid in any respect or any statement therein being untrue or inaccurate in
any respect;     (iv)    payment by any Issuing Bank under a Letter of Credit
against presentation of a draft or other document to such Issuing Bank that does
not comply with the terms of such Letter of Credit;     (v)    any other event
or circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Subsection, constitute a legal or
equitable discharge of, or provide a right of setoff against, the Borrower’s
obligations hereunder; or     (vi)    the existence of an Event of Default.

 
Neither the Administrative Agent, any Issuing Bank, any Lender nor any Affiliate
of the foregoing Persons, nor any director, officer, employee, agent of any such
Person or Affiliate shall have any liability or responsibility by reason of or
in connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to above), or any error, omission, interruption, loss or
delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required to
make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the
 
 
 
 

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26
 
control of the Issuing Bank; provided, that the foregoing shall not be construed
to excuse any Issuing Bank from liability to the Borrower to the extent of any
direct damages (as opposed to consequential damages, claims in respect of which
are hereby waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by such Issuing Bank’s failure to
exercise care when determining whether drafts or other documents presented under
a Letter of Credit comply with the terms thereof. The parties hereto expressly
agree, that in the absence of gross negligence or willful misconduct on the part
of such Issuing Bank (as finally determined by a court of competent
jurisdiction), such Issuing Bank shall be deemed to have exercised care in each
such determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
that appear on their face to be in substantial compliance with the terms of a
Letter of Credit, such Issuing Bank may, in its sole discretion, either accept
and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.
 
    (j)   Each Letter of Credit (1) if a standby Letter of Credit, shall be
subject to the rules of the ISP, and (2) if a commercial Letter of Credit shall
be subject to the Uniform Customs and Practices for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500, as the same
may be amended from time to time, and, to the extent not inconsistent therewith,
the governing law of this Agreement set forth in Section 8.09.
 
    (k)   Upon the satisfaction of the conditions precedent set forth in
Sections 3.01 and 3.02, and without any further action on the part of the
Borrower or the applicable Issuing Bank pursuant to Section 2.15(b) or (c), the
letters of credit described in Schedule II shall be deemed to be Letters of
Credit for all purposes under this Agreement.
 
 
ARTICLE III
CONDITIONS PRECEDENT
 
    SECTION 3.01. Conditions Precedent to Effectiveness of Amendment and
Restatement.
 
    The amendment and restatement of the Prior Credit Agreement contemplated
hereby shall not become effective, and the obligation of each Lender to make its
initial Advance after the date hereof and of each Issuing Bank to issue its
initial Letter of Credit after the date hereof shall not become effective,
unless and until all fees due and payable by the Borrower in connection with
this Agreement have been paid and the Administrative Agent shall have received
the following:
 
    (a)   Promissory notes, in a form acceptable to the Administrative Agent,
payable to the order of each Lender that has requested such a note.
 
    (b)   Copies of the resolutions of the Board of Directors of the Borrower
approving this Agreement and all documents evidencing other necessary corporate
action, certified by the Secretary or an Assistant Secretary of the Borrower to
be true and correct, and in full force and effect on and as of the date hereof.
 
 
 
 

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    (c)   A certificate of the Secretary or an Assistant Secretary of the
Borrower, dated as of the date hereof, certifying the names and true signatures
of the officers of the Borrower authorized to sign this Agreement and the other
documents to be delivered hereunder.
 
    (d)   A certificate of a Responsible Officer of the Borrower, dated as of
the date hereof, certifying (i) the accuracy of the representations and
warranties contained herein and (ii) that no event has occurred and is
continuing that constitutes an Event of Default or that would constitute an
Event of Default but for the requirement that notice be given or time elapse, or
both.
 
    (e)   Certified copies of all governmental approvals and authorizations
required to be obtained in connection with the execution, delivery and
performance by the Borrower of this Agreement.
 
    (f)   Certified copies of the Restated Charter and By-Laws of the Borrower.
 
    (g)   Favorable opinions of counsel for the Borrower, substantially in the
forms of Exhibit C-1 and C-2, respectively, hereto and as to such other matters
as any Issuing Bank or any Lender through the Administrative Agent may
reasonably request.
 
    (h)   A favorable opinion of King & Spalding LLP, counsel for the
Administrative Agent, substantially in the form of Exhibit D hereto.
 
    (i)   All Advances made under the Prior Credit Agreement, together with
accrued interest thereon and all accrued facility fees payable under Section
2.03 through the date of effectiveness of this Agreement, shall have been paid
in full.
 
    (j)   The Up-Front Fees, as defined in the Arrangement Fee Letter, dated as
of January 30, 2012, among the Borrower and the Joint Lead Arrangers (as defined
therein), shall have been paid.
 
    SECTION 3.02. Conditions Precedent to Each Borrowing and to the Issuance of
Letters of Credit.
 
    The obligation of each Lender to make an Advance on the occasion of each
Borrowing (including the initial Borrowing) and of each Issuing Bank to make any
Extension of Credit relating to a Letter of Credit shall be subject to the
further conditions precedent that (a) in the case of the making of an Advance,
the Administrative Agent shall have received the written confirmatory Notice of
Borrowing with respect thereto, and (b) on the date of any Extension of Credit,
the following statements shall be true (and the giving of the Notice of
Borrowing or the giving of notice of a requested Letter of Credit pursuant to
Section 2.15(b) and the acceptance by the Borrower of the proceeds of the
Borrowing or the issuance of a requested Letter of Credit related thereto shall
constitute a representation and warranty by the Borrower that on the date of
such Borrowing or issuance of such Letter of Credit such statements are true):
 

 (i)    The representations and warranties contained in Section 4.01 (other than
the last sentence of Section 4.01(e) and Section 4.01(f)) are correct on and as
of the date of such Extension of Credit before and after giving effect to such
Extension of Credit and to the application of the proceeds therefrom, as though
made on and as of such date; and

 
 
 
 

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28
 
 

 (ii)    No event has occurred and is continuing, or would result from such
Extension of Credit or from the application of the proceeds therefrom that would
constitute an Event of Default but for the requirement that notice be given or
time elapse, or both;

 
and (c) the Administrative Agent shall have received such other approvals,
opinions and documents as any Issuing Bank or any Lender through the
Administrative Agent may reasonably request.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES
 
    SECTION 4.01. Representations and Warranties of the Borrower.
 
    The Borrower represents and warrants as follows:
 
    (a)   Each of the Borrower and each Significant Subsidiary is a corporation
duly incorporated, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated and is duly qualified to do business in
and is in good standing under the laws of each other jurisdiction where the
nature of its business or the nature of property owned or used by it makes such
qualification necessary (except where failure to so qualify would not have a
material adverse affect on the financial condition, operations or properties of
the Borrower and its Subsidiaries, taken as a whole).
 
    (b)   The execution, delivery and performance by the Borrower of this
Agreement are within the Borrower’s corporate powers, have been duly authorized
by all necessary corporate action, and do not contravene (i) the Borrower’s
charter or by-laws or (ii) any law or contractual restriction binding on or
affecting the Borrower or its properties.
 
    (c)   No authorization or approval or other action by, and no notice to or
filing with any governmental authority or regulatory body is required for the
due execution, delivery and performance by the Borrower of this Agreement, other
than a notification to the North Carolina Utilities Commission, which has been
timely made.
 
    (d)    This Agreement has been duly executed and delivered by the Borrower
and is, and any promissory note when delivered pursuant to Section 2.01(b) will
be, the legal, valid and binding obligations of the Borrower enforceable against
the Borrower in accordance with their respective terms.
 
    (e)   The Consolidated balance sheets of the Borrower and its Subsidiaries
as of December 31, 2010, and the related Consolidated statements of income and
retained earnings of the Borrower and its Subsidiaries for the fiscal year then
ended, copies of which have been furnished to each Lender and each Issuing Bank,
fairly present the financial condition of the Borrower and its Subsidiaries as
at such date and the results of the operations of the Borrower and its
Subsidiaries for the period ended on such date, all in accordance with generally
accepted accounting principles consistently applied. Since December 31, 2010,
there has been no material
 
 
 
 

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adverse change in the financial condition, operations or properties of the
Borrower and its Subsidiaries, taken as a whole.
 
    (f)   Except as described in the reports and registration statements that
the Borrower, CP&L, FPC and Florida Power have filed with the Securities and
Exchange Commission prior to the date of this Agreement, there is no pending or
threatened action or proceeding affecting the Borrower or any Subsidiary before
any court, governmental agency or arbitrator, that may materially adversely
affect the financial condition, operations or properties of the Borrower and its
Subsidiaries, taken as a whole.
 
    (g)   No proceeds of any Extension of Credit will be used to acquire any
security in any transaction that is subject to Sections 13 and 14 of the
Exchange Act.
 
    (h)   No proceeds of any Extension of Credit will be used in connection with
any Hostile Acquisition.
 
    (i)    The Borrower is not engaged in the business of extending credit for
the purpose of buying or carrying margin stock (within the meaning of Regulation
U issued by the Board of Governors of the Federal Reserve System), and no
proceeds of any Advance will be used to buy or carry any margin stock or to
extend credit to others for the purpose of buying or carrying any margin stock.
 
    (j)   Following application of the proceeds of each Extension of Credit, not
more than 5% of the value of the assets (either of the Borrower only or of the
Borrower and the Subsidiaries on a Consolidated basis) subject to the provisions
of Section 5.02(a) or 5.02(e) will be margin stock (within the meaning of
Regulation U issued by the Board of Governors of the Federal Reserve System).
 
    (k)   No Termination Event has occurred or is reasonably expected to occur
with respect to any Plan, which is reasonably likely to materially adversely
affect the financial condition, operation or properties of the Borrower and its
Subsidiaries, taken as a whole.
 
    (l)   The Borrower is not an “investment company” or a company “controlled”
by an “investment company”, within the meaning of the Investment Company Act of
1940, as amended.
 
    (m)   The Borrower is in substantial compliance with all applicable laws,
rules, regulations and orders of any governmental authority, the noncompliance
with which would materially and adversely affect the business or condition of
the Borrower, such compliance to include, without limitation, substantial
compliance with ERISA, Environmental Laws and paying before the same become
delinquent all material taxes, assessments and governmental charges imposed upon
it or upon its property, except to the extent compliance with any of the
foregoing is then being contested in good faith by appropriate legal
proceedings.
 
    (n)   The written information furnished by the Borrower to the
Administrative Agent, the Issuing Banks and the Lenders in connection with this
Agreement when taken together with reports filed by the Borrower with the
Securities and Exchange Commission under Section 13 of the Exchange Act as of
any date of determination, does not (and all such information furnished in
 
 
 
 

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the future by the Borrower to the Administrative Agent, the Issuing Banks and
the Lenders, when taken together with such reports filed in the future by the
Borrower will not) contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements contained therein not
misleading in light of the circumstances under which made.
 
    (o)   The Borrower is Solvent.
 
ARTICLE V
COVENANTS OF THE BORROWER
 
    SECTION 5.01. Affirmative Covenants.
 
    So long as there shall be any Outstanding Credits, any amount payable by the
Borrower hereunder shall remain unpaid or any Lender shall have any Commitment
hereunder, the Borrower shall, unless the Majority Lenders shall otherwise
consent in writing:
 
    (a)   Compliance with Laws, Etc. Except to the extent contested in good
faith, comply, and cause each Subsidiary to comply, with all applicable laws,
rules, regulations and orders (such compliance to include, without limitation,
ERISA and applicable environmental laws and paying before the same become
delinquent all taxes, assessments and governmental charges imposed upon it or
upon its property), the non-compliance with which would materially adversely
affect the Borrower’s business or credit.
 
    (b)   Preservation of Corporate Existence, Etc. Except as provided in
Section 5.02(d), preserve and maintain, and cause each Significant Subsidiary to
preserve and maintain, its corporate existence, rights (charter and statutory)
and franchises; provided, however, that Borrower may cause FPC to be merged into
Borrower.
 
    (c)   Visitation Rights. At any reasonable time and from time to time,
permit the Administrative Agent or any of the Lenders or any agents or
representatives thereof to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, the Borrower and
any Subsidiary, and to discuss the affairs, finances and accounts of the
Borrower and any Subsidiary with any of their respective officers or directors.
 
    (d)   Keeping of Books. Keep, and cause each Subsidiary to keep, proper
books of record and account, in which full and correct entries shall be made of
all financial transactions and the assets and business of the Borrower and such
Subsidiary in accordance with GAAP.
 
    (e)   Maintenance of Properties, Etc. Maintain and preserve, and cause each
Subsidiary to maintain and preserve, all of its properties that are used or
useful in the conduct of its business in good working order and condition,
ordinary wear and tear excepted.
 
    (f)   Maintenance of Insurance. Maintain, and cause each Subsidiary to
maintain, insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar properties in the
same general areas in which the Borrower or such Subsidiary operates.
 
 
 
 

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    (g)   Taxes. File, and cause each Subsidiary to file, all tax returns
(federal, state and local) required to be filed and paid and pay all taxes shown
thereon to be due, including interest and penalties except, in the case of
taxes, to the extent the Borrower or such Subsidiary is contesting the same in
good faith and by appropriate proceedings and has set aside adequate reserves
for the payment thereof in accordance with generally accepted accounting
principles.
 
    (h)   Material Obligations. Pay, and cause each Significant Subsidiary to
pay, promptly as the same shall become due each material obligation of the
Borrower or such Significant Subsidiary.
 
    (i)   Reporting Requirements. Furnish to each Issuing Bank and the Lenders:
 

 (i)     as soon as available and in any event within 60 days after the end of
each of the first three quarters of each fiscal year of the Borrower, a
Consolidated balance sheet of the Borrower and the Subsidiaries as at the end of
such quarter and Consolidated statements of income and retained earnings of the
Borrower and the Subsidiaries for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter, certified by the
treasurer or the chief financial officer of the Borrower, together with a
certificate of the treasurer or chief financial officer of the Borrower, setting
forth in reasonable detail the calculation of the Borrower’s compliance with
Section 5.01(j) and stating that no Event of Default and no event that, with the
giving of notice or lapse of time or both, would constitute an Event of Default
has occurred and is continuing, or if an Event of Default or such event has
occurred and is continuing, a statement setting forth details of such Event of
Default or event and the action that the Borrower has taken and proposes to take
with respect thereto;      (ii)    as soon as available and in any event within
120 days after the end of each fiscal year of the Borrower, a copy of the annual
report for such year for the Borrower and the Subsidiaries, containing
Consolidated financial statements for such year certified by Deloitte & Touche
or other independent public accountants acceptable to the Majority Lenders,
together with a certificate of the treasurer or chief financial officer of the
Borrower, substantially in the form of Exhibit E hereto, setting forth in
reasonable detail the calculation of the Borrower’s compliance with Section
5.01(j) and stating that no Event of Default and no event that, with the giving
of notice or lapse of time or both, would constitute an Event of Default has
occurred and is continuing, or if an Event of Default or such event has occurred
and is continuing, a statement setting forth details of such Event of Default or
event and the action that the Borrower has taken and proposes to take with
respect thereto;     (iii)    promptly after the sending or filing thereof,
copies of all reports that the Borrower sends to any of its security holders and
copies of all reports and registration statements that the Borrower or any
Subsidiary files with the Securities and Exchange Commission or any national
securities exchange, to the extent not delivered by the Borrower pursuant to
clause (i) or (ii) of this Section 5.01(i);     (iv)    immediately upon any
Responsible Officer’s obtaining knowledge of the occurrence of any Event of
Default or any event that, with the giving of notice or lapse of    

 
 
 
 
 

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  time, or both, would constitute an Event of Default, a statement of the chief
financial officer or treasurer of the Borrower setting forth details of such
Event of Default or event and the action that the Borrower proposes to take with
respect thereto;     (v)    immediately upon obtaining knowledge thereof, notice
of any change in either the Moody’s Rating or the S&P Rating;     (vi)    as
soon as possible and in any event within five days after the commencement
thereof or any adverse determination or development therein, notice of all
actions, suits and proceedings that may adversely affect the Borrower’s ability
to perform its obligations under this Agreement;     (vii)    as soon as
possible and in any event within five days after the occurrence of a Termination
Event, notice of such Termination Event;     (viii)    from time to time upon
the reasonable request of any Lender or any Issuing Bank through the
Administrative Agent, all information necessary for such Lender or Issuing Bank
to comply with the Patriot Act; and     (ix)    such other information
respecting the condition or operations, financial or otherwise, of the Borrower
or any Subsidiary as any Lender or any Issuing Bank through the Administrative
Agent may from time to time reasonably request.

 
    (j)   Indebtedness to Total Capitalization. Maintain, at all times a ratio
of Consolidated Indebtedness of the Borrower and its Subsidiaries to Total
Capitalization of not more than .68:1.0.
 
    (k)   Use of Proceeds. Use the proceeds of each Advance for general
corporate purposes. No proceeds of any Advance will be used to acquire any
equity security of a class that is registered pursuant to Section 12 of the
Exchange Act, or any security in any transaction that is subject to Sections 13
and 14 of the Exchange Act.
 
    (l)   Ownership of Subsidiaries. Own at all times, directly or indirectly
and free and clear of all liens and encumbrances, 100% of the common stock of
CP&L and Florida Power.
 
    SECTION 5.02. Negative Covenants.
 
    So long as there shall be any Outstanding Credits, any other amount payable
by the Borrower hereunder shall remain unpaid or any Lender shall have any
Commitment hereunder, the Borrower will not, without the written consent of the
Majority Lenders:
 
    (a)   Liens, Etc. Create, incur, assume or suffer to exist, or permit any
Subsidiary to create, incur, assume or suffer to exist, any lien, security
interest or other charge or encumbrance, or any other type of preferential
arrangement, upon or with respect to any of its properties, whether now owned or
hereafter acquired, or assign, or permit any Subsidiary to assign, any right to
receive income, in each case to secure any Indebtedness of any Person, other
than (i) liens, mortgages and security interests created by the Mortgage and the
Florida Power Mortgage, (ii) liens and security interests against the fuel used
by the Borrower in its power
 
 
 
 

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generating operations in favor of the suppliers thereof and (iii) liens,
mortgages and security interests securing other Indebtedness of the Borrower and
its Subsidiaries not exceeding $500,000,000 in the aggregate.
 
    (b)   Indebtedness. Create, incur, assume or suffer to exist, or permit any
Subsidiary to create, incur, assume or suffer to exist, any Indebtedness other
than (i) Indebtedness hereunder, (ii) Indebtedness secured by liens and security
interests permitted pursuant to clauses (ii) and (iii) of subsection 5.02(a),
(iii) Indebtedness evidenced by the First Mortgage Bonds and the Florida Power
Mortgage Bonds and (iv) unsecured Indebtedness, including guarantees issued in
connection with the financing of pollution control facilities operated by CP&L,
FPC or Florida Power, guarantees of Indebtedness incurred by any wholly-owned
Subsidiary and guarantees of debt securities issued by any financing Subsidiary
established to secure debt financing in the offshore markets.
 
   (c)   Lease Obligations. Create, incur, assume or suffer to exist, or permit
any Subsidiary to create, incur, assume or suffer to exist, any obligations for
the payment of rental for any property under leases or agreements to lease
having a term of one year or more that would cause the direct or contingent
Consolidated liabilities of the Borrower and its Subsidiaries in respect of all
such obligations payable in any calendar year to exceed 10% of the Consolidated
operating revenues of the Borrower and its Subsidiaries for the immediately
preceding calendar year.
 
    (d)   Mergers, Etc. Merge with or into or consolidate with or into, or
acquire all or substantially all of the assets or securities of, any Person,
unless, in each case, (i) immediately after giving effect thereto, no event
shall occur and be continuing that constitutes an Event of Default or an event
that with the giving of notice or lapse of time, or both, would constitute an
Event of Default, and (ii) in the case of any such merger to which the Borrower
is a party, such transaction is the Duke Merger or such other Person is a
utility company and the resulting or surviving corporation, if not the Borrower,
(x) is organized and existing under the laws of the United States of America or
any State thereof, (y) is a corporation satisfactory to the Majority Lenders,
and (z) shall have expressly assumed, by an instrument satisfactory in form and
substance to the Majority Lenders, the due and punctual payment of all amounts
due under this Agreement and the performance of every covenant and undertaking
of the Borrower contained in this Agreement.
 
   (e)   Sales, Etc. of Assets. Sell, lease, transfer or otherwise dispose of,
or permit any Subsidiary to sell, lease, transfer or otherwise dispose of, any
of its assets, other than the following sales: (i) sales of generating capacity
to the wholesale customers of the Borrower and the Subsidiaries, (ii) sales of
nuclear fuel, (iii) sales of accounts receivable, (iv) sales in connection with
a transaction authorized by subsection (d) of this Section, (v) the Portfolio
Transaction, (vi) sales of investments in securities with a maturity of less
than one year, and (vii) other sales not exceeding $250,000,000 in the aggregate
in any fiscal year of the Borrower.
 
    (f)   Margin Stock. Use any proceeds of any Advance to buy or carry margin
stock (within the meaning of Regulation U issued by the Board of Governors of
the Federal Reserve System).
 
 
 
 

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34
 
    (g)   Change in Nature of Business. Engage, or cause or permit CP&L or
Florida Power to engage, in a material manner in businesses other than those in
which they are engaged on the date hereof and businesses reasonably related
thereto.
 
    (h)   Hostile Acquisitions. Use any proceeds of any Extension of Credit in
connection with any Hostile Acquisition.
 
ARTICLE VI
EVENTS OF DEFAULT
 
    SECTION 6.01. Events of Default.
 
    If any of the following events (“Events of Default”) shall occur and be
continuing:
 
   (a)   The Borrower shall fail to pay any principal of any Advance or LC
Disbursement when due, or shall fail to pay any interest on the principal amount
of any Advance or LC Disbursement or any fees or other amount payable hereunder
within five Business Days after such interest or fees or other amount shall
become due; or
 
    (b)   Any representation or warranty made by the Borrower herein or by the
Borrower (or any of its officers) in any document delivered pursuant to this
Agreement shall prove to have been incorrect in any material respect when made
or deemed made; or
 
    (c)   The Borrower shall fail to perform or observe any other term, covenant
or agreement contained in Section 5.01(b), 5.01(i)(iv), 5.01(j), 5.01(l) or 5.02
on its part to be performed or observed; or the Borrower shall fail to perform
or observe any other term, covenant or agreement contained in this Agreement on
its part to be performed or observed and any such failure shall remain
unremedied for 30 days after written notice thereof shall have been given to the
Borrower by the Administrative Agent or any Lender; or
 
    (d)   The Borrower or any Significant Subsidiary shall fail to pay any
amount in respect of any Indebtedness in excess of $50,000,000 (but excluding
Indebtedness hereunder) of the Borrower or such Significant Subsidiary (as the
case may be), or any interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) and such
failure shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Indebtedness; or any other default
under any agreement or instrument relating to any such Indebtedness, or any
other event, shall occur and shall continue after the applicable grace period,
if any, specified in such agreement or instrument, if the effect of such default
or event is to accelerate, or to permit the acceleration of, the maturity of
such Indebtedness; or any such Indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or
 
    (e)   The Borrower or any Significant Subsidiary shall generally not pay its
debts as such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Borrower or
any Significant Subsidiary seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
 
 
 
 

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protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or other
similar official for it or for any substantial part of its property; or the
Borrower or any Significant Subsidiary shall take any corporate action to
authorize any of the actions set forth above in this subsection (e); or
 
    (f)   Any judgment or order for the payment of money in excess of
$50,000,000 shall be rendered against the Borrower or any Significant Subsidiary
and either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be any period of 30 consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or
 
    (g)   Any Termination Event with respect to a Plan shall have occurred, and,
30 days after the occurrence thereof, (i) such Termination Event (if
correctable) shall not have been corrected and (ii) the then present value of
such Plan’s vested benefits exceeds the then current value of assets accumulated
in such Plan by more than the amount of $20,000,000 (or in the case of a
Termination Event involving the withdrawal of a “substantial employer” (as
defined in Section 4001(a)(2) of ERISA), the withdrawing employer’s
proportionate share of such excess shall exceed such amount); or
 
    (h)   The Borrower or any of its Affiliates as employer under a
Multiemployer Plan shall have made a complete or partial withdrawal from such
Multiemployer Plan and the plan sponsor of such Multiemployer Plan shall have
notified such withdrawing employer that such employer has incurred a withdrawal
liability in an annual amount exceeding $20,000,000; or
 
    (i)   A Change of Control shall occur;
 
then, and in any such event, the Administrative Agent shall at the request, or
may with the consent, of the Majority Lenders, by notice to the Borrower, (i)
declare the Commitments and the obligation of each Lender and each Issuing Bank
to make Extensions of Credit to be terminated, whereupon the same shall
forthwith terminate, (ii) declare the Outstanding Credits, all interest thereon
and all other amounts payable under this Agreement to be forthwith due and
payable, whereupon such principal amount, all such interest and all such amounts
shall become and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by the Borrower, and (iii) exercise the remedies specified in Section 2.15(g);
provided, however, that in the event of an actual or deemed entry of an order
for relief with respect to the Borrower or any Subsidiary under the Federal
Bankruptcy Code, (A) the obligation of each Lender and each Issuing Bank to make
Extensions of Credit shall automatically be terminated and (B) Outstanding
Credits, all such interest and all such other amounts shall automatically become
and be due and payable, without presentment, demand, protest or any notice of
any kind, all of which are hereby expressly waived by the Borrower.
 
 
 
 

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ARTICLE VII
THE ADMINISTRATIVE AGENT
AND THE ISSUING BANKS
 
    SECTION 7.01. Authorization and Action.
 
    (a)   Each Issuing Bank and each Lender hereby appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Administrative Agent by
the terms hereof, together with such powers as are reasonably provided for by
this Agreement (including, without limitation, enforcement or collection of the
Advances), the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Majority Lenders, and such instructions shall be
binding upon every Issuing Bank and all Lenders; provided, however, that the
Administrative Agent shall not be required to take any action that exposes the
Administrative Agent to personal liability or that is contrary to this Agreement
or applicable law.
 
    (b)   Each Issuing Bank shall act on behalf of the Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith until
such time and except for so long as the Administrative Agent may agree at the
request of the Majority Lenders to act for such Issuing Bank with respect
thereto; provided, that such Issuing Bank shall have all the benefits and
immunities (i) provided to the Administrative Agent in this Article VII with
respect to any acts taken or omissions suffered by each Issuing Bank in
connection with Letters of Credit issued by it or proposed to be issued by it
and the application and agreements for letters of credit pertaining to the
Letters of Credit as fully as if the term “Administrative Agent” as used in this
Article VII included such Issuing Bank with respect to such acts or omissions
and (ii) as additionally provided in this Agreement with respect to such Issuing
Bank.
 
    (c)   In the event that Citibank or any of its Affiliates shall be or become
an indenture trustee under the Trust Indenture Act of 1939 (as amended, the
“Trust Indenture Act”) in respect of any securities issued or guaranteed by the
Borrower, the parties hereto acknowledge and agree that any payment or property
received in satisfaction of or in respect of any obligation of the Borrower
hereunder by or on behalf of Citibank in its capacity as the Administrative
Agent for the benefit of any Lender or Issuing Bank (other than Citibank or an
Affiliate of Citibank) and that is applied in accordance with this Agreement
shall be deemed to be exempt from the requirements of Section 311 of the Trust
Indenture Act pursuant to Section 311(b)(3) of the Trust Indenture Act.
 
    SECTION 7.02. The Administrative Agent’s Reliance, Etc.
 
    Neither the Administrative Agent nor any of its directors, officers, agents
or employees shall be liable for any action taken or omitted to be taken by each
or any of them under or in connection with this Agreement, except for their own
gross negligence or willful misconduct. Without limitation of the generality of
the foregoing, the Administrative Agent: (i) may consult with legal counsel
(including counsel for the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in
 
 
 
 

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37
 
good faith by it in accordance with the advice of such counsel, accountants or
experts; (ii) makes no warranty or representation to any Issuing Bank or any
Lender and shall not be responsible to any Issuing Bank or any Lender for any
statements, warranties or representations made in or in connection with this
Agreement; (iii) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement on the part of the Borrower or to inspect the property (including the
books and records) of the Borrower; (iv) shall not be responsible to any Issuing
Bank or any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other instrument or
document furnished pursuant hereto; and (v) shall incur no liability under or in
respect of this Agreement by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telegram, telecopy or e-mail)
believed by it to be genuine and signed or sent by the proper party or parties.
 
    SECTION 7.03. The Administrative Agent and its Affiliates.
 
    With respect to its Commitments and, the Advances made by it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any other Lender and may exercise the same as though it were not an
Administrative Agent; and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated, include each Agent in its individual capacity, as
applicable. The Administrative Agent and its Affiliates may accept deposits
from, lend money to, act as trustee under indentures of, and generally engage in
any kind of business with, the Borrower, any Subsidiary and any Person who may
do business with or own securities of the Borrower or any Subsidiary, all as if
the Administrative Agent were not the Administrative Agent and without any duty
to account therefor to the Lenders.
 
    SECTION 7.04. Lender Credit Decision.
 
    Each Issuing Bank and each Lender acknowledges that it has, independently
and without reliance upon the Administrative Agent, any other Issuing Bank or
any other Lender (as applicable) and based on the financial statements referred
to in Section 4.01(e) and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Issuing Bank and each Lender also acknowledges that it will,
independently and without reliance upon the Administrative Agent, any other
Issuing Bank or any other Lender and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement.
 
    SECTION 7.05. Indemnification.
 
    The Lenders agree to indemnify the Administrative Agent (to the extent not
reimbursed by the Borrower) and each Issuing Bank, ratably according to the
respective principal amounts of the Outstanding Credits then held by each of
them (or if there are no Outstanding Credits at the time, ratably according to
the respective amounts of their Commitments), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Administrative Agent and such
Issuing Bank in any way relating to or arising out of this Agreement or any
action taken or omitted by the Administrative Agent or such
 
 
 
 

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Issuing Bank (as the case may be) under this Agreement; provided that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent’s or such Issuing Bank’s gross
negligence or willful misconduct.  Without limitation of the foregoing, each
Lender agrees to reimburse the Administrative Agent or such Issuing Bank (as the
case may be) promptly upon demand for its ratable share of any out-of-pocket
expenses (including reasonable counsel fees) incurred by the Administrative
Agent or such Issuing Bank (as the case may be) in connection with the
preparation, execution, administration, or enforcement of, or legal advice in
respect of rights or responsibility under, this Agreement, to the extent that
the Administrative Agent or such Issuing Bank (as the case may be) is not
reimbursed for such expenses by the Borrower.
 
    SECTION 7.06. Successor Administrative Agent.
 
    The Administrative Agent may resign at any time by giving written notice
thereof to the Lenders, each Issuing Bank and the Borrower and may be removed at
any time with or without cause by the Majority Lenders. Upon any such
resignation or removal, the Majority Lenders shall have the right to appoint a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Majority Lenders, and shall have accepted such
appointment, within 30 days after the retiring Administrative Agent’s giving of
notice of resignation or the Majority Lenders’ removal of the retiring
Administrative Agent, the Administrative Agent may appoint a successor
Administrative Agent, which shall be a commercial bank organized under the laws
of the United States of America or of any State thereof and having a combined
capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring
Administrative Agent’s resignation or removal hereunder as Administrative Agent,
the provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement.
 
    SECTION 7.07. Appointment and Resignation of Issuing Banks.
 
    The Borrower may, from time to time, appoint one or more Lenders (or
Affiliates thereof) to act as additional Issuing Banks under this
Agreement.  Any such appointment shall be evidenced by a written agreement
between the Borrower and any such Issuing Bank, setting forth such Issuing
Bank’s agreement to act in such capacity, the LC Commitment of such Issuing Bank
and information required for delivery of notices to such LC Issuing Bank
pursuant to Section 8.02. Upon the delivery of a duly executed copy of such
agreement to the Administrative Agent, such Issuing Bank shall become vested
with all the rights, powers, privileges and duties of an “Issuing Bank” under
this Agreement. In addition, any Issuing Bank may resign as an Issuing Bank
under this Agreement, with the written consent of the Borrower and upon notice
of such resignation to the Administrative Agent, at any time that no Letters of
Credit issued by such Issuing Bank and no LC Disbursements payable to such
Issuing Bank are outstanding. The Administrative Agent shall give prompt notice
to each Lender of the appointment or resignation of any Issuing Bank pursuant to
this Section 7.07.
 
 
 
 

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ARTICLE VIII
MISCELLANEOUS
 
    SECTION 8.01. Amendments, Etc.
 
    (a)   No amendment or waiver of any provision of this Agreement, nor consent
to any departure by the Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Majority Lenders, in the
case of any such amendment, waiver or consent of or in respect of this
Agreement, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by all of the Lenders, do any of the following: (i) waive any of the
conditions specified in Section 3.01 or 3.02, (ii) increase the Commitment of
any Lender or subject any Lender to any additional obligations, (iii) reduce, or
waive the payment of, the principal of, or interest on, the Advances,
reimbursement obligations in respect of LC Disbursements, or any fees or other
amounts payable to the Lenders ratably hereunder, (iv) postpone any date fixed
for any payment of principal of, or interest on, the Advances, reimbursement
obligations in respect of LC Disbursements, or any fees or other amounts payable
to the Lenders ratably hereunder, (v) change the percentage of the Commitments
or of the aggregate unpaid principal amount of the Advances, or the number of
Lenders, which shall be required for the Lenders or any of them to take any
action under this Agreement, or (vi) amend, waive, or in any way modify or
suspend any provision requiring the pro rata application of payments or of
Section 2.14 or of this Section 8.01; provided further, that no amendment,
waiver or consent shall, unless in writing and signed by each Lender affected
thereby, reduce, waive or postpone the date of payment of any amount payable to
such Lender; and provided, further, that (A) no amendment, waiver or consent
shall, unless in writing and signed by the Administrative Agent and each Issuing
Bank in addition to the Lenders required hereinabove to take such action, affect
the rights or duties of such Administrative Agent or each Issuing Bank under
this Agreement, (B) this Agreement may be amended and restated without the
consent of any Lender, the Administrative Agent or any Issuing Bank if, upon
giving effect to such amendment and restatement, such Lender, Administrative
Agent or such Issuing Bank, as the case may be, shall no longer be a party to
this Agreement (as so amended and restated) or have any Commitment or other
obligation hereunder and shall have been paid in full all amounts payable
hereunder to such Lender, the Administrative Agent or such Issuing Bank, as the
case may be, and (C) any Issuing Bank may be appointed and may resign pursuant
to Section 7.07, and the LC Commitment of any Issuing Bank may be increased or
decreased pursuant to a written agreement between the Borrower and such Issuing
Bank, a copy of which shall be delivered to the Administrative Agent, in each
case, without the consent of any Lender.
 
    SECTION 8.02. Notices, Electronic Communications, Etc.
 
    (a)   All notices and other communications provided for hereunder shall,
unless otherwise stated herein, be in writing (including telegraphic
communication) and mailed, telecopied, e-mailed or delivered, if to the
Borrower, at its address at 410 S. Wilmington Street, PEB 19A3, Raleigh, North
Carolina  27601, Attention: Assistant Treasurer, Treasury Department, Facsimile
no.: (919) 546-7826, e-mail: Thomas.Moses@pgnmail.com; if to any Lender, at its
Domestic Lending Office set forth opposite its name on Schedule I hereto; if to
SunTrust Bank, as Issuing Bank, at its address at 25 Park Place, 16th Floor,
Atlanta, Georgia,
 
 
 
 

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30303, Attention: International Operations, SunTrust Bank, Facsimile no.: (404)
588-8129; if to Citibank, as Issuing Bank, at its address at Global Loans, 1615
Brett Road, Ops III, New Castle, Delaware 19720, Attention: Vilma Marku,
Telephone no.: (302) 894-6160, Facsimile no.:(212) 994-0961, e-mail:
Vilma.Marku@citi.com; if to Wells Fargo Bank, National Association, as Issuing
Bank, at its address at 301 South College Street, 15th Floor, MAC: D1053-153,
Charlotte, North Carolina, Attention: Elaine Shue, Telephone no.: (704)
715-3133, Facsimile no.:(877) 487-0377, e-mail: Elaine.shue@wellsfargo.com; and
if to the Administrative Agent, at its address at Two Penns Way, Suite 200, New
Castle, Delaware 19720, Attention: Bank Loan Syndications, Facsimile no.: (212)
994-0161; or, as to each party, at such other address as shall be designated by
such party in a written notice to the other parties or, in the case of any
Lender, to the Administrative Agent, each Issuing Bank and the Borrower. All
such notices and communications shall be effective when received by the
addressee thereof.
 
    (b)   So long as Citibank or any or any of its Affiliates is the
Administrative Agent, materials required to be delivered pursuant to Section
5.01 shall be delivered to the Credit Parties in an electronic medium in a
format acceptable to the Credit Parties by email at
oploanswebadmin@citigroup.com. The Borrower agrees that the Administrative Agent
may make such materials, as well as any other written information, documents,
instruments and other material relating to the Borrower, any of its Subsidiaries
or any other materials or matters relating to this Agreement, the Notes or any
of the transactions contemplated hereby (collectively, the “Communications”)
available to the Issuing Banks and the Lenders by posting such notices on
DebtDomain or a substantially similar electronic system (the “Platform”). The
Borrower acknowledges that (i) the distribution of material through an
electronic medium is not necessarily secure and that there are confidentiality
and other risks associated with such distribution, (ii) the Platform is provided
“as is” and “as available” and (iii) neither the Administrative Agent, its
Affiliates, nor any other Credit Party warrants the accuracy, adequacy or
completeness of the Communications or the Platform and each expressly disclaims
liability for errors or omissions in the Communications or the Platform. No
warranty of any kind, express, implied or statutory, including, without
limitation, any warranty of merchantability, fitness for a particular purpose,
non-infringement of third party rights or freedom from viruses or other code
defects, is made by any Credit Party in connection with the Platform.
 
    SECTION 8.03. No Waiver; Remedies.
 
    No failure on the part of any Lender, any Issuing Bank or the Administrative
Agent to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.
 
    SECTION 8.04. Costs, Expenses, Taxes and Indemnification.
 
    (a)   The Borrower agrees to pay on demand all costs and expenses of the
Administrative Agent (and as described in clause (iv) below, the Lenders and
each Issuing Bank) in connection with (i) the preparation, execution,
negotiation, syndication and delivery of this Agreement and the other documents
to be delivered hereunder, (ii) the first Borrowing under this Agreement, (iii)
any modification, amendment or supplement to this Agreement and the other
 
 
 
 

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documents to be delivered hereunder and (iv) the enforcement of the rights and
remedies of the Lenders, each Issuing Bank and the Administrative Agent under
this Agreement and the other documents to be delivered hereunder (whether
through negotiations or legal proceedings), all the above costs and expenses to
include, without limitation, the reasonable fees and out-of-pocket expenses of
counsel for the Administrative Agent, each Issuing Bank and each of the Lenders
with respect thereto.  In addition, the Borrower shall pay any and all stamp and
other taxes payable or determined to be payable in connection with the execution
and delivery of this Agreement and the other documents to be delivered
hereunder, and agrees to save the Administrative Agent, each Issuing Bank and
each Lender harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes.
 
    (b)   If (i) due to payments made by the Borrower due to the acceleration of
the maturity of the Advances pursuant to Section 6.01 or due to any other
reason, any Lender receives payments of principal of any Eurodollar Rate Advance
based upon the Eurodollar Rate other than on the last day of the Interest Period
for such Advance, or (ii) due to any Conversion of Eurodollar Advance other than
on the last day of an Interest Period pursuant to Section 2.12, the Borrower
shall, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender any amounts required to compensate such Lender for any additional losses,
costs or expenses that it may reasonably incur as a result of such payment,
including, without limitation, any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or maintain such
Advance.  In addition, if the Borrower fails to prepay any Advance on the date
for which notice of prepayment has been given, the Borrower shall, upon demand
by any Lender (with a copy of such demand to the Administrative Agent), pay to
the Administrative Agent for the account of such Lender any amounts required to
compensate such Lender for any losses, costs or expenses (including loss of
anticipated profits) that it may reasonably incur as a result of such prepayment
not having been made on the date specified by the Borrower for such prepayment.
 
    (c)   Any and all payments by the Borrower hereunder shall be made, in
accordance with Section 2.13, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender, each Issuing Bank and the Administrative Agent, taxes imposed on
its income, and franchise taxes imposed on it, by the jurisdiction under the
laws of which such Lender, such Issuing Bank or the Administrative Agent (as the
case may be) is organized or any political subdivision thereof and, in the case
of each Lender, taxes imposed on its income, and franchise taxes imposed on it,
by the jurisdiction of such Lender’s Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as
“Taxes”). If the Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder to any Lender, any Issuing Bank or the
Administrative Agent, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 8.04) such Lender, such Issuing Bank
or the Administrative Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law.
 
 
 
 

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    (d)   The Borrower will indemnify each Lender, each Issuing Bank and the
Administrative Agent for the full amount of Taxes (including, without
limitation, any Taxes imposed by any jurisdiction on amounts payable under this
Section 8.04) paid by such Lender, such Issuing Bank or the Administrative Agent
(as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
were correctly or legally asserted. This indemnification shall be made within 30
days from the date such Lender, such Issuing Bank or the Administrative Agent
(as the case may be) makes written demand therefor.
 
    (e)   Prior to the date of the initial Borrowing or on the date of the
Assignment and Acceptance pursuant to which it became a Lender, in the case of
each Lender that becomes a Lender by virtue of entering into an Assignment and
Acceptance, and from time to time thereafter if requested by the Borrower or the
Administrative Agent, each Lender organized under the laws of a jurisdiction
outside the United States shall provide the Administrative Agent and the
Borrower with the forms prescribed by the Internal Revenue Service of the United
States certifying that such Lender is exempt from United States withholding
taxes with respect to all payments to be made to such Lender hereunder. If for
any reason during the term of this Agreement, any Lender becomes unable to
submit the forms referred to above or the information or representations
contained therein are no longer accurate in any material respect, such Lender
shall notify the Administrative Agent and the Borrower in writing to that
effect. Unless the Borrower and the Administrative Agent have received forms or
other documents satisfactory to them indicating that payments hereunder are not
subject to United States withholding tax, the Borrower or the Administrative
Agent shall withhold taxes from such payments at the applicable statutory rate
in the case of payments to or for any Lender organized under the laws of a
jurisdiction outside the United States.
 
    (f)   Any Lender claiming any additional amounts payable pursuant to Section
8.04(c) or (d) shall use its reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) (i) to change the jurisdiction of
its Applicable Lending Office if the making of such a change would avoid the
need for, or reduce the amount of, any such additional amounts that may
thereafter accrue and would not, in the reasonable judgment of such Lender, be
otherwise disadvantageous to such Lender and (ii) to otherwise minimize the
amounts due, or to become due, under Sections 8.04(c) and (d).
 
    (g)   If the Borrower makes any additional payment to any Issuing Bank or
any Lender pursuant to Sections 8.04(c) and (d) in respect of any Taxes, and
such Issuing Bank or such Lender determines that it has received (i) a refund of
such Taxes or (ii) a credit against or relief or remission for, or a reduction
in the amount of, any tax or other governmental charge solely as a result of any
deduction or credit for any Taxes with respect to which it has received payments
under Sections 8.04(c) and (d), such Issuing Bank or such Lender shall, to the
extent that it can do so without prejudice to the retention of such refund,
credit, relief, remission or reduction, pay to the Borrower such amount as such
Issuing Bank or such Lender shall have determined to be attributable to the
deduction or withholding of such Taxes. If such Issuing Bank or such Lender
later determines that it was not entitled to such refund, credit, relief,
remission or reduction to the full extent of any payment made pursuant to the
first sentence of this Section 8.04(g), the Borrower shall upon demand of such
Issuing Bank or such Lender promptly repay the amount of such overpayment. Any
determination made by such Issuing Bank or such Lender pursuant to
 
 
 
 

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this Section 8.04(g) shall in the absence of bad faith or manifest error be
conclusive, and nothing in this Section 8.04(g) shall be construed as requiring
any Issuing Bank or any Lender to conduct its business or to arrange or alter in
any respect its tax or financial affairs so that it is entitled to receive such
a refund, credit or reduction or as allowing any Person to inspect any records,
including tax returns, of any Issuing Bank or any Lender.
 
    (h)   The Borrower hereby agrees to indemnify and hold harmless each Lender,
each Issuing Bank, the Arrangers, the Syndication Agent, the Administrative
Agent, counsel to the Administrative Agent and their respective officers,
directors, partners, employees, Affiliates and advisors (each, an “Indemnified
Person”) from and against any and all claims, damages, losses, liabilities,
costs, or expenses (including reasonable attorney’s fees and expenses, whether
or not such Indemnified Person is named as a party to any proceeding or is
otherwise subjected to judicial or legal process arising from any such
proceeding), joint and several, that may actually be incurred by or asserted or
awarded against any Indemnified Person (including, without limitation, in
connection with any investigation, litigation or proceeding or the preparation
of a defense in connection therewith) in each case by reason of or in connection
with the execution, delivery, or performance of this Agreement, or the use by
the Borrower of the proceeds of any Extension of Credit (including any refusal
by any Issuing Bank to honor a demand for payment under a Letter of Credit if
the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), except to the extent that such claims,
damages, losses, liabilities, costs, or expenses are determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
solely from the gross negligence or willful misconduct of the party seeking
indemnification. The Borrower also agrees not to assert any claim against any
Indemnified Party on any theory of liability for special or punitive damages
arising out of or otherwise relating to this Agreement, any of the transactions
contemplated herein or the actual or proposed use of the proceeds of any
Extension of Credit.
 
    (i)   Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 8.04 shall survive the payment in full of principal and interest
hereunder and the termination of the Commitments.
 
    SECTION 8.05. Right of Set-off.
 
    Upon (i) the occurrence and during the continuance of any Event of Default
and (ii) the making of the request or the granting of the consent specified by
Section 6.01 to authorize the Administrative Agent to declare the Outstanding
Credits due and payable pursuant to the provisions of Section 6.01, each Lender
and each Issuing Bank are hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender or such Issuing
Bank to or for the credit or the account of the Borrower now or hereafter
existing under this Agreement, irrespective of whether or not such Lender or
such Issuing Bank shall have made any demand under this Agreement and although
such obligations may be unmatured; provided, that in the event that any
Defaulting Lender shall exercise any such right of setoff, (x) all amounts so
set off shall be paid over immediately to the Administrative Agent for further
application in accordance with the provisions of Section 2.14(b) and, pending
such payment, shall be segregated by such Defaulting
 
 
 
 

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Lender from its other funds and deemed held in trust for the benefit of the
Administrative Agent, the Issuing Banks and the Lenders, and (y) the Defaulting
Lender shall provide promptly to the Administrative Agent a statement describing
in reasonable detail the Obligations owing to such Defaulting Lender as to which
it exercised such right of setoff. Each Lender and each Issuing Bank agree
promptly to notify the Borrower after any such set-off and application made by
such Lender or such Issuing Bank; provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
each Lender and each Issuing Bank under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
that such Lender or such Issuing Bank may have.
 
    SECTION 8.06. Binding Effect.
 
    This Agreement shall become effective when (i) it shall have been executed
by the Borrower and the Administrative Agent and when the Administrative Agent
shall have been notified by each Lender and each Issuing Bank that such Lender
or such Issuing Bank has executed it and (ii) the conditions precedent set forth
in Section 3.01 shall have been satisfied, and this Agreement thereafter shall
be binding upon and inure to the benefit of the Borrower, the Administrative
Agent, each Issuing Bank and each Lender and their respective successors and
assigns, except that the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of each
Issuing Bank and each Lender.
 
    SECTION 8.07. Assignments and Participations.
 
    (a)   Each Lender may, with the consent of the Administrative Agent, each
Issuing Bank and the Borrower (each such consent not to be unreasonably withheld
or delayed and, in the case of the Borrower, such consent shall not be required
if an Event of Default has occurred and is continuing), assign to one or more
banks or other entities all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitment and the Advances owing to it); provided, however, that (i) each such
assignment shall be of a constant, and not a varying, percentage of all rights
and obligations under this Agreement, (ii) the amount of the Commitment of the
assigning Lender being assigned pursuant to each such assignment (determined as
of the date of the Assignment and Acceptance with respect to such assignment)
shall in no event be less than the lesser of (A) $10,000,000 and (B) all of such
Lender’s rights and obligations and, if the preceding clause (A) is applicable,
shall be an integral multiple of $1,000,000, (iii) each such assignment shall be
to an Eligible Assignee, and (iv) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance and such parties (other
than when Citibank is an assigning party) shall also deliver to the
Administrative Agent a processing and recordation fee of $3,500; provided,
however, no such assignment shall be made to any Defaulting Lender or any of its
Subsidiaries, or any Person, who upon becoming a Lender hereunder, would
constitute any of the foregoing Persons described in this clause. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, (x) the assignee thereunder shall
be a party hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder and (y) the Lender assignor thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released
 
 
 
 

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from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender’s rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
 
    (b)   By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01(e) and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Administrative Agent, such assigning Lender or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to be performed by
it as a Lender.
 
    (c)   The Administrative Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance (and copies of the related
consents of the Borrower and the Administrative Agent to such assignment)
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Lenders and the Commitment of, and principal amount of the
Advances owing to, each Lender from time to time (the “Register”). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
 
    (d)   Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
the Administrative Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit B hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower.
 
    (e)   Each Lender may assign to one or more banks or other entities any
Advance made by it.
 
 
 
 

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    (f)   Each Lender may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment,
the Advances owing to it); provided, however, that (i) such Lender’s obligations
under this Agreement (including, without limitation, its Commitment to the
Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any promissory note held pursuant
to Section 2.01(b) for all purposes of this Agreement, (iv) the Borrower, each
Issuing Bank, the Administrative Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement and (v) the holder of any such
participation, other than an Affiliate of such Lender, shall not be entitled to
require such Lender to take or omit to take any action hereunder, except action
(A) extending the time for payment of interest on, or the final maturity of any
portion of the principal amount of, the Advances or (B) reducing the principal
amount of or the rate of interest payable on the Advances. Without limiting the
generality of the foregoing: (i) such participating banks or other entities
shall be entitled to the cost protection provisions contained in Sections 2.07,
2.11 and 8.04(b) only if, and to the same extent, the Lender from which such
participating banks or other entities acquired its participation would, at the
time, be entitled to claim thereunder; and (ii) such participating banks or
other entities shall also, to the fullest extent permitted by law, be entitled
to exercise the rights of set-off contained in Section 8.05 as if such
participating banks or other entities were Lenders hereunder.
 
    (g)   If (i) any Lender (or any bank, financial institution, or other entity
to which such Lender has sold a participation) shall make any demand for payment
under Section 2.11(b), or (ii) any Lender shall be a Defaulting Lender, then
within the time period specified in Section 2.15(b) or within 30 days after any
such demand (if, but only if, such demanded payment has been made by the
Borrower) (as applicable), the Borrower may, with the approval of the
Administrative Agent (which approval shall not be unreasonably withheld) demand
that such Lender assign in accordance with this Section 8.07 to one or more
Eligible Assignees designated by the Borrower all (but not less than all) of
such Lender’s Commitment (if any) and the Advances owing to it no later than the
applicable Anniversary Date or within the period ending on the later to occur of
such 30th day and the last day of the longest of the then current Interest
Periods for such Advances (as applicable), provided that (x) no Event of Default
or event that, with the passage of time or the giving of notice, or both, would
constitute an Event of Default shall then have occurred and be continuing, (y)
the Borrower shall have satisfied all its presently due obligations to such
Lender under this Agreement, and (z) if such Eligible Assignee designated by the
Borrower is not an existing Lender on the date of such demand, the Borrower
shall have delivered to the Administrative Agent an administrative fee of
$3,500.  If any such Eligible Assignee designated by the Borrower shall fail to
consummate such assignment on terms acceptable to such Lender, or if the
Borrower shall fail to designate any such Eligible Assignees for all or part of
such Lender’s Commitment or Advances, then such demand by the Borrower shall
become ineffective; it being understood for purposes of this subsection (g) that
such assignment shall be conclusively deemed to be on terms acceptable to such
Lender, and such Lender shall be compelled to consummate such assignment to an
Eligible Assignee designated by the Borrower, if such Eligible Assignee (i)
shall agree to such assignment by entering into an Assignment and Acceptance in
substantially the form of Exhibit B hereto with such Lender and (ii) shall offer
compensation to such Lender in an amount equal to all amounts then owing by the
 
 
 
 

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

47
 
Borrower to such Lender hereunder made by the Borrower to such Lender, whether
for principal, interest, fees, costs or expenses (other than the demanded
payment referred to above and payable by the Borrower as a condition to the
Borrower’s right to demand such assignment), or otherwise.
 
    (h)   Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 8.07, disclose to
the assignee or participant or proposed assignee or participant, any information
relating to the Borrower furnished to such Lender by or on behalf of the
Borrower; provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to preserve the
confidentiality of any confidential information relating to the Borrower
received by it from such Lender.
 
    (i)   Anything in this Section 8.07 to the contrary notwithstanding, any
Lender may (i) assign and pledge all or any portion of its Commitment and the
Advances owing to it to any Federal Reserve Bank (and its transferees) as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank; provided, that no such assignment shall release the assigning Lender from
its obligations hereunder; or (ii) assign its Commitments, Advances and other
rights and obligations hereunder to any of its Affiliates upon notice to, but
without the consent of, the Borrower and the Administrative Agent.
 
    (j)   Notwithstanding anything to the contrary contained herein, any Lender
(a “Granting Lender”) may grant to a special purpose funding vehicle (an “SPC”)
of such Granting Lender identified as such in writing from time to time by the
Granting Lender to the Administrative Agent, each Issuing Bank and the Borrower,
the option to provide to the Borrower all or any part of any Advance that such
Granting Lender would otherwise be obligated to make to the Borrower pursuant to
this Agreement; provided that (i) nothing herein shall constitute a commitment
by any such SPC to make any Advance, (ii) if such SPC elects not to exercise
such option or otherwise fails to provide all or any part of such Advance, the
Granting Lender shall be obligated to make such Advance pursuant to the terms
hereof and (iii) no SPC or Granting Lender shall be entitled to receive any
greater amount pursuant to Section 2.07 or 2.11 than the Granting Lender would
have been entitled to receive had the Granting Lender not otherwise granted such
SPC the option to provide any Advance to the Borrower.  The making of an Advance
by an SPC hereunder shall utilize the Commitment of the Granting Lender to the
same extent, and as if, such Advance were made by such Granting Lender.  Each
party hereto hereby agrees that no SPC shall be liable for any indemnity or
similar payment obligation under this Agreement for which a Lender would
otherwise be liable so long as, and to the extent that, the related Granting
Lender provides such indemnity or makes such payment.  In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other
senior indebtedness of any SPC, it will not institute against or join any other
person in instituting against such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States or any State thereof. Notwithstanding the foregoing, the Granting Lender
unconditionally agrees to indemnify the Borrower, the Administrative Agent, each
Issuing Bank and each Lender against all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may be incurred by or asserted against the
 
 
 
 

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

48
 
Borrower, the Administrative Agent, such Issuing Bank or such Lender, as the
case may be, in any way relating to or arising as a consequence of any such
forbearance or delay in the initiation of any such proceeding against its
SPC. Each party hereto hereby acknowledges and agrees that no SPC shall have the
rights of a Lender hereunder, such rights being retained by the applicable
Granting Lender. Accordingly, and without limiting the foregoing, each party
hereby further acknowledges and agrees that no SPC shall have any voting rights
hereunder and that the voting rights attributable to any Advance made by an SPC
shall be exercised only by the relevant Granting Lender and that each Granting
Lender shall serve as the administrative agent and attorney-in-fact for its SPC
and shall on behalf of its SPC receive any and all payments made for the benefit
of such SPC and take all actions hereunder to the extent, if any, such SPC shall
have any rights hereunder. In addition, notwithstanding anything to the contrary
contained in this Agreement any SPC may with notice to, but without the prior
written consent of any other party hereto, assign all or a portion of its
interest in any Advances to the Granting Lender. This Section may not be amended
without the prior written consent of each Granting Lender, all or any part of
whose Advance is being funded by an SPC at the time of such amendment.
 
    (k)   In connection with any assignment of rights and obligations of any
Defaulting Lender hereunder, no such assignment shall be effective unless and
until, in addition to the other conditions thereto set forth herein, the parties
to the assignment shall make such additional payments to the Administrative
Agent in an aggregate amount sufficient, upon distribution thereof as
appropriate (which may be outright payment, purchases by the assignee of
participations or subparticipations, or other compensating actions, including
funding, with the consent of the Borrower and the Administrative Agent, the
applicable Pro Rata Share of Advances or participations in LC Disbursements
previously requested but not funded by the Defaulting Lender, to each of which
the applicable assignee and assignor hereby irrevocably consent), to (x) pay and
satisfy in full all payment liabilities then owed by such Defaulting Lender to
the Administrative Agent, any Issuing Bank or any Lender hereunder (and interest
accrued thereon) and (y) acquire (and fund as appropriate) its full Pro Rata
Share of all Borrowings and LC Disbursements. Notwithstanding the foregoing, in
the event that any assignment of rights and obligations of any Defaulting Lender
hereunder shall become effective under applicable law without compliance with
the provisions of this subsection, then the assignee of such interest shall be
deemed to be a Defaulting Lender for all purposes of this Agreement until such
compliance occurs.
 
    SECTION 8.08. Waiver of Consequential Damages.
 
    To the fullest extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnified Person, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby, the transactions contemplated hereby or thereby,
any Extension of Credit or the use of proceeds thereof. No Indemnified Person
referred to in Section 8.04(h) shall be liable for any damages arising from the
use by unintended recipients of any information or other materials distributed
by it through telecommunications, electronic or other information transmission
systems in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby.
 
 
 
 

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49
 
    SECTION 8.09. USA PATRIOT Act Notice.
 
    Each Lender that is subject to the Patriot Act, each Issuing Bank and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower pursuant to the requirements of the Patriot Act that it is
required to obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and other
information that will allow such Lender, such Issuing Bank or the Administrative
Agent, as applicable, to identify the Borrower in accordance with the Patriot
Act.
 
    SECTION 8.10. Tax Disclosure.
 
    Notwithstanding any agreement between the parties hereto to the contrary,
the Borrower (and each employee, representative, or other agent of the Borrower)
may disclose to any and all other Persons, without limitation of any kind, the
tax treatment and tax structure of this Agreement and all materials of any kind
(including opinions or other tax analyses) that are provided to the Borrower
relating to such tax treatment and tax structure; provided, however, that such
disclosure may not be made to the extent required to be kept confidential to
comply with any applicable federal or state securities laws.
 
    SECTION 8.11. Governing Law.
 
    This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York. The Borrower (i) irrevocably submits to the
non-exclusive jurisdiction of any New York State court or Federal court sitting
in New York City in any action arising out of this Agreement, (ii) agrees that
all claims in such action may be decided in such court, (iii) waives, to the
fullest extent it may effectively do so, the defense of an inconvenient forum
and (iv) consents to the service of process by mail. A final judgment in any
such action shall be conclusive and may be enforced in other
jurisdictions. Nothing herein shall affect the right of any party to serve legal
process in any manner permitted by law or affect its right to bring any action
in any other court.
 
    SECTION 8.12. WAIVER OF JURY TRIAL.
 
    THE BORROWER, THE ADMINISTRATIVE AGENT, EACH ISSUING BANK AND EACH LENDER
EACH HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY AND
LAWFULLY DO SO, ALL RIGHT TO TRIAL BY JURY AS TO ANY ISSUE RELATING TO THIS
AGREEMENT IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER OR
THEREUNDER.
 
    SECTION 8.13. Execution in Counterparts.
 
    This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
 
 
 
 

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

50
 
    SECTION 8.14. Severability.
 
    Any provision of this Agreement that is prohibited, unenforceable or not
authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition, unenforceability or non-authorization without
invalidating the remaining provisions hereof or affecting the validity,
enforceability or legality of such provision in any other jurisdiction.
 
    SECTION 8.15. Headings.
 
    Section headings in this Agreement are included herein for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.
 
    SECTION 8.16. Entire Agreement.
 
    This Agreement constitutes the entire contract between the parties relative
to the subject matter hereof.  Any previous agreement among the parties with
respect to the subject matter hereof is superseded by this Agreement. Except as
is expressly provided for herein, nothing in this Agreement, expressed or
implied, is intended to confer upon any party other than the parties hereto any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
 
    SECTION 8.17. Defaulting Lenders.
 
    Notwithstanding any provision of this Agreement to the contrary, if any
Lender becomes a Defaulting Lender, then the following provisions shall apply
for so long as such Lender is a Defaulting Lender:
 

 (i)    facility fees payable under Section 2.03 shall cease to accrue on the
unutilized portion of the Commitment of such Defaulting Lender; and      (ii)   
the Commitment of such Defaulting Lender shall not be included in determining
whether the Majority Lenders have taken or may take any action hereunder
(including any consent to any amendment, waiver or other modification pursuant
to Section 8.01); provided, that this clause (ii) shall not apply to the vote of
a Defaulting Lender in the case of an amendment, waiver or other modification
pursuant to clauses (i) through (iv) of Section 8.01.

 
    In the event that the Administrative Agent and the Borrower agree that a
Defaulting Lender has adequately remedied all matters that caused such Lender to
be a Defaulting Lender, then on such date such Lender shall purchase at par such
of the Advances of the other Lenders as the Administrative Agent shall determine
may be necessary in order for such Lender to hold such Advances in accordance
with its Commitment.
 

 
 
 

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

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

   PROGRESS ENERGY, INC.       By: /s/ Sherri L. Green   Name: Sherri L. Green  
Title: Treasurer

 
 

 
 

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

 
 
 

  CITIBANK, N.A., as Administrative Agent, Issuing Bank and Lender       By: /s/
Maureen Maroney   Name: Maureen Maroney   Title: Vice President

 
 
 

 
 

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

 
 
 

  JPMORGAN CHASE BANK, N.A.       By: /s/ Juan J. Javellana   Name: Juan J.
Javellana   Title: Executive Director

 

 
 

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

 
 
 

  SUNTRUST BANK,   as Issuing Bank and Lender       By: /s/ Andrew Johnson  
Name: Andrew Johnson   Title: Director

 
 

 
 

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

 
 
 
 

  THE BANK OF TOKYO-MITSUBISHI   UFJ, LTD.       By: /s/ Nicholas R. Battista  
Name: Nicholas R. Battista   Title: Director

 
 

 
 
 

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

 
 
 
 

  BARCLAYS BANK PLC       By: /s/ Ann E. Sutton   Name: Ann E. Sutton   Title:
Director

 
 

 
 

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

 
 
 
 

  BANK OF AMERICA, N.A.       By: /s/ Mike Mason   Name: Mike Mason   Title:
Director

 
 

 
 

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

 
 
 
 

  THE ROYAL BANK OF SCOTLAND PLC       By: /s/ Tyler J. McCarthy   Name: Tyler
J. McCarthy   Title: Director

 
 

 
 

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

 
 
 
 

  WELLS FARGO BANK, N.A.,   as Issuing Bank and Lender       By: /s/ Allison
Newman   Name: Allison Newman   Title: Director

 
 
 

 
 

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

 
 
 
 

  MORGAN STANLEY BANK, N.A.       By: /s/ Sherrese Clarke   Name: Sherrese
Clarke   Title: Authorized Signatory

 
 

 
 

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

 
 
 
 

  BRANCH BANKING AND TRUST COMPANY       By: /s/ Jack M. Frost   Name: Jack M.
Frost   Title: Senior Vice President

 
 
 

 
 

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

 
 
 
 

  DEUTSCHE BANK AG   NEW YORK BRANCH       By: /s/ Philippe Sandmeier   Name:
Philippe Sandmeier   Title: Managing Director       By: /s/ Ming K. Chu   Name:
Ming K. Chu   Title: Vice President

 
 
 
 
 
 

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

 
 
 
 

  UBS AG, STAMFORD BRANCH       By: /s/ Irja R. Otsa   Name: Irja R. Otsa  
Title: Associate Director       By: /s/ Mary E. Evans   Name: Mary E. Evans  
Title: Associate Director

 
 
 

 
 

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

 
 
 
 

  WILLIAM STREET COMMITMENT CORPORATION       By: /s/ Mark Walton   Name: Mark
Walton   Title: Authorized Signatory

 
 

 
 

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

 
 
 
 

  WILLIAM STREET LLC       By: /s/ Mark Walton   Name: Mark Walton   Title:
Authorized Signatory

 
 
 

 
 

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

 
 
 
 

  THE BANK OF NEW YORK MELLON       By: /s/ Richard K. Fronapfel, Jr.   Name:
Richard K. Fronapfel, Jr.   Title: Vice President

 
 
 
 
 

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

 
SCHEDULE I
 
LIST OF COMMITMENTS AND APPLICABLE LENDING OFFICES

Name of Bank
Eurodollar
Lending Office
Domestic
Lending Office
 
Commitment
Citibank, N.A.
Two Penns Way, Ste. 200
New Castle, Delaware 19720
Attention: Bank Loan Syndications
Same as Eurodollar Lending Office
$49,115,044.23
JPMorgan Chase Bank, N.A.
 
500 Stanton Christiana Road
3/Ops2
Newark, Delaware 19713
Attention: Greg Hutchins
Telephone: 302.634.4593
Email: greg.hutchins@jpmorgan.com
Same as Eurodollar Lending Office
$62,389,380.53
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
BTM Information Services, Inc.
c/o The Bank of Tokyo-Mitsubishi, Ltd., NY Branch
1251 Avenue of  the Americas, 12th Floor
New York, NY 10020-1104
Attention: Rolando Uy, AVP, Loan
Operations Dept.
Telephone: 201.413.8570
Telecopier: 201.521.2304
Email: N/A
Same as Eurodollar Lending Office
$42,035,398.23
Barclays Bank PLC
745 Seventh Avenue
New York, NY 10019
Attention: May Huang
Same as Eurodollar Lending Office
$44,247,787.61
Bank of America, N.A.
100 N. Tryon St.
NC1-007-13-13
Charlotte, NC  28255
Attention: Jacqueline Archuleta
Same as Eurodollar Lending Office
$43,362,831.86
The Royal Bank of Scotland plc
600 Washington Avenue
Stamford, CT 06901
Attention: Annette Rodriguez
Telephone: 203.897.7648
E-Mail: Annette.Rodriguez@RBS.com
Same as Eurodollar Lending Office
$40,707,964.60
Wells Fargo Bank, N.A.
7711 Plantation Rd., 1st Floor
Roanoke, VA 24019-3224
MAC: R4058-010
Attn: Lynn Lumpkin
Telephone: 540.561.7077
E-Mail: lynn.lumpkin1@wellsfargo.com
Same as Eurodollar Lending Office
$23,451,327.43
SunTrust Bank
SunTrust Bank
Mail Code 1929
303 Peachtree Street, 10th Floor
Atlanta, GA 30308
Same as Eurodollar Lending Office
$22,123,893.81
Morgan Stanley Bank, N.A.
1300 Thames Street Warf, 4th Floor
Baltimore, Maryland 21231
Attention: Morgan Stanley Loan Servicing
Same as Eurodollar Lending Office
$22,123,893.81
Branch Banking and Trust Company
434 Fayetteville Street, 4th Floor
Raleigh, North Carolina 27601
Attention: Jack Frost
Same as Eurodollar Lending Office
$11,061,946.90
Deutsche Bank AG New York Branch
60 Wall Street, 11th Floor
New York, NY 10005
Same as Eurodollar Lending Office
$22,123,893.81
UBS AG, Stamford Branch
677 Washington Boulevard
Stamford, CT 06901
Attention: Jacques Jin
Telecopier: 203-719-3888
Email: sh-obp@ubs.com
Same as Eurodollar Lending Office
$35,398,230.09
William Street Commitment Corporation
200 West Street
New York, NY 10282
Facsimile: 212.256.4855
Same as Eurodollar Lending Office
$22,123,893.81
William Street LLC
200 West Street
New York, NY 10282
Facsimile: 917.977.3966
Same as Eurodollar Lending Office
$22,123,893.81
The Bank of New York Mellon
One Wall Street
19th Floor
New York, NY 10286
Attention:  Frank Su, Energy Division
Telephone: 212.635.7532
Telecopier: 212.635.7552
Email: fsu@bankofny.com
Same as Eurodollar Lending Office
$15,486,725.66

 

 
 
 

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

 

SCHEDULE II

ADOPTED LETTERS OF CREDIT

ISSUING BANK:  SUNTRUST BANK
BORROWER:  PROGRESS ENERGY, INC.
 
Letter of Credit Reference
Letter of Credit Face Amount
Expiry Date
F852386
$500,000.00
4/25/2012
F852387
$1,444,272.00
4/25/2012

 
 

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

 

EXHIBIT A-1
Form of Notice of Borrowing

NOTICE OF BORROWING

[Date]

Citibank, N.A., as Administrative Agent
   for the Lenders parties to the
   Agreement referred to below
Two Penns Way, Suite 200
New Castle, Delaware 19720

Attention: Bank Loan Syndications

Ladies and Gentlemen:
 
    The undersigned, Progress Energy, Inc., refers to the Amended and Restated
Credit Agreement, dated as of February 15, 2012 (the “Credit Agreement”, the
terms defined therein being used herein as therein defined), among the
undersigned, the Lenders thereunder, Citibank, N.A., as Administrative Agent for
the Lenders, and the Issuing Banks thereunder, and hereby gives you notice
pursuant to Section 2.02 of the Credit Agreement that the undersigned hereby
requests a Borrowing under the Credit Agreement, and in that connection sets
forth below the information relating to such Borrowing (the “Proposed
Borrowing”) as required by Section 2.02(a) of the Agreement:
 

 (i) The Business Day of the Proposed Borrowing is ________, 20____.      (ii)
The Type of Advances comprising the Proposed Borrowing is [Base Rate
Advances][Eurodollar Rate Advances].      (iii) The aggregate amount of the
Proposed Borrowing is  $________ .      (iv) The Interest Period for each
Eurodollar Rate Advance that is an Advance made as part of the Proposed
Borrowing is ________ months.    

 
    The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Borrowing:
 

 (v) the representations and warranties contained in Section 4.01 (other than
the last sentence of Section 4.01(e) and Section 4.01(f)) of the Credit
Agreement are correct, before and after giving effect to the Proposed Borrowing
and to the application of the proceeds therefrom, as though made on and as of
such date; and (ii) no event has occurred and is continuing, or would result
from such Proposed Borrowing or from the application of the proceeds therefrom,
that constitutes an Event of Default or would constitute an Event of Default but
for the requirement that notice be given or time elapse or both.

 
 

  Very truly yours,       PROGRESS ENERGY, INC.          
By__________________________________   Name:   Title: 

 
 

 
 
 

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

 

EXHIBIT A-2
Form of Notice of Conversion
NOTICE OF CONVERSION
 
[Date]

 
Citibank, N.A., as Administrative Agent
  for the Lenders parties to the
  Agreement referred to below
Two Penns Way, Suite 200
New Castle, Delaware 19720
Attention: Bank Loan Syndications
 
Ladies and Gentlemen:
 
The undersigned, Progress Energy, Inc., refers to the Amended and Restated
Credit Agreement, dated as of February 15, 2012 (the “Credit Agreement”, the
terms defined therein being used herein as therein defined), among the
undersigned, the Lenders thereunder, Citibank, N.A., as Administrative Agent for
the Lenders, and SunTrust Bank, and the Issuing Banks thereunder, and hereby
gives you notice pursuant to Section 2.09 of the Credit Agreement that the
undersigned hereby requests a Conversion under the Credit Agreement, and in that
connection sets forth the terms on which such Conversion (the “Proposed
Conversion”) is requested to be made:
 

(vi) The Business Day of the Proposed Conversion is ______________, 20____.    
(vii) The Type of, and Interest Period applicable to, the Advances (or portions
thereof) proposed to be Converted: ________________.     (viii) The Type of
Advance to which such Advances (or portions thereof) are proposed to be
Converted:  ________________________.     (ix) Except in the case of a
Conversion to Base Rate Advances, the initial Interest Period to be applicable
to the Advances resulting from such Conversion: ______________________________.
    (x) The aggregate amount of Advances (or portions thereof) proposed to be
Converted is $________.

 
    The undersigned hereby certifies that, on the date hereof, and on the date
of the Proposed Conversion, no event has occurred and is continuing, or would
result from such Proposed Conversion, that constitutes an Event of Default.
 

  Very truly yours,   PROGRESS ENERGY, INC.          
By__________________________________   Name:   Title: 

 
 

 
 
 

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

 

EXHIBIT B
Form of Assignment and Acceptance

ASSIGNMENT AND ACCEPTANCE

Dated ________, 20_____

 
    Reference is made to the Amended and Restated Credit Agreement, dated as of
February 15, 2012 (as amended, modified and supplemented from time to time, the
“Credit Agreement”, the terms defined therein being used herein as therein
defined), among Progress Energy, Inc., the Lenders (as defined in the Credit
Agreement) thereunder, Citibank, N.A., as Administrative Agent for the Lenders
thereunder (the “Administrative Agent”) and the Issuing Banks thereunder.
 
    __________ (the “Assignor”) and __________ (the “Assignee”) agree as
follows:
 
    1.    The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, that interest in and to
all of the Assignor’s rights and obligations under the Credit Agreement as of
the date hereof that represents the percentage interest specified on Schedule 1
of all outstanding rights and obligations under the Credit Agreement, including,
without limitation, such interest in the Assignor’s Commitment (to the extent it
has not been terminated), the Advances owing to the Assignor and, to the extent
permitted by applicable law, all claims, suits, causes of action and any other
right of the Assignor (in its capacity as a Lender) against any Person, whether
known or unknown, arising under or in connection with the Credit Agreement, any
other documents or instruments delivered pursuant thereto or the transactions
governed thereby, including but not limited to contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned hereby. After giving
effect to such sale and assignment, the Assignee’s Commitment (if any) and the
amount of the Advances owing to the Assignee will be as set forth in Section 2
of Schedule 1.
 
    2.    The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other instrument or document furnished
pursuant thereto; and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto.
 
    3.    The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.01(e) thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Administrative Agent, the Assignor or any other Lender
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under the Credit Agreement as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (v) agrees that it will perform in
accordance with their terms all of the obligations that by the terms of the
Credit Agreement are required to be performed by it as a Lender; [and] (vi)
specifies as its Domestic Lending Office (and address for notices) and
Eurodollar Lending Office the offices set forth beneath its name on the
signature pages hereof [and (vii) attaches the forms prescribed by the Internal
Revenue Service of the United States certifying as to the Assignee’s status for
purposes of determining exemption from United States withholding taxes with
respect to all payments to be made to the Assignee under the Credit Agreement or
such other documents as are necessary to indicate that all such payments are
subject to such rates at a rate reduced by an applicable tax treaty].1
 
    4.    Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent. The effective date of this
Assignment and Acceptance shall be the date of acceptance thereof by the
Administrative Agent, unless otherwise specified on Schedule 1 hereto (the
“Effective Date”).
 
    5.    Upon such acceptance and recording by the Administrative Agent, as of
the Effective Date, (i) the Assignee shall be a party to the Credit Agreement
and, to the extent provided in this Assignment and Acceptance, have the rights
and obligations of a Lender thereunder and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
 
    6.    Upon such acceptance and recording by the Administrative Agent, from
and after the Effective Date, the Administrative Agent shall make all payments
under the Credit Agreement in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and
commitment fees with respect thereto) to the Assignee. The Assignor and Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
for periods prior to the Effective Date directly between themselves.
 
    7.    This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.
 

 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

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1 If the Assignee is organized under the laws of a jurisdiction outside the
United States.

 
 
 

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   IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution being made on
Schedule 1 hereto.
 
 

[NAME OF ASSIGNOR]   [NAME OF ASSIGNEE]             By:____________________
By:____________________ Name: Name: Title: Title:           Domestic Lending
Office (and address for notices):   [Address]           Eurodollar Lending
Office:   [Address]

 
 
Accepted this _____day of ________, 20_____
 
CITIBANK, N.A., as Administrative Agent
and Issuing Bank

 
By_________________________
Name:
Title:

SUNTRUST BANK, as Issuing Bank

By_________________________
Name:
Title:

WELLS FARGO BANK, N.A., as Issuing Bank

By_________________________
Name:
Title:

PROGRESS ENERGY, INC. 2

By__________________________
Name:
Title:

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2 If required.
 

 
 
 

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SCHEDULE I
 
TO
 
ASSIGNMENT AND ACCEPTANCE
 
 
Dated _______________, 20_____
 
 
 

Section 1           Percentage Interest Assigned: ________ %     Section 2      
    Assignee's Commitment: $         Aggregate Outstanding Principal Amount of  
    Advances owing to Assignee: $     Section 3           Effective Date 3      

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3 This date should be no earlier than the date of acceptance by the
Administrative Agent.
 

 
 

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EXHIBIT C-1
Form of Opinion of General Counsel to
Progress Energy Service Company, LLC

[DATE]

To each of the Lenders parties to the Credit
Agreement referred to below, Citibank, N.A., as
Administrative Agent, and the Issuing Banks thereunder
 
   Re:    Progress Energy, Inc.
 
Ladies and Gentlemen:
 
    This opinion is furnished to you by me as General Counsel to Progress Energy
Service Company, LLC pursuant to Section 3.01(g) of the Amended and Restated
Credit Agreement, dated as of February 15, 2012 (the “Credit Agreement”, the
terms defined therein being used herein as therein defined), among Progress
Energy, Inc. (the “Borrower”), certain lenders thereunder (the “Lenders”),
Citibank, N.A., as Administrative Agent for the Lenders, and the Issuing Banks
thereunder.
 
    In connection with the preparation, execution and delivery of the Credit
Agreement, I or attorneys working under my supervision have examined:
 

(1) The Credit Agreement.     (2) The documents furnished by the Borrower
pursuant to Section 3.01 of the Credit Agreement.     (3) The Amended and
Restated Articles of Incorporation of the Borrower (the “Charter”).     (4) The
By-Laws of the Borrower and all amendments thereto (the “By-Laws”).

 
    I or attorneys working under my supervision have also examined the
originals, or copies of such other corporate records of the Borrower,
certificates of public officials and of officers of the Borrower and agreements,
instruments and other documents as I have deemed necessary as a basis for the
opinions expressed below.  As to questions of fact material to such opinions, I
have, when relevant facts were not independently established by me, relied upon
certificates of the Borrower or its officers or of public officials. I have
assumed the authenticity of all documents submitted to me as originals, the
conformity to originals of all documents submitted as certified
 
 
 
 

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

 
or photostatic copies and the authenticity of signatures (other than those of
the Borrower), and the due execution and delivery, pursuant to due
authorization, of the Credit Agreement by the Lenders and the Administrative
Agent and the validity and binding effect thereof on such parties.  For purposes
of my opinions expressed in paragraph 1 below as to existence and good standing,
I have relied as of their respective dates on certificates of public officials,
copies of which are attached hereto as Exhibit A. Whenever the phrase “to my
knowledge” is used in this opinion it refers to my actual knowledge and the
actual knowledge of the attorneys who work under my supervision and who were
involved in the representation of the Borrower in connection with the
transactions contemplated by the Credit Agreement.
 
    I or attorneys working under my supervision are qualified to practice law in
the States of North Carolina and Florida, and the opinions expressed herein are
limited to the law of the States of North Carolina and Florida, the Federal law
of the United States and, in reliance on a certificate issued by the Secretary
of State of South Carolina and attached hereto as part of Exhibit A, the laws of
the State of South Carolina for purposes of the first sentence of opinion
paragraph 1 below.
 
    Based upon the foregoing and upon such investigation as I have deemed
necessary, I am of the following opinion:
 
    1.    Each of the Borrower and CP&L is a corporation duly organized, validly
existing and in good standing under the laws of the State of North Carolina, and
CP&L is duly qualified to do business and in good standing in the State of South
Carolina. Each of Florida Power and FPC is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida. The
Borrower has the corporate power and authority to enter into the transactions
contemplated by the Credit Agreement.
 
    2.    The execution, delivery and performance of the Credit Agreement by the
Borrower have been duly authorized by all necessary corporate action on the part
of the Borrower and the Credit Agreement has been duly executed and delivered by
the Borrower.
 
    3.    The execution, delivery and performance of the Credit Agreement by the
Borrower will not (i) violate the Charter or the By-Laws or any law, rule or
regulation applicable to the Borrower (including, without limitation, Regulation
X of the Board of Governors of the Federal Reserve System) or (ii) result in a
breach of, or constitute a default under, any judgment, decree or order binding
on the Borrower, or any indenture, mortgage, contract or other instrument to
which it is a party or by which it is bound.
 
    4.    No authorization, approval or other action by, and no notice to or
filing with any governmental authority or regulatory body is required for the
due execution, delivery and performance by the Borrower of the Credit Agreement,
other than a notification to the North Carolina Utilities Commission, which has
been timely made.
 
    5.    To my knowledge, except as described in the reports and registration
statements that the Borrower, CP&L, FPC and Florida Power have filed with the
Securities and Exchange Commission, there are no pending or overtly threatened
actions or proceedings against the Borrower or any of such Subsidiaries before
any court, governmental agency or arbitrator, that may materially adversely
affect the financial condition, operations or properties of the Borrower and its
Subsidiaries, taken as a whole.
 
 
 
 

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    The opinions set forth above are subject to the qualification that no
opinion is expressed herein as to the enforceability of the Credit Agreement or
any other document.
 
    The foregoing opinions are solely for your benefit and may not be relied
upon by any other Person other than (i) any other Person that may become a
Lender or Issuing Bank under the Credit Agreement after the date hereof and (ii)
Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P. and King &
Spalding LLP, in connection with their respective opinions delivered on the date
hereof under Section 3.01 of the Credit Agreement. This letter speaks only as of
the date hereof and may not be relied on by any person with respect to any date
after the date hereof. I do not undertake to advise you of any changes in the
opinions expressed herein from matters that may hereafter arise or be brought to
my attention.
 
 
                               Very truly yours,

 
 

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EXHIBIT C-2
Form of Opinion of Special Counsel for the Borrower
 
[DATE]

To each of the Lenders parties to the Credit
Agreement referred to below, Citibank, N.A., as
Administrative Agent and an Issuing Bank, and the
other Issuing Banks thereunder
 
   Re:           Progress Energy, Inc.

Ladies and Gentlemen:
 
    This opinion is furnished to you by us as counsel for Progress Energy, Inc.
(the “Borrower”) pursuant to Section 3.01(g) of the Amended and Restated Credit
Agreement, dated as of February 15, 2012 (the “Credit Agreement”, the terms
defined therein being used herein as therein defined), among Progress Energy,
Inc., certain lenders thereunder (the “Lenders”), Citibank, N.A., as
Administrative Agent for the Lenders, and the Issuing Banks thereunder.
 
    In connection with the preparation, execution and delivery of the Credit
Agreement, we have examined:
 

(1) The Credit Agreement.     (2) The documents furnished by the Borrower
pursuant to Section 3.01 of the Credit Agreement.     (3) The opinion letter of
even date herewith, addressed to you by David B. Fountain, counsel to the
Borrower and delivered in connection with the transactions contemplated by the
Credit Agreement (the “Company Opinion Letter”).

 
    We have also examined the originals, or copies of such other corporate
records of the Borrower, certificates of public officials and of officers of the
Borrower and agreements, instruments and other documents as we have deemed
necessary as a basis for the opinions expressed below. As to questions of fact
material to such opinions, we have, when relevant facts were not independently
established by us, relied upon certificates of the Borrower or its officers or
of public officials. We have assumed the authenticity of all documents submitted
to us as originals, the conformity to originals of all documents submitted as
certified or photostatic copies and the authenticity of the originals (other
than those of the Borrower), and the due execution and delivery, pursuant to due
authorization, of the Credit Agreement by the Lenders and the Administrative
Agent and the validity and binding effect thereof on such parties. Whenever the
 
 
 
 

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

 
phrase “to our knowledge” is used in this opinion it refers to the actual
knowledge of the attorneys of this firm involved in the representation of the
Borrower without independent investigation.
 
    We are qualified to practice law in the State of North Carolina, and the
opinions expressed herein are limited to the law of the State of North Carolina
and the federal law of the United States. To the extent that our opinions
expressed herein depend upon opinions expressed in paragraphs 1 through 4 of the
Company Opinion Letter, we have relied without independent investigation on the
accuracy of the opinions expressed in the Company Opinion Letter, subject to the
assumptions, qualifications and limitations set forth in the Company Opinion
Letter.
 
    Based upon the foregoing and upon such investigation as we have deemed
necessary, we are of the opinion that:
 
1.   
Based on provisions in the Credit Agreement providing that the Credit Agreement
will be governed by the laws of the State of New York, a court of the State of
North Carolina, if properly presented with the question, would consider such
provisions valid and binding and apply the internal laws of the State of New
York as the laws governing the Credit Agreement, unless the court finds that (a)
another state or jurisdiction has a materially greater interest than the State
of New York, or (b) application of the laws of the State of New York would be
contrary to a fundamental public policy of the State of North Carolina. We note,
however, that choice-of-law issues are decided on a case-by-case basis,
depending on the facts of a particular transaction, and although there is
nothing on the face of the documents to lead us to conclude otherwise, we are
unable to conclude with certainty that a North Carolina court would give effect
to such provisions.

 
2.   
The Credit Agreement provides that it shall be governed by, and construed in
accordance with, the laws of the State of New York. If a court of the State of
North Carolina or a federal court of the United States of America sitting in the
State of North Carolina and applying the conflict of laws principles of North
Carolina law (in either case, a “North Carolina Court”) were to hold that the
Credit Agreement is governed by, and to be construed in accordance with, the
laws of the State of North Carolina, the Credit Agreement would constitute,
under the laws of the State of North Carolina, the legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance with
its terms, except as enforcement may be limited or otherwise affected by (a)
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other
similar laws affecting the rights of creditors generally and (b) principles of
equity, whether considered at law or in equity.

 
    The opinions set forth above are subject to the following additional
qualifications:
 
    (a)    In addition to the application of equitable principles described
above, courts have imposed an obligation on contracting parties to act
reasonably and in good faith in the exercise of their contractual rights and
remedies, and may also apply public policy considerations in limiting the right
of parties seeking to obtain indemnification under circumstances where the
conduct of such parties is determined to have constituted negligence.
 
 
 
 

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

 
    (b)    No opinion is expressed herein as to (i) Section 8.05 of the Credit
Agreement, (ii) the enforceability of provisions purporting to grant to a party
conclusive rights of determination, (iii) the availability of specific
performance or other equitable remedies, (iv) the enforceability of rights to
indemnity under federal or state securities laws or (v) the enforceability of
waivers by parties of their respective rights and remedies under law.
 
    (c)    No opinion is expressed herein as to provisions, if any, in the
Credit Agreement, which (i) purport to excuse, release or exculpate a party for
liability for or indemnify a party against the consequences of its own acts,
(ii) purport to make void any act done in contravention thereof, (iii) purport
to authorize a party to make binding determinations in its sole discretion, (iv)
relate to the effects of laws which may be enacted in the future, (v) require
waivers, consents or amendments to be made only in writing, (vi) purport to
waive rights of offset or to create rights of set off other than as provided by
statute, (vii) purport to permit acceleration of indebtedness and the exercise
of remedies by reason of the occurrence of an immaterial breach of the Credit
Agreement or any related document, (viii) provide for the enforcement of forum
selection provisions, waivers of defenses, or waivers of jury trials or other
waivers of rights or benefits bestowed by operation of law, or (ix) which
provide for the award and amount of expenses, including attorneys’ fees.
 
    The foregoing opinion is solely for your benefit and may not be relied upon
by any other Person other than any other Person that may become a Lender or
Issuing Bank under the Credit Agreement after the date hereof in accordance with
the provisions thereof. This letter speaks only as of the date hereof and may
not be relied on by any person with respect to any date after the date
hereof. We do not undertake to advise you of any changes in the opinions
expressed herein from matters that may hereafter arise or be brought to our
attention.
 
                         Very truly yours,
 
 

 
 
 

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EXHIBIT D

FORM OF OPINION OF COUNSEL
TO THE ADMINISTRATIVE AGENT

[DATE]

To Citibank, N.A. (“Citibank”), as Administrative
Agent for the Lenders referred to below, and to each
of the Lenders and Issuing Banks parties to the
Credit Agreement referred to below

 
    Re:           Progress Energy, Inc.

Ladies and Gentlemen:
 
    We have acted as counsel to the Administrative Agent in connection with the
preparation, execution and delivery of the Amended and Restated Credit
Agreement, dated as of February 15, 2012 (the “Credit Agreement”, the terms
defined therein being used herein as therein defined), among Progress Energy,
Inc., certain Lenders from time to time parties thereto, Citibank, N.A., as
Administrative Agent for the Lenders, and SunTrust Bank, as Issuing Bank
thereunder.
 
    In this connection, we have examined the following documents:
 

1. a counterpart of the Credit Agreement, executed by the parties thereto;    
2. the documents furnished by or on behalf of the Borrower pursuant to
subsections (b) through (g) of Section 3.01 of the Credit Agreement, including,
without limitation, the opinions of __________ and __________, counsel for the
Borrower (the “Borrower Opinions”).

 
    In our examination of the documents referred to above, we have assumed the
authenticity of all such documents submitted to us as originals, the genuineness
of all signatures, the due authority of the parties executing such documents and
the conformity to the originals of all such documents submitted to us as
copies. We have also assumed that you have independently evaluated, and are
satisfied with, the creditworthiness of the Borrower and the business terms
reflected in the Credit Agreement. We have relied, as to factual matters, on the
documents we have examined. We note that we do not represent the Borrower and,
accordingly, are not privy to the nature or character of its
business. Accordingly, we have assumed that the borrower is subject only to
statutes, rules, regulations, judgments, orders and other requirements of law
general applicability to corporations doing business in the State of New York.
 
 
 
 

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

 
    To the extent that our opinions expressed below involve conclusions as to
matters governed by law other than the law of the State of New York, we have
relied upon the Borrower Opinions and have assumed without independent
investigation the correctness of the matters set forth therein, our opinions
expressed below being subject to the assumptions, qualifications and limitations
set forth in the Borrower Opinions.
 
    Based upon and subject to the foregoing, and subject to the qualifications
set forth below, we are of the opinion that the Credit Agreement is the legal,
valid and binding obligation of the Borrower, enforceable against the Borrower
in accordance with its terms.
 
    Our opinion is subject to the following qualifications:
 
    (a)    The enforceability of the Borrower’s obligations under the Credit
Agreement is subject to the effect of any applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar law affecting
creditors’ rights generally.
 
    (b)    The enforceability of the Borrower’s obligations under the Credit
Agreement is subject to the effect of general principles of equity, including
(without limitation) concepts of materiality, reasonableness, good faith and
fair dealing (regardless of whether considered in a proceeding in equity or at
law). Such principles of equity are of general application, and, in applying
such principles, a court, among other things, might not allow a contracting
party to exercise remedies in respect of a default deemed immaterial, or might
decline to order an obligor to perform covenants.
 
    (c)   We note further that, in addition to the application of equitable
principles described above, courts have imposed an obligation on contracting
parties to act reasonably and in good faith in the exercise of their contractual
rights and remedies, and may also apply public policy considerations in limiting
the right of parties seeking to obtain indemnification under circumstances where
the conduct of such parties is determined to have constituted negligence.
 
    (d)   We express no opinion herein as to (i) the enforceability of Section
8.05 of the Credit Agreement, (ii) the enforceability of provisions purporting
to grant to a party conclusive rights of determination, (iii) the availability
of specific performance or other equitable remedies, (iv) the enforceability of
rights to indemnity under federal or state securities laws, or (v) the
enforceability of waivers by parties of their respective rights and remedies
under law.
 
    (e)   Our opinions expressed above are limited to the law of the State of
New York, and we do not express any opinion herein concerning any other
law. Without limiting the generality of the foregoing, we express no opinion as
to the effect of the law of any jurisdiction other than the State of New York
wherein any Lender may be located or wherein enforcement of the Credit Agreement
or the Notes may be sought that limits the rates of interest legally chargeable
or collectible.
 
    (f)   In connection with any provision of the Credit Agreement whereby the
Borrower submits to the jurisdiction of any court of competent jurisdiction, we
note the limitations of 28 U.S.C. §§1331 and 1332 on Federal court of
jurisdiction.
 
 
 
 

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

 
    This opinion letter speaks only as of the date hereof, and we expressly
disclaim any responsibility to advise you of any development or circumstance,
including changes of law of fact, that may occur after the date of this opinion
letter that might affect the opinions expressed herein. This opinion letter is
furnished to the addressees hereof solely in connection with the transactions
contemplated by the Credit Agreement, is solely for the benefit of the
addressees hereof and may not be relied upon by any other Person or for any
other purpose without our prior written consent. Notwithstanding the foregoing,
this opinion letter may be relied upon by any Person that becomes a Lender or an
Issuing Bank after the date hereof in accordance with the provisions of the
Credit Agreement as if this opinion letter were addressed and delivered to such
Person on the date hereof. Any such reliance must be actual and reasonable under
the circumstances existing at the time such Person becomes a Lender or an
Issuing Bank, as applicable, taking into account any changes in law or facts and
any other developments known to or reasonably knowable by such Person at such
time.
 
                         Very truly yours,

 
 

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EXHIBIT E

FORM OF COMPLIANCE CERTIFICATE

[Letterhead of Progress Energy, Inc.]

[Date]

To each of the Lenders and Issuing Banks parties to
the Credit Agreement referred to below, Citibank,
N.A., as Administrative Agent

Progress Energy, Inc.

Ladies and Gentlemen:

This compliance certificate is furnished to you pursuant to Section 5.01(i)[(i)
or (ii)] of the Amended and Restated Credit Agreement, dated as of February 15,
2012 (the “Credit Agreement”), among Progress Energy, Inc., a North Carolina
corporation (the “Borrower”), the lenders parties thereto (the “Lenders”),
Citibank, N.A. (“Citibank”), as administrative agent (the “Administrative
Agent”) for the Lenders, and the letter of credit issuing banks parties
thereto. Terms defined in the Credit Agreement are used herein as therein
defined.

1.           As of  [_______], 20_____, the ratio of Consolidated Indebtedness
of the Borrower and its Subsidiaries to Total Capitalization was _____ to 1.0,
calculated, in accordance with Section 5.01(j) of the Credit Agreement, as
follows:

A.           Indebtedness as of such date was $________, calculated as follows:

Current Indebtedness:
[List all forms of current Debt]
 
Amount
__________________________________
 
$
__________________________________
   
__________________________________
   
__________________________________
 
  __________
Total current Indebtedness
 
$__________
     
Long-term Indebtedness :
[list all forms of long-term Indebtedness]
 
Amount
__________________________________
 
$
__________________________________
   
__________________________________
   
__________________________________
   
Total long-term Indebtedness
 
$__________
     
Total Indebtedness (current Indebtedness plus long-term Indebtedness )
 
$__________

B.           Total Capitalization as of such date was $_____, calculated as
follows:

 
Consolidated Indebtedness
$
       
Preferred Stock
$
       
Common Stock
$
       
Retained Earnings
$__________

2.           As of [_______], 20_____, and as of the date hereof, no Event of
Default and no event that, with the giving of notice or lapse of time or both,
will constitute an Event of Default, has occurred and in continuing.

I hereby certify that the calculations set forth in paragraph 1 hereof were
prepared in accordance with GAAP.

Very truly yours,

PROGRESS ENERGY, INC.

By______________________________________
     Name:
     Title:

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