<PAGE>
                                                                    EXHIBIT 4.10


                    PREFERRED SECURITIES GUARANTEE AGREEMENT


                                     BETWEEN


                           COMMONWEALTH EDISON COMPANY

                                 (AS GUARANTOR)


                                       AND


                            WILMINGTON TRUST COMPANY

                                  (AS TRUSTEE)


                                   DATED AS OF


                                 MARCH 17, 2003


<PAGE>



                                TABLE OF CONTENTS

<Table>
<S>                                                                                           <C>
ARTICLE I  DEFINITIONS ................................................................        1

   SECTION 1.01.  Definitions .........................................................        1

ARTICLE II  TRUST INDENTURE ACT .......................................................        4

   SECTION 2.01.  Trust Indenture Act; Application ....................................        4
   SECTION 2.02.  Lists of Holders of Securities ......................................        4
   SECTION 2.03.  Reports by the Trustee ..............................................        5
   SECTION 2.04.  Periodic Reports to Trustee .........................................        5
   SECTION 2.05.  Evidence of Compliance with Conditions Precedent ....................        5
   SECTION 2.06.  Events of Default; Waiver ...........................................        5
   SECTION 2.07.  Event of Default; Notice ............................................        5
   SECTION 2.08.  Conflicting Interests ...............................................        6

ARTICLE III  POWERS, DUTIES AND RIGHTS OF TRUSTEE .....................................        6

   SECTION 3.01.  Powers and Duties of the Trustee ....................................        6
   SECTION 3.02.  Certain Rights of Trustee ...........................................        7
   SECTION 3.03.  Not Responsible for Recitals or Issuance of Preferred Securities ....        9

ARTICLE IV  TRUSTEE ...................................................................        9

   SECTION 4.01.  Trustee; Eligibility ................................................        9
   SECTION 4.02.  Appointment, Removal and Resignation of Trustee .....................       10

ARTICLE V  GUARANTEE ..................................................................       10

   SECTION 5.01.  Guarantee ...........................................................       10
   SECTION 5.02.  Waiver of Notice and Demand .........................................       10
   SECTION 5.03.  Obligations Not Affected ............................................       11
   SECTION 5.04.  Rights of Holders ...................................................       11
   SECTION 5.05.  Guarantee of Payment ................................................       12
   SECTION 5.06.  Subrogation .........................................................       12
   SECTION 5.07.  Independent Obligations .............................................       12

ARTICLE VI  LIMITATION OF TRANSACTIONS; SUBORDINATION .................................       13

   SECTION 6.01.  Limitation of Transactions ..........................................       13
   SECTION 6.02.  Subordination .......................................................       13
</Table>


<PAGE>

<Table>
<S>                                                                                           <C>
ARTICLE VII  TERMINATION ..............................................................       13

   SECTION 7.01.  Termination .........................................................       13

ARTICLE VIII  INDEMNIFICATION .........................................................       14

   SECTION 8.01.  Exculpation .........................................................       14
   SECTION 8.02.  Indemnification .....................................................       14
   SECTION 8.03.  Compensation and Fees ...............................................       14

ARTICLE IX  MISCELLANEOUS .............................................................       15

   SECTION 9.01.  Successors and Assigns ..............................................       15
   SECTION 9.02.  Amendments ..........................................................       15
   SECTION 9.03.  Notices .............................................................       15
   SECTION 9.04.  Benefit .............................................................       16
   SECTION 9.05.  Interpretation ......................................................       16
   SECTION 9.06.  Governing Law .......................................................       17
   SECTION 9.07.  Counterparts ........................................................       17
</Table>

                                       ii


<PAGE>


                    PREFERRED SECURITIES GUARANTEE AGREEMENT


                  This PREFERRED SECURITIES GUARANTEE AGREEMENT ("Guarantee
Agreement"), dated as of March 17, 2003, is between COMMONWEALTH EDISON COMPANY,
an Illinois corporation (the "Company"), as guarantor (the "Guarantor"), and
WILMINGTON TRUST COMPANY, a Delaware banking corporation, as trustee (the
"Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the Preferred Securities (as defined herein) of ComEd FINANCING III, a
Delaware statutory trust (the "Trust").

                  WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration of Trust"), dated as of March 17, 2003, among the
Wilmington Trust Company, as Delaware and property trustee, the other Trustees
named therein, the Company, as Sponsor, and the holders of undivided beneficial
interests in the assets of the Trust, the Trust is issuing as of the date hereof
200,000 preferred securities, having an aggregate liquidation amount of
$200,000,000, designated the 6.35% Trust Preferred Securities (the "Preferred
Securities") representing preferred undivided beneficial interests in the assets
of the Trust and having the terms set forth in the Declaration of Trust;

                  WHEREAS, the Preferred Securities will be issued by the Trust
and the proceeds thereof will be used to purchase the Notes (as defined in the
Declaration of Trust) of the Company, which will be held by the Trust as trust
assets; and

                  WHEREAS, as incentive for the Holders to purchase the
Preferred Securities, the Guarantor desires to irrevocably and unconditionally
agree, to the extent set forth herein, to pay to the Holders the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein.

                  NOW, THEREFORE, in consideration of the payment for Preferred
Securities by each Holder (as defined herein) thereof, which payment the
Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and
delivers this Guarantee Agreement for the benefit of the Holders from time to
time of the Preferred Securities.

                                    ARTICLE I

                                   DEFINITIONS

                  SECTION 1.01. Definitions. As used in this Guarantee
Agreement, the terms set forth below shall, unless the context otherwise
requires, have the following meanings. Capitalized or otherwise defined terms
used but not otherwise defined herein shall have the meanings assigned to such
terms in the Declaration of Trust as in effect on the date hereof.

                  "Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means


                                       1

<PAGE>

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.

                  "Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Trust.

                  "Covered Person" means any Holder or beneficial owner of
Preferred Securities.

                  "Event of Default" means a failure by the Guarantor to perform
any of its payment or other obligations under this Guarantee Agreement.

                  Fourth Supplemental Indenture means the Fourth Supplemental
Indenture, dated as of March 17, 2003, by and between the Company and Wilmington
Trust Company, as trustee, to the Indenture.

                  "Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred Securities, to
the extent not paid or made by or on behalf of the Trust: (i) any accrued and
unpaid Distributions (as defined in the Declaration of Trust) that are required
to be paid on such Preferred Securities to the extent the Trust has funds
legally available therefor to make such payment; (ii) the redemption price,
including all accrued and unpaid Distributions to the date of redemption (the
"Redemption Price"), with respect to the Preferred Securities called for
redemption by the Trust to the extent that the Trust has funds legally available
therefor to make such payment; and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Trust (other than in connection
with the distribution of Notes to the Holders), the lesser of (a) the aggregate
of the liquidation amount and all accrued and unpaid distributions on the
Preferred Securities to the date of payment, to the extent the Trust has funds
legally available therefor, and (b) the amount of assets of the Trust remaining
available for distribution to Holders in liquidation of the Trust (in either
case, the "Liquidation Distribution").

                  "Holder" means any holder, as registered on the books and
records of the Trust, of any Preferred Securities; provided, however, that in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.

                  "Indemnified Person" means the Trustee, any Affiliate of the
Trustee, or any officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Trustee.

                  "Indenture" means the Indenture, dated as of September 1,
1995, between the Company and Wilmington Trust Company, as trustee, as
heretofore supplemented and as supplemented by the Fourth Supplemental
Indenture.


                                       2
<PAGE>

                  "Majority in liquidation amount of the Preferred Securities"
means, except as provided in the Trust Indenture Act, a vote by Holder(s) of
Preferred Securities of more than 50% of the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accumulated and unpaid Distributions to the date upon which the
voting percentages are determined) of all Preferred Securities outstanding at
the time of determination.

                  "Notes" means the series of subordinated debt securities of
the Guarantor designated the "6.35% Junior Subordinated Deferrable Interest
Notes due March 15, 2033" held by the Property Trustee (as defined in the
Declaration of Trust) of the Trust.

                  "Officers' Certificate" means a certificate signed by the
Chairman of the Board, the President or a Vice President, and by the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary, of the
Guarantor, and delivered to the Trustee. Any Officers' Certificate delivered
with respect to compliance with a condition or covenant provided for in this
Guarantee Agreement (other than pursuant to Section 314(d)(4) of the Trust
Indenture Act) shall include:

                  (a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions relating
thereto;

                  (b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering the
Officers' Certificate;

                  (c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is necessary to
enable such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and

                  (d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.

                  "Other Guarantees" means all guarantees issued, or to be
issued, by the Guarantor with respect to the preferred or common securities
similar to the Preferred Securities and the Common Securities (as defined in the
Declaration of Trust), as the case may be, issued by other trusts established,
or to be established, by the Guarantor, in each case similar to the Trust.
"Other Guarantees" shall include (i) the Preferred Securities Guarantee
Agreement dated as of September 26, 1995 issued by the Guarantor with respect to
the 8.48% Trust Originated Preferred Securities of ComEd Financing I, (ii) the
Common Securities Guarantee Agreement dated as of September 26, 1995 issued by
the Guarantor with respect to the 8.48% Trust Originated Common Securities of
ComEd Financing I, (iii) the Series B Preferred Securities Guarantee Agreement
dated as of July 28, 1997 issued by the Guarantor with respect to the 8.50%
Series B Capital Securities of ComEd Financing II and (iv) the Series B Common
Securities Guarantee Agreement dated as of July 28, 1997 issued by the Guarantor
with respect to the 8.50% Series B Common Securities of ComEd Financing II.


                                       3
<PAGE>

                  "Other Indebtedness" means all subordinated notes, debentures
or other indebtedness issued by the Guarantor from time to time and sold to
trusts established, or to be established, by the Guarantor, in each case similar
to the Trust. "Other Indebtedness" shall include the 8.48% Subordinated
Deferrable Interest Notes due September 30, 2035 issued by the Guarantor to
ComEd Financing I and the 8.50% Series B Subordinated Deferrable Interest
Debentures due January 15, 2027 issued by the Guarantor to ComEd Financing II.

                  "Person" means any individual, corporation, estate,
partnership, limited liability company, joint venture, association, trust,
unincorporated organization or government or any agency or political subdivision
thereof or any other entity of whatever nature.

                  "Responsible Officer" means, with respect to the Trustee, any
managing director, any vice president, any assistant vice president, any
assistant secretary, any assistant treasurer, or any other officer of the
Corporate Trust and Agency Group of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.

                  "Successor Trustee" means a successor Trustee possessing the
qualifications to act as Trustee under Section 4.01.

                  "Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.

                  "Trustee" means Wilmington Trust Company until a Successor
Trustee has been appointed and has accepted such appointment pursuant to the
terms of this Guarantee Agreement and thereafter means each such Successor
Trustee.

                                   ARTICLE II

                               TRUST INDENTURE ACT

                  SECTION 2.01. Trust Indenture Act; Application.

                  (a) This Guarantee Agreement is subject to the provisions of
the Trust Indenture Act that are required to be part of this Guarantee Agreement
and shall, to the extent applicable, be governed by such provisions.

                  (b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.

                  SECTION 2.02. Lists of Holders of Securities.

                  (a) The Guarantor shall furnish or cause to be furnished to
the Trustee a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders ("List


                                       4
<PAGE>

of Holders") (i) semiannually, not later than June 1 and December 1 in each
year, as of a date not more than 15 days prior to the time such list is
furnished, and (ii) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Guarantor of any such request, a List of
Holders as of a date not more than 15 days prior to the time such list is
furnished; provided that, the Guarantor shall not be obligated to provide such
List of Holders at any time the List of Holders does not differ from the most
recent List of Holders given to the Trustee by the Guarantor or at any time the
Trustee is the Securities Registrar under the Declaration of Trust. The Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.

                  (b) The Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.

                  SECTION 2.03. Reports by the Trustee. Within 60 days after May
15 of each year commencing May 15, 2004, the Trustee shall provide to the
Holders of the Preferred Securities such reports as are required by Section
313(a) of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Trustee shall also
comply with the other requirements of Section 313 of the Trust Indenture Act.

                  SECTION 2.04. Periodic Reports to Trustee. The Guarantor shall
provide to the Trustee such documents, reports and information as required by
Section 314 of the Trust Indenture Act (if any) in the form, in the manner and
at the times required by Section 314 of the Trust Indenture Act, and shall
provide, within 120 days after the end of each of its fiscal years, the
compliance certificate required by Section 314(a)(4) of the Trust Indenture Act
in the form and in the manner required by such Section.

                  SECTION 2.05. Evidence of Compliance with Conditions
Precedent. The Guarantor shall provide to the Trustee such evidence of
compliance with the conditions precedent, if any, provided for in this Guarantee
Agreement that relate to any of the matters set forth in Section 314(c) of the
Trust Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.

                  SECTION 2.06. Events of Default; Waiver. The Holders of a
Majority in liquidation amount of the Preferred Securities may, by vote, on
behalf of all of the Holders, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Guarantee Agreement, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent thereon.

                  SECTION 2.07. Event of Default; Notice.


                  (a) The Trustee shall, within 90 days after the occurrence of
an Event of Default, transmit by mail, first class postage prepaid, to the
Holders, notices of all Events of Default known to a Responsible Officer of the
Trustee, unless such defaults have been cured before the giving of such notice,
provided that the Trustee shall be protected in withholding such notice if and
so long as the board of directors, the executive committee, or a trust committee
of directors and/or


                                       5
<PAGE>


Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders.

                  (b) The Trustee shall not be deemed to have knowledge of any
Event of Default unless the Trustee shall have received written notice thereof
from the Guarantor or a Holder, or a Responsible Officer charged with the
administration of the Declaration of Trust shall have obtained actual knowledge,
of such Event of Default.

                  SECTION 2.08. Conflicting Interests. The Declaration of Trust
shall be deemed to be specifically described in this Guarantee Agreement for the
purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.

                                   ARTICLE III

                      POWERS, DUTIES AND RIGHTS OF TRUSTEE

                  SECTION 3.01. Powers and Duties of the Trustee.

                  (a) This Guarantee Agreement shall be held by the Trustee for
the benefit of the Holders, and the Trustee shall not transfer this Guarantee
Agreement to any Person except the Trustee may assign rights hereunder to a
Holder exercising his or her rights pursuant to Section 5.04(b) or to a
Successor Trustee upon acceptance by such Successor Trustee of its appointment
to act as Successor Trustee. The right, title and interest of the Trustee shall
automatically vest in any Successor Trustee, and such vesting and cessation of
title shall be effective whether or not conveyancing documents have been
executed and delivered pursuant to the appointment of such Successor Trustee.

                  (b) If an Event of Default actually known to a Responsible
Officer of the Trustee has occurred and is continuing, the Trustee shall enforce
this Guarantee Agreement for the benefit of the Holders.

                  (c) The Trustee, before the occurrence of any Event of Default
and after the curing or waiving of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.06), the
Trustee shall exercise such of the rights and powers vested in it by this
Guarantee Agreement, and use the same degree of care and skill in its exercise
thereof, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.

                  (d) No provision of this Guarantee Agreement shall be
construed to relieve the Trustee from liability for its own negligent action,
its own negligent failure to act, or its own willful misconduct, except that:

                  (i) prior to the occurrence of any Event of Default and after
         the curing or waiving of all such Events of Default that may have
         occurred:

                                       6
<PAGE>

                           (A) the duties and obligations of the Trustee shall
                  be determined solely by the express provisions of this
                  Guarantee Agreement, and the Trustee shall not be liable
                  except for the performance of such duties and obligations as
                  are specifically set forth in this Guarantee Agreement, and no
                  implied covenants or obligations shall be read into this
                  Guarantee Agreement against the Trustee; and

                           (B) in the absence of bad faith on the part of the
                  Trustee, the Trustee may conclusively rely, as to the truth of
                  the statements and the correctness of the opinions expressed
                  therein, upon any certificates or opinions furnished to the
                  Trustee and conforming to the requirements of this Guarantee
                  Agreement; but in the case of any such certificates or
                  opinions that by any provision hereof are specifically
                  required to be furnished to the Trustee, the Trustee shall be
                  under a duty to examine the same to determine whether or not
                  they conform to the requirements of this Guarantee Agreement;

                  (ii) the Trustee shall not be liable for any error of judgment
         made in good faith by a Responsible Officer of the Trustee, unless it
         shall be proved that the Trustee was negligent in ascertaining the
         pertinent facts upon which such judgment was made;

                  (iii) the Trustee shall not be liable with respect to any
         action taken or omitted to be taken by it in good faith in accordance
         with the direction of the Holders of not less than a Majority in
         liquidation amount of the Preferred Securities relating to the time,
         method and place of conducting any proceeding for any remedy available
         to the Trustee, or exercising any trust or power conferred upon the
         Trustee under this Guarantee Agreement; and

                  (iv) no provision of this Guarantee Agreement shall require
         the Trustee to expend or risk its own funds or otherwise incur personal
         financial liability in the performance of any of its duties or in the
         exercise of any of its rights or powers, if the Trustee shall have
         reasonable grounds for believing that the repayment of such funds or
         liability is not reasonably assured to it under the terms of this
         Guarantee Agreement or adequate indemnity against such risk or
         liability is not reasonably assured to it.

                  SECTION 3.02. Certain Rights of Trustee.

                  (a) Subject to the provisions of Section 3.01:

                  (i) the Trustee may conclusively rely and shall be fully
         protected in acting or refraining from acting upon any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         direction, consent, order, bond, debenture, note, other evidence of
         indebtedness or other paper or document believed by it to be genuine
         and to have been signed, sent or presented by the proper party or
         parties;

                  (ii) any direction or act of the Guarantor contemplated by
         this Guarantee Agreement shall be sufficiently evidenced by an
         Officers' Certificate;

                  (iii) whenever, in the administration of this Guarantee
         Agreement, the Trustee shall deem it desirable that a matter be proved
         or established before taking, suffering or


                                       7
<PAGE>


         omitting any action hereunder, the Trustee (unless other evidence is
         herein specifically prescribed) may, in the absence of bad faith on its
         part, request and rely upon an Officers' Certificate which, upon
         receipt of such request, shall be promptly delivered by the Guarantor;

                  (iv) the Trustee shall have no duty to see to any recording,
         filing or registration of any instrument (or any rerecording, refiling
         or registration thereof);

                  (v) the Trustee may consult with counsel of its choice, and
         the advice or opinion of such counsel with respect to legal matters
         shall be full and complete authorization and protection in respect of
         any action taken, suffered or omitted by it hereunder in good faith and
         in accordance with such advice or opinion; such counsel may be counsel
         to the Guarantor or any of its Affiliates and may include any of its
         employees; the Trustee shall have the right at any time to seek
         instructions concerning the administration of this Guarantee Agreement
         from any court of competent jurisdiction;

                  (vi) the Trustee shall be under no obligation to exercise any
         of the rights or powers vested in it by this Guarantee Agreement at the
         request or direction of any Holder, unless such Holder shall have
         provided to the Trustee reasonable security and indemnity satisfactory
         to the Trustee against the costs, expenses (including attorneys' fees
         and expenses) and liabilities that might be incurred by it in complying
         with such request or direction, including such reasonable advances as
         may be requested by the Trustee; provided that nothing contained in
         this Section 3.02(a)(vi) shall be taken to relieve the Trustee, upon
         the occurrence of an Event of Default, of its obligation to exercise
         the rights and powers vested in it by this Guarantee Agreement;

                  (vii) the Trustee shall not be bound to make any investigation
         into the facts or matters stated in any resolution, certificate,
         statement, instrument, opinion, report, notice, request, direction,
         consent, order, bond, debenture, note, other evidence of indebtedness
         or other paper or document, but the Trustee, in its discretion, may
         make such further inquiry or investigation into such facts or matters
         as it may see fit;

                  (viii) the Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or by or
         through agents or attorneys, and the Trustee shall not be responsible
         for any misconduct or negligence on the part of any agent or attorney
         appointed with due care by it hereunder;

                  (ix) any action taken by the Trustee or its agents hereunder
         shall bind the Holders, and the signature of the Trustee or its agents
         alone shall be sufficient and effective to perform any such action; no
         third party shall be required to inquire as to the authority of the
         Trustee to so act or as to its compliance with any of the terms and
         provisions of this Guarantee Agreement, both of which shall be
         conclusively evidenced by the Trustee's or its agent's taking such
         action;

                  (x) whenever in the administration of this Guarantee Agreement
         the Trustee shall deem it desirable to receive instructions with
         respect to enforcing any remedy or right


                                       8
<PAGE>

         or taking any other action hereunder, the Trustee (A) may request
         instructions from the Holders of a Majority in liquidation amount of
         the Preferred Securities, (B) may refrain from enforcing such remedy or
         right or taking such other action until such instructions are received,
         and (C) shall be protected in acting in accordance with such
         instructions; and

                  (xi) the Trustee shall not be liable for any action taken,
         suffered, or omitted to be taken by it in good faith, without
         negligence, and reasonably believed by it to be authorized or within
         the discretion or rights or powers conferred upon it by this Guarantee
         Agreement.

                  (b) No provision of this Guarantee Agreement shall be deemed
to impose any duty or obligation on the Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Trustee shall be construed to be
a duty.

                  SECTION 3.03. Not Responsible for Recitals or Issuance of
Preferred Securities. The recitals contained in this Guarantee Agreement shall
be taken as the statements of the Guarantor, and the Trustee does not assume any
responsibility for their correctness. The Trustee makes no representation as to
the validity or sufficiency of this Guarantee Agreement.

                                   ARTICLE IV

                                     TRUSTEE


                  SECTION 4.01. Trustee; Eligibility.

                  (a) There shall at all times be a Trustee which shall:

                  (i) not be an Affiliate of the Guarantor; and

                  (ii) be a corporation organized and doing business under the
         laws of the United States of America or any State or Territory thereof
         or of the District of Columbia, or a corporation or Person permitted by
         the Securities and Exchange Commission to act as an institutional
         trustee under the Trust Indenture Act, authorized under such laws to
         exercise corporate trust powers, having a combined capital and surplus
         of at least 50 million U.S. dollars ($50,000,000), and subject to
         supervision or examination by Federal, State, Territorial or District
         of Columbia authority. If such corporation publishes reports of
         condition at least annually, pursuant to law or to the requirements of
         the supervising or examining authority referred to above, then, for the
         purposes of this Section 4.01(a)(ii), the combined capital and surplus
         of such corporation shall be deemed to be its combined capital and
         surplus as set forth in its most recent report of condition so
         published.

                  (b) If at any time the Trustee shall cease to be eligible to
so act under Section 4.01(a), the Trustee shall immediately resign in the manner
and with the effect set out in Section 4.02(c).


                                       9
<PAGE>


                  (c) If the Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Trustee and Guarantor shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act, subject to the rights of the Trustee
under the penultimate paragraph thereof.

         SECTION 4.02. Appointment, Removal and Resignation of Trustee.

                  (a) Subject to Section 4.02(b), the Trustee may be appointed
or removed without cause at any time by the Guarantor except during an Event of
Default.

                  (b) The Trustee shall not be removed in accordance with
Section 4.02(a) until a Successor Trustee has been appointed and has accepted
such appointment by written instrument executed by such Successor Trustee and
delivered to the Guarantor.

                  (c) The Trustee appointed to office shall hold office until a
Successor Trustee shall have been appointed or until its removal or resignation.
The Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the Trustee and delivered to
the Guarantor, which resignation shall not take effect until a Successor Trustee
has been appointed and has accepted such appointment by instrument in writing
executed by such Successor Trustee and delivered to the Guarantor and the
resigning Trustee.

                  (d) If no Successor Trustee shall have been appointed and
accepted appointment as provided in this Section 4.02 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning Trustee
may petition any court of competent jurisdiction for appointment of a Successor
Trustee. Such court may thereupon, after prescribing such notice, if any, as it
may deem proper, appoint a Successor Trustee.

                  (e) No Trustee shall be liable for the acts or omissions to
act of any Successor Trustee.

                  (f) Upon termination of this Guarantee Agreement or removal or
resignation of the Trustee pursuant to this Section 4.02, the Guarantor shall
pay to the Trustee all amounts due to the Trustee accrued to the date of such
termination, removal or resignation.

                                   ARTICLE V

                                   GUARANTEE

                  SECTION 5.01. Guarantee. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by or on behalf of the Trust),
as and when due, regardless of any defense, right of set-off or counterclaim
which the Trust may have or assert against any Person. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Trust to pay
such amounts to the Holders.

                  SECTION 5.02. Waiver of Notice and Demand. The Guarantor
hereby waives notice of acceptance of this Guarantee Agreement and of any
liability to which it applies or may


                                       10
<PAGE>


apply, presentment, demand for payment, any right to require a proceeding first
against the Trust or any other Person before proceeding against the Guarantor,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.

                  SECTION 5.03. Obligations Not Affected. The obligations,
covenants, agreements and duties of the Guarantor under this Guarantee Agreement
shall in no way be affected or impaired by reason of the happening from time to
time of any of the following:

                  (a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Trust of any express or implied
agreement, covenant, term or condition relating to the Preferred Securities to
be performed or observed by the Trust;

                  (b) the extension of time for the payment by the Trust of all
or any portion of the Distributions, Redemption Price, Liquidation Distribution
or any other sums payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Preferred Securities (other than an extension of
time for payment of Distributions, Redemption Price, Liquidation Distribution or
other sum payable that results from the extension of any interest payment period
on the Notes permitted by the Indenture);

                  (c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Trust granting indulgence or
extension of any kind;

                  (d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt of, or other similar proceedings affecting, the Trust or any of the
assets of the Trust;

                  (e) any invalidity of, or defect or deficiency in, the
Preferred Securities;

                  (f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or

                  (g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.03 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.


                  There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.

                  SECTION 5.04. Rights of Holders. The Guarantor expressly
acknowledges:

                  (a) The Guarantee Agreement will be deposited with the Trustee
to be held for the benefit of the Holders. The Trustee has the right to enforce
this Guarantee Agreement on behalf


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<PAGE>

of the Holders. The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee in respect of this Guarantee
Agreement or exercising any trust or power conferred upon the Trustee under this
Guarantee Agreement; provided, however, that, subject to the duties and
responsibilities of the Indenture Trustee pursuant to the Indenture, the Trustee
shall have the right to decline to follow any such direction if the Trustee
shall determine that the action so directed would be unjustly prejudicial to the
Holders not taking part in such direction or if the Trustee being advised by
counsel determines that the action or proceeding so directed may not lawfully be
taken or if the Trustee in good faith by its board of directors or trustees,
executive committee, or a trust committee of directors or trustees and/or
Responsible Officers shall determine that the action or proceedings so directed
would involve the Trustee in personal liability.

                  (b) If the Trustee fails to enforce this Guarantee Agreement,
any Holder may institute a legal proceeding directly against the Guarantor to
enforce the Trustee's rights under this Guarantee Agreement, without first
instituting a legal proceeding against the Trust, the Trustee or any other
person or entity. The Guarantor waives any right or remedy to require that any
action be brought first against the Trust or any other person or entity before
proceeding directly against the Guarantor; it being understood and intended that
no one or more of such Holders shall have any right in any manner whatsoever by
virtue of, or by availing of, any provision of this Guarantee Agreement to
affect, disturb or prejudice the rights of any other of such Holders or to
obtain or to seek to obtain priority or preference over any other of such
Holders or to enforce any right under this Guarantee Agreement, except in the
manner herein provided and for the equal and ratable benefit of all such
Holders.

                  SECTION 5.05. Guarantee of Payment. This Guarantee Agreement
creates a guarantee of payment and not of collection.

                  SECTION 5.06. Subrogation. The Guarantor shall be subrogated
to all (if any) rights of the Holders against the Trust in respect of any
amounts paid to the Holders by the Guarantor under this Guarantee Agreement;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any rights
which it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Guarantee
Agreement, if, at the time of any such payment, any amounts of Guarantee
Payments are due and unpaid under this Guarantee Agreement. If any amount shall
be paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.

                  SECTION 5.07. Independent Obligations. The Guarantor
acknowledges that its obligations hereunder are independent of the obligations
of the Trust with respect to the Preferred Securities and that the Guarantor
shall be liable as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee Agreement notwithstanding the occurrence
of any event referred to in subsections (a) through (g), inclusive, of Section
5.03 hereof.


                                       12
<PAGE>


                                   ARTICLE VI

                    LIMITATION OF TRANSACTIONS; SUBORDINATION

                  SECTION 6.01. Limitation of Transactions. So long as any
Preferred Securities remain outstanding, if the Guarantor shall be in default
with respect to its payment of any obligations under this Guarantee Agreement,
then the Guarantor shall not (i) declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase or make a liquidation payment
with respect to, any of the Guarantor's capital stock, (ii) make any payment of
principal, interest or premium, if any, on or repay or repurchase or redeem any
debt securities (including guarantees) of the Guarantor that rank pari passu
with or junior in right of payment to the Notes or (iii) make any guarantee
payments with respect to the foregoing (except with respect to this Guarantee
Agreement).

                  SECTION 6.02. Subordination. The obligations of the Guarantor
under this Guarantee Agreement will constitute unsecured obligations of the
Guarantor and will rank (i) subordinate and junior in right of payment to the
Senior Indebtedness (as defined in the Fourth Supplemental Indenture) to the
same extent and in the same manner as the Notes are subordinated to Senior
Indebtedness pursuant to the Fourth Supplemental Indenture, it being understood
that the terms of Article VI of the Fourth Supplemental Indenture shall apply to
the obligations of the Guarantor under this Guarantee Agreement as if such
Article VI were set forth herein in full and such obligations were substituted
for the term "Notes" appearing in such Article VI, (ii) subordinate and junior
in right of payment to the Notes and any Other Indebtedness, (iii) pari passu
with the most senior preferred or preference stock now or hereafter issued by
the Guarantor, with any Other Guarantees and with any guarantee now or hereafter
entered into by the Guarantor in respect of any preferred or preference stock of
any Affiliate of the Guarantor, including any other trust or any similar
financing vehicle sponsored by the Guarantor or any Affiliate of the Guarantor
and (iv) senior to all common stock of the Guarantor.

                                  ARTICLE VII

                                   TERMINATION

                  SECTION 7.01. Termination. This Guarantee Agreement shall
terminate and be of no further force and effect upon: (i) full payment of the
Redemption Price of all Preferred Securities, (ii) the distribution of Notes to
the Holders in exchange for all of the Preferred Securities, or (iii) full
payment of the amounts payable in accordance with the Declaration of Trust upon
liquidation of the Trust. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder must restore payment of any sums paid with respect
to Preferred Securities or under this Guarantee Agreement.


                                       13
<PAGE>


                                  ARTICLE VIII

                                 INDEMNIFICATION

                  SECTION 8.01. Exculpation.

                  (a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this
Guarantee Agreement and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Guarantee Agreement or by law, except that an Indemnified Person
shall be liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's negligence or willful misconduct with respect to such acts
or omissions.

                  (b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders might properly be paid.

                  SECTION 8.02. Indemnification. The Guarantor agrees to
indemnify each Indemnified Person for, and to hold each Indemnified Person
harmless against, any and all loss, liability, damage, claim or expense incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of the trust or trusts hereunder,
including the costs and expenses (including reasonable legal fees and expenses)
of defending itself against, or investigating, any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 8.02 shall
survive the termination of this Guarantee Agreement.

                  SECTION 8.03. Compensation and Fees.

                  The Guarantor agrees:

                  (a) to pay to the Trustee from time to time reasonable
compensation for all services rendered by the Trustee hereunder in such amounts
as the Guarantor and the Trustee shall agree from time to time (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust); and

                  (b) except as otherwise expressly provided herein, to
reimburse the Trustee upon request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any provision of
this Guarantee Agreement (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith.


                                       14
<PAGE>


                  The provisions of this Section 8.03 shall survive the
resignation or removal of the Trustee or the termination of this Guarantee
Agreement.


                  To secure the Guarantor's payment obligations in this Section
8.03 and in Section 8.02, the Guarantor and the Holders agree that the Trustee
shall have a lien prior to the Preferred Securities on all money or property
held or collected by the Trustee. Such lien shall survive the termination of
this Guarantee Agreement.

                                   ARTICLE IX

                                  MISCELLANEOUS

                  SECTION 9.01. Successors and Assigns. All guarantees and
agreements contained in this Guarantee Agreement shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Securities then
outstanding.

                  SECTION 9.02. Amendments. Except with respect to any changes
which do not materially and adversely affect the rights of Holders (in which
case no consent of Holders will be required), this Guarantee Agreement may only
be amended with the prior approval of the Holders of a Majority in liquidation
amount of the Preferred Securities. The provisions of Article 6 of the
Declaration of Trust concerning meetings of and voting by Holders shall apply to
the giving of such approval.

                  SECTION 9.03. Notices. Any notice, request or other
communication required or permitted to be given hereunder shall be in writing,
duly signed by the party giving such notice, and delivered, telecopied or mailed
by first class mail as follows:


                  (a) if given to the Trustee, to the address set forth below or
such other address as the Trustee may give notice of to the Guarantor and the
Holders:

                           Wilmington Trust Company
                           Rodney Square North
                           1100 North Market Street
                           Wilmington, Delaware 19890
                           Attention: Mary. St. Amand
                           Telecopy: (302) 636-4145

                  (b) if given to the Guarantor, to the address set forth below
or such other address as the Guarantor may give notice of to the Trustee and the
Holders:

                           Commonwealth Edison Company
                           10 South Dearborn Street - 37th Floor
                           Chicago, Illinois 60603
                           Attention: Treasurer
                           Telecopy: (312) 394-4082


                                       15
<PAGE>


                  (c) if given to the Trust, in care of the Trustee, or to the
Trustee at the Trust's (and the Trustee's) address set forth below or such other
address as the Trustee on behalf of the Trust may give notice to the Holders:

                           ComEd Financing III
                           c/o Commonwealth Edison Company
                           10 South Dearborn Street - 37th Floor
                           Chicago, Illinois 60603
                           Attention: Treasurer
                           Telecopy: (312) 394-4082


                  with a copy, in the case of a notice to the Trust (other than
a notice from the Guarantor), to the Guarantor; and

                  (d) if given to any Holder, at the address set forth on the
books and records of the Trust.


                  All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.

                  SECTION 9.04. Benefit. This Guarantee Agreement is solely for
the benefit of the Holders and, subject to Section 3.01(a), is not separately
transferable from the Preferred Securities.

                  SECTION 9.05. Interpretation. In this Guarantee Agreement,
unless the context otherwise requires:

                  (a) capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to them in
Section 1.01;

                  (b) a term defined anywhere in this Guarantee Agreement has
the same meaning throughout;

                  (c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified, supplemented
or amended from time to time;

                  (d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;

                  (e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;


                                       16
<PAGE>


                  (f) a reference to the singular includes the plural and vice
versa; and

                  (g) the masculine, feminine or neuter genders used herein
shall include the masculine, feminine and neuter genders.

                  SECTION 9.06. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE STATE OF NEW YORK. THE GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK AND ANY COURT IN THE STATE OF NEW YORK LOCATED IN THE CITY AND COUNTY
OF NEW YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO
OR IN CONNECTION WITH THIS GUARANTEE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
THEREBY, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE GUARANTOR HEREBY
WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE IN
ANY SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT
TO THE JURISDICTION OF SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS
BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR
PROCEEDING IS IMPROPER, OR THAT THIS GUARANTEE AGREEMENT OR ANY DOCUMENT OR ANY
INSTRUMENT REFERRED TO HEREIN OR THE SUBJECT MATTER HEREOF MAY NOT BE LITIGATED
IN OR BY SUCH COURTS. THE GUARANTOR AGREES THAT SERVICE OF PROCESS MAY BE MADE
UPON IT BY CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR NOTICES SET FORTH IN
THIS GUARANTEE AGREEMENT OR ANY METHOD AUTHORIZED BY THE LAWS OF NEW YORK.

                  SECTION 9.07. Counterparts. This instrument may be executed in
any number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.


                                       17
<PAGE>


                  THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.


                                        COMMONWEALTH EDISON COMPANY,
                                        as Guarantor


                                        By: /s/ J. Barry Mitchell
                                            -----------------------------------
                                            Name: J. Barry Mitchell
                                            Title: Vice President and Treasurer


                                        WILMINGTON TRUST COMPANY,
                                        not in its individual capacity but
                                        solely as Trustee


                                        By: /s/ Mary C. St. Amand
                                            -----------------------------------
                                            Name: Mary C. St. Amand
                                            Title: Assistant Vice President


                                       18