Document:

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                                                                EXHIBIT 4.11

                                                              EXECUTION COPY

                          PLEDGE AND SECURITY AGREEMENT

                                     between

                               AES RED OAK, L.L.C.
                                   as Pledgor

                                       and

                              THE BANK OF NEW YORK
                               as Collateral Agent

                            Dated as of March 1, 2000

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                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                    Page
                                                                                    ----
<S>    <C>                                                                          <C>
1.     DEFINITIONS...................................................................3
2.     PLEDGE........................................................................3
3.     REPRESENTATIONS, WARRANTIES AND COVENANTS.....................................4
4.     DEFAULT.......................................................................6
5.     RIGHTS AND REMEDIES UPON EVENT OF DEFAULT.....................................6
6.     SECURITY INTEREST ABSOLUTE....................................................6
7.     PLEDGOR REMAINS LIABLE........................................................6
8.     NO DUTY ON COLLATERAL AGENT'S PART............................................6
9.     NOTICES.......................................................................6
10.    WAIVER........................................................................7
11.    TIME OF ESSENCE...............................................................7
12.    BINDING UPON SUCCESSORS.......................................................7
13.    CAPTIONS......................................................................7
14.    GOVERNING LAW, LEGAL PROCEEDINGS AND WAIVER OF JURY TRIAL.....................7
15.    AMENDMENTS, CHANGES AND MODIFICATIONS.........................................7
16.    SEVERABILITY..................................................................8
17.    COLLATERAL AGENT NOT LIABLE...................................................8
18.    LIMITATION OF RECOURSE........................................................8
19.    COUNTERPARTS..................................................................8
20.    CONTINUING ASSIGNMENT, PLEDGE AND SECURITY INTEREST...........................9
21.    SECURITY ONLY.................................................................9
22.    PAYMENTS SET ASIDE............................................................9
       ANNEXES

</TABLE>

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                          PLEDGE AND SECURITY AGREEMENT

         This PLEDGE AND SECURITY AGREEMENT (this "PLEDGE AGREEMENT"), dated
as of March 1, 2000, by and between AES RED OAK, L.L.C., a limited liability
company organized and validly existing under the laws of the State of
Delaware (the "PLEDGOR") and The Bank of New York, a bank duly organized and
existing under the laws of the State of New York ("BNY"), as collateral agent
(together with its successors in such capacity, the "COLLATERAL AGENT") for
the benefit of and on behalf of the Senior Parties defined below.

         A.   Pledgor is providing for the development, construction,
              ownership, leasing and operation of a nominal 830 MW (net)
              gas-fired combined cycle electric generating facility and
              related equipment and facilities (the "PROJECT") to be located
              in the Borough of Sayreville, Middlesex County, New Jersey.

         B.   Pledgor intends to finance the development and construction of
              the Project, in part, through the issuance, from time to time,
              of certain securities (the "SECURITIES") pursuant to a Trust
              Indenture, dated as of March 1, 2000 between the Pledgor and
              BNY, as trustee (the "TRUSTEE") and depositary bank, as it may
              be amended, supplemented or modified and in effect from time to
              time (the "INDENTURE").

         C.   In connection with the commencement of commercial operation of
              the Project, the Pledgor is required to deliver the Debt
              Service Reserve Letter of Credit (the "DSR LETTER OF CREDIT").
              Dresdner Bank AG, acting through its New York Branch
              ("DRESDNER"), as issuing bank, has agreed to issue the DSR
              Letter of Credit subject to the terms and conditions contained
              in the DSR LOC Reimbursement Agreement, dated as of March 1,
              2000 (as amended, supplemented or modified and in effect from
              time to time, the "DSR LOC REIMBURSEMENT AGREEMENT"), among
              each of the banks and financial institutions parties thereto
              and Dresdner, as issuing bank and as agent for such banks
              including the issuing bank and financial institutions (in such
              capacity as agent, and together with its successors and assigns
              in such capacity, the "DSR LOC PROVIDER").

         D.   In connection with the Pledgor's obligations under Section 18.2
              of the Power Purchase Agreement, the Pledgor intends to deliver
              the Power Purchase Agreement Letter of Credit (the "PPA LOC").
              Dresdner, as issuing bank, has agreed to issue the PPA LOC
              subject to the terms and conditions contained in the PPA LOC
              Reimbursement Agreement, dated as of March 1, 2000 (as amended,
              supplemented or modified and in effect from time to time, the
              "PPA LOC REIMBURSEMENT Agreement"), among each of the banks and
              financial institutions parties thereto and Dresdner, as issuing
              bank and as agent for such banks and the issuing bank and
              financial institutions (in such capacity as agent, and together
              with its successors and assigns in such capacity, the "PPA LOC
              PROVIDER").

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         E.   The Pledgor intends to finance certain working capital
              requirements of the Project by entering into a Working Capital
              Agreement (as amended, supplemented or modified and in effect
              from time to time, the "WORKING CAPITAL AGREEMENT") among the
              Pledgor, each of the banks and financial institutions party
              thereto and Dresdner, as agent bank (together with its
              successors and assigns in such capacity, the "WORKING CAPITAL
              PROVIDER").

         F.   All obligations of the Pledgor under the Securities, the DSR
              LOC Reimbursement Agreement and related evidences of
              indebtedness, the PPA LOC Reimbursement Agreement and related
              evidences of indebtedness, the Collateral Agency Agreement
              (defined below), and the Working Capital Agreement and related
              evidences of indebtedness (collectively, the "FINANCING
              DOCUMENTS") to the Trustee, the DSR LOC Provider, the PPA LOC
              Provider, the Collateral Agent, the Working Capital Provider,
              each successor to any such person and any person providing
              Senior Debt to the Pledgor who becomes a party to the
              Collateral Agency Agreement in accordance with its terms
              (collectively, the "SENIOR PARTIES") will be secured by a
              certain Mortgage, the Security Agreement, the Indenture, this
              Pledge Agreement and the Assignment of Leases and Income, each
              between the Pledgor and the Collateral Agent.

         G.   The Collateral Agent, the Pledgor, the DSR LOC Provider, the
              PPA LOC Provider, the Working Capital Provider and the Trustee
              entered into the Collateral Agency and Intercreditor Agreement
              dated as of March 1, 2000 (as amended, supplemented or modified
              and in effect from time to time, the "COLLATERAL AGENCY
              AGREEMENT") to set forth their mutual understanding with
              respect to (a) the exercise of certain rights, remedies and
              options by the respective parties thereto under the above
              described documents, (b) the priority of their respective
              security interests created by the Security Documents, (c) the
              application of project revenues and certain other monies and
              items and (d) the appointment of the Collateral Agent as
              collateral agent.

         H.   On the Closing Date, the Pledgor owns 100% of all of the
              ownership interests of AES Red Oak Urban Renewal Corporation, a
              non-profit corporation organized under the laws of the State of
              New Jersey ("AES URC").

         I.   In order to better secure the benefits of the other Collateral
              subject of the Security Documents, the Pledgor has agreed to
              pledge the ownership interests of AES URC owned by the Pledgor
              from time to time.

         NOW, THEREFORE, in consideration of the premises set forth above,
the mutual covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and FOR THE PURPOSE OF SECURING the payment and performance of the Senior
Debt, which Senior Debt may increase, decrease and increase again, from time
to time, the parties hereto hereby agree as follows:

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         1. DEFINITIONS. Except as otherwise expressly provided herein,
capitalized terms used in this Pledge Agreement and its Annexes shall have
the meaning given to them in the Indenture and the rules of construction set
forth in Section 1.1. of the Indenture shall apply herein as if set forth in
this Pledge Agreement.

         2. PLEDGE. (a) As security for the full payment or performance when
due (whether at stated maturity, by acceleration or otherwise) of any and all
of the Senior Debt now existing or hereafter arising, the Pledgor hereby
grants, pledges and collaterally assigns to and creates in favor of the
Collateral Agent, a lien on (the "SECURITY INTEREST") in all estate, right,
title and interest of the Pledgor in, to and under the following collateral,
whether now existing or hereafter acquired (the "COLLATERAL"):

                   (i) the ownership interests in AES URC and to the extent
         any of the following shall now or hereinafter exist any certificates
         identified in Annex I hereto and all other ownership interests of
         whatever class in AES URC, now or hereafter owned by the Pledgor, in
         each case together with the certificates evidencing the same
         (collectively, the "PLEDGED INTERESTS");

                   (ii) to the extent any of the following shall now or
         hereafter exist, all shares, securities, moneys or property
         representing a dividend on any of the Pledged Interests, or
         representing a distribution or return of capital upon or in respect
         of the Pledged Interests (a "DIVIDEND"), or resulting from a
         split-up, revision, reclassification or other like change of the
         Pledged Interests or otherwise received in exchange therefor, and
         any subscription warrants, rights or options issued to the holders
         of, or otherwise in respect of, the Pledged Interests; provided,
         however, that such Security Interest in any Dividend shall not apply
         to, or to the extent such Security Interest is then existing, shall
         be released without any notice or required action from, such
         Dividend once such Dividend is distributed from the Distribution
         Account in accordance with the terms of the Collateral Agency
         Agreement and is no longer an asset of the Pledgor;

                   (iii) without affecting the obligations of the Pledgor or
         AES URC under any provision prohibiting such action hereunder, in
         the event of any consolidation or merger in which AES URC is not the
         surviving entity, all shares owned by the Pledgor of each class of
         the capital stock of the successor entity formed by or resulting
         from such consolidation or merger;

                   (iv) to the extent not included in the foregoing, all
         proceeds, products and accessions of and to any and all of the
         foregoing, including, without limitation, "proceeds," as defined in
         the Uniform Commercial Code of the State of New York (the "UCC"),
         including whatever is received upon any collection, exchange, sale
         or other disposition of any of the Collateral, and any property into
         which any of the Collateral is converted, whether cash or noncash
         proceeds, and any and all other amounts paid or payable under or in
         connection with any of the Collateral; it being understood that the
         Security Interest in the proceeds, products and accessions of and to
         any Collateral shall not apply to, or to the extent such Security
         Interest is then existing, shall be released

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         without any notice or required action from, such Collateral once
         such Collateral is distributed from the Distribution Account in
         accordance with the terms of the Collateral Agency Agreement and is
         no longer an asset of the Pledgor.

         (b) This Pledge Agreement secures, in accordance with the provisions
hereof, the Senior Debt.

         (c) The Collateral Agent and the Pledgor acknowledge and agree that
remedies, if any, that may be exercised from time to time hereunder during
the continuance of a Trigger Event under the Collateral Agency Agreement,
will be exercised by the Collateral Agent subject to, and in accordance with,
the terms of the Collateral Agency Agreement.

         3. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Pledgor hereby
represents, warrants and covenants as follows:

         (a) The Security Interest granted and created pursuant to this
Pledge Agreement is a legal and valid security interest in the Collateral now
owned by the Pledgor or hereafter acquired.

         (b) The Security Interest granted and created pursuant to this
Pledge Agreement (i) with respect to such of the Collateral in which a
security interest may be perfected by the filing of a Financing Statement,
will, upon the filing of the necessary Financing Statements in all
appropriate jurisdictions, create a perfected security interest in the
Collateral now owned by the Pledgor or hereafter acquired in which a security
interest may be perfected by filing; and (ii) with respect to such of the
Collateral in which a security interest may be perfected by possession, will,
upon the Collateral Agent's taking possession of such Collateral, create a
perfected security interest in such Collateral now owned by the Pledgor or
hereafter acquired in which a security interest may be perfected by
possession.

         (c) The Pledgor shall cause (i) the organizational documents in
respect of the formation of AES URC and (ii) the certificates representing
the Pledged Interests in AES URC to each recite that such organizational
documents and Pledged Interests shall be governed by Article 8 of the UCC.

         (d) The Pledgor is the legal and beneficial owner of the Collateral
now owned by it, free and clear of all Liens.

         (e) The Pledgor shall notify the Collateral Agent promptly in
writing of any claim against the Collateral adverse (other than to a DE
MINIMIS extent) to the interest of the Collateral Agent hereunder.

         (f) The Pledgor agrees that from time to time upon the request of
the Collateral Agent, the Pledgor will, at its sole cost and expense,
promptly execute and deliver all further instruments and documents, and take
all further action, which may be necessary or reasonably advisable, or that
the Collateral Agent may reasonably request in writing, in order to perfect,
maintain, preserve and protect the Security Interest granted or purported to
be granted hereby. Without limiting the generality of the foregoing, the
Pledgor will: (i) if any Collateral shall be evidenced

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by a promissory note or other instrument, deliver and pledge to the
Collateral Agent hereunder such note or instrument duly endorsed and
accompanied by duly executed instruments of transfer or assignment, all in
form and substance reasonably satisfactory to the Collateral Agent, and (ii)
execute and file such financing or continuation statements, or amendments
thereto and assignments thereof, and such other instruments, endorsements or
notices, as may be necessary, or as the Collateral Agent may reasonably
request in writing, in order to perfect, maintain, preserve and protect the
Security Interest granted or purported to be granted hereby. The Pledgor
hereby authorizes the Collateral Agent to file one or more financing or
continuation statements, and amendments thereto and assignments thereof,
relating to all or any part of the Collateral without the signature of the
Pledgor where permitted by law.

         (g) The Pledgor shall keep and maintain, at its sole cost and
expense, satisfactory and complete records of the Collateral. The Pledgor
shall furnish to the Collateral Agent from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Collateral Agent may
reasonably request in writing, all in reasonable detail.

         (h) The Pledgor shall not create, incur or permit to exist, and will
defend the Collateral against, and shall take such other action as is
necessary, to remove any Lien or claim on or to the Collateral and will
defend the right, title and interest of the Collateral Agent in and to any of
the Collateral against the claims and demands of all Persons whomsoever
(other than any Person party to the Financing Documents). In furtherance
thereof, the Pledgor agrees (i) not to enter into a "control agreement" with
or grant "control" (within the meaning of the UCC) to any Person other than
the Collateral Agent in respect of any of the Collateral that constitutes
"uncertificated securities" (within the meaning of the UCC) or (ii) not to
cause AES URC to register any transfer of any of the Collateral that
constitutes "uncertificated securities" (within the meaning of the UCC) to
any Person other than the Collateral Agent.

         (i) The principal place of business and chief executive office of
the Pledgor and the office where the Pledgor keeps its records concerning the
Collateral, including the registration book in which all ownership interests
of AES URC and pledges and transfers thereof are recorded (hereinafter,
collectively called the "Records") is located at the Pledgor's address for
notices set forth in the signature pages hereto.

         (j) The Pledged Interests are duly authorized, validly existing,
fully paid and non-assessable and none of such Pledged Interests are subject
to any contractual restriction, or any restriction under the organic
documents of AES URC, upon the transfer of such Pledged Interests (except for
any such restriction contained herein).

         (k) The Pledged Interests constitute all of the issued and
outstanding shares of ownership interests of any class of AES URC
beneficially owned by the Pledgor on the date hereof (whether or not
registered in the name of the Pledgor).

         (l) The Pledgor owns 100% of the issued and outstanding ownership
interests of the AES URC as of the date hereof.

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         4. DEFAULT. The occurrence and continuation of a Trigger Event under
the Collateral Agency Agreement shall be deemed an "EVENT OF DEFAULT" under
this Pledge Agreement:

         5. RIGHTS AND REMEDIES UPON EVENT OF DEFAULT. The remedies of the
Collateral Agent following an Event of Default hereunder or otherwise are set
forth in the Collateral Agency Agreement and the exercise of such remedies,
if any, shall be done by the Collateral Agent as, when and to the extent
permitted thereunder.

         6. SECURITY INTEREST ABSOLUTE. All rights of the Collateral Agent
hereunder, the Security Interest and all obligations of the Pledgor
hereunder, shall be absolute and unconditional irrespective of:

                        (i) any lack of validity or enforceability of the
         Collateral Agency Agreement or any other agreement or instrument
         relating thereto;

                       (ii) any change in the time, manner or place of payment
          of, or in any other term of, all or any of the Senior Debt, or any
          other amendment or waiver of or any consent to any departure from the
         Collateral Agency Agreement or any of the Collateral;

                      (iii) any exchange, release or non-perfection of any
         Collateral or any other collateral, or any release or amendment or
         waiver of or consent to or departure from any guaranty, for all or any
         of the Senior Debt; or

                       (iv) to the fullest extent permitted by law, any other
         circumstance that might otherwise constitute a defense available to, or
         a discharge of, the Pledgor or any third party pledgor.

         7. PLEDGOR REMAINS LIABLE. Anything herein to the contrary
notwithstanding but subject to Section 18 hereof, the Pledgor shall remain
liable under any agreements included in the Collateral to the extent set
forth therein to perform all of its duties and obligations thereunder to the
same extent as if this Pledge Agreement had not been executed. The exercise
by the Trustee or the Collateral Agent of any of the rights or remedies
hereunder shall not release the Pledgor from any of its duties or obligations
under any agreements included in the Collateral, except to the extent the
Pledgor is expressly released therefrom by the Trustee or the Collateral
Agent in writing. The Collateral Agent shall not have any obligation or
liability under the Collateral by reason of this Pledge Agreement, nor shall
the Collateral Agent be obligated to perform any of the obligations or duties
of the Pledgor thereunder or to take any action to collect or enforce any
claim for payment assigned hereunder, except to the extent the Collateral
Agent expressly assumes such obligations or duties in writing consistent with
its rights under this Pledge Agreement.

         8. NO DUTY ON COLLATERAL AGENT'S PART. The powers conferred on the
Collateral Agent hereunder are solely to protect the Collateral Agent's
interests in the Collateral and shall not impose any duty upon it to exercise
any such powers. The Collateral Agent shall be accountable only for amounts
that it receives as a result of the exercise of such powers, and neither it
nor any of its officers, directors, employees or agents shall be responsible
to the

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Pledgor for any act or failure to act hereunder, except for its own gross
negligence or willful misconduct.

         9. NOTICES. All notices, demands, requests and other communications
required or permitted hereunder shall be in writing and shall be given and
deemed to have been given in accordance with the Collateral Agency Agreement.

         10. WAIVER. By exercising or failing to exercise any of its rights,
options or elections hereunder (without also expressly waiving the same in
writing), the Collateral Agent shall not be deemed to have waived any breach
or default on the part of the Pledgor or to have released the Pledgor from
any of its obligations secured hereby. No failure on the part of the
Collateral Agent to exercise, and no delay in exercising (without also
expressly waiving the same in writing), any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude any other or further
exercise thereof, or the exercise of any other right, power or privilege.

         11. TIME OF ESSENCE. TIME IS OF THE ESSENCE WITH RESPECT TO THIS
PLEDGE AGREEMENT AND ALL OF ITS PROVISIONS.

         12. BINDING UPON SUCCESSORS. This Pledge Agreement shall be binding
upon and inure to the benefit of the respective successors and permitted
assigns of each of the parties hereto.

         13. CAPTIONS. The captions, headings and table of contents used in
this Pledge Agreement are for convenience only and do not and shall not be
deemed to affect, limit, amplify or modify the terms and provisions hereof.

         14. GOVERNING LAW, LEGAL PROCEEDINGS AND WAIVER OF JURY TRIAL. (a)
THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING
TO CONFLICTS OF LAW EXCEPT SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW).

         (b) Any legal action or proceeding with respect to this Pledge
Agreement and any action for enforcement of any judgment in respect thereof
may be brought in the courts of the State of New York or of the United States
of America for the Southern District of New York, and, by execution and
delivery of this Pledge Agreement, the Pledgor hereby accepts for itself and
in respect of its property, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts and appellate courts from any appeal
thereof. The Pledgor hereby irrevocably designates, appoints and empowers CT
Corporation System, 111 Eighth Avenue, New York, New York, 10011, as its
designee, appointee and agent to receive, accept and acknowledge for and on
its behalf, and in respect of its property, service of any and all legal
process, summons, notices and documents which may be served in any action or
proceeding. If for any reason such designee, appointee and agent shall cease
to be available to act as such, the Pledgor, agrees to designate a new
designee, appointee and agent in The City of New York on the terms and for
the

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purposes of this provision satisfactory to the Collateral Agent. The Pledgor
irrevocably consents 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, in
accordance with Section 9. The Pledgor hereby irrevocably waives any
objection which it 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 Pledge Agreement brought in the courts referred to above and hereby
further irrevocably waives and agrees 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. 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 Pledgor in any
other jurisdiction.

         (c) EACH PARTY HERETO HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES THE RIGHT EACH MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS PLEDGE AGREEMENT AND ANY AGREEMENTS CONTEMPLATED HEREBY TO BE EXECUTED
IN CONJUNCTION THEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EACH PARTY. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THIS PLEDGE
AGREEMENT.

         15. AMENDMENTS, CHANGES AND MODIFICATIONS. This Pledge Agreement may
not be effectively amended or terminated except with the written consent of
the Pledgor and the Collateral Agent.

         16. SEVERABILITY. Any provision of this Pledge Agreement that is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization, without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of
such provision in any other jurisdiction.

         17. COLLATERAL AGENT NOT LIABLE. Neither this Pledge Agreement nor
any action on the part of the Collateral Agent (other than an express written
assumption) shall constitute an assumption by the Collateral Agent of any of
the obligations of the Pledgor related to any of the Collateral, and the
Pledgor shall continue to be liable for all such obligations whether incurred
before or after an Event of Default.

         18. LIMITATION OF RECOURSE. In the event of non-performance by the
Pledgor under this Pledge Agreement, or any part thereof, or for any claim
based thereon or otherwise in respect thereof or related thereto or in
respect of the Securities or otherwise related thereto, no recourse shall be
had to (i) any assets or properties of the Pledgor (or any person that
controls the Pledgor within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act) other than the Collateral or (ii) any
Affiliate of the Pledgor or any incorporators, officers, directors or
employees thereof, and no judgment relating to the obligations of the Pledgor
under this Pledge

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Agreement, or any part thereof, or for any claim based thereon or otherwise
in respect thereof or related thereto, shall be obtainable by the Senior
Parties or the Collateral Agent against any Affiliate of the Pledgor or any
other incorporator, stockholder, officer, employee or director past, present
or future of the Pledgor or any Affiliate of the Pledgor; provided, however,
that nothing contained herein shall prevent the taking of any action
permitted by law against the Pledgor or any of its Affiliates, or in any way
affect or impair the rights of the Collateral Agent or Senior Parties to take
any action permitted by law, in either case to realize upon the Collateral
and, provided further, that nothing herein shall be deemed to affect the
obligations of any Affiliate of the Pledgor under any Transaction Document to
which such Affiliate is a party.

         19. COUNTERPARTS. This Pledge Agreement may be executed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.

         20. CONTINUING ASSIGNMENT, PLEDGE AND SECURITY INTEREST. This Pledge
Agreement shall create a continuing assignment, pledge and security interest
in the Collateral and shall remain in full force and effect for the benefit
of the Collateral Agent until the satisfaction in full of the Senior Debt.
Except as set forth in Section 22 hereof, upon the payment in full of the
Senior Debt and all other amounts owing to the Collateral Agent under the
Financing Documents, the Security Interest granted hereby shall terminate and
all rights to the Collateral shall revert to the Pledgor. In connection with
such termination, the Collateral Agent shall execute such instruments of
release prepared by the Pledgor as the Pledgor shall reasonably request at
the Pledgor's sole cost and expense.

         21. SECURITY ONLY. This Pledge Agreement is granted for security
purposes only. Accordingly, the Collateral Agent shall not enforce its rights
with respect to the Collateral until such time as an Event of Default shall
have occurred and be continuing.

         22. PAYMENTS SET ASIDE. To the extent that the Pledgor or any other
Person on behalf of the Pledgor makes a payment or payments to the Collateral
Agent, or the Collateral Agent enforces its security interests or exercise
its rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff of any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then to the extent of
such recovery, the Senior Debt or any part thereof originally intended to be
satisfied, and this Pledge Agreement and all Liens, rights and remedies
therefor, shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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         IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed as of the date first written above.

                                     AES RED OAK, L.L.C.

                                     By:  /s/  LOUIS J. ANATRELLA
                                         -------------------------------------
                                         Name:    Louis J. Anatrella
                                         Title:   Vice President
                                         Address: 1001 North 19th Street
                                                  Arlington, VA  22209

                                     THE BANK OF NEW YORK, as Collateral Agent

                                     By:  /s/  MARYBETH LEWICKI
                                         -------------------------------------
                                          Name:   MaryBeth Lewicki
                                          Title:  Vice President

                         [PLEDGE AND SECURITY AGREEMENT]

<PAGE>

                                     ANNEX I

     See attached.

           Stock Certificate of AES Red Oak Urban Renewal Corporation

                         100 shares to AES Red Oak, LLC

                                       I-1

<PAGE>

                                    ANNEX II
                                       to
                          PLEDGE AND SECURITY AGREEMENT
                            DATED AS OF MARCH 1, 2000

                               FORM OF STOCK POWER

         FOR VALUE RECEIVED, the undersigned, AES RED OAK, L.L.C., a limited
liability company organized and validly existing under the laws of the State
of Delaware, does hereby sell, assign and transfer to ___________________ ten
(10) Common Shares of AES RED OAK URBAN RENEWAL CORPORATION, corporation
organized and validly existing under the laws of the State of New Jersey (the
"Stock"), standing in the name of the undersigned on the books of said
company and does hereby irrevocably constitute and appoint
______________________ _________________ as the undersigned's true and lawful
attorney, for it and in its name and stead, to, as and to the extent
permitted pursuant to Section 2.3 of the Collateral Agency and Intercreditor
Agreement, dated as of March 1, 2000, among AES Red Oak, L.L.C., The Bank of
New York, in its various capacities as described therein and Dresdner Bank
AG, acting through its New York Branch, in its various capacities as
described therein (the "Collateral Agency Agreement"), sell, assign and
transfer all or any of the Stock, and for that purpose to make and execute
all necessary acts of assignment and transfer thereof; and to substitute one
or more persons with like full power, hereby ratifying and confirming all
that said attorney or substitute or substitutes shall lawfully do by virtue
hereof in accordance with the provisions of the Collateral Agency Agreement.

Dated:

                                          AES RED OAK, L.L.C.

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

                                      II-1<PAGE>

                                                                   EXHIBIT 4.12

                                                                 EXECUTION COPY

                   WILLIAMS ENERGY MARKETING & TRADING COMPANY

                              CONSENT TO ASSIGNMENT

         THIS CONSENT TO ASSIGNMENT (this "CONSENT TO ASSIGNMENT") is entered
into as of March 1, 2000 by WILLIAMS ENERGY MARKETING & TRADING COMPANY, a
Delaware corporation (the "CONSENTING PARTY"), and THE BANK OF NEW YORK, as
collateral agent (the "COLLATERAL AGENT", together with any successors
thereto in such capacity, referred to as the "ASSIGNEE"), for the benefit of
and on behalf of the Senior Parties defined below.

         A. AES Red Oak, L.L.C. (the "COMPANY"), a Delaware limited liability
company, is providing for the development, construction, ownership, leasing
and operation of a 764.3 (+/-10%) MW gas-fired combined cycle electric
generating facility (the "FACILITY") and the financing, development and
construction thereof (the Facility, equipment and facilities associated with
the Facility and such financing, development and construction, the "PROJECT")
to be located in the Borough of Sayreville, Middlesex County, New Jersey.

         B. The Company intends to finance the development and construction
of the Project, in part, through the issuance, from time to time, of certain
securities (the "SECURITIES") pursuant to a Trust Indenture, dated as of
March 1, 2000 between the Company and The Bank of New York, as trustee (the
"TRUSTEE"), as it may be amended or supplemented from time to time (the
"INDENTURE").

         C. All obligations of the Company under the Securities, the
Collateral Agency Agreement (defined below) and any other agreements
evidencing senior debt of the Company (collectively, the "FINANCING
DOCUMENTS") to the Trustee, the Collateral Agent, each successor to any such
person and each other person providing senior debt to the Company who is or
becomes a party to the Collateral Agency Agreement pursuant to its terms
(collectively, the "SENIOR PARTIES") will be secured by a certain Mortgage,
Security Agreement, Indenture, Pledge Agreement and Assignment of Leases and
Income, each between the Company and The Bank of New York (collectively, the
"SECURITY DOCUMENTS").

         D. The Senior Parties and the Company have entered into the
Collateral Agency and Intercreditor Agreement, dated as of March 1, 2000 (as
amended, supplemented or modified and in effect from time to time, the
"COLLATERAL AGENCY AGREEMENT") to set forth their mutual understanding with
respect to (a) the exercise of certain rights, remedies and options by the
respective parties thereto under the above described documents, (b) the
priority of their respective security interests created by the Security
Documents, (c) the application of project revenues and certain other monies
and items and (d) the appointment of the Collateral Agent as collateral agent.

         E. The Company and the Consenting Party have entered into that
certain Fuel Conversion Services, Capacity and Ancillary Services Purchase
Agreement, dated September 17,

<PAGE>

1999, as amended (the "ASSIGNED Agreement") for the sale of the Facility's
net capacity and ancillary services and the provision of fuel conversion
services.

         F. The Company has notified the Consenting Party that all of the
Company's right, title and interest in the Assigned Agreement is to be
assigned to the Assignee as security pursuant to one or more of the Security
Documents.

         G. It is a condition precedent to the extension of credit by the
Senior Parties that the Consenting Party execute and deliver this Consent to
Assignment for the benefit of the Senior Parties.

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties hereto agree as
follows:

         1. DEFINITIONS. Capitalized terms used herein shall have the
respective meanings specified herein or, if not defined herein, as defined in
the Assigned Agreement.

         2. CONSENT TO ASSIGNMENT. Subject to the terms and conditions of
this Consent to Assignment, the Consenting Party hereby irrevocably consents
to the assignment of the Assigned Agreement by the Company to the Assignee
for the benefit of the Senior Parties as security, and the Consenting Party
shall continue performance under the Assigned Agreement in accordance with
its terms and the terms of this Consent to Assignment.

         3. NO DEFAULTS. The Consenting Party acknowledges and agrees that
(a) the Assigned Agreement is in full force and effect and there are no
amendments, modifications or supplements thereto, either oral or written
agreed to by it, (b) the Consenting Party has not assigned, transferred or
hypothecated the Assigned Agreement or any interest therein, (c) the
Consenting Party has no knowledge of any default by the Company in any
respect of the performance of any provision of the Assigned Agreement and no
knowledge of any grounds for termination of the Assigned Agreement by the
Consenting Party, (d) to its knowledge none of the Company's rights under the
Assigned Agreement has been waived, (e) the assignment by the Company of the
Assigned Agreement to the Assignee, as security, and the acknowledgment of
and consent to such assignment by the Consenting Party pursuant to and in
accordance with this Consent to Assignment, will not cause or constitute a
default under the Assigned Agreement or an event or condition which would,
with the giving of notice or lapse of time or both, constitute a default
under the Assigned Agreement, and (f) a foreclosure or other exercise of
remedies under any of the Security Documents or any sale thereunder by the
Assignee, any of the Senior Parties or any of their respective designees or
assignees, whether by judicial proceedings or under any power of sale
contained therein, or any conveyance from the Company to the Assignee, any of
the Senior Parties or any of their respective designees or assignees, in lieu
thereof pursuant to and in accordance with this Consent to Assignment, shall
not require the consent of the Consenting Party or cause or constitute a
default under the Assigned Agreement or an event or condition which would,
with the giving of notice or lapse of time or both, constitute a default
under the Assigned Agreement.

                                  2

<PAGE>

         4. NOTICE OF COMPANY'S DEFAULTS AND TERMINATION. Anything in the
Assigned Agreement notwithstanding, for so long as any financing liabilities
are outstanding under the Financing Documents and until the same have been
satisfied in full, the Consenting Party shall not exercise any right it may
have under the Assigned Agreement, at law or in equity, to cancel, suspend or
terminate the Assigned Agreement, or any of its obligations thereunder, as
the result of any default or other action or omission of the Company without
first giving a copy of a notice of default to the Assignee. Such notice shall
be coupled with an opportunity to cure any such default or, with respect to
any defaults which are not susceptible of being so corrected, to rectify to
the Consenting Party's reasonable satisfaction the effect upon the Consenting
Party of such default for a period of not less than sixty (60) days from the
later of (i) expiration of the cure period provided in the Assigned Agreement
or (ii) delivery of such notice to the Assignee (or, with respect to
nonmonetary defaults or defaults the curing of which requires the Assignee's
possession of the Facility through foreclosure, such longer period of time as
may be necessary under the circumstances, but not more than 120 days from the
later of (i) expiration of the cure period provided in the Assigned Agreement
or (ii) delivery of such notice to the Assignee, to complete such foreclosure
or cure such default, provided the Assignee, any of the Senior Parties, or
any of their respective assignees or designees is diligently pursuing such
cure or foreclosure). Such notice shall be in writing and shall be deemed to
have been given (a) when presented personally, (b) one business day after
being deposited for overnight delivery with a nationally recognized overnight
courier, such as FedEx, (c) when received, if deposited in a regularly
maintained receptacle for the United States Postal Service, postage prepaid,
registered or certified, return receipt requested, addressed to the Assignee
at the address indicated below or such other address as the Assignee may have
specified by written notice delivered in accordance herewith, or (d) when
transmitted by telecopy to the number specified below and the receipt
confirmed telephonically by recipient, PROVIDED that such telecopy is then
followed by a copy of such notice delivered by a method specified in clause
(a), (b) or (c) above.

                    The Bank of New York, as Collateral Agent
                    101 Barclay Street,
                    Floor 21W
                    New York, New York 10286
                    Attention: Corporate Trust Administration
                    FACSIMILE: 212-815-3878

         Failure of the Consenting Party to provide such notice to the
Assignee shall not constitute a breach of this Consent to Assignment, and the
Assignee agrees that the Consenting Party shall have no liability to the
Assignee for such failure whatsoever; however, no cancellation, suspension or
termination of the Assigned Agreement by the Consenting Party, or of any of
the Consenting Party's obligations thereunder by the Consenting Party, shall
be binding upon the Assignee or any of the Senior Parties without such notice
and the lapse of the applicable cure period. Any dispute that may arise under
the Assigned Agreement notwithstanding, the Consenting Party shall continue
performance under the Assigned Agreement and resolve any dispute without
discontinuing such performance until the lapse of the notice and applicable
cure periods or extension periods. The Assignee, any of the Senior Parties or
any of their respective assignees or designees may, but shall be under no
obligation to, make any payment or perform

                                  3

<PAGE>

any act required thereunder to be made or performed by the Company, with the
same effect as if made or performed by the Company. If the Assignee, any of
the Senior Parties or any of their respective assignees or designees fails to
cure or rectify the effect of a default under the Assigned Agreement within
the time permitted for such cure, the Consenting Party shall have all its
rights and remedies with respect to such default as set forth in the Assigned
Agreement.

         5. AMENDMENT AND MODIFICATION WITHOUT CONSENT. The Consenting Party
shall not amend, modify or consent to the amendment or modification of the
Assigned Agreement without the prior written consent of the Assignee, unless
the Company has certified to the Consenting Party in writing that such
amendment, modification or consent to amendment or modification is permitted
under the terms of the Financing Documents.

         6. PAYMENTS TO REVENUE ACCOUNT. The Consenting Party hereby agrees
that, so long as any notes, bonds, loans, letters of credit, commitments or
other obligations are outstanding under the Financing Documents and until the
same have been satisfied in full, all payments to be made by the Consenting
Party with respect to the Assigned Agreement shall be in lawful money of the
United States of America, in immediately available funds. The Company hereby
directs the Consenting Party to, and the Consenting Party hereby agrees to,
make all such payments with respect to the Assigned Agreement directly to the
Assignee at ABA No. 021000018, for credit to AES Red Oak, L.L.C., for further
credit to Account No. 002008 (Revenue Account) Attention: Corporate Trust
Administration, or to such other person and/or at such other address as the
Assignee may from time to time specify in writing to the Consenting Party.
Any such payment shall be deemed to be a payment by the Consenting Party to
the Company under the Assigned Agreement.

         7. PROTECTION OF THE ASSIGNEE. In the event that either (a) the
Company's interest in the Project shall be sold, assigned or otherwise
transferred pursuant to the exercise of any right, power or remedy by the
Assignee or pursuant to judicial proceedings, or (b) the Company rejects all
or a portion of the Assigned Agreement under Title 11, United States Code, or
other similar Federal or state statute and such rejection is approved by the
appropriate bankruptcy court or is otherwise effective pursuant to such
statute, AND in either case (i) no funds payable under the Assigned Agreement
shall be due and payable to the Consenting Party, (ii) the effect upon the
Consenting Party of any default not susceptible of being corrected shall have
been rectified to Consenting Party's reasonable satisfaction, (iii) the
Assigned Agreement shall have been validly terminated pursuant to the terms
of the Assigned Agreement by reason of a default or a rejection by the
Company or a trustee in bankruptcy under Title 11, United States Code, or
other similar Federal or state statute, and (iv) the Assignee or any of the
Senior Parties shall have cured, or shall be diligently pursuing a cure of,
or shall have entered into a binding obligation providing for the cure of,
any default susceptible of being corrected by Assignee or any of the Senior
Parties or by a purchaser at any judicial or non-judicial sale, the
Consenting Party shall, promptly, and in no event longer than ten (10) days
after receipt of written request therefor; provided, such request is received
by the Consenting Party not more than 60 days after any event specified in
clause (a) or (b) above, execute and deliver an agreement to the Assignee,
any of the Senior Parties or any of their respective nominees, purchasers,
assignees or transferees, as the case may be, for the remainder of the term
of the Assigned Agreement and with the same terms as are contained therein;
provided, that any nominee, purchaser, assignee, or transferee of the

                                  4

<PAGE>

Assignee or the Senior Parties (x) shall have operated, or contracted with a
party that has operated a power generating facility using technology similar
to that of the Facility and (y) shall assume in writing the obligations of
the Company under the Assigned Agreement. References in this Consent to
Assignment to "Assigned Agreement" shall be deemed also to include such new
agreement.

         8. ACKNOWLEDGEMENT OF THE ASSIGNEE'S OBLIGATIONS AND RIGHTS. Neither
the Assignee nor any of the Senior Parties has any obligation hereunder to
extend credit to the Consenting Party or any contractor of the Consenting
Party at any time for any purpose. Neither the Assignee nor any of the Senior
Parties shall have any obligation to the Consenting Party under the Assigned
Agreement unless and until such time as such entity elects to succeed to the
interest of the Company under the Assigned Agreement in accordance with this
Consent to Assignment. Upon the occurrence and during the continuance of an
event of default under any of the Security Documents, the Assignee or any of
the Senior Parties shall have the right to the extent authorized under the
Security Documents, to (a) take possession of the Project and operate the
same, (b) sell or otherwise transfer their interest in the Project and any
purchaser at such sale shall succeed to the Assignee's or the Senior Parties'
rights hereunder, as the case may be, and (c) exercise all rights of the
Company under the Assigned Agreement in accordance with the terms thereof. In
the case of subsection (b) above, the Assignee and the Senior Parties agree
that any purchaser, assignee, or transferee of the Project who assumes the
Assigned Agreement (x) shall have operated, or contracted with a party that
has operated a power generating facility using technology similar to that of
the Facility and (y) shall assume in writing the obligations of the Company
under the Assigned Agreement. Subject to the Assignee's compliance with the
provisions of the Assigned Agreement (if applicable) and the terms of this
Consent to Assignment, the Consenting Party shall cooperate with the Assignee
and comply in all respects in the Assignee's exercise of such rights. Without
limiting the generality of the foregoing, upon the occurrence and during the
continuance of an event of default under any of the Financing Documents, the
Assignee, any of the Senior Parties or any of their respective designees or
assignees satisfying the qualifications set forth in clause (x) and (y) of
this Section 8 shall have the full right and power to enforce directly
against the Consenting Party all obligations of the Consenting Party under
the Assigned Agreement and to otherwise exercise all remedies thereunder, and
to make all demands and give all notices and make all requests required or
permitted to be made by the Company under the Assigned Agreement. The
Assignee, any of the Senior Parties or any of their respective assignees or
designees satisfying the qualifications set forth in clause (x) and (y) of
this Section 8 shall have the right, but not the obligation, to perform any
act, duty or obligation required of the Company thereunder within the time
periods provided in the Assigned Agreement; provided that nothing herein
shall require the Assignee, any of the Senior Parties or any of their
respective designees or assignees to cure any default of the Company under
the Assigned Agreement or to perform any act, duty or obligation of the
Company under the Assigned Agreement.

         9. REFINANCING. The Consenting Party hereby acknowledges that the
Company may from time to time obtain refinancing for the Project (including
privately or publicly placed bonds or notes), and the Consenting Party agrees
that it will promptly upon request execute in favor of the lenders providing
such refinancing a new consent to assignment as requested by such lenders;
provided that the terms and conditions contained in such consent to
assignment shall be no less

                                  5

<PAGE>

favorable to the Consenting Party than those terms and conditions contained
in this Consent to Assignment unless the documentation governing such
refinancing adversely affects the Consenting Party's rights or remedies under
the Assigned Agreement compared to its position prior to such refinancing.

         10. REPRESENTATIONS. The Consenting Party represents and warrants to
the Assignee as follows:

                  (a) The Consenting Party is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and is in good standing in all jurisdictions where necessary in light of the
business it conducts (including, without limitation, performance of its
obligations under the Assigned Agreement) and the properties it owns.

                  (b) The Consenting Party has the necessary corporate power,
corporate authority and legal right to execute, deliver and perform its
obligations under the Assigned Agreement and this Consent to Assignment, and
the execution and delivery by the Consenting Party of the Assigned Agreement
and this Consent to Assignment and the performance of its obligations
thereunder and hereunder have been duly authorized by all necessary corporate
action and do not and will not (i) require any consent or approval of the
Consenting Party's board of directors or any shareholder of the Consenting
Party (except those previously obtained, in full force and effect and
attached hereto as Exhibit 10(b)(i)), (ii) violate any provision of the
corporate charter or by-laws of the Consenting Party or any provision of any
material law, rule or regulation, or any material order, writ, judgment,
injunction, decree, determination or award having applicability to the
Consenting Party, (iii) result in a breach of or constitute a default under
any material indenture, loan or credit agreement or any other material
agreement, lease or instrument to which the Consenting Party is a party or by
which it or its properties may be bound or affected or (iv) result in, or
require, the creation or imposition of any mortgage, deed of trust, pledge,
lien, security interest, charge or encumbrance of any nature upon or with
respect to any of the properties now owned or hereafter acquired by the
Consenting Party; and the Consenting Party is not in violation, breach or
default of any provision of the corporate charter or by-laws of the
Consenting Party or any provision of any material law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award having
applicability to the Consenting Party or any agreement referred to above in
clause (iii) of this subsection (b), which violation could have a material
adverse effect on the ability of the Consenting Party to perform its
obligations under this Consent to Assignment or the Assigned Agreement.

                  (c) The Assigned Agreement and this Consent to Assignment
have been duly executed and delivered and each constitutes a valid and
binding obligation of the Consenting Party, enforceable in accordance with
its terms, except to the extent that enforceability may be limited by
applicable bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization or other similar laws affecting the enforcement of creditors'
rights and general equitable principles.

                  (d) No consent or approval of, or other action by, or any
notice or filing with, any court or administrative or governmental body (except
those previously obtained, in full force and effect and attached hereto as
Exhibit 10(d)) is required in connection with the execution and

                                  6

<PAGE>

delivery of the Assigned Agreement or this Consent to Assignment or the
performance by the Consenting Party of its obligations thereunder or
hereunder. The Consenting Party has obtained all permits, licenses,
approvals, consents, authorizations and exemptions, if any, with respect to
the performance of its obligations under the Assigned Agreement and this
Consent to Assignment required by applicable laws, statutes, rules and
regulations in effect as of the date hereof.

                  (e) The Consenting Party is not in default with respect to
the Assigned Agreement and has no knowledge, as of the date hereof, of any
claims or rights of set-off by the Consenting Party or by any of its
affiliates against the Company.

                  (f) There are no proceedings pending or, to the best of the
Consenting Party's knowledge after due inquiry, threatened against or
affecting the Consenting Party in any court or before any governmental
authority or arbitration board or tribunal (whether or not purportedly on
behalf of the Consenting Party) which may result in a material or adverse
effect upon the business, condition (financial or otherwise) or operations of
the Consenting Party, or the ability of the Consenting Party to perform its
obligations under, or which purports to affect the legality, validity or
enforceability of, the Assigned Agreement or this Consent to Assignment; and
the Consenting Party is not in default with respect to any order of any
court, governmental authority or arbitration board or tribunal.

         11.      CONCERNING THE ASSIGNED AGREEMENT.

                  (a)   SECTION 8.9.

                  The Consenting Party acknowledges and accepts that certain
maintenance services will be provided to the Company pursuant to that certain
Maintenance Program Parts, Shop Repairs and Scheduled Outage TFA Services
Contract, dated as of December 8, 1999 between the Company and Siemens
Westinghouse Power Corporation.

                  (b) SECTION 10.8.

                  The Consenting Party agrees that Fuel Conversion Volume
Rebates and Non-Dispatch Payments from the Company to the Consenting Party
that are expressly stated under the Assigned Agreement to be paid on a basis
subordinate to the Company's debt service shall be so subordinated and shall
not be subject to set-off under the Assigned Agreement.

                  (c)   SECTION 21.2

                  Upon the occurrence and during the continuance of an event
of default under any of the Security Documents, and to the extent authorized
under the Security Documents, the Assignee or any of the Senior Parties,
subject to the prior right of the Consenting Party pursuant to Section 26.7
of the Assigned Agreement, shall have the right to sell or otherwise transfer
their interest in the Project, including their interest in the Assigned
Agreement, to any purchaser and Section 21.2 of the Assigned Agreement shall
not apply to such sale or other transfer.

                  (d) SECTION 26.7.

                                  7

<PAGE>

                  The Consenting Party acknowledges that, in calculating the
amount referred to in clause (ii) of the second sentence of Section 26.7, the
amount due and owing to the Senior Secured Parties shall be determined by
reference to the Financing Documents and that no consummation of the
transaction contemplated by Section 26.7 shall occur without the execution
and delivery by the Collateral Agent of an agreement of satisfaction and
release in a form satisfactory to the Collateral Agent and the Consenting
Party.

                  (e) SECTION 26.8

                  The Consenting Party acknowledges and agrees that Section
26.8 shall not be construed to deprive the Collateral Agent of the security
provided by the Security Documents.

                  [(f) Other provisions depending on contents of proposed
amendment.]

         12. BINDING UPON SUCCESSORS. All agreements, covenants, conditions
and provisions of this Consent to Assignment shall be binding upon and inure
to the benefit of the successors and assigns of each of the parties hereto.

         13. CAPTIONS. The captions or headings at the beginning of each
Section hereof are for the convenience of the parties hereto only and are not
a part of this Consent to Assignment.

         14.      GOVERNING LAW.

         (a) THIS CONSENT TO ASSIGNMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES
THEREOF RELATING TO CONFLICTS OF LAW EXCEPT SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW).

         (b) Any legal action or proceeding with respect to this Consent to
Assignment and any action for enforcement of any judgment in respect thereof
may be brought in the courts of the State of New York or of the United States
of America for the Southern District of New York, and, by execution and
delivery of this Consent to Assignment, each of the Consenting Party, the
Company and the Collateral Agent hereby accepts for itself and in respect of
its property, generally and unconditionally, the non-exclusive jurisdiction
of the aforesaid courts and appellate courts from any appeal thereof. Each of
the Consenting Party and the Company hereby irrevocably designates, appoints
and empowers CT Corporation System as its designee, appointee and agent to
receive, accept and acknowledge for and on its behalf, and in respect of its
property, service of any and all legal process, summons, notices and
documents which may be served in any action or proceeding. If for any reason
such designee, appointee and agent shall cease to be available to act as
such, the Company or the Consenting Party, as applicable, 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. Each of the
Consenting Party, the Company and the Collateral Agent irrevocably consents
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 the Consenting Party at its notice
address

                                  8

<PAGE>

provided herein. Each of the Consenting Party, the Company and the Collateral
Agent hereby irrevocably waives any objection which it 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 Consent to Assignment brought in
the courts referred to above and hereby further irrevocably waives and agrees
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. Nothing
herein shall affect the right of the Collateral Agent or its designees to
serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against the Consenting Party in any other
jurisdiction.

         15. AMENDMENT. This Consent to Assignment may be modified, amended
or rescinded only by a writing expressly referring to this Consent to
Assignment and signed by both the Consenting Party and the Assignee. The
Assignee may request the direction of the Senior Parties prior to signing any
amendments described herein.

         16. SEVERABILITY. Every provision of this Consent to Assignment is
intended to be severable. If any term or provision hereof is declared by a
court of competent jurisdiction to be illegal, invalid or unenforceable for
any reason whatsoever, such illegality, invalidity or unenforceability shall
not affect the other terms and provisions hereof, which terms and provisions
shall remain binding and enforceable, and to the extent possible all of such
other provisions shall remain in full force and effect.

         17. COUNTERPARTS. This Consent to Assignment may be executed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.

                                  9

<PAGE>

         IN WITNESS WHEREOF, each of the Consenting Party and the Assignee
has duly executed this Consent to Assignment as of the date first above
written.

                           WILLIAMS ENERGY MARKETING & TRADING
                           COMPANY

                           By:  /s/ PHILIP J. SCALZO
                                -----------------------------------
                                Name:  Philip J. Scalzo
                                Title: Vice President

                           THE BANK OF NEW YORK,
                           as COLLATERAL AGENT

                           By:  /s/ MARYBETH LEWICKI
                                -----------------------------------
                                Name:  MaryBeth Lewicki
                                Title: Vice President

REVIEWED AND CONSENTED TO:

AES RED OAK, L.L.C.

By: /s/ PATRICIA L. ROLLIN
    -------------------------------
Name:   Patricia L. Rollin
Title:  Vice President

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