8-K

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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549




                                    FORM 8-K

                                 CURRENT REPORT


                       Pursuant to Section 13 or 15(d) of
                      the Securities Exchange Act of 1934


                          Date of Report: May 18, 2000



                                  Enron Corp.
             (Exact name of registrant as specified in its charter)


                                     Oregon
                 (State or other jurisdiction of incorporation)


             1-13159                                47-0255140
    (Commission File Number)              (IRS Employer Identification No.)


                Enron Building
              1400 Smith Street
                Houston, Texas                              77002
    (Address of principal executive offices)              (Zip Code)


Registrant's telephone number, including area code: 713-853-6161

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Item 7.  Exhibits.

        The registrant is filing herewith the following in connection with the
offering of medium term notes pursuant to its registration statement on Form S-3
(No. 333-70465) filed with the Securities and Exchange Commission under the
Securities Act of 1933, as described in the Prospectus and Prospectus Supplement
dated May 18, 2000 filed with the Securities and Exchange Commission pursuant to
Rule 424(b) under the Securities Act of 1933:

        1.1      Form of Distribution Agreement between the registrant and any
                  entity that serves as agent

        1.2      Form of Administrative Procedures


        8.1      Opinion and consent of Vinson & Elkins L.L.P. with respect to
                  certain federal income tax matters.


                                   SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                           ENRON CORP.



                                           By: /s/ REX R. ROGERS
                                               --------------------------------
                                               Rex R. Rogers
                                               Vice President and
                                               Associate General Counsel




Dated:  May 18, 2000



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                               INDEX TO EXHIBITS


Exhibit
Number
- -------

1.1      Form of Distribution Agreement between the registrant and any entity
         that serves as agent

1.2      Form of Administrative Procedures

8.1      Opinion and consent of Vinson & Elkins L.L.P. with respect to certain
         federal income tax matters.

EX-1.1

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EXHIBIT 1.1


                                  ENRON CORP.

                               MEDIUM-TERM NOTES
                   DUE NINE MONTHS OR MORE FROM DATE OF ISSUE

                             DISTRIBUTION AGREEMENT


                                                                        [Date]


[Name and Address of Agent]

Dear Sirs:

         Enron Corp., an Oregon corporation (the "Company"), confirms its
agreement with the agent set forth above and on the signature page hereto (the
"Agent") with respect to the issue and sale by the Company of its Medium-Term
Notes Due Nine Months or More From Date of Issue (the "Notes"). The Notes are
to be issued pursuant to an Indenture, dated as of November 1, 1985, as amended
or modified from time to time (the "Indenture"), between the Company and The
Bank of New York (as successor to Harris Trust and Savings Bank), as trustee
(the "Trustee"). As of the date hereof, the Company has authorized the issuance
and sale of up to U.S. $500,000,000 aggregate initial offering price of Notes
(or its equivalent, based upon the exchange rate on the applicable trade date
in such foreign currencies as the Company shall designate at the time of
issuance) to or through the Agent pursuant to the terms of this Agreement. It
is understood, however, that the Company may from time to time authorize the
issuance of additional Notes and that such additional Notes may be sold to or
through the Agent pursuant to the terms of this Agreement, all as though the
issuance of such Notes were authorized as of the date hereof.

         This Agreement provides both for the sale of Notes by the Company to
the Agent as principal for resale to investors and other purchasers and for the
sale of Notes by the Company directly to investors (as may from time to time be
agreed to by the Company and the Agent), in which case the Agent will act as an
agent of the Company in soliciting offers for the purchase of Notes.

         The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-70465) for the
registration of its common stock, preferred stock, depositary shares and debt
securities, including the Notes, under the Securities Act of 1933, as amended
(the "1933 Act"), and the offering thereof from time to time in accordance with
Rule 415 of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations"). Such registration statement has been declared
effective by the Commission and the Indenture has been duly qualified under the
Trust Indenture Act of 1939, as amended (the "1939 Act"), and the Company has
filed such post-effective amendments thereto as may be required prior to its
acceptance of any offer for the purchase of Notes and each such post-effective
amendment has been declared effective by the Commission. Such registration


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statement, in the form in which it or any post-effective amendment thereto
became effective, is referred to herein as the "Registration Statement"; and
the final prospectus and all applicable amendments or supplements thereto
(including the final prospectus supplement and pricing supplement relating to
the offering of Notes), in the form first furnished to the Agent for use in
confirming sales of Notes, are collectively referred to herein as the
"Prospectus"; provided, however, that all references to the "Registration
Statement" and the "Prospectus" shall also be deemed to include all documents
incorporated therein by reference pursuant to the Securities Exchange Act of
1934, as amended (the "1934 Act"), prior to the effectiveness of the
Registration Statement or any acceptance by the Company of an offer for the
purchase of Notes, respectively; provided, further, that if the Company files a
registration statement with the Commission pursuant to Rule 462(b) of the 1933
Act Regulations (the "Rule 462(b) Registration Statement"), then, after such
filing, all references to the "Registration Statement" shall also be deemed to
include the Rule 462(b) Registration Statement. A "preliminary prospectus"
shall be deemed to refer to any prospectus used before the Registration
Statement became effective and any prospectus furnished by the Company after
the registration statement became effective and before any acceptance by the
Company of an offer for the purchase of Notes which omitted information to be
included upon pricing in a form of prospectus filed with the Commission
pursuant to Rule 424(b) of the 1933 Act Regulations. All references in this
Agreement to amendments or supplements to the Registration Statement,
Prospectus or preliminary prospectus shall be deemed to include the filing of
any document under the 1934 Act which is incorporated by reference in the
Registration Statement, Prospectus or preliminary prospectus, as the case may
be. For purposes of this Agreement, all references to the Registration
Statement, Prospectus or preliminary prospectus or to any amendment or
supplement thereto shall be deemed to include any copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("EDGAR").

SECTION  1. Appointment as Agent.

         (a) Appointment. Subject to the terms and conditions stated herein and
subject to the reservation by the Company of the right to sell Notes directly
on its own behalf, the Company hereby agrees that Notes will be sold to or
through the Agent on a non-exclusive basis.

         (b) Sale of Notes. The Company shall not sell or approve the
solicitation of offers for the purchase of Notes in excess of the amount which
shall be authorized by the Company from time to time or in excess of the
aggregate initial offering price of Notes registered pursuant to the
Registration Statement. The Agent shall not have any responsibility for
maintaining records with respect to the aggregate initial offering price of
Notes sold, or of otherwise monitoring the availability of Notes for sale,
under the Registration Statement.

         (c) Purchases as Principal. The Agent shall not have any obligation to
purchase Notes from the Company as principal. However, absent an agreement
between the Agent and the Company that the Agent shall be acting solely as an
agent for the Company, the Agent shall be deemed to be acting as principal in
connection with any offering of Notes hereunder. Accordingly, the Agent may
agree from time to time to purchase Notes from the Company as principal for
resale to investors and other purchasers determined by the Agent. Any purchase
of Notes from the Company by the Agent as principal shall be made in accordance
with Section 3(a) hereof.



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         (d) Solicitations as Agent. If agreed upon between the Agent and the
Company, the Agent, acting solely as an agent for the Company and not as
principal, will solicit offers for the purchase of Notes. The Agent will
communicate to the Company, orally, each offer for the purchase of Notes
solicited by it on an agency basis other than those offers rejected by the
Agent. The Agent shall have the right, in its discretion reasonably exercised,
to reject any offer for the purchase of Notes, in whole or in part, and any
such rejection shall not be deemed a breach of its agreement contained herein.
The Company may accept or reject any offer for the purchase of Notes, in whole
or in part. The Agent shall make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer for the purchase of Notes
has been solicited by it on an agency basis and accepted by the Company. The
Agent shall not have any liability to the Company in the event that any such
purchase is not consummated for any reason. If the Company shall default on its
obligation to deliver Notes to a purchaser whose offer has been solicited by
the Agent on an agency basis and accepted by the Company, the Company shall (i)
hold the Agent harmless against any loss, claim or damage arising from or as a
result of such default by the Company and (ii) pay to the Agent any commission
to which it would otherwise be entitled absent such default.

         (e) Reliance. The Company and the Agent agree that any Notes purchased
from the Company by the Agent as principal shall be purchased, and any Notes
the placement of which the Agent arranges as an agent of the Company shall be
placed by the Agent, in reliance on the representations, warranties, covenants
and agreements of the Company contained herein and on the terms and conditions
and in the manner provided herein.

SECTION  2. Representations and Warranties.


         (a) The Company represents and warrants to the Agent as of the date
hereof, as of the date of each acceptance by the Company of an offer for the
purchase of Notes (whether to the Agent as principal or through the Agent as
agent), as of the date of each delivery of Notes (whether to the Agent as
principal or through the Agent as agent) (the date of each such delivery to the
Agent as principal is referred to herein as a "Settlement Date"), and as of any
time that the Registration Statement or the Prospectus shall be amended or
supplemented (each of the times referenced above is referred to herein as a
"Representation Date"), as follows:

                  (i) Due Incorporation, Good Standing and Due Qualification of
         the Company. The Company has been duly organized and is validly
         existing as a corporation in good standing under the laws of the state
         of its incorporation with corporate power and authority to own, lease
         and operate its properties and to conduct its business as described in
         the Prospectus and to enter into this Agreement and consummate the
         transactions contemplated in the Prospectus; and the Company is duly
         qualified as a foreign corporation to transact business and is in good
         standing in each jurisdiction in which such qualification is required,
         whether by reason of the ownership or leasing of property or the
         conduct of business, except where the failure to so qualify or be in
         good standing would not result in a material adverse change in the
         condition, financial or otherwise, or in the earnings, business
         affairs or business prospects of the Company and its subsidiaries
         considered as one enterprise (a "Material Adverse Effect").


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                  (ii) Due Incorporation, Good Standing and Due Qualification
         of Material Subsidiaries. Each Material Subsidiary (as defined below)
         has been duly organized and is validly existing as a corporation in
         good standing under the laws of the jurisdiction of its incorporation,
         has corporate power and authority to own, lease and operate its
         properties and conduct its business as described in the Prospectus and
         is duly qualified as a foreign corporation to transact business and is
         in good standing in each jurisdiction in which such qualification is
         required, whether by reason of the ownership or leasing of property or
         the conduct of business, except where the failure to so qualify or be
         in good standing would not result in a Material Adverse Effect; except
         as stated in the Prospectus, all of the issued and outstanding shares
         of capital stock of each Material Subsidiary has been duly authorized
         and is validly issued, fully paid and non-assessable and is owned by
         the Company, directly or through subsidiaries, free and clear of any
         security interest, mortgage, pledge, lien, encumbrance, claim or
         equity; and none of the outstanding shares of capital stock of any
         Material Subsidiary was issued in violation of preemptive or other
         similar rights of any securityholder of such Material Subsidiary. The
         following subsidiaries of the Company shall be "Material
         Subsidiaries": Citrus Corp., Enron North America Corp., Florida Gas
         Transmission Company, Houston Pipe Line Company, Northern Natural Gas
         Company, Portland General Electric Company, Transwestern Pipeline
         Company and Enron Broadband Services, Inc. and each other subsidiary
         deemed material by the Company prior to any acceptance of an offer to
         purchase Notes.

                  (iii) Registration Statement and Prospectus. The Company
         meets the requirements for use of Form S-3 under the 1933 Act; the
         Registration Statement (or any Rule 462(b) Registration Statement) has
         become effective under the 1933 Act and no stop order suspending the
         effectiveness of the Registration Statement (or any Rule 462(b)
         Registration Statement) has been issued under the 1933 Act and no
         proceedings for that purpose have been instituted or are pending or,
         to the knowledge of the Company, are contemplated by the Commission,
         and any request on the part of the Commission for additional
         information has been complied with; the Indenture has been duly
         qualified under the 1939 Act; at the respective times that the
         Registration Statement (including any Rule 462(b) Registration
         Statement) and any post-effective amendment thereto (including the
         filing of the Company's most recent Annual Report on Form 10-K with
         the Commission (the "Annual Report on Form 10-K")) became effective
         and at each Representation Date, the Registration Statement (including
         any Rule 462(b) Registration Statement) and any amendments thereto
         complied and will comply in all material respects with the
         requirements of the 1933 Act and the 1933 Act Regulations and the 1939
         Act and the rules and regulations of the Commission under the 1939 Act
         (the "1939 Act Regulations") and did not and will not contain an
         untrue statement of a material fact or omit to state a material fact
         required to be stated therein or necessary to make the statements
         therein not misleading; each preliminary prospectus and prospectus
         filed as part of the Registration Statement as originally filed or as
         part of any amendment thereto, or filed pursuant to Rule 424 under the
         1933 Act, complied when so filed in all material respects with the
         1933 Act Regulations; each preliminary prospectus and the Prospectus
         delivered to the Agent for use in connection with the offering of Notes
         are identical to any electronically transmitted copies thereof filed
         with the Commission pursuant to EDGAR, except to the extent permitted
         by Regulation S-T; and at the date hereof, at the date of the
         Prospectus and each amendment or supplement thereto and at



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         each Representation Date, neither the Prospectus nor any amendment or
         supplement thereto included or will include an untrue statement of a
         material fact or omitted or will omit to state a material fact
         necessary in order to make the statements therein, in the light of the
         circumstances under which they were made, not misleading; provided,
         however, that the representations and warranties in this subsection
         shall not apply to statements in or omissions from the Registration
         Statement or the Prospectus made in reliance upon and in conformity
         with information furnished to the Company in writing by the Agent
         expressly for use in the Registration Statement or the Prospectus.

                  (iv) Incorporated Documents. The documents incorporated or
         deemed to be incorporated by reference in the Prospectus, at the time
         they were or hereafter are filed with the Commission, complied and
         will comply in all material respects with the requirements of the 1934
         Act and the rules and regulations of the Commission under the 1934 Act
         (the "1934 Act Regulations") and, when read together with the other
         information in the Prospectus, at the date hereof, at the date of the
         Prospectus and at each Representation Date, did not and will not
         include an untrue statement of a material fact or omit to state a
         material fact necessary in order to make the statements therein, in
         the light of the circumstances under which they were made, not
         misleading.

                  (v) Independent Accountants. The accountants who certified
         the financial statements and any supporting schedules thereto included
         in the Registration Statement and the Prospectus are independent
         public accountants as required by the 1933 Act and the 1933 Act
         Regulations.

                  (vi) Financial Statements. The consolidated financial
         statements of the Company included in the Registration Statement and
         the Prospectus, together with the related schedules and notes, as well
         as those financial statements, schedules and notes of any other entity
         included in the Registration Statement and the Prospectus, present
         fairly the consolidated financial position of the Company and its
         subsidiaries, or such other entity, as the case may be, at the dates
         indicated and the consolidated statement of operations, stockholders'
         equity and cash flows of the Company and its subsidiaries, or such
         other entity, as the case may be, for the periods specified; such
         financial statements have been prepared in conformity with generally
         accepted accounting principles ("GAAP") applied on a consistent basis
         throughout the periods involved; the supporting schedules, if any,
         included in the Registration Statement and the Prospectus present
         fairly in accordance with GAAP the information required to be stated
         therein; the selected financial data and the summary financial
         information included in the Registration Statement and the Prospectus
         present fairly the information shown therein and have been compiled on
         a basis consistent with that of the audited financial statements
         included in the Registration Statement and the Prospectus; and any pro
         forma consolidated financial statements of the Company and its
         subsidiaries and the related notes thereto included in the
         Registration Statement and the Prospectus present fairly the
         information shown therein, have been prepared in accordance with the
         Commission's rules and guidelines with respect to pro forma financial
         statements and have been properly compiled on the bases described
         therein, and the assumptions used in the preparation thereof are
         reasonable and the adjustments used therein are appropriate to give
         effect to the transactions and circumstances referred to therein.


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                  (vii) No Material Changes. Since the respective dates as of
         which information is given in the Registration Statement and the
         Prospectus, except as otherwise stated therein, there has been no
         event or occurrence that would result in a Material Adverse Effect.

                  (viii) Authorization, etc. of this Agreement, the Indenture
         and the Notes. This Agreement has been duly authorized, executed and
         delivered by the Company; the Indenture has been duly authorized,
         executed and delivered by the Company and will be a valid and legally
         binding agreement of the Company, enforceable against the Company in
         accordance with its terms, except as enforcement thereof may be
         limited by bankruptcy, insolvency, reorganization, moratorium or other
         similar laws affecting the enforcement of creditors' rights generally
         or by general equitable principles (regardless of whether enforcement
         is considered in a proceeding in equity or at law), and except further
         as enforcement thereof may be limited by requirements that a claim
         with respect to any debt securities issued under the Indenture that
         are payable in a foreign or composite currency (or a foreign or
         composite currency judgment in respect of such claim) be converted
         into U.S. dollars at a rate of exchange prevailing on a date
         determined pursuant to applicable law or by governmental authority to
         limit, delay or prohibit the making of payments outside the United
         States; the Notes have been duly authorized by the Company for offer,
         sale, issuance and delivery pursuant to this Agreement and, when
         issued, authenticated and delivered in the manner provided for in the
         Indenture and delivered against payment of the consideration therefor,
         will constitute valid and legally binding obligations of the Company,
         enforceable against the Company in accordance with their terms, except
         as enforcement thereof may be limited by bankruptcy, insolvency,
         reorganization, moratorium or other similar laws affecting the
         enforcement of creditors' rights generally or by general equitable
         principles (regardless of whether enforcement is considered in a
         proceeding in equity or at law), and except further as enforcement
         thereof may be limited by requirements that a claim with respect to
         any Notes payable in a foreign or composite currency (or a foreign or
         composite currency judgment in respect of such claim) be converted
         into U.S. dollars at a rate or exchange prevailing on a date
         determined pursuant to applicable law or by governmental authority to
         limit, delay or prohibit the making of payments outside the United
         States; the Notes will be substantially in a form previously certified
         to the Agent and contemplated by the Indenture; and each holder of
         Notes will be entitled to the benefits of the Indenture.

                  (ix) Descriptions of the Indenture and the Notes. The
         Indenture and the Notes conform and will conform in all material
         respects to the statements relating thereto contained in the
         Prospectus and are substantially in the form filed or incorporated by
         reference, as the case may be, as an exhibit to the Registration
         Statement.

                  (x) Absence of Defaults and Conflicts. Neither the Company
         nor any of its subsidiaries is in violation of the provisions of its
         charter or by-laws or in default in the performance or observance of
         any obligation, agreement, covenant or condition contained in any
         contract, indenture, mortgage, deed of trust, loan or credit
         agreement, note, lease or other agreement or instrument to which the
         Company or any of its subsidiaries is a party or by which it or any of
         them may be bound or to which any of the property or


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         assets of the Company or any of its subsidiaries is subject
         (collectively, "Agreements and Instruments"), except for such defaults
         that would not result in a Material Adverse Effect; and the execution,
         delivery and performance of this Agreement, the Indenture, the Notes
         and any other agreement or instrument entered into or issued or to be
         entered into or issued by the Company in connection with the
         transactions contemplated by the Prospectus, the consummation of the
         transactions contemplated in the Prospectus (including the issuance
         and sale of the Notes and the use of proceeds therefrom as described
         in the Prospectus) and the compliance by the Company with its
         obligations hereunder and under the Indenture, the Notes and such
         other agreements or instruments have been duly authorized by all
         necessary corporate action and do not and will not, whether with or
         without the giving of notice or the passage of time or both, conflict
         with or constitute a breach of, or default or event or condition which
         gives the holder of any note, debenture or other evidence of
         indebtedness (or any person acting on such holder's behalf) the right
         to require the repurchase, redemption or repayment of all or a portion
         of such indebtedness by the Company or any of its subsidiaries (a
         "Repayment Event") under, or result in the creation or imposition of
         any lien, charge or encumbrance upon any assets, properties or
         operations of the Company or any of its subsidiaries pursuant to, any
         Agreements and Instruments, except for such liens, charges,
         encumbrances or violations that would not result in a Material Adverse
         Effect, nor will such action result in any violation of the provisions
         of the charter or by-laws of the Company or any of its subsidiaries or
         any applicable law, statute, rule, regulation, judgment, order, writ
         or decree of any government, government instrumentality or court,
         domestic or foreign, having jurisdiction over the Company or any of
         its subsidiaries or any of their assets, properties or operations.

                  (xi) Absence of Proceedings. There is no action, suit,
         proceeding, inquiry or investigation before or brought by any court or
         governmental agency or body, domestic or foreign, now pending, or to
         the knowledge of the Company threatened, against or affecting the
         Company or any of its subsidiaries which is required to be disclosed
         in the Registration Statement and the Prospectus (other than as stated
         therein), or which may reasonably be expected to result in a Material
         Adverse Effect, or which may reasonably be expected to materially and
         adversely affect the assets, properties or operations thereof, the
         performance by the Company of its obligations under this Agreement,
         the Indenture and the Notes or the consummation of the transactions
         contemplated in the Prospectus.

                  (xii) Title to Property. The Company and its subsidiaries
         have good and marketable title to all real property owned by the
         Company and its subsidiaries and good title to all other properties
         owned by them, in each case, free and clear of all mortgages, pledges,
         liens, security interests, claims, restrictions or encumbrances of any
         kind, except (A) as otherwise stated in the Registration Statement and
         the Prospectus or (B) those that do not adversely affect the value of
         such property or interfere with the use made and proposed to be made
         of such property by the Company or any of its subsidiaries, in either
         case in a manner that would result in a Material Adverse Effect; and
         all of the leases and subleases material to the business of the
         Company and its subsidiaries considered as one enterprise, and under
         which the Company or any of its subsidiaries holds properties
         described in the Prospectus, are in full force and effect, and neither
         the Company nor any of its subsidiaries has received any notice of any
         material claim of any sort that has been



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         asserted by anyone adverse to the rights of the Company or any of its
         subsidiaries under any of such leases or subleases, or affecting or
         questioning the rights of the Company or such subsidiary of the
         continued possession of the leased or subleased premises under any
         such lease or sublease, except for those that would not have a
         Material Adverse Effect.

                  (xiii) Environmental Laws. Except as otherwise stated in the
         Registration Statement and the Prospectus and except as would not,
         singly or in the aggregate, result in a Material Adverse Effect, (A)
         neither the Company nor any of its subsidiaries is in violation of any
         federal, state, local or foreign statute, law, rule, regulation,
         ordinance, code, policy or rule of common law or any judicial or
         administrative interpretation thereof including any judicial or
         administrative order, consent, decree or judgment, relating to
         pollution or protection of human health, the environment (including,
         without limitation, ambient air, surface water, groundwater, land
         surface or subsurface strata) or wildlife, including, without
         limitation, laws and regulations relating to the release or threatened
         release of chemicals, pollutants, contaminants, wastes, toxic
         substances, hazardous substances, petroleum or petroleum products
         (collectively, "Hazardous Materials") or to the manufacture,
         processing, distribution, use, treatment, storage, disposal, transport
         or handling of Hazardous Materials (collectively, "Environmental
         Laws"), (B) the Company and its subsidiaries have all permits,
         authorizations and approvals required under any applicable
         Environmental Laws and are each in compliance with their requirements,
         (C) there are no pending or threatened administrative, regulatory or
         judicial actions, suits, demands, demand letters, claims, liens,
         notices of noncompliance or violation, investigation or proceedings
         relating to any Environmental Law against the Company or any of its
         subsidiaries and (D) there are no events or circumstances that may
         reasonably be expected to form the basis of an order for clean-up or
         remediation, or an action, suit or proceeding by any private party or
         governmental body or agency, against or affecting the Company or any
         of its subsidiaries relating to Hazardous Materials or any
         Environmental Laws.

                  (xiv) No Filings, Regulatory Approvals, etc. No filing with,
         or approval, authorization, consent, license, registration,
         qualification, order or decree of, any court or governmental authority
         or agency, domestic or foreign, is necessary or required for the due
         authorization, execution and delivery by the Company of this
         Agreement, the Indenture and the Notes or for the performance by the
         Company of the transactions contemplated in this Agreement, the
         Indenture or the Prospectus, except such as have been previously made,
         obtained or rendered, as applicable.

                  (xv) Investment Company Act. The Company is not, and upon the
         issuance and sale of the Notes as herein contemplated and the
         application of the net proceeds therefrom as described in the
         Prospectus will not be, an "investment company" within the meaning of
         the Investment Company Act of 1940, as amended (the "1940 Act").

                  (xvi) Commodity Exchange Act. The Notes, upon issuance, will
         be excluded or exempted under, or beyond the purview of, the Commodity
         Exchange Act, as amended (the "Commodity Exchange Act"), and the rules
         and regulations of the Commodity


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         Futures Trading Commission under the Commodity Exchange Act (the
         "Commodity Exchange Act Regulations").

         (b) Additional Certifications. Any certificate signed by any officer
of the Company or any of its subsidiaries and delivered to the Agent or to
counsel for the Agent in connection with an offering of Notes to the Agent as
principal or through the Agent as agent shall be deemed a representation and
warranty by the Company to the Agent as to the matters covered thereby on the
date of such certificate and, unless subsequently amended or supplemented, at
each Representation Date subsequent thereto.

SECTION  3. Purchases as Principal; Solicitations as Agent.

         (a) Purchases as Principal. Notes purchased from the Company by the
Agent, as principal shall be made in accordance with terms agreed upon between
the Agent and the Company (which terms shall, to the extent deemed appropriate,
include those terms specified in Exhibit A hereto). The Agent's commitment to
purchase Notes as principal shall be deemed to have been made on the basis of
the representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Unless the context
otherwise requires, references herein to "this Agreement" shall include the
applicable agreement of the Agent to purchase Notes from the Company as
principal. The Agent may engage the services of any broker or dealer in
connection with the resale of the Notes purchased by them as principal and may
allow all or any portion of the discount received from the Company in
connection with such purchases to such brokers or dealers. At the time of each
purchase of Notes from the Company by the Agent as principal, the Agent shall
specify the requirements for the officers' certificate, opinion of counsel and
comfort letter pursuant to Sections 7(b), 7(c) and 7(d) hereof.

         (b) Solicitations as Agent. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, when agreed by the Company and the Agent, the Agent, as an agent of the
Company, will use its reasonable efforts to solicit offers for the purchase of
Notes upon the terms set forth herein and in the Prospectus. The Agent is not
authorized to appoint sub-Agents with respect to Notes sold through it as
agent. All Notes sold through the Agent as agent will be sold at 100% of their
principal amount unless otherwise agreed upon between the Company and the
Agent.

         The Company reserves the right, in its sole discretion, to suspend
solicitation of offers for the purchase of Notes through the Agent, as an agent
of the Company, commencing at any time for any period of time or permanently.
As soon as practicable after receipt of instructions from the Company, the
Agent will suspend solicitation of offers for the purchase of Notes from the
Company until such time as the Company has advised the Agent that such
solicitation may be resumed.

         The Company agrees to pay the Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
Note sold by the Company as a result of a solicitation made by the Agent, as an
agent of the Company, as set forth in Schedule A hereto.


   10




         (c) Administrative Procedures. The purchase price, interest rate or
formula, maturity date and other terms of the Notes specified in Exhibit A
hereto (as applicable) shall be agreed upon between the Company and the Agent
and specified in a pricing supplement to the Prospectus (each, a "Pricing
Supplement") to be prepared by the Company in connection with each sale of
Notes. Except as otherwise specified in the applicable Pricing Supplement, the
Notes will be issued in denominations of U.S. $1,000 or any larger amount that
is an integral multiple of U.S. $1,000. Administrative procedures with respect
to the issuance and sale of the Notes (the "Procedures") shall be agreed upon
from time to time among the Company, the Agent and the Trustee. The Agent and
the Company agree to perform, and the Company agrees to cause the Trustee to
agree to perform, their respective duties and obligations specifically provided
to be performed by them in the Procedures.

SECTION  4. Covenants of the Company.

         The Company covenants and agrees with the Agent as follows:

         (a) Notice of Certain Events. The Company will notify the Agent
immediately, and confirm such notice in writing, of (i) the effectiveness of
any post-effective amendment to the Registration Statement or the filing of any
amendment or supplement to the Prospectus (other than any amendment or
supplement thereto providing solely for the determination of the variable terms
of the Notes or relating solely to the offering of securities other than the
Notes), (ii) the receipt of any comments from the Commission, (iii) any request
by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, (iv)
the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement, or of any order preventing or suspending the use
of any preliminary prospectus, or of the initiation of any proceedings for that
purpose or (v) any change in the rating assigned by any nationally recognized
statistical rating organization to the Program or any debt securities
(including the Notes) of the Company, or the public announcement by any
nationally recognized statistical rating organization that it has under
surveillance or review, with possible negative implications, its rating of the
Program or any such debt securities, or the withdrawal by any nationally
recognized statistical rating organization of its rating of the Program or any
such debt securities. The Company will make every reasonable effort to prevent
the issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.

         (b) Filing or Use of Amendments. Except as otherwise provided in
subsection (m) of this Section 4, the Company will give the Agent advance
notice of its intention to file or prepare any additional registration
statement with respect to the registration of additional Notes, any amendment
to the Registration Statement (including any filing under Rule 462(b) of the
1933 Act Regulations) or any amendment or supplement to the prospectus included
in the Registration Statement at the time it became effective or to the
Prospectus (other than an amendment or supplement thereto providing solely for
the determination of the variable terms of the Notes or relating solely to the
offering of securities other than the Notes), whether pursuant to the 1933 Act,
the 1934 Act or otherwise, will furnish to the Agent copies of any such
document a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file any such document to which the Agent or
counsel for the Agent shall reasonably object.


   11




         (c) Delivery of the Registration Statement. The Company has furnished
to the Agent and to counsel for the Agent, without charge, conformed copies of
the Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference therein) and
conformed copies of all consents and certificates of experts. The Registration
Statement and each amendment thereto furnished to the Agent will be identical
to any electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.

         (d) Delivery of the Prospectus. The Company will deliver to the Agent,
without charge, as many copies of each preliminary prospectus as the Agent may
reasonably request, and the Company hereby consents to the use of such copies
for purposes permitted by the 1933 Act. The Company will furnish to the Agent,
without charge, such number of copies of the Prospectus (as amended or
supplemented) as the Agent may reasonably request. The Prospectus and any
amendments or supplements thereto furnished to the Agent will be identical to
any electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.

         (e) Preparation of Pricing Supplements. The Company will prepare, with
respect to any Notes to be sold to or through the Agent pursuant to this
Agreement, a Pricing Supplement with respect to such Notes in a form previously
approved by the Agent. The Company will deliver such Pricing Supplement no
later than 11:00 a.m., New York City time, on the business day following the
date of the Company's acceptance of the offer for the purchase of such Notes
and will file such Pricing Supplement pursuant to Rule 424(b)(3) under the 1933
Act not later than the close of business of the Commission on the fifth
business day after the date on which such Pricing Supplement is first used.

         (f) Revisions of Prospectus -- Material Changes. Except as otherwise
provided in subsection (m) of this Section 4, if at any time during the term of
this Agreement any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Agent or counsel for
the Company, to amend the Registration Statement in order that the Registration
Statement will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or to amend or supplement the Prospectus in
order that the Prospectus will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the time
the Prospectus is delivered to a purchaser, or if it shall be necessary, in the
opinion of either such counsel, to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company shall give immediate notice,
confirmed in writing, to the Agent to cease the solicitation of offers for the
purchase of Notes in its capacity as agent and to cease sales of any Notes it
may then own as principal, and the Company will promptly prepare and file with
the Commission, subject to Section 4(b) hereof, such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement and Prospectus comply with such requirements, and the
Company will furnish to the Agent, without charge, such number of copies of
such amendment or supplement as the Agent may reasonably request. In addition,
the


   12


Company will comply with the 1933 Act, the 1933 Act Regulations, the 1934 Act
and the 1934 Act Regulations so as to permit the completion of the distribution
of each offering of Notes.

         (g) Prospectus Revisions -- Periodic Financial Information. Except as
otherwise provided in subsection (m) of this Section 4, on or prior to the date
on which there shall be released to the general public interim financial
statement information related to the Company with respect to each of the first
three quarters of any fiscal year or preliminary financial statement
information with respect to any fiscal year, the Company shall furnish such
information to the Agent, confirmed in writing, and shall cause the Prospectus
to be amended or supplemented to include financial information with respect
thereto and corresponding information for the comparable period of the
preceding fiscal year, as well as such other information and explanations as
shall be necessary for an understanding thereof or as shall be required by the
1933 Act or the 1933 Act Regulations.

         (h) Prospectus Revisions -- Audited Financial Information. Except as
otherwise provided in subsection (m) of this Section 4, on or prior to the date
on which there shall be released to the general public financial information
included in or derived from the audited consolidated financial statements of
the Company for the preceding fiscal year, the Company shall furnish such
information to the Agent, confirmed in writing, and shall cause the Prospectus
to be amended or supplemented to include such audited consolidated financial
statements and the report or reports, and consent or consents to such
inclusion, of the independent accountants with respect thereto, as well as such
other information and explanations as shall be necessary for an understanding
of such consolidated financial statements or as shall be required by the 1933
Act or the 1933 Act Regulations.

         (i) Earnings Statements. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally available
to its securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act.

         (j) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the
1934 Act within the time periods prescribed by the 1934 Act and the 1934 Act
Regulations.

         (k) Restriction on Offers and Sales of Securities. Unless otherwise
agreed upon between the Agent acting as principal and the Company, between the
date of the agreement by the Agent to purchase the related Notes from the
Company and the Settlement Date with respect thereto, the Company will not,
without the prior written consent of the Agent, issue, sell, offer or contract
to sell, grant any option for the sale of, or otherwise dispose of, any debt
securities of the Company (other than the Notes that are to be sold pursuant to
such agreement or commercial paper in the ordinary course of business). For
such purposes, debt securities of the Company shall not include guarantees of
the trading obligations of subsidiaries in the ordinary course of business and
consistent with past practices.

         (l) Use of Proceeds. The Company will use the net proceeds received by
it from the issuance and sale of the Notes in the manner specified in the
Prospectus.


   13


         (m) Suspension of Certain Obligations. The Company shall not be
required to comply with the provisions of subsections (b), (f), (g) or (h) of
this Section 4 during any period from the time (i) the Agent shall have
suspended solicitation of offers for the purchase of Notes in its capacity as
agent pursuant to a request from the Company and (ii) the Agent shall not then
hold any Notes purchased from the Company as principal, as the case may be,
until the time the Company shall determine that solicitation of offers for the
purchase of Notes should be resumed or the Agent shall subsequently purchase
Notes from the Company as principal.

         (n) Ratings. The Company will obtain a rating for the Notes from
Moody's Investors Service, Inc. and Standard & Poor's Ratings Services prior to
the issuance of such Notes.

SECTION  5. Conditions of Agent's Obligations.

         The obligations of the Agent to purchase Notes from the Company as
principal and to solicit offers for the purchase of Notes as an agent of the
Company, and the obligations of any purchasers of Notes sold through the Agent
as an agent of the Company, will be subject to the accuracy of the
representations and warranties on the part of the Company herein contained or
contained in any certificate of an officer of the Company or any of its
subsidiaries delivered pursuant to the provisions hereof, to the performance
and observance by the Company of its covenants and other obligations hereunder,
and to the following additional conditions precedent:

         (a) Effectiveness of Registration Statement. The Registration
Statement (including any Rule 462(b) Registration Statement) has become
effective under the 1933 Act and no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act and no
proceedings for that purpose shall have been instituted or shall be pending or
threatened by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Agent.

         (b) Legal Opinions. On the date hereof, the Agent shall have received
the following legal pinions, dated as of the date hereof and in form and
substance satisfactory to the Agent:

                  (1)      Opinion of Counsel for the Company. The favorable
                  opinion of General Counsel of the Company substantially in
                  the form attached hereto as Exhibit B.

                  (2)      Opinions of Counsel for the Agent. The favorable
                  opinion of Bracewell & Patterson, L.L.P., counsel for the
                  Agent, substantially in the form attached hereto as Exhibit C.

         (c) Officer's Certificate. On the date hereof, there shall not have
been, since the respective dates as of which information is given in the
Prospectus, any Material Adverse Effect, whether or not arising in the ordinary
course of business, and the Agent shall have received a certificate of the
President or any Vice President of the Company and any one of the Chief
Financial Officer, the Chief Accounting Officer or the Treasurer of the
Company, dated as of the date hereof, to the effect that (i) there has been no
such Material Adverse Effect, (ii) the representations and warranties of the
Company herein contained are true and correct with the same force and effect as
though expressly made at and as of the date of such certificate, (iii) the
Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to the date of such certificate,
and (iv) no stop order suspending




   14




the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted, are pending or, to the best
of such officer's knowledge, are threatened by the Commission.

         (d) Comfort Letter of Arthur Andersen LLP. On the date hereof, the
Agent shall have received a letter from Arthur Andersen LLP, dated as of the
date hereof and in form and substance satisfactory to the Agent.

         (e) Additional Documents. On the date hereof, counsel to the Agent
shall have been furnished with such documents and opinions as such counsel may
reasonably require for the purpose of enabling such counsel to pass upon the
issuance and sale of Notes as herein contemplated and related proceedings, or
in order to evidence the accuracy of any of the representations and warranties,
or the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and sale of
Notes as herein contemplated shall be satisfactory in form and substance to the
Agent and to counsel to the Agent.

         (f) Ratings. The Notes shall be rated at a rating satisfactory to the
Agent.

         If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Agent by notice to the Company at any time and any such
termination shall be without liability of any party to any other party except
as provided in Section 10 hereof and except that Sections 8, 9, 11, 14 and 15
hereof shall survive any such termination and remain in full force and effect.

SECTION 6. Delivery of and Payment for Notes Sold through an Agent as Agent.

         Delivery of Notes sold through the Agent as an agent of the Company
shall be made by the Company to the Agent for the account of any purchaser only
against payment therefor in immediately available funds. In the event that a
purchaser shall fail either to accept delivery of or to make payment for a Note
on the date fixed for settlement, the Agent shall promptly notify the Company
and deliver such Note to the Company and, if the Agent has theretofore paid the
Company for such Note, the Company will promptly return such funds to the
Agent. If such failure has occurred for any reason other than default by the
Agent in the performance of its obligations hereunder, the Company will
reimburse the Agent on an equitable basis for its loss of the use of the funds
for the period such funds were credited to the Company's account.

SECTION  7. Additional Covenants of the Company.

         The Company further covenants and agrees with the Agent as follows:

         (a) Reaffirmation of Representations and Warranties. Each acceptance
by the Company of an offer for the purchase of Notes (whether to the Agent as
principal or through the Agent as agent), and each delivery of Notes (whether
to the Agent as principal or through the Agent as agent), shall be deemed to be
an affirmation that the representations and warranties of the Company herein
contained and contained in any certificate theretofore delivered to the Agent
pursuant hereto are true and correct at the time of such acceptance, and an
undertaking that such representations and warranties will be true and correct
at the time of delivery to the Agent or to



   15



the purchaser or its agent, as the case may be, of the Notes relating to such
acceptance as though made at and as of each such time (it being understood that
such representations and warranties shall relate to the Registration Statement
and Prospectus as amended and supplemented to each such time).

         (b) Subsequent Delivery of Certificates. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented
(other than by an amendment or supplement providing solely for the
determination of the variable terms of the Notes or relating solely to the
offering of securities other than the Notes), (ii) (if required in connection
with the purchase of Notes from the Company by the Agent as principal) the
Company sells Notes to the Agent as principal or (iii) the Company sells Notes
in a form not previously certified to the Agent by the Company, the Company
shall furnish or cause to be furnished to the Agent, forthwith a certificate
dated the date of filing with the Commission or the date of effectiveness of
such amendment or supplement, as applicable, or the date of such sale, as the
case may be, in form satisfactory to the Agent, to the effect that the
statements contained in the certificate referred to in Section 5(c) hereof
which were last furnished to the Agent are true and correct at the time of the
filing or effectiveness of such amendment or supplement, as applicable, or the
time of such sale, as the case may be, as though made at and as of such time
(except that such statements shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such time) or, in
lieu of such certificate, a certificate of the same tenor as the certificate
referred to in Section 5(c) hereof, modified as necessary to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such certificate (it being understood that, in the case of
clause (ii) above, any such certificate shall also include a certification that
there has been no Material Adverse Effect, whether or not arising in the
ordinary course of business, since the date of the agreement by the Agent to
purchase Notes from the Company as principal).

         (c) Subsequent Delivery of Legal Opinions. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented
(other than by an amendment or supplement providing solely for the
determination of the variable terms of the Notes or relating solely to the
offering of securities other than the Notes), (ii) (if required in connection
with the purchase of Notes from the Company by the Agent as principal) the
Company sells Notes to the Agent as principal or (iii) the Company sells Notes
in a form not previously certified to the Agent by the Company, the Company
shall furnish or cause to be furnished forthwith to the Agent and to counsel to
the Agent the written opinion of General Counsel of the Company, or other
counsel satisfactory to the Agent, and, at least once annually, counsel for the
Agent, dated the date of filing with the Commission or the date of
effectiveness of such amendment or supplement, as applicable, or the date of
such sale, as the case may be, in form and substance satisfactory to the Agent,
of the same tenor as the opinion referred to in Section 5(b) hereof, but
modified, as necessary, to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of such opinion
or, in lieu of such opinion, counsel last furnishing such opinion to the Agent
shall furnish the Agent with a letter substantially to the effect that the
Agent may rely on such last opinion to the same extent as though it was dated
the date of such letter authorizing reliance (except that statements in such
last opinion shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of such letter
authorizing reliance).


   16



         (d) Subsequent Delivery of Comfort Letters. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented to
include additional financial information (other than by an amendment or
supplement relating solely to the issuance and/or offering of securities other
than the Notes) or (ii) (if required in connection with the purchase of Notes
from the Company by the Agent as principal) the Company sells Notes to the
Agent as principal, the Company shall cause Arthur Andersen LLP forthwith to
furnish to the Agent a letter, dated the date of filing with the Commission or
the date of effectiveness of such amendment or supplement, as applicable, or
the date of such sale, as the case may be, in form satisfactory to the Agent,
of the same tenor as the letter referred to in Section 5(d) hereof but modified
to relate to the Registration Statement and Prospectus as amended and
supplemented to the date of such letter.

SECTION  8. Indemnification.

         (a) Indemnification of the Agent. The Company agrees to indemnify and
hold harmless the Agent and each person, if any, who controls the Agent within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as
follows:

                  (i) against any and all loss, liability, claim, damage and
         expense whatsoever, as incurred, arising out of an untrue statement or
         alleged untrue statement of a material fact contained in the
         Registration Statement (or any amendment thereto), or the omission or
         alleged omission therefrom of a material fact required to be stated
         therein or necessary to make the statements therein not misleading, or
         arising out of an untrue statement or alleged untrue statement of a
         material fact included in any preliminary prospectus or the Prospectus
         (or any amendment or supplement thereto), or the omission or alleged
         omission therefrom of a material fact necessary in order to make the
         statements therein, in the light of the circumstances under which they
         were made, not misleading;

                  (ii) against any and all loss, liability, claim, damage and
         expense whatsoever, as incurred, to the extent of the aggregate amount
         paid in settlement of any litigation, or any investigation or
         proceeding by any governmental agency or body, commenced or
         threatened, or any claim whatsoever based upon any such untrue
         statement or omission, or any such alleged untrue statement or
         omission, provided that (subject to Section 8(d) hereof) any such
         settlement is effected with the written consent of the Company; and

                  (iii) against any and all expense whatsoever, as incurred
         (including the fees and disbursements of counsel chosen by the Agent),
         reasonably incurred in investigating, preparing or defending against
         any litigation, or any investigation or proceeding by any governmental
         agency or body, commenced or threatened, or any claim whatsoever based
         upon any such untrue statement or omission, or any such alleged untrue
         statement or omission, to the extent that any such expense is not paid
         under subparagraph (i) or (ii) above;

provided, however, that this indemnity does not apply to (i) any untrue
statement or alleged untrue statement contained in or omission or alleged
omission from a preliminary prospectus delivered to the person asserting the
loss, liability, claim, damage or expense if the Company shall sustain the
burden of proving that such person was not sent or given a copy of the


   17



Prospectus (or any amendment or supplement thereto) at or prior to the written
confirmation of the sale of the related Notes to such person and the untrue
statement contained in or omission from such preliminary prospectus was
corrected in the Prospectus (or any amendment or supplement thereto) and the
Company furnished copies thereof to the Agent a reasonable amount of time in
advance of the delivery of the written confirmation and (ii) any loss,
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Agent expressly for use in the Registration Statement (or any amendment
thereto) or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).

                  (b) Indemnification of Company, Directors and Officers. The
Agent agrees to indemnify and hold harmless the Company, its directors, each of
its officers who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in Section 8(a) hereof, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by the Agent expressly for use in
the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).

                  (c) Actions Against Parties; Notification. Each indemnified
party shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability hereunder to
the extent it is not materially prejudiced as a result thereof and in any event
shall not relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 8(a) hereof, counsel to the indemnified parties shall be
selected by the Agent and, in the case of parties indemnified pursuant to
Section 8(b) hereof, counsel to the indemnified parties shall be selected by
the Company; provided that if it so elects within a reasonable time after
receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such
action with counsel chosen by it and approved by the indemnified parties
defendant in such action, unless such indemnified parties reasonably object to
such assumption on the ground that there may be legal defenses available to
them that are different from or in addition to those available to such
indemnifying party. If an indemnifying party assumes the defense of such action
in accordance with the preceding sentence, the indemnifying parties shall not
be liable for any fees and expenses of counsel for the indemnified parties
incurred thereafter in connection with such action. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or

   18



related actions in the same jurisdiction arising out of the same general
allegations or circumstances.

         No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 8 or 9 hereof (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from
all liability arising out of such litigation, investigation, proceeding or
claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.

                  (d) Settlement without Consent if Failure to Reimburse. If at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 8(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement. Notwithstanding the immediately preceding
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, an indemnifying party shall not be liable for any settlement of the
nature contemplated by Section 8(a)(ii) effected without its consent if such
indemnifying party (i) reimburses such indemnified party in accordance with
such request to the extent it considers such request to be reasonable and (ii)
provides written notice to the indemnified party substantiating the unpaid
balance as unreasonable, in each prior to the date of such settlement.

SECTION 9.  Contribution.

         If the indemnification provided for in Section 8 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company, on the one hand, and the
Agent, on the other hand, from the offering of the Notes that were the subject
of the claim for indemnification or (ii) if the allocation provided by clause
(i) is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company, on the one hand, and the Agent, on the other
hand, in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.

         The relative benefits received by the Company, on the one hand, and
the Agent, on the other hand, in connection with the offering of the Notes that
were the subject of the claim for



   19




indemnification shall be deemed to be in the same respective proportions as the
total net proceeds from the offering of such Notes (before deducting expenses)
received by the Company and the total discount or commission received by the
Agent bears to the aggregate initial offering price of such Notes.

         The relative fault of the Company, on the one hand, and the Agent, on
the other hand, shall be determined by reference to, among other things,
whether any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information supplied by
the Company or by the Agent and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission.

         The Company and the Agent agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 9.
The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 9 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any
applicable untrue or alleged untrue statement or omission or alleged omission.

          Notwithstanding the provisions of this Section 9, (i) the Agent shall
not be required to contribute any amount in excess of the amount by which the
total discount or commission received by it in connection with the offering of
the Notes that were the subject of the claim for indemnification exceeds the
amount of any damages which the Agent has otherwise been required to pay by
reason of any applicable untrue or alleged untrue statement or omission or
alleged omission and (ii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

         For purposes of this Section 9, each person, if any, who controls the
Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Agent, and each
director of the Company, each officer of the Company and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Company.

SECTION 10. Payment of Expenses.

         The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:

         (a) The preparation, filing, printing and delivery of the Registration
Statement as originally filed and all amendments thereto and any preliminary
prospectus, the Prospectus and any amendments or supplements thereto;

         (b) The preparation, printing and delivery of this Agreement and the
Indenture;


   20



         (c) The preparation, issuance and delivery of the Notes, including any
fees and expenses relating to the eligibility and issuance of Notes in
book-entry form and the cost of obtaining CUSIP or other identification numbers
for the Notes;

         (d) The fees and disbursements of the Company's accountants, counsel
and other advisors or Agent (including any calculation agent or exchange rate
agent) and of the Trustee and its counsel;

         (e) The reasonable fees and disbursements of counsel to the Agent
incurred in connection with the establishment of the Program and incurred from
time to time in connection with the transactions contemplated hereby;

         (f) The fees charged by nationally recognized statistical rating
organizations for the rating of the Program and the Notes;

         (g) The fees and expenses incurred in connection with any listing of
Notes on a securities exchange;

         (h) The filing fees incident to, and the reasonable fees and
disbursements of counsel to the Agent in connection with, the review, if any,
by the National Association of Securities Dealers, Inc. (the "NASD"); and

         (i) Any advertising and other out-of-pocket expenses of the Agent
incurred with the approval of the Company.

SECTION  11. Representations, Warranties and Agreements to Survive Delivery.

         All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto or thereto shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
the Agent or any controlling person of the Agent, or by or on behalf of the
Company, and shall survive each delivery of and payment for the Notes.

SECTION  12. Termination.

         (a) Termination of this Agreement. This Agreement (excluding any
agreement by the Agent to purchase Notes from the Company as principal) may be
terminated for any reason, at any time by either the Company or the Agent upon
the giving of 30 days' prior written notice of such termination to the other
party hereto.

         (b) Termination of Agreement to Purchase Notes as Principal. The Agent
may terminate any agreement by it to purchase Notes from the Company as
principal, immediately upon notice to the Company, at any time prior to the
Settlement Date relating thereto, if (i) there has been, since the date of such
agreement or since the respective dates as of which information is given in the
Prospectus, any Material Adverse Effect, whether or not arising in the ordinary
course of business, or (ii) there has occurred any material adverse change in
the financial markets in the United States or, if such Notes are denominated
and/or payable in, or indexed to, one or more foreign currencies, in the
international financial markets, or any outbreak of hostilities or


   21


escalation thereof or other calamity or crisis or any change or development or
event involving a prospective change in national or international political,
financial or economic conditions, in each case the effect of which is such as
to make it, in the judgment of the Agent, impracticable to market such Notes or
enforce contracts for the sale of such Notes, or (iii) trading in any
securities of the Company has been suspended or materially limited by the
Commission or a national securities exchange, or if trading generally on the
New York Stock Exchange or the American Stock Exchange or in the Nasdaq
National Market has been suspended or materially limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by either of said exchanges or by such system or by order of the
Commission, the NASD or any other governmental authority, or (iv) a banking
moratorium has been declared by either Federal or New York authorities or by
the relevant authorities in the country or countries of origin of any foreign
currency in which such Notes are denominated and/or payable, or (v) the rating
assigned by any nationally recognized statistical rating organization to the
Program or any debt securities (including the Notes) of the Company as of the
date of such agreement has been lowered or withdrawn since that date or if any
such rating organization has publicly announced that it has under surveillance
or review its rating of the Program or any such debt securities, or (vi) there
has come to the attention of the Agent any facts that would cause the Agent to
believe that the Prospectus, at the time it was required to be delivered to a
purchaser of such Notes, included an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time of such
delivery, not misleading.

         (c) General. In the event of any such termination, neither party will
have any liability to the other party hereto, except that (i) the Agent shall
be entitled to any commissions earned on Notes actually sold in accordance with
the third paragraph of Section 3(b) hereof, (ii) if at the time of termination
(a) the Agent shall own any Notes purchased by it from the Company as principal
or (b) an offer to purchase any of the Notes has been accepted by the Company
but the time of delivery to the purchaser or his agent of such Notes relating
thereto has not occurred, the covenants set forth in Sections 4 and 7 hereof
shall remain in effect until such Notes are so resold or delivered, as the case
may be, and (iii) the covenant set forth in Section 4(i) hereof, the provisions
of Section 10 hereof, the indemnity and contribution agreements set forth in
Sections 8 and 9 hereof, and the provisions of Sections 11, 14 and 15 hereof
shall remain in effect.

SECTION  13. Notices.

         Unless otherwise provided herein, all notices required under the terms
and provisions hereof shall be in writing, either delivered by hand, by mail or
by telex, telecopier or telegram, and any such notice shall be effective when
received at the address specified below.

         If to the Company:

                  Enron Corp.
                  1400 South Street
                  Houston, Texas 77002
                      Attention:  Treasurer
                  Telecopy No.:  (713) 646-3422


   22

         If to the Agent:

                  [Agent Name and Address]
                  Attention:
                  Telecopy No.:

or at such other address as such party may designate from time to time by
notice duly given in accordance with the terms of this Section 13.

SECTION  14. Parties.

         This Agreement shall inure to the benefit of and be binding upon the
Agent and the Company and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties hereto and their respective
successors and the controlling persons, officers and directors referred to in
Sections 8 and 9 hereof and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and their respective successors, and said controlling persons, officers
and directors and their heirs and legal representatives, and for the benefit of
no other person, firm or corporation. No purchaser of Notes shall be deemed to
be a successor by reason merely of such purchase.

SECTION  15. GOVERNING LAW.

         THIS AGREEMENT AND ALL THE RIGHTS AND OBLIGATIONS OF THE PARTIES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.

SECTION  16. Effect of Headings.


         The Article and Section headings herein are for convenience only and
shall not affect the construction hereof.

SECTION  17. Counterparts.


         This Agreement may be executed in one or more counterparts and, if
executed in more than one counterpart, the executed counterparts hereof shall
constitute a single instrument.



   23


         If the foregoing is in accordance with the Agent's understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this Distribution Agreement, along with all counterparts, will become
a binding agreement between the Agent and the Company in accordance with its
terms.

                                     Very truly yours,

                                     ENRON CORP.


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

CONFIRMED AND ACCEPTED,
By the Agent named below as of the date first above written:

[NAME OF AGENT]



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



   24



                                   SCHEDULE A

         As compensation for the services of the Agent hereunder, the Company
shall pay the Agent, on a discount basis, a commission for the sale of each
Note equal to the principal amount of such Note multiplied by the appropriate
percentage set forth below:

                                                              PERCENT OF
                                                           PRINCIPAL AMOUNT

[To be agreed upon with Agent]




   25


                                                                      EXHIBIT A

                                 PRICING TERMS

         Principal Amount: $_______
                  (or principal amount of foreign or composite currency)

         Interest Rate or Formula:
                  If Fixed Rate Note,
                           Interest Rate:
                           Interest Payment Dates:
                  If Floating Rate Note,
                           Interest Rate Basis(es):
                                If LIBOR,
                                     LIBOR Reuters Page:
                                     LIBOR Telerate Page:
                                    Designated LIBOR Currency:
                                  If CMT Rate,
                                    Designated CMT Telerate Page:
                                         If Telerate Page 7052:
                                             Weekly Average
                                             Monthly Average
                           Index Maturity:
                           Spread and/or Spread Multiplier, if any:
                           Initial Interest Rate, if any:
                           Interest Reset Dates:
                           Interest Payment Dates:
                           Maximum Interest Rate, if any:
                           Minimum Interest Rate, if any:
                           Fixed Rate Commencement Date, if any:
                           Fixed Interest Rate, if any:
                           Day Count Convention:
                           Calculation Agent:

         Redemption Provisions:
                  Initial Redemption Date:
                  Initial Redemption Percentage:
                  Annual Redemption Percentage Reduction, if any:
         Repayment Provisions:
                  Optional Repayment Date(s):

         Original Issue Date:
         Stated Maturity Date:
         Specified Currency:
         Exchange Rate Agent:
         Authorized Denomination:
         Purchase Price:  ___%, plus accrued interest, if any, from ___________
         Price to Public:  ___%, plus accrued interest, if any, from __________
         Issue Price:

         Settlement Date and Time:
         Additional/Other Terms:

Also, in connection with the purchase of Notes from the Company by the Agent as
principal, agreement as to whether the following will be required:


   26




         Officers' Certificate pursuant to Section 7(b) of the Distribution
         Agreement.

         Legal Opinion pursuant to Section 7(c) of the Distribution Agreement.

         Comfort Letter pursuant to Section 7(d) of the Distribution Agreement.

EX-1.2

   1
                                                                     EXHIBIT 1.2


                                  ENRON CORP.

                           ADMINISTRATIVE PROCEDURES

               FOR FIXED RATE AND FLOATING RATE MEDIUM-TERM NOTES
                           (Dated as of _____, ____)

         Medium-Term Notes Due Nine Months or More From Date of Issue (the
"Notes") are to be offered on a continuous basis by Enron Corp., an Oregon
corporation (the "Company"), to or through __________ ( the "Agent") pursuant
to a Distribution Agreement, dated ________, ____ (the "Distribution
Agreement"), by and among the Company and the Agent. The Distribution Agreement
provides both for the sale of Notes by the Company to the Agent as principal
for resale to investors and other purchasers and for the sale of Notes by the
Company directly to investors (as may from time to time be agreed to by the
Company and the Agent), in which case the Agent will act as an agent of the
Company in soliciting purchases of Notes.

         Unless otherwise agreed by the Agent and the Company, Notes will be
purchased by the related Agent as principal. Such purchases will be made in
accordance with terms agreed upon by the related Agent and the Company (which
terms shall be agreed upon orally, with written confirmation prepared by the
related Agent and mailed to the Company). If agreed upon by any Agent and the
Company, the Agent, acting solely as agent for the Company and not as
principal, will use reasonable efforts to solicit offers to purchase the Notes.
Only those provisions in these Administrative Procedures that are applicable to
the particular role to be performed by the related Agent shall apply to the
offer and sale of the relevant Notes.

         The Notes will be issued as a series of debt securities under an
Indenture, dated as of November 1, 1985, as amended, supplemented or modified
from time to time (the "Indenture"), between the Company and Bank of New York,
as trustee (together with any successor in such capacity, the "Trustee"). The
Company has filed a Registration Statement with the Securities and Exchange
Commission (the "Commission") registering, among other securities, debt
securities (which includes the Notes) (the "Registration Statement", which term
shall include any additional registration statements filed in connection with
the Notes). The most recent base prospectus deemed part of the Registration
Statement, as supplemented with respect to the Notes, is herein referred to as
the "Prospectus". The most recent supplement to the Prospectus setting forth
the purchase price, interest rate or formula, maturity date and other terms of
the Notes (as applicable) is herein referred to as the "Pricing Supplement".

         The Notes will either be issued (a) in book-entry form and represented
by one or more fully registered Notes without coupons (each, a "Global Note")
delivered to the Trustee, as agent for The Depository Company ("DTC"), and
recorded in the book-entry system maintained by DTC, or (b) in certificated
form (each, a "Certificated Note") delivered to the investor or other purchaser
thereof or a person designated by such investor or other purchaser.



   2



         General procedures relating to the issuance of all Notes are set forth
in Part I hereof. Additionally, Notes issued in book-entry form will be issued
in accordance with the procedures set forth in Part II hereof and Certificated
Notes will be issued in accordance with the procedures set forth in Part III
hereof. Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed thereto in the Indenture or the Notes, as the case may be.

                  PART I: PROCEDURES OF GENERAL APPLICABILITY

Date of Issuance/Authentication:            Each Note will be dated as of the
                                            date of its authentication by the
                                            Trustee. Each Note shall also bear
                                            an original issue date (each, an
                                            "Original Issue Date"). The
                                            Original Issue Date shall remain
                                            the same for all Notes subsequently
                                            issued upon transfer, exchange or
                                            substitution of an original Note
                                            regardless of their dates of
                                            authentication.

Maturities:                                 Each Note will mature on a date
                                            nine months or more from its
                                            Original Issue Date (the "Stated
                                            Maturity Date") selected by the
                                            investor or other purchaser and
                                            agreed to by the Company.

Registration:                               Unless otherwise provided in the
                                            applicable Pricing Supplement,
                                            Notes will be issued only in fully
                                            registered form.

Denominations:                              Unless otherwise provided in the
                                            applicable Pricing Supplement, the
                                            Notes will be issued in
                                            denominations of U.S.$1,000 and
                                            integral multiples of U.S.$1,000.

Interest Rate Bases applicable
to Floating Rate Notes:                     Unless otherwise provided in the
                                            applicable Pricing Supplement,
                                            Floating Rate Notes will bear
                                            interest at a rate or rates
                                            determined by reference to the CD
                                            Rate, the CMT Rate, the Commercial
                                            Paper Rate, the Eleventh District
                                            Cost of Funds Rate, the Federal
                                            Funds Rate, LIBOR, the Prime Rate,
                                            the Treasury Rate, or such other
                                            interest rate basis or formula as
                                            may be set forth in applicable
                                            Pricing Supplement, or by reference
                                            to two or more such rates, as
                                            adjusted by the Spread and/or
                                            Spread Multiplier, if any,
                                            applicable to such Floating Rate
                                            Notes.

Redemption/Repayment:                       The Notes will be subject to
                                            redemption by the Company in
                                            accordance with the terms of the
                                            Notes, which will be fixed at the
                                            time of sale and set forth in the
                                            applicable Pricing Supplement. If
                                            no Initial Redemption Date is
                                            indicated



   3




                                            with respect to a Note, such Note
                                            will not be redeemable prior to its
                                            Stated Maturity Date.

                                            The Notes will be subject to
                                            repayment at the option of the
                                            Holders thereof in accordance with
                                            the terms of the Notes, which will
                                            be fixed at the time of sale and
                                            set forth in the applicable Pricing
                                            Supplement. If no Optional
                                            Repayment Date is indicated with
                                            respect to a Note, such Note will
                                            not be repayable at the option of
                                            the Holder prior to its Stated
                                            Maturity Date.

Calculation of Interest:                    In case of Fixed Rate Notes,
                                            interest (including payments for
                                            partial periods) will be calculated
                                            and paid on the basis of a 360-day
                                            year of twelve 30-day months.

                                            The interest rate on each Floating
                                            Rate Note will be calculated by
                                            reference to the specified Interest
                                            Rate Basis or Bases plus or minus
                                            the applicable Spread, if any,
                                            and/or multiplied by the applicable
                                            Spread Multiplier, if any.

                                            Unless otherwise provided in the
                                            applicable Pricing Supplement,
                                            interest on each Floating Rate Note
                                            will be calculated by multiplying
                                            its principal amount by an accrued
                                            interest factor. Such accrued
                                            interest factor is computed by
                                            adding the interest factor
                                            calculated for each day in the
                                            period for which accrued interest
                                            is being calculated. Unless
                                            otherwise provided in the
                                            applicable Pricing Supplement, the
                                            interest factor for each such day
                                            is computed by dividing the
                                            interest rate applicable to such
                                            day by 360 if the CD Rate,
                                            Commercial Paper Rate, Eleventh
                                            District Cost of Funds Rate,
                                            Federal Funds Rate, LIBOR or Prime
                                            Rate is an applicable Interest Rate
                                            Basis, or by the actual number of
                                            days in the year if the CMT Rate or
                                            Treasury Rate is an applicable
                                            Interest Rate Basis. As provided in
                                            the applicable Pricing Supplement,
                                            the interest factor for Notes for
                                            which the interest rate is
                                            calculated with reference to two or
                                            more Interest Rate Bases will be
                                            calculated in each period in the
                                            same manner as if only one of the
                                            applicable Interest Rate Bases
                                            applied.

Interest:                                   General. Each Note will bear
                                            interest in accordance with its
                                            terms. Unless otherwise provided in
                                            the applicable Pricing Supplement,
                                            interest on each Note will accrue
                                            from and including the Original
                                            Issue Date of such Note for the


   4


                                            first interest period or from the
                                            most recent Interest Payment FFFF
                                            Date (as defined below) to which
                                            interest has been paid or duly
                                            provided for all subsequent interest
                                            periods to but excluding applicable
                                            Interest Payment Date or the Stated
                                            Maturity Date or date of earlier
                                            redemption or repayment , as the
                                            case may be (the Stated Maturity
                                            Date or date of earlier redemption
                                            or repayment is referred to herein
                                            as the "Maturity Date" with respect
                                            to the principal repayable on such
                                            date).

                                            If an Interest Payment Date or the
                                            Maturity Date with respect to any
                                            Fixed Rate Note falls on a day that
                                            is not a Business Day (as defined
                                            below), the required payment of
                                            principal, premium, if any, or
                                            interest to be made on such day
                                            need not be made on such day, but
                                            may be made on the next succeeding
                                            Business Day with the same force
                                            and effect as if made on such day,
                                            and no interest shall accrue on
                                            such payment for the period from
                                            and after such day to the next
                                            succeeding Business Day. If an
                                            Interest Payment Date other than
                                            the Maturity Date with respect to
                                            any Floating Rate Note would
                                            otherwise fall on a day that is not
                                            a Business Day, such Interest
                                            Payment Date will be postponed to
                                            the next succeeding Business Day,
                                            except that in the case of a Note
                                            for which LIBOR is an applicable
                                            Interest Rate Basis, if such
                                            Business Day falls in the next
                                            succeeding calendar month, such
                                            Interest Payment Date will be the
                                            immediately preceding Business Day.
                                            If the Maturity Date with respect
                                            to any Floating Rate Note falls on
                                            a day that is not a Business Day,
                                            the required payment of principal,
                                            premium, if any, or interest to be
                                            made on such day need not be made
                                            on such day, but may be made on the
                                            next succeeding Business Day with
                                            the same force and effect as if
                                            made on such day, and no interest
                                            shall accrue on such payment for
                                            the period from and after the
                                            Maturity Date to the next
                                            succeeding Business Day. Unless
                                            otherwise provided in the
                                            applicable Pricing Supplement,
                                            "Business Day" has the meaning
                                            specified in the Prospectus.

                                            Regular Record Dates. Unless
                                            otherwise provided in the
                                            applicable Pricing Supplement, the
                                            "Regular Record Date" for a Note
                                            shall be the date 15 calendar days
                                            (whether or not a Business Day)
                                            preceding the applicable Interest
                                            Payment Date.



   5

                                            Interest Payment Dates. Interest
                                            payments will be made on each
                                            Interest Payment Date commencing
                                            with the first Interest Payment
                                            Date following the Original Issue
                                            Date; provided, however, the first
                                            payment of interest on any Note
                                            originally issued between a Regular
                                            Record Date and an Interest Payment
                                            Date will occur on the Interest
                                            Payment Date immediately following
                                            the next succeeding Regular Record
                                            Date.

                                            Unless otherwise provided in the
                                            applicable Pricing Supplement,
                                            interest payments on Fixed Rate
                                            Notes will be made semiannually in
                                            arrears on May 15 and November 15
                                            of each year and on the Maturity
                                            Date, while interest payments on
                                            Floating Rate Notes will be made as
                                            specified in the applicable Pricing
                                            Supplement.

Acceptance and Rejection of Offers
from Solicitation as Agent:                 If agreed upon by the Agent and the
                                            Company, then the Agent acting
                                            solely as agent for the Company and
                                            not as principal will solicit
                                            purchases of the Notes. The Agent
                                            will communicate to the Company,
                                            orally or in writing, each
                                            reasonable offer to purchase Notes
                                            solicited by the Agent on an agency
                                            basis, other than those offers
                                            rejected by the Agent. The Agent
                                            has the right, in its discretion
                                            reasonably exercised, to reject any
                                            proposed purchase of Notes, as a
                                            whole or in part, and any such
                                            rejection shall not be a breach of
                                            the Agent's agreement contained in
                                            the Distribution Agreement. The
                                            Company has the sole right to
                                            accept or reject any proposed
                                            purchase of Notes, in whole or in
                                            part, and any such rejection shall
                                            not be a breach of the Company's
                                            agreement contained in the
                                            Distribution Agreement. The Agent
                                            has agreed to make reasonable
                                            efforts to assist the Company in
                                            obtaining performance by each
                                            purchaser whose offer to purchase
                                            Notes has been solicited by the
                                            Agent and accepted by the Company.

Preparation of Pricing Supplement:          If any offer to purchase a Note is
                                            accepted by the Company, the
                                            Company will promptly prepare a
                                            Pricing Supplement reflecting the
                                            terms of such Note and file such
                                            Pricing Supplement with the
                                            Commission in accordance with the
                                            Securities Act of 1933, as amended.
                                            Information to be included in the
                                            Pricing Supplement shall include:



   6

                                            1.     the name of the Company;

                                            2.     the title of the Notes
                                                   including series designation,
                                                   if any;

                                            3.     the date of the Pricing
                                                   Supplement and the date of
                                                   the Prospectus and Prospectus
                                                   Supplement to which the
                                                   Pricing Supplement relates:

                                            4.     the name of the Agent;

                                            5.     whether such Notes are being
                                                   sold to the Agent as
                                                   principal or to an investor
                                                   to other purchaser through
                                                   the Agent acting as agent
                                                   for the Company;

                                            6.     with respect to Notes sold
                                                   to the Agent as principal,
                                                   whether such Notes will be
                                                   resold by the Agent to
                                                   investors and other
                                                   purchasers at (i) a fixed
                                                   public offering price of a
                                                   specified percentage of
                                                   their principal amount or
                                                   (ii) at varying prices
                                                   related to prevailing market
                                                   prices at the time of resale
                                                   to be determined by the
                                                   Agent;

                                            7.     with respect to Notes sold
                                                   to an investor or other
                                                   purchaser through the Agent
                                                   acting as agent for the
                                                   Company, whether such Notes
                                                   will be sold at (i) 100% of
                                                   their principal amount or
                                                   (ii) a specified percentage
                                                   of their principal amount;

                                            8.     the Agent's discount or
                                                   commission;

                                            9.     Net proceeds to the Company;

                                            10.    the Principal Amount,
                                                   Specified Currency, Original
                                                   Issue Date, Stated Maturity
                                                   Date, Interest Payment
                                                   Date(s), Authorized
                                                   Denomination, Initial
                                                   Redemption Date, if any,
                                                   Initial Redemption
                                                   Percentage, if any, Annual
                                                   Redemption Percentage
                                                   Reduction, if any, Optional
                                                   Repayment Date(s), if any,
                                                   Exchange Rate Agent, if any,
                                                   and, in the case of Fixed
                                                   Rate Notes, the Interest
                                                   Rate, and whether such Fixed
                                                   Rate Note is an Original
                                                   Issue Discount Note (and, if
                                                   so, the Issue Price), and,
                                                   in the case of


   7



                                                   Floating Rate Notes, the
                                                   Interest Category, the
                                                   Interest Rate Basis or
                                                   Bases, the Day Count
                                                   Convention, Index Maturity
                                                   (if applicable), Initial
                                                   Interest Rate, if any,
                                                   Maximum Interest Rate, if
                                                   any, Minimum Interest Rate,
                                                   if any, Initial Interest
                                                   Reset Date, Interest Reset
                                                   Dates, Spread and/or Spread
                                                   Multiplier, if any, and
                                                   Calculation Agent; and

                                            11.    any other additional
                                                   provisions of the Notes
                                                   material to investors or
                                                   other purchasers of the
                                                   Notes not otherwise
                                                   specified in the Prospectus.

                                            The Company shall use its
                                            reasonable best efforts to send
                                            such Pricing Supplement by telecopy
                                            or overnight express (for delivery
                                            by the close of business on the
                                            applicable trade date, but in no
                                            event later than 11:00 a.m. New
                                            York City time, on the Business Day
                                            following the applicable trade
                                            date) to the Agent who made or
                                            presented the offer to purchase the
                                            applicable Note and the Trustee at
                                            the following applicable address:
                                            if to the Agent to the address set
                                            forth in the notice provisions of
                                            the Distribution Agreement or an
                                            address otherwise designated by the
                                            Agent; and if to the Trustee, to:
                                            Bank of New York, 2 North LaSalle
                                            Street, 10th Floor, Chicago,
                                            Illinois 60602, Attention: Frank A.
                                            Pierson, (312) 827-8525,
                                            telecopier: (312) 827-8522. For
                                            record keeping purposes, one copy
                                            of such Pricing Supplement shall
                                            also be mailed or telecopied to
                                            Bracewell & Patterson, L.L.P.,
                                            South Tower Pennzoil Place, Suite
                                            2900, 711 Louisiana Street,
                                            Houston, Texas 77002-2781,
                                            Attention: Gary W. Orloff,
                                            telecopier: (713) 221-2166.

                                            In each instance that a Pricing
                                            Supplement is prepared, the Agent
                                            will provide a copy of such Pricing
                                            Supplement to each investor or
                                            purchaser of the relevant Notes or
                                            the Agent. Pursuant to Rule 434
                                            ("Rule 434") of the Securities Act
                                            of 1933, as amended, the Pricing
                                            Supplement may be delivered
                                            separately from the Prospectus.
                                            Outdated Pricing Supplements (other
                                            than those retained for files) will
                                            be destroyed.

Settlement:                                 The receipt of immediately available
                                            funds by the Company in payment for
                                            a Note and the authentication and
                                            delivery of such Note shall, with
                                            respect to such Note,



   8



                                            constitute "settlement". Offers
                                            accepted by the Company will be
                                            settled in three Business Days, or
                                            at such time as the purchaser, the
                                            Agent and the Company shall agree,
                                            pursuant to the timetable for
                                            settlement set forth in Parts II
                                            and III hereof under "Settlement
                                            Procedure Timetable" with respect
                                            to Global Notes and Certificated
                                            Notes, respectively (each such date
                                            fixed for settlement is hereinafter
                                            referred to as a "Settlement
                                            Date"). If procedures A and B of
                                            the applicable Settlement
                                            Procedures with respect to a
                                            particular offer are not completed
                                            on or before the time set forth
                                            under the applicable "Settlement
                                            Procedures Timetable", such offer
                                            shall not be settled until the
                                            Business Day following the
                                            completion of settlement procedures
                                            A and B or such later date as the
                                            purchaser and the Company shall
                                            agree.

                                            The foregoing settlement procedures
                                            may be modified with respect to any
                                            purchase of Notes by the Agent as
                                            principal if so agreed by the
                                            Company and the Agent.
Procedure for Changing Rates
or Other Variable Terms:                    When a decision has been reached to
                                            change the interest rate or any
                                            other variable term on any Notes
                                            being sold by the Company, the
                                            Company will promptly advise the
                                            Agent and the Trustee by facsimile
                                            transmission and the Agent will
                                            forthwith suspend solicitation of
                                            offers to purchase such Notes. The
                                            Agent will telephone the Company
                                            with recommendations as to the
                                            changed interest rates or other
                                            variable terms. At such time as the
                                            Company notifies the Agent and the
                                            Trustee of the new interest rates
                                            or other variable terms, the Agent
                                            may resume solicitation of offers
                                            to purchase such Notes. Until such
                                            time, only "indications of
                                            interest" may be recorded.
                                            Immediately after acceptance by the
                                            Company of an offer to purchase
                                            Notes at a new interest rate or new
                                            variable term, the Company, the
                                            Agent and the Trustee shall follow
                                            the procedures set forth under the
                                            applicable "Settlement Procedures".

   9
Suspension of Solicitation;
Amendment or Supplement:                    The Company may instruct the Agent
                                            to suspend solicitation of offers
                                            to purchase Notes at any time. Upon
                                            receipt of such instructions, the
                                            Agent will forthwith suspend
                                            solicitation of offers to purchase
                                            from the Company until such time as
                                            the Company has advised the Agent
                                            that solicitation of offers to
                                            purchase may be resumed. If the
                                            Company decides to amend or
                                            supplement the Registration
                                            Statement or the Prospectus (other
                                            than to establish or change
                                            interest rates or formulas,
                                            maturities, prices or other similar
                                            variable terms with respect to the
                                            Notes), it will promptly advise the
                                            Agent and will furnish the Agent
                                            and its counsel with copies of the
                                            proposed amendment or supplement.
                                            Copies of such amendment or
                                            supplement will be delivered or
                                            mailed to the Agent, its counsel
                                            and the Trustee in quantities which
                                            such parties may reasonably request
                                            at the address set forth in the
                                            notice provisions of the
                                            Distribution Agreement; the
                                            Trustee, to: Bank of New York, 2
                                            North LaSalle Street, 10th Floor,
                                            Chicago, Illinois 60602, Attention:
                                            Frank A. Pierson, (312) 827-8525,
                                            telecopier: (312) 827-8522. For
                                            record keeping purposes, one copy
                                            of each such amendment or
                                            supplement shall also be mailed or
                                            telecopied to Bracewell &
                                            Patterson, L.L.P., South Tower
                                            Pennzoil Place, Suite 2900, 711
                                            Louisiana Street, Houston, Texas
                                            77002-2781, Attention: Gary W.
                                            Orloff, (713) 221-1306, telecopier:
                                            (713) 221-2166.

                                            In the event that at the time the
                                            solicitation of offers to purchase
                                            from the Company is suspended
                                            (other than to establish or change
                                            interest rates or formulas,
                                            maturities, prices or other similar
                                            variable terms with respect to the
                                            Notes) there shall be any offers to
                                            purchase Notes that have been
                                            accepted by the Company which have
                                            not been settled, the Company will
                                            promptly advise the Agent and the
                                            Trustee whether such offers may be
                                            settled and whether copies of the
                                            Prospectus as theretofore amended
                                            and/or supplemented as in effect at
                                            the time of the suspension may be
                                            delivered in connection with the
                                            settlement of such offers. The
                                            Company will have the sole
                                            responsibility for such decision
                                            and for any arrangements which may
                                            be made in the event that the
                                            Company determines that such offers
                                            may not be settled or that copies
                                            of such Prospectus may not be so
                                            delivered.


   10



Delivery of Prospectus and
applicable  Pricing Supplement:             A copy of the most recent
                                            Prospectus and the applicable
                                            Pricing Supplement, which pursuant
                                            to Rule 434 may be delivered
                                            separately from the Prospectus,
                                            must accompany or precede the
                                            earlier of (a) the written
                                            confirmation of a sale sent to an
                                            investor or other purchaser or its
                                            agent and (b) the delivery of Notes
                                            to an investor or other purchaser
                                            or its agent.

Authenticity of Signatures:                 The Agent will have no obligation
                                            or liability to the Company or the
                                            Trustee in respect of the
                                            authenticity of the signature of
                                            any officer, employee or agent of
                                            the Company or the Trustee on any
                                            Note.

Documents Incorporated by
Reference:                                  The Company shall supply the Agent
                                            with an adequate supply of all
                                            documents incorporated by reference
                                            in the Registration Statement and
                                            the Prospectus.

                           PART II: PROCEDURES FOR NOTES ISSUED
                                    IN BOOK-ENTRY FORM

         In connection with the qualification of Notes issued in book-entry
form for eligibility in the book-entry system maintained by DTC, the Trustee
will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a Letter
of Representations from the Company and the Trustee to DTC, dated May 17, 2000,
and a Certificate Agreement, dated August 17, 1989, between the Trustee and
DTC, as amended (the "Certificate Agreement"), and its obligations as a
participant in DTC, including DTC's Same-Day Funds Settlement System ("SDFS").

Issuance:                                   All Fixed Rate Notes issued in
                                            book-entry form having the same
                                            Original Issue Date, Specified
                                            Currency, Interest Rate, Default
                                            Rate, redemption and/or repayment
                                            terms, if any, and Stated Maturity
                                            Date (collectively, the "Fixed Rate
                                            Terms") will be represented
                                            initially by a single Global Note;
                                            and all Floating Rate Notes issued
                                            in book-entry form having the same
                                            Original Issue Date, Specified
                                            Currency, Interest Rate Basis,
                                            which may be the CD Rate, the CMT
                                            Rate, the Commercial Paper Rate,
                                            the Eleventh District Cost of Funds
                                            Rate, the Federal Funds Rate,
                                            LIBOR, the Prime Rate or the
                                            Treasury Rate or any other interest
                                            rate basis or formula, and Spread
                                            and/or Spread Multiplier, if any),
                                            Day Count Convention, Initial


   11



                                            Interest Rate, Index Maturity (if
                                            applicable), Minimum Interest Rate,
                                            if any, Maximum Interest Rate, if
                                            any, redemption and/or repayment
                                            terms, if any, Interest Payment
                                            Dates, Initial Interest Reset Date,
                                            Interest Reset Dates and Stated
                                            Maturity Date (collectively, the
                                            "Floating Rate Terms") will be
                                            represented initially by a single
                                            Global Note.

                                            For other variable terms with
                                            respect to the Fixed Rate Notes and
                                            Floating Rate Notes, see the
                                            Prospectus and the applicable
                                            Pricing Supplement.

                                            Owners of beneficial interests in
                                            Global Notes will be entitled to
                                            physical delivery of Certificated
                                            Notes equal in principal amount to
                                            their respective beneficial
                                            interests only upon certain limited
                                            circumstances described in the
                                            Prospectus.

Identification:                             The Company has arranged with the
                                            CUSIP Service Bureau of Standard &
                                            Poor's (the "CUSIP Service Bureau")
                                            for the reservation of one series
                                            of CUSIP numbers, which series
                                            consists of approximately 900 CUSIP
                                            numbers which have been reserved
                                            for and relating to Global Notes
                                            and the Company has delivered to
                                            each of the Trustee and DTC such
                                            list of such CUSIP numbers. The
                                            Company will assign CUSIP numbers
                                            to Global Notes as described below
                                            under Settlement Procedure B. DTC
                                            will notify the CUSIP Service
                                            Bureau periodically of the CUSIP
                                            numbers that the Company has
                                            assigned to Global Notes. The
                                            Trustee will notify the Company at
                                            any time when fewer than 100 of the
                                            reserved CUSIP numbers remain
                                            unassigned to Global Notes, and, if
                                            it deems necessary, the Company
                                            will reserve and obtain additional
                                            CUSIP numbers for assignment to
                                            Global Notes. Upon obtaining such
                                            additional CUSIP numbers, the
                                            Company will deliver a list of such
                                            additional numbers to the Trustee
                                            and DTC. Notes issued in book-entry
                                            form in excess of $400,000,000 (or
                                            the equivalent thereof in one or
                                            more foreign currencies) and
                                            otherwise required to be
                                            represented by the same Global
                                            Certificate will instead be
                                            represented by two or more Global
                                            Certificates which shall all be
                                            assigned the same CUSIP number.


   12


Registration:                               Unless otherwise specified by DTC,
                                            each Global Note will be registered
                                            in the name of Cede & Co., as
                                            nominee for DTC, on the register
                                            maintained by the Trustee under the
                                            Indenture. The beneficial owner of
                                            a Note issued in book-entry form
                                            (i.e., an owner of a beneficial
                                            interest in a Global Note) (or one
                                            or more indirect participants in
                                            DTC designated by such owner) will
                                            designate one or more participants
                                            in DTC (with respect to such Note
                                            issued in book-entry form, the
                                            "Participants") to act as agent for
                                            such beneficial owner in connection
                                            with the book-entry system
                                            maintained by DTC, and DTC will
                                            record in book-entry form, in
                                            accordance with instructions
                                            provided by such Participants, a
                                            credit balance with respect to such
                                            Note issued in book-entry form in
                                            the account of such Participants.
                                            The ownership interest of such
                                            beneficial owner in such Note
                                            issued in book-entry form will be
                                            recorded through the records of
                                            such Participants or through the
                                            separate records of such
                                            Participants and one or more
                                            indirect participants in DTC.

Transfers:                                  Transfers of beneficial ownership
                                            interests in a Global Note will be
                                            accomplished by book entries made
                                            by DTC and, in turn, by
                                            Participants (and in certain cases,
                                            one or more indirect participants
                                            in DTC) acting on behalf of
                                            beneficial transferors and
                                            transferees of such Global Note.

Exchanges:                                  The Trustee may deliver to DTC and
                                            the CUSIP Service Bureau at any
                                            time a written notice specifying
                                            (a) the CUSIP numbers of two or
                                            more Global Notes outstanding on
                                            such date that represent Global
                                            Notes having the same Fixed Rate
                                            Terms or Floating Rate Terms, as
                                            the case may be (other than
                                            Original Issue Dates),and for which
                                            interest has been paid to the same
                                            date; (b) a date, occurring at
                                            least 30 days after such written
                                            notice is delivered and at least 30
                                            days before the next Interest
                                            Payment Date for the related Notes
                                            issued in book-entry form, on which
                                            such Global Notes shall be
                                            exchanged for a single replacement
                                            Global Note; and (c) a new CUSIP
                                            number, obtained from the Company,
                                            to be assigned to such replacement
                                            Global Note. Upon receipt of such a
                                            notice, DTC will send to its
                                            Participants (including the
                                            Trustee) a written reorganization
                                            notice to the effect that such
                                            exchange will occur on such date.
                                            Prior to the specified exchange
                                            date, the Trustee will deliver to
                                            the CUSIP Service Bureau written
                                            notice setting


   13



                                            forth such exchange date and the
                                            new CUSIP number and stating that,
                                            as of such exchange date, the CUSIP
                                            numbers of the Global Notes to be
                                            exchanged will no longer be valid.
                                            On the specified exchange date, the
                                            Trustee will exchange such Global
                                            Notes for a single Global Note
                                            bearing the new CUSIP number and
                                            the CUSIP numbers of the exchanged
                                            Notes will, in accordance with
                                            CUSIP Service Bureau procedures, be
                                            canceled and not immediately
                                            reassigned. Notwithstanding the
                                            foregoing, if the Global Notes to
                                            be exchanged exceed $400,000,000
                                            (or the equivalent thereof in one
                                            or more foreign currencies) in
                                            aggregate principal amount, one
                                            replacement Note will be
                                            authenticated and issued to
                                            represent each $400,000,000 (or the
                                            equivalent thereof in one or more
                                            foreign currencies) in aggregate
                                            principal amount of the exchanged
                                            Notes and an additional Global Note
                                            or Notes will be authenticated and
                                            issued to represent any remaining
                                            principal amount of such Global
                                            Notes (See "Denominations" below).

Denominations:                              Unless otherwise provided in the
                                            applicable Pricing Supplement,
                                            Notes issued in book-entry form
                                            will be issued in denominations of
                                            U.S.$1,000 and integral multiples
                                            of U.S.$1,000. Global Notes will
                                            not be denominated in excess of
                                            $400,000,000 (or the equivalent
                                            thereof in one or more foreign
                                            currencies). If one or more Notes
                                            are issued in book-entry form
                                            having an aggregate principal
                                            amount of $400,000,000 (or the
                                            equivalent thereof in one or more
                                            foreign currencies) and would, but
                                            for the preceding sentence, be
                                            represented by a single Note, then
                                            one Note will be issued to
                                            represent each $400,000,000 (or the
                                            equivalent thereof in one or more
                                            foreign currencies) of principal
                                            amount of such Notes issued in
                                            book-entry form and an additional
                                            Global Note or Notes will be issued
                                            to represent any remaining
                                            aggregate principal amount of such
                                            Note or Notes issued in book-entry
                                            form. In such a case, each of the
                                            Global Notes representing Notes
                                            issued in book-entry form shall be
                                            assigned the same CUSIP number.

Payments of Principal
and Interest:                               Payments of Interest Only. Promptly
                                            after each Regular Record Date, the
                                            Trustee will deliver to the Company
                                            and DTC a written notice specifying
                                            by CUSIP number the amount of
                                            interest to be paid on each Global
                                            Note on the




   14





                                            following Interest Payment Date
                                            (other than an Interest Payment
                                            Date coinciding with the Maturity
                                            Date) and the total of such
                                            amounts. DTC will confirm the
                                            amount payable on each Global Note
                                            on such Interest Payment Date by
                                            reference to the daily bond reports
                                            published by Standard & Poor's. On
                                            such Interest Payment Date, the
                                            Company will pay to the Trustee in
                                            immediately available funds an
                                            amount sufficient to pay the
                                            interest then due and owing on the
                                            Global Notes, and upon receipt of
                                            such funds from the Company, the
                                            Trustee in turn will pay to DTC
                                            such total amount of interest due
                                            on such Global Notes (other than on
                                            the Maturity Date) which is payable
                                            in U.S. dollars, at the times and
                                            in the manner set forth below under
                                            "Manner of Payment". The Trustee
                                            shall make payment of that amount
                                            of interest due and owing on any
                                            Global Notes that Participants have
                                            elected to receive in foreign
                                            currency directly to such
                                            Participants.

                                            Notice of Interest Payments and
                                            Regular Record Dates. Promptly
                                            after each Interest Determination
                                            Date for Floating Rate Notes issued
                                            in book-entry form, the Trustee
                                            will notify each of Moody's
                                            Investors Service and Standard &
                                            Poor's of the interest rates
                                            determined as of such Interest
                                            Determination Date.

                                            Payments at Maturity. On or about
                                            the first Business Day of each
                                            month, the Trustee will deliver to
                                            the Company and DTC a written list
                                            of principal, premium, if any, and
                                            interest to be paid on each Global
                                            Note maturing or otherwise becoming
                                            due in the following month. The
                                            Trustee, the Company and DTC will
                                            confirm the amounts of such
                                            principal, premium, if any, and
                                            interest payments with respect to
                                            each such Global Note on or about
                                            the fifth Business Day preceding
                                            the Maturity Date of such Global
                                            Note. On the Maturity Date, the
                                            Company will pay to the Trustee in
                                            immediately available funds an
                                            amount sufficient to make the
                                            required payments, and upon receipt
                                            of such funds the Trustee in turn
                                            will pay to DTC the principal
                                            amount of Global Notes, together
                                            with premium, if any, and interest
                                            due on the Maturity Date, which are
                                            payable in U.S. dollars, at the
                                            times and in the manner set forth
                                            below under "Manner of Payment".
                                            The Trustee shall make payment of
                                            the principal, premium, if any, and
                                            interest to be paid on the Maturity
                                            Date of each Global




   15





                                            Note that Participants have elected
                                            to receive in foreign or composite
                                            currencies directly to such
                                            Participants. Promptly after (i)
                                            payment to DTC of the principal,
                                            premium, if any, and interest due
                                            on the Maturity Date of such Global
                                            Note which are payable in U.S.
                                            dollars and (ii) payment of the
                                            principal, premium, if any, and
                                            interest due on the Maturity Date
                                            of such Global Note to those
                                            Participants who have elected to
                                            receive such payments in foreign or
                                            composite currencies, the Trustee
                                            will cancel such Global Note and
                                            deliver it to the Company with an
                                            appropriate debit advice. On the
                                            first Business Day of each month,
                                            the Trustee will deliver to the
                                            Company a written statement
                                            indicating the total principal
                                            amount of outstanding Global Notes
                                            as of the close of business on the
                                            immediately preceding Business Day.

                                            Manner of Payment. The total amount
                                            of any principal, premium, if any,
                                            and interest due on Global Notes on
                                            any Interest Payment Date or the
                                            Maturity Date, as the case may be,
                                            which is payable in U.S. dollars
                                            shall be paid by the Company to the
                                            Trustee in funds available for use
                                            by the Trustee no later than 10:00
                                            a.m., New York City time, on such
                                            date. The Company will make such
                                            payment on such Global Notes to an
                                            account specified by the Trustee.
                                            Upon receipt of such funds, the
                                            Trustee will pay by separate wire
                                            transfer (using Fedwire message
                                            entry instructions in a form
                                            previously specified by DTC) to an
                                            account at the Federal Reserve Bank
                                            of New York previously specified by
                                            DTC, in funds available for
                                            immediate use by DTC, each payment
                                            in U.S. dollars of principal,
                                            premium, if any, and interest due
                                            on Global Notes on such date.
                                            Thereafter on such date, DTC will
                                            pay, in accordance with its SDFS
                                            operating procedures then in
                                            effect, such amounts in funds
                                            available for immediate use to the
                                            respective Participants in whose
                                            names the beneficial interests in
                                            such Global Notes are recorded in
                                            the book-entry system maintained by
                                            DTC. Neither the Company nor the
                                            Trustee shall have any
                                            responsibility or liability for the
                                            payment in U.S. dollars by DTC of
                                            the principal of, or premium, if
                                            any, or interest on, the Global
                                            Notes. The Trustee shall make all
                                            payments of principal, premium, if
                                            any, and interest on each Global
                                            Note that Participants have elected
                                            to receive in foreign or composite
                                            currencies directly to such
                                            Participants.


   16

                                            Withholding Taxes. The amount of
                                            any taxes required under applicable
                                            law to be withheld from any
                                            interest payment on a Global Note
                                            will be determined and withheld by
                                            the Participant, indirect
                                            participant in DTC or other Person
                                            responsible for forwarding payments
                                            and materials directly to the
                                            beneficial owner of such Global
                                            Note.

Settlement Procedures:                      Settlement Procedures with regard
                                            to each Note in book-entry form
                                            sold by the Agent, as agent of the
                                            Company, or purchased by the Agent,
                                            as principal, will be as follows:
    
                                            A.     The Agent will advise the Company by telephone, confirmed by
                                                   facsimile, of the following settlement information:

                                                   1.     Principal amount, Authorized Denomination, and Specified
                                                          Currency.

                                                   2.     Exchange Rate Agent, if any.

                                                   3.     (a)   Fixed Rate Notes:

                                                                (i)    Interest Rate.

                                                                (ii)   Interest Payment Dates.

                                                          (b)   Floating Rate Notes:

                                                                (i)    Interest Rate Basis or Bases.

                                                                (ii)   Initial Interest Rate.

                                                                (iv)   Spread and/or Spread Multiplier, if any.

                                                                (v)    Interest Reset Dates.

                                                                (vi)   Interest Rate Reset Period.

                                                                (vii)  Interest Payment Dates.

                                                                (viii) Interest Payment Period.


                                            




   17


           
                                                                (ix)   Record Dates.

                                                                (x)    Index Maturity, if any.

                                                                (xi)   Maximum and/or Minimum Interest Rates, if
                                                                       any.

                                                                (xii)  Day Count Convention.

                                                                (xiii) Calculation Agent.

                                                   4.     Price to public, if
                                                          any, of such Note (or
                                                          whether such Note is
                                                          being offered at
                                                          varying prices
                                                          relating to
                                                          prevailing market
                                                          prices at time of
                                                          resale as determined
                                                          by the Agent).

                                                   5.     Trade Date.

                                                   6.     Settlement Date
                                                          (Original Issue Date).

                                                   7.     Stated Maturity Date.

                                                   8.     Redemption provisions,
                                                          if any, including:
                                                          Redemption Date,
                                                          Initial Redemption
                                                          Percentage and
                                                          Annual Redemption
                                                          Percentage Reduction.

                                                   9.     Optional Repayment
                                                          Dates, if any.

                                                   10.    Net proceeds to the
                                                          Company.

                                                   11.    The Agent's discount
                                                          or commission.

                                                   12.    Whether such Note is
                                                          being sold to the
                                                          Agent as principal or
                                                          to an investor or
                                                          other purchaser
                                                          through the Agent
                                                          acting as agent for
                                                          the Company.

                                                   13.    Whether such Note is
                                                          being issued with
                                                          Original Issue
                                                          Discount and the terms
                                                          thereof.

                                                   14.    Such other information
                                                          specified with respect
                                                          to such  Note
                                                          (whether by Addendum
                                                          or otherwise).



                                                  

   18


                                            B.     The Company will assign a
                                                   CUSIP number to the Global
                                                   Note representing such Note
                                                   and then advise the Trustee
                                                   by facsimile transmission or
                                                   other electronic
                                                   transmission of the above
                                                   settlement information
                                                   received from the Agent,
                                                   such CUSIP number and the
                                                   name of the Agent. The
                                                   Company will also advise the
                                                   Agent of the CUSIP number
                                                   assigned to the Global Note.

                                            C.     The Trustee will communicate
                                                   to DTC and the Agent through
                                                   DTC's Participant Terminal
                                                   System a pending deposit
                                                   message specifying the
                                                   following settlement
                                                   information:
    
                                                   1.     The information set forth in the Settlement Procedure A.

                                                   2.     Identification numbers of the participant accounts
                                                          maintained by DTC on behalf of the Trustee and the Agent.

                                                   3.     Identification of the Global Note as a Fixed Rate Global
                                                          Note or Floating Rate Global Note.

                                                   4.     Initial Interest Payment Date for such Note, number of
                                                          days by which such date succeeds the related record date
                                                          for DTC purposes (or, in the case of Floating Rate Notes
                                                          which reset daily or weekly, the date five calendar days
                                                          preceding the Interest Payment Date) and, if then
                                                          calculable, the amount of interest payable on such
                                                          Interest Payment Date (which amount shall have been
                                                          confirmed by the Trustee).

                                                   5.     CUSIP number of the Note representing such Note.

                                                   6.     Whether such Global Note represents any other Notes
                                                          issued or to be issued in book-entry form.

                                                   DTC will arrange for each
                                                   pending deposit message
                                                   described above to be
                                                   transmitted to Standard &
                                                   Poor's Corporation, which
                                                   will use the information in




                                                   



   19

                                                   the message to include
                                                   certain terms of the related
                                                   Global Note in the
                                                   appropriate daily bond
                                                   report published by Standard
                                                   & Poor's Corporation.

                                            D.     The Trustee will complete
                                                   and authenticate the Global
                                                   Note representing such Note.

                                            E.     DTC will credit such Note to
                                                   the participant account of
                                                   the Trustee maintained by
                                                   DTC.

                                            F.     The Trustee will enter an
                                                   SDFS deliver order through
                                                   DTC's Participant Terminal
                                                   System instructing DTC (i)
                                                   to debit such Note to the
                                                   Trustee's participant
                                                   account and credit such Note
                                                   to the participant account
                                                   of the Agent maintained by
                                                   DTC and (ii) to debit the
                                                   settlement account of the
                                                   Agent and credit the
                                                   settlement account of the
                                                   Trustee maintained by DTC,
                                                   in an amount equal to the
                                                   price of such Note less such
                                                   Agent's discount or
                                                   underwriting commission, as
                                                   applicable. Any entry of
                                                   such a deliver order shall
                                                   be deemed to constitute a
                                                   representation and warranty
                                                   by the Trustee to DTC that
                                                   (i) the Global Note
                                                   representing such Note has
                                                   been issued and
                                                   authenticated and (ii) the
                                                   Trustee is holding such
                                                   Global Note pursuant to the
                                                   Certificate Agreement.

                                            G.     In the case of Notes in
                                                   book-entry form sold through
                                                   the Agent, as agent, the
                                                   Agent will enter an SDFS
                                                   deliver order through DTC's
                                                   Participant Terminal System
                                                   instructing DTC (i) to debit
                                                   such Note to the Agent's
                                                   participant account and
                                                   credit such Note to the
                                                   participant account of the
                                                   Participants maintained by
                                                   DTC and (ii) to debit the
                                                   settlement accounts of such
                                                   Participants and credit the
                                                   settlement account of the
                                                   Agent maintained by DTC in
                                                   an amount equal to the
                                                   initial public offering
                                                   price of such Note.

                                            H.     Transfers of funds in
                                                   accordance with SDFS deliver
                                                   orders described in
                                                   Settlement Procedures F and
                                                   G will be settled in
                                                   accordance with SDFS
                                                   operating procedures in
                                                   effect on the Settlement
                                                   Date.
   20

                                            I.     Upon receipt, the Trustee
                                                   will pay the Company, by
                                                   wire transfer of immediately
                                                   available funds to an
                                                   account specified by the
                                                   Company to the Trustee from
                                                   time to time, the amount
                                                   transferred to the Trustee
                                                   in accordance with
                                                   Settlement Procedure F.

                                            J.     The Trustee will send a copy
                                                   of the Global Note by first
                                                   class mail to the Company
                                                   together with a statement
                                                   setting forth the principal
                                                   amount of Notes Outstanding
                                                   as of the related Settlement
                                                   Date after giving effect to
                                                   such transaction and all
                                                   other offers to purchase
                                                   Notes of which the Company
                                                   has advised the Trustee but
                                                   which have not yet been
                                                   settled.

                                            K.     If such Note was sold
                                                   through the Agent, as agent,
                                                   the Agent will confirm the
                                                   purchase of such Note to the
                                                   investor or other purchaser
                                                   either by transmitting to
                                                   the Participant with respect
                                                   to such Note a confirmation
                                                   order through DTC's
                                                   Participant Terminal System
                                                   or by mailing a written
                                                   confirmation to such
                                                   investor or other purchaser.

Settlement Procedures Timetable:            For offers to purchase Notes
                                            accepted by the Company, Settlement
                                            Procedures A through K set forth
                                            above shall be completed as soon as
                                            possible following the trade but not
                                            later than the respective times (New
                                            York City time) set forth below:
                                            

                                            SETTLEMENT
                                            PROCEDURE             TIME
                                            ----------            ----
                                                            
                                                A                11:00 a.m. on the trade date or within one
                                                                 hour following the trade
                                                B                As soon as practicable following the trade,
                                                                 but in no event later than 12:00 noon on the
                                                                 Business Day following the trade date
                                                C                No later than the close of business on the
                                                                 trade date
                                                D                9:00 a.m. on Settlement Date
                                                E                10:00 a.m. on Settlement Date
                                                F-G              No later than 2:00 p.m. on Settlement Date
                                                H                4:00 p.m. on Settlement Date
                                                I-K              5:00 p.m. on Settlement Date




   21


                                            Settlement Procedure H is subject
                                            to extension in accordance with any
                                            extension of Fedwire closing
                                            deadlines and in the other events
                                            specified in the SDFS operating
                                            procedures in effect on the
                                            Settlement Date.

                                            If settlement of a Note issued in
                                            book-entry form is rescheduled or
                                            canceled, the Trustee will deliver
                                            to DTC, through DTC's Participant
                                            Terminal System, a cancellation
                                            message to such effect by no later
                                            than 5:00 p.m., New York City time,
                                            on the Business Day immediately
                                            preceding the scheduled Settlement
                                            Date.

Failure to Settle:                          If the Trustee fails to enter an
                                            SDFS deliver order with respect to
                                            a Note issued in book-entry form
                                            pursuant to Settlement Procedure F,
                                            the Trustee may deliver to DTC,
                                            through DTC's Participant Terminal
                                            System, as soon as practicable a
                                            withdrawal message instructing DTC
                                            to debit such Note to the
                                            participant account of the Trustee
                                            maintained at DTC. DTC will process
                                            the withdrawal message, provided
                                            that such participant account
                                            contains a principal amount of the
                                            Global Note representing such Note
                                            that is at least equal to the
                                            principal amount to be debited. If
                                            withdrawal messages are processed
                                            with respect to all the Notes
                                            represented by a Global Note, the
                                            Trustee will mark such Global Note
                                            "canceled", make appropriate
                                            entries in its records and send
                                            certification of destruction of
                                            such canceled Global Note to the
                                            Company. The CUSIP number assigned
                                            to such Global Note shall, in
                                            accordance with CUSIP Service
                                            Bureau procedures, be canceled and
                                            not immediately reassigned. If
                                            withdrawal messages are processed
                                            with respect to a portion of the
                                            Notes represented by a Global Note,
                                            the Trustee will exchange such
                                            Global Note for two Global Notes,
                                            one of which shall represent the
                                            Global Notes for which withdrawal
                                            messages are processed and shall be
                                            canceled immediately after issuance
                                            and the other of which shall
                                            represent the other Notes
                                            previously represented by the
                                            surrendered Global Note and shall
                                            bear the CUSIP number of the
                                            surrendered Global Note.

                                            In the case of any Note in
                                            book-entry form sold through the
                                            Agent, as agent, if the purchase
                                            price for any such Note is not
                                            timely paid to the Participants
                                            with respect thereto by the
                                            beneficial investor or other
                                            purchaser thereof (or a person,
                                            including an indirect participant
                                            in DTC, acting on

   22



                                            behalf of such investor or other
                                            purchaser), such Participants and,
                                            in turn, the related Agent may
                                            enter SDFS deliver orders through
                                            DTC's Participant Terminal System
                                            reversing the orders entered
                                            pursuant to Settlement Procedures F
                                            and G, respectively. Thereafter,
                                            the Trustee will deliver the
                                            withdrawal message and take the
                                            related actions described in the
                                            preceding paragraph. If such
                                            failure shall have occurred for any
                                            reason other than default by the
                                            Agent to perform its obligations
                                            hereunder or under the Distribution
                                            Agreement, the Company will
                                            reimburse the Agent on an equitable
                                            basis for its reasonable loss of
                                            the use of funds during the period
                                            when the funds were credited to the
                                            account of the Company.
                                            Notwithstanding the foregoing, upon
                                            any failure to settle with respect
                                            to a Note in book-entry form, DTC
                                            may take any actions in accordance
                                            with its SDFS operating procedures
                                            then in effect. In the event of a
                                            failure to settle with respect to a
                                            Note that was to have been
                                            represented by a Global Note also
                                            representing other Notes, the
                                            Trustee will provide, in accordance
                                            with Settlement Procedure D, for
                                            the authentication and issuance of
                                            a Global Note representing such
                                            remaining Notes and will make
                                            appropriate entries in its records.

                  PART III: PROCEDURES FOR CERTIFICATED NOTES

Denominations:                              Unless otherwise provided in the
                                            applicable Pricing Supplement, the
                                            Certificated Notes will be issued
                                            in denominations of U.S.$1,000 and
                                            integral multiples of U.S.$1,000.

Payments of Principal,
  Premium, if any, and Interest:            Upon presentment and delivery of
                                            the Certificated Note, the Trustee
                                            upon receipt of immediately
                                            available funds from the Company
                                            will pay the principal of, premium,
                                            if any, and interest on, each
                                            Certificated Note on the Maturity
                                            Date in immediately available
                                            funds. All interest payments on a
                                            Certificated Note, other than
                                            interest due on the Maturity Date,
                                            will be made by check mailed to the
                                            address of the person entitled
                                            thereto as such address shall
                                            appear in the Security Register;
                                            provided, however, that Holders of
                                            $10,000,000 or more in aggregate
                                            principal amount of Certificated
                                            Notes (whether having identical or
                                            different terms and provisions)
                                            shall be entitled to receive such



   23


                                            interest payments by wire transfer
                                            of immediately available funds if
                                            appropriate wire transfer
                                            instructions have been received in
                                            writing by the Trustee not less
                                            than 15 calendar days prior to the
                                            applicable Interest Payment Date.

                                            The Trustee will provide monthly to
                                            the Company a list of the
                                            principal, premium, if any, and
                                            interest to be paid on Certificated
                                            Notes maturing in the next
                                            succeeding month. The Trustee will
                                            be responsible for withholding
                                            taxes on interest paid as required
                                            by applicable law.

                                            Certificated Notes presented to the
                                            Trustee on the Maturity Date for
                                            payment will be canceled by the
                                            Trustee. All canceled Certificated
                                            Notes held by the Trustee shall be
                                            destroyed, and the Trustee shall
                                            furnish to the Company a
                                            certificate with respect to such
                                            destruction.

Settlement Procedures:                      Settlement Procedures with regard
                                            to each Certificated Note purchased
                                            by the Agent, as principal, or
                                            through the Agent, as agent, shall
                                            be as follows:
     
                                            A.     The Agent will advise the Company by telephone of the
                                                   following Settlement information with regard to each
                                                   Certificated Note:

                                                   1.     Exact name in which the Certificated Note(s) is to be
                                                          registered (the "Registered Owner").

                                                   2.     Exact address or addresses of the Registered Owner for
                                                          delivery, notices and payments of principal, premium, if
                                                          any, and interest.

                                                   3.     Taxpayer identification number of the Registered Owner.

                                                   4.     Principal amount, Authorized Denomination and Specified
                                                          Currency.

                                                   5.     Exchange Rate Agent, if any.

                                                   6.     (a)   Fixed Rate Notes:

                                                                (i)    Interest Rate.



                                           



   24
   
                                                                (ii)   Interest Payment Dates.

                                                          (b)   Floating Rate Notes:

                                                                (i)    Interest Rate Basis or Bases.

                                                                (ii)   Initial Interest Rate.

                                                                (iv)   Spread and/or Spread Multiplier, if any.

                                                                (v)    Interest Reset Dates.

                                                                (vi)   Interest Rate Reset Period.

                                                                (vii)  Interest Payment Dates.

                                                                (viii) Interest Payment Period.

                                                                (ix)   Record Dates.

                                                                (x)    Index Maturity, if any.

                                                                (xi)   Maximum and/or Minimum Interest Rates, if
                                                                       any.

                                                                (xii)  Calculation Agent.

                                                   7.     Price to public of
                                                          such Certificated
                                                          Note (or whether such
                                                          Note is being offered
                                                          at varying prices
                                                          relating to
                                                          prevailing market
                                                          prices at time of
                                                          resale as determined
                                                          by the Agent).

                                                   8.     Trade Date.

                                                   9.     Settlement Date
                                                         (Original Issue Date).

                                                   10.    Stated Maturity Date.

                                                   11.    Redemption provisions,
                                                          if any, including:
                                                          Initial Redemption
                                                          Date, Initial
                                                          Redemption Percentage
                                                          and Annual Redemption
                                                          Percentage Reduction.



                                                   

   25


                                                   12.    Optional Repayment
                                                          provisions, if any.

                                                   13.    Net proceeds to the
                                                          Company.

                                                   14.    The Agent's discount
                                                          or commission.

                                                   15.    Whether such Note is
                                                          being sold to the
                                                          Agent as principal or
                                                          to an investor or
                                                          other purchaser
                                                          through the Agent
                                                          acting as agent for
                                                          the Company.

                                                   16.    Whether such Note is
                                                          being issued with
                                                          Original Issue
                                                          Discount and the terms
                                                          thereof.

                                                   17.    Such other information
                                                          specified with respect
                                                          to such Note (whether
                                                          by Addendum or
                                                          otherwise).

                                            B.     After receiving such
                                                   settlement information from
                                                   the Agent, the Company will
                                                   advise the Trustee of the
                                                   above settlement information
                                                   by facsimile transmission
                                                   confirmed by telephone. The
                                                   Company will prepare a
                                                   Pricing Supplement to the
                                                   Prospectus and deliver
                                                   copies to the Agent and the
                                                   Trustee and will cause the
                                                   Trustee to issue,
                                                   authenticate and deliver the
                                                   Certificated Note.

                                            C.     The Trustee will complete
                                                   the Certificated Note in the
                                                   form approved by the Company
                                                   and the Agent, and will make
                                                   three copies thereof (herein
                                                   called "Stub 1", "Stub 2"
                                                   and "Stub 3"):

                                                   1.  Certificated Note with
                                                       the Agent's
                                                       confirmation, if traded
                                                       on a principal basis, or
                                                       the Agent's customer
                                                       confirmation, if traded
                                                       on an agency basis.

                                                   2.  Stub 1 for Trustee.

                                                   3.  Stub 2 for Agent.

                                                   4.  Stub 3 for the Company.


   26



                                            D.     With respect to each trade,
                                                   the Trustee will deliver the
                                                   Certificated Note and Stub 2
                                                   thereof to the Agent at the
                                                   address set forth in the
                                                   notice provisions of the
                                                   Distribution Agreement or to
                                                   an address otherwise
                                                   designated by the Agent to
                                                   the Trustee; and the Trustee
                                                   will keep Stub 1. The Agent
                                                   will acknowledge receipt of
                                                   the Certificated Note
                                                   through a broker's receipt
                                                   and will keep Stub 2.
                                                   Delivery of the Certificated
                                                   Note will be made only
                                                   against such acknowledgment
                                                   of receipt. Upon
                                                   determination that the
                                                   Certificated Note has been
                                                   authorized, delivered and
                                                   completed as aforementioned,
                                                   the Agent will wire the net
                                                   proceeds of the Certificated
                                                   Note after deduction of its
                                                   applicable commission to the
                                                   Company pursuant to standard
                                                   wire instructions given by
                                                   the Company.

                                            E.     In the case of a
                                                   Certificated Note sold
                                                   through the Agent, as agent,
                                                   the Agent will deliver such
                                                   Certificated Note as well as
                                                   a copy of the Prospectus and
                                                   any applicable Pricing
                                                   Supplement received from the
                                                   Company (with the
                                                   confirmation) to the
                                                   purchaser against payment in
                                                   immediately available funds.

                                            F.     The Trustee will send Stub 3
                                                   to the Company.

Settlement Procedures
  Timetable:                                For offers to purchase Certificated
                                            Notes accepted by the Company,
                                            Settlement Procedures A through F
                                            set forth above shall be completed
                                            as soon as possible following the
                                            trade but not later than the
                                            respective times (New York City
                                            time) set forth below:



                                            SETTLEMENT
                                            PROCEDURE                  TIME
                                            ---------                  ----

                                                             
                                                   A            11:00 a.m. on the trade date
                                                   B            3:00 p.m. on the trade date
                                                   C-D          2:15 p.m. on Settlement Date
                                                   E            3:00 p.m. on Settlement Date
                                                   F            5:00 p.m. on Settlement Date


Failure to Settle:                          In the case of Certificated Notes
                                            sold through the Agent, as agent,
                                            if an investor or other purchaser
                                            of a Certificated

   27


                                            Note from the Company shall either
                                            fail to accept delivery of or make
                                            payment for such Certificated Note
                                            on the date fixed for settlement,
                                            the Agent will forthwith notify the
                                            Trustee and the Company by
                                            telephone, confirmed in writing,
                                            and return such Certificated Note
                                            to the Trustee.

                                            The Trustee, upon receipt of such
                                            Certificated Note from the Agent,
                                            will immediately advise the Company
                                            and the Company will promptly
                                            arrange to credit the account of
                                            the Agent in an amount of
                                            immediately available funds equal
                                            to the amount previously paid to
                                            the Company by such Agent in
                                            settlement for such Certificated
                                            Note. Such credits will be made on
                                            the Settlement Date if possible,
                                            and in any event not later than the
                                            Business Day following the
                                            Settlement Date; provided that the
                                            Company has received notice on the
                                            same day. If such failure shall
                                            have occurred for any reason other
                                            than failure by such Agent to
                                            perform its obligations hereunder
                                            or under the Distribution
                                            Agreement, the Company will
                                            reimburse such Agent on an
                                            equitable basis for its reasonable
                                            loss of the use of funds during the
                                            period when the funds were credited
                                            to the account of the Company.
                                            Immediately upon receipt of the
                                            Certificated Note in respect of
                                            which the failure occurred, the
                                            Trustee will cancel and destroy
                                            such Certificated Note, make
                                            appropriate entries in its records
                                            to reflect the fact that such
                                            Certificated Note was never issued,
                                            and accordingly notify in writing
                                            the Company.

EX-8.1

   1
                                                                     EXHIBIT 8.1


                                  May 18, 2000

Enron Corp.
1400 Smith Street
Houston, Texas 77002-7369

Ladies and Gentlemen:

         We have acted as counsel to Enron in connection with its Medium Term
Note Program. In connection with the opinion expressed below, we have examined
the Registration Statement, the Prospectus, the documents incorporated by
reference therein and such other documents and records as we have deemed
necessary or advisable for purposes of the opinion expressed below.

         Based on the foregoing and subject to the qualifications and
limitations set forth below and in the Prospectus, in our opinion, the
discussion and legal conclusions set forth in the Prospectus under the caption
"United States Federal Income Taxation" are accurate and complete in all
material respects.

         Our opinion expressed above is based and conditioned upon the initial
and continuing accuracy of the facts and assumptions set forth in the
Prospectus and on the representations of management of Enron as to the
existence of certain facts. Our opinion is also based on existing provisions of
the Internal Revenue Code of 1986, regulations promulgated or proposed
thereunder and interpretations thereof by the Internal Revenue Service and the
courts, all of which are subject to change with prospective or retroactive
effect, and such opinion could be adversely affected or rendered obsolete by
any such change.

         We hereby consent to the references to this firm under the captions
"United States Federal Income Taxation" in the Prospectus and to the filing of
this opinion as an Exhibit to the Registration Statement. By giving such
consent, we do not admit that we are within the category of person whose
consent is required under Section 7 of the Securities Act or the rules and
regulations of the Commission issued thereunder

                                                   Very truly yours,


                                                   /s/ VINSON & ELKINS L.L.P.