Document:

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                                                                   EXHIBIT 10.23

                             COST SHARING AGREEMENT

                             ENRON CORP. TRADEMARKS

         THIS COST SHARING AGREEMENT ("Agreement") is made and entered into
between Enron Corp. ("Enron"), an Oregon corporation having its principal place
of business in Houston, Texas and the entities (collectively, the "Subsidiaries"
and individually, a "Subsidiary")) listed on the signature page of this
Agreement (together, Enron and the Subsidiaries shall be referred to hereinafter
as the "Participants"), to be effective the first day of January, 1999.

         WHEREAS, Enron and the Subsidiaries constitute an integrated natural
gas and electricity company that produces electricity and natural gas, develops,
constructs and operates energy and water facilities worldwide and delivers
physical commodities and risk management and financial services to customers
around the world; and

         WHEREAS, Enron and the Subsidiaries conduct their operations under
corporate names that include the name ENRON, and utilize logos and other
trademarks and service marks which either include or are associated with the
name and mark ENRON that are listed on Schedule A to this Agreement (All of the
names and marks which either include or are associated with the name and mark
ENRON are cumulatively referred to herein as the "Trademarks"); and

         WHEREAS, Enron is the legal owner of the Trademarks; and

         WHEREAS, Enron has granted to each of the Subsidiaries a non-exclusive,
non- transferable license to use some or all of the Trademarks in such
Subsidiary's respective area of interest and Territory (each such agreement
being referred to herein as the "Licenses" and the term "Territory" herein
having the same meaning as in each License); and

         WHEREAS, pursuant to the terms of the Licenses, each
Subsidiary-Licensee agrees to undertake certain obligations with respect to use
of the Trademarks licensed to it, including assumption of certain financial
obligations, in consideration for the grant of the license to use the
Trademarks; and

         WHEREAS, the Participants wish to enter into an agreement to share
certain costs and risks of developing, enhancing, maintaining and defending the
licensed Trademarks in their areas of interest and Territories, all as set forth
more specifically below (hereinafter, the "Cost Sharing Arrangement"); an

         WHEREAS, the Participants intend for this Agreement to constitute a
"qualified cost sharing arrangement" within the meaning of U.S. Treas.
Reg. Section 1.482-7 as well as under applicable OECD guidelines.

                                    -Page 1-
                     Enron Trademark Cost Sharing Agreement
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         NOW, THEREFORE, for and in consideration of the mutual promises and
covenants contained herein, the receipt and sufficiency of such consideration
being hereby acknowledged, Enron and the Subsidiaries do hereby agree as
follows:

1.       AGREEMENT TO SHARE COSTS

         1.1 Subject to the terms and conditions set forth herein, and to the
extent that the Participants may lawfully do so, the Participants hereby agree
to share the General Benefit Trademark Costs, ad defined in section 1.3, in the
Cost Shares determined in accordance with section 1.4 below, [AND TO MAKE THE
BUY-IN AND BUY-OUT PAYMENTS DESCRIBED IN ARTICLE 2.]

         1.2      Trademark Costs

         (a)      For purposes of this Agreement, the term Trademark Costs means
                  costs incurred to develop, maintain, enhance, promote, or
                  defend the licensed Trademarks. For purposes of illustration
                  but not limitation, Trademark Costs may include the cost of
                  developing advertising content, publishing, broadcasting or
                  displaying advertising, agency fees, cost of developing or
                  producing print materials, brochures, promotional materials,
                  signs and logos, costs of registration, prosecution or defense
                  of claims of infringement or ownership.

         (b)      Trademark Costs shall include, but are not limited to, the
                  following items:

                  (i)      Operating Expenses. All expenses directly related to
                           the Trademarks not included in cost of goods sold
                           except for interest expense, foreign income taxes (as
                           defined in U.S. Treas. Reg. Section 1.901-2(a),
                           domestic income taxes, depreciation or amortization
                           expense; plus

                  (ii)     Leased Property. A reasonable charge for the use of
                           any tangible property made available to the Cost
                           Sharing Arrangement. If any such property is
                           furnished by an entity under common ownership or
                           control with a Participant within the meaning of
                           IRC Section 482, then the charge for the use of such
                           tangible property shall be an arm's- length amount as
                           determined under U.S. Treas. Reg. Section 1.482-2(c).

         (c)      Trademark Costs shall be considered "intangible development
                  costs" within the meaning of U.S. Treas. Reg. Section
                  1.482-7(d)(l).

         1.3      Specific Benefit versus General Benefit Trademark costs.

         (a)      Specific Benefit Trademark Expenses. Trademark Costs that
                  primarily benefit particular Participants and that produce
                  only incidental or ancillary benefit to other Participants
                  constitutes Specific Benefit Trademark Costs.

                                    -Page 2-
                     Enron Trademark Cost Sharing Agreement
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                  The Participants that are likely to receive the primary
                  benefit of Specific Benefit Trademark Costs shall bear the
                  full amount of such costs.

         (b)      General Benefit Trademark Expense. All Trademark Costs other
                  than Specified Benefit Trademark Costs constitute General
                  Benefit Trademark Costs. Such costs shall be shared by the
                  Participants as provided in section l.4 of this Agreement.

         1.4      Determination of Cost Shares.

                  (a) In general. The Share of the General Benefit Trademark
                  Costs to be paid by each Subsidiary for any taxable year (a
                  "Subsidiary Share") shall equal the total General Benefit
                  Trademark Costs multiplied by a fraction, the numerator of
                  which shall be projected Subsidiary Earnings Before Interest
                  and Tax ("EBIT"), computed in accordance with generally
                  accepted accounting principles ("GAAP"), as set forth in the
                  annual operating budget and the denominator of which shall be
                  projected total Worldwide EBIT of Enron and affiliates,
                  computed in accordance with GAAP, as set forth in such budget.
                  For purposes of this Agreement, the term Subsidiary EBIT shall
                  mean, in the case of each Subsidiary that is a Participant,
                  the total EBIT of such Subsidiary in its Territory for the
                  taxable year. Negative EBIT of any Participant shall be
                  treated as zero EBIT, except that if Enron's total Worldwide
                  EBIT is zero, the fractions described in this paragraph shall
                  be computed by substituting the word "Revenue" for the word
                  "EBIT". The Share of the General Benefit Trademark Costs to be
                  paid by Enron and any of its affiliates (other than the
                  Subsidiaries) for any taxable year (the "Enron Share") shall
                  equal total General Benefit Trademark Costs minus the total of
                  all Subsidiary Shares.

                  (b) Periodic Adjustment. Notwithstanding anything to the
                  contrary provided in section 1.4(a) hereof, the Participants
                  shall evaluate the Cost Shares, no less frequently than
                  annually, to determine whether the General Benefit Trademark
                  Costs are shared in a manner that is proportionate to the
                  benefits reasonably anticipated to be derived by each
                  participant from the Agreement, taking into account changes in
                  economic conditions, the business operations and practices of
                  the Participants, the terms of each License, and the ongoing
                  development of the licensed Trademarks. If the Participants
                  determine that the General Benefit Trademark Costs are shared
                  in a manner that is not likely to reflect the relative
                  benefits reasonably expected to be received by each, then the
                  Participants shall make adjustments to the Cost Shares, on a
                  prospective basis, or terminate the Agreement in accordance
                  with Article 4 hereof, as appropriate.

                  (c) Further Cost Sharing by Participant. Nothing in this
                  Agreement shall prevent any Participant from charging any
                  affiliate a share of such

                                    -Page 3-
                     Enron Trademark Cost Sharing Agreement
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                  Participant's Cost Share based on the benefits such affiliate
                  may reasonably expect to derive from use of the licensed
                  Trademarks.

                  (d) Time and Method of Payment. Enron shall charge each
                  Subsidiary annually for its annual Cost Share determined in
                  accordance with this section 1.4. The Subsidiaries shall pay
                  such invoiced amount to Enron by any reasonable means
                  including, without limitation, wire transfer, offset of
                  intercompany account, or by furnishing evidence of a
                  Subsidiary's having directly paid for authorized General
                  Benefit Trademark Costs. All invoices from and payments to
                  Enron under this Agreement shall be in U.S. dollars unless
                  otherwise agreed. Except at otherwise agreed by the
                  Participants, all payments made pursuant to this Agreement
                  shall be net of any federal, state or local tax, levy, duty,
                  impost, withholding or similar assessment of any kind. Amounts
                  not paid within 90 days shall bear interest at [LIBOR OR] the
                  Applicable Federal rate as defined in IRC Section 1274(d),
                  whichever is greater.

                  (e) Accounting. Enron shall maintain adequate books and
                  records to establish, with reasonable completeness and detail,
                  the nature and amount of each General Benefit Trademark Cost.
                  Enron shall afford the Subsidiaries reasonable access to
                  inspect, verify, copy and audit such records for any
                  legitimate purpose. Nothing in this subparagraph shall be
                  construed to create rights in any third party. Any
                  disagreement shall be resolved by [members of senior
                  management for the affected Participants].

2.       BUY-IN AND BUY-OUT

         2.1      Buy-In.

         (a)      In General. If any Participant ("Buy-in Transferor") makes
                  available to any other Participant ("Buy-in Transferee") the
                  ownership or use of any trademark created or acquired outside
                  the scope of this Agreement in which it has an interest
                  ("Non-Cost Shared Mark"), then the Transferee shall pay to the
                  Transferor a Buy-In Payment. The Buy-In Payment, if any, shall
                  be equal to the arm's-length price for the applicable rights
                  in the applicable Territory in the Non-Cost Shared Mark
                  determined under the rules of U.S. Texas Reg. Section 1.482-1
                  and Section 1.482-4 through Section 1.482.6.

         (b)      Payment Mechanics. The Buy-In Payment shall be made on the
                  same terms as are set forth in the applicable License.

         2.2      Buy-Out.

         (a)      In General. If a Participant "("Buy-Out Transferor")
                  transfers, abandons or relinquishes an interest in any
                  licensed Trademark in favor of any other Participant ("Buy-Out
                  Transferee"), then each Buy-Out Transferee shall

                                    -Page 4-
                     Enron Trademark Cost Sharing Agreement
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                  make a Buy-Out Payment to the Transferor. The Buy-Out Payment,
                  if any, shall be equal to the arm's-length price for the
                  transferred rights in the Trademark determined under the rules
                  of Treas. Reg. Section 1.482-1 and Section 1.482-4 through
                  Section 1.482.6.

         (b)      Payment Mechanics. The Buy-Out Payment shall be made on such
                  terms as the Buy-Out Transferor and the Buy-Out Transferee
                  agree including cross licenses, lump sum, installment or
                  royalty payments.

3.       USE OF TRADEMARKS

         3.1 Each Subsidiary's rights with respect to the Trademarks shall be
governed by the License to which Enron and such Subsidiary are parties. Nothing
in this Agreement shall be deemed to affect such rights.

4.       TERM AND TERMINATION

         4.1 This Agreement shall become effective on the effective date hereof
and shall remain in full force and effect for one (1) year thereafter, unless
earlier terminated in accordance with Section 4.2 hereof; provided, however,
this Agreement shall be renewed for additional terms of one (1) year each unless
the Participants mutually agree in writing at least thirty (30) days prior to
the expiration of the initial or any renewal term hereof, to allow the term of
this Agreement to expire on the date of the expiration of the then current term.
Any renewal term of this Agreement shall also be subject to early termination
from any Event of Default as set forth in Section 4.2 hereof.

         4.2 Events of Default. Notwithstanding any other right of termination
to which a Participant may be entitled pursuant to this Agreement or an
applicable License, upon the occurrence of one or more of the following Events
of Default, the Participant hereto not in default shall have the right to
terminate this Agreement as it applies to such defaulting Participant, in
writing, effective immediately upon the occurrence of the event indicated or the
running of any prescribed period:

         (a)      If a Subsidiary fails to pay any amount payable to Enron
                  hereunder when due and such default continues for more than
                  fifteen (15) days after dispatch of notice thereof to such
                  Subsidiary;

         (b)      If a Participant materially breaches any of the terms of this
                  Agreement or the License and does not cure such breach to the
                  satisfaction of the other party hereto within fifteen (15)
                  days after notice of the same;

         (c)      If a Participant makes application for relief as a debtor
                  under any bankruptcy or similar act, is involuntarily placed
                  in bankruptcy and does not within one hundred and twenty (120)
                  days thereafter have the bankruptcy proceeding dismissed, it
                  is adjudicated bankrupt or insolvent, or enters into a
                  composition with its creditors;

                                    -Page 5-
                     Enron Trademark Cost Sharing Agreement
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                  (d) If a Participant pledges or encumbers any of its rights or
                  interests granted under this Agreement to any creditor or
                  other third party without the consent of Enron or assigns any
                  of its rights under this Agreement except as specifically
                  authorized hereunder; or

                  (e) If a Participant during the term of this Agreement (i)
                  dissolves, voluntarily liquidates or winds up its business,
                  (ii) merges or consolidates with or into any corporation or
                  corporations other than Enron or Enron's wholly-owned
                  subsidiaries or affiliates, (iii) otherwise directly or
                  indirectly sells or disposes of all or substantially all of
                  its business or assets, or (iv) effects and reorganization or
                  debt restructuring without the permission of Enron.

                  4.3. Upon the expiration of this Agreement, all rights and
     privileges granted to Participants under this Agreement shall immediately
     terminate. Upon termination of this Agreement as it applies to a particular
     Participant (other than on expiration), all rights and privileges granted
     to such Participant under this Agreement shall immediately terminate.
     Termination or expiration of this Agreement shall not release any
     Participant from any continuing or accrued obligations imposed by this
     Agreement, e.g., continuing obligations relating to the treatment of
     confidential or proprietary information.

5.       MISCELLANEOUS

         5.1 The validity, construction and performance of this Agreement shall
be governed by and construed in accordance with the laws of the State of Texas
and the United States in all respects.

         5.2 The waiver, express or implied, by any Participant of any right
arising hereunder or of any failure to perform or breach hereof by another
Participant hereto shall not constitute or be deemed a waiver of any other right
hereunder or of any other failure to perform or breach hereof by such other
Participant, whether of a similar or dissimilar nature thereto.

         5.3 This Agreement may be amended at any time by mutual agreement of
the Participants.

         5.4 A Participant shall not be liable to another Participant for any
loss, injury, delay, damages, or other casualty suffered or incurred by the
latter due to strikes, riots, storms, fires, explosions, acts of God, war,
action of any government or any other cause similar thereto which is beyond the
reasonable control of the former, and any failure or delay by either party
hereto in performance of any of its obligations under this Agreement due to one
or more of the foregoing causes shall not be considered a breach of this
Agreement.

         5.5 Except as otherwise provided in this Agreement all notices required
or permitted to be given hereunder shall be in writing and shall be valid and
sufficient if

                                    -Page 6-
                     Enron Trademark Cost Sharing Agreement
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dispatched by registered mail or airmail (where appropriate),
postage prepaid, in any post office in the United States of America or in such
Subsidiary's respective Territory, as the case may be, or by facsimile (if
confirmed by registered mail or airmail (where appropriate), postage prepaid),
as follows:

                    If to Licensor:           Enron Corp
                                              1400 Smith Street
                                              Houston, TX  77002
                                              Facsimile:  (713) 646-2532

                    If to a Subsidiary:       See Signature Page

Any Participant may change its address by a written notice to the other
Participants in the manner set forth above. Notices given as herein provided
shall be considered to have been given ten (10) days after the mailing thereof
or if by facsimile, on the next business day of the receiver form the date sent.

         5.6 This Agreement embodies the entire agreement of the Participants
with respect to the subject matter hereof and supersedes and cancels any and all
prior understandings or agreements, verbal or otherwise, in relation hereto,
which may exist between the Participants. No oral explanation or oral
information by either of the Participants hereto shall alter the meaning or
interpretation of this Agreement. No amendment or change hereof or addition
hereto shall be effective or binding on either of the Participants hereto unless
reduced to writing and executed by the respective duly authorized
representatives of each of the Participants hereto.

         5.7 This Agreement may be executed in one or more counterparts, each of
which shall be considered an original, but all of which together shall
constitute one the same instrument.

         IN WITNESS WHEREOF, the Participants hereto have executed this
agreement by and through their respective duly authorized representatives to be
effective as of the 1st day of January, 1999.

ENRON CORP. AND CONSOLIDATED U.S. SUBSIDIARIES

By: /s/ RICHARD A. CAUSEY
    ---------------------------------------------------------
         Richard A. Causey
         Senior Vice President, Chief Accounting, Information
                  and Administrative Officer

         Executed this 8th day of June, 1999

                                    -Page 7-
                     Enron Trademark Cost Sharing Agreement
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             SUBSIDIARIES PARTICIPATING IN COST SHARING AGREEMENT

                                        AZURIX CORP.

                                        By: /s/ EDWARD N. ROBINSON
                                            ------------------------------------
                                        Name: Edward N. Robinson
                                        Title: Executive Director
                                        Executed this 9th day of June, 1999

                                    -Page 8-
                     Enron Trademark Cost Sharing Agreement
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                                   SCHEDULE A

                      TRADEMARKS AND TRADEMARK APPLICATIONS

                 EXHIBIT A TO TRADEMARK COST SHARING AGREEMENT
                         BETWEEN ENRON AND SUBSIDIARIES<PAGE>   1
                                                                   EXHIBIT 10.24

                               SERVICES AGREEMENT

         This Services Agreement (this "Agreement") is made and entered into as
of May 1, 1999, between Enron Corp., an Oregon corporation ("Enron"), and Azurix
Corp., a Delaware corporation ("Azurix"). Azurix and Enron may hereinafter be
referred to individually as a "Party" or collectively as the "Parties."

                                   RECITALS:

         WHEREAS, Enron and Azurix desire by their execution of this Agreement
to evidence their understanding concerning the provision of certain services by
Enron to Azurix and its subsidiaries;

         NOW, THEREFORE, for and in consideration of the mutual promises and
conditions contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereto
hereby agree as follows:

         1. Services. In order to assist the continued and orderly conduct of
certain corporate functions currently performed by Enron and its affiliates for
the benefit of the Referenced Subsidiaries (defined below), Enron agrees to
provide and Azurix agrees to purchase, subject to the terms and conditions set
forth herein, certain corporate staff and support services, as identified in
Exhibit A attached hereto (collectively, the "Services"), in each case if and
only to the extent requested by Azurix except as to services relating to office
space which shall be substantially identical in nature and quality to the
Services provided by Enron to its wholly-owned subsidiaries.

         "Referenced Subsidiaries" shall mean Azurix and its subsidiaries from
time to time. Such subsidiaries shall initially include, without limitation,
those subsidiaries listed on Exhibit B.

         2. Term. This Agreement shall become effective and Enron shall make the
Services available to the Referenced Subsidiaries pursuant to the terms of this
Agreement for the period commencing on May 1, 1999, and terminating on the date
180 days following written notice by either party to the other (or earlier by
mutual written agreement); provided, however, (i) the Referenced Subsidiaries
shall remain responsible for all out-of-pocket costs and expenses incurred by
Enron (directly or through its other subsidiaries) pursuant to agreements
entered into for the benefit of the Referenced Subsidiaries that could not be
terminated prior to the date of termination of this Agreement, and (ii) upon the
mutual agreement of Azurix and Enron, services may be provided beyond the
termination date set forth in the notice in order to allow the Referenced
Subsidiaries the opportunity to make alternative arrangements for such services.
In the event any of the Services being performed hereunder are no longer
available, Enron, any Enron

<PAGE>   2

subsidiary or affiliate, then Enron shall be relieved of its obligations under
this Agreement to provide that particular Service to the Referenced
Subsidiaries. The foregoing shall include any cessation of or failure of
Services due to Year 2000 problems. Enron will advise the Referenced
Subsidiaries of any cessation of Services and shall use commercially reasonable
judgement in assisting the Referenced Subsidiaries in securing alternative
services for the Referenced Subsidiaries.

         3. Nature and Quality of Services. The Parties understand and agree
that the Services shall be substantially identical in nature and quality to the
Services provided by Enron to its wholly-owned subsidiaries.

         4. Payment. Azurix, as compensation for the performance of the
Services, agrees to reimburse Enron for: (i) all expenses actually incurred by
Enron and readily identifiable to the Referenced Subsidiaries relating to the
Services ("Direct Charges"), which calculation shall be based on the cost of
such Services to Enron and charged to the Referenced Subsidiaries in the same
manner as costs charged to other Enron subsidiaries or affiliated companies and
in accordance with the charge bases identified on Exhibit A, if applicable; (ii)
the actual cost of any goods or services purchased specifically for the
Referenced Subsidiaries by Enron from third parties unaffiliated with Enron
("Operating Charges"); (iii) the actual cost or charge for outsourced services
provided by any third party unaffiliated with Enron specifically for the
Referenced Subsidiaries under an Enron or Enron affiliate agreement with such
third party ("Outsourced Charges"); (iv) an allocation of services related to
office space similar to that charged by Enron to its wholly-owned subsidiaries
("Space-Related Charges") and (v) an overhead allocation to the Referenced
Subsidiaries of administrative and general expenses of Enron corporate staff and
support services reasonably related to the amount of such services provided to
the Referenced Subsidiaries for which Azurix does not receive Direct Charges
("Allocated Charge"). Such Allocated Charge shall be payable in monthly
installments.

         If the compensation for the Services does not include sales, use,
excise, value-added or similar taxes, and if any such taxes are imposed on the
Services after the effective date of this Agreement, then such taxes shall be
promptly paid by Azurix.

         Any change in the methodology due to regulatory, accounting or legal
reasons, to be used for determining any Direct Charges, Operating Charges,
Outsourced Charges, Space-Related Charges, Allocated Charges or any other charge
for Services provided by Enron, any Enron affiliate or third party,

                                        2

<PAGE>   3

for the Referenced Subsidiaries from that being used on the effective date of
this Agreement shall be deemed agreed to by Azurix without the necessity of
getting Azurix's consent so long as such changes are in good faith and are
charged or allocated to the Referenced Subsidiaries in the same manner as to the
other Enron subsidiaries or affiliated companies.

         5. Invoicing. Enron shall invoice Azurix by the 15th working day of
each month for all Direct Charges, Operating Charges, Outsourced Charges,
Space-Related Charges, and Allocated Charges, all with respect to the preceding
month. All invoices shall reflect in reasonable detail a description of the
Services performed during the preceding month, and shall be due and payable on
the last day of the month of the invoice. In the event of a dispute as to the
propriety of invoiced amounts, Azurix shall pay all undisputed amounts on each
invoice, but shall be entitled to withhold payment of any amount in dispute and
shall promptly notify Enron of such dispute. Enron or its applicable affiliate
shall provide Azurix with records relating to the disputed amount so as to
enable the Parties to resolve the dispute. Azurix shall pay interest at an
annual rate of 18% on any disputed amounts which it should have paid but
withheld.

         6. Confidentiality. Each party shall exert the same efforts and
maintain the same precautions that it exerts and maintains with respect to its
own confidential and proprietary information with respect to all information
received from the other party in connection with the performance of the
Services; provided, however, that a party may disclose such information (i) if
required to do so by applicable laws, rules, regulations, or orders (including
any laws, rules, regulations or orders to which either party voluntarily
subjects itself and any applicable securities exchange rules), or (ii) if such
information was or becomes generally available to such party on a
non-confidential basis, provided that the source of such information was not
known by such party to be bound by a confidentiality obligation.

         7. Information from Azurix. Any information necessary for Enron or any
third party to perform any Services shall be submitted by Azurix in a manner
consistent with the practices utilized by the Referenced Subsidiaries during the
period immediately prior to the effective date of this Agreement, which manner
shall not be altered except by mutual written agreement of the Parties. Should
Azurix's failure to supply such input render Enron's or any third party's
performance of any Services unreasonably difficult, Enron or such third party,
upon reasonable notice to Azurix, may refuse to perform such Services until such
input is supplied.

         8. Sole Beneficiaries. Azurix acknowledges that the Services shall be
provided only with

                                        3

<PAGE>   4

respect to the business of Azurix and its subsidiaries or affiliates. Azurix
will not request performance of any Services for the benefit of any entity other
than Azurix and its subsidiaries or affiliates. Azurix represents and agrees
that it will use the Services only in accordance with all applicable federal,
state and local laws and regulations and communications and common carrier
tariffs, and in accordance with the reasonable conditions, rules, regulations
and specifications which may be set forth in any manuals, materials, documents
or instructions in existence on the effective date of this Agreement and
furnished by Enron to Azurix. Enron reserves the right to take all actions,
including termination of any particular Services, that Enron reasonably believes
to be necessary to assure compliance with applicable laws, regulations and
tariffs. Waiver by Enron of any of the provisions of this Agreement shall not be
construed as a waiver of such provision generally or of the right of Enron
thereafter to enforce each and every such provision.

         9. User Codes and Passwords. Enron will assign to the Referenced
Subsidiaries all user codes, passwords or numbers, or other control or
identifying cards or numbers, necessary for Enron to perform the Services.
Azurix assumes full responsibility for selection and use of any such codes,
passwords, cards or numbers that may be permitted or required in connection with
the Services involved.

         10. LIMITED WARRANTY; LIMITATION OF LIABILITY. ALL PRODUCTS OBTAINED
FOR THE REFERENCED SUBSIDIARIES ARE AS IS, WHERE IS, AS TO ENRON, WITH ALL
FAULTS, OTHER THAN FAULTS DUE TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
ENRON. NEITHER ENRON NOR ANY ENRON AFFILIATE PERFORMING ANY SERVICES HEREUNDER
MAKE ANY WARRANTIES OR REPRESENTATIONS WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING
THE WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT
TO THE SERVICES RENDERED FOR OR PRODUCTS OBTAINED FOR THE REFERENCED
SUBSIDIARIES, INCLUDING WITHOUT LIMITATION THOSE RENDERED BY OR OBTAINED FROM A
THIRD PARTY. NOTWITHSTANDING THE FOREGOING, TO THE EXTENT A WARRANTY PROVIDED BY
A THIRD PARTY MANUFACTURER OR PROVIDER OF GOODS OR SERVICES TO ENRON OR ITS
AFFILIATES CAN BE PASSED-ON TO THE REFERENCED SUBSIDIARIES, NOTHING HEREIN IS
INTENDED TO LIMIT SAME AND THE REFERENCED SUBSIDIARIES SHALL HAVE THE RIGHT TO
THE BENEFITS

                                        4

<PAGE>   5

(SUBJECT TO THE TERMS AND CONDITIONS THEREOF) OF ALL SUCH THIRD
PARTY WARRANTIES.

         IN NO EVENT SHALL EITHER ENRON OR THE REFERENCED SUBSIDIARIES BE LIABLE
TO THE OTHER PARTY OR ANY OTHER PERSON FOR ANY INDIRECT, SPECIAL OR
CONSEQUENTIAL DAMAGES RESULTING FROM ANY ERROR IN THE PERFORMANCE OF SERVICES OR
FROM THE BREACH OF THIS AGREEMENT, REGARDLESS OF FAULT. TO THE EXTENT ANY THIRD
PARTY HAS LIMITED ITS LIABILITY TO ENRON FOR SERVICES UNDER AN OUTSOURCING OR
OTHER AGREEMENT, THE REFERENCED SUBSIDIARIES AGREE TO BE BOUND BY SUCH
LIMITATION OF LIABILITY FOR ANY PRODUCT OR SERVICE PROVIDED TO ENRON BY SUCH
THIRD PARTY UNDER SUCH AGREEMENT.

         11. Force Majeure. Enron shall have no obligation to perform the
Services if its failure to do so is caused by or results from any act of God,
governmental action, natural disaster, strike, failure of essential equipment,
Y2K problem, or any other cause or circumstance beyond the control of Enron.
Enron agrees that upon restoring service following any failure of any equipment
necessary for Enron or its affiliates to provide any Services, Enron will allow
the Referenced Subsidiaries to have equal priority, in accordance with prior
practice, with respect to access to the restored service.

         12. Severability. In the event any portion of this Agreement shall be
found by a court of competent jurisdiction to be unenforceable, that portion of
the Agreement will be null and void and the remainder of the Agreement will be
binding on the Parties as if the unenforceable provisions had never been
contained herein.

         13. Assignment. This Agreement shall not be assignable by either of the
Parties hereto except by operation of law or with the written consent of the
non-assigning Party.

         14. Entire Agreement; Amendment. This Agreement constitutes the entire
agreement of the Parties relating to the performance of the Services and all
prior or contemporaneous written or oral agreements are merged herein. This
Agreement may not be amended or otherwise modified except by a writing signed by
both Parties.

         15. Choice of Law. This Agreement shall be governed by the laws of the
State of Texas, without regard to any conflict-of-law rule or principle that
might refer the construction or interpretation of

                                        5

<PAGE>   6

this Agreement to the laws of another state.

         16. Notice. Any notice, request, instruction, correspondence or other
document to be given hereunder by either Party to the other (herein collectively
called "Notice") shall be in writing and delivered personally or by facsimile,
as follows:

         If to Enron:   Enron Corp.
                        1400 Smith Street
                        P. 0. Box 1188
                        Houston, Texas 77251-1188
                        Attention: Senior Vice President, Chief Accounting and
                                   Information Officer
                        Facsimile No.: 713-853-3920
                        With a copy to: Senior Vice President and
                                        General Counsel
                        Facsimile No.: 713-853-3920

         If to Azurix:  Azurix Corp.
                        333 Clay Street 10th Floor
                        Houston, Texas 77002
                        Attention:  Chief Accounting Officer
                        Facsimile No. 713-345-5154
                        With a copy to: General Counsel
                        Facsimile No. 713-345-5330

Notice given by personal delivery shall be effective upon actual receipt by the
Party to whom addressed. Notice given by facsimile or telegram shall be
effective upon actual receipt if received during the recipient's normal business
hours, or at the beginning of the recipient's next business day after receipt if
not received during the recipient's normal business hours. Any Party may change
any address to which Notice is to be given to it by giving Notice as provided
above of such change of address.

         17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

                                        6

<PAGE>   7

         IN WITNESS WHEREOF, the Parties hereto have caused this Services
Agreement to be signed on their behalf by their duly authorized officers.

                              ENRON CORP.

                              By: /s/ RICHARD A. CAUSEY
                                 ------------------------------------------
                              Name:  Richard A. Causey
                              Title: Senior Vice President and Chief Accounting
                                        and Information Officer

                              AZURIX CORP.

                              By: /s/ EDWARD N. ROBINSON
                                 ------------------------------------------
                              Name:  Edward N. Robinson
                              Title: Executive Director

                                        7

<PAGE>   8

                                    EXHIBIT A

<TABLE>
<CAPTION>

 ENRON RC #

                         COMPANY #  901                     CHARGE BASES
                         --------------
<S>                      <C>                                <C>
         581             Facility Maintenance               Azurix's Floor Space - Square Feet*
         629             Corporate Security                 Azurix's Floor Space - Square Feet*
         898             Building Services                  Azurix's Floor Space - Square Feet*
         2234            Facility Operations                Azurix's Floor Space - Square Feet*
          75             ECAS Administration                Azurix's Usage of Services
         566             Construction                       Azurix's Usage of Services
         580             Facility Planning                  Azurix's Usage of Services
         692             Churn/Relocation                   Azurix's Usage of Services
         703             Audio Visual & Locks               Azurix's Usage of Services
         1829            International Security             Azurix's Usage of Services
         2334            Bus/Parking Subsidy                Azurix's Usage of Services
         2441            ABS Utility                        Azurix's Usage of Services
         2455            Rent                               Azurix's Floor Space - Square Feet*
         746             Furniture                          Azurix's Usage of Services
      0781/0782          Aviation                           Azurix's Usage of Services
         103             Shipping/Receiving                 Azurix's Usage of Services
         228             Copy Center                        Azurix's Usage of Services
         492             Mail Center                        Azurix's Usage of Services
         586             Concierge Services                 Azurix's Usage of Services
         2255            Convenience Copiers                Azurix's Usage of Services
         2453            Cafeteria                          Azurix's Usage of Services
         215             Records                            Azurix's Usage of Services
         0508            Real Estate                        Azurix's Usage of Services
         0502            Travel                             Azurix's Usage of Services
                                                            Azurix's Usage of Services or occasioned by
         0752            Legal                              Azurix

                         *sublease or lease covered by separate agreement;
                         space-related charges as per Sections 1, 4, and 5.

                         COMPANY # 001 ENRON MANAGEMENT COMPANY
                         --------------------------------------
      0208/0649          Compensation/Benefits              % of Benefits

                         COMPANY # 011 ENRON CORP.
                         -------------------------
      1140/1284          Enron Events                       % of Downtown HC
    658/1946/1949        Development & Training             Azurix's Usage of Services
         2397            Employee Communications            % of total employees
         319             VP - Compensation/Benefits         % of Headcount
         2326            Stock Option Plan                  Grant Elections
 0071/2242/0632-0246     Human Resources                    % of Headcount New Hires
         2349            Audit Fees                         Direct
 0647/2453/2454/2460     Wellness                           % of Downtown HC
         610             Corp. Secretary                    # of Companies - Legal Entities

 0866/1263/1264/1956     REGULATORY AFFAIRS                 Azurix's Usage of Services/Allocation

                         MARKETING AFFAIRS                  Azurix's Usage of Services/Allocation

                         COMPANY # 969 ECM
                         -----------------
         2411            Insurance                          Prop. Val./Rev/HC
         451             Treasurer
                         Bank Fees
         1990            Vehicle Funding

                         RISK ASSESSMENT & CONTROL
 0258/0826/1128/1129/
 1130/1131/1281/1958                                        Azurix's Usage of Services

                         INFORMATION TECHNOLOGY             % of Headcount
</TABLE>

                                        8

<PAGE>   9

Other Services:

o        From time to time, the Referenced Subsidiaries shall utilize the
         international offices of Enron and its affiliates for certain projects,
         in each case subject to the mutual agreement of Azurix and Enron or its
         affiliates, as applicable.

o        Such other services to be mutually agreed by Azurix and Enron.

                                        9

<PAGE>   10

                                    EXHIBIT B

Azurix Jose Holdings Ltd.
Azurix Jose Investment Ltd.
Azurix Jose Ltd.
Enron Argentina Holding Inc.
Azurix Misiones SRL
Azurix Cancun B.V.
Azurix Cancun SRL
Enron Water Israel Ltd.
Azurix Suez Ltd.
Azurix Colombia Holdings Ltd.
Azurix Colombia Investments Ltd.
Azurix Colombia Ltd.
Azurix Isla Mujeres B.V.
Operadora de Buenos Aires SRL
Operadora de Misiones SRL
Azurix Mendoza Water Investments Ltd.
Azurix Chengdu Holdings Ltd.
Azurix Chengdu Ltd.
Azurix Misiones Holdings Ltd.
Azurix Misiones Ltd.
Azurix U.K. Ltd.
Azurix Rio Holdings Ltd.
Azurix Rio Investments Ltd.
SPE-Sociedade PAULISTA de Energia Ltda.
SEC-Sociedade Carioca de Energia Ltda.
Azurix Kuwait Ltd.
Azurix AGOSBA Holdings Ltd.
Azurix AGOSBA Ltd.
Azurix AGOSBA SRL
Azurix Chaoyang Water Holdings Ltd.
Azurix Chile Holdings Ltd.
Azurix Chile Ltd.
Azurix Suzhou Water Holdings Ltd.
Azurix Vietnam Holdings Ltd.
Azurix Vietnam Investments Ltd.
Azurix Vietnam Ltd.
Azurix Jordan Ltd.
Azurix Lebanon Ltd.
Azurix Tangiers Ltd.
Azurix Philippines Holdings Ltd.
Azurix Philippines Investments Ltd.
Azurix Philipppines Ltd.
Azurix Guam Corporation
Azurix Panama Holdings Ltd.
Azurix Panama Investments Ltd.
Azurix China Holdings Ltd.
Azurix China Investments Ltd.
Azurix Projects Holdings Ltd.
Azurix Projects Ltd.
Azurix Saigon Holding Co.
Azurix Saigon Ltd.
Azurix Ltd.
Azurix Europe Ltd.
Wessex Water Ltd.
Wessex Water Services Ltd.

                                       10

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