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                                                                EXHIBIT 10.1.9.1

                                                                  EXECUTION COPY

                                    GUARANTY

          GUARANTY, dated as of November 14, 2000 (this "GUARANTY"), from
CONSOLIDATED EDISON, INC., a New York corporation (the "GUARANTOR"), in favor of
HAWKEYE FUNDING, LIMITED PARTNERSHIP, a Delaware limited partnership (the
"LESSOR"), and its successors and assigns.

          WHEREAS, the Guarantor wishes to induce the Lessor to enter into a
certain Agreement for Lease (as defined below) and Lease (as defined below) with
a Subsidiary (as defined below) of the Guarantor; and

          WHEREAS, the Lessor is unwilling to enter into the Agreement for Lease
or the Lease unless the Guarantor enters into this Guaranty;

          NOW, THEREFORE, in order to induce the Lessor to enter into the
Agreement for Lease and the Lease, the Guarantor hereby agrees as follows:

                                    SECTION 1

                                 DEFINED TERMS;
                              RULES OF CONSTRUCTION

          1.1  DEFINITIONS. As used in this Guaranty, capitalized terms defined
in the preamble and other Sections of this Guaranty shall have the meanings set
forth therein, terms defined in EXHIBIT A shall have the meanings set forth
therein, and capitalized terms used herein or in EXHIBIT A but not otherwise
defined herein or in EXHIBIT A shall, except as otherwise provided in the
Agreement for Lease or the Lease, have the meanings set forth in the Lease, for
any period on or after the Effective Date (as defined in the Lease) or the
Agreement for Lease, for any period prior thereto.

          1.2  ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP.

          1.3  USE OF CERTAIN TERMS. Unless the context of this Guaranty
requires otherwise, the plural includes the singular, the singular includes the
plural, and "including" has the inclusive meaning of "including without
limitation." The words "hereof," "herein," "hereby," "hereunder" and other
similar terms of this Guaranty refer to this Guaranty as a whole and not
exclusively to any particular provision of this Guaranty. All pronouns and any
variations thereof shall be deemed to refer to masculine, feminine or neuter,
singular or plural, as the identity of the Person or Persons may require.

          1.4  HEADINGS AND REFERENCES. Section and other headings are for
reference only, and shall not affect the interpretation or meaning of any
provision of this Guaranty. Unless otherwise provided, references to Articles,
Sections, Schedules and Exhibits shall be deemed references to Articles,
Sections, Schedules and Exhibits of this Guaranty. References to this Guaranty
and any

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other Operative Document include this Guaranty and the other Operative Documents
as the same may be modified, amended, restated or supplemented from time to time
pursuant to the provisions hereof or thereof. A reference to any law shall mean
that law as it may be amended, modified or supplemented from time to time, and
any successor law. A reference to a Person includes the successors and assigns
of such Person, but such reference shall not increase, decrease or otherwise
modify in any way the provisions in this Guaranty governing the assignment of
rights and obligations under or the binding effect of any provision of this
Guaranty.

                                    SECTION 2

                                    GUARANTY

          2.1  GUARANTY. Subject to the terms and conditions in this Guaranty,
the Guarantor absolutely, unconditionally and irrevocably guarantees to the
Lessor and each Assignee that (a) all Payment Obligations will be promptly paid
in full as and when due in accordance with the terms thereof whether at the
stated due date, by acceleration or otherwise, and (b) the Lessee will duly and
punctually perform, comply with and observe all Covenant Obligations as and when
required in accordance with the terms thereof, in each case, without regard to
whether such Obligation is direct or indirect, absolute or contingent, now or
hereafter existing or owing, voluntary or involuntary, created or arising by
contract, operation of law or otherwise or incurred or payable before or after
commencement of any proceedings by or against the Lessee under any Bankruptcy
law.

          If an event permitting the exercise of remedies under the Operative
Documents shall at any time have occurred and be continuing and such exercise,
or any consequences thereof provided in the Operative Documents, shall at such
time be prevented by reason of the pendency against the Lessee of a case or
proceeding under any Bankruptcy law, the Guarantor agrees that, solely for
purposes of this Guaranty and its obligations hereunder, the Obligations and all
other amounts as to which such remedies would have been exercisable under the
Operative Documents in the absence of such case or proceeding shall be deemed to
have been declared in default, with all attendant consequences as provided in
the Operative Documents as if such declaration of default and the consequences
thereof had been accomplished in accordance with the terms of the Operative
Documents, and the Guarantor shall forthwith pay any such amounts guaranteed
hereunder, without further notice or demand.

          2.2  GUARANTY ABSOLUTE. This Guaranty is an absolute, unlimited and
continuing guaranty of performance and payment (and not of collection) of the
Obligations. This Guaranty is in no way conditioned upon any attempt to collect
from the Lessee or upon any other event or contingency, and shall be binding
upon and enforceable against the Guarantor without regard to the validity or
enforceability of any Operative Document, or of any term thereof.

          The obligations of the Guarantor set forth herein constitute the full
recourse obligations of the Guarantor enforceable against it to the full extent
of all its assets and properties, notwithstanding any provision in the Agreement
for Lease or the Lease limiting the liability of any Person, or any agreement by
Assignee to look for payment with respect thereto, solely to certain property
and other collateral as described in the Operative Documents. Without limiting

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the foregoing, it is agreed and understood that (a) repeated and successive
demands may be made and recoveries may be had hereunder as and when, from time
to time, the Lessee shall be in default with respect to the Obligations under
the terms of any Operative Document, and (b) notwithstanding the recovery
hereunder for or in respect of any given default with respect to the Obligations
by the Lessee under the Agreement for Lease or the Lease, this Guaranty shall
remain in full force and effect and shall apply to each and every subsequent
default with respect to the Obligations.

          2.3  REINSTATEMENT. In case any Operative Document shall be terminated
as a result of the rejection thereof by any trustee, receiver or liquidating
agent of the Lessee or any of its properties in any Bankruptcy or similar
proceeding, the Guarantor's obligations hereunder shall continue to the same
extent as if such agreement had not been so rejected. The Guarantor agrees that
this Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time payment to the Lessor of the Obligations or any part thereof
is rescinded or must otherwise be returned by the Lessor upon the Bankruptcy of
the Lessee, or otherwise, as though such payment to the Lessor had not been
made.

          2.4  ENFORCEMENT. The Guarantor shall pay all costs, expenses and
damages incurred (including reasonable attorneys' fees and disbursements) in
connection with the enforcement of the Obligations to the extent that such
costs, expenses and damages are not paid by the Lessee, and in connection with
the enforcement of the obligations of the Guarantor under this Guaranty.

          2.5  GUARANTY NOT SUBJECT TO SETOFF, ETC. The obligations of the
Guarantor hereunder shall not be subject to any counterclaim, setoff, deduction
or defense based upon any claim the Guarantor or the Lessee may have against the
Lessor or any claim the Guarantor may have against the Lessee or any other
Person and shall remain in full force and effect without regard to, and shall
not be released, discharged, reduced or in any way affected by any circumstance
or condition whatsoever (whether or not the Guarantor shall have any knowledge
or notice thereof) which might constitute a legal or equitable discharge or
defense including, but not limited to, (a) the amending, modifying,
supplementing or terminating (by operation of law or otherwise), expressly or
impliedly, of any Operative Document, or any other instrument applicable to the
Lessee or to its Obligations, or any part thereof; (b) any failure on the part
of the Lessee to perform or comply with any term of any Operative Document or
any failure of any other Person to perform or comply with any term of any
Operative Document; (c) any waiver, consent, change, extension, indulgence or
other action or any action or inaction under or in respect of any Operative
Document or this Guaranty, whether or not the Lessor, the Lessee or the
Guarantor has notice or knowledge of any of the foregoing; (d) any Bankruptcy or
similar proceeding with respect to the Lessor, the Guarantor or the Lessee, or
their respective properties or their creditors, or any action taken by any
trustee or receiver or by any court in any such proceeding; (e) any furnishing
or acceptance of additional security or any release of any security (and the
Guarantor authorizes the Lessor to furnish, accept or release said security);
(f) any limitation on the liability or Obligations of the Lessee under any
Operative Document (except as expressly set forth therein) or any termination
(by operation of law or otherwise), cancellation (by operation of law or
otherwise), frustration or unenforceability, in whole or in part, of any
Operative Document, or any term thereof; (g) any lien, charge or encumbrance on
or affecting the Guarantor's, the Lessor's or the Lessee's respective assets and
properties; (h) any act, omission or breach on the part of the Lessor or
Assignee under any Operative Document, or any other agreement at any

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time existing between the Lessor and the Lessee or any other law, governmental
regulation or other agreement applicable to the Lessor or any Obligation; (i)
any claim as a result of any other dealings among the Lessor, any Assignee, the
Guarantor or any of them; (j) the assignment or transfer of this Guaranty, any
Operative Document (whether or not in accordance with and subject to the terms
thereof) or any other agreement or instrument referred to in any Operative
Document or applicable to the Lessee or the Obligations by the Lessor to any
other Person; (k) any change in the name of the Lessor, Assignee, the Lessee or
any other Person; (l) any subleasing or further subleasing of the Project or any
part thereof, or any redelivery, repossession, sale, transfer or other
disposition, surrender or destruction of the Project or any part thereof; (m)
the transfer, assignment, mortgaging or purported transfer, assignment or
mortgaging of all or any part of the interest of the Lessor, its successors or
assigns, or the Lessee in the Project; (n) any failure of title with respect to
the interest of the Lessor or the Lessee, or their respective successors and
assigns, in the Project; (o) any defect in the compliance with specifications,
condition, design, operation or fitness for use of, or any damage to or loss or
destruction of, or any interruption or cessation in the use of or failure to
complete, the Project or any portion thereof by the Lessee or any other Person
for any reason whatsoever (including, without limitation, any governmental
prohibition or restriction, condemnation, requisition, seizure or any other act
on the part of any governmental or military authority, or any act of God or of
the public enemy, or any Event of Loss), and regardless of the duration thereof
(even though such duration would otherwise constitute a frustration of the
Lease), whether or not without fault on the part of the Lessee or any other
Person; (p) any merger or consolidation of the Lessee or the Guarantor into or
with any other Person or any direct or indirect sale, lease or transfer of any
other assets of the Lessee or the Guarantor to any other Person; (q) any change
in the ownership of any shares of capital stock or other equity interests of the
Guarantor or the Lessee (including any such change which results in the
Guarantor no longer owning (directly or indirectly) capital stock of the
Lessee); or (r) any other event or circumstance whatsoever (other than payment
and performance in full of the Obligations).

          2.6  WAIVER. The Guarantor unconditionally waives: (a) notice of any
of the matters referred to in Section 2 hereof; (b) all notices which may be
required by statute, rule of law or otherwise to preserve any rights against the
Guarantor hereunder, including notice of the acceptance of this Guaranty by the
Lessor or Assignee, or the creation, renewal, extension, modification or accrual
of the Obligations or notice of any other matters relating thereto, any
presentment, demand, notice of dishonor, protest or nonpayment of any damages or
other amounts payable under any Operative Document; (c) any requirement for the
enforcement, assertion or exercise of any right, remedy, power or privilege
under or in respect of any Operative Document, including diligence in collection
or protection of or realization upon the Obligations or any part thereof or any
collateral therefor; (d) any requirement of diligence; (e) any requirement to
mitigate the damages resulting from a default or other termination under any
Operative Document, except that this shall not relieve the Lessor or such
Assignee of any such obligation; (f) the occurrence of every other condition
precedent to which the Guarantor or the Lessee may otherwise be entitled, except
as provided in any Operative Document; and (g) the right to require the Lessor
or such Assignee to proceed against the Lessee or any other Person liable on the
Obligations, to proceed against or exhaust security held from the Lessee or any
other Person, or to pursue any other remedy in the Lessor's power whatsoever,
and the Guarantor waives the right to have the property of the Lessee first
applied to the discharge of the Obligations.

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          The Lessor or Assignee may, at its election, exercise any right or
remedy it might have against the Lessee or any security held by the Lessor or
such Assignee, including the right to foreclose upon any such security by
judicial or nonjudicial sale, without affecting or impairing in any way the
liability of the Guarantor hereunder, except to the extent the Obligations have
been paid or satisfied, and the Guarantor waives any defense arising out of the
absence, impairment or loss of any right of reimbursement, contribution or
subrogation or any other right or remedy of the Guarantor against the Lessee or
any such security, whether resulting from such election by the Lessor or such
Assignee or otherwise. The Guarantor waives any defense arising by reason of any
disability or other defense of the Lessee, or by reason of the cessation from
any cause whatsoever of the liability, either in whole or in part, of the Lessee
to the Lessor or Assignee for the Obligations.

          The Guarantor understands that the Lessor's or Assignee's exercise of
certain rights and remedies contained in the Operative Documents may affect or
eliminate the Guarantor's rights of subrogation against the Lessee and that the
Guarantor may therefore incur partially or totally nonreimbursable liability
hereunder; nevertheless, the Guarantor hereby authorizes and empowers the Lessor
and each Assignee, to exercise in its or their sole discretion, any rights and
remedies, or any combination thereof, which may then be available, it being the
purpose and intent of the Guarantor that its obligations hereunder shall be
absolute, irrevocable, independent and unconditional under any and all
circumstances.

          The Guarantor assumes the responsibility for being and keeping
informed of the financial condition of the Lessee and of all other circumstances
bearing upon the risk of nonpayment of the Obligations and agrees that neither
the Lessor nor Assignee shall have any duty to advise the Guarantor of
information regarding any condition or circumstance or any change in such
condition or circumstance. The Guarantor acknowledges that neither the Lessor
nor Assignee has made any representation to the Guarantor concerning the
financial condition of the Lessee.

                                    SECTION 3

                           COVENANTS OF THE GUARANTOR

          3.1  AFFIRMATIVE COVENANTS. So long as any of the Obligations shall
remain outstanding, the Guarantor covenants to the Lessor and Assignee as
follows:

               3.1.1  OWNERSHIP OF CORE ELECTRICITY DISTRIBUTION BUSINESS. The
Guarantor shall at all times continue to beneficially own and operate, directly
or indirectly, at least fifty-one percent (51%) of the Core Electricity
Distribution Business.

               3.1.2  OWNERSHIP OF LESSEE. The Guarantor shall own (directly or
indirectly) beneficially and of record a majority of the membership interests of
the Lessee.

               3.1.3  FINANCIAL AND BUSINESS INFORMATION. The Guarantor will
deliver or otherwise make available to the Lessor and Assignee:

               (a) QUARTERLY STATEMENTS -- within 60 days after the end of each
          quarterly fiscal period in each fiscal year of the Guarantor (other
          than the last quarterly fiscal period of each such fiscal year),
          copies of:

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                     (i)    a consolidated balance sheet of the Guarantor and
               its Consolidated Subsidiaries as at the end of such quarter, and

                     (ii)   consolidated statements of income and cash flows of
               the Guarantor and its Consolidated Subsidiaries, for such quarter
               and (in the case of the second and third quarters) for the
               portion of the fiscal year ending with such quarter,

          setting forth in each case in comparative form the figures for the
          corresponding periods in the previous fiscal year, all in reasonable
          detail, prepared in accordance with GAAP applicable to quarterly
          financial statements generally, and certified by a Senior Financial
          Officer as fairly presenting, in all material respects, the financial
          position of the companies being reported on and their results of
          operations and cash flows, subject to changes resulting from year-end
          adjustments, PROVIDED that filing with the SEC of the Guarantor's
          Quarterly Report on Form 10-Q prepared in compliance with the
          requirements therefor shall be deemed to satisfy the requirements of
          this Section 3.1.3(a);

               (b) ANNUAL STATEMENTS -- as soon as available and in any event
          within 120 days after the end of each fiscal year of the Guarantor,
          copies of

                     (i)    a consolidated balance sheet of the Guarantor and
               its Consolidated Subsidiaries as at the end of such year, and

                     (ii)   consolidated statements of income, changes in
               shareholders' equity and cash flows of the Guarantor and its
               Consolidated Subsidiaries for such year,

          setting forth in each case in comparative form the figures for the
          previous fiscal year, all in reasonable detail, prepared in accordance
          with GAAP, and accompanied by an opinion thereon of independent public
          accountants of recognized national standing, which opinion shall state
          that such financial statements present fairly, in all material
          respects, the financial position of the companies being reported upon
          and their results of operations and cash flows and have been prepared
          in conformity with GAAP, and that the examination of such accountants
          in connection with such financial statements has been made in
          accordance with generally accepted auditing standards, and that such
          audit provides a reasonable basis for such opinion in the
          circumstances, PROVIDED that filing with the SEC of the Guarantor's
          Annual Report on Form 10-K for such fiscal year (together with the
          Guarantor's annual report to shareholders, if any, prepared pursuant
          to Rule 14a-3 under the Exchange Act) prepared in accordance with the
          requirements therefor shall be deemed to satisfy the requirements of
          this Section 3.1.3(b);

               (c) NOTICE OF POTENTIAL DEFAULT OR EVENT OF DEFAULT -- promptly,
          and in any event within five days after a Responsible Officer's
          becoming aware of the existence of any Potential Default or Event of
          Default, a written notice specifying the nature and period of
          existence thereof and what action the Guarantor is taking or proposes
          to take with respect thereto;

               (d) NO DEFAULT CERTIFICATES -- simultaneously with the delivery
          or earliest availability of each set of quarterly and annual financial
          statements referred to in paragraphs (a) and (b) of this Section
          3.1.3, a certificate of a Responsible Officer stating,

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          to the best knowledge of such Responsible Officer after reasonable
          inquiry, whether there exists on the date of such certificate any
          Potential Default or Event of Default, and if any Potential Default or
          Event of Default exists, specifying the nature and period of existence
          thereof and what action, if any, the Guarantor has taken, is taking,
          or proposes to take with respect thereto;

               (e) ERISA MATTERS -- promptly, and in any event within thirty
          (30) days after a Responsible Officer's becoming aware of any of the
          following, a written notice setting forth the nature thereof and the
          action, if any, that the Guarantor or a member of the ERISA Group
          proposes to take with respect thereto:

                     (i)    with respect to any Plan, any reportable event, as
               defined in section 4043(b) of ERISA and the regulations
               thereunder, for which notice thereof has not been waived pursuant
               to such regulations as in effect on the date hereof, or any
               successor regulations; or

                     (ii)   the taking by the PBGC of steps to institute, or the
               threatening by the PBGC of the institution of, proceedings under
               section 4042 of ERISA for the termination of, or the appointment
               of a trustee to administer, any Plan, or the receipt by the
               Guarantor or any member of the ERISA Group of a notice from a
               Multiemployer Plan that such action has been taken by the PBGC
               with respect to such Multiemployer Plan; or

                     (iii)  any event, transaction or condition that could
               result in the incurrence of any liability by the Guarantor or any
               member of the ERISA Group pursuant to Title I or IV of ERISA or
               the penalty or excise tax provisions of the Code relating to
               employee benefit plans, or in the imposition of any Lien on any
               of the rights, properties or assets of the Guarantor or any
               member of the ERISA Group pursuant to Title I or IV of ERISA or
               such penalty or excise tax provisions, if such liability or Lien,
               taken together with any other such liabilities or Liens then
               existing, will result, directly or indirectly, in a Material
               Adverse Effect; and

               (f) REQUESTED INFORMATION -- with reasonable promptness, and in
          any event within sixty (60) days after such request, such other data
          and information relating to the business, operations, affairs,
          financial condition, assets or properties of the Guarantor, any of its
          Material Subsidiaries or the Lessee as from time to time may be
          requested by the Lessor or Assignee, to the extent that such data and
          information relates to the ability of the Guarantor to perform its
          obligations under this Guaranty or the Consent and Agreement (as
          defined in the Note Purchase Agreement) of Guarantor or the ability of
          the Lessee to perform its obligations under the Agreement for Lease
          and the Lease.

               3.1.4  INTENTIONALLY OMITTED.

               3.1.5  INSPECTION. The Guarantor shall permit the Lessor, each
Qualifying Noteholder or their respective representatives: (a) at the expense of
the Lessor or such Qualifying Noteholder, as the case may be, if the Guarantor
is no longer required to make public filings with the SEC under the Securities
Exchange Act of 1934, as amended, or (b) at the expense of the

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Guarantor, if an Event of Default under the Lease or the Agreement for Lease
then exists, to visit and inspect any of the offices or properties of the
Guarantor, any Material Subsidiary or the Lessee, to discuss their respective
affairs, finances and accounts with their respective officers and independent
public accountants (and by this provision the Guarantor authorizes said
accountants to discuss the affairs, finances and accounts of the Guarantor, its
Material Subsidiaries and the Lessee), all at such times and as often as may be
requested (and subject to the requirement that each such representative sign the
Guarantor's customary confidentiality agreement with respect to any proprietary
information sought to be examined or discussed and compliance with the
Guarantor's or any Material Subsidiary's safety procedures), to the extent that
such examinations and discussions relate to the ability of the Guarantor to
perform its obligations under this Guaranty or the Consent and Agreement (as
defined in the Note Purchase Agreement) of the Guarantor or the ability of the
Lessee to perform its obligations under the Agreement for Lease and the Lease.

               3.1.6  COMPLIANCE WITH LAW. Without limiting the requirements of
Section 2 of the Lease, the Guarantor will and will cause each of its Material
Subsidiaries to comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without limitation,
Environmental Requirements, except where the necessity of compliance therewith
is contested in good faith by appropriate proceedings or except where the
failure to comply will not result, directly or indirectly, in a Material Adverse
Effect.

               3.1.7  INTENTIONALLY OMITTED.

               3.1.8  MAINTENANCE OF PROPERTIES. Without limiting the
requirements of Section 9 of the Lease, the Guarantor will and will cause each
of its Material Subsidiaries to maintain and keep, or cause to be maintained and
kept, their respective properties in good repair, working order and condition
(other than ordinary wear and tear), so that the business carried on in
connection therewith may be properly conducted at all times, provided that
subject to the provisions of Section 3.1.1 hereof, this Section 3.1.8 shall not
prevent the Guarantor or any Material Subsidiary from disposing of or
discontinuing the operation and maintenance of any of its properties if such
disposition or discontinuance is desirable in the conduct of its business and
the Guarantor has concluded that such disposition or discontinuance will not,
directly or indirectly and individually or in the aggregate, result in a
Material Adverse Effect.

               3.1.9  PAYMENT OF TAXES AND CLAIMS. The Guarantor will and will
cause each of its Material Subsidiaries to file all tax returns required to be
filed in any jurisdiction and to pay and discharge all taxes shown to be due and
payable on such returns and all other taxes, assessments, governmental charges
or levies imposed on them or any of their properties, assets, income or
franchises, to the extent such taxes and assessments have become due and payable
and before they have become delinquent and all claims for which sums have become
due and payable that have or might become a Lien on properties or assets of the
Guarantor or any Material Subsidiary, provided that neither the Guarantor nor
any Material Subsidiary need pay any such tax, assessment, charge, levy or claim
if (a) the amount, applicability or validity thereof is contested by the
Guarantor or such Material Subsidiary on a timely basis in good faith and in
appropriate proceedings, and the Guarantor or a Material Subsidiary has
established adequate reserves therefor in accordance with GAAP on the books of
the Guarantor or such Material

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Subsidiary or (b) the nonpayment of all such taxes, assessments, charges, levies
or claims in the aggregate will not, directly or indirectly, result in a
Material Adverse Effect.

               3.1.10 CORPORATE EXISTENCE, ETC. Subject to Section 3.2.1, the
Guarantor will at all times preserve and keep in full force and effect its
corporate existence. Subject to Section 3.2.1, the Guarantor will at all times
preserve and keep in full force and effect the corporate existence of each of
its Material Subsidiaries and all rights and franchises of the Guarantor and its
Material Subsidiaries unless, in the good faith judgment of the Guarantor, the
termination of or failure to preserve and keep in full force and effect such
corporate existence, right or franchise will not, directly or indirectly and
individually or in the aggregate, result in a Material Adverse Effect.

          3.2  NEGATIVE COVENANTS. So long as any of the Obligations shall
remain outstanding, the Guarantor will not, and will not permit any Material
Subsidiary to:

               3.2.1  MERGERS AND CONSOLIDATIONS. Directly or indirectly merge
into or consolidate with any Person, except that:

               (a) any Material Subsidiary may merge into or consolidate with
          any other Material Subsidiary (including any Subsidiary that becomes a
          Material Subsidiary in connection with such merger or consolidation);
          and

               (b) any Material Subsidiary may merge into or consolidate with
          the Guarantor, and the Guarantor or any Material Subsidiary may merge
          into or consolidate with any other Person;

PROVIDED that in each case, immediately after giving effect thereto, (i) no
Event of Default shall occur and be continuing, (ii) in the case of any merger
or consolidation to which the Guarantor is not a party, either (A) a Subsidiary
of the Guarantor shall be the continuing or surviving Person or (B) such merger
or consolidation will not impair the ability of the Guarantor to perform its
obligations under this Guaranty, and (iii) in the case of any such merger or
consolidation to which the Guarantor is a party, either (A) the Guarantor is the
continuing or surviving Person or (B) if the Guarantor is not the continuing or
surviving Person: (I) the continuing or surviving Person shall be a corporation,
partnership or limited liability company that is duly formed and validly
existing under the laws of the United States, a State thereof or the District of
Columbia, (II) the continuing or surviving Person shall assume, by execution and
delivery of instruments reasonably satisfactory to the Lessor and Assignee, the
obligations of the Guarantor under this Guaranty and the CEI Note and shall
become successor to the Guarantor for purposes of this Guaranty and the CEI Note
and (III) the continuing or surviving Person shall deliver to the Lessor and
Assignee an opinion of counsel of such continuing or surviving Person, in form
and substance reasonably satisfactory to the Lessor and Assignee, with respect
to the enforceability of the assumption of this Guaranty and the CEI Note by
such continuing or surviving Person.

               3.2.2  CONSOLIDATED DEBT TO CONSOLIDATED CAPITAL. Permit
Consolidated Debt to exceed sixty-seven and one-half percent (67.5%) of
Consolidated Capital.

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                                    SECTION 4

                         REPRESENTATIONS AND WARRANTIES

          The Guarantor represents and warrants to the Lessor and Assignee that:

          4.1  ORGANIZATION; POWER AND AUTHORITY. The Guarantor is a corporation
duly organized, validly existing and in good standing under the laws of its
state of incorporation, and is duly qualified as a foreign corporation and is in
good standing in each jurisdiction in which such qualification is required by
law, except where the failure to so qualify would not materially impair the
ability of the Guarantor to perform its obligations under this Guaranty.

          4.2  CORPORATE POWER. The Guarantor has full corporate power and
authority to execute, deliver and perform its obligations under this Guaranty
and has taken all necessary corporate action to authorize the execution,
delivery and performance of this Guaranty.

          4.3  AUTHORIZATION, ETC. This Guaranty has been duly authorized by all
necessary corporate and shareholder action on the part of the Guarantor, and
this Guaranty constitutes a legal, valid and binding obligation of the Guarantor
enforceable against the Guarantor in accordance with its terms, except as such
enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (b) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

          4.4  DISCLOSURE. The Private Placement Memorandum dated September 2000
(such Private Placement Memorandum (as supplemented by a Supplementary Update on
or about September 21, 2000), together with any documents incorporated therein
by reference, collectively the "MEMORANDUM"), relating to the transactions
contemplated hereby fairly describes, in all material respects, the business and
properties of the Guarantor and its Material Subsidiaries. The Memorandum taken
as a whole does not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not misleading
in light of the circumstances under which they were made. Since December 31,
1999, there has been no change in the financial condition, operations, business
or properties of the Guarantor or any Material Subsidiary except (a) changes
that have been disclosed in the Memorandum or in public filings made by the
Guarantor with the SEC after the date of the Memorandum and prior to the date
hereof, copies of which are attached as Schedule 4.4, and (b) changes that
individually or in the aggregate could not reasonably be expected to have a
material adverse effect on (i) the ability of the Guarantor to perform its
obligations under this Guaranty in a timely manner, (ii) the business, assets,
properties, financial condition, operations or prospects of the Guarantor, or
(iii) the rights or interests of the Lessor or Assignee under this Guaranty.

          4.5  ORGANIZATION AND OWNERSHIP OF SHARES OF MATERIAL SUBSIDIARIES.
(a) Schedule 4.5 to this Guaranty contains on the date hereof complete and
correct lists of (i) the Material Subsidiaries, showing, as to each such
Material Subsidiary, the correct name thereof, the jurisdiction of its
organization, and the percentage of shares of each class of its capital stock or
similar equity interests outstanding owned by the Guarantor and each other
Subsidiary of the Guarantor and (ii) the Guarantor's directors and senior
officers.

                                      -10-
<Page>

               (b)   All of the outstanding shares of capital stock or similar
equity interests of each Material Subsidiary shown in Schedule 4.5 as being
owned by the Guarantor and its Subsidiaries have been validly issued, are fully
paid and nonassessable and are owned by the Guarantor or another Subsidiary free
and clear of any Lien (except as otherwise disclosed in Schedule 4.5).

               (c)   Each Material Subsidiary is a corporation or other legal
entity duly organized, validly existing and in good standing under the laws of
its jurisdiction of organization, and is duly qualified as a foreign corporation
or other legal entity and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on (i) the
ability of the Guarantor to perform its obligations under this Guaranty in a
timely manner, (ii) the business, assets, properties, financial condition,
operations or prospects of the Guarantor, or (iii) the rights or interests of
the Lessor or Assignee under this Guaranty. Each such Material Subsidiary has
the corporate or other power and authority to own or hold under lease the
properties it purports to own or hold under lease and to transact the business
it transacts and proposes to transact.

               (d)   As of the date hereof, no Material Subsidiary is a party to
or otherwise subject to any legal restriction or any agreement (other than this
Guaranty, the agreements listed on Schedule 4.5 and customary limitations
imposed by corporate law statutes and applicable regulatory requirements,
including without limitation the Public Utility Holding Company Act of 1935 and
similar provisions of state and local law) restricting the ability of such
Material Subsidiary to pay dividends out of profits or make any other similar
distributions of profits to the Guarantor or any of its Subsidiaries that owns
outstanding shares of capital stock of such Material Subsidiary.

          4.6  FINANCIAL STATEMENTS. The consolidated financial statements of
the Guarantor incorporated by reference in the Memorandum (including in each
case the related schedules and notes) fairly present in all material respects
the consolidated financial position of the Guarantor and its Consolidated
Subsidiaries as of the respective dates of such financial statements and the
consolidated results of their operations and cash flows for the respective
periods of such financial statements and have been prepared in accordance with
GAAP consistently applied throughout the periods involved except as set forth in
the notes thereto (subject, in the case of any interim financial statements, to
normal year-end adjustments).

          4.7  CHANGES. Except as disclosed in the Memorandum or in public
filings made by the Guarantor with the SEC after the date of the Memorandum and
prior to the date hereof, copies of which are attached as Schedule 4.4, since
December 31, 1999, there has been no material adverse change in the business,
assets, properties, revenues, financial condition, operations or prospects of
the Guarantor, nor any change which could reasonably be expected to have a
material adverse effect on (a) the ability of the Guarantor to perform its
obligations under this Guaranty in a timely manner, (b) the business, assets,
properties, financial condition, operations or prospects of the Guarantor, or
(c) the rights or interests of the Lessor or Assignee under this Guaranty.

          4.8  COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC. The execution,
delivery and performance by the Guarantor of this Guaranty will not (a)
contravene, result in any breach of, or

                                      -11-
<Page>

constitute a default under, or result in the creation of any Lien in respect of
any property of the Guarantor or any of its Subsidiaries under, any indenture,
mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate
charter or by-laws, or any other Material agreement or instrument to which the
Guarantor or any of its Subsidiaries is bound or by which the Guarantor or any
of its Subsidiaries or any of their respective properties may be bound or
affected, (b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree or ruling of any court,
arbitrator or Governmental Authority applicable to the Guarantor or any of its
Subsidiaries or (c) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Guarantor or any of
its Subsidiaries.

          4.9  GOVERNMENTAL AUTHORIZATIONS, ETC. No consent, approval or
authorization of any Governmental Authority is required in connection with the
execution, delivery or performance by the Guarantor of this Guaranty.

          4.10 LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS.

               (a)   Except as disclosed in public filings made by the Guarantor
with the SEC prior to the date hereof and in the Memorandum (including the
Guarantor's consolidated financial statements incorporated therein by
reference), there are no actions, suits or proceedings pending or, to the
knowledge of the Guarantor, threatened against or affecting the Guarantor or any
of its Subsidiaries or any property of the Guarantor or any of its Subsidiaries
in any court or before any arbitrator of any kind or before or by any
Governmental Authority, which, if adversely determined, could reasonably be
expected to have a material adverse effect on (i) the ability of the Guarantor
to perform its obligations under this Guaranty in a timely manner, (ii) the
business, assets, properties, financial condition, operations or prospects of
the Guarantor, or (iii) the rights or interests of the Lessor or Assignee under
this Guaranty.

               (b)   Neither the Guarantor nor any of its Subsidiaries is in
default under any term of any agreement or instrument to which it is a party or
by which it is bound, or any order, judgment, decree or ruling of any court,
arbitrator or Governmental Authority applicable to it, or is in violation of any
applicable law, ordinance, rule or regulation (including without limitation
Environmental Requirements) of any Governmental Authority, which default or
violation, individually or in the aggregate, could reasonably be expected to
have a material adverse effect on (i) the ability of the Guarantor to perform
its obligations under this Guaranty in a timely manner, (ii) the business,
assets, properties, financial condition, operations or prospects of the
Guarantor, or (iii) the rights or interests of the Lessor or Assignee under this
Guaranty.

          4.11 TAXES. The Guarantor and its Subsidiaries have filed all tax
returns that are required to have been filed in any jurisdiction, and have paid
all taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments (a) the
nonpayment of which could not, individually or in the aggregate, be expected to
have a material adverse effect on (i) the ability of the Guarantor to perform
its obligations under this Guaranty in a timely manner, (ii) the business,
assets, properties, financial condition, operations or prospects of the
Guarantor, or (iii) the rights or interests of the Lessor or Assignee under this
Guaranty; or (b) the amount, applicability or validity of which is currently
being contested in good faith by

                                      -12-
<Page>

appropriate proceedings and with respect to which the Guarantor or any of its
Subsidiaries, as the case may be, has established adequate reserves in
accordance with GAAP.

          4.12 TITLE TO PROPERTY; LEASES. The Guarantor and its Material
Subsidiaries have good and sufficient title to their respective properties that
individually or in the aggregate are Material to their respective businesses,
including all such properties reflected in the most recent audited balance sheet
included in the Memorandum or purported to have been acquired by the Guarantor
or any Material Subsidiary after the date of such balance sheet (except as sold
or otherwise disposed of in the ordinary course of business). The Lease and all
other leases of Guarantor and its Material Subsidiaries that individually or in
the aggregate are Material to their respective businesses are valid and
subsisting and are in full force and effect in all material respects.

          4.13 LICENSES, PERMITS, ETC.

               (a)   The Guarantor and its Material Subsidiaries own or possess
all licenses, permits, franchises, authorizations, patents, proprietary
software, copyrights, service marks, trademarks and trade names, or rights
thereto, that individually or in the aggregate are Material, without known
conflict with the rights of others.

               (b)   No product of the Guarantor or any Material Subsidiary
infringes in any Material respect on any license, permit, franchise,
authorization, patent, proprietary software, copyright, service mark, trademark,
trade name or other right owned by any other Person.

               (c)   There is no Material violation by any Person of any right
of the Guarantor or any of its Material Subsidiaries with respect to any patent,
proprietary software, copyright, service mark, trademark, trade name or other
right owned or used by the Guarantor or any of its Material Subsidiaries.

          4.14 COMPLIANCE WITH ERISA.

               (a)   The Guarantor and each member of the ERISA Group have
operated and administered each Plan in compliance with all applicable laws
except for such instances of noncompliance as have not resulted in and could not
reasonably be expected to result in a material adverse effect on (i) the ability
of the Guarantor to perform its obligations under this Guaranty in a timely
manner, (ii) the business, assets, properties, financial condition, operations
or prospects of the Guarantor, or (iii) the rights or interests of the Lessor or
Assignee under this Guaranty. Neither the Guarantor nor any member of the ERISA
Group has incurred any liability pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to employee benefit plans
(as defined in section 3 of ERISA), other than such liabilities as would not,
individually or in the aggregate, be Material, and no event, transaction or
condition has occurred or exists that could reasonably be expected to result in
the incurrence of any such liability by the Guarantor or any member of the ERISA
Group, or in the imposition of any Lien on any of the rights, properties or
assets of the Guarantor or any member of the ERISA Group, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to Section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not, individually or in the aggregate, be Material.

               (b)   The present value of the aggregate benefit liabilities
under each of the Plans (other than Multiemployer Plans), determined on the
basis of the actuarial assumptions specified for funding purposes in such Plan's
most recent actuarial valuation report, did not exceed the aggregate current
value of the assets of such Plan allocable to such benefit liabilities.

                                      -13-
<Page>

The term "benefit liabilities" has the meaning specified in section 4001 of
ERISA and the terms "current value" and "present value" have the meaning
specified in section 3 of ERISA.

               (c)   The Guarantor and the ERISA Group have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer
Plans that individually or in the aggregate are Material.

               (d)   The expected postretirement benefit obligation (determined
as of the last day of the Guarantor's most recently ended fiscal year in
accordance with Financial Accounting Standards Board Statement No. 106, without
regard to liabilities attributable to continuation coverage mandated by section
4980B of the Code) of the Guarantor and its Subsidiaries is reflected in the
financial statements included in the Memorandum as of the respective dates
thereof.

               (e)   The execution and delivery of this Guaranty will not
involve any transaction that is subject to the prohibitions of section 406 of
ERISA or in connection with which a tax could be imposed pursuant to Section
4975(c)(1)(A)-(D) of the Code. The representation by the Guarantor in the first
sentence of this Section 4.14(e) is made in reliance upon and subject to the
accuracy of the representations of the Note Purchasers in Section 2.2 of the
Note Purchase Agreement as to the sources of the funds used to pay the purchase
price of the Notes to be purchased by them thereunder.

          4.15 OFFERING OF THE NOTES AND THIS GUARANTY, ETC. Neither the
Guarantor nor anyone authorized to act on its behalf has offered this Guaranty
or the Notes or any similar securities for sale to, or solicited any offer to
buy any of the same from, or otherwise approached or negotiated in respect
thereof with, any Person other than the Note Purchasers and not more than 125
other institutional investors (all such investors being "accredited investors"
as defined under Section 501(a) of the Securities Act). Neither the Guarantor
nor anyone authorized to act on its behalf has taken, or will take, any action
that would subject the execution and delivery of this Guaranty or the issuance
or sale of the Notes to the registration requirements of Section 5 of the
Securities Act.

          4.16 EXISTING INDEBTEDNESS. Neither the Guarantor nor any Subsidiary
is in default, and no waiver of default is currently in effect, in the payment
of any principal or interest on any Indebtedness of the Guarantor or such
Subsidiary and no event or condition exists with respect to any such
Indebtedness of the Guarantor or any Subsidiary that would permit one or more
Persons to cause such Indebtedness to become due and payable before its stated
maturity, except in each case for any default, event or condition which,
individually or in the aggregate, could not reasonably be expected to have a
material adverse effect on (i) the ability of the Guarantor to perform its
obligations under this Guaranty in a timely manner, (ii) the business, assets,
properties, financial condition, operations or prospects of the Guarantor, or
(iii) the rights or interests of the Lessor or Assignee under this Guaranty.

                                    SECTION 5

                                  MISCELLANEOUS

          5.1  PAYMENTS. Each payment by the Guarantor under this Guaranty shall
be made in immediately available funds to or on the order of the Lessor or
Assignee, as the case may be, in

                                      -14-
<Page>

each case without setoff or counterclaim; PROVIDED that, no such payment shall
be deemed a waiver of any rights the Guarantor may have against the Lessor or
the Lessee.

          5.2  PARTIES. This Guaranty shall inure to the benefit of the Lessor
and each Assignee and its and their respective successors, assigns or
transferees, and shall be binding upon the Guarantor and its successors and
assigns. Subject to the provisions of Section 3.2.1(b) hereof, the Guarantor may
not delegate any of its duties under this Guaranty without the prior written
consent of the Lessor and each Assignee. Upon notice to the Guarantor, the
Lessor and its successors, assigns and transferees may assign its or their
rights and benefits under this Guaranty to (a) any financial institutions
providing financing to the Lessor in connection with the Agreement for Lease and
the Lease or any trustee for such financial institutions, and (b) any purchaser
or transferee of all or a substantial portion of the rights and interests of the
Lessor and its successors, assigns or transferees in and to the Project.

          5.3  NOTICES. All notices, offers, acceptances, approvals, waivers,
requests, demands and other communications hereunder shall be in writing, shall
be addressed as provided below and shall be considered as properly given (a) if
delivered in person, (b) if sent by express courier service (including Federal
Express, DHL, Airborne Express, and other similar express delivery services),
(c) in the event overnight delivery services are not readily available, if
mailed through the United States Postal Service, postage prepaid, registered or
certified with return receipt requested, or (d) if sent by telecopy and
confirmed; PROVIDED, that in the case of a notice by telecopy, the sender shall
in addition confirm such notice by writing sent in the manner specified in
clauses (a), (b) or (c) of this Section 5.3. All notices shall be effective upon
receipt by the addressee; PROVIDED, HOWEVER, that if any notice is tendered to
an addressee and the delivery thereof is refused by such addressee, such notice
shall be effective upon such tender. For the purposes of notice, the addresses
of the parties shall be as set forth below; PROVIDED, HOWEVER, that any party
shall have the right to change its address for notice hereunder to any other
location by giving written notice to the other party in the manner set forth
herein. The initial addresses of the parties hereto are as follows:

               If to the Lessor:

                     Hawkeye Funding, Limited Partnership
                     c/o Hawkeye Funding, Inc.,
                        as General Partner
                     c/o ML Leasing Equipment Corp.
                     Four World Financial Center
                     New York, New York 10080

                     Attention: Jean M. Tomaselli
                     Telecopier: (212) 449-2854
                     Telephone:  (212) 449-7925

               With a copy to:

                     ML Leasing Equipment Corp.
                     Controller's Office

                                      -15-
<Page>

                     Two World Financial Center
                     14th Floor
                     New York, New York  10281

                     Attention: Kira Toone
                     Telecopier: (212) 236-7584
                     Telephone:  (212) 236-7203

               If to the Guarantor:

                     Consolidated Edison, Inc.
                     4 Irving Place
                     New York, New York  10003

                     Attention: Treasurer
                     Telecopier: (212) 460-2786
                     Telephone:  (212) 228-5713

               With a copy to:

                     Consolidated Edison, Inc.
                     4 Irving Place
                     New York, New York  10003

                     Attention: General Counsel
                     Telecopier: (212) 674-7329
                     Telephone:  (212) 460-6330

                     and to:

                     Consolidated Edison Development, Inc.
                     111 Broadway
                     16th Floor
                     New York, New York  10006

                     Attention: President
                     Telecopier: (212) 393-9282
                     Telephone:  (212) 393-9242

          5.4  REMEDIES. The Guarantor stipulates that the remedies at law in
respect of any default or threatened default by the Guarantor in the performance
of or compliance with any of the terms of this Guaranty may not be adequate, and
that any of such terms may be specifically enforced by a decree for specific
performance or by an injunction against violation of any such terms or
otherwise.

          5.5  RIGHT TO DEAL WITH THE LESSEE. At any time and from time to time,
without terminating, affecting or impairing the validity of this Guaranty or the
obligations of the

                                      -16-
<Page>

Guarantor hereunder, the Lessor or Assignee may deal with the Lessee in the same
manner and as fully and as if this Guaranty did not exist and shall be entitled,
among other things, to grant the Lessee, without notice or demand and without
affecting the Guarantor's liability hereunder, such extension or extensions of
time to perform, renew, compromise, accelerate or otherwise change the time for
payment of or otherwise change the terms of payment or any part thereof
contained in or arising under any Operative Document, or to waive any Obligation
of the Lessee to perform any act or acts as the Lessor or Assignee may deem
advisable.

          5.6  SUBROGATION. The Guarantor will not exercise any rights which it
may acquire by way of subrogation hereunder, by any payment made hereunder or
otherwise, until all of the Obligations have been paid in full in cash and
performed in full. If any amount shall be paid to the Guarantor on account of
such subrogation rights at any time when all of the Obligations shall not have
been paid in full in cash, such amount shall be held in trust for the benefit of
the Lessor and Assignee and shall forthwith be paid as provided in Section 5.1
hereof to be credited and applied upon the Obligations, whether matured or
unmatured, in accordance with the terms of the Operative Documents. If (a) the
Guarantor shall make payment to the Lessor, Assignee or any successor, assignee
or transferee of the Lessor or Assignee of all or any part of the Obligations
and (b) all the Obligations shall be indefeasibly paid in full in cash, the
Lessor or any such successor, assignee or transferee of the Lessor will, at the
Guarantor's request and expense, execute and deliver to the Guarantor
appropriate documents, without recourse as set forth in Section 30 of the Lease,
and without representation or warranty, necessary to evidence the transfer by
subrogation to the Guarantor of an interest in the Obligations resulting from
such payment by the Guarantor.

          5.7  SURVIVAL OF REPRESENTATIONS, WARRANTIES, ETC. All
representations, warranties, covenants and agreements made herein and in
statements or certificates delivered pursuant hereto shall survive any
investigation or inspection made by or on behalf of the Lessor or Assignee and
shall continue in full force and effect until all of the obligations of the
Guarantor under this Guaranty shall be fully performed in accordance with the
terms hereof including, without limitation, the payment and performance in full
of all Obligations.

          5.8  GOVERNING LAW AND CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.
THIS GUARANTY HAS BEEN EXECUTED AND DELIVERED IN THE STATE OF NEW YORK. THE
GUARANTOR AND LESSOR AGREE THAT, TO THE MAXIMUM EXTENT PERMITTED BY THE LAWS OF
THE STATE OF NEW YORK, THIS GUARANTY, AND THE RIGHTS AND DUTIES OF THE GUARANTOR
AND LESSOR HEREUNDER, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK IN ALL RESPECTS, INCLUDING, WITHOUT
LIMITATION, IN RESPECT OF ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
THE GUARANTOR AND LESSOR EXPRESSLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM RELATED TO THIS GUARANTY. THE GUARANTOR AND
LESSOR ACKNOWLEDGE THAT THE PROVISIONS OF THIS SECTION 5.8 HAVE BEEN BARGAINED
FOR AND THAT THEY HAVE BEEN REPRESENTED BY COUNSEL IN CONNECTION THEREWITH.

                                      -17-
<Page>

          5.9  SEVERABILITY. If any term of this Guaranty or any application
thereof shall be invalid or unenforceable, the remainder of this Guaranty and
any other application of such term shall not be affected thereby. Any term of
this Guaranty may be amended, modified, waived, discharged or terminated only by
an instrument in writing signed by the Guarantor and Lessor, and consented to by
each Assignee.

          5.10 COUNTERPARTS. This Guaranty may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

          5.11 NO MERGER. There shall be no merger of this Guaranty and the
Lease by reason of the fact that the same person, firm or entity is, directly or
indirectly, the Guarantor and a lessee under the Lease or acquires or holds the
leasehold estate created by the Lease or any part of such leasehold estate.

                            [SIGNATURE PAGE FOLLOWS]

                                      -18-
<Page>

          IN WITNESS WHEREOF, the undersigned have caused this Guaranty to be
executed and delivered as of the day and year first above written.

                                                 CONSOLIDATED EDISON, INC.,
                                                 as Guarantor


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



Acknowledged and Agreed:

HAWKEYE FUNDING, LIMITED PARTNERSHIP

By: Hawkeye Funding, Inc.,
    its General Partner


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

                                      -19-
<Page>

                                    EXHIBIT A

                                  DEFINED TERMS

          "AFFILIATE" of any Person means any other Person controlling,
controlled by or under direct or indirect common control with such Person. For
the purposes of this definition, "CONTROL," when used with respect to any
specified Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "CONTROLLING" and
"CONTROLLED" have meanings correlative to the foregoing.

          "AGREEMENT FOR LEASE" means the Agreement for Lease, dated as of
November 14, 2000, between the Lessor, as owner, and the Lessee, as agent, as
the same may be amended or supplemented from time to time in accordance with its
terms.

          "ASSIGNEE" means the Collateral Trustee and any successor to the
Collateral Trustee.

          "BANKRUPTCY" means, with respect to any Person, a Voluntary Bankruptcy
or an Involuntary Bankruptcy. A "VOLUNTARY BANKRUPTCY" means, with respect to
any Person, (a) the insolvency (however evidenced) of such Person, (b) an
admission of insolvency or bankruptcy by such Person, (c) the commencement by
such Person of a voluntary case under the Federal bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal or state bankruptcy,
insolvency or other similar law, (d) the consent by such Person to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of such Person or
of any substantial part of such Person's property, (e) the making by such Person
of an assignment for the benefit of creditors, (f) the failure of such Person
generally to pay its debts as such debts become due, or (g) the taking of
corporate action by such Person in furtherance of any such actions set forth
above. An "INVOLUNTARY BANKRUPTCY" means, with respect to any Person, without
the consent or acquiescence of such Person, the entry of a decree or order for
relief in respect of such Person by a court having jurisdiction in the premises
or the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of such Person or of any substantial part of
such Person's property, or ordering the winding up or liquidation of such
Person's affairs, in an involuntary case under the Federal bankruptcy laws, as
now or hereafter constituted, or any other applicable Federal or state
bankruptcy, insolvency or other similar law, and such decree or order remains
unstayed and in effect for sixty (60) consecutive days; or the commencement
against such Person of an involuntary case under the Federal bankruptcy laws, as
now or hereafter constituted, or any other applicable Federal or state
bankruptcy, insolvency or other similar law, and the continuance of any such
case unstayed and in effect for a period of sixty (60) consecutive days.

          "CEI NOTE" means the Promissory Note, dated November 16, 2000, from
the Guarantor, as borrower, in favor of the Lessor, as lender, evidencing the
advances made by the Lessor to the Guarantor thereunder, and any promissory note
or notes of the Guarantor issued in substitution thereof.

                                       A-1
<Page>

          "COLLATERAL TRUSTEE" means The Bank of New York, in its capacity as
collateral trustee under the Indenture of Trust, Security Agreement and
Collateral Assignment of Contracts, dated as of November 14, 2000, entered into
by the Lessor and the Collateral Trustee, pursuant to which the Lessor has
granted a security interest in certain collateral to the Collateral Trustee, as
the same may be amended, restated, modified or supplemented from time to time in
accordance with the terms thereof.

          "CONSOLIDATED CAPITAL" means, at any date, the sum of (i) Consolidated
Debt at such date and (ii) consolidated shareholder equity of the Guarantor and
its Consolidated Subsidiaries determined at such date in accordance with GAAP.

          "CONSOLIDATED DEBT" means all Indebtedness of the Guarantor and its
Consolidated Subsidiaries determined (without duplication) on a consolidated
basis.

          "CONSOLIDATED SUBSIDIARIES" means, at any date, all Subsidiaries of
the Guarantor the accounts of which would be consolidated with those of the
Guarantor in its consolidated financial statements in accordance with GAAP if
such statements were prepared as of such date.

          "CORE ELECTRICITY DISTRIBUTION BUSINESS" means the electricity
distribution business of Consolidated Edison Company of New York, Inc. in New
York City, viewed as a whole as of the date hereof.

          "COVENANT OBLIGATIONS" means all obligations (other than Payment
Obligations), covenants and undertakings of the Lessee contained in the
Operative Documents, after taking into account all applicable grace periods in
such Operative Documents.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.

          "ERISA GROUP" means the Guarantor, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Guarantor or any
Subsidiary, are treated as a single employer under Section 414 of the Code.

          "EVENT OF DEFAULT" means any of the following events shall occur and
be continuing:

               (a)   The Guarantor shall fail to pay any amount due under this
          Guaranty when the same becomes due and payable (including, without
          limitation, any Payment Obligations); or

               (b)   The Guarantor shall fail to perform or observe (i) any
          term, covenant or agreement contained in Section 3 hereof, and in the
          case of a default arising under Section 3.1.3(a), 3.1.3(b) or 3.1.5(a)
          hereof, such default shall continue for thirty (30) days after written
          notice thereof shall have been given to the Guarantor by the Lessor or
          Assignee, or (ii) any other term, covenant or agreement contained in
          this Guaranty on its part to be performed or observed if the failure
          to perform or observe such other term,

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          covenant or agreement shall remain unremedied for thirty (30) days
          after written notice thereof shall have been given to the Guarantor by
          the Lessor or Assignee; or

               (c)   A default or event of default by the Guarantor or any of
          its Material Subsidiaries shall occur, the effect of which is that the
          holder or holders of any Indebtedness of the Guarantor or any such
          Material Subsidiary having a then outstanding principal balance in
          excess of $100,000,000, causes or declares such Indebtedness of the
          Guarantor or any such Material Subsidiary to become due prior to its
          stated maturity under the provisions of any agreement or agreements
          pursuant to which such Indebtedness was created; or

               (d)   The Guarantor or any of its Material Subsidiaries shall
          default in any payment of principal of or interest on any Indebtedness
          of the Guarantor or any such Material Subsidiary having a then
          outstanding principal balance in excess of $100,000,000, beyond the
          period of grace, if any, under the provisions of any instrument or
          instruments or agreement or agreements pursuant to which such
          Indebtedness was created; or

               (e)   Any final judgment or judgments for the payment of money in
          excess of $100,000,000 in the aggregate shall be rendered against the
          Guarantor or any of its Material Subsidiaries by any court of
          competent jurisdiction and the same shall remain undischarged for a
          period of thirty (30) days from the date such payment is due, during
          which execution of such judgment or judgments shall not be effectively
          stayed; or

               (f)   The entry of a decree or order for relief in respect of the
          Guarantor by a court having jurisdiction in the premises or the
          appointment of a receiver, liquidator, assignee, custodian, trustee,
          sequestrator (or similar official) of the Guarantor or of any
          substantial part of the Guarantor's property, or ordering the winding
          up or liquidation of the Guarantor's affairs, in an involuntary case
          under the Federal bankruptcy laws, as now or hereafter constituted, or
          any other applicable Federal or state bankruptcy, insolvency or other
          similar law, and such decree or order remains unstayed and in effect
          for sixty (60) consecutive days; or the commencement against the
          Guarantor of an involuntary case under the Federal bankruptcy laws, as
          now or hereafter constituted, or any other applicable Federal or state
          bankruptcy, insolvency or other similar law, and the continuance of
          any such case unstayed and in effect for a period of sixty (60)
          consecutive days; or

               (g)   The Guarantor's insolvency (however evidenced), or the
          Guarantor's admission of insolvency or bankruptcy, or the commencement
          by the Guarantor of a voluntary case under the Federal bankruptcy
          laws, as now or hereafter constituted, or any other applicable Federal
          or state bankruptcy, insolvency or other similar law, or the consent
          by the Guarantor to the appointment of or taking possession by a
          receiver, liquidator, assignee, custodian, trustee, sequestrator (or
          other similar official) of the Guarantor or of any substantial part of
          the Guarantor's property, or the making by the Guarantor of an
          assignment for the benefit of creditors, or the failure of the
          Guarantor generally to pay its debts as such debts become due, or the
          taking of corporate action by the Guarantor in furtherance of any such
          action.

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<Page>

          "FINANCIAL STATEMENTS" means the financial statements accompanying the
Guarantor's Annual Report on Form 10-K or the Guarantor's Quarterly Reports on
Form 10-Q filed from time to time with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934.

          "GAAP" means generally accepted accounting principles as in effect
from time to time in the United States, applied on a consistent basis.

          "INDEBTEDNESS" means, for any Person, without duplication, (i) all
obligations of such Person for borrowed money or under any lease which, in
either case, is recognized as debt on the balance sheet of such Person in
accordance with GAAP, (ii) all obligations of such Person to pay the deferred
purchase price of property or services, including any such obligations created
under or arising out of any conditional sale or other title retention agreement
(other than property and services obtained in the ordinary course of business or
operations), (iii) all non-contingent obligations of such Person under
reimbursement or similar agreements with respect to the issuance of letters of
credit and (iv) all obligations of any other Person of the type specified in
clause (i), (ii) or (iii) above, (A) the payment or collection of which such
Person has guaranteed (except by reason of endorsement for collection in the
ordinary course of business), (B) in respect of which such Person is liable,
contingently or otherwise, including, without limitation, liable by way of
agreement to purchase products or securities, to provide funds for payment, to
maintain working capital or other balance sheet conditions or otherwise to
assure a creditor against loss, or (C) secured by any Lien upon or in property
(including, without limitation, accounts and contract rights) owned by such
Person; PROVIDED, HOWEVER, that Indebtedness shall not include Non-Recourse Debt
(including, without limitation, Securitized Debt).

          "INDEMNIFICATION OBLIGATIONS" means any amount or amounts due to any
Indemnified Person from the Lessee pursuant to Section 11 of the Lease and
Section 12 of the Agreement for Lease.

          "LEASE" means the Lease Agreement, dated as of November 14, 2000,
between the Lessor and the Lessee, as the same may be amended or supplemented
from time to time in accordance with its terms.

          "LESSEE" means Newington Energy, L.L.C., a Delaware limited liability
company.

          "MATERIAL" means material in relation to the business, operations,
affairs, financial condition, assets or properties of the Guarantor and its
Subsidiaries taken as a whole.

          "MATERIAL ADVERSE EFFECT" means (a) the total common shareholders
equity of the Guarantor and its subsidiaries as determined on a consolidated
basis and as reflected in accordance with GAAP on the Guarantor's then most
recent Financial Statements shall fall below $4,610,510,000, (b) the fair market
sales value of the Project shall decrease by an amount equal to or greater than
7.5% of the Adjusted Acquisition Cost (as defined in the Lease) of the Project,
or (c) the Lessor or Assignee shall become, by virtue of the transactions or
activities contemplated by the Operative Documents, subject to financial, rate
or other similar regulation as, a public utility, or an electric utility or a
public utility holding company under a Legal Requirement (including any Legal
Requirement (i) under the 1935 Act, (ii) imposed by any state

                                        4
<Page>

or local public utility commission or other similar regulatory body, authority
or group having jurisdiction over the Lessor or the Lessee or any such
transactions or activities or (iii) under the Federal Power Act, as amended).

          "MATERIAL SUBSIDIARY" means any Subsidiary with shareholders' equity
for financial reporting purposes in excess of $500,000,000.

          "MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).

          "NON-RECOURSE DEBT" means, for any Person, obligations of such Person
of the type specified in clauses (i)-(iv) of the definition of "Indebtedness"
(not exceeding the cost of the acquisition, construction or creation of the
relevant asset, project or property) incurred or existing in connection with the
financing or refinancing of any asset, project or property, the repayment of
which obligations is to be made from the revenues arising out of, or other
proceeds of realization from, the acquired or created asset, project or
property, with recourse to those revenues and proceeds and assets forming the
subject matter of such asset, project or property (including, without
limitation, insurance contracts and shares or other rights of ownership in the
entity(ies) which own the relevant assets, projects or properties) and other
assets and properties ancillary thereto but without recourse to any other asset
or property or otherwise to such Person; PROVIDED that recourse liability shall
not be deemed to exist by reason of normal and customary sponsor support
arrangements.

          "NOTE PURCHASE AGREEMENT" means, collectively, the several Note
Purchase Agreements, each dated as of November 14, 2000, between the Lessor and
the purchasers of the Lessor's Senior Secured Notes due 2022, as the same may be
amended, restated, modified or supplemented from time to time.

          "OBLIGATIONS" means Payment Obligations and Covenant Obligations,
individually and collectively.

          "OPERATIVE DOCUMENTS" means the Agreement for Lease, the Lease, the
Pledge Agreement, the Consent and Agreement (as defined in the Note Purchase
Agreement), and the Reimbursement Agreement, dated as of the date hereof, among
the Lessee, the Lessor and ML Leasing Equipment Corp.

          "PAYMENT OBLIGATIONS" means all amounts stated in the Operative
Documents to be payable by the Lessee, after the expiration of all applicable
grace periods in such Operative Documents, including, without limitation,
amounts in respect of (a)(i) an Event of Loss, Event of Default or Event of
Project Termination (as each such term is defined in the Agreement for Lease),
(ii) an Event of Loss, Termination Event or Event of Default (as each such term
is defined in the Lease) and (iii) any other termination or expiration of the
Agreement for Lease and the Lease, including, without limitation, a termination
of the Agreement for Lease pursuant to the terms of Section 15 and subsection
18.11 of the Agreement for Lease, and a termination of the Lease or purchase of
the Project, as the case may be, pursuant to the terms of Section 12, Section
13, Section 14, Section 15, Section 16 and Section 19 of the Lease; (b) Basic
Rent, Additional Rent, Acquisition Cost, Debt Yield-Maintenance Premium and
Modified Call

                                        5
<Page>

Premium; and (c) all amounts of Indemnification Obligations, in each case,
notwithstanding any rejection of the Agreement for Lease or Lease by the Lessee
or a trustee in any Federal or state Bankruptcy or other similar proceeding and
any limit imposed in any such proceeding or by statute or other applicable law
on the amounts payable under the Agreement for Lease or Lease by the Lessee.

          "PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, limited liability company,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.

          "PLAN" means, at any time, an employee pension benefit plan (other
than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 4123 of the Internal Revenue Code
and either (i) is maintained, or contributed to, by any member of the ERISA
Group for employees of the ERISA group or (ii) has at any time within the
preceding five years been maintained, or contributed, to by any Person which was
at such time a member of the ERISA Group for employees of any Person which was
at such time a member of the ERISA Group.

          "POTENTIAL DEFAULT" means any event that, with the giving of notice,
lapse of time or both would constitute an Event of Default.

          "QUALIFYING NOTEHOLDER" has the meaning assigned to such term in the
Note Purchase Agreement.

          "RESPONSIBLE OFFICER" means the General Counsel or a Senior Financial
Officer of the Guarantor.

          "SEC" means the Securities and Exchange Commission.

          "SECURITIZED DEBT" means, for any Person, obligations of such Person
of the type specified in clauses (i)-(iv) of the definition of "Indebtedness"
secured by a Lien on one or more assets or rights to receive revenues, in each
case in respect of Stranded Costs (or related items) of such Person where the
holders of such obligations do not have recourse to any other assets, properties
or rights of such Person to receive revenue, in each case in respect of Stranded
Costs (or related items) of such Person.

          "SENIOR FINANCIAL OFFICER" means the Chief Financial Officer,
Treasurer or Controller of the Guarantor.

          "STRANDED COSTS" means (i) charges in respect of prior utility
investments or commitments in fossil-fueled and nuclear generating plants or
operations, (ii) commitments for decommissioning fossil-fueled and nuclear
generating plants or operations, (iii) charges with respect to contracts with
non-utility generators for electric power and energy, (iv) charges in respect of
prior utility investments or commitments in steam systems or operations and (v)
charges with respect to contracts with non-utility steam suppliers.

          "SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, joint venture, or other entity of which more than 50% of the
outstanding capital stock or other

                                        6
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ownership interest (irrespective of whether or not at the time capital stock or
other equity interest of any other class or classes of such corporation,
partnership, joint venture, or other entity shall or might have voting power
upon the happening of any contingency) is at the time owned directly or
indirectly by such Person; unless otherwise specified, "Subsidiary" means a
Subsidiary of the Guarantor.

                                        7
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                                  SCHEDULE 4.4

                               SEC PUBLIC FILINGS

<Page>

                                  SCHEDULE 4.5

    LIST OF MATERIAL SUBSIDIARIES, GUARANTOR'S DIRECTORS AND SENIOR OFFICERS


MATERIAL SUBSIDIARIES OF GUARANTOR:

Name of Material Subsidiary: Consolidated Edison Company of New York, Inc.

          Jurisdiction of Incorporation:
               New York

          Percentage of Capital Stock Owned by Guarantor/Subsidiaries:
               Common Stock: 100% owned by Guarantor


DIRECTORS AND SENIOR OFFICERS OF GUARANTOR:

Directors:

George Campbell, Jr.        Director
E. Virgil Conway            Director
Gordon J. Davis             Director
Ruth M. Davis               Director
Michael J. Del Giudice      Director
Joan S. Freilich            Director
Ellen V. Futter             Director
Sally  Hernandez-Pinero     Director
Peter W. Likins             Director
Eugene R. McGrath           Director
Richard A. Voell            Director
Stephen R. Volk             Director


Senior Officers:

Eugene R. McGrath           Chairman of the Board, President and Chief Executive
                            Officer
Joan S. Freilich            Executive Vice President and Chief Financial Officer
John D. McMahon             Senior Vice President and General Counsel
Hyman  Schoenblum           Vice President, Controller and Chief Accounting
                            Officer
Robert P. Stelben           Vice President and Treasurer
Archie M. Bankston          Secretary

<Page>

                             SCHEDULE 4.5 (CONT'D.)

    LIST OF MATERIAL SUBSIDIARIES, GUARANTOR'S DIRECTORS AND SENIOR OFFICERS

LIST OF AGREEMENTS RESTRICTING DIVIDENDS:

O&R Merger approval from NY PSC : "Joint petition of Con Edison and O&R for
approval of a certificate of merger and stock acquisition" Case 98-M-0961

Pending approval of NU Merger by NY PSC "Joint petition of Con Edison Inc. and
NU regarding merger and stock acquisition" Case 00-M-0095

Pending approval by Connecticut DPUC "Joint application of Con Edison, Inc and
NU for approval for a change of control" Docket No. 00-01-11