Document:

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                                                               Exhibit 10.(a)(2)

                                                                  EXECUTION COPY

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                                  $170,000,000
                               (364-DAY FACILITY)

                                CREDIT AGREEMENT
                          Dated as of December 18, 2001

                            FLORIDA POWER CORPORATION
                                   (Borrower)

                                       and

                 THE BANKS LISTED ON THE SIGNATURE PAGES HEREOF
                                     (Banks)

                                       and

                              BANK OF AMERICA, N.A.
                             (Administrative Agent)

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                        MERRILL LYNCH CAPITAL CORPORATION
                   (Sole Lead Arranger and Syndication Agent)

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                                TABLE OF CONTENTS
                                -----------------

Section                                                                    Page
-------                                                                    ----

                   ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.01. Certain Defined Terms..........................................1
SECTION 1.02. Computation of Time Periods...................................10
SECTION 1.03. Accounting Terms..............................................10

                  ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES

SECTION 2.01. The  Advances.................................................10
SECTION 2.02. Making the Advances...........................................11
SECTION 2.03. Fees..........................................................12
SECTION 2.04. Reduction of the Commitments..................................12
SECTION 2.05. Repayment of Advances.........................................13
SECTION 2.06. Interest on Advances..........................................13
SECTION 2.07. Additional Interest on Eurodollar Rate Advances...............13
SECTION 2.08. Interest Rate Determination...................................14
SECTION 2.09. Voluntary Conversion of Advances..............................15
SECTION 2.10. Prepayments of Advances.......................................15
SECTION 2.11. Increased Costs...............................................16
SECTION 2.12. Illegality....................................................17
SECTION 2.13. Payments and Computations.....................................17
SECTION 2.14. Sharing of Payments, Etc......................................18

                        ARTICLE III CONDITIONS OF LENDING

SECTION 3.01. Conditions Precedent to Closing...............................18
SECTION 3.02. Conditions Precedent to Each Borrowing........................19

                    ARTICLE IV REPRESENTATIONS AND WARRANTIES

SECTION 4.01. Representations and Warranties of the Borrower................20

                       ARTICLE V COVENANTS OF THE COMPANY

SECTION 5.01. Affirmative Covenants.........................................22
SECTION 5.02. Negative Covenants............................................24

                          ARTICLE VI EVENTS OF DEFAULT

SECTION 6.01. Events of Default.............................................25

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                              ARTICLE VII THE AGENT

SECTION 7.01. Authorization and Action......................................27
SECTION 7.02. The Agent's Reliance, Etc.....................................27
SECTION 7.03. The Agent and its Affiliates..................................28
SECTION 7.04. Lender Credit Decision........................................28
SECTION 7.05. Indemnification...............................................28
SECTION 7.06. Successor Administrative Agent................................29

                           ARTICLE VIII MISCELLANEOUS

SECTION 8.01. Amendments, Etc...............................................29
SECTION 8.02. Notices, Etc..................................................30
SECTION 8.03. No Waiver; Remedies...........................................30
SECTION 8.04. Costs, Expenses, Taxes and Indemnification....................31
SECTION 8.05. Right of Set-off..............................................33
SECTION 8.06. Binding Effect................................................34
SECTION 8.07. Assignments and Participations................................34
SECTION 8.08. Governing Law.................................................38
SECTION 8.09. Waiver of Jury Trial..........................................38
SECTION 8.10. Execution in Counterparts.....................................38
SECTION 8.11. Severability..................................................38
SECTION 8.12. Headings......................................................38
SECTION 8.13. Entire Agreement..............................................38

SCHEDULES
---------

SCHEDULE I    -  List of Commitments and Applicable Lending Offices
SCHEDULE II   -  Permitted Existing Indebtedness

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 the Borrower
C-2   Form of Opinion of Special Counsel for the Borrower
D     Form of Opinion of Counsel for the Arranger
E     Form of Compliance Certificate

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                                CREDIT AGREEMENT

                          Dated as of December 18, 2001

     This CREDIT AGREEMENT (this "Agreement") is made by FLORIDA POWER
CORPORATION, a Florida corporation (the "Borrower"), the banks listed on the
signature pages hereof (the "Banks"), BANK OF AMERICA, N.A. ("Bank of America"),
as administrative agent (the "Administrative Agent") for the Lenders (as
hereinafter defined).

                                   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.

     "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 :

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--------------------------------------------------------------------------
                            Applicable Margin for    Applicable Margin for
Applicable Rating Level   Eurodollar Rate Advances     Base Rate Advances
--------------------------------------------------------------------------
           1                       0.295%                      0%
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           2                       0.410%                      0%
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           3                       0.650%                      0%
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           4                       0.750%                      0%
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           5                       0.950%                      0%
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           6                       1.300%                      0%
--------------------------------------------------------------------------

provided, that

          (i) the Applicable Margins for Eurodollar Rate Advances set forth
     above for each Applicable Rating Level shall increase at any time the
     aggregate principal amount of Advances outstanding is greater than 50% of
     the aggregate Commitments by 0.125% at Levels 1, 2, 3, 4 and 5 and by
     0.250% at Level 6,

          (ii) 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

          (iii) 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- and Baa3                                        5
-----------------------------------------------------------------
lower than BBB- and Baa3 or unrated                  6
-----------------------------------------------------------------

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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. In the
event that the S&P Rating and the Moody's Rating differ by more than one
Applicable Rating Level, 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.

     "Arranger" has the meaning specified in the introductory paragraph of this
Agreement.

     "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.

     "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 higher from time to time
of:

          (i) the rate of interest announced publicly by Bank of America in
     Charlotte, North Carolina, from time to time, as Bank of America's base
     rate; and

          (ii) 1/2 of one percent per annum above the Federal Funds Rate in
     effect from time to time.

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

     "Bank of America" has the meaning specified in the introductory paragraph
of this Agreement.

     "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 (i) the failure of the Parent to own, directly or indirectly, 100% of the
voting stock of the Borrower or (ii) 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 Parent (or other securities convertible into such

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securities) representing 30% or more of the combined voting power of all
securities of the Parent entitled to vote in the election of directors.

     "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 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).

     "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 & Light Company.

     "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.

     "Eligible Assignee" means (i) any other Lender or any Affiliate of a Lender
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 of 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).

     "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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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 average (rounded upward to the nearest whole multiple of 1/8 of 1% per
annum, if such average is not such a multiple) of the rates per annum at which
deposits in U.S. dollars are offered by the principal office of each of the
Reference Banks in London, England to prime banks in the London Interbank market
at 11:00 A.M. (London time) two Business Days before the first day of such
Interest Period for a period equal to such Interest Period and in an amount
substantially equal to the amount of such Eurodollar Rate Advance comprising
part of such Borrowing to be outstanding during such Interest Period from such
Reference Bank. The Eurodollar Rate for the Interest Period for each Eurodollar
Rate Advance comprising part of the same Borrowing shall be determined by the
Administrative Agent on the basis of the applicable rates furnished to and
received by the Administrative Agent from the Reference Banks two Business Days
before the first day of such Interest Period, subject, however, to the
provisions of Section 2.08.

     "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.

     "Events of Default" has the meaning assigned to that term in Section 6.01.

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     "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.

     "Existing Credit Facility" means, the Fourth Amended and Restated Credit
Agreement A, dated as of November 14, 2000, among the Borrower, the Lenders
identified therein and The Chase Manhattan Bank, as Agent

     "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      Facility Fee
      Level             Percentage
-------------------------------------
        1                 0.100%
-------------------------------------
        2                 0.100%
-------------------------------------
        3                 0.100%
-------------------------------------
        4                 0.125%
-------------------------------------
        5                 0.175%
-------------------------------------
        6                 0.200%
-------------------------------------

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.

     "Florida Power Mortgage" means the Indenture, dated as of January 1, 1944,
between the Borrower, Guaranty Trust Company of New York and the Florida
National Bank of Jacksonville, as modified, amended or supplemented from time to
time.

     "Florida Power Mortgage Bonds" means those bonds issued from time to time
by the Borrower pursuant to the Florida Power Mortgage.

     "FPC" means Florida Progress Corporation.

     "FPSC Order" means an order of the Florida Public Service Commission that
authorizes the Borrower to borrow and perform its obligations under this
Agreement.

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     "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.

     "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 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

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     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.

     "Lenders" means the Lenders listed on the signature pages hereof and each
Eligible Assignee that shall become a party hereto pursuant to Section 8.07.

     "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 at least 66 2/3% of
the aggregate principal amount of the Advances then outstanding, or, if no such
principal amount is then outstanding, Lenders having at least 66 2/3% 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.

     "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.

     "Parent" means Progress Energy, Inc.

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     "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.

     "Progress Capital" means Progress Capital Holdings, Inc.

     "Reference Banks" means Bank of America and Bank One, NA.

     "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(d), or in a
certificate delivered to the Administrative Agent replacing or amending such
certificate. Each Lender may conclusively rely on each certificate so delivered
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.

     "SEC Order" means Order Nos. 35-27440 and 70-9909 of the Securities and
Exchange Commission issued September 20, 2001.

     "Significant Subsidiary" means any 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).

     "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).

     "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.

                                       9

<PAGE>

     "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, (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, with respect to a Lender, the earlier to occur of
(i) December 17, 2002 and (ii) the date of termination in whole of the
Commitments pursuant to Section 2.04 or 6.01.

     "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 generally accepted accounting principles
consistent with those applied in the preparation of the financial statements
referred to in Section 4.01(e)), plus 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 generally accepted accounting principles consistent with those
applied in the preparation of the financial statements referred to in Section
4.01(e).

                                   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 Termination
Date, in an aggregate amount outstanding not to

                                       10

<PAGE>

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"). 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
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 2.01.

     (b) Any Lender may request that any 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 10:00 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 12:00 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.

                                       11

<PAGE>

     (c) Unless the Administrative Agent shall have received notice from a
Lender prior to the 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 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, from the date hereof, in the case of each Bank, and 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.

     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

                                       12

<PAGE>

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 Advances then
outstanding; 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.

     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

                                       13

<PAGE>

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) Each Reference Bank agrees to furnish to the Administrative Agent
timely information for the purpose of determining the Eurodollar Rate. If any
one or more of the Reference Banks shall not furnish such timely information to
the Administrative Agent for determination of any such interest rate, the
Administrative Agent shall determine such interest rate on the basis of timely
information furnished by the remaining Reference Banks.

     (b) 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), and the applicable rate, if any,
furnished by each Reference Bank for determining the applicable interest rate
under Section 2.06(b).

     (c) If fewer than two Reference Banks furnish timely information to the
Administrative Agent for determining the Eurodollar Rate for any Eurodollar Rate
Advances,

          (i) the Administrative Agent shall forthwith notify the Borrower and
     the Lenders that the interest rate cannot be determined for such Eurodollar
     Rate Advances,

          (ii) each such Advance will automatically, on the last day of the then
     existing Interest Period therefor, Convert into a Base Rate Advance (or if
     such Advance is then a Base Rate Advance, will continue as a Base Rate
     Advance), and

          (iii) 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.

     (d) 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.

     (e) 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

                                       14

<PAGE>

and the Lenders and such Advances will automatically, on the last day of the
then existing Interest Period therefor, Convert into Base Rate Advances.

     (f) 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 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.

     (g) 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 10:00 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

                                       15

<PAGE>

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.

     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), there shall be any increase
in the cost to any Lender of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances, then the Borrower shall from time to time, upon demand
by such Lender (with a copy of such demand to the Administrative Agent), pay to
the Administrative Agent for account of such Lender additional amounts
sufficient to reimburse such Lender for such increased cost. All claims for
increased cost 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 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 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, shall be conclusive and binding for all purposes, absent
manifest error.

     (b) If any Lender 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) affects or would affect the amount of
capital required or expected to be maintained by such Lender or any corporation
controlling such Lender and that the amount of such capital is increased by or
based upon the existence of such Lender's commitment to lend hereunder and other
commitments of this type, then, upon demand by such Lender (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, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender or such corporation in the light of such circumstances, to the extent
that such Lender reasonably determines such increase in capital to be allocable
to the existence of such Lender's commitment to lend hereunder. All claims for
such additional amounts shall be submitted by such Lender (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, 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 shall thereby waive its claim to such additional
amounts incurred during such 90-day period but not to any such additional
amounts

                                       16

<PAGE>

incurred thereafter. A certificate as to such amounts submitted to the Borrower
and the Administrative Agent by such Lender 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 Lender 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.

     (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 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 of
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.

                                       17

<PAGE>

     (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.

     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 Advances obtained by
all the Lenders, such Lender shall forthwith purchase from the other Lenders
such participation in the Advances 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-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.

                                  ARTICLE III
                              CONDITIONS OF LENDING

     SECTION 3.01. Conditions Precedent to Closing.

     The Commitments of the Lenders 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:

                                       18

<PAGE>

     (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.

     (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 R. Alexander Glenn, Associate General Counsel of
the Borrower, and of Hunton & Williams, 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 Lender through the Administrative Agent may reasonably request.

     (h) A favorable opinion of King & Spalding, counsel for the Arranger,
substantially in the form of Exhibit D hereto.

     (i) Evidence that all outstanding obligations of the Borrower under the
Existing Credit Facility have been paid in full and that the commitments of the
lenders under the Existing Credit Facility have been terminated.

     SECTION 3.02. Conditions Precedent to Each Borrowing.

     The obligation of each Lender to make an Advance on the occasion of each
Borrowing (including the initial Borrowing) 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, (b) on the date of such Borrowing, the following
statements shall be true (and the giving of the Notice of Borrowing and the
acceptance by the Borrower of the proceeds of such Borrowing shall constitute a
representation and warranty by the Borrower that on the date of such Borrowing
such statements are true):

          (i) The representations and warranties contained in Section 4.01 are
     true and correct on and as of the date of such Borrowing before and after
     giving effect to such

                                       19

<PAGE>

     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 Borrowing or from the application of the proceeds therefrom, 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;

and (c) the Administrative Agent shall have received such other approvals,
opinions and documents as 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 the SEC Order and the FPSC Order, each of which has been duly issued and is
in full force and effect.

     (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
at December 31, 2000, and the related Consolidated statements of income and
retained earnings of the Borrower and its Subsidiaries for the fiscal year then
ended, and the Consolidated balance sheets of the Borrower and its Subsidiaries
as at June 30, 2001, and the related Consolidated statements of income and
retained earnings of the Borrower and its Subsidiaries, copies of each of which
have been furnished to each Lender, fairly present (subject, in the case of such
financial

                                       20

<PAGE>

statements dated June 30, 2001, to year end adjustments) the financial condition
of the Borrower and its Subsidiaries as at such dates and the results of the
operations of the Borrower and its Subsidiaries for the periods ended on such
dates, all in accordance with generally accepted accounting principles
consistently applied. Since December 31, 2000, there has been no material
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 and Parent 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 Advance will be used to acquire any security in any
transaction that is subject to Sections 13 and 14 of the Exchange Act.

     (h) 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.

     (i) Following application of the proceeds of each Advance, 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).

     (j) No Termination Event has occurred or is reasonably expected to occur
with respect to any Plan.

     (k) 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.

     (l) 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.

     (m) All written information furnished by the Borrower to the Agent and the
Lenders in connection with this Agreement (the "Disclosed Information") was (and
all information furnished in the future by the Borrower to the Agent and the
Lenders will be) complete and correct in all respects material to the
creditworthiness of the Borrower when delivered. As of the

                                       21

<PAGE>

date hereof, the Disclosed Information does 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.

                                   ARTICLE V
                            COVENANTS OF THE COMPANY

     SECTION 5.01. Affirmative Covenants.

     So long as any Advance or any other 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,
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.

     (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 generally accepted accounting principles
consistently applied.

     (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.

     (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

                                       22

<PAGE>

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 Subsidiary to pay, promptly
as the same shall become due each material obligation of the Borrower or such
Subsidiary.

     (i) Reporting Requirements. Furnish to 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 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;

                                       23

<PAGE>

          (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; and

          (viii) such other information respecting the condition or operations,
     financial or otherwise, of the Borrower or any Subsidiary as any Lender
     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 .65:1.0.

     (k) Use of Proceeds. Use the proceeds of each Advance solely for general
corporate purposes (including, in each case, without limitation, as a commercial
paper back-up). 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.

     SECTION 5.02. Negative Covenants.

     So long as any Advance or 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 Florida Power
Mortgage, (ii) liens and security interests against the fuel used by the
Borrower in its power 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 $100,000,000 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 Florida Power Mortgage Bonds, (iv) unsecured
Indebtedness, including guarantees issued in connection with the financing of
pollution control facilities operated by the Borrower, guarantees of
Indebtedness incurred by any

                                       24

<PAGE>

wholly-owned Subsidiary and guarantees of debt securities issued by any
financing Subsidiary established to secure debt financing in the offshore
markets, and (v) other Indebtedness outstanding on the date of this Agreement,
as described on Schedule II hereto.

     (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 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) sales of
investments in securities with a maturity of less than one year, or (vi) other
sales not exceeding $150,000,000 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).

     (g) Change in Nature of Business. Engage, or cause or permit CP&L 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.

                                   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 when due,
or shall fail to pay any interest on the principal amount of any Advance or any
fees or other amount payable

                                       25

<PAGE>

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 Subsidiary shall fail to pay any amount in respect
of any Indebtedness in excess of $10,000,000 (but excluding Indebtedness
hereunder) of the Borrower or such 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 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 Subsidiary
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, 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
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 $10,000,000
shall be rendered against the Borrower or any 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

                                       26

<PAGE>

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 to make Advances to be
terminated, whereupon the same shall forthwith terminate, and (ii) declare the
principal amount of the Advances then outstanding, 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; 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 to make Advances
shall automatically be terminated and (B) the principal amount of the Advances
then outstanding, 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.

                                   ARTICLE VII
                                    THE AGENT

     SECTION 7.01. Authorization and Action.

     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 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.

     SECTION 7.02. The 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.

                                       27

<PAGE>

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 good faith by it in
accordance with the advice of such counsel, accountants or experts; (ii) makes
no warranty or representation to any Lender and shall not be responsible to 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 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 Agent and its Affiliates.

     With respect to its Commitments and, the Advances made by it, the
Administrative 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 Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender 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 Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent 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), ratably according to the respective principal
amounts of the Advances then held by each of them (or if no Advances are at the
time outstanding, 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 in any way relating to or arising out
of this Agreement or any action taken or omitted by the Administrative Agent
under this Agreement; provided that no Lender shall be liable

                                       28

<PAGE>

for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender agrees to reimburse the Administrative
Agent promptly upon demand for its ratable share of any out-of-pocket expenses
(including reasonable counsel fees) incurred by the Administrative Agent 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 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 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. Other Agents.

     Each party to this Agreement hereby agrees that the "syndication agent" so
identified on the cover page of this Agreement shall have no right, power,
obligation, liability, responsibility or duty under this Agreement and shall not
have or be deemed to have any fiduciary relationship with any Lender.

                                  ARTICLE VIII
                                  MISCELLANEOUS

     SECTION 8.01. Amendments, Etc.

     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

                                       29

<PAGE>

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 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 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 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, other than any such
amount payable to the Lenders ratably; and provided, further, that (A) no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required hereinabove to take
such action, affect the rights or duties of such Administrative Agent under this
Agreement and (B) this Agreement may be amended and restated without the consent
of any Lender or the Administrative Agent if, upon giving effect to such
amendment and restatement, such Lender or Administrative Agent, 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 or Administrative Agent, as
the case may be.

     SECTION 8.02. Notices, Etc.

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
c/o Progress Energy, Inc., 410 S. Wilmington Street, PEB 19A3, Raleigh, North
Carolina 27601, Attention: Director of Financial Operations, Treasury
Department, Facsimile no. (919) 546-7826, e-mail: charles.beuris@pgnmail.com; if
                                                  --------------------------
to any Lender, at its Domestic Lending Office set forth opposite its name on
Schedule I hereto; and if to the Administrative Agent, at its address at Bank of
America, N.A., 901 Main Street, Dallas, Texas 75202, Attention: Jarrod Martin,
Telephone: 214-209-1225, Facsimile no.: (214) 290-9404, e-mail:
jarrod.martin@bankofamerica.com or, as to each party, at such other address as
-------------------------------
shall be designated by such party in a written notice to the other parties. All
such notices and communications shall be effective when received by the
addressee thereof.

     SECTION 8.03. No Waiver; Remedies.

     No failure on the part of any Lender 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.

                                       30

<PAGE>

     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) 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 documents to be delivered
hereunder and (iv) the enforcement of the rights and remedies of the Lenders 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 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 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 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 or 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
or Agent, (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including

                                       31

<PAGE>

deductions applicable to additional sums payable under this Section 8.04) such
Lender or 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.

     (d) The Borrower will indemnify each Lender 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 or 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 or 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 Lender pursuant to
Sections 8.04(c) and (d) in respect of any Taxes, and 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 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 Lender shall have determined to be attributable to
the deduction or withholding of such Taxes. If such Lender later

                                       32

<PAGE>

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 Lender promptly
repay the amount of such overpayment. Any determination made by such Lender
pursuant to 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 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 Lender.

     (h) The Borrower hereby agrees to indemnify and hold harmless each Lender,
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 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 Advance, 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.

     (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 Advances due
and payable pursuant to the provisions of Section 6.01, each Lender is 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 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 shall have made any demand under this Agreement and although such
obligations may be unmatured. Each Lender agrees promptly to notify the Borrower
after any such set-off and application made by such Lender; provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) that such Lender may have.

                                       33

<PAGE>

     SECTION 8.06. Binding Effect.

     This Agreement shall become effective when it shall have been executed by
the Borrower and the Administrative Agent and when the Administrative Agent
shall have been notified by each Lender that such Lender has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, the
Administrative Agent 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
Lender.

     SECTION 8.07. Assignments and Participations.

     (a) Each Lender may, with the consent of the Administrative Agent and the
Borrower (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) $5,000,000 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 Bank of America
is an assigning party) shall also deliver to the Administrative Agent a
processing and recordation fee of $3,500. 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 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

                                       34

<PAGE>

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.

     (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, 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)

                                       35

<PAGE>

such participating banks or other entities shall be entitled to the cost
protection provisions contained in Sections 2.08, 2.12 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 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), then within 30 days after any such demand (if, but only
if, such demanded payment has been made by the Borrower), 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 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, provided that (i) 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, (ii) the Borrower shall have
satisfied all its presently due obligations to such Lender under this Agreement,
and (iii) 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 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

                                       36

<PAGE>

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 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 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 Borrower, the
Administrative Agent 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.

                                       37

<PAGE>

     SECTION 8.08. 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 8.09. Waiver of Jury Trial.

     THE BORROWER, THE ADMINISTRATIVE AGENT 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 8.10. 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.

     SECTION 8.11. 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 8.12. 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 8.13. 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.

                                       38

<PAGE>

                                                                             S-1

     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.

                                           FLORIDA POWER CORPORATION

                                           By
                                             -----------------------------------
                                               Thomas R. Sullivan
                                               Treasurer

                                       39

<PAGE>

                                                                             S-2

                                           BANK OF AMERICA,N.A,as Administrative
                                           Agent and Lender

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

<PAGE>

                                                                             S-3

                                           MERRILL LYNCH BANK USA

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

<PAGE>
                                                                             S-4

                                           BANK ONE, NA

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

<PAGE>

                                                                             S-5

                                           NORTHERN TRUST

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

<PAGE>

                                                                             S-6

                                           SUNTRUST BANK

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

<PAGE>

                                   SCHEDULE I

                            FLORIDA POWER CORPORATION

               List of Commitments and Applicable Lending Offices

<TABLE>
<CAPTION>
                                  Eurodollar                 Domestic
     Name of Bank               Lending Office            Lending Office      Commitment
     ------------               --------------            --------------      ----------
<S>                      <C>                            <C>                  <C>
Bank of America, N.A.    901 Main Street                Same as Eurodollar   $ 21,900,000
                         Dallas, Texas 75202            Lending Office

                         Attention: Jarrod Martin

Bank One, NA             1 Bank One Plaza, Suite 0363   Same as Eurodollar   $ 17,800,000
                         Chicago, Illinois 60670-0363   Lending Office

                         Attention: Madeleine Pember

Merrill Lynch Bank USA   15 W. South Temple             Same as Eurodollar   $100,000,000
                         Suite 300                      Lending Office
                         Salt Lake City, UT 84101

                         Attention: Frank Stepan

Northern Trust           50 S. LaSalle                  Same as Eurodollar   $ 12,500,000
                         Chicago, IL 60675              Lending Office

                         Attention: Chris McKean

SunTrust Bank            200 South Orange Avenue        Same as Eurodollar   $ 17,800,000
                         Orlando, Florida 32801         Lending Office

                         Attention: William Barr
</TABLE>

<PAGE>

                                   SCHEDULE II

                         Permitted Existing Indebtedness

     None.

<PAGE>

                                   EXHIBIT A-1

                               NOTICE OF BORROWING

                                                                          [Date]

Bank of America, N.A., as Administrative Agent
 for the Lenders parties to the
 Credit Agreement referred to below
[Address]

Attention:
           -----------------

Ladies and Gentlemen:

     The undersigned, FLORIDA POWER CORPORATION refers to the Credit Agreement,
dated as of December 18, 2001 (the "Credit Agreement", the terms defined therein
being used herein as therein defined), among the undersigned, certain Lenders
from time to time parties thereto and BANK OF AMERICA, N.A., as Administrative
Agent for the Lenders, 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 Credit 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:

          (i) the representations and warranties contained in Section 4.01 of
     the Credit Agreement are true and 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

                                     A-1-1

<PAGE>

     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,

                                                FLORIDA POWER CORPORATION

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

                                     A-1-2

<PAGE>

                                   EXHIBIT A-2

                              NOTICE OF CONVERSION

                                                                          [Date]

Bank of America, N.A., as Administrative Agent
 for the Lenders parties to the
 Credit Agreement referred to below
[Address]

Attention:
           ---------------

Ladies and Gentlemen:

     The undersigned, FLORIDA POWER CORPORATION refers to the Credit Agreement,
dated as of December 18, 2001 (the "Credit Agreement", the terms defined therein
being used herein as therein defined), among the undersigned, certain Lenders
from time to time parties thereto and BANK OF AMERICA, N.A., as Administrative
Agent for the Lenders, 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:

          (i) The Business Day of the Proposed Conversion is               ,
                                                             --------------
     20    .
       ----
          (ii) The Type of, and Interest Period applicable to, the Advances (or
     portions thereof) proposed to be Converted:                 .
                                                 ----------------

          (iii) The Type of Advance to which such Advances (or portions thereof)
     are proposed to be Converted:                         .
                                   ------------------------

          (iv) 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:                               .
                      ------------------------------

          (v) The aggregate amount of Advances (or portions thereof) proposed to
     be Converted is $                 .
                       ---------------

                                     A-2-1

<PAGE>

     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,

                                            FLORIDA POWER CORPORATION

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

                                     A-2-2

<PAGE>

                                    EXHIBIT B

                            ASSIGNMENT AND ACCEPTANCE

                           Dated                 , 20
                                 ----------------     ---

     Reference is made to the Credit Agreement, dated as of December 18, 2001
(as amended, modified and supplemented from time to time, the "Credit
Agreement", the terms defined therein being used herein as therein defined),
among FLORIDA POWER CORPORATION, certain Lenders (as defined in the Credit
Agreement) from time to time parties thereto and BANK OF AMERICA, N.A., as
Administrative Agent (the "Administrative Agent") for the Lenders.

                     (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. 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

                                       B-1

<PAGE>

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.]

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

                                       B-2

<PAGE>

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

BANK OF AMERICA, N.A.,
  as Administrative Agent

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

FLORIDA POWER CORPORATION/2/

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

----------
/2/ If required

                                       B-3

<PAGE>

                                   SCHEDULE 1

                                       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/

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

<PAGE>

                                   EXHIBIT C-1

           FORM OF OPINION OF ASSOCIATE GENERAL COUNSEL TO THE COMPANY

                                                           [December     , 2001]
                                                                     ----

To each of the Lenders parties to the Credit
Agreement referred to below and to Bank of America,
N.A., as Administrative Agent

     Re: Florida Power Corporation

Ladies and Gentlemen:

     This opinion is furnished to you by me as Associate General Counsel to
Florida Power Corporation (the "Borrower") pursuant to Section 3.01(g) of the
Credit Agreement, dated as of December 18, 2001 (the "Credit Agreement", the
terms defined therein being used herein as therein defined), among Florida Power
Corporation, certain lenders named therein (the "Lenders") and Bank of America,
N.A., as Administrative Agent for the Lenders.

     In connection with the preparation, execution and delivery of the Credit
Agreement, I 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 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

                                     C-1-1

<PAGE>

delivery, pursuant to due authorization, of the Credit Agreement by the Lenders
and the 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 its Subsidiaries 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. 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 the SEC Order and the FPSC Order, which has been duly issued and is
in full force and effect.

     5. To my knowledge, except as described in the reports and registration
statements that the Borrower and the Parent have filed with the Securities and
Exchange Commission, there are no pending or overtly threatened actions or
proceedings against the Borrower or any of its

                                     C-1-2

<PAGE>

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.

     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 under the Credit Agreement after the date hereof and (ii) Hunton &
Williams and King & Spalding, in connection with their respective opinions
delivered on the date hereof under Section 3.01 of the Credit Agreement.

                                                     Very truly yours,

                                     C-1-3

<PAGE>

                                   EXHIBIT C-2

               FORM OF OPINION OF SPECIAL COUNSEL FOR THE COMPANY

                                                           [December     , 2001]
                                                                     ----

To each of the Lenders parties to the Credit Agreement
referred to below and to Bank of America, N.A., as
Administrative Agent

     Re: Florida Power Corporation

Ladies and Gentlemen:

     This opinion is furnished to you by us as counsel for Florida Power
Corporation (the "Borrower") pursuant to Section 3.01(g) of the Credit
Agreement, dated as of December 18, 2001 (the "Credit Agreement", the terms
defined therein being used herein as therein defined), among the Borrower,
certain lenders named therein (the "Lenders") and Bank of America, N.A., as
Administrative Agent for the Lenders.

     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
             , General Counsel to the Company 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

                                     C-2-1

<PAGE>

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 States of North Carolina, Florida
and New York, and the opinions expressed herein are limited to the law of the
States of North Carolina, Florida and New York 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 the Credit Agreement constitutes the
legal, valid and binding obligation 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 opinion set forth above is subject to the following 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 (A) purport to excuse, release or exculpate a party for
liability for or indemnify a party against the consequences of its own acts, (B)
purport to make void any act done in contravention thereof, (C) purport to
authorize a party to make binding determinations in its sole discretion, (D)
relate to the effects of laws which may be enacted in the future, (E) require
waivers, consents or amendments to be made only in writing, (F) purport to waive
rights of offset or to create rights of set off other than as provided by
statute, or (G) 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. Further, we express no opinion as to the
necessity for any Lender, by reason of such Lender's particular circumstances,
to qualify to transact business in the State of New York or as to any Lender's
liability for taxes in any jurisdiction.

     The foregoing opinion is 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
under the Credit Agreement

                                     C-2-2

<PAGE>

after the date hereof in accordance with the provisions thereof and (ii) King &
Spalding, in connection with their opinion delivered on the date hereof under
Section 3.01 of the Credit Agreement.

                                                     Very truly yours,

                                     C-2-3

<PAGE>

                                    EXHIBIT D

                           FORM OF OPINION OF COUNSEL
                                 TO THE ARRANGER

                                     [DATE]

To Bank of America, N.A. ("Bank of America"),
as Administrative Agent for the Lenders referred to
below, and to the Arranger and Lenders parties to
the Credit Agreement referred to below

     Re: Florida Power Corporation

Ladies and Gentlemen:

     We have acted as counsel to the Arranger in connection with the
preparation, execution and delivery of the Credit Agreement, dated as of
December 18, 2001 (the "Credit Agreement", the terms defined therein being used
herein as therein defined), among Florida Power Corporation, certain Lenders
from time to time parties thereto and Bank of America, as Administrative Agent
for the Lenders.

     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 opinion of R. Alexander Glenn, Associate
     General Counsel to the Borrower, and the opinion of Hunton & Williams,
     special counsel to the Borrower (collectively, 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.

     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

                                       D-1

<PAGE>

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.

     The foregoing opinion is solely for your benefit and may not be relied upon
by any other Person other than a Person that becomes a Lender under the Credit
Agreement after the date hereof.

                                Very truly yours,

                                       D-2

<PAGE>

                                    EXHIBIT E

                         FORM OF COMPLIANCE CERTIFICATE

                    [Letterhead of Florida Power Corporation]

                                                                          [Date]

To the Lenders party to the
Credit Agreement referred
to below and to Bank of America, N.A.
as Administrative Agent

                            Florida Power Corporation
                            -------------------------

Ladies and Gentlemen:

This compliance certificate is furnished to you pursuant to Section 5.01(i)(ii)
of the Credit Agreement, dated as of December 18, 2001 (the "Credit Agreement"),
among Florida Power Corporation, a Florida corporation (the "Borrower"), the
banks listed on the signature pages thereof (the "Banks") and Bank of America,
N.A. ("Bank of America"), as administrative agent (the "Administrative Agent"),
for the Lenders (as hereinafter defined). Terms defined in the Credit Agreement
are used herein as therein defined.

1. As of [       ], 2001, 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:                                                  Amount
                                                                       ------
     [List all forms of current Debt]

     ----------------------------------                             $

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

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

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

Total current Indebtedness                                          $
                                                                     -----------

Long-term Indebtedness :                                               Amount
                                                                       ------
     [list all forms of long-term Indebtedness]

     ----------------------------------                             $

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

                                       E-1

<PAGE>

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

     ----------------------------------
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 [       ], 2001, 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 generally accepted accounting principles consistent
with those applied in the preparation of the financial statements referred to in
Section 4.01(e) of the Credit Agreement.

                                              Very truly yours,

                                              FLORIDA POWER CORPORATION

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

                                       E-2<PAGE>

                                                                   Exhibit 4b(2)

                                                                 COUNTERPART
                                                                             ---
                                                             OF 110 COUNTERPARTS

                         CAROLINA POWER & LIGHT COMPANY

                                       TO

                              THE BANK OF NEW YORK
                         (formerly Irving Trust Company)

                                       AND

                               DOUGLAS J. MACINNES

            (successor to Frederick G. Herbst, Richard H. West, J.A.
             Austin, E.J. McCabe, G. White, D.W. May, J.A. Vaughan,
                Joseph J. Arney, Wafaa Orfy and W.T. Cunningham)

                                 as Trustees under Carolina Power & Light
                                 Company's Mortgage and Deed of Trust, dated as
                                 of May 1, 1940

                                   ----------

                      Seventy-first Supplemental Indenture

    Providing among other things for First Mortgage Bonds, Pollution Control
                           Series W (Eightieth Series)

                                   ----------

                          Dated as of February 1, 2002

                                                   Prepared by and Return to:
                                                   Hunton & Williams (TSG)
                                                   Post Office Box 109
                                                   Raleigh, North Carolina 27602

                                        1

<PAGE>

                      SEVENTY-FIRST SUPPLEMENTAL INDENTURE

     INDENTURE, dated as of February 1, 2002, by and between CAROLINA POWER &
LIGHT COMPANY, a corporation of the State of North Carolina, whose post office
address is 411 Fayetteville Street, Raleigh, North Carolina 27601-1768
(hereinafter sometimes called the Company), and THE BANK OF NEW YORK (formerly
Irving Trust Company), a corporation of the State of New York, whose post office
address is 101 Barclay Street, New York, New York 10286 (hereinafter sometimes
called the Corporate Trustee), and DOUGLAS J. MACINNES (successor to Frederick
G. Herbst, Richard H. West, J.A. Austin, E.J. McCabe, G. White, D.W. May, J.A.
Vaughan, Joseph J. Arney, Wafaa Orfy and W.T. Cunningham), whose post office
address is 1784 W. McGalliard Avenue, Hamilton, New Jersey 08610 (the Corporate
Trustee and the Individual Trustee being hereinafter together sometimes called
the Trustees), as Trustees under the Mortgage and Deed of Trust, dated as of May
1, 1940 (hereinafter called the Mortgage), which Mortgage was executed and
delivered by the Company to Irving Trust Company (now The Bank of New York) and
Frederick G. Herbst to secure the payment of bonds issued or to be issued under
and in accordance with the provisions of the Mortgage, reference to which
Mortgage is hereby made, this Indenture (hereinafter sometimes called the
Seventy-first Supplemental Indenture) being supplemental thereto:

     WHEREAS, the Mortgage was recorded in various Counties in the States of
North Carolina and South Carolina; and

     WHEREAS, the Mortgage was indexed and cross-indexed in the real and chattel
mortgage records in various Counties in the States of North Carolina and South
Carolina; and

     WHEREAS, an instrument, dated as of June 25, 1945, was executed by the
Company appointing Richard H. West as Individual Trustee in succession to said
Frederick G. Herbst (deceased) under the Mortgage, and by Richard H. West
accepting said appointment, which instrument was recorded in various Counties in
the States of North Carolina and South Carolina; and

     WHEREAS, an instrument, dated as of December 12, 1957, was executed by the
Company appointing J.A. Austin as Individual Trustee in succession to said
Richard H. West (resigned) under the Mortgage, and by J.A. Austin accepting said
appointment, which instrument was recorded in various Counties in the States of
North Carolina and South Carolina; and

     WHEREAS, an instrument, dated as of April 15, 1966, was executed by the
Company appointing E.J. McCabe as Individual Trustee in succession to said J.A.
Austin (resigned) under the Mortgage, and by E.J. McCabe accepting said
appointment, which instrument was recorded in various Counties in the States of
North Carolina and South Carolina; and

     WHEREAS, by the Seventeenth Supplemental Indenture mentioned below, the
Company, among other things, appointed G. White as Individual Trustee in
succession to said E.J. McCabe (resigned), and G. White accepted said
appointment; and

     WHEREAS, by the Nineteenth Supplemental Indenture mentioned below, the
Company, among other things, appointed D.W. May as Individual Trustee in
succession to said G. White (resigned), and D.W. May accepted said appointment;
and

                                        2

<PAGE>

     WHEREAS, by the Thirty-fifth Supplemental Indenture mentioned below, the
Company, among other things, appointed J.A. Vaughan as Individual Trustee in
succession to said D.W. May (resigned), and J.A. Vaughan accepted said
appointment; and

     WHEREAS, an instrument, dated as of June 27, 1988, was executed by the
Company appointing Joseph J. Arney as Individual Trustee in succession to said
J.A. Vaughan (resigned) under the Mortgage, and by Joseph J. Arney accepting
said appointment, which instrument was recorded in various Counties in the
States of North Carolina and South Carolina; and

     WHEREAS, by the Forty-fifth Supplemental Indenture mentioned below, the
Company, among other things, appointed Wafaa Orfy as Individual Trustee in
succession to said Joseph J. Arney (resigned), and Wafaa Orfy accepted said
appointment; and

     WHEREAS, by the Forty-ninth Supplemental Indenture mentioned below, the
Company, among other things, appointed W.T. Cunningham as Individual Trustee in
succession to said Wafaa Orfy (resigned), and W.T. Cunningham accepted said
appointment; and

     WHEREAS, by the Sixty-sixth Supplemental Indenture mentioned below, the
Company, among other things, appointed Douglas J. MacInnes as Individual Trustee
in succession to said W.T. Cunningham (resigned), and Douglas J. MacInnes
accepted said appointment; and

     WHEREAS, such instruments were indexed and cross-indexed in the real and
chattel mortgage records in various Counties in the States of North Carolina and
South Carolina; and

     WHEREAS, by the Mortgage, the Company covenanted that it would execute and
deliver such supplemental indenture or indentures and such further instruments
and do such further acts as might be necessary or proper to carry out more
effectually the purposes of the Mortgage and to make subject to the lien of the
Mortgage any property thereafter acquired intended to be subject to the lien
thereof; and

     WHEREAS, for said purposes, among others, the Company executed and
delivered to the Trustees the following supplemental indentures:

               Designation                                Dated as of
               -----------                                -----------
First Supplemental Indenture........................   January 1, 1949
Second Supplemental Indenture.......................   December 1, 1949
Third Supplemental Indenture........................   February 1, 1951
Fourth Supplemental Indenture.......................   October 1, 1952
Fifth Supplemental Indenture........................   March 1, 1958
Sixth Supplemental Indenture........................   April 1, 1960
Seventh Supplemental Indenture......................   November 1, 1961
Eighth Supplemental Indenture.......................   July 1, 1964
Ninth Supplemental Indenture........................   April 1, 1966
Tenth Supplemental Indenture........................   October 1, 1967
Eleventh Supplemental Indenture.....................   October 1, 1968
Twelfth Supplemental Indenture......................   January 1, 1970
Thirteenth Supplemental Indenture...................   August 1, 1970

                                        3

<PAGE>

               Designation                                 Dated as of
               -----------                                 -----------
Fourteenth Supplemental Indenture...................   January 1, 1971
Fifteenth Supplemental Indenture....................   October 1, 1971
Sixteenth Supplemental Indenture....................   May 1, 1972
Seventeenth Supplemental Indenture..................   May 1, 1973
Eighteenth Supplemental Indenture...................   November 1, 1973
Nineteenth Supplemental Indenture...................   May 1, 1974
Twentieth Supplemental Indenture....................   December 1, 1974
Twenty-first Supplemental Indenture.................   April 15, 1975
Twenty-second Supplemental Indenture................   October 1, 1977
Twenty-third Supplemental Indenture.................   June 1, 1978
Twenty-fourth Supplemental Indenture................   May 15, 1979
Twenty-fifth Supplemental Indenture.................   November 1, 1979
Twenty-sixth Supplemental Indenture.................   November 1, 1979
Twenty-seventh Supplemental Indenture...............   April 1, 1980
Twenty-eighth Supplemental Indenture................   October 1, 1980
Twenty-ninth Supplemental Indenture.................   October 1, 1980
Thirtieth Supplemental Indenture....................   December 1, 1982
Thirty-first Supplemental Indenture.................   March 15, 1983
Thirty-second Supplemental Indenture................   March 15, 1983
Thirty-third Supplemental Indenture.................   December 1, 1983
Thirty-fourth Supplemental Indenture................   December 15, 1983
Thirty-fifth Supplemental Indenture.................   April 1, 1984
Thirty-sixth Supplemental Indenture.................   June 1, 1984
Thirty-seventh Supplemental Indenture...............   June 1, 1984
Thirty-eighth Supplemental Indenture................   June 1, 1984
Thirty-ninth Supplemental Indenture.................   April 1, 1985
Fortieth Supplemental Indenture.....................   October 1, 1985
Forty-first Supplemental Indenture..................   March 1, 1986
Forty-second Supplemental Indenture.................   July 1, 1986
Forty-third Supplemental Indenture..................   January 1, 1987
Forty-fourth Supplemental Indenture.................   December 1, 1987
Forty-fifth Supplemental Indenture..................   September 1, 1988
Forty-sixth Supplemental Indenture..................   April 1, 1989
Forty-seventh Supplemental Indenture................   August 1, 1989
Forty-eighth Supplemental Indenture.................   November 15, 1990
Forty-ninth Supplemental Indenture..................   November 15, 1990
Fiftieth Supplemental Indenture.....................   February 15, 1991
Fifty-first Supplemental Indenture..................   April 1, 1991
Fifty-second Supplemental Indenture.................   September 15, 1991
Fifty-third Supplemental Indenture..................   January 1, 1992
Fifty-fourth Supplemental Indenture.................   April 15, 1992
Fifty-fifth Supplemental Indenture..................   July 1, 1992
Fifty-sixth Supplemental Indenture..................   October 1, 1992
Fifty-seventh Supplemental Indenture................   February 1, 1993
Fifty-eighth Supplemental Indenture.................   March 1, 1993

                                        4

<PAGE>

               Designation                                Dated as of
               -----------                                -----------
Fifty-ninth Supplemental Indenture..................   July 1, 1993
Sixtieth Supplemental Indenture.....................   July 1, 1993
Sixty-first Supplemental Indenture..................   August 15, 1993
Sixty-second Supplemental Indenture.................   January 15, 1994
Sixty-third Supplemental Indenture..................   May 1, 1994
Sixty-fourth Supplemental Indenture.................   August 15, 1997
Sixty-fifth Supplemental Indenture..................   April 1, 1998
Sixty-sixth Supplemental Indenture..................   March 1, 1999
Sixty-seventh Supplemental Indenture................   March 1, 2000
Sixty-eighth Supplemental Indenture.................   April 1, 2000
Sixty-ninth Supplemental Indenture..................   June 1, 2000
Seventieth Supplemental Indenture...................   July 1, 2000

which supplemental indentures (other than said Sixty-fifth Supplemental
Indenture and said Sixty-seventh Supplemental Indenture) were recorded in
various Counties in the States of North Carolina and South Carolina, and were
indexed and cross-indexed in the real and chattel mortgage or security interest
records in various Counties in the States of North Carolina and South Carolina;
and

     WHEREAS, no recording or filing of said Sixty-fifth Supplemental Indenture
in any manner or place is required by law in order to fully preserve and protect
the security of the bondholders and all rights of the Trustees or is necessary
to make effective the lien intended to be created by the Mortgage or said
Sixty-fifth Supplemental Indenture; and said Sixty-seventh Supplemental
Indenture was recorded only in Rowan County, North Carolina to make subject to
the lien of the Mortgage, as supplemented, certain property of the Company
located in said County intended to be subject to the lien of the Mortgage, as
supplemented, all in accordance with Section 42 of the Mortgage; and

     WHEREAS, the Mortgage and said First through Seventieth Supplemental
Indentures (other than said Sixty-fifth and said Sixty-seventh Supplemental
Indentures) were or are to be recorded in all Counties in the States of North
Carolina and South Carolina in which this Seventy-first Supplemental Indenture
is to be recorded; and

     WHEREAS, in addition to the property described in the Mortgage, as
heretofore supplemented, the Company has acquired certain other property, rights
and interests in property; and

     WHEREAS, the Company has heretofore issued, in accordance with the
provisions of the Mortgage, as supplemented, the following series of First
Mortgage Bonds:

       Series                       Principal Amount Issued     Outstanding
       ------                       -----------------------     -----------
3-3/4% Series due 1965                  $ 46,000,000               None
3-1/8% Series due 1979                    20,100,000               None
3-1/4% Series due 1979                    43,930,000               None

                                        5

<PAGE>

        Series                        Principal Amount Issued   Outstanding
        ------                        -----------------------   ------------

2-7/8% Series due 1981                     $ 15,000,000                 None
3-1/2% Series due 1982                       20,000,000                 None
4-1/8% Series due 1988                       20,000,000                 None
4-7/8% Series due 1990                       25,000,000                 None
4-1/2% Series due 1991                       25,000,000                 None
4-1/2% Series due 1994                       30,000,000                 None
5-1/8% Series due 1996                       30,000,000                 None
6-3/8% Series due 1997                       40,000,000                 None
6-7/8% Series due 1998                       40,000,000                 None
8-3/4% Series due 2000                       40,000,000                 None
8-3/4% Series due August 1, 2000             50,000,000                 None
7-3/8% Series due 2001                       65,000,000                 None
7-3/4% Series due October 1, 2001            70,000,000                 None
7-3/4% Series due 2002                      100,000,000                 None
7-3/4% Series due 2003                      100,000,000                 None
8-1/8% Series due November 1, 2003          100,000,000                 None
9-3/4% Series due 2004                      125,000,000                 None
11-1/8% Series due 1994                      50,000,000                 None
11% Series due April 15, 1984               100,000,000                 None
8-1/2% Series due October 1, 2007           100,000,000                 None
9-1/4% Series due June 1, 2008              100,000,000                 None
10-1/2% Series due May 15, 2009             125,000,000                 None
12-1/4% Series due November 1, 2009         100,000,000                 None
Pollution Control Series A                   63,000,000                 None
14-1/8% Series due April 1, 1987            125,000,000                 None
Pollution Control Series B                   50,000,000                 None
Pollution Control Series C                    6,000,000                 None
11-5/8% Series due December 1, 1992         100,000,000                 None
Pollution Control Series D                   48,485,000         $ 48,485,000
Pollution Control Series E                    5,970,000                 None
12-7/8% Series due December 1, 2013         100,000,000                 None
Pollution Control Series F                   34,700,000           34,700,000
13-3/8% Series due April 1, 1994            100,000,000                 None
Pollution Control Series G                  122,615,000                 None
Pollution Control Series H                   70,000,000                 None
Pollution Control Series I                   70,000,000                 None
Pollution Control Series J                    6,385,000            1,795,000
Pollution Control Series K                    2,580,000            2,580,000
Extendible Series due April 1, 1995         125,000,000                 None
11-3/4% Series due October 1, 2015          100,000,000                 None
8-7/8% Series due March 1, 2016             100,000,000                 None
8-1/8% Series due July 1, 1996              125,000,000                 None
8-1/2% Series due January 1, 2017           100,000,000                 None
9.174% Series due December 1, 1992          100,000,000                 None
9% Series due September 1, 1993             100,000,000                 None

                                        6

<PAGE>

<TABLE>
<CAPTION>
           Series                            Principal Amount Issued    Outstanding
           ------                            -----------------------   -------------
<S>                                               <C>                   <C>
9.60% Series due April 1, 1991                    $100,000,000                  None
Secured Medium-Term Notes, Series A                200,000,000                  None
8-1/8% Series due November 15, 1993                100,000,000                  None
Secured Medium-Term Notes, Series B                100,000,000                  None
8-7/8% Series due February 15, 2021                125,000,000                  None
9% Series due April 1, 2022                        100,000,000                  None
8-5/8% Series due September 15, 2021               100,000,000          $100,000,000
5.20% Series due January 1, 1995                   125,000,000                  None
7-7/8% Series due April 15, 2004                   150,000,000           150,000,000
8.20% Series due July 1, 2022                      150,000,000           150,000,000
6-3/4% Series due October 1, 2002                  100,000,000           100,000,000
6-1/8% Series due February 1, 2000                 150,000,000                  None
7-1/2% Series due March 1, 2023                    150,000,000           150,000,000
5-3/8% Series due July 1, 1998                     100,000,000                  None
Secured Medium-Term Notes, Series C                200,000,000                  None
6-7/8% Series due August 15, 2023                  100,000,000           100,000,000
5-7/8% Series due January 15, 2004                 150,000,000           150,000,000
Pollution Control Series L                          72,600,000            72,600,000
Pollution Control Series M                          50,000,000            50,000,000
6.80% Series due August 15, 2007                   200,000,000           200,000,000
5.95% Senior Note Series due March 1, 2009         400,000,000           400,000,000
7.50% Senior Note Series Due April 1, 2005         300,000,000           300,000,000
Pollution Control Series N                          67,300,000            67,300,000
Pollution Control Series O                          55,640,000            55,640,000
Pollution Control Series P                          50,000,000            50,000,000
Pollution Control Series Q                          50,000,000            50,000,000
Pollution Control Series R                          45,600,000            45,600,000
Pollution Control Series S                          41,700,000            41,700,000
Pollution Control Series T                          50,000,000            50,000,000
Pollution Control Series U                          50,000,000            50,000,000
Pollution Control Series V                          87,400,000            87,400,000
</TABLE>

which bonds are sometimes called bonds of the First through Seventy-ninth
Series, respectively; and

     WHEREAS, Section 8 of the Mortgage provides that the form of each series of
bonds (other than the First Series) issued thereunder and of the coupons to be
attached to coupon bonds of such series shall be established by Resolution of
the Board of Directors of the Company and that the form of such series, as
established by said Board of Directors, shall specify the descriptive title of
the bonds and various other terms thereof, and may also contain such provisions
not inconsistent with the provisions of the Mortgage as said Board of Directors
may, in its discretion, cause to be inserted therein expressing or referring to
the terms and conditions upon which such bonds are to be issued and/or secured
under the Mortgage; and

                                        7

<PAGE>

     WHEREAS, Section 120 of the Mortgage provides, among other things, that any
power, privilege or right expressly or impliedly reserved to or in any way
conferred upon the Company by any provision of the Mortgage, whether such power,
privilege or right is in any way restricted or is unrestricted, may be in whole
or in part waived or surrendered or subjected to any restriction if at the time
unrestricted or to additional restriction if already restricted, and the Company
may enter into any further covenants, limitations or restrictions for the
benefit of any one or more series of bonds issued thereunder, or the Company may
cure any ambiguity contained therein, or in any supplemental indenture, or may
establish the terms and provisions of any series of bonds other than said First
Series, by an instrument in writing executed and acknowledged by the Company in
such manner as would be necessary to entitle a conveyance of real estate to
record in all of the states in which any property at the time subject to the
lien of the Mortgage shall be situated; and

     WHEREAS, the Company now desires to create a new series of bonds and to add
to its covenants and agreements contained in the Mortgage, as heretofore
supplemented, certain other covenants and agreements to be observed by it and to
alter and amend in certain respects the covenants and provisions contained in
the Mortgage, as heretofore supplemented; and

     WHEREAS, the execution and delivery by the Company of this Seventy-first
Supplemental Indenture, and the terms of the bonds of the Eightieth Series,
hereinafter referred to, have been duly authorized by the Board of Directors of
the Company by appropriate resolutions of said Board of Directors;

     NOW, THEREFORE, THIS INDENTURE WITNESSETH:

     That the Company, in consideration of the premises and of One Dollar to it
duly paid by the Trustees at or before the ensealing and delivery of these
presents, the receipt whereof is hereby acknowledged, and in further evidence of
assurance of the estate, title and rights of the Trustees and in order further
to secure the payment of both the principal of and interest and premium, if any,
on the bonds from time to time issued under the Mortgage, according to their
tenor and effect and the performance of all the provisions of the Mortgage
(including any instruments supplemental thereto and any modification made as in
the Mortgage provided) and of said bonds, hereby grants, bargains, sells,
releases, conveys, assigns, transfers, mortgages, pledges, sets over and
confirms (subject, however, to Excepted Encumbrances as defined in Section 6 of
the Mortgage) unto The Bank of New York and Douglas J. MacInnes, as Trustees
under the Mortgage, and to their successor or successors in said trust, and to
said Trustees and their successors and assigns forever, all the following
described properties of the Company:

          All electric generating plants, stations, transmission lines, and
          electric distribution systems, including permanent improvements,
          extensions or additions to or about such electrical plants, stations,
          transmission lines and distribution systems of the Company; all dams,
          power houses, power sites, buildings, generators, reservoirs, pipe
          lines, flumes, structures and works; all substations, transformers,
          switchboards, towers, poles, wires, insulators, and other appliances
          and equipment, and the Company's rights or interests in the land upon
          which the same are situated, and all other

                                        8

<PAGE>

          property, real or personal, forming a part of or appertaining to, or
          used, occupied or enjoyed in connection with said generating plants,
          stations, transmission lines, and distribution systems; together with
          all rights of way, easements, permits, privileges, franchises and
          rights for or related to the construction, maintenance, or operation
          thereof, through, over, under or upon any public streets or highways,
          or the public lands of the United States, or of any State or other
          lands; and all water appropriations and water rights, permits and
          privileges; including all property, real, personal, and mixed,
          acquired by the Company after the date of the execution and delivery
          of the Mortgage, in addition to property covered by the
          above-mentioned supplemental indentures (except any herein or in the
          Mortgage, as heretofore supplemented, expressly excepted), now owned
          or, subject to the provisions of Section 87 of the Mortgage, hereafter
          acquired by the Company and wheresoever situated, including (without
          in anywise limiting or impairing by the enumeration of the same the
          scope and intent of the foregoing or of any general description
          contained in this Seventy-first Supplemental Indenture) all lands,
          power sites, flowage rights, water rights, flumes, raceways, dams,
          rights of way and roads; all steam and power houses, gas plants,
          street lighting systems, standards and other equipment incidental
          thereto, telephone, radio and television systems, air-conditioning
          systems and equipment incidental thereto, water works, steam heat and
          hot water plants, lines, service and supply systems, bridges,
          culverts, tracts, ice or refrigeration plants and equipment, street
          and interurban railway systems, offices, buildings and other
          structures and the equipment thereof; all machinery, engines, boilers,
          dynamos, electric and gas machines, regulators, meters, transformers,
          generators, motors, electrical, gas and mechanical appliances,
          conduits, cables, water, steam heat, gas or other pipes, gas mains and
          pipes, service pipes, fittings, valves and connections, pole and
          transmission lines, wires, cables, tools, implements, apparatus,
          furniture, chattels and choses in action; all municipal and other
          franchises, consents or permits; all lines for the transmission and
          distribution of electric current, gas, steam heat or water for any
          purpose including poles, wires, cables, pipes, conduits, ducts and all
          apparatus for use in connection therewith; all real estate, lands,
          easements, servitudes, licenses, permits, franchises, privileges,
          rights of way and other rights in or relating to real estate or the
          occupancy of the same and (except as herein or in the Mortgage, as
          heretofore supplemented, expressly excepted) all the right, title and
          interest of the Company in and to all other property of any kind or
          nature appertaining to and/or used and/or occupied and/or enjoyed in
          connection with any property

                                       9

<PAGE>

          hereinbefore or in the Mortgage, as heretofore supplemented,
          described.

     TOGETHER WITH all and singular the tenements, hereditaments and
appurtenances belonging or in anywise appertaining to the aforesaid property or
any part thereof, with the reversion and reversions, remainder and remainders
and (subject to the provisions of Section 57 of the Mortgage) the tolls, rents,
revenues, issues, earnings, income, product and profits thereof, and all the
estate, right, title and interest and claim whatsoever, at law as well as in
equity, which the Company now has or may hereafter acquire in and to the
aforesaid property and franchises and every part and parcel thereof.

     IT IS HEREBY AGREED by the Company that, subject to the provisions of
Section 87 of the Mortgage, all the property, rights and franchises acquired by
the Company after the date hereof (except any herein or in the Mortgage, as
heretofore supplemented, expressly excepted) shall be and are as fully granted
and conveyed hereby and as fully embraced within the lien hereof and the lien of
the Mortgage as if such property, rights and franchises were now owned by the
Company and were specifically described herein and conveyed hereby.

     PROVIDED THAT the following are not and are not intended to be now or
hereafter granted, bargained, sold, released, conveyed, assigned, transferred,
mortgaged, pledged, set over or confirmed hereunder and are hereby expressly
excepted from the lien and operation of this Seventy-first Supplemental
Indenture and from the lien and operation of the Mortgage, namely: (1) cash,
shares of stock and obligations (including bonds, notes and other securities)
not hereafter specifically pledged, paid, deposited or delivered under the
Mortgage or covenanted so to be; (2) merchandise, equipment, materials or
supplies held for the purpose of sale in the usual course of business and fuel,
oil and similar materials and supplies consumable in the operation of any
properties of the Company; rolling stock, buses, motor coaches, vehicles and
automobiles; (3) bills, notes and accounts receivable, and all contracts, leases
and operating agreements not specifically pledged under the Mortgage, as
heretofore supplemented, or this Seventy-first Supplemental Indenture or
covenanted so to be; (4) electric energy and other materials or products
generated, manufactured, produced or purchased by the Company for sale,
distribution or use in the ordinary course of its business; and (5) any property
and rights heretofore released from the lien of the Mortgage; provided, however,
that the property and rights expressly excepted from the lien and operation of
the Mortgage and this Seventy-first Supplemental Indenture in the above
subdivisions (2) and (3) shall (to the extent permitted by law) cease to be so
excepted in the event and as of the date that either or both of the Trustees or
a receiver or trustee shall enter upon and take possession of the Mortgaged and
Pledged Property in the manner provided in Article XII of the Mortgage by reason
of the occurrence of a Default as defined in said Article XII.

     TO HAVE AND TO HOLD all such properties, real, personal and mixed, granted,
bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged,
set over or confirmed by the Company as aforesaid, or intended so to be, unto
the Trustees, their successors and assigns forever.

                                       10

<PAGE>

     IN TRUST NEVERTHELESS, for the same purposes and upon the same terms,
trusts and conditions and subject to and with the same provisos and covenants as
are set forth in the Mortgage, as heretofore supplemented, this Seventy-first
Supplemental Indenture being supplemental to the Mortgage.

     AND IT IS HEREBY COVENANTED by the Company that all the terms, conditions,
provisos, covenants and provisions contained in the Mortgage, as heretofore
supplemented, shall affect and apply to the property hereinbefore described and
conveyed and to the estate, rights, obligations and duties of the Company and
the Trustees and the beneficiaries of the trust with respect to said property,
and to the Trustees and their successors as Trustees of said property in the
same manner and with the same effect as if the said property had been owned by
the Company at the time of the execution of the Mortgage and had been
specifically and at length described in and conveyed to the Trustees by the
Mortgage as a part of the property therein stated to be conveyed.

     The Company further covenants and agrees to and with the Trustees and their
successor or successors in such trust under the Mortgage as follows:

                                    ARTICLE I

                            EIGHTIETH SERIES OF BONDS

     Section 1.(I) There shall be a series of bonds designated "Pollution
Control Series W" (herein sometimes referred to as the "Eightieth Series"), each
of which shall also bear the descriptive title "First Mortgage Bond," and the
form thereof, which shall be established by Resolution of the Board of Directors
of the Company, shall contain suitable provisions with respect to the matters
hereinafter in this Section specified. Bonds of the Eightieth Series shall be
dated as in Section 10 of the Mortgage provided, and mature on February 1, 2017.

     Bonds of the Eightieth Series shall be issued as fully registered bonds in
denominations of Five Thousand Dollars and, at the option of the Company, in any
multiple or multiples of Five Thousand Dollars (the exercise of such option to
be evidenced by the execution and delivery thereof); they shall bear interest at
the rate of 5.375% per annum, payable on each Interest Payment Date, as such
term is defined in the Pollution Control Revenue Refunding Bonds (Carolina Power
& Light Company Project), Series 2002 (the "Wake Bonds") issued by The Wake
County Industrial Facilities and Pollution Control Financing Authority (the
"Wake Authority") under the Trust Indenture, dated as of February 1, 2002 (the
"Wake Indenture"), between the Wake Authority and First Union National Bank, as
trustee (the "Wake Trustee," which term includes any successor trustee under the
Wake Indenture) (each a "Wake Interest Payment Date"), from the last Wake
Interest Payment Date to which interest on the Wake Bonds has been paid in full
or, if no interest has been paid in full on the Wake Bonds, then from the date
of first authentication by the Corporate Trustee of bonds of the Eightieth
Series. The principal of, premium, if any, and interest on each said bond shall
be payable at the office or agency of the Company in the Borough of Manhattan,
The City of New York, in such coin or currency of the United States of America
as at the time of payment is legal tender for public and private debts.

                                       11

<PAGE>

     (II) The bonds of the Eightieth Series shall be initially issued in the
aggregate principal amount of $48,485,000 to, and registered in the name of, the
Wake Trustee in order to secure the obligation of the Company to repay loans of
the proceeds of the sale of the Wake Bonds made by the Wake Authority to the
Company pursuant to the Loan Agreement, dated as of February 1, 2002 (the "Wake
Loan Agreement"), to finance costs of refunding the outstanding $48,485,000
Pollution Control Revenue Bonds (Carolina Power & Light Company Project)
Adjustable Rate Option Bond Series 1983.

     The Company's obligation to make payments with respect to the principal of,
premium, if any, and interest on the bonds of the Eightieth Series shall be
fully or partially satisfied and discharged to the extent that, at the time any
such payment shall be due, the corresponding amount then due of principal of,
and/or premium, if any, and interest on the Wake Bonds, issued contemporaneously
herewith, shall have been fully or partially paid (other than by the application
of the proceeds of a payment in respect of the bonds of the Eightieth Series),
as the case may be, or there shall have been deposited with the Wake Trustee
pursuant to the Wake Indenture trust funds sufficient under the Wake Indenture
to pay fully or partially, as the case may be, the corresponding amount then due
of principal of, and/or premium, if any, and/or interest on, the Wake Bonds
(other than by the application of the proceeds of a payment in respect of the
bonds of the Eightieth Series).

     Upon payment of the principal of, premium if any, and interest due on the
Wake Bonds, whether at maturity or prior to maturity by acceleration, redemption
or otherwise, or upon provision for the payment thereof having been made in
accordance with the Wake Indenture (other than by the application of the
proceeds of a payment in respect of the bonds of the Eightieth Series), bonds of
the Eightieth Series in a principal amount equal to the principal amount of Wake
Bonds so paid or for which such provision for payment has been made shall be
deemed fully paid, satisfied and discharged, and the obligations of the Company
thereunder shall be terminated and the bonds of the Eightieth Series shall be
surrendered to the Corporate Trustee and canceled by the Corporate Trustee in
accordance with Section 56 of the Mortgage, except as otherwise provided in the
Wake Indenture.

     From and after the Release Date (as defined in the Wake Indenture (the
"Wake Release Date")), and upon delivery to the Wake Trustee of the documents
provided for in Section 4.01(a)(iii) of the Wake Loan Agreement, the bonds of
the Eightieth Series shall be deemed fully paid, satisfied and discharged, the
obligation of the Company thereunder shall be terminated, and the bonds of the
Eightieth Series shall be surrendered to the Corporate Trustee and canceled by
the Corporate Trustee in accordance with Section 56 of the Mortgage.

     The Corporate Trustee may conclusively presume that the obligation of the
Company to pay the principal of, premium, if any, and interest on the bonds of
the Eightieth Series as the same shall become due and payable shall have been
fully satisfied and discharged unless and until it shall have received a written
notice from the Wake Trustee, signed by its President, a Vice President or a
Trust Officer, stating that the corresponding payment of principal of, or
premium, if any, or interest on the Wake Bonds has become due and payable and
has not been fully paid and, with respect to principal and premium, if any, of
the Wake Bonds, specifying the principal of, and premium, if any, on the Wake
Bonds then due and payable and the amount of funds required to make such
payment, and, with respect to interest on the Wake Bonds,

                                       12

<PAGE>

specifying the last date to which interest has been paid and the amount of funds
required to make such payment.

     (III) In the event that any Wake Bonds are to be redeemed pursuant to the
Wake Indenture, bonds of the Eightieth Series, in a principal amount equal to
the principal amount of Wake Bonds so to be redeemed, shall be redeemed by the
Company, on the date fixed for redemption of such Wake Bonds, at the principal
amount thereof plus accrued interest to such redemption date and, should the
Wake Bonds so to be redeemed be redeemable at a price that includes a redemption
premium, together with premium in an amount equal to such redemption premium on
such Wake Bonds.

     In the event that the principal of and accrued interest on the Wake Bonds
shall have been declared by the Wake Trustee to be due and payable in accordance
with the provisions of Section 12.03 of the Wake Indenture, the bonds of the
Eightieth Series then Outstanding shall be redeemed by the Company, immediately
and on the same date as the Wake Bonds thereby become due and payable, at the
principal amount thereof and premium, if any, plus accrued interest to the date
of their payment; provided, however, that if such declaration and its
consequences have been rescinded and annulled in accordance with the provisions
of Section 12.03 of the Wake Indenture, the Company shall not be required so to
redeem any bonds of the Eightieth Series then Outstanding.

     The Corporate Trustee may conclusively presume that no redemption of bonds
of the Eightieth Series is required pursuant to this subsection (III) unless and
until it shall have received a written notice from the Wake Trustee, signed by
its President, a Vice President or a Trust Officer, stating that the Wake Bonds
are to be redeemed pursuant to the Wake Indenture or stating that the principal
of and accrued interest on the Wake Bonds has been declared by the Wake Trustee
to be due and payable pursuant to Section 12.03 of the Wake Indenture, as the
case may be, and specifying the principal amount and premium, if any, and
accrued and unpaid interest, if any, and redemption date of the Wake Bonds to be
so redeemed. Said notice shall also contain a waiver of notice of said
redemption by the Wake Trustee, as holder of all the bonds of the Eightieth
Series then Outstanding.

     Bonds of the Eightieth Series shall not be redeemable at the option of the
Company except as provided in this subsection (III).

     (IV) The Company hereby waives its right to have any notice of redemption
pursuant to subsection (III) of this Section 1 state that such notice is subject
to the receipt of the redemption moneys by the Corporate Trustee before the date
fixed for redemption. Notwithstanding the provisions of Section 52 of the
Mortgage, any such notice under such subsection shall not be conditional.

     (V) The bonds of the Eightieth Series shall not be transferable except as
required to effect an assignment to a successor trustee under the Wake Indenture
or a nominee of such trustee, any such transfer to be made at the office or
agency of the Company in the Borough of Manhattan, The City of New York.

                                       13

<PAGE>

     At the option of the registered owner, any bonds of the Eightieth Series,
upon surrender thereof for cancellation at the office or agency of the Company
in the Borough of Manhattan, The City of New York, are exchangeable for a like
aggregate principal amount of bonds of the same series of other authorized
denominations. The bonds of the Eightieth Series may bear such legends as may be
necessary to comply with any law or with any rules or regulations made pursuant
thereto or with the rules or regulations of any stock exchange or to conform to
usage or agreement with respect thereto.

     Upon any exchange or transfer of bonds of the Eightieth Series, the Company
may make a charge therefor sufficient to reimburse it for any tax or taxes or
other governmental charge required to be paid by the Company, as provided in
Section 12 of the Mortgage, but the Company hereby waives any right to make a
charge in addition thereto for any exchange or transfer of bonds of said Series.

     (VI) The Company covenants and agrees that, prior to the Wake Release Date,
it will not take any action that would cause the outstanding principal amount of
the bonds of the Eightieth Series to be less than the then outstanding principal
amount of the Wake Bonds.

                                   ARTICLE II

               CERTAIN PROVISIONS WITH RESPECT TO FUTURE ADVANCES

     SECTION 2. Upon the filing of this Seventy-first Supplemental Indenture for
record in all counties in which the Mortgaged and Pledged Property is located,
and until a further indenture or indentures supplemental to the Mortgage shall
be executed and delivered by the Company to the Trustees pursuant to
authorization by the Board of Directors of the Company and filed for record in
all counties in which the Mortgaged and Pledged Property is located further
increasing or decreasing the amount of future advances which may be secured by
the Mortgage, as supplemented, the Mortgage, as supplemented, may secure future
advances and other indebtedness and sums not to exceed in the aggregate
$750,000,000, in addition to $2,556,650,000 in aggregate principal amount of
bonds to be Outstanding at the time of such filing, and all such advances and
other indebtedness and sums shall be secured by the Mortgage, as supplemented,
equally, to the same extent and with the same priority, as the amount originally
advanced on the security of the Mortgage, namely, $46,000,000, and such advances
and other indebtedness and sums may be made or become owing and may be repaid
and again made or become owing and the amount so stated shall be considered only
as the total amount of such advances and other indebtedness and sums as may be
outstanding at one time.

                                   ARTICLE III

                            MISCELLANEOUS PROVISIONS

     SECTION 3. Subject to any amendments provided for in this Seventy-first
Supplemental Indenture, the terms defined in the Mortgage, as heretofore
supplemented, shall, for all purposes of this Seventy-first Supplemental
Indenture, have the meanings specified in the Mortgage, as heretofore
supplemented.

                                       14

<PAGE>

     SECTION 4. The Trustees hereby accept the trusts herein declared, provided,
created or supplemented and agree to perform the same upon the terms and
conditions herein and in the Mortgage, as heretofore supplemented, set forth and
upon the following terms and conditions:

          The Trustees shall not be responsible in any manner whatsoever for or
          in respect of the validity or sufficiency of this Seventy-first
          Supplemental Indenture or for or in respect of the recitals contained
          herein, all of which recitals are made by the Company solely. In
          general each and every term and condition contained in Article XVI of
          the Mortgage shall apply to and form part of this Seventy-first
          Supplemental Indenture with the same force and effect as if the same
          were herein set forth in full with such omissions, variations and
          insertions, if any, as may be appropriate to make the same conform to
          the provisions of this Seventy-first Supplemental Indenture.

     SECTION 5. Subject to the provisions of Article XV and Article XVI of the
Mortgage, whenever in this Seventy-first Supplemental Indenture either of the
parties hereto is named or referred to, this shall be deemed to include the
successors or assigns of such party, and all the covenants and agreements in
this Seventy-first Supplemental Indenture contained by or on behalf of the
Company or by or on behalf of the Trustees shall bind and inure to the benefit
of the respective successors and assigns of such parties whether so expressed or
not.

     SECTION 6. Nothing in this Seventy-first Supplemental Indenture, expressed
or implied, is intended, or shall be construed, to confer upon, or to give to,
any person, firm or corporation, other than the parties hereto and the holders
of the Outstanding bonds and coupons, any right, remedy or claim under or by
reason of this Seventy-first Supplemental Indenture or any covenant, condition,
stipulation, promise or agreement hereof, and all the covenants, conditions,
stipulations, promises and agreements in this Seventy-first Supplemental
Indenture contained by or on behalf of the Company shall be for the sole and
exclusive benefit of the parties hereto, and of the holders of the Outstanding
bonds and coupons.

     SECTION 7. This Seventy-first Supplemental Indenture shall be executed in
several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.

                                       15

<PAGE>

     IN WITNESS WHEREOF, Carolina Power & Light Company has caused its corporate
name to be hereunto affixed, and this instrument to be signed and sealed by its
President or one of its Vice Presidents or its Treasurer and its corporate seal
to be attested by its Secretary or one of its Assistant Secretaries, and The
Bank of New York has caused its corporate name to be hereunto affixed, and this
instrument to be signed and sealed by one of its Vice Presidents or Assistant
Vice Presidents, and its corporate seal to be attested by one of its Vice
Presidents, Assistant Vice Presidents or Assistant Treasurers and Douglas J.
MacInnes has hereunto set his hand and affixed his seal, all as of the day and
year first above written.

                                              CAROLINA POWER & LIGHT COMPANY

                                              By:
                                                   -----------------------------
                                                   Thomas R. Sullivan, Treasurer

ATTEST:

-------------------------
Patricia Kornegay-Timmons
Assistant Secretary

Executed, sealed and delivered by CAROLINA
POWER & LIGHT COMPANY in the presence of:

-------------------------
Sarah Nelson

-------------------------
Phyllis Jensen

                       (Trustees' Signature Page Follows)

                                       16

<PAGE>

                            Trustees' Signature Page

 Seventy-first Supplemental Indenture dated as of February 1, 2002, to Mortgage
                    and Deed of Trust dated as of May 1, 1940

                                              THE BANK OF NEW YORK, as Trustee

                                              By:
                                                   -----------------------------
                                                   Ming Shiang, Vice President

ATTEST:

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

                                                                         (L. S.)
                                                   -----------------------------
                                                   DOUGLAS J. MACINNES

Executed, sealed and delivered
    by THE BANK OF NEW YORK and
    DOUGLAS J. MACINNES
    in the presence of:

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

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

                                       17

<PAGE>

STATE OF NORTH CAROLINA   )
                          )  SS.:
COUNTY OF WAKE            )

     This 5th day of February, A.D. 2002, personally came before me, Sherry M.
Dean, a Notary Public for Wake County, THOMAS R. SULLIVAN, who, being by me duly
sworn, says that he is the Vice President and Treasurer of CAROLINA POWER &
LIGHT COMPANY, and that the seal affixed to the foregoing instrument in writing
is the corporate seal of said company, and that said writing was signed and
sealed by him in behalf of said corporation by its authority duly given. And the
said THOMAS R. SULLIVAN acknowledged the said writing to be the act and deed of
said corporation.

     On the 5th day of February, in the year of 2002, before me personally came
THOMAS R. SULLIVAN, to me known, who, being by me duly sworn, did depose and say
that he resides at 121 Lock Pointe Drive, Cary, North Carolina 27511, State of
North Carolina; that he is the Treasurer of CAROLINA POWER & LIGHT COMPANY, one
of the corporations described in and which executed the above instrument; that
he knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by order of the Board of
Directors of said corporation, and that he signed his name thereto by like
order.

                                          --------------------------------------
                                          Notary Public, State of North Carolina
                                          Wake County
                                          My Commission Expires:  10/14/2003

                                       18

<PAGE>

STATE OF NORTH CAROLINA   )
                          )  SS.:
COUNTY OF WAKE            )

     Personally appeared before me Sarah Nelson, who being duly sworn, says that
she saw the corporate seal of CAROLINA POWER & LIGHT COMPANY affixed to the
above written instrument, and that she also saw THOMAS R. SULLIVAN, Treasurer,
with PATRICIA KORNEGAY-TIMMONS, an Assistant Secretary, of said CAROLINA POWER &
LIGHT COMPANY, sign and attest the same, and that she, deponent, with Phyllis
Jensen, witnessed the execution and delivery thereof as the act and deed of said
CAROLINA POWER & LIGHT COMPANY.

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

Sworn to before me this 5th day of February, 2002

------------------------------------
Sherry M. Dean, Notary Public
State of North Carolina, Wake County
My Commission Expires:  October 14, 2003

                                       19

<PAGE>

STATE OF NEW YORK    )
                     ) SS.:
COUNTY OF NEW YORK   )

     This      day of February, A.D. 2002, personally came before me, WILLIAM J.
         -----
CASSELS, a Notary Public in and for the County aforesaid, MING SHIANG, who,
being by me duly sworn, says that she is a Vice President of THE BANK OF NEW
YORK, and that the seal affixed to the foregoing instrument in writing is the
corporate seal of said company, and that said writing was signed and sealed by
her in behalf of said corporation by its authority duly given. And the said MING
SHIANG acknowledged the said writing to be the act and deed of said corporation.

     On the       day of February, in the year 2002, before me personally came
            -----
MING SHIANG, to me known, who, being by me duly sworn, did depose and say that
She resides in Montclair, New Jersey; that she is a Vice President of THE BANK
OF NEW YORK, one of the corporations described in and which executed the above
instrument; that she knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed by order of
the Board of Directors of said corporation, and that she signed her name thereto
by like order.

     I, WILLIAM J. CASSELS, a Notary Public in and for the County aforesaid, do
hereby certify that DOUGLAS J. MACINNES personally appeared before me this day
and acknowledged the due execution by him as successor Individual Trustee of the
foregoing instrument.

     On the        day of February, 2002, before me personally came DOUGLAS J.
            ------
MACINNES, to me known to be the person described in and who executed the
foregoing instrument and acknowledged that he, as successor Individual Trustee,
executed the same.

     WITNESS my hand and official seal this        day of February, 2002.
                                            ------

                                                --------------------------------
                                                Notary Public, State of New York
                                                No. 01CA5027729
                                                Qualified in Bronx County
                                                Commission Expires  May 16, 2002

                                       20

<PAGE>

STATE OF NEW YORK    )
                     ) SS.:
COUNTY OF NEW YORK   )

     Personally appeared before me                   , who, being duly sworn,
                                   ------------------
says that she saw the corporate seal of THE BANK OF NEW YORK affixed to the
above written instrument and that she also saw MING SHIANG, a Vice President,
with THE BANK OF NEW YORK, sign and attest the same, and that she, deponent,
with                     , witnessed the execution and delivery thereof as the
     --------------------
act and deed of said THE BANK OF NEW YORK.

     Personally appeared before me                       , who, being duly
                                   ----------------------
sworn, says that she saw the within named DOUGLAS J. MACINNES, as successor
Individual Trustee, sign, seal and as his act and deed deliver the foregoing
instrument for the purposes therein mentioned, and that she, deponent, with
                     , witnessed the execution thereof.
---------------------

     WITNESS my hand and official seal this        day of February, 2002.
                                            ------

                                                --------------------------------
                                                Notary Public, State of New York
                                                No. 01CA5027729
                                                Qualified in Bronx County
                                                Commission Expires  May 16, 2002

                                       21

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