Duke Energy Progress 完成10亿美元第一抵押权债券发行（7亿2036年到期5.55%＋3亿2056年到期6.15%），属受监管公用事业子公司的常规货架债务融资

----- tm2625236d1_8k.htm -----
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported):
September 11, 2026
DUKE ENERGY
PROGRESS, LLC
(Exact Name of Registrant as Specified
in its Charter)
North Carolina
001-3382
56-0165465
(State or Other Jurisdiction
of Incorporation or Organization)
(Commission
File Number)
(IRS Employer
Identification No.)
411
Fayetteville Street
,
Raleigh
,
North
Carolina
27601-1748
(Address of Principal Executive Offices,
including Zip Code)
(
800
)
488-3853
(Registrant’s telephone number, including area code)
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant
to Section 12(b) of the Act:
Title of each class:
Trading Symbol(s):
Name of each exchange on which registered:
None
Indicate by check mark whether the registrant is an emerging
growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this chapter).
¨
Emerging growth company
¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 8.01. Other Events.
On September 11, 2026, Duke Energy Progress, LLC
(the “Company”) consummated the issuance and sale of the securities described below pursuant to an underwriting agreement,
dated September 8, 2026 (the “Underwriting Agreement”), with BNY Mellon Capital Markets, LLC, MUFG Securities Americas Inc.,
PNC Capital Markets LLC, Scotia Capital (USA) Inc., SMBC Nikko Securities America, Inc. and U.S. Bancorp Investments, Inc., as representatives
of the several underwriters named therein (the “Underwriters”), pursuant to which the Company agreed to issue and sell to
the Underwriters $700,000,000 aggregate principal amount of the Company’s First Mortgage Bonds, 5.55% Series due 2036 and $300,000,000
aggregate principal amount of the Company’s First Mortgage Bonds, 6.15% Series due 2056 (collectively, the “Mortgage Bonds”).
The Mortgage Bonds were sold to the Underwriters at discounts to their principal amounts. The Mortgage Bonds were issued under the Mortgage
and Deed of Trust (dated as of May 1, 1940) with The Bank of New York Mellon (formerly Irving Trust Company) (the “Corporate Trustee”)
and Barbara Zsombori (successor to Frederick G. Herbst), as trustees (together with the Corporate Trustee, the “Mortgage Trustees”),
as supplemented from time to time, including by the Ninety-seventh Supplemental Indenture, dated as of September 1, 2026 (the “Ninety-seventh
Supplemental Indenture”), among the Company and the Mortgage Trustees, relating to the Mortgage Bonds (collectively, the “Mortgage”).
The foregoing disclosure is qualified in its entirety
by the provisions of the Mortgage, the Ninety-seventh Supplemental Indenture, together with the forms of global bonds evidencing the Mortgage
Bonds included therein, which is filed as Exhibit 4.1 hereto, and the Underwriting Agreement, which is filed as Exhibit 99.1 hereto. Such
exhibits are incorporated herein by reference. Also, in connection with the issuance and sale of the Mortgage Bonds, the Company is filing
a legal opinion regarding the validity of the Mortgage Bonds as Exhibit 5.1 to this Current Report on Form 8-K for the purpose of incorporating
the opinion into the Company’s Registration Statement on Form S-3 (No. 333-290475-01).
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Description
Exhibit 4.1
Ninety-seventh Supplemental Indenture, dated as of September 1, 2026, among the Company, The Bank of New York Mellon (formerly Irving Trust Company) and Barbara Zsombori (successor to Frederick G. Herbst) and forms of global bonds.
Exhibit 5.1
Opinion regarding validity of the Mortgage Bonds.
Exhibit 23.1
Consent (included as part of Exhibit 5.1).
Exhibit 99.1
Underwriting Agreement, dated September 8, 2026, among the Company and BNY Mellon Capital Markets, LLC, MUFG Securities Americas Inc., PNC Capital Markets LLC, Scotia Capital (USA) Inc., SMBC Nikko Securities America, Inc. and U.S. Bancorp Investments, Inc., as representatives of the several underwriters named therein.
Exhibit 104
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.
2
SIGNATURE
Pursuant to the requirements of the Securities
and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
DUKE ENERGY PROGRESS, LLC
Date: September 11, 2026
By:
/s/ Elizabeth Jones
Name:
Elizabeth Jones
Title:
Assistant Secretary
3

----- tm2625236d1_ex4-1.htm -----
EX-4.1
2
tm2625236d1_ex4-1.htm
EXHIBIT 4.1
Exhibit 4.1
Counterpart __ of 75 Counterparts
DUKE ENERGY PROGRESS, LLC
(formerly Duke Energy Progress, Inc.)
TO
THE BANK OF NEW YORK MELLON
(formerly The Bank of New York (formerly Irving
Trust Company))
AND
BARBARA ZSOMBORI
(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,
W.T. Cunningham, Douglas J. MacInnes, Ming Ryan,
Tina D. Gonzalez and Christie Leppert)
as Trustees
under Duke Energy Progress, LLC’s Mortgage and Deed of Trust, dated as of May 1,1940
Ninety-seventh Supplemental
Indenture
Providing among other things for
First Mortgage Bonds, 5.55% Series due 2036
(One Hundred-eighteenth Series)
First Mortgage Bonds, 6.15% Series due 2056
(One Hundred-nineteenth Series)
Dated as of September 1, 2026
Prepared by and Return to:
Hunton Andrews Kurth LLP
c/o Brendan P. Harney
200 Park Avenue, 52
nd
Floor
New York, New York 10166
Ninety-sEVENth
SUPPLEMENTAL INDENTURE
INDENTURE
, dated as
of September 1, 2026, by and between DUKE ENERGY PROGRESS, LLC (formerly Duke Energy Progress, Inc.), a limited liability company
of the State of North Carolina, whose post office address is 411 Fayetteville Street, Raleigh, North Carolina 27601-1748 (hereinafter
sometimes referred to as the “Company”), and THE BANK OF NEW YORK MELLON (formerly The Bank of New York (formerly Irving Trust
Company)), a corporation of the State of New York, whose post office address is 240 Greenwich Street, New York, New York 10286 (hereinafter
sometimes referred to as the “Corporate Trustee”), and BARBARA ZSOMBORI (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, W.T. Cunningham, Douglas J. MacInnes, Ming Ryan,
Tina D. Gonzalez and Christie Leppert), whose post office address is 4655 Salisbury Road, Suite 300, Jacksonville, Florida 32256
(hereinafter sometimes referred to as the “Individual Trustee”; the Corporate Trustee and the Individual Trustee being hereinafter
together sometimes referred to as the “Trustees”), as Trustees under the Mortgage and Deed of Trust, dated as of May 1,
1940 (hereinafter referred to as the “Original Mortgage” and, as supplemented from time to time by the ninety-six supplemental
indentures mentioned below, by this Indenture, and by all other indentures, if any, supplemental to the Original Mortgage, hereinafter
referred to as the “Mortgage”), which Original Mortgage was executed and delivered by the Company to Irving Trust Company
(now The Bank of New York Mellon) and Frederick G. Herbst to secure the payment of bonds issued or to be issued under and in accordance
with the provisions of the Original Mortgage, reference to which Original Mortgage is hereby made, this Indenture (hereinafter sometimes
referred to as the “Ninety-seventh Supplemental Indenture”) being supplemental thereto:
WHEREAS, the Original Mortgage
was recorded in various Counties in the States of North Carolina and South Carolina; and
WHEREAS, the Original 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 Original Mortgage, as theretofore supplemented, 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 Original Mortgage, as theretofore supplemented, 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 Original Mortgage, as theretofore supplemented, 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 Original Mortgage, as theretofore supplemented, 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, by the Seventy-sixth
Supplemental Indenture mentioned below, the Company, among other things, appointed Ming Ryan as Individual Trustee in succession to said
Douglas J. MacInnes (resigned), and Ming Ryan accepted said appointment; and
WHEREAS, by the Seventy-ninth
Supplemental Indenture mentioned below, the Company, among other things, appointed Tina D. Gonzalez as Individual Trustee in succession
to said Ming Ryan (resigned), and Tina D. Gonzalez accepted said appointment; and
WHEREAS, by the Eighty-seventh
Supplemental Indenture mentioned below, the Company, among other things, appointed Christie Leppert as Individual Trustee in succession
to said Tina D. Gonzalez (resigned), and Christie Leppert 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, effective January 1,
2003, the Company began doing business under the name Progress Energy Carolinas, Inc., without changing the legal name of the Company;
and certificates of doing business by the Company under such name were recorded in all counties in the States of North Carolina and South
Carolina in which this Ninety-seventh Supplemental Indenture is to be recorded and were filed and indexed and cross-indexed in the real
property records in each of such counties; and
WHEREAS, effective April 29,
2013, the Company changed its name to Duke Energy Progress, Inc. and evidence of such name change was (i) recorded in all counties
in the States of North Carolina and South Carolina in which this Ninety-seventh Supplemental Indenture is to be recorded and (ii) filed
and indexed and cross-indexed in the real property records in each of such counties; and
2
WHEREAS, the Company converted
its form of organization effective August 1, 2015 from a North Carolina corporation to a North Carolina limited liability company
named “Duke Energy Progress, LLC,” and evidence of such conversion was (i) recorded in all counties in the States of
North Carolina and South Carolina in which this Ninety-seventh Supplemental Indenture is to be recorded and (ii) filed and indexed
and cross-indexed in the real property records in each of such counties; and
WHEREAS, by the Original 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 Original 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
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
3
Designation
Dated as of
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
Sixty-eighth Supplemental Indenture
April 1, 2000
Sixty-ninth Supplemental Indenture
June 1, 2000
Seventieth Supplemental Indenture
July 1, 2000
Seventy-first Supplemental Indenture
February 1, 2002
Seventy-second Supplemental Indenture
September 1, 2003
Seventy-third Supplemental Indenture
March 1, 2005
Seventy-fourth Supplemental Indenture
November 1, 2005
Seventy-fifth Supplemental Indenture
March 1, 2008
Seventy-sixth Supplemental Indenture
January 1, 2009
Seventy-seventh Supplemental Indenture
June 18, 2009
Seventy-eighth Supplemental Indenture
September 1, 2011
Seventy-ninth Supplemental Indenture
May 1, 2012
Eightieth Supplemental Indenture
March 1, 2013
Eighty-first Supplemental Indenture
June 1, 2013
Eighty-second Supplemental Indenture
March 1, 2014
Eighty-third Supplemental Indenture
November 1, 2014
Eighty-fourth Supplemental Indenture
August 1, 2015
Eighty-fifth Supplemental Indenture
August 1, 2015
Eighty-sixth Supplemental Indenture
September 1, 2016
Eighty-seventh Supplemental Indenture
September 1, 2017
Eighty-eighth Supplemental Indenture
August 1, 2018
Eighty-ninth Supplemental Indenture
March 1, 2019
Ninetieth Supplemental Indenture
August 1, 2020
Ninety-first Supplemental Indenture
August 1, 2021
Ninety-second Supplemental Indenture
March 1, 2022
Ninety-third Supplemental Indenture
September 1, 2022
4
Designation
Dated as of
Ninety-fourth Supplemental Indenture
March 1, 2023
Ninety-fifth Supplemental Indenture
March 1, 2024
Ninety-sixth Supplemental Indenture
March 1, 2025
which supplemental indentures (other than said
Sixty-fifth Supplemental Indenture and said Sixty-sixth 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 Original 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 certain property of the Company located in said County intended to be subject to the lien
of the Original Mortgage, all in accordance with Section 42 of the Mortgage; and
WHEREAS, the Original Mortgage
and said First through Ninety-sixth 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 Ninety-seventh Supplemental
Indenture is to be recorded; and
WHEREAS, in addition to the
property described in the Original 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 Original Mortgage, as from time to time then supplemented, the following series of First
Mortgage Bonds:
Series
Principal
Amount
Issued
Principal
Amount
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
5
Series
Principal
Amount
Issued
Principal
Amount
Outstanding
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
None
Pollution Control Series E
5,970,000
None
12-7/8% Series due December 1, 2013
100,000,000
None
Pollution Control Series F
34,700,000
None
13-3/8% Series due April 1, 1994
100,000,000
None
Pollution Control Series G
122,615,000
None
Pollution Control Series H
70,000,000
None
Pollution Control Series I
70,000,000
None
Pollution Control Series J
6,385,000
None
Pollution Control Series K
2,580,000
None
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
None
5.20% Series due January 1, 1995
125,000,000
None
7-7/8% Series due April 15, 2004
150,000,000
None
8.20% Series due July 1, 2022
150,000,000
None
6-3/4% Series due October 1, 2002
100,000,000
None
6-1/8% Series due February 1, 2000
150,000,000
None
7-1/2% Series due March 1, 2023
150,000,000
None
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
None
5-7/8% Series due January 15, 2004
150,000,000
None
Pollution Control Series L
72,600,000
None
Pollution Control Series M
50,000,000
None
6.80% Series due August 15, 2007
200,000,000
None
5.95% Senior Note Series due March 1, 2009
400,000,000
None
7.50% Senior Note Series due April 1, 2005
300,000,000
None
Pollution Control Series N
67,300,000
None
Pollution Control Series O
55,640,000
None
Pollution Control Series P
50,000,000
None
Pollution Control Series Q
50,000,000
None
6
Series
Principal
Amount
Issued
Principal
Amount
Outstanding
Pollution Control Series R
45,600,000
None
Pollution Control Series S
41,700,000
None
Pollution Control Series T
50,000,000
None
Pollution Control Series U
50,000,000
None
Pollution Control Series V
87,400,000
None
Pollution Control Series W
48,485,000
None
5.125% Series due 2013
400,000,000
None
6.125% Series due 2033
200,000,000
200,000,000
5.15% Series due 2015
300,000,000
None
5.70% Series due 2035
200,000,000
200,000,000
5.25% Series due 2015
400,000,000
None
6.30% Series due 2038
325,000,000
325,000,000
5.30% Series due 2019
600,000,000
None
3.00% Series due 2021
500,000,000
None
2.80% Series due 2022
500,000,000
None
4.10% Series due 2042
500,000,000
500,000,000
4.10% Series due 2043
500,000,000
500,000,000
Pollution Control Series X
48,485,000
48,485,000
Floating Rate Series due 2017
250,000,000
None
4.375% Series due 2044
400,000,000
400,000,000
Second Floating Rate Series due 2017
200,000,000
None
4.15% Series due 2044
500,000,000
500,000,000
3.25% Series due 2025
500,000,000
None
4.20% Series due 2045
700,000,000
700,000,000
3.70% Series due 2046
450,000,000
450,000,000
Floating Rate Series due 2020
300,000,000
None
3.60% Series due 2047
500,000,000
500,000,000
3.375% Series due 2023
300,000,000
None
3.700% Series due 2028
500,000,000
500,000,000
3.45% Series due 2029
600,000,000
600,000,000
2.50% Series due 2050
600,000,000
600,000,000
2.00% Series due 2031
650,000,000
650,000,000
2.90% Series due 2051
450,000,000
450,000,000
3.40% Series due 2032
500,000,000
500,000,000
4.00% Series due 2052
400,000,000
400,000,000
Pollution Control Series 2022A
410,000,000
410,000,000
Pollution Control Series 2022B
41,700,000
41,700,000
5.25% Series due 2033
500,000,000
500,000,000
5.35% Series due 2053
500,000,000
500,000,000
5.10% Series due 2034
500,000,000
500,000,000
4.35% Series due 2027
500,000,000
500,000,00
5.05% Series due 2035
850,000,000
850,000,000
5.55% Series due 2055
750,000,000
750,000,000
which bonds are herein sometimes referred to as
bonds of the First through One Hundred-seventeenth Series, respectively; and
WHEREAS, Section 8 of
the Original Mortgage, as heretofore supplemented, provides that the form of each series of bonds (other than the First Series) issued
thereunder and of the coupons to be attached to coupon bonds of such series shall be established by Resolution of the Board of Directors
of the Company and that the form of such series, as established by said Board of Directors, shall specify the descriptive title of the
bonds and various other terms thereof, and may also contain such provisions not inconsistent with the provisions of the Mortgage as said
Board of Directors may, in its discretion, cause to be inserted therein expressing or referring to the terms and conditions upon which
such bonds are to be issued and/or secured under the Mortgage; and
7
WHEREAS, Section 120
of the Original Mortgage, as heretofore supplemented, 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 two new series of bonds and to add to its covenants and agreements contained in the Original Mortgage, as heretofore supplemented,
certain other covenants and agreements to be observed by it; and
WHEREAS, the execution and
delivery by the Company of this Ninety-seventh Supplemental Indenture, and the terms of the bonds of the One Hundred-eighteenth and One
Hundred-nineteenth 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 Christie Leppert has
heretofor resigned as Individual Trustee under the Mortgage;
That, pursuant to Section 102
of the Mortgage, and by order of its Board of Directors, the Company hereby appoints Barbara Zsombori as successor Individual Trustee
under the Mortgage, subject to the conditions in Article XVI thereof expressed, effective immediately;
That the undersigned Duke
Energy Progress LLC will proceed with the publication of the notice of resignation and notice of appointment, as provided respectively
in Sections 101 and 102 of the Mortgage, in substantially the forms provided in Exhibit A hereto annexed;
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 Original 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
Original Mortgage, as heretofore supplemented) unto The Bank of New York Mellon and Barbara Zsombori, 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:
8
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 Original
Mortgage, in addition to property covered by the above-mentioned supplemental indentures (except any herein or in the Original 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 Ninety-seventh 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, tracks, 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 Original 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 Original Mortgage, as heretofore supplemented, described.
TOGETHER WITH all and singular
the tenements, hereditaments and appurtenances belonging or in any wise 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 Original Mortgage, as
heretofore supplemented) 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 Original Mortgage, as heretofore supplemented, 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 Original
Mortgage as if such property, rights and franchises were now owned by the Company and were specifically described herein and conveyed
hereby.
9
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 Ninety-seventh 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
or this Ninety-seventh 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; (5) any
property which does not constitute Property Additions, Funded Property or Funded Cash (each as defined in the Original Mortgage as supplemented)
and (6) any property and rights heretofore released from the lien of the Original Mortgage, as heretofore supplemented; provided,
however, that the property and rights expressly excepted from the lien and operation of the Original Mortgage, as heretofore supplemented,
and this Ninety-seventh 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 Original Mortgage, as heretofore supplemented, this Ninety-seventh Supplemental Indenture being supplemental to the Original 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 Original Mortgage and had been specifically and at length described in and conveyed to the Trustees by the Original 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
ONE HUNDRED-EIGHTEENTH SERIES OF BONDS
SECTION 1. (A) There
shall be a series of bonds designated “5.55% Series due 2036” (herein sometimes referred to as the “One Hundred-eighteenth
Series”), 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 One Hundred-eighteenth Series shall be initially issued in the aggregate principal amount of
$700,000,000, mature on September 15, 2036, bear interest at the rate of 5.55% per annum, payable from September 11, 2026, if
the date of said bonds is on or prior to March 15, 2027, or, if the date of said bonds is after March 15, 2027, from the March 15
or September 15 next preceding the date of said bonds, semi-annually on March 15 and September 15 of each year commencing
on March 15, 2027, be issued as fully registered bonds in the denominations of Two Thousand Dollars and in any integral multiple
of One Thousand Dollars in excess 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.
10
Interest on bonds of the One
Hundred-eighteenth Series will be computed on the basis of a 360-day year comprised of twelve 30-day months. If a due date for the
payment of interest, principal or any 2036 Redemption Price (as defined below) on the bonds of the One Hundred-eighteenth Series, falls
on a day that is not a Business Day, then the payment will be made on the next succeeding Business Day, and no interest will accrue on
the amounts payable for the period from and after the original due date and until the next Business Day. The term “Business Day”
means any day other than a Saturday or Sunday or day on which banking institutions in The City of New York are required or authorized
to close.
(B)            On
or after June 15, 2036 (the “2036 Par Call Date”), the Company may redeem the bonds of the One Hundred-eighteenth Series at
the option of the Company, or with the Proceeds of Released Property (as contemplated by clause (4) of Section 61 of the Mortgage),
in whole or in part, at any time and from time to time, upon notice as provided in Sections 52 and 54 of the Mortgage (given by mail or,
if the bonds of the One Hundred-eighteenth Series are represented by one or more One Hundred-eighteenth Series Global Bonds
(as hereinafter defined), given in accordance with the procedures of DTC (as hereinafter defined), not less than 30 days and not more
than 90 days prior to the date fixed for redemption), at a redemption price equal to 100% of the principal amount of the bonds then Outstanding
to be redeemed, plus accrued and unpaid interest thereon to, but excluding, the 2036 Redemption Date (as defined below).
Prior to the 2036 Par Call
Date, the Company may redeem the bonds of the One Hundred-eighteenth Series at the option of the Company, or with the Proceeds of
Released Property (as contemplated by clause (4) of Section 61 of the Mortgage), in whole or in part, at any time and from time
to time, upon notice as provided in Sections 52 and 54 of the Mortgage (given by mail or, if the bonds of the One Hundred-eighteenth Series are
represented by one or more One Hundred-eighteenth Series Global Bonds (as hereinafter defined), given in accordance with the procedures
of DTC (as hereinafter defined), not less than 30 days and not more than 90 days prior to the date fixed for redemption (together with
the date fixed for redemption referred to in the preceding sentence, each a “2036 Redemption Date”)), at a redemption price
(expressed as a percentage of principal amount and rounded to three decimal places (hereinafter sometimes referred to as the “2036
Make-Whole Redemption Price” and, together with the redemption price referred to in the preceding sentence, each a “2036 Redemption
Price”) equal to the greater of: (i)(a) the sum of the present values of the remaining scheduled payments of principal and
interest thereon discounted to the redemption date (assuming such bonds matured on the 2036 Par Call Date), on a semi-annual basis (assuming
a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below) plus 15 basis points less (b) interest
accrued to such 2036 Redemption Date; and (ii) 100% of the principal amount of the bonds then Outstanding to be redeemed, plus, in
either case, accrued and unpaid interest thereon to, but excluding, such 2036 Redemption Date. On and after any 2036 Redemption Date,
if sufficient cash shall have been deposited with the Corporate Trustee (and/or if the Company has irrevocably directed the Corporate
Trustee to apply, from moneys held by it available to be used for the redemption of bonds, sufficient cash) to redeem all of the bonds
of the One Hundred-eighteenth Series called for redemption, interest on the bonds of the One Hundred-eighteenth Series, or the portions
of them so called for redemption, shall cease to accrue.
11
“Treasury Rate” means, with respect
to any redemption date, the yield determined by the Company in accordance with the following two paragraphs.
The Treasury Rate shall be determined by the Company
after 4:15 p.m., New York City time (or after such time as yields on U.S. government securities are posted daily by the Board of Governors
of the Federal Reserve System), on the third business day preceding the redemption date based upon the yield or yields for the most recent
day that appear after such time on such day in the most recent statistical release published by the Board of Governors of the Federal
Reserve System designated as “Selected Interest Rates (Daily)—H.15” (or any successor designation or publication) (“H.15”)
under the caption “U.S. government securities—Treasury constant maturities — Nominal” (or any successor
caption or heading) (“H.15 TCM”). In determining the Treasury Rate, the Company shall select, as applicable:
•
the yield for the Treasury constant maturity on H.15 exactly equal to the
period from the 2036 Redemption Date to the 2036 Par Call Date (the “2036 Remaining Life”); or
•
if there is no such Treasury constant maturity on H.15 exactly equal to the
2036 Remaining Life, the two yields—one yield corresponding to the Treasury constant maturity on H.15 immediately shorter than and
one yield corresponding to the Treasury constant maturity on H.15 immediately longer than such 2036 Remaining Life—and shall interpolate
to the 2036 Par Call Date, on a straight-line basis (using the actual number of days) using such yields and rounding the result to three
decimal places; or
•
if there is no such Treasury constant maturity on H.15 shorter than or longer
than the 2036 Remaining Life, the yield for the single Treasury constant maturity on H.15 closest to the 2036 Remaining Life. For purposes
of this clause, the applicable Treasury constant maturity or maturities on H.15 shall be deemed to have a maturity date equal to the relevant
number of months or years, as applicable, of such Treasury constant maturity from the 2036 Redemption Date.
If on the third business day preceding the 2036
Redemption Date H.15 TCM is no longer published, the Company shall calculate the Treasury Rate based on the rate per annum equal to the
semi-annual equivalent yield to maturity at 11:00 a.m., New York City time, on the second business day preceding such redemption date
of the United States Treasury security maturing on, or with a maturity that is closest to, the 2036 Par Call Date. If there is no United
States Treasury security maturing on the 2036 Par Call Date, but there are two or more United States Treasury securities with a maturity
date equally distant from the 2036 Par Call Date, one with a maturity date preceding the 2036 Par Call Date and one with a maturity date
following the 2036 Par Call Date, the Company shall select the United States Treasury security with a maturity date preceding the 2036
Par Call Date. If there are two or more United States Treasury securities maturing on the 2036 Par Call Date, or two or more United States
Treasury securities meeting the criteria of the preceding sentence, the Company shall select from among these two or more United States
Treasury securities the United States Treasury security that is trading closest to par based upon the average of the bid and asked prices
for such United States Treasury securities at 11:00 a.m., New York City time. In determining the Treasury Rate in accordance with the
terms of this paragraph, the semi-annual yield to maturity of the applicable United States Treasury security shall be based upon the average
of the bid and asked prices (expressed as a percentage of principal amount) at 11:00 a.m., New York City time, of such United States Treasury
security, and rounded to three decimal places.
12
The Company’s actions and determinations
in determining the 2036 Redemption Price shall be conclusive and binding for all purposes, absent manifest error.
The Trustee shall have no obligation or duty whatsoever
to determine, or to verify the Company’s calculations of, the 2036 Redemption Price.
In case of a redemption of
only a part of the bonds of the One Hundred-eighteenth Series, absent any written agreement of the registered holders of all of the bonds
of the One Hundred-eighteenth Series satisfactory to the Corporate Trustee specifying the particular bonds of the One Hundred-eighteenth
Series to be redeemed, the Corporate Trustee shall draw by lot, according to such method as it shall deem proper in its discretion,
or portions of them, to be redeemed, provided, that if the bonds of the One Hundred-eighteenth Series are represented by one or more
One Hundred-eighteenth Series Global Bonds, interests in the bonds of the One Hundred-eighteenth Series shall be selected for
redemption by DTC in accordance with its standard procedures therefor.
In case of any bonds of the
One Hundred-eighteenth Series called for redemption in whole or in part prior to the 2036 Par Call Date, the Company shall deliver
to the Corporate Trustee promptly upon its calculation thereof, but in any event prior to the related 2036 Redemption Date, a Treasurer’s
Certificate setting forth its calculation of the 2036 Make-Whole Redemption Price applicable to such redemption. The Corporate Trustee
shall be under no duty to inquire into, may conclusively presume the correctness of, and shall be fully protected in relying upon the
Company’s calculation of any 2036 Make-Whole Redemption Price of the bonds of the One Hundred-eighteenth Series.
In lieu of stating any 2036
Make-Whole Redemption Price, notices of redemption of the bonds of the One Hundred-eighteenth Series called for redemption in whole
or in part shall state substantially the following: “The redemption price of the bonds to be redeemed shall equal the greater of
(i) 100% of the principal amount of the bonds then Outstanding to be redeemed and (ii) the sum of the present values of the
remaining scheduled payments of principal and interest thereon being redeemed that would be due if such bonds matured on the 2036 Par
Call Date, computed by discounting such payments, in each case, to the 2036 Redemption Date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Treasury Rate (as defined in this Ninety-seventh Supplemental Indenture) plus 15 basis
points , plus, in each case, accrued and unpaid interest on the principal amount thereof called for redemption to, but excluding, the
2036 Redemption Date.”
Except as provided herein,
Article X of the Mortgage shall apply to redemptions of bonds of the One Hundred-eighteenth Series.
(C)            If
a Tax Credit Event occurs, the Company may redeem, upon notice as provided in Sections 52 and 54 of the Mortgage (given by mail or, if
the bonds of the One Hundred-eighteenth Series are represented by one or more One Hundred-eighteenth Series Global Bonds, given
in accordance with the procedures of DTC, not less than 30 days and not more than 90 days prior to the date fixed for redemption), the
bonds of the One Hundred-eighteenth Series in whole but not in part at a redemption price equal to 101% of the principal amount of
the bonds of the One Hundred-eighteenth Series being redeemed, plus accrued and unpaid interest to but excluding the redemption date.
A notice of redemption of the bonds of the One Hundred-eighteenth Series upon the occurrence of a Tax Credit Event (i) may only
be sent by the later of (a) the end of the calendar year in which the bonds of the One Hundred-eighteenth Series were issued
and (b) six months from the date of issuance of the bonds of the One Hundred-eighteenth Series and (ii) shall be accompanied
by a certificate from an officer of the Company stating that a Tax Credit Event has occurred. The consummation of a redemption upon a
Tax Credit Event may be subject to the Trustees’ receipt of the required redemption moneys on or before the redemption date (and
in such case no such redemption shall occur unless such moneys have been received by the Trustees on or before such date).
13
A “Tax Credit Event” occurs with respect
to the bonds of One Hundred-eighteenth Series if, in the Company's reasonable determination, there exists a material risk, due to
the bonds of the One Hundred-eighteenth Series (considered together with other debt) having been issued, as part of an original issuance,
to one or more “specified foreign entities,” as defined in Section 7701(a)(51)(B) of the Internal Revenue Code (the
“Code”), that the Company or any of its affiliates would be unable to utilize or otherwise ineligible to claim any tax credits
otherwise allowed under Section 38 of the Code.
(D)            Subject
to the provisions set forth below with respect to One Hundred-eighteenth Series Global Bonds, at the option of the registered owner,
any bonds of the One Hundred-eighteenth 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 One Hundred-eighteenth 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.
Subject to the provisions
set forth below with respect to One Hundred-eighteenth Series Global Bonds, bonds of the One Hundred-eighteenth Series shall
be transferable upon the surrender thereof for cancellation, together with a written instrument of transfer in form approved by the registrar
duly executed by the registered owner or by his duly authorized attorney, at the office or agency of the Company in the Borough of Manhattan,
The City of New York.
Upon any exchange or transfer
of bonds of the One Hundred-eighteenth 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.
(E)            The
bonds of the One Hundred-eighteenth Series shall be issued in registered form without coupons and shall be issued initially in the
form of one or more global bonds (each such global bond hereinafter sometimes referred to as a “One Hundred-eighteenth Series Global
Bond”) to or on behalf of The Depository Trust Company (hereinafter sometimes referred to as “DTC”), as depositary therefor,
and registered in the name of such depositary or its nominee. Any bonds of the One Hundred-eighteenth Series 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 depositary or nominee) for such
purpose shall bear the depositary legends as required or otherwise agreed to by the Corporate Trustee and 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 each shall agree, in
each case such agreement to be confirmed in writing to the Corporate Trustee. Notwithstanding any other provision in this Ninety-seventh
Supplemental Indenture, payment of interest on the bonds of the One Hundred-eighteenth Series may be made at the option of the Company
by check mailed to the registered holders thereof at their registered address, and, with respect to a One Hundred-eighteenth Series Global
Bond, the Company may make payments of principal of, any 2036 Redemption Price and interest on such One Hundred-eighteenth Series Global
Bond pursuant to and in accordance with such arrangements as are agreed upon by the Company and the depositary for such One Hundred-eighteenth
Series Global Bond.
Except under the limited circumstances
described below, bonds of the One Hundred-eighteenth Series represented by a One Hundred-eighteenth Series Global Bond or Bonds
shall not be exchangeable for, and shall not otherwise be issuable as, bonds of the One Hundred-eighteenth Series in definitive form.
The One Hundred-eighteenth Series Global Bond or Bonds described in this Section 1(D) may not be transferred except by
the depositary to a nominee of the depositary or by a nominee of the depositary to the depositary or another nominee of the depositary
or to a successor depositary or its nominee.
14
A One Hundred-eighteenth Series Global
Bond shall be exchangeable for bonds of the One Hundred-eighteenth Series registered in the names of persons other than the depositary
or its nominee only if (i) the depositary notifies the Company that it is unwilling or unable to continue as a depositary for such
One Hundred-eighteenth Series Global Bond and no successor depositary shall have been appointed by the Company within 90 days of
receipt by the Company of such notification, or if at any time the depositary ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) at a time when the depositary is required to be so registered to act
as such depositary and no successor depositary shall have been appointed by the Company within 90 days after it becomes aware of such
cessation, (ii) a Default has occurred and is continuing with respect to the bonds of the One Hundred-eighteenth Series or (iii) the
Company in its sole discretion, and subject to the procedures of the depositary, determines that such One Hundred-eighteenth Series Global
Bond shall be so exchangeable. Any One Hundred-eighteenth Series Global Bond that is exchangeable pursuant to the preceding sentence
shall be exchangeable for bonds of the One Hundred-eighteenth Series registered in such names as the depositary shall direct.
In any exchange provided in
the preceding paragraph the Company shall execute, and the Corporate Trustee, upon receipt of a Company request for the authentication
and delivery of bonds of the One Hundred-eighteenth Series in the form of definitive certificates in exchange in whole or in part
for such One Hundred-eighteenth Series Global Bond or Bonds, shall authenticate and deliver, without service charge, to each person
specified by the depositary, bonds of the One Hundred-eighteenth Series in the form of definitive certificates of like tenor and
terms in an aggregate principal amount equal to the principal amount of such One Hundred-eighteenth Series Global Bond or the aggregate
principal amount of such One Hundred-eighteenth Series Global Bonds in exchange for such One Hundred-eighteenth Series Global
Bond or Bonds. Upon the exchange of the entire principal amount of a One Hundred-eighteenth Series Global Bond for bonds of the One
Hundred-eighteenth Series in the form of definitive certificates, such One Hundred-eighteenth Series Global Bond shall be canceled
by the Corporate Trustee. Bonds of the One Hundred-eighteenth Series issued in exchange for a One Hundred-eighteenth Series Global
Bond shall be registered in such names and in such authorized denominations as the depositary for such One Hundred-eighteenth Series Global
Bond, acting pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Corporate Trustee. Provided
that the Company and the Corporate Trustee have so agreed, the Corporate Trustee shall deliver such bonds of the One Hundred-eighteenth
Series to the persons in whose names the bonds of the One Hundred-eighteenth Series are so to be registered.
Any endorsement of a One Hundred-eighteenth
Series Global Bond 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 One Hundred-eighteenth Series Global Bond or in a Company
request. Subject to the terms of the Mortgage, the Corporate Trustee shall deliver and redeliver any such One Hundred-eighteenth Series Global
Bond 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 One Hundred-eighteenth Series Global
Bond or in any applicable Company request. If a Company request is so delivered, any instructions by the Company with respect to such
One Hundred-eighteenth Series Global Bond contained therein shall be in writing but need not be accompanied by or contained in a
Treasurer’s Certificate and need not be accompanied by an opinion of counsel.
15
The depositary or, if there
be one, its nominee, shall be the holder of a One Hundred-eighteenth Series Global Bond for all purposes under the Mortgage and the
bonds of the One Hundred-eighteenth Series and beneficial owners with respect to such One Hundred-eighteenth Series Global Bond
shall hold their interests pursuant to applicable procedures of such depositary. The Company, the Corporate Trustee, any bond registrar,
any paying agent and any other agent of the Company or the Corporate Trustee shall be entitled to deal with such depositary for all purposes
of the Mortgage relating to such One Hundred-eighteenth Series Global Bond (including the payment of principal, the 2036 Redemption
Price, if applicable, and interest and the giving of instructions or directions by or to the beneficial owners of such One Hundred-eighteenth
Series Global Bond as the sole holder of such One Hundred-eighteenth Series Global Bond and shall have no obligations to the
beneficial owners thereof (including any direct or indirect participants in such depositary)). None of the Company, the Corporate Trustee,
any paying agent, any bond registrar or any other agent of the Company or the Corporate Trustee 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 beneficial owner in or pursuant
to any applicable letter of representations or other arrangement or transaction entered into with, or procedures of, the depositary with
respect to such One Hundred-eighteenth Series Global Bond or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests, or for any acts or omissions of a depositary.
ARTICLE II
ONE HUNDRED-NINETEENTH SERIES OF BONDS
SECTION 1. (A) There
shall be a series of bonds designated “6.15% Series due 2056” (herein sometimes referred to as the “One Hundred-nineteenth
Series”), 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 One Hundred-nineteenth Series shall be initially issued in the aggregate principal amount of
$300,000,000, mature on September 15, 2056, bear interest at the rate of 6.15% per annum, payable from September 11, 2026, if
the date of said bonds is on or prior to March 15, 2027, or, if the date of said bonds is after March 15, 2027, from the March 15
or September 15 next preceding the date of said bonds, semi-annually on March 15 and September 15 of each year commencing
on March 15, 2027, be issued as fully registered bonds in the denominations of Two Thousand Dollars and in any integral multiple
of One Thousand Dollars in excess 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.
Interest on bonds of the One
Hundred-nineteenth Series will be computed on the basis of a 360-day year comprised of twelve 30-day months. If a due date for the
payment of interest, principal or any 2056 Redemption Price (as defined below) on the bonds of the One Hundred-nineteenth Series, falls
on a day that is not a Business Day, then the payment will be made on the next succeeding Business Day, and no interest will accrue on
the amounts payable for the period from and after the original due date and until the next Business Day. The term “Business Day”
means any day other than a Saturday or Sunday or day on which banking institutions in The City of New York are required or authorized
to close.
(B)            On
or after March 15, 2056 (the “2056 Par Call Date”), the Company may redeem the bonds of the One Hundred-nineteenth Series at
the option of the Company, or with the Proceeds of Released Property (as contemplated by clause (4) of Section 61 of the Mortgage),
in whole or in part, at any time and from time to time, upon notice as provided in Sections 52 and 54 of the Mortgage (given by mail or,
if the bonds of the One Hundred-nineteenth Series are represented by one or more One Hundred-nineteenth Series Global Bonds
(as hereinafter defined), given in accordance with the procedures of DTC (as hereinafter defined), not less than 30 days and not more
than 90 days prior to the date fixed for redemption), at a redemption price equal to 100% of the principal amount of the bonds then Outstanding
to be redeemed, plus accrued and unpaid interest thereon to, but excluding, the 2056 Redemption Date (as defined below).
16
Prior to the 2056 Par Call
Date, the Company may redeem the bonds of the One Hundred-nineteenth Series at the option of the Company, or with the Proceeds of
Released Property (as contemplated by clause (4) of Section 61 of the Mortgage), in whole or in part, at any time and from time
to time, upon notice as provided in Sections 52 and 54 of the Mortgage (given by mail or, if the bonds of the One Hundred-nineteenth Series are
represented by one or more One Hundred-nineteenth Series Global Bonds (as hereinafter defined), given in accordance with the procedures
of DTC (as hereinafter defined), not less than 30 days and not more than 90 days prior to the date fixed for redemption (together with
the date fixed for redemption referred to in the preceding sentence, each a “2056 Redemption Date”)), at a redemption price
(expressed as a percentage of principal amount and rounded to three decimal places (hereinafter sometimes referred to as the “2056
Make-Whole Redemption Price” and, together with the redemption price referred to in the preceding sentence, each a “2056 Redemption
Price”) equal to the greater of: (i)(a) the sum of the present values of the remaining scheduled payments of principal and
interest thereon discounted to the redemption date (assuming such bonds matured on the 2056 Par Call Date), on a semi-annual basis (assuming
a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below) plus 15 basis points less (b) interest
accrued to such 2056 Redemption Date; and (ii) 100% of the principal amount of the bonds then Outstanding to be redeemed, plus, in
either case, accrued and unpaid interest thereon to, but excluding, such 2056 Redemption Date. On and after any 2056 Redemption Date,
if sufficient cash shall have been deposited with the Corporate Trustee (and/or if the Company has irrevocably directed the Corporate
Trustee to apply, from moneys held by it available to be used for the redemption of bonds, sufficient cash) to redeem all of the bonds
of the One Hundred-nineteenth Series called for redemption, interest on the bonds of the One Hundred-nineteenth Series, or the portions
of them so called for redemption, shall cease to accrue.
“Treasury Rate” means, with respect
to any redemption date, the yield determined by the Company in accordance with the following two paragraphs.
The Treasury Rate shall be determined by the Company
after 4:15 p.m., New York City time (or after such time as yields on U.S. government securities are posted daily by the Board of Governors
of the Federal Reserve System), on the third business day preceding the redemption date based upon the yield or yields for the most recent
day that appear after such time on such day in the most recent statistical release published by the Board of Governors of the Federal
Reserve System designated as “Selected Interest Rates (Daily)—H.15” (or any successor designation or publication) (“H.15”)
under the caption “U.S. government securities—Treasury constant maturities — Nominal” (or any successor
caption or heading) (“H.15 TCM”). In determining the Treasury Rate, the Company shall select, as applicable:
•
the yield for the Treasury constant maturity on H.15 exactly equal to the
period from the 2056 Redemption Date to the 2056 Par Call Date (the “2056 Remaining Life”); or
•
if there is no such Treasury constant maturity on H.15 exactly equal to the
2056 Remaining Life, the two yields—one yield corresponding to the Treasury constant maturity on H.15 immediately shorter than and
one yield corresponding to the Treasury constant maturity on H.15 immediately longer than such 2056 Remaining Life—and shall interpolate
to the 2056 Par Call Date, on a straight-line basis (using the actual number of days) using such yields and rounding the result to three
decimal places; or
17
•
if there is no such Treasury constant maturity on H.15 shorter than or longer
than the 2056 Remaining Life, the yield for the single Treasury constant maturity on H.15 closest to the 2056 Remaining Life. For purposes
of this clause, the applicable Treasury constant maturity or maturities on H.15 shall be deemed to have a maturity date equal to the relevant
number of months or years, as applicable, of such Treasury constant maturity from the 2056 Redemption Date.
If on the third business day preceding the 2056
Redemption Date H.15 TCM is no longer published, the Company shall calculate the Treasury Rate based on the rate per annum equal to the
semi-annual equivalent yield to maturity at 11:00 a.m., New York City time, on the second business day preceding such redemption date
of the United States Treasury security maturing on, or with a maturity that is closest to, the 2056 Par Call Date. If there is no United
States Treasury security maturing on the 2056 Par Call Date, but there are two or more United States Treasury securities with a maturity
date equally distant from the 2056 Par Call Date, one with a maturity date preceding the 2056 Par Call Date and one with a maturity date
following the 2056 Par Call Date, the Company shall select the United States Treasury security with a maturity date preceding the 2056
Par Call Date. If there are two or more United States Treasury securities maturing on the 2056 Par Call Date, or two or more United States
Treasury securities meeting the criteria of the preceding sentence, the Company shall select from among these two or more United States
Treasury securities the United States Treasury security that is trading closest to par based upon the average of the bid and asked prices
for such United States Treasury securities at 11:00 a.m., New York City time. In determining the Treasury Rate in accordance with the
terms of this paragraph, the semi-annual yield to maturity of the applicable United States Treasury security shall be based upon the average
of the bid and asked prices (expressed as a percentage of principal amount) at 11:00 a.m., New York City time, of such United States Treasury
security, and rounded to three decimal places.
The Company’s actions and determinations
in determining the 2056 Redemption Price shall be conclusive and binding for all purposes, absent manifest error.
The Trustee shall have no obligation or duty whatsoever
to determine, or to verify the Company’s calculations of, the 2056 Redemption Price.
In case of a redemption of
only a part of the bonds of the One Hundred-nineteenth Series, absent any written agreement of the registered holders of all of the bonds
of the One Hundred-nineteenth Series satisfactory to the Corporate Trustee specifying the particular bonds of the One Hundred-nineteenth
Series to be redeemed, the Corporate Trustee shall draw by lot, according to such method as it shall deem proper in its discretion,
or portions of them, to be redeemed, provided, that if the bonds of the One Hundred-nineteenth Series are represented by one or more
One Hundred-nineteenth Series Global Bonds, interests in the bonds of the One Hundred-nineteenth Series shall be selected for
redemption by DTC in accordance with its standard procedures therefor.
In case of any bonds of the
One Hundred-nineteenth Series called for redemption in whole or in part prior to the 2056 Par Call Date, the Company shall deliver
to the Corporate Trustee promptly upon its calculation thereof, but in any event prior to the related 2056 Redemption Date, a Treasurer’s
Certificate setting forth its calculation of the 2056 Make-Whole Redemption Price applicable to such redemption. The Corporate Trustee
shall be under no duty to inquire into, may conclusively presume the correctness of, and shall be fully protected in relying upon the
Company’s calculation of any 2056 Make-Whole Redemption Price of the bonds of the One Hundred-nineteenth Series.
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In lieu of stating any 2056
Make-Whole Redemption Price, notices of redemption of the bonds of the One Hundred-nineteenth Series called for redemption in whole
or in part shall state substantially the following: “The redemption price of the bonds to be redeemed shall equal the greater of
(i) 100% of the principal amount of the bonds then Outstanding to be redeemed and (ii) the sum of the present values of the
remaining scheduled payments of principal and interest thereon being redeemed that would be due if such bonds matured on the 2056 Par
Call Date, computed by discounting such payments, in each case, to the 2056 Redemption Date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Treasury Rate (as defined in this Ninety-seventh Supplemental Indenture) plus 15 basis
points , plus, in each case, accrued and unpaid interest on the principal amount thereof called for redemption to, but excluding, the
2056 Redemption Date.”
Except as provided herein,
Article X of the Mortgage shall apply to redemptions of bonds of the One Hundred-nineteenth Series.
(C)            If
a Tax Credit Event occurs, the Company may redeem, upon notice as provided in Sections 52 and 54 of the Mortgage (given by mail or, if
the bonds of the One Hundred-nineteenth Series are represented by one or more One Hundred-nineteenth Series Global Bonds, given
in accordance with the procedures of DTC, not less than 30 days and not more than 90 days prior to the date fixed for redemption), the
bonds of the One Hundred-nineteenth Series in whole but not in part at a redemption price equal to 101% of the principal amount of
the bonds of the One Hundred-nineteenth Series being redeemed, plus accrued and unpaid interest to but excluding the redemption date.
A notice of redemption of the bonds of the One Hundred-nineteenth Series upon the occurrence of a Tax Credit Event (i) may only
be sent by the later of (a) the end of the calendar year in which the bonds of the One Hundred-nineteenth Series were issued
and (b) six months from the date of issuance of the bonds of the One Hundred-nineteenth Series and (ii) shall be accompanied
by a certificate from an officer of the Company stating that a Tax Credit Event has occurred. The consummation of a redemption upon a
Tax Credit Event may be subject to the Trustees’ receipt of the required redemption moneys on or before the redemption date (and
in such case no such redemption shall occur unless such moneys have been received by the Trustees on or before such date).
A “Tax Credit Event” occurs with respect
to the bonds of One Hundred-nineteenth Series if, in the Company's reasonable determination, there exists a material risk, due to
the bonds of the One Hundred-nineteenth Series (considered together with other debt) having been issued, as part of an original issuance,
to one or more “specified foreign entities,” as defined in Section 7701(a)(51)(B) of the Internal Revenue Code (the
“Code”), that the Company or any of its affiliates would be unable to utilize or otherwise ineligible to claim any tax credits
otherwise allowed under Section 38 of the Code.
(D)            Subject
to the provisions set forth below with respect to One Hundred-nineteenth Series Global Bonds, at the option of the registered owner,
any bonds of the One Hundred-nineteenth 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 One Hundred-nineteenth 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.
Subject to the provisions
set forth below with respect to One Hundred-nineteenth Series Global Bonds, bonds of the One Hundred-nineteenth Series shall
be transferable upon the surrender thereof for cancellation, together with a written instrument of transfer in form approved by the registrar
duly executed by the registered owner or by his duly authorized attorney, at the office or agency of the Company in the Borough of Manhattan,
The City of New York.
19
Upon any exchange or transfer
of bonds of the One Hundred-nineteenth 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.
(E)            The
bonds of the One Hundred-nineteenth Series shall be issued in registered form without coupons and shall be issued initially in the
form of one or more global bonds (each such global bond hereinafter sometimes referred to as a “One Hundred-nineteenth Series Global
Bond”) to or on behalf of The Depository Trust Company (hereinafter sometimes referred to as “DTC”), as depositary therefor,
and registered in the name of such depositary or its nominee. Any bonds of the One Hundred-nineteenth Series 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 depositary or nominee) for such
purpose shall bear the depositary legends as required or otherwise agreed to by the Corporate Trustee and 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 each shall agree, in
each case such agreement to be confirmed in writing to the Corporate Trustee. Notwithstanding any other provision in this Ninety-seventh
Supplemental Indenture, payment of interest on the bonds of the One Hundred-nineteenth Series may be made at the option of the Company
by check mailed to the registered holders thereof at their registered address, and, with respect to a One Hundred-nineteenth Series Global
Bond, the Company may make payments of principal of, any 2056 Redemption Price and interest on such One Hundred-nineteenth Series Global
Bond pursuant to and in accordance with such arrangements as are agreed upon by the Company and the depositary for such One Hundred-nineteenth
Series Global Bond.
Except under the limited circumstances
described below, bonds of the One Hundred-nineteenth Series represented by a One Hundred-nineteenth Series Global Bond or Bonds
shall not be exchangeable for, and shall not otherwise be issuable as, bonds of the One Hundred-nineteenth Series in definitive form.
The One Hundred-nineteenth Series Global Bond or Bonds described in this Section 1(D) may not be transferred except by
the depositary to a nominee of the depositary or by a nominee of the depositary to the depositary or another nominee of the depositary
or to a successor depositary or its nominee.
A One Hundred-nineteenth Series Global
Bond shall be exchangeable for bonds of the One Hundred-nineteenth Series registered in the names of persons other than the depositary
or its nominee only if (i) the depositary notifies the Company that it is unwilling or unable to continue as a depositary for such
One Hundred-nineteenth Series Global Bond and no successor depositary shall have been appointed by the Company within 90 days of
receipt by the Company of such notification, or if at any time the depositary ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) at a time when the depositary is required to be so registered to act
as such depositary and no successor depositary shall have been appointed by the Company within 90 days after it becomes aware of such
cessation, (ii) a Default has occurred and is continuing with respect to the bonds of the One Hundred-nineteenth Series or (iii) the
Company in its sole discretion, and subject to the procedures of the depositary, determines that such One Hundred-nineteenth Series Global
Bond shall be so exchangeable. Any One Hundred-nineteenth Series Global Bond that is exchangeable pursuant to the preceding sentence
shall be exchangeable for bonds of the One Hundred-nineteenth Series registered in such names as the depositary shall direct.
20
In any exchange provided in
the preceding paragraph the Company shall execute, and the Corporate Trustee, upon receipt of a Company request for the authentication
and delivery of bonds of the One Hundred-nineteenth Series in the form of definitive certificates in exchange in whole or in part
for such One Hundred-nineteenth Series Global Bond or Bonds, shall authenticate and deliver, without service charge, to each person
specified by the depositary, bonds of the One Hundred-nineteenth Series in the form of definitive certificates of like tenor and
terms in an aggregate principal amount equal to the principal amount of such One Hundred-nineteenth Series Global Bond or the aggregate
principal amount of such One Hundred-nineteenth Series Global Bonds in exchange for such One Hundred-nineteenth Series Global
Bond or Bonds. Upon the exchange of the entire principal amount of a One Hundred-nineteenth Series Global Bond for bonds of the One
Hundred-nineteenth Series in the form of definitive certificates, such One Hundred-nineteenth Series Global Bond shall be canceled
by the Corporate Trustee. Bonds of the One Hundred-nineteenth Series issued in exchange for a One Hundred-nineteenth Series Global
Bond shall be registered in such names and in such authorized denominations as the depositary for such One Hundred-nineteenth Series Global
Bond, acting pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Corporate Trustee. Provided
that the Company and the Corporate Trustee have so agreed, the Corporate Trustee shall deliver such bonds of the One Hundred-nineteenth
Series to the persons in whose names the bonds of the One Hundred-nineteenth Series are so to be registered.
Any endorsement of a One Hundred-nineteenth
Series Global Bond 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 One Hundred-nineteenth Series Global Bond or in a Company
request. Subject to the terms of the Mortgage, the Corporate Trustee shall deliver and redeliver any such One Hundred-nineteenth Series Global
Bond 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 One Hundred-nineteenth Series Global
Bond or in any applicable Company request. If a Company request is so delivered, any instructions by the Company with respect to such
One Hundred-nineteenth Series Global Bond contained therein shall be in writing but need not be accompanied by or contained in a
Treasurer’s Certificate and need not be accompanied by an opinion of counsel.
The depositary or, if there
be one, its nominee, shall be the holder of a One Hundred-nineteenth Series Global Bond for all purposes under the Mortgage and the
bonds of the One Hundred-nineteenth Series and beneficial owners with respect to such One Hundred-nineteenth Series Global Bond
shall hold their interests pursuant to applicable procedures of such depositary. The Company, the Corporate Trustee, any bond registrar,
any paying agent and any other agent of the Company or the Corporate Trustee shall be entitled to deal with such depositary for all purposes
of the Mortgage relating to such One Hundred-nineteenth Series Global Bond (including the payment of principal, the 2056 Redemption
Price, if applicable, and interest and the giving of instructions or directions by or to the beneficial owners of such One Hundred-nineteenth
Series Global Bond as the sole holder of such One Hundred-nineteenth Series Global Bond and shall have no obligations to the
beneficial owners thereof (including any direct or indirect participants in such depositary)). None of the Company, the Corporate Trustee,
any paying agent, any bond registrar or any other agent of the Company or the Corporate Trustee 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 beneficial owner in or pursuant
to any applicable letter of representations or other arrangement or transaction entered into with, or procedures of, the depositary with
respect to such One Hundred-nineteenth Series Global Bond or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests, or for any acts or omissions of a depositary.
ARTICLE III
DIVIDEND COVENANT
SECTION 1. The Company
covenants and agrees that, so long as any of the bonds of the One Hundred-eighteenth or One Hundred-nineteenth 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
21
(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 2026 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 1.
The terms (i) “dividend”
shall be interpreted so as to include distributions and (ii) “common stock” and “shares of common stock”
shall be interpreted so as to include membership interests.
ARTICLE IV
CERTAIN PROVISIONS WITH RESPECT TO FUTURE ADVANCES
SECTION 1. Upon the filing
of this Ninety-seventh 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, the Mortgage may secure
future advances and other indebtedness and sums not to exceed in the aggregate $2,500,000,000, in addition to $13,000,000,000 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, equally, to the same extent and with the same priority, as the amount originally advanced on the security of
the Original 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.
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ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 1. Subject to
any amendments provided for in this Ninety-seventh Supplemental Indenture, the terms defined in the Original Mortgage, as heretofore supplemented,
shall, for all purposes of this Ninety-seventh Supplemental Indenture, have the meanings specified in the Original Mortgage, as heretofore
supplemented.
SECTION 2. 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 Original 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 Ninety-seventh 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 Original Mortgage, as heretofore supplemented, shall apply to and form part of this
Ninety-seventh 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 Ninety-seventh Supplemental
Indenture.
SECTION 3. Subject to
the provisions of Article XV and Article XVI of the Mortgage, whenever in this Ninety-seventh 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 Ninety-seventh 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 4. Nothing in
this Ninety-seventh 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 Ninety-seventh Supplemental Indenture or any covenant, condition, stipulation, promise or agreement hereof,
and all the covenants, conditions, stipulations, promises and agreements in this Ninety-seventh 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 5. The Corporate
Trustee shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given
pursuant to this Ninety-seventh Supplemental Indenture and delivered using Electronic Means (as defined below); provided, however, that
the Company shall provide to the Corporate Trustee an incumbency certificate listing officers with the authority to provide such Instructions
(“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall
be amended by the Company whenever a person is to be added or deleted from the listing. If the Company elects to give the Corporate Trustee
Instructions using Electronic Means and the Corporate Trustee in its discretion elects to act upon such Instructions, the Corporate Trustee’s
understanding of such Instructions shall be deemed controlling. The Company understands and agrees that the Corporate Trustee cannot determine
the identity of the actual sender of such Instructions and that the Corporate Trustee shall conclusively presume that directions that
purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Corporate Trustee have been sent
by such Authorized Officer. The Company shall be responsible for ensuring that only Authorized Officers transmit such Instructions to
the Corporate Trustee and that the Company and all Authorized Officers are solely responsible to safeguard the use and confidentiality
of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the Company. The Corporate Trustee shall
not be liable for any losses, costs or expenses arising directly or indirectly from the Corporate Trustee’s good faith reliance
upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction.
The Company agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Corporate Trustee,
including without limitation the risk of the Corporate Trustee acting on unauthorized Instructions, and the risk of interception and misuse
by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting
Instructions to the Corporate Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected
by the Company; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide
to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Corporate
Trustee as soon as reasonably practicable upon learning of any compromise or unauthorized use of the security procedures. “Electronic
Means” shall mean the following communications methods: e-mail, secure electronic transmission containing applicable authorization
codes, passwords and/or authentication keys issued by the Corporate Trustee, or another method or system specified by the Corporate Trustee
as available for use in connection with its services hereunder.
23
SECTION 6. This Ninety-seventh
Supplemental Indenture 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. The words “execution,” signed,” signature,”
and words of like import in the Mortgage shall include images of manually executed signatures transmitted by email or other electronic
format (including, without limitation, “pdf,” “tif” or “jpg”) and other electronic signatures (including
without limitation, DocuSign and AdobeSign). The use of electronic signatures and electronic records (including, without limitation, any
contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal effect,
validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted
by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions
Act or the Uniform Commercial Code. Without limitation to the foregoing, and anything in the Mortgage to the contrary notwithstanding,
(a) any officers’ certificate, Opinion of Counsel, Trustee’s Certificate, Engineer’s Certificate, Net Earning Certificate,
bond, certificate of authentication appearing on or attached to any bond, or other certificate, opinion of counsel, instrument, agreement
or other document delivered pursuant to the Mortgage may be executed, attested and transmitted by any of the foregoing electronic means
and formats, (b) all references in Article II or elsewhere in the Mortgage to the execution, attestation or authentication of
any bond or any certificate of authentication appearing on or attached to any bond by means of a manual or facsimile signature shall be
deemed to include signatures that are made or transmitted by any of the foregoing electronic means or formats, and (c) any requirement
in Article II or elsewhere in the Mortgage that any signature be made under a corporate seal (or facsimile thereof) shall not be
applicable to the bonds of the One Hundred-eighteenth or One Hundred-nineteenth Series.
[SIGNATURES
ON THE FOLLOWING PAGES]
24
The laws of South Carolina
provide that in any real estate foreclosure proceeding a defendant against whom a personal judgment is taken or asked may within thirty
days after the sale of the mortgaged property apply to the court for an order of appraisal. The statutory appraisal value as approved
by the court would be substituted for the high bid and may decrease the amount of any deficiency owing in connection with the transaction.
THE COMPANY HEREBY WAIVES AND RELINQUISHES THE STATUTORY APPRAISAL RIGHTS, WHICH MEANS THE HIGH BID AT THE JUDICIAL FORECLOSURE SALE
WILL BE APPLIED TO THE DEBT REGARDLESS OF ANY APPRAISED VALUE OF THE MORTGAGED PROPERTY
.
IN WITNESS WHEREOF, Duke Energy
Progress, LLC has caused its 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 company seal to be attested by its Corporate Secretary or one of its Assistant Secretaries, and The
Bank of New York Mellon has caused its corporate name to be hereunto affixed, and this instrument to be signed and sealed by one of its
Vice Presidents, Senior Associates or Associates and its corporate seal to be attested by one of its Vice Presidents, Senior Associates
or Associates, and Barbara Zsombori (who is appointed as successor Individual Trustee effective immediately) has hereunto set her hand
and seal, all as of the day and year first above written.
DUKE ENERGY PROGRESS, LLC
By:
/s/
Nicholas
J. Giaimo
Nicholas
J. Giaimo
Senior Vice President, Treasurer and Chief Risk Officer
Executed, sealed and delivered by DUKE
ENERGY PROGRESS, LLC by Nicholas J. Giaimo,
one of its Senior Vice Presidents, and
attested by Elizabeth Jones, one of its
Assistant Secretaries, in the presence of:
ATTEST:
/s/ Elizabeth
H. Jones
Elizabeth H. Jones
Assistant Secretary
/s/ Sheila Lemoine
Sheila Lemoine
/s/ Kristin M. Oberheu
Kristin M. Oberheu
[COMPANY’S SIGNATURE PAGE]
[NINETY-SEVENTH SUPPLEMENTAL INDENTURE DATED AS OF SEPTEMBER 1, 2026
TO THE DUKE ENERGY PROGRESS, LLC MORTGAGE AND DEED OF TRUST
DATED AS OF MAY 1, 1940]
THE BANK OF NEW YORK MELLON,
as Corporate Trustee
By:
/s/
Glenn
G. McKeever
Glenn
G. McKeever
Vice President
Executed, sealed and delivered
by THE BANK OF NEW YORK
MELLON, as Corporate Trustee, by Glenn G. McKeever,
one of its Vice Presidents,
and attested by Melissa Matthews,
one of its Agents, in the
presence of:
ATTEST:
/s/ Melissa Matthews
Melissa Matthews
Vice President
/s/
Mike Diep
Mike Diep
/s/ Michael C. White
Michael C. White
[CORPORATE TRUSTEE’S SIGNATURE PAGE]
[NINETY-SEVENTH SUPPLEMENTAL INDENTURE DATED AS OF SEPTEMBER 1, 2026
TO THE DUKE ENERGY PROGRESS, LLC MORTGAGE AND DEED OF TRUST
DATED AS OF MAY 1, 1940]
/s/ Barbara Zsombori
Barbara Zsombori,
as successor Individual Trustee
Executed and delivered by
BARBARA ZSOMBORI, as successor Individual Trustee, in the presence of:
/s/
Stephanie Caroline Cowart
Stephanie Caroline Cowart
/s/ Richard B. Dillard
Richard B. Dillard
[INDIVIDUAL TRUSTEE’S SIGNATURE PAGE]
[NINETY-SEVENTH SUPPLEMENTAL INDENTURE DATED AS OF SEPTEMBER 1, 2026
TO THE DUKE ENERGY PROGRESS, LLC MORTGAGE AND DEED OF TRUST
DATED AS OF MAY 1, 1940]
STATE OF NORTH CAROLINA
)
) SS.:
COUNTY OF MECKLENBURG
)
This 9th day of September,
A.D. 2026, personally came before me, Jenny Pattana, a Notary Public, NICHOLAS J. GIAIMO, who, being by me duly sworn, acknowledged before
me that he is Senior Vice President, Treasurer and Chief Risk Officer of DUKE ENERGY PROGRESS, LLC, and that the seal affixed to the foregoing
instrument in writing is the company seal of said company, and that said writing was signed and sealed by him in behalf of said limited
liability company by its authority duly given. And the said NICHOLAS J. GIAIMO acknowledged the said writing to be the act and deed of
said limited liability company.
On the 9th day of September,
in the year of 2026, before me personally came NICHOLAS J. GIAIMO, to me known, who, being by me duly sworn, did depose and say that his
business address is 525 South Tryon Street Charlotte, North Carolina 28202; that he is Senior Vice President, Treasurer and Chief Risk
Officer of DUKE ENERGY PROGRESS, LLC, one of the limited liability companies described in and which executed the above instrument; that
he knows the seal of said limited liability company; that the seal affixed to said instrument is such company seal; that it was so affixed
by order of the Board of Directors of said limited liability company, and that he signed his name thereto by like order.
/s/
Jenny Pattana
Jenny Pattana
NOTARY PUBLIC, State of North Carolina
Cabarrus County
My Commission Expires: June 8, 2030
(Stamp)
STATE OF NORTH CAROLINA
)
) SS.:
COUNTY OF MECKLENBURG
)
This 9th day of
September, A.D. 2026, personally came before me, Jenny Pattana, a Notary Public, ELIZABETH H. JONES, who, being by me duly sworn,
acknowledged before me that she is the Assistant Secretary of DUKE ENERGY PROGRESS, LLC, and that the seal affixed to the foregoing
instrument in writing is the company seal of said company, and that said writing was signed and attested by her on behalf of said
limited liability company by its authority duly given.
On the 9th day of
September, A.D. 2026, before me personally came ELIZABETH H. JONES, to me known, who, being by me duly sworn, did depose and say
that her business address is 525 South Tryon Street Charlotte, North Carolina 28202; that she is the Assistant Secretary of DUKE
ENERGY PROGRESS, LLC, one of the limited liability companies described in and which executed the above instrument; that she knows
the seal of said limited liability company; that the seal affixed to said instrument is such company seal; that it was so affixed by
order of the Board of Directors of said limited liability company, and that she signed and attested her name thereto by the authority
of the Board of Directors of said limited liability company.
/s/
Jenny Pattana
Jenny Pattana
NOTARY PUBLIC, State of North Carolina
Cabarrus County
My Commission Expires: June 8, 2030
(Stamp)
STATE OF NEW YORK
)
) SS.:
COUNTY OF NEW YORK
)
On September 9, 2026 before me, the undersigned, personally appeared Glenn G. McKeever, personally known to me or proved to me on
the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that
he signed the same in his capacity as a Vice President of THE BANK OF NEW YORK MELLON, a New York banking corporation, as Corporate Trustee,
and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, signed the instrument.
I, Rafal Bar a Notary Public
of the State of New York, certify that Glenn G. McKeever personally came before me this day and acknowledged that he is a Vice President
of THE BANK OF NEW YORK MELLON, a New York banking corporation, as Corporate Trustee, and that he, as Vice President, being authorized
to do so, signed the foregoing on behalf of the corporation.
Witness my hand and official
seal, this the 9th day of September, 2026.
/s/
Rafal Bar
Rafal Bar
RAFAL BAR
NOTARY PUBLIC, STATE OF NEW YORK
Registration No. 01BA6293822
Qualified in KING County
Commission Expires January 31, 2030
STATE OF NEW YORK
)
) SS.:
COUNTY OF NEW YORK
)
On September 9, 2026
before me, the undersigned, personally appeared Melissa Matthews, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that she signed and attested the
same in her capacity as an Agent of THE BANK OF NEW YORK MELLON, a New York banking corporation, as Corporate Trustee, and that by her
signature on the instrument, the individual, or the person upon behalf of which the individual acted, signed and attested the instrument.
I, Rafal Bar, a Notary Public
of the State of New York, certify that Melissa Matthews personally came before me this day and acknowledged that she is an Agent of THE
BANK OF NEW YORK MELLON, a New York banking corporation, as Corporate Trustee, and that she, as Agent, being authorized to do so, signed
and attested the foregoing on behalf of the corporation.
Witness my hand and official
seal, this the 9th day of September, 2026.
/s/
Rafal Bar
Rafal Bar
RAFAL BAR
NOTARY PUBLIC, STATE OF NEW YORK
Registration No. 01BA6293822
Qualified in KING County
Commission Expires January 31, 2030
STATE OF FLORIDA
)
) SS.:
COUNTY OF DUVAL
)
On September 9, 2026
before me, the undersigned, personally appeared BARBARA ZSOMBORI, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that she executed the same in her
capacity as successor Individual Trustee, and that by her signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.
I, Mirnesa Velic, a Notary
Public of the State of Florida, do hereby certify that BARBARA ZSOMBORI, as successor Individual Trustee, personally appeared before me
this day and acknowledged the due execution of the foregoing instrument.
Witness my hand and official
seal, this the 9th day of September, 2026.
/s/ Mirnesa Velic
Mirnesa Velic
Notary Public State of Florida
Expires 12/21/2029
Mirnesa Velic
My Commission
HH 722285
Exhibit A
NOTICE OF RESIGNATION OF INDIVIDUAL TRUSTEE
NOTICE IS HEREBY GIVEN that Christie Leppert has
resigned as successor Individual Trustee under the Mortgage and Deed of Trust, dated as of May 1, 1940, as amended, of Duke Energy
Progress LLC to Irving Trust Company (now The Bank of New York Mellon) and Frederick G. Herbst (Richard H. West, J. A. Austin, E. J. McCabe,
G. White, D. W. May, J. A. Vaughan, Joseph J. Arney, Wafaa Orfey, W. T. Cunningham, Douglas J. MacInnes, Ming Ryan, Tina D. Gonzalez and
Christie Leppert successors), as Trustees, such resignation having taken effect on September 8, 2026.
Dated: September 8, 2026
Christie Leppert
NOTICE OF APPOINTMENT OF SUCCESSOR INDIVIDUAL
TRUSTEE
NOTICE IS HEREBY GIVEN that the undersigned Duke
Energy Progress LLC has received notice of and accepted the foregoing resignation of Christie Leppert as Individual Trustee under its
said Mortgage and Deed of Trust, dated as of May 1, 1940, as amended, and that, as provided in said Mortgage and Deed of Trust, the
undersigned has appointed Barbara Zsombori as successor Individual Trustee thereunder, effective on September 8, 2026.
Dated: September 8, 2026
Duke Energy Progress, LLC
(Form of Bond of Series Due 2036)
[THIS SECURITY IS A ONE HUNDRED-EIGHTEENTH SERIES
GLOBAL BOND WITHIN THE MEANING OF THE MORTGAGE 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 MORTGAGE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO DUKE ENERGY PROGRESS, LLC 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 FIRST MORTGAGE BOND, 5.55% SERIES DUE 2036
MAY, UNDER CONDITIONS PROVIDED IN THE MORTGAGE, BE EXCHANGED FOR FIRST MORTGAGE BONDS, 5.55% SERIES DUE 2036 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 CORPORATE TRUSTEE. ANY SUCH EXCHANGE SHALL BE MADE UPON RECEIPT BY THE CORPORATE TRUSTEE
OF A REQUEST BY DUKE ENERGY PROGRESS, LLC THEREFOR AND A WRITTEN INSTRUCTION FROM THE DEPOSITARY SETTING FORTH THE NAME OR NAMES IN WHICH
THE CORPORATE TRUSTEE IS TO REGISTER SUCH FIRST MORTGAGE BONDS, 5.55% SERIES DUE 2036 IN THE FORM OF DEFINITIVE CERTIFICATES.]
1
REGISTERED BOND
CUSIP: 26442U AW4
DUKE ENERGY PROGRESS, LLC
First Mortgage Bond,
5.55% Series due 2036
No. R-
$__________
1
This be included only if the Bonds are being issued in
global form.
DUKE ENERGY PROGRESS, LLC,
a North Carolina limited liability company (the “
Company
”), for value received, hereby promises to pay to
______________
or registered assigns, at the office or agency
of the Company in the Borough of Manhattan, The City of New York,
__________
DOLLARS
($__________)
on September 15, 2036, 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, and to pay to the registered owner
hereof interest thereon from September 11, 2026, if the date of this bond is on or prior to March 15, 2027, or, if the date
of this bond is after March 15, 2027, from the March 15 or September 15 next preceding the date of this bond, at the rate
of 5.55% per annum (with interest on overdue principal and overdue installments of interest payable in accordance with the terms of the
Mortgage (as hereinafter defined)) in like coin or currency semi-annually at said office or agency, on March 15 and September 15
in each year until the principal of this bond shall have become due and payable (each an “
Interest Payment Date
”).
If the date of this bond is on or prior to March 15, 2027, such payments shall commence on March 15, 2027. Interest on this
bond will be computed on the basis of a 360-day year comprised of twelve 30-day months.
Any interest on this bond
which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the person in whose name
this bond (or one or more predecessor bonds) is registered at the close of business on the tenth calendar day next preceding such Interest
Payment Date (
i.e.
, March 5 and September 5, respectively) (each a “
Regular Record Date
”), provided,
however, that so long as this bond is registered in the name of The Depository Trust Company, a New York corporation, its nominee or a
successor depositary, the Regular Record Date shall be the close of business on the business day (as defined in the Ninety-seventh Supplemental
Indenture mentioned below) immediately preceding such Interest Payment Date.
Any interest on this bond
which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date shall forthwith cease to be payable to
the registered holder on the relevant Regular Record Date solely by virtue of such holder having been such holder; and such interest,
together with any interest thereon as provided in the Mortgage (collectively, “
Defaulted Interest
”), may be paid by
the Company, at its election in each case, as provided in Subsection A or B below:
A.            The
Company may elect to make payment of any Defaulted Interest on the bonds of this series (as defined below) to the persons in whose names
such bonds (or their respective predecessor bonds) are registered at the close of business on a special record date for the payment of
such Defaulted Interest, which shall be fixed in the following manner (a “
Special Record Date
”). The Company shall
notify the Corporate Trustee referred to below in writing of the amount of Defaulted Interest proposed to be paid on each bond and the
date of the proposed payment (which date shall be such as will enable the Corporate Trustee to comply with the next two sentences hereof),
and at the same time the Company shall deposit with the Corporate Trustee an amount of money equal to the aggregate amount proposed to
be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Corporate Trustee for such deposit prior
to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the persons entitled to such Defaulted
Interest as in this Subsection provided and not to be deemed otherwise part of the trust estate or trust moneys. Thereupon the Corporate
Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days
prior to the date of the proposed payment and not less than 10 days after the receipt by the Corporate Trustee of the notice of the proposed
payment. The Corporate Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class
postage prepaid, to each holder of a bond of this series at such holder’s address as it appears in the bond register not less than
10 days prior to such Special Record Date. The Corporate Trustee may, in its discretion in the name and at the expense of the Company,
cause a similar notice to be published at least once in a newspaper approved by the Company in each place of payment of the bonds of this
series, but such publication shall not be a condition precedent to the establishment of such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest shall
be paid to the persons in whose names the bonds of this series (or their respective predecessor bonds) are registered on such Special
Record Date and shall no longer be payable pursuant to the following Subsection B.
B.            The
Company may make payment of any Defaulted Interest on the bonds of this series in any other lawful manner not inconsistent with the requirements
of any securities exchange on which such bonds may be listed and upon such notice as may be required by such exchange, if, after notice
given by the Company to the Corporate Trustee of the proposed payment pursuant to this Subsection, such payment shall be deemed practicable
by the Corporate Trustee.
Subject to the foregoing,
each bond of this series delivered under the Mortgage hereinafter mentioned upon transfer of or in exchange for or in lieu of any other
bond of this series shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other bond.
This bond is one of an issue
of bonds of the Company issuable in series and is one of a series known as its First Mortgage Bonds, 5.55% Series due 2036 (the “
bonds
of this series
”), all bonds of all series issued and to be issued under and equally secured (except insofar as any sinking fund
or other fund, established in accordance with the provisions of the Mortgage hereinafter mentioned, may afford additional security for
the bonds of any particular series) by a Mortgage and Deed of Trust (together with any indenture supplemental thereto, including the Ninety-seventh
Supplemental Indenture, dated as of September 1, 2026, the “
Mortgage
”), dated as of May 1, 1940, executed
by the Company to The Bank of New York Mellon (formerly Irving Trust Company), as Corporate Trustee, and Barbara Zsombori (successor to
Frederick G. Herbst), as Individual Trustee. Reference is made to the Mortgage for a description of the property mortgaged and pledged,
the nature and extent of the security, the rights of the holders of the bonds and of the Trustees in respect thereof, the duties and immunities
of the Trustees and the terms and conditions upon which the bonds are and are to be secured and the circumstances under which additional
bonds may be issued. With the consent of the Company and to the extent permitted by and as provided in the Mortgage, the rights and obligations
of the Company and/or the rights of the holders of the bonds and/or coupons and/or the terms and provisions of the Mortgage may be modified
or altered by affirmative vote of the holders of at least 66 2/3% in principal amount of the bonds then outstanding under the Mortgage
and, if the rights of one or more, but less than all, series of bonds then outstanding are to be affected, then also by affirmative vote
of the holders of at least 66 2/3% in principal amount of the bonds then outstanding of each series of bonds so to be affected (excluding
in any case bonds disqualified from voting by reason of the Company’s interest therein as provided in the Mortgage); provided that,
without the consent of the holder hereof, no such modification or alteration, among other things, shall impair or affect the right of
the holder to receive payment of the principal of and interest on this bond, on or after the respective due dates expressed herein, or
permit the creation of any lien equal or prior to the lien of the Mortgage or deprive the holder of a lien on the mortgaged and pledged
property.
The principal hereof may be
declared or may become due prior to the maturity date hereinbefore named on the conditions, in the manner and at the time set forth in
the Mortgage, upon the occurrence of a default as in the Mortgage provided.
This bond is transferable
as prescribed in the Mortgage by the registered owner hereof in person, or by his duly authorized attorney, at the office or agency of
the Company in the Borough of Manhattan, The City of New York, upon surrender and cancellation of this bond, and thereupon a new fully
registered temporary or definitive bond of the same series for a like principal amount will be issued to the transferee in exchange herefor
as provided in the Mortgage. The Company and the Trustees may deem and treat the person in whose name this bond is registered as the absolute
owner hereof for the purpose of receiving payment and for all other purposes.
In the manner prescribed in
the Mortgage, any bonds of this series, upon surrender thereof for cancellation at the office or agency of the Company in the Borough
of Manhattan, The City of New York, are exchangeable for a like aggregate principal amount of bonds of the same series of other authorized
denominations.
On or after June 15,
2036 (the “Par Call Date”), the Company may redeem the bonds of this series at the option of the Company, in whole or in part,
at any time and from time to time, upon notice as provided in the Mortgage (given not less than 30 days and not more than 90 days prior
to the date fixed for redemption), at a redemption price equal to 100% of the principal amount of the bonds then outstanding to be redeemed,
plus accrued and unpaid interest thereon to, but excluding, the redemption date.
Prior to the Par Call Date,
the Company may redeem the bonds of this series at the option of the Company, in whole or in part, at any time and from time to time,
upon notice as provided in the Mortgage (given not less than 30 days and not more than 90 days prior to the date fixed for redemption
(together with the date fixed for redemption referred to in the preceding sentence, each a “
Redemption Date
”)), at
a redemption price (expressed as a percentage of principal amount and rounded to three decimal places (together with the redemption price
referred to in the preceding sentence, each a “
Redemption Price
”)) equal to the greater of: (i)(a) the sum of
the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date (assuming such
bonds matured on the Par Call Date), on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate (as defined in the Ninety-seventh Supplemental Indenture mentioned above) plus 15 basis points less (b) interest accrued to
such Redemption Date; and (ii) 100% of the principal amount of the bonds then outstanding to be redeemed, plus, in either case, accrued
and unpaid interest thereon to, but excluding, such Redemption Date. On and after any Redemption Date, if sufficient cash shall have been
deposited with Corporate Trustee (and/or if the Company has irrevocably directed the Corporate Trustee to apply, from moneys held by it
available to be used for the redemption of bonds, sufficient cash) to redeem all of the bonds of this series called for redemption, interest
on the bonds of this series, or the portions of them so called for redemption, shall cease to accrue. Reference is made to said Ninety-seventh
Supplemental Indenture for the full terms of the redemption provisions applicable to the bonds of this series.
If a Tax Credit Event occurs,
the Company may redeem, upon notice as provided in the Mortgage (given not less than 30 days and not more than 90 days prior to the date
fixed for redemption), the bonds of this series in whole but not in part at a redemption price equal to 101% of the principal amount of
the bonds of this series being redeemed, plus accrued and unpaid interest to but excluding the redemption date. A notice of redemption
of the bonds of this series upon the occurrence of a Tax Credit Event (i) may only be sent by the later of (a) the end of the
calendar year in which the bonds of this series were issued and (b) six months from the date of issuance of the bonds of this series
and (ii) shall be accompanied by a certificate from an officer of the Company stating that a Tax Credit Event has occurred. The consummation
of a redemption upon a Tax Credit Event may be subject to the Trustees’ receipt of the required redemption moneys on or before the
redemption date (and in such case no such redemption shall occur unless such moneys have been received by the Trustees on or before such
date).
A “Tax Credit Event”
occurs with respect to the bonds of this series if, in the Company's reasonable determination, there exists a material risk, due to the
bonds of this series (considered together with other debt) having been issued, as part of an original issuance, to one or more “specified
foreign entities,” as defined in Section 7701(a)(51)(B) of the Internal Revenue Code (the “Code”), that the
Company or any of its affiliates would be unable to utilize or otherwise ineligible to claim any tax credits otherwise allowed under Section 38
of the Code.
No recourse shall be had for
the payment of the principal or any Redemption Price of or interest on this bond against any incorporator or any past, present or future
subscriber to the capital stock, stockholder, officer or director of the Company or of any predecessor or successor corporation, as such,
either directly or through the Company or any predecessor or successor corporation, under any rule of law, statute or constitution
or by the enforcement of any assessment or otherwise, all such liability of incorporators, subscribers, stockholders, officers and directors
being released by the holder or owner hereof by the acceptance of this bond and being likewise waived and released by the terms of the
Mortgage.
This bond shall not become
obligatory until The Bank of New York Mellon (formerly Irving Trust Company), the Corporate Trustee under the Mortgage, or its successor
thereunder, shall have signed the form of certificate endorsed hereon.
[Signature Page Follows]
IN WITNESS WHEREOF, DUKE ENERGY
PROGRESS, LLC has caused this bond to be signed in its name with the manual or facsimile signature of its President or one of its Vice
Presidents and its company seal to be impressed or imprinted hereon and attested by its Secretary or one of its Assistant Secretaries.
DUKE ENERGY PROGRESS, LLC
DATED:
By:
Authorized Signatory
ATTEST:
[  ]
CORPORATE
TRUSTEE’S CERTIFICATE
This bond is one of the bonds,
of the series herein designated, described or provided for in the within-mentioned Mortgage.
DATED:
THE BANK OF NEW YORK MELLON,
Corporate Trustee
By:
Authorized Officer
(Form of Bond of Series Due 2056)
THIS SECURITY IS A ONE HUNDRED-NINETEENTH SERIES
GLOBAL BOND WITHIN THE MEANING OF THE MORTGAGE 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 MORTGAGE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO DUKE ENERGY PROGRESS, LLC 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 FIRST MORTGAGE BOND, 6.15% SERIES DUE 2056
MAY, UNDER CONDITIONS PROVIDED IN THE MORTGAGE, BE EXCHANGED FOR FIRST MORTGAGE BONDS, 6.15% SERIES DUE 2056 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 CORPORATE TRUSTEE. ANY SUCH EXCHANGE SHALL BE MADE UPON RECEIPT BY THE CORPORATE TRUSTEE
OF A REQUEST BY DUKE ENERGY PROGRESS, LLC THEREFOR AND A WRITTEN INSTRUCTION FROM THE DEPOSITARY SETTING FORTH THE NAME OR NAMES IN WHICH
THE CORPORATE TRUSTEE IS TO REGISTER SUCH FIRST MORTGAGE BONDS, 6.15% SERIES DUE 2056 IN THE FORM OF DEFINITIVE CERTIFICATES.
REGISTERED BOND
CUSIP: 26442U AX2
DUKE ENERGY PROGRESS, LLC
First Mortgage Bond,
6.15% Series due 2056
No. R-
$_________
DUKE ENERGY PROGRESS, LLC,
a North Carolina limited liability company (the “
Company
”), for value received, hereby promises to pay to
___________
or registered assigns, at the office or agency
of the Company in the Borough of Manhattan, The City of New York,
_________
DOLLARS
($__________)
on September 15, 2056, 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, and to pay to the registered owner
hereof interest thereon from September 11, 2026, if the date of this bond is on or prior to March 15, 2027, or, if the date
of this bond is after March 15, 2027, from the March 15 or September 15 next preceding the date of this bond, at the rate
of 6.15% per annum (with interest on overdue principal and overdue installments of interest payable in accordance with the terms of the
Mortgage (as hereinafter defined)) in like coin or currency semi-annually at said office or agency, on March 15 and September 15
in each year until the principal of this bond shall have become due and payable (each an “
Interest Payment Date
”).
If the date of this bond is on or prior to March 15, 2027, such payments shall commence on March 15, 2027. Interest on this
bond will be computed on the basis of a 360-day year comprised of twelve 30-day months.
Any interest on this bond
which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the person in whose name
this bond (or one or more predecessor bonds) is registered at the close of business on the tenth calendar day next preceding such Interest
Payment Date (
i.e.
, March 5 and September 5, respectively) (each a “
Regular Record Date
”), provided,
however, that so long as this bond is registered in the name of The Depository Trust Company, a New York corporation, its nominee or a
successor depositary, the Regular Record Date shall be the close of business on the business day (as defined in the Ninety-seventh Supplemental
Indenture mentioned below) immediately preceding such Interest Payment Date.
Any interest on this bond
which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date shall forthwith cease to be payable to
the registered holder on the relevant Regular Record Date solely by virtue of such holder having been such holder; and such interest,
together with any interest thereon as provided in the Mortgage (collectively, “
Defaulted Interest
”), may be paid by
the Company, at its election in each case, as provided in Subsection A or B below:
A.            The
Company may elect to make payment of any Defaulted Interest on the bonds of this series (as defined below) to the persons in whose names
such bonds (or their respective predecessor bonds) are registered at the close of business on a special record date for the payment of
such Defaulted Interest, which shall be fixed in the following manner (a “
Special Record Date
”). The Company shall
notify the Corporate Trustee referred to below in writing of the amount of Defaulted Interest proposed to be paid on each bond and the
date of the proposed payment (which date shall be such as will enable the Corporate Trustee to comply with the next two sentences hereof),
and at the same time the Company shall deposit with the Corporate Trustee an amount of money equal to the aggregate amount proposed to
be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Corporate Trustee for such deposit prior
to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the persons entitled to such Defaulted
Interest as in this Subsection provided and not to be deemed otherwise part of the trust estate or trust moneys. Thereupon the Corporate
Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days
prior to the date of the proposed payment and not less than 10 days after the receipt by the Corporate Trustee of the notice of the proposed
payment. The Corporate Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class
postage prepaid, to each holder of a bond of this series at such holder’s address as it appears in the bond register not less than
10 days prior to such Special Record Date. The Corporate Trustee may, in its discretion in the name and at the expense of the Company,
cause a similar notice to be published at least once in a newspaper approved by the Company in each place of payment of the bonds of this
series, but such publication shall not be a condition precedent to the establishment of such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest shall
be paid to the persons in whose names the bonds of this series (or their respective predecessor bonds) are registered on such Special
Record Date and shall no longer be payable pursuant to the following Subsection B.
B.            The
Company may make payment of any Defaulted Interest on the bonds of this series in any other lawful manner not inconsistent with the requirements
of any securities exchange on which such bonds may be listed and upon such notice as may be required by such exchange, if, after notice
given by the Company to the Corporate Trustee of the proposed payment pursuant to this Subsection, such payment shall be deemed practicable
by the Corporate Trustee.
Subject to the foregoing,
each bond of this series delivered under the Mortgage hereinafter mentioned upon transfer of or in exchange for or in lieu of any other
bond of this series shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other bond.
This bond is one of an issue
of bonds of the Company issuable in series and is one of a series known as its First Mortgage Bonds, 6.15% Series due 2056 (the “
bonds
of this series
”), all bonds of all series issued and to be issued under and equally secured (except insofar as any sinking fund
or other fund, established in accordance with the provisions of the Mortgage hereinafter mentioned, may afford additional security for
the bonds of any particular series) by a Mortgage and Deed of Trust (together with any indenture supplemental thereto, including the Ninety-seventh
Supplemental Indenture, dated as of September 1, 2026, the “
Mortgage
”), dated as of May 1, 1940, executed
by the Company to The Bank of New York Mellon (formerly Irving Trust Company), as Corporate Trustee, and Barbara Zsombori (successor to
Frederick G. Herbst), as Individual Trustee. Reference is made to the Mortgage for a description of the property mortgaged and pledged,
the nature and extent of the security, the rights of the holders of the bonds and of the Trustees in respect thereof, the duties and immunities
of the Trustees and the terms and conditions upon which the bonds are and are to be secured and the circumstances under which additional
bonds may be issued. With the consent of the Company and to the extent permitted by and as provided in the Mortgage, the rights and obligations
of the Company and/or the rights of the holders of the bonds and/or coupons and/or the terms and provisions of the Mortgage may be modified
or altered by affirmative vote of the holders of at least 66 2/3% in principal amount of the bonds then outstanding under the Mortgage
and, if the rights of one or more, but less than all, series of bonds then outstanding are to be affected, then also by affirmative vote
of the holders of at least 66 2/3% in principal amount of the bonds then outstanding of each series of bonds so to be affected (excluding
in any case bonds disqualified from voting by reason of the Company’s interest therein as provided in the Mortgage); provided that,
without the consent of the holder hereof, no such modification or alteration, among other things, shall impair or affect the right of
the holder to receive payment of the principal of and interest on this bond, on or after the respective due dates expressed herein, or
permit the creation of any lien equal or prior to the lien of the Mortgage or deprive the holder of a lien on the mortgaged and pledged
property.
The principal hereof may be
declared or may become due prior to the maturity date hereinbefore named on the conditions, in the manner and at the time set forth in
the Mortgage, upon the occurrence of a default as in the Mortgage provided.
This bond is transferable
as prescribed in the Mortgage by the registered owner hereof in person, or by his duly authorized attorney, at the office or agency of
the Company in the Borough of Manhattan, The City of New York, upon surrender and cancellation of this bond, and thereupon a new fully
registered temporary or definitive bond of the same series for a like principal amount will be issued to the transferee in exchange herefor
as provided in the Mortgage. The Company and the Trustees may deem and treat the person in whose name this bond is registered as the absolute
owner hereof for the purpose of receiving payment and for all other purposes.
In the manner prescribed in
the Mortgage, any bonds of this series, upon surrender thereof for cancellation at the office or agency of the Company in the Borough
of Manhattan, The City of New York, are exchangeable for a like aggregate principal amount of bonds of the same series of other authorized
denominations.
On or after March 15,
2056 (the “Par Call Date”), the Company may redeem the bonds of this series at the option of the Company, in whole or in part,
at any time and from time to time, upon notice as provided in the Mortgage (given not less than 30 days and not more than 90 days prior
to the date fixed for redemption), at a redemption price equal to 100% of the principal amount of the bonds then outstanding to be redeemed,
plus accrued and unpaid interest thereon to, but excluding, the redemption date.
Prior to the Par Call Date,
the Company may redeem the bonds of this series at the option of the Company, in whole or in part, at any time and from time to time,
upon notice as provided in the Mortgage (given not less than 30 days and not more than 90 days prior to the date fixed for redemption
(together with the date fixed for redemption referred to in the preceding sentence, each a “
Redemption Date
”)), at
a redemption price (expressed as a percentage of principal amount and rounded to three decimal places (together with the redemption price
referred to in the preceding sentence, each a “
Redemption Price
”)) equal to the greater of: (i)(a) the sum of
the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date (assuming such
bonds matured on the Par Call Date), on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate (as defined in the Ninety-seventh Supplemental Indenture mentioned above) plus 15 basis points less (b) interest accrued to
such Redemption Date; and (ii) 100% of the principal amount of the bonds then outstanding to be redeemed, plus, in either case, accrued
and unpaid interest thereon to, but excluding, such Redemption Date. On and after any Redemption Date, if sufficient cash shall have been
deposited with Corporate Trustee (and/or if the Company has irrevocably directed the Corporate Trustee to apply, from moneys held by it
available to be used for the redemption of bonds, sufficient cash) to redeem all of the bonds of this series called for redemption, interest
on the bonds of this series, or the portions of them so called for redemption, shall cease to accrue. Reference is made to said Ninety-seventh
Supplemental Indenture for the full terms of the redemption provisions applicable to the bonds of this series.
If a Tax Credit Event occurs,
the Company may redeem, upon notice as provided in the Mortgage (given not less than 30 days and not more than 90 days prior to the date
fixed for redemption), the bonds of this series in whole but not in part at a redemption price equal to 101% of the principal amount of
the bonds of this series being redeemed, plus accrued and unpaid interest to but excluding the redemption date. A notice of redemption
of the bonds of this series upon the occurrence of a Tax Credit Event (i) may only be sent by the later of (a) the end of the
calendar year in which the bonds of this series were issued and (b) six months from the date of issuance of the bonds of this series
and (ii) shall be accompanied by a certificate from an officer of the Company stating that a Tax Credit Event has occurred. The consummation
of a redemption upon a Tax Credit Event may be subject to the Trustees’ receipt of the required redemption moneys on or before the
redemption date (and in such case no such redemption shall occur unless such moneys have been received by the Trustees on or before such
date).
A “Tax Credit Event”
occurs with respect to the bonds of this series if, in the Company's reasonable determination, there exists a material risk, due to the
bonds of this series (considered together with other debt) having been issued, as part of an original issuance, to one or more “specified
foreign entities,” as defined in Section 7701(a)(51)(B) of the Internal Revenue Code (the “Code”), that the
Company or any of its affiliates would be unable to utilize or otherwise ineligible to claim any tax credits otherwise allowed under Section 38
of the Code.
No recourse shall be had for
the payment of the principal or any Redemption Price of or interest on this bond against any incorporator or any past, present or future
subscriber to the capital stock, stockholder, officer or director of the Company or of any predecessor or successor corporation, as such,
either directly or through the Company or any predecessor or successor corporation, under any rule of law, statute or constitution
or by the enforcement of any assessment or otherwise, all such liability of incorporators, subscribers, stockholders, officers and directors
being released by the holder or owner hereof by the acceptance of this bond and being likewise waived and released by the terms of the
Mortgage.
This bond shall not become
obligatory until The Bank of New York Mellon (formerly Irving Trust Company), the Corporate Trustee under the Mortgage, or its successor
thereunder, shall have signed the form of certificate endorsed hereon.
[Signature Page Follows]
IN WITNESS WHEREOF, DUKE ENERGY
PROGRESS, LLC has caused this bond to be signed in its name with the manual or facsimile signature of its President or one of its Vice
Presidents and its company seal to be impressed or imprinted hereon and attested by its Secretary or one of its Assistant Secretaries.
DUKE ENERGY PROGRESS, LLC
DATED:
By:
Authorized Officer
ATTEST:
[ ]
CORPORATE
TRUSTEE’S CERTIFICATE
This bond is one of the bonds,
of the series herein designated, described or provided for in the within-mentioned Mortgage.
DATED:
THE BANK OF NEW YORK MELLON,
Corporate Trustee
By:
Authorized Officer

----- tm2625236d1_ex5-1.htm -----
EX-5.1
3
tm2625236d1_ex5-1.htm
EXHIBIT 5.1
Exhibit 5.1
DUKE ENERGY BUSINESS SERVICES LLC
525 South Tryon Street
Charlotte, North Carolina 28202
September 11, 2026
Duke Energy Progress, LLC
411 Fayetteville Street
Raleigh, North Carolina 27601
Re: Duke Energy Progress, LLC $700,000,000 aggregate principal amount
of First Mortgage Bonds, 5.55% Series due 2036 and $300,000,000 aggregate principal amount of First Mortgage Bonds, 6.15% Series due 2056
To the Addressee:
I am Deputy General Counsel of Duke Energy Business
Services LLC, the service company affiliate of Duke Energy Progress, LLC, a North Carolina limited liability company (the “Company”),
and in such capacity I have acted as counsel to the Company in connection with the public offering of $700,000,000 aggregate principal
amount of First Mortgage Bonds, 5.55% Series due 2036 and $300,000,000 aggregate principal amount of First Mortgage Bonds, 6.15% Series
due 2056 (collectively, the “Securities”), to be issued pursuant to a Mortgage and Deed of Trust, dated as of May 1, 1940
(the “Original Mortgage”), with The Bank of New York Mellon (formerly Irving Trust Company) (the “Corporate Trustee”)
and Barbara Zsombori (successor to Frederick G. Herbst), as trustees (together with the Corporate Trustee, the “Mortgage Trustees”),
as heretofore supplemented and amended and as further supplemented by the Ninety-seventh Supplemental Indenture, dated as of September
1, 2026 (the “Ninety-seventh Supplemental Indenture”), among the Company and the Mortgage Trustees, relating to the Securities
(collectively, the “Mortgage”). On September 8, 2026, the Company entered into an Underwriting Agreement dated September 8,
2026 (the “Underwriting Agreement”) with BNY Mellon Capital Markets, LLC, MUFG Securities Americas Inc., PNC Capital Markets
LLC, Scotia Capital (USA) Inc., SMBC Nikko Securities America, Inc. and U.S. Bancorp Investments, Inc., as representatives of the several
underwriters named therein (the “Underwriters”), relating to the sale by the Company to the Underwriters of the Securities.
This opinion letter is being delivered in accordance
with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended (the “Securities Act”).
I am a member of the bar of the State of North
Carolina and my opinions set forth herein are limited to the laws of the State of New York, the North Carolina limited liability company
law and the federal laws of the United States that, in my experience, are normally applicable to transactions of the type contemplated
above and, to the extent that judicial or regulatory orders or decrees or consents, approvals, licenses, authorizations, validations,
filings, recordings or registrations with governmental authorities are relevant, to those required under such laws (all of the foregoing
being referred to as “Opined on Law”). I do not express any opinion with respect to the law of any jurisdiction other than
Opined on Law or as to the effect of any such non-opined law on the opinions herein stated. This opinion letter is limited to the
laws, including the rules and regulations, as in effect on the date hereof, which laws are subject to change with possible retroactive
effect. The Mortgage and the forms of Securities do not include provisions specifying the governing law. For purposes of my opinions set
forth herein, I have assumed that the Mortgage and the Securities are governed exclusively by the internal substantive laws and judicial
interpretations of the State of North Carolina.
In connection with this opinion letter, I or attorneys
under my supervision (with whom I have consulted) have examined and are familiar with originals or copies, certified or otherwise identified
to our satisfaction, of:
(a)
the registration statement on Form S-3, as amended (File No. 333-290475-01) of the Company originally filed on September
24, 2025 with the Securities and Exchange Commission (the “Commission”) under the Securities Act, allowing for delayed offerings
pursuant to Rule 415 under the Securities Act and the information deemed to be a part of such registration statement as of the date
hereof pursuant to Rule 430B of the rules and regulations under the Securities Act (the “Securities Act Regulations”)
and the information incorporated or deemed to be incorporated by reference in such registration statement pursuant to Item 12 of Form S-3
under the Securities Act (such registration statement, effective upon filing with the Commission on September 24, 2025 pursuant to Rule
462(e) of the Securities Act Regulations, being hereinafter referred to as the “Registration Statement”);
(b)
the prospectus, dated September 23, 2025, including the information incorporated or deemed to be incorporated by reference therein,
which forms a part of and is included in the Registration Statement in the form filed with the Commission pursuant to Rule 424(b) of the
Securities Act Regulations;
(c)
the preliminary prospectus supplement, dated September 8, 2026, including the information incorporated or deemed to be incorporated
by reference therein, relating to the offering of the Securities in the form filed with the Commission pursuant to Rule 424(b) of the
Securities Act Regulations;
(d)
the prospectus supplement, dated September 8, 2026, including the information incorporated or deemed to be incorporated by reference
therein (the “Prospectus Supplement”), relating to the offering of the Securities in the form filed with the Commission pursuant
to Rule 424(b) of the Securities Act Regulations;
(e)
the Issuer Free Writing Prospectus relating to the offering of the Securities filed with the Commission on September 8, 2026 pursuant
to Rule 433(d) of the Securities Act Regulations and Section 5(e) of the Underwriting Agreement;
(f)
an executed copy of the Underwriting Agreement;
(g)
an executed copy of the Mortgage, including the Ninety-seventh Supplemental Indenture;
(h)
specimens of the Securities;
(i)
the Articles of Organization Including Articles of Conversion dated July 31, 2015;
(j)
the Limited Liability Company Operating Agreement of the Company, dated as of August 1, 2015;
(k)
resolutions of the Board of Directors of the Company (the “Board of Directors”), adopted at meetings of the Board of Directors
on April 25, 1940 and May 17, 1940, relating to, among other things, the authorization of the execution of the Original Mortgage;
(l)
resolutions of the Board of Directors, adopted on December 13, 2000, June 20, 2011, March 7, 2013, August 7, 2015, September 16, 2019,
August 17, 2020, January 6, 2022, September 19, 2025 and September 1, 2026, relating to, among other things, the preparation and filing
with the Commission of the Registration Statement and the establishment and delegation of authority to a Securities Pricing Committee
of the Board of Directors of the Company;
(m)
the written consent of the Securities Pricing Committee of the Board of Directors, effective September 8, 2026, acting pursuant to
specific delegation made and authorization given by the Board of Directors pursuant to the resolutions described in clause (l) above,
relating to the offering of the Securities; and
I or attorneys under my supervision (with whom
I have consulted) have also examined originals or copies, certified or otherwise identified to our satisfaction, of such records of the
Company and such agreements and certificates and receipts of public officials, certificates of officers or other representatives of the
Company and others, and such other documents, certificates and records as I or attorneys under my supervision (with whom I have consulted)
have deemed necessary or appropriate as a basis for the opinions set forth below.
In my examination, I or attorneys under my supervision
(with whom I have consulted) have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity
of all documents submitted to me as originals, the conformity to original documents of all documents submitted to me as facsimile, electronic,
certified or photostatic copies, and the authenticity of such copies. In making my examination of executed documents or documents to be
executed, I have assumed that the parties thereto, other than the Company, had the power or will have the power, limited liability company
or other, to enter into and perform all obligations thereunder and I have also assumed the due authorization by all requisite action,
limited liability company or other, and the execution and delivery by such parties of such documents and, except to the extent expressly
set forth below, the validity and binding effect thereof on such parties. As to any facts material to the opinions expressed herein which
were not independently established or verified, I or attorneys under my supervision (with whom I have consulted) have relied upon oral
or written statements and representations of officers and other representatives of the Company and others and of public officials.
The opinions set forth below are subject to the
following further qualifications, assumptions and limitations:
(i)
the validity or enforcement of any agreements or instruments may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting mortgagees’ and other creditors’ rights generally and by general principles of
equity (regardless of whether enforceability is considered in a proceeding in equity or at law); and
(ii)
I do not express any opinion as to the applicability or effect of any fraudulent transfer, preference or similar law on any agreements
or instruments or any transactions contemplated thereby.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, I am of the opinion that the Securities have been duly authorized and executed
by the Company, and that when duly authenticated by the Corporate Trustee and issued and delivered by the Company against payment therefor
in accordance with the terms of the Underwriting Agreement and the Mortgage, the Securities will constitute valid and binding obligations
of the Company entitled to the benefits of the Mortgage and enforceable against the Company in accordance with their terms; and
I hereby consent to the filing of this opinion
letter with the Commission as an exhibit to the Registration Statement through incorporation by reference of a current report on Form
8-K. I also hereby consent to the use of my name under the heading “Legal Matters” in the Prospectus Supplement. In giving
this consent, I do not hereby admit that I am in the category of persons whose consent is required under Section 7 of the Securities Act
or the rules and regulations of the Commission promulgated thereunder. This opinion letter is expressed as of the date hereof unless otherwise
expressly stated, and I disclaim any undertaking to advise you of any subsequent changes in the facts stated or assumed herein or of any
subsequent changes in applicable laws.
Very truly yours,
/s/ Elizabeth Jones
Elizabeth Jones, Esq.

----- tm2625236d1_ex99-1.htm -----
EX-99.1
4
tm2625236d1_ex99-1.htm
EXHIBIT 99.1
Exhibit 99.1
Execution Version
DUKE
ENERGY PROGRESS, LLC
$
700,000,000
First Mortgage Bonds,
5.55
%
Series due 2036
$
300,000,000
First Mortgage Bonds,
6.15
%
Series due 2056
UNDERWRITING AGREEMENT
September 8, 2026
BNY Mellon Capital Markets, LLC
MUFG Securities Americas Inc.
PNC Capital Markets LLC
Scotia Capital (USA) Inc.
SMBC Nikko Securities America, Inc.
U.S. Bancorp Investments, Inc.
As Representatives of the several Underwriters
c/o
MUFG
Securities Americas Inc.
1221 Avenue of the Americas, 6th Floor
New York, New York 10020
Ladies and Gentlemen:
1.
Introductory
. DUKE ENERGY PROGRESS, LLC, a North Carolina limited liability company (the “
Company
”),
proposes, subject to the terms and conditions stated herein, to issue and sell (i) $700,000,000 aggregate principal amount of First Mortgage
Bonds, 5.55% Series due 2036 (the “
2036 Bonds
”) and (ii) $300,000,000 aggregate principal amount of First Mortgage
Bonds, 6.15% Series due 2056 (the “
2056 Bonds
” and together with the 2036 Bonds, the “
Bonds
”) to
be issued under and secured by its Mortgage and Deed of Trust, dated as of May 1, 1940 (the “
Original Mortgage
”), between
the Company and The Bank of New York Mellon (formerly Irving Trust Company) (the “
Corporate Trustee
”) and Barbara Zsombori
(successor to Frederick G. Herbst), as trustees (together with the Corporate Trustee, the “
Trustees
”), as amended and
supplemented by various supplemental indentures, including the Ninety-Seventh Supplemental Indenture, to be dated as of September 1, 2026
(the “
Supplemental Indenture
”) (the Original Mortgage, as so amended and supplemented, being hereinafter called the
“
Mortgage
”). BNY Mellon Capital Markets, LLC, MUFG Securities Americas Inc., PNC Capital Markets LLC, Scotia Capital
(USA) Inc., SMBC Nikko Securities America, Inc. and U.S. Bancorp Investments, Inc. (the “
Representatives
”) are acting
as representatives of the several underwriters named in Schedule A hereto (together with the Representatives, the “
Underwriters
”).
The Company understands that the several Underwriters propose to offer the Bonds for sale upon the terms and conditions contemplated by
(i) this Agreement and (ii) the Base Prospectus, the Preliminary Prospectus and any Permitted Free Writing Prospectus (each as defined
below) issued at or prior to the Applicable Time (as defined below) (the documents referred to in the foregoing subclause (ii) are referred
to herein as the “
Pricing Disclosure Package
”).
2.
Representations and Warranties of the Company.
As of the date hereof, as of the Applicable Time (as defined below) and as
of the Closing Date (as defined below) the Company represents and warrants to, and agrees with, the several Underwriters that:
(a)
A registration statement (No. 333-290475-01), including a prospectus, relating to the Bonds and certain
other securities has been filed with the Securities and Exchange Commission (the “
Commission
”) under the Securities
Act of 1933, as amended (the “
1933 Act
”). Such registration statement and any post-effective amendment thereto, each
in the form heretofore delivered to you, became effective upon filing with the Commission pursuant to Rule 462 of the rules and regulations
of the Commission under the 1933 Act (the “
1933 Act Regulations
”), and no stop order suspending the effectiveness of
such registration statement has been issued and no proceeding for that purpose or pursuant to Section 8A of the 1933 Act has been initiated
or threatened by the Commission (if prepared, any preliminary prospectus supplement specifically relating to the Bonds immediately prior
to the Applicable Time included in such registration statement or filed with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations
being hereinafter called a “
Preliminary Prospectus
”); the term “
Registration Statement
” means the
registration statement as deemed revised pursuant to Rule 430B(f)(1) of the 1933 Act Regulations on the date of such registration statement’s
effectiveness for purposes of Section 11 of the 1933 Act, as such section applies to the Company and the Underwriters for the Bonds pursuant
to Rule 430B(f)(2) of the 1933 Act Regulations (the “
Effective Date
”), including all exhibits thereto and including
the documents incorporated by reference in the prospectus contained in the Registration Statement at the time such part of the Registration
Statement became effective; the term “
Base Prospectus
” means the prospectus filed with the Commission on the date hereof
by the Company; and the term “
Prospectus
” means the Base Prospectus together with the prospectus supplement specifically
relating to the Bonds prepared in accordance with the provisions of Rule 430B and promptly filed after execution and delivery of this
Agreement pursuant to Rule 430B or Rule 424(b) of the 1933 Act Regulations; any information included in such Prospectus that was omitted
from the Registration Statement at the time it became effective but that is deemed to be a part of and included in such registration statement
pursuant to Rule 430B is referred to as “
Rule 430B Information
;” and any reference herein to the Registration Statement,
the Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein,
prior to the date hereof; any reference to any amendment or supplement to any Preliminary Prospectus or Prospectus shall be deemed to
refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the “
1934 Act
”), and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; and any reference to any amendment to the Registration Statement shall be deemed to refer to and include
any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the 1934 Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration Statement. For purposes of this Agreement, the term “
Applicable
Time
” means 4:15 p.m. (New York City time) on the date hereof.
2
(b)
The Registration Statement, the Permitted Free Writing Prospectus specified on Schedule B hereto, the
Preliminary Prospectus and the Prospectus conform, and any amendments or supplements thereto will conform, in all material respects to
the requirements of the 1933 Act and the 1933 Act Regulations; and (A) the Registration Statement, as of its original effective date,
as of the date of any amendment, at each deemed effective date with respect to the Underwriters pursuant to Rule 430B(f)(2) of the 1933
Act Regulations, and at the Closing Date, did not and will not contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein not misleading, and (B) (i) the Pricing Disclosure Package,
as of the Applicable Time, did not, (ii) the Prospectus and any amendment or supplement thereto, as of their dates, will not, and (iii)
the Prospectus as of the Closing Date will not, include any untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the Company
makes no warranty or representation to the Underwriters with respect to any statements or omissions made in reliance upon and in conformity
with written information furnished to the Company by the Representatives on behalf of the Underwriters specifically for use in the Registration
Statement, the Permitted Free Writing Prospectus, the Preliminary Prospectus or the Prospectus.
(c)
Any Permitted Free Writing Prospectus specified on Schedule B hereto as of its issue date and at all subsequent
times through the completion of the public offer and sale of the Bonds or until any earlier date that the Company notified or notifies
the Underwriters pursuant to Section 5(f) hereof did not, does not and will not include any information that conflicts with the information
(not superseded or modified as of the Effective Date) contained in the Registration Statement, any Preliminary Prospectus or the Prospectus.
(d)
At the earliest time the Company or another offering participant made a bona fide offer (within the meaning
of Rule 164(h)(2) of the 1933 Act Regulations) of the Bonds, the Company was not an “ineligible issuer” as defined in Rule
405 of the 1933 Act Regulations. The Company is, and was at the time of the initial filing of the Registration Statement, eligible to
use Form S-3 under the 1933 Act.
(e)
The documents and interactive data in eXtensible Business Reporting Language (“
XBRL
”)
incorporated or deemed to be incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus,
at the time they were filed or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements
of the 1934 Act and the rules and regulations of the Commission thereunder (the “
1934 Act Regulations
”), and, when
read together with the other information in the Prospectus, (i) at the time the Registration Statement became effective, (ii) at the Applicable
Time and (iii) on the Closing Date did not, and will 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, in the light of the circumstances under which they were made,
not misleading.
3
(f)
The Company’s most recent Annual Report filed on Form 10-K meets the conditions specified in General
Instruction I(1)(a) and (b) of the General Instructions for Form 10-K.
(g)
The compliance by the Company with all of the provisions of this Agreement has been duly authorized by
all necessary limited liability company action and the consummation of the transactions herein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company is a party or by which it is bound or to which any of its
properties or assets is subject that would have a material adverse effect on the business, financial condition or results of operations
of the Company, nor will such action result in any violation of the Company’s Articles of Organization including Articles of Conversion
for the Company (the “
Articles of Organization
”), or the Company’s Limited Liability Company Operating Agreement
(the “
Operating Agreement
”) or other governing document of the Company or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the Company or any of its properties that would have a material adverse
effect on the business, financial condition or results of operations of the Company; and no consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or body is required for the consummation by the Company of the transactions
contemplated by this Agreement, except for authorization by the North Carolina Utilities Commission and the Public Service Commission
of South Carolina and the registration under the 1933 Act of the Bonds, qualification under the Trust Indenture Act of 1939, as amended
(the “
1939 Act
”) and such consents, approvals, authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and distribution of the Bonds by the Underwriters.
(h)
This Agreement has been duly authorized, executed and delivered by the Company.
(i)
The Original Mortgage has been duly authorized, executed and delivered by the Company and duly qualified
under the 1939 Act and the Supplemental Indenture has been duly authorized and when executed and delivered by the Company and, assuming
the due authorization, execution and delivery thereof by the Trustees, the Mortgage constitutes a valid and legally binding instrument
of the Company enforceable against the Company in accordance with its terms, subject to the qualifications that the enforceability of
the Company’s obligations under the Mortgage may be limited by (x) the laws of the states of North Carolina and South Carolina (in
which states all physical property of the Company subject to the Mortgage is located except for certain interconnection lines) with respect
to or affecting the remedies to enforce the security provided by the Mortgage, which laws do not make inadequate the remedies necessary
for the realization of the benefits of such security, and by bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting mortgagees’ and other creditors’ rights generally, and by general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at law), and (y) that the provisions of the Mortgage subjecting
to the lien thereof the revenues and income from the mortgaged property may not be effective prior to the delivery or taking of possession
of such revenues or income or of the mortgaged property by or on behalf of the Trustees.
4
(j)
The Bonds have been duly authorized and when executed by the Company, and when authenticated by the Corporate
Trustee, in the manner provided in the Mortgage and delivered against payment therefor, will constitute valid and legally binding obligations
of the Company, enforceable against the Company in accordance with their terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting mortgagees’ and other creditors’ rights generally
and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law) and are entitled
to the benefits and security afforded by the Mortgage in accordance with the terms of the Mortgage and the Bonds, except as set forth
in paragraph (i) above.
(k)
Any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument set forth on Annex
A hereto or filed or incorporated by reference as an exhibit to the Registration Statement or the Annual Report on Form 10-K of the Company
for the fiscal year ended December 31, 2025 or any subsequent Quarterly Report on Form 10-Q of the Company or any Current Report on Form
8-K of the Company with an execution or a filing date after December 31, 2025 are all indentures, mortgages, deeds of trust, loan agreements
or other agreements or instruments that are material to the Company and its subsidiaries taken as a whole.
(l)
The Company has no “significant subsidiaries” within the meaning of Rule 1-02 of Regulation
S-X under the 1933 Act.
(m)
The Company (i) is a limited liability company duly organized and validly existing in good standing under the laws of the State of
North Carolina and (ii) is duly qualified to do business in each jurisdiction where the failure to be so qualified would materially adversely
affect the ability of the Company to perform its obligations under this Agreement, the Mortgage or the Bonds.
(n)
Any pro forma financial statements and the related notes thereto incorporated by reference in the Registration Statement, the Pricing
Disclosure Package and the Prospectus have been prepared in accordance with the Commission’s rules and guidelines with respect to
pro forma financial statements and have been properly compiled on the bases described therein.
5
3.
Purchase, Sale and Delivery of Bonds.
On the basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to sell to the Underwriters, and the Underwriters agree, severally
and not jointly, to purchase from the Company, at a purchase price of (i) 99.000% of the principal amount of the 2036 Bonds, plus accrued
interest, if any, from September 11, 2026 and (ii) 99.029% of the principal amount of the 2056 Bonds, plus accrued interest, if any, from
September 11, 2026, (and in the manner set forth below), the respective principal amounts of Bonds set forth opposite the name of each
Underwriter on Schedule A hereto plus the respective principal amounts of additional Bonds which each such Underwriter may become obligated
to purchase pursuant to the provisions of Section 8 hereof. The Underwriters hereby also agree to make a payment to the Company in an
aggregate amount equal to $1,775,000, including in respect of expenses incurred by the Company in connection with the offering of the
Bonds.
Payment
of the respective purchase prices for the Bonds to be purchased by the Underwriters and the payment referred to above shall be made to
the Company by wire transfer of immediately available funds, payable to the order of the Company against delivery of the Bonds, in fully
registered forms, to you or upon your order at 10:00 a.m., New York City time, on September 11, 2026 or such other time and date as shall
be mutually agreed upon in writing by the Company and the Representatives (the “
Closing Date
”). The 2036 Bonds and
the 2056 Bonds shall each be delivered in the form of one or more global certificates in aggregate denominations equal to the aggregate
principal amount of the respective 2036 Bonds and 2056 Bonds upon original issuance, and registered in the name of Cede & Co., as
nominee for The Depository Trust Company (“
DTC
”). All other documents referred to herein that are to be delivered at
the Closing Date shall be delivered at that time at the offices of Sidley Austin
LLP
, 787
Seventh Avenue, New York, New York 10019.
4.
Offering by the Underwriters.
It is understood that the several Underwriters propose to offer the Bonds for sale to the
public as set forth in the Pricing Disclosure Package and the Prospectus.
5.
Covenants of the Company.
The Company covenants and agrees with the several Underwriters that:
(a)
The Company will cause any Preliminary Prospectus and the Prospectus to be filed pursuant to, and in compliance
with, Rule 424(b) of the 1933 Act Regulations, and advise the Underwriters promptly of the filing of any amendment or supplement to the
Registration Statement, any Preliminary Prospectus or the Prospectus and of the institution by the Commission of any stop order proceedings
in respect of the Registration Statement, and will use its best efforts to prevent the issuance of any such stop order and to obtain as
soon as possible its lifting, if issued.
(b)
If at any time when a prospectus relating to the Bonds (or the notice referred to in Rule 173(a) of the
1933 Act Regulations) is required to be delivered under the 1933 Act any event occurs as a result of which the Pricing Disclosure Package
or the Prospectus as then amended or supplemented would include an untrue statement of a material fact, or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it
is necessary at any time to amend the Pricing Disclosure Package or the Prospectus to comply with the 1933 Act, the Company promptly will
prepare and file with the Commission an amendment, a supplement or an appropriate document pursuant to Section 13 or 14 of the 1934 Act
which will correct such statement or omission or which will effect such compliance.
6
(c)
The Company, during the period when a prospectus relating to the Bonds is required to be delivered under
the 1933 Act, will timely file all documents required to be filed with the Commission pursuant to Section 13 or 14 of the 1934 Act.
(d)
Without the prior consent of the Underwriters, the Company has not made and will not make any offer relating
to the Bonds that would constitute a “free writing prospectus” as defined in Rule 405 of the 1933 Act Regulations, other than
a Permitted Free Writing Prospectus; each Underwriter, severally and not jointly, represents and agrees that, without the prior consent
of the Company, it has not made and will not make any offer relating to the Bonds that would constitute a “free writing prospectus”
as defined in Rule 405 of the 1933 Act Regulations, other than a Permitted Free Writing Prospectus or a free writing prospectus that is
not required to be filed by the Company pursuant to Rule 433 of the 1933 Act Regulations (“
Rule 433
”); any such free
writing prospectus (which shall include the pricing term sheet referred to in Section 5(e) below), the use of which has been consented
to by the Company and the Underwriters, is specified in Item 3 of Schedule B and herein is called a “
Permitted Free Writing Prospectus
.”
The Company represents that it has treated or agrees that it will treat each Permitted Free Writing Prospectus as an “issuer free
writing prospectus,” as defined in Rule 433, and has complied and will comply with the requirements of Rule 433 applicable to any
Permitted Free Writing Prospectus, including timely filing with the Commission where required, legending and record keeping.
(e)
The Company agrees to prepare a pricing term sheet specifying the terms of the Bonds not contained in
any Preliminary Prospectus, substantially in the form of Schedule C hereto and approved by the Representatives on behalf of the Underwriters,
and to file such pricing term sheet as an “issuer free writing prospectus” pursuant to Rule 433 prior to the close of business
two business days after the date hereof.
(f)
The Company agrees that if at any time following the issuance of a Permitted Free Writing Prospectus any
event occurs as a result of which such Permitted Free Writing Prospectus would conflict with the information (not superseded or modified
as of the Effective Date) in the Registration Statement, the Pricing Disclosure Package or the Prospectus or would include an 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
then prevailing, not misleading, the Company will give prompt notice thereof to the Underwriters and, if requested by the Underwriters,
will prepare and furnish without charge to each Underwriter a free writing prospectus or other document, the use of which has been consented
to by the Underwriters, which will correct such conflict, statement or omission; provided, however, that this covenant shall not apply
to any statements or omissions made in reliance upon and in conformity with written information furnished to the Company by the Representatives
on behalf of the Underwriters specifically for use in the Registration Statement, the Pricing Disclosure Package or the Prospectus.
7
(g)
The Company will make generally available to its security holders, in each case as soon as practicable
but not later than 60 days after the close of the period covered thereby, earnings statements (in form complying with the provisions of
Rule 158 under the 1933 Act, which need not be certified by independent certified public accountants unless required by the 1933 Act)
covering (i) a twelve-month period beginning not later than the first day of the Company’s fiscal quarter next following the effective
date of the Registration Statement and (ii) a twelve-month period beginning not later than the first day of the Company’s fiscal
quarter next following the date of this Agreement.
(h)
The Company will furnish to you, without charge, copies of the Registration Statement (three of which
will include all exhibits other than those incorporated by reference), the Pricing Disclosure Package and the Prospectus, and all amendments
and supplements to such documents, in each case as soon as available and in such quantities as you reasonably request.
(i)
The Company will arrange or cooperate in arrangements, if necessary, for the qualification of the Bonds
for sale under the laws of such jurisdictions as you designate and will continue such qualifications in effect so long as required for
the distribution; provided, however, that the Company shall not be required to qualify as a foreign limited liability company or to file
any general consents to service of process under the laws of any state where it is not now so subject.
(j)
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 and any Blue Sky Survey, (ii) the
preparation and printing of certificates for the Bonds, (iii) the issuance and delivery of the Bonds as specified herein, (iv) the fees
and disbursements of counsel for the Underwriters in connection with the qualification of the Bonds under the securities laws of any jurisdiction
in accordance with the provisions of Section 5(i) and in connection with the preparation of the Blue Sky Survey, such fees not to exceed
$7,500, (v) the printing and delivery to the Underwriters, in quantities as hereinabove referred to, of copies of the Registration Statement
and any amendments thereto, of any Preliminary Prospectus, of the Prospectus, of any Permitted Free Writing Prospectus and any amendments
or supplements thereto, (vi) any fees charged by independent rating agencies for rating the Bonds, (vii) any fees and expenses in connection
with the listing of the Bonds on the New York Stock Exchange LLC, (viii) any filing fee required by the Financial Industry Regulatory
Authority, Inc., (ix) the costs of any depository arrangements for the Bonds with DTC or any successor depositary, (x) the costs and expenses
of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering
of the Bonds, including, without limitation, expenses associated with the production of road show slides and graphics, fees and expenses
of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses
of the Underwriters and officers of the Company and any such consultants, and the cost of any aircraft chartered in connection with the
road show; provided, however, the Underwriters shall reimburse a portion of the costs and expenses referred to in this clause (x), and
(xi) the preparation, execution, filing and recording by the Company of the Supplemental Indenture; and the Company will pay all taxes,
if any (but not including any transfer taxes), on the filing and recordation of the Supplemental Indenture.
8
(k)
Promptly after the Closing Date, the Company will cause the Supplemental Indenture to be recorded in all
recording offices in the states of North Carolina and South Carolina in which the property intended to be subject to the lien of the Mortgage
is located.
6.
Conditions of the Obligations of the Underwriters.
The obligations of the several Underwriters to purchase and pay for the
Bonds will be subject to the accuracy of the representations and warranties on the part of the Company herein, to the accuracy of the
statements of officers of the Company made pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder
and to the following additional conditions precedent:
(a)
The Prospectus shall have been filed by the Company with the Commission pursuant to Rule 424(b) within
the applicable time period prescribed for filing by the 1933 Act Regulations and in accordance herewith and each Permitted Free Writing
Prospectus shall have been filed by the Company with the Commission within the applicable time periods prescribed for such filings by,
and otherwise in compliance with, Rule 433.
(b)
At or after the Applicable Time and prior to the Closing Date, no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceedings for that purpose or pursuant to Section 8A of the 1933 Act shall
have been instituted or, to the knowledge of the Company or you, shall be threatened by the Commission.
(c)
At or after the Applicable Time and prior to the Closing Date, the rating assigned by Moody’s Investors
Service, Inc. or S&P Global Ratings (or any of their successors) to any debt securities or preferred stock of the Company as of the
date of this Agreement shall not have been lowered.
(d)
Since the respective most recent dates as of which information is given in the Pricing Disclosure Package
and the Prospectus and up to the Closing Date, there shall not have been any material adverse change in the condition of the Company,
financial or otherwise, except as reflected in or contemplated by the Pricing Disclosure Package and the Prospectus, and, since such dates
and up to the Closing Date, there shall not have been any material transaction entered into by the Company other than transactions contemplated
by the Pricing Disclosure Package and the Prospectus and transactions in the ordinary course of business, the effect of which in your
reasonable judgment is so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery
of the Bonds on the terms and in the manner contemplated by the Pricing Disclosure Package and the Prospectus.
9
(e)
You shall have received an opinion of Elizabeth H. Jones, Esq., Deputy General Counsel of Duke Energy
Business Services LLC, the service company subsidiary of Duke Energy Corporation (who in such capacity provides legal services to the
Company) (or other appropriate counsel reasonably satisfactory to the Representatives, which may include Duke Energy Corporation’s
other “in-house” counsel), dated the Closing Date, to the effect that:
(i)
The Company has been duly organized and is validly existing as a limited liability company in good standing
under the laws of the State of North Carolina, with power and authority (limited liability company and other) to own its properties and
conduct its business as described in the Pricing Disclosure Package and the Prospectus and to enter into and perform its obligations under
this Agreement.
(ii)
The Company is duly qualified to do business in each jurisdiction in which the ownership or leasing of
its property or the conduct of its business requires such qualification, except where the failure to so qualify, considering all such
cases in the aggregate, does not have a material adverse effect on the business, properties, financial condition or results of operations
of the Company.
(iii)
The Registration Statement became effective upon filing with the Commission pursuant to Rule 462 of the
1933 Act Regulations, and, to the best of such counsel’s knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been instituted or are pending or threatened under the 1933 Act.
(iv)
The descriptions in the Registration Statement, the Pricing Disclosure Package and the Prospectus of any
legal or governmental proceedings are accurate and fairly present the information required to be shown, and such counsel does not know
of any litigation or any legal or governmental proceeding instituted or threatened against the Company or any of its properties that would
be required to be disclosed in the Registration Statement, the Pricing Disclosure Package or the Prospectus and is not so disclosed.
(v)
This Agreement has been duly authorized, executed and delivered by the Company.
10
(vi)
The issuance and sale of the Bonds by the Company and the execution, delivery and performance by the Company
of this Agreement, the Mortgage and the Bonds will not contravene any of the provisions of the Articles of Organization or the Operating
Agreement, the North Carolina Limited Liability Company Act or any statute or any order, rule or regulation of which such counsel is aware
of any court or governmental agency or body having jurisdiction over the Company or any of its property, nor will such action conflict
with or result in a breach or violation of any of the terms or provisions of, or constitute a default under any indenture, mortgage, deed
of trust, loan agreement or other agreement to which the Company is a party or by which it or its property is bound or to which any of
its property or assets is subject or any instrument filed or incorporated by reference as an exhibit to the Annual Report on Form 10-K
of the Company for the fiscal year ended December 31, 2025 or any subsequent Quarterly Report on Form 10-Q of the Company or any Current
Report on Form 8-K of the Company with an execution or filing date after December 31, 2025 or identified in Annex A to this Agreement,
which affects in a material way the Company’s ability to perform its obligations under this Agreement, the Mortgage or the Bonds.
(vii)
The North Carolina Utilities Commission and the Public Service Commission of South Carolina have issued
appropriate orders with respect to the issuance and sale of the Bonds in accordance with this Agreement, and, to the best of such counsel’s
knowledge, such orders are still in effect and the issuance and sale of the Bonds to the Underwriters are in conformity with the terms
of such orders; and no other authorization, approval or consent of any other governmental body (other than in connection or compliance
with the provisions of the securities or Blue Sky laws of any jurisdiction) is legally required for the issuance and sale of the Bonds
pursuant to this Agreement.
(viii)
The Mortgage has been duly authorized, executed and delivered by the Company and qualified under the 1939
Act, and, assuming the due authorization, execution and delivery thereof by the Trustees, constitutes a valid and legally binding instrument
of the Company, enforceable against the Company in accordance with its terms, except (x) as the same may be limited by the laws of the
States of North Carolina and South Carolina (in which States all physical property of the Company subject to the Mortgage is located except
for certain interconnection lines) with respect to or affecting the remedies to enforce the security provided by the Mortgage, which laws
do not make inadequate the remedies necessary for the realization of the benefits of such security, and (y) that the provisions of the
Mortgage subjecting to the lien thereof the revenues and income from the mortgaged property may not be effective prior to the delivery
or taking of possession of such revenues or income or of the mortgaged property by or on behalf of the Trustees.
11
(ix)
The Bonds have been duly authorized, executed and issued by the Company and, when the same have been authenticated
by the Corporate Trustee as specified in the Mortgage and delivered against payment therefor, will constitute valid and legally binding
obligations of the Company enforceable against the Company in accordance with their terms, and are entitled to the benefits and security
afforded by the Mortgage in accordance with the terms of the Mortgage and the Bonds, except as set forth in paragraph (viii) above.
(x)
The Company has good title to all properties owned by it, subject only (a) to the lien of the Mortgage,
(b) to Excepted Encumbrances as defined in the Mortgage, (c) to minor exceptions and defects which do not, in the aggregate, materially
interfere with the use by the Company of such properties for the purposes for which they are held, materially detract from the value of
said properties or in any material way impair the security afforded by the Mortgage, (d) in the case of the Company’s existing hydroelectric
plants, to provisions of licenses issued by the Federal Power Commission or the Federal Energy Regulatory Commission and to the provisions
of the Federal Power Act and (e) to 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).
(xi)
The Mortgage complies as to form with all applicable laws of the states wherein the properties subjected
or intended to be subjected to the lien of the Mortgage are located, including all applicable recording laws, and constitutes a valid,
direct first mortgage lien on all properties and franchises purported to be owned by the Company, except such property as is specifically
excepted from the lien thereof, subject only to the liens, charges and encumbrances stated in paragraph (x) above; all fixed electric
properties hereafter acquired by the Company will, upon such acquisition, become subject to the lien of the Mortgage, subject, however,
to liens or charges of the character permitted to exist by the Mortgage, and to liens, if any, existing or placed on such property at
the time of the acquisition thereof by the Company, and the description of such property and franchises in the Mortgage is adequate to
constitute a lien on such property and franchises of the Company except as aforesaid.
(xii)
The Original Mortgage and the supplemental indentures thereto, other than the Supplemental Indenture,
have been duly recorded or filed for recordation in all such offices as are necessary to perfect and to preserve and protect the lien
of the Mortgage upon the property intended to be subjected to the lien thereof, and upon the filing and recording of the Supplemental
Indenture, no other recording or any periodic or other refiling or rerecording of the Mortgage is or will be required in order to perfect
and to preserve and protect the lien of the Mortgage upon such property, and there are no mortgage, recording or other taxes required
to be paid in connection with such filing and recording or in connection with the issuance of the Bonds other than customary filing and
recording fees.
12
(xiii)
No consent, approval, authorization, order, registration or qualification of or with any federal, North
Carolina or South Carolina governmental agency or body or, to such counsel’s knowledge, any federal or North Carolina court, which
has not been obtained or taken and is not in full force and effect, is required to authorize or for the Company to consummate the transactions
contemplated by this Agreement, except for such consents, approvals, authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the purchase and distribution of the Bonds by the Underwriters.
Such counsel may state that
such counsel’s opinions in paragraphs (viii) and (ix) above are subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting mortgagees’ and other creditors’ rights generally,
and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law) and to an
implied covenant of good faith and fair dealing. Such counsel may also state that such counsel’s opinion in paragraph (x) above
is based upon the Company’s title insurance. Such counsel shall state that nothing has come to such counsel’s attention that
has caused such counsel to believe that each document incorporated by reference in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, when filed, was not, on its face, appropriately responsive, in all material respects, to the requirements
of the 1934 Act and the 1934 Act Regulations. Such counsel shall also state that nothing has come to such counsel’s attention that
has caused such counsel to believe that (i) the Registration Statement, as of the effective date with respect to the Underwriters pursuant
to Rule 430B(f)(2) of the 1933 Act Regulations, contained any 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, (ii) the Pricing Disclosure Package at the Applicable
Time contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading or (iii) that the Prospectus as of its date or at
the Closing Date, contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Such counsel may
also state that, except as otherwise expressly provided in such opinion, such counsel does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in or incorporated by reference into the Registration Statement, the Pricing Disclosure
Package or the Prospectus and does not express any opinion or belief as to (i) the financial statements or other financial and accounting
data contained or incorporated by reference therein, or excluded therefrom, including XBRL interactive data, (ii) the statements of the
eligibility and qualification of the Trustees included in the Registration Statement (the “
Forms T-1 and T-2
”) or (iii)
the information in the Pricing Disclosure Package and the Prospectus under the caption “Book-Entry System.”
In rendering the foregoing
opinion, such counsel may state that such counsel does not express any opinion concerning any law other than the law of the State of North
Carolina or, to the extent set forth in the foregoing opinions, the federal securities laws and the law of the State of South Carolina
and may rely as to all matters of the law of the State of South Carolina on the opinion of Karol P. Mack, Esq., Deputy General Counsel
of Duke Energy Business Services LLC, the service company subsidiary of Duke Energy Corporation (who in such capacity provides legal services
to the Company), or other appropriate counsel reasonably satisfactory to the Representatives, which may include Duke Energy Corporation’s
other “in-house” counsel. Such counsel may also state that such counsel has relied as to certain factual matters on information
obtained from public officials, officers of the Company and other sources believed by such counsel to be reliable.
13
(f)
You shall have received an opinion of Hunton Andrews Kurth LLP, counsel to the Company, dated the Closing
Date, to the effect that:
(i)
The statements set forth (i) under the caption “Description of First Mortgage Bonds” in the
Base Prospectus and (ii) under the caption “Description of the Mortgage Bonds” in the Pricing Disclosure Package and the Prospectus,
insofar as such statements purport to summarize certain provisions of the Mortgage and the Bonds, fairly summarize such provisions in
all material respects.
(ii)
No Governmental Approval (as defined below), which has not been obtained or taken and is not in full force
and effect, is required to authorize, or is required for, the execution or delivery of this Agreement by the Company or the consummation
by the Company of the transactions contemplated hereby, except for such consents, authorizations, orders, registrations or qualifications
as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Bonds by the Underwriters.
(iii)
The Company is not and, solely after giving effect to the offering and sale of the Bonds and the application
of the proceeds thereof as described in the Prospectus, will not be subject to registration and regulation as an “investment company”
as such term is defined in the Investment Company Act of 1940, as amended.
(iv)
The execution and delivery by the Company of this Agreement and the consummation by the Company of the
transactions contemplated thereby, including the issuance and sale of the Bonds, will not violate or conflict with, or result in any contravention
of, any Applicable Laws (as defined below) of the States of North Carolina and New York.
(v)
The statements set forth in the Pricing Disclosure Package and the Prospectus under the caption “Underwriting
(Conflicts of Interest),” insofar as such statements purport to summarize certain provisions of this Agreement, fairly summarize
such provisions in all material respects.
(vi)
T
he statements set forth
in the Pricing Disclosure Package and the Prospectus under the caption “Certain U.S. Federal Income Tax Considerations,” insofar
as such statements purport to constitute summaries of matters of United States federal income tax law, constitute accurate and complete
summaries, in all material respects, subject to the qualifications set forth therein.
14
In rendering the
foregoing opinions, Hunton Andrews Kurth LLP may state that (i) “Governmental Approval” means any consent, approval, license,
authorization or validation of, or filing, qualification or registration with, any Governmental Authority (as defined below) required
to be made or obtained by the Company pursuant to Applicable Laws, other than any consent, approval, license, authorization, validation,
filing, qualification or registration that may have become applicable as a result of the involvement of any party (other than the Company)
in the transactions contemplated by this Agreement or because of such parties’ legal or regulatory status or because of any other
facts specifically pertaining to such parties; (ii) “Governmental Authorities” means any court, regulatory body, administrative
agency or governmental body of the States of North Carolina and New York having jurisdiction over the Company under Applicable Laws and
the Federal Energy Regulatory Commission, but excluding the North Carolina Utilities Commission and the New York State Public Service
Commission; and (iii) “Applicable Laws” means those laws, rules and regulations of the States of North Carolina and New York
and those federal laws, rules and regulations of the United States, in each case, that, in such counsel’s experience, are normally
applicable to transactions of the type contemplated by this Agreement (other than the antifraud provisions of the United States federal
securities laws, state securities or Blue Sky laws, antifraud laws, the rules and regulations of the Financial Industry Regulatory Authority,
Inc., the North Carolina Public Utilities Act, the rules and regulations of the North Carolina Utilities Commission and the New York State
Public Service Commission and the New York State Public Service Law), but without such counsel having made any special investigation as
to the applicability of any specific law, rule or regulation, and the Federal Power Act and the rules and regulations of the Federal Energy
Regulatory Commission thereunder. In addition, such counsel may state that it has relied as to certain factual matters on information
obtained from public officials, officers and representatives of the Company and that the signatures on all documents examined by such
counsel are genuine, assumptions which such counsel shall not independently verified.
15
You shall also have
received a statement of Hunton Andrews Kurth LLP, dated the Closing Date, to the effect that:
(i) no facts have
come to such counsel’s attention that have caused such counsel to believe that the documents filed by the Company under the 1934
Act and the 1934 Act Regulations that are incorporated by reference in the preliminary prospectus supplement that forms a part of the
Pricing Disclosure Package and the Prospectus, when filed, were not, on their face, appropriately responsive in all material respects
to the requirements of the 1934 Act and the 1934 Act Regulations (except that in each case such counsel need not express any view with
respect to the financial statements, schedules and other financial and accounting information included or incorporated by reference therein
or excluded therefrom, including XBRL interactive data), (ii) no facts have come to such counsel’s attention that have caused such
counsel to believe that the Registration Statement, at the Applicable Time, and the Prospectus, as of its date, were not, on their face,
appropriately responsive in all material respects to the requirements of the 1933 Act and the 1933 Act Regulations (except that in each
case such counsel need not express any view with respect to the financial statements, schedules and other financial and accounting information
included or incorporated by reference therein or excluded therefrom, including XBRL interactive data, or that part of the Registration
Statement that constitutes the statements of eligibility on the Forms T-1 and T-2) and (iii) no facts have come to such counsel’s
attention that have caused such counsel to believe that the Registration Statement, at the Applicable Time, 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, as of its date and as of the Closing Date, contained or contains 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 that in each case such counsel need not express any view with respect to the financial statements, schedules
and other financial and accounting information included or incorporated by reference therein or excluded therefrom, including XBRL interactive
data, or that part of the Registration Statement that constitutes the statements of eligibility on the Forms T-1 and T-2). Such counsel
shall further state that, in addition, no facts have come to such counsel’s attention that have caused such counsel to believe that
the Pricing Disclosure Package, as of the Applicable Time, contained an untrue statement of a material fact or omitted 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
that such counsel need not express any view with respect to the financial statements, schedules and other financial and accounting information
included or incorporated by reference therein or excluded therefrom, including XBRL interactive data).
In addition, such
statement shall confirm that the Prospectus has been filed with the Commission within the time period required by Rule 424 of the 1933
Act Regulations and any required filing of a Permitted Free Writing Prospectus pursuant to Rule 433 of the 1933 Act Regulations has been
made with the Commission within the time period required by Rule 433(d) of the 1933 Act Regulations. Such statement shall further state
that assuming the accuracy of the factual matters contained in the representations and warranties of the Company set forth in Section
2(d) of this Agreement, the Registration Statement became effective upon filing with the Commission pursuant to Rule 462 of the 1933 Act
Regulations and, pursuant to Section 309 of the 1939 Act, the Mortgage has been qualified under the 1939 Act, and that based solely on
such counsel’s review of the Commission’s website, no stop order suspending the effectiveness of the Registration Statement
has been issued and, to such counsel’s knowledge, no proceedings for that purpose have been instituted or are pending or threatened
by the Commission.
16
In addition, such
counsel may state that such counsel does not pass upon, or assume any responsibility for, the accuracy, completeness or fairness of the
statements contained or incorporated by reference in the Registration Statement, the Pricing Disclosure Package or the Prospectus and
has made no independent check or verification thereof (except to the limited extent referred to in Sections 6(f)(i), (v) and (vi) above).
(g)
You shall have received a letter from Sidley Austin
llp
,
counsel for the Underwriters, dated the Closing Date, with respect to such opinions and statements as you may reasonably request, and
the Company shall have furnished to such counsel such documents as it may request for the purpose of enabling it to pass upon such matters.
In delivering its letter pursuant to this Section 6(g), Sidley Austin
llp
may rely on the
opinion of Elizabeth H. Jones, Esq. as to matters of North Carolina law and on the opinion of Karol P. Mack, Esq., Deputy General Counsel
of Duke Energy Business Services LLC, the service company subsidiary of Duke Energy Corporation (or other appropriate counsel reasonably
satisfactory to the Representatives, which may include Duke Energy Corporation’s other “in-house” counsel), as to matters
of South Carolina law.
(h)
At or after the date hereof, there shall not have occurred any of the following: (i) a suspension or material
limitation in trading in securities generally or of the securities of the Company or Duke Energy Corporation, on the New York Stock Exchange
LLC; or (ii) a general moratorium on commercial banking activities in New York declared by either Federal or New York State authorities
or a material disruption in commercial banking services or securities settlement or clearance services in the United States; or (iii)
the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency
or war, if the effect of any such event specified in this subsection (h) in your reasonable judgment makes it impracticable or inadvisable
to proceed with the public offering or the delivery of the Bonds on the terms and in the manner contemplated in the Pricing Disclosure
Package and the Prospectus. In such event there shall be no liability on the part of any party to any other party except as otherwise
provided in Section 7 hereof and except for the expenses to be borne by the Company as provided in Section 5(j) hereof.
(i)
You shall have received a certificate of the Chairman of the Board, the President, any Vice President,
the Secretary or an Assistant Secretary and any financial or accounting officer of the Company, dated the Closing Date, in which such
officers, to the best of their knowledge after reasonable investigation, shall state that the representations and warranties of the Company
in this Agreement are true and correct as of the Closing Date, that the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to the Closing Date, that the conditions specified in Section 6(c) and Section 6(d)
have been satisfied, and that no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are threatened by the Commission.
17
(j)
At the time of the execution of this Agreement, you shall have received (i) a letter dated such date, in form and substance satisfactory
to you, from Deloitte & Touche LLP, the Company’s independent registered public accounting firm, containing statements and information
of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements
and certain financial information of the Company contained in or incorporated by reference into the Registration Statement, the Pricing
Disclosure Package and the Prospectus, including specific references to inquiries regarding any increase in long-term debt (excluding
current maturities), decrease in net current assets (defined as current assets less current liabilities) or member’s equity, and
decrease in operating revenues or net income for the period subsequent to the latest financial statements incorporated by reference in
the Registration Statement when compared with the corresponding period from the preceding year, and (ii) a letter dated such date, in
form and substance satisfactory to you, from Deloitte & Touche LLP, Duke Energy Carolinas, LLC’s independent registered public
accounting firm, containing statements and information of the type ordinarily included in accountants’ “comfort letters”
to underwriters with respect to the financial statements and certain financial information of Duke Energy Carolinas, LLC contained in
or incorporated by reference into the Registration Statement, the Pricing Disclosure Package and the Prospectus, in each case as of a
specified date not more than three business days prior to the date of this Agreement.
(k)
At the Closing Date, you shall have received from Deloitte & Touche LLP, letters dated as of the Closing
Date, to the effect that they reaffirm the statements made in each letter furnished pursuant to subsection (j) of this Section 6, except
that the specified date referred to in each such letter delivered pursuant to this subsection (k) shall be not more than three business
days prior to the Closing Date.
The Company will furnish you
with such conformed copies of such opinions, certificates, letters and documents as you reasonably request.
18
7.
Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter, their respective officers and directors,
and each person, if any, who controls any Underwriter (the “
Indemnified Parties
”) within the meaning of Section 15
of the 1933 Act, as follows:
(i)
against any and all loss, liability, claim, damage and expense whatsoever arising out of any untrue statement
or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto) including the Rule 430B
Information, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in the Preliminary
Prospectus, the Pricing Disclosure Package, the Prospectus (or any amendment or supplement thereto) or any Permitted Free Writing Prospectus,
or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, unless such statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with written information furnished to the Company by the Representatives on behalf of the Underwriters
expressly for use in the Registration Statement (or any amendment thereto), the Preliminary Prospectus, the Pricing Disclosure Package,
the Prospectus (or any amendment or supplement thereto) or any Permitted Free Writing Prospectus;
(ii)
against any and all loss, liability, claim, damage and expense whatsoever to the extent of the aggregate
amount paid in settlement of any litigation, commenced or threatened, or of any claim whatsoever arising out of or based upon any such
untrue statement or omission or any such alleged untrue statement or omission, if such settlement is effected with the written consent
of the Company; and
(iii)
against any and all expense whatsoever reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged
untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) of this subsection 7(a).
(b)
Each Underwriter severally and not jointly agrees that it will indemnify and hold harmless the Company,
its directors and each of the officers 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 1933 Act to the same extent as the indemnity contained in subsection (a) of this Section
7, but only with respect to statements or omissions made in the Registration Statement (or any amendment thereto), the Preliminary Prospectus,
the Pricing Disclosure Package, the Prospectus (or any amendment or supplement thereto) or any Permitted Free Writing Prospectus, in reliance
upon and in conformity with written information furnished to the Company by the Representatives on behalf of the Underwriters expressly
for use in the Registration Statement (or any amendment thereto), the Preliminary Prospectus, the Pricing Disclosure Package, the Prospectus
(or any amendment or supplement thereto) or any Permitted Free Writing Prospectus. In case any action shall be brought against the Company
or any person so indemnified based on the Registration Statement (or any amendment thereto), the Preliminary Prospectus, the Pricing Disclosure
Package, the Prospectus (or any amendment or supplement thereto) or any Permitted Free Writing Prospectus and in respect of which indemnity
may be sought against any Underwriter, such Underwriter shall have the rights and duties given to the Company, and the Company and each
person so indemnified shall have the rights and duties given to the Underwriters, by the provisions of subsection (a) of this Section
7.
19
In no case shall the Company or an Underwriter
(an “indemnifying party”) be liable under this indemnity agreement with respect to any claim made against any Indemnified
Party or a party indemnified pursuant to Section 7(b) hereof, as the case may be, unless the indemnifying party shall be notified in writing
of the nature of the claim within a reasonable time after the assertion thereof, but failure to so notify an indemnifying party shall
not relieve it from any liability which it may have otherwise than under Sections 7(a) or 7(b) hereof, as applicable. An indemnifying
party shall be entitled to participate at its own expense in the defense, or, if it so elects, within a reasonable time after receipt
of such notice, to assume the defense of any suit, but if it so elects to assume the defense, such defense shall be conducted by counsel
chosen by it and approved by the applicable Indemnified Party or Parties or party or parties indemnified pursuant to Section 7(b) hereof
in any suit so brought, which approval shall not be unreasonably withheld. In any such suit, any such indemnified party shall have the
right to employ its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i)
the indemnifying party and such indemnified party shall have mutually agreed to the employment of such counsel, or (ii) the named parties
to any such action (including any impleaded parties) include both such indemnified party and the indemnifying party and such indemnified
party shall have been advised by such counsel that a conflict of interest between the indemnifying party and such indemnified party may
arise and for this reason it is not desirable for the same counsel to represent both the indemnifying party and also the indemnified party
(it being understood, however, that the indemnifying party shall not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys for all such indemnified parties, which firm shall be designated in writing
by the indemnified party). The Company agrees to notify you within a reasonable time of the assertion of any claim against it, any of
its officers or directors or any person who controls the Company within the meaning of Section 15 of the 1933 Act, in connection with
the sale of the Bonds.
(c)
No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement
of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding, and does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.
20
(d)
If the indemnification provided for in this Section 7 is unavailable to or insufficient to hold harmless
an indemnified party in respect of any and all loss, liability, claim, damage and expense whatsoever (or actions in respect thereof) that
would otherwise have been indemnified under the terms of such indemnity, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of such loss, liability, claim, damage or expense (or actions in respect thereof) 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 from the offering of the Bonds. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required above, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the
relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted
in such loss, liability, claim, damage or expense (or actions in respect thereof), 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 shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total compensation received
by the Underwriters in respect of the underwriting discount as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Underwriters
on the other 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 contributions pursuant to this Section
7 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 Section 7. The amount paid or payable
by an indemnified party as a result of the losses, liabilities, claims, damages or expenses (or actions in respect thereof) referred to
above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 7, no Underwriter shall be required
to contribute any amount in excess of the amount by which the total price at which the Bonds underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
The Underwriters’ obligations to contribute are several in proportion to their respective underwriting obligations and not joint.
21
8.
Default by One or More of the Underwriters.
(a) If any Underwriter shall default in its obligation to purchase the principal
amount of the the 2036 Bonds or the 2056 Bonds, as applicable, which it has agreed to purchase hereunder on the Closing Date, you may
in your discretion arrange for you or another party or other parties to purchase such 2036 Bonds and/or 2056 Bonds, as applicable, on
the terms contained herein. If within twenty-four hours after such default by any Underwriter you do not arrange for the purchase of such
Bonds, then the Company shall be entitled to a further period of twenty-four hours within which to procure another party or other parties
satisfactory to you to purchase such Bonds on such terms. In the event that, within the respective prescribed periods, you notify the
Company that you have so arranged for the purchase of such Bonds, or the Company notifies you that it has so arranged for the purchase
of such Bonds, you or the Company shall have the right to postpone such Closing Date for a period of not more than seven days, in order
to effect whatever changes may thereby be made necessary in the Registration Statement, the Pricing Disclosure Package or the Prospectus,
or in any other documents or arrangements, and the Company agrees to file promptly any amendments to the Registration Statement, the Pricing
Disclosure Package or the Prospectus which may be required. The term “
Underwriter
” as used in this Agreement shall
include any person substituted under this Section 8 with like effect as if such person had originally been a party to this Agreement with
respect to such Bonds.
(b)
If, after giving effect to any arrangements for the purchase of the Bonds of a defaulting Underwriter
or Underwriters by you or the Company as provided in subsection (a) above, the aggregate amount of such Bonds which remains unpurchased
does not exceed one-tenth of the aggregate amount of all the Bonds to be purchased at such Closing Date, then the Company shall have the
right to require each non-defaulting Underwriter to purchase the amounts of Bonds which such Underwriter agreed to purchase hereunder
at such Closing Date and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the amounts
of Bonds which such Underwriter agreed to purchase hereunder) of the Bonds of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default.
(c)
If, after giving effect to any arrangements for the purchase of the Bonds of a defaulting Underwriter
or Underwriters by you or the Company as provided in subsection (a) above, the aggregate amount of such Bonds which remains unpurchased
exceeds one-tenth of the aggregate amount of all the Bonds to be purchased at such Closing Date, or if the Company shall not exercise
the right described in subsection (b) above to require non-defaulting Underwriters to purchase the Bonds of a defaulting Underwriter or
Underwriters, then this Agreement shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Company,
except for the expenses to be borne by the Company as provided in Section 5(j) hereof and the indemnity and contribution agreement in
Section 7 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default.
9.
Representations and Indemnities to Survive Delivery.
The respective indemnities, agreements, representations, warranties
and other statements of the Company or its officers and of the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any
Underwriter or the Company, or any of their respective officers or directors or any controlling person referred to in Section 7 hereof,
and will survive delivery of and payment for the Bonds.
22
10.
Reliance on Your Acts.
In all dealings hereunder, the Representatives shall act on behalf of each of the Underwriters, and
the Company shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given
by the Representatives.
11.
No Fiduciary Relationship
. The Company acknowledges and agrees that (a) the purchase and sale of the Bonds pursuant to this
Agreement is an arm’s-length commercial transaction between the Company on the one hand, and the Underwriters on the other hand,
(b) in connection with the offering contemplated hereby and the process leading to such transaction, each Underwriter is and has been
acting solely as a principal and is not the agent or fiduciary of the Company or its shareholders, creditors, employees, or any other
party, (c) no Underwriter has assumed or will assume an advisory or fiduciary responsibility in favor of the Company with respect to the
offering contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising
the Company on other matters) and no Underwriter has any obligation to the Company with respect to the offering contemplated hereby except
the obligations expressly set forth in this Agreement, (d) the Underwriters and their respective affiliates may be engaged in a broad
range of transactions that involve interests that differ from those of the Company, and (e) the Underwriters have not provided any legal,
accounting, regulatory or tax advice with respect to the transaction contemplated hereby and the Company has consulted its own legal,
accounting, regulatory and tax advisors to the extent it deemed appropriate.
12.
Recognition of the U.S. Special Resolution Regimes
.
(i)
In the event that any Underwriter that is a Covered Entity (as defined below) becomes subject to a proceeding
under a U.S. Special Resolution Regime (as defined below), the transfer from such Underwriter of this Agreement, and any interest and
obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special
Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of
the United States.
(ii)
In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate (as defined below) of
such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights (as defined below) under this
Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could
be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the
United States.
As used in this Section 12:
“BHC Act Affiliate” has
the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
23
“Covered Entity” means any
of the following:
(i)
a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R.
§ 252.82(b);
(ii)
a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R.
§ 47.3(b); or
(iii)
a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R.
§ 382.2(b).
“Default Right” has the
meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“U.S. Special Resolution Regime”
means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall
Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
13.
Notices.
All communications hereunder will be in writing and, if sent to the Underwriters, will be mailed or telecopied
and confirmed to BNY Mellon Capital Markets, LLC, 240 Greenwich Street 3W, New York, New York 10286, Facsimile: (212) 815-6403; MUFG Securities
Americas Inc., 1221 Avenue of the Americas, 6th Floor, New York, New York 10020, Attention: Capital Markets Group, Facsimile: (646) 434-3455;
PNC Capital Markets LLC, 300 Fifth Avenue, 10th Floor, Pittsburgh, PA 15222, email: capitalmarketsnotices@pnc.com, Attention: Debt Capital
Markets, Fixed Income Transaction Execution; Scotia Capital (USA) Inc., 250 Vesey Street, New York, New York 10281, email: US.Legal@scotiabank.com,
TAG@scotiabank.com, Attention: U.S. Debt Capital Markets; SMBC Nikko Securities America, Inc., 277 Park Avenue, New York, New York 10172,
Attention: Debt Capital Markets, email: NikkoGCNotices@smbcnikko-si.com; U.S. Bancorp Investments, Inc., 214 N. Tryon Street, Charlotte,
North Carolina 28202, Attention: Credit Fixed Income, Facsimile: (877) 774-3462; or, if sent to the Company, will be mailed or telecopied
and confirmed to it at 411 Fayetteville Street, Raleigh, North Carolina 27601, Telephone: (800) 488-3853, attention of Assistant Treasurer.
Any such communications shall take effect upon receipt thereof.
14.
Business Day.
As used herein, the term “business day” shall mean any day when the Commission’s office
in Washington, D.C. is open for business.
15.
Successors.
This Agreement shall inure to the benefit of and be binding upon the Underwriters and the Company and their
respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the parties hereto and their respective successors and the controlling persons, officers and directors referred
to in Section 7 and their respective successors, heirs and legal representatives, any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained; this Agreement and all conditions and provisions hereof being intended
to be and being for the sole and exclusive benefit of the parties hereto and their respective successors and said controlling persons,
officers and directors and their respective successors, heirs and legal representatives, and for the benefit of no other person, firm
or corporation. No purchaser of Bonds from any Underwriter shall be deemed to be a successor or assign by reason merely of such purchase.
24
16.
Counterparts; Electronic Signatures.
This Agreement may be executed in two or more counterparts, each of which when so executed
shall be deemed to be an original and all of which when taken together shall constitute one and the same instrument. The words “execution,”
“signed,” “signature,” and words of like import in this Agreement or in any other certificate, agreement or document
related to this Agreement, the Indenture or the Bonds shall include images of manually executed signatures transmitted by facsimile or
other electronic format (including, without limitation, “pdf”, “tif” or “jpg”) and other electronic
signatures (including, without limitation, DocuSign and AdobeSign). The use of electronic signatures and electronic records (including,
without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall
be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system
to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the
New York State Electronic Signatures and Records Act and any other applicable law, including, without limitation, any state law based
on the Uniform Electronic Transactions Act or the Uniform Commercial Code.
17.
Applicable Law.
This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.
25
If the foregoing is in accordance
with your understanding, kindly sign and return to us two counterparts hereof, and upon confirmation and acceptance by the Underwriters,
this Agreement and such confirmation and acceptance will become a binding agreement between the Company, on the one hand, and each of
the Underwriters, on the other hand, in accordance with its terms.
Very truly yours,
DUKE ENERGY PROGRESS, LLC
By:
/s/ Jordan Morgan
Name:
Jordan Morgan
Title:
Assistant Treasurer
[
Remainder of page left blank intentionally
]
[Signature Page – Underwriting Agreement]
The foregoing Agreement is hereby confirmed and accepted as of the
date first above written.
BNY Mellon Capital Markets,
LLC
MUFG Securities Americas Inc.
PNC Capital Markets LLC
Scotia Capital (USA) Inc.
SMBC Nikko Securities America,
Inc.
U.S. Bancorp Investments, Inc.
On behalf of each of the Underwriters
BNY
Mellon Capital Markets, LLC
MUFG Securities Americas Inc.
By:
/s/ Dan Klinger
By:
/s/ Maheen Baig
Name: Dan Klinger
Name: Maheen Baig
Title: Managing Director
Title: Managing Director
PNC Capital Markets LLC
Scotia
Capital (USA) Inc.
By:
/s/ Valerie Shadeck
By:
/s/ Michael Ravanesi
Name: Valerie Shadeck
Name: Michael Ravanesi
Title: Managing Director
Title: Managing Director
SMBC
Nikko Securities America, Inc
.
U.S. Bancorp Investments, Inc.
By:
/s/ Amanda Boggs
By:
/s/ Brent Kreissl
Name: Amanda Boggs
Name: Brent Kreissl
Title: Managing Director
Title: Managing Director
For themselves and as Representatives of the several Underwriters named
on Schedule A hereto.
[Signature Page – Underwriting Agreement]
SCHEDULE A
Underwriter
Principal Amount
of 2036 Bonds
to be Purchased
Principal Amount
of 2056 Bonds
to be Purchased
BNY Mellon Capital Markets, LLC
$
84,000,000
$
36,000,000
MUFG Securities Americas Inc.
84,000,000
36,000,000
PNC Capital Markets LLC
84,000,000
36,000,000
Scotia Capital (USA) Inc.
84,000,000
36,000,000
SMBC Nikko Securities America, Inc.
84,000,000
36,000,000
U.S. Bancorp Investments, Inc.
84,000,000
36,000,000
Citizens JMP Securities, LLC
29,400,000
12,600,000
Fifth Third Securities, Inc.
29,400,000
12,600,000
FNB America Securities LLC
29,400,000
12,600,000
Huntington Securities, Inc.
29,400,000
12,600,000
Siebert Williams Shank & Co., LLC
29,400,000
12,600,000
Synovus Securities, Inc.
29,400,000
12,600,000
Blaylock Van, LLC
3,920,000
1,680,000
Drexel Hamilton, LLC
3,920,000
1,680,000
Loop Capital Markets LLC
3,920,000
1,680,000
R. Seelaus & Co., LLC
3,920,000
1,680,000
Samuel A. Ramirez & Company, Inc.
3,920,000
1,680,000
Total
$
700,000,000
$
300,000,000
A
-1
SCHEDULE B
PRICING DISCLOSURE PACKAGE
1)
Base Prospectus
2)
Preliminary Prospectus Supplement dated September 8, 2026
3)
Permitted Free Writing Prospectus
a)
Pricing Term Sheet attached as Schedule C hereto
B
-1
SCHEDULE C
Filed pursuant to Rule 433
September 8, 2026
Relating to
Preliminary
Prospectus Supplement dated
September 8, 2026
to
Prospectus dated September 23, 2025
Registration Statement No. 333-290475-01
Duke Energy Progress, LLC
$700,000,000 First Mortgage Bonds, 5.55% Series
due 2036
$300,000,000
First Mortgage Bonds
, 6.15%
Series due
2056
Pricing Term Sheet
Issuer:
Duke Energy Progress, LLC (the “
Issuer
”)
Trade Date:
September 8, 2026
Settlement Date:
September 11, 2026 (T+3)
Security
Description:
First Mortgage Bonds, 5.55% Series due 2036 (the “
2036
Mortgage Bonds
”)
First Mortgage Bonds, 6.15% Series due 2056 (the “
2056
Mortgage Bonds
”)
Principal Amount:
2036 Mortgage Bonds: $700,000,000
2056 Mortgage Bonds: $300,000,000
Interest Payment Dates:
2036 Mortgage Bonds: March 15 and September 15, beginning
on March 15, 2027
2056 Mortgage Bonds: March 15 and September 15, beginning
on March 15, 2027
Maturity Date:
2036 Mortgage Bonds: September 15, 2036
2056 Mortgage Bonds: September 15, 2056
Benchmark
Treasury:
2036 Mortgage Bonds: 4.625% due August 15, 2036
2056 Mortgage Bonds: 5.000% due May 15, 2056
Benchmark
Treasury Price:
2036 Mortgage Bonds: 98-21
2056 Mortgage Bonds: 96-05
Benchmark
Treasury Yield:
2036 Mortgage Bonds: 4.796%
2056 Mortgage Bonds: 5.257%
Spread to
Benchmark
Treasury:
2036 Mortgage Bonds: +80 bps
2056 Mortgage Bonds: +90 bps
Coupon:
2036 Mortgage Bonds: 5.55%
2056 Mortgage Bonds: 6.15%
Reoffer Yield:
2036 Mortgage Bonds: 5.596%
2056 Mortgage Bonds: 6.157%
C-
1
Price to the Public:
2036 Mortgage Bonds: 99.650% per 2036 Mortgage Bond, plus
accrued interest, if any, from September 11, 2026
2056 Mortgage Bonds: 99.904% per 2056 Mortgage Bond, plus
accrued interest, if any, from September 11, 2026
Redemption Provisions /
Make-Whole Call:
Prior to the applicable Par Call Date (as set forth in the table below), the Issuer may redeem each series of the 2036 Mortgage Bonds
and the 2056 Mortgage Bonds at its option, in whole or in part, at any time and from time to time, at a redemption price (expressed as
a percentage of principal amount and rounded to three decimal places) equal to the greater of:
•      (1)(a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption
date (assuming such series of Mortgage Bonds matured on the applicable Par Call Date) on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Rate plus a number of basis points equal to the applicable Make-Whole Spread (as set
forth in the table below) less (b) interest accrued to the redemption date; and
•      (2) 100% of the principal amount of such series of Mortgage Bonds to be redeemed, plus, in either case, accrued and unpaid interest thereon
to, but excluding, the redemption date.
On or after the applicable Par Call Date, the Issuer may redeem each series of the 2036 Mortgage Bonds and the 2056 Mortgage Bonds at
its option, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal amount of such
series of Mortgage Bonds to be redeemed plus accrued and unpaid interest thereon to, but excluding, the redemption date for such series
of Mortgage Bonds.
Series
Par Call Date
Make-Whole Spread
2036
Mortgage Bonds
June 15, 2036
15 bps
2056
Mortgage Bonds
March 15, 2056
15 bps
Tax Credit Event Redemption:
At the Issuer’s option, in whole but
not in part at 101% of the principal amount plus accrued and unpaid interest to, but excluding, the redemption date (any notice of redemption
may be issued by the later of (a) December 31, 2026 and (b) six months from the date of issuance).
CUSIP / ISIN:
2036 Mortgage Bonds: 26442U AW4 / US26442UAW45
2056 Mortgage Bonds: 26442U AX2 / US26442UAX28
Joint Book-
Running Managers:
BNY Mellon Capital Markets, LLC
MUFG Securities Americas Inc.
PNC Capital Markets LLC
Scotia Capital (USA) Inc.
SMBC Nikko Securities America, Inc.
U.S. Bancorp Investments, Inc.
C-
2
Co-Managers:
Citizens JMP Securities, LLC
Fifth Third Securities, Inc.
FNB America Securities LLC
Huntington Securities, Inc.
Siebert Williams Shank & Co., LLC
Synovus Securities, Inc.
Blaylock Van, LLC
Drexel Hamilton, LLC
Loop Capital Markets LLC
R. Seelaus & Co., LLC
Samuel A. Ramirez & Company, Inc.
The Issuer has filed a registration statement
(including a prospectus) with the Securities and Exchange Commission (“SEC”) for the offering to which this communication
relates. Before you invest, you should read the prospectus in that registration statement and other documents the Issuer has filed with
the SEC for more complete information about the Issuer and this offering. You may get these documents for free by visiting EDGAR on the
SEC Website at www.sec.gov. Alternatively, the Issuer, any underwriter or any dealer participating in the offering will arrange to send
you the prospectus if you request it by calling BNY Mellon Capital Markets, LLC toll-free at (800) 269-6864, MUFG Securities Americas
Inc. toll-free at (877) 649-6848, PNC Capital Markets LLC toll-free at (855) 881-0697, Scotia Capital (USA) Inc. toll-free at (800) 372-3930,
SMBC Nikko Securities America, Inc. toll-free at (888) 868-6856, and U.S. Bancorp Investments, Inc. toll-free at (877) 558-2607.
ANY DISCLAIMER OR OTHER NOTICE THAT MAY APPEAR
BELOW IS NOT APPLICABLE TO THIS COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMER OR NOTICE WAS AUTOMATICALLY GENERATED AS A RESULT
OF THIS COMMUNICATION BEING SENT BY BLOOMBERG OR ANOTHER EMAIL SYSTEM.
C-
3
Annex A
Material Agreements
364-Day Delayed Draw Term Loan Credit Agreement,
dated as of March 13, 2026, by and among Duke Energy Progress, LLC, as Borrower, the lenders referred to therein, as Lenders, and PNC
Bank, National Association, as Administrative Agent, PNC Capital Markets LLC, BofA Securities, LLC, Mizuho Bank, LTD., Truist Securities,
Inc., Sumitomo Mitsui Banking Corporation and U.S. Bank National Association, as Joint Lead Arrangers and Joint Bookrunners.
Annex A-1