CAROLINA POWER & LIGHT CO (Form: 8-K, Received: 04/20/2000 16:20:16)

FORM 8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): April 1, 2000

CAROLINA POWER & LIGHT COMPANY
(Exact name of registrant as specified in its charter)

        North Carolina              1-3382                    56-0165465
--------------------------------------------------------------------------------
(State or other jurisdiction      (Commission                (IRS Employer
        of incorporation)         File Number)             Identification No.)

411 Fayetteville Street, Raleigh, North Carolina 27601-1748
(Address of principal executive offices)

Registrant's telephone number, including area code: (919) 546-6111

ITEM 5. OTHER EVENTS

(a) UNDERWRITING AGREEMENT. The Registrant has entered into an Underwriting Agreement, dated April 5, 2000, with Chase Securities Inc. and Banc One Capital Markets, Inc., as Representative of several Underwriters, in connection with the offering of Senior Notes, 7.50% Series Due April 1, 2005 (the "Senior Notes Due 2005"), registered with the Securities and Exchange Commission on Form S-3 (Reg. No. 333-69237). A copy of the Underwriting Agreement is filed herewith as Exhibit 1.

(b) SENIOR NOTE INDENTURE. The Registrant entered into an Indenture (For Senior Notes), dated as of March 1, 1999, and a Second Supplemental Senior Note Indenture, dated as of April 1, 2000, with The Bank of New York, as Trustee, in connection with the offering of the Senior Notes Due 2005. A copy of the Second Supplemental Senior Note Indenture is filed herewith as Exhibit 4(a).

(c) SIXTY-EIGHTH SUPPLEMENTAL INDENTURE TO THE MORTGAGE. The Registrant has entered into a Sixty-eighth Supplemental Indenture, dated as of April 1, 2000, to its Mortgage and Deed of Trust, dated May 1, 1940 (the "Mortgage"), with The Bank of New York and Douglas J. MacInnes, as Trustees, in connection with the issuance of the Registrant's First Mortgage Bonds, 7.50% Senior Note Series due April 1, 2005, which are being delivered as security for the Senior Notes Due 2005. A copy of the Sixty-eighth Supplemental Indenture to the Mortgage is filed herewith as Exhibit 4(b).

ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS

1        Underwriting Agreement, dated April 5, 2000, between
         Carolina Power & Light Company and Chase Securities,
         Inc. and Banc One Capital Markets, Inc., as
         Representative of several Underwriters.

4(a)     Second Supplemental Senior Note Indenture, dated as
         of April 1, 2000, between Carolina Power & Light
         Company and The Bank of New York, as Trustee.

4(b)     Sixty-eighth Supplemental Indenture, dated as of
         April 1, 2000, to Carolina Power & Light Company's
         Mortgage and Deed of Trust, dated May 1, 1940,
         between Carolina Power & Light Company and The Bank
         of New York and Douglas J. MacInnes, as Trustees.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CAROLINA POWER & LIGHT COMPANY
Registrant

                                            By: /s/ Robert B. McGehee
                                                --------------------------------
                                                         Robert B. McGehee
                                                     Executive Vice President

Date:  April 20, 2000

EXHIBIT INDEX

1        Underwriting Agreement, dated April 5, 2000, between Carolina Power &
         Light Company and Chase Securities, Inc. and Banc One Capital Markets,
         Inc., as Representative of several Underwriters.

4(a)     Second Supplemental Senior Note Indenture, dated as of April 1, 2000,
         between Carolina Power & Light Company and The Bank of New York, as
         Trustee.

4(b)     Sixty-eighth Supplemental Indenture, dated as of April 1, 2000, to
         Carolina Power & Light Company's Mortgage and Deed of Trust, dated May
         1, 1940, between Carolina Power & Light Company and The Bank of New
         York and Douglas J. MacInnes, as Trustees.

Exhibit 1

CAROLINA POWER & LIGHT COMPANY

Senior Notes, 7.50% Series Due April 1, 2005

UNDERWRITING AGREEMENT

April 5, 2000

To the Representative named in Schedule I hereto of the Underwriters named in Schedule II hereto

Dear Sirs:

The undersigned Carolina Power & Light Company (the "Company") hereby confirms its agreement with each of the several Underwriters hereinafter named as follows:

1. Underwriters and Representative. The term "Underwriters" as used herein shall be deemed to mean the firm or corporation or the several firms or corporations named in Schedule II hereto and any underwriter substituted as provided in paragraph 6, and the term "Underwriter" shall be deemed to mean one of such Underwriters. If the firm or firms listed in Schedule I hereto (the "Representative") are the same as the firm or firms listed in Schedule II hereto, then the terms "Underwriters" and "Representative," as used herein, shall each be deemed to refer to such firm or firms. The Representative represents that it has been authorized by the Underwriters to execute this Agreement on their behalf and to act for them in the manner herein provided. All obligations of the Underwriters hereunder are several and not joint. If more than one firm is named in Schedule I hereto, any action under or in respect of this Agreement may be taken by such firms jointly as the Representative or by one of the firms acting on behalf of the Representative, and such action will be binding upon all the Underwriters.

2. Description of Notes. The Company proposes to issue and sell its Senior Notes of the designation, with the terms and in the amount specified in Schedule I hereto (the "Notes") in one or more new series under a governing indenture (together with any supplements, the "Senior Note Indenture") each between the Company and The Bank of New York, as trustee (the "Senior Note Trustee"), in substantially the form heretofore delivered to the Representative. Until the Release Date (as defined in the Senior Note Indenture), the Notes will be secured by one or more series of Senior Note First Mortgage Bonds (as defined in the Senior Note Indenture) issued and delivered by the Company to the Senior Note Trustee. On the Release Date, the Notes will cease to be secured by the Senior Note First Mortgage Bonds and will become unsecured obligations of the Company. The Senior Note First Mortgage Bonds securing the Notes will be issued under the Company's Mortgage and Deed of Trust, dated as of May 1, 1940 with The Bank of New York (formerly Irving Trust Company) and Frederick G. Herbst (Douglas J. MacInnes, successor) as Mortgage Trustees, as supplemented and as it will be supplemented by a supplemental indenture relating to the Senior Note First Mortgage Bonds (the "Sixty-eighth Supplemental Indenture" and together with the Mortgage and Deed of Trust as supplemented, the "Mortgage") in substantially the form heretofore delivered to the Representative.

3. Representations and Warranties of the Company. The Company represents and warrants to each of the Underwriters that:

(a) The Company has filed with the Securities and Exchange Commission (the "Commission") a Registration Statement on Form S-3 (No. 333-69237) (the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), for the registration of up to an aggregate of $1,500,000,000 principal amount of the Company's First Mortgage Bonds, Senior Notes and Debt Securities (collectively, the "Registered Securities") in unallocated amounts, as each is defined in the Registration Statement. As of the date hereof, the Company has sold an aggregate of $900,000,000 principal amount of Registered Securities. The Registration Statement has been declared effective by the Commission, and the Mortgage and Senior Note Indenture have each been qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act"). The term "Registration Statement" shall be deemed to include all amendments to the date hereof and all documents incorporated by reference therein (the "Incorporated Documents"). The prospectus included in the Registration Statement, as it is to be supplemented by a prospectus supplement, dated on or about the date hereof, substantially in the form delivered to the Representative prior to the execution hereof, relating to the Notes (the "Prospectus Supplement"), and all prior amendments or supplements thereto (other than amendments or supplements relating to securities of the Company other than the Notes), including the Incorporated Documents, is hereinafter referred to as the "Prospectus." Any reference herein to the terms "amend," "amendment" or "supplement" with respect to the Registration Statement or the Prospectus shall be deemed to refer to and include the filing of any document under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), deemed to be incorporated therein after the date hereof and prior to the termination of the offering of the Notes by the Underwriters, and any references herein to the terms "Registration Statement" or "Prospectus" at a date after the filing of the Prospectus Supplement shall be deemed to refer to the Registration Statement or the Prospectus, as the case may be, as each may be amended or supplemented prior to such date.

(b) Prior to the termination of the offering of the Notes, the Company will not file any amendment to the Registration Statement or supplement to the Prospectus which shall not have previously been furnished to the Representative or of which the Representative shall not previously have been advised or to which the Representative shall reasonably object in writing and which has not been approved by the Underwriter(s) or their counsel acting on behalf of the Underwriters.

(c) The Registration Statement, at the time and date it was declared effective by the Commission, complied, and the Registration Statement, the Prospectus, the Senior Note Indenture and the Mortgage, at the date the Prospectus is filed with, or transmitted for filing to, the Commission pursuant to Rule 424 under the Securities Act ("Rule 424") and at the Closing Date, will comply, in all material respects, with the applicable provisions of the Securities Act and the 1939 Act and the applicable rules and regulations of the Commission thereunder; the Registration Statement, at the time and date it was declared effective by the Commission, did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus, at the date it is filed with, or transmitted for filing to, the Commission pursuant to Rule 424 and at the Closing Date, will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the foregoing representations and warranties in this subparagraph (c) shall not apply to statements or omissions made in reliance upon and in conformity with information furnished herein or in writing to the Company by the Representative or by or on behalf of any Underwriter through the Representative expressly for use in the Prospectus or to any statements in or omissions from the Statements of

Eligibility (Forms T-1 and T-2) of the trustees under the Mortgage and the Senior Note Indenture. The Incorporated Documents, when they were filed with the Commission, complied in all material respects with the applicable requirements of the Exchange Act and the rules and regulations of the Commission thereunder, and any documents so filed and incorporated by reference subsequent to the date hereof and prior to the termination of the offering of the Notes by the Underwriters will, when they are filed with the Commission, comply in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission thereunder; and, when read together with the Registration Statement and the Prospectus, none of such documents included or includes or will include any untrue statement of a material fact or omitted or omits or will omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(d) The financial statements incorporated by reference in the Registration Statement present fairly the financial condition and operations of the Company at the respective dates or for the respective periods to which they apply; such financial statements have been prepared in each case in accordance with generally accepted accounting principles consistently applied throughout the periods involved; and Deloitte & Touche LLP, who have audited certain of the financial statements, are independent public or independent certified public accountants as required by the Securities Act or the Exchange Act and the rules and regulations of the Commission thereunder.

(e) Except as reflected in, or contemplated by, the Registration Statement and the Prospectus, since the respective dates as of which information is given in the Registration Statement and Prospectus, and prior to the Closing Date, there has not been any material adverse change in the business, property, financial condition or prospects of the Company and its subsidiaries considered as a whole, and since such dates and prior to the Closing Date, there has not been any material transaction entered into by the Company other than transactions contemplated by the Registration Statement and Prospectus and transactions arising in the ordinary course of business. The Company has no material contingent obligation which is not disclosed in the Registration Statement and Prospectus.

(f) The consummation of the transactions herein contemplated and the fulfillment of the terms hereof on the part of the Company to be fulfilled have been duly authorized by all necessary corporate action of the Company in accordance with the provisions of its charter (the "Charter"), by-laws and applicable law; and the Notes, when issued and delivered as provided herein, will constitute legal, valid and binding obligations of the Company in accordance with their terms except as limited by bankruptcy, insolvency or other laws affecting mortgagees' and other creditors' rights and general equitable principles.

(g) The Senior Note First Mortgage Bonds, when issued and delivered as provided herein, will constitute legal, valid and binding obligations of the Company in accordance with their terms except as limited by bankruptcy, insolvency or other laws affecting mortgagees' and other creditors' rights and general equitable principles; provided, however, that certain remedies, waivers and other provisions of the Senior Note First Mortgage Bonds may not be enforceable, but such unenforceability will not render the Senior Note First Mortgage Bonds invalid as a whole or affect the judicial enforcement of (i) the obligation of the Company to repay the principal, together with the interest thereon as provided in the Senior Note First Mortgage Bonds or
(ii) the right of the Mortgage Trustees to exercise their right to foreclose under the Mortgage.

(h) The consummation of the transaction herein contemplated and the fulfillment of the terms hereof will not result in a breach of any of the terms or provisions of, or constitute a

default under, the Charter, the Company's by-laws, applicable law or any indenture, mortgage, deed of trust or other agreement or instrument to which the Company is now a party or any judgment, order, writ or decree of any government or governmental authority or agency or court having jurisdiction over the Company or any of its subsidiaries or any of their assets, properties or operations.

(i) The summaries of the terms of the Notes and the Senior Note First Mortgage Bonds contained in the Registration Statement and Prospectus fairly describe the provisions thereof required to be described by the registration statement form.

(j) The Company does not have any significant subsidiaries as defined in Rule 1-02 of Regulation S-X promulgated under the Securities Act.

(k) Neither the Company nor any of its subsidiaries is an "investment company" within the meaning of the Investment Company Act of 1940, as amended (the "1940 Act").

(l) Except as described in or contemplated by the Prospectus, there are no pending actions, suits or proceedings against or affecting the Company or any of its subsidiaries or properties which are likely in the aggregate, to result in any material adverse change in the business, property, financial condition or prospects of the Company and its subsidiaries considered as a whole or which are likely in the aggregate to materially and adversely affect the consummation of this Agreement, the Senior Note Indenture, the Mortgage, the Notes, the Senior Note First Mortgage Bonds or the transactions contemplated herein or therein.

(m) No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency is necessary or required for the performance by the Company of its obligations hereunder in connection with the offering, issuance or sale of the Securities hereunder or the consummation of the transactions herein contemplated or for the due execution, delivery or performance of the Senior Note Indenture and the Mortgage by the Company, except such as have been already obtained or as may be required under the Securities Act or state securities laws and except for the qualification of the Indenture under the 1939 Act.

(n) The Senior Note Indenture and the Mortgage (A) have been duly authorized, executed and delivered by the Company, and, assuming due authorization, execution and delivery by the Trustee and the Mortgage Trustees, respectively, constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or similar laws affecting creditor's rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity and except the effect on enforceability of federal or state law limiting, delaying or prohibiting the making of payments outside the United States); and (B) conform in all material respects to the descriptions thereof in the Prospectus.

4. Purchase and Sale. On the basis of the representations, warranties and covenants herein contained, but subject to the terms and conditions herein set forth, the Company agrees to sell to each of the Underwriters, severally and not jointly, and each such Underwriter agrees, severally and not jointly, to purchase from the Company, the respective principal amount of Notes set forth opposite the name of such Underwriter in Schedule II hereto at the purchase price set forth in Schedule I hereto.

5. Reoffering by Underwriters. The Underwriters agree to make promptly a bona fide public offering of the Notes to the public for sale as set forth in the Prospectus, subject, however, to the terms and conditions of this Agreement.

6. Time and Place of Closing; Default of Underwriters.

(a) Payment for the Notes shall be made at the place, time and date specified in Schedule I hereto against delivery of the Notes at the office of The Bank of New York, 101 Barclay Street, New York, New York 10286, or such other place, time and date as the Representative and the Company may agree. The hour and date of such delivery and payment are herein called the "Closing Date." Payment for the Notes shall be by wire transfer of immediately available funds against delivery of the Notes to The Depository Trust Company or to The Bank of New York, as custodian for The Depository Trust Company, in fully registered global form registered in the name of Cede & Co., for the respective accounts specified by the Representative not later than the close of business on the business day prior to the Closing Date or such other date and time not later than the Closing Date as agreed by The Depository Trust Company or The Bank of New York. For the purpose of expediting the checking of the certificates by the Representative, the Company agrees to make the Notes available to the Representative not later than 10 A.M., on the last full business day prior to the Closing Date at said office of The Bank of New York.

(b) If one or more of the Underwriters shall, for any reason permitted hereunder, cancel its obligation to purchase hereunder and to take up and pay for the principal amount of the Notes to be purchased by such one or more Underwriters, the Company shall immediately notify the Representative, and the remaining Underwriters shall have the right, within 24 hours of receipt of such notice, either to take up and pay for (in such proportion as may be agreed upon among them) or to substitute another Underwriter or Underwriters, satisfactory to the Company, to take up and pay for the principal amount of the Notes which such one or more Underwriters did not purchase. If one or more Underwriters shall, for any reason other than a reason permitted hereunder, fail to take up and pay for the principal amount of the Notes to be purchased by such one or more Underwriters, the Company shall immediately notify the Representative, and the remaining Underwriters shall be obligated to take up and pay for (in addition to the respective principal amount of the Notes set forth opposite their respective names in Schedule II hereto) the principal amount of the Notes which such defaulting Underwriter or Underwriters failed to take up and pay for, up to a principal amount thereof equal to, in the case of each such remaining Underwriter, ten percent (10%) of the principal amount of the Notes set forth opposite the name of such remaining Underwriter in said Schedule II, and such remaining Underwriters shall have the right, within 24 hours of receipt of such notice, either to take up and pay for (in such proportion as may be agreed upon among them), or to substitute another Underwriter or Underwriters, satisfactory to the Company, to take up and pay for, the remaining principal amount of the Notes which the defaulting Underwriter or Underwriters agreed but failed to purchase. If any unpurchased Notes still remain, then the Company or the Representative shall be entitled to an additional period of 24 hours within which to procure another party or parties, members of the National Association of Securities Dealers, Inc. (or if not members of such Association, who are not eligible for membership in said Association and who agree (i) to make no sales within the United States, its territories or its possessions or to persons who are citizens thereof or residents therein and (ii) in making sales to comply with said Association's Rules of Fair Practice) and satisfactory to the Company, to purchase or agree to purchase such unpurchased Notes on the terms herein set forth. In any such case either the Representative or the Company shall have the right to postpone the Closing Date for a period not to exceed three

full business days from the date agreed upon in accordance with this paragraph 6, in order that the necessary changes in the Registration Statement and Prospectus and any other documents and arrangements may be effected. If (i) neither the non-defaulting Underwriters nor the Company has arranged for the purchase of such unpurchased Notes by another party or parties as above provided and (ii) the Company and the non-defaulting Underwriters have not mutually agreed to offer and sell the Notes other than the unpurchased Notes, then this Agreement shall terminate without any liability on the part of the Company or any Underwriter (other than an Underwriter which shall have failed or refused, in accordance with the terms hereof, to purchase and pay for the principal amount of the Notes which such Underwriter has agreed to purchase as provided in paragraph 4 hereof), except as otherwise provided in paragraph 7 and paragraph 8 hereof.

7. Covenants of the Company. The Company covenants with each Underwriter that:

(a) As soon as possible after the execution and delivery of this Agreement, the Company will file the Prospectus with the Commission pursuant to Rule 424, setting forth, among other things, the necessary information with respect to the terms of offering of the Notes. The Company will promptly deliver to the Representative and to counsel for the Underwriters, to the extent not previously delivered, one fully executed copy or one conformed copy, certified by an officer of the Company, of the Registration Statement, as originally filed, and of all amendments thereto, heretofore or hereafter made, (other than those relating solely to securities other than the Notes), including any post-effective amendment (in each case including all exhibits filed therewith and all documents incorporated therein not previously furnished to the Representative), including signed copies of each consent and certificate included therein or filed as an exhibit thereto, and will deliver to the Representative for distribution to the Underwriters as many conformed copies of the foregoing (excluding the exhibits, but including all documents incorporated therein) as the Representative may reasonably request. The Company will also send to the Underwriters as soon as practicable after the date of this Agreement and thereafter from time to time as many copies of the Prospectus as the Representative may reasonably request for the purposes required by the Securities Act.

(b) During such period (not exceeding nine months) after the commencement of the offering of the Notes as the Underwriters may be required by law to deliver a Prospectus, if any event relating to or affecting the Company, or of which the Company shall be advised in writing by the Representative shall occur, which in the opinion of the Company's counsel or the Underwriters' counsel should be set forth in a supplement to or an amendment of the Prospectus in order to make the Prospectus not misleading in the light of the circumstances when it is delivered to a purchaser, or if it is necessary to amend the Prospectus to comply with the Securities Act, the Company will forthwith at its expense prepare and furnish to the Underwriters and dealers named by the Representative a reasonable number of copies of a supplement or supplements or an amendment or amendments to the Prospectus which will supplement or amend the Prospectus so that as supplemented or amended it will comply with the Securities Act and will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading. In case any Underwriter is required to deliver a Prospectus after the expiration of nine months after the commencement of the offering of the Notes, the Company, upon the request of the Representative, will furnish to the Representative, at the expense of such Underwriter, a reasonable quantity of a supplemented or amended prospectus, or supplements or amendments to the Prospectus, complying with Section 10(a) of the Securities Act.

(c) The Company will make generally available to its security holders, as soon as reasonably practicable, but in any event not later than 16 months after the end of the fiscal quarter in which the filing of the Prospectus pursuant to Rule 424 occurs, an earning statement (in form complying with the provisions of Section 11(a) of the Securities Act, which need not be certified by independent public accountants) covering a period of twelve months beginning not later than the first day of the Company's fiscal quarter next following the filing of the Prospectus pursuant to Rule 424.

(d) The Company will use its best efforts promptly to do and perform all things to be done and performed by it hereunder prior to the Closing Date and to satisfy all conditions precedent to the delivery by it of the Notes.

(e) The Company will advise the Representative promptly of the filing of the Prospectus pursuant to Rule 424 and of any amendment or supplement to the Prospectus or Registration Statement or of official notice of institution of proceedings for, or the entry of, a stop order suspending the effectiveness of the Registration Statement and, if such a stop order should be entered, use its best efforts to obtain the prompt removal thereof.

(f) The Company will use its best efforts to qualify the Notes for offer and sale under the Blue Sky or legal investment laws of such jurisdictions as the Representative may designate, and will file and make in each year such statements or reports as are or may be reasonably required by the laws of such jurisdictions; provided, however, that the Company shall not be required to qualify as a foreign corporation or dealer in securities, or to file any general consents to service of process under the laws of any jurisdiction.

8. Payment of Expenses. The Company will pay all expenses incident to the performance of its obligations under this Agreement, including (i) the printing and filing of the Registration Statement and the printing of this Agreement, (ii) the delivery of the Notes to the Underwriters, (iii) the fees and disbursements of the Company's counsel and accountants, (iv) the expenses in connection with the qualification of the Notes under securities laws in accordance with the provisions of paragraph 7(f), including filing fees and the fees and disbursements of counsel for the Underwriters in connection therewith, and in connection with the preparation of the Blue Sky Survey and any Legality Memorandum, such fees and disbursements not to exceed $5,000, (v) the printing and delivery to the Underwriters of copies of the Registration Statement and all amendments thereto, of the preliminary prospectuses, and of the Prospectus and any amendments or supplements thereto, (vi) the printing and delivery to the Underwriters of copies of the Blue Sky Survey and Legality Memorandum, (vii) the preparation, execution, filing and recording by the Company of the Sixty-eighth Supplemental Indenture (such filing and recordation to be promptly made, after execution and delivery of such Sixty-eighth Supplemental Indenture to the Mortgage Trustees under the Mortgage in the counties in which the mortgaged property of the Company is located); and the Company will pay all taxes, if any (but not including any transfer taxes), on the issue of the Notes and the filing and recordation of the Sixty-eighth Supplemental Indenture, and (viii) any filings required in order to perfect the interests of the Senior Note Trustee in the Senior Note First Mortgage Bonds and the proceeds thereof.

The fees and disbursements of Underwriters' counsel shall be paid by the Underwriters (subject, however, to the provisions of the preceding paragraph requiring payment by the Company of fees and expenses not to exceed $5,000); provided, however, that if this Agreement is terminated in accordance with the provisions of paragraph 9, 10 or 12, the Company shall reimburse the Representative for the account of the Underwriters for the fees and disbursements of Underwriters' counsel. The Company shall not be required to pay any amount for any expenses of the Representative or of any other of the

Underwriters except as provided in paragraph 7 and in this paragraph 8. The Company shall not in any event be liable to any of the Underwriters for damages on account of the loss of anticipated profit.

9. Conditions of Underwriters' Obligations. The several obligations of the Underwriters to purchase and pay for the Notes shall be subject to the accuracy of the representations and warranties on the part of the Company as of the date hereof and the Closing Date, to the performance by the Company of its obligations to be performed hereunder prior to the Closing Date, and to the following further conditions:

(a) No stop order suspending the effectiveness of the Registration Statement shall be in effect on the Closing Date, no proceedings for that purpose shall be pending before, or, to the knowledge of the Company, threatened by, the Commission on the Closing Date; and the Representative shall have received, prior to payment for the Notes, a certificate dated the Closing Date and signed by the Chairman, President or a Vice President of the Company to the effect that no such stop order is in effect and that no proceedings for such purpose are pending before or, to the knowledge of the Company, threatened by the Commission.

(b) At the time of execution of this Agreement, or such later date as shall have been consented to by the Representative, there shall have been issued and on the Closing Date there shall be in full force and effect orders of the North Carolina Utilities Commission and the South Carolina Public Service Commission authorizing the issuance and sale of the Notes and the Senior Note First Mortgage Bonds, none of which shall contain any provision unacceptable to the Representative by reason of its being materially adverse to the Company (it being understood that no such order in effect on the date of this Agreement and heretofore furnished to the Representative or counsel for the Underwriters, contains any such unacceptable provision).

(c) At the Closing Date, the Representative shall receive favorable opinions from: (1) Hunton & Williams, counsel to the Company, which opinion shall be satisfactory in form and substance to counsel for the Underwriters, and (2) Winthrop, Stimson, Putnam & Roberts, counsel for the Underwriters, in each of which opinions (except as to subdivisions (viii) (as to documents incorporated by reference, at the time they were filed with the Commission) and (x) of this subparagraph
(c), as to which Winthrop, Stimson, Putnam & Roberts need express no opinion) said counsel (except Hunton & Williams as to North Carolina law) may rely as to all matters of North Carolina and South Carolina law upon the opinions of William D. Johnson, Esq., Senior Vice President and Corporate Secretary for the Company, and Nelson Mullins Riley & Scarborough, L.L.P., respectively, to the effect that:

(i) The Senior Note Indenture has been duly and validly authorized by all necessary corporate action, has been duly and validly executed and delivered, and is a valid and binding obligation of the Company enforceable in accordance with its terms, except as limited by bankruptcy, insolvency or other laws affecting mortgagees' and other creditors' rights and general equitable principles and any implied covenant of good faith and fair dealing; provided, however, that certain remedies, waivers and other provisions of the Senior Note Indenture may not be enforceable, but such unenforceability will not render the Senior Note Indenture invalid as a whole or affect the judicial enforcement of (i) the obligation of the Company to repay the principal, together with the interest thereon as provided in the Notes or (ii) the right of the Trustee to collect amounts due under the Senior Note First Mortgage Bonds;

(ii) The Mortgage has been duly and validly authorized by all necessary corporate action (with this opinion required in the Hunton & Williams opinion as to only

the original Mortgage, the Sixty-fourth Supplemental Indenture, and subsequent Supplemental Indentures), has been duly and validly executed and delivered by the Company (with this opinion required in the Hunton & Williams opinion as to only the Sixty-fourth Supplemental Indenture and subsequent Supplemental Indentures), and is a valid and binding mortgage of the Company enforceable in accordance with its terms, except as limited by bankruptcy, insolvency or other laws affecting mortgagees' and other creditors' rights and general equitable principles and any implied covenant of good faith and fair dealing; provided, however, that certain remedies, waivers and other provisions of the Mortgage may not be enforceable, but such unenforceability will not render the Mortgage invalid as a whole or affect the judicial enforcement of (i) the obligation of the Company to repay the principal, together with the interest thereon as provided in the Senior Note First Mortgage Bonds or (ii) the right of the Mortgage Trustees to exercise their right to foreclose under the Mortgage;

(iii) The Mortgage and the Senior Note Indenture have been duly qualified under the 1939 Act;

(iv) The Notes have been duly and validly authorized, executed and delivered by the Company and, assuming authentication by the Trustee (as defined in the Senior Note Indenture) in accordance with the Senior Note Indenture and delivery to and payment for the Notes by the Underwriters, as provided in this Agreement, the Notes are legal, valid and binding obligations of the Company enforceable in accordance with their terms, except as limited by bankruptcy, insolvency or other laws affecting mortgagees' and other creditors' rights and general equitable principles, and the Notes are entitled to the benefits of the security afforded by the Senior Note Indenture and will be secured equally and ratably with all other notes which may be issued under the Senior Note Indenture except insofar as any sinking or other fund may afford additional security for the notes of any particular series;

(v) The Senior Note First Mortgage Bonds have been duly and validly authorized, executed and delivered by the Company and, assuming authentication by the Corporate Trustee (as defined in the Mortgage) in accordance with the Mortgage and delivery to and payment for the Notes by the Underwriters, as provided in this Agreement, the Senior Note First Mortgage Bonds are legal, valid and binding obligations of the Company enforceable in accordance with their terms, except as limited by bankruptcy, insolvency or other laws affecting mortgagees' and other creditors' rights and general equitable principles, and the Senior Note First Mortgage Bonds are entitled to the benefits of the security afforded by the Mortgage and are secured equally and ratably with all other bonds outstanding under the Mortgage except insofar as any sinking or other fund may afford additional security for the bonds of any particular series;

(vi) The statements made in the Prospectus under the captions "Description of First Mortgage Bonds" and "Description of Senior Notes" and in the Prospectus Supplement under the caption "Description of the Notes" insofar as they purport to constitute summaries of the documents referred to therein, are correct in all material respects;

(vii) This Agreement has been duly and validly authorized, executed and delivered by the Company;

(viii) The Registration Statement, at the time and date it was declared effective by the Commission, and the Prospectus, at the time it was filed with, or transmitted for filing to, the Commission pursuant to Rule 424 (except as to the financial statements and other financial and statistical data constituting a part thereof or incorporated by reference therein, upon which such opinions need not pass), complied as to form in all material respects with the requirements of the Securities Act and the 1939 Act and the applicable instructions, rules and regulations of the Commission thereunder; the documents or portions thereof filed with the Commission pursuant to the Exchange Act and deemed to be incorporated by reference in the Registration Statement and the Prospectus pursuant to Item 12 of Form S-3 (except as to financial statements and other financial and statistical data constituting a part thereof or incorporated by reference therein, upon which such opinions need not pass), at the time they were filed with the Commission, complied as to form in all material respects with the requirements of the Exchange Act and the applicable instructions, rules and regulations of the Commission thereunder; the Registration Statement has become effective under the Securities Act and, to the best of the knowledge of said counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and not withdrawn and no proceedings for a stop order with respect thereto are threatened or pending under Section 8 of the Securities Act;

(ix) Nothing has come to the attention of said counsel that would lead them to believe that the Registration Statement, at the time and date it was declared effective by the Commission, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus, at the time it was filed with, or transmitted for filing to, the Commission pursuant to Rule 424 or at the Closing Date, included or includes an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (except as to financial statements and other financial and statistical data constituting a part of the Registration Statement or the Prospectus or incorporated by reference therein, upon which such opinions need not pass); and

(x) Orders have been entered by the North Carolina Utilities Commission and the South Carolina Public Service Commission authorizing the issuance and sale of the Notes and the Senior Note First Mortgage Bonds, and to the best of the knowledge of said counsel, said orders are still in force and effect; and no further approval, authorization, consent or other order of any public board or body (except such as have been obtained under the Securities Act and as may be required under the state securities or Blue Sky laws of any jurisdiction) is legally required for the consummation of the transactions contemplated in this Agreement.

(d) At the Closing Date, the Representative shall receive from William D. Johnson, Esq., Senior Vice President and Corporate Secretary for the Company, a favorable opinion in form and substance satisfactory to counsel for the Underwriters, to the same effect with respect to the matters enumerated in subdivisions (i) through (vii) and subdivisions
(ix) and (x) of subparagraph (c) of this paragraph 9 as the opinions required by said subparagraph (c), and to the further effect that:

(i) The Company is a validly organized and existing corporation and is in good standing under the laws of the State of North Carolina and is duly qualified to do

business as an electrical utility and is doing business in that State and in the State of South Carolina;

(ii) The Company is duly authorized by its Charter to conduct the business which it is now conducting as set forth in the Prospectus;

(iii) The Company has valid and subsisting franchises, licenses and permits free from burdensome restrictions and adequate for the conduct of its business;

(iv) The Company has good and marketable title, with minor exceptions, restrictions and reservations in conveyances, and defects, which are of the nature ordinarily found in properties of similar character and magnitude, and which, in his opinion, cannot in any substantial way impair the security afforded by the Mortgage, to all the properties described in the granting clauses of the Mortgage and upon which the Mortgage purports to create a lien, except certain rights-of-way over private property on which are located transmission and distribution lines formerly owned by the Tide Water Power Company (merged into the Company on February 29, 1952), title to which can be perfected by condemnation proceedings. The description in the Mortgage of the above-mentioned properties (including those formerly owned by Tide Water Power Company) is legally sufficient to constitute the Mortgage a lien upon said properties. Said properties constitute substantially all the permanent physical properties and franchises of the Company and are held by the Company free and clear of all liens and encumbrances except the lien of the Mortgage and Excepted Encumbrances, as defined in the Mortgage. The Company has followed the practice generally of purchasing rights-of-way and easements and certain small parcels of fee property appurtenant thereto and for use in conjunction therewith, and certain other properties of small or inconsequential value, without an examination of title and, as to the title to lands affected by rights-of-way and easements, of not examining the title of the lessor or grantor whenever the lands affected by such rights-of-way and easements are not of such substantial value as in the opinion of the Company to justify the expense attendant upon examination of titles in connection therewith. In his opinion such practice of the Company is consistent with good practice and with the method followed by other companies engaged in the same business and is reasonably adequate to assure the Company of good and marketable title to all such property acquired by it. It is his opinion that any such conditions or defects as may be covered by the above recited exceptions are not, except as to certain rights-of-way on which are located transmission lines acquired from Tide Water Power Company, substantial and would not interfere with the Company's business operations. The Company has the right of eminent domain in the States of North Carolina and South Carolina under which it may, if necessary, perfect or obtain title to privately owned land or acquire easements or rights-of-way required for use or used by the Company in its public utility operations;

(v) The Company's Mortgage and Deed of Trust dated as of May 1, 1940 and the First through the Sixty-seventh Supplemental Indentures thereto have been recorded and filed in such manner and in such places as may be required by law in order fully to preserve and protect the security of the bondholders and all rights of the Mortgage Trustees thereunder; and the Sixty-eighth Supplemental Indenture relating to the Senior Note First Mortgage Bonds is in proper form for filing for record both as a real estate mortgage and as a security interest in all counties in the States of North Carolina and South Carolina in which any of the property (except as any therein or in the

Mortgage are expressly excepted) described therein or in the Mortgage as subject to the lien of the Mortgage is located;

(vi) The Mortgage constitutes a valid first mortgage lien of record upon all the franchises and properties now owned by the Company (other than those expressly excepted therefrom) situated in the States of North Carolina and South Carolina, as described or referred to in the granting clauses of the Mortgage, subject to the exceptions as to bankruptcy, insolvency and other laws stated in subdivision (ii) of subparagraph (c) above;

(vii) The issuance and sale of the Notes and the issuance and delivery of the Senior Note First Mortgage Bonds have been duly authorized by all necessary corporate action on the part of the Company;

(viii) Except as described in or contemplated by the Prospectus, there are no pending actions, suits or proceedings against or affecting the Company or any of its subsidiaries or properties which are likely, in the aggregate, to result in any material adverse change in the business, property, financial condition, earnings, business affairs, or business prospects of the Company and its subsidiaries considered as a whole or which are likely, in the aggregate, to materially and adversely affect the consummation of this Agreement, the Senior Note Indenture, the Notes or the transactions contemplated herein or therein; and

(ix) The consummation of the transactions herein contemplated and the fulfillment of the terms hereof will not result in a breach of any of the terms or provisions of, or constitute a default under, the Charter, the Company's by-laws, applicable law or any indenture, mortgage, deed of trust or other agreement or instrument to which the Company is now a party or any judgment, order, writ or decree of any government or governmental authority or agency or court having jurisdiction over the Company or any of its subsidiaries or any of their assets, properties or operations.

In said opinion such counsel may rely as to all matters of South Carolina law (except as to subdivisions (iii), (iv) and (vi) of this subparagraph (d)) on the opinion of Nelson Mullins Riley & Scarborough, L.L.P., and as to all matters of New York law on the opinion of Hunton & Williams.

(e) At the Closing Date, the Representative shall receive from Nelson Mullins Riley & Scarborough, L.L.P., a favorable opinion in form and substance satisfactory to counsel for the Underwriters, to the effect that:

(i) The Company is an electrical utility engaged in the business of generating, transmitting, distributing and selling electric power to the general public in the States of South Carolina and North Carolina. The Company conducts its South Carolina retail operations subject to the jurisdiction of the South Carolina Public Service Commission pursuant to South Carolina Code Annotated, Sections 58-27-10 et seq. (1976 as amended);

(ii) The Company is duly qualified to transact business in the State of South Carolina;

(iii) The Company's Mortgage and Deed of Trust dated as of May 1, 1940 and the First through the Sixty-seventh Supplemental Indentures thereto have been

recorded and filed in such manner and in such places as may be required by law, in the State of South Carolina, in order fully to preserve and protect the security of the bondholders and all rights of the Mortgage Trustees thereunder;

(iv) The Sixty-eighth Supplemental Indenture relating to the Senior Note First Mortgage Bonds is in proper form for filing for record both as a real estate mortgage and as a security interest in all counties in the State of South Carolina in which any of the property (except as any therein or in the Mortgage, are expressly excepted) described therein or in the Mortgage as subject to the lien of the Mortgage is located;

(v) They have reviewed the opinion letter of even date therewith addressed to you by William D. Johnson, Esq., Senior Vice President and Corporate Secretary for the Company, and they concur, insofar as they relate to the laws of the State of South Carolina, with the opinions that he has expressed therein corresponding with subdivisions (ii) and (x) of subparagraph (c) of this paragraph 9, and subdivisions (i) and (vi) of subparagraph (d) of this paragraph 9; and

(f) At the Closing Date, the Representative shall have received from Deloitte & Touche LLP a letter, dated the Closing Date, confirming that they are independent certified public accountants within the meaning of the Securities Act and the Exchange Act, and of the applicable published rules and regulations thereunder, and stating in effect that: (i) in their opinion, the audited financial statements incorporated by reference in the Registration Statement comply as to form in all material respects with the applicable accounting requirements of the Securities Act or the Exchange Act, as applicable, and of the published rules and regulations thereunder; (ii) based on the performance of the procedures specified by the American Institute of Certified Public Accountants for review of interim financial information as described in Statement on Auditing Standards ("SAS") No. 71, Interim Financial Information, on the unaudited financial statements incorporated by reference in the Registration Statement, inquiries of officials of the Company responsible for financial and accounting matters and reading the minutes of meetings of the Board of Directors, of the Executive Committee of the Board of Directors and of the shareholders, nothing came to their attention that caused them to believe that (A) the unaudited financial statements incorporated by reference in the Registration Statement do not comply as to form in all material respects with the applicable accounting requirements of the Securities Act or the Exchange Act, as applicable, and the published rules and regulations thereunder or any material modifications should be made for them to be in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the most recent audited financial statements incorporated by reference in the Registration Statement; or (B) at the date of the latest available interim balance sheet read by them and at a subsequent date not more than three business days prior to the date of the letter, there was any change in the capital stock or long-term debt of the Company, or at the date of the latest available interim balance sheet read by them, there was any decrease in net assets as compared with the amount shown on the most recent balance sheet incorporated by reference in the Registration Statement, except for changes or decreases that the Registration Statement discloses have occurred or may occur, for declarations of dividends, for common stock sales under the Automatic Dividend Reinvestment and Customer Stock Ownership Plan and Stock Purchase-Savings Plan, or for changes or decreases that are described in the letter; and (iii) covering such other matters as the Representative shall reasonably request.

(g) At the Closing Date, the Representative shall receive a certificate of the Chairman, President or a Vice President of the Company, dated the Closing Date, to the effect

that the representations and warranties of the Company in this Agreement are true and correct as of the Closing Date.

(h) All legal proceedings taken in connection with the sale and delivery of the Notes shall have been satisfactory in form and substance to counsel for the Underwriters.

In case any of the conditions specified above in this paragraph 9 shall not have been fulfilled at the Closing Date, this Agreement may be terminated by the Representative by mailing or delivering written notice thereof to the Company. Any such termination shall be without liability of any party to any other party except as otherwise provided in paragraphs 7 and 8.

10. Conditions of the Company's Obligations. The obligations of the Company to deliver the Notes and the Senior Note First Mortgage Bonds shall be subject to the following conditions:

(a) No stop order suspending the effectiveness of the Registration Statement shall be in effect on the Closing Date, and no proceedings for that purpose shall be pending before or threatened by the Commission on the Closing Date.

(b) Prior to 12 Noon, New York Time, on the day following the date of this Agreement, or such later date as shall have been consented to by the Company, there shall have been issued and on the Closing Date there shall be in full force and effect orders of the North Carolina Utilities Commission and the South Carolina Public Service Commission authorizing the issuance and sale by the Company of the Notes and the Senior Note First Mortgage Bonds, none of which shall contain any provision unacceptable to the Company by reason of its being materially adverse to the Company (it being understood that no such order in effect as of the date of this Agreement contains any such unacceptable provision).

In case any of the conditions specified in this paragraph 10 shall not have been fulfilled at the Closing Date, this Agreement may be terminated by the Company by mailing or delivering written notice thereof to the Representative. Any such termination shall be without liability of any party to any other party except as otherwise provided in paragraphs 7 and 8.

11. Indemnification.

(a) The Company agrees to indemnify and hold harmless each Underwriter and each person who controls any Underwriter within the meaning of Section 15 of the Securities Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act or under any other statute or common law and to reimburse each such Underwriter and controlling person for any legal or other expenses (including to the extent hereinafter provided, reasonable counsel fees) incurred by them (when and as incurred) in connection with investigating any such losses, claims, damages or liabilities or in connection with defending any actions, insofar as such losses, claims, damages, liabilities, expenses or actions arise out of or are based upon any untrue statement, or alleged untrue statement, of a material fact contained in the Registration Statement, any preliminary prospectus or the Prospectus, or in the Registration Statement or Prospectus as amended or supplemented (if any amendments or supplements thereto shall have been furnished), or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the indemnity agreement contained in this paragraph 11 shall not apply to any such losses, claims, damages, liabilities, expenses or actions arising out of, or based upon any such untrue statement or alleged untrue statement, or any such omission or alleged omission, if such statement or omission was made in reliance upon

and in conformity with information furnished herein or in writing to the Company by any Underwriter through the Representative expressly for use in the Registration Statement or Prospectus, or any amendment or supplement to either thereof, or arising out of, or based upon, statements in or omissions from that part of the Registration Statement which shall constitute the Statements of Eligibility under the 1939 Act (Forms T-1 and T-2) of the Mortgage Trustees under the Mortgage and the Senior Note Trustee under the Senior Note Indenture, and provided, further, that the indemnity agreement contained in this paragraph 11 shall not inure to the benefit of any Underwriter (or of any person controlling such Underwriter) on account of any such losses, claims, damages, liabilities, expenses or actions arising from the sale of the Notes to any person if a copy of the Prospectus (excluding documents incorporated by reference therein) shall not have been given or sent to such person by or on behalf of such Underwriter with or prior to the written confirmation of the sale involved, unless such Prospectus failed to correct the omission or misstatement. The indemnity agreement of the Company contained in this paragraph 11 and the representations and warranties of the Company contained in paragraph 3 hereof shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any Underwriter or any such controlling person and shall survive the delivery of the Notes.

(b) Each Underwriter severally and not jointly agrees to indemnify and hold harmless the Company, its officers and directors, and each person who controls the Company within the meaning of Section 15 of the Securities Act, against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act or under any other statute or common law, and to reimburse each of them for any legal or other expenses (including, to the extent hereinafter provided, reasonable counsel fees) incurred by them (when and as incurred) in connection with investigating any such losses, claims, damages, or liabilities, or in connection with defending any actions, insofar as such losses, claims, damages, liabilities, expenses or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or Prospectus as amended or supplemented (if any amendments or supplements thereto shall have been furnished), or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such statement or omission was made in reliance upon and in conformity with information furnished herein or in writing to the Company by such Underwriter through the Representative for use in the Registration Statement or the Prospectus or any amendment or supplement to either thereof. The indemnity agreement of all the respective Underwriters contained in this paragraph 11 shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Company or any other Underwriter, or any such controlling person, and shall survive the delivery of the Notes.

(c) The Company and each of the Underwriters agree that, upon the receipt of notice of the commencement of any action against it, its officers and directors, or any person controlling it as aforesaid, in respect of which indemnity may be sought on account of any indemnity agreement contained herein, it will promptly give written notice of the commencement thereof to the party or parties against whom indemnity shall be sought hereunder. The Company and each of the Underwriters agree that the notification required by the preceding sentence shall be a material term of this Agreement. The omission so to notify such indemnifying party or parties of any such action shall relieve such indemnifying party or parties from any liability which it or they may have to the indemnified party on account of any indemnity agreement contained herein but shall not relieve such indemnifying party or parties from any liability which it or they may have to the indemnified party otherwise than on account of such indemnity agreement. In case such notice of any such action shall be so given, such

indemnifying party shall be entitled to participate at its own expense in the defense or, if it so elects, to assume (in conjunction with any other indemnifying parties) the defense of such action, in which event such defense shall be conducted by counsel chosen by such indemnifying party (or parties) and satisfactory to the indemnified party or parties who shall be defendant or defendants in such action, and such defendant or defendants shall bear the fees and expenses of any additional counsel retained by them; but if the indemnifying party shall elect not to assume the defense of such action, such indemnifying parties will reimburse such indemnified party or parties for the reasonable fees and expenses of any counsel retained by them, as such expenses are incurred; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and counsel for the indemnified party shall have reasonably concluded that there may be a conflict of interest involved in the representation by one counsel of both the indemnifying party and the indemnified party, the indemnified party or parties shall have the right to select separate counsel, satisfactory to the indemnifying party, to participate in the defense of such action on behalf of such indemnified party or parties (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel representing the indemnified parties who are parties to such action).

(d) If the indemnification provided for in subparagraphs (a) or (b) above is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and the Underwriters, on the other hand, from the offering of the Notes pursuant to this Agreement or (ii) if the allocation provided by clause
(i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and of the Underwriters, on the other hand, in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company, on the one hand, and the Underwriters, on the other hand, in connection with the offering of the Notes pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Notes pursuant to this Agreement (before deducting expenses) received by the Company and the total underwriting discount received by the Underwriters, in each case as set forth on the cover of the Prospectus, bear to the aggregate initial public offering price of the Notes as set forth on such cover. The relative fault of the Company, on the one hand, and the Underwriters, on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this paragraph (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this paragraph (d). No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this paragraph (d), each person, if any, who controls an Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the

same rights to contribution as such Underwriter, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Company. The Underwriters' respective obligations to contribute pursuant to this paragraph (d) are several in proportion to the number of Notes set forth opposite their respective names in Schedule II hereto and not joint.

(e) For purposes of this paragraph 11, it is understood and agreed that the only information provided by the Underwriters for inclusion in the Prospectus were the following parts of the section of the Prospectus Supplement titled "Underwriting": the last three sentences of the second paragraph, the third sentence of the third paragraph, and all of the fourth paragraph.

12. Termination Date of this Agreement. This Agreement may be terminated by the Representative at any time prior to the Closing Date by mailing or delivering written notice thereof to the Company, if on or after the date of this Agreement but prior to such time (a) there shall have occurred any general suspension of trading in securities on the New York or Pacific Stock Exchange, or there shall have been established by the New York or Pacific Stock Exchange or by the Commission or by any federal or state agency or by the decision of any court any limitation on prices for such trading or any restrictions on the distribution of securities, or (b) there shall have occurred any new outbreak of hostilities, including, but not limited to, an escalation of hostilities which existed prior to the date of this Agreement, or other national or international calamity or crisis, the effect of which on the financial markets of the United States shall be such as to make it impracticable, in the reasonable judgment of the Representative, for the Underwriters to enforce contracts for the sale of the Notes, or (c) the Company shall have sustained a substantial loss by fire, flood, accident or other calamity which renders it impracticable, in the reasonable judgment of the Representative, to consummate the sale of the Notes and the delivery of the Notes by the several Underwriters at the initial public offering price or (d) there shall have been any downgrading or any notice of any intended or potential downgrading in the rating accorded the Company's securities by any "nationally recognized statistical rating organization" as that term is defined by the Commission for the purposes of Securities Act Rule 436(g)(2), or any such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of the Notes, the Senior Note First Mortgage Bonds or any of the Company's other outstanding debt, the effect of which in the reasonable judgment of the Representative, makes it impracticable or inadvisable to consummate the sale of the Notes and the delivery of the Notes by the several Underwriters at the initial public offering price. This Agreement may also be terminated at any time prior to the Closing Date if in the reasonable judgment of the Representative the subject matter of any amendment or supplement to the Registration Statement or Prospectus (other than an amendment or supplement relating solely to the activity of any Underwriter or Underwriters) filed after the execution of this Agreement shall have materially impaired the marketability of the Notes. Any termination hereof pursuant to this paragraph 12 shall be without liability of any party to any other party except as otherwise provided in paragraphs 7 and 8.

13. Miscellaneous. The validity and interpretation of this Agreement shall be governed by the laws of the State of New York. Unless otherwise specified, time of day refers to New York City time. This Agreement shall inure to the benefit of, and be binding upon, the Company, the several Underwriters, and with respect to the provisions of paragraph 11, the officers and directors and each controlling person referred to in paragraph 11, and their respective successors. Nothing in this Agreement is intended or shall be construed to give to any other person, firm or corporation any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. The term "successors" as used in this Agreement shall not include any purchaser, as such purchaser, of any of the Notes from any of the several Underwriters.

14. Notices. All communications hereunder shall be in writing or by telefax and, if to the Underwriters, shall be mailed, transmitted by any standard form of telecommunication or delivered to the Representative at the address set forth in Schedule I hereto and if to the Company, shall be mailed or delivered to it at 411 Fayetteville Street, Raleigh, North Carolina 27601-1748, attention of Mark F. Mulhern, Treasurer.

15. Counterparts. This Agreement may be simultaneously executed in counterparts, each of which when so executed shall be deemed to be an original. Such counterparts shall together constitute one and the same instrument.

16. Defined Terms. Unless otherwise defined herein, capitalized terms used in this Underwriting Agreement shall have the meanings assigned to them in the Registration Statement.

[The remainder of this page has been intentionally left blank.]

If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to the Company the enclosed duplicate hereof whereupon it will become a binding agreement between the Company and the several Underwriters in accordance with its terms.

Very truly yours,

CAROLINA POWER & LIGHT COMPANY

By: /s/ Mark F. Mulhhern
   --------------------------------------
          Authorized Representative

Accepted as of the date first
above written, as Underwriter
named in, and as the Representative
of the other Underwriters named in, Schedule II.

CHASE SECURITIES INC.

By:       /S/ Robert Gelnaw
   ---------------------------------------
         Authorized Representative

BANC ONE CAPITAL MARKETS, INC.

By:       /S/ Katherine Cokic
   ---------------------------------------
         Authorized Representative

SCHEDULE I

Underwriting Agreement dated April 5, 2000

Registration Statement No. 333-69237

Representative and Addresses:

Chase Securities Inc.
270 Park Avenue, 8th Floor
New York, New York 10017-2070
Attention: Peter Madonia

with a copy of any notice pursuant to Section 11(a) to:

One Chase Manhattan Plaza
26th Floor
New York, New York 10081
Attention: Legal Department

Banc One Capital Markets, Inc.
1 Bank One Plaza, IL1-0595
Chicago, Illinois 60670
Attention: Evonne Taylor

Designation:               Senior Notes, 7.50% Series Due April 1, 2005

Principal Amount:          $300,000,000

Secured by:                First Mortgage Bonds, 7.50% Senior Note Series Due
                           April 1, 2005

Indenture:                 Indenture (For Senior Notes) dated as of March 1,
                           1999, as previously supplemented, and Second
                           Supplemental Indenture, dated as of April 1, 2000,
                           to Indenture (For Senior Notes)

Date of Maturity:          April 1, 2005

Interest Rate:             7.50% per annum, payable April 1 and October 1 of
                           each year, commencing October 1, 2000.

Record Dates:              March 15 and September 15, commencing September 15,
                           2000.

Purchase Price:            99.187% of the principal amount thereof.

Public Offering Price:     99.787% of the principal amount thereof.

Redemption                 Terms: Redeemable prior to maturity at the option of
                           the Company at the greater of (i) the outstanding
                           principal amount or (ii) the present value of the
                           remaining payments, computed by discounting at the
                           Treasury Yield plus 25 basis points (as defined, and
                           described in further detail, in the Prospectus
                           Supplement).

Closing Date and Location:

April 11, 2000

Hunton & Williams
One Hannover Square, 14th Floor Raleigh, North Carolina 27601

SCHEDULE II

       Underwriters                             Principal Amount
       ------------                             ----------------

Banc One Capital Markets, Inc.                   $ 82,500,000
Chase Securities Inc.                            $ 82,500,000
First Union Securities, Inc.                     $ 45,000,000
J.P. Morgan Securities Inc.                      $ 45,000,000
Wachovia Securities, Inc.                        $ 45,000,000

                    TOTAL...............         $300,000,000
                                                 ============

Exhibit 4(a)
COUNTERPART 1
OF 20 COUNTERPARTS

CAROLINA POWER & LIGHT COMPANY

THE BANK OF NEW YORK,

TRUSTEE

SECOND SUPPLEMENTAL INDENTURE
DATED AS OF APRIL 1, 2000

INDENTURE
(FOR SENIOR NOTES)

DATED AS OF MARCH 1, 1999

SENIOR NOTES, 7.50% SERIES DUE APRIL 1, 2005

THIS SECOND SUPPLEMENTAL INDENTURE, dated as of April 1, 2000, between CAROLINA POWER & LIGHT COMPANY, a corporation duly organized and existing under the laws of the State of North Carolina (herein called the "Company"), having its principal office at 411 Fayetteville Street, Raleigh, North Carolina 27601-1748, and THE BANK OF NEW YORK, a banking corporation of the State of New York, having its principal office at 101 Barclay Street, New York, New York, 10286, as Trustee (herein called the "Trustee") under the Indenture (For Senior Notes) dated as of March 1, 1999 between the Company and the Trustee (the "Indenture").

RECITALS OF THE COMPANY

A. The Company has executed and delivered the Indenture to the Trustee to provide for the issuance from time to time of its Senior Notes (the "Notes"), said Notes to be issued in one or more series as in the Indenture provided.

B. The Company has executed and delivered to the Trustee the following indenture supplemental to the Indenture: a First Supplemental Indenture, dated as of March 1, 1999, which established the form and terms of a series of Notes.

C. Pursuant to the terms of the Indenture, the Company desires to establish a new series of its Notes to be known as its Senior Notes, 7.50% Series Due April 1, 2005 (herein called the "Senior Notes Due 2005"), the form and substance of such Senior Notes Due 2005 and the terms, provisions, and conditions thereof to be set forth as provided in the Indenture and this Second Supplemental Indenture.

D. All things necessary to make this Second Supplemental Indenture a valid agreement of the Company, and to make the Senior Notes Due 2005, when executed by the Company and authenticated and delivered by the Trustee, the valid obligations of the Company, have been done.

NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of the Senior Notes Due 2005 by the Holders thereof, and for the purpose of setting forth, as provided in the Indenture, the form and substance of the Senior Notes Due 2005 and the terms, provisions, and conditions thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Senior Notes Due 2005, as follows:

ARTICLE I

GENERAL TERMS AND CONDITIONS OF THE SENIOR NOTES DUE 2005

SECTION 101. There is hereby established a series of Notes designated the "Senior Notes, ____% Series Due April 1, 2005." The Notes of such series shall be initially authenticated and delivered from time to time upon delivery to the Trustee of the documents required by Section 303 of the Indenture including, among other things, a Company Order for the authentication and delivery of Senior Notes Due 2005.

SECTION 102. (a) The Senior Notes Due 2005 shall be issued in registered form without coupons and shall be issued initially in the form of one or more Global Notes (each such Global Note, a "Senior Note Due 2005 Global Note") to or on behalf of The Depository Trust Company ("DTC"), as Depositary therefor, and registered in the name of such Depositary or its nominee. Any Senior Notes Due 2005 to be issued or transferred to, or to be held by or on behalf of DTC as such Depositary or such nominee (or any successor of such nominee) for such purpose shall bear the depositary legends in substantially the form set forth at the top of the form of Senior Notes Due 2005 in Article III hereof, unless otherwise agreed by the Company, and in the case of a successor Depositary, such legend or legends as such Depositary and/or the Company shall require and to which they shall agree, in each case such agreement to be confirmed in writing to the Trustee. Principal of, and premium, if any, and interest on the Senior Notes Due 2005 will be payable, the transfer of Senior Notes Due 2005 will be registrable and Senior Notes Due 2005 will be exchangeable for Senior Notes Due 2005 bearing identical terms and provisions, at the office or agency of the Company in the Borough of Manhattan, The City and State of New York; PROVIDED, HOWEVER, that payment of interest may be made at the option of the Company by check mailed to the registered Holders thereof at such address as shall appear in the Note Register; and FURTHER PROVIDED, HOWEVER, that with respect to a Senior Note Due 2005 Global Note, the Company may make payments of principal of, and premium, if any, and interest on such Senior Note Due 2005 Global Note pursuant to and in accordance with such arrangements as are agreed upon by the Company and the Depositary for such Senior Note Due 2005 Global Note. The Senior Notes Due 2005 shall have the terms set forth in the form of the Senior Notes Due 2005 set forth in Article III hereof.

(b) Notwithstanding any other provision of this Section 102 or of Section 305 of the Indenture, except as contemplated by the provisions of paragraph (c) below, a Senior Note Due 2005 Global Note may be transferred, in whole but not in part and in the manner provided in Section 305 of the Indenture, only to a nominee of the Depositary for such Senior Note Due 2005 Global Note, or to the Depositary, or to a successor Depositary for such Senior Note Due 2005 Global Note selected or approved by the Company, or to a nominee of such successor Depositary.

(c) (1) If at any time the Depositary for a Senior Note Due 2005 Global Note notifies the Company that it is unwilling or unable to continue as the Depositary for such Senior Note Due 2005 Global Note or if at any time the Depositary for a Senior Note Due 2005 Global Note shall no longer be eligible or in good standing under the Exchange Act, or other applicable statute or regulation, the Company shall appoint a successor Depositary with respect to such Senior Note Due 2005 Global Note. If a successor Depositary for such Global Note is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such ineligibility, the Company will execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of Senior Notes Due 2005 in the form of definitive certificates in exchange for such Senior Note Due 2005 Global Note, will authenticate and deliver Senior Notes Due 2005 in the form of definitive certificates of like tenor and terms in an aggregate principal amount equal to the principal amount of the Senior Note Due 2005 Global Note in exchange for such Senior Note Due 2005 Global Note. Such Senior Notes Due 2005 will be issued to and registered in the name of such Person or Persons as are specified by the Depositary.

(2) The Company may at any time and in its sole discretion determine that any Senior Notes Due 2005 issued or issuable in the form of one or more Senior Note Due 2005 Global Notes shall no longer be represented by such Global Note or Notes. In any such event the Company will execute, and the Trustee, upon receipt of a Company Request for the

authentication and delivery of Senior Notes Due 2005 in the form of definitive certificates in exchange in whole or in part for such Senior Note Due 2005 Global Note or Notes, will authenticate and deliver without service charge, to each Person specified by the Depositary, Senior Notes Due 2005 in the form of definitive certificates of like tenor and terms in an aggregate principal amount equal to the principal amount of such Senior Note Due 2005 Global Note or the aggregate principal amount of such Senior Note Due 2005 Global Notes in exchange for such Senior Note Due 2005 Global Note or Notes.

(3) If the Company so elects in an Officer's Certificate, the Depositary may surrender Senior Notes Due 2005 issued in the form of a Global Note in exchange in whole or in part for Senior Notes Due 2005 in the form of definitive certificates of like tenor and terms on such terms as are acceptable to the Company and such Depositary. Thereupon the Company shall execute, and the Trustee shall authenticate and deliver, without service charge, (A) to each Person specified by such Depositary a new Senior Note Due 2005 or Senior Notes Due 2005 of like tenor and terms and any authorized denomination as requested by such Person in aggregate principal amount equal to and in exchange for such Person's beneficial interest in the Global Note; and (B) to such Depositary a new Senior Note Due 2005 Global Note of like tenor and terms and in an authorized denomination equal to the difference, if any, between the principal amount of the surrendered Global Note and the aggregate principal amount of Notes delivered to Holders thereof.

(4) In any exchange provided for in any of the preceding three subparagraphs, the Company shall execute and the Trustee shall authenticate and deliver Senior Notes Due 2005 in the form of definitive certificates in authorized denominations. Upon the exchange of the entire principal amount of a Senior Note Due 2005 Global Note for Senior Notes Due 2005 in the form of definitive certificates, such Senior Note Due 2005 Global Note shall be canceled by the Trustee. Except as provided in the immediately preceding subparagraph, Senior Notes Due 2005 issued in exchange for a Senior Note Due 2005 Global Note pursuant to this Section 102 shall be registered in such names and in such authorized denominations as the Depositary for such Senior Note Due 2005 Global Note, acting pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. Provided that the Company and the Trustee have so agreed, the Trustee shall deliver such Senior Notes Due 2005 to the Persons in whose names the Senior Notes Due 2005 are so to be registered.

(5) Any endorsement of a Senior Note Due 2005 Global Note to reflect the principal amount thereof, or any increase or decrease in such principal amount, shall be made in such manner and by such Person or Persons as shall be specified in or pursuant to any applicable letter of representations or other arrangement entered into with, or procedures of, the Depositary with respect to such Senior Note Due 2005 Global Note or in the Company Order delivered or to be delivered pursuant to Section 303 of the Indenture with respect thereto. Subject to the provisions of Section 303 of the Indenture, the Trustee shall deliver and redeliver any such Global Note in the manner and upon instructions given by the Person or Persons specified in or pursuant to any applicable letter of representations or other arrangement entered into with, or procedures of, the Depositary with respect to such Senior Note Due 2005 Global Note or in any applicable Company Order. If a Company Order pursuant to Section 303 of the Indenture is so delivered, any instructions by the Company with respect to such Senior Note Due 2005 Global Note contained therein shall be in writing but need not be accompanied by or contained in an Officer's Certificate and need not be accompanied by an Opinion of Counsel.

(6) The Depositary or, if there be one, its nominee, shall be the Holder of a Senior Note Due 2005 Global Note for all purposes under the Indenture and the Senior Notes Due 2005 and beneficial owners with respect to such Global Note shall hold their interests pursuant to applicable procedures of such Depositary. The Company, the Trustee and the Note Registrar shall be entitled to deal with such Depositary for all purposes of the Indenture relating to such Global Note (including the payment of principal, premium, if any, and interest and the giving of instructions or directions by or to the beneficial owners of such Global Note as the sole Holder of such Global Note and shall have no obligations to the beneficial owners thereof (including any direct or indirect participants in such Depositary. None of the Company, the Trustee, any Paying Agent or the Note Registrar shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a in or pursuant to any applicable letter of representations or other arrangement entered into with, or procedures of, the Depositary with respect to such Senior Note Due 2005 Global Note Global Note or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

SECTION 103. The Company may, at its option, redeem, at any time, all, or, from time to time, any part of the Senior Notes Due 2005, upon notice as provided in the Indenture (not less than 30 nor more than 60 days prior to a date fixed for redemption (the "Redemption Date")) at a redemption price equal to the greater of (i) 100% of their principal amount or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon from the Redemption Date to the maturity date, computed by discounting such payments, in each case, to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Yield plus 25 basis points (.25%), plus in each case accrued interest on the principal amount thereof to the Redemption Date (the "Redemption Price"), such Redemption Price to be set forth in an Officer's Certificate delivered to the Trustee on or before the Redemption Date and upon which the Trustee may conclusively rely.

For purposes of this Section 103, the following terms shall have the following meanings:

"Treasury Yield" means, with respect to any Redemption Date, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.

"Comparable Treasury Issue" means the United States Treasury security selected by an Independent Investment Banker having a maturity comparable to the remaining term of the Senior Notes Due 2005 that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Senior Notes Due 2005. "Independent Investment Banker" means Chase Securities Inc. or, if such firm is unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing selected by the Company and appointed by the Trustee.

"Comparable Treasury Price" means, with respect to any Redemption Date,
(i) the average of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) on the third business day preceding such Redemption Date, as set forth in the daily statistical release (or any successor release) published by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S. Government Securities" or (ii) if such

release (or any successor release) is not published or does not contain such prices on such business day, the average of the Reference Treasury Dealer Quotations for such Redemption Date.

"Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the third business day preceding such Redemption Date. The Company shall furnish the Trustee a notice in writing at least five business days and not more than ten business days prior to such Redemption Date of (a) the name of each Reference Treasury Dealer, (b) the Redemption Date, and (c) the third business day preceding the Redemption Date.

"Reference Treasury Dealer" means each of Banc One Capital Markets, Inc., Chase Securities Inc. and J.P. Morgan Securities Inc., and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government Securities dealer in New York City (a "Primary Treasury Dealer"), the Company shall substitute therefor another Primary Treasury Dealer.

The Company shall deliver to the Trustee the Officer's Certificate referred to above in this Section 103 setting forth the Company's calculation of the Redemption Price applicable to any such redemption promptly after the calculation thereof but, in any event, prior to the Redemption Date of any such Senior Notes Due 2005. Except with respect to the obligations of the Trustee expressly set forth in the foregoing definition of "Reference Treasury Dealer Quotations," the Trustee shall be under no duty to inquire into, may presume the correctness of, and shall be fully protected in acting upon the Company's calculation of any Redemption Price of the Senior Notes Due 2005.

SECTION 104. The Company has issued pursuant to the Sixty-eighth Supplemental Indenture to the First Mortgage, and hereby delivers to the Trustee for the benefit of the Holders of all Notes from time to time Outstanding under the Indenture, a series of Senior Note First Mortgage Bonds designated the "First Mortgage Bonds, 7.50% Senior Note Series Due 2005." Such Senior Note First Mortgage Bonds have the same rate or rates of interest (or interest calculated in the same manner) (including interest payable following a default on the Senior Notes Due 2005), interest payment dates, maturity and redemption provisions, and have been issued in the same aggregate principal amount, as the Senior Notes Due 2005.

SECTION 105. When the obligation of the Company to make payments with respect to the principal of, and premium, if any, and interest on all or any part of the Senior Note First Mortgage Bonds delivered pursuant to Section 104 of this Second Supplemental Indenture shall be satisfied or deemed satisfied pursuant to Section 403, Section 801 or Section 802 of the Indenture or pursuant to Section 103 of this Second Supplemental Indenture, the Trustee shall, upon written request of the Company and the receipt of the certificate of the Expert described in Section 404(b) of the Indenture (if such certificate is then required by Section 404(b) of the Indenture), deliver to the Company without charge therefor all of the Senior Note First Mortgage Bonds so satisfied or deemed satisfied, together with such appropriate instruments of transfer or release as may be reasonably requested by the Company. All Senior Note First Mortgage Bonds delivered to the Company in accordance with this Section 105 shall be delivered by the Company to the Mortgage Trustee for cancellation.

SECTION 106. The Senior Notes Due 2005 shall be defeasible pursuant to
Section 801 of the Indenture.

ARTICLE II

ADDITIONAL COVENANTS

SECTION 201. (a) From and after the Release Date and so long as any Senior Notes Due 2005 are Outstanding, the Company will not issue, assume, or guarantee (including any contingent obligation to purchase) any Debt secured by any mortgage, security interest, pledge, or lien (herein referred to as a "Lien") of or upon any Operating Property of the Company, whether owned at the date of the Indenture or thereafter acquired, and will not permit to exist any Debt secured by a Lien on any Operating Property created on or prior to the Release Date, without in any such case effectively securing, on the later to occur of the issuance, assumption, or guarantee of any such Debt or the Release Date, the Outstanding Senior Notes Due 2005 (together with, if the Company shall so determine, any other Note or Debt of or guaranteed by the Company ranking equally with, the Senior Notes Due 2005) equally and ratably with such Debt; provided, however, that the foregoing restriction shall not apply to Debt secured by any of the following:

                                    (1) Liens on any Operating Property existing
at the time of  acquisition thereof and not created in contemplation of such
acquisition;

                                    (2) Liens on Operating Property of a

corporation existing at the time such corporation is merged into or consolidated with the Company, or at the time of a sale, lease, or other disposition of the properties of such corporation or a division thereof as an entirety or substantially as an entirety to the Company, provided that such Lien as a result of such merger, consolidation, sale, lease, or other disposition is not extended to property owned by the Company immediately prior thereto and is not created in contemplation of such merger, consolidation, sale, lease or other disposition;

(3) Liens on Operating Property to secure all or part of the cost of acquiring, constructing, developing, or substantially repairing, altering, or improving such property, or to secure indebtedness incurred to provide funds for any such purpose or for reimbursement of funds previously expended for any such purpose, provided such Liens are created or assumed contemporaneously with, or within eighteen (18) months after, such acquisition or completion of construction, development, or substantial repair, alteration, or improvement or within six (6) months thereafter pursuant to a commitment for financing arranged with a lender or investor within such eighteen
(18) month period;

(4) Liens in favor of the United States of America or any State thereof, or any department, agency, or instrumentality or political subdivision of the United States of America or any State thereof, or for the benefit of holders of securities issued by any such entity, to secure any Debt incurred for the purpose of financing all or any part of the purchase price or the cost of constructing, developing, or substantially repairing, altering, or improving the property subject to such Liens; or

(5) any extension, renewal or replacement (or successive extensions, renewals, or replacements), in whole or in part, of any Lien referred to in the foregoing clauses (1) to (4), inclusive; provided, however, that the principal amount of Debt secured thereby

and not otherwise authorized by said clauses (1) to (4), inclusive, shall not exceed the principal amount of Debt, plus any premium or fee payable in connection with any such extension, renewal, or replacement, so secured at the time of such extension, renewal, or replacement.

(b) Notwithstanding the provisions of Section 201(a), from and after the Release Date and so long as any Senior Notes Due 2005 are Outstanding, the Company may issue, assume, or guarantee Debt, or permit to exist Debt, secured by Liens which would otherwise be subject to the restrictions of Section 201(a) up to an aggregate principal amount that, together with the principal amount of all other Debt of the Company secured by Liens (other than Liens permitted by Section 201(a) that would otherwise be subject to the foregoing restrictions) and the Value of all Sale and Lease-Back Transactions in existence at such time (other than (i) any Sale and Lease-Back Transaction that, if such Sale and Lease-Back Transaction had been a Lien, would have been permitted by Section 201(a), (ii) Sale and Lease-Back Transactions permitted by Section 202 because the commitment by or on behalf of the purchaser was obtained no later than eighteen (18) months after the later of events described in (i) or (ii) of Section 202, and (iii) Sale and Lease-Back Transactions as to which application of amounts has been made in accordance with clause (z) of Section 202), does not at the time exceed the greater of ten percent (10%) of Net Tangible Assets or ten percent (10%) of Capitalization.

(c) If at any time the Company shall issue, assume, or guarantee any Debt secured by any Lien and if Section 201(a) requires that the Outstanding Senior Notes Due 2005 be secured equally and ratably with such Debt, the Company will promptly execute, at its expense, any instruments necessary to so equally and ratably secure the Outstanding Senior Notes Due 2005 and deliver the same to the Trustee along with:

(1) an Officers' Certificate stating that the covenant of the Company contained in Section 201(a) has been complied with; and

(2) an Opinion of Counsel to the effect that the Company has complied with the covenant contained in Section 201(a), and that any instrument executed by the Company in the performance of such covenant complies with the requirements of such covenant.

In the event that the Company shall hereafter secure Outstanding Senior Notes Due 2005 equally and ratably with any other obligation or indebtedness (including other Notes) pursuant to the provisions of this
Section 201, the Trustee is hereby authorized to enter into an indenture or agreement supplemental hereto and to take such action, if any, as it may, in its sole and absolute discretion, deem advisable to enable it to enforce effectively the rights of the Holders of Outstanding Senior Notes Due 2005 so secured, equally and ratably with such other obligation or indebtedness.

SECTION 202. From and after the Release Date and so long as any Senior Notes Due 2005 are outstanding, the Company will not enter into any Sale and Lease-Back Transaction with respect to any Operating Property and will not permit to remain in effect any Sale and Lease-Back Transaction entered into on or prior to the Release Date with respect to any Operating Property if, in any case, the commitment by or on behalf of the purchaser is or was obtained more than eighteen (18) months after the later of (i) the completion of the acquisition, construction, or development of such Operating Property or (ii) the placing in operation of such Operating Property or of such Operating Property as constructed, developed, or substantially repaired, altered, or improved, unless

(x) the Company would be entitled pursuant to Section 201(a) to issue, assume, or guarantee Debt secured by a Lien on such Operating Property without equally and ratably securing the Senior Notes Due 2005 or (y) the Company would be entitled pursuant to Section 201(b), after giving effect to such Sale and Lease-Back Transaction, to incur $1.00 of additional Debt secured by Liens (other than Liens permitted by Section 201(a)) or (z) the Company shall apply or cause to be applied, in the case of a sale or transfer for cash, an amount equal to the net proceeds thereof (but not less than the fair value (as determined by the Company's Chief Financial Officer) of such Operating Property at the date of such sale or transfer) and, in the case of a sale or transfer otherwise than for cash, an amount equal to the fair value (as determined by the Board of Directors) of the Operating Property so leased, to the retirement, within one hundred eighty (180) days after the later to occur of the effective date of such Sale and Lease-Back Transaction or the Release Date, of Notes or other Debt of the Company ranking equally with, the Senior Notes Due 2005; PROVIDED, HOWEVER, that any such retirement of Notes shall be in accordance with the terms and provisions of the Indenture and the Senior Notes Due 2005; PROVIDED, FURTHER, that the amount to be applied to such retirement of Notes or other Debt shall be reduced by an amount equal to the sum of (a) an amount equal to the redemption price with respect to Notes delivered within such one hundred eighty (180)-day period to the Trustee for retirement and cancellation and (b) the principal amount, plus any premium or fee paid in connection with any redemption in accordance with the terms of other Debt voluntarily retired by the Company within such one hundred eighty (180)-day period, excluding in each case retirements pursuant to mandatory sinking fund or prepayment provisions and payments at maturity.

SECTION 203. DEFINITIONS

For purposes of Section 201 and Section 202 of this Second Supplemental Indenture, the following terms shall have the following meanings:

"Capitalization" means the total of all the following items appearing on, or included in, the consolidated balance sheet of the Company: (i) liabilities for indebtedness maturing more than twelve (12) months from the date of determination; and (ii) common stock, preferred stock, premium on capital stock, capital surplus, capital in excess of par value, and retained earnings (however the foregoing may be designated), less, to the extent not otherwise deducted, the cost of shares of capital stock of the Company held in its treasury.

Subject to the foregoing, Capitalization shall be determined in accordance with generally accepted accounting principles and practices applicable to the type of business in which the Company is engaged and that are approved by independent accountants regularly retained by the Company, and may be determined as of a date not more than (sixty) 60 days prior to the happening of an event for which such determination is being made.

The term "Debt" means any outstanding debt for money borrowed evidenced by notes, debentures, bonds, or other securities, or guarantees of any debt.

The term "Net Tangible Assets" means the amount shown as total assets on the consolidated balance sheet of the Company, less the following: (i) intangible assets including, but without limitation, such items as goodwill, trademarks, trade names, patents, and unamortized debt discount and expense and other regulatory assets carried as an asset on the Company's consolidated balance sheet; and (ii) appropriate adjustments, if any, on account of minority interests.

Net Tangible Assets shall be determined in accordance with generally accepted accounting principles and practices applicable to the type of business in which the Company is engaged and that are approved by the independent accountants regularly retained by the Company, and may be determined as of a date not more than (sixty) 60 days prior to the happening of the event for which such determination is being made.

The term "Operating Property" means (i) any interest in real property owned by the Company and (ii) any asset owned by the Company that is depreciable in accordance with generally accepted accounting principles, excluding in either case, any interest of the Company as lessee under any lease (except for a lease that results from a Sale and Lease-Back Transaction) which has been or would be capitalized on the books of the lessee in accordance with generally accepted accounting principles.

The term "Sale and Lease-Back Transaction" means any arrangement with any person providing for the leasing to the Company of any Operating Property (except for temporary leases for a term, including any renewal or potential renewal thereof, of not more than forty-eight (48) months), which Operating Property has been or is to be sold or transferred by the Company to such person; PROVIDED, HOWEVER, Sale and Lease-Back Transaction shall not include any arrangement first entered into prior to the date hereof, and shall not include any transaction pursuant to which the Company sells Operating Property to, and thereafter purchases energy or services from, any entity if such transaction is ordered or authorized by any regulatory authority having jurisdiction over the Company or its operations or is entered into pursuant to any plan or program of industry restructuring ordered or authorized by any regulatory authority.

The term "Value" means, with respect to a Sale and Lease-Back Transaction, as of any particular time, the amount equal to the greater of (1) the net proceeds to the Company from the sale or transfer of the property leased pursuant to such Sale and Lease-Back Transaction or (2) the net book value of such property, as determined in accordance with generally accepted accounting principles by the Company at the time of entering into such Sale and Lease-Back Transaction, in either case multiplied by a fraction, the numerator of which shall be equal to the number of full years of the term of the lease that is part of such Sale and Lease-Back Transaction remaining at the time of determination and the denominator of which shall be equal to the number of full years of such term, without regard, in any case, to any renewal or extension options contained in such lease.

ARTICLE III

FORM OF

SENIOR NOTES DUE 2005

SECTION 301. The Senior Notes Due 2005 and the Trustee's certificate of authentication to appear thereon are to be substantially in the following forms:

[Form of Face of Senior Notes Due 2005]

[Insert applicable depositary legend or legends, which initially shall be the following: THIS SECURITY IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN

SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO CAROLINA POWER & LIGHT COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS SENIOR NOTE DUE 2005 MAY, AS PROVIDED IN THE INDENTURE, BE EXCHANGED FOR SENIOR NOTES DUE 2005 IN THE FORM OF DEFINITIVE CERTIFICATES OF LIKE TENOR AND OF AN EQUAL AGGREGATE PRINCIPAL AMOUNT, IN AUTHORIZED DENOMINATIONS, REGISTERED IN THE NAMES OF SUCH PERSONS AS THE DEPOSITARY SHALL INSTRUCT THE TRUSTEE, IF (I) THE DEPOSITARY GIVES NOTICE TO THE COMPANY OR TO THE TRUSTEE THAT IT IS UNWILLING OR UNABLE TO CONTINUE AS DEPOSITARY AND A SUCCESSOR DEPOSITARY IS NOT APPOINTED BY THE COMPANY WITHIN 90 DAYS, (II) THE DEPOSITARY CEASES TO BE ELIGIBLE UNDER THE INDENTURE AND A SUCCESSOR DEPOSITARY IS NOT APPOINTED BY THE COMPANY WITHIN 90 DAYS OR (III) THE COMPANY DECIDES TO DISCONTINUE USE OF THE SYSTEM OF BOOK-ENTRY TRANSFERS THROUGH THE DEPOSITARY OR ITS SUCCESSOR. ANY SUCH EXCHANGE SHALL BE MADE UPON RECEIPT BY THE TRUSTEE OF AN OFFICER'S CERTIFICATE THEREFOR AND A WRITTEN INSTRUCTION FROM THE DEPOSITARY

SETTING FORTH THE NAME OR NAMES IN WHICH THE TRUSTEE IS TO REGISTER SUCH SENIOR NOTES DUE 2005 IN THE FORM OF DEFINITIVE CERTIFICATES. ]

CAROLINA POWER & LIGHT COMPANY

Senior Notes, 7.50% Series Due April 1, 2005

No. ___                                                             $___________

                                                             CUSIP No. _________

         Carolina Power & Light Company, a corporation duly organized and

existing under the laws of the State of North Carolina (herein called the "Company," which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to _____________, or registered assigns, the principal sum of _____________________ and No/100 Dollars ($_______________) on April 1, 2005, and to pay interest thereon from April 11, 2000 or from the most recent Interest Payment Date with respect to which interest has been paid or duly provided for, semi-annually on April 1 and October 1 in each year (each an "Interest Payment Date"), commencing October 1, 2000, at the rate of 7.50% per annum, until the principal hereof is paid or made available for payment, PROVIDED that any principal and premium, and any such installment of interest, which is overdue shall bear interest at the rate of 7.50% per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on the Regular Record Date for such interest, which shall be March 15 or September 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on

a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.

Payment of the principal of (and premium if any) and such interest on this Note will be made at the office or agency of the Company maintained for that purpose in 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 payment of public and private debts; PROVIDED, HOWEVER, that at the option of the Company payment of such interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Note Register.

The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months. Interest will accrue from each prior Interest Payment Date to, but not including, the relevant payment date. In the event that any date on which interest is payable on the Notes of this series is not a Business Day at any Place of Payment, then payment of interest or principal and premium, if any, need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity, and, if such payment is made or duly provided for on such Business Day, no interest shall accrue on the amount so payable for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be, to such Business Day. A "Business Day" means when used with respect to a Place of Payment or any other particular location specified in the Indenture, means any day, other than a Saturday or Sunday, which is not a day on which banking institutions or trust companies in such Place of Payment or other location are generally authorized or required by law, regulation or executive order to remain closed.

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

Unless the certificate of authentication hereon has been executed by the Trustee referred to below by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

Dated:

CAROLINA POWER & LIGHT COMPANY

                                        By: ____________________________________
[SEAL]                                                  [Name]
                                                        [Title]
Attest:


_____________________________________
         [Name]
         [Title]

[Form of Reverse of Senior Notes Due 2005]

This Note is one of a duly authorized issue of securities of the Company (herein called the "Notes"), issued and to be issued in one or more series under an Indenture (For Senior Notes), dated as of March 1, 1999 (herein, together with any indenture supplemental thereto, including the Second Supplemental Indenture dated as of April 1, 2000, called the "Indenture," which term shall have the meaning assigned to it in such instrument), between the Company and The Bank of New York, as Trustee (herein called the "Trustee," which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. This Note is one of the series designated on the face hereof.

Prior to the Release Date (as hereinafter defined), this Note will be secured by first mortgage bonds (the "Senior Note First Mortgage Bonds") delivered by the Company to the Trustee for the benefit of all Holders of Notes from time to time Outstanding, issued under the Mortgage and Deed of Trust, dated as of May 1, 1940, from the Company to Irving Trust Company (now The Bank of New York) and Frederick G. Herbst (Douglas J. MacInnes, successor), as trustees (the "Mortgage Trustees"), as supplemented and amended (the "First Mortgage"). Reference is made to the First Mortgage for a description of property mortgaged and pledged, the nature and extent of the security, the rights of the holders of the first mortgage bonds under the First Mortgage and of the Mortgage Trustees in respect thereof, the duties and immunities of the Mortgage Trustees and the terms and conditions upon which the Senior Note First Mortgage Bonds are secured and the circumstances under which additional first mortgage bonds may be issued.

FROM AND AFTER SUCH TIME AS ALL FIRST MORTGAGE BONDS, OTHER THAN FIRST MORTGAGE BONDS WHICH DO NOT IN AGGREGATE PRINCIPAL AMOUNT EXCEED THE GREATER OF FIVE PERCENT (5%) OF NET TANGIBLE ASSETS OR FIVE PERCENT (5%) OF CAPITALIZATION, HAVE BEEN RETIRED THROUGH PAYMENT, REDEMPTION OR OTHERWISE (INCLUDING THOSE FIRST MORTGAGE BONDS THE PAYMENT FOR WHICH HAS BEEN PROVIDED FOR IN ACCORDANCE WITH THE FIRST MORTGAGE) AT, BEFORE OR AFTER THE MATURITY THEREOF, PROVIDED THAT NO DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING (THE "RELEASE DATE"), THE SENIOR NOTE FIRST MORTGAGE BONDS SHALL CEASE TO SECURE THE NOTES IN ANY MANNER.

The Notes of this series are subject to redemption by the Company, at its option, in whole, at any time, or in part, from time to time, upon notice as provided in the Indenture (not less than 30 nor more than 60 days prior to a date fixed for redemption (the "Redemption Date")) at a redemption price equal to the greater of (i) 100% of their principal amount or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon from the Redemption Date to the maturity date, computed by discounting such payments, in each case, to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Yield plus 25 basis points (.25%), plus in each case accrued interest on the principal amount thereof to the Redemption Date (the "Redemption Price"), such Redemption Price to be set forth in an Officer's Certificate delivered to the Trustee on or before the Redemption Date and upon which the Trustee may conclusively rely.

If notice has been given as provided in the Indenture and funds for the redemption of any Notes (or any portion thereof) called for redemption shall have been made available on the redemption date referred to in such notice, such Notes (or any portion thereof) will cease to bear interest on the date fixed for such redemption specified in such notice and the only right of the Holders of such Notes will be to receive payment of the Redemption Price.

Notice of any optional redemption of Notes of this series (or any portion thereof) will be given to Holders at their addresses, as shown in the Note Register for such Notes, not more than 60 nor less than 30 days prior to the date fixed for redemption. The notice of redemption will specify, among other items, the method of calculation of the Redemption Price and the principal amount of the Notes held by such Holder to

be redeemed. If less than all of the Notes are to be redeemed at the option of the Company, the Trustee shall select, in such manner as it shall deem fair and appropriate, the portion of such Note to be redeemed in whole or in part.

As used herein:

"Comparable Treasury Issue" means the United States Treasury security selected by an Independent Investment Banker having a maturity comparable to the remaining term of the Notes of this series that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes of this series. "Independent Investment Banker" means Chase Securities Inc. or, if such firm is unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing selected by the Company and appointed by the Trustee.

"Comparable Treasury Price" means, with respect to any Redemption Date, (i) the average of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) on the third Business Day preceding such Redemption Date, as set forth in the daily statistical release (or any successor release) published by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S. Government Securities" or (ii) if such release (or any successor release) is not published or does not contain such prices on such Business Day, the average of the Reference Treasury Dealer Quotations for such Redemption Date.

"Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the third Business Day preceding such Redemption Date. The Company shall furnish the Trustee a notice in writing at least five Business Days and not more than ten Business Days prior to such Redemption Date of (a) the name of each Reference Treasury Dealer, (b) the Redemption Date, and (c) the third Business Day preceding the Redemption Date.

The Notes of this series will not be subject to any sinking fund.

In the event of redemption of this Note in part only, a new Note or Notes of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Note upon compliance with certain conditions set forth in the Indenture.

If an Event of Default with respect to Notes of this series shall occur and be continuing, the principal of the Notes may be declared due and payable in the manner and with the effect provided in the

Indenture and, upon such declaration, the Trustee shall demand the acceleration of the payment of principal of the Senior Note First Mortgage Bonds as provided in the Indenture.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Notes to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of specified percentages of the Notes Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes at the time Outstanding, on behalf of the Holders of all Notes, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.

As provided in and subject to the provisions of the Indenture, the Holder of this Note shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Notes of this series, the Holders of not less than a majority in aggregate principal amount of the Notes of all series at the time Outstanding in respect of which an Event of Default shall have occurred and be continuing shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not have received from the Holders of a majority in principal amount of Notes of all series at the time Outstanding in respect of which an Event of Default shall have occurred and be continuing a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Note for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Note Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Note Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

The Notes of this series are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the

owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture.

[Form of Certificate of Authentication]

CERTIFICATE OF AUTHENTICATION

This is one of the Notes of the series designated therein referred to in the within-mentioned Indenture.

Dated:

THE BANK OF NEW YORK,
as Trustee

By:______________________________________
Authorized Signatory

ARTICLE IV

ORIGINAL ISSUE OF SENIOR NOTES DUE 2005

SECTION 401. Senior Notes Due 2005 may, upon execution of this Second Supplemental Indenture, and from time to time thereafter, be executed by the Company by an Authorized Officer and delivered to the Trustee for authentication, and the Trustee shall thereupon authenticate and deliver said Senior Notes Due 2005 in accordance with and in such aggregate principal amounts as shall be specified in a Company Order therefor without any further action by the Company.

ARTICLE V

PAYING AGENT AND REGISTRAR

SECTION 501. The Bank of New York will be the Paying Agent and Note Registrar for the Senior Notes Due 2005.

ARTICLE VI

MISCELLANEOUS PROVISIONS

SECTION 601. Except as otherwise expressly provided in this Second Supplemental Indenture or in the form of Senior Notes Due 2005 or otherwise clearly required by the context hereof or thereof, all terms used herein or in said form of Senior Notes Due 2005 that are defined in the Indenture shall have the several meanings respectively assigned to them thereby.

SECTION 602. The Indenture, as heretofore supplemented and as further supplemented by this Second Supplemental Indenture, is in all respects ratified and confirmed, and this Second Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided.

SECTION 603. The Trustee hereby accepts the trusts herein declared, provided, created, supplemented, or amended and agrees to perform the same upon the terms and conditions herein and in the Indenture set forth and upon the following terms and conditions:

The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Second 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 VIII of the Indenture shall apply to and form part of this Second 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 Second Supplemental Indenture.

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

IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written.

CAROLINA POWER & LIGHT COMPANY

                                        By:_____________________________________
[SEAL]                                              Mark F. Mulhern
                                             Vice President and Treasurer

ATTEST:


______________________________________
      Patricia Kornegay-Timmons
         Assistant Secretary

(TRUSTEE'S SIGNATURE PAGE FOLLOWS)

TRUSTEE'S SIGNATURE PAGE

SECOND SUPPLEMENTAL INDENTURE, DATED AS OF APRIL 1, 2000, TO
INDENTURE (FOR SENIOR NOTES), DATED AS OF MARCH 1, 1999

THE BANK OF NEW YORK, as Trustee

                                        By:____________________________________
[SEAL]                                               Michael Culhane
                                                     Vice President

ATTEST:


______________________________________
        Suzanne J. MacDonald

Vice President and Assistant Secretary

Exhibit 4(b)

COUNTERPART ___
OF 110 COUNTERPARTS

CAROLINA POWER & LIGHT COMPANY

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

Sixty-eighth Supplemental Indenture

Providing among other things for

First Mortgage Bonds, 7.50% Senior Note Series Due April 1, 2005

(Seventieth Series)

Dated as of April 1, 2000

Prepared by and Return to:

Hunton & Williams (TSG)
Post Office Box 109
Raleigh, North Carolina 27602

SIXTY-EIGHTH SUPPLEMENTAL INDENTURE

INDENTURE, dated as of April 1, 2000, 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 Sixty-eighth 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

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
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

                              3

           Designation                              Dated as of
           -----------                              -----------

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
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

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 Sixty-seventh 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 Sixty-eighth 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:

                                                  Principal         Principal
                                                    Amount            Amount
              Series                                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
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       5,970,000
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

                                       5
                                                 Principal         Principal
                                                   Amount            Amount
              Series                               Issued          Outstanding
              ------                             ---------         -----------

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
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

which bonds are sometimes called bonds of the First through Sixty-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

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 Sixty-eighth Supplemental Indenture, and the terms of the bonds of the Seventieth 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 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 Sixty-eighth 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 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 Sixty-eighth 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 Sixty-eighth 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 Sixty-eighth 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.

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 Sixty-eighth 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

SEVENTIETH SERIES OF BONDS

SECTION 1. There shall be a series of bonds designated "7.50% Senior Note Series Due April 1, 2005" (herein sometimes referred to as the "Seventieth 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 Seventieth Series shall be initially issued in the aggregate principal amount of $300,000,000, mature on April 1, 2005, bear interest at the rate of 7.50% per annum, payable from April 11, 2000, if the date of said bonds is prior to October 1, 2000, or, if the date of said bonds is after October 1, 2000, from the April or October next preceding the date of said bonds, and thereafter semi-annually on April 1 and October 1 of each year, be issued as fully registered bonds in the denominations of One Thousand Dollars and, at the option of the Company, in any multiple or multiples of One Thousand Dollars (the exercise of such option to be evidenced by the execution and delivery thereof) and be dated as in Section 10 of the Mortgage provided, the principal of and interest on each said bond to 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.

At the option of the registered owner, any bonds of the Seventieth Series, upon surrender thereof for cancellation at the office or agency of the Company in the Borough of Manhattan, The City of New York, shall be exchangeable for a like aggregate principal amount of bonds of the same series of other authorized denominations. The bonds of the Seventieth 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.

Bonds of the Seventieth Series will not be transferable except (i) as required to effect an assignment to a successor trustee under the Indenture (For Senior Notes) dated as of March 1, 1999, between the Company and The Bank of New York, as trustee (said trustee or any successor trustee under said Senior Note Indenture being hereinafter referred to as the "Senior Note Trustee"), as the same may be supplemented from time to time (the "Senior Note Indenture") or as otherwise provided in Sections 407 and 409 of the Senior Note Indenture, or (ii) in compliance with a final order of a court of competent jurisdiction in connection with any bankruptcy or reorganization proceeding of the Company.

Upon any exchange or transfer of bonds of the Seventieth 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.

The Company's obligation to make payments with respect to the principal of, premium, if any, and or interest on, the bonds of the Seventieth 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/or interest then due on, the Company's Senior Notes, 7.50% Series Due April 1, 2005 (hereinafter called the "Senior Notes"), issued contemporaneously with the bonds of the Seventieth Series, 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 Seventieth Series), as the case may be, or there shall have been deposited with the Senior Note Trustee pursuant to the Senior Note Indenture trust funds sufficient under such indenture to fully or partially pay, as the case may be, the corresponding amount then due of principal of, and/or premium, if any and/or interest on, the Senior Notes (other than by the application of the proceeds of a payment in respect of the bonds of the Seventieth Series).

SECTION 2. Except as otherwise provided in Section 406 of the Senior Note Indenture, the registered owner of all bonds of the Seventieth Series shall be the Senior Note Trustee.

SECTION 3. Upon payment of the principal of, and premium if any, and interest due on the Senior Notes, 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 Senior Note Indenture (other than by the application of the proceeds of a payment in respect of the bonds of the Seventieth Series), bonds of the Seventieth Series in a principal amount equal to the principal amount of Senior Notes 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 Seventieth Series shall be canceled by the Corporate Trustee in accordance with Section 56 of the Mortgage, except as otherwise provided in the Senior Note Indenture. From and after the Release Date (as defined in the Senior Note Indenture, the "Release Date"), the bonds of the Seventieth Series shall be deemed fully paid, satisfied

and discharged and the obligation of the Company thereunder shall be terminated. On the Release Date, the bonds of the Seventieth Series shall be canceled by the Corporate Trustee in accordance with Section 56 of the Mortgage.

The bonds of the Seventieth Series are subject to redemption by the Company, at its option, in whole, at any time, or in part, from time to time, upon notice as provided in the Mortgage (not less than 30 nor more than 60 days prior to a date fixed for redemption (the "Redemption Date")) at a redemption price equal to the greater of (i) 100% of their principal amount or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon from the Redemption Date to the maturity date, computed by discounting such payments, in each case, to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Yield (as defined in the Second Supplemental Indenture, dated as of April 1, 2000, supplemental to the Senior Note Indenture) plus 25 basis points (.25%), plus in each case accrued interest on the principal amount thereof to the Redemption Date (the "Redemption Price"), such Redemption Price to be set forth in a Treasurer's Certificate delivered to the Corporate Trustee on or before the Redemption Date and upon which the Trustees may conclusively rely.

At any time the Senior Notes or any portion thereof have become due and payable in accordance with Section 505 of the Senior Note Indenture, the bonds of the Seventieth Series will thereupon automatically become due and payable pursuant to the redemption provisions of the preceding paragraph.

The Company covenants and agrees that, prior to the Release Date, it will not take any action that would cause the outstanding principal amount of the bonds of the Seventieth Series to be less than the then outstanding principal amount of the Senior Notes.

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

ARTICLE II

DIVIDEND COVENANT

SECTION 4. The Company covenants and agrees that, so long as any of the bonds of the Seventieth Series remain Outstanding, the Company will not declare or pay any dividends upon its common stock (other than dividends in common stock) or make any other distributions on its common stock or purchase or otherwise retire any shares of its common stock, unless immediately after such declaration, payment, purchase, retirement or distribution (hereinafter in this
Section referred to as "Restricted Payments"), and giving effect thereto, the amount arrived at by adding

(a) the aggregate amount of all such Restricted Payments (other than the dividend of fifty cents ($.50) per share declared on December 8, 1948 and paid on February 1, 1949 to holders of Common Stock) made by the Company during the period from December 31, 1948, to and including the effective date of the Restricted Payment in respect of which the determination is being made, plus

(b) an amount equal to the aggregate amount of cumulative dividends for such period (whether or not paid) on all preferred stock of the Company from time to time outstanding during such period, at the rate or rates borne by such preferred stock, plus

(c) an amount equal to the amount, if any, by which fifteen per centum (15%) of the Gross Operating Revenues of the Company for such period shall exceed the aggregate amount during such period expended and/or accrued on its books for maintenance and/or appropriated on its books out of income for property retirement, in each case in respect of the Mortgaged and Pledged Property and/or automotive equipment used primarily in the electric utility business of the Company (but excluding any provisions for

amortization of any amounts included in utility plant acquisition adjustment accounts or utility plant adjustment accounts),

will not exceed the amount of the aggregate net income of the Company for said period available for dividends (computed and ascertained in accordance with sound accounting practice, on a cumulative basis, including the making of proper deductions for any deficits occurring during any part of such period), plus $3,000,000.

The Company further covenants and agrees that not later than May 1 of each year beginning with the year 2000 it will furnish to the Corporate Trustee a Treasurer's Certificate stating whether or not the Company has fully observed the restrictions imposed upon it by the covenant contained in this Section 4.

ARTICLE III

CERTAIN PROVISIONS WITH RESPECT TO FUTURE ADVANCES

SECTION 5. Upon the filing of this Sixty-eighth 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 $2,016,130,000 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 IV

MISCELLANEOUS PROVISIONS

SECTION 6. Subject to any amendments provided for in this Sixty-eighth Supplemental Indenture, the terms defined in the Mortgage, as heretofore supplemented, shall, for all purposes of this Sixty-eighth Supplemental Indenture, have the meanings specified in the Mortgage, as heretofore supplemented.

SECTION 7. 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 Sixty-eighth 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 Sixty-eighth 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 Sixty-eighth Supplemental Indenture.

SECTION 8. Subject to the provisions of Article XV and Article XVI of the Mortgage, whenever in this Sixty-eighth 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 Sixty-eighth 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 9. Nothing in this Sixty-eighth 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 Sixty-eighth Supplemental Indenture or any covenant, condition, stipulation, promise or agreement hereof, and all the covenants, conditions, stipulations, promises and agreements in this Sixty-eighth 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 10. This Sixty-eighth 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.

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 Assistant Vice Presidents or Assistant Secretaries 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 /s/ Mark F. Mulhhern
                                      -----------------------------------------
                                      Mark F. Mulhhern, President and Treasurer


ATTEST:

/s/ Patricia Kornegay-Timmons
----------------------------------------------
Patricia Kornegay-Timmons, Assistant Secretary

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

        /s/ Sarah C. Nelson
----------------------------------------------
            Sarah C. Nelson

     /s/ Kimberley C. Cross
----------------------------------------------
         Kimberley C. Cross

(Trustees' Signature Page Follows)

Trustees' Signature Page

Sixty-eighth Supplemental Indenture, dated as of April 1, 2000, to Mortgage and Deed of Trust, dated as of May 1, 1940

THE BANK OF NEW YORK, as Trustee

                                       By:/s/ Michael Culhane
                                          -----------------------------------
                                              Michael Culhane, Vice President


ATTEST:

       /s/ Suzanne J. MacDonald
--------------------------------------
           Suzanne J. MacDonald,
Vice President and Assistant Secretary


                                              /s/ Douglas J. MacInnes(L.S.)
                                              -------------------------------
                                                  Douglas J. MacInnes

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

           /s/ Sherma Thomas
---------------------------------------
               Sherma Thomas

          /s/ Patrick J. O'Leary
---------------------------------------
              Patrick J. O'Leary

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

This 1st day of April, A.D. 2000, personally came before me, DIANE T. PARRISH, a Notary Public for Wake County, MARK F. MULHERN, 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 MARK F. MULHERN acknowledged the said writing to be the act and deed of said corporation.

On the 1st day of April, in the year of 2000, before me personally came MARK F. MULHERN, to me known, who, being by me duly sworn, did depose and say that he resides at 109 Deer Valley Drive, Apex, North Carolina 27502, State of North Carolina; that he is the Vice President and 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.

      /s/ Diane T. Parrish
-------------------------------------------
          DIANE T. PARRISH
 Notary Public, State of North Carolina
             Wake County
 My Commission Expires:  July 7, 2003

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

Personally appeared before me SARAH C. 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 MARK F. MULHERN, the Vice President and Treasurer, with PATRICIA KORNEGAY-TIMMONS, an Assistant Secretary, of said CAROLINA POWER & LIGHT COMPANY, sign and attest the same, and that she, deponent, with KIMBERLEY C. CROSS, witnessed the execution and delivery thereof as the act and deed of said CAROLINA POWER & LIGHT COMPANY.

                                                  /s/ Sarah C. Nelson
                                           -------------------------------------
                                                      Sarah C. Nelson
Sworn to before me this
1st day of April, 2000

        /s/ Diane T. Parrish
----------------------------------------
            DIANE T. PARRISH
 Notary Public, State of North Carolina
               Wake County
  My Commission Expires:  July 7, 2003

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

This 4th day of April, A.D. 2000, personally came before me, WILLIAM J. CASSELS, a Notary Public in and for the County aforesaid, MICHAEL CULHANE, who, being by me duly sworn, says that he 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 him in behalf of said corporation by its authority duly given. And the said MICHAEL CULHANE acknowledged the said writing to be the act and deed of said corporation.

On the 4th day of April, in the year 2000, before me personally came MICHAEL CULHANE, to me known, who, being by me duly sworn, did depose and say that he resides in Bay Ridge, New York; that he is a Vice President of THE BANK OF NEW YORK, 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.

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 4th day of April, 2000, 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 4th day of April, 2000.

     /s/ William J. Cassels
------------------------------------
         WILLIAM J. CASSELS
    Notary Pubic, State of New York
           No. 01CA5027729
      Qualified in Bronx County
Certificate filed in New York County
   Commission Expires May 16, 2000

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

Personally appeared before me SHERMA THOMAS, 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 MICHAEL CULHANE, a Vice President, with SUZANNE J. MACDONALD, a Vice President and Assistant Secretary, of said THE BANK OF NEW YORK, sign and attest the same, and that she, deponent, with PATRICK J. O'LEARY, witnessed the execution and delivery thereof as the act and deed of said THE BANK OF NEW YORK.

Personally appeared before me SHERMA THOMAS, 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 PATRICK J. O'LEARY, witnessed the execution thereof.

        /s/ Sherma Thomas
-----------------------------------
            SHERMA THOMAS

Sworn to before me this
4th day of April, 2000

          /s/ William J. Cassels
----------------------------------------------
              WILLIAM J. CASSELS
       Notary Public, State of New York
                No. 01CA5027729
           Qualified in Bronx County
     Certificate filed in New York County
       Commission Expires May 16, 2000