<PAGE>
                                                       Exhibit 10.27.10


Execution Version



                     PLEDGE AND SECURITY AGREEMENT


                     dated as of December 10, 1997


                                 among


                          NRGG FUNDING INC.,
                             as a Pledgor


                           NRG MORRIS INC.,
                             as a Pledgor


                                  and


                       THE CHASE MANHATTAN BANK,
                          as Collateral Agent


     <PAGE>

                           TABLE OF CONTENTS

                                                                 Page


                               ARTICLE 1
               DEFINED TERMS; PRINCIPLES OF CONSTRUCTION

     Section 1.1    Defined Terms                                  2
     Section 1.2    Principles of Construction                     2

                               ARTICLE 2
                                PLEDGE

     Section 2.1    Pledged Collateral                             3
     Section 2.2    Pledgors' Rights                               4
     Section 2.3    Secured Parties Not Liable                     5
     Section 2.4    Attorney-in-Fact                               5
     Section 2.5    Collateral Agent May Perform                   6
     Section 2.6    Reasonable Care                                6
     Section 2.7    Security Interest Absolute                     6

                               ARTICLE 3
            REPRESENTATIONS AND WARRANTIES OF THE PLEDGORS

     Section 3.1    Ownership of Pledged Collateral; Other
                     Financing Statements                          7
     Section 3.2    Due Incorporation; Qualification               7
     Section 3.3    Authority; Authorization, Execution
                     and Delivery; Enforceability                  7
     Section 3.4    Consents; Governmental Approvals               8
     Section 3.5    No Conflicts                                   8
     Section 3.6    Litigation                                     8
     Section 3.7    Necessary Filings                              8
     Section 3.8    Compliance with Laws                           9
     Section 3.9    No Defaults                                    9
     Section 3.10   Chief Executive Office                         9

                               ARTICLE 4
                       COVENANTS OF THE PLEDGORS

     Section 4.1    Transfer of Interests                          9
     Section 4.2    No Other Liens                                10
     Section 4.3    Maintenance of Existence                      10
     Section 4.4    Compliance with Laws; Governmental Approvals  10
     Section 4.5    Payment of Taxes                              10

                                   i

     <PAGE>

     Section 4.6    Amendment of LLC Agreement                    11
     Section 4.7    Chief Executive Office                        11
     Section 4.8    Supplements; Further Assurances               11
     Section 4.9    Certificated Interests                        11
     Section 4.10   Records; Statements and Schedules             12
     Section 4.11   Improper Distributions                        12
     Section 4.12   Bankruptcy                                    12

                               ARTICLE 5
             EXERCISE OF REMEDIES UPON AN EVENT OF DEFAULT

     Section 5.1    Remedies Generally                            12
     Section 5.2    Sale of Pledged Collateral                    12
     Section 5.3    Purchase of Pledged Collateral                13
     Section 5.4    Application of Proceeds                       14
     Section 5.5    Expenses                                      14

                               ARTICLE 6
                       MISCELLANEOUS PROVISIONS

     Section 6.1    Notices                                       14
     Section 6.2    Continuing Security Interest                  15
     Section 6.3    Release                                       15
     Section 6.4    Reinstatement                                 15
     Section 6.5    Independent Security                          15
     Section 6.6    Amendments                                    16
     Section 6.7    Successors and Assigns                        16
     Section 6.8    Third Party Beneficiaries                     16
     Section 6.9    Survival                                      16
     Section 6.10   No Waiver; Remedies Cumulative                16
     Section 6.11   Counterparts                                  16
     Section 6.12   Headings Descriptive                          17
     Section 6.13   Severability                                  17
     Section 6.14   Governing Law; Submission to Jurisdiction
                     and Venue; Waiver of Jury Trial              17
     Section 6.15   Entire Agreement                              18
     Section 6.16   Indemnity                                     18
     Section 6.17   Independent Obligations                       20
     Section 6.18   Waiver of Defenses                            20
Section 6.19   Subrogation, Etc.
21
     Section 6.20   Joint and Several Liability                   21
Section 6.21   Recourse Limited to Collateral                21

                                  ii

     <PAGE>

                     PLEDGE AND SECURITY AGREEMENT

               This PLEDGE AND SECURITY AGREEMENT (this
     "Agreement"), dated as of December 10, 1997, among NRGG FUNDING
     INC., a Delaware corporation ("NRGG FUNDING"), NRG MORRIS INC.,
     a Delaware corporation ("NRGMI"), and THE CHASE MANHATTAN BANK,
     as Collateral Agent (as defined below) and grantee hereunder
     for the benefit of the Secured Parties (as defined below).
     NRGG Funding and NRGMI are sometimes referred to herein
     collectively as the "Pledgors" and each individually as a
     "Pledgor."


                         W I T N E S S E T H :

               WHEREAS, NRG (Morris) Cogen, LLC, a Delaware limited
     liability company (the "Borrower") entered into the
     Construction and Term Loan Agreement, dated as of September 15,
     1997 (as amended, supplemented or otherwise modified from time
     to time, the "Credit Agreement"), with the banks party thereto
     (the "Banks"), The Chase Manhattan Bank, as agent for the Banks
     (in such capacity, the "Agent Bank"), and The Chase Manhattan
     Bank, as collateral agent for the Banks and the Agent Bank (in
     such capacity, the "Collateral Agent" and, collectively with
     the Banks and the Agent Bank, the "Secured Parties"), pursuant
     to which the Banks make construction and term loans and other
     extensions of credit to the Borrower;

               WHEREAS, NRG Energy, Inc. ("NRG Energy"), NRGMI and
     the Collateral Agent entered into the Pledge and Security
     Agreement, dated as of September 15, 1997 (the "Original Pledge
     Agreement"), pursuant to which NRG Energy and NRGMI granted a
     security interest in the Pledged Collateral (as defined
     therein) to the Collateral Agent to secure the Borrower's
     obligations under the Credit Agreement;

               WHEREAS, pursuant to the Membership Interest Purchase
     Agreement, dated as of December 10, 1997 (the "Purchase
     Agreement"), between NRGG Funding and NRG Energy, NRGG Funding
     will purchase all of NRG Energy's membership interests in the
     Borrower;

               WHEREAS, upon execution and delivery of the Purchase
     Agreement, the Pledgors together will own one hundred percent
     (100%) of the membership interests in the Borrower and,
     accordingly, will benefit from the extensions of credit made by
     the Banks to the Borrower under the Credit Agreement;

               WHEREAS, it is a condition precedent to (i) obtaining
     the consent of the Collateral Agent and the Agent Bank to the
     form and substance of the Purchase Agreement and (ii) to the
     Banks continuing to extend credit to the Borrower under the
     Credit Agreement that the Pledgors execute and deliver this
     Agreement;

     <PAGE>

               NOW, THEREFORE, in consideration of the foregoing
     premises and for other good and valuable consideration, the
     receipt and adequacy of which are hereby acknowledged, the
     Pledgors hereby agree with the Collateral Agent as follows:


                               ARTICLE 1
               DEFINED TERMS; PRINCIPLES OF CONSTRUCTION

          Section 1.1  Defined Terms.  (a) Unless otherwise defined
     herein, terms defined in the Credit Agreement shall have such
     defined meanings when used herein.

               (b) The following terms shall have the following
     respective meanings:

               "Expenses" shall have the meaning ascribed thereto in
     Section 6.16(a).

               "Financing Statement" shall mean all financing
     statements, recordings, filings or other instruments of
     registration necessary and appropriate to perfect a security
     interest or Lien by filing in any appropriate filing or
     recording office in accordance with the Uniform Commercial Code
     as enacted in any and all relevant jurisdictions or any other
     relevant applicable Law.

               "Indemnitee" shall have the meaning ascribed thereto
     in Section 6.16(a).

               "LLC Agreement" shall mean the Amended and Restated
     Limited Liability Company Agreement of NRG (Morris) Cogen, LLC,
     dated December 10, 1997, between the Pledgors, and all
     amendments, modifications and supplements thereto and
     restatements thereof made in accordance with Section 4.6.

               "LLC Interests" shall have the meaning ascribed
     thereto in Section 2.1(a)(i).

               "NRG Energy Lien" shall have the meaning ascribed
     thereto in Section 3.1.

               "Permitted Liens" shall mean:  (a) Liens granted
     pursuant to this Agree ment; (b) Liens granted pursuant to the
     Subordinated Pledge Agreement; (c) Liens (other than any Lien
     imposed by ERISA) in connection with workmen's compensation,
     unemployment insurance or other social security or pension
     obligations; (d) Liens for taxes not yet delinquent or, if
     delinquent, which are subject to a Contest; and (e) attachment
     or judgment Liens, provided that (i) the existence of such
     Liens could not reasonably be expected to result in a Material
     Adverse Effect (as defined in Section 3.2) and (ii) such Liens
     are discharged within thirty (30) days of the creation thereof.

                                   2

     <PAGE>

               "Pledged Collateral" shall have the meaning ascribed
     thereto in Section 2.1(a).

               "Secured Obligations" shall mean (i) the Obligations
     and (ii) the Pledgors' obligations hereunder.

               "Securities Act" shall have the meaning ascribed
     thereto in Section 5.2(b).

               "Subordinated Pledge Agreement" shall mean the
     Subordinated Pledge and Security Agreement, dated as of the
     date hereof, among the Pledgors and NRG Energy.

          Section 1.2  Principles of Construction.  Unless otherwise
     expressly provided herein, the principles of construction set
     forth in Section 1.4 of the Credit Agreement shall apply to
     this Agreement.


                               ARTICLE 2
                                PLEDGE

          Section 2.1  Pledged Collateral.  (a)  As collateral
     security for the prompt and complete payment and performance
     when due, whether at stated maturity, by acceleration or
     otherwise (including the payment of amounts which would become
     due but for the operation of the automatic stay under Section
     362(a) of the Bankruptcy Code, 11 U.S.C. 362(a)), of all of the
     Secured Obligations, whether now existing or hereafter arising
     and howsoever evidenced, each Pledgor hereby pledges, grants,
     assigns, hypothecates, transfers and delivers to the Collateral
     Agent, for its benefit and the benefit of the other Secured
     Parties, a first priority security interest in the following,
     whether now existing or hereafter from time to time acquired
     (collectively, the "Pledged Collateral"):

                    (i) all of such Pledgor's membership interests
          in the Borrower (such Pledgor's "LLC Interests") and all
          of such Pledgor's rights to acquire membership interests
          in the Borrower in addition to or in exchange or
          substitution for such Pledgor's LLC Interests;

                    (ii) all of such Pledgor's rights, privileges,
          authority and powers as a member of the Borrower under the
          LLC Agreement;

                    (iii) all certificates or other documents (if
          any) representing any and all of the foregoing in clauses
          (i) and (ii);

                    (iv) all dividends, distributions, cash,
          securities, instruments and other property of any kind to
          which such Pledgor may be entitled in its capacity as a
          member of the Borrower by way of distribution, return of
          capital or otherwise;

                                   3

          <PAGE>

                    (v) any other claim which such Pledgor now has
          or may in the future acquire in its capacity as a member
          of the Borrower against the Borrower and its property; and

                    (vi) all proceeds, products and accessions of
          and to any of the property described in the preceding
          clauses (i) through (v).

               (b)  As used herein, the term "proceeds" shall be
     construed in its broadest sense and shall include whatever is
     received or receivable when any of the Pledged Collateral, or
     any proceeds thereof, is sold, collected, exchanged or
     otherwise disposed of, whether voluntarily or involuntarily,
     and shall include, without limitation, all rights to payment,
     including interest and premiums, with respect to any of the
     Pledged Collateral or any proceeds thereof.

          Section 2.2  Pledgors' Rights.

               (a) Distributions.  Unless an Event of Default shall
     have occurred and be continuing, the Pledgors shall be entitled
     to receive and retain any and all distributions paid in respect
     of the Pledged Collateral in compliance with the terms of the
     Credit Agreement; provided, however, that any and all

                    (i) distributions paid or payable in respect of
          any Pledged Collateral (whether paid in cash, securities
          or other property) in connection with (A) any partial or
          total liquidation or dissolution of the Borrower, (B) any
          distribution of capital of the Borrower, (C) any
          recapitalization or reclassification of the capital of the
          Borrower or (D) any reorganization of the Borrower, and

                    (ii) all property (whether cash, securities or
          other property) paid, payable or otherwise distributed in
          redemption of, or in exchange for, the property described
          in clause (i) immediately above,

     shall be, and shall be forthwith delivered to the Collateral
     Agent to hold as, Pledged Collateral and shall, if received by
     either of the Pledgors, be received in trust for the benefit of
     the Collateral Agent, be segregated from the other property or
     funds of such Pledgor, and be forthwith delivered to the
     Collateral Agent as Pledged Collateral in the same form as so
     received (with any necessary endorsement).  All cash and cash
     equivalents received by the Collateral Agent pursuant to the
     preceding sentence shall be deposited in the appropriate
     Project Account in accordance with the Credit Agreement.  Upon
     the occurrence and during the continuance of an Event of
     Default, all rights of the Pledgors to receive the
     distributions which they would otherwise be authorized to
     receive and retain pursuant to this clause (a) shall cease, and
     all such rights shall thereupon become vested in the Collateral
     Agent which shall thereupon have the sole right to receive and
     hold as Pledged Collateral such distributions; provided that,
     notwithstanding anything

                                   4

     <PAGE>

     herein to the contrary, if such Event of Default is cured or
     waived in accordance with the terms of the Credit Agreement,
     any such distribution previously paid to the Collateral Agent
     shall, upon request of the relevant Pledgor, be returned to
     such Pledgor.

               (b) Other Rights.  Unless an Event of Default shall
     have occurred and be continuing, each Pledgor shall be entitled
     to exercise all voting and other rights with respect to such
     Pledgor's LLC Interests; provided, however, that no vote shall
     be cast, right exercised or other action taken which could
     impair the Pledged Collateral or which would be inconsistent
     with or result in any violation of any provision of this
     Agreement or any other Transaction Document.  Upon the
     occurrence and during the continuance of an Event of Default,
     all voting and other rights of each Pledgor with respect to
     such Pledgor's LLC Interests which such Pledgor would otherwise
     be entitled to exercise pursuant to the terms of this Agreement
     shall cease, and all such rights shall be vested in the
     Collateral Agent which shall thereupon have the sole right to
     exercise such rights.

               (c) Turnover.  All distributions and other amounts
     which are received by any Pledgor contrary to the provisions of
     this Agreement shall be received in trust for the benefit of
     the Collateral Agent, shall be segregated from other funds of
     such Pledgor and shall be forthwith paid over to the Collateral
     Agent as Pledged Collateral in the same form as so received
     (with any necessary endorsement).

          Section 2.3  Secured Parties Not Liable.  Notwithstanding
     any other provision contained in this Agreement, the Pledgors
     shall remain liable under the LLC Agreement to observe and
     perform all of the conditions and obligations to be observed
     and performed by the Pledgors thereunder.  None of the
     Collateral Agent, any other Secured Party or any of their
     respective directors, officers, employees or agents shall have
     any obligations or liability under or with respect to any
     Pledged Collateral by reason of or arising out of this
     Agreement or the receipt by the Collateral Agent of any payment
     relating to any Pledged Collateral, nor shall any of the
     Collateral Agent, any other Secured Party or any of their
     respective directors, officers, employees or agents be
     obligated in any manner to (a) perform any of the obligations
     of either Pledgor under or pursuant to the LLC Agreement or any
     other agreement to which either Pledgor is a party, (b) make
     any payment or to inquire as to the nature or sufficiency of
     any payment or performance with respect to any Pledged
     Collateral, (c) present or file any claim or collect the
     payment of any amounts or take any action to enforce any
     performance with respect to the Pledged Collateral or (d) take
     any other action whatsoever with respect to the Pledged
     Collateral.

          Section 2.4  Attorney-in-Fact.  (a) Each Pledgor hereby
     appoints the Collateral Agent, on behalf of the Secured
     Parties, or any Person, officer or agent whom the Collateral
     Agent may designate, as its true and lawful attorney-in-fact,
     with full irrevocable power and authority in the place and
     stead of such Pledgor and in the name of such Pledgor or in its
     own name, at such Pledgor's cost and expense, from time to time
     in the Collateral Agent's reasonable discretion (as directed by
     the Agent Bank, acting in

                                   5

     <PAGE>

     accordance with the Credit Agreement) to take any action and to
     execute any instrument which the Collateral Agent may
     reasonably deem necessary or advisable to enforce its rights
     under this Agreement, including, without limitation, authority
     to receive, endorse and collect all instruments made payable to
     such Pledgor representing any distribution, interest payment or
     other payment in respect of the Pledged Collateral or any part
     thereof and to give full discharge for the same; provided,
     however, that the Collateral Agent will not exercise its powers
     under this Section 2.4 unless an Event of Default has occurred
     and is continuing (except that the Collateral Agent may at any
     time, in the name of either Pledgor or in its own name,
     prepare, sign and file any Financing Statement for the purpose
     of perfecting the security interest granted hereunder).

               (b) Each Pledgor hereby ratifies all that said
     attorney shall lawfully do or cause to be done by virtue
     hereof, in each case pursuant to the powers granted hereunder.
     Each Pledgor hereby acknowledges and agrees that in acting
     pursuant to the power-of-attorney granted in clause (a)
     immediately above, the Collateral Agent shall be acting in its
     own interest and on behalf of the Secured Parties, and each
     Pledgor acknowledges and agrees that the Collateral Agent and
     the other Secured Parties shall have no fiduciary duties to
     such Pledgor and such Pledgor hereby waives any claims or
     rights of a beneficiary of a fiduciary relationship hereunder.

          Section 2.5  Collateral Agent May Perform.  If either
     Pledgor fails to perform any agreement contained herein after
     receipt of a written request to do so from the Collateral
     Agent, the Collateral Agent may itself perform, or cause
     performance of, such agreement, and the reasonable expenses of
     the Collateral Agent, including the reasonable fees and
     expenses of its counsel, incurred in connection therewith shall
     be payable by such Pledgor under Section 6.16; provided that if
     an Event of Bankruptcy shall have occurred with respect to such
     Pledgor, the notice described in this Section 2.5 shall not be
     required and shall be deemed to have been delivered upon the
     failure of such Pledgor to perform such agreement.

          Section 2.6  Reasonable Care.  The Collateral Agent shall
     be deemed to have exercised reasonable care in the custody and
     preservation of the Pledged Collateral in its possession if the
     Pledged Collateral is accorded treatment substantially
     equivalent to that which the Collateral Agent accords its own
     property of the type of which the Pledged Collateral consists,
     it being understood that the Collateral Agent shall have no
     responsibility for () ascertaining or taking action with
     respect to calls, conversions, exchanges, maturities, tenders
     or other matters relative to any Pledged Collateral, whether or
     not the Collateral Agent has or is deemed to have knowledge of
     such matters, or () taking any necessary steps to preserve
     rights against any parties with respect to any Pledged
     Collateral.

                                   6

     <PAGE>

          Section 2.7  Security Interest Absolute.  All rights of
     the Collateral Agent and security interests hereunder, and all
     obligations of the Pledgors hereunder, shall be absolute and
     unconditional irrespective of:

               (a) any lack of validity or enforceability of any of
          the Transaction Documents or any other agreement or
          instrument relating thereto (other than against the
          Collateral Agent);

               (b) any change in the time, manner or place of
          payment of, or in any other term of, all or any of the
          Secured Obligations, or any other amendment or waiver of
          or any consent to any departure from the Transaction
          Documents or any other agreement or instrument relating
          thereto;

               (c) any exchange, release or non-perfection of any
          other collateral, or any release or amendment or waiver of
          or consent to any departure from any guaranty, for all or
          any of the Secured Obligations; or

               (d) any other circumstance (other than the
          indefeasible payment in full of the Secured Obligations in
          cash or cash equivalents and/or application of the
          purchase price of any or all of the Pledged Collateral
          purchased by the Collateral Agent pursuant to Section 5.3)
          which might otherwise constitute a defense avail able to,
          or a discharge of, the Pledgors.


                               ARTICLE 3
            REPRESENTATIONS AND WARRANTIES OF THE PLEDGORS

          Each Pledgor represents and warrants as follows, which
     representations and warranties shall survive the execution and
     delivery of this Agreement and the making and repayment of the
     Secured Obligations; provided that (i) prior to the effective
     date of this Agreement, such representations and warranties
     shall be made by the Pledgors on a several basis, and (ii) on
     and after the effective date of this Agreement, such
     representations and warranties shall be made by the Pledgors on
     a joint and several basis:

          Section 3.1  Ownership of Pledged Collateral; Other
     Financing Statements.  Such Pledgor is the sole legal and
     beneficial owner of the Pledged Collateral pledged by it
     hereunder free and clear of any Lien other than (a) the Lien
     created pursuant to this Agreement and (b) the subordinated
     Lien (the "NRG Energy Lien") created in favor of NRG Energy
     pursuant to the Subordinated Pledge Agreement.  No security
     agreement, Financing Statement or other public notice with
     respect to all or any part of the Pledged Collateral is on file
     or of record in any public office, except such as may have been
     filed (x) in favor of the Collateral Agent pursuant to this
     Agreement or (y) in favor of NRG Energy pursuant to the
     Subordinated Pledge Agreement.

                                   7

     <PAGE>

          Section 3.2  Due Incorporation; Qualification.  Such
     Pledgor is a corporation duly organized and validly existing
     under the Laws of the State of Delaware, and is qualified to
     own property and transact business in every jurisdiction where
     the ownership of its property and the nature of its business as
     currently conducted and as contemplated to be conducted
     requires it to be qualified, except where the failure to so
     qualify could not reasonably be expected to result in a
     Material Adverse Effect (as herein defined).  For purposes of
     this Section 3.2, "Material Adverse Effect" shall mean a
     material adverse effect on any of (i) the operations, business,
     financial condition or property of NRGG Funding and its
     subsidiaries on a consolidated basis, (ii) the ability of
     either Pledgor to perform in a timely manner its material
     obligations under this Agreement or any other Transaction
     Document to which it is a party, (iii) the rights and interests
     of the Banks, the Agent Bank and the Collateral Agent under the
     Transaction Documents or (iv) the value of the Pledged
     Collateral or the validity or priority of the security
     interests therein granted to the Collateral Agent.

          Section 3.3  Authority; Authorization, Execution and
     Delivery; Enforceability.  Such Pledgor has full power,
     authority and legal right to enter into this Agreement and to
     perform its obligations hereunder and to pledge all of the
     Pledged Collateral pledged by it pursuant to this Agreement.
     The pledge of such Pledged Collateral pursuant to this
     Agreement has been duly authorized by such Pledgor.  This
     Agreement has been duly authorized, executed and delivered by
     such Pledgor and constitutes a legal, valid and binding
     obligation of such Pledgor enforceable against such Pledgor in
     accordance with its terms, except as enforceability may be
     limited by applicable bankruptcy, insolvency, moratorium or
     other similar Laws affecting creditors' rights generally and
     except as enforceability may be limited by general principles
     of equity (whether considered in a suit at law or in equity).

          Section 3.4  Consents; Governmental Approvals.  No consent
     of any other party (including, without limitation, stockholders
     or creditors of such Pledgor) and no Governmental Approval is
     required which has not been obtained either (a) for the
     execution, delivery and performance by such Pledgor of this
     Agreement, (b) for the pledge by such Pledgor of the Pledged
     Collateral pledged by it pursuant to this Agreement, or (c) for
     the exercise by the Collateral Agent of the rights provided for
     in this Agreement or the remedies in respect of the Pledged
     Collateral pursuant to this Agreement.

          Section 3.5  No Conflicts.  The execution, delivery and
     performance of this Agreement and each other Transaction
     Document to which such Pledgor is a party will not (i) require
     any consent or approval of the Board of Directors of such
     Pledgor which has not been obtained, (ii) violate the
     provisions of such Pledgor's Certificate of Incorporation or By-
     laws, (iii) violate the provisions of any Law (including,
     without limitation, any usury Laws), regulation or order of any
     Governmental Authority applicable to such Pledgor, (iv) result
     in a breach of or constitute a default under any material
     agreement relating to the management or affairs of such
     Pledgor, or any indenture or loan or credit

                                   8

     <PAGE>

     agreement or any other material agreement, lease or instrument
     to which such Pledgor is a party or by which such Pledgor or
     any of its material properties may be bound or (v) result in or
     create any Lien (other than Permitted Liens) under, or require
     any consent which has not been obtained under, any indenture or
     loan or credit agreement or any other material agreement,
     instrument or document, or the provisions of any order, writ,
     judgment, injunction, decree, determination or award of any
     Governmental Authority binding upon such Pledgor or the
     Borrower or any of their respective properties.

          Section 3.6  Litigation.  No Event of Bankruptcy has
     occurred with respect to such Pledgor and there is no action,
     suit or proceeding at Law or in equity or by or before any
     Governmental Authority, arbitral tribunal or other body now
     pending against such Pledgor or, to the best knowledge of such
     Pledgor, threatened against such Pledgor which questions the
     validity or legality of or seeks damages in connection with
     this Agreement or any other Transaction Document to which such
     Pledgor is a party.

          Section 3.7  Necessary Filings.  Upon the filing with the
     Minnesota Secretary of State of all necessary Financing
     Statements executed by the Pledgors in favor of the Collateral
     Agent with respect to the Pledged Collateral, all filings,
     registrations and recordings necessary or appropriate to
     create, preserve, protect and perfect the security interest
     granted by such Pledgor to the Collateral Agent hereby in
     respect of the Pledged Collateral shall have been accomplished
     and the security interest granted by such Pledgor to the
     Collateral Agent pursuant to this Agreement in the Pledged
     Collateral constitutes a valid and enforceable perfected
     security interest therein superior and prior to the rights of
     all other Persons therein and, in each case, subject to no
     other Liens, sales, assignments, conveyances, settings over or
     transfers.

          Section 3.8  Compliance with Laws.  Such Pledgor has been
     in the past and is in current compliance with all applicable
     Laws () in respect of the conduct of its business and the
     ownership of its property, () in connection with the
     procurement of any Transaction Document to which it is a party
     and () in connection with the execution, delivery and
     performance of any Transaction Document to which it is a party,
     except in each case where such Pledgor's failure to comply
     could not reasonably be expected to result in a Material
     Adverse Effect.

          Section 3.9  No Defaults.  Such Pledgor is not in default
     in the performance, observance or fulfillment of any of the
     material obligations, covenants or conditions applicable to
     such Pledgor contained in any Transaction Document to which it
     is a party.

          Section 3.10  Chief Executive Office.  (a) The chief
     executive office of NRGG Funding and the office where NRGG
     Funding keeps its records concerning the Borrower and the
     Project and all contracts relating thereto is located at:

          1221 Nicollet Mall, Suite 610

                                   9

     <PAGE>

          Minneapolis, MN 55403.

          (b) The chief executive office of NRGMI and the office
     where NRGMI keeps its records concerning the Borrower and the
     Project and all contracts relating thereto is located at:

          1221 Nicollet Mall, Suite 610
          Minneapolis, MN 55403.


                               ARTICLE 4
                       COVENANTS OF THE PLEDGORS

          Each Pledgor hereby covenants and agrees from and after
     the date of this Agreement until the termination of this
     Agreement in accordance with the provisions of Section 6.3:

          Section 4.1  Transfer of Interests.  (a) Such Pledgor
     shall not sell or otherwise dispose of the Pledged Collateral
     or any interest therein without the prior written consent of
     the Collateral Agent (as directed by the Agent Bank, acting
     upon the instructions of the Required Banks); provided,
     however, that such Pledgor may, without the prior written
     consent of the Collateral Agent (as directed by the Agent Bank,
     acting upon the instructions of the Required Banks), sell,
     together with any sale of LLC Interests made by the other
     Pledgor pursuant to this provisio, less than or equal to ten
     percent (10%) of its LLC Interests to the Energy Purchaser
     within one hundred twenty (120) days after the Closing Date
     pursuant to Section 19.5 of the Energy Services Agreement if
     (i) such sale does not cause a Default or an Event of Default
     under the Credit Agreement and (ii) such sale is consummated
     under documentation that is acceptable in form and substance
     satisfactory to the Collateral Agent and the Agent Bank and
     which causes the Energy Purchaser to pledge its membership
     interests in the Borrower so purchased to the Collateral Agent
     for the benefit of the Secured Parties as security for the
     Secured Obligations; provided that no sale of LLC Interests
     shall be permitted under this clause (a) unless NRGG Funding
     remains obligated under the Equity Commitment Agreement, dated
     as of September 15, 1997, among NRG Energy, the Borrower and
     the Collateral Agent, as assumed by NRGG Funding pursuant to
     the Assignment and Assumption Agreement, dated as of the date
     hereof, between NRG Energy and NRGG Funding.

               (b) If either Pledgor transfers all of its LLC
     Interests pursuant to any transfer permitted under clause (a)
     of this Section 4.1, then the Secured Parties, upon the request
     and at the expense of such Pledgor, shall execute and deliver
     all such documentation reasonably necessary to release such
     Pledgor from the terms of this Agreement.

                                   10

     <PAGE>

          Section 4.2  No Other Liens.  Such Pledgor shall not
     create, incur or permit to exist, shall defend the Pledged
     Collateral against and shall take such other action as is
     necessary to remove, any Lien or claim on or to the Pledged
     Collateral (other than Permitted Liens), and shall defend the
     right, title and interest of the Collateral Agent in and to any
     of the Pledged Collateral against the claims and demands of all
     Persons whomsoever.

          Section 4.3  Maintenance of Existence.  Such Pledgor shall
     preserve and maintain its legal existence as a corporation in
     good standing under the Laws of the State of Delaware; provided
     that NRGMI shall be permitted to merge into NRGG Funding if, in
     connection with such merger, NRGG Funding and NRGMI execute
     such documentation as is reasonably necessary to continue the
     Lien of the Collateral Agent on the Pledged Collateral.

          Section 4.4  Compliance with Laws; Governmental Approvals.
     Such Pledgor (i) shall comply with all Laws and (ii) shall
     obtain, maintain and comply with all Governmental Approvals as
     shall now or hereafter be necessary under applicable Law, rule
     or regulation, in each case in connection with the making and
     performance by such Pledgor of any material provision of the
     Transaction Documents to which it is a party, except where the
     failure to do so could not reasonably be expected to result in
     a Material Adverse Effect (as defined in Section 3.2).

          Section 4.5  Payment of Taxes.  Such Pledgor shall pay and
     discharge all taxes, assessments and governmental charges or
     levies imposed on it or on its income or profits or on any of
     its property prior to the date on which penalties attach
     thereto, and all lawful claims which, if unpaid, could
     reasonably be expected to become a Lien (other than a Permitted
     Lien) upon the Pledged Collateral, unless such matters are
     subject to a Contest.  Such Pledgor will promptly pay or cause
     to be paid any valid, final judgment enforcing any such tax,
     assessment, charge, levy or claim and cause the same to be
     satisfied of record.

          Section 4.6  Amendment of LLC Agreement.  Such Pledgor
     shall not, without the prior written consent of the Collateral
     Agent (as directed by the Agent Bank, acting upon the
     instructions of the Required Banks), agree to or permit (a) the
     cancellation or termination of the LLC Agreement, except upon
     the expiration of the stated term thereof or (b) any amendment,
     supplement, or modification of, or waiver with respect to any
     of the provisions of, the LLC Agreement (except with respect to
     (x) any sale of LLC Interests in accordance with Section 4.1 or
     (y) with the prior written consent of the Collateral Agent and
     the Agent Bank (which consent shall not be unreasonably
     withheld), any amendment that could not reasonably be expected
     to have an adverse effect on any of the rights of any of the
     Secured Parties under this Agreement).

                                   11

     <PAGE>

          Section 4.7  Chief Executive Office.  Such Pledgor shall
     not establish a new location for its chief executive office or
     change its name until (i) it has given to the Collateral Agent
     not less than thirty (30) days prior written notice of its
     intention so to do, clearly describing such new location or
     specifying such new name, as the case may be, and (ii) with
     respect to such new location or such new name, as the case may
     be, it shall have taken all action, satisfactory to the
     Collateral Agent, to maintain the security interest of the
     Collateral Agent in the Pledged Collateral intended to be
     granted hereby at all times fully perfected and in full force
     and effect.

          Section 4.8  Supplements; Further Assurances.  Such
     Pledgor shall at any time and from time to time, at the expense
     of such Pledgor, promptly execute and deliver all further
     instruments and documents, and take all further action, that
     may be necessary or desirable, or that the Collateral Agent may
     reasonably request, in order to perfect and protect any
     security interest granted or purported to be granted hereby or
     to enable the Collateral Agent to exercise and enforce its
     rights and remedies hereunder with respect to any Pledged
     Collateral.

          Section 4.9  Certificated Interests.  If such Pledgor
     shall become entitled to receive or shall receive any
     certificate, instrument, option or rights, whether as an
     addition to, in substitution of or in exchange for the Pledged
     Collateral or any part thereof, or otherwise, such Pledgor
     shall accept any such certificate, instrument, option or rights
     as the Collateral Agent's agent, shall hold them in trust for
     the Collateral Agent and shall deliver them forthwith to the
     Collateral Agent in the exact form received, with such
     Pledgor's endorsement when necessary or accompanied by duly
     executed instruments of transfer or assignment in blank or, if
     requested by the Collateral Agent, an additional pledge
     agreement or security agreement executed and delivered by such
     Pledgor, all in form and substance satisfactory to the
     Collateral Agent, to be held by the Collateral Agent, subject
     to the terms hereof, as further collateral security for the
     Secured Obligations.

          Section 4.10  Records; Statements and Schedules.  Such
     Pledgor shall keep and maintain, at its own cost and expense,
     records of the Pledged Collateral, including, but not limited
     to, records of all payments received with respect thereto, and
     such Pledgor shall make the same available to the Collateral
     Agent and the other Secured Parties for inspection at such
     Pledgor's chief executive office, at such Pledgor's own cost
     and expense, at any and all times upon demand.  Such Pledgor
     shall furnish to the Collateral Agent from time to time
     statements and schedules further identifying and describing the
     Pledged Collateral and such other reports in connection with
     the Pledged Collateral as the Collateral Agent may reasonably
     request, all in reasonable detail.

          Section 4.11  Improper Distributions.  Notwithstanding any
     other provision contained in this Agreement, such Pledgor shall
     not accept any distributions, dividends or other payments (or
     any collateral in lieu thereof) in respect of the Pledged
     Collateral,

                                   12

     <PAGE>

     except to the extent the same are expressly permitted by the
     terms of this Agreement and the Credit Agreement.

          Section 4.12  Bankruptcy.  Such Pledgor shall not
     authorize or permit the Borrower to make a general assignment
     for the benefit of the Borrower's creditors.  Such Pledgor
     shall not commence or join with any other Person (other than
     the Collateral Agent) in commencing any proceeding against the
     Borrower under any bankruptcy, reorganization, liquidation or
     insolvency law or statute now or hereafter in effect in any
     jurisdiction.


                               ARTICLE 5
             EXERCISE OF REMEDIES UPON AN EVENT OF DEFAULT

          Section 5.1  Remedies Generally.  If an Event of Default
     shall have occurred and be continuing, the Collateral Agent (as
     directed by the Agent Bank, acting in accordance with the
     Credit Agreement) may exercise, in addition to all other rights
     and remedies granted in this Agreement and in any other
     instrument or agreement securing, evidencing or relating to the
     Secured Obligations, all rights and remedies of a secured party
     under the Uniform Commercial Code in effect from time to time
     in any relevant jurisdiction and all other rights and remedies
     available at Law or in equity.

          Section 5.2  Sale of Pledged Collateral.  (a) Without
     limiting the generality of Section 5.1, the Collateral Agent
     (as directed by the Agent Bank, acting in accordance with the
     Credit Agreement) may, without notice except as specified
     below, sell the Pledged Collateral or any part thereof in one
     or more parcels at public or private sale or at any of the
     Collateral Agent's Office or elsewhere, for cash, on credit or
     for future delivery, and at such price or prices and upon such
     other terms as the Collateral Agent may reasonably deem
     commercially reasonable, irrespective of the impact of any such
     sales on the market price of the Pledged Collateral at any such
     sale.  Each purchaser at any such sale shall hold the property
     sold absolutely, free from any claim or right on the part of
     the Pledgors, and the Pledgors hereby waive (to the extent
     permitted by Law) all rights of redemption, stay and/or
     appraisal which they now have or may at any time in the future
     have under any rule of Law or statute now existing or hereafter
     enacted.  The Pledgors agree that, to the extent notice of sale
     shall be required by Law, at least ten (10) days' notice to the
     Pledgors of the time and place of any public sale or the time
     after which any private sale is to be made shall constitute
     reasonable notification.  The Collateral Agent shall not be
     obligated to make any sale of Pledged Collateral regardless of
     notice of sale having been given.  The Collateral Agent may
     adjourn any public or private sale from time to time by
     announcement at the time and place fixed therefor, and such
     sale may, without further notice, be made at the time and place
     to which it was so adjourned.  Assuming that such sales are
     made in compliance with federal and state securities Laws, the
     Collateral Agent shall incur no liability as a result of the
     sale of the Pledged Collateral,

                                   13

     <PAGE>

     or any part thereof, at any public or private sale.  The
     Pledgors hereby waive any claims against the Collateral Agent
     arising by reason of the fact that the price at which any
     Pledged Collateral may have been sold at such a private sale,
     if commercially reasonable, was less than the price which might
     have been obtained at a public sale, even if the Collateral
     Agent accepts the first offer received and does not offer such
     Pledged Collateral to more than one offeree.

               (b) The Pledgors recognize that the Collateral Agent
     (as directed by the Agent Bank, acting in accordance with the
     Credit Agreement) may elect to sell all or a part of the
     Pledged Collateral to one or more purchasers in privately
     negotiated transactions in which the purchasers will be
     obligated to agree, among other things, to acquire the Pledged
     Collateral for their own account, for investment and not with a
     view to the distribution or resale thereof.  The Pledgors
     acknowledge that any such private sales may be at prices and on
     terms less favorable than those obtainable through a public
     sale (including, without limitation, a public offering made
     pursuant to a registration statement under the Securities Act
     of 1933, as amended (the "Securities Act")), and the Pledgors
     and the Collateral Agent agree that such private sales shall be
     made in a commercially reasonable manner and that the
     Collateral Agent has no obligation to engage in public sales
     and no obligation to delay sale of any Pledged Collateral to
     permit the issuer thereof to register the Pledged Collateral
     for a form of public sale requiring registration under the
     Securities Act.

          Section 5.3  Purchase of Pledged Collateral.  The
     Collateral Agent may be a purchaser of the Pledged Collateral
     or any part thereof or any right or interest therein at any
     sale thereof, whether pursuant to foreclosure, power of sale or
     otherwise hereunder and the Collateral Agent may apply the
     purchase price to the payment of the Secured Obligations.  Any
     purchaser of all or any part of the Pledged Collateral shall,
     upon any such purchase, acquire good title to the Pledged
     Collateral so purchased, free of the security interests created
     by this Agreement.

          Section 5.4  Application of Proceeds.  The Collateral
     Agent shall apply any proceeds from time to time held by it and
     the net proceeds of any collection, recovery, receipt,
     appropriation, realization or sale with respect to the Pledged
     Collateral in accordance with the relevant provisions of the
     Credit Agreement.  For avoidance of doubt, it is understood
     that the Borrower shall remain liable to the extent of any
     deficiency between the amount of proceeds of the Pledged
     Collateral and the aggregated amount of the Secured
     Obligations.

          Section 5.5  Expenses.  The Pledgors shall upon demand pay
     to the Collateral Agent the amount of any and all reasonable
     expenses, including the reasonable fees and expenses of its
     counsel and of any experts and agents, and any transfer taxes,
     in each case payable upon sale of the Pledged Collateral, which
     the Collateral Agent may incur in connection with () the
     custody or preservation of, or the sale of, collection from or
     other

                                   14

     <PAGE>

     realization upon, any of the Pledged Collateral pursuant to the
     exercise or enforcement of any of the rights of the Collateral
     Agent hereunder or (b) the failure by the Pledgors to perform
     or observe any of the provisions hereof, together with interest
     thereon from the date of demand at the rate per annum equal to
     the Base Rate plus the Applicable Margin plus two percent (2%).
     Any amount payable by the Pledgors pursuant to this Section 5.5
     shall be payable on demand and shall constitute Secured
     Obligations secured hereby.


                               ARTICLE 6
                       MISCELLANEOUS PROVISIONS

          Section 6.1  Notices.  Except as otherwise expressly
     provided herein, all notices, requests and demands to or upon
     the respective parties hereto to be effective shall be in
     writing (including by telecopy, telex or cable communication),
     and shall be deemed to have been duly given or made when
     delivered by hand, or upon actual receipt if deposited in the
     United States mail, postage prepaid, or, in the case of telex
     notice, when answerback is received, or, in the case of
     telecopy notice, when confirmation is received, or, in the case
     of a nationally recognized overnight courier service, one
     Business Day after delivery to such courier service, addressed,
     in the case of each party hereto, at its address specified
     below its signature hereto or to such other address as may be
     designated by any party in a written notice to the other
     parties hereto; provided that notices and communications to the
     Collateral Agent shall not be effective until received by the
     Collateral Agent.

          Section 6.2  Continuing Security Interest.  This Agreement
     shall create a continuing security interest in the Pledged
     Collateral until the release thereof pursuant to Section 6.3.

          Section 6.3  Release.  Upon the indefeasible payment in
     full of the Secured Obligations in cash or cash equivalents
     and/or application of the purchase price of any or all of the
     Pledged Collateral purchased by the Collateral Agent pursuant
     to Section 5.3, the Collateral Agent, upon the request, and at
     the expense, of the Pledgors, shall execute and deliver all
     such documentation necessary to release the security interest
     created pursuant to this Agreement.

          Section 6.4  Reinstatement.  This Agreement shall continue
     to be effective or be reinstated, as the case may be, if at any
     time any amount received by the Collateral Agent or any other
     Secured Party hereunder or pursuant hereto is rescinded or must
     otherwise be restored or returned by the Collateral Agent or
     such Secured Party, as the case may be, upon the insolvency,
     bankruptcy, dissolution, liquidation or reorganization of
     either of the Pledgors or the Borrower or upon the appointment
     of any intervenor or conservator of, or trustee or similar
     official for, either of the Pledgors or the Borrower or any
     substantial part of either of the Pledgors' or the Borrower's
     assets, or upon the entry of an order by any

                                   15

     <PAGE>

     court avoiding the payment of such amount, or otherwise, all as
     though such payments had not been made.

          Section 6.5  Independent Security.  The security provided
     for in this Agreement shall be in addition to and shall be
     independent of every other security which the Secured Parties
     may at any time hold for any of the Secured Obligations hereby
     secured, whether or not under the Security Documents.  The
     execution of any other Security Document shall not modify or
     supersede the security interest or any rights or obligations
     contained in this Agreement and shall not in any way affect,
     impair or invalidate the effectiveness and validity of this
     Agreement or any term or condition hereof.  The Pledgors hereby
     waive their rights to plead or claim in any court that the
     execution of any other Security Document is a cause for
     extinguishing, invalidating, impairing or modifying the
     effectiveness and validity of this Agreement or any term or
     condition contained herein.  The Collateral Agent shall be at
     liberty to accept further security from the Pledgors or from
     any third party and/or release such security without notifying
     the Pledgors and without affecting in any way the obligations
     of the Pledgors under the Security Documents or the other
     Transaction Documents.  The Collateral Agent (as directed by
     the Agent Bank, acting in accordance with the Credit Agreement)
     shall determine if any security conferred upon the Secured
     Parties under the Security Documents shall be enforced by the
     Collateral Agent, as well as the sequence of securities to be
     so enforced.

          Section 6.6  Amendments.  No waiver, amendment,
     modification or termination of any provision of this Agreement,
     or consent to any departure by the Pledgors therefrom, shall in
     any event be effective without the prior written consent of the
     Collateral Agent and none of the Pledged Collateral shall be
     released without the written consent of the Collateral Agent.
     Any such waiver or consent shall be effective only in the
     specific instance and for the specific purpose for which given.

          Section 6.7  Successors and Assigns.  This Agreement shall
     be binding upon the Pledgors and their respective successors
     and assigns and shall inure to the benefit of the Collateral
     Agent and the other Secured Parties and their respective
     successors and assigns (subject to Section 11.4 of the Credit
     Agreement).  Subject to Section 4.1, the Pledgors may not
     assign or otherwise transfer any of their respective rights or
     obligations under this Agreement without the written consent of
     the Collateral Agent.

          Section 6.8  Third Party Beneficiaries.  The agreements of
     the parties hereto are intended to benefit the Banks and the
     Agent Bank and their respective successors and assigns.

                                   16

     <PAGE>

          Section 6.9  Survival.  All agreements, statements,
     representations and warranties made by the Pledgors herein or
     in any certificate or other instrument delivered by the
     Pledgors or on their behalf under this Agreement shall be
     considered to have been relied upon by the Collateral Agent and
     the Secured Parties and shall survive the execution and
     delivery of this Agreement and the other Transaction Documents
     until termination thereof or the indefeasible payment in full
     in cash or cash equivalents of all of the Secured Obligations
     regardless of any investigation made by the Collateral Agent or
     the Secured Parties, or made on their behalf.

          Section 6.10  No Waiver; Remedies Cumulative.  No failure
     or delay on the part of the Collateral Agent in exercising any
     right, power or privilege hereunder and no course of dealing
     between the Pledgors and the Collateral Agent shall operate as
     a waiver thereof; nor shall any single or partial exercise of
     any right, power or privilege hereunder preclude any other or
     further exercise thereof or the exercise of any other right,
     power or privilege hereunder or thereunder.  The rights and
     remedies herein expressly provided are cumulative and not
     exclusive of any rights or remedies which the Collateral Agent
     would otherwise have.

          Section 6.11  Counterparts.  This Agreement may be
     executed in any number of counterparts and by the different
     parties hereto on separate counterparts, each of which when so
     executed and delivered shall be an original, but all of which
     shall together constitute one and the same instrument.

          Section 6.12  Headings Descriptive.  The headings of the
     several Sections and sub sections of this Agreement are
     inserted for convenience only and shall not in any way affect
     the meaning or construction of any provision of this Agreement.

          Section 6.13  Severability.  In case any provision
     contained in or obligation under this Agreement shall be
     invalid, illegal or unenforceable in any jurisdiction, the
     validity, legality and enforceability of the remaining
     provisions or obligations, or of such provision or obligation
     in any other jurisdiction, shall not in any way be affected or
     impaired thereby.

          Section 6.14  Governing Law; Submission to Jurisdiction
     and Venue; Waiver of Jury Trial.  (a) This Agreement is a
     contract made under the Laws of the State of New York of the
     United States and shall for all purposes be governed by and
     construed in accordance with the Laws of such State without
     regard to the conflict of Law rules thereof (other than Section
     5-1401 of the New York General Obligations Law).

               (b) Any legal action or proceeding against the
     Pledgors with respect to this Agreement may be brought in the
     courts of the State of New York in the County of New York or of
     the United States for the Southern District of New York and, by
     execution and delivery of this Agreement, each Pledgor hereby
     irrevocably accepts for itself and in

                                   17

     <PAGE>

     respect of its property, generally and unconditionally, the
     jurisdiction of the aforesaid courts.  The Pledgors agree that
     a judgment, after exhaustion of all available appeals, in any
     such action or proceeding shall be conclusive and binding upon
     the Pledgors and may be enforced in any other jurisdiction by a
     suit upon such judgment, a certified copy of which shall be
     conclusive evidence of the judgment.  Each Pledgor hereby
     irrevocably designates, appoints and empowers CT Corporation
     System, with its offices as of the date hereof at 1633
     Broadway, New York, New York 10019, as its designee, appointee
     and agent to receive and accept for and on its behalf service
     of any and all legal process, summons, notices and documents
     which may be served in any such action or proceeding.  If for
     any reason such designee, appointee and agent shall cease to be
     available to act as such, each Pledgor agrees to designate a
     new designee, appointee and agent in New York City on the terms
     and for the purposes of this provision satisfactory to the
     Collateral Agent.  The Pledgors further irrevocably consent to
     the service of process out of any of the aforementioned courts
     in any such action or proceeding by the mailing of copies
     thereof by registered or certified mail, postage prepaid, to
     each Pledgor at its address referred to in Section 6.1, such
     service to become effective thirty (30) days after such
     mailing.  Nothing herein shall affect the right of the
     Collateral Agent to serve process in any other manner permitted
     by Law or to commence legal proceedings or otherwise proceed
     against the Pledgors in any other jurisdiction.

               (c) The Pledgors hereby irrevocably waive any
     objection which they may now or hereafter have to the laying of
     venue of any of the aforesaid actions or proceedings arising
     out of or in connection with this Agreement or any other
     Transaction Document brought in the courts referred to in
     clause (b) above and hereby further irrevocably waive and agree
     not to plead or claim in any such court that any such action or
     proceeding brought in any such court has been brought in an
     inconvenient forum.

          (d) WITH REGARD TO THIS AGREEMENT, THE PLEDGORS AND THE
     COLLATERAL AGENT HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY.

          Section 6.15  Entire Agreement.  This Agreement, together
     with any other agree ment executed in connection herewith, is
     intended by the parties as a final expression of their
     agreement as to the matters covered hereby and is intended as a
     complete and exclusive statement of the terms and conditions
     thereof.

          Section 6.16  Indemnity.  (a) Each Pledgor agrees to
     indemnify, reimburse and hold the Collateral Agent and the
     other Secured Parties and their respective officers, directors,
     employees, and agents (each individually, an "Indemnitee," and
     collectively, "Indemnitees") harmless from any and all
     liabilities, obligations, damages, injuries, penalties, claims,
     demands, actions, suits, judgments and any and all costs and
     expenses (including reasonable attorneys' fees and
     disbursements) (such expenses, for purposes of this Section
     6.16, hereinafter "Expenses") of whatsoever kind and nature
     imposed on, asserted against or incurred by any of the
     Indemnitees in any way relating to this Agree-

                                   18

     <PAGE>

     ment or the Pledged Collateral and arising out of (i) this
     Agreement or the documents executed in connection herewith or
     in any other way connected with the administration of the
     transactions contemplated hereby, or the enforcement of any of
     the terms hereof, or the preservation of any rights hereunder,
     (ii) the ownership, purchase, delivery, control, acceptance,
     financing, possession, condition, sale, return or other
     disposition, or use of, the Pledged Collateral (including,
     without limitation, latent or other defects, whether or not
     discoverable), (iii) the violation of any Laws, (iv) any tort
     (including, without limitation, claims arising or imposed under
     the doctrine of strict liability, or for or on account of
     injury to or the death of any Person including any Indemnitee)
     or property damage, or (v) any contract claim, excluding in all
     cases those Expenses, claims and liabilities finally judicially
     determined to have arisen solely from the gross negligence or
     willful misconduct of any Indemnitee.  Each Indemnitee agrees
     to use its best efforts to promptly notify such Pledgor of any
     assertion of any such liability, damage, injury, penalty,
     claim, demand, action, judgment or suit of which such
     Indemnitee has knowledge.  In case any action, suit or
     proceeding shall be brought against any Indemnitee for which
     the Indemnitee is indemnified under this clause (a), such
     Indemnitee shall notify the relevant Pledgor of the
     commencement thereof, and such Pledgor shall be entitled, at
     its expense, acting through counsel reasonably acceptable to
     such Indemnitee, to participate in, and, to the extent that
     such Pledgor desires to, assume and control the defense
     thereof; provided, however, that such Pledgor shall have
     acknowledged in writing its obligation to fully indemnify such
     Indemnitee in respect of such action, suit or proceeding; and
     provided, further, that such Pledgor shall not be entitled to
     assume and control the defense of any such action, suit or
     proceeding if and to the extent that, (A) in the reasonable
     opinion of such Indemnitee, (x) (i) such action, suit or
     proceeding involves any risk of imposition of criminal
     liability or (ii) such action, suit or proceeding involves any
     material risk of material civil liability on such Indemnitee or
     will involve a material risk of the sale, forfeiture or loss
     of, or the creation of any Lien (other than a Permitted Lien)
     on, the Pledged Collateral or any part thereof, unless, in the
     case of this clause (x) (ii), such Pledgor shall have posted a
     bond or other security satisfactory to the relevant Indemnitees
     in respect to such risk or (y) the control of such action, suit
     or proceeding would involve a bona fide conflict of interest,
     (B) such proceeding involves Expenses not fully indemnified by
     such Pledgor which such Pledgor and the Indemnitee have been
     unable to sever from the indemnified Expense(s), (C) a Default
     or an Event of Default has occurred and is continuing or (D)
     such action, suit or proceeding involves matters which extend
     beyond or are unrelated to the transactions contemplated by the
     Transaction Documents and if determined adversely could be
     materially detrimental to the interests of such Indemnitee
     notwithstanding indemnification by such Pledgor.  The
     Indemnitee, on the one hand, and such Pledgor, on the other
     hand, may participate in a reasonable manner at its own expense
     and with its own counsel in any proceeding conducted by the
     other in accordance with the foregoing.  Each Indemnitee shall
     at such Pledgor's expense supply such Pledgor with such
     information and documents reasonably requested by such Pledgor
     as are necessary or advisable for such Pledgor to participate
     in any action, suit or proceeding to the extent permitted by
     this clause (a).  Unless an Event of Default shall have
     occurred and be continuing, no Indemnitee shall

                                   19

     <PAGE>

     enter into any settlement or other compromise with respect to
     any Expense which is entitled to be indemnified under this
     clause (a) without the prior written consent of the relevant
     Pledgor, which consent shall not be unreasonably withheld or
     delayed, unless such Indemnitee waives its right to be
     indemnified under this clause (a) with respect to such Expense.
     In addition, if an Indemnitee, in violation of either Pledgor's
     right to assume and control the defense of any Expense, refuses
     to permit such Pledgor to control the defense after written
     demand by such Pledgor for such control, such Indemnitee waives
     its right to be indemnified under this clause (a) with respect
     to such Expense.  Upon payment in full of any Expense by either
     Pledgor pursuant to this clause (a) to or on behalf of an
     Indemnitee, such Pledgor without any further action shall be
     subrogated to any and all claims that such Indemnitee may have
     relating thereto (other than claims in respect of insurance
     policies maintained by such Indemnitee at its own expense), and
     such Indemnitee shall execute such instruments of assignment
     and conveyance, evidence of claims and payment and such other
     documents, instruments and agreements as may be necessary to
     preserve any such claims and otherwise cooperate with such
     Pledgor and give such further assurances as are necessary or
     advisable to enable such Pledgor vigorously to pursue such
     claims.  The obligations and rights of each Pledgor under this
     Section 6.16 shall survive the repayment of all Secured
     Obligations and the termination of this Agreement.

               (b) Without limiting the application of clause (a)
     immediately above, each Pledgor agrees to pay, or reimburse the
     Collateral Agent for, any and all fees, costs and Expenses of
     whatever kind or nature incurred in connection with the
     creation, preservation, protection or validation of the
     Collateral Agent's Liens on, and security interest in, the
     Pledged Collateral, including, without limitation, all fees and
     taxes in connection with the recording or filing of instruments
     and documents in public offices, payment or discharge of any
     taxes or Lien upon or in respect of the Pledged Collateral,
     premiums for insurance with respect to the Pledged Collateral
     and all other fees, costs and expenses in connection with
     protecting, maintaining or preserving the Pledged Collateral
     and the Collateral Agent's interest therein, whether through
     judicial proceedings or otherwise, or in defending or
     prosecuting any actions, suits or proceedings arising out of or
     relating to the Pledged Collateral.

               (c) Without limiting the application of clause (a)
     immediately above, each Pledgor agrees to pay, indemnify and
     hold each Indemnitee harmless from and against any loss, costs,
     damages and Expenses which such Indemnitee may suffer, expend
     or incur in consequence of or growing out of any failure of
     such Pledgor to comply with its obligations under this
     Agreement, or any misrepresentation by such Pledgor in this
     Agreement, or in any statement or writing contemplated by or
     made or delivered pursuant to or in connection with this
     Agreement.

               (d) If and to the extent that the obligations of the
     Pledgors under this Section 6.16 are unenforceable for any
     reason, each Pledgor hereby agrees to make the

                                   20

     <PAGE>

     maximum contribution to the payment and satisfaction of such
     obligations which is permissible under applicable Law.

               (e) Any amounts paid by any Indemnitee as to which
     such Indemnitee has the right to reimbursement, together with
     interest on such amounts from the date paid until reimbursement
     in full at a rate per annum equal at all times to the Base Rate
     plus the Applicable Margin plus two percent (2%), shall
     constitute Secured Obligations secured by the Pledged
     Collateral.

          Section 6.17  Independent Obligations.  The Pledgors'
     obligations under this Agreement are independent of those of
     the Borrower.  The Collateral Agent may bring a separate action
     against the Pledgors without first proceeding against the
     Borrower or any other Person or any other security held by the
     Collateral Agent and without pursuing any other remedy.

          Section 6.18  Waiver of Defenses.  The Pledgors hereby
     waive:  (a) any defense of a statute of limitations; (b) any
     defense based on the legal disability of the Borrower or any
     discharge or limitation of the liability of the Borrower to the
     Collateral Agent or the Secured Parties, whether consensual or
     arising by operation of law; (c) presentment, demand, protest
     and notice of any kind; and (d) any defense based upon or
     arising out of any defense (other than the indefeasible payment
     in full in cash or cash equivalents of the Secured Obligations)
     which the Borrower may have to the payment or performance of
     any part of the Secured Obligations.

          Section 6.19  Subrogation, Etc.  Notwithstanding any
     payment or payments made by the Pledgors or the exercise by the
     Collateral Agent of any of the remedies provided under this
     Agreement or any other Financing Document, until the Secured
     Obligations have been indefeasibly paid in full in cash or cash
     equivalents, the Pledgors shall have no claim (as defined in 11
     U.S.C.  101(5)) of subrogation to any of the rights of the
     Collateral Agent against the Borrower, the Pledged Collateral
     or any guaranty held by the Collateral Agent for the
     satisfaction of any of the Secured Obligations, nor shall the
     Pledgors have any claims (as defined in 11 U.S.C.  101(5)) for
     reimbursement, indemnity, exoneration or contribution from the
     Borrower in respect of payments made by the Pledgors hereunder.
     Notwithstanding the foregoing, if any amount shall be paid to
     the Pledgors on account of such subrogation, reimbursement,
     indemnity, exoneration or contribution rights at any time, such
     amount shall be held by the Pledgors in trust for the
     Collateral Agent segregated from other funds of the Pledgors,
     and shall be turned over to the Collateral Agent in the exact
     form received by the Pledgors (duly endorsed by the Pledgors to
     the Collateral Agent if required) to be applied against the
     Secured Obligations in such amounts and in such order as the
     Collateral Agent (as directed by the Agent Bank, acting in
     accordance with the Credit Agreement) may elect.

                                   21

     <PAGE>

          Section 6.20  Joint and Several Liability.  Prior to the
     effective date of this Agreement, the obligations of the
     Pledgors hereunder shall be several and not joint.  On and
     after the effective date of this Agreement, the obligations of
     the Pledgors under this Agreement shall be joint and several.

          Section 6.21  Recourse Limited to Collateral.
     Notwithstanding anything herein to the contrary, including,
     without limitation, Section 6.16, the Collateral Agent
     acknowledges and agrees on behalf of itself and each Secured
     Party, that neither of the Pledgors, nor any past or present
     shareholder, officer, employee, servant, controlling Person,
     executive, director, agent or authorized representative or
     Affiliate (other than the Borrower) of either of the Pledgors,
     shall be personally liable for any deficiency in the payment or
     satisfaction of the Secured Obligations and that the sole
     recourse of the Collateral Agent and each Secured Party for
     payment and performance of the obligations of the Pledgors
     hereunder shall be to the Pledged Collateral.  This provision
     shall not be deemed to waive any cause of action the Collateral
     Agent or any Secured Party may have against the Pledgors for
     their nonperformance or against any Person for fraud or willful
     misconduct by such Person.


     [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

     <PAGE>

               IN WITNESS WHEREOF, the parties hereto have caused
     this Pledge and Security Agreement to be duly executed and
     delivered by their officers thereunto duly authorized as of the
     date first above written.


                              NRGG FUNDING INC.

                                                       By:  /s/
                                   Timothy P. Hunstad
                                   Name: Timothy P. Hunstad
                                   Title:  VP-CFO

                              Address for Notices:
                              1221 Nicollet Mall, Suite 610
                              Minneapolis, MN 55403


                              NRG MORRIS INC.

                              By:  /s/ Craig Mataczynski
                                   Name: Craig Mataczynski
                                   Title:  President

                              Address for Notices:
                              1221 Nicollet Mall, Suite 610
                              Minneapolis, MN 55403


                              THE CHASE MANHATTAN BANK,
                              as Collateral Agent

                              By:  /s/ Annette M. Marsula
                                   Name: Annette M. Marsula
                                   Title:  Assistant Vice President

                              Address for Notices:
                              450 West 33rd Street, 15th Floor
                                       New York, NY 10001