{"id":42974,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/1995-tax-allocation-agreement-enron-corp-enron-oil.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"1995-tax-allocation-agreement-enron-corp-enron-oil","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/1995-tax-allocation-agreement-enron-corp-enron-oil.html","title":{"rendered":"1995 Tax Allocation Agreement &#8211; Enron Corp., Enron Oil &amp; Gas Co."},"content":{"rendered":"<pre>\n                          1995 TAX ALLOCATION AGREEMENT\n\n         THIS 1995 TAX ALLOCATION AGREEMENT ('Agreement') is entered into\neffective as of the Deconsolidation Date being December ___, 1995 between Enron\nCorp., a Delaware corporation with its principal place of business being\nHouston, Texas ('Enron'), Enron Oil &amp; Gas Company, also a Delaware corporation\nwith its principal place of business being Houston, Texas ('EOG'), and those\ndomestic subsidiaries of EOG listed below as additional parties. (Enron, EOG,\nand those EOG subsidiaries listed below are hereinafter collectively referred to\nas the 'Parties' and singularly as a 'Party', while EOG and its domestic\nsubsidiaries are collectively referred to as 'EOG').\n\n                                    RECITALS\n\n         WHEREAS, Enron and EOG previously entered into that certain First\nAmended and Restated Tax Allocation Agreement (hereinafter the 'Base Agreement')\nexecuted in August 1991 generally providing for the apportionment and allocation\nof federal income and other tax liabilities between the Parties; and\n\n         WHEREAS, the Parties subsequently modified the terms of the Base\nAgreement, as reflected in Modification 'A' to the First Amended and Restated\nTax Allocation Agreement executed in 1992 (the Base Agreement and Modification\n'A' are hereinafter collectively referred to as the 'Earlier Agreements') so as\nto further specify their agreement as to the apportionment and allocation of\nfederal income and other tax liabilities; and\n\n         WHEREAS, Enron is considering selling a certain number of shares of\ncommon stock that it owns in EOG, thus reducing its ownership interest in EOG\nbelow 80 percent and thereby precluding Enron from continuing to include EOG in\nthe consolidated federal income tax returns prepared by Enron as common parent\nfor the taxable periods following the Deconsolidation Date;\n\n         WHEREAS, EOG has represented in various public statements that the\nDeconsolidation, when coupled with the effectiveness of the Earlier Agreements\nand this Agreement, will not have a material adverse effect on its financial\ncondition or results of operations; and\n\n         WHEREAS, the Earlier Agreements do not fully address the obligations of\nthe Parties vis-a-vis one another upon Deconsolidation; and\n\n         WHEREAS, the Parties have agreed to change certain of the provisions of\nthe Earlier Agreements and thus would like to memorialize such agreement\nregarding their respective rights, obligations, and intentions as to any tax\npayments to be made by EOG to Enron or by Enron to EOG during the\nPost-Deconsolidation Date Period but related to the Pre-Consolidation Date\nPeriod and, in particular, the Parties' rights, obligations, and intentions with\nrespect to (i) paragraph 7 of Modification 'A' and (ii) any refund of Taxes to\nbe received by the Consolidated Group attributable to the four years from 1988\nthrough and including 1991, and have such terms generally supersede those of the\nEarlier Agreements.\n\n         NOW, THEREFORE, the Parties to this Agreement agree as follows:\n\n                                    ARTICLE I\n                                   DEFINITIONS\n\n         1.1 DEFINITIONS: As used in this Agreement, the following terms have\nthe following meanings:\n\n         'Code' means the Internal Revenue Code of 1986, as amended, or\ncorresponding provisions of any subsequent federal tax laws.\n\n         'Consolidated Group' means the 'affiliated group' of corporations of\nwhich Enron is the 'common parent corporation', as such terms are defined in\nCode ss. 1504(a)(1).\n\n         'Consolidated Minimum Tax Credit(s)' means the consolidated minimum tax\ncredit(s) computed in accordance with Code ss.ss. 53, 1502, and 1503, and shown\non a Consolidated Return with respect to those tax periods up to and including\nthe Deconsolidation Date.\n\n         'Consolidated Return' means the consolidated federal income tax return\nof the Consolidated Group for each taxable year as filed or to be filed by Enron\non behalf of the Consolidated Group.\n\n         'Consolidated Tax Liability' means, generally, the consolidated federal\nincome tax liability computed in accordance with Treasury Regulation ss.\n1.1502-2 and shown on a Consolidated Return, taking into account all credits to\nwhich the Consolidated Group is entitled under the Code, but not taking into\naccount any 'consolidated alternative minimum tax liability' (as provided under\nCode ss.ss. 55, 1502, and 1503) or any Consolidated Minimum Tax Credit.\n\n         'Deconsolidation' means that event which causes Enron to no longer have\nthe requisite ownership interest in EOG so as to allow the Parties to file as a\nConsolidated Group.\n\n         'Deconsolidation Date' means that date when Enron and EOG no longer\nconstitute a Consolidated Group.\n\n         'Earlier Agreements' has that meaning ascribed to it in the Recitals.\n\n         'Party' and 'Parties' have that meaning ascribed to them in the\nRecitals.\n\n                                      -2-\n\n         'Pre-Deconsolidation Date Period' means, chronologically, those tax\nyears prior to the 1995 tax year plus that period in time beginning January 1,\n1995 and ending on and including the Deconsolidation Date.\n\n         'Post-Deconsolidation Date Period' means, chronologically, that period\nfollowing the Deconsolidation Date.\n\n         'Taxes' or 'Tax' means federal income taxes as provided in Code ss. 11,\nalternative minimum tax as provided in Code ss. 55, and any state taxes measured\nby net income (including state taxes measured by net income reflected in any\nUnitary Tax Returns filed by Enron) and any interest or penalties thereon. The\nterm Taxes or Tax, however, specifically excludes any tax imposed by any foreign\ngovernment.\n\n         'Unitary Tax Return' means a state income tax return which reflects the\ncombined and\/or consolidated reporting (either on a domestic or worldwide basis)\nof Enron and its affiliates for a state which either (i) imposes its income tax\non its apportioned and\/or allocable share of the net income and its United\nStates affiliates that are engaged in a 'unitary business', part of which is\nconducted in the state or (ii) imposes its income tax on its apportioned and\/or\nallocable share of the net income of a taxpayer and its affiliates--both\ndomestic and foreign--that are engaged in a unitary business.\n\n         Other terms defined herein have the meanings given them.\n\n                                   ARTICLE II\n                               TAX INDEMNIFICATION\n\n         2.1 ENRON'S TAX INDEMNIFICATION FOR THE PRE-DECONSOLIDATION DATE\nPERIOD: Enron shall be liable for, indemnify, and hold EOG harmless for all\nTaxes (i) imposed on or incurred by EOG for the Pre-Deconsolidation Date Period\nand (ii) equitably apportioned to EOG by Enron for all tax periods beginning\nbefore and ending after the Deconsolidation Date. Enron, in turn, shall be\nentitled to receive all refunds of Taxes attributable to the Pre-Deconsolidation\nDate Period, if any, from either the applicable tax authorities or EOG (in the\nevent such refund(s) have been made directly to EOG), except with respect to the\n$10.5 million amount set forth in Section 2.3(a) below.\n\n         2.2 EOG'S 1995 TAX LIABILITY AND PAYMENT\n\n                  (a) EOG's sole liability for Taxes for the portion of the\nPre-Deconsolidation Date Period attributable to the 1995 tax year shall be based\non EOG's preparation of its portion of Enron's 1995 Consolidated Return and\nEnron's review thereof. Any discrepancies between EOG's return position and\nEnron's subsequent review shall be resolved by consultation by each Party's\nrespective tax officers and Enron's ultimate determination shall be controlling\nas long as such determination does not have a material adverse effect on EOG's\nfinancial condition or results of operations.\n\n                                      -3-\n\n                  (b) The Parties agree that in determining EOG's allocable\nshare of the (i) Unitary and (ii) Consolidated Tax Liabilities for the 1995 tax\nyear that they shall follow the allocation and methodology set forth in the\nEarlier Agreements.\n\n                  (c) EOG shall pay Enron its allocable share of the estimated\nUnitary and Consolidated Tax Liabilities for the 1995 tax year, net of any 1995\nCode ss. 29 credits, within 45 days from the Deconsolidation Date. A 'true-up'\npayment, should one be necessary, shall be made by EOG to Enron or Enron to EOG\nwithin 15 days after Enron's subsequent determination of EOG's liability based\non taxable income and tax credits reported as part of Enron's 1995 Unitary and\nConsolidated Returns and EOG's separate state Tax returns.\n\n                  (d) Enron shall be liable for, indemnify, and hold EOG\nharmless for all Taxes attributable to the event of Deconsolidation.\n\n         2.3 OTHER PAYMENTS TO BE MADE BETWEEN THE PARTIES\n\n                  (a) Enron is obligated to pay to EOG $10.5 million\nattributable to a federal income tax refund to be received by Enron for the four\ntax years from 1988 through and including 1991.\n\n                  (b) In consideration of Enron's tax indemnification as set\nforth in Section 2.1 to this Agreement, EOG shall be obligated to pay to Enron\n$8 million no later than on the Deconsolidation Date.\n\n                  (c) In the event Enron has not paid EOG the $10.5 million\nrefund amount by the Deconsolidation Date, EOG shall have the right to offset\nits $8 million indemnification payment obligation to Enron by such $10.5 million\nsum thus resulting in a net payment by Enron to EOG of $2.5 million no later\nthan on the Deconsolidation Date.\n\n                                   ARTICLE III\n                               MINIMUM TAX CREDIT\n               AND RELATED MATTERS ASSOCIATED WITH DECONSOLIDATION\n\n         3.1 CONSOLIDATED MINIMUM TAX CREDIT\n\n                  (a) As currently calculated by Enron, no Consolidated Minimum\nTax Credits have been allocated to EOG by Enron based on Consolidated Returns\nfiled through tax year ended December 31, 1994 under the methodology followed\nfor the Pre-Deconsolidation Date Period and Enron has not made any determination\nof EOG's allocable share of Consolidated Minimum Tax Credits for the 1995 tax\nyear. In the event Consolidated Minimum Tax Credits are allocated to EOG, EOG\nshall be obligated to reimburse Enron for the amount of such credits allocated\nto EOG upon the occurrence of the earlier of the following two events:\n\n                                      -4-\n\n                           (i) The date of EOG's filing of its federal income\n         tax return for the tax year in the Post-Deconsolidation Date Period\n         when EOG utilizes any reallocated Consolidated Minimum Tax Credits; or\n\n                           (ii) The date of Enron's filing its federal income\n         tax return for the tax year in the Post-Deconsolidation Date Period\n         when Enron could have utilized such Consolidated Minimum Tax Credits\n         but is precluded from doing so because of the reallocation to EOG.\n\n                  (b) For purposes of Section 3.1(a)(ii), no Consolidated\nMinimum Tax Credits will be considered usable by Enron until Enron could have\nfirst utilized all Consolidated Minimum Tax Credits remaining with Enron after\nthe reallocation. Any minimum tax credits generated by Enron in the\nPost-Deconsolidation Date Period shall be disregarded in making this\ndetermination. For purposes of Section 3.1(a)(i), no Consolidated Minimum Tax\nCredits will be considered as utilized by EOG until EOG first utilizes all\nminimum tax credits it has generated in the Post-Deconsolidation Date Period.\n\n                  (c) For purposes of Section 3.1(a), any payments to be made\nbetween EOG and Enron may be made for more than one tax year of the\nPost-Deconsolidation Date Period until the reallocated Consolidated Minimum Tax\nCredit is used (or could have been used) in its entirety.\n\n         3.2 CONSOLIDATED MINIMUM TAX CREDIT ALLOCATION ADJUSTMENTS: In the\nevent the amount of the Consolidated Minimum Tax Credits allocated to EOG are\nadjusted resulting in a reduction of Consolidated Minimum Tax Credits previously\nutilized by EOG and a payment has been made by EOG to Enron pursuant to the\nterms of Section 3.1, Enron shall be obligated to pay EOG for any assessment\nmade against it by the Internal Revenue Service attributable to such adjustment.\nPayment shall be made by Enron to EOG on the day EOG pays the Internal Revenue\nService for such assessment.\n\n                                   ARTICLE IV\n                        AUDITS AND OTHER TAX PROCEEDINGS\n\n         4.1 GENERAL COOPERATION AND EXCHANGE OF INFORMATION\n\n                  (a) EOG shall provide, or cause to be provided, to Enron\ncopies of all correspondence received from any taxing authority by EOG in\nconnection with the liability of the Parties for Taxes for the\nPre-Deconsolidation Date Period. EOG shall also provide Enron with access to or\ncopies of any materials requested by Enron which would assist Enron in resolving\nany tax matters for the Consolidated Group for the Pre-Deconsolidation Date\nPeriod. Further, the Parties will provide each other with such cooperation and\ninformation as they may reasonably request of each other in preparing or filing\nany return, amended return, or claim for refund, in determining liability or\nright of refund, or in conducting any audit or other proceeding, in respect of\nTaxes\n\n                                      -5-\n\nimposed on the Parties or their respective affiliates including, by way of\nexample, information relating to net operating losses, foreign tax credits,\noverall foreign losses, and excess loss accounts..\n\n                  (b) Enron on one hand and EOG on the other hand and their\naffiliates will preserve and retain all returns, schedules, workpapers, and all\nmaterial records or other documents relating to any such returns, claims,\naudits, or other proceedings until the expiration of the statutory period of\nlimitations (including extensions) of the taxable periods to which such\ndocuments relate and until the final determination of any payments which may be\nrequired with respect to such periods under this Agreement and shall make such\ndocuments available at the then-current corporate headquarters of such Party to\nthe other Party or any affiliate thereof, and their respective officers,\nemployees, and agents, upon reasonable notice and at reasonable times, it being\nunderstood that such representative shall be entitled to make copies of any such\nbooks and records relating to Enron or EOG as they shall deem necessary.\n\n                  (c) Enron on one hand and EOG on the other hand further agree\nto permit representatives of the other Party or any affiliate thereof to meet\nwith employees of such Party on a mutually convenient basis in order to enable\nsuch representatives to obtain additional information and explanations of any\ndocuments provided pursuant to this Section 4.1. Enron on one hand and EOG on\nthe other hand shall make available to the representatives of the other Party or\nany affiliate thereof sufficient workspace and facilities to perform the\nactivities described in this Section. Any information obtained pursuant to this\nSection 4.1 shall be kept confidential, except as may be otherwise necessary in\nconnection with the filing of returns or claims for refund or in conducting any\naudit or other proceeding. Each Party shall provide the cooperation and\ninformation required by this Section 4.1 at its own expense.\n\n         4.2 AUDITS: In the event of an audit by the Internal Revenue Service,\nor by any state or local tax authority, of a return filed by Enron for the\nPre-Deconsolidation Date Period, Enron shall give EOG timely and reasonable\nnotice of audit proceedings and EOG will provide all necessary information and\nother assistance reasonably requested by Enron with respect to issues concerning\nthe activities of EOG. All communications with the Internal Revenue Service\nconcerning such audit will be made by Enron unless otherwise agreed between the\nParties hereto.\n\n         4.3 MATERIAL ADVERSE IMPACT TO EOG: Notwithstanding the provisions of\nSection 4.2, the Parties agree that in no event shall Enron file any amended tax\nreturn, claim for refund, or make any tax election affecting the\nPre-Deconsolidation Date Period that would have any material adverse impact on\nEOG's financial condition or results of operations without first obtaining the\nwritten permission of EOG.\n\n                                      -6-\n\n                                    ARTICLE V\n                               UNITARY TAX RETURNS\n                  FOR POST-DECONSOLIDATION DATE PERIOD FILINGS\n\n         Enron agrees to continue to file any Unitary Tax Returns and allocate\nUnitary tax liability for the Post-Deconsolidation Date Period in which the\noperations of EOG are reflected in a manner consistent with the methodology\nfollowed for the Pre-Deconsolidation Date Period.\n\n                                   ARTICLE VI\n                                OTHER PROVISIONS\n\n         6.1 EFFECT OF THE AGREEMENT: The obligations of the Parties set forth\nunder this Agreement shall be unconditional and absolute, and shall remain in\neffect without limitation as to time. Further, all prior tax sharing and\nallocation agreements between Enron and EOG (including the Earlier Agreements)\nshall terminate effective as of the Deconsolidation Date, except that those\nprovisions of the Earlier Agreement regarding the allocation of Consolidated Tax\nLiability shall remain in effect for the 1995 tax year until the provisions of\nSection 2.2 of this Agreement are fully implemented by the Parties.\n\n         6.2 CONFLICT OR AMBIGUITY: Because the terms of this Agreement\ngenerally supersede the terms of the Earlier Agreements, the Parties agree that\nif there is any conflict or ambiguity between the Earlier Agreements and this\nAgreement the terms of this Agreement shall control.\n\n         6.3 ASSIGNABILITY: The rights and obligations of the Parties under this\nAgreement may not be assigned by a Party without the prior written consent of\nthe other Party to this Agreement.\n\n         6.4 GOVERNING LAW: This Agreement shall be governed by the laws of the\nstate of Texas.\n\n         IN WITNESS WHEREOF, the Parties hereto have caused their names to be\nsubscribed and executed by the respective authorized officers on the dates\nindicated, effective as of the date first written above.\n\n                                       ENRON CORP.\n\n                                       By:____________________________________\n                                             Robert J. Hermann\n                                             Vice President, Tax\n\n                                       ENRON OIL &amp; GAS COMPANY\n\n                                       By:____________________________________\n                                             Susan M. Murray\n                                             Vice President, Tax\n\n                                       ENRON OIL &amp; GAS INTERNATIONAL, INC.\n\n                                       By:____________________________________\n                                             Susan M. Murray\n                                             Vice President, Tax\n\n                                       EOGI-TRINIDAD, INC.\n\n                                       By:____________________________________\n                                             Susan M. Murray\n                                             Vice President, Tax\n\n                                       EOGI-AUSTRALIA, INC.\n\n                                       By:____________________________________\n                                             Susan M. Murray\n                                             Vice President, Tax\n\n                                       EOGI-FRANCE, INC.\n\n                                       By:____________________________________\n                                             Susan M. Murray\n                                             Vice President, Tax\n\n                                      -8-\n\n                                       EOGI-RUSSIA, INC.\n\n                                       By:____________________________________\n                                             Susan M. Murray\n                                             Vice President, Tax\n\n                                       EOGI-QATAR, INC.\n\n                                       By:____________________________________\n                                             Susan M. Murray\n                                             Vice President, Tax\n\n                                       EOGI-UZBEKISTAN, INC.\n\n                                       By:____________________________________\n                                             Susan M. Murray\n                                             Vice President, Tax\n\n                                       EOGI-KUWAIT, INC.\n\n                                       By:____________________________________\n                                             Susan M. Murray\n                                             Vice President, Tax\n\n                                       ENRON OIL &amp; GAS-CARTHAGE, INC.\n\n                                       By:____________________________________\n                                             Susan M. Murray\n                                             Vice President, Tax\n\n                                      -9-\n\n                                       ERSO, INC.\n\n                                       By:____________________________________\n                                             Susan M. Murray\n                                             Vice President, Tax\n\n                                       ENRON OIL &amp; GAS PROPERTY MANAGEMENT, INC.\n\n                                       By:____________________________________\n                                             Susan M. Murray\n                                             Vice President, Tax\n\n                                       ENRON OIL &amp; GAS MARKETING, INC.\n\n                                       By:____________________________________\n                                             Susan M. Murray\n                                             Vice President, Tax\n\n                                       I N HOLDINGS, INC.\n\n                                       By:____________________________________\n                                             Susan M. Murray\n                                             Vice President, Tax\n\n                                       NILO OPERATING COMPANY\n\n                                       By:____________________________________\n                                             Susan M. Murray\n                                             Vice President, Tax\n\n                                      -10-\n\n                                       EOGI-TRINIDAD U(a) BLOCK, INC.\n\n                                       By:____________________________________\n                                             Susan M. Murray\n                                             Vice President, Tax\n\n                                       EOGI-ALGERIA, INC.\n\n                                       By:____________________________________\n                                             Susan M. Murray\n                                             Vice President, Tax\n\n                                      -11-\n\n                                       EOGI TRINIDAD COMPANY\n\n                                       By:____________________________________\n                                             Dennis M. Ulak\n                                             Assistant Secretary\n\n                                       EOGI AUSTRALIA COMPANY\n\n                                       By:____________________________________\n                                             Dennis M. Ulak\n                                             Assistant Secretary\n\n                                       EOGI-KAZAKHSTAN, INC.\n\n                                       By:____________________________________\n                                             Dennis M. Ulak\n                                             Assistant Secretary\n\n                                       EOGI-INDIA, INC.\n\n                                       By:____________________________________\n                                             Dennis M. Ulak\n                                             Assistant Secretary\n\n                                       EOGI-CHINA, INC.\n\n                                       By:____________________________________\n                                             Dennis M. Ulak\n                                             Assistant Secretary\n\n                                      -12-\n\n                                       EOGI-UNITED KINGDOM, INC.\n\n                                       By:____________________________________\n                                             Angus H. Davis\n                                             Assistant Secretary\n\n                                      -13-\n\n                                       ENRON OIL &amp; GAS INVESTMENTS, INC.\n\n                                       By:____________________________________\n                                             Douglas Weaver\n                                             President\n\n                                      -14-\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7454],"corporate_contracts_industries":[9535],"corporate_contracts_types":[9622,9628],"class_list":["post-42974","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-enron-corp","corporate_contracts_industries-utilities__gas","corporate_contracts_types-planning","corporate_contracts_types-planning__separation"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42974","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42974"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42974"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42974"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42974"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}